CJ Konstantinos - Bitcoin Bonds Will Change Everything
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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 CJ Constantinos, who is all in on Bitcoin as pristine collateral and the ultimate reserve asset for the internet economy. CJ is fired up about strategic Bitcoin reserves and Bitcoin bonds, calling them game changing tools to fix negative real rates,

rescuing failing pensions and creating a more sustainable economy. In CJ's eyes, we stand at a historic turning point. These innovations aren't just solutions. They're the key to restoring trust and securing America's dominance in a rapidly unfolding Bitcoin-driven future.

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 few 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 Larry Lepard, Bob Burnett, CJ Konstantinos, Maddie Ice, Nico, and Carly Benson will be there, and others like Michelle Weakley, Charlie Shrem, Paul Tarantino, and me.

Your ticket is an 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 Bitcoin Day IO and typing in promo code MATRIX at checkout. 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 the YouTube channel.

And if you want to get in touch with me, it's Cedric at the BitcoinMatrix.com. And now let's enter the Bitcoin Matrix with Bitcoin OG CJ Constantinos. What is real? How do you define real? You can't jump into cash. Cash is trash. What do you do? You get out.

CJ Constantinos, welcome to the Bitcoin Matrix podcast. How are you? I'm doing well. Thank you, Cedric, for having me. It's great to be here. Yeah, man. It's great to finally sit down and chat. You know, if I put up on Twitter or what we call X now, who should I bring on the Bitcoin Matrix? What guests do you want to hear from? And I guarantee, and I've seen it, you're one of the most nominated people in those threads.

People love hearing from you. I think in a lot of ways, and I say this as a compliment, you're underrated. I think people really get a lot of signal from you, and so they wanted me to bring you on the show. And I've been looking at your account for a while and loving what you're putting out. So I'm excited about this. And we got to meet briefly in Miami at Bitcoin Day Miami. But in about a month from now, from when we're recording, we'll be in Naples together at Bitcoin Day Naples.

Yes, that's right. Along with a bunch of others. Let me pull that up actually right now. Yeah, I'm looking forward to that one. We're talking about it.

Yeah, me too. Actually, I really enjoy Bitcoin Day Naples immensely. It's kind of got a lot of the appeal of the smaller, more focused conferences. And you really, you know, it's a great group, not too big. And you get to be really close to the panels. And there's a lot of off the side, on the sidelines kind of chatter and reconnecting with people. So, yeah, I enjoy it immensely. That's where I first met you at Bitcoin Day Naples.

But briefly. And then later at Bitcoin Day Miami, we finally did some talking. But I also had the chance to meet Lawrence Lepard at Bitcoin Day Naples. So it's amazing the lineup that they produce and have.

You know, it's really cool. Larry gave me like 15 minutes of his time, the first time ever meeting him. And it's just like an amazing experience how open Bitcoiners are. It's such an important piece of the network. Well, that is true. I mean, that's where I met Lawrence or Larry Lepard myself for the very first time at Bitcoin Day Naples, maybe two or three years ago. And he gave me his card and said he'd come on the show. And we've done two shows together and they're both in my top five.

He'll be there again this year alongside Bob Burnett, who Bob and I are launching a couple of projects together that I'd love to share with you guys shortly. Charlie Shrem will be there. I just actually got to meet him for the first time in person a few weeks ago at dinner. You'll be there. Nico will be there, of course, from Simply Bitcoin.

Myself and lots of, I mean, just other fantastic guests like Danny Condon, Chris Sullivan, Maddie Ice, Paul Tarantino, Rosa Shores, Jackie Price, Michelle Weekly. So, I mean, they're adding guests all the time. And it's an excuse to go to Florida if you're not local or just come from different parts of the state. So I can't wait to that.

And kind of maybe segueing a bit, I'd love to hear a bit about your background. I mean, you're a fellow Floridian. I don't know if you're from Florida, but what is maybe your background before Bitcoin? Yeah, so I actually grew up in New Jersey. I graduated high school in New Jersey, and I decided to come to Florida to play hockey to get the best of both worlds. I was tired of the snow and the ice.

So when I got a chance to get the beach, I said, all right, I'm going to take that opportunity. And so that was a fun experience, but it brought me down that same pathway that so many Americans are forced to go down right now, chasing a degree, chasing a higher number salary just to try to get ahead in life. And I...

I have a very similar experience to many people that entered into Bitcoin. When you first find it, you have no idea what it is, but you're going to be the best, smartest trader in the world because this thing goes up and down. You just have to click a button a few times and you'll be a millionaire. And it was amazing. I started buying Bitcoin like at $150. I watched it go up.

all the way up and then come all the way down. And then that's when my journey really began, which is similar to many, many people who get into Bitcoin. And that's what brought me into mining and getting into the mining was an absolutely, I think that was just a, that changed the game for me, understanding Bitcoin

how proof of work consensus works, understanding the I've never heard of the difficulty adjustment. So then fully understanding the difficulty adjustment and the role that it plays in price discovery and how a node works and how nodes trust nobody so that anybody can trust everybody. And it just sets up this ledger, this perfect ledger of truth. And that's when the when that light bulb went off for me.

I just was chasing after it because at that point in time, coming out of school, I was getting into a lot of conspiracy theories, you know, like 9-11. And, you know, friends don't want to talk to me anymore. I'm questioning things that they don't want to think about.

And then you finally start to land on some of these truths. And Bitcoin was like one of the most powerful truths that I landed on out of everything because it could be verified. You don't have to trust. You can verify some of these other things. We have strong beliefs about what the truth is, but we still can't verify the truth to this day. But Bitcoin verifies the truth every 10 minutes. And that's something that you can build an economy on top of. That's something you can build a system on top of because when you have a foundation of truth,

You're built on the rock. And when the storm comes, it's not going to get washed away. But if you build that house on the sand and the storm comes, you get washed away. And that's what we see in fiat right now. We've built our house on the sand. So when the storm comes, we have to print money and build walls to block that storm from hitting our city. Because if it hits, everything will collapse. And that's what's so amazing about where I see the marketplace going right now. In my time, I've watched Bitcoin start out as digital gold stock.

into the reserve asset of the internet economy and then, you know, pristine collateral now with it being fused into traditional debt products. This is, to see this happen over 15 years is just mind-boggling, especially for those who understand the history of money and how we went from

C-cells and all the way up from the barter system through monetization of gold and then financialization. These things took literally hundreds and even thousands of years to take place. Bitcoin is doing what they did in 15 years. And it's being built on top of the Internet, which did the harder part and grew at a slower pace. So Bitcoin is even growing faster and Bitcoin adoption is taking place faster than the Internet.

adoption did. So the acceleration that we're seeing into this, this new age of technology is just baffling, especially within 15 years. So and I think the next 10 years, it won't even be recognizable. Yeah, I agree with what a lot you're saying. I like how you kind of unpacked it there. You know, I'm from New York myself.

When my parents finally decided to leave New York, they asked me, what do you think if we moved to New Jersey? I said, I would never visit you again. I'm just kidding. So they chose Florida, which lucky for me, years later, I fell in love with it myself. But I get what you're saying about coming across a difficulty adjustment and things like proof of work. These were all new concepts to me. Cryptography wasn't a new concept, but it wasn't something I'd studied before.

Difficulty adjustment is kind of funny because it's kind of like a thermometer, but just how it's used in the Bitcoin sort of engineering ecosystem is novel and fascinating. You speak about 9-11. I was in New York City on 9-11. And actually, months before that day, I worked in the towers. I used to work on the 94 Tower 2 tower.

And similar to yourself, you know, I question things like 9-11 or what you see in the sky with the clouds or just anything. And just to be able to, you know, it's interesting to ask the questions doesn't even mean, in my opinion, that you have an interpretation. You know, you're just like, this doesn't look right to me. And then a lot of people, to your point, just don't even like the questions. Yep.

And Bitcoin is really interesting because you actually find this truth machine and you can know maybe more about it than someone else and ask questions and they can ask questions, but you know, like the answers like, you know, we've debunked a lot of things over the years with Bitcoin. But, you know, it's like you can't really debate sort of how the parameters of the system are built.

how it's engineered. It's the one thing where they say, prove it, and then you can. Right. They might not put in the work to understand how you've proven it,

But it's provable. And it's audible, which is brilliant. It's a fantastic ledger. So let's talk a little bit more about that. I like the way you kind of explained this concept. But how do you think of Bitcoin as the reserve asset of the internet economy? Yeah. So I've been a DeFi market maker for quite some time now. And it always like...

intrigued me because once you find your digital gold in the earlier years there were no ways to turn it into a collateral so once we had some tools around bitcoin that would help it and transform it or evolve it into a collateral with decentralized finance that piqued my interest because the counterparty risk being a smart contract i think is pretty interesting and i think

For those of us who were involved early in ETH, the thought was never that ETH would ever compete with Bitcoin. It was there to complement Bitcoin. It was a smart contract infrastructure to facilitate contractual agreements with Bitcoin as the main focus. It was not until later that Ethereum started doing some

And started saying that we are money instead of gas and that they started messing with the supply because there is no limit and they could just continuously inflate. So they wanted to burn some off in order to balance that mechanism. I mean, you see all that's all this is volatility. Bitcoin has been nothing but stable since the beginning.

So Ethereum is displaying when you have that type of centralized system, the instability and policies and application of those policies and even changing of narrative. Bitcoin's narrative has been a natural progression from the digital gold to the pristine collateral and now the reserve asset of the internet economy. And…

I call it the internet economy because I feel like in the – there's this real-world economy, right? It's the traditional yield curve. It is stated interest rates, so it's socialist interest rates with price controls. So people have to understand that when you – interest rates are the price of money. So when you state the interest rate, you are actually implementing price controls on money, and that causes a lot of the issues that we have today. That's why –

People like PIMCO are exiting the bond market. I saw an article recently where PIMCO is – they're changing their strategy. There's opportunities elsewhere. And the reason is because they're starting to realize over the last 10-year period what's happened, especially because of what happened in 2020.

