Jeff Booth on Bitcoin, technology and deflation

00:00 Jeff, six years ago you published the book Price of Tomorrow with the essential thesis that technology would force deflation and break the fiat system. >> If we lived in a free market, it would make prices fall even faster. >> Today, debt sits around $36 trillion. When you say $36 trillion, you're talking about federal debt only. You're not talking about the total [music] global debt of $350 trillion. But the $350 trillion >> [music] >> cannot be repaid. >> Can you help us understand the role of Bitcoin? >> I've spent probably 15,000 hours myself trying to kill Bitcoin. >> Bitcoin explained in one sentence. >> A decentralized [music] >> Welcome to another episode of 51

00:45 Insights, today with Jeff Booth. Jeff, welcome to the show. >> Thanks, Mark. Great to be here. >> Jeff, you are the founding partner at Ego Death Capital that just closed a fund at $100 million to invest in the Bitcoin ecosystem. [music] You also sit on the board of Core Scientific. You also wrote the book that taught a generation of allocators why technology is deflationary and how the dollar system is at war with [music] itself. Jeff, welcome to the show. We have a lot of topics to discuss today, and I'm excited for [music] this discussion. >> Yeah, thanks for having me. >> Yeah, Jeff, six years ago you published the book Price of Tomorrow with the essential thesis that technology would force deflation and break the fiat system. It's 2026, six years later. Can

01:30 you just unpack for our audience what's the thesis in that book? How did that play out over the last six years? >> Yeah, the thesis is that credit-based money needs exponentially more credit-based money to expand. So, credit-based money, an instrument that money is loaned into existence with an interest rate, has premises that has to expand exponentially forever, and that would be against the natural state of the free market. So, the natural state of the free market deflation. We have to compete to provide value to other people to be able to to win. And we choose things as as consumers or purchasers of goods and services that give us more value. So, if an entrepreneur or somebody having to or working for an entrepreneur, if the sum total of their

02:16 experiences, they have to create more value than what came before them. And they only survive if they create more value cuz we only choose the things that give us more value. Then how could that not force prices down in a free market or or or value up? Because we're we're we're part of that market. Um so, when you realize the gravity of what I just said, the statement of what I just said, and you then you realize that you had exponential technology that was ideas in our head put into So, when I use technology as a word, I'm saying ideas that drive productivity growth. And that productivity growth, if we lived in a free market, would make prices fall even faster if you had exponential productivity growth. And

03:02 that productivity growth is faster deflation. But a credit-based system can't allow that to happen. So, when I when I said we're at war, I said you're at two different systems colliding into each other. One, the free market. And one, a version of people's reality a version that is nothing like the free market, that's a centralizing structure that has to make government bigger, that has to make big big money pools bigger, that has to make centralize every big tech, big everything, because it's operating on a foundation of credit money that [music] can't allow the natural state of the free market. And so, today you find yourself so what what what I talked about in that book,

03:48 all of the things I talked about in the book were just further along that path. Right? You have these two systems. Prices should be falling exponentially abundance in the world. You have credit-based money moving exponentially to try to stop that. No matter who's in power, no government can can stop stop this. No um you have a version of infinite money units being created to stop what I just said, which is centralizing all control into a very few companies and and uh um and and and and and people. Everybody's inside that system measuring Bitcoin or any other thing else from from the volatility and the and the

04:33 nonsense from a credit instrument that is already insolvent. >> So, today debt sits around $36 trillion. defense spending as well. When you say centralized control of a very few companies, what do you mean by that? >> Well, so what what ends up happening is and I wrote about this in the book. So, in 2008 uh you let's use an example. So, the entire system would have collapsed to the ground if it wasn't bailed out. Right? TARP and then TARP extended and then there was more monetary easing and um and none of the people none of the companies the kind of the systematic anchors in that system. No one went to jail. A bunch of people got wiped out. Nobody went to jail. Those all those people are still the

05:19 power brokers that are still in that system today. And if you knew that that if you got big enough fast enough and you were a part of the architecture of of of the money flows, that you had you had a no way to lose. Heads I win, tails I win. Because if if I make bad bets, government has to bail me out cuz otherwise the entire system falls to the ground. Would you create more of those companies or or less? More systemic risk or less? Of course, you'd create more systemic risk cuz everybody would know how to game a free market. And they would realize that they would And so, what you see is an extension of that. You see You see Elon Musk coming in and saying doge, we're going to remove the waste. And what happens? It just gets [music] bigger. Right? Because people believe you can

06:05 remove the waste and be fiscally responsible without causing a deflationary spiral. But if you were So, so fraud expands. Centralization expands. No matter which government which No matter which side you vote for, the outcome is the same. Monetary units expand. When you say 36 trillion, you're you're talking about uh federal uh debt only. You're not talking about the total global debt of 350 trill- trillion. And if And it's probably more than that with black pools of capital capital. And that 350 trillion dollars is supporting, say, 900 trillion dollars of assets. But the 350 trillion dollars cannot be

