support dispatch: https://citadeldispatch.com/donate
EPISODE: 98
BLOCK: 783909
PRICE: 3552 sats per dollar
TOPICS: Puerto Rico, Podcasting 2.0, Value for Value, AI, Barry Silbert Ran a Ponzi Scheme and Owes Billions, The Bitcoin Conference, The Taliban Adopting Bitcoin
David Bailey on Twitter: https://twitter.com/DavidFBailey
nostr live chat: https://citadeldispatch.com/stream
nostr account: https://primal.net/odell
youtube: https://www.youtube.com/@citadeldispatch
podcast: https://www.podpage.com/citadeldispatch
stream sats to the show: https://www.fountain.fm/
(00:04:02) Introduction and conversation with David Bailey
(00:09:51) Discussion on podcasting 2.0 and its impact
(00:30:11) The potential of AI and its relationship with Bitcoin
(00:39:01) Barry's creation of Bitcoin Trust and its impact
(00:40:13) Genesis lending desk and financing trade
(00:43:32) Closed-end fund structure and limitations
(01:17:43) Living in the shadow of Bitcoin 2019
(01:18:26) Goal of bringing back OG Bitcoiners
(01:19:29) Possibility of Jihan coming to the conference
[00:00:32]
ODELL:
Happy Bitcoin Tuesday, freaks. It's your host, Odell, here for another SIL dispatch. This live show focused on actionable Bitcoin and Freedom Tech discussion. We have a great conversation lined up today, but before we get there, I wanna thank all the freaks who continue to support the show. Dispatch is purely funded by audience donations. We have no sponsors. We have no ads, so it's made possible thanks to all the amazing supporters who continue to support the show with Bitcoin. The easiest way to do that is by going to cildispatch.com/donate. That will take you to our geyser.fund page where you can donate via lightning or on chain Bitcoin.
There's a cool little message board there. You can leave a message. You can attach it to your Twitter if you wanna climb the leaderboard, or you can donate anonymously if that is your preference. You can also support the show using podcasting 2.0 apps, like Breeze, Fountain Podcasts, echoln, podverse.fm. They work like regular podcasting apps. You search the little dispatch, you press the subscribe button, but then you load it up with Bitcoin, choose how many sats per minute you think the show is worth, and then as you listen, those sats go directly to my node.
It's incredibly cool and empowering seeing those stats flow in, so thank you to the freaks who continue to support that way. Also, podcasting 2.0 has a feature called boostograms where you attach a comment to a amount of Bitcoin, and the top four comments from the previous episode, I read at the beginning of every dispatch. So with that said, we have ride or die freak, 8 MythRendur with 7,770 8 sat saying, Odell at the end, this guy is based enough to agree with my citadel theory. You are correct. We have at tomzardbesan giving a shaka sign in 7,777 sats. We have at fadedflage with 6,789 sats saying, love you. Love you as well, sir.
Then we have at kepford with 2,000 sats saying, hey, Matt. How's that top g life going? Stay humble. Stack sats. That was fake news. Appreciate all the support, freaks. Last but not least, dispatch is a live show. We have a live interactive chat that you can access via YouTube, Twitch, Twitter, and Matrix. The Matrix chat is at sildispatch.com/chat. That is going on all day, every day, 247, 365. So consider joining us there. We have such great conversation there. But with all that said, I mean, you freaks who continue to join us in the live shows, make this show what it is. It makes it really truly unique. So thank you all for participating.
And one more shout is I know it's a recession. I know it's a bear market. Maybe it's not a bear market anymore. Who knows? Doesn't really matter. Stack stats. But, if you can't spare any stats, the easiest way to support the show is subscribing on your favorite platform, sharing it with friends and family, leaving a review. All of these things help. They are appreciated. Dispatch is pretty much on every platform, Bitcoin TV, Rumble, Twitch, Twitter, YouTube, every podcast app. You just search the little dispatch, and, it's a great way to support the show. With all that said, we have a wonderful Tuesday morning here in Nashville at Bitcoin Park.
And my good friend, who's in town, so we had to sit down for this wonderful coffee morning rep. We have David Bailey here, CEO of Bitcoin Magazine. How's it going, David? What's up, Matt? Thanks for having me on. It's a pleasure.
[00:04:10] David Bailey:
This is my first podcast I've done in, like, a year. So, you know, I was supposed to do some podcast last week. I canceled because I was sick. So, thank you for,
[00:04:21] ODELL:
you know, being my first Well, I didn't know that. I almost got rugged prematurely there. That's I'm glad, I'm not glad you got sick, but, it's it's an honor to have you on dispatch. I mean, before we get started, one thing that I kinda forgot forgot to mention in the preshow. You know, David kind of convinced me to move to Nashville. And then about 2 weeks after I moved here with my lovely wife, he then left Nashville and moved to Puerto Rico. Yeah. That was the real rug. Sorry. It all start it all started with a rug.
[00:04:56] David Bailey:
Yeah. Well, hey, Nashville's, a good second second best.
[00:05:02] ODELL:
Fair enough. How's how's San Juan going? How's, Puerto Rico? Oh, it's great, man. It's great. It's,
[00:05:09] David Bailey:
you know, we got a good setup there. It's, you know, honestly, I feel like, we moved there to escape all the craziness. And as time goes on, like, the America just looks crazier and crazier. And in Puerto Rico, like, none of that shit happens. There's no school shootings. There's no You know Puerto Rico is in America. Right, though? I I do. Yeah. But it's like, it's not America in the sense of its its own cultural identity and it's like, you know, if you tried to explain to people there, like, what trans is, they're just like, what the fuck are you talking about? So, I mean, it's, it's it's much more of like a Spanish speaking country. But, yeah, man. I got sold on this this concept that Puerto Rico is the Alamo, for freedom, freedom loving Bitcoiners, and that we can build our own nation there. So that's what we're doing, and, you know, it's a lot of fun. It's like playing, you know, SimCity except it's real. And now you have, like, fruit trees in your backyard. Oh, yeah. I'm, like, becoming a farmer. I I have chickens.
I got, bananas, papayas. I have star fruit, grapefruit, oranges. I have cacao. I have these little, fruits called hobos. I got avocados. I mean That's awesome. Yeah. We're we're trying to, become totally self sufficient on food and stuff. And, like, Puerto Rico, it's like miracle grows just dumped on everything that grows there every day. It's just, like, insane. So, when I get back, we'll have a bunch of fruit to harvest. But, yeah, man. I'm I'm That's badass. Trying to learn real life skills, and Puerto Rico is kind of a playground to do it in. And Have you learned any Spanish yet? My daughter's first word was actually, agua.
And, Her first word was Spanish. Was Spanish. Look at that. And we had no idea. We're like, she's just, like, babbling a lot. Water. Yeah. Water. And so,
[00:07:10] ODELL:
yeah. It's like now I happen to have to learn it because my daughter knows, like, more Spanish than she knows knows English. So it's a problem. Yeah. I mean, I have a lot of friends there. I think a lot of the schools, they do, like, it's bilingual school. Like, they, like, teach you both in English and Spanish. Yeah. Yeah. Yeah. Yeah.
[00:07:26] David Bailey:
And, you know, when you get, like, bullied on the playground, you gotta be able to, like, come back with your, you know, Spanish comebacks. So it's, like, do or die. You gotta learn to yeah.
[00:07:36] ODELL:
Well, that's awesome. I look forward to visiting you all over there. I mean, you went there with a decent crew too. Yeah. Just getting started, though.
[00:07:45] David Bailey:
When Nashville goes woke, we'll we'll have Puerto Rican ice ready for you. When that happens. I I wouldn't bet on it. But by step. How the flight's pretty easy too. Right? Yeah. Yeah. And I mean and and also one side benefit, you pay no taxes. Right. So if you have an ethical issue with With no cap gains. Right? That's the big advantage. No cap gains, 4% corporate income tax, no dividend tax, and no, interest tax. So what people do, like what some of the people at our company do, they set up, companies in Puerto Rico. They provide consulting services to our business. Right. We pay the salary to their company. They pay a 4 percent tax on that money, and then they dividend the money, the the profits to themselves at a 0% tax rate.
So You don't you don't pay federal income tax unless you pay? No. You don't even have to file anything with the IRS. You don't even have to tell them you're alive. Wow.
[00:08:39] ODELL:
And then there's also something that well, first of all, I mean, the cap gains thing will be would be nice if anyone had any gains this year. Yeah. The there there's, like, a the way that ruling is set up is it, like, it screws the locals. Right? It's,
[00:08:53] David Bailey:
like, you only get it if you move there. Yeah. Not if you've been there already. Yeah. It's there's definitely, like, some messed up stuff about it. It's actually one of the things we're trying to, like, lobby to change right now. We've gotten some some traction. But, yeah. You have to leave the island for 10 years, and then come back in order to qualify, which is bullshit. Because then it means, like, all the green goes get this tax benefit, and the locals don't get it. So, and, like, the we looked into, like, the total amount of capital gains paid by Puerto Rican locals, and it's, like, 40,000,000 a year, which is just, like, nothing. Right. It's tiny. So, yeah. We we have this, bill that we're trying to push. It's called act 60 for all, which would extend all the benefits, to all Puerto Ricans, that the Gringos get under that tax status. So, hey, it's one That's awesome. Building 1 nation. So
[00:09:45] ODELL:
cool. Cool. Cool.
[00:09:47] David Bailey:
Hey, before we go into a different topic, can we talk about podcasting 2.0? Yeah. Let's talk about it. So I'm interested to just hear, like, okay. You've been doing that for a while? Yes. How long have you been doing it for?
[00:09:58] ODELL:
A little bit over 2 years now.
[00:10:00] David Bailey:
Talk about the results of it and and how it's, changed over time. Because I I saw Marty, you know, throw out some video where he was, like flashing his stats. Yeah.
[00:10:13] ODELL:
Yeah. He likes doing that. It's a cool it's a cool way to introduce someone to Bitcoin, or at least the Lightning Network to show, like, it actually works. And and that when he was showing that video share of his phone, that was his own node, which is even cooler, because you don't you don't have to trust someone in between. But, podcasting 2.0, I mean, the dream is very simple. Right? Right now, most media on the Internet is funded by ads. It creates a bit of a conflict of interest. The ads are the the ad partners are your customers. They're the ones you need to please. The audience is the product, that you're selling to the advertisers.
There's a whole element of corporate surveillance built into that. Right? Surveillance capitalism, where the more information you know about your audience, the easier it is to sell ads against them. Right? And and everyone knows how corrupt that can be. So so this is this is not a new dream. Right? We've already seen it kinda happen with Patreon and stuff, but this idea of, like, direct audience funding, where your audience is a customer, your incentives are completely aligned, and you wanna provide them the most value because they're contributing value back. What's cool about this is because it uses Bitcoin, because it uses its interoperable monetary network, you can do it with very limited middlemen. So instead of paying Patreon 10% or or whatnot, you can do it with very low fees, and you can do it direct from user to content creator or any kind of creator.
Now it's still very much early days. There's a lot of friction still. The key is trying to reduce the friction as much as possible. What's the main friction? The main friction is using lightning in a sovereign way. So, like, I run my own lightning nodes. Most podcasters that do podcasting 2.0 right now are are doing custodial lightning nodes. And then on the sender side, every listener needs to have a lightning wallet, and most of them are using custodial wallets right now. So when I mentioned it earlier when I when I did my little read in the beginning saying the podcasting 2 point o apps. Right? The fountain podcast is the number 1 podcasting 2 point o app.
It's custodial by default. So when someone signs up to fountain podcast, they're loading up a custodial wallet. Yep. That custodial wallet is actually run by ZBD, the the the gaming infrastructure company. So it's not even Fountain can't rug their users, but a third party company can rug Fountain users. But that's to make it more the the key with all these things is is what I've noticed is most people wanna support good content, but they don't wanna go out of their way to support good content. Right? So you wanna reduce the friction as much as possible, so that it's easy and it's it's easy for them to support.
[00:13:04] David Bailey:
But it's cool. Like, this whole ecosystem's building up. Now the realest Can you speak, like, how many people are using these apps, like, and how much has it grown over the past year or 2 years? I mean, I don't know hard numbers,
[00:13:17] ODELL:
but it's grown significantly. I mean, in the beginning, it was very niche. So, like, rabbit hole recap my weekly news show, we do a hybrid approach. We still have some sponsors, and then people can also support with the idea that hopefully we'll switch fully to audience funded. Still, dispatch from the very beginning was like, let's prove out this concept. No sponsors ever. And, yeah, we have mister robot in the comments saying, if you go to new podcast apps.com, you can see all the different podcasting 2 point o apps that exist. The a lot more people are using it, a lot more sats are flowing, but it's still this couldn't be my full time job. Like, there's there's it is it is not, we haven't hit the threshold yet where, like, the revenue from Sats is overtaking, you know,
[00:14:12] David Bailey:
ad revenue. Can you share what that number is? Like, what do you bring in per episode?
[00:14:18] ODELL:
I've had dispatch. I don't know. Probably dispatch is, like, 200 to $300 an episode. Oh, that's not bad. So yeah. But Peter McCormick's bringing in, you know, maybe $10,000 an episode or
[00:14:31] David Bailey:
$15,000 an episode on the ad model. But the growth rate that you have on this on fountain app is, like, a couple 100% a year or so? Probably bigger than that. Bigger than that. So, like, you're saying, like, in 2 years' time,
[00:14:44] ODELL:
you know There's also this cool concept with it that so, like, the way podcasting is very dominated by podcasting charts in terms of growth of shows. So, like, people will just open Apple Podcasts, right, and they'll subscribe to the top 10 tech podcasts. Right? Now that is a complete black box. How does Apple decide who is in the top 10? How does some Apple decide if you're number 15 or number like 25 or number 35? On fountain podcasts, you can go to their charts. Right? It's all sats. And it's just whoever received the most sats that week. It's a very objective, and there's a cost behind it. So, like, right now, like, could it be gamed? Yeah. Like, I'll tell the freaks right now. I do not send stats to myself, but people could send stats to themselves.
But as those numbers all increase, gaming, it becomes more and more expensive, to the to the creator. And, it's just really cool. I mean, a huge shout out to to my audience because they continuously keep me on the top of those podcasting 2 point o charts. Nice. So I I really do appreciate the support. It's really cool. It creates this whole dynamic. I do think it's the future of content. I just think it's just very early, and we're just kind of we're kind of building it out. If you look at the top charts, they're almost it's like, besides Adam Curry's show, and Adam Adam is a Bitcoiner now, if you look at the top ten, it's, like, maybe 6 of the shows are are Bitcoin shows if you include Adam's shows,
[00:16:14] David Bailey:
which aren't directly Bitcoin shows, but he is a Bitcoiner. And all the Bitcoin is user, funded? What do you mean? Like, the the Bitcoin that's that's, like, I subscribe to your podcast. I listen to it, and I pay, what, per second I'm listening or per minute or per show?
[00:16:31] ODELL:
Yes. All the above? It's it's all denominated in sats. And paid? In sats.
[00:16:38] David Bailey:
Okay. So,
[00:16:39] ODELL:
and then the There's two elements. You you can you can set a sats per minute Got it. Or you can send a flat amount, and that you can think of that as, like, a a global comment messaging board where it's just ranked by who sends the most sats. And then the, and then the stats that I have on the platform, I bought those stats. Correct. Got it. Well, there's a whole another element where I mean, if we wanna just go a little bit deeper, there's a whole other element where, fountain actually is paying out sats to people who listen as, like, a sats back to try and juice the whole system. Yeah. But that is not I would call that separate from podcasting 2.0. That's a that's a fountain podcast growth strategy. And and if you had to take a guess at, like, the number of people broadly using this app, like or how many sats are flowing across, like, the top 10 shows. Can you can you see that? Well, like, I know what like I said, I'm I'm bringing, like, a 1,000,000 sats, 2,000,000 sats a show. Right? So that's 200 to 280 to $560.
Right? And dispatch is routinely in top 3 podcasting 2 point so, like, I have insight into it to a degree because I know what I make, and I know I'm at the top of the charts. But the cool part about this is there's no centralized company that can really like, Lightning privacy has a lot to to to do better. Right? There's a lot of room for improvement there. But if you compare it to the traditional system where, like, Spotify knows exactly all this stuff, it's hard to get direct insights into a global view of podcasting 2.0. And that's by design. That's a feature, not a bug. Right? Yeah. Because you don't have middlemen everywhere that are able to see it. Now maybe Fountain, out of all companies, probably could figure it out the most and extrapolate from there just because they probably they're probably, like, 60% of podcasting 2.0 right now is run through fountain. And a lot of podcasters, they made it really easy for, like, the Peter McCormicks of the world to onboard onto podcasting 2.0. You can just download the app. You basically link your RSS feed that you already have for podcasting, and they set you up with a custodial wallet, and they set up that whole thing. And so that's all we're running through custodian.
