Bitcoin vs Real Estate with Leon Wankum
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Hey, hey, welcome to the Bitcoin Matrix podcast. I'm your host, Cedric Youngleman. Today, I had the pleasure of interviewing Leon Wankum, who delves into the transformative potential of Bitcoin in real estate. Leon discusses the historical ties between wealth and property and why real estate struggles as a modern store of value. From investment strategies to the societal implications of rising real estate prices,

Leon offers a thought-provoking perspective on the intersection of Bitcoin, real estate, and sound money principles. Now, before we get started, I want to tell you about the most locally world-famous Bitcoin event of the year happening this January in Naples, Florida, and that is Bitcoin Day Naples 2025.

It's coming in a couple of weeks on Saturday, January 18th, where Bitcoiners from all around the South Florida region will be gathering to share, discuss, and debate some of Bitcoin's greatest ideas for the new year. Speakers like Lawrence Lepard, Bob Burnett, CJ Constantinos, Matty Ice, Nico, and Carly Benson will be there, and others like Michelle Weakley, Charlie Shrem, Paul Tarantino, and me.

Your ticket is all inclusive access to connect and hang in real life with some of your favorite Bitcoiners that you see on all the best podcasts, including this one. You can get $21 off your ticket by going to bitcoinday.io and typing in promo code MATRIX at checkout.

go to bitcoinday.io and enter promo code MATRIX. We'll see you there. So I hope you enjoy this rip. Again, the only thing I'm going to ask of you is if you can please go and subscribe to the RSS feed and subscribe to our YouTube channel. And if you do want to get in touch with me, it's Cedric at thebitcoinmatrix.com. And now let's enter the Bitcoin Matrix real estate expert, Leon Wankum. What is real?

how do you define real you can't jump into cash cash is trash what do you do you get out leon vancom was one of the first financial economics students to write a thesis on bitcoin in 2015. the work focused on how bitcoin can help citizens in underdeveloped regions currently excluded from the existing financial system and its potential for the remittance market

Introduced to Bitcoin during a discussion on the Austrian economist Ludwig von Mises in Leon's philosophy and ethics degree. He became interested in Bitcoin as a peer-to-peer decentralized electronic cash system. Today, Leon is active in real estate and venture capital. He specializes in developing Bitcoin strategies for real estate developers. Leon Vancom, welcome to the Bitcoin Matrix podcast. How are you? Thank you for having me. Thank you. I'm well. I'm good.

I'm currently getting ready for the upcoming bull market. We're probably already in the first innings and things started a bit quicker than I thought. So I'm excited for what's to come. Okay, interesting. Things are moving a little faster than you thought. For those wondering, it's hovering around 100k right now. So let's get into your background. I think even music played a role in your background.

Tell me a little bit about yourself, maybe what you were doing before you found Bitcoin. Yeah, I'd be happy to. And I can also tie my Bitcoin journey into the music business. So when I studied philosophy, I learned about Bitcoin.

around a decade ago, a bit more even. And I was studying philosophy and ethics and business management. So I was doing a joint bachelor's. And I really focused on my philosophy degree. And in my philosophy degree, I just met an individual who basically showed me that he's using Bitcoin

to purchase goods and services online, mostly goods. And I just witnessed him doing a transaction. And that really intrigued me. And that caught my interest. And then I was going deeper into different schools of philosophy. And I went into Aristotle. And then I learned about ethics. And then I learned about Austrian economics.

and the Austrian School of Thinking. And then I decided to do my master's in financial economics. I was thinking about doing a master's in philosophy as well. I really enjoyed philosophy, but I went into more of a finance direction and I studied financial economics. And then I decided to really study Bitcoin as money.

Before I was studying Bitcoin as a transaction system that obviously involves money, but I was looking at Bitcoin less as an investment or as a store of value, but more as a censorship resistant payment network. And the reason for me going into financial economics was in 2014, I was working for a record label actually in Los Angeles. I was always very much into music and we were organizing gigs on the weekend while studying philosophy.

And I basically, through understanding decentralized file sharing networks like BitTorrent and LimeWire, I started to understand that Bitcoin is much bigger than I initially thought. Because what I thought is if the MP3 file can replace the CD, which it did back then at the time, what happened was that

decentralized file sharing networks like Napster, like LimeWire and like BitTorrent. They enabled the distribution through a decentralized network of MP3 files that people used to listen to music instead of CDs. And that really disrupted the music business. And I thought if that happened, if the MP3 file can replace the CD, Bitcoin can replace fiat money.

Obviously, fiat money does exist on electronic and digital rails. It's not like the music business that was mostly analog at the time. But it was an interesting thought process that really helped me to understand I should focus on Bitcoin rather than anything else. So that led me into studying Bitcoin and financial economics in 2015 while doing my master's at the University of Glasgow.

Yeah, and that's really the start of my Bitcoin journey. Were you skeptical of Bitcoin when you first found it? Did you sort of question or push back against it? Not at all, to be honest with you. When I saw it, when I saw my friend doing the transaction, I just thought, finally, there's an internet currency. For a very long time,

I was looking for an internet currency. I was looking for a currency I could use online because I just thought that's the logical next step for the internet to have its own currency. So to be honest with you, not meaning I understood what I was witnessing, but I wasn't questioning Bitcoin. I just really thought

This is something the internet is missing. But it took me years. It took me a very, very long time to fully grasp the full potential of Bitcoin. And I do believe that working in the real estate industry really helped me to be able to do that. Because when I left university in 2015, I started working in the real estate business. So in 2016, 2017...

I started working in the real estate business and doing construction, real estate development, classical real estate development. But as I was going further into that business, I started to understand the potential of Bitcoin because I suddenly saw the huge market cap of real estate. And I came to understand the important position of real estate as a store of value.

for our financial system and for civilization at the moment. And then thinking that Bitcoin is actually a better store of value because it's a digital technology that's cheap to maintain and it's highly divisible and you can send it around the globe at light speed. That really helped me to understand the potential of Bitcoin beyond

Because I started to compare the market cap of real estate as the world's biggest store of value, which is over 300 trillion with Bitcoin's market cap, which at the time was less than 100 billion. So I thought to myself, if Bitcoin is a better store of value than real estate and real estate is the biggest store of value, Bitcoin could potentially be

partially replace real estate in its function as a store of value. And that really helped me to understand the full potential of Bitcoin. And that obviously

was in parallel with Michael Saylor brushing on the scene because in 2020, when Michael Saylor came on the scene and he started to talk about Bitcoin as digital property, and he laid out all these different leverage plays that also caught my interest because he basically talked to my real estate developer brain. The way that he started to talk about Bitcoin as capital and Bitcoin as property, that really helped me to understand Bitcoin as digital real estate.

because he talked to my real estate developer brain, which naturally

uses leverage to build wealth because in real estate development, if you understand why real estate development is so interesting as an investment class within the scope of the system, it is because of leverage. Because if you look at the year over year return that real estate has, it doesn't outperform inflation. So when I talk about inflation, I talk about monetary inflation. I talk about the increase in the monetary supply.

And when you look at the increase of the monetary supply in the US since 1971, you can see that the increase

of the price of real estate, residential real estate closely tracked the increase in a monetary supply. So we estimated that the monetary supply M2 in the US grew around 6.8% since 1971 and residential real estate around 5.7%. So you can really see how real estate closely tracks the monetary supply and commercial real estate

also had a similar growth pattern. It grew around 4.4% on an analyzed basis since 1971. So when you look at that, you understand that real estate actually does not outperform inflation. But once you take on leverage, once you take on borrowed money from a bank and you invest that into real estate, then you have a higher return, obviously. Let's say you take

20,000 and you get another loan from the bank, which is around 80,000. There's leverage now. You have a leverage around four or five here. And that makes real estate investment interesting.

Right. In the scope of the fiat system. Now, Bitcoin obviously changes the dynamic because now if when you look at the compound and growth rate of Bitcoin, it actually outperforms real estate bought on leverage. Because the example that I just laid out where you put in twenty thousand and you take a loan from a bank of eighty thousand. Now you can buy a property that's worth one hundred thousand. So you have leverage here.

But the year on year growth of that investment will still not outperform Bitcoin's compound annual growth rate of around 50% that we experienced over the past 10 years. I do believe that in the future, Bitcoin's growth rate will come down a little bit, maybe to 20, 30% if we take a decade out or maybe if we look 20 years out.

But then think of the effort that you need to put into a real estate investment and the effort you have to put into Bitcoin. And also taking the name of your podcast, it's all still happening within the fiat matrix, right? So I think if we think about wealth, we can also maybe redefine what wealth is, because what Bitcoin also helped me to understand when I also looked into the Austrian School of Economics,

economics and how they view wealth, they believe wealth to be a state of you being able to choose what you want to do with your time. So true wealth means being in possession of your time because that's the only real scarce asset

or resource in this universe in our lifetime. And Bitcoin allows you to take back your time and to be your own boss. And I think that is also a new type of being wealthy. So if we look at the compound annual growth rate of Bitcoin over the past decade, it has outperformed any real estate investment done on leverage. Of course, if you do a real estate investment with 100% borrowed money, right?

the return looks different. But again, this all happens within the fiat matrix. And something that I personally enjoy about Bitcoin, it does take you out of that matrix and it allows you to build a new type of wealth, a new type of standard that you operate on. And that is something that I personally prefer when thinking about Bitcoin. But that does not mean that real estate investment has no place.

Also going forward, I do believe that the speculation that is happening in real estate that will move over into Bitcoin because people can save in Bitcoin by default. They don't have to invest into real estate to outperform inflation.