All of the real rates of return on these bonds have turned extremely negative. Like in some cases, they're double digit negative in real terms. So you have a business, you can fool a person, but a business who has like a 10 year plan and says, Hey, you know, with a 10 year note at this rate, we'll be able to build two warehouses here. And then in year nine, they meet and it's like, we need more money. We need to allocate more money if we're just going to build one warehouse. And it's like,

What? Who do I need to... Who's getting in trouble here? Who's getting fired? Who made the mistake? But it wasn't anybody's mistake on the team. It was the abuse of the currency system by the government through issuance, unlimited, almost unlimited helicopter money, right? So people forget we're in the helicopter money phase. The government printed money and just sent it to you. That always marks the end of a currency life cycle. So we're coming to a fork in the road here where...

If we don't do something, if we don't innovate, if we don't create new revolutionary products, if we don't adopt Bitcoin and fuse it with

with our debt, if we don't put it on the asset side of our balance sheet, then liability growth is going to continue to outpace asset growth. And eventually, trust will be lost. And when trust is lost, we will transition from inflation to hyperinflation. So we have a chance to avoid that. I always thought that we would not have a chance to avoid that. When I first learned about Bitcoin, my thought was that this is inevitable.

But now with the maturation of Bitcoin from digital gold to pristine collateral to now the reserve asset of the internet economy, which I will jump into in a second.

But the maturation of it and the integration and fusion of it into the traditional system is actually the godsend that we need because no matter what the Fed decides to do, they can go left or they can go right. If they want to raise interest rates, net interest expenditures are going to go through the roof. We're going to need more inflation. Costs are going to go through the roof. It's going to push prices up throughout the economy. We're going to need more inflation.

If they go and they lower, then all the trillions of dollars sitting on the sidelines is going to rush back into goods, services, and assets. And we're going to have inflation. So it doesn't matter which way they go. They're stuck. But now at this fork in the road, we have a golden path, a golden pathway in the middle with a big Bitcoin shining. And all you have to do is embrace that Bitcoin and step onto that path. And we have a Bitcoin future. And it'll look like El Salvador.

The IMF is trying to loan money to El Salvador again. Why? Because they're one of the only countries in the world whose asset side of their balance sheet is outpacing the liability side of their balance sheet. That's why. Because they're taking the dollars that they're earning through taxes or earning through growth and reinvesting them in Bitcoin.

And then Bitcoin's compounding annual growth rate is performing at a rate and pace that the economy can't perform at, that their land, labors, and material can't perform at, that their natural resources can't perform at. Like they just found a whole bunch of gold, but they'd have to invest hundreds of billions of dollars of gold and take a long time to pull that gold out and liquidate it and turn it into Bitcoin.

But when they get Bitcoin, they have immediate liquidity and they have immediate growth and immediate value added to their balance sheets. And it's immediately accretive. And now the JP Morgan and the rating agencies, they're forced to increase the credit worthiness of El Salvador. They're forced to do it.

And that's what will happen here in the United States. The United States government cannot borrow money and create a deficit budget and then take that deficit and spend it into the economy and get more than a dollar's worth of growth. They're going to get less than a dollar's worth of growth. They're going to get less than principal plus interest returned on investment. Well, they can't put it into housing because that will make housing prices go up and you have a bigger affordability crisis.

And they can't put it into natural resources because it takes hundreds of billions of dollars and a long time to liquidate those resources and bring to market.

But now the magic golden pathway, this magic internet money, you can embrace Bitcoin, put it on your balance sheet, and for every dollar you put into it, you're going to get more than a dollar of return on investment. And this is going to allow the asset side of your balance sheet to outpace the growth of the liability side of your balance sheet. That introduces – that reintroduces the idea of sustainability.

And that's what we need here in the United States. We need sustainability. We need to rebuild trust within the system. It's a very clear trend that trust in government has been going down, especially since 2020. It's accelerated. But with

The adoption of Bitcoin and the integration of Bitcoin into our economic and monetary and fiscal policies, we can rebuild that trust and that Ray Dalio arc, that famous arc that goes up and comes down every single time on every country before. I think for the first time ever, we have a chance to restrengthen our currency.

As long as we embrace Bitcoin as money and we accept that dollars are currency and not money, and there's a difference between the two, but both are financial tools. Money is a store of value and a medium of exchange. Currency is not. Currency is a medium of exchange, but not a store of value. You can't save in it. So if we embrace that fact and we use both tools at the same time, that Ray Dalio arc is all of a sudden going to shoot back up for the first time in history. And we're going to get the chance to take the lead

in that internet economy. And I know I keep going here, Cedric, but I did want to dive on this internet economy because that was your original question. But now I've laid the groundwork for you for why on this pristine collateral and how it's working and how it's benefiting. And because it's working, this whole domain is being monetized. It's being adopted and monetized by the powers that be. And they're doing that and it's solidifying the internet economy. And the internet economy is an aggregate economy of the world. No one country or people or person can control it

And no one country or people or person can outperform it because it's an aggregate. And nobody can state the interest rate in the internet economy. It is a free market interest rate with Bitcoin as the reserve asset based on the supply of money, the demand on loans, and the perceived counterparty risk.

So this is the only economy in the world that offers free market interest rates on its money or on its reserve asset. And it's now out-incentivizing the socialist price-controlled stated rates of the traditional economy, which means market makers are embracing it and requesting regulation and wanting exposure to the marketplace because it turns out, as USA capitalists would have already known, that free markets are always more profitable, better, safer than socialist-controlled markets.

That was tremendous. So I want to kind of expand on that. And I'll ask this in a one-two punch, because maybe you touched on the first part, but I want to ask it because maybe there's more to elaborate there. And we can kind of look to the second part. So why are U.S. treasuries losing their place as the world's reserve asset? And

If that's so, can we live in a world with a strong dollar and a strong Bitcoin?

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I think we should want to. I think our goal should be to live in a world with a strong dollar and a strong Bitcoin. And I know some people get mad about that. But let me be clear. I'm a Bitcoin maxi. Bitcoin is money and nothing else can compete with it. And anything trying to compete with it, I believe, is a scam. But there are going to be systems, both decentralized and centralized, built up around Bitcoin that are going to help financialize it, that are going to help monetize it, just the same way real estate has been financialized.

Now, what happened to real estate is that we financialized not money but one of the hierarchy of needs that we need in a home. And homes become less affordable. Michael Saylor makes a great point on that when he speaks about the rich people who are land banking. And that pushes up prices. They're eating up supply because they're just trying to store their value. Well, now they didn't really have that prime value store asset because the smarter ones, they did land banking instead of government banking.

Because the real rate of return is negative. That means that the real rate of return is in terms of purchasing power. So if you're getting 5% from the government, at the end of the year, your account's going to have 5% more money. There's no doubt. You're going to get it. That's guaranteed by the full faith and credit of the U.S. government and the printer that they control. The risk has become when I get paid that money after 5 years or 10 years or 30 years, what am I going to be able to buy with it?

And that is what has changed the dynamic between the people, the big buyers, the big bondholders who are trying to store massive amounts of wealth. They've asked that question, what am I going to be able to buy with it? And unfortunately, because of the way of the centralized control system and management, prices are now outpacing the growth of wages and savings and the purchasing power value of the dollar.

So you might have got paid that 5%, but when prices go up 10%, you're buying negative 5% stuff. You have a negative 5% increase in your purchasing power, which means you're going to buy less goods and services, which means the quality of your life and the standard of your living are going to decrease.

And that negative real rate of return is what the whole world is really waking up to. And I think a lot of them already knew it, which is why real estate has been financialized. But now it's creeping down into their businesses because they can't even make business plans because the rate of the devaluation is nowhere near the headline CPI. So most people calculate the real rate of return by looking at the government's headline CPI and deducting it from the APY they're getting on whatever debt instrument they're holding.

However, that headline CPI, now that it's substitution-based, is not accurate to prices. And a lot of people will say, well, you can never be accurate to prices because it changes with each person and each person's consumption. Okay, that's fine, but you can be more accurate to businesses. So when businesses have a fixed marginal cost of production and that cost of production goes up,

Unless they raise their prices, then their profit margin shrinks. So they can only let that marginal cost of production increase so much before they're forced to raise their prices. And they're the ones who have to consume energy and different types of goods and services throughout the world in order to build their product or service. So it's inescapable when you see this push, this cost push inflation. Sure, there's a demand push inflation, which is what we talked about earlier. If the Fed lowers interest rate, all those people incentivized inflation.

By still negative interest rates, I guess they didn't think it through, but all those people incentivized to save with negative interest rates are now going to have even more negative interest rates and that will push them back into the market. And that's going to be a demand on the existing supply of goods and services in the market. And that demand pushes up the price and the supply demand curve.

but simultaneously when you have the devaluation of the currency you're getting that cost push because it's also the cost that needs to be pushed the consumer it's not always demand and this is this is perfectly seen in venezuela they had a demand destruction campaign that destroyed the entire economy nobody really needed or wanted anything except food and water but prices still went up because the source of inflation was not from the economy but the abuse of the currency and that's kind of

kind of where we're stuck right now. So it's exciting to see Elon getting in there with Doge because if we have the Department of Government Efficiency who is able to reduce the deficit, cut waste, cut fraud, and shrink the pace of growth on the liability side of the balance sheet, and then at the same time, we're able to adopt a strategic Bitcoin reserve

and start putting Bitcoin on the asset side of our balance sheet. We are now doing everything that we need to be doing to change the trend of trust and to start to rebuild trust within the marketplace to let people know, hey, we are taking the right and proper steps to not keep extracting value

so that you lose purchasing power. We're here to restore that purchasing power, to build up our creditworthiness, and to gain back the trust in the marketplace that not only through the abuse of currency expansion, but also through the weaponization of the dollar, we have lost that trust. So we got some work to do to gain it all back. But I think by embracing Bitcoin and putting an element of truth back into the system, this is the perfect step

that the United States can take to take the lead in the internet economy. Because it's been a gift that BRICS has been talking about gold. I mean, hopefully that wasn't a distraction. They haven't been accumulating Bitcoin. I know some Middle Eastern countries have been accumulating Bitcoin, but they know game theory. They're not going to come out and announce it like the United States has. So the way that this is progressing, we are...