So they can obviously see all those transactions. Right? We,
[00:18:54] David Bailey:
we need to clone that for the, Bitcoin Magazine app. The, that's why I'm asking because it's the, it seems like I've seen growth on those platforms. I need to download and check it out. But, and it's interesting for a media company. I mean, like, for us to be able to monetize that way. But, the Bitcoin Magazine app where we pay people now we're we're paying people to read content, which is kinda like what Fountain's doing. Exactly. It doesn't go to the end content creator yet. But, you know, we're we've gotten that up to I think we're at, like, 23,000, unique, monthly or or daily I don't know, monthly or daily active users, and it's growing at, like, 10 to 15% month over month. So I feel like there's, more and more of this micro transaction driven content. It's interesting. It's interesting because there's 2 different,
[00:19:46] ODELL:
philosophies about this, and I disagree with, my cohost on Robert Hall recap Marty a lot on this is so Marty thinks not to put words in his mouth, but I'll I will put words in his mouth. Marty thinks that Bitcoin enables way less friction on paywall content, and and he thinks, you know, you you provide some content for free, but then you also put content behind a paywall. A little QR code pops up. You pay 10¢ or whatever, and then you're actually able to view the content. And then value for value is this idea that you provide it to the world for free. Anyone could listen to this show for free.
They can even torrent it. I provide all all the shows out for torrent. And then, ideally, I hope that some people find value and they support, and maybe there's, like, 10% or, like, the ride or die audience that actually supports all the content. And it's, it should be interesting to see how that plays out, you know, does the paywall method work better? Does the value for value method work better? And I think the value for value method is is the one that wins because I think just information wants to be free. And I you know, part of why I was willing to do this with dispatch is because I think the open source movement is hope. I think the open source movement is is is what breaks us out of all these chains, that breaks us out of, like, these corrupt institutions, including Bitcoin. Bitcoin as a subset of the open source movement. Right?
And and part of the what we do at the conferences is is trying to highlight open source contributors. That's one of my main focuses at at Bitcoin Magazine, and providing them free tickets and and doing all that. And I've seen firsthand that most of them are just working, working out in the open, contributing their time, their energy, their efforts with the hope that someone will appreciate it, and they will get supported in the future. Right. And I think there's a lot of there's a correlation there. There's a comparison there between good content. And it could be part of that whole same kind of movement to this movement to like more open free society.
[00:21:54] David Bailey:
Mhmm. Interesting.
[00:21:55] ODELL:
And maybe maybe it's just an interoperable native digital money that doesn't require permission was the the final piece that was needed to kind of juice the whole
[00:22:06] David Bailey:
thing. Well, I I I definitely agree with you that it's distribution is the most valuable part. Content is going to 0. Information is going to 0. It does wanna be free. You know, I tweeted about this the other day, but chat gbt 4 is just gonna, like, change the game of of flooding content out there, and you're gonna have a hard time charging for something,
[00:22:31] ODELL:
when a robot created it for free. Well, there's thousands of hours of me saying every single word in the dictionary. So I do wonder what that timeline is before there starts to be, like, bootleg AI Odell podcast where I don't even have any control over Yeah. Endorsing shit coins. Yeah. I mean, I think that might be the the least bad version of that. It's gonna be crazy. It's gonna be fucking insane. Yeah. And then on the written content side, I mean, I don't even know. Like, that's like, there there's probably already writers that are at least half using chat gpt to to tailor the stuff. I mean, I'm telling our our editorial team that we need to be integrating it, like,
[00:23:15] David Bailey:
deeply into the business. I mean, it's it's, you know, we my wife and I were playing with it the other day, and we got it, you know, to write a a children's book on Bitcoin and monetary history in the voice of, like, doctor Seuss. I think I posted the the what it spit out to us in the Slack general chat. And, honestly, it's better than any children's book that's been written in this entire industry. And it's like, okay. Now we just need DALL E to, like, generate some images for the pages. And then literally in 2 hours of effort, we created the best book yet in the market, children's book in the market for Bitcoin. It's like, you know, fundamentally, that's just like that breaks how all the models work right now. I do wonder,
[00:24:05] ODELL:
and maybe it's my I mean, you've been in Bitcoin longer than me, but I'm just like an old man in Bitcoin now. And I'm, like, a little bit, raggedy around the edges. The AI stuff is interesting because it reminds me of Bitcoin, in that there's definitely signal there. Like, it's gonna completely change the world, but there seems like there's a lot of blockchain crap. And I've already spent all my cycles discerning the crap in the Bitcoin space. Yeah. So, like, I have no intention of doing that in the AI space, and I wonder how much of it is how much of it is bullshit that that is just noise and is isn't actually any kind of revolution or anything. And then and then what is the core signal? Because there's there definitely seems like a comparison there between, like, Bitcoin and and, quote, unquote, blockchain and crypto versus, like, some subset of AI versus the rest of the bullshit. Yeah. I mean, I I definitely. I mean,
[00:25:02] David Bailey:
the snake oil is always sold, you know Yeah. Near the hottest thing. But, I mean, have you used chat gbt 4 at all? Yes. Okay. It's extremely powerful. I mean, yeah. It's like it the proof is in the in what you can do with it. I mean, to be clear,
[00:25:16] ODELL:
the the guy who's behind is Sam Altman, he also Psychopath. He's, like, scanning poor people's eyes around the world and then giving them his premine shit coin world coin. Yeah. And did you see he just came out like his proof of humanness or proof of humanity? That was real or if that was in April April fools joke. I think he lawn he launched on March 31st to give himself a little bit of coverage just in case he got too much.
[00:25:40] David Bailey:
Dude, April 1st is the day to launch any product you're nervous about. Because if it doesn't go well, you just you just read it. I don't know if you saw Ryan Selkis announce that he was running for, for senate, on April fools and he got, like, a ton of traction. And he was like, that was an April fools joke, but now I'm actually thinking about it. Yeah. I don't know how much of an April fools joke that was. He's he's had aspirations for office for Yeah. Since
[00:26:05] ODELL:
went down, it feels like, almost. Yeah. But yeah. No. I that that's some the Worldcoin stuff, pea people don't realize it's happening right now. Everyone thinks it just died, but that's some dystopian shit. They're literally just scanning people's eyeballs and then giving them a shit coin in return. Well, you know, I
[00:26:26] David Bailey:
I have very, let's say, immature thoughts on this in general just because, like, I very much have the same mindset. It's like I'm I'm skeptical wow, this is I can see the direct use of this. But, you know, we've been talking internally, like, okay, You know, how long before we can give chat gbt 4 control of the Bitcoin wallet and, you know, have it start executing transactions autonomously. And then it's like, okay, start extending that idea a little bit. Like, first off, like, chat gbt 4 or any AI generated economic activity is not gonna be using fiat to do those transactions. Right. It's gotta use Bitcoin. So it's like Bitcoin is really money for the AI. And then it's like, okay, well, one part of Bitcoin that's been talked about in the early days and completely undeveloped. And it's like something that I've wanted to see developed for a long time is machine to machine payments. Yep. And there was always this dream of, like, the vending machine paying the drone to deliver soda to it and, you know, that economic activity happening without any human, you know The car pays the gas pump. Yeah. Exactly.
I feel like AI could be, the first real example of that happening where you give AI a few $100 in Bitcoin. You tell it, hey, I want you to achieve this. There's a bunch of interment intermediary steps that need to happen in order to get there, and it's gonna use the Bitcoin you gave it to pay its robot friends or Right. Different sensors. Broad politicians. Exactly. Yeah. And, you know, pay ZipRecruiter to put a posting for a job or whatever. Bitcoin's that missing piece there. It's the missing piece. And it's like, okay. Well, if if you can really develop a machine to machine economy, first off, the scale that that can grow to is unfathomable. I mean, you're talking about, like, it can get many, many orders of magnitude bigger than human economic activity.
And then it's like your fiat's no good there. So when you start thinking about, like, purchasing power of money, it's like, okay, it's it's almost like when people say, hey, what can you buy with Bitcoin? You know, like, can you buy your groceries with it? Okay. Well, if we have a machine to machine economy, it's gonna be like, what can you buy with fiat? Like Right. You know, you can only do human to human interactions to a subset of humans. My Bitcoin can, you know, harness the power of all machines. So, I feel like it's a very unexplored It's very early stuff. Yeah. For Bitcoin, but I think there's, like, a massive, immense opportunity there. I mean, massive.
You know? So I told I tweeted Balaji yesterday. He needs to bring back that 21 computer with the sensors where he had, like, that data marketplace. I swear he's gonna put a miner in every toaster. Yeah. And and he was gonna make it where you could, like, basically sell your, sell an API to, like, your sensors of, like, weather or humidity or whatever. And it's like, okay. No one actually bought the data. That was the problem. But, like, with AI, it's like, okay. I'm starting a farm. I need to grow, food on my farm. What should I grow?
Oh, I've tapped the sensors of people living in Puerto Rico to determine, you know, elevation, humidity, soil samples types. This is the optimal thing that you should grow based on all these data endpoints, and I had to pay $12 to the sensors to collect the information. Sensors. Yeah. And it's like, okay. That would be, you know, that that's the next level. Like, that's a really a cool idea. So it's kinda maybe Bellagio's idea was, like, spot on, but just,
[00:30:08] ODELL:
It was way too early. A decade too early.
[00:30:11] David Bailey:
Maybe, like, his bet as well. Maybe a decade too early, but we'll see.
[00:30:15] ODELL:
Well, yeah, definitely not before conference day. We're not gonna have Yeah. $1,000,000 Bitcoin. I think what are we we're down to, like, 76 days now. $1,000,000 in 76 days. That would be some crazy shit. On the AI on the AI topic, it's interesting because there's 2 elements there with AI and Bitcoin that I've kind of been focused on. First of all, I agree. Like, the money for for AI is obviously Bitcoin. They they need a trust minimized digitally native settled money. Right? They're not gonna use a bunch of different fiat rails and intermediaries and whatnot. That that much is very obvious. There's some cool things that could happen in terms of you know, a lot of my focus has has historically been on education in the Bitcoin space. We were just talking about friction with podcasting 2.0 and using lightning in a self custody way. Like, a bunch of different things can get automated behind the scenes just by integrating AI into wallets or basic AI into wallets.
But then there's this whole other element where there's there's this term that that I've seen floating around now called AI anxiety, which is, like, all these all these people that, you know, have, quite frankly, jobs that can be replaced very easily by AI, are concerned about their livelihoods, and people are pushing for them to be regulated and all this other stuff. And to me, like, Bitcoin is almost AI insurance. So, like, you can pay the AI and you can interact with the AI using Bitcoin, but, ultimately, at the end of the day, the AI can't counterfeit your Bitcoin. They can't seize or block your Bitcoin. So, like, if you want money that's resilient to AI interfere interference, that's probably Bitcoin as well.
[00:31:56] David Bailey:
Yeah. No. Brandon, Brandon Green from our team, we're having a conversation about this last night, and he was telling me there's something called, like, the paperclip problem. I mean, again, I'm a novice at all this stuff. So I Yeah. But the paper clip problem where it's like, if you tell AI to, like, make a paper clip, like, it will, like, end up consuming all the resources of the world to make as many paper clips until, like, it's, like, you know, destroyed the planet in the process of making paper clips. And, that the solution to this problem is Bitcoin because it can't create more Bitcoin. Right. And so if if Bitcoin becomes the value system of AI, unlike with fiat where you the Cantillion effect makes it where you can literally manipulate the inputs that an AI would use in order to determine what the next steps are.
With with Bitcoin, you're actually introducing the concept of scarcity to AI so that it would choose not to do certain decisions or actions because It costs too much. It costs too much. Yeah. And so it's like, okay, that's like the feedback mechanism that actually, like, keeps AI bound to some, like, moral system, which is like free trade, capitalism, like, property rights. Like, that's the guiding light of, like, letting these things run rampant. Yeah. Yeah. It's the ultimate check. It's the only check. Yeah. And I would say there's another element there too where it's like
[00:33:22] ODELL:
we're seeing and maybe this is just my open source bias, but we're seeing it's gonna be at the forefront of people's minds very soon, this idea of closed software and, like, proprietary black boxes. Like, what is chat gbt doing in the background? You know, what does Sam Altman know that nobody else knows? Because if you control the the primary AI platforms, you have immense power. We've already seen, like That's gonna be a problem. Chat gbt has is, like, hard coded with certain political biases and stuff. So I think more important than ever is this idea of of open open protocols, open platforms.
It would be nice to see some real strong competition there in terms of, like, open source AI. I don't know. Right. That's like I said, I'm an Open AI. Yeah. But it's not open at all.
[00:34:11] David Bailey:
Yeah. No. I think well, that's I the naming. I definitely think that that's a major problem. I don't know how, like, that's gonna play out, but, you know, maybe Bitcoin has something to do with that. Maybe it's like an open platform that can leverage Bitcoin and becomes more of a You you know, the the, the I to the question of, like, people having anxiety about losing their trade, it's like, how many open source developers are there in Bitcoin?
[00:34:35] ODELL:
I don't know. Not enough? 10,000?
[00:34:38] David Bailey:
Yeah. If that. Yeah. Okay. How many users are there in Bitcoin? There's about a 120 that have applied for free tickets. Yeah. There you go. And then, like, how many users of Bitcoin are there? 50,000,000? Yeah. That's probably probably maybe
[00:34:52] ODELL:
I a user of Bitcoin is someone who holds their own keys in my opinion. Yeah. That then less way less than 50,000,000.
[00:34:59] David Bailey:
But, like, okay. How many of those people would be open source developers if they could be? If they had the skill set or the talent set. Right. And so, like, that's the power of of, you know, AI is, like, not people losing their trade because of this redundant. It's actually people gaining new trades that they never would have had the ability or the to contribute to. And now all of a sudden, you could have a 1,000,000 open source contributors because they're able to deploy the right prompts. They're able to, like, come up with the right creative ideas Right. To contribute in some way even if they don't have the technical skill themselves.
[00:35:36] ODELL:
No. Yeah. I mean, people are just gonna have to adapt as as always. Right? Yeah. Good. It's like the industrial revolution. Yeah. Fuck laziness. You know? You gotta you gotta stay on your toes. Yeah. Well, as as I said earlier, you know, dispatches of future will just be AI junk. Yeah. We'll figure it out. But in the meantime, try and accumulate as much Bitcoin as possible so you have optionality. It's kind of the thesis I'm going on. Yeah. So, I mean, we have we have some time constraints on our conversation here. I would like to talk while I have you. I would like to talk about how Barry Silberd owes 1,000,000,000 of dollars to people. Yeah.
[00:36:15] David Bailey:
You wanna jump into that? Yeah. Where do you wanna begin? I mean, I I don't think I mean, I've been doing some, Twitter spaces, but I don't think I've talked about this on a podcast at all since it all went down. So do you want me to start at the beginning, or do you want me to start at the end?
[00:36:28] ODELL:
Let's let's start at the beginning. I mean, I remember when I was first sounding the alarm, everyone was focused on CZ and Binance, and I started tweeting out that that DCG was fucked. And, people were calling me an alarmist and an idiot. Meanwhile, that was 150 days ago or something like that. Yeah. Yeah. It seems like they're still fucked. Yeah.
[00:36:51] David Bailey:
No. So, you know, basically, oh, man. Where'd it begin? I haven't practiced telling the story in a, like, you know, in a consolidated way, but with, so so Digital Currency Group is Barry Silberts' baby. Yeah.
[00:37:08] ODELL:
They were the absolute titans, in the Bitcoin and, quote, unquote, crypto industry for years. His his his star product was gbtc, or is gbtc. It still exists now. And,
[00:37:24] David Bailey:
yeah. So he he has really 2 businesses. Well, he has a good portfolio of businesses, to be honest, Doug, because I think Foundry is a good company. I've heard good Largest mining pool in the world. Yep. I've heard good things about Luno. But What about Luno? It's a international exchange. It's like OTC? Or Yeah. It's, like, focused on well, no. It's a it's like a, you know, a bit stamp or Really? Yeah. But it's like focused on international markets, which I think is cool to bring Ben Glenn to those markets. So, but, he like, his two core businesses were Genesis, which was a a trading desk, and lending desk, that every institution in the industry used. And then, grayscale, which was his trust product. And basically, he was in the business of taking different digital assets, bundling them together in these these trusts, and then getting these trusts listed on the on the public markets, so that retail investors and their 401 k or whatever could buy them. You could buy them on Charles Schwab or whatever. Yeah, exactly. And so, I mean, he really pioneered that method. It was kind of a backdoor method to allowing people to buy Bitcoin in their brokerage accounts or whatever.
And it started with Bitcoin, but then it expanded to a whole host of shit coins. So many shitcoin. And, you know, honestly, if you go through the list and read, like, what it is, it's like some of these are, like, you could just know, like, live peer or some shit like that or horizon. And it's like, what backroom deal got done where, like, you know They got a bunch of pre mine and then Yeah. Made it happen. So it's like, you know, if any, like if the s c c's listening to this, you know, if you want a cookie trail to go follow, just look at all the shit coin trust and then find the documentation for how those things are created. But, anyway, so, yeah, he created these, these vehicles and the Bitcoin Trust specifically, became, the biggest holding of Bitcoin in the world. So it has about 3% of the world's Bitcoin in it. 620, 630,000 Bitcoins right now.
And he charges, a fee, a pretty high fee. Wasn't that high when it got started. I mean, because it was a new product, but now that it's a commoditized solution, he charges 2% of the NAV, per year. And so, collectively, across these assets, he he has maybe $20,000,000,000, at today's prices of different crypto, in these trusts, and he's taking 2% or more, 2 and a half percent on some of them, off the top. It's kinda like a model you can't believe you could lose with because Pure cash cow. It's just a pure cash cow. But somehow, incredibly, that wasn't enough.
And so, Barry was like, how do we take this up a notch? And, that's where Genesis, his lending desk comes in, where they were using other people's money. Cause Genesis that you, you deposited your crypto there to, to earn yield your Bitcoin there to earn yield. So he was using your Bitcoin, your cash, to finance a whole host of interesting characters.