06:51 repaid. Go through the math and think of what it would cost to repay 350 trillion dollars. It's impossible. Be it the the debt servicing to try to [music] do that, especially in in technology that's driving prices down to make that more expensive. So, what happens? People are pricing all of their assets, all of everything, all of their way of life on top of a system that's growing exponentially in that number of that that debt. And they're And it's [music] just moving around at at exploding at a debt And they think all of the assets on top of that debt are safe because they assume the risk-free rate of that debt is a long bond rate.

07:36 And that's the And that's the true risk-free rate of the world. So, there there there there's an error in their calculation because they error they believe that money is that that credit is solvent. And if you believe that credit is a solvent, it always has been solvent. Government will always step in. And they create the solvency by driving more inflation, by devaluing the currency. >> Japan has run a 260% debt-to-GDP in three decades of deflationary stagnation without monetary breakdown. The US now sits at around, I think, 120%. What stops the US from just Japan-ifying its way through all of this? >> So, it's likely going to happen.

08:21 But what what ends up happening? How much does Japan government own of the stock market? How much does the the When I said centralization, that's what ends up happening. And Japan don't assets all over the world, including treasuries, and they work and could could actually get away with that for a long time. The question is that can the whole world get away with the same thing and for how long? When do people realize that their entire imaginary version of reality sits on top of what somebody else can print for free. Just make up. All right. So, they're working for like their labor, and that labor is being devalued. Their time is being devalued at a crazy rate. Like a staggering rate, way more than the inflation rate would say. Because it's not the inflation rate.

09:06 It's what the productivity rate of the world is doing versus the inflation [music] rate. And not versus the inflation rate, even the stated inflation rate, the monetary printing rate. >> The obvious antithesis of that is Bitcoin. Can you help us understand the role of Bitcoin and where are we in that transition of Bitcoin becoming some kind of asset that is much more important to the world than it was 10 or 15 years ago? >> I think it's actually the most simple when I say simple, there's there's layers of this understanding. And [music] and just for your audience, I've spent probably 15,000 hours myself trying to kill Bitcoin. So when when you're hearing what I'm saying now, it's not just okay, I want this to be a true

09:53 and it's true and I'm just going to I I and why I'm investing on top of and everything else. Take take it from somebody who understood the gravity of of the situation that the free market. We've never lived in the natural state of the free market. So we wouldn't have a pattern recognition for what I'm saying. All of our models came from a historical zero-sum game. That that mean like our our model of democracy. When did you last vote for how much monetary printing there was? Do you actually have a vote that matters when most of the theft you have no vote in it. And the consequence of that theft on crime and people and and picking the pockets of people people and everything else. The consequences are too

10:38 downstream of the thing you have no vote in. You've no idea that it's even happening. So it starts to challenge your mental picture of of the reality that you're starting to to that you're measuring everything from. And so now ask a different question on Bitcoin. You have this decentralized and secure protocol. I don't call it an asset. You could believe it's an asset, but you have a protocol that's bounded by energy decentralized and secure that's that's capped at 21 million. So you have 21 million units. >> [music] >> Um that are going if it stayed decentralized and secure, you could question that. We can go deeper in that, but if it stayed decentralized and secure and there was only 21 million units and it couldn't change because of the decentralized and

11:24 security, you couldn't change it to 28 million, 50 million like you can the existing system. You have 21 million units. What would that be pricing? And it would be pricing the first free market that ever existed. Relative to that protocol, all prices, what you would expect to happen in a free market, that we serve each other, we create value, and prices fall, and then and the margin that we create, somebody else attacks it, creates more value, and we use the things that give us more value. What you'd expect to see from that new new protocol is all prices falling forever. That's what it's really easy, right? Cuz it's 21 million units. Um and and if it would stay decentralized and secure, remember gold

12:10 always centralized, and then the rules changed. So, you could you could question that it could Bitcoin centralize, and would the rules change? But if it stayed decentralized and secure, it'd be the first version of reality that we would actually impose a system that would be the free market, and all prices would fall forever. If I look at what's happening in Bitcoin, that's exactly my observation. A model should be predictive, and it should predict the next outcomes. When you walk up the stairs, your brain doesn't think about which stair, right? Your model of walking up the stairs is predictive >> [music] >> in in in in reality. And that's exactly what's happening in Bitcoin. It's predictive in [music] what should happen in in this free market. But it's predictive on the other