I think hopeful. I've been this is the most hopeful I've ever been because I think the incoming administration and I think it's I think it's also bipartisan. I think there's a lot of bipartisan support for Bitcoin integration into the strategic Bitcoin reserve. And I love the rules around the strategic Bitcoin reserve. You take the Bitcoin and you put it in there, you can't touch it for 20 years, which

Which means you're understanding, you're acknowledging by law it's a long-term savings technology. When you go to sell it, you can only sell 10% of it. That's good because you don't want anybody fat-fingering anything in the government for whatever reason. And the proceeds from that sale have to go to paying down the debt.

So those are all phenomenal rules and policies that I agree with. But I think if we really want to take the lead in the internet economy, we also need a Bitcoin recapitalization fund. The Strategic Bitcoin Reserve comes with too much handcuffs. But I agree with those handcuffs and we need them. So we need a separate fund that a smaller amount of the Bitcoin we accumulate goes into that allows us to perform this financial innovation that allows the U.S. government to issue Bitcoin bonds.

That allows the U.S. government to sell those Bitcoin bonds to the Social Security funds, to the veteran benefits, to the fire, EMT, and police pension funds. We need to recapitalize the republic because we've sold our debt to these pensions, and now that debt is yielding in negative real terms. So their retirements –

and the benefits that they get for putting in service to our community are becoming worth less and less and less. That's a bad trend. That doesn't incentivize good teachers. That doesn't incentivize cops who want to do the right thing. That doesn't incentivize people who want to become firefighters and EMTs to help perform these medical services which are critical to a functioning economy and society.

for safety and everybody wants these things so we need to make sure we're treating these people better and better not letting their pensions get a lower and lower more negative real rate of return year after year and the way that we do this is we integrate bitcoin we fuse bitcoin we create revolutionary new products that allow and enable the united states to take the lead in the internet economy and to do it with the bitcoin recapitalization fund a smaller portion of our stack

that has less handcuffs that makes it easier to integrate into our economic, monetary and fiscal policies. That's exciting stuff. And I kind of want to kind of maybe break that down a little bit. So maybe to level set, what are Bitcoin bonds? Bitcoin bonds come in many forms, just like a regular bond comes in many forms. So I think the real question is, what's the problem?

Because a lot of companies will try to create a product, but it's not a solution to anything. So I think at first we need to understand the problem. If you've been listening to the last 15 minutes, I think you have a good understanding of the problem. The problem is this. Real negative rates of return. The interest rate cannot go high enough to compensate for the real increase in prices.

And therefore, there is a negative real rate of return across the entire U.S. Treasury yield curve, even if you're in bills at 4.5% and we're at 5%. It doesn't matter. The pre-1983 non-substitution-based CPI, which is a government equation which doesn't use substitution practices, is up towards 11%.

So imagine if they had to put treasury bill rates up at 11%. It's unsustainable. Net interest expense would balloon, and what would happen is they would try to raise it to fight inflation, but because of the amount of debt that we have, and that's what's different between now and the 70s. Now we have trillions of dollars of debt, so when you raise that interest really high, the net interest expense makes the deficit grow.

And the growth of the deficit is actually the definition of inflation. So they can't raise the rates that high to properly incentivize lenders to lend their money because the rate of inflation is higher than the highest yield. And they literally can't push it up there because the higher they push it,

the more inflation it causes. And that's the debt-debt spiral. Max Keiser did a quote tweet of me and got put in Forbes talking about the debt-debt spiral. They're stuck. They can't go either way. That's very alarming. So what do we need to do? We need to solve the problem of negative real rates. We need to find a way for our debt holders to end up at the end of the maturation of that bill, note, or bond to have a positive real rate of return.

So that's what the Bitcoin bond does. It takes U.S. Treasury debt or in our marketplace, other counterparties issuer debt. In some cases,

It might be a city or a municipality. One thing that's amazing about the strategic Bitcoin reserve is that local politicians are waking up really quick. If the federal government has a strategic reserve, then the state is going to have it. And that's been confirmed. But going a little bit deeper, which more people don't talk about, the state's balance sheet is not the same balance sheet of the city. And the city's balance sheet is not the same balance sheet as the municipality. So

So you're going to see these small towns and cities that are going to create their own strategic Bitcoin reserves as well. And they'll be issuing, I believe, what they call municipal Bitcoin bonds. So imagine the city of Naples, Florida, where we'll be enjoying a Bitcoin day together. They issue a municipal Bitcoin bond.

And the city of Naples is pretty wealthy. It's a great area. People pay high taxes there. They have a lot of cash flow to take care of the municipality. So they have a good credit rating. So you're going to have a pretty strong credit rating in the city of Naples with their debt combined with Bitcoin. Or depending on who you want your counterparty to be, you could also invest in a Bitcoin bond.

which is a special principal protected note that combines U.S. treasuries with the Bitcoin. So there are going to be different counterparty risks depending on the issuer of the bond. But let's just use a U.S. treasury in this example. We do a billion dollar issuance. $800 million will go into the five-year note at 4.5%. $200 million goes into Bitcoin. So you have $800 million of U.S. treasury notes and you have $200 million of Bitcoin.

Now what happens is it's a five-year principal protected note. What does that mean? That means over the course of five years, that $800 million at 4.5% will mature with a value of $1 billion, the same amount of your principal investment. So your principal is protected by the full faith and credit of the United States government, by the power of the printer.

Yeah, you're going to get that money no matter what because they're going to print it and pay it to you. When you get it, we don't know what you're going to be able to buy, but that's the same risk you're getting every other debt product anyway. What's different here is what happened to the $200 million worth of Bitcoin over those five years. And this is what's so interesting because the first question we get is, okay, well, what if Bitcoin goes down 50%? And to which I say, people like you and I know Bitcoin can go down 50% in five days, but it's not going to go down 50% in five years.

So there's, you know, you have to be clear what happens here. But let's just say they go down 50 percent in five years because these people think that's a possibility. The 200 million turns into 100 million. The principal protected note matures with a value of 1.1 billion. Well, 0.1 is 10 percent divided by five years in simple interest terms. That's 2 percent APY.

So as the Fed continues to lower rates, you're going to pretty much match that prime rate anyway. And if Bitcoin price stays the same, that's 4% APY.

But what happens if Bitcoin does what we think it's going to do? What happens if Bitcoin does what it was engineered to do? Because you and I know with proof-of-work consensus, the difficulty adjustment, absolute digital scarcity, that it was strategically designed to leverage the natural laws of economics and commodity cycles and price discovery cycles to empower its holders, we the people, to drive value into the network. So as it does what it was designed to do as savings technology,

In the bond, it actually produces the yield. That's why we call it a Bitcoin bond because it's the Bitcoin performance that produces the yield on the bond even though technically it's a principal protected note. So if Bitcoin maintains its 60% compounding annual growth rate, in five years, the price will be 10 times higher. That $200 million will be worth $2 billion. The note will mature with $3 billion worth of value.

And that is 200%. 200% divided by those five years in simple interest terms is 40% APY. But what if compounding annual growth rate is cut down to 30%? The note will mature with 20% APY. So even if Bitcoin's performance over the next five years doesn't match its previous 10-year CAGR,

Half of that will still produce 20% APY. Now, in a credit market, you have to be willing to practice usury and charge people 26% on credit cards and get a super high default rate risk in order to get a 20% plus APY. But with a Bitcoin bond, you're getting 20% plus APY with principal protection from the United States government.

So this type of product, this type of engineered debt that inserts and integrates and fuses engineered money into traditional debt fixes that problem. Because at 20% APY, now when you take away the 11% of real price increases, you're positive 9%.

So the person is able to increase their purchasing power over time by lending into this product. And some of you might be saying, well, why would a person want to do that? To which I would say, yeah, absolutely. If you're an astute money manager, you should probably just put Bitcoin on your balance sheet because you're going to get 60% CAGR. So why take 20% APY when you can get 60% CAGR just putting Bitcoin on your balance sheet?

Well, the answer to this question lies in the bigger picture, which is we're not all using Bitcoin for our personal use. We want to use it in our businesses. We want to use it in business models. And for a business, they can't swallow the volatility. So imagine a business takes all of their profit, pays their costs, and puts their profit into Bitcoin, and then Bitcoin goes down 50% in five days.

Well, the company's profitability just got knacked 50% in five days. So that creates a big problem because what if there's an emergency? What if the company needs that access to that money and liquidity, but the equity value is not there now?

Well, that's different when you have a Bitcoin bond, because when you have a Bitcoin bond, you have principal protection to the downside. So if even Bitcoin goes down 50 percent. Oh, well, you're looking at two percent APY maturation. You still have access to the full value, the full par value of that instrument. And that's something exciting we're doing at People's Reserve. You can post your Bitcoin bond there.

as collateral and bar against it if you're a business and you need access to that equity value you don't have to wait to maturation and you don't have to take mark to market losses so it's a it's a beautiful instrument that is going to be utilized by

by people to create cash flow and maintain exposure to Bitcoin upside. But also, more importantly, I think even by businesses and corporations to eliminate downside volatility, but still maintain exposure to the best performing asset in the world, which is Bitcoin. And it's that price performance that produces the yield on the Bitcoin bond itself. That's interesting. I want to hear more about People's Reserve, so I'll make sure to bring that up again, for sure. What about maybe people who say that there's...

negative side effects or this is not a great idea the SBR like I'll probably I'm looking forward to I'm going to reach out to Mark Goodwin to have him back on the show again he kind of has a lot of interesting commentary on this I mean you know is this a form of debt pardoning you know the United States government has racked up a lot of unfunded liabilities and

You know, a lot of people want to are anti-state as Bitcoiners or want to separate money from state. Is this us kind of going to the state to pump our bags?

