Jan. 26, 2022
CD52: venezuela, latin america, and bitcoin with @elsultanbitcoin and @cryptonomista
EPISODE: 52
BLOCK: 720384
PRICE: 2710 sats per dollar
TOPICS: venezuela, latin america, hyperinflation, mining, p2p markets, stablecoins, el salvador, sanctions
@elsultanbitcoin: https://twitter.com/elsultanbitcoin
@cryptonomista: https://twitter.com/cryptonomista
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00:00 - Strike CEO Jack Mallers announces expansion into Argentina
00:25 - The impact of inflation in Argentina and the use case for Bitcoin
03:08 - Strike CEO Jack Mallers discusses global expansion plans
07:23 - Discussion on Venezuela, Latin America, and Bitcoin
21:44 - The misconception of sanctions on Venezuela and the oil industry
48:25 - The potential risks of dollarization and the role of Bitcoin
56:01 - Introduction to Bitcoin in Venezuela
56:59 - Migration to Bitcoin and government resistance
01:00:18 - Use of stablecoins in South America
01:06:47 - Concerns about reliance on stablecoins
01:19:48 - Government seizure of Bitcoin mining equipment
01:26:09 - Government-run mining pool
01:40:08 - Impact of sanctions on Venezuela
01:52:13 - The risk of losing global power and the need for cooperation
01:54:31 - The benefits of a permissionless system
01:55:40 - The adoption of Bitcoin in El Salvador
WEBVTT
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 8:20:06 PM
Duration: 8501.499
Channels: 1
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One company is continuing its push to bring the crypto to countries around the world. Joining us now is Strike CEO Jack Mallers. The company announcing its expansion into Argentina
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today.
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Jack, it's great to have you back. This is a big deal, but do you think the government will be as receptive as El Salvador's
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was?
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Yo, Kelly.
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Happy New Year. Let's change the world.
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No. I don't. Listen, Kelly, I'm not a government consultant.
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I'm here to change the world, push our species in a direction that I think will make the world a better place. And,
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the Salvadoran government aligned with the vision and thought Bitcoin was a useful tool, for their citizens.
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The Argentine government, that's not my job.
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I'm just
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impressed with my team, impressed with Bitcoin, and the tool set that we've been allowed for with what Satoshi created in making the world a better place. We're giving the people of Argentina
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a monetary asset, a monetary policy, a monetary network that they can rely on and make free instant cross border payments that subscribe to an asset in a store of wealth that is external of any government or central party intervention,
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that's really pained them over the last 100 years. And Argentina, obviously, has had such a tough time with inflation. I know when I visited there about a decade ago, they basically said just use your US dollars because, you know, that's a better way to do business around here. Don't even bother changing it into pesos and back. So I see the use case. In in El Salvador's case, it's not like you partner with the government to go in there. You launch the app, it got really successful and then they wanted to look into that. So I'm just gonna be curious to see if you're successful in Argentina, if you're met with sort of similar,
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sort of, should we say, tacit approval by the authorities there or if they would have any reason to say, you know what? We don't want our citizens doing business this way.
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Yeah. So, Kelly, here well, this is what I think is interesting is that you're exactly right. The inflation that has plagued Argentina, they now their unit of account is US dollars and demand for dollars is through the roof. In the parallel black market, a dollars worth,
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twice as much as it is as according to official rate. So they are looking to to store their wealth in something else. Many of them use Bitcoin, but even that is too volatile for them. However,
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their ability to make payments Kelly, this is a a cash economy.
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People buy houses with cash. They're not even allowed to use,
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payment networks that are denominated in dollars. The Visa network
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that operates on US dollars does not work in Argentina. It is banned. And so for Strike, what's really interesting for us is offering them a convenient cash collateral. They like their daily spending cash collateral to be in dollars,
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but interfacing that cash collateral over the Bitcoin and Lightning Network, making it seamless to make instant free cross border payments. And so to the individual, if you wanna hold as much Bitcoin or as little Bitcoin as you want, that is up to you. What we allow you to do is hold a dollar like cash collateral,
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but then use the Bitcoin network under the hood to escrow the value to make for digital seamless payments and excuse them of this really monstrous
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cash based economy. They're telling me I have about 2 minutes, Jack, and I have about 10 minutes worth of questions. So let me just try to get through this quickly. Is Venezuela next
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for you?
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Everywhere is next for us. The the novel thing about Bitcoin
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is it takes the property that makes Internet companies valuable and important is that they have a target audience of about 8,000,000,000 people. It is an open global singular network. The good thing about strike is that we get to sell them money, not advertising. We're delivering one of the most viral products in human history, and that's money. It's akin to, like, water to live a high quality of life. And so the combination of that, we get to try and sell money to all 8,000,000,000 people, a better financial and superior financial experience. So I'm on a mission to deliver this to everyone that has a pulse on this planet.
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Happy Bitcoin Tuesday, freaks. It's your boy, Matt Odell, here for Citadel dispatch
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52.
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Citadel dispatch is an interactive live show about Bitcoin distributed systems privacy and open source software.
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As I went over last week,
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dispatch is no longer available on the TFTC
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podcast feed.
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So if you enjoy podcasts,
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go search Citadel Dispatch in your favorite podcast feed and subscribe there instead.
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Also, we have moved our live chat over to Matrix, a distributed
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open source
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protocol that allows messaging,
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to be done in an encrypted way,
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from self hosted servers around the world that are federated.
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That might sound complicated,
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but, it's a lot easier to use than you might expect. If you go to citadel.chat,
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you can join that live chat.
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That is not exclusive to Bitcoin Tuesdays. We have over 500 Bitcoiners in there now that are just constantly talking about
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very important topics,
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that affect all Bitcoiners and different tips and tricks. It's a very cool little community we're building over there, so come join us.
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My favorite matrix client there's a bunch of different matrix clients you can use,
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to chat in the room.
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My favorite one is Element. You can go to
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element.io
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to download it on your computer or your or your phone.
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Huge shout out
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to the freaks that are joining us in the live chat. We do appreciate you.
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You guys make this show unique.
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And a really big shout out to all of our supporters,
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that keep dispatch a 100% audience funded
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I if if you wanna support the show,
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it is all being done through Bitcoin.
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So there are 2 ways you can do it. You can do it through podcasting 2.0 apps.
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My favorite are Fountain Podcasts and Breeze Wallet.
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They operate as traditional podcasting apps,
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where you load SATs up though. You put some SATs on it, you search SITL dispatch, and then as you're listening, you can stream SATs directly to my node.
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The other way is through BTC payserver,
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which you can access at silodispatch.com.
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You can send funds on chain or lightning that way.
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I also have a pay name,
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with support for samurai or Sparrow Wallet. My pay name is Odell. It's very easy to remember.
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So to all the freaks out there that continue to support the show, I really do appreciate you.
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I really do not wanna adhaz or sponsors.
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I think that
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keeping this completely a 100% audience funded
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is
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quite an undertaking, but it is rewarding long term,
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and I really do appreciate all of you that continuously support the show, so thank you.
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With all that said, we have a very fun, interesting topic today that I'm really looking forward to with some great guests. This is serial dispatch 52.
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The focus is Venezuela, Latin America, and Bitcoin.
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Our first guest is Sultan Bitcoin. How's it going, Sultan?
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Yo. How are you all doing?
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Stoked for having me here.
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Cheers. Thank you for joining us. And our second guest is Mauricio.
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How's it going, Mauricio?
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Did we lose him?
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We cannot hear you. Sorry. Sorry. I'm back. I'm back. Unfortunately, I had to press the mute button. Sorry, guys.
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Very very happy to be here and always happy to chat Venezuela and Bitcoin.
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Awesome. Awesome.
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So, I mean, I don't have
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Sultan reached out to me,
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asked if I was interested in this topic. I am very interested in this topic. I very much feel
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like Latin America
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this has been this has been the year of Latin America
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entering the Bitcoin scene in a big way,
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and I think a lot of people are underestimating,
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what the significance of that can be.
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But overall, I mean, you guys are both,
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Venezuelans.
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I am not,
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this is not necessarily my area of expertise.
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So I'm gonna be leaning on you guys to kind of lead this discussion.
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So with all that said, I mean, where do you wanna start? Where do you think is the best place to start here?
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There there's so many places,
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that that we could take this. But I think,
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maybe to to set the to set the stage for for, I guess, broadly, what are the situation that a lot of Latin America finds itself in, Maybe we could speak about the the sort of history of Latin America that has had with inflation.
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And I could speak to, I know Venezuela's kinda history with inflation quite well. I'm not, you know, I know of the,
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the other inflation problems that the other countries have had, but I wouldn't consider myself an expert. But I I'd be happy to kinda,
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you know, set the stage for what kinda led to hyperinflation in Venezuela and and and kind of how that kinda
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not corner, but ushered people
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into into Bitcoin out of necessity. I don't know if you agree with that, Ale.
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No. Com completely, man. Just, let's take it from there.
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Sure. So
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maybe maybe to start, you know,
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I guess, Venezuela,
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you know, it's maybe I'll try to kinda start from the beginning, but Venezuela has always been a very resource rich country.
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And for very like, known by most people because we were great producers of oil. We had massive, you know, massive oil production capacity. We still have the largest oil reserves in the planet,
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but still, it is one of the most impoverished countries in the world. So a lot of people wonder
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how that how that happened. You know? How how do we go from
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still the country with the most sort of,
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you
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know, potential resources in terms of energy? How how is everybody starving and people,
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you know, not have enough money to to eat?
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And and the answer is complicated.
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Then it's it's not as it's not really a simple answer.
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But, you know,
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I think one of the things that stood out to me as as I was growing up, and and this is a problem,
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not just for Venezuela, but for for many economies that are resource rich,
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is that once you have,
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once you have a way of of, you know, fabricating money, whether it is by sort of yanking it out of the ground
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or printing it. Like Venezuela was able to to get away with murder for a lot of years because they didn't really have to manage a a a type book in terms of, like, the money they spent and the and the and the money they they they collected in taxes because they always had this
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massive kind of oil subsidy that they could just be yanked out of the ground. But they got really,
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you know, the the the problem with oil is that also,
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because the country relies on oil so much and the economy relies on oil so much, whenever oil prices
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rally or crash,
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that led into
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political turmoil as well. Because every time oil prices dropped, you know, the economy suffered and we got into this, you know, everybody started pointing fingers.
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And,
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you know, that makes it very difficult to run the country, but I think what really tripped things over the edge in Venezuela
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was obviously the the political event that occurred, which was when, you know, the the sort of communist party,
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took over at first democratically,
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but slowly over time, it started dismantling
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the democratic institutions,
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which turned into sort of a fallout dictatorship,
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and and that's what kinda led to the the the the the first round of people trying to look for the door and and and causing that first bout of hyperinflation.
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Ale, I'll I'll pause.
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No. Yeah. I guess it's just a very interesting way to start the conversation here. And related to what Mauricio was saying, like,
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you know, it's it's mostly related to what economists now call the natural resource score. CERS. Right? So,
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there's this famous, you know, famous words from from a Venezuela in
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1976.
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His name is was Juan Pablo Perez Alfonso.
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Basically, this was the Venezuelan diplomat
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that in in the seventies going all the way into the eighties,
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he he was the pioneer at structuring the OPEC,
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the the OPEC cartel, right, and the organization of petroleum exporting countries.
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And and in in 1976,
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he said that 10 years from now, 20 years from now,
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Venezuelans would has would start seeing that oil would bring us ruins. Right? And and he called it the devil's excrement.
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So I guess it's it's,
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it's
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funny because every single time it's as Venezuela has started approaching, you know, but but the
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nowadays,
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what what we basically experienced
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as Venezuelans was just the government trying to find
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other ways of financing
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itself.
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And that's how gradually
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the government started, you know, breaking breaking down the rule of law that was created during the the thirties, the forties, and fifties, and sixties
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that basically created what what what was at its time the most stable banking system of
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of all of Latin America. Right? So, eventually,
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to to Mauricio's point, right,
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when whenever that started happening,
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you
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saw how the the tissues of the system started tearing apart. And so the democratization of Venezuela started becoming the socialization.
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Right? And so Venezuela diving into socialism
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and eventually dictatorship.
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To to the point,
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it it in in to today. Right, you you need the the after government started financing itself using using its
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the the Venezuelan banking system and using the savings of of people in 1983,
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Venezuelan experience what we call our own Black Friday event.
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So,
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essentially, you know, after a huge shortage shortage of cash,
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again, related to the volatility or volume of prices and and and the international oil market,
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this this,
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Luzera campaigns, the Venezuelan president in the eighties,
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he basically
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devalued
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by over 50% overnight
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all of the Venezuelan savings,
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by essentially forcing, right, and putting in place,
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country current currency exchange rates in the country. So since the eighties,
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we started we started
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truly seeing
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our our our currency, the Venezuelan
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Bolivar,
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depreciating
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against
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the dollar
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because of this shortage of cash and and this and and that was basically the initial stages of
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just, you know, just to quickly summarize it,
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bad monetary policies and administrative policies
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coming from different Venezuelan regimes
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since then.
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So this is interesting.
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I never really,
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thought about it from the resource rich angle. So, like, the way you guys
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are describing it here, would you say it's, like, kind of similar to,
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like, what we see happen to, like, lottery winners
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or professional athletes that just they, like, get a lot of money and they just don't know how to spend it, so they just end up broke at the end of the day.
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Or ICO companies, I would add as well.
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So it it it's it's a similar kind of culture or or because it it creates this this sense of there is no need to be accountable. Right? Like, there's always more where that came from kind of thing. And, and it just doesn't, you don't have an incentive to run a tight ship.
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And so that that sets
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kind of a bad culture to to start with. But I think one thing that I've
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you know one of the lessons that I've learned over the years is that
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people tend to think of inflation and hyperinflation
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as, like, an extension of the same thing. And I actually think they're both caused by very, very different reasons.
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So what I mean by that is
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inflation
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is typically an economic phenomenon. Meaning,
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what's happening in the US right now is that the government printed, you you know, 40% of extra dollars and prices of things have rocketed by more than 40%, and that's
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inflation. That is very much,
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you know, related to the extra money that was printed. Right? And so what you see in the prices is simply a reflection
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of the new size of the money supply. Right? That's just your basic inflation. That's just a math like, just a a rational reaction
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to an increase in money supply.
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Hyperinflation
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is actually an a complete loss of faith in the system.
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Right? It's not necessarily you reacting to an extra 10 or 20% of money that got printed by pricing your assets by an additional 30 to 40%, right, or 20%. That's just proportional.
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Hyperinflation
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happens
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when you've lost complete faith
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in that the value of the currency that you're using,
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is is gonna hold any any of its value. So you basically proactively
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start getting rid of any exposure
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you have
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to that currency
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actively, like, in a matter of time. And and and the other thing, just to put it in Bitcoin terms,
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the higher the inflation,
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the higher your time preference.
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You cannot have low time preference or it's incredibly
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difficult to have a low time preference in a high inflation environment because you you're you're trained to spend it as soon as you get it. And you're trained to think in increasingly shorter and shorter time frames because there is no ability to project anything 5, 6 months out because inflation makes that impossible.
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And so it just throws society
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into this
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shorter and shorter cycles of things and and and more and more uncertainty,
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and it gets you to the point where you you lose faith in holding the currency, you lose faith in investing in that market locally, you lose faith in your property assurances in that market. So it's basically,
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hyperinflation
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really hits when a large majority of the economic participants in that country
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see that
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state or that political project
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as a failed project.
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And so while I think countries like Venezuela,
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Turkey,
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you know,
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Sudan, others that are sort of
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their entire democratic institutions are just completely out of whack, that's when you see hyperinflation.
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I find it personally
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very difficult
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to think that we're gonna have anything close to hyperinflation
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in a place like Canada or the US
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anytime soon, and that's because
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it's really only because the the fiat system is just a a set of dominoes
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and the base domino is the US. So before the US goes into hyperinflation,
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we're gonna have to see hyperinflation in a world of other currencies,
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like the bolivar, like the peso, because these currencies are gonna get,
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sold off much before the dollar does. Well, like, what happens, right, is is so, like, if if Venezuela's experienced hyperinflation
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or Argentina's experienced hyperinflation,
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people tend to escape to other fiat currencies first. Right? So they they look for those stronger ones,
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and, typically, that'll be the US dollar to a lesser extent, maybe the Canadian dollar. Right?
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Completely only the US dollar. So, like, euros only really will enter the picture in there if there is a full out sanction of dollars, like what happened in Venezuela. But broadly speaking,
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when co when currencies fail,
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the the the in the the participants
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inside that society rush to the dollar. It's just it's what they know. It's what they are it's what they pay their invoices in. It's what they do all international trade with. And so,
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an economy, like, for example, Venezuela
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today is a fully dollarized economy.
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The only people that use boriodas in Venezuela are the people that absolutely have to because they have no choice or they do not know any better. So, you know, and this has been the case in in many places in Latin America. So for example,
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Panama is a dollarized society, 1 to 1 peg. Ecuador,
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dollarized society, 1 to 1 peg. In Peru, you can legally use a dollar, 1 to 1 peg. El Salvador is a great example of a country that lost its seniorish and used 1 to 1 dollar. So we are
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there is already so many presidents of Latin American,
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currencies that have failed, and then the dollar has been adopted by proxy. And that is just,
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in my view, that is sort of, a a a sort of currency subordination,
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in a sort of a global,
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scale
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because the that particular country was unable
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to maintain demand for their own local currency. That they're just they couldn't instill enough trust in their own country to hold their own currency.
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Right. I mean, that makes sense to me.
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But then you also see there's another dynamic at play, right, where
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these these governments,
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when when their backup back is up against the wall and they see people leaving
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their currency,
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they tend to try and close the exits. Right? Like, in Argentina
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Mhmm. Right now, it's very hard to use
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dollars in the traditional financial system. Like, there's a
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there's massive usage of my understanding is there's massive usage of dollars in in form of cash.
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But in terms of actually trying to move it through banks and whatnot, that is being blocked actively by the government.
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Do you are you are you seeing that same thing in Venezuela, or are they just allowing people to
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to use to use dollars in in
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traditional financial ways? And, like, how does Bitcoin enter that equation? Right? Because I feel like it's harder to block the Bitcoin exits
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than it is to block
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the USD ones.
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Right. So I think that it could expand on that one, and and it's pretty much related in a in a in a huge way to what Mauricio was saying about, you know, the the system at some point completely
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fallen down the cliff,
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after coming from inflation rampant inflation to high inflation all the way down to hyperinflation once you fall down the cliff.
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So, let me give you the boots boots on the ground experience of 2017 pre pre
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like, a couple of months before
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hyperinflation
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started to kick in in in the Venezuelan economy. So,
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it it is amazing how at some point after, you know, you're not able any longer to,
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you know, like,
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close some contracts with our agreements with anyone because after a month or potentially weeks,
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the the currency that's,
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that's part of you know, the underlying currency that's part of that agreement
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lost 20 to 30% of its value. Right? So,
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which makes
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the jurisdictional system
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in the case of in in this case, the Venezuelan jurisdictional system, which had completely
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banned,
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right, the usage of other fiat currencies,
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it it it loses
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people lose trust in it because it stops
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functioning. It doesn't
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function efficiently, and people just can't rely any longer on that on the, on that jurisdictional system. So so,
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basically, what started happening is
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after the government started financing itself
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by,
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you know,
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fixing
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forex rates and the forex market in Venezuela.
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That started trickling down to the banking system and the banks
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that were basically assigned
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with the power
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to assign dollars to businesses
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and tourists.
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So essentially, Venezuelans traveling abroad the country with this preferential
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exchange rate for the US dollar to Bolivar rate. Right? So it
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started at a governmental level. It grinds down to a banking system level, public banks, private banks, then it trickles down to businesses. And then at some
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point, the people on the ground, right, on the streets, they start noticing. The people that live in the informal
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economy,
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right, that didn't own a bank account or whatever, they start noticing and they and they say, okay. I can no longer rely on this form of cash.
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What else can I do? And so in 2017, you started seeing this
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very interest interesting trend in Venezuela,
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whereby,
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informal
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merchants,
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right, and informal businesses
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were basically forced because of the velocity
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of of of, you know, of of of of of money
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and inflation and how rapid it starts increasing.
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They were forced to open up bank accounts so that they were essentially able
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to,
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you know,
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open up more ways for receiving and and commercializing
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their their their merch. Because, essentially, it was
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it was almost impossible,
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you know, to just, like,
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receive cash
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in the morning, and then by the afternoon or next day, go to the supermarket and you had already lost,
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you you know,
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the value of your, of your savings
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would have already depreciated so much that you were not able,
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you you were no no longer able to buy the same amount of goods. Right? So it's just a it's just a matter of speed to Mauricio's point. Speed in the economy starts increasing, and you just try to become this person that is,
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that you're essentially trying to look for more ways to,
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intake money and then get rid of it faster.
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So in 2017,
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I remember when at some point,
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you were still able to, you know, transact and live and believe it is in the country.
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If you had dollars and you exchange your dollars or Bitcoin, right, to your point, Matt, you were essentially financing
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a lifestyle
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for a couple of 100 of dollars a month,
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which you couldn't finance yourself with
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1,000 or tens of 1,000 of dollars
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abroad.
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Right? So outside of Venezuela.
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So
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when that started happening and people on the ground started noticing,
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you you saw
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I remember telling my girlfriend that I was so worried because $1 was already worth 3 believers in the country. And then after a couple of months, it was already, you know, like, worth a 100 a 100 believers, 200 believers, 300 believers, and then hyperinflation started coming in. Then
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the problem here is
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when hyperinflation started coming in,
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the Venezuelan
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government had banned,
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you know, had banned the usage of of dollars,
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whatever, euros, whatever.
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People started,
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you know,
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essentially reverting to their family members that had already left the country, and they would try to send them money back into the country via this,
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you know, in,
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informal money transmitters
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that would essentially assist these people that and businesses mainly that would that wanted to get rid of the currency
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and receive essentially dollars in a US bank account abroad
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or people that would travel into other country, family members that would come into the country to visit their family would essentially bring cash,
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piles of cash, as as much as they could,
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just to bring it to to their families. Then the thing is that in 2017,
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the other important thing to mention that happened is that the US sanctioned the Venezuelan regime.
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So,
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the Venezuelan government started plugging right? Started
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as as they try to come up with ways
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to continue moving the economy
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and and treat this hyperinflation
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anomaly, which was,
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you know, in part also because
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of not being able to access
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dollars within the international
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you know, the global banking system nor the euro because they were banned by the EU as well.
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They just they were forced
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to
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hit the money printer harder.
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Right? And so
404
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what what they started doing after that was essentially
405
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plug cash
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into the Venezuelan economy
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to the point in which right now 90% of all transactions
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done to merchants
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in Venezuela
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is is done is is dollars, dude, honestly. Like, if you go to a favela
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or, you know, like a small town in Venezuela right now, and you wanna buy, you know,
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a glass of of juice
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from a teenager that is selling used to make, selling juice on the streets just to make a living,
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He or he doesn't want bond of ours anymore. It's all being priced in dollars.
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It's
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so, you know, as the And that's all That's mostly cash based or they're using Exactly. That's mostly that's mostly cash based. And then you also have, you know, certain people,
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do commerce over, you know, like PayPal accounts or or Zelle or or Zelle payments. So, like, payments within the the US banking system. So it's it's at a local level that the exchange is happening, but it's at a at an international level that the,
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transfer value is happening. So it's it's essentially not happening
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within the Venezuelan banking system any longer.
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Now if you look at the reports of certain firms that, you know, they they have, like, their own,
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statistical analysis and and models, and they're backed by the IMF to come up with, you know, like, real data for the Venezuelan economy.
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1.9%
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of all payments being done to
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major merchants in this right now
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is being done with cryptocurrencies.
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If you look at the IMF standards,
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based on their standards,
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anything above the 1%
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threshold is considered as relevant.
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So it is huge it is at a huge level, very relevant, the amount
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of payments that are being done,
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with cryptocurrencies within the Venezuelan economy.
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And that just,
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you know and if if we take 2 steps back
435
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between
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2017 and today,
437
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what we saw happening,
438
00:31:40.475 --> 00:31:49.535
Marisha and I and I started and I started seeing this when I went to college. My friends started doing this. I started doing this. Essentially, we just found a better way
439
00:31:50.009 --> 00:31:57.629
to beat a, like, a faster, more efficient way to beat the, you know, the the the old informal
440
00:31:58.009 --> 00:31:59.049
money transmit
441
00:31:59.735 --> 00:32:00.475
money transmitters
442
00:32:01.015 --> 00:32:05.035
that were, you know, just receiving Volibars and making payments,
443
00:32:06.055 --> 00:32:11.669
within within US bank accounts or Panamanian accounts or whatever outside of the country. We just found
444
00:32:12.129 --> 00:32:12.629
LocalBitcoins,
445
00:32:13.570 --> 00:32:14.470
Store Bitcoin.
446
00:32:15.035 --> 00:32:23.615
Now we have, you know, Binance speed up here. Paxful used to work in the country at its time. But we were just able to beat them at their own game
447
00:32:24.070 --> 00:32:28.410
by using Bitcoin as the underlying currency to essentially
448
00:32:29.030 --> 00:32:30.250
exchange bolivars
449
00:32:31.005 --> 00:32:31.745
for dollars
450
00:32:32.285 --> 00:32:33.345
outside of Venezuela.
451
00:32:33.805 --> 00:32:45.110
And that will bring us to the point where Mauricio will start explaining us his whole story of how his brother started mining Bitcoin in Minnesota. And then when Mauricio traveled back to Venezuela from Canada,
452
00:32:45.570 --> 00:32:51.524
he was mind blown by his brother showing him how in under an hour,
453
00:32:51.825 --> 00:32:56.004
he was able to get him all of ours into his bank account
454
00:32:56.350 --> 00:32:57.330
from his computer
455
00:32:57.950 --> 00:33:03.730
without resorting back to, you know, any this of this, what we call, informal money transmitters.
456
00:33:07.685 --> 00:33:11.945
Yeah. That that, you know, that that's a good point, Alessandro. And I and I think I
457
00:33:12.640 --> 00:33:16.500
I wanted to extend a little bit on what what Matt said earlier, which was,
458
00:33:17.680 --> 00:33:18.180
governments
459
00:33:18.560 --> 00:33:20.880
make it hard for you to protect your savings,
460
00:33:21.835 --> 00:33:25.135
once inflation starts hitting. And and I just wanted to give
461
00:33:25.675 --> 00:33:34.330
maybe, like, a quick like, a story or or not a story, but essentially kind of paint a picture as as I see it and as as in my view, what kinda went down in Venezuela.