12:55 side, too. Because as it's imposing a new reality, all of the people that are measuring their reality in infinitely growing monetary units and think prices are rising, are chasing every gamble, everything inside that system. And from monetary assets rising and centralization and world's getting divided faster and faster, and they think there's a hero inside that system, and it gets faster and faster and faster. And so, um I don't expect the end of the US dollar tomorrow. I don't expect the uh I expect this thing to keep marching on both systems. And depending which system you're observing from

13:41 will depend where you sit in your economic value from from the system. The Bitcoin's doesn't care what I'm saying, right? It doesn't care that that every 10 minutes there's a new block. It's bounded it's bounded by energy. It's decentralized and secure. It's been that way for 17 years. And if you had if you held Bitcoin, you would see the value of your dollars in purchasing other things, what you would expect to see in the free market, you would see them constantly increase. >> Let's make this very practical. I think some people would say that's great, and I understand this. Bitcoin is a parallel system. It's a deflationary system, but that would also require that asset prices or assets are priced in

14:28 Bitcoin, right? And it would require Bitcoin to be a currency that people buy assets with. What are other things that are required that make this a reality? >> So, I would say it's only one thing. It's the say decentralized and secure. And because of it say decentralized and secure, and this is the misframing that most people have in it. I because it and I think it's because it matches a previous reality. Remember, our future comes from our past, right? We we make we make assumptions tied to our past, and we iterate on that. And sometimes something is so different, but it our past is our model, so we iterate. So, it would be easy to lump Bitcoin into digital gold. Right? And this is what the thing. And

15:14 it would be the asset, and if you could do the same work on the asset, and you could say um wow, this is this is impenetrable. 17 years all the attacks China's going to stop it. US is going to stop it. It's bad for the environment. All the attacks make it stronger. It's more decentralized secure today than it than it was it's and it keeps on marching on. And you could say okay, this is this is this is the underpinning of a new financial system. And you [music] could easily make that system just like gold and without without realizing that that um the underpinning of the financial system that you've always lived in is why do you need assets in the first place? Like your your question and today have you ever thought about your question? We need assets in the first place because

16:00 you've never been able to store your money in money. And governments always cheated and you always had to try to find an asset [music] that could with store your purchasing power. So if now you had a new asset that was like gold underneath a new system that increased monetary units forever. Then all that would create is newly >> [music] >> new new wealth in the world and new control system. And then eventually Bitcoin would centralize and fail. That's what it would that's what it would look like by the math of what would have to happen by infinitely creating more credit units that we've always lived that would match our reality. And why would we know that that would happen? Because it's happened to gold over and over and over again.

16:46 That's what happens to gold and it gets repriced. It gets taken from you from the state, gets repriced. We go back to living in the imaginary land of increasing monetary units and then not not the free market. But if you thought Bitcoin was a protocol, not you thought, you knew it was a protocol like the internet. And it was emerging in layers. Um and you would realize that you didn't need all these other coins. The The thing that happened in the internet. people wanted to attack the internet and create the the controlled version of the internet. But a neutral protocol is winner take all. So, the internet started in 1969, actually previous to that by Paul Baran

17:31 in 1965 as packet technology that would keep up communications in a nuclear war. That that you there was no central shutdown. It was decentralized in nature. >> [music] >> And because it couldn't be attacked and it kept on growing and growing at that same which turned into TCP/IP. Then you had new layers building on top of it. And those layers came in in predictable paths to [music] be able to extend functionality to be able to build on top of it. And then on all the applications on top of all of that are the applications like Google, Facebook, Amazon that we use today, Apple that we use today on top of that same tech technology stack. All of those companies

18:16 I mentioned didn't exist in 1989 [music] before the internet. Right? And so so um it was the un- it was the protocol building in layers that extended functionality that most of the world missed that was happening. Now, that's what's happening in Bitcoin and it is [music] becoming money to your question. I'm I go to I've been all around the world to circular economies that are using this extensively. In our portfolio in our portfolio, we have many companies doing billions of dollars per quarter growing straight up on payments on top of Bitcoin that most of the world is still saying

19:02 people aren't using this for payments. We've been there's privacy on top of Bitcoin now, complete privacy on top of Bitcoin now. Um that it that that is extending this protocol stack and as it extends this protocol stack, essentially a new parallel internet is being developed from energy all the way up. It's It's replacing a bunch of the nonsense that in the existing fiat monetary system, but we're very early on that understanding. That's where all the value is. And as that value gets unlocked, entrepreneurs are racing in to say, "With this piece and this piece and this piece, I can create something [music] entirely new." Similar to what happened with Amazon, similar to what happened to Facebook and

