Dabbling Path

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Daz Bea Co-founder @LookingGlassEDU and the Co-Author of B is for Bitcoin

 During this conversation, we discussed, 
- What is Money 
- What is bitcoin 
- How do bitcoins work!!! 
- How to acquire bitcoin 
- How to store bitcoin


Mentioned @LookingGlassEdu @Pete_Winn @LynAldenContact @TheBTCAdviser

If you found this insightful/entertaining, all I ask is that you share it with 1 other person. Much love ✌️

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You can find Daz on Twitter: @dazbea


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Outro - Ten Sats Commandments https://www.youtube.com/watch?v=dnDC3uWjhlo 

My favourite Bitcoin Artist - https://asanoha.gold/

[00:00:06] Unknown:

Bitcoin changes absolutely   everything.  

[00:00:11] Unknown:

Hello, beautiful people. First things first. A big shout out each and every one of you for tuning in. I hope you have been soaking up all the value we've been dishing out in every episode.   Now, here's the scoop. We're all about keeping things chill and ad free. Yep. You heard it right. No pesky ads interrupting your listening experience. We're all in on this value for value model. Oh, but wait. There's more. Ever heard of podcasting 2.0?   We're talking about apps   like Breeze and Fountain.   Tune in with those apps and guess what? While you're enjoying our banter, you're earning sats. And here's a twist. You can use those sats to give us a boost or stream them our way. It's like high fiving us through the airwaves. But, hey, the fun doesn't stop there. You can also support the show by subscribing and sharing it with your friends and family.   Alright, folks. Now it's show time.  



[00:01:04] Unknown:

What's in there?  

[00:01:07] Unknown:

Only what you take with you.  

[00:01:14] Unknown:

Hey, Dash. Thanks for making the time. Yeah. And I was thinking, given that this is like the 100 and 50th episode, it's easy number for me to remember.   You'll do like a pretty   basic,   or not. I mean, like a good overview of what is Bitcoin? How does one acquire it? How does one store it? All the newbie   or newbie questions that someone would have, and I think you'd be the perfect person to   address those.   But but yeah. Yeah, go ahead. I'm honored,   to be included in your 150th episode, mate. And well done to you. That's, quite an achievement. Yeah. Thanks, man. But, yeah, I mean, just for the people that are listening, and they probably don't know who you are, you just want to give a brief background about yourself?  

[00:01:55] Unknown:

Sure. Yep. So names does BDZ   BEA on most platforms.   I am co founder of Looking Glass Education. So we are   macroeconomic and finance and Bitcoin education platform really,   you know, really   tailored towards   by journalists, people who perhaps don't have   a in-depth understanding of finance and macroeconomics and all these complex topics. So that's really who we're geared to try and distill down some of these complex topics for everyday people and try and make it, accessible and approachable and try and keep it free too. So all of these courses that we have on on our side are are free.   And also author of the book Beers for Bitcoin. And again, that's a deep dive into Bitcoin, how it works, the history,   all the complex things that can sometimes,   sort of be hard to understand for newcomers.  

And again, we just try and take that approach of distilling down complex topics into everyday language.  

[00:02:48] Unknown:

Oh, awesome. Yeah. And for yeah. Just again, so someone might wanna go or, like, as they are listening to it, wanna open a tab and look this up. It's, like, looking glass education dot com dotau?   Just dotcom. Yep. So looking glass education dot com. Yep. Dotcom. Okay. Cool. I'll put in the show notes as well and link to the book and everything. So yeah. So   now given that it's like, I guess we are already in the bull market. There's probably newbies that would come and start DMing you and messaging and there's friends and family and all sorts of people to start reaching out the crazy Bitcoin guys, because they're reaching out. What is this Bitcoin thing? So so if someone's gonna reach out to you and ask, like, what is Bitcoin?   Like, how would you address, like, that sort of question?  



[00:03:34] Unknown:

Great question. And and honestly, it's one of the I think for most people, it's the it's the question that you need to be asking yourself in the first instance. Like, if you're interested in Bitcoin, it's really is around   well, what the hell is it? Right? And my sort of easy take, and I'm stealing this from a good mutual friend from Western Australia, Pete Wynne. He recently said this at our Bitcoin,   Bitcoin,   Alive Conference was that Bitcoin essentially is money how your grandmother   used to understand money.   So it's money that you can pretty much tuck under your mattress, come back at a later date, and buy yourself something pretty. Right? And in its fundamental form, it's actually one of the easiest   investment,   vehicles to understand out of the whole investment landscape, whether we're talking about, you know, if we're comparing that against equities or real estate, Bitcoin,   gold, all of these traditional investment vehicles, under the hood, really, when you understand Bitcoin and how it works, it really is that simple. It's probably one of the easiest things that you can   spend your time understanding and easiest things to save your wealth in, really.  



[00:04:41] Unknown:

Right. Yeah. I remember   coming across, I think, some post on Twitter where this grandkid finds his grandmother's savings and it's big stacks of   some pesos, is South American currency.   But they have no value at all today. So yeah.  

[00:04:58] Unknown:

Exactly. And that and that's probably the fundamental core thing to for people to really understand is ask yourself, do I under actually understand money? And and go down a bit of a route on monetary history and just try and understand where we've gotten to today. Because the money that we use really is is currency, and there is a difference between currency and money. And at its core, that's what we need to understand is what is money and how does Bitcoin, you know, address that. Right. So you wanna elaborate on the difference between money and currency?   Sure. I guess it's probably easier to understand money at its fundamental level. And Lyn Alden's book, Broken Money, if you actually wanna do a really big deep dive on this, it's a it's a pretty thick book, but it's a very   thorough introduction to money.  

That's so that book's called Broken Money. And essentially at its core, money is just a ledger.   And she does a really good job of breaking down and just setting down the history history in and around how that actually works. And and if we sort of just take up, a laid back approach to it, if we go back to the caveman days, right,   essentially,   it this all stemmed from,   a balance of credits and debits. Right? So we're in Yep. You know, we're in a tribe. You and I go out hunting together. I make a kill. I drag this mammoth back to the cave, and we all gorge, and we all eat this mammoth. And on the cave painting, we chalk up. Daz has one kill. Mary Kate for free. Mary goes us, you know,   he owes us a kill. Right? And so that's the that's a ledger. Okay? We've just, you know, entered into an agreement in and around a social construct, in and around a credit and debit system.  

And then as we sort of fast forward and we sort of start to get into this industrialized,   society,   we start to specialize in various things. Right? So I might be a chicken farmer. You might grow apples.   Yep. And then we settle on this notion of a coincident of wants. Okay? So that's a problem. If if I need apples, but you don't need chickens,   we needed to settle on, medium,   a medium of exchange in the in the intermediary   that we could store value in, that we knew that we could exchange, that was socially acceptable, that people found value in. And really at its core monies, this,   when we start to look at these commodity type monies, it's really now abstracting away from that direct   barter, that direct exchange of goods and services. It's something that we park our value in   in the in the intermediary   in order for us to then go and spend later on. And it's really like a battery. So money should be a battery of our time and energy. So if I specialize in something, I go at night work or I produce a good or a service,   and I'm storing that energy. I'm expending that energy in the present, and I'm looking to store that energy in value that I can expend later on and bringing forward this this notion of or how do I then   save in something that is gonna store energy in order for me to be able to expend that later to obtain goods and services that are gonna service my life, you know, put food on my table. And so that's where we turn towards   things that we find mutually,   mutually of value. Right? So salt was a really good one to you know, salt had a use case. It could be weighed. It could be measured. You know, it wasn't really great in terms of it wasn't that durable. So if it got wet, it dissolved.  