What do you kind of say to those kind of notions or, you know, commentary? Yeah, I think that is a good mindset and that should be the default mindset. But after a little bit of due diligence, you have to admit that Bitcoin is not scalable as it is. And we don't want to increase block size because we're going to lose decentralization. It's going to be too hard and you need to be easy and cheap to spin up a node. So, yeah.

You can't have that trade-off. So we know we need a different layer to expand Bitcoin. And my position is this. I think the dollar is the best L2 for Bitcoin. Why are we going to build a complete entire new infrastructure...

to allow Bitcoin monetary velocity to increase because you can't buy the cup of coffee with your Bitcoin. And you really don't want to do it anyway. And this comes back to like the money currency thing. People who think dollars are money and Bitcoin are money think that they see a money fighting a money. Bitcoin's an entire league of itself.

The fiat currency is not money. The fiat currency is like a high school wrestler going, and Bitcoin is like the UFC heavyweight champion. It's not even comparable. You're talking about a shovel versus a rake. You're talking about something completely different. Money isn't currency. Currency isn't money. And I think that's where the confusion comes from. That's where this...

diametrically opposed. We have to be this way or we have to be that way type thing. But no, Bitcoin is actually the money. When you use currency with that money, you can borrow the currency against the Bitcoin and Bitcoin will go up and currency will go down. And that actually empowers you.

as the holder of Bitcoin. And then at the same time, we get the benefits of that now, today. Because there exists no solution. Like, Lightning Network is beautiful. And I know Gabe Higgins over at BlockSpaces is working on some really cool stuff that's going to bring a lot of functionality to the Lightning Network. So I think there's a really bright future there. But in a true free market, there's multiple solutions to problems. And the market chooses the solution that fits the problem that they are specifically facing.

And I think lightning is one of those solutions. I think liquid is going to be one of those solutions. I think there's going to be other L2 solutions that pop up. But I think that the dollars network, the dollars network is undefeated. It's worldwide. It's established. Why not tap into that network and make it Bitcoin's L2? It's already built and we get all the benefits of it today. And the dollar is not a threat to Bitcoin.

And Bitcoin's not a threat to the dollar. Like I was mentioning earlier, you put Bitcoin on your balance sheet, it makes the dollar stronger. How do I know that? Because El Salvador puts Bitcoin on their balance sheet, it makes their creditworthiness go up. So the same thing is going to happen here that happened there once you put it on your balance sheet. But what Bitcoin does is it keeps you in check.

It keeps you in check. Just like gold kept them in check. Why did they remove gold? Because they didn't want to be kept in check. When you put Bitcoin back in it, it puts the government back in check. It'll be a measure of the economy and people will be able to get a realistic measurement of spending versus growth. And I don't think we're getting that accurate measurement today. So I see it as being complimentary.

I see it being that the dollar as currency is the best existing L2 solution to increase Bitcoin's monetary velocity. Because if we're taking those dollars, going back and forth, and then putting them back in Bitcoin, it's a complementary system. Because we want to spend our dollars with currency, but we want to save our time and energy in Bitcoin. If we can embrace that, I think the United States can take the lead in the internet economy. And if we don't embrace that, then BRICS or somebody else is going to do it and free market –

incentives are going to win in the long run. Yeah, I can see that. I do totally agree that there's gonna be a lot of financialization of Bitcoin. It's inevitable. It makes a lot of sense. It's a base layer. It's interesting kind of talking about the dollar as layer two. I think my only qualm there or worry or concern would be around on ramps and off ramps and the political control of that.

Because I do want to see the complete separation of money and state. I want to ask about the politicalization or the possibility to politicize like a strategic Bitcoin reserve. I see that, you know, it comes with handcuffs. You mentioned them before, you know, must huddle the Bitcoin for 20 years, only able to sell 10% of the time, proceeds only to pay down debt. But I think all those are sort of maybe negotiable once you have the large honeypot of Bitcoin on the balance sheet.

And maybe there's a politician who says, you know, runs for office on the we'll change the law and we'll sell 50 percent to give everyone a 50 grand check for housing. You know, these kinds of things.

Or 50,000 sats. It doesn't even have to go out. Whatever it is, but the value. Estimating the value in terms of what's on the balance sheet and liquidating it. I don't know if those are concerns of yours at all. So to the politicalization of an SBR. Yeah, I mean, at any point in time, whenever you have a voting block, they're going to be able to come in and make changes that

Sometimes even what the majority of people don't want. That's kind of like the ultimate conundrum of a republic. So these problems are inescapable, and I think they do pose a risk, but they don't pose a risk to us personally. That poses a risk to our government. And to me, I'm a constitutionalist. I'm a patriot. I wanted to headquarter my company here in the United States. We'd be live already if we built offshore.

I mean, we would have saved a lot of money too. So it wasn't easy to build here, but I'm a constitutionalist. I'm a patriot. I want to be here in the United States. I want to be made in USA. I believe in make America healthy again. I believe in make America great again. And I think that I want to do that for my kids because we live in a government that admits the government doesn't give you rights. God has given you the right to life, liberty, and the pursuit of happiness.

So the government has no right meddling here. And by the way, here's a specific bill of rights that people have that you can't take away from them. There's no other country that does that. We set the standard. So if we allow ourselves to destroy ourselves, we're really taking away the freedom that comes with our republic from our children.

So I think, you know, we need to... That's probably where we got here. That's how we got here, Cedric. We got here because good people stood by and did nothing, and bad people went and took action, and over time, they got into power, and we wanted to enjoy our life and live it peaceably, and they wanted to live life their way. They wanted to force you to put boys in women's sports. They wanted to force you to do things that weren't common sense, because the good person stepped back and wanted to live their life, and nobody wanted to extend the helping hand to another.

That's why I love Bitcoin. They say you don't change Bitcoin. Bitcoin changes you. So I think that these risks are real. But I hope that over time that the same change I've seen in myself from Bitcoin, it would be integrated into the system. We would see that consequence on the system. Well, we would change our way of thinking. We would change our mind because we're now not in this little fish tank of fiat money.

economics. The fish tank has broken and we're in the reality and Bitcoin is powering us in the reality versus this fiat system, which is continually extracting value. So I think that risk is there, but I also think there'll be a transition of mindset. And with that transition of mindset, if we can defend Bitcoin through that transition of mindset, we can mitigate that risk. So speaking of mitigating that risk and sort of, you know, back to nation states and their way of looking at Bitcoin,

And this is kind of a two-part question. Are they going to regain our trust? And maybe Bitcoin's a component of that. But more of the question is, are they going to print the hell out of their currency to buy the hell out of Bitcoin? And tell us that's for our own benefit. Yeah, that's a good question. My...

See, I hope your viewers, I'll take this second to just say that I've had the honor to be nominated to RFK's Council of Economic Advisors. I'm sure Cedric will put the link under the video. You can go and vote there for me. And if I get onto that council, I promise to be a voice for Bitcoin because we don't just need the Strategic Bitcoin Reserve. We need the Bitcoin Recapitalization Fund. We need to not just print and buy Bitcoin. I don't think that's going to solve the problem, and I don't think that's going to build trust.

But when you take Bitcoin and perhaps the government is coming to the People's Reserve, instead of going to the Federal Reserve, why don't you come to the People's Reserve? Issue your Bitcoin bond to the marketplace who values Bitcoin and understands what they're loaning into, who understands that they're getting a real rate of return. And allow the marketplace to reprice risk. That is our thesis. Risk is being repriced. We are moving from a promised-based economy.

fiat credit system to a commodity-backed credit system where risk is reduced and therefore interest rates can be reduced. It's amazing how the fiat system wants low interest rates, but then they introduce higher risk. That's the opposite of free market price discovery for interest rates. It's sure it's based on the supply of money, demand of loans, but also the perceived counterparty risk. That's why you have a credit score. The higher your credit score, the lower the perceived risk, the better the rate you can get. This is how the market incentivizes you. Well,

Right now, you can go and make a promise to your banker and he'll loan you money from 4% to 6% depending on your relationship with him. And if you have Bitcoin collateral and you want to post a million dollars of Bitcoin collateral and borrow $500,000 against it and be 150% over collateralized, you can borrow 16%.

You see how that doesn't match up? You have an over-collateralized risk-free position paying 16%, and you have a promise-based position paying 4%. What's going to happen is the pendulum is going to – the seesaw is going to switch, and we're going to redefine risk. And it's not going to be those with the printer who are risk-free. It's going to be those with Bitcoin.

who are risk free. So if you want access to the lowest interest rates, you better be a Bitcoiner. If your government wants to not see its fiat currency become weaker against other governments who have adopted Bitcoin, then you better get on the Bitcoin standard because if you're not putting Bitcoin on the asset side of your balance sheet, your currencies will their purchasing power will get absolutely decimated and destroyed because everything is going to

to zero against Bitcoin. So all of these things play a role. But what's really magical is your listeners can go to my highlights and check out the Bitcoin bonds video.

Because what the government can do is they can apply Bitcoin bonds to the Social Security funds and to the veteran benefits funds, even to the teachers and firefighters and EMTs unions and pensions. And what they can do is they can create a special Bitcoin bond that just locks in a five-year note rate at 4.5%, fuse it with Bitcoin the way we discussed before.

and sell it directly to those pension plans sell it directly to the take the social security tax that's coming in every month and use it to buy the bitcoin bond that you're issuing perhaps the u.s government doesn't even offer the bitcoin bond to the to the public they empower the public by making it a private offering that only the social security fund and only the veterans fund and teachers pensions are eligible to purchase because now they're recapitalizing that balance sheet the

The positive rate of return on that bond will actually save some of these programs. Social Security is in trouble. It's a Ponzi scheme, and the only way you can – the only thing you can do is print more money and raise the retirement age.