19:48 Google and everything else. That's it. We're just really early in that in Bitcoin. >> Yeah, and one of these companies that you invested in is Arc Labs, uh, where you co-invested with Tether. Can you just unpack for us a little bit what's that company about and why was it interesting for you to invest in that? >> Yeah, and I and instead of going into what I'll I'll tell briefly uh, at one end instead of the deep down technical details, but lightning is a is a second layer and actually following a protocol stack. So, we've had this idea and we've spent a lot of time is was Bitcoin a protocol or was it an asset? Was it because of as a protocol, your investment thesis to build on top of it and extend that protocol, imagine going back [clears throat] to 1969

20:35 and you could own a piece of the internet itself. And all of the value that came on top of it. Instead of owning just a company on top of it, you could all value forever accrued to you through owning a piece of the the internet. Imagine that scenario. And then imagine how many people would have held it, right? They could be I remember in 2000 when Amazon was $126 and fell to $3, how many people held Amazon at that time, right? So, So, now go back to 1969 and think how many people would hold a protocol in development that they could own essentially their share of the productivity of the world flowing to them through all of the bumps and things from that that misinterpretation. So, we spent a lot of time in Ego Death

21:21 understanding is this a protocol? And what would it take and what would that look like? At that time, Lightning was just coming out. And Lightning when Lightning first emerged, just like all second layers of uh uh of uh just like what happened on the internet on the second layer of the internet. There were battles and everything else, which is going to work. And Lightning at first because it was designed at first by a bunch of Bitcoiners who cared about decentralized and security. So, the first iteration of Lightning were [music] all kind of self-hosted Lightning nodes. Um and I and I like to look at it as it was designed as as as a highway system with all back lane one-way roads. And so, you would try to do a Lightning

22:07 transaction and it would fail about 50% of the time. And then all of the people in crypto and money said, "See, Bitcoin will never be used as a currency cuz it cuz cuz it's failing 50% of the time. That can't happen." Well, all of the people building on the protocol were extending the functionality. So, now Lightning works like 99.99% [music] of the time. Um and there's new implementations like Spark, like Liquid, like Arc that are different versions, different tradeoffs, but all of them together with Lightning create this impenetrable payment layer in in uh in a neutral currency that cannot be taken.

22:54 And so so, Arc is one of those versions of of you have liquidity anytime you want fr- uh from this. But the suite of tools that is now protocol layer two is is extensive. That if our cover got blown up or spark got blown up or liquid, it can't all get blown up at the same time. It's decentralized secure across all of it. And now you have your choice of trade-offs. You won't even know this later on. You won't care. Just like the internet, you don't care what TCP You don't Most people don't know who Paul Baran is. Right? Or what it looked like in the emergence of the Bitcoin Or sorry, emergence of the internet. They just know they log on to a dial-up They log

23:40 on to the machine and it always works. That's the same thing that's happening in this emergent proto- protocol. The same thing is happening in privacy. We invested in another company called Fedi, um which is built into Bitcoin. Right now you have complete privacy if you wanted to use this. You have complete privacy um you have complete privacy in your communications and and money inside of this inside of this emergent thing on top of Bitcoin. >> And there's a race going on right now in the US in particular since the passing of the Genius Act in building stablecoin rails. Pretty much every major US bank is building on a stablecoin, is building own tokenized deposits, is looking into

24:25 building their own blockchain layer one. We see new payment layer ones like Arc or Tempo or others. JP Morgan is building on their own blockchain or has built it already. If you talk to executives like that, what would be the pitch from you on why they should pay attention to Bitcoin for payments? >> So they're increasing their cost. And let's imagine what What What is a stablecoin? Let's go into the this before anytime a government names something, it's the opposite of what it means. What is the Patriot Act? It It takes away your individual rights and freedoms, right? What is a stablecoin? A stablecoin gains its stability by

25:11 pegging itself to the US dollar, which loses value against Bitcoin because it's built built on infinite use pieces of paper. So, the stability should be called a guaranteed loss coin. But of course, every company is going to do this and try to build their own because you can because if you could get people to use your guaranteed loss coin, you're gaining from their loss. Right? You're gaining control from them losing. And And so, of course this fight is going to play out. And of course, most people are going to be confused because the media and the environment and everything else favors the favors the big companies and favors the the biggest. And we look to put our savings in JP Morgan because they're the

25:58 best and the biggest. Right? We wouldn't think about our savings are actually devaluing in the bank. So, we're easily fooled into these these these structures that that essentially take our money, which is our stored energy, and give it to somebody else. But But if you just think, "What is a stablecoin?" Just Just have somebody honestly answer that. Against its stability from losing money against Bitcoin. >> Jeff, I also want to talk a little bit about the risk of Bitcoin. And one of the things that we hear over and over again, and I know that you just had a speech about this as well at Bitcoin 2026 in Las Vegas, is Bitcoin's quantum resistance. On April 24th, a researcher