You know, it was it wasn't a but it was a good intermediary   step between, say, BARDA   and then are settling on something that   was mutually acceptable.   And then we started turning towards other things. So one of the good one of the properties of money that makes a good money is this notion of scarcity.   So if I can create   if I can create salt at a thin air, right, it's easy to to imagine that, you know, if I had a salt printer,   essentially, or a salt factory,   I could then go and overwhelm and purchase all of the goods in a village. So it wasn't you know, it's probably a bad example, but we've that's where we've seen other types of money such as glass beads and seashells,   all of these things that have been used through,   through history as a money haven't been a great money because while they might be scarce in one area, they're abundant in others. And that abundance can actually erode a whole economic, you know,   economic structure for a whole country or a whole village, you know. Yeah.  



[00:09:07] Unknown:

Yep. I mean,   you pointed out that,   our ability to keep debits and credits and Naval Ravikant, if you're familiar with Naval Ravikant, he he he makes he has the argument that debits and credits is what   has let our species advance over other species. The our ability to maintain debits and credits has has given us the ability to go ahead of all the other species.   Because,   yeah, there's no other species that could are able to do that.  

[00:09:37] Unknown:

Well, it's really helped us coordinate and specialize. Yes.   Having a good credit and debit system and then something that represented   a credit, basically. Right? So if I give you the chickens, you need to give me something in exchange that's gonna maintain that value for me to, you know, I I've given you the chickens, but you needed to give me something. And that's where that coincidental wants became an issue. So we needed to settle on something that we both found   mutually acceptable.   And you have a trust system, right, in in that in that money. And it just so happens that as we evolve and we push forward,   better forms of money started to pop up. So monetary metals are a really good example of that. So it was it expanded energy   to create   that were scarce, that were hard to mine, that were hard to cast, that were hard to, you know, there was a there was a bit of proof of work, you know, and this notion of a proof of work going into that metal. And that's where,   you know, it it particularly in this, the notion around money and the scarcity notion around it not being easily created. So that's where   monetary metals really became,   a better form of money over the time. We could then stamp coinage. We could stamp face values into it. Beautiful. And they weren't without their own issues. Right? So this is the as we sort of progress into evolution, into into human   history and flourishing,   you know, where things will be co opted with money, they always will be. Right? So a good example for monetary metals, when there were coins,   we had all sorts of buggery that used to go on in coins as well, so clipping.  

So, you know,   the the emperors in Rome were known to be clipping the coins, taking little chunks of the coins and recasting them. So while the face value still said, you know, it's worth $1,   in reality,   the monetary metal  

[00:11:21] Unknown:

didn't make up the same amount because we take little chunks over the side and recast them and make new coins. Yep. Yep. So so yeah. I mean, clipping I mean, instead of $1, it would be like, say, if it is a gram of a gold coin, so then they clip it and it still punch it as a gram. So it's like maybe point,   yeah, 0.9th   of a gram or whatever it is, and then just to clip it out. Or there's other practices like shaving even, like shave the sides off and yeah.  

[00:11:48] Unknown:

Yeah. And then Yeah. Yeah. And then we also had dilution through,   money, just mixing of monetary metals. Alright? So you could start to mix other metals into the molten,   you know, the the the the molten form.   So you're starting to dilute the silver with a bit of nickel and, you know, all of these other metals that started to come in. So, again, it wasn't a great,   while it was probably the best money that they had in ancient times, it still had it still within its flaws. Right? Yep.  

[00:12:19] Unknown:

Yeah. I just wanna add, like, on the biggest,   I think eve even though if the money itself maintained its value, the mon the metal money has maintained its value,   The big problem with it is that you're not able to scale it across   space. So, basically, it's really hard to move across long distances.  

[00:12:38] Unknown:

So even space and time. Yeah. Yeah. Yeah. Exactly.   So, you know, and that's where, paper money really started to come to, to fruition in in the sense of so if if we had a gold bar, okay, and you and I wanted to trade a horse,   Like, I could trade the gold bar for the horse, and you can accept that gold bar. But how do we secure that gold bar? Where do we store it? You know, there's a obviously a lot of, wealth and a lot of, purchasing power tied into to gold. That's really the the monetary metal that sort of reigns   supreme over time due to its scarcity   and due to its, lack of other industrial use as well. Like, it makes great jewelry to a degree it's a good conductor, electrical conductor because of its scarcity, it doesn't actually get used in industry that much. And this is a good little,   thing to think about in terms of the better that something hasn't, the more industrial use that a monetary good has, the less good it is as money.  

So we could use a really good example between the, say, the copper, the silver, and the and the and the gold. Right? So copper is a worse form of money because it has more utility, has more industrial use than silver.   Silver's a better form of money than, sorry,   has more industrial use and more utility than gold. So it's a less better form of money than gold. And we saw that over time, you know,   that we use less copper, we use less gold, silver, and now we sort of still deem gold as a monetary good because central banks still hold it. Right? They don't they don't hold too much of the other monetary metals, but they do still,   still hold gold. Now so this this, but gold's hard to deal with. Right? It's can it's heavy. It's cumbersome. It's, you know, slow to to to deal in, and that's where we and it's hard to secure. So that's where we started turn towards these warehouses to store our gold in. And then we got these promissory notes to say that the bearer of this note, this receipt   can come back to this warehouse and redeem   for gold.  

So   when I turn that piece of paper back into the warehouse, they would look at it, they'd, you know, see the signature on it, they'd see the wax seal or the embossment or however it is that they market to to make it, legit, and then they would go and redeem the gold. Now we, as humans, always looking to optimize for speed and efficiencies. Right? So if I wanted to buy that horse off you, Merrick, I'd come to you with that bolt. I'd go to the warehouse. I'd get my gold bar out. I'd come to you on that horse. I'd give you the gold only for you to return to the same warehouse and deposit that gold back in and get your promissory note. So, you know, we sort of caught on to this and it's like, well, if that note is largely the same note that I check into the bank to get the gold and you're gonna check the gold back in to get, you the same note. Why don't we just trade the note? And that efficiency started to,   you know, to to proliferate in terms of, well, this is a lot easier, isn't it? We don't have to actually deal with this gold at all. But humans being humans   catch onto this and they start to. And there's a really good book by, Murray Rothbard who talks about this history. I think it's the Bank of England and, you know, the 1800 or some stage around that sort of time frame.  

And the first sort of bank starting I think the first bank was actually in Amsterdam, the first central bank, and then Yep. Yep. And,   and so these these bankers, these warehouse merchants are starting to notice that, hey. You know, only like, you know, 2 out of 10 people come back for their goal.   Why don't we just issue an extra note here? Will anyone catch on? You know? So, essentially,   banking in its in   its started with crooks. Right? They started with with a scam,   issuing more notes than they had gold. The problem was there was no precedent in law. So they actually got caught. There was no precedent in law, so no charges were laid. But the other decision makers within the community started to notice the flourishing that started to occur by having more monetary notes in an in an economy. So if we can introduce   extra notes within an economy, we actually start to observe   really good effects, economic effects within that economy because we've got more money in circulation.  

So when they're looking through   the harm versus the good, right,   they started to see probably more good than than harm. But what's important to note about this   very vital piece of history is that we've now got our 1st fractionalized reserve   system banking system,   where they have a an acceptance of the fact that our money is fractionally reserved by the good that it's supposed to protect. Right? And so on those notes, it still said this is redeemable for gold. We just knew there wasn't as many gold as as promissory notes   in circulation. And that is basically our 1st fiat currency.  