[00:40:46] ODELL:
You would lend him Bitcoin so then he could lend the
[00:40:57] David Bailey:
a trade with, you know, the great folks at Alameda Right. Or Celsius or, 3 arrows. Really just the best the best of the industry, you could say. And he would finance, them, taking that money, the the the other people's money, depositing into his trust, which it can never leave from, and then letting them use the shares that were generated from depositing the money into the trust as collateral to borrow more money to put into the trust. And so it was kind of this flywheel or basically just sucking money out of Genesis and piling it into grayscale knowing that And he makes double dips, gets the fees off that. Correct. And he knows that once it goes into grayscale, there's no way for it to come out. Right. So, this is how he was able to run up this massive Because it's not a proper ETF,
[00:41:51] ODELL:
so Yeah. It's almost a one way street in.
[00:41:54] David Bailey:
So I'll explain that real quick. So it's a closed end fund, which which basically, means that there's a a process of creating and redeeming shares in the trust. But, you actually have to go through a, a redemption process. It's a limited number of people who can actually go through that redemption process. And, ultimately, they stopped the redemption process about 4 or 5 years ago. So you can only put, Bitcoin into the trust.
[00:42:25] ODELL:
You can you can't take it out. Why did they stop the redemption process?
[00:42:29] David Bailey:
Because they aren't allowed to be an ETF. They didn't get ETF approval, and so doing creation and redemption is basically an an ETF. And, the SEC, made them pay, like, a $10,000 fine or something and and, stop redemptions. But the key thing is is that it wasn't that they just can't do redemptions. It's that they can't do creations and redemptions at the same time. So if they wanna just create new shares in the trust, which means you deposit Bitcoin, they create new shares and give them to you, and you can go and sell them on the secondary to other people.
[00:43:02] ODELL:
That's okay. Which was for a while, it was a premium. Yeah. Which is what people were doing. They were they were putting in Bitcoin, and then they were getting shares that were worth maybe 30% more or whatever. Yeah. Yeah. So there was this arb trade going on. Right.
[00:43:14] David Bailey:
And so, Yeah. So they, you can do the creation, or if you're not doing creation of shares, you can do redemption. But you can only do one at a time. You can't do both. Okay? That's the that's the key thing. So, yeah. While they were trading at a premium, that was fine because people just wanted to create shares and then dump them in the in the secondary market Right. And and make that premium. And so a lot of people did that. A lot of funds. Our fund did that. Right. And, what our fund didn't do though was all of that activity actually being financed, via Barry at Genesis. Right.
So So you just took your own money, put it in for the arb trade. Yeah. Exactly. And, you had to go through a process called seasoning as well. So it means that when you when you create the shares, the shares have to season for, like, at first it was 12 months, and then it became 6 months. And then after that period of time, you could sell the shares. There's a lockup. There's a lockup. Yeah. Basically.
[00:44:16] ODELL:
So, And then you flip negative on all your asses while you're in the lockup. Correct.
[00:44:21] David Bailey:
Correct. And what's also interesting is that for people who were doing this financing trade at Genesis, you were able to use the shares as collateral, even though they're supposed to be locked up and they're supposed to have to go through seasoning. Unseasoned shares could be used as if they were seasoned at Genesis. To get instant liquidity. Yeah. Get instant liquidity, which is then creates this, what was the word they used? This cycle trade. You know, I was, talking to one regulator. You know, regulation for that type of trade. We call it a Ponzi scheme. How's it gonna Chris? I was like, oh, okay. But, so anyway.
So this is all fine and dandy while this is trading at a premium. When it flips to a discount, all these people that levered up to do that trade, they all blow up. So Alameda blows up, 3 arrows blows up, etcetera, etcetera. Well, when they blow up, it means that they can't pay back the money that they borrowed from Barry. So when they can't pay back the money they borrowed from Barry, it wasn't Barry's money. It was the depositors at at Genesis's money. It means they couldn't pay back those users. And so who were those users? It was. But Volvo's 200,000 users. It was Gemini's 200,000 users. It was a whole host of OGs. I don't know if you've gone through down the creditors list. It's very sad. It's a lot of OG Bitcoiners from the, old days like losing 50,000,000, 40,000,000. I mean, brutal stuff.
So yeah. So, Barry proceeds to vaporize, I think it's $5,000,000,000. Oof. That was vaporized there. Now, there are a whole host of things that we, if we have time, we can get into or not, but, about sketchy shit that was happening at Genesis, as it relates to, blackmail, as it relates to, Alameda, as it relates to Sam Bankman Fried's Ponzi scheme, and f FTT, his token. Maybe we save that for later on. Some loans with FTT as collateral. 1,000,000,000 of dollars in loans. 1,000,000,000 of bribes being paid. All sorts of sketchy shit. So, but just to stay focused on the topic.
So grayscale trading at a 30% premium. Well, now as all these firms blow up and these shares that they were holding have to be liquidated, the 30% premium, it becomes a 50% discount. So, you know, for simplicity's sake, we'll use today's prices, but $20,000,000,000 in assets and the underlying assets are sitting in this trust are trading for $10,000,000,000. Right. So, yeah. That's fucking bullshit. That's bullshit. And a lot of people were frustrated about it before they knew about all this financing stuff But then when it came out that, oh, the reason why it's trading on a discount is because Barry was, you know, running effectively a Ponzi scheme at at Genesis and it's really, you know, his malfeasance that caused this. A lot of people got, like, more than just, you know, frustrated and they got pissed. And so, my part of this this journey here began when, I fucking made some tweets complaining about this and, pointing out that it seems like what they were doing, has a lot of similarities to what Sam was doing at FTX. Right. And, I started getting flooded with, messages, emails, etcetera. And so we threw up a little website called redeemgbtc.com, so that we could just, like, systematize people reaching out to us. Right.
And over 3,000 investors, representing roughly 35% of all the GBTC shares, reached out through that site. And did the horror stories that we heard from people, just disgusting. I mean, we read we read, we got one comment from a guy who said he put his entire, 401 k in this thing when it was trading at a 30% discount or 30% premium. And now, it's trading at a 50% discount. So he's down, you know, over 80%. That's brilliant. And he's having to go back and get a new job because he doesn't have enough money to survive. You know, people I mean, just just brutal stuff. And this product, I think, hit worse because, like, the people buying this, they weren't buying these aren't d gens on FTX buying a shit coin that they're pumping and dumping. These are, like, old people and their 41 k's on Fidelity and on Charles Schwab buying this. And, like, from the grown up responsible I don't remember the ads. It was supposed to be, like, the safe way to invest. Yeah. Yeah.
Drop gold.
[00:49:17] ODELL:
I think quite Exactly. So, and on the Gemini side, it's really brutal because Gemini was so Gemini's earned product used Genesis. So anyone who is in Gemini's earned product got rugged and still hasn't seen their money to this point. And, I mean, I remember all the Gemini ads running through New York, Crypto needs rules. You know, this is the safe place. Crypto needs trust, I think, was one of them or whatever. And I I have a friend I have a friend, you know, he's decently well off, and he got rugged in that. And he told me that, essentially, like, they were just getting emails from Gemini. It's like, oh, you already have money in your Gemini account. Like, why don't you wanna make 5% off of that? Like, you might as well move it over. And there was not a clear delineation that, like, you were there was obviously, like, bunches of terms and conditions and stuff that nobody read.
But there wasn't a clear delineation of, like, oh, if you move it into this thing, we're gonna lend it out to degens. Yeah.
[00:50:16] David Bailey:
Well, and even if they had said we're gonna lend out to DCG, like, oh, okay. They're responsible Right. Company. Little did they know that that's actually all the d gens you know were actually getting their money from Genesis. It was like the central bank of the d gins. So, so yeah. So, yeah. A lot of people have been wrecked. GBTC has about 850,000 shareholders. So, you know, between Genesis Oh, shit. And GBTC, this is gonna include, like, Ethe and the other trust products. I mean, you're talking about, almost 2,000,000 people, that have been, you know, basically wiped out, on their investment here, which in, you know, based on what I've heard is is relatively on the same scale as FTX in terms of users affected and bigger than FTX in terms of dollars lost, if you combine the 2. I mean, almost twice as big as FTX.
So,
[00:51:13] ODELL:
kinda staggering. But it's, like, 3,000,000,000, $4,000,000,000 or something? Well, I think 8,000,000,000 was lost at FTX.
[00:51:19] David Bailey:
But they lost 5,000,000,000 at Genesys, but they were down 10,000,000,000 at GBTC alone. So so in terms of the discount. So this is the state of the situation. And then they collect fees based on the total value. Yeah. So that's the discount. That's another fucked up part about this. So, like, in the dude, this has been just this whole year has been a lesson in, like, And they could just lower their fees, like, super easy if they wanted to be a little bit ethical about it. Right? They could redeem people out of the trust today if they wanted to. Okay. The if they wanted to. Right. So but yeah. Because they're cash cows. This is the only thing that makes money. Yeah. Correct. So the the the fees are calculated on it on NAV, which means that when it's trading on a 50% discount, your fees are actually closer to 4%. It's double. Yes. Double. And if if let's say the situation devolved more and it went to a 75% discount, which there's no reason why that's impossible.
Okay. Now you're paying an 8% fee effectively. So, like, there's a death spiral situation here too, which is, like, who in their right mind would buy this product when the the effective fees are just like The only reason it's not trading at even larger discounts because everyone's kind of banking on on him
[00:52:27] ODELL:
on him losing his battle and and losing control of the trust and then getting redeemed. Yes. Yes.
[00:52:32] David Bailey:
It's like the opposite of faith and barriers. Like, lack of faith and barriers propping up the the the So there's there's that piece, and then there's the piece of, like, they're claiming they're still trying to get an ETF approved. Right. They keep pretending. Yeah. So they they,
[00:52:47] ODELL:
because if an ETF gets proved approved theoretically, then it goes right back to NAV. Yeah. Because then people can redeem out. Yeah.
[00:52:54] David Bailey:
You know, I find it very hard to believe that it will be approved when They're fucking suing the SCC right now. Yeah. Like, they're under criminal investigation. Like, there's a DOJ investigation. You know, words like fraud and Ponzi are being thrown out there. The funds the trust has been completely mismanaged. There are securities violations and and security laws that were just disregarded by Barry at Genesis. And it's like, yeah, you're gonna get the first ETF ahead of Fidelity. Not gonna happen. Not gonna happen. But, so they're selling the dream though.
And, you know, it's actually kind of ironic. This is some, some alpha I'll share here that is not out there publicly, but, the, the, ETF, if it was approved, would actually be disastrous for Berry. Because if the ETF is approved, the fees on the trust are gonna come from 2% on NAV down to, let's call it, 50 basis points. So he's gonna lose Half a percent. Yeah. Half a percent. So he's gonna lose 75% of his fee income, and there's gonna be redemptions out of the trust because his money's been locked up for so long. Yeah. People are just ready to go to the exits. So his total AUM might fall by
[00:54:11] ODELL:
30%. Why would the fees go lower? It's usually he'd be required to. Because there's other products
[00:54:17] David Bailey:
that have, the same mechanics and have fees that are substantially less. So, like, why am I gonna hold my Bitcoin at a 2% fee in Oh, because of redemptions. Because redemptions open up, he has to compete on fees. Exactly. Yeah. Exactly. Like, right now, you're just like a prisoner. Right. So but Everybody locked you in there, so there's nothing you can do about it. Exactly. So the, so he needs that money in order to keep DCG from going bankrupt right now. So he needs you to think
[00:54:47] ODELL:
that an ETF is on the table while also not actually getting the ETF. Correct. I was actually
[00:54:53] David Bailey:
AKA is just completely fucked. Let me let me think how to obscure this a little bit. I have heard through the grapevine that they have contemplated a situation in which the ETF is approved, and they've already designed mechanics, so that even if an ETF was approved this year, it would take years before it could go live. So even though they could go right away Right. They're they have they're gonna have multiple years of excuses why you're still gonna be stuck in the trust, still paying the fees, even though they're approved for the DM. So fucked up. So so, yeah. So they, that process is, is ongoing. And, you know, another interesting piece of this is, like, their their their whole point is, like, hey, we're gonna get become an ETF. But that only applies to, like, the Bitcoin part of it. All the shit coins, the ETH. Right. That's never gonna be pulled it up, by the way,
[00:55:55] ODELL:
just to list their trust. They have the Bitcoin Cash Trust. They have the Basic Attention Token Trust, the Chainlink Trust, the Decentraland Trust, the Ethereum Classic Trust, the Ethereum Trust, the Filecoin Trust, the Horizon Trust, the Litecoin Trust, the Livepeer Trust, the Solana Trust, the Stellar Lumens Trust, the Zcash Trust, the Decentralized Finance Fund, and the Digital Large Cap Fund, and the Smart Contract Platform ex Ethereum
[00:56:22] David Bailey:
fund. Yeah. When do you think the Decentraland ETF is gonna be approved? Right. I mean, these are these are rappers on unregistered securities. I mean, it's like like, hey. We're gonna create a security out of an unregistered security.
[00:56:34] ODELL:
So And sell it to retail on top. In their retirement accounts. And then charge a ridiculous fee on top. And then sue the SEC when they told us to make money to it. It's so absurd.
[00:56:45] David Bailey:
But, so so so yeah. So, like, they don't even have, like, a logical, like, argument for those things. And, yeah. So, that is that is the state of play. And so now, there are a bunch of institutions. There are a bunch of sophisticated investors. There are a bunch of Bitcoin stalwarts, people that are well loved and respected in this, industry that are working diligently behind the scenes to, bring the empire that is DCG or was DCG, down, and to free the Bitcoin that is in the trust. And they're doing that through a variety of means, legal means. There's there's a class action lawsuit. Well, there's a lawsuit likely to become a class action lawsuit that was filed by FTX.
We have a books and records request, complaint that we filed in Delaware. There's a hedge fund called Fir Tree that's filed their own books and records request in Delaware. There's a fund called Osprey that sued, via, anti competitive grounds in in, in I don't remember what state. Not Delaware, but Massachusetts or something.
[00:57:58] ODELL:
Don't they have their own GBTC product, Osprey or whatever? Yeah. Closed end fund. Yeah. And,
[00:58:04] David Bailey:
so, like, the actually, something kinda cool, like, so DCG has been, like, lying or Grayscale's been lying that they can't do redemptions. And so, Osprey was like, hey, not only can you do redemptions, but our fund that's suffering from the same problem, we're actually going to do redemptions and and file the reg m relief that we have to file for to do it, add Osprey ourselves and issue redemptions add Osprey to prove that it can be done. So they also have a negative? They also traded at a at a discount. Yeah. And so, like, they're about to begin off begin the redemptions in Osprey, and it's like, I mean, it's kinda awkward because it's just like, okay, like, you're clearly lying grayscale. Here's a competitor doing the same thing and they're able to offer it.
So, there's a bunch of industry companies. There's another company, 3iQ that is trying to do like a hostile, Canadian, takeover or it's a little bit complicated, but it's cool. Like the term hostile Canadian takeover. Yeah. Yeah. It's it's it's basically like, hey. You can't get an ETF approved in America, but we have one approved in Canada. So we'll just consume the shares and then let you redeem for Bitcoin in Canada. It's a cool concept. And then there are a bunch of, lobbying groups that have been, leveraged up that are going out there talking to regulators, talking to the SEC, talking to state regulators, talking to FINRA, talking to, anyone that will listen to to get this trust busted open. So, you know, from my perspective, like, I'm we're in the middle of it as just a, let's say, connector of all these different parties that are around the table.
This trust is gonna get busted. It's just, how is it gonna get busted and, how long does it take? And so, yeah. That's I'm I'm spending about, I'd say, 50% of my time, a little bit less with the conference coming up, but, on this. And it is, honestly, when we're when we're successful busting this trust, it's gonna be the dopest thing I've ever been a part of in Bitcoin other than the Bitcoin conference, which is fucking the dopest shit. But, like this is, this is the biggest activist shareholder campaign in history. It's the 1st activist shareholder campaign organized over Twitter in history. That's interesting. Yeah. Yeah. So, we're going to bust this fucking trust. And, I think it's gonna happen sooner than people expect, and I think it's gonna get, very crazy very soon.
So
[01:00:53] ODELL:
from my seat, obviously, Not Your Keys, Not Your Coins. Another prime ex this whole year has just been prime examples of of custodial risk. Yeah. Obviously, I think a lot of people have learned this lesson in the expensive way. But I guess my question is, as someone who who holds self custody that is not directly exposed to GBDC, doesn't own any GBTC products, I'm not a FTX creditor, a bunch of I'm not stuck on Gemini Earn. What do you think the impact is to is there an impact like, can most people that are just staying on the stacking sites and holding their own keys just safely ignore this and just let you guys run with it, and whatever happens, happens? Yeah. I think,
[01:01:49] David Bailey:
I think, definitely, there is alignment amongst all the parties that however this trust gets redeemed to do it in a way that it minimizes its impact on the market. And there's a variety of different perspectives of what happens if you redeem the trust. I mean, there's 630,000 Bitcoins in this. That's a shit ton. That's 3 Mt. Goxes Right. Of Bitcoins. So, there are a lot of different, opinions. 3 Mt. Gox's worth of Bitcoin. Yeah. Yeah. But, like, I I'm actually of the opinion when the trust gets redeemed, the price of Bitcoin will go up, rather than going down. Some people think it'll go down.