26:44 broke a 15-bit ECC key on public quantum hardware. Google now puts Bitcoin's break at fewer than 500,000 qubits, not millions. Adam Back calls the threat real but distant. What's your take on that and why do you argue that quantum isn't really a threat for Bitcoin? >> So, think about the other threats that have hit Bitcoin or potential threats that have hit Bitcoin. Um and every one of them relies on giving your agency to somebody else. It's bad for the environment because those experts told us it was bad for the environment. It's bad for China because it's bad for a communist system, so you can't use it. All of the threat vectors, the government is going to shut it down. All of the threat vectors actually rely

27:29 on you your fear giving your agency to somebody else. Now, pick Now, pick quantum. And even what you just [music] mentioned, if you look deeper into quantum, you realize that that that that attack that you just said was actually trained by a classical computer that with the numbers that hopefully the Bitcoin the quantum computer could find. So, the So, the threat vector is so far further out than people believe or if it if it even exists. But But because you wouldn't understand quantum, it would be natural to say those experts, right? And it would be this boogeyman that would be create massive fear that you wouldn't do the your job you wouldn't do the looking you wouldn't do

28:14 the review of what you needed to discount those threats. They're all these being marketed somebody marketing. The even even imagine that my book coming out. Really simple premise. You could explain the economy to a five-year-old. We compete to provide more value to each other and prices fall as a result. That's the entire economy global economy. Means everything that you've ever known and every economist that you've ever told you that you can't live in that system is from the control system. And And you don't want to question the experts because what if you're wrong? And so so you give your agency away to those economists to tell you how to you live your life. And you should live it cuz inflation's normal. You have to have inflation. Theft is normal in money. You

29:00 have to have it to have productive economy. And you just believe it hook, line, and sinker again sink again something that is so obvious that you don't have to. So now you take that threat up a level and you say, "How many people will do their actual work on is quantum a threat when when it's something so confusing to them that they have to rely on experts?" And so you could expect this noise. But if you run a node it um it and you are following this this closely, you can also do the work and you can take agency. And And if quantum becomes a threat, I don't think it will. Um and and I'm And it would to it would take longer to that

29:45 than unpack on this. But if it became a threat you would be watching when and how and you would just upgrade your node that to to make it quantum resistant. But you sure wouldn't you sure wouldn't go really fast just because some marketing material told you and scared everyone else. >> Yeah, that's a a great point. Another point I wanted to bring up is something I hear often when I talk to people and investors about Bitcoin is what Michael Saylor is doing with strategy. Strategy is a Bitcoin buying vehicle. It's listed at the I think Nasdaq or New York Stock Exchange, I'm not sure anymore. But they own by now about 4% of Bitcoin's total supply. At the beginning when Saylor

30:31 started this, it was a great marketing machine for Bitcoin. It gave institutional investors access to Bitcoin as an asset class. But at some point it might also become a risk. How do you think about strategy and the role of strategy for the Bitcoin ecosystem? >> I think it's just a natural evolution of this of this free market emerging and people taking So, the first question you'd have to say is where does the where does the interest come from? Right? If if the natural state of the free market prices are falling and Bitcoin isn't paying interest, where does the interest come from? And so, somebody is absorbing risk somewhere.

31:16 And and that risk might be a long long way out. But but there is So, and and um so, but somebody is Where does the interest come from? It's somebody is absorb absorbing that risk. They might do they it might go on for a long time and you might be able to trust somebody else holding your Bitcoin. You think it's your Bitcoin, but you're not in self-custody and you've given away your agency or you've given away your Bitcoin to somebody else cuz they'll make better decisions than you. Um but uh but it has to accrue because it's against the natural state of the free market and Bitcoin is imposing a new free market. So, so, depend Now now, I think Saylor is brilliant. I think he's done a lot of good for Bitcoin. I think his credit answer I I

32:02 own MicroStrategy in my RRSP. So, I I he's done a lot of really good things. Brilliant It's brilliant design. It's good and I think I think he is going to be solvent through a bunch of these things. But I can I can know both think he's brilliant and disagree with him on digital capital versus protocol. Digital gold versus protocol and only one can be right. In for a time, they can both appear right. The protocol will reprice everything over time. And but I had totally understand if just cuz most people didn't hold the internet right the whole time. I can totally understand that a whole bunch of people are going to make bets and move their Bitcoin to somebody else

32:50 thinking it's safe. >> Jeff, I also want to talk with you about AI. Hyperscaler AI ethics is tracking towards $400 billion in 2026 with energy contracts pushing power prices higher across the grid. How does that fit into your deflationary model? >> So it's it's interesting exactly where it So you know in in my book I wrote two chapters on AI and where we would be today, right? And because I was measuring AI exponentially and most people were measuring it linearly. And so if you understood how fast AI was coming, you could see what was going to happen. And AI that we're The AI that we're using today is the worst it'll ever be by far. If you think about the productivity tool that's going to sweep across everything,