And we have gone on gold standards, fractionalized gold standards to and fro for the last couple of centuries,   finally until we hit 1971.   So   filling the gaps in from sort of World War 1 to World War 2. World War   2, a lot of the gold ended up in the US. So they were helping,   and build tanks and build planes and ammunitions, and they were,   you know, outsourced,   sending a lot of this out to,   you know, fund the war.   And all the gold flowed into the US to pay for that.   And post World War 2, we ended up on the Bretton Woods system. So they met in Bretton Woods, New Hampshire, and they had a problem to solve. They said, okay. Well, most of our central banks around the world have been depleted.   We no longer can go back onto a gold standard because we no longer have the gold to back the notes. So what are we going to do? So the US said, well, we'll we've got all the gold. We'll back our dollar to gold, and you just back your currencies to ours. And this is where we started to see the US as the global reserve currency,   and we had fixed exchange rates.  

And we fast forward to 1971 and for many reasons, including,   sort of this globalized banking system as well as Vietnam War.   We started to see an expansion of the peg from the dollars to the gold that was backing it. And France was the first country, it's been said, to to catch on to this. And they sent a battleship over the US, not to fight them, but to secure their gold. And they said, we don't want these promissory paper notes that you keep printing and expanding this gold peg. We want the gold that lays claim to.   Once France   expressed that interest, so did a lot of other countries. And then overnight, 1971, Richard Nixon closed the gold window. So no longer is the US dollar redeemable for gold Yep. Overnight. And from that point on, we've been on Fiat currency systems worldwide. So 1971 onwards. And and this is, I think, the the the really important point to underscore is, like, most people think the currency that we use today is is a long held tradition, but it's not. It's actually quite immature. Right? It's only been we've been on this monetary system, this currency system that we that we use today only since 1971.  



[00:19:30] Unknown:

Yeah.   Lower 50 years. Yep.   And, and yeah, I mean, I was shocked that when I was speaking to some friends who sort of had the similar,   same, if not the similar education as me, as to what money is and what money is backed by. Even today, they even to date, they believe that money is backed by gold.  

[00:19:50] Unknown:

Yeah. I just had an Uber driver   going to the airport the other night, saw black and blue that the money is still backed by gold. And, you know, I think there's there's a lot of miss misunderstanding   in and around how money actually works, and I I guess that's the first,   place to start. Now I think the other the other thing to give, I guess, some credit to the system   in terms of why they they push this way. I mean, one was obviously the the issues that we just highlighted, but also   we started to open up. We started to globalize. So we started to really have more global trade, more trade routes between countries, more manufacturing starting to leave various countries for a variety of reasons.   And gold is a really crappy   medium of exchange,   settlement   asset when you've gotta do it over vast distances. We already touched on it. Gold gold failed with,   you know, time and and space Mhmm. In transacting over time and space. So we've we've either got 2 things. We are the if we're, say, France needs to settle a debt with Japan,   they can do it 1 of 2 ways. We can either ship the gold,   you know, but that involves France packing it, securing it, shipping it, making sure it makes it all the way there. And then when Japan receives it, do they trust France? Probably not. They cast it. They melt it down. They recast it, making sure it's pure,   recast it into their own into their own bars. So all of that takes a long time, and it's super, super expensive.  

So where we ended up was,   intermediaries.   So Bank of International Settlements is a trusted   or it was a trusted intermediary,   where countries would store their gold. So, you know, the bank event there's another book called The Terror of Babel, which is, illustrates this, really well. So back, World War 2, again, we've everyone's got their piles of gold in this Bank of International Settlements. So, you know, UK's got their pile of gold. Australia might have a pile of gold. Czechoslovakia's got a pile of gold. Germany's got a pile of gold.   Germany invades Czechoslovakia.  

Germany gets in contact with the Bank of International Settlements and says, hey. You know that big pile of gold that's got Czechoslovakia's   name on it? That's now ours. And the Bank of International Settlements turns around and says, okay.   So straight away, we can see that a trusted intermediary   doesn't work that   well,   in in terms of   storing your wealth. If you're a country that doesn't trust any other countries, where how are you gonna do this, and how are you gonna how are you gonna keep up with global trade? And that was the other reinforcing mechanism behind   our fiat currency system. And then as we've, like, sort of fast forward even more so now we're on this fiat currency system where the paper's just printed. Right? But we still had a fractional reserve   system where they promised that they would have a certain amount of notes,   physical notes. Right? And although it takes very little energy now to to make, this currency,   it's still a fractional reserve system in in the sense that they still needed a a a certain amount of physical notes in circulation,   for the banking system. But as we sort of fast forward and we start to look at, a digital   system   Mhmm. Where, you know, we've got the Internet rails now, we've got wire transfers,   We start to see credit really start to take off. So this fractional reserve ratio, everyone's leaning into this fractional reserve ratio.  

Because if I can just invent   zeros digitally   on my balance sheet as a bank, I can basically go and acquire all of the assets through proxies like mortgages and credits and take the clip. Right? So men being men,   greedy greed being greed, that's how we end up with these massive massive credit bubbles. And you fast forward right through today, and I mean, the US is what? I've lost count, $35,000,000,000,000   in debt now. And this is all because we've lost the physical tie between our money, our monetary good, and energy.   It's it's no check. Right?  

And then if we look back, like, a very at the very start of this conversation, we said money is just a ledger, and it has been a ledger all this time. So we've just, like, you know, stored the credits and the debits in various things along the way. We've had a fractional reserve ratio. That's a ledger to a degree, and it's no different today. We've still got a ledger. But when I log in to my bank account,   my bank is carrying its own ledger, and your bank's carrying its own ledger. And then we've got central banks that have their own ledgers.   And, essentially,   there's a inherent amount of debt. Well, it's all trust. It's a trust based system.  

And so when I log into my bank account, I've got a trust that my bank says, well, DAS has x amount of dollars in there. You know, they're keeping the ledger up to date. Now when I transfer money to Merrick,   we're trusting that that communication   method is sound and that I update my ledger and you're updating your ledger and all of these checks and balances are essentially just a   a lot of ledgers   globally distributed,   but they're not coordinated.   There's a there's a very big amount of trust in there, plus this credit layer which we've already spoken about. So there's not enough physical dollars. And I think this is a really the you know, we're starting to see a lot of people waking up under this notion of cash is king, cash is king, cash is king, which I I get. I think, yes, that's a that's a good way   of thinking about   making sure that physical dollars exist and there's a whole heap of privacy gains and all that sort of thing. But at the end of the day, whether it's paper or it's digital, it's still printed out of thin air today. So the value extraction that we've sustained that we've that we've copped as wage earners from 1971 to today is when you look under the hood, it's actually really, really, really   corrosive. It's it's it's diabolical, the loss in purchasing power that that we've suffered as wage earners. And I think where this shows up for wage earners is the fact that we don't own a lot of assets. That's what we're trying to do. We're trying to pay the house off. We're trying to accumulate an investment property. We're trying to get ahead. We're trying to get to this retirement, this   this utopian dream that we've all been touted. Like, you work your little ass off, Daz, and when you hit 67, will it lead to retire with this with this savings account? But, like, ultimately, all of us as humans just want to excel and bring that forward. We'd all like to be able to spend our time and energy the way that we want to. But really now, it's just getting worse and worse and worse for wage earners. Like, mom and dad are both in   in,   work. You know, the kids are in daycare since they pretty much come out of the womb. They're put in daycare because we just simply can't keep up with inflation. And that's the biggest byproduct of this fiat monetary system is inflation.  

