BITCOIN ONLY: Saifedean's "Unconditional" Advice for the Next Decade

Buy bitcoin, hold it for the long term, you'll be alright. Doesn't matter what the price is. Hold bitcoin. If you have the ability to wait five, six years, then you're going to be fine. People are going to do whatever they want with the bitcoin, including selling access to it or exposure to it in all kinds of different ways. If you don't like it, you don't buy it. You know, stack your own bitcoins. This is the question, how much demand is there for money that does not get debased? Zcash is a shitcoin. Nothing changes about it. Hi there.

Welcome back to Cointelegraph's YouTube channel. We're here at Bitcoin Amsterdam speaking to one of my favorite bitcoiners and probably one of your favorite bitcoiners, Saifuddin Amus, of course, famous for the bitcoin standard. I want to start there. First of all, it's a great pleasure to finally speak to you. I'll be honest, I've been writing about Bitcoin since 2017 and I don't think it really clicked in my brain until I read the bitcoin standard. I want you to take us back to when bitcoin first clicked in your brain, perhaps when you first heard about it and if you were as skeptical as everyone else.

Yeah, well, first of all, thank you for having me. I first heard about bitcoin very early. I honestly don't even remember when I first heard about it. There is wasn't a moment when I first. Well, there was, but I don't remember that moment when I first heard about it. But I heard about it pretty early in Internet, the dark corners of hard money and gold bug Internet where people were mentioning this new thing and I was pretty skeptical. I heard about it, I think it was probably 2011, but I was pretty skeptical for the, for the longest time. You know, there were very few resources around that time and I was an academic and I had the kind of, that very, very evolved kind of academic stupidity where you think that your credentials allow you to pass judgment on things without having to look into them because you know you've got credentials. So I was sure that bitcoin wasn't going to work and I was like that for several years, which was a very, very, very expensive mistake. But then around 2013, 14, 15 is when I started to really give it a second look, started to pay attention to how it works. Started to understand that it's not as easy as just a bunch of people deciding to change 21 million. That 21 million was really difficult to change. Once that started to click, that's when I became a little less skeptical and started opening my mind to it and started studying it more.

Saif, when you, when. When you wrote the bitcoin standard, did you anticipate that it would become as successful as it is? I mean, I'd love for you to tell me what the numbers are now, but I know it's way more than a million copies sold. But lots of people, a lot of people that I speak to that are very knowledgeable in the industry cite your book as the aha moment.

Yeah, no, I did not expect it to be this big. I mean, I was an academic, so I was writing an academic book, and I just did not think academic books would be that popular. And, you know, that didn't cross my mind that my book would become this kind of must read almost where everybody in the industry knows it and everybody tells everybody to read it and everybody gives it to their mom. But, you know, I'm not complaining. I'm very happy about it. I'm very thankful. And, you know, to everybody listening, keep reading and keep buying those books. Yeah. To answer the question, I think it's more than a million copies. I don't have exact numbers, but I'm. But I think it's over a million by now.

Yeah. Let's talk about the new book, the gold standard. You spoke about it a little bit earlier and online, and I actually wasn't sure if you were joking. And I was having a conversation upstairs in the whale area, and people were like, is it really a sort of fictional story about what would happen if gold was what bitcoin was?

It's a fictional book. I think I may have invented the genre of economic fiction. I don't think anybody has done that before. There's fiction, there's economics, and I don't think they meet. And I think they have the same kind of readership. What is the real world implication of this? And in order to do that, you know, I needed an elaborate thought experiment in that book.

I take it that Peter Schiff is not going to be endorsing this book and you're not getting on the gold bug train.

No, no, I'm not getting on a gold bug train. Even though it's called the gold standard, it's really a bitcoin book. So the only way that gold manages to change history in the 20th century is and continues to be money in the 20th century is that it becomes a lot more like Bitcoin. And that's the kind of the novel part of the book is where I take the liberty of imagining a world in which airplanes in 1910 and 1915 become a lot more advanced, a lot faster, because a bunch of entrepreneurs set up a gold clearance business using airplanes. This was the first commercial application of airplanes. And so they start using airplanes to move gold around. And that makes gold very fast. And because gold is very fast, people don't need to keep a lot of their gold at their local central bank. And that rugs all of the major central banks in World War I. So while they're fighting the war and printing money to fight the war, people have their gold, their flying around outside of the control of the central banks, which leads to the collapse of the central bank's fiat currencies. And that then leads to an outbreak of peace, prosperity and abundance throughout the century.