33:37 it's a um and and make businesses more effective. And if they don't use it, you will use a new business that doesn't have all that labor. Because it'll be benefit bit benefiting you. And then that's going to sweep across it's going to move into robotics, it's going to move into physical goods, too. We're at the very start of this um and it's the worst it'll ever be today. Most people are are doing uh very little in it. When you when you in at the front edge of this, the power that this gives you. I just think about my own my former company. Uh I had had over 100 engineers. Um you develop it well over and

34:22 at one time uh um you're to develop the tools that you would deliver the your architecture, your your structure, of company. Um I can do I can develop most of that what that by myself now. You can take idea, imagination into execution. Uh, firstly, by coding a little bit more, but without the skills and it's a staggering what's happening. So, that's going to create to to hyperscalers going to create both. So, there's going to be this demand impulse, this massive wave because everybody's going to raise hand and there's going to be a shortage of electricity because it's so uber price competitive. And there's going to be this demand and you can see that the output on the

35:08 models are are racing the demand is staggering. Um, I believe in time, I believe this is horizontal technology instead of uh, that is people are miscalculating it as it's Amazon. Um, it um, it it's network effects like Amazon. So, in time this is going to move into open source models and it's going to look more like electricity than it does Amazon of AI. And so, what what does that mean um, for for the entire infrastructure build? Then then you need to make the right bets on your on your counterparties that

35:55 you're signing contracts to. Are they going to be solvent or and and where what does this look like? Who are the winners? What does this look like over time? Because the amount of capital that's racing into this is determining is what's the revenue from the capital. What's the long-term revenue from the capital? Now, one of the things we are seeing is the chips are lasting longer. And then and [music] the new and so, the cycles might might extend, they might be more profitable than people imagine. There's so much innovation in the space, too. That you could have the the value gain, the productivity gains are staggering. And that productivity gains

36:40 if you set in a free market in a natural state of the free market, prices fall to the marginal cost of production. Long term, you you have to ask what's uh what's the marginal cost of production of a line of code creating another line of code? >> That's a good line, Jeff. And you're also in the board of Core Scientific, which was a Bitcoin miner, and which sold 208 million dollars worth of Bitcoin in Q1 to fund its AI pivot. Mining is in the company's own words essentially in run off. How do you square that with the thesis that Bitcoin must be the base layer of AI? And how do you see just a mining Bitcoin mining business in general right now? >> Yeah, so Bitcoin mining business is

37:26 these are potentially complicated topics on on such a short short show. But it but it but there was this belief that Bitcoin mining would centralize. Um going back 5 years ago, it was centralized in big [music] tech and Bitcoin mining. And I and I used to say it's impossible for it to centralize because every cycle needs lower cost energy. And what the centralized mining does is they lock themselves in bad them to high cost energy from the last halving cycle. And they might have been profitable then, but now all their equipment is in this high cost facility. They cannot work for the next cycle cuz the halving happens and now you need 3 cent [music] energy to be profitable. And so Bitcoin naturally is Bitcoin mining is an extension of the

38:11 free market. It's constantly changing chasing abundant uh energy all around the world at low cost free energy uh, um, flare gas, things where you can use heat back into the cycle to make more, to to make more money. And so, it's a this innovation that's spreading um, grassroots around the around the world, and you can't, [music] no matter what you do, if you had an a facility at 6 cents mining, you're hemorrhaging money right now by mining. Forget even the capital cycle of reinvesting in new new machines. So, so the the new machines go to new miners mining cheaper energy, and that cycle constantly repeats, and it it flushes out the old

38:58 miners. So, you you know this Scientific, I joined Core Scientific, I joined because of one of the equity one of the owners asked me to stand in his place as a equity as they made this transition, [music] and they came out of bankruptcy from the last cycle. Same same same thing. And so, what would you do? You would convert your energy to somebody who would pay for a pay for that energy at a much higher rate. And that's where all the that's where we are in the cycle, and AI AI companies and Meta, Amazon, Nvidia all need the energy badly, and they can project out how much demand

39:43 is coming for uh, for for AI, and they're racing into these energy sites desperate for that energy and and and and and paying good dollars on a 10- to 12-year [music] forward forwarder forward earnings on what that would look like. So, that's why So, that that's why that pivot to to AI. What's my personal belief though? That my my personal belief is Bitcoin is re-price Bitcoin is the best AI investment you can make. In the longer term because it's a combination of all AI investments. Moving moving to moving to that that productivity gained is all flowing to Bitcoin if [music] you're measuring in

40:28 Bitcoin, not a piece of paper. >> Can you unpack that a little bit for the audience? >> You you have 21 million units repricing the world and all productivity. Period. Right? And that 21 million against what most people are pricing infinite units. So, what would appear to be rising in price from infinite units isn't really rising in price. What it is according to the infinite units that you're measuring from. But if you measured from 21 million units, you would see the productivity [music] gains flowing directly to you. >> Let's stay for a second at the mining market. If miners [snorts] exit the market, hash rate goes down, mining becomes cheaper, profitability increases.