And you know, I, I, I think broadly, you know, it's gonna be good for the entire industry, to have this scam gone. Right. That's in everyone's best interest. That's in everyone's best interest. Just a bad look on all of us. A lot of the Ponzi schemes that existed in the space, the source of where the Ponzi came from was this arb trade on GBTC and Genesis. And so, like, it's gonna the I've called it the ring of power, like like, various Sauron, and he has the ring of power, and he's like corrupting all the creatures of middle earth, like, over time. So it's, like, when the ring of power is gone, it's gonna remove a a massive catalyst and funding source for all of this bullshit and Ponzi scheming stuff that's been going on. That's interesting. And, there's a million people that once this thing is redeemable, they're gonna be able to take control of their own keys, and we're gonna basically add 2% to the Well, how many people do you think own, hold their own keys? Like 20,000,000 or something. 20,000,000.
Okay. So, if we get a 1000000 people that redeem out of this this trust and hold their own keys, we've just added 5% to the user base of actual Bitcoin But I do think
[01:03:38] ODELL:
I I a lot of them are just gonna go to Fidelity and just have Fidelity all Yeah. Probably. But the I mean, I'll say of the people that I've heard from,
[01:03:48] David Bailey:
people were like, I never understood the value of holding your own keys until GBTC. So it's been a massive advertising campaign for why not to trust other people with your with your Bitcoin.
[01:03:59] ODELL:
The buddy I said about Gemini Earn, I mean, the freaks can imagine he was he's a college friend of mine. I was incessant even up to, like, 3 weeks before all this blew up. Hold your own keys, withdraw. He's like, none, and it's not necessary or whatever. If he gets even a negligible amount of Bitcoin out of because who knows how much Bitcoin the Gemini earn people will get? Yeah. He's gonna immediately self custody. Like, there's he just can't right now because he doesn't have any Bitcoin. Yeah. Yeah.
[01:04:29] David Bailey:
No. Yeah. I I think they'll get some, some out of some Bitcoin back. But, yeah, I mean, Barry is saying that if this trust is taken away from him, I mean, it's in the documentation of the trust that, while they can redeem people in kind in Bitcoin, they're going to just liquidate the trust in the cash and redeem everyone in cash. And it's kinda like Just a gun to the head kind of thing? Yeah. It's like if you try to take this from us, we're gonna fucking take yeah. Exactly. So that would be the if if it was all liquidated in the cash in a disorderly way, Just to be a dick. Just to be a dick Yeah.
Which would be the ultimate when we talk about rage quits Yeah. Such a better rage quit than Mike Hearn, where it is like, I'm selling 3% of all the Bitcoin and crashing the price. Yeah. But, have some cash on the side, some some piggy bank money I do not really. No cash on the Sell some lemonade,
[01:05:26] ODELL:
Matt, because you you can get some cheap zap. Balaji told me hyperinflation was hitting in 2, 3 weeks. There's there's no there's no shot at how I'm holding any of that US dollar shitcoin.
[01:05:36] David Bailey:
Yeah. Fair.
[01:05:39] ODELL:
Yeah. Wow. Well, we'll see what happens. It should be interesting. But fuck Barry. So Dude,
[01:05:44] David Bailey:
he's he's he's the he's the Sam Bankman Fried, but, like, with like, without the League of Legends aspect. Like, he is SBF, and he just is more polished, and he has better lawyers, and he knows what he's doing better than Sam did. More successful. Yeah. Yeah. But he was running the same scam. I almost feel like like, SBF was, like, working at Jump or wherever it was that he was from. Where did he work? Not Jump. State Street? Not State Street. Jane. He worked at Jane. Yeah. Jane Street. He's, like, at Jane Street, and he's, like, seeing Barry's, like, game. He's he's like, I could do that. I could do that. Yeah. So, he was like his Fiat protege.
Yeah. So, I mean, getting rid of SBF is gonna be a huge tangible benefit to, Bitcoin, and getting rid of Barry's gonna be a huge benefit. Think about how many billions of Bitcoin Barry sold when he gave that Bitcoin to these other scams who just went and fucking sold it. Right. Like, he's been the source of so much selling of Bitcoin. And so much paper Bitcoin. And so much paper Bitcoin. Yeah.
[01:06:51] ODELL:
So, I have joked that we would have had 200 k by conference day if it wasn't for Barry.
[01:06:57] David Bailey:
I, dude, if it wasn't for Barry and if it wasn't for Sam Yeah. Then I agree. Yeah.
[01:07:02] ODELL:
Yeah. I think it likes Scooby Doo if it wasn't for those those meddling
[01:07:08] David Bailey:
suits. So, yeah, dude. It's it's quite the saga, man. It's quite the saga.
[01:07:14] ODELL:
It's exciting. Yeah. It's just another chapter in Bitcoin history. Well, it seems like it's been keeping you busy.
[01:07:20] David Bailey:
It has been.
[01:07:22] ODELL:
So, David, we're, I know I know time is tight. We've this has been a fantastic conversation. Before we wrap, you I mean, your your flagship Bitcoin festival, I I don't even think it's a conference. It's more of a festival Festival. Is happening in, what, 43 days or something like that? 45? May 16th to 18th.
[01:07:45] David Bailey:
May 18th to 20th, I thought. May 18th to fuck. Hey. You could be right. I don't know. The
[01:07:51] ODELL:
CK is gonna kill me on that one. Yeah, man. It's the bear market edition. So CK has, like, a ticker in the Slack that, like, tells you how many days are left. May 18th to 20th. Sorry. My head's a little bit out there. Good. I'm glad I wasn't wrong.
[01:08:05] David Bailey:
I could've been. Yeah. It's the Bear Market edition. So, you know, this year, instead of having a music festival, we're gonna have mayonnaise sandwiches in a tent city. A little bit of Fyre Fest. A little bit of Fyre Fest, but, it is it's the builder conference. It's the conference with out all of the, flamboyancy of, we're all buying Lambos, and it's more like the, we're all broke, so we gotta make this thing, you know, build this thing and make it work. The bear market about this. Yeah. Exactly. Which honestly is, like, the shtick I prefer.
You know, the it's, Higher signal automatically. Automatically. So, but, yeah, it's coming up in 45, 46 days. It's gonna be awesome. We have, people from the real world coming to to integrate or announce things with Bitcoin, some people from different nation states, bit big corporations, etcetera. We have, cool people within the space building awesome open source projects, building controversial projects. You know, I'm excited to hear from Casey Rodemore at the at the conference, even though that's gonna be, you know, we've gotten some flack for that, but I, You like the drama?
You know, drama means, that's relevant, but, you know, I just like seeing people do shit with Bitcoin. And it's like, you know, the haters, like, you know, there's one way to get me to do something. Yep. It's to tell me I've heard you say this so many times. I can't do it. Yeah. It's like like You can't have this speaker. It's like, I need that speaker. Yes. Exactly. I mean, you know, I've known even I am not interested in NFTs in the in the slightest. When people told me, you can't have ordinals on Bitcoin, first fucking thing I did was get an ordinals wallet and figure out how to buy one of these things just to be, like, fuck you. Yeah. I can. So,
[01:10:05] ODELL:
did you buy any rare stats? No. I've been trying to. You're an idiot.
[01:10:09] David Bailey:
I'm why?
[01:10:11] ODELL:
Because rare stats are dumb. Yeah. The the inscription side, like, makes sense to me to a degree. Like, obviously, like, Bitcoin chain is gonna outlive all of us. Right? So if if you wanna immortalize something, there's obviously Hire glyphs. There's a value to do it on the Bitcoin chain. Yeah. But, like, one sat being worth a 1000000 sats, just I Yeah. I don't follow that. Yeah. It doesn't make well, that just sounds like Craziness? Yeah. It just sounds like greater fool theory or whatever. It's just Well, if someone wants to buy my sat for a 1,000,000 sats, like, I'll sell it to you. Yeah. Okay. Sweet.
[01:10:47] David Bailey:
Do do you have any rare sats? I have no idea. You should chat. Every sat is a rare sat. That that is true. But I want the rarest ones. Though, you know, I do buy in, like, okay, this is is ordinals, etcetera. It's like just social convention or whatever. But, the concept of there being, like
[01:11:06] ODELL:
Yeah. It's not even enforced by the chain. It's just like a religion. You decide what is rare. Yeah. It's not. Right. But,
[01:11:13] David Bailey:
the idea of there being, like like, objectively rare events that happen in, like, block time is cool. Like, the fact that, like, okay, there's a halving that happens. If I could Halving. Halving. Halving. I agree to disagree. Yeah. The
[01:11:32] ODELL:
like, that happens. If I could own the whole block that was mined Well, we've already seen that preordinals. Like, I remember, like, Chinese mining pools would sell.
[01:11:41] David Bailey:
Yeah. They would all compete to try and get that first block out. So imagine if you, like, owned that block and, like, the Bitcoin and the mining reward from that block.
[01:11:49] ODELL:
That'd be fucking dope. Yeah. But ordinals doesn't prove that. Like, that's different than having, you know, the Coinbase like, wasn't it, it was one of the Chinese pools. They were selling the gold coins Yeah. That like BTC BTC was paid out of the Coinbase reward. So they're actually, like, the blocks, you know, the block reward of that block. Yeah. So you're saying that you think that's dope? I'm not saying it's dope. I'm saying there's validity to that, I think. Yeah. So Like, I wouldn't I wouldn't purchase that collector's item. The only I think every Bitcoiner well, most Bitcoiners has some dark collectible past.
You know, I have signed basketballs. I have you know, my family got wrecked on Beanie Babies, you know, like, all this shit. But, like, now sats are just my I don't do any other collectible nonsense. It's just like I try and stack as many sats as possible. What what's the how many halvings are there? Halvings.
[01:12:38] David Bailey:
Halvings? How many halvings? 16? It it just keeps halving forever. Yeah. No. It it it ends at a certain point, like 20 21 40? Yeah. Yeah. 21 40. Projected it And it never haves again after that? Correct. Yeah. The so the, so there's, like I thought it was just, like, a negligible having after that. No. It it ends at that point. The, but the, so, like, there's only gonna be 24 of those in history or, I think it's 24. 24 of those in history, and it's, like, for forever. You know, like like, you know, what if you had the first fucking gold coin that was ever minted in, like, human history? That's that's fucking cool. So, anyway, so the ordinals is the poor man's version of that because it's just social convention. And now we instead of having to get the whole block reward, you can just get, you know, a side of the block reward. I don't know. I think it's kinda cool. The,
[01:13:37] ODELL:
firstly, I think it's bullshit, but people can do whatever they want.
[01:13:42] David Bailey:
Exactly. So, so, anyway, we got Casey speaking at the conference. We, have some cool freedom fighters. Speaking of rare sats that are stupid, we got Julian Assange. It's gonna be, taking some of his rare sats that are from his wallet from the original, WikiLeaks donations, and auctioning a few of them off. Goes to a good cause, but, you know, it's kinda cool.
[01:14:08] ODELL:
For Assange. For Assange. And, I And I think I think the org does a really good job. Like, the conferences do a really good job with physical art, and I Oh, yeah. I think a lot of this drama is kind of pulling away from that. Yeah. It was the largest Bitcoin physical art gallery in the world. For sure. And as much as I know you're a big collector of Bitcoin physical art, I haven't been able to justify it yet in my So I would like to be a massive art patron in the future. But I just the purchasing power of Bitcoin is not high yet for me to justify that. But,
[01:14:42] David Bailey:
the actual physical art collection that is showcased there is is is truly impressive. Yeah. Like, 1,000,000 of dollars of art move every year, and and, for, like, artists that create this, like, it's like a big opportunity for them to, like, make a year's income in one day. But yeah. I mean, it's, you know, the the conference is to be a showcase of Bitcoin culture. And, like, every cultural revolution that's ever occurred, it's, like, driven by culture, art, music, the things that people interact with and touch in their daily lives. So, yeah, we, we make art front and center. You know, we make the philosophy of Bitcoin front and center.
We make the technology of Bitcoin front and center, and we make the business of Bitcoin front and center. And we try to be a platform for all it to come together. The parts that clash, they clash, but, you know, ultimately, we wanna make the dopest celebration of freedom, on the planet. We want this to be like a pilgrimage where, you know, like, I've described it before as, like, Burning Man meets, like, South by Southwest meets, like, Money 2020. Like, you know, we wanna be, something absolutely unique that, inspires people around the world to adopt and evangelize Bitcoin. So, we got a cool show coming together for Miami 45 days. There's gonna be lots of announcements. 18th to 20th, and get your ticket to the conference. And if you can't afford a ticket, hit us up. We have discounts basically for an infinite number of reasons, made up reasons, like cost should not be a barrier to anyone to attend this conference.
We just have to not go bankrupt in the process of putting it on. So that's why we charge what we charge. But if you can't afford a ticket, hit us up, and we'll we'll get you a discount code. And you had some close calls there with bankruptcy too. So Oh. You mean it when you say it. Oh, many.
[01:16:39] ODELL:
And I mean, to talk my own book, if you go to b.tc/conference/open source, if you're an open source contributor, you can apply there for a free ticket.
[01:16:49] David Bailey:
So definitely consider that. Definitely for the open source crowd. Get your free ticket. I mean, it's like,
[01:16:55] ODELL:
it's a no brainer. We're at, like I think we've given away a little over a 120 open source tickets,
[01:17:02] David Bailey:
and CK says I'm a failure if I don't get to 200. So Get to 200. The the I think pitch day maybe just closed or it's about to close. We've had, like, 250 companies apply for pitch day. That's awesome. And so we're gonna bring the best 20 to the conference and have them pitch to VCs. But, dude, I mean, every year cool shit comes out of it. I think Swan came out of, Bitcoin in 2019. Zebedee came out of Bitcoin in 2019. Albie, the lightning extension. I mean, lots of companies come out of the conference. And, dude, that's why we do it. It's like to bring together great great minds, great investors,
[01:17:39] ODELL:
great technologists, and, like, build shit, create shit. That's the goal. You know, Freaks, a lot of you give me shit for 200 k by conference day, but before 200 k by conference day existed, I told everyone to stack at the all time high of $13,000, which is at Bitcoin 2019, and I had to live in that shadow for 2 years. I don't expect this time to be any different, and, one day one day, I'll get out of the shadow of the 2. Pretty soon. Pretty soon. People made fun of me for years after that Bitcoin 2019 event. That was a fun event. Dude, that event was, On the roof of the parking garage. That was dope.
The failed city of San Francisco.
[01:18:20] David Bailey:
Yep. Yep. I mean, in the in the shadow of, Citibank or whatever. The bank right now is good. Right? I think I'll I'll say this. Like, one of my goals for this conference when we started going back to Bitcoin 2019 was, like, we were just coming off the block wars, and it was, like, okay. Let's bring the community Which, by the way, fuck Barry again. Yeah. Yeah. Oh, yeah. The New York agreement. Wow. So it was like, let's bring back OG Bitcoiners and and OG Bitcoin vibes and realign the community over the things that we agree on and, like, knock a motor consensus and, like, put the past just like fucking who cares about it? Like, let's just focus on building what we need to build. And, my goal has been to get Roger Ver and Ji Han You tried to do that in 2019? Yeah. To come to the conference and participate, but they have to abide by the rules, which is they can't talk about any other fucking crypto. They can't talk about Bitcoin Cash. They have to, like, say positive things, like, contribute positively to Bitcoin.
And I've gotten close to getting Roger before, but he just, every year he just chickens out and he, he, he can't can't follow the rules. I think Jihan is gonna come this year. He's been really quiet. He has been really quiet. And, he's he's gotten back to his Bitcoin roots. To the new freaks out there, he's the head of of Bitmain. Former head founder of Bitmain. I think now he's not he's not in the day to day anymore, but he's also the first person to translate the satoshi white paper into Chinese.
[01:19:48] ODELL:
He's really the founder of the Chinese Bitcoin community. So we have Kiwi in the chat saying, fuck that. Why would you want him there?
[01:19:55] David Bailey:
Why would we want him there? Because And then he said, fuck your mother if you wanna fuck.
[01:19:59] ODELL:
The famous GM tweet.
[01:20:02] David Bailey:
Anyone who can contribute positively to Bitcoin, we want there. Like, that's that's the key thing. Like, it all that matters is freeing humanity with sound money and free money. And, if the Taliban wanted to adopt Bitcoin, I would give them the stage. Like, if if, like, if anyone, I mean, honestly, I I there's there's no bones to pick. All that matters is that Bitcoin wins. And so, my goal is that we can see Jihan come into the conference, return to his roots, and start a new Bitcoin company focused on Bitcoin Nakamoto Consensus. Now, that's a controversial take, but I'm gonna stand by it because that's the point of fucking Bitcoin. Bitcoin's for your enemies, Bitcoin's for all people. If you can contribute to it, come build it.
[01:20:55] ODELL:
Yeah. I mean, I don't agree with everything, that you think, but, I respect it. And, hopefully, the takeaway of this is that the Taliban is gonna be at Bitcoin 2024.
[01:21:04] David Bailey:
Let's see. Big announcement coming soon. Big announcement.
[01:21:08] ODELL:
David, this has been great.