But real estate development is still a business that some people are very good at. And that's something that I also want to allude to, that the building environment will not go away. People always need a place to live. So the real estate business will stay relevant. But because of Bitcoin's superior properties as a store of value, I do believe that Bitcoin represents competition to the real estate sector.

And it is important as a real estate investor to be aware of the paradigm shift that Bitcoin potentially brings to the real estate industry that has benefited from the fiat system over the past because inflation has caused people to invest so heavily into real estate that especially since 2008, since the great financial crisis, ever since central banks around the world really lowered interest rates to

1%, half a percent in Sweden and Denmark, interest rates were even negative. So people were really forced to invest into real estate. But now there's a superior store of value. There are higher interest rates. So the market environment is changing. Just be aware and think about how you can benefit from Bitcoin because yes, Bitcoin represents digital disruption as a digital store of value to the real estate industry, but it also represents an opportunity.

Yeah, for sure. Definitely a lot to unpack there. So, you know, let's maybe, you know, as we shift away from, you know, real estate being the best store of value, the best inflation hedge. And, you know, it seems like a quarter, you know, according to your work, it's like one third to one half half of the world's wealth is wrapped up in real estate. How has real estate changed?

been tied to wealth historically, you know, from like looking at it from like a cultural economic point of view? Yes, that is a good question because real estate, in fact, has always been tied to wealth, right? Even before 1971, before the start of the fiat system as we know it, the modern fiat system, going back to

most cultures we had around the world. I looked into it. You can look into India, you can look into China, into the Han Dynasty, also the Zen culture and the samurai culture in Japan that was built about landlords and feudal lords protecting agricultural estates, the feudal system in Europe, and also more native cultures in North America.

The Maya, also the Inca, these were all cultures that were centered around agricultural societies and owning land always meant power. So in Rome, for example, and in Greek, if you wanted to be somebody with political power, you had to own land.

But the value of that land was more calculated by the agricultural capacity of that land rather than its scarcity. So the desirability of land was tied more to its agricultural capacity than to its scarcity prior to 1971. So when you look at land, and maybe that is something that you guys can do at home, look at land prices around the globe.

We have a global land price index that records land prices globally since 1890. But then also for different jurisdictions and different countries, you can find different statistics. And it's pretty interesting to see that overall, of course, there were boom and bust cycles. For example, in the American West, you had boom cycles in the 1900s when people were going out there looking for gold.

and other natural resources, you had boom and bust cycles within certain regions because of the increased demand for land in certain regions due to people's demand for gold, for example, or for just accessing the West. But having a bull market, a 50-year or 60-year bull market that we are actually experiencing around the world because the U.S. really sets the standard, the global standard,

with the global reserve currency, the dollar that they established in 1944 as the global reserve currency with the Bretton Woods Agreement and then really solidified in 1971 when Richard Nixon

announced that the gold would the u.s would end the convertibility of the dollar into gold at a fixed rate and then in 1971 when the petrodollar sorry in 1974 three years after when the petrodollar was established and king faisal of saudi arabia agreed to sell all the oil

in gold, right? That really solidified the dollar as the global reserve currency. These three events, Bretton Woods in 1944, 1971, the Nixon shock, and then in 1974, the agreement with Saudi Arabia and King Faisal to sell all the oil in dollar. And since then, real estate prices around the world really

have really soared as an answer to the increasing monetary supply that has caused people to invest in real estate. But that's a fairly new phenomenon. So even though real estate was tied to wealth throughout human history, its use as a speculative investment vehicle is actually a new phenomenon. Yeah. So why would, maybe we could expand a little bit more on why real estate is a bad store of value in our modern world.

Yes, sure. I'd be happy to because it's something I'm thinking about a lot.

because I do still work in real estate development. And sometimes when I stand on site and I look at the buildings, I'm thinking to myself, that is a very bad use of capital in a highly digitalized world. And if you take an alien view and you just look at our world and our civilization, we are actually highly digitalized, right? We can travel fast.

Information especially can travel very fast. We have digital communication and we have electronic payment systems, but we still store value in tangible objects that cannot be moved. And real estate, just by its name, if you think about the root in Latin,

The root in Latin of real estate is immobiles, which means unable to move. And if you take different European languages, for example, German, and you look at the root of the word and the meaning of the word, in Germany, real estate translates to immobilia, which means to be immobile and to have your wealth tied up in an immobile, tangible asset,

that is highly illiquid and a highly digitalized world doesn't really make sense. So there's a mismatch here. There's a mismatch here. And it's an important mismatch to pay attention to because we are digitalizing our world so fast. So the internet really was the digitalization of information. And now with Bitcoin, we have the digitalization of value. And real estate as a store of value

right now faces competition from Bitcoin and Bitcoin will most likely absorb the monetary premium that sits in real estate over time and real estate will collapse to its utility value. So I believe that over time people will prefer saving in Bitcoin rather than having to invest into real estate and that will cause the demand for real estate as a store of value to go down a little bit over time

And that money will be held in Bitcoin because people will most likely prefer holding their wealth in Bitcoin rather than doing it in Bitcoin because Bitcoin is way more liquid. And there's also the use of real estate as collateral. It's maybe something that we can talk to as well because it's pretty interesting.

Real estate is not just the number one store value in the world. It's also the most important form of collateral, both on a personal level. If you think about it, how many people have a loan on their own home? Also, a mortgage is a loan. So most houses are bought on debt. Right. And also most institutions are.

pension funds, companies and governments, they own real estate themselves and they borrow against that real estate. That is also why there is no interest from the fiat system

for real estate to go back down to its utility value because real estate is collateralized in the fiat financial system globally. It is used to leverage against to fund the existing system. That is why in 08 when the great financial crisis came about and real estate prices were tanking globally,

central banks were so motivated to increase the monetary supply so people would invest into real estate because real estate is really the backbone of our financial system. It is used as collateral by most fiat institutions. And Bitcoin presents a solution here because

Real estate has been priced away from its utility value and it's used as a store value to hedge against inflation. It is used as collateral to lend against, but it should not be used as a store value and it should not be used as the main form of collateral because it is mispriced from its utility value and that is

very risky. It creates systematic risk. Think about it, that the global financial system is built on an asset as collateral that is not meant to be used as collateral. It is actually mispriced. It has

and priced away from its utility value. So because Bitcoin works as a much better collateral, what I would suggest is if you work in the real estate industry, start buying as much Bitcoin as you can and dual collateralize the real estate that you own with Bitcoin to hedge yourself against the systematic risk that exists in a fiat system. Because

By being in the real estate industry, you are actually exposed to the systematic risk that exists in a fiat system. On one side, we as real estate investors, as real estate developers, we have actually benefited from the fiat system because inflation has caused people to invest into real estate and it has caused prices to go up. But now we've reached a level where the systematic risk

is so extremely bad that you have to pay attention to how you hedge yourself against that systematic risk. And obviously the system, the global financial system will benefit as well. If real estate developers start to do a collateralize the real estate that they own with Bitcoin. So if you package up real

Real estate collateral together with Bitcoin from a regulatory perspective. This is very, very difficult. But from a theoretical perspective, it's very important. So I just want to talk about it, even though I'm aware this is not easy. But I do want to talk about it and touch on it briefly because it's also something that is now being publicly discussed.

Andrew Holmes of Battery Finance went on CNBC around two weeks ago and he suggested that people that own real estate refinance their real estate holdings and they use the additional capital that they can obtain to buy Bitcoin. So the idea, I think, is brilliant. You say there's so much outstanding real estate right now that is being valued

at a certain rate that we could suggest on a Bitcoin standard would not exist. So at this point of time, you can offer real estate developers to refinance the real estate portfolios that they own, leverage the real estate portfolio into Bitcoin and buy Bitcoin with the additional capital. It really is the same strategy that Michael Saylor is pursuing with MicroStrategy. Because what Michael Saylor is doing

Of course, now he's doing way more sophisticated things. He's not just using simple leverage. He's actually now forming a financial company that potentially could revolutionize the debt market. If you really think about what he's doing, he's actually now a competition to BlackRock. But what he initially did was he looked at MicroStrategy, which is a company that provides a business, which is software intelligence, and that business generates income.

But he also understood that income, that cash flow is in danger because of inflation. So the purchasing power of the business's cash flow is being drained year on year by an increasing rate. While at the same time, the business itself is at risk because of increased inflation.

So now the question he had was, how can I save my cash flow? And how can I save the value of my company? Actually, as a real estate developer, as somebody that owns real estate, you're faced with a similar question. The cash flow that you obtained, the rental income is being drained. Why? Because of monetary inflation, the purchasing power of your cash flow is dying year by year.

Plus the value of your real estate might increase in fiat value. But if you start measuring it in Bitcoin, it's losing value very, very, very fast. So you have to change your unit of account. If you start to think about the value of your real estate portfolio on Bitcoin, you start to understand that it's losing in value very, very fast. So you would be very smart if you would use Bitcoin

whatever you have accumulated in wealth within the world of real estate and leverage that into Bitcoin and bring it over into this new digital store of value. I agree with everything you said there. Tons more to unpack and we're going to try to get to it all. You know, the irony of bringing up Michael Saylor, who wrote The Mobile Wave, and we're talking about how immobile real estate is. So let's get into Bitcoin a bit.