41:13 Do you think that will lead to a rebound of miners coming back to Bitcoin mining? >> That's what happens. So, with the difficulty adjustment, right? You still have 10-minute blocks. It gets more profitable, races in it's it's just a supply demand in all over the world. But you don't see you don't see mining materially falling in in difficulty. It's it's expanding because because if you're in I'm an investor in a company in Africa that's mining at [music] 2-cent power and super profitable mining at 2-cent power. Um and so this is happening. What do you think's going to happen in Venezuela? I'm watching people race into these these markets and getting virtually free

41:58 energy. That helps build this the grid back big grid stability back into into this. Now, we're really early in some of these some of these regions, but the world is not short energy. It's short energy in certain places and it's short it and it's short energy because you never had an economic buyer that could go aggregate that energy um and make money on that energy wherever it was. And so you now you have you have this um There's a There's a person in Bitcoin called Brandon Quittem and he he created this thing a long time ago that says it was like a it was like mycelium network

42:43 and the the mycelium network extending everywhere in the world chasing this and it's that stable energy-backed protocol that is the foundation of Bitcoin. >> Jeff, if you look at the Bitcoin ecosystem and the topics we talked about now, Bitcoin mining, Bitcoin as an asset class, Bitcoin as a payment network, as a protocol, where do you think is the biggest upside for investors across this ecosystem in the next years? >> I think that people are mis- misallocating to mis- misunderstanding it cuz they don't they don't understand it's a protocol. So just yesterday or the day before between Nostr, Bitcoin, thing called

43:28 Blossom, all of these are early protocols that you can have email that is not SMTP email that that is others completely now outside of the protocol stack that you'd call your internet and and outside [music] the visibility. So if you think about your identity how how many things you're inside of a surveillance state more and more and more and you have this parallel system that's moving it outside and then as these things get developed more and more entrepreneurs race in and take this piece this piece create something totally new that gives people value that they'd have no idea that the value is coming. That is so misunderstood today. It's why it's why I can't believe that there's venture capital funds investing

44:13 in in coins. Like this when you can invest in a long-term protocol and gain the value. So most of our companies are are are building on this then accepting Bitcoin then create and and turning the profits. So they're adding adding Bitcoin to the balance sheet every single month as this thing is grow growing really fast by providing value in it. So it's a it's a way to accrue more Bitcoin by building by by building value on top of it and I think it's completely misunderstood. And truthfully, if I didn't see this or if I wasn't immersed in it every day watching it happen all around the world I would probably miss it, too because it

44:58 would feel complicated. It would match my other version of reality from from infinite monetary units pricing assets within those infinite monetary units, I wouldn't see this either. It's just now that I'm in this new system and investing in and watching it and watching what people say about it versus what's happening it's it it takes your breath away. So it's so that's that's where the value lies. >> And can you give the audience a couple of pointers of like specific projects or initiatives that they should look at or focus on to understand that new system? >> So I could like you could look at our portfolio companies and you could see a lot of what's because because [music] they're some of the the deep tech

45:44 architectural foundations of what's what's now being built on top of. So FediMint would be one of those Fedi. Where somebody [music] could essentially download that, create their own version, their own wallet, have privacy in their communications. It acts like a super app, privacy and money, privacy in their communications, and they could invite their friends [music] to really easy. So, that you see these things um maybe not in the US growing as fast, but in regions where um if if let's say you're a dissident against a state and a dictator, let's say North Korea um or China, where your privacy is critical, you're seeing these explode in in different regions of the world where

46:29 where privacy is critical. And then you can imagine in in countries where you believe that you've had privacy, but you haven't, or you believe you have individual rights and freedoms that are moving away, these things are going to become more and more important in time and in time. So, um it So, those are that would be one um Breeze is another uh company that's open source like uh Lightning Rails, Spark, or could be integrated into it as as well. But, lots of people lots of developers are taking that open source tech and then building payments into their apps, and it's happening at a rate [music] that is like it's faster and faster and faster. So, because now you can

47:16 think about what happens in the world today. We pay people 2 and 1/2% of money to to take money that's losing money in value, right? And you could you can now jump out of that system, and you can accept money that's not losing money and not losing money, and you don't have to pay it 2 and 1/2% to to Visa, MasterCard, or bank. You can just embed it into your app. If you embed it into your app, you're making more money, and you can give better value to your customer. So, what do you think would happen in the free market is exactly what's happening all around the world. This is That's that's why it just moves faster and faster. >> What would you say to someone who says, "That's great, and we would love for our