Saif, I want to take the conversation to sort of today, now, the kind of trends that we're seeing in the industry. I was myself very skeptical when bitcoin Treasuries came out. And Michael Saylor's been doing it for a long time. I mean, it's like it's no secret. And it basically just took people four years to catch up and figure out how he was doing it and doing it well and then copy paste and go about doing it. Do you think there are too many bitcoin treasury companies before I ask you if you think they're even valuable in the first place?

Yeah, it's a difficult question. It's not up to me to decide whether there's too many or too little. They live and die by their own balance sheets. So it's an interesting question. You know, when Michael Sater started this trend that was he started off just buying bitcoin, holding his cash balance in bitcoin. And that for me, I think is. It's a great idea. I think every company needs to become a bitcoin treasury company just because bitcoin is better money. So you want to make your treasury run on bitcoin rather than other inferior, leaky monies that are constantly losing value. But, you know, Michael Slater took it a step further and then started using financing to buy Bitcoin, which is essentially not really the kind of simple bitcoin treasury idea that I had described in the bitcoin standard or that I kind of alluded to in the bitcoin standard, where you just use it as a better money, because now you're essentially conducting financial arbitrage. And that's I mean, it's a different thing, but that doesn't necessarily mean that it's a bad thing. So there's a lot of capital in the fiat financial markets and that's always looking for a way to achieve good return. So if you manage to achieve that good return by buying Bitcoin, well then you are able to monetize in all kinds of different ways. So, you know, it's not something that I feel comfortable enough to recommend to people. I still tell people, just buy Bitcoin and hold it for the long term. And once you, when you're thinking about buying a Treasury, it's a company so you know, it's on you to do the due diligence, to look at the balance sheet to see if this is a good choice. And it's not something that can be recommended wholeheartedly, unconditionally, like with bitcoin. With Bitcoin I just say buy bitcoin, hold it for the long term, you'll be alright, doesn't matter what the price is, doesn't matter where we are, just hold bitcoin. If you have the ability to wait five, six years, then you're going to be fine. But with companies, you know, it's entirely dependent on their financials and their financial position. So I don't feel comfortable telling anybody to buy any of those things. I think you need to exercise real entrepreneurial and investment judgment if you're going to be using that. So it's an interesting question of how this continues to go. There may be a case to be made that just like with bitcoin, there is no second best. Maybe with treasury companies there is no second best. And Michael Saylor is going to continue to dominate because, you know, he got in very early, he stacked a lot of bitcoin before he started borrowing. He's got a decent safety margin between him and liquidation, he's got an enormous first mover advantage and a major brand associated with it. I'm sure others can enter the field, but the issue is that the more they enter, the more Bitcoin they buy, the more they pump his bags, the more attractive it is for him to borrow more so and then the bigger he becomes, the lower the interest rates at which he can borrow. So I don't know, I mean, it'll be interesting to see how the whole thing plays out.

Yeah, it's been fascinating. I'm lucky enough I've never spoken to Michael Saylor yet, so he's still on my wish list. But I've spoken to Jack Mallers you know, many other people that are at the head of these really big bitcoin treasury companies. And one of the things that's stuck out to me from Jack Mallows in particular was like, no one gets to choose who uses bitcoin and how they use bitcoin. And it's actually a very good thing that bitcoin is great for the sovereign minded individual, someone who wants to take money into their own hands. It's great for a company if they want to have a hard asset on their balance sheet. It's probably great for a nation state if they want to hold gold and bitcoin as the two hardest assets that we have. So it ticks all those boxes. But it does kind of make me think, and I've asked people like Adam back this as well. Like, does it matter that bitcoin's moving away from its sort of cypherpunk ethos and just becoming this massively mainstream financial assets by virtue of what it is?