You have the erosion of our purchasing power. And so when you can't save in assets, you're trying to accumulate assets, you try and save in dollars. But when you put those that money in the bank,   inflation is outstripping our ability to save. So our purchasing power is forever running away, and we can't accumulate those assets because they're accelerating further and further out of reach.  

[00:26:42] Unknown:

No. 100%. Yeah. And now just 2 things I'd wanna point out. 1 is that,   something that we sort of glossed over is that we,   as your Uber driver and some of my friends, they don't know what money is or don't know that money is not backed by gold.   This is this is by design that the system   sort   of I mean, we are not taught we don't learn about this in school. Right? Like, we don't like, it's deliberately not taught to   us. That's one. So that is, this game keeps going on.   And the other thing is like,   Yeah, because of inflation,   it's turning everyone into an investor. So we just don't have an asset. We just can't save in money, but we are seeking out,   I'm gonna   sort of buy stocks. I'm gonna do this and that. So this we are always seeking   something else, but we can't just store it in our bank because it's not gonna have it's the same purchasing power over the next year or so.  



[00:27:37] Unknown:

It's a really good point. So everything else is attracting a monetary premium.   Mhmm. So real estate is probably the easiest for most wage owners to understand in terms of this monetary premium. All we need to do is look around and start to see   house prices in your in your local jurisdiction. I don't care if you're in regional   Australia or or a regional area. Mostly   all across the globe, real estate starting to go through the roof. And and one of the reasons for that is because everyday people   don't necessarily understand   complex   financial instruments,   but they can understand real estate. The thesis is quite understandable with real estate. It's like everybody needs somewhere to live. And if I look back from, you know, particularly 1970 onward,   real estates tend to keep going up in price. Alright? There's been a couple of corrections and a couple of flutters here, but if you zoom out, you look over the longer term, real estate performs really, really well because it it it keeps up with inflation. Right?  

And the demand then for   real estate starts to increase because people can understand real estate easier.   So they tend to turn towards real estate as an investment option. But the real danger here is that you get in a really over levered over levered position. Now debt can serve you. That that can be a good thing. Like, you know, if you can never save the $700,000   for a 4 bedroom house for your family, like, that's that serves a purpose. But where I think this real estate market's is really starting to get really frothy is this extra demand from people who   turn towards it for an investment. We're no longer looking at it as a consumable,   as something to live in, as a roof over our heads. We're now turning towards it as something we know we can park some value into that's gonna appreciate over time. Money doesn't do it for us anymore, and we might not even be consciously aware of it. But subconsciously, us as humans, I mean, we're not dumb. We know that if we're saving in the bank, we're not tend to get ahead. And then when we look around and we look at, you know, my neighbor who's got 2 investment properties, oh, he's doing okay for himself. It's a reinforcing mechanism amongst amongst others. Right? So everything all other assets   really start to attract this monetary premium. And and it's the same with equities. So equities attract the monetary premium,   and   the really top companies   start to attract this monetary premium over and above others. And it's a reinforcing mechanism by what we call passive investing.  

So   if you don't know how to and this is this is probably   I'll just take a quick step back and I'll explain   how equities are valued. And and the really simple example is if you were to go down to the coffee shop down the corner of the street and you were to say to the coffee shop, hey. I'm interested in buying your business.   Please tell me how many cups of coffee you sell. What's your cost for the coffee? What's your cost for the cups? What's your overheads? What's your electricity bill? How many staff do you have? You're gonna look at the profit and loss statement. Right? You're gonna say, what's your what's your cost basis? What's your profit margin? And and and how much are you selling and how much are you worth? And from a coffee shop perspective, it's actually really easy   to start to value what that might be worth. You know, it might be a a a multiple of 3 or something above their yearly profits. That might be a a a good,   corollary for how much you would wanna pay for the coffee shop. But when you start to look at equities, everyday people don't treat equities the same in a lot in a lot of instances, and it's because it's complicated.  

Yep. So but you should treat an equity the same way you would treat a coffee shop. You should be looking at the balance sheet. You should be looking at the debt. You should be looking at the cash flow statement, and you should be saying, what is this company worth?   Where a lot of   retail investors like us wage earners, if we are lucky enough to save in excess and we can turn towards the equity market,   you know, quite often you'll hear, oh, I bought BHB Build in today from your work colleague or something. And you go, oh, why did you buy that? Oh, well, it's 6% down today. It'll go back up without any indication of what it's actually worth, you know, and it's because it's complicated to do. It's complicated to value. It's complicated to reread the balance sheet. So what we do typically   as retail investors   is we turn towards these investment vehicles that they've put that really started to come to the fore around the nineties called ETFs.  

Yep. So exchange traded funds. So these exchange traded funds really give you exposure to a lot of different   markets. And if you read the popular investing books for the last well, you can go back right back to 1920,   to The Intelligent Investor written by Benjamin Graham who teaches you how to value a stock way back then.   But the underlying thing even from that book forward is   you won't outperform the market, so just buy the market.   And what that means is, like, these ETFs popped up to give you an easier way to buy just buy the market. So, like, a good example of an ETF is the S and P 500. Alright? S and P 500 is a market weighted   lot of goods. It's 500 of the top stocks within the the United States   by market weight.  

So what you do for every dollar that you put into an ETF, they go and buy   the same equivalent. Like, so if Apple is 20% of that market cap, you buy 20% worth of Apple. You buy a Tesla, you buy and you're buying on autopilot,   and it's a self reinforcing mechanism. So we're not doing any price discovery anymore. We're not doing what is Apple actually worth Mhmm. Because all this money is just coming in passively, and we don't care what price we pay for Apple. We just know we need to buy 20% of Apple because it represents 20% of this basket of goods.   Correct. And, again,   like, equities is attracting this monetary premium now. And I I know I'm we're sort of getting off off off topic No. No. No. Around Bitcoin here, but it's it's just to really highlight that because our money doesn't work as money.  

We've turned towards anything else that we can park value in, that we can try and understand. So an ETF, I can understand. Real estate, I can understand. So we're starting to attract the all of these extra things are starting to attract a monetary premium   above and beyond   what they are actually valued at. Now a 100%. And like,  

[00:33:46] Unknown:

what it reminded me is, like, we're trying to park value into anything and everything   is like, I have friends who are purchasing Pokemon cards or who are doing, who are purchasing all sorts of these figurines or these towers figures or whatever it is, right? Like are these anime figures? And they're saying, oh, this is gonna have more value in, like, 1 year from now because they're only gonna make 100 of these or blah blah blah.   And yeah. And  

[00:34:11] Unknown:

And and you know what's fed that is this notion of and it's getting worse. Right? So we've just navigated through a really high inflationary   period. Now we've always suffered inflation.   It's just it's really noticeable now. We've always been suffering a 2 or 3%, you know, quote, unquote, 2, 3%, what they tell us inflation is, which is another another rabbit hole. But,   you know, we've always suffered inflation, but it's just really noticeable now. When when it's upwards of 6%, you know, or Yeah. Plus 5%, it's really starting oh, every week I'm starting to notice that now. So people are starting to question. And but what it's what it's really highlighted is   this sense of financial nihilism,   this sense of, like and this is why I, you know, we can we can probably touch on on on crypto a bit later on, but this is where   people turn towards quick wins. They turn towards gambling. They turn towards crypto. They turn towards all of these other vehicles because if you can only save $10 left at the end of each week because you've, you know, you paid for the kids' school or the health care, the the the electricity cost, the fuel cost, all of that. All you've got left is 2 sticks to rub together.  