Well, I mean, how many people are going to be happy saving for retirement and then they can touch their money and then they're supposed to die five years later? That's where we're getting to. What happens when they have to die one year later? Because all they can do is raise the retirement age because they have to print more money to meet the liability, which means the purchasing power value of Social Security is becoming less and less and less and less. What is provided for by Social Security continues to decline because the liability side of the balance sheet is outgrowing the asset side.

So how do we get the asset side to outgrow the liability side? Definitely not by putting more treasuries into the funds. You need to create a hybridized product that has a real positive rate of return, which is the Bitcoin bond. Now you load these funds up with the Bitcoin bond and assets are growing at a faster pace than liability. That's the definition of sustainability. And by the way, I'm a capitalist, not a socialist. So I think we should do this to the tune of recapitalizing the program so that we can come through on the promises that we made and then end the program. Cut it.

End the program. We don't need a socialist retirement system. People can save for the retirement on their own or if they choose to in a union or whatever, they can go into a pension. But we don't need a socialist security system. Let's recapitalize it. Let's come through on the promises that we made, but then let's end it.

And then let's focus on the veterans. There's so many veterans in this country who don't even own a home. I'm really happy with the home loans that they get with zero down and the rates that they deserve every one of it because me and my children and us Americans, we wouldn't have the freedom that we have today if they didn't make those sacrifices. So you know what? They deserve to have a Bitcoin bond in their pension plan. They deserve to have a Bitcoin bond in their emergency relief fund. God forbid someone passes away in service.

They deserve to have these things so that their families can be empowered and so that their retirement can provide more for them for the service that they give to the community. This is why nobody wants to be a firefighter. Nobody wants to be a policeman. Nobody wants to be a teacher because they're not properly incentivized. It should be no surprise that our kids are dumb because we're not paying our teachers.

We're paying our teachers like they're babysitters instead of educators. We're paying our policemen like we don't want them to pay attention to crime instead of going out and fighting the crime. We don't need to defund the police. We need to fund the police. And we don't just need to fund the police. We need to recapitalize the entire system so that people want to perform these services. And we can do that with Bitcoin bonds. So I think it's super important that we start integrating Bitcoin and fusing this engineered money

into our monetary, fiscal and economic policies because this is how you make America great again. This is how you make we the people be empowered again. And this is how you flip the system from a system of value extraction to a system of value delivery. But we have to be strategic and we have to be playing 5D chess here. This isn't tic-tac-toe.

We can't just have a strategic Bitcoin reserve. We need to start thinking ahead. We need to take the lead and we need to innovate and we need to be the revolutionary people that we know that we are because we're the only ones to ever do it in this country to give ourselves the rights to life, liberty and the pursuit of happiness. So then what do you say to people? I mean, a lot of that just makes so much sense, right? And we can kind of predicate

All that is ground zero and you build everything on top of that. But what do you say to people say is like, is Bitcoin too risky? 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 Lepard, Bob

Bob Burnett, CJ Constantinos, Paul Tarantino, Carly Benson, Charlie Schrem, and me. You'll get access to high-signal discussions where we can do deep dives on the macro outlook as the Trump administration takes office, strategic reserves, the monetization of Bitcoin, and even learn how to influence your friends and create your own Bitcoin community. Your ticket will also get you access to exclusive events like the Naples famous After

party, head over to BitcoinDay.io and use the promo code MATRIX for $21 off your ticket. 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. Well, that's my most common question.

That's and in my highlights where I first talk about Bitcoin bonds, I say Bitcoin's too risky because I go and I talk to a family office. I talk to wealthy individuals and they say, listen, son, I've been in markets longer than you've been alive. We want to lend our money. Some entities are not even allowed to invest. They have to lend their money.

So they're looking for products that give them lending exposure, not investment exposure, because you invest to add risk and you lend to diversify and mitigate risk.

And with that mindset, it's automatically ingrained into them that the volatility equals risk. They don't understand. They just – the dots don't connect there because stability. It's always stability, right? With the Fed, we want stable price increases, right? Stable prices means 2% price increases. Isn't that funny? It's stability, but it's –

We define what stability is. Well, Bitcoin's stable. You know why? Because after every four-year halving cycle, we go through a natural boom-bust credit cycle just like the real economy would if it weren't too big to fail. And at the end of it, we end up at a stronger, higher foundation. That is the definition of savings technology. Higher lows.

not higher highs. The higher highs are really fun to talk about. The higher highs are really bullish and euphoric and you get butterflies in your stomach and you start looking at yachts and you start looking at real estate and you start getting really excited. But that's not what's important here. The goal of my savings is to come down to a higher low, to increase my purchasing power over and over and over again. So the first thing I say is I say Bitcoin is engineered money, just like we went from a candle to a light bulb.

and from the horse to the horsepower in the engine, and from newspapers to now digital strings in our phones that show us these texts from the newspapers on our devices. We are now going from the gold to the digital dollar, but now to pristine collateral, to 100% absolutely digital scarce, decentralized, cannot be controlled by any one entity,

Perfect money. Arguably the first form of money. Gold is that natural form and Bitcoin is the engineered form. It does what every other process does in the engineering process. It uses human ingenuity to leverage the natural laws of the universe to empower people.

the person that that product or service is built for. And Bitcoin is that in the form of money. Bitcoin is savings technology. And then if they don't get that, then I go down the cost of production line where I tell them, you know, if you're a producer and you're building something,

what's the price you offer to the marketplace? Because people get really confused about this. I'm like, when you go to the grocery store, do you bid for your items? And they go, they almost get offended. They're like, no, you know, like obviously not. And I'm like, come on, let me set it up. Let me, let me cook over here. You know, let me cook. I'll tell him, yeah, you don't set the prices because who sets the prices? The producer. Okay, good. Well, what does he base that price on? Let me ask you a question. Can the producer name a price that's lower than his cost?

Well, yeah, no, of course not. Oh, okay. So then there are some rules on where these prices are coming from, aren't they? They're not just random. They're not just a number that gets spit out randomly. There's actually a lot of understanding. There's a free market price discovery cycle. Matter of fact, that's what makes the United States capitalists. That's what makes us us. We believe in the free market price signal. We believe that when the market is willing to pay a price above the cost of production, that creates the profit. And the profit is the invisible hand that drives the marketplace.

So if a producer offers a good or service and the community is willing to buy that good or service at a price above the cost, that is the validation of that community with their monetary voting. They are monetarily voting and validating the value proposition of your good or service.

Now, if your good or service does not provide value, people will not pay above the cost. They'll say, oh, here's a water bottle, $20. What are you, kidding me? What is this, made of gold? $20, this doesn't make any sense. I'm not – the value proposition is not – I'm thirsty. And that's how free market competition helps too, prices, because now a competitor comes in and says, hey –

This guy's crazy. He's charging $20. I'll charge 15. And the other guy says, well, I'll charge 10 and I'll charge eight. And competition helps bring prices down closer to the cost of production, but never below the cost of production. Because once you go below cost of production, there's no profit. And that's the free market price signal telling you, hey, reallocate your resources. You are wasting your resources as a producer here, making something that those who vote with their money are telling you are not getting the value for it.

And a good entrepreneur reads that price signal and reallocates resources and produces a good or service that the community is willing to pay a price above the cost, which then validates the value proposition of that good or service. Well, for Bitcoin, there's a cost of production. There's a cost to earning the subsidy of the block. And that cost continues to go up and up and up by design. Bitcoin is the only asset in the world that.

That can raise its own cost of production. It can also lower its cost of production, too, as a form of sustainability. But there exists no other asset in the world that has its own ability. Imagine if oil just said, oh, you know, I don't really like OPEC's decision. So I'm going to go ahead and just make myself cost more to rip out of the ground now. No, I mean, like that's what Bitcoin can do. It can think.

It's algorithmic. The difficulty adjustment is based on the amount of block time in a 2016 block period. And if there's a lot of hash rate and miners are finding blocks faster than a 10 minute rate, the difficulty will go up and that will push the cost of production up. And that means the value proposition to access the network is now going up because miners have to ask for a price above their cost, which

Which then means the asset class itself, if you ever looked at any one of my charts, you see that red price cloud. The red price cloud, it keeps going up. The low lows keep going up because the cost of production keeps going up. And the producers, the miners, they have to ask for a price above that cost in order for their business to be sustainable.

But what that does is it creates a natural up only savings technology that drives value into the network so that the larger the network gets, the more hash rate there is, the more value that's delivered by the network, the higher the cost to access that value proposition.

And that's where we are right now, Cedric. We're in the middle of discovering what is Bitcoin's entire value proposition and how much should it cost me to access this perfect, pristine, truthful ledger in a world full of lies. And I think we're going to find out that that value proposition is quite a bit higher than $100,000. Well, thinking about how much higher than $100,000, how do you think about the future value of Bitcoin? So

So as the creator of the Bitcoin fair value algorithm, that process I just described is called a commodity cycle.

And I created the algorithm to help the miner decide where they are within their commodity cycle because each miner has different – there's not a universal plug-in. There's so many variables. There's land, labor, materials, and different miners have different costs and different operational expenditures versus capital expenditures. So BFV is highly customizable. We'll come in, and we'll help you determine your cost basis.

And then the market price relative to your cost basis tells you where you are in that commodity cycle. And when you're at a premium, you want to lock in profits and capture that premium. And when you're in a discount, you want to deploy those profits because you're a miner. So whether you mine with dollars or electricity, it doesn't matter. Both need to be used to be fully efficient. And.

When you're at that default, you deploy the dollars, you turn off your machines, you deploy the dollars to mine Bitcoin, and you're still building Bitcoin. And that's really important for people to understand because that's how it's worked through these past halving cycles. The past halving cycles worked like this because the halving is the catalyst to the doubling of the cost of production. When a halving takes place, that very block, cost of production doubles. Now we have to go through a new price discovery cycle.