How is Bitcoin like digital real estate? What makes it digital real estate? Yes. So I'd like to allude to that using the analogy of digital real estate really helped me to understand Bitcoin and its function as a store of value and as collateral. Of course, Bitcoin is money, right? Bitcoin is near perfect money. And if you want to break it down in digital level,

Bitcoin is a string of numbers, zeros and ones, right? But what real estate is at this point of time, real estate is actually being used as money because

The money that we use that is being forced upon us by the government, fiat currency, actually is a very bad store of value. If we look at the functions of money, there are three main functions of money. Number one, it needs to be a good medium of exchange. Number two, it needs to be a good store of value. Otherwise, nobody would use it as a medium of exchange. And number three, it's a unit of account.

And both functions, being a medium of exchange and being a good medium of account, are actually tied to the function of being a good store of value. And because fiat money is a very bad store of value, people use other things to...

to store value and real estate because of its scarcity and because of the favorable financing options that exist within the fiat system has become the world's preferred store of value. And it also has become the world's preferred collateral. And because Bitcoin is a better store of value and because Bitcoin

is pristine collateral for lending, I believe it will partially replace real estate in its function as a store of value and in its function as collateral. And that's why I think that thinking of Bitcoin as digital real estate can help to understand Bitcoin's superiority as a store of value and as collateral over to real estate. Because if you think about what is real estate today,

within the global financial system and really within society, real estate is almost like the space layer for building wealth. So when I talk to friends and family, obviously this changed over the last, I think over the last four years, this changed drastically. But generally speaking,

four years ago and also now people still believe that they can build wealth with investing into real estate. So friends and family of mine usually when they saved up, let's say 20, 30, 40,000 grand, they usually approach me and they ask me, Leon,

Where should I invest my money? Where should I buy real estate? And how could I obtain financing for a mortgage? And I always told them, don't invest in real estate, invest in Bitcoin. Hey Bitcoiners, invest in Bitcoin with confidence. Why do I recommend River? River is the best place to build your Bitcoin wealth and they offer zero fee on recurring buys.

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Because Bitcoin is a more accessible store of value than real estate and it's a much better store of value and it will grow faster in purchasing power. And that will also allow you to lend against Bitcoin. Yes, you can use real estate to obtain credit, but using real estate to obtain credit is actually not that easy and it takes a lot of time.

it's not that easy to access the value of real estate. If I approach the bank, right, that financed a real estate purchase, let's say a decade after I purchased

that property, the bank will have to access the value of the property once more. So they can say 10 years ago, the value of the property was X. And now the value of the property will be X plus 10 years. So we have to look into it. It's probably going to cost maybe 20,000 euros to write a report. And it's going to cost time, right? With real estate, it's very inefficient.

to access the value. Whereas with real estate, there's a market price that's accessible 24/7 globally. So it's very easy for a lender to access the value of Bitcoin as collateral. So if you own Bitcoin,

And you save it over time. You can build that base that you could also lend against if you want to, to fund your business, maybe fund a home, right? Because real estate will still as a home be very important, even become more important for us Bitcoiners because we will be able to afford a home earlier on.

Because the rate of growth and purchasing power of Bitcoin outpaces not just inflation, it also outpaces the growth of real estate. So for everybody that owns Bitcoin, real estate will become cheaper over time. So that's a nice side effect. And we will be able as Bitcoiners to maybe fulfill our dream for a beautiful home and find a basis for our community, for our families.

And I believe Bitcoin will and can make housing affordable over time. If you hold Bitcoin, things become cheaper over time. And because Bitcoin exists, people can invest in Bitcoin. They don't have to invest into real estate.

which means real estate will most likely be priced closer to its utility value. So Bitcoin as digital real estate really means Bitcoin is this pristine store value, this near perfect money that you can save in. You can also use it as collateral to lend against. And it really builds this new base for building true wealth. And with true wealth, I also mean being a sovereign individual and a free individual and live a free life.

Yeah, well, we all want that. And then speaking of things, you know, everyone wants maybe is a beautiful home. And I think a lot of Bitcoiners are thinking, you know, when are homes and houses going to reach or trend more towards utility value? Or when is Bitcoin purchasing power going to be increased enough either, you know, at a macro or personal level to to buy those homes? And maybe at the end, we'll get to ask you a little bit about your opinions on those things.

But, you know, speaking of homes and buildings, why do you think Bitcoin is more akin or like land than like homes or buildings? Yeah, there's but Jesse Myers also has a great article out on this. So I want to give a shout out to him. The reason is scarcity, scarcity and desirability. So if you really think about what makes a good store of value, it's scarcity and desirability.

Also, when we talk about Bitcoin, it's true that Bitcoin is limited in supply and Bitcoin is absolutely scarce, but it's relatively scarce, giving the desirability of that good. If nobody wants Bitcoin, the absolute scarcity of Bitcoin doesn't matter. But Bitcoin is desired for its superior monetary properties. So for things to be valuable, there always needs to be both scarcity and desirability.

And the reason why real estate has become so expensive is not because of the house that sits on land, but is because of the scarcity of that land that makes it desirable for people to save in. So that's why I believe that Bitcoin is more keen to land than to a house, but also because of the UTXO structure of real estate.

And there's another article by Surfer Jim called actually Bitcoin as land, I think. So that's an article that also influenced my thinking. I want to give a shout out to him as well. And there's another article called Bitcoin as an island that I would like for people to read as well. And if you think about the UTXO structure of Bitcoin, it's very similar to land parcels where you own a certain property.

a number of UTXOs. And if you want to do a transaction, if you think of UTXOs just as land parcels, I like it as a visualization, you pass on a certain part of your land to somebody else. So if you want to do a Bitcoin transaction, what you do is you spend

part of your UTXO to somebody else, but the rest stays within your possession. So I imagine it to be this piece of land where you take part of piece of that land and you give it to somebody else. So both the UTXO structure of Bitcoin and the dynamic of scarcity and desirability that plays out in land and also in Bitcoin, I think, make Bitcoin a key into land rather than a

the physical, tangible house that actually sits on top of land. Yeah. And speaking of Bitcoin is land, Surfer Jim, and speaking of Surfer Jim, was on episode number 17 of the Bitcoin Matrix around November 17th, 2020. So a little over four years ago, we talked,

You know, we spoke with the Bitcoin radical, the gnarly libertarian and free thinker and truth seeker, Surfer Jim. And we got into all things sort of current events in his article, Bitcoin is Land, back in 2020. What I also want to ask you is why is credit so important? Yes.

That is a good question. And maybe I answer your question by talking about why credit has become so important in the fiat system. And then maybe how I imagine credit to be on a Bitcoin standard or maybe also in the future where we have both Bitcoin and a Bitcoin standard and fiat. So on a fiat standard where money constantly loses value,

you want to borrow money to outpace the rate of monetary inflation. So if you think about what saving, what are savings? Savings are really the chance for the individual to plan for the future. By having savings, I can mitigate uncertainty because I don't know what happens in the future. It's always good to have some money saved that enables you to deal with the uncertainty that comes up in the future. For somebody that

is a family man, there might be cost for your kids. And for somebody that's building a family, maybe there will be costs coming up for an engagement party. Or if you're an entrepreneur and if you want to fund a business, maybe you need funds to invest into your business. And it's not a smart idea to use all your savings because owning savings allow to plan for the future. And it also allows to build a low time preference.

So a low-type preference means to make decisions that are based on having an outlook into the future rather than just thinking about the present moment. So I believe that having savings is very important. So obtaining credit allows you to keep your savings. And in a fiat system where money loses value very, very fast, you actually need credit for certain business activities, especially investments.

for certain industries. So if you think about aviation, building a plane, if you think about cars, developing a new car, if you think about Starlink or SpaceX, these companies that are innovative in the field of space, that is so innovative.

capital intents that you need credit because inflation has made things so expensive that you won't be able to pay for

innovation by just saving. And I give you an example that makes it easier to understand. So the Wright brothers, they invented flying. And there was a gentleman called Otto Liegenthal. He was actually German. And he invented not flying with a plane, but the first paraglide flight. So there's a famous picture of him. He looks almost like a

like a Superman or something. He invented the first paraglider. He was living, I think, in Brandenburg, close to Berlin. He was a German Jew. His family had to leave Germany, unfortunately, obviously, when the Nazis came into power. But he was a very smart individual. And the Wright brothers, who lived in North Carolina, they were inspired by him. And then Kitty Hawk in North Carolina, from 1899 till 1905,

three they invented flying and um they had to spend only four thousand dollars

on developing, I think they had three or four airplanes that they developed, some of them without a motor, some with. And obviously, the technology they used wasn't as sophisticated as today. But I still believe, I still think it's very interesting that they were able to spend $4,000 only and fund four years of coming up with

with how to fly and they were not dependent on any capital from somebody else because they were living on a gold standard by the time. So at the time,

The Wright brothers were living on a gold standard and they were operating a bicycle shop. And that bicycle shop allowed them to save enough money to have the time and the capital to fund their innovation. Because to basically act on your ideas not only needs money, it also needs time. You need a lot of time to think.

You need a lot of time to try out your ideas. And they were able to self-fund their ventures and spent only $4,000 and they basically invented flying. But today, because money has lost purchasing power so rapidly, it would cost $2 billion to invent a new car. I know that today you need more sophisticated engineers

technology and you need different also production processes that involve more people. But I still think it's interesting to think about it cost $4,000 to invent the first plane 100 years ago. And now it costs over 2 billion euros or $2 billion to invent a car. And that's just totally crazy. And it shows you need credit for innovation. So if I want to now innovate and if I want to come up

with a new car, I want to come up with a new type of technology, I need credit. So credit is very, very important anyway, and has become more important within the fiat system because things have become increasingly expensive. And also if I want to construct real estate, I need credit because real estate has become so expensive. If you think about the average price of a home. So

The average price of a home in the 1950s in the US was around $5,000. And today it's around $500,000. So that's an increase by 100. So maybe in the 1950s, I was able to save and then acquire a home.