You may as well, you know, throw the dice against the wall. Right? Right? That's that's the sense of financial nihilism that people are really starting to feel. And this is where we get a little bit passionate as Bitcoin is in and around   the education piece around Bitcoin and where it ties into a monetary good and how it really fixes   all of the problems that we've that we've experienced   in the monetary system and how we've gotten to today.   And I think that's probably a good place just to loop back and tie a little bow on this monetary history stuff. Right? So 100%. Yeah. If if we look at gold and why gold failed is because it it couldn't move across space and time. So but if we take all of the features that made gold the most pristine form of money that we've had throughout history, and that then that is absolutely true, and many would agree with that. If we take a look at all of the features that made it really good, right, it's portable,   it's durable,   it's scarce,   it takes energy to create,   And we package all of those things in and but we make it digital, and we make it movable, and we make it, you know, the ability to for it to go from one end of the earth to the other in a fraction of a second,   that's basically what Bitcoin is. It's a monetary good. It's a bearer asset, and that's easily said, harder to understand, but that's really what Bitcoin has sold for. It's it's taken all of the properties that made gold great, and it's taken all the properties that made gold bad and solve them all and provided us with a monetary good that's provably scarce, that's finitely scarce, that's verifiable   with 0 trust. And that's probably the other thing just to really underscore and highlight for people is this notion that we spoke about that notion with,   with gold being needed a trusted system. If you were going   to do do transactions   fast, Bitcoin doesn't need that. It's a trustless system. It's it's trust minimized. It can be globally distributed, and we can dig right into that, a little bit later in around how it actually works and nodes and verifiability and all of those sort of things. But to just to really underscore that,   it's taken gold, all the great properties of gold, and then solved all the bad properties of gold and basically created us a digital form of gold that can be transferred   end to end of the world without 3rd parties.  



[00:37:35] Unknown:

And you can yeah. You'd and for I mean, most people would think, oh, Bitcoin costs whatever it is now, like, $90,090,000   Australian dollars. I can't buy a Bitcoin.  

[00:37:45] Unknown:

Right? So that's another thing. Absolutely. Yeah. And that's why gold will fail in the future. Right? So Bitcoin is, like you say, it's divisible. So, on the base chain,   gold, Bitcoin as we know it, is divisible to 10 to the negative 8. So that's a fraction of a cent per   so   you can get access to Bitcoin at 10¢, you know, 1¢ if if your exchange allows it. So you can get exposure to Bitcoin in that fractional   way.   That represents,   you know, your ability to stack it in meaningful,   amounts that are meaningful to you, whatever that that means. Now when we look at gold and why it wouldn't be able to perform into the future is I don't know if anybody   listening has actually ever purchased an ounce of gold, but I can tell you it's about the size of a 5¢ piece.  

So in that so what's that? In Australian dollars, it's 38100 or something. In US dollars, it's 24100   dollars around that that mark. You can imagine buying a loaf of bread in the future   with gold is gonna be really, really hard. Right?   Because you can't you can't just shave off little bits of gold, and it's really hard to weigh, hard to deal with deal with. So gold is never gonna come back to the fore as the monetary metal.   Right? Because it it's now starting to you know, when you look at the the the the world and the globe,   we're ever expanding. You know, population's expanding, production's expanding,   consumables are expanding. We're starting to lift 3rd world out of the slums into, you know, productive means. They're gonna consume more. It's an ever expanding pot of productivity, of goods and services,   competing for really   a finite scarce asset like gold. When if it was to compete with a finite scarce asset like gold,   we very quickly start to,   you know, gold then starts to appreciate in value just like any scarce asset will start to appreciate in value. But we we're creating that problem even more. Like, we can't divide gold anymore. We'll get to a point where a speck of gold,   you know, might represent a a loaf of bread. Whereas Bitcoin being digital,   on the base chain, it's 10 to the negative 8. But then on 2nd layers, we can actually make that infinitely the divisible. So we can always be   dividing,   to make that smallest unit that spent small spendable unit adjust to   the future in whatever situation.  



[00:40:02] Unknown:

Yep. Yep. 100%.   So now   yeah. As a listener, as a newbie,   I'm sold.   How do I go about buying   Bitcoin? How do I go about acquiring Bitcoin?  

[00:40:16] Unknown:

So is it there's a number of ways. The easiest way, though, is on an exchange, on a Bitcoin only exchange. We always advocate for Bitcoin only exchanges. There's plenty   in every jurisdiction on the planet. There's just about a a Bitcoin only exchange that you can tap into.   That is honestly the easiest way. The rails are there for you to be able to send fiat currency from your existing bank account into an exchange.   When that money hits that exchange,   if anyone's ever bought a stock before, it's very similar. Basically, all you're going to do is edit that fiat currency,   you can,   convert that into Bitcoin on the spot. Right? And then so you've got a Bitcoin balance. So and that's done at today's Bitcoin price. So if today's Bitcoin price is trading for a 100,000   dollars,   you know, and you go and buy $10 Australian worth of Bitcoin today, that will convert at that price, and you will get the same equivalent in Bitcoin into your Bitcoin wallet held on that exchange.  

That is the easiest way to acquire Bitcoin, in my humble opinion, is to do that through an exchange. There are other ways. You can earn it. You can you know, friends can send it to you, all of those sort of things. But ultimately,   that is the most approachable way   for the most majority of people throughout the world.   Yep.  

[00:41:31] Unknown:

And okay. Now so how about storing it? Because you said it's a monetary asset. So how about you go go about storing it? So holding it on an exchange is basically keeping it in someone else's warehouse. Right? So Exactly.  

[00:41:43] Unknown:

And that comes with risks.   And so what we what we talk about in the Bitcoin space in terms of owning Bitcoin is this notion around custody.   So taking custody of your Bitcoin, and it's a really, really important point. So when you buy Bitcoin on an exchange, you're you're you're putting in an inherent amount of trust in that exchange.   Basically, you don't own necessarily Bitcoin at that point in time.   You own a claim to Bitcoin. The exchange has the Bitcoin or they should have the Bitcoin. And, again, there's a level of trust here. And and with Bitcoin, we're trying to get   trust minimised. We're trying to remove all of these layers of trust.  

So while an exchange is a great way to get access to the Bitcoin,   everybody should think about   how to take their own custody of Bitcoin. Now that's going to be different for different people. It's a very personal approach to custody, and we'll talk through some of the options. But   it really does depend on how much Bitcoin you have. So if you only have a couple of tens of dollars of Bitcoin, okay, you're   leaving that on an exchange might be a good trade off. Okay? You don't necessarily   need to you know, if they rug pull you, it's a couple of tens of dollars.   You know, if they seize the Bitcoin or they they get involved in stuff that they shouldn't be getting involved in and they and they, you know, run into financial trouble and they go into receivership and administrators come in, which happens time and time again with exchanges and that's why we always bang the drum on this.  

That's really,   the risk that you're running by buying Bitcoin on an exchange and leaving on an exchange. But for a couple of tens of dollars, that might be okay. It might be a a decent trade off. As you start to get into 100 of dollars, that's really when you need to start thinking about,   am I comfortable with what I've stacked on here? How much Bitcoin I have? How much do I how much would I be happy to lose? Right? Essentially. So when you've got a balance on an exchange, that's really the question you need to be asking yourself is, how much am I prepared to lose? And that's about   the limit of how much you wanna keep on on an exchange.  