But that's the commodity cycle. I believe, to answer your question, we are now moving out of the commodity cycle. Michael Saylor's famous comment of all your models will be destroyed. You know, I'm looking right here in the mirror and I'm saying, yeah, he's right. My model is going to be destroyed. Like it's still going to be relevant. I still want to see how high of a premium we go to. But the fact of the matter is, is that at the bottom of the S curve, you're in a commodity price discovery cycle. But Bitcoin as a commodity is now being monetized.

So the monetization of Bitcoin is now accelerating us up the S-curve of adoption. And that's going to lead to a complete repricing. Right now, price is trying to catch up to hash rate. When Bitcoin is repriced, hash rate will be trying to catch up to price. So we're entering into a time right now where...

The old four-year market cycle and understanding it as a commodity cycle and the premiums to the cost that the miners are looking at who set the price margin because they're the only four sellers of the asset. That is changing. That market dynamic is evolving because we're now seeing mainstream adoption and monetization, and I think now it's going to be based more on credit cycles.

Then the commodity cycle. Not yet. We're still we're not there yet. We still need to see all this stuff take place. We still need to see how all of this game theory plays out. But I think the new administration gets in there. We get a federal strategic Bitcoin reserve. We get the states doing the strategic Bitcoin reserves. Cities and municipalities are going to do the strategic Bitcoin reserves. Lord willing, we can get the Bitcoin recapitalization fund and we see cities doing

issuing municipal Bitcoin bonds and we can really start to pick up this pace. But the better that picture becomes, the more aggressive the repricing on Bitcoin is going to be because it's price agnostic demand. It's price agnostic demand. And when a city or a municipality or a state or the federal government starts buying Bitcoin, they are not going to care what the price is. That's not how it's going to work. They're going to dollar cost average. So what they'll do is they'll take a portion of the taxes that they collect

And they'll take that agreed upon percentage and they'll just buy Bitcoin. And they don't care if it's 100,000 or 100 million. They do not care what the price is. It's price agnostic accumulation. And because of that, I think we're going to see the entire four-year cycle mature.

because we're moving out of the commodity, right? When Bitcoin was a commodity, it behaved in a commodity cycle. It's now being monetized, so it's going to behave like money within a credit cycle. So all of these things are converging right now. We're in that interesting in-between time right now. And I think for the next five years, we're going to be in that in-between time. But again, you add another five years onto that, and I think the system is not even going to look anything like it does today. Yeah, I mean, this has all been incredibly fascinating. Yeah.

I have a few more questions for you. When studying history, what have you noticed about how inflation turns into hyperinflation? Yeah, so to me, even though the textbook tries to put a mathematical number on it,

What I've noticed across all time and space, whether you look at Rome or Greece or Weimar or Venezuela, there is no mathematical way to define inflation. Inflation turns into hyperinflation. One and only thing is found the same across all these examples, and it's when the people who use that currency lost trust.

So the difference between inflation and hyperinflation is trust. So if we continue to abuse the system and we don't take the proper steps to build trust, one day that trust will be lost. And I like to say right now we're in financial COVID.

What COVID was for the medical industry, we are now facing in the financial industry. The GDP is wrong because real GDP is not being deflated properly. So it's overstating the economic performance. CPI is understated because of the substitution-based practices and manipulations. I'm so happy that we have at least the government shares the data with us. It's probably the only thing the government really does successfully is they aggregate all of this data from 300 plus million people and share it with us.

The problem is they're taking that raw, authentic data that is actually true and they're plugging it into manipulated equations which tweak the data, which then tweets the output, which then creates unreliable information. So in the financial world right now, the government would have you think that real rates are positive because inflation is 2% and the treasury bill rate is 4.5%. And 4.5% minus 2% is 2.5%, positive. So hey, you should lend us money because at the end of it, you're going to be able to buy more stuff.

Yeah, but 2%, what are you talking about? In what world are you living in? My bills are up way more than 2%. You're trying to, I'm offended that you're trying to tell me inflation is 2% when my bills are up at least 5% to 10% and everything I spend my money on. So where's this 2% number coming from? And that doesn't do any good in building trust. So we need to be really careful here because the medical industry is right now paying the price for the trust that they abused.

And we don't want to pay that price in the financial industry because the loss of trust in finance is going to be the difference between being in an inflationary recession versus a hyperinflationary depression. And that's the only difference. Trust. Trust is not there. And it's interesting. You kind of have some notes here that kind of summarize some of what I think is you're thinking. And it's like, you know, eventually the government's going to be printing their currency to be taking our future tax revenues back.

And they're buying Bitcoin because and what that means is that the value of those future tax revenues is nothing. And, you know, they're going to try to recapitalize the balance sheet. It's this is all fascinating stuff. I really want to ask you a little bit more about your rabbit hole story. Rabbit hole stories can be fascinating, especially I think the earlier more veterans or OGs because you had less people to turn to, less educational resources, and you had to exercise a lot more patience.

both through cycles economically, your own bags or whatever, but really psychologically more about like the earlier you came to maybe certain conclusions, the longer you have to sit on when the rest of the world catches up.

It was tough living in the future. Definitely. It hurts to be early. A lot of people are like, oh, that'd be great. Yeah, but the psychological warfare with yourself through it all is intense. Yeah, and I'm sure a lot of, I mean, and I don't know what your impression of this, but I would think that a lot of early Bitcoiners, whether it was through forced holding, you know, like maybe Mt. Gox or Silk Road,

or just luck. They bought Bitcoin for other reasons, not sort of monetary economics or beat inflation and just consider themselves really smart about that and then went on to other things and tried to say, well, I'm smart about energy and all these other things and how to fix the world in every other area and maybe lost touch with Bitcoin or something or just went sort of manic. And a lot of people probably got in early and then sold early and got angry or whatever. So

I made that mistake too. I made that mistake too. I just told Matt Brunel, I bought my single family home for 100 Bitcoin and I can't even get 10 Bitcoin for it today. And that played a big role in developing our product. You learn through your failures. Any real entrepreneur is going to tell you, I learn more from my failures and bad decisions than I do my good decisions. But let's maybe talk a little bit about the successes and the framework of like you're grokking this thing.

When did you stumble across Bitcoin? In what context? And then did you think of it as something that you could speculate on? Or did you think about it as something as, did you go right to mining? How did it progress? What were the materials or conversations that impacted you? Do you know Jeff Berwick, the dollar vigilante? Yeah, totally. I've talked with him about coming on the show.

Um, yeah, totally. Yeah. So he was my mentor when I first found Bitcoin. I heard of it and I wish I bought it when I first started hearing of it, but we all have a similar experience. We hear about it. We don't really care. And then you find out and you see all the volatility in the price action. So you're like, well, maybe I can trade it here and there. And then you get a really good trade and then it all disappears. And you're like, all right, I got to figure out what the heck this thing is. So when I, after I,

dip my toes in at that 150 level, watch it go all the way up and come all the way back down. Now all of a sudden I'm like, okay, I got to figure out what I have here and I got to figure out how this works. And I stumbled upon Jeff Berwick. So I started digging into his content and he was a great mentor. I highly recommend Jeff and some of his takes today are pretty funny. I would say I don't

share all of my opinions that he shares, but I love his content and I'm very thankful to him and Max Kaiser as well. Max Kaiser played a big role. And after I'd learned from Jeff, I started learning from Max's content and Max's amazing orange pill for everybody, like since like a dollar or even less. So those two played a big role in me when I took my deep dive, but I didn't take my deep dive until I had that

I was like, this is really good trade. And then, gone. So then it makes you ask... Were you trading other things? Were you into trading? Yeah, trade stocks. In college, I started out in nursing. But it didn't matter because of my undergrad years anyway. And I ended up transitioning into business for accounting and finance. So by those years, towards the end of those years, I was...

Trading what was hot back then if I remember correctly it was like marijuana stocks And I was like do I want to get marijuana stocks or do I want to get Bitcoin and I you know I was like I decided okay I should do both because one's this system and one is this system and this I'll try to just trade this and I'll invest over here So Bitcoin was like my trading account and then the other stocks were like my investing account Which I look back on now it's really funny to think about but that's how it started and then I

I fell on their content. I started getting into mining. I don't remember exactly how I got into mining, like who said it, but it was just

Just through the course of study, through proof of work consensus, like once we started having those discussions. Did you get into mining to get more Bitcoin or to learn about Bitcoin? Or both? I mean... Both. Both. I would say I got into mining to make money. That was my number one driver. I was like, okay. I can mine this thing. I can get this thing and sell it for more than it cost me to produce it. Correct. Correct. And it was amazing. I actually built my own...

It's on one of my old phones. I'll have to go back and find the picture and post it. It's hilarious. I built wooden rigs to hold my cards. Like...

How stupid could you be? You know, like using wood instead of metal. But I just wanted to get it done. I just wanted to build it. I never had built a computer before. So it was a fun process to piece all the pieces together and then plug it in the wall and listen to it hum and say, oh my gosh, you know, this is how this works. Did this make you feel better or worse about Bitcoin? And I ask that in the context of like worse, like anyone could put this thing together and make money or like better, like, wow, this is freedom money and we're separating money. I mean, when did it become more about like,

I'll call it philosophical or existential or sort of like about the nature of money versus making money, making fiat versus like, oh, wow, this is the future of money and it's going to change the world. And it's more than just what it does for net worth or something like that. Yeah. Well...

I guess that came, that came, definitely came later for me because mining was such a twist for me because I started mining and it was a lot of fun and then I started making projections which was even more fun but then I learned about the difficulty adjustment because you can, when you project the hash rate that you pre-order on the existing hash rate, it does not take into account everybody else's hash rate increasing the difficulty.

So my original projections, so I built this machine, I plugged it in, it was doing really well. Maybe it was making like $20 or $30 a day at that time. And I'm like, well, let's scale this puppy up. Let's build some more machines here. And as I started building more machines, I started learning about how the difficulty adjustment affects your profits. Because all of a sudden, every two weeks, I was becoming less and less profitable. So I was like, well, this is, how's this happening? What's happening here? And then what really hit me hard was the halving.