462
00:33:35.190 --> 00:33:35.690
So,
463
00:33:36.470 --> 00:33:41.185
typically, what happens is most governments look at their local currency exchange rate
464
00:33:41.725 --> 00:33:44.225
against the US dollar as essentially,
465
00:33:45.245 --> 00:33:45.985
a barometer
466
00:33:46.445 --> 00:33:47.425
of how well
467
00:33:47.750 --> 00:33:50.010
the investment community or their own citizens
468
00:33:50.550 --> 00:33:51.050
perceive
469
00:33:51.910 --> 00:33:54.330
their country. And what I mean by that is
470
00:33:55.225 --> 00:34:02.765
if your government is doing a a great job and people want to invest in your project and they think you're going in a right direction,
471
00:34:03.390 --> 00:34:10.369
you don't really have an incentive to sell your local cash into dollars. If anything, you have an incentive to bring your dollars from overseas
472
00:34:10.670 --> 00:34:12.130
and invest them in the country.
473
00:34:12.444 --> 00:34:39.755
And when you do that, you're effectively buying local currency with dollars. And what that does is that that elevates the price of your local currency relative to dollars. So if your if your government plan is great and your and your constituents are all aligned, what you should see is you should see a stable currency that in fact could even become stronger or remain at a level, you know, of ground relative to the dollar. K?
474
00:34:40.610 --> 00:34:51.645
If you're if you come out with a wild plan, like what happened in Venezuela, where Travis's plan was literally to give free things to everybody for free, everything for free for everybody.
475
00:34:52.265 --> 00:35:00.650
The investment community, understanding that money doesn't grow on trees, was absolutely freaked out, and they said, I will not be caught dead financing
476
00:35:01.349 --> 00:35:11.665
you know, giving everyone free everything with my money because that's the only way they're gonna get the assets to give people free things is they're going to print more and they're going to debase
477
00:35:11.970 --> 00:35:18.869
my savings. So I'm going to take my savings away from this currency and I will not be exposed to that ridiculous
478
00:35:19.170 --> 00:35:21.975
plan of government that will surely fail. K?
479
00:35:22.515 --> 00:35:28.935
What the government does is they say, no, mister investor, you are wrong. Our plan to give free things to everybody
480
00:35:29.520 --> 00:35:33.380
will work, and you just haven't we you know, you just haven't seen this done right.
481
00:35:33.920 --> 00:35:44.145
And what they say and eventually, they they come at odds. Right? And investors continue to sell off their local currency to buy dollars, to get the money out, and what this does is that it starts
482
00:35:44.470 --> 00:35:46.569
ramping up the rate of exchange,
483
00:35:46.950 --> 00:35:49.770
and and the government starts looking really poorly
484
00:35:50.230 --> 00:35:51.210
because now
485
00:35:51.589 --> 00:35:53.609
the the person an average person
486
00:35:54.045 --> 00:35:59.105
needs more of the local currency to buy the same good. So the government wants to prevent,
487
00:35:59.964 --> 00:36:02.704
you know, they do not wanna look bad. So
488
00:36:03.319 --> 00:36:06.299
instead of fixing the problem at the core,
489
00:36:07.079 --> 00:36:09.579
what they do is they try to fix
490
00:36:09.960 --> 00:36:10.780
the price
491
00:36:11.085 --> 00:36:21.350
of certain things. And they they at first, they try to fix the price of a particular asset or a good, and later they go on to fix the price of the exchange rate of the actual dollar.
492
00:36:22.450 --> 00:36:22.950
So
493
00:36:23.410 --> 00:36:34.850
what I what I wanted to say is is to your point, Matt, they will as they see that people do not agree with the government plan and they start selling off their local currency for dollars, things that they do believe in,
494
00:36:35.330 --> 00:36:40.630
the government starts saying, you cannot do that. That is not allowed. They they don't say,
495
00:36:40.930 --> 00:36:51.455
you know, we're we're doing something wrong. Let's fix this so you don't wanna take your money out. They say, you are not allowed to take your money out. And what what that has created over the years in many Latin American,
496
00:36:52.600 --> 00:36:53.100
societies
497
00:36:53.400 --> 00:36:54.460
is this idea
498
00:36:55.000 --> 00:36:57.340
that because our governments have been so volatile
499
00:36:57.880 --> 00:36:58.620
over time,
500
00:36:59.080 --> 00:37:01.420
most wealthy people in Latin America,
501
00:37:02.025 --> 00:37:08.365
once they make a little bit of wealth, the first thing they do is they send it out of their local banking system, out of their local currency.
502
00:37:08.665 --> 00:37:09.325
And so
503
00:37:10.029 --> 00:37:16.529
Bitcoin is not really that different in the sense that it is just one more exit door and to your point,
504
00:37:16.990 --> 00:37:18.369
when things go tough,
505
00:37:19.225 --> 00:37:30.390
they will try to ban Bitcoin, and they will try to ban Bitcoin because it's working. And that is exactly what I think is happening in Russia right now, in Turkey, in China, and any other place that wants to ban Bitcoin.
506
00:37:30.770 --> 00:37:35.430
And what that tells me is that it's actually doing precisely what it's designed to do for its citizens.
507
00:37:47.380 --> 00:37:49.400
Hey, guys. No. Sorry if I lost you. Sorry.
508
00:37:49.940 --> 00:37:53.000
Hey. No. We're here. I don't know if Matt's still here though.
509
00:37:54.244 --> 00:37:57.765
No. No. That's fine. I I I yeah. To me, it's it's,
510
00:37:59.045 --> 00:38:01.865
it's really just that the government tried to to to
511
00:38:02.510 --> 00:38:07.170
never they just wanna keep their optics at all cost, and it's all a big theater,
512
00:38:07.950 --> 00:38:10.050
which is which is unfortunate. But
513
00:38:10.725 --> 00:38:12.425
but, yeah, they can't really do much.
514
00:38:12.965 --> 00:38:15.545
Once people discover Bitcoin and once people
515
00:38:16.085 --> 00:38:20.670
realize that they do not wanna hold that asset, they will do whatever it takes to get rid of it.
516
00:38:21.609 --> 00:38:29.475
I I think Mbak is back. And as, and as Matt gets back, I I love, you know, reading here, you know, blog. We're a blog 700,020,000,
517
00:38:32.895 --> 00:38:34.115
whatever. And then
518
00:38:34.520 --> 00:38:35.340
it says
519
00:38:36.040 --> 00:38:36.540
2,710
520
00:38:37.400 --> 00:38:38.460
sats per dollar,
521
00:38:38.920 --> 00:38:49.724
but one sat is already worth more than 1 ball of it right now. Right? Like like, if you take into account the 14 zeros that the Venezuelan government
522
00:38:50.505 --> 00:38:53.005
took off the the bolivar,
523
00:38:53.500 --> 00:38:55.760
Right now, you need approximately, like,
524
00:38:56.620 --> 00:38:57.120
480,000,000,000,000
525
00:38:57.980 --> 00:39:00.080
bolivars just to buy a dollar
526
00:39:00.380 --> 00:39:01.280
in the country.
527
00:39:01.885 --> 00:39:02.385
So,
528
00:39:03.245 --> 00:39:06.705
you you know, Fiat Fiat Fiat is an illusion of the power.
529
00:39:08.285 --> 00:39:10.465
Go ahead, Matt. I think we lost you.
530
00:39:10.829 --> 00:39:11.650
Yeah. I'm back.
531
00:39:12.349 --> 00:39:13.569
Sorry about that.
532
00:39:14.829 --> 00:39:23.065
I had a little bit of an Internet issue here. Seems to be resolved. I was afraid it was gonna kill the whole stream, so I'm glad that we are still live, it appears.
533
00:39:25.940 --> 00:39:32.280
So where are we in this conversation? Don't let me don't let me hold you guys back. I know one of the big things that I wanted
534
00:39:33.140 --> 00:39:33.950
to touch on,
535
00:39:35.474 --> 00:39:37.255
just to go back a tiny bit,
536
00:39:37.714 --> 00:39:40.775
is, you know, there was some conversation there about,
537
00:39:42.195 --> 00:39:44.695
Venezuelans using the traditional financial
538
00:39:45.460 --> 00:39:49.400
to to move dollars around, whether that's Zelle or some other kind of
539
00:39:49.940 --> 00:39:51.080
finance app.
540
00:39:52.900 --> 00:39:53.880
You know, Venezuela
541
00:39:55.525 --> 00:39:57.464
has a little bit of a unique twist
542
00:39:57.765 --> 00:39:59.865
on other Latin American
543
00:40:00.244 --> 00:40:00.744
hyperinflation
544
00:40:01.125 --> 00:40:03.704
stories in that it's also a sanctioned country.
545
00:40:04.330 --> 00:40:08.430
How do, like how does, like, the whole like, how are people able to use
546
00:40:10.090 --> 00:40:11.710
apps like Zelle if
547
00:40:12.015 --> 00:40:13.795
if the country's under sanctions?
548
00:40:14.974 --> 00:40:16.835
So this is a very interesting,
549
00:40:17.454 --> 00:40:17.954
nuance
550
00:40:18.335 --> 00:40:20.115
about Venezuela that many
551
00:40:20.599 --> 00:40:22.780
people don't know. And I think this nuance,
552
00:40:23.960 --> 00:40:24.460
illustrates
553
00:40:25.319 --> 00:40:27.420
a couple of things quite well. It illustrates
554
00:40:28.235 --> 00:40:31.695
how well the Venezuelan government is able to spin propaganda
555
00:40:32.235 --> 00:40:35.055
to make people believe things that aren't actually true.
556
00:40:36.730 --> 00:40:39.790
And the other piece that I think it it this illuminates
557
00:40:40.090 --> 00:40:40.590
is
558
00:40:41.130 --> 00:40:41.950
how strategic,
559
00:40:42.730 --> 00:40:44.670
the flip side of that is how strategic,
560
00:40:45.515 --> 00:40:47.135
the US government can be,
561
00:40:47.595 --> 00:40:51.055
on certain things. So let me let me kind of explain.
562
00:40:51.595 --> 00:40:52.095
Venezuela
563
00:40:52.395 --> 00:40:53.775
is not a sanctioned
564
00:40:54.075 --> 00:40:54.575
country.
565
00:40:55.740 --> 00:40:57.200
Venezuela there are
566
00:40:57.660 --> 00:40:58.640
several Venezuelan
567
00:40:59.020 --> 00:40:59.520
entities
568
00:40:59.820 --> 00:41:00.720
that are sanctioned.
569
00:41:01.500 --> 00:41:03.520
So the country itself
570
00:41:03.975 --> 00:41:05.035
is not sanctioned.
571
00:41:05.495 --> 00:41:07.195
The people who are sanctioned
572
00:41:07.735 --> 00:41:09.675
are rogue government officials
573
00:41:10.215 --> 00:41:12.075
and the state oil company.
574
00:41:13.180 --> 00:41:13.680
And
575
00:41:14.060 --> 00:41:14.560
interestingly,
576
00:41:16.540 --> 00:41:19.520
the United States over the last 3 years continues
577
00:41:19.900 --> 00:41:22.965
to be the biggest buyer of Venezuelan oil.
578
00:41:24.645 --> 00:41:26.025
And so the
579
00:41:26.885 --> 00:41:27.945
the sanction
580
00:41:28.485 --> 00:41:32.070
narrative is really an, a a a a fabrication
581
00:41:32.849 --> 00:41:34.390
of the Venezuelan regime,
582
00:41:35.330 --> 00:41:36.150
to essentially
583
00:41:36.849 --> 00:41:38.790
paint the US as a boogeyman
584
00:41:39.385 --> 00:41:40.125
that prevents
585
00:41:40.745 --> 00:41:42.685
better people from thriving,
586
00:41:43.225 --> 00:41:44.125
but is actually
587
00:41:44.665 --> 00:41:45.705
very, very,
588
00:41:46.105 --> 00:41:46.605
misunderstood
589
00:41:47.305 --> 00:41:48.445
in the sense that
590
00:41:48.820 --> 00:41:54.280
the United States does not fully sanction the country. McDonald's is still there. Coca Cola is still there.
591
00:41:54.820 --> 00:41:57.640
You know, Procter and Gamble, Oreo is still there.
592
00:41:58.235 --> 00:41:59.135
It's really
593
00:41:59.755 --> 00:42:00.335
a a facade.
594
00:42:01.035 --> 00:42:05.215
Gotcha. Gotcha. So what's what's the deal with the the oil purchases?
595
00:42:05.920 --> 00:42:10.740
Like, can we unpack that? I don't even know if it's that relevant to this conversation, but I'm curious.
596
00:42:11.839 --> 00:42:15.665
So I'll I'll caveat this when I'm I'm not necessarily, like, an oil
597
00:42:16.145 --> 00:42:16.645
expert.
598
00:42:16.945 --> 00:42:18.865
What I will say is that,
599
00:42:19.665 --> 00:42:20.165
Venezuela
600
00:42:20.545 --> 00:42:22.565
is is is a unique oil producer
601
00:42:24.050 --> 00:42:25.190
for a few reasons.
602
00:42:25.890 --> 00:42:26.390
1,
603
00:42:26.770 --> 00:42:27.270
so
604
00:42:27.650 --> 00:42:35.675
before this whole mess with Chavez started, there there's actually a a pretty tight link between the US and Venezuela, and and it's broadly
605
00:42:35.975 --> 00:42:37.675
because of a company called Citgo,
606
00:42:38.055 --> 00:42:42.315
c I t g o. And you probably have seen the Citgo gas stations throughout the US.
607
00:42:42.970 --> 00:42:50.349
Citgo is actually a Venezuelan company, and Citgo used to be a joint venture between the Venezuelan state company and some US,
608
00:42:50.650 --> 00:42:51.470
oil companies.
609
00:42:52.035 --> 00:42:52.535
Now,
610
00:42:53.155 --> 00:42:57.255
because of that, the the other interesting point there is that Venezuela doesn't have refineries,
611
00:42:57.714 --> 00:43:00.535
so Venezuela actually cannot process its own gasoline.
612
00:43:00.870 --> 00:43:01.770
So it's dependent
613
00:43:02.470 --> 00:43:03.930
on exporting its oil
614
00:43:04.310 --> 00:43:04.810
to,
615
00:43:06.310 --> 00:43:16.995
yeah, so so I see the comment here, Citgo is Venezuelan oil, if you see one we have their oil. So, yes, he he Narwhal is, like, Narwhal is exactly right. Sidgo is Venezuelan oil. And there was at one point,
616
00:43:17.910 --> 00:43:23.130
a a a Sidco ad that had pictures of Chavez and other politicians back when he was in Vogue,
617
00:43:23.589 --> 00:43:25.885
which actually made me wanna throw up when I saw it,
618
00:43:26.445 --> 00:43:29.485
but, but that that did happen. And so that is,
619
00:43:29.885 --> 00:43:32.625
largely, I believe, why the link is still there.
620
00:43:33.245 --> 00:43:36.410
I think in in many places in politics, you will see,
621
00:43:37.830 --> 00:43:41.770
groups or entities that's that that that seem to have a a
622
00:43:42.550 --> 00:43:45.210
public sort of narrative of not being friendly,
623
00:43:45.565 --> 00:43:49.265
but in the background, they're actually, you know, never stop doing deals with each other.
624
00:43:49.725 --> 00:43:51.905
And and I think that's very much the case,
625
00:43:52.365 --> 00:43:54.545
with the kinda US Venezuela relationship.
626
00:43:56.290 --> 00:43:57.510
Got it. Got it.
627
00:43:58.050 --> 00:44:04.470
Yeah. Well, you're absolutely correct that it's a common misconception because I did not realize the sanctions were
628
00:44:05.325 --> 00:44:06.385
specifically targeted.
629
00:44:06.685 --> 00:44:08.145
I thought they were more broad.
630
00:44:08.525 --> 00:44:09.425
I I
631
00:44:09.725 --> 00:44:14.710
I mean, I don't know if you guys know. I I my understanding is the sanctions on Iran
632
00:44:15.010 --> 00:44:16.390
Iran is for
633
00:44:17.010 --> 00:44:17.910
all their people.
634
00:44:18.450 --> 00:44:32.530
Yeah. I don't know if that's correct. I don't know now. So we got I'll let probably some lawyers in the room confirm, but that is that that is the case. You know, my understanding is that some countries like North Korea, for instance, they are fully sanctioned as a country,
635
00:44:33.390 --> 00:44:35.570
but there are others like Venezuela,
636
00:44:36.190 --> 00:44:36.690
where
637
00:44:37.230 --> 00:44:38.290
the rogue
638
00:44:39.195 --> 00:44:39.695
criminals,
639
00:44:40.635 --> 00:44:42.895
which actually are elected officials, ironically,
640
00:44:43.595 --> 00:44:48.095
are the only ones that are sanctioned. The rest of the people are not. And the intent here
641
00:44:48.600 --> 00:44:49.240
was really
642
00:44:50.040 --> 00:45:03.315
the the the intent of the US was to say, you know, they were trying to be as explicit as possible that this was not meant to hurt the Venezuelan people, only the bad people in Venezuela. But, of course, the Venezuelan government is gonna try to paint a completely different picture.
643
00:45:03.615 --> 00:45:09.820
Right? And so one group was trying to say, hey, this is how we did it. The other one was trying to say, you know, completely
644
00:45:10.120 --> 00:45:12.460
a lie, but as you can tell,
645
00:45:13.800 --> 00:45:17.885
once any regime whether it's Venezuela or any other actually,
646
00:45:18.345 --> 00:45:23.724
this is something that is not talked about enough, in Venezuela, but so Chavez, when he came in,
647
00:45:24.105 --> 00:45:26.045
he the first thing he did is rewrote the constitution. The second thing he did is he
648
00:45:26.420 --> 00:45:28.760
the second thing he did is he dismantled
649
00:45:29.299 --> 00:45:33.400
every single media outlet that was against him. So in Venezuela,
650
00:45:33.780 --> 00:45:38.235
in the 4 years after Chavez was selected, Ale, do you have the number? But I think it's over 1,500
651
00:45:38.935 --> 00:45:40.555
radio licenses were revoked.
652
00:45:41.495 --> 00:45:47.400
I don't have the the exact number, but it yeah. It it it's crazy, dude. It was that was hectic. Yeah.
653
00:45:51.540 --> 00:45:55.645
Yeah. Look. I I and I guess it related to what Mauricio was saying.
654
00:45:56.905 --> 00:46:03.870
You know, the the problem with with Venezuela, and it's all related back to, you know, what we were we were just discussing
655
00:46:04.250 --> 00:46:04.750
this.
656
00:46:06.730 --> 00:46:08.110
It's it's basically,
657
00:46:10.095 --> 00:46:10.835
the government,
658
00:46:12.095 --> 00:46:12.595
swallowing,
659
00:46:15.375 --> 00:46:16.434
you know, limitlessly
660
00:46:18.089 --> 00:46:24.910
the different economic apparatus in in parts of the industry in the country. So the broad a huge problem with with, Venezuela
661
00:46:25.210 --> 00:46:25.710
and
662
00:46:26.075 --> 00:46:29.375
and the bad administers policies with the was that essentially,
663
00:46:30.234 --> 00:46:32.654
you you know, Chavez started
664
00:46:33.194 --> 00:46:33.694
expropriating,
665
00:46:35.299 --> 00:46:39.400
companies in in Minnesota. So Chavez, for example, took,
666
00:46:40.020 --> 00:46:40.839
made public
667
00:46:41.539 --> 00:46:44.280
the national state oil company, PDVSA,
668
00:46:44.725 --> 00:46:48.425
right, that we were just talking about that has its subsidiary or a Cinco in the US.
669
00:46:48.725 --> 00:46:52.470
That was it used to be a private company, man. I mean, like,
670
00:46:52.950 --> 00:46:56.250
over the 30 thirties and forties, the the first
671
00:46:56.869 --> 00:46:57.770
main highways
672
00:46:58.390 --> 00:46:59.210
in Germany
673
00:46:59.885 --> 00:47:02.465
were were built using Venezuelan
674
00:47:02.765 --> 00:47:03.265
asphalt.
675
00:47:04.285 --> 00:47:05.345
Right? So,
676
00:47:06.285 --> 00:47:08.625
during during Chavez's presidency,
677
00:47:10.160 --> 00:47:11.060
over $1,500,000,000,000
678
00:47:15.359 --> 00:47:16.099
in revenue,
679
00:47:18.175 --> 00:47:19.635
fell into the hands of.
680
00:47:20.575 --> 00:47:21.635
And so, essentially,
681
00:47:22.494 --> 00:47:22.994
completely
682
00:47:23.454 --> 00:47:28.570
into the hands of the government because it it became a public company. Then Travis started nationalizing
683
00:47:29.110 --> 00:47:29.610
banks,
684
00:47:30.150 --> 00:47:30.650
nationalizing
685
00:47:31.350 --> 00:47:31.850
factories,
686
00:47:32.405 --> 00:47:33.145
you know,
687
00:47:33.765 --> 00:47:35.865
whatever, man. You you name it. So,
688
00:47:37.045 --> 00:47:39.785
it's just to say that the more
689
00:47:40.670 --> 00:47:44.130
the the more control over the money supply
690
00:47:44.990 --> 00:47:45.490
and,
691
00:47:46.350 --> 00:47:47.650
you know, the revenues
692
00:47:47.950 --> 00:47:49.810
of a certain country or whatever,
693
00:47:50.655 --> 00:47:52.755
the more you give to the state,
694
00:47:53.695 --> 00:48:01.900
the the more greed that you will just get, man. Honestly, that's that's that's part of what I live in a in a short summery sway
695
00:48:02.360 --> 00:48:03.980
in in Venezuela do.
696
00:48:04.760 --> 00:48:06.700
So, I mean, on that note,
697
00:48:07.964 --> 00:48:11.825
so in a lot of ways so so we see these countries, they move to dollars,
698
00:48:12.684 --> 00:48:13.184
because
699
00:48:14.045 --> 00:48:17.070
that is what they know. It's accessible. It's, you know,
700
00:48:17.370 --> 00:48:20.350
the undisputed world champion in fiat currencies.
701
00:48:21.690 --> 00:48:23.150
Aren't they kind of just
702
00:48:25.265 --> 00:48:30.885
are are are we ending up in a situation I know Mauricio said earlier, like, we shouldn't expect, like, a hyperinflationary
703
00:48:31.505 --> 00:48:33.680
event in the United States anytime
704
00:48:35.579 --> 00:48:40.400
soon. But we are seeing, you know, the official inflation numbers are coming out of, like, 7%,
705
00:48:41.660 --> 00:48:42.400
which is
706
00:48:42.925 --> 00:48:53.299
historically pretty high for the United States, and that that's, you know, a discounted number for all for all intents and purposes is probably much higher. That's the one they're willing to admit. Are we, like
707
00:48:54.240 --> 00:49:03.184
is is the world putting all of their eggs in one basket, so to speak? Like, is it are we just compounding risk instead of you have all these countries that mismanage
708
00:49:04.045 --> 00:49:05.424
their treasuries, mismanage
709
00:49:05.724 --> 00:49:07.184
their currencies, and then
710
00:49:08.125 --> 00:49:09.184
if we're all moving
711
00:49:09.559 --> 00:49:11.420
towards a single country's currency,
712
00:49:15.160 --> 00:49:18.380
when that eventually collapses, it's gonna be
713
00:49:19.385 --> 00:49:20.605
way worse. No?
714
00:49:22.025 --> 00:49:25.405
It it it's a very it's a very good point, Matt.
715
00:49:25.945 --> 00:49:26.605
You know,
716
00:49:27.000 --> 00:49:31.740
the way the way I see this the way I I kinda see the the the transition
717
00:49:32.280 --> 00:49:33.500
and to say it, like,
718
00:49:34.485 --> 00:49:37.465
from one fiat to the other is is really,
719
00:49:40.885 --> 00:49:43.305
it's hard to kinda put it to words, but it's almost
720
00:49:43.610 --> 00:49:54.475
a Fiat is nothing more than a belief. Right? Like, the the the the the power of the dollar is just as good as the or as Europe belief in that the United States will be able to manage
721
00:49:55.335 --> 00:49:56.635
their finances accordingly
722
00:49:56.935 --> 00:50:06.619
and and meet their obligations. Right? Like, that is really all that backs fiat, is the belief in whoever the operator is of that fiat. Right? Like,
723
00:50:07.260 --> 00:50:08.070
you know, the the
724
00:50:08.885 --> 00:50:17.465
how you manage the issuance of that fiat relative to your reserves and and relative to, like, you know, the the the other value that you can create within your economy.
725
00:50:18.180 --> 00:50:18.680
Now
726
00:50:19.300 --> 00:50:20.359
what what happens
727
00:50:20.740 --> 00:50:23.720
what I see happens when a when a country's currency
728
00:50:24.020 --> 00:50:27.319
fails and it moves to, say, a different country
729
00:50:29.225 --> 00:50:30.445
is, that country loses
730
00:50:30.825 --> 00:50:33.085
a tremendous amount of independence
731
00:50:33.465 --> 00:50:35.565
because it loses its right to do seniorage.
732
00:50:36.220 --> 00:50:42.160
So it it essentially is now bound by the the monetary policy that the United States has.
733
00:50:42.619 --> 00:50:46.135
It it puts the US government at a massive advantage
734
00:50:46.515 --> 00:50:48.055
relative to other governments
735
00:50:48.515 --> 00:50:52.215
because it can control its monetary policy and and others cannot.
736
00:50:52.840 --> 00:50:53.340
So
737
00:50:54.200 --> 00:50:54.520
I
738
00:50:55.240 --> 00:50:55.980
it it really,
739
00:50:57.080 --> 00:51:12.740
whether we're making the problem bigger, I mean, we're just trading one problem for another. Right? Like, we're we're training the the what what we're basically saying is this particular group is unable to manage their books, and we're going to use the currency of the group that we believe can manage their books.
740
00:51:13.760 --> 00:51:16.020
To your point, if we start seeing
741
00:51:18.055 --> 00:51:23.915
concerns or doubts start to emerge around the US being able to maintain its book,
742
00:51:24.230 --> 00:51:28.650
then you might see people interested in other monetary instruments and that might be Bitcoin,
743
00:51:29.110 --> 00:51:44.110
you know, or that might be the country that is doing things better, you know, come 10 years from now or 5 years from now if if the US stops or, you know, starts creating doubts. So do you do do you think it's a valid perspective that the way we've seen dollarization
744
00:51:44.570 --> 00:51:45.070
happen
745
00:51:46.010 --> 00:51:48.750
in these other countries is the way we will see
746
00:51:49.205 --> 00:51:49.705
Bitcoinization
747
00:51:50.005 --> 00:51:50.505
happen
748
00:51:51.125 --> 00:51:52.265
as the dollar fails,
749
00:51:52.805 --> 00:51:55.225
or is it not a complete analogy?