But today, in order to acquire a home, I need credit, I will not be able to save 500,000 in my 30s or my 40s with an average income. So you can see here how important credit has become for both innovating

for purchasing a home, but also for building a home. So now me as a real estate developer, if I want to construct, it will not cost me 500,000, but maybe it will cost me 400,000. And 400,000 is still a lot of money. So I need credit in order to be able to perform the economic activity of building a house. So both consumption and

and production needs credit and also investing. So everything from innovating to consuming to producing needs credit in the fiat system on a Bitcoin standard that looks a bit different on a Bitcoin standard that looks a bit different because by saving in Bitcoin over time, we can build a capital base that we can use to consume, to purchase, to produce and to innovate.

Bitcoin grows in purchasing power so fast that you don't necessarily need credit to do any of the things that I just described. Look at yourself. If I would ask you, have you become more wealthy over the past four years or less wealthy? What would you ask as a Bitcoin holder that has held on to his Bitcoin? More wealthy.

And I would also argue that just, you know, philosophically in your mind, if you hold some sats, you know, you're going to be wealthy, even if you hold just a precious few because of the, you know, the infinite value of sats in the future. So, you know, it helps you feel abundant in the mind, you know, and feel abundance. But yes, I think Bitcoiners are more wealthy over the last four years today than they were.

Exactly. So you can afford more over time. But I also like the second point that you said that alludes to the redefinition of wealth. You also know that you don't have to. So that changes how you consume. So whereas credit in the fiat system, if you look at consumer credit, right? I said that real estate is the number one type of collateral used in a fiat system.

The second most important type of collateral are actually cars because they are bought on credit. So consumer credit in the fiat system is very, very important and it will be less important on the Bitcoin system because I think as a Bitcoiner, not necessarily, we can't say things will happen necessarily, but most likely judging by what you said and also judging by my own behavior, we don't spend things

and sets on things we don't need because we understand that over time Bitcoin increases in purchasing power, which also creates a new type of thinking of what wealth really is. Wealth doesn't mean you need a lot of things. It actually means you understand you don't need them. Whereas in the fiat system, sometimes we think we need things to be happy. Whereas with Bitcoin, we can learn we don't need them to be happy, which can lead to true happiness.

And I think that is also beautiful. And that is something that Bitcoin can help us help us to understand. So that also then also maybe brings me into credit on the on a Bitcoin standard. So now credit is not tied to responsibility. If I take on a loan,

I know that the purchasing power of the loan will decrease in the future because more fiat currency will be produced. So actually that incentivizes me to do bad investments. That incentivizes me to act not very thoughtful with the money that I receive as credit. Whereas with Bitcoin, it's very different. Imagine somebody gives you credit denominated in Bitcoin.

that money will increase in purchasing power over time. So as in the fiat system that that we take out decreases in purchasing power over time,

credit that we take out and loans that we take on on a Bitcoin standard actually increases in purchasing power over time because Bitcoin increases in purchasing power over time. So now I have to think twice. Do I really want to take out credit? How do I invest my money? Do I spend that money wisely? So now they have a high responsibility as somebody, as a borrower that takes out money. Now I have a high responsibility to be

because I need to pay back that money. And also as a lender, think about it like this. If you are a commercial bank, you want to give out as much money as possible because the interest that you receive on that money, that actually represents your profit or your revenue that can be profit. Whereas on a Bitcoin standard,

If I give out Bitcoin and you don't pay me back, there's a high risk involved for the lender because the Bitcoin will be gone forever. And the Bitcoin that I have given out as a loan, right? They carry the potential to increase in purchasing power forever because Bitcoin is limited in supply, meaning that the Bitcoin that I give out as a lender,

they carry a high risk because potentially if I don't receive my Bitcoin back, I miss out on deflation forever. So there's a huge risk and that's why interest rates on a Bitcoin standard, they should be higher than today. And I expect interest rates to be the average increase in purchasing power of Bitcoin with a risk premium because the risk could be Bitcoin would not be paid back and they could be lost forever.

And I quickly maybe just want to touch on investing as well. You ask about credit, but I think credit and investing, they're very close tied together because what are people doing today in the fiat system? If they want to invest, they get a loan. You know, if you want to invest in real estate, how do you do it? You get a loan. Even people invest into startups based on loans, not always, but often.

on Bitcoin that doesn't work, right? Because if you get a loan that is Bitcoin denominated, your investment needs to outperform Bitcoin. So now there's a new benchmark, which is Bitcoin. So you don't need to invest as much. In a fiat standard, you constantly need to invest to outperform inflation. On a Bitcoin standard, you don't need to because Bitcoin has a new benchmark, sets a new standard that you need to outperform, which carries risk. So you don't need to do it. So I believe...

Most likely over time, this will lead to a better allocation of capital in the market and companies that don't perform well will not be able to get money so easily. But I do believe there will be zombie companies. And I think that that is pretty interesting. So a friend of mine, Jeremy, he basically he raised the point recently that

And you know, zombie companies, we all know zombie companies in the fiat system. How I would define a zombie company in a fiat system, a company that I would consider a zombie company is a company that lives off cheap credit. They continuously fund themselves on cheap credit. They don't provide any value or innovation to the market. They just found a way to get cheap credit.

on a Bitcoin standard, a zombie company could be a company that bought Bitcoin very early on. And I give you an example. EOS, for example, our block one,

That was an ICO, I think in 2017. And they raised hundreds of thousands of Bitcoin. Until this day, they have not released a viable product, but they still exist until this day because they have so much Bitcoin that they can just ride Bitcoin's increase in purchasing power. That would be my definition of a zombie company in the fiat system. The difference though would be that over time,

They either have to spend their Bitcoin, right?

or they will not actually provide any value and they cannot be bailed out because zombie companies and the fiat system, they can continuously be bailed out by centralized institutions that control the money printer. Whereas on a fiat standard, even if you are a zombie company that holds loads of Bitcoin and you just ride Bitcoin's increase in purchasing power, if you make a bad economic decision,

And if you spend your Bitcoins, you cannot be bailed out. So eventually the justice of the market will hit you. So that is the positive difference that I see here. Yeah. I mean, I agree with what you're saying about zombie companies, especially in the current environment. There's very little justice in that market. And we're probably getting a lot of shitty service and shitty products because a lot of companies are surviving on cheap credit and not...

maybe giving us the best deal in terms of being a consumer. But why is Bitcoin pristine collateral for lending? That is a question that I get asked a lot by real estate investors. And I think that is because for most real estate investors, a good type of collateral is a type of collateral that has cash flow, like real estate. But if you think about it,

A good type of collateral not necessarily needs to have cash flow, but it needs to increase in purchasing power over time to be able to decrease the loan to value ratio over time. So if you think about money in its essence and you think about what money was before the fiat system, take gold. Gold is a very good asset.

example of good money that I think helps to understand why money in its essence serves as collateral by default. So gold is a good store of value because it is limited in supply and it has certain properties like a certain divisibility, a certain mobility, fungibility and portability that allowed humanity to use it as a monetary network. And because

Gold is scarce in supply and it has these monetary properties that I explained. Over time, it increases in purchasing power. So if you own gold, you can go to someone and say, hey, I have a good business idea. I give you the gold that I own. You give me money. If my business idea works, I either pay your money back or I give you equity in the business. If it doesn't work, you keep my gold, right?

for the lender that's actually a good deal because if the business idea doesn't work out you have an asset that is worth as much as the money that you gave to the individual and it also compensates for the increase of the purchasing power of that money because gold is limited in supply and if it works out you either get a return on your money because that individual pays you back in

you know, a fixed yearly sum that you agreed on or because you get equity in the business. And I believe that getting equity in a business will also become more important on a Bitcoin standard. So now people just pay debt back by paying interest rates or paying interest rates and principal in the case of real estate.

But I believe in the future, people will lend against their Bitcoin and they will not just pay back in money, but they will actually pay back in equity because the risk is so large of obtaining credit on a Bitcoin standard. And the risk of giving out credit is so large as well, because Bitcoin is a near perfect store of value that you just need to hold on to.

that it needs to be more than simple money that you receive for giving out credit and Bitcoin. I think equity as a payback for credit will become increasingly important. Noah, I will answer your question. Why is Bitcoin pristine collateral for lending? So first understand an asset is pristine collateral for lending, not necessarily because it has cash flow.

but because it increases in purchasing power over time. And that naturally acts as a hedge against the outstanding debt that you have. As a lender, this becomes very important. You want to hold an asset that increases in purchasing power over time. And now there are different properties that Bitcoin has as a digital asset. Think about liquidation.

If you own real estate as a lender, it takes a long time to liquidate that collateral if you need to liquidate it. And it's very expensive to maintain. Bitcoin you can hold in a digital multi-signature wallet. It costs very little to maintain and it's very liquid. You can sell it immediately if you need to.

you can even program the collateral. Bitcoin is programmable, right? So you could say, if the borrower pays me back 30% of the loan, I will automatically release X amount of the collateral. If the borrower pays me back X amount of the loan after 10 years, I will release X amount of the collateral. So there's even programmability that you can program in into the collateral that will make

Paying back the loan and releasing the money much easier. Now think about security. It's much easier to secure Bitcoin. If you have a financial company, you always want to build resilience, right? If you think about longevity, I personally believe I wouldn't build a company without a 20-year time frame.