No, I don't really see it that way. I think, to be honest, a lot of people project too much onto bitcoin. Ultimately it's just a bunch of software and anybody can use it in any way that they want and anybody can make, you know, can do of it whatever they want. So it's a tool that people are going to be using. And of course, initially it's a small subset of people that uses it and then they start projecting their values onto it and then over time they expect it to continue to abide. But over time, if it's a successful technology, it's going to be used by everybody. It's going to be used by small businesses, large businesses, governments, individuals. It's money. Everybody uses money. Eight and a half billion people on earth, they all use money and they're all going to continue to use money. And bitcoin is just the best money. So if you have very strong feelings about how people should and shouldn't use bitcoin, you're in for a rough time, I would say. So make peace with it. Just accept the fact that, you know, people can do with their money whatever they want. And the way that the protocol works is that it's completely blind to what you're doing with your coins on the bitcoin blockchain. There is no paper bitcoin. There's no such thing as paper bitcoin. There's only 21 million bitcoin and every node makes sure of that every 10 minutes. And then if somebody who has some of these bitcoin on Their private key decides to sell obligations, financial liabilities, referring to that Bitcoin under any condition. That's their choice. And so it's outside of Bitcoin and it's outside of the realm of other bitcoin users being able to say this is right or wrong and this should happen or shouldn't happen. People are going to do whatever they want with the bitcoin, including selling access to it or exposure to it in all kinds of different ways. And if you don't like it, you don't buy it. Stack your own bitcoins.

I guess that's kind of true. And we've seen it with gold and a whole load of assets. That's what happens. If it's a really great asset and it's hard, you're going to slap all these things on, but it doesn't really impact the underlying. A couple more questions. You're very outspoken about the rest of the cryptocurrency industry. Every other cryptocurrency you've openly said many times is a shitcoin. There's a lot of hardcore bitcoin maximalists that, that still subscribe to this view. I found it really interesting that zcash has finally found a huge amount of support from a lot of big names in the bitcoin industry. I just spoke to the Winkelvoss twins who launched the zcash treasury company this week. A lot of people are just touting the privacy benefits. And if you go and look at the history, the Zero Cash protocol was created by a lot of cryptographers that wanted to do this on bitcoin. And the paper itself is, you know, basically private money from bitcoin. So it's very squarely focused at that. But when Satoshi removed opcat, it meant that we cannot do some of these privacy preserving things that protocols like zcash can do. The Winklevoss twin said to me they think that they can coexist. What do you think about zcash? Would you love to see more privacy on bitcoin? Does it matter? What's your view?

Yeah, no, zcash. Zcash is a shitcoin. Nothing changes the about it. The whole thing is built on a trusted setup where you have to trust a bunch of people who started the whole thing. I'm not in any mood to get into these kind of stupid games. You know, feel free to test them yourself. Also, I'm not sure of this. You know, I don't follow shitcoins all that closely, but from what I understand the anonymity benefits come at the expense of the auditability benefits. And so therefore nobody can be quite sure of the total supply. So good luck playing that game as well if you're interested. Ultimately, I think all of these shitcoins, you know, they have zero liquidity practically. And so they are essentially larping privacy because without liquidity there is no privacy. It's all being held by a very small number of people traded on exchanges. So the idea that you could just, you know, you can just make privacy into a feature where you click a button and then it's private, I don't think that makes sense. There are always ways of tracking and without a large liquidity pool, there can be no real world application of these kind of nice games of privacy. So essentially. And there can be no large liquidity without supply guarantees, which you can't get without the auditability. So therefore, you know, this ends up being just a glorified science project. And I think on the issue of privacy, I mean, it's interesting how it'll evolve. I think one unpopular opinion I have is that on chain privacy is very difficult. And I think it continues to get more and more difficult, but that's not necessarily a bad thing because people can get the privacy they want on second layers. And I think it's. I think it's just. I don't think it compromises it. I think people would rather have hard money that is not private over easy money that is private. And I think it's just, you know, the narrative that people want privacy in their money I think is massively overblown in order to provide marketing for shitcoins. Because in reality, money by its nature is an anti private technology. Every time you buy something from somebody, you know, the whole point of using money is that somebody that you don't know and that you don't need to establish a relationship with them. But every time you buy or sell something, you are establishing some kind of relationship with somebody else, so you're leaving information. So it's very difficult to make money into something that is private. And on chain it's always going to be difficult. But what people really want is resistance to the basement. That's the thing that actually has a $300 trillion total addressable market.