As soon as it starts to become a meaningful amount of money for you and I always liken it to how much money am I comfortable walking around in my wallet,   right, in in in my wallet, in my back pocket.   So, you know, I I keep a couple of tens normally. You know? As soon as it's a couple of 100, I'm starting to think about it, and that's kind of the same way with with your Bitcoin on your exchange. So   at that point, if you've got a couple of 100 of dollars worth of Bitcoin, a hot wallet is a really good way for you to get,   exposure to how to interact with Bitcoin. Now a hot wallet is essentially any wallet that touches the Internet. The most common types are are apps that you can download from most app stores,   and they will give you   the option to remove your Bitcoin from an exchange. And there's a number of ways you can do that. We can touch on a bit later on whether it's on chain or using another,   network called Lightning. But, essentially, what you're doing is you're removing that Bitcoin   from the exchange,   and you're taking or you're approaching custody.  

Now these hot wallets,   there's a few iterations of hot wallets and and just being being mindful of getting probably too bogged in into the detail, but there are   custodial wallets and there are noncustodial   wallets. Now by default, you really should opt in for a noncustodial   wallet. Okay? That means that the wallet provider, the person who you're using the software,   again, doesn't own your Bitcoin. You own your Bitcoin.   Now it's very easy to tell whether you're using a custodial service or a non custodial service simply by the fact that when you create your wallet,   did it ask you   for,   to to create using 12 or 24 words?  

Mhmm. K. Usually, those 2 iterations, 12 or 24.   So those words are essentially what protects your Bitcoin.   Now it probably helps at this point in time to look back at how Bitcoin actually works and and and what you're actually doing when you're taking custody. And then we can talk about the other options in terms of the the custody. But it does help to sort of illustrate how Bitcoin works   and and how your Bitcoin is protected and how you interact with your Bitcoin when you do take custody. So we we we've touched on this notion before and we sort of built up this conversation in and around Bitcoin being a ledger.   Okay. Money being a ledger, and Bitcoin is essentially just a ledger. So Bitcoins don't exist in any physical form. They're not a JPEG. They're not a, you know, they're not a file that you store in your computer or you store in your mobile phone or anything like that. It's essentially   a record of credits and debits. Right? It's a it's a ledger   of balances   of Bitcoin   held against what we call addresses.  

So you can liken it to a massive excel spreadsheet   and in that spreadsheet there's a whole hit list of these alphanumeric   things we call addresses,   and against them are balances   balances of Bitcoin. And it's the whole history stack of all of the movements of Bitcoin from creation right through to spending and right through to the balances that as they exist today. Who holds   what Bitcoin?   Now that question is is really the the the key thing to understand here is who owns the Bitcoin? So if there's an address here, basically, how we protect Bitcoin against these addresses is through cryptography.   Now without really getting too bogged down into the detail around how Mhmm. Cryptography works,   All you really need to understand is that if I have a Bitcoin address and I have a balance against that address, I need to be able to provide the pass phrase. Sorry. The what I should use is password, k, because that's easy to understand. A password   which is essentially   a joint number. It is a huge number.  

Now this password   is just,   this number is so big that you and I are stumbling across the same password. If you're thinking about, oh, if it's just a password, surely someone can guess it or a computer can guess it. That number is so large that it's akin to you and I being able to stumble across the same atom within the entire universe.   Right? That number is huge.   Now to make it easier to deal with this number, we very cleverly come up with this seed phrase system where we've got a bank of 2,048   words, which essentially represents every combination of of a a numbering system to be able to represent   that really big number in a way that us as humans can interact with it a little bit,   better with minimizing error.  

Mhmm. So, essentially, these 12 or 24 words   is your password.   In combination, it is that really big number. It is that and we call them, you know, a seed phrase. Okay? So this seed phrase   is 12 or 24 words depending on the on the encryption that we use. But 12 is just as secure. Like, 12 is actually very, very it's a it's a huge number too. 24 words is a bigger number, but 12 is just as hard to guess as 24.   And, essentially, those 12 words is what protects your Bitcoin.   So when we think it back to this audio around custody,   it's   who owns the Bitcoin? Who owns the address? Where is that Bitcoin   in the in the in the ledger in the history of the ledger? Where does it actually stack up against,   the the the history of all of those addresses, and who owns   the seed phrase   to be able to move that Bitcoin. So we, again, we we protect this via cryptography. So if I wanna send you Bitcoin out of one of these addresses that I own,   I need to produce the password that's gonna unlock   the the the Bitcoin to be able to move from my address to your address, and that's essentially   how these seed phrases work.  

So   with custody,   when we look at these hot wallets and we go back to this this example around using a hot wallet, it's a bit of software that touches the Internet, it's directly connected to an the Internet,   and there's two forms of this. It's the custodial model or the non custodial   model. So a custodial model,   these software developers   say, hey. We'll look after your seed phrase for you. And but there's an inherent amount of trust that you're putting into this system to say, hey.   We're gonna control the keys for this, and that's really the the keyword there as he's   looping this back into normal Bitcoin speak. That password is more often than not referred to as keys, And we have this saying, not your keys, not your coins. So that password is basically a a private key. That's the other word you'll hear in in Bitcoin space, private key, password,   seed phrase. All these things are used interchangeably   and basically just to represent this really big number.  

So these custodians basically say, we'll manage your keys for you,   and we'll give you a username or a password into our platform. So the the benefit of doing that, right, is some of these   custodial   solutions   will give you a username and password. So if you lose your phone   and you or you delete that app or the kids delete that app on you, right, to install Minecraft or Roblox to play,   that when you download that app again, you should just be able to use your username and password and get back access to your Bitcoin. Okay? There's the benefit of using that service.   The downside of that is, again, it's a trust system where we're trusting them not to rug pull us, that we're trusting them not to disappear off the face of the earth and steal our Bitcoin.  

So the next best iteration of that is a non custodial wallet. That means they're non custodians of your Bitcoin. All they do is they provide you a platform   in order to interact with your Bitcoin,   and you are taking   custody of that Bitcoin. You are creating that 12 or 24 word seed phrase. You are creating that private key, and then you are   in control of your own destiny here. Okay?   So if you lose that seed phrase, there is no back button. There is no customer support. There's nobody who can help you recover that Bitcoin. So the other thing we like to say, it's an old Spider Man, you know, Spider Man number 1 movie with,   Tobey Maguire. Uncle Ben's dying. You know, he's looking up. They've shot shot out of the taxi or whatever the situation was. And he says, with great power comes great responsibility.  

Mhmm. And that's something we echo all the time in the Bitcoin space. So as soon as you take self custody, this is where you need to up your game in terms of thinking about how you secure   this seed phrase. So that seed phrase, you need to protect with your life. Right?   Essentially.   Because there's no one who can who can pull you out if you mismanage that seed phrase. And again,   this is a personal thing, and it comes down to the best practices now in managing that seed phrase really comes down now to how much exposure you have the Bitcoin and what's meaningful to you in terms of dollar value in Bitcoin.   Mhmm.  

So I might pause there for any questions before we crack on with,  

[00:52:15] Unknown:

the Yeah. Yeah. Okay. Cool.   So does so you mentioned Excel   spreadsheet.   You sort of said there's a big ledger. There's an Excel spreadsheet.   So who maintains this spreadsheet?   Do you wanna address that first, or you you wanna continue on the track of storing the 12 and 24 words in a noncustodial?  

[00:52:34] Unknown:

Yeah. Well, we we might come back to it if that's okay, Merrick, because then we can tie in nodes and minors and all of those other complex complex things that people need to know about. So,   yeah, back back to this notion of custody. So, again, I think where we left off was, this this notion of   really starting to think about your custody solution then being tied directly into how much exposure you have to Bitcoin and how much wealth you have in Bitcoin. Sure. So we use that example in and around,   you know, tens of dollars on an exchange might be okay. It's kind of the same thinking when we're talking about these hot wallets. It's what level   there's still an exposure risk here. So when you're starting to deal in a digital bearer asset, something that's   final and, you know, can be disappeared very quickly if you mismanage these seed phrases and or you've got rug pull risk with custodians.  