This might sound strange to most entrepreneurs because most entrepreneurs, they want to enter and build a company to exit the company and sell it. But I think that's a bit of a fiat mindset. I believe if you build a company that's profitable, I basically see it as a fiat, as a Bitcoin mine. So the reason for me to build a business is to obtain more Bitcoin.

it's not to make an exit and then just have fiat money. I want to accumulate Bitcoin over time and I want to build a business that allows me to do that. So using Bitcoin as collateral also, I think, plays into that because there's more longevity in the asset, both from the perspective of the borrower and from the perspective of the lender. And I want to talk a bit about the lender first, because this product can only exist

exist if a financial institution is, if a lender understands Bitcoin's role as pristine collateral for lending. As a borrower, it's very clear, as long as Bitcoin increases in purchasing power faster than the interest rates on fiat denominated debt, I just want to borrow against my Bitcoin because I don't want to sell my Bitcoin. So that's very obvious. But then the question is, why should somebody provide a product for me that allows me to do that?

And the reason is the following. If you are an entrepreneur and if you are a financial institution, you want to run on a resilient system. And Bitcoin is a very resilient system because it has volatility. And for fiat economists, volatility means risk. But if you understand that volatility over time breeds resilience, you understand it's actually a feature, not a bug. And I'll give you a very simple example.

the most successful organisms, right in the universe, take animals, for example, the organisms, the animals that rest are able to perform the best. And you can also look at human performance, the athletes that train the hardest and rest the best, are able to create the most resilient muscle structure. So muscles, they don't grow when you train to grow when you rest,

It's the same for any type of system, for monetary system like Bitcoin, the same rules apply. The reason why Bitcoin is so resilient is because the volatility fosters a certain economic behavior where players like Zeng Ben-Ming Fried and FTX that act maliciously, they are being penalized over time. They're being washed out of the market.

downward pressure also kicks out leverage and Bitcoin becomes more resilient over time. So once you understand that and you understand that if you hold as a lender, if you hold Bitcoin in your lending book, you will create the most resilient business infrastructure you can imagine because you build on the most resilient monetary network that ever existed. And now think about the purchasing power of Bitcoin. If you hold Bitcoin in your books,

and you are able to create a product that withstands the 70, 60, 80% drawdowns of Bitcoin, your lending book will grow very, very fast. Your lending book will grow as fast as Bitcoin will grow in purchasing power, right? So you actually want to give people money to buy Bitcoin that you then hold together with them in a multi-signature wallet,

because it allows your lending book to grow very, very fast. And it allows you to hedge yourself against any systematic risk in the fiat system. And I personally believe

Any loan should be dual collateralized with Bitcoin. And I give the example of a real estate loan. So now imagine this. Imagine you give out a credit of $10 million to a real estate developer. Why don't you give a million dollars extra on Bitcoin? So you give out a loan in total that is $11 million.

10 million, 91% of that loan will be allocated to real estate development as is done traditionally. But 9% of that $11 million loan, $1 million will be allocated to the purchase of Bitcoin immediately, right? So now the entity that constructs the real estate project and that holds the finished property will also hold Bitcoin.

So after five years, because on average, it would take around five years to a property to be finished from start to finish. After five years, the Bitcoin that is held in the same entity as the real estate project, that Bitcoin will most likely have increased in purchasing power because every four years, Bitcoin goes through a halving cycle where new supply is being reduced.

which usually leads to a bull market because less supply leads to a higher price and a higher price leads to more publicity, more publicity leads to higher price. And this creates this perpetual bull market then eventually crashes. But Bitcoin increases in purchasing power significantly every four years. So once the real estate project is finished after five years, the entity that holds the asset real estate

already has built this novel capital base through owning Bitcoin that can be used to lend against, to fund maintenance work, or quite simply to better the financial position of the entity that holds the real estate project. Because think about the balance sheet of a real estate developer. On the liability side, you have mostly debt, not only, but mostly.

And on the asset side, you have real estate, right? So what happens when interest rates increase? The liability side increases because debt increases. But the asset side, right? Bitcoin decreases for two reasons.

People are not able to obtain credit if interest rates go up. So there's less demand for real estate. And that means real estate goes down in price. So we can expect a market environment where interest rates will be around 3% going forward. So this has a negative effect on the average person.

a balance sheet of a real estate developer. But if you now add Bitcoin to the asset side of your balance sheet, you hedge yourself against that development. And from the lender side, you now protected yourself against the borrower defaulting on the loan. Because if we now let's play out a very dystopian scenario, worst case scenario next year, we are not going to have a bull market in Bitcoin.

interest rates remain above 3% and somebody drops a nuclear bomb. That is the worst case scenario that I can think of, but that's always a possible scenario that you want to hedge yourself. If a real estate developer that you today give out a loan goes bankrupt,

the Bitcoin that you also financed, right? They will increase in purchasing power over time, even if the borrower defaulted on the loan. So by giving out...

money to buy Bitcoin within a loan structure, the lender protects against borrower default. This is not just true for the real estate market. This is true for any type of market. And I quickly want to give an example. This is a real life example of a good friend of mine. He's also in the real estate business.

And he's also in the business of furniture. So he constructs real estate, but he then also, he's an architect and he will also sell you a house that's fully furnished. And he recently bought a furniture business that went bust. And that business is worth around 2 million euros. It was a business in Germany. So the business is worth around 2 million euros and the bank made him an offer. The bank said, we'll finance your purchase of that business with 300,000 euros.

But we want you to invest that money back into the growth of the business and we'll give you all the furniture the business owns, which is worth one, two million for free. We don't want the business to go bust. He said, okay, good deal. I take the 300,000 euro, I buy the business, but I will ask for $350,000 and with the additional $50,000,

He bought Bitcoin to hedge himself against that business going completely bust. So what he's doing here, he understands the systematic risk and the fiat system. And even though he's making a good deal, he hedges himself by getting some more capital and buying Bitcoin against that business going completely bust. So what I know also is,

I for any new development that we are doing, I'm trying to get additional capital. So I tried to infuse

any loan that we are obtaining now for real estate development with extra capital to buy Bitcoin so that we hedge ourselves against Bitcoin potentially draining the monetary premium that sits in real estate flowing into Bitcoin. We hedge ourselves against systematic risk within the fiat system. We hedge ourselves against inflation, which also drives up the cost of construction over time.

And we built this novel capital base, which is Bitcoin, that over time we can use to obtain credit, to fund maintenance, to fund further construction, or quite frankly, to maybe even buy more Bitcoin. Well, I mean, those are very effective strategies that you outlined to help real estate developers survive.

you know you know maintenance reserve safeguard cash flow by potentially taking converting rent into bitcoin buy the hedge diversifying by converting real estate profits into bitcoin uh or you know refinance as speculation shifts from real estate to bitcoin secure profits and future by reinvesting in bitcoin or taking out more of the loan and investing in bitcoin

So, you know, and those are reasons why every real estate investor should own Bitcoin. And that's one of your articles in Bitcoin magazine. And, you know, let's let's kind of maybe turn to the fun stuff a little bit then. You know, it's when does you know, I mean, I think it seems like demand for real estate is flattening. And maybe you could speak to maybe some of the social issues around that, like.

Why? Maybe, you know, do younger people want real estate as collateral? You know, can do they? How do they feel about real estate and the real estate business? Or what are some of the social issues in the headwinds of real estate? Yeah, yeah. Thank you for that question, because I think about it a lot. And I'm currently in the process of writing a book with the working title Digital Real Estate.

And the third chapter, the third and final chapter is really going into detail into how Bitcoin and the adoption of Bitcoin has second order effects for the real estate market, for the affordability of housing and for society, human action and human behavior. So I think that the use of real estate

as a store value and especially the use of collateral is actually very problematic. Obviously, because it drives up the cost of living, right? I mean, think about it. The average home in your area has probably increased maybe by two, 300% over the last 20 years.

which has made it increasingly difficult, especially for young people, to find apartments, look into most of the metropolitan cities. It's very normal now. You think about New Delhi, St. Louis, Bangkok, Berlin, Paris, London, New York. People usually don't even...

rent their own apartments, they usually rent rooms, right? They rent rooms because it has become too expensive to own a full apartment because living space has become a commodity, quite frankly, that people use to hedge against inflation. And I think young people, especially are, they have been priced out of real estate. It has become inaccessible because a single unit, if you think about

The average home in the US has a single unit. And you think about Bitcoin as a single unit. Bitcoin is much more accessible because it's highly divisible. And real estate is not. And of course, the tokenization of real estate is a try to make real estate more accessible. But I think that try will fail because you can just buy Bitcoin, which allows you to store value much more easily.

better than just owning a tokenized fraction of a building that you don't possess yourself. And also think about the demographic change. So think about birth rates. Birth rate, it's actually declining. And if you look at Japan in the 1980s, there was a crazy real estate bubble in Japan. Interest rates were extremely low and banks were even giving out more money than people needed.

to nurture the economy with fresh currency. And that led to a crazy real estate bubble. And that real estate bubble burst in the 90s and it never recovered. Why did it never recover? It never recovered because there's no immigration in Japan. So the Japanese, they are very...

their own culture is very important to them. So they are afraid of new cultures coming in and then affecting their culture in a way that they don't like. So I think net immigration in Japan is under 2%. But because of low birth rates, this also means there's no demand for real estate.