Look, I want to just finish on a parting note there because you said a lot of interesting things about privacy. And if I think about privacy and money, the only really real way that I can kind of transact privately with people with fiat money without them knowing anything about what's in my bank Account is if I go and I just draw cash, or I only accept cash and use cash, because then I go and pay for something, the vendor's not going to ask who I am. They're not going to really ask where the money came from. X, Y, Z. If I'm paying them in cash, it's the amount of money I put it down, we walk away and we're okay with that. And I don't know where that privacy.

Element is massively overstated because first of all, there are cameras everywhere. So when you're going and paying with physical cash, you're paying with physical cash in the physical world, and the physical world has cameras everywhere. So if somebody needs to track down who made this transaction, there will be many cameras. And, you know, your phone has a lot of detection software on it that can tell where you are. So this notion that money is private, that cash is private, I think is severely undermined recently. Governments and banks can keep track of bills. They know where bills go and they know who withdraws which bill from an atm. So and, you know, the ability to withdraw cash is severely restricted. More and more over time, it's progressively being restricted more. So the privacy on the cash layer is massively, is massively declining, and I think it'll continue to decline. It's just, you know, technology is making recording information so much cheaper and so much easier. And therefore processing. And also processing that information to try and get data from it is also becoming cheaper and easier. So, you know, you go to the supermarket, there's a camera, it's going to know that it's you face. Detection technology today is very strong. So, you know, money is. It's just difficult to keep private in an age of extra information. But that's fine. The main thing that you want from Bitcoin, at least for me, and I think this is the thing that has the most demand. Because ultimately, how much demand is there for this is the question. How much demand is there for money that does not get debased versus how much demand is there for money that allows you to perform?

That's what I was going to ask you. What is the value of privacy when it comes to money versus what is the value of money that holds its value?

Well, even the person who wants the most privacy in their coin, with 99% of their transactions that they carry out, they essentially have no use for privacy. They go to a sandwich shop, they buy a sandwich, it's not make or break for them if the sandwich shop has a camera and can figure out who they are. Whereas the demand for money being hard is something in the range of $300 trillion. So I think we need the liquidity first, and then after the liquidity, you'll get the privacy.

Yeah, that's fair. And I think one of the big arguments that people put forward was like, you shouldn't be doing this anyway. But if you went to the coffee shop and you bought a cup of coffee with your main bitcoin wallet, that has a huge amount of bit 10 bitcoin in it. Like, if someone was savvy and they went and they look at a block Explorer, they can see like, holy shit, safe's got 10, 10, 10 Bitcoin there. We should go and rob him. You know, and the zcash advocates are kind of saying like, you can go and pay for your coffee and no one will ever know how much money or what the record is. And that's, that's a fair assessment. But I also think no one's going.

To go and do that because nobody wants to hold zcash. That's the thing. So ultimately, this is the thing that a lot of bitcoiners fall for, which is why I call it LARPing. When you pay for something with bitcoin, but the person that you pay, they take the bitcoin and they sell it and they're accumulating cash, then really you're just adding a layer of performative drama to the situation. If they have their cash balance in fiat and you have your cash balance in fiat, but then you buy bitcoin and to give him the bitcoin and then he sells the bitcoin, then you've just incurred a bunch of transaction fees. And the only real adoption happens when you are paying out of a cash balance in bitcoin because you hold bitcoin and he is receiving the money in bitcoin because he also holds bitcoin. When you do it that way, then yeah, I think it's workable and sustainable. And I think that would be. That's the real adoption.

Final question. Are you still hopeful about hyper bitcoinization and everyone using bitcoin as money in the next 5, 10, 15, 20 years?

Well, I mean, yeah, but 5 may still be too early. 10 may still be too early. But you know, 15, 20, I think. Yeah, I think bitcoin will be the world's top money in about 15, 20 years or so.

Beautiful. Saif, thank you so much for your time. It was a great pleasure to catch up with you and finally speak all things Bitcoin. Listen wisely. He knows better than most. Thank you very much.