750
00:51:55.845 --> 00:51:59.150
I I'll I'll let Mauricio expand further into that. But but
751
00:51:59.450 --> 00:52:03.950
yeah. Like, if if I I look. I I I lived the hyper dollarization
752
00:52:05.210 --> 00:52:13.775
process of Venezuela and had been, you know, in mind in the country back in 2013, 2015. And then I I had some hope that more
753
00:52:14.335 --> 00:52:23.050
you know, we would we would have seen more retail adoption, although it's pretty big in in in in Venezuela. We could dive more into that. But but, truly,
754
00:52:24.025 --> 00:52:26.925
it it went already through a hyper dollarization
755
00:52:27.305 --> 00:52:28.365
process, and
756
00:52:28.825 --> 00:52:29.885
that's what,
757
00:52:30.905 --> 00:52:32.045
eventually starts,
758
00:52:32.905 --> 00:52:33.485
you know,
759
00:52:34.140 --> 00:52:36.000
ground grinding down towards,
760
00:52:36.700 --> 00:52:37.600
hyper Bitcoinization
761
00:52:37.900 --> 00:52:39.520
and more usage of Bitcoin,
762
00:52:40.300 --> 00:52:45.195
as people just some people start understanding Bitcoin in this country as a more,
763
00:52:45.495 --> 00:52:48.635
you know, rapid and less costly medium of exchange
764
00:52:49.015 --> 00:52:49.755
to reach
765
00:52:50.215 --> 00:52:55.309
other local currencies and make international payments. Because because the other problem is okay. Right.
766
00:52:55.769 --> 00:52:57.390
The problem with hyper dollarization
767
00:52:57.769 --> 00:52:59.150
is if it's done in cash,
768
00:52:59.690 --> 00:53:00.190
sweet.
769
00:53:00.495 --> 00:53:01.235
But then
770
00:53:01.535 --> 00:53:02.995
it's it's a dollarization
771
00:53:03.455 --> 00:53:04.355
that will live
772
00:53:04.975 --> 00:53:10.610
just if if if if the banking system of that particular country does not embrace
773
00:53:10.910 --> 00:53:14.530
the dollar as legal tender and does not abide
774
00:53:14.990 --> 00:53:17.330
to the rules and the regulations
775
00:53:17.710 --> 00:53:19.184
of of of US,
776
00:53:20.045 --> 00:53:24.464
then and and if you're not essentially a green or or a goodwill
777
00:53:24.845 --> 00:53:27.025
trading partner of of the US,
778
00:53:27.840 --> 00:53:32.020
then there's there's no way to, you know, provide, like,
779
00:53:32.560 --> 00:53:33.700
real global
780
00:53:34.000 --> 00:53:35.700
exposure to that dollarization.
781
00:53:36.000 --> 00:53:38.845
And so it's just a it's just a closed door
782
00:53:39.325 --> 00:53:42.285
it's closed doors economy. You know what I mean? Like,
783
00:53:42.765 --> 00:53:48.760
and and and so that's and then and then we'd have to speak about, of course, the problem of confiscation.
784
00:53:49.620 --> 00:53:50.120
Right?
785
00:53:51.780 --> 00:53:52.920
England confiscated,
786
00:53:54.394 --> 00:53:55.375
Venezuela's gold.
787
00:53:55.914 --> 00:53:59.934
If you don't use dollar and and if you don't have access to
788
00:54:00.394 --> 00:54:11.200
using dollars and the global banking system, what are you gonna use other than gold? You just you just have Bitcoin. You know what I mean? And so I'll I'll let Mauricio give his stake on that.
789
00:54:13.645 --> 00:54:16.625
Yeah. It's a it's a really good point, Matt. I think
790
00:54:17.565 --> 00:54:31.674
if if you look at, you know, if I try to look at things as as as sort of human events, and I think when you when when somebody thinks macro and how this happens or how that happens, I like to think of macro events as a as a combination
791
00:54:31.974 --> 00:54:33.835
of just individual actions.
792
00:54:34.135 --> 00:54:36.730
K? And if if you look at how,
793
00:54:37.130 --> 00:54:40.670
or why people drop the bolio out of for the dollar
794
00:54:41.130 --> 00:54:45.790
or why somebody would drop the dollar for a bolio out or sorry, the dollar for Bitcoin,
795
00:54:46.155 --> 00:54:52.655
In my view, it would happens a little bit like this and and for this, I I wanna give a quick story about mining in Venezuela, which I think can illuminate
796
00:54:53.275 --> 00:54:57.160
a lot of things about how how this transfer of knowledge happens.
797
00:54:58.660 --> 00:54:59.640
So the way,
798
00:55:00.660 --> 00:55:02.920
people don't find out about dollars or hyperinflation
799
00:55:03.225 --> 00:55:05.565
or inflation all at the same time. They do this,
800
00:55:06.265 --> 00:55:15.680
by by, you know, living certain experiences and seeing people do certain things. So I'll give you an example. When we first started setting up mines and build and installing miners in Venezuela,
801
00:55:16.220 --> 00:55:17.119
we were using,
802
00:55:17.900 --> 00:55:20.619
the electrical contractors that would that came from the,
803
00:55:21.285 --> 00:55:34.580
from from residential construction because that's what my dad used to do. And so we started calling up our electricians to help us do the the sort of electrical upgrades that we did to run the power, feeds to to our miners and to set up our our networks and to bring in our sort of Internet,
804
00:55:34.880 --> 00:55:38.180
to to to our our Internet networks, like our LAN networks.
805
00:55:38.725 --> 00:55:54.720
And in the first time around they came, they were like, oh, this is cool. You know, we were we were installing miners and building something in the time where everything else in Venezuela was falling apart. So naturally they were curious and they were like, oh, what are you doing this big installation for? And we said, oh, it's who gonna install these machines, they mine these things called Bitcoin.
806
00:55:55.525 --> 00:55:57.865
And, and so the second time around,
807
00:55:58.165 --> 00:56:00.025
we called them up for a second installation.
808
00:56:01.205 --> 00:56:07.360
And when they came to do the second installation, they saw that we were growing and that we were installing more and they said,
809
00:56:07.740 --> 00:56:17.335
hey, what is this Bitcoin thing? Where can I learn more about it? You know, can you can you tell me a bit more about it? And there was very little Spanish resources, but we kinda pointed them out in a few in a few directions.
810
00:56:17.875 --> 00:56:18.275
And,
811
00:56:19.075 --> 00:56:21.575
a few months later, we called them back for a 3rd installation.
812
00:56:22.450 --> 00:56:25.270
And when they, when they came in for the 3rd installation,
813
00:56:25.570 --> 00:56:26.310
they said,
814
00:56:26.930 --> 00:56:29.865
this time I wanna get paid in Bitcoin. And,
815
00:56:30.645 --> 00:56:36.265
and they had their addresses and they were able to receive Bitcoin for payment. Again, what I'm trying to say is
816
00:56:37.339 --> 00:56:37.839
people
817
00:56:38.220 --> 00:56:38.720
emulate,
818
00:56:39.500 --> 00:56:41.759
when people see other people doing well
819
00:56:42.059 --> 00:56:51.965
and they're doing a certain action and that action leads them to them doing well, people emulate that action. So the same way these people saw us installing miners and gotten interested in Bitcoin,
820
00:56:52.425 --> 00:56:55.650
other people will see other people spend and hold dollars over Bolivariz,
821
00:56:55.950 --> 00:57:13.270
and they will then start emulating that. And they will benefit from it. They'll run their their math at the end of the week and they said, holy crap. I am better off. And then they start moving on to dollars. And eventually, I think the migration to Bitcoin is actually gonna be very similar to your point, Matt, because it's gonna start out of necessity
822
00:57:14.130 --> 00:57:21.434
and governments are likely going to fight it at first. But there will be a government or a group in that government that says,
823
00:57:21.815 --> 00:57:22.954
this is inevitable.
824
00:57:23.335 --> 00:57:29.620
So they get behind it and they rally the population and then it becomes law. And so I I think we're gonna see
825
00:57:30.500 --> 00:57:33.240
that that's how I picture it, and transitioning,
826
00:57:33.700 --> 00:57:34.760
but I do not,
827
00:57:35.435 --> 00:57:46.150
I do not think that, that governments are gonna do this without a fight. I I do think that there will be some contentious part of this journey, and we just need to be ready for it.
828
00:57:46.850 --> 00:57:51.110
I mean, you crystallized something there that I talk about a lot, which is
829
00:57:54.685 --> 00:57:57.265
which I I think is lost on most Americans
830
00:57:58.205 --> 00:58:01.105
and and probably Europeans as well and Canadians
831
00:58:01.740 --> 00:58:04.640
and is this idea of of necessity,
832
00:58:05.340 --> 00:58:10.400
this idea of actually realizing there is a need for something better and going out and seeking it.
833
00:58:12.405 --> 00:58:12.905
Yep.
834
00:58:13.445 --> 00:58:19.865
Right? Like, that is that is the key. Right? As people start to realize the need, they will seek out a better alternative,
835
00:58:20.200 --> 00:58:21.900
and we basically just need to be ready
836
00:58:22.680 --> 00:58:24.060
with tools, resources,
837
00:58:24.760 --> 00:58:25.260
education,
838
00:58:26.920 --> 00:58:30.974
for people when they realize that need rather than necessarily trying to
839
00:58:31.675 --> 00:58:35.055
convince someone to use Bitcoin that doesn't necessarily need it.
840
00:58:38.330 --> 00:58:39.390
I mean, a 100%.
841
00:58:39.770 --> 00:58:40.170
And,
842
00:58:43.210 --> 00:58:43.850
it's it's
843
00:58:44.725 --> 00:58:54.185
it it happened to me that way. Right? Like, I died with Bitcoin because of necessity. My family lost its savings, almost all of its savings in in 2008 with the great financial crisis.
844
00:58:54.690 --> 00:58:55.190
And,
845
00:58:56.369 --> 00:58:58.869
the only thing that allowed me as a Venezuelan
846
00:58:59.170 --> 00:58:59.670
after
847
00:59:00.130 --> 00:59:04.705
after that and the whole, you know, depression of the Venezuelan economy,
848
00:59:05.244 --> 00:59:10.065
the they completely wiped out all of our savings and local currency as well.
849
00:59:10.740 --> 00:59:12.360
Jurisdiction doesn't work.
850
00:59:12.900 --> 00:59:19.390
It's only based on, you know, trust and pay somebody nowadays. It's it's it's been Bitcoin. So I do,
851
00:59:20.325 --> 00:59:21.865
and and then the other thing,
852
00:59:23.125 --> 00:59:26.505
you know, in the in the case of Venezuela that creates a need,
853
00:59:26.885 --> 00:59:28.345
it's like if you
854
00:59:28.720 --> 00:59:29.460
if you
855
00:59:30.240 --> 00:59:31.140
leave the country
856
00:59:31.760 --> 00:59:33.060
and you go to, say,
857
00:59:33.520 --> 00:59:34.020
Spain,
858
00:59:34.560 --> 00:59:38.175
whatever, right, You still have to go through this bureaucratic
859
00:59:38.475 --> 00:59:46.339
normal process of establishing yourself as a resident of that of that country. And until you don't do that, you don't have access to banking,
860
00:59:46.640 --> 00:59:51.779
you can have a job, you can't do anything, and you continue living in the informal economy.
861
00:59:52.480 --> 00:59:52.980
And
862
00:59:53.485 --> 00:59:54.865
what I learned by that
863
00:59:55.325 --> 00:59:56.065
is that
864
00:59:56.445 --> 00:59:57.425
the best way
865
00:59:57.965 --> 00:59:59.105
to, like,
866
01:00:00.125 --> 01:00:08.250
best way to monetize the informal economy is through cryptocurrency peer to peer markets. And so, essentially, I made a living out of, you know, peer to peer arbitrage
867
01:00:09.165 --> 01:00:09.825
by arbitrashing
868
01:00:10.125 --> 01:00:12.465
different different currencies and and
869
01:00:12.925 --> 01:00:14.865
and South America by using,
870
01:00:15.165 --> 01:00:17.185
you know, local Bitcoins or whatever. So
871
01:00:17.565 --> 01:00:18.065
So
872
01:00:18.510 --> 01:00:23.490
go ahead. Let let's let's talk about that a little bit because Mhmm. You know? So I have a buddy
873
01:00:23.790 --> 01:00:26.050
who is only a buddy because he's a Bitcoiner,
874
01:00:26.855 --> 01:00:28.075
and he's from Columbia.
875
01:00:29.575 --> 01:00:32.715
By the way, this is, you know, one of the coolest aspects
876
01:00:33.175 --> 01:00:37.329
of being active in the Bitcoin community is that I just feel like I have
877
01:00:37.630 --> 01:00:41.329
friends around the world who I have not met yet in person,
878
01:00:43.135 --> 01:00:46.835
but that I can just have these these great conversations with. And
879
01:00:47.375 --> 01:00:49.155
he mentioned that in Colombia,
880
01:00:50.150 --> 01:00:54.089
the main way people are buying Bitcoin and selling Bitcoin trading
881
01:00:54.470 --> 01:00:56.809
is through Binance peer to peer marketplace,
882
01:00:57.395 --> 01:01:01.415
which is something that was just not even on my radar at all. Like, we all know LocalBitcoins.
883
01:01:02.435 --> 01:01:03.734
We know PAC's full.
884
01:01:04.115 --> 01:01:13.180
But apparently, Binance's p p market is blowing the fuck up. Do you guys have any insight on that? Oh, you hear the Latinos giggling. You hear the Latinos giggling.
885
01:01:14.714 --> 01:01:17.295
Dude, I have all of them, honestly. Look.
886
01:01:18.954 --> 01:01:20.575
Binance fear to peer market.
887
01:01:20.875 --> 01:01:22.974
The Binance fear to peer marketplace started
888
01:01:23.300 --> 01:01:27.800
booming in South America after, you know, SurveyCoin, Paxful, LocalBitcoins,
889
01:01:28.340 --> 01:01:29.640
whatever. There's so many.
890
01:01:30.475 --> 01:01:31.695
Because they introduced
891
01:01:31.995 --> 01:01:33.695
the 1st peer to peer marketplace
892
01:01:33.995 --> 01:01:34.815
that used
893
01:01:35.115 --> 01:01:36.095
stable coins.
894
01:01:36.475 --> 01:01:38.539
In this case, dollar tether.
895
01:01:39.319 --> 01:01:46.619
So the problem that most of this, let's call them informal OTCs or, again, the term that it's, you know,
896
01:01:47.454 --> 01:01:51.875
generally used in the financial world and the banking and the banking world is,
897
01:01:52.815 --> 01:01:54.435
informal money transmitters.
898
01:01:54.940 --> 01:01:57.280
The problem that crypto this cryptocurrency
899
01:01:57.900 --> 01:02:02.905
informal money transmitters or informal OTCs had with Bitcoin
900
01:02:03.285 --> 01:02:05.785
peer to peer marketplaces was essentially volatile.
901
01:02:06.325 --> 01:02:10.510
Right? So it was a problem that you were charging somebody someone between
902
01:02:10.810 --> 01:02:11.710
1 or 2%
903
01:02:12.650 --> 01:02:14.730
or even 3% sometimes, right,
904
01:02:15.210 --> 01:02:21.715
to associate receive the local currency and make a payment for them in dollars wherever. Right? And so,
905
01:02:23.615 --> 01:02:30.619
you you made 1% to 2% on one side of the trade, and then you made 1% to 2% on the other side of the trade by selling
906
01:02:31.079 --> 01:02:34.805
by selling Bitcoin to a Bitcoin buyer in another country,
907
01:02:35.665 --> 01:02:38.805
right, to access dollars in the other country. So,
908
01:02:39.425 --> 01:02:45.110
or or whichever whichever currency. It could be Colombia Colombian pesos or Peruvian soles or whatever.
909
01:02:46.210 --> 01:02:50.710
Again, the wrong with that was volatility. So whenever you were carrying on a trade
910
01:02:51.315 --> 01:02:53.095
and within a matter of hours,
911
01:02:54.035 --> 01:02:57.095
Bitcoin dropped, like, 5% or 10%, whatever,
912
01:02:57.555 --> 01:03:00.295
you were essentially losing all of your profits.
913
01:03:00.849 --> 01:03:02.630
So it was a thing about speed
914
01:03:03.170 --> 01:03:11.405
and liquidity in the market. As peer to peer marketplaces started started booming and and and and being more used,
915
01:03:12.425 --> 01:03:13.565
in South America,
916
01:03:14.105 --> 01:03:14.605
then
917
01:03:14.905 --> 01:03:15.405
Binance
918
01:03:15.945 --> 01:03:16.445
Binance
919
01:03:17.240 --> 01:03:18.540
really understood that,
920
01:03:18.840 --> 01:03:21.420
and they really cashed in that opportunity.
921
01:03:21.800 --> 01:03:26.140
And and they really solved the volatility problem by essentially essentially
922
01:03:27.715 --> 01:03:31.415
just pegging dollar tethered to a peer to peer marketplace.
923
01:03:32.195 --> 01:03:34.270
And so that's essentially
924
01:03:34.730 --> 01:03:38.270
why Binance is currently functioning as the back end
925
01:03:38.970 --> 01:03:40.670
for peer to peer trades,
926
01:03:41.370 --> 01:03:41.870
especially
927
01:03:42.925 --> 01:03:44.385
being done in South America.
928
01:03:45.405 --> 01:03:48.705
But how do they that's very interesting. How do the users
929
01:03:49.805 --> 01:03:50.305
get
930
01:03:50.990 --> 01:03:51.490
Tether?
931
01:03:52.910 --> 01:04:03.445
Are they getting Bitcoin first, and then they're just when they want to sell, they're just holding Tether? Or No. So the the it's basically the the way Binance innovated, and I'll let Ale,
932
01:04:04.245 --> 01:04:10.500
confirm this because he uses these these platforms more than I do. I I heard anecdotally from a lot of my friends, but,
933
01:04:10.960 --> 01:04:12.820
what I essentially, Matt,
934
01:04:13.545 --> 01:04:16.845
it it it goes back to this idea of Bitcoin versus dollars.
935
01:04:17.224 --> 01:04:19.325
And what became very clear,
936
01:04:20.025 --> 01:04:21.484
or what Binance saw,
937
01:04:21.840 --> 01:04:26.500
in in in some ways, what we have seen in in in but we we can get into that later. But
938
01:04:27.600 --> 01:04:29.860
Venezuela and Latin America in general
939
01:04:30.164 --> 01:04:33.704
has a huge appetite for dollars on crypto rails.
940
01:04:34.005 --> 01:04:34.404
So,
941
01:04:34.805 --> 01:04:40.070
it's it's hard to to explain because most people in the listening to this will have
942
01:04:40.530 --> 01:04:45.670
likely held dollars and and transacted in dollars and they've never had an issue sending dollars around the world.
943
01:04:46.130 --> 01:04:46.630
But
944
01:04:46.935 --> 01:04:50.234
to to a Venezuelan to be told that you can send a dollar
945
01:04:51.255 --> 01:04:53.355
to Mexico, Colombia, the US,
946
01:04:54.030 --> 01:04:54.530
Spain,
947
01:04:54.910 --> 01:05:08.165
and that you don't have to go through your bank to do that. Most Venezuelans face a world of restrictions to move dollars around, Most people outside of the US do. In fact, I remember, just so that you guys know how terrible this is,
948
01:05:08.785 --> 01:05:09.760
my family had,
949
01:05:10.160 --> 01:05:14.340
some of our dollars in a in a bank account in Panama as did many other Venezuelans.
950
01:05:14.960 --> 01:05:24.025
And there was one time we were trying to pay for a surgery for one of my, relatives, and this surgery was going to the Anderson Clinic in Texas,
951
01:05:24.325 --> 01:05:25.705
and they were the wire recipient.
952
01:05:26.780 --> 01:05:29.840
I was not we were not allowed to wire that money.
953
01:05:30.380 --> 01:05:34.160
It took us 2 weeks to wire that money, and it was an emergency surgery.
954
01:05:35.275 --> 01:05:35.775
So
955
01:05:36.315 --> 01:05:37.454
just to give you
956
01:05:38.795 --> 01:05:39.935
the the excruciating
957
01:05:41.275 --> 01:05:46.480
I don't even wanna use bad words, I'm trying to limit my language, but when you're trying to move dollars
958
01:05:46.940 --> 01:05:50.960
outside of the US, you're made feel you're made to feel like a criminal,
959
01:05:51.420 --> 01:05:53.040
and that is
960
01:05:53.475 --> 01:05:54.215
fucking unacceptable,
961
01:05:55.315 --> 01:05:58.855
in my books. So when you give somebody
962
01:05:59.235 --> 01:06:02.455
in that part of the world a dollar on Crypto Rails,
963
01:06:02.809 --> 01:06:03.710
you are literally
964
01:06:04.650 --> 01:06:05.150
changing
965
01:06:06.170 --> 01:06:13.075
the realm of opportunities that that person ever had a chance to transact with. So, yes, Bitcoin is amazing,
966
01:06:13.615 --> 01:06:19.395
but it takes people a really long time to understand it and why it's important and how it works.
967
01:06:20.240 --> 01:06:25.299
If it's it's much simpler to explain a dollar on crypto rails that you can send to anyone.
968
01:06:25.680 --> 01:06:27.299
And I think that that's why,
969
01:06:28.285 --> 01:06:30.464
stablecoins are gonna be such a great segue
970
01:06:31.005 --> 01:06:31.825
into Bitcoin.
971
01:06:32.684 --> 01:06:36.224
And so, I I think that was They're basically they're basically getting
972
01:06:36.820 --> 01:06:37.720
a lot of the benefits
973
01:06:38.420 --> 01:06:40.760
that Bitcoin provides without having to understand
974
01:06:41.060 --> 01:06:43.720
the necessarily, like, the monetary policy specifics.
975
01:06:44.500 --> 01:06:45.560
Bang on.
976
01:06:47.165 --> 01:06:48.625
But then but still,
977
01:06:48.925 --> 01:06:49.425
how
978
01:06:49.965 --> 01:06:52.545
how is Tether entering that economy?
979
01:06:52.845 --> 01:07:02.440
Is it entering through It's just what's available. It's just what's available, and it's stable. Maybe, Ale, you can take this one. Do they have, like is there is there are there places where you can
980
01:07:02.995 --> 01:07:04.215
just exchange cash
981
01:07:04.515 --> 01:07:12.790
directly for Tether? Is that the answer to it? Oh, dude. Oh, dude. That's a that's a thing now. But it did it it that was not the case
982
01:07:13.090 --> 01:07:17.670
4 to 5 years ago, man. And so what happened what what happened was essentially this. Look.
983
01:07:18.994 --> 01:07:23.575
Venezuela is still functioning as the heart like, it's the heartbeat
984
01:07:24.675 --> 01:07:25.734
for Latin American
985
01:07:26.460 --> 01:07:29.040
peer to peer vault cryptocurrency peer to peer vault.
986
01:07:29.500 --> 01:07:30.000
So
987
01:07:30.540 --> 01:07:31.520
back in 2019,
988
01:07:32.460 --> 01:07:34.320
if you look at LocalBitcoins volume,
989
01:07:35.260 --> 01:07:36.000
in Venezuela,
990
01:07:37.565 --> 01:07:44.464
was being transacted, like, around 25 100 Bitcoin per week. Right now, that came down to, like, 30 Bitcoin.
991
01:07:45.109 --> 01:07:46.490
Sometimes it's, like, 40 Bitcoin.
992
01:07:47.910 --> 01:07:54.329
Because, you know, you you do have to take into account, the Venezuelan economy shrinking and Bitcoin going up in price, etcetera.
993
01:07:56.345 --> 01:07:57.565
So before Tether,
994
01:07:58.665 --> 01:07:59.805
it was all Bitcoin.
995
01:08:00.185 --> 01:08:01.885
When Tether joined the scenes,
996
01:08:02.580 --> 01:08:04.760
Tether was not a trusted thing
997
01:08:05.060 --> 01:08:07.080
within all of the of these,
998
01:08:08.420 --> 01:08:13.515
you know, again, OTC dealers, whatever. I did this for a living in Minnesota. Right? So,
999
01:08:14.695 --> 01:08:16.395
essentially, at some point
1000
01:08:17.095 --> 01:08:18.315
after the 2017
1001
01:08:18.935 --> 01:08:20.475
bull run-in Bitcoin,
1002
01:08:21.950 --> 01:08:22.930
some of us
1003
01:08:23.390 --> 01:08:25.490
some of us cashed out
1004
01:08:26.350 --> 01:08:30.530
and put some money within exchanges and stable coins or whatever.
1005
01:08:30.975 --> 01:08:31.875
And that's how
1006
01:08:32.415 --> 01:08:43.889
they that's how, really, it started growing this usage and understanding of stable coins. Like, what is the stable point thing? What can I do with it? Whatever. So the problem was that
1007
01:08:44.349 --> 01:08:44.849
before
1008
01:08:45.949 --> 01:08:46.849
they were,
1009
01:08:47.309 --> 01:08:53.365
you know, they became part of this peer to peer markets. And and right now, even Paxful has USDT as well. Right?
1010
01:08:55.345 --> 01:08:58.485
Nobody care about that, honestly. It was mostly
1011
01:08:59.220 --> 01:08:59.960
it was
1012
01:09:00.500 --> 01:09:05.320
mostly a thing that people that were trying to do trading on exchanges
1013
01:09:06.645 --> 01:09:07.525
were getting
1014
01:09:08.245 --> 01:09:13.305
that's how people started getting familiar familiarized with Tether. But right now,
1015
01:09:14.180 --> 01:09:15.080
after seeing,
1016
01:09:15.380 --> 01:09:17.000
you know, the usage of stablecoins
1017
01:09:17.460 --> 01:09:17.960
evolve
1018
01:09:18.420 --> 01:09:21.480
throughout all this past, you know, 5 years what whatever,
1019
01:09:22.595 --> 01:09:24.535
Dude, you go to play soccer
1020
01:09:25.315 --> 01:09:26.775
with your crypto buddies,
1021
01:09:27.395 --> 01:09:29.415
a Bitcoin buddies or whatever in Venezuela,
1022
01:09:29.989 --> 01:09:33.770
and you would see you would see people making payments,
1023
01:09:34.150 --> 01:09:35.929
you you know, between each other
1024
01:09:36.550 --> 01:09:42.705
in in in in dollar Tether, man, and Binance purely. So I guess that it's it's
1025
01:09:43.165 --> 01:09:44.545
a mixture of
1026
01:09:45.005 --> 01:09:46.945
the people that are early
1027
01:09:55.200 --> 01:09:55.700
Argentina
1028
01:09:56.405 --> 01:09:56.985
or Paraguay,
1029
01:09:57.685 --> 01:09:58.185
etcetera.
1030
01:09:58.804 --> 01:09:59.465
And then
1031
01:09:59.925 --> 01:10:00.645
you have,
1032
01:10:01.445 --> 01:10:12.699
you have to add this whole, you know, mon informal money transmitters and OTC deal dealers that were digital dealing with digital assets for their daily operations as the underlying currencies.
1033
01:10:13.985 --> 01:10:15.605
And then you have the traders,
1034
01:10:17.585 --> 01:10:20.165
on experienced traders or whatever you wanna call them.