[01:21:11] David Bailey:
Do you have any final thoughts before we wrap? No, man. Thank you for having me on. Thank you for, making Nashville, putting Nashville on the map for,
[01:21:20] ODELL:
freedom money in the US. There you go. I'm gonna I'm gonna make sure that Nashville becomes the Bitcoin capital of the world just to get you back for your your your rug pull when I first moved here. Alright. Fair deal. Appreciate you. Appreciate you, freaks. Thanks for joining us. Huge shout out to our guest, David. Hopefully, he will join us again at some point. I love these in person rips. The in person rips are just so good. Thank you for joining me in my studio. Yeah. Huge shout out to the freaks, and, stay humble, Stack sets. Cheers. Rock on, people.
Happy Bitcoin Tuesday, freaks. It's your host, Odell, here for another SIL dispatch. This live show focused on actionable Bitcoin and Freedom Tech discussion. We have a great conversation lined up today, but before we get there, I wanna thank all the freaks who continue to support the show. Dispatch is purely funded by audience donations. We have no sponsors. We have no ads, so it's made possible thanks to all the amazing supporters who continue to support the show with Bitcoin. The easiest way to do that is by going to cildispatch.com/donate. That will take you to our geyser.fund page where you can donate via lightning or on chain Bitcoin.
There's a cool little message board there. You can leave a message. You can attach it to your Twitter if you wanna climb the leaderboard, or you can donate anonymously if that is your preference. You can also support the show using podcasting 2.0 apps, like Breeze, Fountain Podcasts, echoln, podverse.fm. They work like regular podcasting apps. You search the little dispatch, you press the subscribe button, but then you load it up with Bitcoin, choose how many sats per minute you think the show is worth, and then as you listen, those sats go directly to my node.
It's incredibly cool and empowering seeing those stats flow in, so thank you to the freaks who continue to support that way. Also, podcasting 2.0 has a feature called boostograms where you attach a comment to a amount of Bitcoin, and the top four comments from the previous episode, I read at the beginning of every dispatch. So with that said, we have ride or die freak, 8 MythRendur with 7,770 8 sat saying, Odell at the end, this guy is based enough to agree with my citadel theory. You are correct. We have at tomzardbesan giving a shaka sign in 7,777 sats. We have at fadedflage with 6,789 sats saying, love you. Love you as well, sir.
Then we have at kepford with 2,000 sats saying, hey, Matt. How's that top g life going? Stay humble. Stack sats. That was fake news. Appreciate all the support, freaks. Last but not least, dispatch is a live show. We have a live interactive chat that you can access via YouTube, Twitch, Twitter, and Matrix. The Matrix chat is at sildispatch.com/chat. That is going on all day, every day, 247, 365. So consider joining us there. We have such great conversation there. But with all that said, I mean, you freaks who continue to join us in the live shows, make this show what it is. It makes it really truly unique. So thank you all for participating.
And one more shout is I know it's a recession. I know it's a bear market. Maybe it's not a bear market anymore. Who knows? Doesn't really matter. Stack stats. But, if you can't spare any stats, the easiest way to support the show is subscribing on your favorite platform, sharing it with friends and family, leaving a review. All of these things help. They are appreciated. Dispatch is pretty much on every platform, Bitcoin TV, Rumble, Twitch, Twitter, YouTube, every podcast app. You just search the little dispatch, and, it's a great way to support the show. With all that said, we have a wonderful Tuesday morning here in Nashville at Bitcoin Park.
And my good friend, who's in town, so we had to sit down for this wonderful coffee morning rep. We have David Bailey here, CEO of Bitcoin Magazine. How's it going, David? What's up, Matt? Thanks for having me on. It's a pleasure.
[00:04:10] David Bailey:
This is my first podcast I've done in, like, a year. So, you know, I was supposed to do some podcast last week. I canceled because I was sick. So, thank you for,
[00:04:21] ODELL:
you know, being my first Well, I didn't know that. I almost got rugged prematurely there. That's I'm glad, I'm not glad you got sick, but, it's it's an honor to have you on dispatch. I mean, before we get started, one thing that I kinda forgot forgot to mention in the preshow. You know, David kind of convinced me to move to Nashville. And then about 2 weeks after I moved here with my lovely wife, he then left Nashville and moved to Puerto Rico. Yeah. That was the real rug. Sorry. It all start it all started with a rug.
[00:04:56] David Bailey:
Yeah. Well, hey, Nashville's, a good second second best.
[00:05:02] ODELL:
Fair enough. How's how's San Juan going? How's, Puerto Rico? Oh, it's great, man. It's great. It's,
[00:05:09] David Bailey:
you know, we got a good setup there. It's, you know, honestly, I feel like, we moved there to escape all the craziness. And as time goes on, like, the America just looks crazier and crazier. And in Puerto Rico, like, none of that shit happens. There's no school shootings. There's no You know Puerto Rico is in America. Right, though? I I do. Yeah. But it's like, it's not America in the sense of its its own cultural identity and it's like, you know, if you tried to explain to people there, like, what trans is, they're just like, what the fuck are you talking about? So, I mean, it's, it's it's much more of like a Spanish speaking country. But, yeah, man. I got sold on this this concept that Puerto Rico is the Alamo, for freedom, freedom loving Bitcoiners, and that we can build our own nation there. So that's what we're doing, and, you know, it's a lot of fun. It's like playing, you know, SimCity except it's real. And now you have, like, fruit trees in your backyard. Oh, yeah. I'm, like, becoming a farmer. I I have chickens.
I got, bananas, papayas. I have star fruit, grapefruit, oranges. I have cacao. I have these little, fruits called hobos. I got avocados. I mean That's awesome. Yeah. We're we're trying to, become totally self sufficient on food and stuff. And, like, Puerto Rico, it's like miracle grows just dumped on everything that grows there every day. It's just, like, insane. So, when I get back, we'll have a bunch of fruit to harvest. But, yeah, man. I'm I'm That's badass. Trying to learn real life skills, and Puerto Rico is kind of a playground to do it in. And Have you learned any Spanish yet? My daughter's first word was actually, agua.
And, Her first word was Spanish. Was Spanish. Look at that. And we had no idea. We're like, she's just, like, babbling a lot. Water. Yeah. Water. And so,
[00:07:10] ODELL:
yeah. It's like now I happen to have to learn it because my daughter knows, like, more Spanish than she knows knows English. So it's a problem. Yeah. I mean, I have a lot of friends there. I think a lot of the schools, they do, like, it's bilingual school. Like, they, like, teach you both in English and Spanish. Yeah. Yeah. Yeah. Yeah.
[00:07:26] David Bailey:
And, you know, when you get, like, bullied on the playground, you gotta be able to, like, come back with your, you know, Spanish comebacks. So it's, like, do or die. You gotta learn to yeah.
[00:07:36] ODELL:
Well, that's awesome. I look forward to visiting you all over there. I mean, you went there with a decent crew too. Yeah. Just getting started, though.
[00:07:45] David Bailey:
When Nashville goes woke, we'll we'll have Puerto Rican ice ready for you. When that happens. I I wouldn't bet on it. But by step. How the flight's pretty easy too. Right? Yeah. Yeah. And I mean and and also one side benefit, you pay no taxes. Right. So if you have an ethical issue with With no cap gains. Right? That's the big advantage. No cap gains, 4% corporate income tax, no dividend tax, and no, interest tax. So what people do, like what some of the people at our company do, they set up, companies in Puerto Rico. They provide consulting services to our business. Right. We pay the salary to their company. They pay a 4 percent tax on that money, and then they dividend the money, the the profits to themselves at a 0% tax rate.
So You don't you don't pay federal income tax unless you pay? No. You don't even have to file anything with the IRS. You don't even have to tell them you're alive. Wow.
[00:08:39] ODELL:
And then there's also something that well, first of all, I mean, the cap gains thing will be would be nice if anyone had any gains this year. Yeah. The there there's, like, a the way that ruling is set up is it, like, it screws the locals. Right? It's,
[00:08:53] David Bailey:
like, you only get it if you move there. Yeah. Not if you've been there already. Yeah. It's there's definitely, like, some messed up stuff about it. It's actually one of the things we're trying to, like, lobby to change right now. We've gotten some some traction. But, yeah. You have to leave the island for 10 years, and then come back in order to qualify, which is bullshit. Because then it means, like, all the green goes get this tax benefit, and the locals don't get it. So, and, like, the we looked into, like, the total amount of capital gains paid by Puerto Rican locals, and it's, like, 40,000,000 a year, which is just, like, nothing. Right. It's tiny. So, yeah. We we have this, bill that we're trying to push. It's called act 60 for all, which would extend all the benefits, to all Puerto Ricans, that the Gringos get under that tax status. So, hey, it's one That's awesome. Building 1 nation. So
[00:09:45] ODELL:
cool. Cool. Cool.
[00:09:47] David Bailey:
Hey, before we go into a different topic, can we talk about podcasting 2.0? Yeah. Let's talk about it. So I'm interested to just hear, like, okay. You've been doing that for a while? Yes. How long have you been doing it for?
[00:09:58] ODELL:
A little bit over 2 years now.
[00:10:00] David Bailey:
Talk about the results of it and and how it's, changed over time. Because I I saw Marty, you know, throw out some video where he was, like flashing his stats. Yeah.
[00:10:13] ODELL:
Yeah. He likes doing that. It's a cool it's a cool way to introduce someone to Bitcoin, or at least the Lightning Network to show, like, it actually works. And and that when he was showing that video share of his phone, that was his own node, which is even cooler, because you don't you don't have to trust someone in between. But, podcasting 2.0, I mean, the dream is very simple. Right? Right now, most media on the Internet is funded by ads. It creates a bit of a conflict of interest. The ads are the the ad partners are your customers. They're the ones you need to please. The audience is the product, that you're selling to the advertisers.
There's a whole element of corporate surveillance built into that. Right? Surveillance capitalism, where the more information you know about your audience, the easier it is to sell ads against them. Right? And and everyone knows how corrupt that can be. So so this is this is not a new dream. Right? We've already seen it kinda happen with Patreon and stuff, but this idea of, like, direct audience funding, where your audience is a customer, your incentives are completely aligned, and you wanna provide them the most value because they're contributing value back. What's cool about this is because it uses Bitcoin, because it uses its interoperable monetary network, you can do it with very limited middlemen. So instead of paying Patreon 10% or or whatnot, you can do it with very low fees, and you can do it direct from user to content creator or any kind of creator.
Now it's still very much early days. There's a lot of friction still. The key is trying to reduce the friction as much as possible. What's the main friction? The main friction is using lightning in a sovereign way. So, like, I run my own lightning nodes. Most podcasters that do podcasting 2.0 right now are are doing custodial lightning nodes. And then on the sender side, every listener needs to have a lightning wallet, and most of them are using custodial wallets right now. So when I mentioned it earlier when I when I did my little read in the beginning saying the podcasting 2 point o apps. Right? The fountain podcast is the number 1 podcasting 2 point o app.
It's custodial by default. So when someone signs up to fountain podcast, they're loading up a custodial wallet. Yep. That custodial wallet is actually run by ZBD, the the the gaming infrastructure company. So it's not even Fountain can't rug their users, but a third party company can rug Fountain users. But that's to make it more the the key with all these things is is what I've noticed is most people wanna support good content, but they don't wanna go out of their way to support good content. Right? So you wanna reduce the friction as much as possible, so that it's easy and it's it's easy for them to support.
[00:13:04] David Bailey:
But it's cool. Like, this whole ecosystem's building up. Now the realest Can you speak, like, how many people are using these apps, like, and how much has it grown over the past year or 2 years? I mean, I don't know hard numbers,
[00:13:17] ODELL:
but it's grown significantly. I mean, in the beginning, it was very niche. So, like, rabbit hole recap my weekly news show, we do a hybrid approach. We still have some sponsors, and then people can also support with the idea that hopefully we'll switch fully to audience funded. Still, dispatch from the very beginning was like, let's prove out this concept. No sponsors ever. And, yeah, we have mister robot in the comments saying, if you go to new podcast apps.com, you can see all the different podcasting 2 point o apps that exist. The a lot more people are using it, a lot more sats are flowing, but it's still this couldn't be my full time job. Like, there's there's it is it is not, we haven't hit the threshold yet where, like, the revenue from Sats is overtaking, you know,
[00:14:12] David Bailey:
ad revenue. Can you share what that number is? Like, what do you bring in per episode?
[00:14:18] ODELL:
I've had dispatch. I don't know. Probably dispatch is, like, 200 to $300 an episode. Oh, that's not bad. So yeah. But Peter McCormick's bringing in, you know, maybe $10,000 an episode or
[00:14:31] David Bailey:
$15,000 an episode on the ad model. But the growth rate that you have on this on fountain app is, like, a couple 100% a year or so? Probably bigger than that. Bigger than that. So, like, you're saying, like, in 2 years' time,
[00:14:44] ODELL:
you know There's also this cool concept with it that so, like, the way podcasting is very dominated by podcasting charts in terms of growth of shows. So, like, people will just open Apple Podcasts, right, and they'll subscribe to the top 10 tech podcasts. Right? Now that is a complete black box. How does Apple decide who is in the top 10? How does some Apple decide if you're number 15 or number like 25 or number 35? On fountain podcasts, you can go to their charts. Right? It's all sats. And it's just whoever received the most sats that week. It's a very objective, and there's a cost behind it. So, like, right now, like, could it be gamed? Yeah. Like, I'll tell the freaks right now. I do not send stats to myself, but people could send stats to themselves.
But as those numbers all increase, gaming, it becomes more and more expensive, to the to the creator. And, it's just really cool. I mean, a huge shout out to to my audience because they continuously keep me on the top of those podcasting 2 point o charts. Nice. So I I really do appreciate the support. It's really cool. It creates this whole dynamic. I do think it's the future of content. I just think it's just very early, and we're just kind of we're kind of building it out. If you look at the top charts, they're almost it's like, besides Adam Curry's show, and Adam Adam is a Bitcoiner now, if you look at the top ten, it's, like, maybe 6 of the shows are are Bitcoin shows if you include Adam's shows,
[00:16:14] David Bailey:
which aren't directly Bitcoin shows, but he is a Bitcoiner. And all the Bitcoin is user, funded? What do you mean? Like, the the Bitcoin that's that's, like, I subscribe to your podcast. I listen to it, and I pay, what, per second I'm listening or per minute or per show?
[00:16:31] ODELL:
Yes. All the above? It's it's all denominated in sats. And paid? In sats.
[00:16:38] David Bailey:
Okay. So,
[00:16:39] ODELL:
and then the There's two elements. You you can you can set a sats per minute Got it. Or you can send a flat amount, and that you can think of that as, like, a a global comment messaging board where it's just ranked by who sends the most sats. And then the, and then the stats that I have on the platform, I bought those stats. Correct. Got it. Well, there's a whole another element where I mean, if we wanna just go a little bit deeper, there's a whole other element where, fountain actually is paying out sats to people who listen as, like, a sats back to try and juice the whole system. Yeah. But that is not I would call that separate from podcasting 2.0. That's a that's a fountain podcast growth strategy. And and if you had to take a guess at, like, the number of people broadly using this app, like or how many sats are flowing across, like, the top 10 shows. Can you can you see that? Well, like, I know what like I said, I'm I'm bringing, like, a 1,000,000 sats, 2,000,000 sats a show. Right? So that's 200 to 280 to $560.
Right? And dispatch is routinely in top 3 podcasting 2 point so, like, I have insight into it to a degree because I know what I make, and I know I'm at the top of the charts. But the cool part about this is there's no centralized company that can really like, Lightning privacy has a lot to to to do better. Right? There's a lot of room for improvement there. But if you compare it to the traditional system where, like, Spotify knows exactly all this stuff, it's hard to get direct insights into a global view of podcasting 2.0. And that's by design. That's a feature, not a bug. Right? Yeah. Because you don't have middlemen everywhere that are able to see it. Now maybe Fountain, out of all companies, probably could figure it out the most and extrapolate from there just because they probably they're probably, like, 60% of podcasting 2.0 right now is run through fountain. And a lot of podcasters, they made it really easy for, like, the Peter McCormicks of the world to onboard onto podcasting 2.0. You can just download the app. You basically link your RSS feed that you already have for podcasting, and they set you up with a custodial wallet, and they set up that whole thing. And so that's all we're running through custodian.
So they can obviously see all those transactions. Right? We,
[00:18:54] David Bailey:
we need to clone that for the, Bitcoin Magazine app. The, that's why I'm asking because it's the, it seems like I've seen growth on those platforms. I need to download and check it out. But, and it's interesting for a media company. I mean, like, for us to be able to monetize that way. But, the Bitcoin Magazine app where we pay people now we're we're paying people to read content, which is kinda like what Fountain's doing. Exactly. It doesn't go to the end content creator yet. But, you know, we're we've gotten that up to I think we're at, like, 23,000, unique, monthly or or daily I don't know, monthly or daily active users, and it's growing at, like, 10 to 15% month over month. So I feel like there's, more and more of this micro transaction driven content. It's interesting. It's interesting because there's 2 different,
[00:19:46] ODELL:
philosophies about this, and I disagree with, my cohost on Robert Hall recap Marty a lot on this is so Marty thinks not to put words in his mouth, but I'll I will put words in his mouth. Marty thinks that Bitcoin enables way less friction on paywall content, and and he thinks, you know, you you provide some content for free, but then you also put content behind a paywall. A little QR code pops up. You pay 10¢ or whatever, and then you're actually able to view the content. And then value for value is this idea that you provide it to the world for free. Anyone could listen to this show for free.