48:03 customers to do that, but these customers are still stuck in this other system, and most of their assets are still priced in US dollars, and they are worried about holding something in Bitcoin, which might be a more compelling system, but it also is very volatile and might lose its half of its value over a couple of months." >> Yeah, I would say that this is going to be the way that it is. Like, this is going to be chaotic. Now, if you go back to the chart of Germany, the Weimar Republic, and you watch the measure to gold, the German currency, you'll see inflation, deflation, inflation, deflation. You see that people get rinsed, and they take massive risks going on one side, and

48:48 then they get flushed on the other side, then flushed on the other side, flushed and [music] it creates such a tension for for the population trying to gamble on where to put their money that's losing money at a crazy crazy rate, and it causes all sorts of I'm going to do this, I'm going to do this, and do and that fear drives them drives people to to different things. And everybody thinks they're winning, right? Or losing. I won on the inflation. I put my assets and I get flushed on the other side. That system, the money's already unstable. It's great creating more and more instability all the time. It works on one reason, that that somebody is going to print more money [music] and steal more of your time. The only

49:33 otherwise it would already be failed. It would have already failed. Your entire version of reality trying to [music] take asset bets from that currency from that currency is under threat. I can't tell you the time. I can't tell you when it's going to happen, where you're going to have a crash in real estate, and it's and people are going to get liquidated, when it's going to be a melt up in real estate. People will think they're they're heroes on any different asset, gold, silver, everything else. I can tell you it's already unstable and it's going to get far worse. And you don't and you can play in that game as long as you want and take those risks, but the risks will get multiplied or you can just move more of your time into the other system. The develop it will appear because the other one's

50:18 moving around so much. If they the the the opposite lens that but you can just leave it because the only thing you have to worry about, the only thing is will it remain decentralized [music] and secure and you have a voice. You can run a node. You can run a node. You can actually ensure it does because your your node can tell tell you is it decentralized and secure? Am I a part of the solution? >> Jeff, you're almost at the end of the show. Last question before we do a quick lightning round is what are you personally looking forward to on the Bitcoin road map in the next year, 2 years, 3 years? What are you excited about? >> Honestly, right now I I can't believe I get to do this. Like when I see what what what would I

51:04 expect to happen from this system? So what I would expect to happen is is some of the smartest minds in the world are driving into it and expand [music] expanding it and and you're now operating on a base of honesty that world's never ever seen before. I would I would expect that that would be really chaotic to understand from the other system. But I would expect the people that I would be dealing with in this would be they would know that, right? They'd be the same after you've gone down to the depth of that and you understand that the competition there is in service of you. You don't care about the competition anymore. The competition serves you. So my expectation, what I see every day, is how easy everything is

51:49 from this system. Is my expectation would be more and more people start to understand [music] this and just move with their time as that happens be really chaotic, but it's just a incredible spot to spend your time. Then and so it that's I've seen it for I've seen the exact same thing happening for the better part of 7 years that I've been in it. Um and it just keeps on getting easier. >> That's great, Jeff. Let's do a quick uh lightning round. Short questions, short answers. First one, why the name Ego Death Capital? >> I didn't come up with it. My partners did, but I loved it. >> One asset you'd hold for 50 years that isn't Bitcoin. >> Nothing.

52:35 >> Bitcoin explained in one sentence. >> A decentralized secure protocol. >> Do you think Bitcoin will correlate with gold again? >> No, it's going [music] to reprice gold along the way to repricing everything else. >> Overrated or underrated sovereign Bitcoin reserves. >> Overrated. >> Last one, what do you think Satoshi got wrong, if anything? >> I don't think he got anything wrong. >> That's great, Jeff. Great to have you on the show. It was very interesting discussion. Uh where can people learn more about you, about Ego Death Capital? >> At Ego Death Capital or my my own website at jeffreybooth.com. Um please I'm I'm not on Twitter anymore. I I have an agent on Twitter now, but I'm on Nostr. Um if you're going to follow me, make sure you go to my website first to be

53:20 able to follow follow me because there's just too many scammers out there. I'll never ask you for money. >> And we'll also link to your book in the show notes, of course, and all the rest that we discussed as well. Jeff, thank you for coming and all the best. >> Thank you. >> You obviously liked this video enough that you got to the end. Listen, >> [music] >> do me a favor, hit that like and subscribe button because I think you'll like it. And if you want even more, with more I mean incredible alpha, research, and digital asset market updates, subscribe to our newsletter on 51, that's the number 51, insights.xyz, [music] and get the most actionable insights on digital assets. See you next time.