Again, you need to start asking yourself, how much am I comfortable losing?   Because, really, any wallet that's tied directly to the Internet, there's a non zero risk   of your key being exposed when you generated it.   Now we're coming through, like how you interact with your seed phrase and all this sort of thing. There are there are non zero risks   to really start thinking about.   And that again is directly tied to how much exposure you've got to it. So how I, again, like starting thinking about this is how much cash am I comfortable walking around with?   That's kind of how comfortable I am in keeping in a hot wallet. So I still use hot wallets. They they serve a great purpose. So there's lots of, you know, great,   lightning wallets where we can pay each other when we go to these conferences and stuff. And that's what I use a hot wallet for is, like, the means of payment means of medium of exchange when I'm starting to interact with Bitcoin and paying others and buying goods and services.  

And   I like a a couple of $100 maybe to a $1,000 is about as much as I'm comfortable   keeping in a hot wallet. Because if I lost it, I'd be I'd be I'd be pissed. Right? I'd be upset if somebody,   if somebody stole that. Right? So and that's again where I think the line for most people is. Couple of $100. Oh, okay. I'd be really upset, but it's not life ending.   Whereas as soon as you start to get into 1,000 of dollars, that's, I think, the the point of time when you need to start thinking about the next   form of custody, which we refer to as cold wallets or hardware wallets. Or you'll hear other terms like, seed signers,   ways to interact with your seed. Hardware wallets is probably the most common type. And really what they   are, they're a dedicated hardware device   that help you interact with your seed phrase to help you move Bitcoin and sign transactions   and sign sign the fact well, when we move that Bitcoin from those addresses that are on that ledger   and they say, alright, cough up your password,   These hardware wallets make it an easy way to interact with that seed phrase so that we don't have to enter in that seed phrase into any computer   because that's what we're trying to avoid. We're trying to avoid that Internet and computer connection   to the seed phrase so that these hardware wallets introduce a level of abstraction   that separates that physical seed phrase   from signing devices. So what they allow us to do   is sign, yes, I'm the owner of this Bitcoin that I wanna move,   and I'm gonna sign that transaction. I'm gonna cryptographically   verify that I own that Bitcoin, that I possess the key that's paired with that address,   and it allows me to pass that message through to that computer without divulging my secret, without divulging my password, giving up my seed phrase,   or answering that pass that seed phrase or that private key into that computer.  

And that's really, you know, again, around that $1,000 mark is where you're probably gonna start thinking about that. Right? Because these hardware wallets, I mean, they're not cheap.   The cheapest will probably set you back in the vicinity of $100   up to a couple of $100 depending on on what you want to achieve and which ones you wanna do. And there's plenty on the market that we can, that we can recommend and and talk about. And maybe, in the show notes, you can put some links into some of those various devices.   And   the the one that you choose   should be you should do some research   and be very comfortable in your own   Admit to yourself how good you are with tech.  

So there are some that are very easy in terms of plugging them in straight away and being able to sign while they're plugged into your computer. There are others   that are probably deemed as best practice,   that you but but that will take you a little while to,   understand how to do these what we call air gapped transactions. Okay? Now that's best practice.   Highly recommended as you start to get   exposure, like bigger numbers of exposure that you're taking best practices. But, again, you just gotta be comfortable in your own skin. If you're, you know, in your eighties and you're not comfortable with computers, then maybe you go with one of these plug in options. But if it's quite tech savvy, you know, you're   sort of 40 or below or, you know, 50 or below, don't shoot me. Anybody out there is tech savvy and and older. But, you know, they take a little bit more to understand what's really going on and some people do struggle. But, just be just be open with yourself. And I think, you know, some of these plug in ones are a great place to start, and I think custody with Bitcoiners.  

It's always an evolving journey.   It's always, I think,   you know, as your net wealth starts to appreciate in this thing, and that's just by virtue of how long you've been around. Like, you might not have even started with a lot of dollars in Bitcoin. But if you if you fast forward 8 years,   you know, Bitcoin's gonna continue doing what it's going to do, and you will become a high net worth individual. If you're buying Bitcoin right now, it's only a matter of cycles before that is meaningful to you. Okay? And then as you progress through and your net wealth starts to appreciate in Bitcoin terms and your purchasing power   in US dollar or Aussie dollar starts to appreciate,   really, your evolution and your learning journey   starts to evolve in and around Bitcoin.  

And I think what's probably good to touch on now is some other options in and around that wealth management. So we've gone from Bitcoin on an exchange   to Bitcoin on a hot wallet to Bitcoin into a cold wallet. And now as you start to really appreciate   in in purchasing power so, you know, and and this can be very personal things. So this might be tens of 1,000 of dollars, might be 100 of 1,000 of dollars exposure.   You're gonna want to start thinking about what we refer to in the custody space as single points of failure.   So this is   how am I gonna get in my own way   of   stuffing up,   mismanaging that seed phrase, mismanaging the the the cold wallet. You know,   if you mismanage your seed phrase, someone steals your seed phrase and you're on what we call a single sig. So today, we've only spoken about this single signature. We need one pass key, one pass private key to sign the transaction.  

You are starting to then,   think about these single points of failure. So if I had my whole net worth   tied up in a single sig,   on a with that seed phrase written down on a piece of paper   and it's in, you know, in in a drawer at home in my desk and I had a house fire. Right? Right. Your whole net your whole net wealth is gone.  

[00:59:43] Unknown:

Yep.   Daz, just before you go there, maybe sort of, just briefly elaborate on why someone should be storing those   words on paper and not digitally.   And,  

[00:59:55] Unknown:

perfect. Yeah. Yes. Very good point. So just with that seed phrase, we just like we're starting to think about this cold storage.   Right? That seed phrase should absolutely never be stored digitally. You don't take a photo of it. You don't store it in the cloud. You don't put it in a password manager. Those 12 words are sacrosanct. You need to protect them at all costs.   So the the most   likely   iteration for people as they're along this journey is to write them down on paper and keep them somewhere really secure. But we go one step further as Bitcoiners, and we recommend strongly   that you back that up on steel. And there are a number of ways to do that. You can get plate steel from any sort of steel manufacturer. You can get a rotary drill like a dremel, and you can engrave it on that steel.  

There are off the shelf products you can do with pin punches that you can punch that seed phrase into.   There's all of these other ones with little tiny metal letters that you can put into a fold and and, you know, screw it down. There's a number of different ways. Probably one of the most simple and approachable ways for most people   and cheapest is to go down to to Bunnings or, you know, trade tools or your your your local hardware store.   Go and buy a stamp kit. So that's a whole set of stamps, the metal stamps. So they're a, b, c, d, right through the alphabet, numbers 1 through 9, a couple of symbols. And you're gonna get some 12 mil stainless steel washers,   a bolt, and a nut.  

And there's little jigs you can 3 d print called block mints. They're really cool,   to to help you, deal with this. But essentially, all you do is you go and you put those seed phrase that seed phrase 1 at a time. So 1 number, you know, that's the first word, 1, and then you stamp in. And what's important to note with these seed phrases with these words, there's a bank of 2,048 of these words. So any combination of those 2,048   words, you're you're likely to come across. But what's unique is it's only the first four letters of each of these seed phrases   that's actually unique.  