And there's a lot of abandoned real estate in Japan. So Japan is actually an interesting case because it is a Western civilization that largely follows the American fiat model, but real estate is not used as a store of value. They use bonds. They use bonds as their predominant store of value. And that is also why inflation is so high in Japan. Interest rates are always kept low. So the central bank

can buy its own bonds, right? They don't use real estate. So bonds in Japan are really the base layer as collateral for their financial system. And now look at North America and look at Euro. In theory, real estate should become cheaper because of declining birth rates, but we have immigration, which is a net positive. And I want to raise a point.

There's a lot of discussion around immigration and something that sometimes gets lost is immigration, generally speaking, is a net positive. So also talking as the grandson of immigrants that came into Germany, immigration is a net positive. But now I tell you when it becomes a problem. The problem is the following.

it becomes a problem when it's used as an economic weapon to keep a dying system alive. So in Germany, for example, and a lot of inner cities and a lot of the urban areas, there's less demand for real estate because of declining birth rates. There's less people living in Germany. There's less new people being born and there's actually less demand for real estate. But what is happening? Millions of people and

Hundreds of thousands of people are being brought in from outside of Germany and they're being allocated to certain properties so that the demand for those properties on paper does not go down because the rent of these individuals is paid for by the government.

And I know it because I see it as a landlord. I see where the rental income is coming from. And I can say around a third of the rental income by now is coming from the government. So around a third of the rental income of inner city projects, so-called social housing projects,

is being paid for by the government. So that demand is actually fake, right? Because the currency that's being used to pay for that rent is being produced and overall, yes,

We as a landlord, we benefit, but overall the economy is being penalized because savers are being penalized because the addition of new currency into the market actually means that outstanding units, savings, lose purchasing power. And it also means that the prices for real estate are artificially being held high

Because so many institutions in the fiat system are dependent on the price of real estate being kept high because they are themselves using it as collateral. If Bitcoin would be used now to store value instead of real estate and no immigrants would come in,

right, that the government then could pay their rent for the demographic change in the Western world, the declining birth rates would actually mean declining real estate prices, which actually would be a good thing. But because real estate has this very particular function as collateral, the key players in the fiat system

institutions, central banks, pension funds in nation states, they are not interested to see that drastic price fall in real estate because it would create systematic risk. And we could see and maybe look at 2008, look at 2009, the great financial crisis that happened in 2008.

And you see, it took maybe eight months for central banks globally to decide, you know what, we are going to print money like never before. We are going to buy bonds and we are also buying all the mortgages. Because think about the importance of mortgages. If you buy mortgages, what you are actually doing, you're propping up the prices of

the property that mortgage is being tied to. Because real estate today is a financial asset and you have to really look at it as an asset class, as a financial asset class. And that's why I think the demographic change is an interesting point because it should naturally lead to declining property prices. And I want to present a solution now here. Bitcoin is a solution. Think about it. You don't need to artificially keep up

real estate prices, just add Bitcoin to your real estate portfolio. This is true for the individual investor because you want to hedge yourself against any negative scenarios that could negatively affect the value of your portfolio. And if your portfolio is a real estate portfolio, it's very obvious what you need to do.

Use your cash flow, buy Bitcoin, refinance your portfolio, buy Bitcoin. If you have a new project, take out additional money, buy Bitcoin. So you infuse Bitcoin as a store of value technology

in your portfolio. So you benefit of Bitcoin nonetheless. You benefit even if the asset class of real estate does not benefit because you can use real estate right now with leverage to accumulate Bitcoin on a large scale, right? Owning Bitcoin is great, but owning a real estate portfolio that you can use now to then own a lot of Bitcoin is even better. But also if you're a pension fund,

And you understand that society is not just carried on the shoulder of the nation state, but it's also carried on the individual and on every business. Start dual collateralizing real estate with Bitcoin and you don't have to do it within the same product. Because if you think about it from a regulatory perspective, there's no point in bundling up the volatility of Bitcoin into Bitcoin.

a real estate lending product because it will actually introduce additional risk from the perspective of the fiat market. So you could actually also separate the two. If you own a lot of real estate, just start owning a lot of Bitcoin as well. You don't need to own it in the same entity. You can, but you don't need to. If you own real estate, you can. But if you are a regulated entity, a pension fund that has to play

within the fiat system that has to pay more attention to the regulatory body, the regulatory environment, just start accumulating Bitcoin as well. Because for the foreseeable future, I'd say for the next 20, 30 years, I definitely would say real estate will continue to increase in nominal value. Yes, if you do price real estate in Bitcoin,

it loses value in Bitcoin because Bitcoin is scarcer than real estate. And it actually increases in purchasing power faster than real estate. But if you just price this in fiat currency, there will be more

monetary debasement in the future because nation states, they need to create more currency just to be able to deal with borrowing costs. So we can expect the nominal value of real estate to continue to increase over time.

And we can also always expect that people have individual preferences, right? You and me, we receive the information that Bitcoin is a near perfect store value. We also chose to act on that information. Some people don't have that information and some people don't act on that information. So even though, yes, Bitcoin is a better investment than real estate, a lot of people will continue to invest

in real estate going forward. Yes, Bitcoin is a better investment than real estate, but people will continue to invest into real estate just because that's what they know. And that's because what they feel comfortable with. So due to individual preferences, there will be diversification in how people invest going on. It's just something I want to say. And it's important because if you are a pension fund,

You don't need to sell all the real estate that you own now to buy Bitcoin because that will actually bring you in a situation where you would run into regulatory issues. And I always make a difference between an individual that just owns Bitcoin, because if you just own Bitcoin, I would even tell you,

a different strategy where you don't need to mix it with any other asset at all. But if you are an entrepreneur that works in the real estate business, of course, I would suggest to adding Bitcoin and Bitcoin strategies to the existing business. And now if you're an institution that is very large and has to play by fiat rules,

You have to be smart and add Bitcoin to your business in a way where you can accumulate Bitcoin without running into too many issues. I love that. And another thing I want to touch on, how does Bitcoin...

make the financial system, especially around sort of home buying more private. I want to invite you to the first Bitcoin event of the new year. And that's Bitcoin Day Naples One Day Pleb Fest, Saturday, January 18th. You can meet other Bitcoin and Bitcoin Matrix fans and hear content from some of your favorite Bitcoin voices like Larry Lippard, Bob

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We'll kick off the new year in style, celebrate that 100k milestone and hang out with some of the best Bitcoiners on the planet. I'm excited to see you guys there. And now back to the show. Actually, thank you for raising the point of privacy, because it's something I should have mentioned also when you asked me about Bitcoin's role as collateral and Bitcoin's quality as collateral, because

Bitcoin allows for a more private financial system because in theory, you could lend money to an individual without receiving any information on that individual other than that individual's Bitcoin holdings and the address history. For example, I could ask you, please show me your Bitcoin address. And if you say, here's my Bitcoin address that holds 100 Bitcoin since 10 years.

I can suggest that individual is a trustworthy individual. He or she has held to Bitcoin for 10 years. He has never or she has never sold. And if we hold now some Bitcoin that you own in shared multi-sig custodian,

I actually, I can give you money. I can give you credit easily without having any personal information that could also then be leaked in the event of a data breach, right? Because you always create a honeypot of information when you obtain information about the individuals that get a financial service from you. And that is a real threat. Also, if you think about security and now, if you think about privacy,

The current financial system does not allow for privacy because of regulation. With every financial crisis that we go through, instead of saying, well, we need to make some changes to the way we run business, to the way our financial system is structured, what usually happens is more regulation occurs.

more KYC rules, more AML, any money laundering rules. But that just creates friction because think about energy, think about frequency. Information wants to move very fast, right? If I tell you something, you actually naturally have the urge to tell it to somebody else, right? And that is a good example for how information needs to move.

And value and money is information as well. If you think about what money is, money is actually information who owns what. If you go back into the Sumerian culture, which is the culture before the Babylonians and how they came up with money, they created inventory clay tablets for the inventory they held in temples. So they wanted to know how many cows,

How many bags of wheat do we own in certain temples? And they just created a registry. And then over time, numbers were developed out of that writing. So money really is a data bank. Who owns what? And if we now have money that cannot move freely, that is a problem because information wants to move freely. And if we now have money that is being regulated freely,

we will create an economic reality where we cannot discover our full economic potential. So think about it that we are actually living in an environment where we are almost, if you think about it, and this sounds very extreme to somebody that is not into Bitcoin and that has maybe grown up

within the regular fiat system, but it is a system of mental enslavement. And it is a system of economic enslavement because our economic power is tied to the ability to privately transact. So I think that the freedom of transaction should be as important as the freedom to say what you want and the freedom of speech, because both speech

and written text is information and so was money and so was Bitcoin. Bitcoin is information. So the freedom of speech should be applied to Bitcoin and I think the freedom of transact is something that should be as essential as the freedom to say what you like. For sure. Bitcoin is freedom money. You know, this has been awesome covering your pieces, especially that you've written in Bitcoin Magazine that are on your blog.