They can even torrent it. I provide all all the shows out for torrent. And then, ideally, I hope that some people find value and they support, and maybe there's, like, 10% or, like, the ride or die audience that actually supports all the content. And it's, it should be interesting to see how that plays out, you know, does the paywall method work better? Does the value for value method work better? And I think the value for value method is is the one that wins because I think just information wants to be free. And I you know, part of why I was willing to do this with dispatch is because I think the open source movement is hope. I think the open source movement is is is what breaks us out of all these chains, that breaks us out of, like, these corrupt institutions, including Bitcoin. Bitcoin as a subset of the open source movement. Right?
And and part of the what we do at the conferences is is trying to highlight open source contributors. That's one of my main focuses at at Bitcoin Magazine, and providing them free tickets and and doing all that. And I've seen firsthand that most of them are just working, working out in the open, contributing their time, their energy, their efforts with the hope that someone will appreciate it, and they will get supported in the future. Right. And I think there's a lot of there's a correlation there. There's a comparison there between good content. And it could be part of that whole same kind of movement to this movement to like more open free society.
[00:21:54] David Bailey:
Mhmm. Interesting.
[00:21:55] ODELL:
And maybe maybe it's just an interoperable native digital money that doesn't require permission was the the final piece that was needed to kind of juice the whole
[00:22:06] David Bailey:
thing. Well, I I I definitely agree with you that it's distribution is the most valuable part. Content is going to 0. Information is going to 0. It does wanna be free. You know, I tweeted about this the other day, but chat gbt 4 is just gonna, like, change the game of of flooding content out there, and you're gonna have a hard time charging for something,
[00:22:31] ODELL:
when a robot created it for free. Well, there's thousands of hours of me saying every single word in the dictionary. So I do wonder what that timeline is before there starts to be, like, bootleg AI Odell podcast where I don't even have any control over Yeah. Endorsing shit coins. Yeah. I mean, I think that might be the the least bad version of that. It's gonna be crazy. It's gonna be fucking insane. Yeah. And then on the written content side, I mean, I don't even know. Like, that's like, there there's probably already writers that are at least half using chat gpt to to tailor the stuff. I mean, I'm telling our our editorial team that we need to be integrating it, like,
[00:23:15] David Bailey:
deeply into the business. I mean, it's it's, you know, we my wife and I were playing with it the other day, and we got it, you know, to write a a children's book on Bitcoin and monetary history in the voice of, like, doctor Seuss. I think I posted the the what it spit out to us in the Slack general chat. And, honestly, it's better than any children's book that's been written in this entire industry. And it's like, okay. Now we just need DALL E to, like, generate some images for the pages. And then literally in 2 hours of effort, we created the best book yet in the market, children's book in the market for Bitcoin. It's like, you know, fundamentally, that's just like that breaks how all the models work right now. I do wonder,
[00:24:05] ODELL:
and maybe it's my I mean, you've been in Bitcoin longer than me, but I'm just like an old man in Bitcoin now. And I'm, like, a little bit, raggedy around the edges. The AI stuff is interesting because it reminds me of Bitcoin, in that there's definitely signal there. Like, it's gonna completely change the world, but there seems like there's a lot of blockchain crap. And I've already spent all my cycles discerning the crap in the Bitcoin space. Yeah. So, like, I have no intention of doing that in the AI space, and I wonder how much of it is how much of it is bullshit that that is just noise and is isn't actually any kind of revolution or anything. And then and then what is the core signal? Because there's there definitely seems like a comparison there between, like, Bitcoin and and, quote, unquote, blockchain and crypto versus, like, some subset of AI versus the rest of the bullshit. Yeah. I mean, I I definitely. I mean,
[00:25:02] David Bailey:
the snake oil is always sold, you know Yeah. Near the hottest thing. But, I mean, have you used chat gbt 4 at all? Yes. Okay. It's extremely powerful. I mean, yeah. It's like it the proof is in the in what you can do with it. I mean, to be clear,
[00:25:16] ODELL:
the the guy who's behind is Sam Altman, he also Psychopath. He's, like, scanning poor people's eyes around the world and then giving them his premine shit coin world coin. Yeah. And did you see he just came out like his proof of humanness or proof of humanity? That was real or if that was in April April fools joke. I think he lawn he launched on March 31st to give himself a little bit of coverage just in case he got too much.
[00:25:40] David Bailey:
Dude, April 1st is the day to launch any product you're nervous about. Because if it doesn't go well, you just you just read it. I don't know if you saw Ryan Selkis announce that he was running for, for senate, on April fools and he got, like, a ton of traction. And he was like, that was an April fools joke, but now I'm actually thinking about it. Yeah. I don't know how much of an April fools joke that was. He's he's had aspirations for office for Yeah. Since
[00:26:05] ODELL:
went down, it feels like, almost. Yeah. But yeah. No. I that that's some the Worldcoin stuff, pea people don't realize it's happening right now. Everyone thinks it just died, but that's some dystopian shit. They're literally just scanning people's eyeballs and then giving them a shit coin in return. Well, you know, I
[00:26:26] David Bailey:
I have very, let's say, immature thoughts on this in general just because, like, I very much have the same mindset. It's like I'm I'm skeptical wow, this is I can see the direct use of this. But, you know, we've been talking internally, like, okay, You know, how long before we can give chat gbt 4 control of the Bitcoin wallet and, you know, have it start executing transactions autonomously. And then it's like, okay, start extending that idea a little bit. Like, first off, like, chat gbt 4 or any AI generated economic activity is not gonna be using fiat to do those transactions. Right. It's gotta use Bitcoin. So it's like Bitcoin is really money for the AI. And then it's like, okay, well, one part of Bitcoin that's been talked about in the early days and completely undeveloped. And it's like something that I've wanted to see developed for a long time is machine to machine payments. Yep. And there was always this dream of, like, the vending machine paying the drone to deliver soda to it and, you know, that economic activity happening without any human, you know The car pays the gas pump. Yeah. Exactly.
I feel like AI could be, the first real example of that happening where you give AI a few $100 in Bitcoin. You tell it, hey, I want you to achieve this. There's a bunch of interment intermediary steps that need to happen in order to get there, and it's gonna use the Bitcoin you gave it to pay its robot friends or Right. Different sensors. Broad politicians. Exactly. Yeah. And, you know, pay ZipRecruiter to put a posting for a job or whatever. Bitcoin's that missing piece there. It's the missing piece. And it's like, okay. Well, if if you can really develop a machine to machine economy, first off, the scale that that can grow to is unfathomable. I mean, you're talking about, like, it can get many, many orders of magnitude bigger than human economic activity.
And then it's like your fiat's no good there. So when you start thinking about, like, purchasing power of money, it's like, okay, it's it's almost like when people say, hey, what can you buy with Bitcoin? You know, like, can you buy your groceries with it? Okay. Well, if we have a machine to machine economy, it's gonna be like, what can you buy with fiat? Like Right. You know, you can only do human to human interactions to a subset of humans. My Bitcoin can, you know, harness the power of all machines. So, I feel like it's a very unexplored It's very early stuff. Yeah. For Bitcoin, but I think there's, like, a massive, immense opportunity there. I mean, massive.
You know? So I told I tweeted Balaji yesterday. He needs to bring back that 21 computer with the sensors where he had, like, that data marketplace. I swear he's gonna put a miner in every toaster. Yeah. And and he was gonna make it where you could, like, basically sell your, sell an API to, like, your sensors of, like, weather or humidity or whatever. And it's like, okay. No one actually bought the data. That was the problem. But, like, with AI, it's like, okay. I'm starting a farm. I need to grow, food on my farm. What should I grow?
Oh, I've tapped the sensors of people living in Puerto Rico to determine, you know, elevation, humidity, soil samples types. This is the optimal thing that you should grow based on all these data endpoints, and I had to pay $12 to the sensors to collect the information. Sensors. Yeah. And it's like, okay. That would be, you know, that that's the next level. Like, that's a really a cool idea. So it's kinda maybe Bellagio's idea was, like, spot on, but just,
[00:30:08] ODELL:
It was way too early. A decade too early.
[00:30:11] David Bailey:
Maybe, like, his bet as well. Maybe a decade too early, but we'll see.
[00:30:15] ODELL:
Well, yeah, definitely not before conference day. We're not gonna have Yeah. $1,000,000 Bitcoin. I think what are we we're down to, like, 76 days now. $1,000,000 in 76 days. That would be some crazy shit. On the AI on the AI topic, it's interesting because there's 2 elements there with AI and Bitcoin that I've kind of been focused on. First of all, I agree. Like, the money for for AI is obviously Bitcoin. They they need a trust minimized digitally native settled money. Right? They're not gonna use a bunch of different fiat rails and intermediaries and whatnot. That that much is very obvious. There's some cool things that could happen in terms of you know, a lot of my focus has has historically been on education in the Bitcoin space. We were just talking about friction with podcasting 2.0 and using lightning in a self custody way. Like, a bunch of different things can get automated behind the scenes just by integrating AI into wallets or basic AI into wallets.
But then there's this whole other element where there's there's this term that that I've seen floating around now called AI anxiety, which is, like, all these all these people that, you know, have, quite frankly, jobs that can be replaced very easily by AI, are concerned about their livelihoods, and people are pushing for them to be regulated and all this other stuff. And to me, like, Bitcoin is almost AI insurance. So, like, you can pay the AI and you can interact with the AI using Bitcoin, but, ultimately, at the end of the day, the AI can't counterfeit your Bitcoin. They can't seize or block your Bitcoin. So, like, if you want money that's resilient to AI interfere interference, that's probably Bitcoin as well.
[00:31:56] David Bailey:
Yeah. No. Brandon, Brandon Green from our team, we're having a conversation about this last night, and he was telling me there's something called, like, the paperclip problem. I mean, again, I'm a novice at all this stuff. So I Yeah. But the paper clip problem where it's like, if you tell AI to, like, make a paper clip, like, it will, like, end up consuming all the resources of the world to make as many paper clips until, like, it's, like, you know, destroyed the planet in the process of making paper clips. And, that the solution to this problem is Bitcoin because it can't create more Bitcoin. Right. And so if if Bitcoin becomes the value system of AI, unlike with fiat where you the Cantillion effect makes it where you can literally manipulate the inputs that an AI would use in order to determine what the next steps are.
With with Bitcoin, you're actually introducing the concept of scarcity to AI so that it would choose not to do certain decisions or actions because It costs too much. It costs too much. Yeah. And so it's like, okay, that's like the feedback mechanism that actually, like, keeps AI bound to some, like, moral system, which is like free trade, capitalism, like, property rights. Like, that's the guiding light of, like, letting these things run rampant. Yeah. Yeah. It's the ultimate check. It's the only check. Yeah. And I would say there's another element there too where it's like
[00:33:22] ODELL:
we're seeing and maybe this is just my open source bias, but we're seeing it's gonna be at the forefront of people's minds very soon, this idea of closed software and, like, proprietary black boxes. Like, what is chat gbt doing in the background? You know, what does Sam Altman know that nobody else knows? Because if you control the the primary AI platforms, you have immense power. We've already seen, like That's gonna be a problem. Chat gbt has is, like, hard coded with certain political biases and stuff. So I think more important than ever is this idea of of open open protocols, open platforms.
It would be nice to see some real strong competition there in terms of, like, open source AI. I don't know. Right. That's like I said, I'm an Open AI. Yeah. But it's not open at all.
[00:34:11] David Bailey:
Yeah. No. I think well, that's I the naming. I definitely think that that's a major problem. I don't know how, like, that's gonna play out, but, you know, maybe Bitcoin has something to do with that. Maybe it's like an open platform that can leverage Bitcoin and becomes more of a You you know, the the, the I to the question of, like, people having anxiety about losing their trade, it's like, how many open source developers are there in Bitcoin?
[00:34:35] ODELL:
I don't know. Not enough? 10,000?
[00:34:38] David Bailey:
Yeah. If that. Yeah. Okay. How many users are there in Bitcoin? There's about a 120 that have applied for free tickets. Yeah. There you go. And then, like, how many users of Bitcoin are there? 50,000,000? Yeah. That's probably probably maybe
[00:34:52] ODELL:
I a user of Bitcoin is someone who holds their own keys in my opinion. Yeah. That then less way less than 50,000,000.
[00:34:59] David Bailey:
But, like, okay. How many of those people would be open source developers if they could be? If they had the skill set or the talent set. Right. And so, like, that's the power of of, you know, AI is, like, not people losing their trade because of this redundant. It's actually people gaining new trades that they never would have had the ability or the to contribute to. And now all of a sudden, you could have a 1,000,000 open source contributors because they're able to deploy the right prompts. They're able to, like, come up with the right creative ideas Right. To contribute in some way even if they don't have the technical skill themselves.
[00:35:36] ODELL:
No. Yeah. I mean, people are just gonna have to adapt as as always. Right? Yeah. Good. It's like the industrial revolution. Yeah. Fuck laziness. You know? You gotta you gotta stay on your toes. Yeah. Well, as as I said earlier, you know, dispatches of future will just be AI junk. Yeah. We'll figure it out. But in the meantime, try and accumulate as much Bitcoin as possible so you have optionality. It's kind of the thesis I'm going on. Yeah. So, I mean, we have we have some time constraints on our conversation here. I would like to talk while I have you. I would like to talk about how Barry Silberd owes 1,000,000,000 of dollars to people. Yeah.
[00:36:15] David Bailey:
You wanna jump into that? Yeah. Where do you wanna begin? I mean, I I don't think I mean, I've been doing some, Twitter spaces, but I don't think I've talked about this on a podcast at all since it all went down. So do you want me to start at the beginning, or do you want me to start at the end?
[00:36:28] ODELL:
Let's let's start at the beginning. I mean, I remember when I was first sounding the alarm, everyone was focused on CZ and Binance, and I started tweeting out that that DCG was fucked. And, people were calling me an alarmist and an idiot. Meanwhile, that was 150 days ago or something like that. Yeah. Yeah. It seems like they're still fucked. Yeah.
[00:36:51] David Bailey:
No. So, you know, basically, oh, man. Where'd it begin? I haven't practiced telling the story in a, like, you know, in a consolidated way, but with, so so Digital Currency Group is Barry Silberts' baby. Yeah.
[00:37:08] ODELL:
They were the absolute titans, in the Bitcoin and, quote, unquote, crypto industry for years. His his his star product was gbtc, or is gbtc. It still exists now. And,
[00:37:24] David Bailey:
yeah. So he he has really 2 businesses. Well, he has a good portfolio of businesses, to be honest, Doug, because I think Foundry is a good company. I've heard good Largest mining pool in the world. Yep. I've heard good things about Luno. But What about Luno? It's a international exchange. It's like OTC? Or Yeah. It's, like, focused on well, no. It's a it's like a, you know, a bit stamp or Really? Yeah. But it's like focused on international markets, which I think is cool to bring Ben Glenn to those markets. So, but, he like, his two core businesses were Genesis, which was a a trading desk, and lending desk, that every institution in the industry used. And then, grayscale, which was his trust product. And basically, he was in the business of taking different digital assets, bundling them together in these these trusts, and then getting these trusts listed on the on the public markets, so that retail investors and their 401 k or whatever could buy them. You could buy them on Charles Schwab or whatever. Yeah, exactly. And so, I mean, he really pioneered that method. It was kind of a backdoor method to allowing people to buy Bitcoin in their brokerage accounts or whatever.
And it started with Bitcoin, but then it expanded to a whole host of shit coins. So many shitcoin. And, you know, honestly, if you go through the list and read, like, what it is, it's like some of these are, like, you could just know, like, live peer or some shit like that or horizon. And it's like, what backroom deal got done where, like, you know They got a bunch of pre mine and then Yeah. Made it happen. So it's like, you know, if any, like if the s c c's listening to this, you know, if you want a cookie trail to go follow, just look at all the shit coin trust and then find the documentation for how those things are created. But, anyway, so, yeah, he created these, these vehicles and the Bitcoin Trust specifically, became, the biggest holding of Bitcoin in the world. So it has about 3% of the world's Bitcoin in it. 620, 630,000 Bitcoins right now.
And he charges, a fee, a pretty high fee. Wasn't that high when it got started. I mean, because it was a new product, but now that it's a commoditized solution, he charges 2% of the NAV, per year. And so, collectively, across these assets, he he has maybe $20,000,000,000, at today's prices of different crypto, in these trusts, and he's taking 2% or more, 2 and a half percent on some of them, off the top. It's kinda like a model you can't believe you could lose with because Pure cash cow. It's just a pure cash cow. But somehow, incredibly, that wasn't enough.
And so, Barry was like, how do we take this up a notch? And, that's where Genesis, his lending desk comes in, where they were using other people's money. Cause Genesis that you, you deposited your crypto there to, to earn yield your Bitcoin there to earn yield. So he was using your Bitcoin, your cash, to finance a whole host of interesting characters.
[00:40:46] ODELL:
You would lend him Bitcoin so then he could lend the
[00:40:57] David Bailey:
a trade with, you know, the great folks at Alameda Right. Or Celsius or, 3 arrows. Really just the best the best of the industry, you could say. And he would finance, them, taking that money, the the the other people's money, depositing into his trust, which it can never leave from, and then letting them use the shares that were generated from depositing the money into the trust as collateral to borrow more money to put into the trust. And so it was kind of this flywheel or basically just sucking money out of Genesis and piling it into grayscale knowing that And he makes double dips, gets the fees off that. Correct. And he knows that once it goes into grayscale, there's no way for it to come out. Right. So, this is how he was able to run up this massive Because it's not a proper ETF,
[00:41:51] ODELL:
so Yeah. It's almost a one way street in.