1035
01:10:20.864 --> 01:10:24.550
And and then you have and now you have
1036
01:10:25.090 --> 01:10:26.230
the layer of,
1037
01:10:26.610 --> 01:10:27.670
you know, businesses
1038
01:10:28.530 --> 01:10:29.910
and day to day people
1039
01:10:30.534 --> 01:10:31.994
that understand that, okay.
1040
01:10:32.375 --> 01:10:34.715
I need to travel all the way to the US.
1041
01:10:35.175 --> 01:10:39.514
I need to have access to an address in the US just to own a bank account in the US.
1042
01:10:39.860 --> 01:10:45.880
My bank account can get frozen. I need to spend sometimes day hours, days, if not weeks,
1043
01:10:46.500 --> 01:10:50.245
trying to reach out to customer support at a at my US Bank.
1044
01:10:50.625 --> 01:10:51.125
Right?
1045
01:10:51.985 --> 01:10:54.725
Sometimes I make a Zelle payment of a $100,
1046
01:10:55.345 --> 01:10:57.765
and my account gets frozen or blocked.
1047
01:10:58.480 --> 01:11:06.165
And yada yada yada, same story, you have to reach out to customer success from the h x y z bank in the US or Panama or whatever.
1048
01:11:06.485 --> 01:11:12.585
So it it's right now, to Mauricio's point, it's just a more comfortable and accessible way
1049
01:11:12.965 --> 01:11:14.505
of moving dollars
1050
01:11:15.070 --> 01:11:16.290
within payment rails.
1051
01:11:16.670 --> 01:11:24.475
That it's pretty much it. And in a digital in a purely digital manner. Right? Because you don't have to travel anywhere. You just need an email, a phone
1052
01:11:24.935 --> 01:11:32.530
number, and set up a TOTP security on your phone or whatever. And so you essentially have access to dollars and your phone,
1053
01:11:33.150 --> 01:11:33.650
and
1054
01:11:34.030 --> 01:11:40.605
that I I think that that's that's how it started evolving, honestly. It was Bitcoiners who brought it in. Exactly.
1055
01:11:40.985 --> 01:11:43.085
Exactly. Had Bitcoin, so they had access
1056
01:11:43.785 --> 01:11:44.525
to Tether,
1057
01:11:45.305 --> 01:11:53.880
and then it spread from there. And and, like, I'll give you another example. I have a buddy of mine that used to have this Western Union franchise,
1058
01:11:54.635 --> 01:11:56.015
right, in Peru.
1059
01:11:56.795 --> 01:11:58.255
Eventually, this dude
1060
01:11:58.715 --> 01:12:00.815
started mining with us in Venezuela.
1061
01:12:01.949 --> 01:12:03.090
And then he said,
1062
01:12:03.550 --> 01:12:04.370
So wait.
1063
01:12:04.909 --> 01:12:06.370
I have a better way
1064
01:12:06.989 --> 01:12:10.850
for doing the same thing that I doing with Western Union,
1065
01:12:11.695 --> 01:12:13.155
but with this LocalBitcoins
1066
01:12:13.695 --> 01:12:20.755
thing that you're showing me. So why don't I try to plug that as a back end for my Western Union business
1067
01:12:21.100 --> 01:12:23.040
just so that I can make more money
1068
01:12:23.500 --> 01:12:27.280
and and and move it faster, move it more times,
1069
01:12:27.660 --> 01:12:34.165
you know, spend keeps keep the wheel spinning, but at a faster pace and just just make more profits
1070
01:12:34.545 --> 01:12:39.284
with the same infrastructure they have. But I'm just I'm just opening myself an account
1071
01:12:39.730 --> 01:12:40.390
at a,
1072
01:12:40.930 --> 01:12:42.070
you know, at a marketplace
1073
01:12:42.610 --> 01:12:45.910
similar to opening an account in Amazon or Mercado
1074
01:12:46.770 --> 01:12:47.270
Libre
1075
01:12:47.730 --> 01:12:52.985
or whatever. Right? So what you're seeing in South America is an increasing
1076
01:12:53.365 --> 01:12:56.425
trend, an ever increasing trend of even
1077
01:12:57.045 --> 01:12:57.545
traditional
1078
01:12:58.590 --> 01:12:59.890
money remittance services
1079
01:13:00.350 --> 01:13:01.970
and money transmit and services
1080
01:13:02.830 --> 01:13:05.490
diving into digital assets because it's just
1081
01:13:06.190 --> 01:13:08.130
cheaper, faster, quicker, better.
1082
01:13:12.975 --> 01:13:14.675
Well, I definitely feel that.
1083
01:13:16.100 --> 01:13:17.960
I appreciate the insight, guys. So,
1084
01:13:18.740 --> 01:13:22.760
I mean, so with this reliance on are are you guys concerned
1085
01:13:24.055 --> 01:13:28.875
are you guys concerned about the reliance on stable coins? Like, they are pretty much all centralized.
1086
01:13:31.449 --> 01:13:32.989
You know, Tethr is a massive
1087
01:13:33.690 --> 01:13:34.909
regulatory target.
1088
01:13:36.489 --> 01:13:37.310
Do you
1089
01:13:38.145 --> 01:13:42.645
or or is is that something that's on your radar, or do you think it's overblown?
1090
01:13:44.705 --> 01:13:49.110
So I think going back to to to your concept or your question about,
1091
01:13:50.050 --> 01:13:56.625
you know, are we trading one problem for another by letting these countries use a dollar rather than their own local currency?
1092
01:13:57.085 --> 01:13:57.665
I think
1093
01:13:58.445 --> 01:14:00.630
what what I see in this
1094
01:14:01.030 --> 01:14:06.810
in in the way people are are behaving and and the and the the stable coins and and the choices that they're making
1095
01:14:07.350 --> 01:14:08.889
is essentially they're saying,
1096
01:14:09.885 --> 01:14:13.585
yes. You know, I may not know who's behind this Tethr organization.
1097
01:14:13.885 --> 01:14:15.825
I may not know who's behind this
1098
01:14:16.205 --> 01:14:20.389
other group that is that is managing these these other assets,
1099
01:14:21.090 --> 01:14:23.830
but I do know what my option is.
1100
01:14:24.425 --> 01:14:29.885
And my option is staying in my broken system, which will certainly lead me to failure.
1101
01:14:30.185 --> 01:14:30.925
And so,
1102
01:14:31.619 --> 01:14:32.739
again, it's really,
1103
01:14:34.500 --> 01:14:35.079
you know,
1104
01:14:35.860 --> 01:14:53.429
if you think Tether is bad, like, you should see the books of the Venezuelan government. You know what I mean? And and I think that that's what what people are saying. You what the the people that you see going to Tether, you know, they don't have the greatest central banks in the world. They may not have the full information to your point, Matt. And if they did know
1105
01:14:53.730 --> 01:15:02.575
everything they need to know, they may choose to use something else. But I think that they're making this decision based on what they know. And I think what is,
1106
01:15:03.035 --> 01:15:07.340
sometimes missed by by people outside of North America or Europe
1107
01:15:07.720 --> 01:15:08.220
is
1108
01:15:08.680 --> 01:15:10.380
how much fear
1109
01:15:11.080 --> 01:15:12.940
there is and how much power
1110
01:15:13.594 --> 01:15:14.735
a country has
1111
01:15:15.195 --> 01:15:22.655
when it turns against you or your group of friends or or your peers or your industry.
1112
01:15:24.020 --> 01:15:26.920
In in in in Latin America, we've seen the government
1113
01:15:27.620 --> 01:15:31.320
expropriate our savings from the bank. That's happened many times.
1114
01:15:31.675 --> 01:15:32.735
We've seen governments,
1115
01:15:33.595 --> 01:15:34.095
expropriate
1116
01:15:34.555 --> 01:15:35.855
assets like factories,
1117
01:15:36.635 --> 01:15:37.775
houses, farms.
1118
01:15:38.235 --> 01:15:40.735
So we have very shaken
1119
01:15:41.719 --> 01:15:42.860
property assurances.
1120
01:15:43.960 --> 01:15:44.780
And so,
1121
01:15:45.960 --> 01:15:49.820
so what what you see is people have have very little trust
1122
01:15:50.295 --> 01:15:53.835
in in the tools that are at their disposal, and they're willing to place
1123
01:15:54.135 --> 01:15:55.355
blind faith almost
1124
01:15:55.735 --> 01:15:56.715
on these options
1125
01:15:57.489 --> 01:15:59.510
that other people are using. So
1126
01:15:59.969 --> 01:16:12.615
I I I don't I I think it's basically training one problem for the other, But what I think is is important to highlight is as bad and as scary as we think some operators of these coins might be,
1127
01:16:13.679 --> 01:16:15.940
the people that are switching to these operators
1128
01:16:16.880 --> 01:16:20.420
see way scarier boogeyman and way scarier outcomes
1129
01:16:20.825 --> 01:16:27.805
if they don't move over to Tethr, if that makes sense. Right. I mean, ultimately, everything has trade offs. Right? I mean, I think Yeah. Most people wouldn't argue
1130
01:16:28.500 --> 01:16:31.320
against the fact that using something like Tethr,
1131
01:16:32.659 --> 01:16:33.400
gives you
1132
01:16:34.420 --> 01:16:39.205
additional censorship resistant guarantee. Like, Tether has been frozen and seized,
1133
01:16:39.665 --> 01:16:41.445
but compared to something like Zelle
1134
01:16:41.905 --> 01:16:45.350
or a traditional bank wire or something, it is obviously
1135
01:16:45.750 --> 01:16:48.170
a massive improvement on that trade off balance.
1136
01:16:49.030 --> 01:16:56.655
Yeah. The the other assumption that I wanna challenge there, briefly is the idea that you have privacy in some of these authoritarian countries. Like,
1137
01:16:57.675 --> 01:17:10.480
there is no privacy in Venezuela. If the Venezuelan government knows everything you do in the banking system, They have a system that knows how many times you've been to the doctor, how many cars you drive, how many pets you have, how many kids you have.
1138
01:17:11.405 --> 01:17:18.065
So the surveillance state is already here. I I think a lot of people just don't really appreciate that.
1139
01:17:19.920 --> 01:17:21.140
I mean, on that point,
1140
01:17:21.440 --> 01:17:25.220
there was a lot of there was a lot of writing and articles about
1141
01:17:28.525 --> 01:17:31.985
the Venezuelan government seizing Bitcoin mining operations.
1142
01:17:32.525 --> 01:17:33.985
Mhmm. I was one of them.
1143
01:17:34.500 --> 01:17:37.460
That was one of them. You wanna talk about that at all? Or
1144
01:17:39.619 --> 01:17:40.119
sure.
1145
01:17:41.945 --> 01:17:42.445
So
1146
01:17:43.784 --> 01:17:45.804
how do how do where to start?
1147
01:17:48.344 --> 01:17:49.724
So as many Venezuelans,
1148
01:17:51.449 --> 01:17:56.270
back in the day, when when many when the first type of group of Venezuelans got into Bitcoin,
1149
01:17:57.370 --> 01:17:57.870
we,
1150
01:17:58.805 --> 01:18:01.465
you know, many quickly saw this connection,
1151
01:18:02.405 --> 01:18:02.905
between
1152
01:18:03.685 --> 01:18:04.185
Venezuela
1153
01:18:04.565 --> 01:18:06.185
and subsidized electricity,
1154
01:18:07.150 --> 01:18:08.370
and our
1155
01:18:08.750 --> 01:18:13.730
strict currency control that enabled us or or prevented us from from protecting our savings.
1156
01:18:14.405 --> 01:18:17.065
And they saw Bitcoin, and they saw mining,
1157
01:18:17.365 --> 01:18:23.820
and connected the two dots, and in a very similar way that that China did, and we get that get into that in a second.
1158
01:18:24.599 --> 01:18:26.060
They started using Bitcoin
1159
01:18:26.440 --> 01:18:27.900
to essentially extract
1160
01:18:29.855 --> 01:18:33.075
an incentive that was being provided by the government by way of subsidies,
1161
01:18:33.615 --> 01:18:34.675
and essentially,
1162
01:18:35.935 --> 01:18:37.475
use Bitcoin to
1163
01:18:40.160 --> 01:18:43.440
be well better off in a system that,
1164
01:18:43.760 --> 01:18:46.355
did not let you acquire dollars at the time.
1165
01:18:46.915 --> 01:18:51.735
So a lot of people start mining Bitcoin, and they start doing really well.
1166
01:18:52.835 --> 01:18:53.085
And,
1167
01:18:53.830 --> 01:18:57.850
at first, it was a bit secretive. People were scared. They didn't know how the government was gonna react,
1168
01:18:58.710 --> 01:19:08.014
but it wasn't illegal. So me my family and I, we just got we were so excited. We were just telling everyone that would come to us and helping them how to mine, set up facilities,
1169
01:19:08.635 --> 01:19:11.090
figure out the electrical work, and essentially,
1170
01:19:11.870 --> 01:19:14.210
started helping many people set up their mines.
1171
01:19:14.830 --> 01:19:18.530
And, and mining starts getting quite viral in Venezuela because,
1172
01:19:18.830 --> 01:19:19.790
you know, you were getting
1173
01:19:20.415 --> 01:19:26.114
I remember back in the day, you were getting a 3 to $400 a month from a rig, and minimum wage in Venezuela was about $20.
1174
01:19:26.494 --> 01:19:29.155
So people were getting, like, 20 times minimum wage
1175
01:19:29.520 --> 01:19:31.540
by by just setting up a rig,
1176
01:19:31.920 --> 01:19:36.180
even if it was a GPU or or a basic, they were kinda at the same revenue at the time.
1177
01:19:36.495 --> 01:19:36.995
And,
1178
01:19:37.535 --> 01:19:38.195
and so
1179
01:19:38.895 --> 01:19:39.555
what happens,
1180
01:19:40.094 --> 01:19:44.340
and and the the the the this is where the Petro comes into the story. And,
1181
01:19:44.880 --> 01:19:48.020
what happens is this is happening in the middle of an ICO boom.
1182
01:19:48.640 --> 01:19:54.525
The Venezuelan government oh, man. This is gonna be a long story, but I I have to tell it. So the Venezuelan government,
1183
01:19:55.625 --> 01:19:58.685
once they once Chavez died and they started facing issues,
1184
01:19:59.065 --> 01:20:01.325
they they they they got on this trend
1185
01:20:01.719 --> 01:20:18.935
that every year towards Christmas, when when people were most upset, because usually by then, you know, people were just mad that they didn't have money going up to Christmas to buy gifts and and the country was just in shambles. So they would they would find a way to give to get to do freebie, to do giveaways. So in 2017,
1186
01:20:20.130 --> 01:20:21.990
they they took the largest,
1187
01:20:22.450 --> 01:20:22.950
electronics
1188
01:20:23.410 --> 01:20:27.190
company, in the country. So like equivalent to like Venezuela and Best Buy,
1189
01:20:27.605 --> 01:20:30.505
and they went into Best Buy and took all of their stores
1190
01:20:31.205 --> 01:20:32.665
countrywide and said that
1191
01:20:33.125 --> 01:20:33.865
these stores
1192
01:20:34.965 --> 01:20:36.825
had been bringing in goods
1193
01:20:37.350 --> 01:20:42.810
at, at speculative prices and that the government has essentially slashed all of their prices by like 70%
1194
01:20:43.430 --> 01:20:47.034
and they were going to distribute them to the people, for Christmas.
1195
01:20:47.335 --> 01:20:50.795
And so, of course, people lined up to get 40 inch TVs for $20,
1196
01:20:51.335 --> 01:21:01.330
and, and they absolutely raided the inventory and stock of this company, and this company, essentially crashed and and seized existing. It could never recover from from that. But the government,
1197
01:21:02.110 --> 01:21:05.255
had happy voters for another year for another few months.
1198
01:21:05.875 --> 01:21:10.215
The the year after that, they, did the same thing with a big shoe company.
1199
01:21:10.540 --> 01:21:11.280
They essentially,
1200
01:21:12.219 --> 01:21:21.595
basically seized all their inventory, sliced, like slashed it in prices and gave it away to people and again, you know, photo ops for people walking out with 7 pairs of shoes for $7.
1201
01:21:22.455 --> 01:21:22.955
And,
1202
01:21:23.815 --> 01:21:27.035
obviously, as companies caught onto this, they stopped bringing inventory.
1203
01:21:27.860 --> 01:21:28.360
And
1204
01:21:28.660 --> 01:21:29.480
come Christmas
1205
01:21:29.940 --> 01:21:32.280
2000 and I believe this was 2017,
1206
01:21:33.940 --> 01:21:42.650
right around the peak of the market, nobody had inventory. Nobody had been bringing inventory of the year because they wanna be they wanna be the idiots that that we're gonna be giving away free Christmas gifts.
1207
01:21:43.130 --> 01:21:43.630
And,
1208
01:21:44.330 --> 01:21:47.870
basically, the year was coming to an end, there was nothing to give away,
1209
01:21:48.330 --> 01:21:50.670
and, I I don't really have,
1210
01:21:51.210 --> 01:21:54.974
specific data for this, but I think what went down was something like this.
1211
01:21:56.394 --> 01:21:56.894
Maduro
1212
01:21:57.355 --> 01:22:05.090
is is trying to keep his crony officials happy. Crony officials are getting upset because they're looking at Christmas and they're not gonna get free money,
1213
01:22:05.550 --> 01:22:16.475
and, and so they say, what are you gonna do for us? And Maduro says, bring me all the importation records for what's been brought into the country this year. And there was a name that kept recurring
1214
01:22:16.820 --> 01:22:18.680
throughout 2017 as importers,
1215
01:22:19.460 --> 01:22:22.520
of shipping goods into Venezuela, and that name was Bitmain.
1216
01:22:24.180 --> 01:22:30.955
And so they dug a little bit deeper in Bitmain, and they saw that these machines literally printed the dollars or Bitcoin.
1217
01:22:31.574 --> 01:22:33.435
And they said, oh my god.
1218
01:22:33.900 --> 01:22:37.280
There are machines that print dollars, and they are in this country.
1219
01:22:37.820 --> 01:22:38.720
How can we
1220
01:22:39.260 --> 01:22:41.520
redistribute these machines to our cronies?
1221
01:22:42.425 --> 01:22:44.765
And they advised this marvelous plan
1222
01:22:45.465 --> 01:22:46.765
that, involved
1223
01:22:47.545 --> 01:22:49.485
announcing a fake new cryptocurrency,
1224
01:22:51.790 --> 01:22:54.690
so that by promoting this fake new cryptocurrency,
1225
01:22:55.550 --> 01:22:57.329
they could educate their cronies
1226
01:22:57.630 --> 01:23:01.975
on what these mining machines look like and basically instruct them,
1227
01:23:02.515 --> 01:23:03.495
that they could go,
1228
01:23:04.594 --> 01:23:08.135
take them from these people and then start mining dollars for themselves.
1229
01:23:08.790 --> 01:23:11.130
And so this is where the Petro push starts.
1230
01:23:11.590 --> 01:23:13.370
And if you look at the Petro,
1231
01:23:13.910 --> 01:23:15.350
and if you look at the,
1232
01:23:15.830 --> 01:23:20.555
promotional materials that were done for the Petro, they all revolved around mining,
1233
01:23:21.095 --> 01:23:24.955
mining equipment, and they would show ASICs and they would show GPU rigs.
1234
01:23:25.255 --> 01:23:26.795
And you wanna hear something funny?
1235
01:23:27.220 --> 01:23:28.840
The Petro was never,
1236
01:23:30.580 --> 01:23:34.935
there were never any miners for the Petro. The Petro could not be mined. It's a closed network.
1237
01:23:35.495 --> 01:23:36.635
So what these,
1238
01:23:38.455 --> 01:23:39.355
Petro advertisements
1239
01:23:39.815 --> 01:23:42.555
were was in fact education campaigns
1240
01:23:43.170 --> 01:23:51.429
for so that people could identify miners, understand miners, and then go seize them from the people that were legally mining in the country.
1241
01:23:52.905 --> 01:23:54.125
Right after the Petro
1242
01:23:56.265 --> 01:23:56.765
promotion,
1243
01:23:57.225 --> 01:24:03.139
we and many other miners around the country started seeing new strange visitors into our mining facilities,
1244
01:24:04.159 --> 01:24:05.760
and they would come dressed as,
1245
01:24:06.159 --> 01:24:10.245
utility people, they would come dressed as mostly utility people.
1246
01:24:11.745 --> 01:24:12.245
And,
1247
01:24:13.265 --> 01:24:13.765
surely,
1248
01:24:14.465 --> 01:24:19.380
few days later, these utility people revealed themselves as not utility people,
1249
01:24:20.159 --> 01:24:27.060
and they started essentially harassing miners, threatening miners to to seize equipment, threatening miners to to shut down their facilities,
1250
01:24:27.795 --> 01:24:29.335
and then miners essentially,
1251
01:24:30.435 --> 01:24:32.775
you know, reneged and and they were basically
1252
01:24:33.315 --> 01:24:34.135
all the,
1253
01:24:35.270 --> 01:24:37.770
miners like ourselves that did not,
1254
01:24:38.230 --> 01:24:42.410
wanna accept that and would not ever get in bed with that type of government.
1255
01:24:42.795 --> 01:24:45.934
We basically rolled rolled up our facilities and left.
1256
01:24:46.954 --> 01:24:55.030
But what the government did is they continued seizing machines from a bunch of people, in fact, some of the machines that were shipped to Venezuela
1257
01:24:55.410 --> 01:25:04.245
were actually stolen from us at the dock and the shipping company called us to tell us that they had been stolen. And when we asked what we could do about it,
1258
01:25:04.865 --> 01:25:06.965
we were told that the last person
1259
01:25:07.270 --> 01:25:13.590
that had gone and asked about what happened, with their mining equipment was told never to go back to the,
1260
01:25:14.310 --> 01:25:16.810
army office where they went to pose the question.
1261
01:25:17.385 --> 01:25:17.885
So
1262
01:25:18.985 --> 01:25:20.445
fast forward until today,
1263
01:25:21.145 --> 01:25:22.844
what ended up happening is the government,
1264
01:25:24.025 --> 01:25:26.284
of course, they saw something that could benefit
1265
01:25:26.770 --> 01:25:28.150
people or themselves
1266
01:25:28.690 --> 01:25:30.469
and they decided to
1267
01:25:30.929 --> 01:25:31.750
help themselves,
1268
01:25:32.369 --> 01:25:35.670
of course, they've created this entity called Sunakrip.
1269
01:25:36.565 --> 01:25:38.585
Sunacrip is the national cryptocurrency
1270
01:25:39.125 --> 01:25:39.625
body,
1271
01:25:40.324 --> 01:25:47.699
of course, it is one of the sanctioned bodies, one of the few fully sanctioned bodies in Venezuela is the Sunacrip, and another fully sanctioned,
1272
01:25:48.639 --> 01:25:52.739
part of Venezuela is the Petro and anyone that has to do with the Petro, ironically enough.
1273
01:25:53.215 --> 01:25:55.955
So so Nakrip created a national pool,
1274
01:25:56.495 --> 01:25:59.235
and it forces every Venezuelan miner
1275
01:25:59.695 --> 01:26:00.195
to
1276
01:26:00.900 --> 01:26:03.080
send their payouts to the government run pool,
1277
01:26:04.020 --> 01:26:08.760
and then they have to trust the government to disperse your Bitcoin back to you as a miner.
1278
01:26:09.225 --> 01:26:09.725
So,
1279
01:26:10.264 --> 01:26:14.125
yeah. I'll pause there, but I'd love to hear your thoughts on that pool, Matt.
1280
01:26:16.665 --> 01:26:17.565
So I mean,
1281
01:26:18.110 --> 01:26:18.690
this is,
1282
01:26:20.910 --> 01:26:21.969
I I appreciate
1283
01:26:22.270 --> 01:26:22.770
the
1284
01:26:23.230 --> 01:26:29.485
this that's some story right there. So so a couple things to unpack there. First of all, you said
1285
01:26:30.025 --> 01:26:32.364
your family disbanded their mining operation
1286
01:26:33.409 --> 01:26:37.670
and moved it out of the country. You literally got the mining rigs out of the country.
1287
01:26:38.369 --> 01:26:41.830
We did not. We sold them to people locally that wanted to continue mining.
1288
01:26:43.005 --> 01:26:46.065
And then you can set up shop somewhere else if you want to.
1289
01:26:47.005 --> 01:26:56.470
Yeah. So the the the way out was there's obviously a lot more nuance to the way out. They you know, in fact, what ended up happening was they they raided one of my brother's facilities.
1290
01:26:57.365 --> 01:26:58.585
They threatened us
1291
01:26:58.965 --> 01:26:59.945
to, you
1292
01:27:00.405 --> 01:27:03.625
know, to extend us, or or, you know, place charges
1293
01:27:04.199 --> 01:27:04.800
against us.
1294
01:27:05.239 --> 01:27:08.699
They they they tried to threaten with all these weird scary sounding,
1295
01:27:09.719 --> 01:27:10.860
charges and allegations.
1296
01:27:11.735 --> 01:27:21.680
Of course, legally, that's all been you know, they you know, we won that case. There's you know, we set the record straight. There's absolutely nothing wrong with what we did. But at the
1297
01:27:22.140 --> 01:27:22.960
time, as
1298
01:27:23.260 --> 01:27:31.655
as as Ale will and then many other Venezuelans will know, like, Venezuela is a very lawless place. So everyone's gonna try to bully you into something. And it's really a dog eat dog,
1299
01:27:32.195 --> 01:27:32.695
world.
1300
01:27:33.074 --> 01:27:33.554
So,
1301
01:27:34.195 --> 01:27:45.489
basically we, we did not play ball with with those guys at the time, with the cronies at the time, and we, instead, decided to take it up in court and and clean it up that way, and and that's what happened.
1302
01:27:47.545 --> 01:27:48.585
Got it. Got it.
1303
01:27:49.704 --> 01:27:55.244
What I mean, the other I mean, there was a lot there. The other thing I wanna unpack, the Petro still exists. Right?
1304
01:27:56.210 --> 01:28:04.290
Like, aren't they is it true that they're, like, giving it out as welfare as well? Like, you get you get Mhmm. If you register, you get free Petro? Or
1305
01:28:05.455 --> 01:28:12.515
Yeah. Because, essentially, it's just 2, 2 basically related to what Maurizio was saying. It's it's, again, just like a government's,
1306
01:28:13.550 --> 01:28:20.190
a government ran social program. So there's, like, this special ID in Minnesota, which is like,
1307
01:28:21.655 --> 01:28:29.515
you know, if if you if you issue yourself that ID, then you have the ability to register in the Petro app,
1308
01:28:30.030 --> 01:28:32.290
which is essentially like a national
1309
01:28:32.909 --> 01:28:34.130
a national wallet.