That 2016 halving, I didn't put two and two together, and that's why I'm telling you the halving is the catalyst because it doubles miners' cost of production. When your reward gets cut in half, your cost of production doubles. It's the other side of the coin that most people don't look at.

And then so you have the difficulty adjustment eating away at your profits, and then you have the having your profits all in one day, like the worst day for a business ever. You're guaranteed half profits perpetually now. And so it was good news and bad news because I was like, wow, this system is amazing. Basically what I'm doing is I'm like working for Visa or MasterCard.

Imagine if Visa or MasterCard allowed you to just set up a computer and then paid you to process their transactions on your computer. So that was my mindset. I felt like I was... It was a payment network and I was just paying... I was playing one small piece of the payment network and the bigger the portion of the payment network I contributed to, the more I got paid. So it made perfect sense. But then...

From the difficulty adjustment and then getting hit with the halving, I'm like, oh my gosh, this is rough. So it was fun and aggravating at the same time because ultimately the halving completely decimated my operation.

But that's what allowed me to kind of recalibrate and account for the difficulty adjustment and having. And that's where the Bitcoin fair value algorithm came from. I learned that you cannot emotionally navigate through Bitcoin cycles. You need a mathematical understanding of where you are in the cycle to properly manage your treasury. If you want a sustainable mining business, it's just that simple. And right now I don't mind anymore. I stopped a long time ago because I,

I believe you need access to institutional capital. You cannot compete with public companies who can do ATMs and note converts. You just can't do it. You don't have access to that type of liquidity, so you need

There's just no way to outperform them. So I think on a personal level, I still recommend people to mine not to make money, but to learn the things that I learned to learn how the system fits together and pieces together in the background because it helps you understand price discovery. It helps you understand the intrinsic value of Bitcoin all the time and energy that goes into sustaining the network.

Some people who say it's not backed by anything, they don't understand the time, energy and effort of the people who are processing transactions and contributing hash to the network are actually doing. That's the network itself. And the effect of the network are what give it intrinsic value and what secure the value. And then the free market price discovery process built around that cost of production, which Bitcoin is just engineered to continue producing.

moving up over time, that experience is worth it alone. Just to have that experience. And that set the foundation for me. Once I understood that Bitcoin was engineered money and it was a savings technology, when I started to hear about DeFi, and I learned this before there were any DeFi protocols, but when

But when DeFi first started out, that was my form of the lucky. Like you said before, some people just bought it for other reasons. Well, when DeFi came out, I was putting $5,000 here, $5,000 here, $10,000 here, $5,000 here, not to invest. I mean, looking back on it, I wish I had. But I was just playing around with it. I was just seeing how things work. And this was interesting to me. Like, let's bridge Bitcoin. You know, I wrapped Bitcoin, bridge protocols.

DeFi, liquidity pools, all of this stuff just intrigued me immensely. And I think it's because I had that Visa understanding like, oh my goodness, now I'm just not going to be the guy who's processing the Visa when they swipe their card. Now I'm like the be your own bank. That's the saying, be your own bank. Right now I'm like the banker. I'm the market maker in the background facilitating this type of transaction. And you can earn with it. And then that exploded. And that was my lucky moment for sure.

I mean, coins like Lend that were bought for pennies going up to $300. Uniswap, Balancer, Maker, all these protocols that I think are going to be around for a long time, not because they're competing with Bitcoin, but because they're there to complement Bitcoin. They're there to expand the use case of Bitcoin, arguably just like the dollar system is there to expand the use case of Bitcoin and help increase the monetary velocity of Bitcoin. And that...

That decentralized economy, that's the internet economy. That's the free market interest rate economy. So getting in there and playing with it and learning how things work and understanding your counterparty risk in that smart contract, understanding liquidity pools, understanding the opportunity for delta neutral positioning and perpetual contracts and different futures. It's unbelievable. And this is why BlackRock is tokenizing treasuries with Buildle.

They're tokenizing treasuries because they want liquid access to these free market internet economy. That's why. They're one of the biggest market makers in the world as one of the largest asset managers in the world, and they're not going to pass up the opportunity to build their name and brand and deploy their market-making strategies in what is the fastest-growing, most profitable economy in the world.

And that's what we're looking at here. That's what we're living through. And that all starts at the bottom of the rabbit hole. I always like to say I went to the bottom of the rabbit hole. I planted some dynamite and blew it up and went deeper. And, you know, I set up a nice man cave down there for everybody to come learn with me. And it's been a heck of a ride seeing where we were back then starting in 2013, 2014.

All the way up to the 2016 halving, just crushing me, accelerating Bitcoin fair value algorithm, moving into decentralized finance, learning how to be a market maker, learning how these protocols work and how true finance works, not based on a stated rate yield curve, but based on bonding curves and different algorithms built into these protocols.

And I'm still addicted to that. That's why I'm building People's Reserve. People's Reserve is a market maker for we the people. So it takes all of my market making strategies I've learned and deploys them. But it deploys them to not empower myself. It deploys them to empower our customers. It's literally a reserve of money for the people being deployed to empower the people. And it's just...

The way it should have been. Every bank should be a market maker for the people. Every market maker should be looking to empower their customers, not extract value. And that's the difference. And you'll see that in our products versus the products that come out to try to compete with us. We're a first market mover. We've built these products as innovators and pioneers. And the maxis will come and they'll copy us. But you know what?

They'll make you buy Bitcoin and then they'll benefit from that Bitcoin that you own too. It's just a wild concept that someone will lend you money, force you to buy Bitcoin, and then contractually obligate the benefit of that Bitcoin to the borrower and the lender. That's value extraction. That's a fiat maxi mindset. So that's what we're preparing for at People's Reserve. We're a bunch of Bitcoin maxis who are building for a Bitcoin standard. And that Bitcoin standard is Bitcoin as the base layer money.

and then fiat currencies as the L2 to that base layer money. You know, when I came to Bitcoin as someone with a background and a love for finance, and when I say a love for finance, I don't mean as a rent seeker, but just what you can do with the economic properties of money and how you can use money as a tool. And I did, you know, get really into, you can call them shit coins or crypto for a lot of those reasons.

And so it's exciting. I think we'll have some sort of probably 180 degree or 360 degree probably turn where we, you know, we hate and repudiate shit coins and crypto and all these things. But I do think that our love for finance or my love for finance and the financialization of Bitcoin will come back around and we'll see different things on Bitcoin that will be legit one day. And that will be useful forever.

And we'll incorporate the best aspects of finance and economics for the people, like you were saying, because these are tools. You know, I think that's a perfect transition, if you don't mind me. No. Yeah. That's a perfect transition to quickly touch on our self-repaying mortgage, because I know we're coming up on time here. Let's do it. But I can run through this to show you what I mean by that when I say that. What do you mean deliver value? Yeah.

In most cases, you're going to borrow from your Bitcoin. You're going to pay an elevated interest rate. You're not just going to pay prime. You're going to pay prime plus. And sometimes it's prime plus 100%. And the rates are up towards 14% to 16% to borrow against your Bitcoin. Well, you also have liquidation risk because if you post a million dollars worth of Bitcoin collateral and you borrow 500 and Bitcoin goes down 48%, 49%, you're going to get margin called. And there's a chance that you can lose your Bitcoin. Well, my pain point was paying that 100 Bitcoin for the house.

And watching it become worth less, less, less, and less, and less. And that experience helped me develop this product, which is if I had just posted that Bitcoin and allowed that Bitcoin to accrete value over time while making my payment, I'd be $9 million richer. So there's a big problem here for Bitcoiners who want to buy their house because they've been responsible savers of the most pristine form of collateral in the world. So it's very interesting that...

With the Bitcoin mortgage, with the self-repaying mortgage from People's Reserve, when you post Bitcoin collateral, the only way you can get liquidated is if you default on the mortgage. That's really important. So it's not price dependent on Bitcoin. The only way you get liquidated with your Bitcoin is if you default on the mortgage. Now, what happens if the price goes down? If the price goes down, what happens is there's contractually stated LTV thresholds.

And if the value of your Bitcoin goes down and now your LTV ratio changes and you enter into a lower threshold, your interest rate goes up.

Because the amount of risk in the product is actually increasing, so therefore the lender needs to be compensated for that risk. And the way you compensate for risk is with a higher interest rate. But vice versa. If the price of Bitcoin goes up and you enter into a higher threshold, your interest rate will go down even further because there's even less risk for the lender. And you can sleep easy at night if you have to add more margin because you know you're not going to default on the mortgage. You're going to make your mortgage payment. And –

It's one of your prime hierarchy of needs. So it's of the utmost importance that you do that. And if you don't, then your Bitcoin is at risk. So you're properly incentivized. But at the same time, you don't have to worry about that price action destroying your savings. So that's what I want. So I look at some other products in the marketplace and I say, I don't want that. I don't want that. I'm definitely not getting scammed by that. I don't want that. I don't want that. Oh.

Well, here's something that that this is interesting. OK, there's a little bit of risk here because the rate can move up and down based on the price of Bitcoin. But if I'm using my Bitcoin as collateral anyway, I should be using a responsible portion of it. You know, if I default on that mortgage and I get a call from People's Reserve and they say, hey, you default on your mortgage, we had to liquidate your Bitcoin. But congratulations, you own your home free and clear now. So usually when you get liquidated, you're not used to winning anything. You're not. It's a complete and total loss.

Because it's usually based on a leveraged trade or a live borrowing. But now, if you breach those levels and you finally default, then you actually own your home free and clear. And the worst case scenario is if the Bitcoin goes down, you let the lower threshold go. You make a few payments. The Bitcoin goes down. You make a few payments. Then you default. Then we have to foreclose on the home as well because there is still a lien on the property. And it has to be to protect the lender. But –

What it does is it creates a fair product. So when people are able to review this contract, which they'll be able to review later next year after we reveal our platform at the end of the first quarter of next year. We've been building in stealth for three years. And I think one of the big things that a lot of people are asking also, Cedric, is what about custody? Like how does the custody work? Well, there's something I want to say that I didn't get to say before, which is –

When it comes to custody, we're talking about multisig because that's what I would want to use because I'm a Bitcoin maxi. We're also talking about a special purpose vehicle holding the contract so it's detached from the People's Reserve balance sheet.