So what you do with that is you take the first four letters of those words. So if the first word was beach, right, you'd put in your little on your on your stainless steel washer with your stamps, you'd go 0, hammer that in, you'd put a 1, you'd hammer that in, and you'd go b e a c.   And then you drop it onto the bolt.   And then you go for your second word. If your second word was age.   Okay. First four letters. Right? But there's also spaces. So age would be 2age   and nothing else. Right? You drop that onto the vault. And then you keep doing that, and then they're numbered.   And then you you're stacking them up on the vault, then you put the little knot on the vault, and you keep that somewhere secure. And as your net wealth increases, absolutely, you should go and install a safe in your home or,   you know, document storage. And and what's really important with that seed phrase is when you're creating that, when you're doing that, it's a really good practice just to go on another spec. Go on the shed   and leave your phone in   in the house. Like, don't have a laptop with a camera. Just like good practices. Like, the the the likelihood of somebody   snooping in and watching is is is low. Right? But   we know that that is possible.  

So, you know, especially if you've got malware or you've downloaded some dodgy software along the line or something like that. So it's just best practice when you're dealing with these seed phrases   is to just take the time to understand   all the attack vectors. What could I possibly be doing better? So technology, just leave it out. You don't need it. Right? You you write down that seed phrase on your piece of paper. You take it straight to the shed. You smash it out on on some steel,   and then you store that very securely where nobody's gonna come across it. And we're talking about cleaners. We're talking about tradespeople that come in your home. You do not want to be leaving these out in the open that's visible. Because I tell you what, if I'm in your home and I come across a plate or a piece of paper with 12 or 24 words written on it, I'm a bit connor. I know what that is.   Right? I take a quick photo of that, and it might be 2 weeks later. I'll sweep you. I'll sweep your funds, and you won't know it was me. Right? It might be 2 years later. I sweep your funds, and you won't know it was me. You don't know at what point that seed has been exposed.  

So it's good just to do a little bit of homework in and around   how you should be managing,   your your Bitcoin seed phrase. Right? And and why we recommend steel   is and putting it in a fireproof safe is because then you've you've ticked off most of the attack vectors on that single point of failure. Flood,   fire, you know, if it's in a safe, it's it should be Dyna bolted to your concrete floor or or whatever, so it should be hard to steal. Like, we're trying to mitigate as much as we can against these single points of failure.   And then I think the next iteration for people to consider   is what we call a multi sig. Okay? So the multi sig is the same sort of concept that we've spoken about with a single sig where we take we need one signature. We need one private key to be able to move Bitcoin. But we take this idea,   and we come up with some combinations. And there's can be a a number of combinations, but the most common is a 2 of 3 multisick.  

So the notion with this is that, okay, I can actually take 3 keys to protect my Bitcoin,   and then I need a combination of any 2   of those 3 keys and a descriptor file, like, a map basically to those 3 keys, and I can I can spend my Bitcoin?   And that does, if I'm to be perfectly honest, for most people who haven't been in the space   for quite a while, can be   hard to understand and hard to understand the best management practices and the trade offs   associated with that. But there are starting to be a lot of services that are starting to pop up to help people in and around that, free plug. I I work for 1 called the Bitcoin Advisor   where we can help you manage keys. So we are a key agent. There's other collaborative custody models that can help you set that up, help you manage the file associate   associated with that, help you,   you know, upload   whatever number of keys that you want. And however, there's many ways to skin the cat, which we won't get into, you know, necessary detail around all of those things. But just know that when you start to appreciate   in in   in net wealth terms in terms of Bitcoin,   it's probably time to start thinking about what are your backup options. What is your inheritance plan? Does your wife know how to recover Bitcoin? Does your mother-in-law know how to own Bitcoin, and manage Bitcoin? So, you know, when we start talking about wills and the executives of your will, do they know how to deal with this as an asset   when you start to inevitably   accumulate   generational wealth and meaningful wealth and, you know, wealth that can change your life. You know? So we're seeing this all the time. Bitcoiners have been in this space quite a while now. Humble plebs, humble, you know, tradespeople, retail workers starting to really have quite significant wealth in this thing and starting to then   think about their custody situation and then questioning themselves whether there's something that they could be doing better in terms of helping me to manage that, helping make sure that my loved ones can   can,   can access it if something happens to me. You know? Yep. Yep.  



[01:06:58] Unknown:

And, yeah, I mean, if someone's,   someone is completely sold and there's, like, oh, I don't deal in, like,   10, $20, or even 100 and 1,000, or I wanna move in big a big stack. And but they are not sure how to self custody or or is interested in this multiseg model. What's the best place to reach you with us with the with the Bitcoin sellers? Yep. Yeah. For sure. So, the Bitcoin advisor, there's a lots of advisers on there that specify,  

[01:07:23] Unknown:

you know, specialize in that inheritance planning and that,   collaborative custody model. But by all means as well, in looking glass education.com,   we've got a custody service on there as well. Reach out to us, and we can do a free assessment for anybody who's really needs needs to sit down.   Open to to anyone listening today. If you if you want a conversation in and around, just help me navigate through what's the best solution for me. I'm absolutely happy to spend the time with you and and help you,   help you come up with the best solution. And did you say a free assessment, or did you say an assessment? A free assessment? Yep. Yeah. We can definitely do that. Yep. Yep. So we'll just sit people down,   talk through what's important to them, what keeps them up at night, you know. And again, all of this, I we we tend to find that all of this is directly related to your level of exposure and your level and how hard you you know, how long you've been in the space, how much you understand. And, like,   everyone's different. Everyone's goals are different. Everyone's concerns are different. Everyone's family situation's different. So there's not any one size fits all, but it just helps if you've got somebody who can sit down and help you navigate through and   say, what is the best way for me to approach it given my my individual circumstances? So we're more than happy to spend the time with anybody to to navigate that.  



[01:08:34] Unknown:

Yep.   That's we've covered quite a bit. I think it might be a bit too much to delve into maybe mining and nodes and etcetera etcetera just for the first one. Do you wanna catch up again and, like, cover it off  

[01:08:48] Unknown:

at some point? Yeah. Yeah. Let's do it. Okay. Cool.  

[01:08:52] Unknown:

So, yeah, I mean, you did mention looking class education, Bitcoin advisor,   and for yourself, it just dash b best place to find you.  

[01:09:01] Unknown:

Yep. At does be, d I z b e a on Twitter. You can find me on Linkedin as well now. I just started a profile on there. So,   definitely, anybody who wants to, reach out and have a chat, more than more than happy to help. And and so part of that, I should should just reiterate, part of that service with Looking Glass is after that first initial consultation. If you need somebody to hold your hand while you   roll your own in terms of whatever that custody solution, we we have a paid for service that they can, tap into post that initial conversation if they need somebody just to oversee,   teach them best practices, and and and try and, find the best custody solution for them.  

Okay. Awesome.  

[01:09:39] Unknown:

Awesome. Thanks, Daz. I'll, yeah, I'll drop everything in the show notes, and, yeah, hopefully, people find this valuable, and then yeah.   And if at all they wanna reach out, like, yeah, they'll have all that information there. Perfect.   Thanks, Mark. Thanks, guys.  

[01:10:19] Unknown:

2, if you ain't ashen and you're stacking, we tryna cash flow to stats flow, that's how we average out the cost. We're calling that DCH and Btc,   convert off fiat,   havings and forevermore. Number 5. Protect your seat at all costs because evaluate your stats. You're rocking and jump on number 6. That god   Let's have a state keeping on your privacy,   but we're moving like gentlemen. Yeah, we're moving solidly. 10, hodling   in the system with low time preference and a little bit of wisdom.