1310
01:28:34.590 --> 01:28:42.645
So similar to, like, the Chivo wallet in El Salvador, but in this case, it's, like, you know, connected to the the the Venezuelan government's
1311
01:28:43.825 --> 01:28:48.005
monetary network, so so to speak. So it's more like a a a
1312
01:28:48.530 --> 01:28:56.310
put it into context, I I think it's it's kinda like a national PayPal. You know what I mean? So that's like the Petro doesn't have any blockchain.
1313
01:28:57.125 --> 01:28:59.065
You can make Petro payments
1314
01:28:59.445 --> 01:29:01.545
with within the natural app.
1315
01:29:02.085 --> 01:29:07.370
And They don't even have a centralized there's not even, like, a centralized blockchain attached to it. It's
1316
01:29:07.830 --> 01:29:08.650
just completely
1317
01:29:09.750 --> 01:29:12.170
Yeah. It's a it's a low it's a low shit coin.
1318
01:29:12.630 --> 01:29:17.195
Exactly. That's Right. But, like, they haven't even gone the full they have there it's not even
1319
01:29:17.815 --> 01:29:24.954
it's it's not it hasn't even hit Shitcoin status. Right? Like, it doesn't have a blockchain or You can run a node. You cannot run a node.
1320
01:29:25.400 --> 01:29:32.220
Okay. Gotcha. Exactly. So so it was it was supposed to to be launched as a federated network,
1321
01:29:32.605 --> 01:29:33.425
and, essentially,
1322
01:29:34.125 --> 01:29:39.105
the initial white paper of the El Petro that came out back in 2017
1323
01:29:40.420 --> 01:29:40.920
was
1324
01:29:41.780 --> 01:29:45.320
a hard fork of Dash. So it was built on x11
1325
01:29:45.620 --> 01:29:49.935
it was supposed to be built on x11 on the x11 algorithm. Right?
1326
01:29:52.635 --> 01:29:55.685
That never happened. And then just the the,
1327
01:29:58.290 --> 01:30:14.870
government body that Mauricio was talking about, it was it just changed the the dude that was, you know, like, the the minister of of this government body. They changed them, like, 2 twice or or 3 times or whatever. And so plans would just would just change.
1328
01:30:15.570 --> 01:30:18.950
It's it's mostly based on purely lobbying.
1329
01:30:19.730 --> 01:30:23.755
You know what I mean? And and and it it it essentially became just like,
1330
01:30:24.715 --> 01:30:27.054
the closer you got to Sunacrip,
1331
01:30:28.510 --> 01:30:33.010
the closer you had the opportunity of being granted a permit
1332
01:30:33.710 --> 01:30:34.449
to become,
1333
01:30:34.975 --> 01:30:35.795
you know, a cryptocurrency
1334
01:30:36.415 --> 01:30:38.675
exchange in Minnesota so that you could legally,
1335
01:30:39.695 --> 01:30:58.744
build a platform to onboard users and then, you know, receive their their ball of ours. And then you could you could, you know, legally go to to private banks or even public banks in the country and and open up a a corporate treasury account to receive, believe it is, under your Venezuelan Corporation.
1336
01:30:59.445 --> 01:31:02.660
And then there's some, like, very but this is really sketchy
1337
01:31:03.520 --> 01:31:06.260
little Petro thing, which is, like, you know, like, Petro
1338
01:31:07.040 --> 01:31:08.340
Petro Arbitrage
1339
01:31:08.805 --> 01:31:11.545
traders, which is essentially people that would buy
1340
01:31:12.165 --> 01:31:15.225
that would buy Petro at a discounted
1341
01:31:16.005 --> 01:31:16.505
prices
1342
01:31:17.440 --> 01:31:23.300
from from other people because they would pay them in cash or whatever. And so you would you would essentially be buying Petros
1343
01:31:23.760 --> 01:31:25.585
at, you know, like, 70%
1344
01:31:26.045 --> 01:31:27.425
discount or whatever.
1345
01:31:27.725 --> 01:31:28.385
And then
1346
01:31:28.925 --> 01:31:34.350
and then these people's these people would change would either change petrol for
1347
01:31:34.810 --> 01:31:38.430
gas at gas stations because you can get you could get,
1348
01:31:39.050 --> 01:31:39.950
discount rates
1349
01:31:40.415 --> 01:31:40.995
at at
1350
01:31:41.375 --> 01:31:45.155
at, at the gasoline gas stations if you pay with the petrol, essentially,
1351
01:31:45.615 --> 01:31:54.050
at certain gas stations at least. And so there's different The gas stations down there are state owned. Right? Or all of them Exactly. All of them. Yeah, man. It it's
1352
01:31:54.555 --> 01:31:57.695
it's all a government sham in trying to get you to use the petrol,
1353
01:31:58.555 --> 01:31:59.295
and again,
1354
01:31:59.675 --> 01:32:01.695
it it all comes back to optics.
1355
01:32:02.890 --> 01:32:04.990
So if you have 2 currencies
1356
01:32:05.770 --> 01:32:06.750
at the same time,
1357
01:32:07.290 --> 01:32:19.625
you can inflate the 2 of them and you'll have 2 separate rates of inflation, and you won't pile on the whole inflation onto one of them. Does that make sense? It's so fucked up. It's all optics, bro. It's all a game of optics.
1358
01:32:19.980 --> 01:32:23.520
And the Petro was nothing more than a tool to manipulate
1359
01:32:24.460 --> 01:32:24.960
optics.
1360
01:32:25.340 --> 01:32:37.620
But you keep talking about it in the past tense, like, it still exists. Right? Like, people are I've I've already written it off with some bullshit token, like, you know, whoever whoever is using it, I can't help you if you're still using the Petrobrill, like, you're lost. Like
1361
01:32:38.180 --> 01:32:39.560
But people are. Right?
1362
01:32:40.020 --> 01:32:46.985
No. I mean, the only people that I would argue are using the Petro are people that are being lied to and people that are being told miss
1363
01:32:47.545 --> 01:32:49.245
people that are getting complete misrepresentations
1364
01:32:49.625 --> 01:32:52.285
about what this thing does. The people that are using
1365
01:32:52.750 --> 01:32:58.369
Bitcoin today or, sorry, the Petro today are the same people that still believe in Chavez's government plan.
1366
01:32:58.989 --> 01:33:02.545
So Yeah. Like, you will still have those people. They're just hopeless.
1367
01:33:03.245 --> 01:33:09.425
Yeah. Yeah. Yeah. Like, dude, you can't cash out of the Petro. Like, you can't cash out of the Petro. You would see Petro's international
1368
01:33:10.810 --> 01:33:11.310
Bolivarian
1369
01:33:11.610 --> 01:33:22.565
wallet or whatever, but you can cash out of that thing. And nobody get wants to get near that thing. To the point that Are are there no, like, Bitcoin Petro markets?
1370
01:33:23.505 --> 01:33:42.125
Or No. I told you no Bitcoiner would be caught dead doing that. Like, no real Bitcoiner would ever accept that. You know what I mean? Like, they they know too much. They know so much better than to accept the petrol. At least if if anybody that's taking the petrol right now is trying to pull a fast one, thinking that they know more than someone else,
1371
01:33:42.665 --> 01:33:45.725
and most likely they're gonna get cut. There's a saying in Spanish
1372
01:33:46.300 --> 01:33:48.239
that I remember oftentimes it says,
1373
01:33:48.699 --> 01:33:52.719
if you like butter, it's been butter in Venezuela used to come in a tin can
1374
01:33:53.155 --> 01:33:53.554
So,
1375
01:33:53.955 --> 01:33:54.455
there's,
1376
01:33:55.075 --> 01:34:07.380
there's a saying that says, if you like eating if you like dipping your your finger into the butter can to eat the butter, you may cut yourself when you do that. And so what that is meant to say is if you like
1377
01:34:07.920 --> 01:34:15.415
easy money and if you look at easy things, like, you will get cut. Like, there is a very good chance you'll get cut because it's very risky.
1378
01:34:19.440 --> 01:34:22.100
Yeah. That makes sense to me. Too good to be true.
1379
01:34:22.640 --> 01:34:23.140
Correct.
1380
01:34:25.195 --> 01:34:28.415
Correct. So then the other interesting thing to unpack from your
1381
01:34:29.595 --> 01:34:31.355
from your story is,
1382
01:34:32.450 --> 01:34:34.150
the Venezuelan government mining.
1383
01:34:35.010 --> 01:34:37.190
So you said there's a government mining pool.
1384
01:34:37.650 --> 01:34:38.150
Presumably,
1385
01:34:38.610 --> 01:34:40.070
that mining pool is
1386
01:34:40.505 --> 01:34:46.285
is not a public mining pool, so it's registered in the unknown if you look at one of the mining pool charts.
1387
01:34:49.400 --> 01:34:51.980
Would you agree with the statement that
1388
01:34:52.600 --> 01:34:55.820
the Venezuelan government is the single largest
1389
01:34:57.745 --> 01:34:58.645
government based
1390
01:34:59.025 --> 01:35:01.445
mining operation that exists in the world today?
1391
01:35:04.740 --> 01:35:07.480
There's a I don't know Turkey, but there's a very good chance.
1392
01:35:09.300 --> 01:35:11.880
Is is Turkey mining Bitcoin, the government?
1393
01:35:13.375 --> 01:35:16.355
They they have a a a pool as well, my understanding.
1394
01:35:17.695 --> 01:35:19.075
I wasn't aware of that.
1395
01:35:19.870 --> 01:35:21.489
Yeah. I believe they have a Right.
1396
01:35:22.110 --> 01:35:23.570
A a a mining pool on Turkey.
1397
01:35:25.310 --> 01:35:27.570
Right. So if I were to buy some insight,
1398
01:35:29.315 --> 01:35:42.330
Hit us. Like, look look, Matt. It this all brings this all of this amazing conversation that we've had so far between the 3 of us, it all brings back, if you notice, if you go deep into it,
1399
01:35:42.870 --> 01:35:43.610
to 2017.
1400
01:35:44.395 --> 01:35:47.055
2017 was the year of hyperinflation in Minnesota.
1401
01:35:47.515 --> 01:35:49.535
2017 was the year that dollarization
1402
01:35:49.915 --> 01:35:51.855
started, like, ticking up in Minnesota.
1403
01:35:52.310 --> 01:35:57.929
2017 was the year that the Venezuelan government introduced their plans to, you know, launch El Petro.
1404
01:35:58.469 --> 01:35:58.969
2017
1405
01:35:59.755 --> 01:36:04.575
was the year when the Venezuelan regime got sanctioned by the US, and 2017
1406
01:36:05.755 --> 01:36:07.215
was the same year
1407
01:36:07.950 --> 01:36:10.130
because of all that scene of events
1408
01:36:11.390 --> 01:36:14.370
that the Venezuelan government started, you know, seizing
1409
01:36:14.830 --> 01:36:15.330
mining
1410
01:36:15.710 --> 01:36:16.210
equipment,
1411
01:36:16.785 --> 01:36:20.565
you know, from people that were essentially mining Bitcoin in the country. Because
1412
01:36:21.185 --> 01:36:29.270
for for a great period of time, that was like a black hole year, dude, in in Venezuela. And, you
1413
01:36:29.650 --> 01:36:32.310
know, the government not being able to move
1414
01:36:32.850 --> 01:36:33.750
their dollars,
1415
01:36:34.485 --> 01:36:35.305
their euros
1416
01:36:36.005 --> 01:36:36.505
deposited
1417
01:36:36.885 --> 01:36:38.425
in EU bank accounts,
1418
01:36:38.965 --> 01:36:39.785
their gold
1419
01:36:40.325 --> 01:36:42.265
deposited in gold vaults,
1420
01:36:42.725 --> 01:36:43.705
right, in England,
1421
01:36:44.180 --> 01:36:44.920
They're dollars
1422
01:36:45.460 --> 01:36:46.840
deposited at Citibank
1423
01:36:47.699 --> 01:36:49.960
in in in the US. I'm sorry.
1424
01:36:50.340 --> 01:36:53.160
So what else what else could you do
1425
01:36:53.815 --> 01:36:54.955
to finance yourself
1426
01:36:55.975 --> 01:36:56.635
other than
1427
01:36:57.015 --> 01:36:59.035
using the already almost,
1428
01:36:59.735 --> 01:37:01.755
like, wiped out local currency?
1429
01:37:02.910 --> 01:37:03.410
Mine
1430
01:37:03.950 --> 01:37:04.450
Bitcoin
1431
01:37:04.830 --> 01:37:07.010
with your cheap electricity
1432
01:37:07.470 --> 01:37:07.970
rates.
1433
01:37:08.510 --> 01:37:23.720
And before you started figuring out, you know, as a government, right, like, how how am I gonna buy this mining equipment? Where does this actually come from? How do I set up this? What if it was essentially trying to tap
1434
01:37:24.100 --> 01:37:27.385
into the already existing mining infrastructure that was
1435
01:37:27.784 --> 01:37:35.885
that was built in the country. And so tapping into private individuals that would try to agree to go rogue,
1436
01:37:36.890 --> 01:37:42.429
to Mauricio's point, and did not agree, your your mining equipment was just seized. So
1437
01:37:42.890 --> 01:37:44.429
It was easier to extort
1438
01:37:44.865 --> 01:37:48.245
individuals or pressure individuals than start from scratch.
1439
01:37:48.705 --> 01:37:56.590
Yeah. And so one one thing that I will say that I that just to challenge the idea that Venezuelan government could be mining Bitcoin is 1.
1440
01:37:56.970 --> 01:37:58.350
They are the most inept
1441
01:37:58.730 --> 01:38:01.630
and incompetent group of people I have ever come across.
1442
01:38:02.135 --> 01:38:18.139
So I do not know that they even have the capacity to organize themselves to mine for their own collective good. I have a feeling that a lot of these miners were ad hoc assigned to their top cronies so that they could mine for themselves, and they would have to and they would basically come off the payroll.
1443
01:38:18.440 --> 01:38:22.265
Right? So I think they've given a bunch of,
1444
01:38:22.965 --> 01:38:34.580
generals or army this or army that, like, a a set amount of minors to sort of, you know, keep them happy, but I I I I there are 2 things that I know to be true. 1, is these are
1445
01:38:35.120 --> 01:38:41.344
very short term oriented and and not very sort of intelligent in terms of financing.
1446
01:38:41.724 --> 01:38:43.105
And the second one is
1447
01:38:43.565 --> 01:38:47.025
they I don't think they have the capacity or the resources
1448
01:38:47.490 --> 01:38:48.390
to have invested
1449
01:38:48.770 --> 01:38:49.590
or grown
1450
01:38:50.050 --> 01:39:03.074
beyond the machines or the assets that they, extorted from people that have already done that work. Basically, is they saw something that was working and they took it, but they are incapable of building something that works from scratch.
1451
01:39:06.110 --> 01:39:07.889
Yeah. I mean, that makes sense to me.
1452
01:39:09.869 --> 01:39:11.730
I guess in a lot of ways, probably
1453
01:39:12.665 --> 01:39:20.605
even excluding Bitcoin. Right? When when someone says, like, the Venezuelan government, it's really a collection of cronies, right, rather than,
1454
01:39:21.550 --> 01:39:24.530
like, some It depends on who you ask, but for sure, in my view.
1455
01:39:26.750 --> 01:39:29.490
So, I mean, the story of Venezuela is really interesting,
1456
01:39:29.965 --> 01:39:33.505
especially how it relates to Bitcoin and the broader ecosystem there,
1457
01:39:34.525 --> 01:39:35.665
where it's, like, almost
1458
01:39:36.445 --> 01:39:40.210
it's a story of the people getting fucked by their local,
1459
01:39:42.750 --> 01:39:43.889
their their local,
1460
01:39:44.510 --> 01:39:51.465
you know, their local economy, and then it's a story of the government getting fucked by the global economy. Right?
1461
01:39:52.245 --> 01:39:56.185
Like, the global financial system. Like, the local financial system failed
1462
01:39:56.680 --> 01:39:59.580
the individuals, and then the global financial system
1463
01:40:00.280 --> 01:40:01.580
failed the government
1464
01:40:01.960 --> 01:40:07.155
both at the same time and both kind of moved towards Bitcoin and the greater ecosystem?
1465
01:40:08.895 --> 01:40:16.100
Yeah. I would challenge this idea that the the the the world the financial world failed Venezuela. I I think Venezuela
1466
01:40:16.480 --> 01:40:16.960
was,
1467
01:40:17.600 --> 01:40:19.060
Venezuela was responsible
1468
01:40:19.360 --> 01:40:20.420
for their own
1469
01:40:21.200 --> 01:40:21.700
failure.
1470
01:40:22.455 --> 01:40:22.955
They,
1471
01:40:23.494 --> 01:40:31.070
they had they still have all the resources to do things right, but they just chose not to. And Well, I meant, like, specifically,
1472
01:40:31.770 --> 01:40:34.190
like, the gold in the UK vaults,
1473
01:40:35.770 --> 01:40:38.110
European bank accounts, stuff like that. Right?
1474
01:40:38.645 --> 01:40:46.425
Yeah. And listen, at the end of the day, this this is a very difficult thing for me to answer because I'll speak very candidly. Okay?
1475
01:40:49.440 --> 01:40:51.140
When you are in a country
1476
01:40:51.520 --> 01:40:54.670
and and you see a a a a government
1477
01:40:55.345 --> 01:40:55.845
literally
1478
01:40:56.545 --> 01:40:57.045
chase
1479
01:40:58.385 --> 01:41:01.125
a group of people out of the country and
1480
01:41:01.905 --> 01:41:03.365
rob every opportunity
1481
01:41:03.790 --> 01:41:13.685
that they had, take away their factories, make it impossible for them to hire people, make them unable to access financing, make them unable to buy dollars. You are essentially
1482
01:41:14.545 --> 01:41:16.965
kicking people out of their own country,
1483
01:41:17.825 --> 01:41:22.690
and you're doing this not through democratic means, you're doing this by force.
1484
01:41:23.550 --> 01:41:32.494
You're doing this as you're getting millions of people on the street protesting and when people go out and protest, what did you do? Maduro went out and shot them. I had friends
1485
01:41:33.034 --> 01:41:38.335
literally, and this is gonna sound dramatic, but I actually had friends, people I knew died in protests
1486
01:41:39.010 --> 01:41:43.350
trying to get a recount of our election that was clearly stolen.
1487
01:41:44.770 --> 01:41:46.790
When you see a group of criminals
1488
01:41:48.535 --> 01:41:49.035
chase
1489
01:41:49.735 --> 01:41:53.355
a group of hardworking, honest individuals out of their own country,
1490
01:41:55.760 --> 01:41:57.699
and you see what they're trying to do,
1491
01:41:59.520 --> 01:42:00.020
I
1492
01:42:00.400 --> 01:42:00.880
do not
1493
01:42:01.599 --> 01:42:06.905
I have a really hard time, even though I am a Bitcoiner and even though I believe in open permissionless
1494
01:42:07.285 --> 01:42:08.345
access to transactions,
1495
01:42:09.525 --> 01:42:11.865
I do think that there is the possibility
1496
01:42:12.810 --> 01:42:14.510
that very, very bad
1497
01:42:15.050 --> 01:42:15.550
agents
1498
01:42:16.730 --> 01:42:17.470
can get
1499
01:42:17.850 --> 01:42:18.350
circumstantially
1500
01:42:19.130 --> 01:42:20.270
a lot of power
1501
01:42:21.035 --> 01:42:23.855
And we, as a global society,
1502
01:42:24.875 --> 01:42:25.614
should have
1503
01:42:25.915 --> 01:42:26.975
checks and balances
1504
01:42:27.435 --> 01:42:35.370
so that we can bring that bad agent or prevent that bad agent from create causing damage in other parts of the world.
1505
01:42:35.990 --> 01:42:36.490
And
1506
01:42:37.395 --> 01:42:38.055
I thought,
1507
01:42:38.595 --> 01:42:39.735
as I've been a student,
1508
01:42:40.595 --> 01:42:43.255
we have been going through this for 20 years.
1509
01:42:44.275 --> 01:42:44.775
20
1510
01:42:45.410 --> 01:42:50.949
5 years, this has been going on for it. Or it's not as came in in 99. It's been 23 years.
1511
01:42:51.650 --> 01:42:53.085
23 years, man.
1512
01:42:53.645 --> 01:42:54.545
In 2017,
1513
01:42:54.925 --> 01:42:56.465
that was 5 years ago,
1514
01:42:56.925 --> 01:43:00.065
after we had already been going through the grind for
1515
01:43:01.085 --> 01:43:02.065
18 years.
1516
01:43:03.140 --> 01:43:04.840
For the first time ever,
1517
01:43:05.380 --> 01:43:14.875
the US government stood stood up and said, what you are doing is wrong. The the government of Venezuela should not be called the government, they should be called a group of terrorists
1518
01:43:15.815 --> 01:43:19.355
and they sanctioned them. And you know how that made me feel?
1519
01:43:20.050 --> 01:43:22.390
Like there was a little bit of justice in the world.
1520
01:43:22.929 --> 01:43:29.110
And of course, it didn't work because they're still there, they kicked out my family, they kicked out Ale, they kicked out all of us,
1521
01:43:29.645 --> 01:43:36.385
and they separated all of our families, they broken our finances, they've given us a new life, sure, in a different country, all separated.
1522
01:43:37.220 --> 01:43:37.720
But
1523
01:43:38.740 --> 01:43:39.400
I worry
1524
01:43:41.620 --> 01:43:42.120
about
1525
01:43:43.140 --> 01:43:45.320
the the world losing its ability
1526
01:43:46.100 --> 01:43:46.600
to,
1527
01:43:48.095 --> 01:43:55.475
I would say without the use of force because you can still coerce somebody by twisting their arm financially without having to go use force,
1528
01:43:56.620 --> 01:43:57.120
but
1529
01:43:58.220 --> 01:44:00.320
we were unable to do that and
1530
01:44:01.260 --> 01:44:03.600
the Venezuelan government because they have this
1531
01:44:04.375 --> 01:44:07.115
magical thing that comes from the ground that is oil,
1532
01:44:07.655 --> 01:44:09.275
they can literally sit there
1533
01:44:09.815 --> 01:44:13.889
and have zero popular support from their voting population,
1534
01:44:14.190 --> 01:44:15.730
but they still have the resources
1535
01:44:16.269 --> 01:44:23.155
to keep them all down from rising up. And they will stay that way until someone's willing to do something,
1536
01:44:24.094 --> 01:44:28.675
and we won't. So for us in Venezuela, that just means we have to write off the fucking country,
1537
01:44:28.980 --> 01:44:30.199
and we have to leave,
1538
01:44:30.500 --> 01:44:33.079
because we knew nobody was gonna come in and do things right.
1539
01:44:33.460 --> 01:44:35.079
So I I
1540
01:44:35.780 --> 01:44:43.905
I do not think that Venezuela not being able to access their gold or their dollars is necessarily all that bad because if they had,
1541
01:44:44.284 --> 01:44:46.739
I don't know what would have happened in Venezuela.
1542
01:44:49.679 --> 01:44:59.545
Yeah. Agreed. And I guess at an interesting point there yeah. Sorry sorry about that. I I guess at an interesting point to bring up, and shed shed some light on, right, is is
1543
01:45:00.790 --> 01:45:03.290
whenever Travis precedent and you were,
1544
01:45:03.670 --> 01:45:11.225
you know, a government contractor or you did some project with the government or even if it it was the state oil company or whatever, right, or or public bank,
1545
01:45:11.685 --> 01:45:12.905
the perception
1546
01:45:14.245 --> 01:45:17.225
was that you were you were doing business
1547
01:45:18.190 --> 01:45:24.770
directly or indirectly, whatever, with the Venezuelan government. Right? Which was okay. But right now,
1548
01:45:25.655 --> 01:45:29.595
to be completely honest, the perception and the vibe is that
1549
01:45:30.375 --> 01:45:32.235
you are doing business
1550
01:45:32.855 --> 01:45:33.355
with
1551
01:45:34.349 --> 01:45:41.010
the most powerful families in Venezuela, which are 5 families, which are essentially the 5 families
1552
01:45:41.665 --> 01:45:43.445
that divide between themselves
1553
01:45:43.985 --> 01:45:44.645
with $25,000,000,000
1554
01:45:45.745 --> 01:45:46.405
in revenue
1555
01:45:46.785 --> 01:45:49.525
coming from oil that Venezuela receives
1556
01:45:49.905 --> 01:45:51.920
every single year. So it's $5,000,000,000
1557
01:45:52.780 --> 01:46:02.465
going to each one of these families, and you're no longer doing business with Venezuelan government or you're no longer being paid with the with, you know, the country's
1558
01:46:03.085 --> 01:46:07.085
money, the the the citizen's money or whatever, you're being paid
1559
01:46:08.204 --> 01:46:10.545
their mentality is that you're being paid
1560
01:46:12.389 --> 01:46:13.449
with their money.
1561
01:46:13.750 --> 01:46:15.290
You know what I mean? So it's like
1562
01:46:15.670 --> 01:46:33.369
various I've got to it's like all the cards. Honestly, they're they're all the cards, dude. And then it's it's fucking crazy. It's similar to, like, this rushing all the cards thing or whatever. By the way, just side note comment, Matt. I sent you via private message on a Twitter chat with Mauricio some screenshots of CryptoLago. CryptoLago
1563
01:46:34.185 --> 01:46:37.405
is essentially the only cryptocurrency exchange in Venezuela
1564
01:46:38.105 --> 01:46:40.205
that has a marketplace
1565
01:46:41.304 --> 01:46:42.205
for Petros.
1566
01:46:44.040 --> 01:46:46.200
I send you, like, a screenshot of my
1567
01:46:46.600 --> 01:46:55.075
there. I only have a user just to peek into that some from night. You will see that it's it it it only has a liquidity of 20 Petros.
1568
01:46:55.775 --> 01:47:03.969
20 Petros. 20 Petros by $90 that what's what's currently more or less trading the the the barrel of oil right now in international markets.
1569
01:47:04.510 --> 01:47:05.489
What is that like?
1570
01:47:06.030 --> 01:47:07.170
Nothing, dude. Like
1571
01:47:07.805 --> 01:47:08.705
like, not even
1572
01:47:09.165 --> 01:47:15.345
$2,000, man. Right? Worth of liquidity and petros that I at a national exchange. So it's a complete failure.
1573
01:47:18.949 --> 01:47:21.530
Yeah. I'm gonna pull those screenshots up on screen,
1574
01:47:22.150 --> 01:47:22.650
shortly.
1575
01:47:23.805 --> 01:47:27.105
Before I do that, first of all, I mean, obviously, this whole
1576
01:47:30.525 --> 01:47:34.170
it's complete fucking tragedy what is what happened to your country.
1577
01:47:35.270 --> 01:47:36.970
I absolutely hate to see it,
1578
01:47:37.510 --> 01:47:39.770
but I I feel like Mauricio
1579
01:47:40.150 --> 01:47:41.610
touched on a very interesting
1580
01:47:43.055 --> 01:47:45.155
conversation there in terms of sanctions.