And one of your pieces is why every real estate investor should own Bitcoin. And we've kind of we've covered that, you know. So I'm going to flip it, though. So should every Bitcoiner own real estate? And I ask this from the perspective of, you know, let's say, you know, let's let's let's caveat or stipulate. There are some Bitcoins out there that have their three percent mortgages or they're paid off homes.

but maybe more about Bitcoiners who are thinking about their first home or who are renting now and thinking about renting versus buying and maybe getting back into their second home or whatever it might be. But when should Bitcoiners maybe think about buying a home or is it Bitcoin related or is it a personal thing, just wherever they are? I'm going to try to answer that question by just...

sharing some personal experience, my personal thought process. So until now, I don't, and this might sound strange to you because I'm a real estate investor, but personally, I don't own any real estate. I am involved in a real estate company as an employee. And I do have, in some of the projects that I work on, I do have some equity that in 20 or 30 years,

I'll be able to benefit from, which were given to me as an incentive to work on these projects. But since working in the real estate industry, I put all the money that I personally made through my income into Bitcoin. So I didn't invest into real estate alongside of Bitcoin. I never participated in real estate by putting in money. I only participated by giving my time and work and then

was given equity as a reward for doing that. So I think from an investment perspective, there's no need to own real estate. But now over time, Bitcoin has changed me in the way that I developed a lower time preference. So I really enjoy traveling. But I do also now understand the need of building roots somewhere and also having a family and having a home.

So the meaning of having a home completely now switched on me. So before I was looking at real estate as an investment and even I was looking into buying a real estate, a property, both as a home and as an investment. So I was thinking I'll invest my money into a place that I also can use as a home. But I was always thinking firstly of investment.

making an investment. And that changed. I put all the money into Bitcoin. I decided against putting my money into real estate and obtaining a mortgage in around 2020. Obviously, the best decision of my life. But now I start again to think about real estate as a home. And as a home, I think now I would like to own a place where I can build my roots. I live in a fairly small apartment, a 42 square meter apartment.

I literally put all my money into Bitcoin because I thought the opportunity cost of putting my money into real estate is way too high. And in 2020, the compound annual growth rate of Bitcoin was a bit higher than today. So I think it was 74% or 69%, depending on the timeframe. And I thought, even if I take out a loan, even if I buy real estate on leverage,

I won't be able to outperform Bitcoin. Plus, what I personally really like, I like to have my wealth mobile. And I personally have experience coming from an immigrant family that went both through persecution and through war and two times had to reset and had to start from zero. I don't want to do that. So one of the biggest fears that I have

A lot of the conversations I had with the friends of my grandfather. So some of the friends of my grandfather, they were doctors and investors, and then they had to fled their country because of war. They came to Germany and maybe they were architects that didn't have the proper license and they had to restart as a taxi driver. And I don't want to

denounce the job of a taxi driver at all. What I just want to say is they came from considerably wealthy background or successful, were self-made men in their 60s. They came to Germany and suddenly they had to work again, a job that they maybe worked when in their 20s, right, as a student. So I have a fear inside of myself that maybe in 10, 20 years, I have to start from scratch again.

And that is something that I don't have to do if I keep my wealth in Bitcoin. So the mobility of Bitcoin is something that really resonates with me. And it really allowed me to really funnel all my economic activity into Bitcoin. Because imagine that in the future, especially if you live in Europe, I know that most of the podcast listeners that you have, they come from the US and I can see also the statistics that

In my newsletter, I think around 70% of my readers are from North America, which is actually an honor to see people all over the world being interested in my content. But you guys, I think because of your right to carry arms and

and other reasons, you don't have to fear a military invasion or a totalitarian government. That is a fear that I have. A totalitarian government that suppresses certain minorities based on their ethnicity, their religion, or because of their political opinions, just confiscating property. And I know of very wealthy real estate investors

investors and people that own diamonds in the 40s and the 30s in Germany, they lost everything overnight. So that value proposition of Bitcoin is just so great. It's just such a great value proposition that you can hold your wealth in a digital asset that you can move

around the globe that you can move over your restrictions and you don't need to be in fear and you're not in danger of totalitarian governments wanting to steal from you. So that freedom aspect I think is so important. So Bitcoin really is what I use to build wealth. And I also in the past, by the way, I've even lent against Bitcoin to invest into Bitcoin companies

So Bitcoin is this great base layer that you can use to really become free and build true wealth. And real estate becomes a utility. It becomes something that you can own if you enjoy it. It's almost like art. I was listening to a podcast yesterday. Somebody asked, you know, for somebody that wants to invest into art,

What is a good recommendation? And then the individual said,

Just buy art that you love, right? You cannot, right? And that's the same with real estate. Now, if somebody would ask me, what is a good real estate investment? I would say, just buy something that you love. Don't think about the price. Think about something that you enjoy. And if you have a family, think about a place that your kids can grow up in. And if you want to build a business, think about the community space and think about it as an investment secondary.

I'm wondering if the guy you were listening to is Tad Smith, I think his name is, maybe from Sotheby's. Exactly. He'd be someone to be interested in or ask about art. Now, art's another category, but I think a lot of people when they're growing up or when they come of age and investing or maybe you're married to one of these kinds of people, they're the stock people and they're the real estate people. Equities versus real estate. And real estate tends to be more owner-operator, more sweat equity, more leverage-based people.

But I think there are two kinds of people, your equity maxis before they come to Bitcoin and your real estate maxis. And so I just have two more questions before we roll out. One, why is unit of account so important to real estate? I think it is actually the essential metric. If you think about any type of investment, it's the same actually for any type of stock.

And I have to say next to being a real estate investor, I would consider myself a value investor. So when getting into real estate, I was already into stock investing. I got into stock investing early and I read Benjamin Graham's book, The Intelligent Investor. Then I became obsessed with Warren Buffett and Charlie Munger and then Stanley Drunkmiller and Peter Lynch.

And even though I don't like his persona, even George Soros, I looked into his way of thinking and I really dislike his persona. But something that he said is first invest and then investigate. And that's what I did with Bitcoin. So when Bitcoin came up, I first invested and then I investigated, meaning I just put in some money because I intuitively felt this is interesting. And then I really looked into it. But

I predominantly invested in stocks because when I got into real estate in 2017, real estate was already inaccessible for me. So I understood if I want to build wealth, I need to invest. So I invested in stocks for almost a decade.

And then I understood that actually Bitcoin and MicroStrategy is the best value investing I can make. Because if you look into MicroStrategy 2022, look at the Bitcoin they own, then project what those Bitcoin should be worth going forward. And then look what MicroStrategy was worth. It was worth $19 at the time. So as a value investor, I thought,

I'm going to exit every single stock I own and I'm going to go all in on Bitcoin. I'm going to go all in on MicroStrategy. So coming also from a value investor mindset, I think it is quite plausible to understand and invest in Bitcoin and MicroStrategy.

And now talking about the unit of account. If you look at your wealth, it doesn't matter if you invest into art, if you invest into equities, if you invest into real estate, or if you hold your wealth in gold and bonds. You need to think about how you measure that wealth, right? If you measure your wealth in fiat currency, your wealth goes up in nominal value with inflation.

If you measure your wealth in gold, it already looks different. So if you measure real estate, for example, in gold, which is scarcer than the dollar, for example, it doesn't increase in value as fast, right? Because gold doesn't increase in value, sorry, in amount as fast. So yes, if you hold real estate,

You become wealthy in nominal terms because you become wealthy with the monetary debasement that's happening. But if you actually think about it, it's not the asset that you own that grows in value. It's the unit of account it's being measured in that is losing purchasing power.

But now if you value your wealth in Bitcoin, that is how you can truly measure your wealth because Bitcoin is an absolutely scarce unit of account. There's a limit to how much Bitcoin can be produced. There are 21 million Bitcoin and that's it. That's the cap. So I believe Bitcoin

It's not even worth measuring your wealth in any other unit than Bitcoin. And that's personally what I did in 2020. I looked into all of my investments and I own some gold that I inherited from my grandfather who lived through the second world war. And he told me,

Real estate is a good inflation hedge because you already understood the dynamic of the fiat system because he was born shortly after the Weimar Republic when Germany went through a stage of hyperinflation from 1918, 1919 to like 1923. The Germans produced so much Reismark that the inflation rate was a couple of hundred thousand percent. So he understood, you know, if you own real estate, at least you're hedged against

monetary debasement, but he said own some gold as well. So he gave me some gold. And I respect his opinion a lot, because he went through a world war. And my other grandfather, as I said, has this immigrant story. So they both

taught me certain financial skills that now helped me to become a Bitcoin and utilize Bitcoin properly. But I still, I sold all my gold, I put it into Bitcoin because I understood Bitcoin is digital gold. It's superior. Then I looked at my stocks and I said, okay, my investment thesis from around 2015 to 2020 was I want to invest anything that has a network effect. Alibaba, PayPal, Facebook,

MercadoLibre in South America and Bitcoin. So those were the investments that I made because I said anything that has a digital network effect will grow exponentially and it will outperform any other company in the S&P 500 or in any other stock market. But then in 2020, I said,

it's not just any type of network that I want to own. I want to own Bitcoin because it just, it not just has a network effect. It has the effect of being a monetary network with an absolutely scarce unit of account or currency that's part of the network. So I said, it's going to outperform MercadoLibre. It's going to outperform Alibaba and it's going to outperform PayPal or Facebook.

any of these other monetary network because these networks are all denominated or the stocks of the companies of these networks, they are all denominated in the dollar. But the dollar is being debased every year. So even if they perform very well, I have to deduct the rate of monetary inflation from the performance of these stocks. Once I did that, I realized Bitcoin outperforms them by almost 60% a year. So I sold all my stocks

and put them into Bitcoin. But then as a real estate developer, I still have to have credibility in the fiat system because personally,

I told you I didn't invest into any real estate, but I am part of some companies that develop real estate, right? So my credit worthiness in the fiat system still plays a role in my existence because I have an existence both in the fiat system and as a Bitcoiner. And then I thought to myself, I do want to sell all my stocks and put my money into Bitcoin, but I need to own some stocks because I need to have some credibility, credibility

in the fiat system because banks every couple of years ask, hey, do you own any stocks? If you want to refinance the real estate that you are involved with. And then I basically had the idea, I just invest all the money into Michael's strategy instead of owning any other stock. So I think if you are a real estate developer, maybe this is something that you have in your mind

You think to yourself, yes, I understand. Bitcoin is the superior store of value, but I need to be able to obtain credit in the fiat system. And yes, you can do it by owning real estate, but maybe you can also own a proxy on Bitcoin, which is MicroStrategy. At this point of time, we think there's a lot of risk into owning MicroStrategy because MicroStrategy and the price of the stock is tied to the Bitcoin price.