Finally, we're talking about proof of reserves and transparency that allow you to know that, first of all, from the lender's perspective, that the borrower isn't spending that Bitcoin elsewhere. And from the borrower's perspective, that we, People's Reserve, are not rehypothecating your Bitcoin.

We don't believe in rehypothecation. So we're building these products with a Bitcoin maxi mindset and security maxi mindset. And we want to make sure that it's mutually beneficial to both borrower and lender. That's how you capture the market. That's how you build a product that a Bitcoin maxi like myself would want to use. And that's the bar that we set. If I wouldn't use the product as a Bitcoin maxi, then I'm not going to build the product. That's why I want to ask the question. So it's a multi-sig situation.

And you're not loaning out the Bitcoin. You're not rehypothecating it. How does it work in terms of you get a benefit from it, People's Reserve or whoever, if I still have access to it or have one of the keys or however that works? Yeah.

Where is the benefit? There is no benefit when it comes to Bitcoin. So Bitcoin is not being leveraged for people's reserve in any way whatsoever to create a profit. But we are still writing you a loan at a specific interest rate. So there's that yield on the loan, which is going to be less than the prime rate. So that's going to be where you take a cut. But there's another element to our ecosystem, which we are not sharing yet, which is relevant to the people's reserve. Remember I said it's a reserve of money that's being used for the people.

So you can keep that in mind, but I'm really not allowed to discuss any more than that. But there are additional elements that don't introduce any risk to the Bitcoin that actually make writing the self-repaying mortgage for people's reserve more profitable than writing a regular mortgage at the prime rate. So the incentives are aligned and the incentives are proper once people understand the full feedback loop of the platform and the ecosystem that we built.

Because we're talking about two products. We've revealed two products, the self-repay mortgage and the Bitcoin bond. We have two other products that we have not shared yet. We've been billing stealth for three years. And some people go to our website and they're like, your website has no information. Yeah, because we're still in stealth. We're just teasing you guys. We're showing you what we've been working on, but we're not revealing all the details yet.

We're the first market mover. We're raising the bar. We're not sharing our business plans with our future competitors. Sorry. Well, you'll get it when we go live and we'll reveal our platform at the end of the first quarter next year. And we'll start writing our first self-repaying mortgages in Q2 of next year. And we'll start issuing our first Bitcoin bonds in Q2 of next year. And that's when you can look down and read the contracts and see all the fine print.

In the meantime, you can look forward to being empowered by your responsible saving of Bitcoin as the most pristine form of cloud in the world because there are coming tools for you to use to empower yourself and to leverage the wealth that you've built in the internet economy without all the problems that you face today just doing a straight sell of that Bitcoin to buy that property. You'll be alive on the outside but dead on the inside. Well, speaking of housing...

You had a great tweet around July 4th. What has been sort of... You were invited to socialize with some of your neighbors on July 4th. What was that experience like? Oh my gosh. It was funny. I came home. Neighbors were in the driveway. They waved me over. Come have a hot dog. Come have a beer. I'm like, okay, I'm going to go over there. Went over there and said hi to everybody. I guess they were in the middle of talking about...

the housing price performance and how the housings were going up in dollar values. So of course, I came over and they're like, "CJ, you know, you've been here for a while now. It's been since 2019, you know, your house is doing great, huh? It's more than doubled in value, hasn't it? Like, are you happy?" And I say, "Look, I paid 100 Bitcoin for my home. I can't even get 10 Bitcoin for my home. The house is crashing and burning against my savings vehicle."

So even though my house is worth more than twice what I paid for it, I've actually lost more than 90% of the value with what I paid for it with. So I'm not really that happy with the performance at all. I cannot buy anywhere near amount of Bitcoin back that I paid for it. And this is, this haunts me at nighttime, but yeah, you know, everything else is great. Love the neighborhood. HOA going down is nice too. You know, nice to save some money on those fees. And then everybody was like,

They're like, you know, you got the freeze on the hot dog, like, what is he talking about? Because, you know, I told them about it when I first moved in there. Hey, how are you? What do you do? You know, it's like the first question everybody asked when they first meet you. How are you? Nice to meet you. What's your name? What do you do? And, you know, I'm the Bitcoin guy. And back then it was laughable. But, you know, at those prices, I was like, this is amazing. Like, this is crazy. I can't believe I can, you know, and.

And someone asked me a good question, actually, that they said, hey, look, somebody who understands the Bitcoin cycles, why the heck did you sell in 2019 instead of 2021? Like, you know how the cycles work. And I was like, wow, that's a really astute question. That's a good question. And I'll share an answer with everybody. At that time, my wife got pregnant. So we were expecting our second kid and we needed to we needed more space. We could not make it work where we were. So it was time to either re-rent or

or by and even knowing the cycles

Thankfully been blessed enough that there was enough growth there where it made sense to my overall savings to do that and get my family in there and I'm happy I did I don't regret it at all because ultimately we want to spend our Bitcoin But what I learned through that process is that you don't want to spend your Bitcoin outright you want to first borrow dollars against it and then spend those dollars and slowly pay them back and when you do that you get the best of both worlds you get to keep the Bitcoin and you get to keep the house and

And that played a big role in the development of this product so that we can help other Bitcoins who have to make a similar decision in the future, except they won't have to give up their Bitcoin. They'll be able to benefit from their cash flow, from their job, but also from the growth of that Bitcoin over time so that they can pass it on to future generations who can continue to benefit from that wealth. That's awesome. I hope I can benefit from your services in Q2 of 2025 when I look to buy a house.

What can you tell me about, you mentioned earlier in the show, that the countries in the Middle East are buying? Probably my last question for you. So, I mean, how do you know something like that?

You know, it's just the rumor mill. There's a rumor mill that goes around on OTC desks. Who's looking for coins? How many do they want? How many can they buy? And how much will they buy perpetually? That's the real question. The real OTC hunts are not for one-time buys. The buyers that are coming in are looking for consistent amounts of coins well into the future. And they want to buy in big blocks. They don't want small blocks. So just seeing the natural...

growth and pace of demand grow in some of the ways that you wouldn't really see it in an exchange, right? You won't really see it when you look at a chart. But when you're networked, when you're tapped in and certain people are asking you certain things about whether you'd want to sell a certain amount of coins, you're

It all starts to add up, and you can piece two and two together where that money is coming from. And I think that the trade deficits that we see, the United States has massive trade deficits, which means the other countries got the surpluses. They used to take those surpluses, and Luke Groman, I think, hit the nail on the head with this thesis. They used to take those surpluses and buy the treasuries. We knew that. But now, since we weaponized the dollar, real rates of return are negative. They're taking those surpluses, and they're putting them into gold.

They're taking those surpluses and they're reinvesting them into the economy or into infrastructure. And they're not sitting on those dollars anymore. They're re-spending them immediately because that's what they're being incentivized to do by the marketplace. And some of them are not just doing that. They're also starting to build their own strategic Bitcoin. Wow, that's wild. You wrote one of your tweets. Bitcoin was engineered to leverage the natural laws of economics, commodity cycles, and price discovery to empower we the people.

It's awesome to watch and I've loved hearing about your story. I'll leave it to you to let, you know, this has been incredibly dope. I'll leave it to you to let people know where they can find you and your work.

And we'll see each other on January 18th in Naples, Florida. And maybe we'll have some progress on Florida's strategic Bitcoin reserve by then. I think we will. I'll leave it to you. I definitely think Florida's moving fast. That guy, Jimmy Petronas, the CFO, he wrote a letter to Chris Spencer, the head of the State Board of Administration, who's in charge of the pension plans, and asked for a

A report. A report that lawmakers are going to be using in the upcoming session here in Florida. So it's really important for your listeners to support people like Watchman Action Group with Arcee and Juliana Williams, Citizens for Sound Money with Daniel Diaz, even Florida Bitcoin Blockchain Association with Samuel Arms.

These are the people that we want to empower. Dennis Porter, Satoshi Action Fund. They are going to the politicians and they are pushing these things forward. They're going to move a lot faster than people are anticipating. The people in the power positions are now starting to listen. A couple of years ago when there was a war on crypto,

Nobody was really listening. But now with the incoming administration, bipartisan support, and rapid progress of crypto's influence within the political realm, more politicians are listening. And they're not just listening. They're actually eager to learn. The good ones are actually eager to learn. So I think that's going to be hitting a lot faster. That trickle down from the federal to the state to the cities to the municipality is going to happen faster than anybody really anticipates.

So I'm excited about that because I see it kind of working in the background. So please support those groups, support those people because the work they do is of the utmost importance. And.

You can follow me on X at CJ Constantinos. And of course you can follow People's Reserve on X at People's Reserve. We don't really do anything else. That's kind of the greatness of building in stealth. You don't have to have all this CRM and manage all these things. We don't need to maintain our website and other stuff like that. Like we are building in stealth and we are building for you. And when we're ready, we'll go live and you can look at everything. Until then, follow me on X, follow People's Reserve on X.

And we'll continue to teach you what we feel comfortable teaching until we're live in the marketplace offering our products and services. And by the way, we're never going to put our name on a stadium because we're building products and services that don't require marketing. They just work. And when your product works and it solves a problem, it markets itself. So don't expect to be getting some blast from us trying to convince you of our products. You'll hear it from your family and friends before you hear it from us. We're building products that work and that empower you. And then we're not going to force you to realize that.

We're going to help the math realize that just the same way Bitcoin has taught us over time. Never, never, never sell your Bitcoin. Simply just borrow against it. Yeah, I mean, probably 99.999% of advertising and marketing is to get you to buy things that you don't really want or need and to convince you otherwise. CJ, this has been so dope. Thank you so much. This has been great. Yeah, thank you so much. I'll see you in Naples and I hope to see everybody else there as well.