1581
01:47:48.175 --> 01:47:48.835
I mean,
1582
01:47:49.695 --> 01:47:50.995
if Bitcoin's successful
1583
01:47:52.350 --> 01:47:53.969
as we expect it to be,
1584
01:47:56.350 --> 01:48:04.344
that cat is kind of out of the bag. Like, how do you circle that how do you circle that square? Like, there Right. I mean, to
1585
01:48:04.965 --> 01:48:08.664
to protect to the way I always looked at it is to protect
1586
01:48:09.900 --> 01:48:11.440
a dissident or opposition
1587
01:48:12.460 --> 01:48:14.080
or protester or refugee
1588
01:48:15.420 --> 01:48:15.920
from
1589
01:48:17.755 --> 01:48:19.614
exclusion from the financial system,
1590
01:48:20.315 --> 01:48:22.014
from a dictator or an authoritarian,
1591
01:48:23.275 --> 01:48:23.775
the
1592
01:48:24.960 --> 01:48:28.100
the trade off there is that a dictator and authoritarian
1593
01:48:28.560 --> 01:48:30.900
is also gonna have that same type of access
1594
01:48:31.235 --> 01:48:33.335
in terms of the global financial system.
1595
01:48:34.435 --> 01:48:37.975
And this is a topic that I think is just not often discussed
1596
01:48:38.410 --> 01:48:40.830
in Bitcoin land just because it's so sensitive.
1597
01:48:41.610 --> 01:48:42.110
Yep.
1598
01:48:42.570 --> 01:48:46.510
How do you feel about that? Like, do you think it's a net benefit? Do you think
1599
01:48:47.485 --> 01:48:50.364
it it it it ends up in a worse situation? Or
1600
01:48:51.405 --> 01:48:54.385
I wanna I wanna I wanna give you my my heartfelt
1601
01:48:55.190 --> 01:48:55.690
answer.
1602
01:48:59.510 --> 01:49:01.130
There's one thing that I believe
1603
01:49:01.670 --> 01:49:07.705
that I that is true, and that is that there are more good people trapped in bad regimes
1604
01:49:08.165 --> 01:49:09.305
than bad people,
1605
01:49:10.645 --> 01:49:12.640
you know, that need to be,
1606
01:49:13.260 --> 01:49:14.560
that that can be empowered
1607
01:49:15.100 --> 01:49:16.640
by, an open currency.
1608
01:49:17.020 --> 01:49:18.560
So I do think
1609
01:49:18.915 --> 01:49:22.614
at a base level that this will have a net benefit
1610
01:49:22.995 --> 01:49:25.655
to the world because I think that there are more people
1611
01:49:26.240 --> 01:49:28.980
being treated unfairly under these wild regimes
1612
01:49:29.520 --> 01:49:30.340
than there are,
1613
01:49:30.800 --> 01:49:33.060
than there is an absolute number of bad regimes.
1614
01:49:33.485 --> 01:49:41.184
Right? It it's kinda similar to the to the, to the Internet theory, which is, you know, if you put it out there, people are gonna start spreading bad information,
1615
01:49:41.660 --> 01:49:49.840
but they're gonna be spreading good information too, and the good information is gonna outnumber the bat by multiples. And so that that's kinda why that works. There are obviously trade offs.
1616
01:49:50.925 --> 01:49:52.465
As a as a Bitcoiner,
1617
01:49:53.085 --> 01:49:56.225
I to me, it was a very, very difficult time,
1618
01:49:56.925 --> 01:49:59.745
2017 when when people were raving about the Petro
1619
01:50:00.440 --> 01:50:03.180
and where, you know, in in many ways,
1620
01:50:04.600 --> 01:50:08.940
I've I've I I thought that the Venezuelan government was using
1621
01:50:09.285 --> 01:50:10.665
in some ways, Bitcoin
1622
01:50:11.045 --> 01:50:11.545
to,
1623
01:50:12.485 --> 01:50:15.865
circumvent some of the challenges that were that were posed by the sanctions.
1624
01:50:16.620 --> 01:50:17.120
And,
1625
01:50:18.220 --> 01:50:25.200
and and and so much so that, you know, a lot of people would reference the p to p volumes in in local Bitcoins in Venezuela.
1626
01:50:25.925 --> 01:50:33.705
And and I always thought that that was interesting because I would look at the math and I would speak to my friends, and I would try to understand who was on the other side of those trades.
1627
01:50:34.165 --> 01:50:34.985
And I
1628
01:50:35.490 --> 01:50:37.430
I have a pretty strong inclination
1629
01:50:38.130 --> 01:50:40.950
that the government was the one buying
1630
01:50:41.410 --> 01:50:44.070
Bitcoin in those b two b markets with printed fiat,
1631
01:50:44.565 --> 01:50:47.225
and they were using that Bitcoin to then pay
1632
01:50:47.605 --> 01:50:48.105
vendors
1633
01:50:48.405 --> 01:50:53.625
internationally. And so they were flooding the p two b markets with fiat to just acquire Bitcoin in exchange of worthless,
1634
01:50:54.570 --> 01:50:56.670
tokens in a in a in a in a
1635
01:50:57.050 --> 01:50:59.870
anonymous way. Right. That makes sense to me.
1636
01:51:00.330 --> 01:51:01.950
And so during that time,
1637
01:51:02.585 --> 01:51:05.965
I was I was I was really struggling because
1638
01:51:06.825 --> 01:51:10.605
I was finding a new career and a new love in Bitcoin,
1639
01:51:11.810 --> 01:51:13.190
While at the same time,
1640
01:51:13.890 --> 01:51:15.270
I I saw Bitcoin
1641
01:51:16.370 --> 01:51:16.870
basically
1642
01:51:17.250 --> 01:51:21.765
being Bitcoin and and being open and permissionless, and and and I couldn't
1643
01:51:22.225 --> 01:51:28.645
stop, even if I knew that it was them, I could have stopped them from using it. And I knew that by using it, they were benefiting.
1644
01:51:32.930 --> 01:51:34.790
As as much as I
1645
01:51:35.250 --> 01:51:35.990
would love
1646
01:51:36.370 --> 01:51:36.870
to
1647
01:51:38.945 --> 01:51:40.885
stop the Venezuela's from happening.
1648
01:51:42.625 --> 01:51:43.284
I think
1649
01:51:44.545 --> 01:51:45.605
if I knew
1650
01:51:46.170 --> 01:51:50.590
that regardless of where in the world you are, the next time a dictatorial
1651
01:51:50.970 --> 01:51:52.190
president comes around,
1652
01:51:52.490 --> 01:51:54.430
you will have the tools to escape
1653
01:51:55.335 --> 01:51:56.955
and that tool will be Bitcoin,
1654
01:51:57.735 --> 01:52:00.635
I I think that's a win because
1655
01:52:01.574 --> 01:52:05.730
I don't think that we'll be able to predict how humans behave.
1656
01:52:06.110 --> 01:52:10.050
I think that we just need to arm and educate people so that they can
1657
01:52:10.590 --> 01:52:12.610
defend themselves against a potential
1658
01:52:13.415 --> 01:52:17.755
attack. Right? So people need to be able to fend for their own. And so,
1659
01:52:19.015 --> 01:52:20.795
as much as I think it's a risk
1660
01:52:21.620 --> 01:52:22.120
that
1661
01:52:22.420 --> 01:52:23.960
globally, we might lose
1662
01:52:24.500 --> 01:52:28.120
some some of our power to kinda whip some rogue states back in line,
1663
01:52:28.855 --> 01:52:30.554
I do think that we only,
1664
01:52:31.335 --> 01:52:33.035
we can regain that ability
1665
01:52:33.495 --> 01:52:36.155
by all coming together and and try to coerce
1666
01:52:37.000 --> 01:52:41.340
potential rogue states in a different way that's not choking them out of the financial system.
1667
01:52:46.815 --> 01:52:48.275
Yeah. I mean, that makes that,
1668
01:52:50.335 --> 01:52:53.235
we're, we're on the same page on that. I mean
1669
01:52:54.060 --> 01:52:57.040
I mean, a lot of ways, the way I tend to look at it is
1670
01:52:57.660 --> 01:53:00.560
maybe it's a little bit different with the Venezuelan government,
1671
01:53:03.324 --> 01:53:11.190
But the way I look at it is it kind of gives individuals the same power that that elites, kind of, already have in the traditional financial system anyway.
1672
01:53:12.370 --> 01:53:19.750
Yeah. When there's a will, there's a way. When there's resources, there's a way, and and the elites tend to figure it out regardless of Bitcoin.
1673
01:53:21.885 --> 01:53:25.025
So to me, I mean, it's a it's a clear massive net benefit,
1674
01:53:25.405 --> 01:53:26.605
and there's no real
1675
01:53:27.630 --> 01:53:28.850
if if if
1676
01:53:29.550 --> 01:53:30.290
I mean,
1677
01:53:32.270 --> 01:53:36.290
let's be absolutely clear here. Like, the US government is not
1678
01:53:38.344 --> 01:53:40.284
is not this bastion of
1679
01:53:40.665 --> 01:53:42.925
of good judgment and
1680
01:53:46.219 --> 01:53:47.840
reason and fairness.
1681
01:53:48.539 --> 01:53:49.760
There's a lot of
1682
01:53:51.340 --> 01:53:57.455
misjustice that has happened that happens in the traditional financial system that is practically run by the US government.
1683
01:53:57.995 --> 01:54:00.815
So if you wanna guarantee individuals rights,
1684
01:54:01.690 --> 01:54:08.030
there's really no way to do it unless you guarantee everyone's rights in a properly permissionless way.
1685
01:54:08.730 --> 01:54:09.230
So
1686
01:54:09.735 --> 01:54:11.115
there's really no alternative.
1687
01:54:11.735 --> 01:54:15.435
There's no alternative where bad people get blocked, but good people don't.
1688
01:54:15.815 --> 01:54:16.635
So, ultimately,
1689
01:54:18.210 --> 01:54:20.390
you just need to build a system where
1690
01:54:20.930 --> 01:54:25.510
no one can control it, period, and anyone can use it regardless of
1691
01:54:26.935 --> 01:54:28.795
where they stand morally or ethically.
1692
01:54:31.575 --> 01:54:41.949
Yeah. It's, it's it's it's leveling the playing field, right, in many ways. It's it's making their reserve asset the same as your reserve asset, and and you have equal access and equal information
1693
01:54:42.465 --> 01:54:44.245
to what's going on with that asset.
1694
01:54:44.705 --> 01:54:45.205
Right.
1695
01:54:46.145 --> 01:54:48.965
So, I mean, we're getting close to the 2 hour points,
1696
01:54:49.505 --> 01:54:51.205
where I like to try and,
1697
01:54:53.900 --> 01:54:57.900
you know, keep our discussions too. But before we do, I mean, I
1698
01:54:58.725 --> 01:55:00.585
El Salvador has been a massive,
1699
01:55:01.285 --> 01:55:03.465
topic of conversation with how they
1700
01:55:04.245 --> 01:55:05.545
adopted legal tender,
1701
01:55:06.405 --> 01:55:07.145
and also
1702
01:55:08.119 --> 01:55:12.940
just, you know, how president Bukele over there is running things.
1703
01:55:14.280 --> 01:55:16.059
I'm curious with, like, your experiences,
1704
01:55:16.375 --> 01:55:18.315
both of your experiences with Venezuela,
1705
01:55:19.015 --> 01:55:26.620
Latin America in general. Like, how do you view the whole El Salvador movement towards Bitcoin? How do you view Bukele
1706
01:55:27.080 --> 01:55:28.780
specifically in his regime?
1707
01:55:29.560 --> 01:55:35.685
Like, what are your thoughts there on on what maybe we might see over the next 2 years? What are your thoughts over
1708
01:55:36.065 --> 01:55:37.925
what we've seen over the last year?
1709
01:55:38.864 --> 01:55:39.685
Pretty curious.
1710
01:55:40.600 --> 01:55:41.580
Right. So,
1711
01:55:42.040 --> 01:55:42.700
I mean,
1712
01:55:43.080 --> 01:55:45.420
Mauricio and I went to solve them to represent
1713
01:55:45.960 --> 01:55:48.060
letting at LaBitcon. Right?
1714
01:55:48.525 --> 01:55:52.465
This was recently in November. I think it look. Look. As a as a Venezuelan,
1715
01:55:53.245 --> 01:55:57.265
right, and and taking into consideration that regarding South America,
1716
01:55:59.550 --> 01:56:00.929
Venezuela is the country
1717
01:56:01.389 --> 01:56:02.449
with the highest
1718
01:56:03.550 --> 01:56:04.050
percentage
1719
01:56:04.670 --> 01:56:07.010
of of of of citizens
1720
01:56:07.695 --> 01:56:09.395
and families, in this case, families,
1721
01:56:09.855 --> 01:56:10.355
owning
1722
01:56:10.975 --> 01:56:11.955
a bank account.
1723
01:56:12.255 --> 01:56:15.795
Right? So in the case of a solid Venezuela has, like, 30,000,000 people.
1724
01:56:16.895 --> 01:56:17.395
Almost
1725
01:56:17.889 --> 01:56:20.389
almost a 100% of Venezuelan families
1726
01:56:20.929 --> 01:56:27.965
own a bank account. So maybe your son doesn't have a bank account. Maybe your your wife doesn't have a bank account in certain cases,
1727
01:56:28.505 --> 01:56:29.725
but as a family,
1728
01:56:30.585 --> 01:56:33.565
you have a bank account. Right? In the case of El Salvador,
1729
01:56:34.570 --> 01:56:35.310
it's completely
1730
01:56:35.690 --> 01:56:41.550
different. Right? So, like, only 1.2 or roughly 1.5, I don't recall the exact number
1731
01:56:42.085 --> 01:56:43.785
of people on a bank account,
1732
01:56:44.565 --> 01:56:47.545
in a country that has over 6,000,000 people.
1733
01:56:48.005 --> 01:56:51.225
Right? Over population of over 6,000,000 people. So
1734
01:56:51.900 --> 01:56:52.960
the thing is that
1735
01:56:53.900 --> 01:56:54.640
El Salvador,
1736
01:56:55.260 --> 01:57:00.000
right, if we take into account the numbers that were being provided from
1737
01:57:00.380 --> 01:57:01.755
the Venezuelan the
1738
01:57:02.135 --> 01:57:03.915
the Salvadorian government. Right?
1739
01:57:04.455 --> 01:57:05.514
You can't use government.
1740
01:57:06.215 --> 01:57:07.915
More more than 4,000,000
1741
01:57:08.455 --> 01:57:08.955
Salvadorans
1742
01:57:09.495 --> 01:57:10.155
right now
1743
01:57:10.990 --> 01:57:11.490
own,
1744
01:57:12.190 --> 01:57:17.010
chi have have downloaded Chivo Wallet. Right? So they have some sort of,
1745
01:57:17.870 --> 01:57:18.930
you know, access
1746
01:57:19.625 --> 01:57:20.445
to the formal
1747
01:57:20.985 --> 01:57:22.125
financial system.
1748
01:57:22.425 --> 01:57:25.405
Right? And and so I think that the powerful
1749
01:57:26.425 --> 01:57:27.165
the powerful
1750
01:57:27.465 --> 01:57:28.605
side of that approach
1751
01:57:29.490 --> 01:57:30.150
is that
1752
01:57:31.170 --> 01:57:33.990
El Salvador achieved in a matter of months
1753
01:57:35.010 --> 01:57:36.470
what South America's
1754
01:57:37.235 --> 01:57:37.975
biggest cryptocurrency
1755
01:57:39.155 --> 01:57:39.655
exchange
1756
01:57:40.675 --> 01:57:41.495
hasn't achieved
1757
01:57:42.115 --> 01:57:45.415
in over 9 years. Like Mercado Bitcoin.
1758
01:57:46.370 --> 01:57:50.550
Right? So so Brazil's biggest exchange and Latin America's biggest exchange
1759
01:57:51.090 --> 01:57:53.830
has roughly over 3,000,000 users,
1760
01:57:54.545 --> 01:58:02.245
and they they launched back in 2013. Right? So so right? So I I think that's it is an interesting approach.
1761
01:58:02.930 --> 01:58:03.430
This,
1762
01:58:04.050 --> 01:58:07.030
the one that El Salvador's government took because
1763
01:58:07.810 --> 01:58:12.635
they literally banked over 4,000,000 people again in just, like, what, 2
1764
01:58:13.255 --> 01:58:13.914
months. And
1765
01:58:15.335 --> 01:58:16.954
and, you know, the the biggest
1766
01:58:17.414 --> 01:58:18.954
the the biggest private
1767
01:58:19.489 --> 01:58:21.750
cryptocurrency company of the continent
1768
01:58:22.530 --> 01:58:25.429
was was wasn't able to do that. Right? So,
1769
01:58:26.875 --> 01:58:35.935
if you ask me, it's it's a it's an interesting way, and it's just the initial state. It's just at its initial stages. Right? Like,
1770
01:58:36.290 --> 01:58:39.110
of course, this like, we could dive into,
1771
01:58:39.730 --> 01:58:42.150
you know, what we already discussed that this
1772
01:58:42.690 --> 01:58:45.190
this part of the world has volatile
1773
01:58:45.955 --> 01:58:47.094
volatile economies,
1774
01:58:47.715 --> 01:58:53.094
volatile governments. Governments can be thrown out or whatever, but it's more of, like, a political
1775
01:58:53.920 --> 01:59:00.739
pure political discussion. Right? So so I guess that, it has positive things. Just like anything, it has trade offs.
1776
01:59:01.965 --> 01:59:08.545
But it it was amazing, man. Honestly, it was amazing seeing this swath of swath of
1777
01:59:09.040 --> 01:59:12.020
Bitcoiners traveling globally in the midst of, you know,
1778
01:59:12.480 --> 01:59:17.540
pandemic times or crisis times or whatever you you whatever the term you wanna use,
1779
01:59:18.155 --> 01:59:22.255
everybody flew there just to see what was happening, contribute to the economy,
1780
01:59:22.795 --> 01:59:27.800
have Bitcoin discussions. How can we further help us solve their what is actually happening in.
1781
01:59:28.260 --> 01:59:29.560
I paid for some
1782
01:59:30.020 --> 01:59:31.880
on the street, like, a dollar of
1783
01:59:32.980 --> 01:59:33.960
using Bitcoin.
1784
01:59:34.755 --> 01:59:40.535
You you know what I mean? Like, these these 2 teenagers that sell pupusas and coffee on the streets
1785
01:59:40.915 --> 01:59:41.975
to make a living,
1786
01:59:42.370 --> 01:59:50.790
they now have access to Bitcoin, and they have their $30 in Bitcoin that was deposited to them by the Salvadoran government. So if you asked me as a Venezuelan,
1787
01:59:51.385 --> 01:59:52.125
I would have loved,
1788
01:59:53.385 --> 01:59:58.205
a long time ago, seeing my my government, right,
1789
01:59:58.665 --> 01:59:59.165
do
1790
01:59:59.660 --> 02:00:00.880
a similar approach,
1791
02:00:01.180 --> 02:00:03.440
right, which which is the complete
1792
02:00:04.220 --> 02:00:07.020
opposite. Right? Like, they tried creating their own
1793
02:00:07.900 --> 02:00:08.720
like, look.
1794
02:00:09.855 --> 02:00:14.755
Venezuela Central Bank is trying to look into ways to custody by themselves
1795
02:00:15.295 --> 02:00:17.715
Bitcoin and Ethereum to make international
1796
02:00:18.015 --> 02:00:19.530
payments through the central bank.
1797
02:00:20.550 --> 02:00:29.935
They even, at some point, evaluated, you know, like, issuing a Petrol, the Ethereum blockchain, the Dash blockchain, whichever blockchain, whatever. You know what I mean? Like and
1798
02:00:30.475 --> 02:00:33.775
and they they came back to the same conclusion that was,
1799
02:00:34.395 --> 02:00:37.055
we can only do this at some point
1800
02:00:37.540 --> 02:00:45.640
with Bitcoin with, like, RGP, smart contracts, or whatever. You know what I mean? But but if we do that, we're just gonna be we're just gonna be
1801
02:00:46.135 --> 02:00:55.890
losing some of our power, and we're gonna be giving that back to the people. And we're gonna be doing free marketing for Bitcoin, and that's not and that's a pretty much
1802
02:00:56.750 --> 02:00:59.409
at least a more democratic approach to it
1803
02:00:59.710 --> 02:01:01.969
than issuing your own sovereign cryptocurrency
1804
02:01:02.350 --> 02:01:11.165
that nobody knows where it lives in and that is backed by your, you know, national reserves that you pretty much control by yourself, whatever. So if you ask me,
1805
02:01:11.705 --> 02:01:12.205
I
1806
02:01:12.600 --> 02:01:12.760
it
1807
02:01:13.560 --> 02:01:14.699
I feel invigorated,
1808
02:01:15.000 --> 02:01:18.380
you know, and and I felt, you know, this this vibrant
1809
02:01:18.760 --> 02:01:19.260
passion
1810
02:01:19.755 --> 02:01:22.574
when it went to El Salvador just to meet other Bitcoiners
1811
02:01:23.355 --> 02:01:25.295
coming from all over the world
1812
02:01:25.755 --> 02:01:30.490
just to do whatever it is that we love doing that. So I think
1813
02:01:31.430 --> 02:01:32.410
it's a net
1814
02:01:32.790 --> 02:01:39.050
positive approach, deal solvers approach so far. Go ahead, Mauricio. I think you could you could expand on this very well.
1815
02:01:41.225 --> 02:01:48.925
Yeah. Thank you, Elliot. No. I think so. The first off, I wanna say kudos to the Lightning Labs guys. I came back from El Salvador, a absolute lightning believer.
1816
02:01:50.350 --> 02:01:52.530
It was crazy to see it in the wild,
1817
02:01:52.909 --> 02:01:59.775
and and it's just amazing to see how the fees are basically 0. So I I came back a very much a lightning
1818
02:02:00.155 --> 02:02:09.469
believer. I I I didn't have a chance to, like, be, interact too much with lightning before the trip, but when I saw how people were using it, I I it really changed my view.
1819
02:02:10.730 --> 02:02:11.869
What I will say,
1820
02:02:12.650 --> 02:02:13.469
as Venezuelans,
1821
02:02:14.255 --> 02:02:15.875
we're very jaded by politics,
1822
02:02:17.375 --> 02:02:18.915
and we've seen politics
1823
02:02:19.455 --> 02:02:19.955
essentially
1824
02:02:20.895 --> 02:02:23.395
look great one day and 6 months later,
1825
02:02:23.850 --> 02:02:32.190
the entire country hates you and you're you know, you can't be voted out. And so that all can change very quickly in terms of politics.
1826
02:02:32.965 --> 02:02:34.265
I think it was,
1827
02:02:35.685 --> 02:02:40.745
it was a very interesting move from their part. One one thing to consider is El Salvador
1828
02:02:41.290 --> 02:02:47.630
did not give up senior rich rights by adding Bitcoin. They never had senior rich rights to begin with because they were dollarized.
1829
02:02:48.250 --> 02:03:01.730
So it's easier in some ways for El Salvador to adopt Bitcoin than it is for someone that has their own local currency. Because by doing that, El Salvador isn't making their own currency look like crap, it's making the dollar potentially look like crap,
1830
02:03:02.190 --> 02:03:04.450
as as its value inflates away against Bitcoin.
1831
02:03:04.910 --> 02:03:10.665
So in that sense, I think it's it's very forward looking. It's it's it's it looks
1832
02:03:11.525 --> 02:03:16.025
like a genuine attempt to help the people of El Salvador because as a government,
1833
02:03:16.860 --> 02:03:20.000
you're introducing a currency that you cannot control or manipulate.
1834
02:03:20.300 --> 02:03:22.480
So I thought that was pretty interesting.
1835
02:03:23.180 --> 02:03:24.220
What I what I
1836
02:03:24.935 --> 02:03:28.955
the only thing that I worry about or one of the things that I worry about is,
1837
02:03:29.895 --> 02:03:32.875
one is this idea of Bitcoin becoming politicized.
1838
02:03:33.710 --> 02:03:36.210
So I I don't think we should have
1839
02:03:36.510 --> 02:03:42.610
politicians lead Bitcoin because what that when that happens, you'll have one political party that is very pro Bitcoin.
1840
02:03:42.915 --> 02:03:56.680
The other one will take the natural opposing view, which is anti Bitcoin. And I think that as the democracy kinda ebbs and flows between the 2, that could hurt Bitcoin in the long term. I would love to see a fully bipartisan support for Bitcoin
1841
02:03:56.980 --> 02:04:07.085
in in any sort of, you know, house of government because that ensures that there's not gonna be this passing of the baton between the pro Bitcoin and the non pro Bitcoin groups. So,
1842
02:04:07.565 --> 02:04:15.160
that that concerns me a bit that we're maybe we could potentially pigeonhole Bitcoin into one side of the political group and and and essentially
1843
02:04:15.815 --> 02:04:19.835
not get the full benefit of having a bipartisan support on the 2.
1844
02:04:21.095 --> 02:04:24.715
And the other one, which is, you know, Matt, going back to this sanctions
1845
02:04:26.020 --> 02:04:26.520
world,
1846
02:04:27.060 --> 02:04:35.955
the the the El Salvador bond is a very interesting development in the sense that it will be if it if it's successful or when it's successful, I do believe it will be successful,
1847
02:04:37.215 --> 02:04:41.315
it will be the first time that a sovereign country has raised debt,
1848
02:04:41.920 --> 02:04:45.940
sovereign debt, outside of the rails of the traditional
1849
02:04:46.240 --> 02:04:47.380
finance world,
1850
02:04:47.840 --> 02:04:51.060
I e the IMF, I e the US controlled bond markets.
1851
02:04:52.685 --> 02:04:53.665
I think that
1852
02:04:54.285 --> 02:05:04.770
right now, it sounds a bit benign when we see El Salvador raising these bonds and blah blah blah, and we all like their sort of project that they're behind. But what that what quickly will follow
1853
02:05:05.150 --> 02:05:07.730
is a every other rogue state
1854
02:05:08.110 --> 02:05:10.850
that has been blocked out of these financial markets
1855
02:05:11.375 --> 02:05:13.315
is going to try to do the same.
1856
02:05:13.695 --> 02:05:17.955
And so going back to the point we had earlier around around sanctions,
1857
02:05:18.390 --> 02:05:20.490
I I think there's a lot of,
1858
02:05:21.990 --> 02:05:25.130
unintended consequences that that some of this could have
1859
02:05:25.430 --> 02:05:28.010
that are you know, it it it warrants a conversation.
1860
02:05:33.094 --> 02:05:33.915
That's interesting.
1861
02:05:34.375 --> 02:05:35.915
I appreciate both your insights.