[00:41:54] David Bailey:
So I'll explain that real quick. So it's a closed end fund, which which basically, means that there's a a process of creating and redeeming shares in the trust. But, you actually have to go through a, a redemption process. It's a limited number of people who can actually go through that redemption process. And, ultimately, they stopped the redemption process about 4 or 5 years ago. So you can only put, Bitcoin into the trust.
[00:42:25] ODELL:
You can you can't take it out. Why did they stop the redemption process?
[00:42:29] David Bailey:
Because they aren't allowed to be an ETF. They didn't get ETF approval, and so doing creation and redemption is basically an an ETF. And, the SEC, made them pay, like, a $10,000 fine or something and and, stop redemptions. But the key thing is is that it wasn't that they just can't do redemptions. It's that they can't do creations and redemptions at the same time. So if they wanna just create new shares in the trust, which means you deposit Bitcoin, they create new shares and give them to you, and you can go and sell them on the secondary to other people.
[00:43:02] ODELL:
That's okay. Which was for a while, it was a premium. Yeah. Which is what people were doing. They were they were putting in Bitcoin, and then they were getting shares that were worth maybe 30% more or whatever. Yeah. Yeah. So there was this arb trade going on. Right.
[00:43:14] David Bailey:
And so, Yeah. So they, you can do the creation, or if you're not doing creation of shares, you can do redemption. But you can only do one at a time. You can't do both. Okay? That's the that's the key thing. So, yeah. While they were trading at a premium, that was fine because people just wanted to create shares and then dump them in the in the secondary market Right. And and make that premium. And so a lot of people did that. A lot of funds. Our fund did that. Right. And, what our fund didn't do though was all of that activity actually being financed, via Barry at Genesis. Right.
So So you just took your own money, put it in for the arb trade. Yeah. Exactly. And, you had to go through a process called seasoning as well. So it means that when you when you create the shares, the shares have to season for, like, at first it was 12 months, and then it became 6 months. And then after that period of time, you could sell the shares. There's a lockup. There's a lockup. Yeah. Basically.
[00:44:16] ODELL:
So, And then you flip negative on all your asses while you're in the lockup. Correct.
[00:44:21] David Bailey:
Correct. And what's also interesting is that for people who were doing this financing trade at Genesis, you were able to use the shares as collateral, even though they're supposed to be locked up and they're supposed to have to go through seasoning. Unseasoned shares could be used as if they were seasoned at Genesis. To get instant liquidity. Yeah. Get instant liquidity, which is then creates this, what was the word they used? This cycle trade. You know, I was, talking to one regulator. You know, regulation for that type of trade. We call it a Ponzi scheme. How's it gonna Chris? I was like, oh, okay. But, so anyway.
So this is all fine and dandy while this is trading at a premium. When it flips to a discount, all these people that levered up to do that trade, they all blow up. So Alameda blows up, 3 arrows blows up, etcetera, etcetera. Well, when they blow up, it means that they can't pay back the money that they borrowed from Barry. So when they can't pay back the money they borrowed from Barry, it wasn't Barry's money. It was the depositors at at Genesis's money. It means they couldn't pay back those users. And so who were those users? It was. But Volvo's 200,000 users. It was Gemini's 200,000 users. It was a whole host of OGs. I don't know if you've gone through down the creditors list. It's very sad. It's a lot of OG Bitcoiners from the, old days like losing 50,000,000, 40,000,000. I mean, brutal stuff.
So yeah. So, Barry proceeds to vaporize, I think it's $5,000,000,000. Oof. That was vaporized there. Now, there are a whole host of things that we, if we have time, we can get into or not, but, about sketchy shit that was happening at Genesis, as it relates to, blackmail, as it relates to, Alameda, as it relates to Sam Bankman Fried's Ponzi scheme, and f FTT, his token. Maybe we save that for later on. Some loans with FTT as collateral. 1,000,000,000 of dollars in loans. 1,000,000,000 of bribes being paid. All sorts of sketchy shit. So, but just to stay focused on the topic.
So grayscale trading at a 30% premium. Well, now as all these firms blow up and these shares that they were holding have to be liquidated, the 30% premium, it becomes a 50% discount. So, you know, for simplicity's sake, we'll use today's prices, but $20,000,000,000 in assets and the underlying assets are sitting in this trust are trading for $10,000,000,000. Right. So, yeah. That's fucking bullshit. That's bullshit. And a lot of people were frustrated about it before they knew about all this financing stuff But then when it came out that, oh, the reason why it's trading on a discount is because Barry was, you know, running effectively a Ponzi scheme at at Genesis and it's really, you know, his malfeasance that caused this. A lot of people got, like, more than just, you know, frustrated and they got pissed. And so, my part of this this journey here began when, I fucking made some tweets complaining about this and, pointing out that it seems like what they were doing, has a lot of similarities to what Sam was doing at FTX. Right. And, I started getting flooded with, messages, emails, etcetera. And so we threw up a little website called redeemgbtc.com, so that we could just, like, systematize people reaching out to us. Right.
And over 3,000 investors, representing roughly 35% of all the GBTC shares, reached out through that site. And did the horror stories that we heard from people, just disgusting. I mean, we read we read, we got one comment from a guy who said he put his entire, 401 k in this thing when it was trading at a 30% discount or 30% premium. And now, it's trading at a 50% discount. So he's down, you know, over 80%. That's brilliant. And he's having to go back and get a new job because he doesn't have enough money to survive. You know, people I mean, just just brutal stuff. And this product, I think, hit worse because, like, the people buying this, they weren't buying these aren't d gens on FTX buying a shit coin that they're pumping and dumping. These are, like, old people and their 41 k's on Fidelity and on Charles Schwab buying this. And, like, from the grown up responsible I don't remember the ads. It was supposed to be, like, the safe way to invest. Yeah. Yeah.
Drop gold.
[00:49:17] ODELL:
I think quite Exactly. So, and on the Gemini side, it's really brutal because Gemini was so Gemini's earned product used Genesis. So anyone who is in Gemini's earned product got rugged and still hasn't seen their money to this point. And, I mean, I remember all the Gemini ads running through New York, Crypto needs rules. You know, this is the safe place. Crypto needs trust, I think, was one of them or whatever. And I I have a friend I have a friend, you know, he's decently well off, and he got rugged in that. And he told me that, essentially, like, they were just getting emails from Gemini. It's like, oh, you already have money in your Gemini account. Like, why don't you wanna make 5% off of that? Like, you might as well move it over. And there was not a clear delineation that, like, you were there was obviously, like, bunches of terms and conditions and stuff that nobody read.
But there wasn't a clear delineation of, like, oh, if you move it into this thing, we're gonna lend it out to degens. Yeah.
[00:50:16] David Bailey:
Well, and even if they had said we're gonna lend out to DCG, like, oh, okay. They're responsible Right. Company. Little did they know that that's actually all the d gens you know were actually getting their money from Genesis. It was like the central bank of the d gins. So, so yeah. So, yeah. A lot of people have been wrecked. GBTC has about 850,000 shareholders. So, you know, between Genesis Oh, shit. And GBTC, this is gonna include, like, Ethe and the other trust products. I mean, you're talking about, almost 2,000,000 people, that have been, you know, basically wiped out, on their investment here, which in, you know, based on what I've heard is is relatively on the same scale as FTX in terms of users affected and bigger than FTX in terms of dollars lost, if you combine the 2. I mean, almost twice as big as FTX.
So,
[00:51:13] ODELL:
kinda staggering. But it's, like, 3,000,000,000, $4,000,000,000 or something? Well, I think 8,000,000,000 was lost at FTX.
[00:51:19] David Bailey:
But they lost 5,000,000,000 at Genesys, but they were down 10,000,000,000 at GBTC alone. So so in terms of the discount. So this is the state of the situation. And then they collect fees based on the total value. Yeah. So that's the discount. That's another fucked up part about this. So, like, in the dude, this has been just this whole year has been a lesson in, like, And they could just lower their fees, like, super easy if they wanted to be a little bit ethical about it. Right? They could redeem people out of the trust today if they wanted to. Okay. The if they wanted to. Right. So but yeah. Because they're cash cows. This is the only thing that makes money. Yeah. Correct. So the the the fees are calculated on it on NAV, which means that when it's trading on a 50% discount, your fees are actually closer to 4%. It's double. Yes. Double. And if if let's say the situation devolved more and it went to a 75% discount, which there's no reason why that's impossible.
Okay. Now you're paying an 8% fee effectively. So, like, there's a death spiral situation here too, which is, like, who in their right mind would buy this product when the the effective fees are just like The only reason it's not trading at even larger discounts because everyone's kind of banking on on him
[00:52:27] ODELL:
on him losing his battle and and losing control of the trust and then getting redeemed. Yes. Yes.
[00:52:32] David Bailey:
It's like the opposite of faith and barriers. Like, lack of faith and barriers propping up the the the So there's there's that piece, and then there's the piece of, like, they're claiming they're still trying to get an ETF approved. Right. They keep pretending. Yeah. So they they,
[00:52:47] ODELL:
because if an ETF gets proved approved theoretically, then it goes right back to NAV. Yeah. Because then people can redeem out. Yeah.
[00:52:54] David Bailey:
You know, I find it very hard to believe that it will be approved when They're fucking suing the SCC right now. Yeah. Like, they're under criminal investigation. Like, there's a DOJ investigation. You know, words like fraud and Ponzi are being thrown out there. The funds the trust has been completely mismanaged. There are securities violations and and security laws that were just disregarded by Barry at Genesis. And it's like, yeah, you're gonna get the first ETF ahead of Fidelity. Not gonna happen. Not gonna happen. But, so they're selling the dream though.
And, you know, it's actually kind of ironic. This is some, some alpha I'll share here that is not out there publicly, but, the, the, ETF, if it was approved, would actually be disastrous for Berry. Because if the ETF is approved, the fees on the trust are gonna come from 2% on NAV down to, let's call it, 50 basis points. So he's gonna lose Half a percent. Yeah. Half a percent. So he's gonna lose 75% of his fee income, and there's gonna be redemptions out of the trust because his money's been locked up for so long. Yeah. People are just ready to go to the exits. So his total AUM might fall by
[00:54:11] ODELL:
30%. Why would the fees go lower? It's usually he'd be required to. Because there's other products
[00:54:17] David Bailey:
that have, the same mechanics and have fees that are substantially less. So, like, why am I gonna hold my Bitcoin at a 2% fee in Oh, because of redemptions. Because redemptions open up, he has to compete on fees. Exactly. Yeah. Exactly. Like, right now, you're just like a prisoner. Right. So but Everybody locked you in there, so there's nothing you can do about it. Exactly. So the, so he needs that money in order to keep DCG from going bankrupt right now. So he needs you to think
[00:54:47] ODELL:
that an ETF is on the table while also not actually getting the ETF. Correct. I was actually
[00:54:53] David Bailey:
AKA is just completely fucked. Let me let me think how to obscure this a little bit. I have heard through the grapevine that they have contemplated a situation in which the ETF is approved, and they've already designed mechanics, so that even if an ETF was approved this year, it would take years before it could go live. So even though they could go right away Right. They're they have they're gonna have multiple years of excuses why you're still gonna be stuck in the trust, still paying the fees, even though they're approved for the DM. So fucked up. So so, yeah. So they, that process is, is ongoing. And, you know, another interesting piece of this is, like, their their their whole point is, like, hey, we're gonna get become an ETF. But that only applies to, like, the Bitcoin part of it. All the shit coins, the ETH. Right. That's never gonna be pulled it up, by the way,
[00:55:55] ODELL:
just to list their trust. They have the Bitcoin Cash Trust. They have the Basic Attention Token Trust, the Chainlink Trust, the Decentraland Trust, the Ethereum Classic Trust, the Ethereum Trust, the Filecoin Trust, the Horizon Trust, the Litecoin Trust, the Livepeer Trust, the Solana Trust, the Stellar Lumens Trust, the Zcash Trust, the Decentralized Finance Fund, and the Digital Large Cap Fund, and the Smart Contract Platform ex Ethereum
[00:56:22] David Bailey:
fund. Yeah. When do you think the Decentraland ETF is gonna be approved? Right. I mean, these are these are rappers on unregistered securities. I mean, it's like like, hey. We're gonna create a security out of an unregistered security.
[00:56:34] ODELL:
So And sell it to retail on top. In their retirement accounts. And then charge a ridiculous fee on top. And then sue the SEC when they told us to make money to it. It's so absurd.
[00:56:45] David Bailey:
But, so so so yeah. So, like, they don't even have, like, a logical, like, argument for those things. And, yeah. So, that is that is the state of play. And so now, there are a bunch of institutions. There are a bunch of sophisticated investors. There are a bunch of Bitcoin stalwarts, people that are well loved and respected in this, industry that are working diligently behind the scenes to, bring the empire that is DCG or was DCG, down, and to free the Bitcoin that is in the trust. And they're doing that through a variety of means, legal means. There's there's a class action lawsuit. Well, there's a lawsuit likely to become a class action lawsuit that was filed by FTX.
We have a books and records request, complaint that we filed in Delaware. There's a hedge fund called Fir Tree that's filed their own books and records request in Delaware. There's a fund called Osprey that sued, via, anti competitive grounds in in, in I don't remember what state. Not Delaware, but Massachusetts or something.
[00:57:58] ODELL:
Don't they have their own GBTC product, Osprey or whatever? Yeah. Closed end fund. Yeah. And,
[00:58:04] David Bailey:
so, like, the actually, something kinda cool, like, so DCG has been, like, lying or Grayscale's been lying that they can't do redemptions. And so, Osprey was like, hey, not only can you do redemptions, but our fund that's suffering from the same problem, we're actually going to do redemptions and and file the reg m relief that we have to file for to do it, add Osprey ourselves and issue redemptions add Osprey to prove that it can be done. So they also have a negative? They also traded at a at a discount. Yeah. And so, like, they're about to begin off begin the redemptions in Osprey, and it's like, I mean, it's kinda awkward because it's just like, okay, like, you're clearly lying grayscale. Here's a competitor doing the same thing and they're able to offer it.
So, there's a bunch of industry companies. There's another company, 3iQ that is trying to do like a hostile, Canadian, takeover or it's a little bit complicated, but it's cool. Like the term hostile Canadian takeover. Yeah. Yeah. It's it's it's basically like, hey. You can't get an ETF approved in America, but we have one approved in Canada. So we'll just consume the shares and then let you redeem for Bitcoin in Canada. It's a cool concept. And then there are a bunch of, lobbying groups that have been, leveraged up that are going out there talking to regulators, talking to the SEC, talking to state regulators, talking to FINRA, talking to, anyone that will listen to to get this trust busted open. So, you know, from my perspective, like, I'm we're in the middle of it as just a, let's say, connector of all these different parties that are around the table.
This trust is gonna get busted. It's just, how is it gonna get busted and, how long does it take? And so, yeah. That's I'm I'm spending about, I'd say, 50% of my time, a little bit less with the conference coming up, but, on this. And it is, honestly, when we're when we're successful busting this trust, it's gonna be the dopest thing I've ever been a part of in Bitcoin other than the Bitcoin conference, which is fucking the dopest shit. But, like this is, this is the biggest activist shareholder campaign in history. It's the 1st activist shareholder campaign organized over Twitter in history. That's interesting. Yeah. Yeah. So, we're going to bust this fucking trust. And, I think it's gonna happen sooner than people expect, and I think it's gonna get, very crazy very soon.
So
[01:00:53] ODELL:
from my seat, obviously, Not Your Keys, Not Your Coins. Another prime ex this whole year has just been prime examples of of custodial risk. Yeah. Obviously, I think a lot of people have learned this lesson in the expensive way. But I guess my question is, as someone who who holds self custody that is not directly exposed to GBDC, doesn't own any GBTC products, I'm not a FTX creditor, a bunch of I'm not stuck on Gemini Earn. What do you think the impact is to is there an impact like, can most people that are just staying on the stacking sites and holding their own keys just safely ignore this and just let you guys run with it, and whatever happens, happens? Yeah. I think,
[01:01:49] David Bailey:
I think, definitely, there is alignment amongst all the parties that however this trust gets redeemed to do it in a way that it minimizes its impact on the market. And there's a variety of different perspectives of what happens if you redeem the trust. I mean, there's 630,000 Bitcoins in this. That's a shit ton. That's 3 Mt. Goxes Right. Of Bitcoins. So, there are a lot of different, opinions. 3 Mt. Gox's worth of Bitcoin. Yeah. Yeah. But, like, I I'm actually of the opinion when the trust gets redeemed, the price of Bitcoin will go up, rather than going down. Some people think it'll go down.
And you know, I, I, I think broadly, you know, it's gonna be good for the entire industry, to have this scam gone. Right. That's in everyone's best interest. That's in everyone's best interest. Just a bad look on all of us. A lot of the Ponzi schemes that existed in the space, the source of where the Ponzi came from was this arb trade on GBTC and Genesis. And so, like, it's gonna the I've called it the ring of power, like like, various Sauron, and he has the ring of power, and he's like corrupting all the creatures of middle earth, like, over time. So it's, like, when the ring of power is gone, it's gonna remove a a massive catalyst and funding source for all of this bullshit and Ponzi scheming stuff that's been going on. That's interesting. And, there's a million people that once this thing is redeemable, they're gonna be able to take control of their own keys, and we're gonna basically add 2% to the Well, how many people do you think own, hold their own keys? Like 20,000,000 or something. 20,000,000.