And it's very important to understand that Bitcoin will go to a bear market. And that's important and essential because resilience is built in times of rest, both

for the individual, for an organism and for an asset, right? The fiat system has systematic issues because it does not go through short term volatility. Whenever the system experiences volatility and assets come down in price,

Money is being funneled into the system to proper the prices of these assets because the systematic risk can actually lead to a complete destruction of the system. Bitcoin is different. Every couple of years, Bitcoin goes through a bear market. And that's very important because it takes out the leverage in the system and it takes out malicious market actors and it builds resilience.

So I do believe that let's assume that this bear market will be similar to the bear markets we've experienced. We can have another three to four months of strong price action in Bitcoin.

And we can have another three and four months of strong price action and micro strategy. It can go up to $700, even higher, but it will come down again. And it will eventually, sorry to say this to any holder of micro strategy. And I will be interested in your opinion as well, because I know that you are a holder of micro strategy and I will buy back after.

But I see MicroStrategy coming down as soon as Bitcoin crashes. Maybe this will be November or December of 2025 at the end of the 18 months that follow every halving. And that usually go, you know, the 18 months that follow a Bitcoin halving.

These 18 months are usually the Bitcoin bull market, right? That we know and it happens every four years. But at the end of every Bitcoin bull market, usually in November or December, it happened in 2013. It happened in 2017. It happened in 2021. It will hopefully happen again to make Bitcoin.

Bitcoin more resilient and take out some of these malicious actors that are now coming into the Bitcoin ecosystem. Once that happens and Bitcoin crashes from $150,000 or $180,000 to, I don't know, $120,000, $100,000 or $80,000, the MicroStrategy stock will also drop in price. This is something I want to say because

Sometimes in podcasts, I hear people talking about MicroStrategy and the strategies that Michael Saylor so brilliantly is basically laying out. And I follow it with great interest as well. And I only have a portfolio that consists out of Bitcoin and MicroStrategy. But I just want to say right now we are higher up the risk curve.

We are already in the early innings of the bull market. There's more room to growth here. But just be aware, volatility is coming. And there's also the potential of a short-term crash. We will just give you more time to accumulate more. Yeah, I mean, I think I agree with everything you're saying. I think, Michael, I think...

You know, it's, you know, securities and bonds. It's like a third rail in the Bitcoin space. I think that securities and bonds and all these things will will exist in a Bitcoin standard. There'll be financialization of Bitcoin. It'll just be different. Maybe it won't be fractionally reserved. I think Michael Saylor is building the greatest security or engineering the greatest security security that's ever existed. But, you know, if if my

Bitcoin experiences tremendous volatility, maybe net positive, but in the short term, massive volatility, MicroStrategy will experience more volatility and people might not be prepared for that. I don't know if we will see major drawdowns in the future. The scenarios you described to me, I wouldn't feel like are major drawdowns, like 180 to 120, but do we go from 800,000 to 120,000?

I don't know if I see that in the future. I think we have a limited data set behind us. I think the major drawdowns are more like 500,000 to 300,000.

And I think for Bitcoiners who have been involved a long time, I think those things will be kind of weatherable. But those will be exciting for new entrants and things like that. And I think MicroStrategy, you know, comes with all sorts of risks that Bitcoin doesn't come with. It's got a greater volatility and it's got counterparty risk and all sorts of things. But it's very exciting what he's building.

this conversation has been incredibly dope leon this has been unreal um you know it real estate is sort of another third rail and uh you know a lot of bitcoiners are maybe even married you know got husbands or wives that are real estate maxis you know and um maybe they're bitcoiners as well but real estate is near and dear it gives security it gives it's a home a lot of people think of it as a home you

You know, you can argue about property taxes and repairs and maintenance and all these things that kind of drag on it. But it's where you raise your family, whether you homeschool or use public schools or private schools. It's where you're situated. It's where you build your community. It's your it could be your village. So a lot of people want to lock that down. They don't want to be subjected maybe to a landlord telling them when to come and go. Maybe the lease is over or, you know, things like that.

There are benefits to, you know, I think, you know, one of the things I like, I rent. One of the things I like as a renter is I don't have to do the repairs and maintenance myself. And it doesn't take up as much of my time. But I will be looking to buy a home soon. It's, you know, I want to...

I love where we live, we're living and you know, you want to place roots and you want the kids to have their lifelong friends and things like that. And so you got to figure that out. So this has been awesome. I think one thing we'll tease.

is maybe that you've been kind of saying Bitcoin mining can energize real estate. And I think that's a lot of something for a lot of people to think about how they can incorporate, you know, proof of work and hash power into the real estate equation, sort of how you were talking about leverage and financing. So I'll leave it to you for any final words and let people know where they can find you and your work. Thank you for having me on.

I really enjoyed this conversation as well. And it's great to see that more and more smart money, I call it smart money, from the world of real estate is maneuvering over into Bitcoin. And they bring with it a lot of skills that we can utilize in the Bitcoin ecosystem.

And I think that also Bitcoin as a tool can energize real estate. And I just briefly want to touch on what you said. And maybe that's time for another discussion and people, if you want to read about it.

check out my newsletter on leon.vancom.subset.com where I have an article on how Bitcoin mining can energize real estate and a problem that we faced when the war in Ukraine started. I think it was the 23rd of February in 2023. What happened immediately was that energy costs, they went up significantly.

So we were paying up to 40 cents a kilowatt for a short amount of time in our properties. And I had to find a solution basically to deal with these energy costs. And one solution is solar. You can build solar on every roof, of course. But the problem with that is that in Germany, you have around 15 to 20, 22, 23% of sunlight

on an average base on a day a year. So it's not a very effective strategy. But now what you could do, you could use Bitcoin mining and you use the excess heat to heat apartment buildings. Or what you could also do, you build solar on the roof and whenever you

there's no capacity for the electricity that you produce. You funnel it into Bitcoin mining. And because there's little sunlight throughout the day, it's not very profitable to operate solar panels. It becomes profitable when you add Bitcoin mining. So when you add Bitcoin mining into the equation, renewable energies of which solar is one strain becomes more profitable. So Bitcoin mining really allows you

to energize properties, to cut down costs on energy, and to potentially also create additional revenue. There are some details depending on the jurisdiction you are in. It might be classified as a commercial activity and doing commercial activities might influence tax advantages of holding real estate. So I go in through the intricacies and the details in my article if you want to learn about it.

But just think about it. If you own real estate, even if you own an apartment, think about incorporating Bitcoin mining to save on costs, right? You could potentially also create an additional revenue stream. If you operate real estate in a country that has a lot of sunlight, place some solar on the roof, use it to mine. And use also the energy to heat your building. So I think in the future, as we go forward,

apartments might be heated by ASICs and the inclusion of mining into more complicated physical infrastructures will become more relevant. And I think that, think about it, Bitcoin mining now is a business model where there are publicly traded companies that raise capital, that employees, and there are individuals with cheap access to energy.

But at some point, mining will only be profitable if you actually have energy that's almost for free. So you need to have an energy source where energy is almost a byproduct that you can use to mine. So I think that going forward, energy companies, they will mine by default. They will use mining as another revenue stream.

And it's the same for real estate. If you operate real estate, think about real estate as a fiat mine. Any business is a fiat mine. But think about it now. Change it. It's a Bitcoin mine, right? It's not a way.

to mine fiat, it's actually a way to mine Bitcoin. This is also true for business switch your mindset, a business is not obtain a way to obtain fiat, it's a way to obtain Bitcoin. And now optimize any strategies that you pursue to receiving Bitcoin. Within real estate, there are certain financial strategies that we talked about

which include use the maintenance reserves, the cash flow to buy Bitcoin and build maintenance reserves, refinance your portfolio, include Bitcoin at the beginning, obtain additional capital in real estate development financing. And now secondly, if real estate is being priced by being used as a utility object, think about it as a tangible object. Think about it as a tangible object and include Bitcoin mining,

Because what I personally believe, as somebody coming from the building environment, I think Bitcoin is so interesting because through proof of work, it is tied to our physical reality. And it brings so much benefits to our physical reality. It's energy money. And real estate also is a tangible object where the costs are tied to energy because turning on the light is very energy intense.

Wanting water is very energy intense and heating your building is very energy intense. And Bitcoin mining can help you to both save on cost and potentially create extra cash flow. Yeah. Oh, man, Leon, this has been awesome. I love all the applications for Bitcoin mining in the future. Maybe they'll be in every appliance. Hopefully that'll be a way to decentralize Bitcoin mining and hopefully it won't be as centralized as some of us fret about. This has been so dope. Please let people know where they can find you and your work.

Yes. Thank you for having me. You can find me on Nosta, at Leon Vancom. You can find me on X. And if you want to find my reading, you can find me on Bitcoin Magazine and leon.vancom.substack.com. That's my newsletter where I share a monthly piece. Thank you so much, Leon.