1862
02:05:37.390 --> 02:05:50.665
I'm I made a similar conclusion on the it it's interesting that I mean, it makes a lot of sense to me that, you know, one of the first the first country that adopted Bitcoin as legal tender was already a dollarized country, so they didn't give up their seen senior,
1863
02:05:51.125 --> 02:05:51.625
rights,
1864
02:05:54.330 --> 02:05:56.510
which is that just makes sense to me.
1865
02:05:57.210 --> 02:05:59.230
The Chivo wallet concerns me.
1866
02:06:00.090 --> 02:06:02.590
Reliance on the Chivo wallet concerns me.
1867
02:06:04.105 --> 02:06:07.005
In a lot of ways, that seems, you know, very much
1868
02:06:07.625 --> 02:06:10.125
very similar to, like, the CBDC
1869
02:06:10.505 --> 02:06:11.005
strategy
1870
02:06:11.385 --> 02:06:11.885
or
1871
02:06:14.449 --> 02:06:22.435
if if you're gonna be extreme, like, the Petro strategy, but obviously, it's using dollars and Bitcoin instead of some made up shit coin.
1872
02:06:24.495 --> 02:06:28.995
But there's some concern there. The the bipartisan comment is interesting because
1873
02:06:31.940 --> 02:06:33.400
do you not agree that
1874
02:06:34.660 --> 02:06:39.365
it that might that might that aspect might not even matter because by the time opposition
1875
02:06:39.745 --> 02:06:44.965
gets power, I mean, if if the people are already accustomed to Bitcoin and using Bitcoin,
1876
02:06:46.449 --> 02:06:47.830
it might just be completely
1877
02:06:49.250 --> 02:06:51.350
unpalatable for anyone to
1878
02:06:51.890 --> 02:06:53.909
kind of pull back on that decision.
1879
02:06:54.215 --> 02:07:02.350
Like, I feel like it's really sticky once once they have access, especially I mean, it's not just Bitcoin. Right? Once they have access to Bitcoin and the broader ecosystem, they're able to
1880
02:07:03.230 --> 02:07:04.370
stable coins and whatnot.
1881
02:07:05.550 --> 02:07:09.010
No. But it's it's pretty hard to put that cap back in the bag. No?
1882
02:07:09.445 --> 02:07:17.625
Yeah. But the fear is always the charlatan politicians that'll turn this the the the the speech around and say that Bitcoin is the cause of your hyperinflation.
1883
02:07:18.430 --> 02:07:30.775
Bitcoin is the reason that you're being left behind. And with their program to get you free stuff, you won't have to think about Bitcoin anymore because it's you have to work to get the Bitcoin. Whereas with their program, you'll get everything for free. Right.
1884
02:07:31.395 --> 02:07:32.135
Free stuff.
1885
02:07:32.515 --> 02:07:35.015
People vote for free stuff. Believe me.
1886
02:07:35.349 --> 02:07:36.489
Yeah. I feel that.
1887
02:07:39.110 --> 02:07:44.565
Awesome. Well, I mean, I think this discussion was absolutely fantastic. I hope the freaks agree with me.
1888
02:07:45.765 --> 02:07:49.945
We're past the 2 hour point. I respect and appreciate both your time,
1889
02:07:50.885 --> 02:07:52.824
coming on here and sharing with us.
1890
02:07:54.600 --> 02:08:00.540
Before we wrap this up, you guys, I like to finish this with some final thoughts. So, Salton, final thoughts.
1891
02:08:05.445 --> 02:08:07.625
His final thoughts is that,
1892
02:08:10.480 --> 02:08:12.020
listening into our Venezuelan
1893
02:08:12.480 --> 02:08:12.980
story,
1894
02:08:13.679 --> 02:08:17.540
you need to understand that Fiat is a hard bitch to kill.
1895
02:08:18.159 --> 02:08:19.060
It's not
1896
02:08:19.724 --> 02:08:23.985
it's it's not gonna go it's not gonna go away anytime soon.
1897
02:08:25.724 --> 02:08:26.224
So
1898
02:08:26.920 --> 02:08:28.780
you better keep stacking sats
1899
02:08:29.320 --> 02:08:31.580
because you're doing the right thing by doing it.
1900
02:08:32.040 --> 02:08:33.740
And, ultimately, just
1901
02:08:35.435 --> 02:08:37.295
be wary out there, honestly.
1902
02:08:38.155 --> 02:08:40.335
Nobody's coming to save you. And
1903
02:08:41.115 --> 02:08:42.655
I do feel that
1904
02:08:44.380 --> 02:08:45.440
we still haven't
1905
02:08:45.740 --> 02:08:48.400
felt the the true need
1906
02:08:48.940 --> 02:08:52.480
as a, I'd say, as a global community to
1907
02:08:53.045 --> 02:08:54.025
get into a
1908
02:08:54.485 --> 02:08:56.745
we have to build until we die,
1909
02:08:57.605 --> 02:08:58.105
like,
1910
02:08:58.405 --> 02:09:01.700
vibe. But I think that at some point with
1911
02:09:02.080 --> 02:09:06.020
more government pressure and etcetera, that could become a thing.
1912
02:09:07.840 --> 02:09:08.340
So
1913
02:09:08.835 --> 02:09:16.054
keep building out there whatever it is that you're building on top of Bitcoin and understand that education is still needed. And,
1914
02:09:16.610 --> 02:09:18.950
yeah, not only in the US. It's
1915
02:09:19.330 --> 02:09:22.950
it's a global thing, and we need to continue, like, untapping.
1916
02:09:23.410 --> 02:09:25.910
Right? Like, I'm sorry, tapping into those.
1917
02:09:26.525 --> 02:09:36.280
You know, there are some voices out there that need to be heard, and we're not hearing them right now. And we gotta continue doing a better job of doing that. So I'm thankful for,
1918
02:09:36.820 --> 02:09:37.800
you know, approaches
1919
02:09:38.100 --> 02:09:38.600
like
1920
02:09:39.139 --> 02:09:39.800
the Citadel
1921
02:09:40.100 --> 02:09:40.600
dispatch
1922
02:09:42.260 --> 02:09:45.255
that help helped at doing that, man. And
1923
02:09:45.795 --> 02:09:53.175
I say that from, you know, the from the bottom of my heart as a Venezuelan that for many years, I just wanted to
1924
02:09:53.860 --> 02:09:56.840
I just wanted to have voice, and what gave me voice is Bitcoin.
1925
02:09:57.780 --> 02:09:58.760
And thank you all.
1926
02:09:59.380 --> 02:10:01.075
Cheers. Appreciate you.
1927
02:10:01.875 --> 02:10:03.415
Mauricio, final thoughts.
1928
02:10:04.595 --> 02:10:05.895
Man. Final thoughts.
1929
02:10:08.740 --> 02:10:12.680
You know, I I I I think it's easy to think about all the the
1930
02:10:13.300 --> 02:10:19.355
the stuff that is kinda falling apart around the world. But I I what I do love about Bitcoin is that
1931
02:10:19.735 --> 02:10:26.075
it does it feels like it's the complete opposite. It feels like we're actually rebuilding the entire system from the ground up in a way that
1932
02:10:26.500 --> 02:10:27.000
we,
1933
02:10:27.860 --> 02:10:40.735
you know, we wanna see into the future. So I I I just think being in this industry has has shifted my perspective into the world is ending to we're rebuilding the world into a better place. And so I I,
1934
02:10:41.640 --> 02:10:43.260
yeah, I just want to,
1935
02:10:44.280 --> 02:10:49.340
thank you all for for for, you know, making Bitcoin what it is today. And and, you know,
1936
02:10:49.645 --> 02:10:56.864
4 years ago, 3 years ago, we you know, I was I was listening to these podcasts just the same way many people are, and and
1937
02:10:57.410 --> 02:10:59.990
Bitcoin is so new and is so filled with opportunity
1938
02:11:00.530 --> 02:11:06.630
that, I I think the best way to make sure that it goes in the direction that we want is to be involved and stay involved
1939
02:11:07.075 --> 02:11:21.070
and to and to always have a say. I think one of the biggest problems with politics is we've all become so disenfranchised with politics. We always we we feel like it's it's not good enough for us to deal with, someone else has to deal with it. And and when that happens,
1940
02:11:21.530 --> 02:11:39.530
you get that someone else in power, and that and that is much always way worse than if you had stayed and try to try to express your view. So I encourage everybody to to get involved in Bitcoin and continue defending their beliefs so that we can play your role in in keeping Bitcoin in the direction we all want it to be.
1941
02:11:40.150 --> 02:11:42.170
Thanks, Mauricio. Very well said.
1942
02:11:44.305 --> 02:11:54.130
So I just wanted to thank our guests. Thank you for your time. Thank you for all your work. It is appreciated. I wanted to thank the freaks for joining in for another SIL dispatch.
1943
02:11:55.470 --> 02:11:57.970
Dispatch is is meant to model
1944
02:11:58.750 --> 02:12:01.090
the open source projects that we so much
1945
02:12:02.094 --> 02:12:03.155
rely on today,
1946
02:12:04.415 --> 02:12:08.034
and we will rely on going forward if we want this movement to be successful.
1947
02:12:09.580 --> 02:12:14.560
And with that, it means I'm relying on on you freaks to
1948
02:12:15.420 --> 02:12:18.239
to support the show, to provide feedback, to participate.
1949
02:12:19.405 --> 02:12:21.585
All those links are available at sill dispatch.com.
1950
02:12:22.685 --> 02:12:24.545
Don't hesitate to reach out.
1951
02:12:25.325 --> 02:12:27.665
Join the chat. The link is there.
1952
02:12:28.470 --> 02:12:29.690
Subscribe to the podcast.
1953
02:12:31.750 --> 02:12:33.290
All the archives are there.
1954
02:12:33.670 --> 02:12:36.489
There's links to support the show using Bitcoin.
1955
02:12:37.475 --> 02:12:39.495
At the end of the day, it's all about
1956
02:12:40.035 --> 02:12:40.775
you guys.
1957
02:12:41.395 --> 02:12:47.550
I think together, we can truly make this world a better place. Hopefully, put some of these stories behind us
1958
02:12:48.170 --> 02:12:50.910
rather than relive them over and over again in the future.
1959
02:12:53.565 --> 02:12:56.465
Thanks for joining us, guys. I really do appreciate you.
1960
02:12:59.940 --> 02:13:03.640
No. Thanks for having us, man. Thank you for the opportunity, dude.
1961
02:13:04.260 --> 02:13:07.960
Cheers. Until next time. I look forward to meeting you guys in person someday.
1962
02:13:09.235 --> 02:13:10.375
Farewell, my friend.
1963
02:13:10.994 --> 02:13:11.494
Cheers.
1964
02:17:48.715 --> 02:17:49.535
Come calling
1965
02:17:50.154 --> 02:17:51.135
home back
1966
02:17:51.515 --> 02:17:52.015
to
1967
02:17:52.475 --> 02:17:52.975
you.
1968
02:21:30.295 --> 02:21:31.354
Rest in peace,
1969
02:21:32.055 --> 02:21:32.555
Meatloaf.
1970
02:21:34.614 --> 02:21:38.875
Love you, freaks. See you next week. Stay on, both stacked sets.
1971
02:21:39.204 --> 02:21:39.704
Cheers.
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 8:20:06 PM
Duration: 8501.499
Channels: 1
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2
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today.
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Jack, it's great to have you back. This is a big deal, but do you think the government will be as receptive as El Salvador's
4
00:00:18.500 --> 00:00:19.000
was?
5
00:00:19.539 --> 00:00:20.599
6
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Happy New Year. Let's change the world.
7
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No. I don't. Listen, Kelly, I'm not a government consultant.
8
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I'm here to change the world, push our species in a direction that I think will make the world a better place. And,
9
00:00:35.270 --> 00:00:41.129
the Salvadoran government aligned with the vision and thought Bitcoin was a useful tool, for their citizens.
10
00:00:41.670 --> 00:00:44.215
The Argentine government, that's not my job.
11
00:00:44.675 --> 00:00:45.414
I'm just
12
00:00:45.795 --> 00:00:53.160
impressed with my team, impressed with Bitcoin, and the tool set that we've been allowed for with what Satoshi created in making the world a better place. We're giving the people of Argentina
13
00:00:53.620 --> 00:01:05.395
a monetary asset, a monetary policy, a monetary network that they can rely on and make free instant cross border payments that subscribe to an asset in a store of wealth that is external of any government or central party intervention,
14
00:01:05.935 --> 00:01:34.679
15
00:01:36.105 --> 00:01:43.085
sort of, should we say, tacit approval by the authorities there or if they would have any reason to say, you know what? We don't want our citizens doing business this way.
16
00:01:44.600 --> 00:01:57.235
17
00:01:57.955 --> 00:02:08.070
twice as much as it is as according to official rate. So they are looking to to store their wealth in something else. Many of them use Bitcoin, but even that is too volatile for them. However,
18
00:02:08.610 --> 00:02:12.150
their ability to make payments Kelly, this is a a cash economy.
19
00:02:12.575 --> 00:02:15.715
People buy houses with cash. They're not even allowed to use,
20
00:02:16.095 --> 00:02:19.155
payment networks that are denominated in dollars. The Visa network
21
00:02:19.820 --> 00:02:32.025
that operates on US dollars does not work in Argentina. It is banned. And so for Strike, what's really interesting for us is offering them a convenient cash collateral. They like their daily spending cash collateral to be in dollars,
22
00:02:32.325 --> 00:02:48.465
but interfacing that cash collateral over the Bitcoin and Lightning Network, making it seamless to make instant free cross border payments. And so to the individual, if you wanna hold as much Bitcoin or as little Bitcoin as you want, that is up to you. What we allow you to do is hold a dollar like cash collateral,
23
00:02:48.765 --> 00:02:56.810
but then use the Bitcoin network under the hood to escrow the value to make for digital seamless payments and excuse them of this really monstrous
24
00:02:57.349 --> 00:03:05.504
25
00:03:06.409 --> 00:03:06.989
for you?
26
00:03:08.090 --> 00:03:11.870
27
00:03:12.170 --> 00:03:41.100
is it takes the property that makes Internet companies valuable and important is that they have a target audience of about 8,000,000,000 people. It is an open global singular network. The good thing about strike is that we get to sell them money, not advertising. We're delivering one of the most viral products in human history, and that's money. It's akin to, like, water to live a high quality of life. And so the combination of that, we get to try and sell money to all 8,000,000,000 people, a better financial and superior financial experience. So I'm on a mission to deliver this to everyone that has a pulse on this planet.
28
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29
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52.
30
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Citadel dispatch is an interactive live show about Bitcoin distributed systems privacy and open source software.
31
00:04:29.860 --> 00:04:31.800
As I went over last week,
32
00:04:32.475 --> 00:04:35.135
dispatch is no longer available on the TFTC
33
00:04:35.595 --> 00:04:36.574
podcast feed.
34
00:04:37.115 --> 00:04:38.495
So if you enjoy podcasts,
35
00:04:39.170 --> 00:04:44.150
go search Citadel Dispatch in your favorite podcast feed and subscribe there instead.
36
00:04:45.090 --> 00:04:49.175
Also, we have moved our live chat over to Matrix, a distributed
37
00:04:50.195 --> 00:04:51.014
open source
38
00:04:51.634 --> 00:04:53.415
protocol that allows messaging,
39
00:04:54.035 --> 00:04:55.975
to be done in an encrypted way,
40
00:04:56.920 --> 00:05:00.139
from self hosted servers around the world that are federated.
41
00:05:01.080 --> 00:05:02.300
That might sound complicated,
42
00:05:03.000 --> 00:05:07.075
but, it's a lot easier to use than you might expect. If you go to citadel.chat,
43
00:05:08.255 --> 00:05:10.275
you can join that live chat.
44
00:05:11.080 --> 00:05:17.099
That is not exclusive to Bitcoin Tuesdays. We have over 500 Bitcoiners in there now that are just constantly talking about
45
00:05:18.905 --> 00:05:20.205
very important topics,
46
00:05:20.585 --> 00:05:27.885
that affect all Bitcoiners and different tips and tricks. It's a very cool little community we're building over there, so come join us.
47
00:05:28.450 --> 00:05:32.310
My favorite matrix client there's a bunch of different matrix clients you can use,
48
00:05:32.930 --> 00:05:34.230
to chat in the room.
49
00:05:34.930 --> 00:05:37.475
My favorite one is Element. You can go to
50
00:05:37.775 --> 00:05:38.275
element.io
51
00:05:39.215 --> 00:05:41.955
to download it on your computer or your or your phone.
52
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Huge shout out
53
00:05:45.340 --> 00:05:49.600
to the freaks that are joining us in the live chat. We do appreciate you.
54
00:05:50.460 --> 00:05:52.160
You guys make this show unique.
55
00:05:52.875 --> 00:05:56.414
And a really big shout out to all of our supporters,
56
00:05:57.435 --> 00:06:00.495
that keep dispatch a 100% audience funded
57
00:06:00.860 --> 00:06:04.880
without ads or sponsors and purely focused on actionable Bitcoin discussion.
58
00:06:06.620 --> 00:06:09.120
I if if you wanna support the show,
59
00:06:10.005 --> 00:06:12.345
it is all being done through Bitcoin.
60
00:06:12.725 --> 00:06:17.305
So there are 2 ways you can do it. You can do it through podcasting 2.0 apps.
61
00:06:17.620 --> 00:06:20.840
My favorite are Fountain Podcasts and Breeze Wallet.
62
00:06:21.300 --> 00:06:24.520
They operate as traditional podcasting apps,
63
00:06:25.655 --> 00:06:33.115
where you load SATs up though. You put some SATs on it, you search SITL dispatch, and then as you're listening, you can stream SATs directly to my node.
64
00:06:33.560 --> 00:06:35.500
The other way is through BTC payserver,
65
00:06:36.040 --> 00:06:37.580
which you can access at silodispatch.com.
66
00:06:38.440 --> 00:06:41.580
You can send funds on chain or lightning that way.
67
00:06:42.035 --> 00:06:43.575
I also have a pay name,
68
00:06:44.115 --> 00:06:49.575
with support for samurai or Sparrow Wallet. My pay name is Odell. It's very easy to remember.
69
00:06:50.240 --> 00:06:54.260
So to all the freaks out there that continue to support the show, I really do appreciate you.
70
00:06:55.840 --> 00:06:57.940
I really do not wanna adhaz or sponsors.
71
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I think that
72
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keeping this completely a 100% audience funded
73
00:07:04.105 --> 00:07:04.605
is
74
00:07:05.570 --> 00:07:09.030
quite an undertaking, but it is rewarding long term,
75
00:07:09.570 --> 00:07:14.310
and I really do appreciate all of you that continuously support the show, so thank you.
76
00:07:14.825 --> 00:07:22.365
With all that said, we have a very fun, interesting topic today that I'm really looking forward to with some great guests. This is serial dispatch 52.
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The focus is Venezuela, Latin America, and Bitcoin.
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Our first guest is Sultan Bitcoin. How's it going, Sultan?
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Stoked for having me here.
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How's it going, Mauricio?
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Did we lose him?
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Very very happy to be here and always happy to chat Venezuela and Bitcoin.
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So, I mean, I don't have
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Sultan reached out to me,
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asked if I was interested in this topic. I am very interested in this topic. I very much feel
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like Latin America
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this has been this has been the year of Latin America
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entering the Bitcoin scene in a big way,
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and I think a lot of people are underestimating,
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what the significance of that can be.
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But overall, I mean, you guys are both,
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Venezuelans.
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I am not,
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this is not necessarily my area of expertise.
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So I'm gonna be leaning on you guys to kind of lead this discussion.
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So with all that said, I mean, where do you wanna start? Where do you think is the best place to start here?
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that that we could take this. But I think,
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maybe to to set the to set the stage for for, I guess, broadly, what are the situation that a lot of Latin America finds itself in, Maybe we could speak about the the sort of history of Latin America that has had with inflation.
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And I could speak to, I know Venezuela's kinda history with inflation quite well. I'm not, you know, I know of the,
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the other inflation problems that the other countries have had, but I wouldn't consider myself an expert. But I I'd be happy to kinda,
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you know, set the stage for what kinda led to hyperinflation in Venezuela and and and kind of how that kinda
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not corner, but ushered people
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into into Bitcoin out of necessity. I don't know if you agree with that, Ale.
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maybe maybe to start, you know,
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I guess, Venezuela,
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you know, it's maybe I'll try to kinda start from the beginning, but Venezuela has always been a very resource rich country.
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And for very like, known by most people because we were great producers of oil. We had massive, you know, massive oil production capacity. We still have the largest oil reserves in the planet,
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but still, it is one of the most impoverished countries in the world. So a lot of people wonder
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how that how that happened. You know? How how do we go from
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still the country with the most sort of,
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you
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know, potential resources in terms of energy? How how is everybody starving and people,
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you know, not have enough money to to eat?
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And and the answer is complicated.
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Then it's it's not as it's not really a simple answer.
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But, you know,
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I think one of the things that stood out to me as as I was growing up, and and this is a problem,
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not just for Venezuela, but for for many economies that are resource rich,
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is that once you have,
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once you have a way of of, you know, fabricating money, whether it is by sort of yanking it out of the ground
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or printing it. Like Venezuela was able to to get away with murder for a lot of years because they didn't really have to manage a a a type book in terms of, like, the money they spent and the and the and the money they they they collected in taxes because they always had this
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massive kind of oil subsidy that they could just be yanked out of the ground. But they got really,
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you know, the the the problem with oil is that also,
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because the country relies on oil so much and the economy relies on oil so much, whenever oil prices
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rally or crash,
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that led into
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political turmoil as well. Because every time oil prices dropped, you know, the economy suffered and we got into this, you know, everybody started pointing fingers.
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And,
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you know, that makes it very difficult to run the country, but I think what really tripped things over the edge in Venezuela
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was obviously the the political event that occurred, which was when, you know, the the sort of communist party,
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took over at first democratically,
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but slowly over time, it started dismantling
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the democratic institutions,
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which turned into sort of a fallout dictatorship,
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and and that's what kinda led to the the the the the first round of people trying to look for the door and and and causing that first bout of hyperinflation.
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Ale, I'll I'll pause.
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you know, it's it's mostly related to what economists now call the natural resource score. CERS. Right? So,
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there's this famous, you know, famous words from from a Venezuela in
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1976.
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His name is was Juan Pablo Perez Alfonso.
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Basically, this was the Venezuelan diplomat
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that in in the seventies going all the way into the eighties,
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he he was the pioneer at structuring the OPEC,
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the the OPEC cartel, right, and the organization of petroleum exporting countries.
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And and in in 1976,
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he said that 10 years from now, 20 years from now,
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Venezuelans would has would start seeing that oil would bring us ruins. Right? And and he called it the devil's excrement.
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So I guess it's it's,
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it's
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funny because every single time it's as Venezuela has started approaching, you know, but but the
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nowadays,
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what what we basically experienced
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as Venezuelans was just the government trying to find
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other ways of financing
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itself.
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And that's how gradually
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the government started, you know, breaking breaking down the rule of law that was created during the the thirties, the forties, and fifties, and sixties
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that basically created what what what was at its time the most stable banking system of
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of all of Latin America. Right? So, eventually,
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to to Mauricio's point, right,
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when whenever that started happening,
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you
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saw how the the tissues of the system started tearing apart. And so the democratization of Venezuela started becoming the socialization.
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Right? And so Venezuela diving into socialism
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and eventually dictatorship.
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To to the point,
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it it in in to today. Right, you you need the the after government started financing itself using using its
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the the Venezuelan banking system and using the savings of of people in 1983,
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Venezuelan experience what we call our own Black Friday event.
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So,
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essentially, you know, after a huge shortage shortage of cash,
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again, related to the volatility or volume of prices and and and the international oil market,
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this this,
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Luzera campaigns, the Venezuelan president in the eighties,
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he basically
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devalued
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by over 50% overnight
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all of the Venezuelan savings,
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by essentially forcing, right, and putting in place,
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country current currency exchange rates in the country. So since the eighties,
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we started we started
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truly seeing
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our our our currency, the Venezuelan
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Bolivar,
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depreciating
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against
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the dollar
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because of this shortage of cash and and this and and that was basically the initial stages of
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just, you know, just to quickly summarize it,
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bad monetary policies and administrative policies
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coming from different Venezuelan regimes
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since then.
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I never really,
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thought about it from the resource rich angle. So, like, the way you guys
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are describing it here, would you say it's, like, kind of similar to,
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like, what we see happen to, like, lottery winners
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or professional athletes that just they, like, get a lot of money and they just don't know how to spend it, so they just end up broke at the end of the day.
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So it it it's it's a similar kind of culture or or because it it creates this this sense of there is no need to be accountable. Right? Like, there's always more where that came from kind of thing. And, and it just doesn't, you don't have an incentive to run a tight ship.
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And so that that sets
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kind of a bad culture to to start with. But I think one thing that I've
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you know one of the lessons that I've learned over the years is that
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people tend to think of inflation and hyperinflation
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as, like, an extension of the same thing. And I actually think they're both caused by very, very different reasons.
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So what I mean by that is
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inflation
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is typically an economic phenomenon. Meaning,
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what's happening in the US right now is that the government printed, you you know, 40% of extra dollars and prices of things have rocketed by more than 40%, and that's
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inflation. That is very much,
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you know, related to the extra money that was printed. Right? And so what you see in the prices is simply a reflection
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of the new size of the money supply. Right? That's just your basic inflation. That's just a math like, just a a rational reaction
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to an increase in money supply.
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Hyperinflation
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is actually an a complete loss of faith in the system.
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Right? It's not necessarily you reacting to an extra 10 or 20% of money that got printed by pricing your assets by an additional 30 to 40%, right, or 20%. That's just proportional.
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Hyperinflation
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happens
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when you've lost complete faith
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in that the value of the currency that you're using,
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is is gonna hold any any of its value. So you basically proactively
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start getting rid of any exposure
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you have
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to that currency
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actively, like, in a matter of time. And and and the other thing, just to put it in Bitcoin terms,
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the higher the inflation,
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the higher your time preference.
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You cannot have low time preference or it's incredibly
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difficult to have a low time preference in a high inflation environment because you you're you're trained to spend it as soon as you get it. And you're trained to think in increasingly shorter and shorter time frames because there is no ability to project anything 5, 6 months out because inflation makes that impossible.
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And so it just throws society
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into this
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shorter and shorter cycles of things and and and more and more uncertainty,
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and it gets you to the point where you you lose faith in holding the currency, you lose faith in investing in that market locally, you lose faith in your property assurances in that market. So it's basically,
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hyperinflation
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really hits when a large majority of the economic participants in that country
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see that
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state or that political project
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as a failed project.
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And so while I think countries like Venezuela,
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Turkey,
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you know,
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Sudan, others that are sort of
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their entire democratic institutions are just completely out of whack, that's when you see hyperinflation.