Okay. So, if we get a 1000000 people that redeem out of this this trust and hold their own keys, we've just added 5% to the user base of actual Bitcoin But I do think
[01:03:38] ODELL:
I I a lot of them are just gonna go to Fidelity and just have Fidelity all Yeah. Probably. But the I mean, I'll say of the people that I've heard from,
[01:03:48] David Bailey:
people were like, I never understood the value of holding your own keys until GBTC. So it's been a massive advertising campaign for why not to trust other people with your with your Bitcoin.
[01:03:59] ODELL:
The buddy I said about Gemini Earn, I mean, the freaks can imagine he was he's a college friend of mine. I was incessant even up to, like, 3 weeks before all this blew up. Hold your own keys, withdraw. He's like, none, and it's not necessary or whatever. If he gets even a negligible amount of Bitcoin out of because who knows how much Bitcoin the Gemini earn people will get? Yeah. He's gonna immediately self custody. Like, there's he just can't right now because he doesn't have any Bitcoin. Yeah. Yeah.
[01:04:29] David Bailey:
No. Yeah. I I think they'll get some, some out of some Bitcoin back. But, yeah, I mean, Barry is saying that if this trust is taken away from him, I mean, it's in the documentation of the trust that, while they can redeem people in kind in Bitcoin, they're going to just liquidate the trust in the cash and redeem everyone in cash. And it's kinda like Just a gun to the head kind of thing? Yeah. It's like if you try to take this from us, we're gonna fucking take yeah. Exactly. So that would be the if if it was all liquidated in the cash in a disorderly way, Just to be a dick. Just to be a dick Yeah.
Which would be the ultimate when we talk about rage quits Yeah. Such a better rage quit than Mike Hearn, where it is like, I'm selling 3% of all the Bitcoin and crashing the price. Yeah. But, have some cash on the side, some some piggy bank money I do not really. No cash on the Sell some lemonade,
[01:05:26] ODELL:
Matt, because you you can get some cheap zap. Balaji told me hyperinflation was hitting in 2, 3 weeks. There's there's no there's no shot at how I'm holding any of that US dollar shitcoin.
[01:05:36] David Bailey:
Yeah. Fair.
[01:05:39] ODELL:
Yeah. Wow. Well, we'll see what happens. It should be interesting. But fuck Barry. So Dude,
[01:05:44] David Bailey:
he's he's he's the he's the Sam Bankman Fried, but, like, with like, without the League of Legends aspect. Like, he is SBF, and he just is more polished, and he has better lawyers, and he knows what he's doing better than Sam did. More successful. Yeah. Yeah. But he was running the same scam. I almost feel like like, SBF was, like, working at Jump or wherever it was that he was from. Where did he work? Not Jump. State Street? Not State Street. Jane. He worked at Jane. Yeah. Jane Street. He's, like, at Jane Street, and he's, like, seeing Barry's, like, game. He's he's like, I could do that. I could do that. Yeah. So, he was like his Fiat protege.
Yeah. So, I mean, getting rid of SBF is gonna be a huge tangible benefit to, Bitcoin, and getting rid of Barry's gonna be a huge benefit. Think about how many billions of Bitcoin Barry sold when he gave that Bitcoin to these other scams who just went and fucking sold it. Right. Like, he's been the source of so much selling of Bitcoin. And so much paper Bitcoin. And so much paper Bitcoin. Yeah.
[01:06:51] ODELL:
So, I have joked that we would have had 200 k by conference day if it wasn't for Barry.
[01:06:57] David Bailey:
I, dude, if it wasn't for Barry and if it wasn't for Sam Yeah. Then I agree. Yeah.
[01:07:02] ODELL:
Yeah. I think it likes Scooby Doo if it wasn't for those those meddling
[01:07:08] David Bailey:
suits. So, yeah, dude. It's it's quite the saga, man. It's quite the saga.
[01:07:14] ODELL:
It's exciting. Yeah. It's just another chapter in Bitcoin history. Well, it seems like it's been keeping you busy.
[01:07:20] David Bailey:
It has been.
[01:07:22] ODELL:
So, David, we're, I know I know time is tight. We've this has been a fantastic conversation. Before we wrap, you I mean, your your flagship Bitcoin festival, I I don't even think it's a conference. It's more of a festival Festival. Is happening in, what, 43 days or something like that? 45? May 16th to 18th.
[01:07:45] David Bailey:
May 18th to 20th, I thought. May 18th to fuck. Hey. You could be right. I don't know. The
[01:07:51] ODELL:
CK is gonna kill me on that one. Yeah, man. It's the bear market edition. So CK has, like, a ticker in the Slack that, like, tells you how many days are left. May 18th to 20th. Sorry. My head's a little bit out there. Good. I'm glad I wasn't wrong.
[01:08:05] David Bailey:
I could've been. Yeah. It's the Bear Market edition. So, you know, this year, instead of having a music festival, we're gonna have mayonnaise sandwiches in a tent city. A little bit of Fyre Fest. A little bit of Fyre Fest, but, it is it's the builder conference. It's the conference with out all of the, flamboyancy of, we're all buying Lambos, and it's more like the, we're all broke, so we gotta make this thing, you know, build this thing and make it work. The bear market about this. Yeah. Exactly. Which honestly is, like, the shtick I prefer.
You know, the it's, Higher signal automatically. Automatically. So, but, yeah, it's coming up in 45, 46 days. It's gonna be awesome. We have, people from the real world coming to to integrate or announce things with Bitcoin, some people from different nation states, bit big corporations, etcetera. We have, cool people within the space building awesome open source projects, building controversial projects. You know, I'm excited to hear from Casey Rodemore at the at the conference, even though that's gonna be, you know, we've gotten some flack for that, but I, You like the drama?
You know, drama means, that's relevant, but, you know, I just like seeing people do shit with Bitcoin. And it's like, you know, the haters, like, you know, there's one way to get me to do something. Yep. It's to tell me I've heard you say this so many times. I can't do it. Yeah. It's like like You can't have this speaker. It's like, I need that speaker. Yes. Exactly. I mean, you know, I've known even I am not interested in NFTs in the in the slightest. When people told me, you can't have ordinals on Bitcoin, first fucking thing I did was get an ordinals wallet and figure out how to buy one of these things just to be, like, fuck you. Yeah. I can. So,
[01:10:05] ODELL:
did you buy any rare stats? No. I've been trying to. You're an idiot.
[01:10:09] David Bailey:
I'm why?
[01:10:11] ODELL:
Because rare stats are dumb. Yeah. The the inscription side, like, makes sense to me to a degree. Like, obviously, like, Bitcoin chain is gonna outlive all of us. Right? So if if you wanna immortalize something, there's obviously Hire glyphs. There's a value to do it on the Bitcoin chain. Yeah. But, like, one sat being worth a 1000000 sats, just I Yeah. I don't follow that. Yeah. It doesn't make well, that just sounds like Craziness? Yeah. It just sounds like greater fool theory or whatever. It's just Well, if someone wants to buy my sat for a 1,000,000 sats, like, I'll sell it to you. Yeah. Okay. Sweet.
[01:10:47] David Bailey:
Do do you have any rare sats? I have no idea. You should chat. Every sat is a rare sat. That that is true. But I want the rarest ones. Though, you know, I do buy in, like, okay, this is is ordinals, etcetera. It's like just social convention or whatever. But, the concept of there being, like
[01:11:06] ODELL:
Yeah. It's not even enforced by the chain. It's just like a religion. You decide what is rare. Yeah. It's not. Right. But,
[01:11:13] David Bailey:
the idea of there being, like like, objectively rare events that happen in, like, block time is cool. Like, the fact that, like, okay, there's a halving that happens. If I could Halving. Halving. Halving. I agree to disagree. Yeah. The
[01:11:32] ODELL:
like, that happens. If I could own the whole block that was mined Well, we've already seen that preordinals. Like, I remember, like, Chinese mining pools would sell.
[01:11:41] David Bailey:
Yeah. They would all compete to try and get that first block out. So imagine if you, like, owned that block and, like, the Bitcoin and the mining reward from that block.
[01:11:49] ODELL:
That'd be fucking dope. Yeah. But ordinals doesn't prove that. Like, that's different than having, you know, the Coinbase like, wasn't it, it was one of the Chinese pools. They were selling the gold coins Yeah. That like BTC BTC was paid out of the Coinbase reward. So they're actually, like, the blocks, you know, the block reward of that block. Yeah. So you're saying that you think that's dope? I'm not saying it's dope. I'm saying there's validity to that, I think. Yeah. So Like, I wouldn't I wouldn't purchase that collector's item. The only I think every Bitcoiner well, most Bitcoiners has some dark collectible past.
You know, I have signed basketballs. I have you know, my family got wrecked on Beanie Babies, you know, like, all this shit. But, like, now sats are just my I don't do any other collectible nonsense. It's just like I try and stack as many sats as possible. What what's the how many halvings are there? Halvings.
[01:12:38] David Bailey:
Halvings? How many halvings? 16? It it just keeps halving forever. Yeah. No. It it it ends at a certain point, like 20 21 40? Yeah. Yeah. 21 40. Projected it And it never haves again after that? Correct. Yeah. The so the, so there's, like I thought it was just, like, a negligible having after that. No. It it ends at that point. The, but the, so, like, there's only gonna be 24 of those in history or, I think it's 24. 24 of those in history, and it's, like, for forever. You know, like like, you know, what if you had the first fucking gold coin that was ever minted in, like, human history? That's that's fucking cool. So, anyway, so the ordinals is the poor man's version of that because it's just social convention. And now we instead of having to get the whole block reward, you can just get, you know, a side of the block reward. I don't know. I think it's kinda cool. The,
[01:13:37] ODELL:
firstly, I think it's bullshit, but people can do whatever they want.
[01:13:42] David Bailey:
Exactly. So, so, anyway, we got Casey speaking at the conference. We, have some cool freedom fighters. Speaking of rare sats that are stupid, we got Julian Assange. It's gonna be, taking some of his rare sats that are from his wallet from the original, WikiLeaks donations, and auctioning a few of them off. Goes to a good cause, but, you know, it's kinda cool.
[01:14:08] ODELL:
For Assange. For Assange. And, I And I think I think the org does a really good job. Like, the conferences do a really good job with physical art, and I Oh, yeah. I think a lot of this drama is kind of pulling away from that. Yeah. It was the largest Bitcoin physical art gallery in the world. For sure. And as much as I know you're a big collector of Bitcoin physical art, I haven't been able to justify it yet in my So I would like to be a massive art patron in the future. But I just the purchasing power of Bitcoin is not high yet for me to justify that. But,
[01:14:42] David Bailey:
the actual physical art collection that is showcased there is is is truly impressive. Yeah. Like, 1,000,000 of dollars of art move every year, and and, for, like, artists that create this, like, it's like a big opportunity for them to, like, make a year's income in one day. But yeah. I mean, it's, you know, the the conference is to be a showcase of Bitcoin culture. And, like, every cultural revolution that's ever occurred, it's, like, driven by culture, art, music, the things that people interact with and touch in their daily lives. So, yeah, we, we make art front and center. You know, we make the philosophy of Bitcoin front and center.
We make the technology of Bitcoin front and center, and we make the business of Bitcoin front and center. And we try to be a platform for all it to come together. The parts that clash, they clash, but, you know, ultimately, we wanna make the dopest celebration of freedom, on the planet. We want this to be like a pilgrimage where, you know, like, I've described it before as, like, Burning Man meets, like, South by Southwest meets, like, Money 2020. Like, you know, we wanna be, something absolutely unique that, inspires people around the world to adopt and evangelize Bitcoin. So, we got a cool show coming together for Miami 45 days. There's gonna be lots of announcements. 18th to 20th, and get your ticket to the conference. And if you can't afford a ticket, hit us up. We have discounts basically for an infinite number of reasons, made up reasons, like cost should not be a barrier to anyone to attend this conference.
We just have to not go bankrupt in the process of putting it on. So that's why we charge what we charge. But if you can't afford a ticket, hit us up, and we'll we'll get you a discount code. And you had some close calls there with bankruptcy too. So Oh. You mean it when you say it. Oh, many.
[01:16:39] ODELL:
And I mean, to talk my own book, if you go to b.tc/conference/open source, if you're an open source contributor, you can apply there for a free ticket.
[01:16:49] David Bailey:
So definitely consider that. Definitely for the open source crowd. Get your free ticket. I mean, it's like,
[01:16:55] ODELL:
it's a no brainer. We're at, like I think we've given away a little over a 120 open source tickets,
[01:17:02] David Bailey:
and CK says I'm a failure if I don't get to 200. So Get to 200. The the I think pitch day maybe just closed or it's about to close. We've had, like, 250 companies apply for pitch day. That's awesome. And so we're gonna bring the best 20 to the conference and have them pitch to VCs. But, dude, I mean, every year cool shit comes out of it. I think Swan came out of, Bitcoin in 2019. Zebedee came out of Bitcoin in 2019. Albie, the lightning extension. I mean, lots of companies come out of the conference. And, dude, that's why we do it. It's like to bring together great great minds, great investors,
[01:17:39] ODELL:
great technologists, and, like, build shit, create shit. That's the goal. You know, Freaks, a lot of you give me shit for 200 k by conference day, but before 200 k by conference day existed, I told everyone to stack at the all time high of $13,000, which is at Bitcoin 2019, and I had to live in that shadow for 2 years. I don't expect this time to be any different, and, one day one day, I'll get out of the shadow of the 2. Pretty soon. Pretty soon. People made fun of me for years after that Bitcoin 2019 event. That was a fun event. Dude, that event was, On the roof of the parking garage. That was dope.
The failed city of San Francisco.
[01:18:20] David Bailey:
Yep. Yep. I mean, in the in the shadow of, Citibank or whatever. The bank right now is good. Right? I think I'll I'll say this. Like, one of my goals for this conference when we started going back to Bitcoin 2019 was, like, we were just coming off the block wars, and it was, like, okay. Let's bring the community Which, by the way, fuck Barry again. Yeah. Yeah. Oh, yeah. The New York agreement. Wow. So it was like, let's bring back OG Bitcoiners and and OG Bitcoin vibes and realign the community over the things that we agree on and, like, knock a motor consensus and, like, put the past just like fucking who cares about it? Like, let's just focus on building what we need to build. And, my goal has been to get Roger Ver and Ji Han You tried to do that in 2019? Yeah. To come to the conference and participate, but they have to abide by the rules, which is they can't talk about any other fucking crypto. They can't talk about Bitcoin Cash. They have to, like, say positive things, like, contribute positively to Bitcoin.
And I've gotten close to getting Roger before, but he just, every year he just chickens out and he, he, he can't can't follow the rules. I think Jihan is gonna come this year. He's been really quiet. He has been really quiet. And, he's he's gotten back to his Bitcoin roots. To the new freaks out there, he's the head of of Bitmain. Former head founder of Bitmain. I think now he's not he's not in the day to day anymore, but he's also the first person to translate the satoshi white paper into Chinese.
[01:19:48] ODELL:
He's really the founder of the Chinese Bitcoin community. So we have Kiwi in the chat saying, fuck that. Why would you want him there?
[01:19:55] David Bailey:
Why would we want him there? Because And then he said, fuck your mother if you wanna fuck.
[01:19:59] ODELL:
The famous GM tweet.
[01:20:02] David Bailey:
Anyone who can contribute positively to Bitcoin, we want there. Like, that's that's the key thing. Like, it all that matters is freeing humanity with sound money and free money. And, if the Taliban wanted to adopt Bitcoin, I would give them the stage. Like, if if, like, if anyone, I mean, honestly, I I there's there's no bones to pick. All that matters is that Bitcoin wins. And so, my goal is that we can see Jihan come into the conference, return to his roots, and start a new Bitcoin company focused on Bitcoin Nakamoto Consensus. Now, that's a controversial take, but I'm gonna stand by it because that's the point of fucking Bitcoin. Bitcoin's for your enemies, Bitcoin's for all people. If you can contribute to it, come build it.
[01:20:55] ODELL:
Yeah. I mean, I don't agree with everything, that you think, but, I respect it. And, hopefully, the takeaway of this is that the Taliban is gonna be at Bitcoin 2024.
[01:21:04] David Bailey:
Let's see. Big announcement coming soon. Big announcement.
[01:21:08] ODELL:
David, this has been great.
[01:21:11] David Bailey:
Do you have any final thoughts before we wrap? No, man. Thank you for having me on. Thank you for, making Nashville, putting Nashville on the map for,
[01:21:20] ODELL:
freedom money in the US. There you go. I'm gonna I'm gonna make sure that Nashville becomes the Bitcoin capital of the world just to get you back for your your your rug pull when I first moved here. Alright. Fair deal. Appreciate you. Appreciate you, freaks. Thanks for joining us. Huge shout out to our guest, David. Hopefully, he will join us again at some point. I love these in person rips. The in person rips are just so good. Thank you for joining me in my studio. Yeah. Huge shout out to the freaks, and, stay humble, Stack sets. Cheers. Rock on, people.
Introduction and conversation with David Bailey
Discussion on podcasting 2.0 and its impact
The potential of AI and its relationship with Bitcoin
Barry's creation of Bitcoin Trust and its impact
Genesis lending desk and financing trade
Closed-end fund structure and limitations
Living in the shadow of Bitcoin 2019
Goal of bringing back OG Bitcoiners
Possibility of Jihan coming to the conference