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I find it personally
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very difficult
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to think that we're gonna have anything close to hyperinflation
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in a place like Canada or the US
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anytime soon, and that's because
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it's really only because the the fiat system is just a a set of dominoes
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and the base domino is the US. So before the US goes into hyperinflation,
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we're gonna have to see hyperinflation in a world of other currencies,
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like the bolivar, like the peso, because these currencies are gonna get,
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or Argentina's experienced hyperinflation,
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people tend to escape to other fiat currencies first. Right? So they they look for those stronger ones,
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and, typically, that'll be the US dollar to a lesser extent, maybe the Canadian dollar. Right?
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when co when currencies fail,
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the the the in the the participants
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inside that society rush to the dollar. It's just it's what they know. It's what they are it's what they pay their invoices in. It's what they do all international trade with. And so,
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an economy, like, for example, Venezuela
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today is a fully dollarized economy.
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The only people that use boriodas in Venezuela are the people that absolutely have to because they have no choice or they do not know any better. So, you know, and this has been the case in in many places in Latin America. So for example,
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Panama is a dollarized society, 1 to 1 peg. Ecuador,
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dollarized society, 1 to 1 peg. In Peru, you can legally use a dollar, 1 to 1 peg. El Salvador is a great example of a country that lost its seniorish and used 1 to 1 dollar. So we are
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there is already so many presidents of Latin American,
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currencies that have failed, and then the dollar has been adopted by proxy. And that is just,
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in my view, that is sort of, a a a sort of currency subordination,
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in a sort of a global,
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scale
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because the that particular country was unable
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to maintain demand for their own local currency. That they're just they couldn't instill enough trust in their own country to hold their own currency.
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But then you also see there's another dynamic at play, right, where
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these these governments,
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when when their backup back is up against the wall and they see people leaving
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their currency,
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they tend to try and close the exits. Right? Like, in Argentina
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Mhmm. Right now, it's very hard to use
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dollars in the traditional financial system. Like, there's a
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there's massive usage of my understanding is there's massive usage of dollars in in form of cash.
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But in terms of actually trying to move it through banks and whatnot, that is being blocked actively by the government.
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Do you are you are you seeing that same thing in Venezuela, or are they just allowing people to
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to use to use dollars in in
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traditional financial ways? And, like, how does Bitcoin enter that equation? Right? Because I feel like it's harder to block the Bitcoin exits
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than it is to block
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the USD ones.
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fallen down the cliff,
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after coming from inflation rampant inflation to high inflation all the way down to hyperinflation once you fall down the cliff.
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So, let me give you the boots boots on the ground experience of 2017 pre pre
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like, a couple of months before
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hyperinflation
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started to kick in in in the Venezuelan economy. So,
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it it is amazing how at some point after, you know, you're not able any longer to,
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you know, like,
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close some contracts with our agreements with anyone because after a month or potentially weeks,
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the the currency that's,
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that's part of you know, the underlying currency that's part of that agreement
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lost 20 to 30% of its value. Right? So,
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which makes
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the jurisdictional system
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in the case of in in this case, the Venezuelan jurisdictional system, which had completely
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banned,
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00:24:04.455 --> 00:24:06.635
right, the usage of other fiat currencies,
314
00:24:07.255 --> 00:24:09.014
it it it loses
315
00:24:09.419 --> 00:24:11.679
people lose trust in it because it stops
316
00:24:12.140 --> 00:24:13.679
functioning. It doesn't
317
00:24:14.140 --> 00:24:21.825
function efficiently, and people just can't rely any longer on that on the, on that jurisdictional system. So so,
318
00:24:22.445 --> 00:24:24.305
basically, what started happening is
319
00:24:25.340 --> 00:24:27.920
after the government started financing itself
320
00:24:28.860 --> 00:24:29.360
by,
321
00:24:29.820 --> 00:24:30.400
you know,
322
00:24:31.100 --> 00:24:31.600
fixing
323
00:24:32.405 --> 00:24:35.785
forex rates and the forex market in Venezuela.
324
00:24:36.245 --> 00:24:40.265
That started trickling down to the banking system and the banks
325
00:24:40.640 --> 00:24:42.420
that were basically assigned
326
00:24:42.960 --> 00:24:44.740
with the power
327
00:24:45.200 --> 00:24:47.300
to assign dollars to businesses
328
00:24:47.840 --> 00:24:48.580
and tourists.
329
00:24:49.515 --> 00:24:53.695
So essentially, Venezuelans traveling abroad the country with this preferential
330
00:24:54.075 --> 00:24:59.400
exchange rate for the US dollar to Bolivar rate. Right? So it
331
00:25:00.100 --> 00:25:09.235
started at a governmental level. It grinds down to a banking system level, public banks, private banks, then it trickles down to businesses. And then at some
332
00:25:09.535 --> 00:25:16.835
point, the people on the ground, right, on the streets, they start noticing. The people that live in the informal
333
00:25:17.650 --> 00:25:18.150
economy,
334
00:25:18.770 --> 00:25:27.975
right, that didn't own a bank account or whatever, they start noticing and they and they say, okay. I can no longer rely on this form of cash.
335
00:25:28.755 --> 00:25:33.095
What else can I do? And so in 2017, you started seeing this
336
00:25:33.955 --> 00:25:36.535
very interest interesting trend in Venezuela,
337
00:25:37.200 --> 00:25:37.700
whereby,
338
00:25:39.200 --> 00:25:39.700
informal
339
00:25:40.800 --> 00:25:41.300
merchants,
340
00:25:41.680 --> 00:25:43.220
right, and informal businesses
341
00:25:43.600 --> 00:25:46.695
were basically forced because of the velocity
342
00:25:47.235 --> 00:25:50.695
of of of, you know, of of of of of money
343
00:25:51.154 --> 00:25:53.815
and inflation and how rapid it starts increasing.
344
00:25:55.080 --> 00:26:00.220
They were forced to open up bank accounts so that they were essentially able
345
00:26:00.520 --> 00:26:01.020
to,
346
00:26:01.800 --> 00:26:02.380
you know,
347
00:26:03.415 --> 00:26:07.355
open up more ways for receiving and and commercializing
348
00:26:07.895 --> 00:26:11.100
their their their merch. Because, essentially, it was
349
00:26:11.580 --> 00:26:13.280
it was almost impossible,
350
00:26:13.900 --> 00:26:15.200
you know, to just, like,
351
00:26:16.299 --> 00:26:17.360
receive cash
352
00:26:17.820 --> 00:26:23.414
in the morning, and then by the afternoon or next day, go to the supermarket and you had already lost,
353
00:26:23.715 --> 00:26:24.455
you you know,
354
00:26:24.835 --> 00:26:26.934
the value of your, of your savings
355
00:26:27.620 --> 00:26:31.080
would have already depreciated so much that you were not able,
356
00:26:31.940 --> 00:26:44.590
you you were no no longer able to buy the same amount of goods. Right? So it's just a it's just a matter of speed to Mauricio's point. Speed in the economy starts increasing, and you just try to become this person that is,
357
00:26:45.470 --> 00:26:48.529
that you're essentially trying to look for more ways to,
358
00:26:49.150 --> 00:26:52.130
intake money and then get rid of it faster.
359
00:26:52.475 --> 00:26:53.455
So in 2017,
360
00:26:53.835 --> 00:26:55.934
I remember when at some point,
361
00:26:56.475 --> 00:27:00.895
you were still able to, you know, transact and live and believe it is in the country.
362
00:27:01.250 --> 00:27:07.910
If you had dollars and you exchange your dollars or Bitcoin, right, to your point, Matt, you were essentially financing
363
00:27:08.785 --> 00:27:09.525
a lifestyle
364
00:27:10.145 --> 00:27:12.725
for a couple of 100 of dollars a month,
365
00:27:13.345 --> 00:27:15.925
which you couldn't finance yourself with
366
00:27:16.269 --> 00:27:18.610
1,000 or tens of 1,000 of dollars
367
00:27:19.149 --> 00:27:19.649
abroad.
368
00:27:19.950 --> 00:27:21.490
Right? So outside of Venezuela.
369
00:27:21.870 --> 00:27:22.370
So
370
00:27:22.909 --> 00:27:26.825
when that started happening and people on the ground started noticing,
371
00:27:27.365 --> 00:27:28.565
you you saw
372
00:27:29.205 --> 00:27:44.050
I remember telling my girlfriend that I was so worried because $1 was already worth 3 believers in the country. And then after a couple of months, it was already, you know, like, worth a 100 a 100 believers, 200 believers, 300 believers, and then hyperinflation started coming in. Then
373
00:27:44.745 --> 00:27:46.044
the problem here is
374
00:27:46.345 --> 00:27:48.365
when hyperinflation started coming in,
375
00:27:48.745 --> 00:27:49.405
the Venezuelan
376
00:27:49.785 --> 00:27:51.085
government had banned,
377
00:27:51.990 --> 00:27:54.730
you know, had banned the usage of of dollars,
378
00:27:55.670 --> 00:27:57.130
whatever, euros, whatever.
379
00:27:57.510 --> 00:27:58.410
People started,
380
00:28:01.085 --> 00:28:01.745
you know,
381
00:28:04.684 --> 00:28:12.350
essentially reverting to their family members that had already left the country, and they would try to send them money back into the country via this,
382
00:28:12.809 --> 00:28:13.529
you know, in,
383
00:28:14.330 --> 00:28:15.870
informal money transmitters
384
00:28:16.395 --> 00:28:23.055
that would essentially assist these people that and businesses mainly that would that wanted to get rid of the currency
385
00:28:23.750 --> 00:28:27.289
and receive essentially dollars in a US bank account abroad
386
00:28:27.910 --> 00:28:34.705
or people that would travel into other country, family members that would come into the country to visit their family would essentially bring cash,
387
00:28:35.085 --> 00:28:37.825
piles of cash, as as much as they could,
388
00:28:38.685 --> 00:28:42.910
just to bring it to to their families. Then the thing is that in 2017,
389
00:28:43.610 --> 00:28:48.990
the other important thing to mention that happened is that the US sanctioned the Venezuelan regime.
390
00:28:49.525 --> 00:28:49.765
So,
391
00:28:51.205 --> 00:28:53.925
the Venezuelan government started plugging right? Started
392
00:28:54.405 --> 00:28:56.985
as as they try to come up with ways
393
00:28:57.380 --> 00:28:59.080
to continue moving the economy
394
00:28:59.700 --> 00:29:01.480
and and treat this hyperinflation
395
00:29:01.860 --> 00:29:03.400
anomaly, which was,
396
00:29:03.780 --> 00:29:05.800
you know, in part also because
397
00:29:06.165 --> 00:29:08.265
of not being able to access
398
00:29:08.965 --> 00:29:10.905
dollars within the international
399
00:29:11.685 --> 00:29:16.940
you know, the global banking system nor the euro because they were banned by the EU as well.
400
00:29:17.399 --> 00:29:19.100
They just they were forced
401
00:29:19.559 --> 00:29:20.059
to
402
00:29:20.679 --> 00:29:23.019
hit the money printer harder.
403
00:29:23.399 --> 00:29:24.855
Right? And so
404
00:29:25.395 --> 00:29:28.775
what what they started doing after that was essentially
405
00:29:29.315 --> 00:29:30.375
plug cash
406
00:29:30.915 --> 00:29:32.535
into the Venezuelan economy
407
00:29:33.080 --> 00:29:36.380
to the point in which right now 90% of all transactions
408
00:29:36.680 --> 00:29:37.660
done to merchants
409
00:29:38.120 --> 00:29:38.860
in Venezuela
410
00:29:39.160 --> 00:29:43.535
is is done is is dollars, dude, honestly. Like, if you go to a favela
411
00:29:43.995 --> 00:29:48.975
or, you know, like a small town in Venezuela right now, and you wanna buy, you know,
412
00:29:49.320 --> 00:29:51.260
a glass of of juice
413
00:29:51.720 --> 00:29:56.860
from a teenager that is selling used to make, selling juice on the streets just to make a living,
414
00:29:57.815 --> 00:30:02.555
He or he doesn't want bond of ours anymore. It's all being priced in dollars.
415
00:30:03.335 --> 00:30:03.655
It's
416
00:30:04.135 --> 00:30:14.950
so, you know, as the And that's all That's mostly cash based or they're using Exactly. That's mostly that's mostly cash based. And then you also have, you know, certain people,
417
00:30:16.945 --> 00:30:33.289
do commerce over, you know, like PayPal accounts or or Zelle or or Zelle payments. So, like, payments within the the US banking system. So it's it's at a local level that the exchange is happening, but it's at a at an international level that the,
418
00:30:34.445 --> 00:30:39.105
transfer value is happening. So it's it's essentially not happening
419
00:30:39.645 --> 00:30:42.465
within the Venezuelan banking system any longer.
420
00:30:42.789 --> 00:30:47.990
Now if you look at the reports of certain firms that, you know, they they have, like, their own,
421
00:30:49.350 --> 00:30:56.255
statistical analysis and and models, and they're backed by the IMF to come up with, you know, like, real data for the Venezuelan economy.
422
00:30:56.875 --> 00:30:57.375
1.9%
423
00:30:58.235 --> 00:31:00.495
of all payments being done to
424
00:31:01.010 --> 00:31:02.789
major merchants in this right now
425
00:31:03.410 --> 00:31:05.429
is being done with cryptocurrencies.
426
00:31:06.690 --> 00:31:08.710
If you look at the IMF standards,
427
00:31:09.414 --> 00:31:10.635
based on their standards,
428
00:31:11.174 --> 00:31:12.955
anything above the 1%
429
00:31:13.255 --> 00:31:15.914
threshold is considered as relevant.
430
00:31:16.429 --> 00:31:21.090
So it is huge it is at a huge level, very relevant, the amount
431
00:31:21.390 --> 00:31:23.250
of payments that are being done,
432
00:31:24.815 --> 00:31:27.475
with cryptocurrencies within the Venezuelan economy.
433
00:31:28.495 --> 00:31:29.475
And that just,
434
00:31:30.575 --> 00:31:33.075
you know and if if we take 2 steps back
435
00:31:33.590 --> 00:31:34.090
between
436
00:31:36.870 --> 00:31:37.770
2017 and today,
437
00:31:38.470 --> 00:31:39.850
what we saw happening,
438
00:31:40.475 --> 00:31:49.535
Marisha and I and I started and I started seeing this when I went to college. My friends started doing this. I started doing this. Essentially, we just found a better way
439
00:31:50.009 --> 00:31:57.629
to beat a, like, a faster, more efficient way to beat the, you know, the the the old informal
440
00:31:58.009 --> 00:31:59.049
money transmit
441
00:31:59.735 --> 00:32:00.475
money transmitters
442
00:32:01.015 --> 00:32:05.035
that were, you know, just receiving Volibars and making payments,
443
00:32:06.055 --> 00:32:11.669
within within US bank accounts or Panamanian accounts or whatever outside of the country. We just found
444
00:32:12.129 --> 00:32:12.629
LocalBitcoins,
445
00:32:13.570 --> 00:32:14.470
Store Bitcoin.
446
00:32:15.035 --> 00:32:23.615
Now we have, you know, Binance speed up here. Paxful used to work in the country at its time. But we were just able to beat them at their own game
447
00:32:24.070 --> 00:32:28.410
by using Bitcoin as the underlying currency to essentially
448
00:32:29.030 --> 00:32:30.250
exchange bolivars
449
00:32:31.005 --> 00:32:31.745
for dollars
450
00:32:32.285 --> 00:32:33.345
outside of Venezuela.
451
00:32:33.805 --> 00:32:45.110
And that will bring us to the point where Mauricio will start explaining us his whole story of how his brother started mining Bitcoin in Minnesota. And then when Mauricio traveled back to Venezuela from Canada,
452
00:32:45.570 --> 00:32:51.524
he was mind blown by his brother showing him how in under an hour,
453
00:32:51.825 --> 00:32:56.004
he was able to get him all of ours into his bank account
454
00:32:56.350 --> 00:32:57.330
from his computer
455
00:32:57.950 --> 00:33:03.730
without resorting back to, you know, any this of this, what we call, informal money transmitters.
456
00:33:07.685 --> 00:33:11.945
457
00:33:12.640 --> 00:33:16.500
I wanted to extend a little bit on what what Matt said earlier, which was,
458
00:33:17.680 --> 00:33:18.180
governments
459
00:33:18.560 --> 00:33:20.880
make it hard for you to protect your savings,
460
00:33:21.835 --> 00:33:25.135
once inflation starts hitting. And and I just wanted to give
461
00:33:25.675 --> 00:33:34.330
maybe, like, a quick like, a story or or not a story, but essentially kind of paint a picture as as I see it and as as in my view, what kinda went down in Venezuela.
462
00:33:35.190 --> 00:33:35.690
So,
463
00:33:36.470 --> 00:33:41.185
typically, what happens is most governments look at their local currency exchange rate
464
00:33:41.725 --> 00:33:44.225
against the US dollar as essentially,
465
00:33:45.245 --> 00:33:45.985
a barometer
466
00:33:46.445 --> 00:33:47.425
of how well
467
00:33:47.750 --> 00:33:50.010
the investment community or their own citizens
468
00:33:50.550 --> 00:33:51.050
perceive
469
00:33:51.910 --> 00:33:54.330
their country. And what I mean by that is
470
00:33:55.225 --> 00:34:02.765
if your government is doing a a great job and people want to invest in your project and they think you're going in a right direction,
471
00:34:03.390 --> 00:34:10.369
you don't really have an incentive to sell your local cash into dollars. If anything, you have an incentive to bring your dollars from overseas
472
00:34:10.670 --> 00:34:12.130
and invest them in the country.
473
00:34:12.444 --> 00:34:39.755
And when you do that, you're effectively buying local currency with dollars. And what that does is that that elevates the price of your local currency relative to dollars. So if your if your government plan is great and your and your constituents are all aligned, what you should see is you should see a stable currency that in fact could even become stronger or remain at a level, you know, of ground relative to the dollar. K?
474
00:34:40.610 --> 00:34:51.645
If you're if you come out with a wild plan, like what happened in Venezuela, where Travis's plan was literally to give free things to everybody for free, everything for free for everybody.
475
00:34:52.265 --> 00:35:00.650
The investment community, understanding that money doesn't grow on trees, was absolutely freaked out, and they said, I will not be caught dead financing
476
00:35:01.349 --> 00:35:11.665
you know, giving everyone free everything with my money because that's the only way they're gonna get the assets to give people free things is they're going to print more and they're going to debase
477
00:35:11.970 --> 00:35:18.869
my savings. So I'm going to take my savings away from this currency and I will not be exposed to that ridiculous
478
00:35:19.170 --> 00:35:21.975
plan of government that will surely fail. K?
479
00:35:22.515 --> 00:35:28.935
What the government does is they say, no, mister investor, you are wrong. Our plan to give free things to everybody
480
00:35:29.520 --> 00:35:33.380
will work, and you just haven't we you know, you just haven't seen this done right.
481
00:35:33.920 --> 00:35:44.145
And what they say and eventually, they they come at odds. Right? And investors continue to sell off their local currency to buy dollars, to get the money out, and what this does is that it starts
482
00:35:44.470 --> 00:35:46.569
ramping up the rate of exchange,
483
00:35:46.950 --> 00:35:49.770
and and the government starts looking really poorly
484
00:35:50.230 --> 00:35:51.210
because now
485
00:35:51.589 --> 00:35:53.609
the the person an average person
486
00:35:54.045 --> 00:35:59.105
needs more of the local currency to buy the same good. So the government wants to prevent,
487
00:35:59.964 --> 00:36:02.704
you know, they do not wanna look bad. So
488
00:36:03.319 --> 00:36:06.299
instead of fixing the problem at the core,
489
00:36:07.079 --> 00:36:09.579
what they do is they try to fix
490
00:36:09.960 --> 00:36:10.780
the price
491
00:36:11.085 --> 00:36:21.350
of certain things. And they they at first, they try to fix the price of a particular asset or a good, and later they go on to fix the price of the exchange rate of the actual dollar.
492
00:36:22.450 --> 00:36:22.950
So
493
00:36:23.410 --> 00:36:34.850
what I what I wanted to say is is to your point, Matt, they will as they see that people do not agree with the government plan and they start selling off their local currency for dollars, things that they do believe in,
494
00:36:35.330 --> 00:36:40.630
the government starts saying, you cannot do that. That is not allowed. They they don't say,
495
00:36:40.930 --> 00:36:51.455
you know, we're we're doing something wrong. Let's fix this so you don't wanna take your money out. They say, you are not allowed to take your money out. And what what that has created over the years in many Latin American,
496
00:36:52.600 --> 00:36:53.100
societies
497
00:36:53.400 --> 00:36:54.460
is this idea
498
00:36:55.000 --> 00:36:57.340
that because our governments have been so volatile
499
00:36:57.880 --> 00:36:58.620
over time,
500
00:36:59.080 --> 00:37:01.420
most wealthy people in Latin America,
501
00:37:02.025 --> 00:37:08.365
once they make a little bit of wealth, the first thing they do is they send it out of their local banking system, out of their local currency.
502
00:37:08.665 --> 00:37:09.325
And so
503
00:37:10.029 --> 00:37:16.529
Bitcoin is not really that different in the sense that it is just one more exit door and to your point,
504
00:37:16.990 --> 00:37:18.369
when things go tough,
505
00:37:19.225 --> 00:37:30.390
they will try to ban Bitcoin, and they will try to ban Bitcoin because it's working. And that is exactly what I think is happening in Russia right now, in Turkey, in China, and any other place that wants to ban Bitcoin.
506
00:37:30.770 --> 00:37:35.430
And what that tells me is that it's actually doing precisely what it's designed to do for its citizens.
507
00:37:47.380 --> 00:37:49.400
Hey, guys. No. Sorry if I lost you. Sorry.
508
00:37:49.940 --> 00:37:53.000
509
00:37:54.244 --> 00:37:57.765
510
00:37:59.045 --> 00:38:01.865
it's really just that the government tried to to to
511
00:38:02.510 --> 00:38:07.170
never they just wanna keep their optics at all cost, and it's all a big theater,
512
00:38:07.950 --> 00:38:10.050
which is which is unfortunate. But
513
00:38:10.725 --> 00:38:12.425
but, yeah, they can't really do much.
514
00:38:12.965 --> 00:38:15.545
Once people discover Bitcoin and once people
515
00:38:16.085 --> 00:38:20.670
realize that they do not wanna hold that asset, they will do whatever it takes to get rid of it.
516
00:38:21.609 --> 00:38:29.475
517
00:38:32.895 --> 00:38:34.115
whatever. And then
518
00:38:34.520 --> 00:38:35.340
it says
519
00:38:36.040 --> 00:38:36.540
2,710
520
00:38:37.400 --> 00:38:38.460
sats per dollar,
521
00:38:38.920 --> 00:38:49.724
but one sat is already worth more than 1 ball of it right now. Right? Like like, if you take into account the 14 zeros that the Venezuelan government
522
00:38:50.505 --> 00:38:53.005
took off the the bolivar,
523
00:38:53.500 --> 00:38:55.760
Right now, you need approximately, like,
524
00:38:56.620 --> 00:38:57.120
480,000,000,000,000
525
00:38:57.980 --> 00:39:00.080
bolivars just to buy a dollar
526
00:39:00.380 --> 00:39:01.280
in the country.
527
00:39:01.885 --> 00:39:02.385
So,
528
00:39:03.245 --> 00:39:06.705
you you know, Fiat Fiat Fiat is an illusion of the power.
529
00:39:08.285 --> 00:39:10.465
Go ahead, Matt. I think we lost you.
530
00:39:10.829 --> 00:39:11.650
531
00:39:12.349 --> 00:39:13.569
Sorry about that.
532
00:39:14.829 --> 00:39:23.065
I had a little bit of an Internet issue here. Seems to be resolved. I was afraid it was gonna kill the whole stream, so I'm glad that we are still live, it appears.
533
00:39:25.940 --> 00:39:32.280
So where are we in this conversation? Don't let me don't let me hold you guys back. I know one of the big things that I wanted
534
00:39:33.140 --> 00:39:33.950
to touch on,
535
00:39:35.474 --> 00:39:37.255
just to go back a tiny bit,
536
00:39:37.714 --> 00:39:40.775
is, you know, there was some conversation there about,
537
00:39:42.195 --> 00:39:44.695
Venezuelans using the traditional financial
538
00:39:45.460 --> 00:39:49.400
to to move dollars around, whether that's Zelle or some other kind of
539
00:39:49.940 --> 00:39:51.080
finance app.
540
00:39:52.900 --> 00:39:53.880
You know, Venezuela
541
00:39:55.525 --> 00:39:57.464
has a little bit of a unique twist
542
00:39:57.765 --> 00:39:59.865
on other Latin American
543
00:40:00.244 --> 00:40:00.744
hyperinflation
544
00:40:01.125 --> 00:40:03.704
stories in that it's also a sanctioned country.
545
00:40:04.330 --> 00:40:08.430
How do, like how does, like, the whole like, how are people able to use
546
00:40:10.090 --> 00:40:11.710
apps like Zelle if
547
00:40:12.015 --> 00:40:13.795
if the country's under sanctions?
548
00:40:14.974 --> 00:40:16.835
549
00:40:17.454 --> 00:40:17.954
nuance
550
00:40:18.335 --> 00:40:20.115
about Venezuela that many
551
00:40:20.599 --> 00:40:22.780
people don't know. And I think this nuance,
552
00:40:23.960 --> 00:40:24.460
illustrates
553
00:40:25.319 --> 00:40:27.420
a couple of things quite well. It illustrates
554
00:40:28.235 --> 00:40:31.695
how well the Venezuelan government is able to spin propaganda
555
00:40:32.235 --> 00:40:35.055
to make people believe things that aren't actually true.
556
00:40:36.730 --> 00:40:39.790
And the other piece that I think it it this illuminates
557
00:40:40.090 --> 00:40:40.590
is
558
00:40:41.130 --> 00:40:41.950
how strategic,
559
00:40:42.730 --> 00:40:44.670
the flip side of that is how strategic,
560
00:40:45.515 --> 00:40:47.135
the US government can be,
561
00:40:47.595 --> 00:40:51.055
on certain things. So let me let me kind of explain.
562
00:40:51.595 --> 00:40:52.095
Venezuela
563
00:40:52.395 --> 00:40:53.775
is not a sanctioned
564
00:40:54.075 --> 00:40:54.575
country.
565
00:40:55.740 --> 00:40:57.200
Venezuela there are
566
00:40:57.660 --> 00:40:58.640
several Venezuelan
567
00:40:59.020 --> 00:40:59.520
entities
568
00:40:59.820 --> 00:41:00.720
that are sanctioned.
569
00:41:01.500 --> 00:41:03.520
So the country itself
570
00:41:03.975 --> 00:41:05.035
is not sanctioned.
571
00:41:05.495 --> 00:41:07.195
The people who are sanctioned
572
00:41:07.735 --> 00:41:09.675
are rogue government officials
573
00:41:10.215 --> 00:41:12.075
and the state oil company.
574
00:41:13.180 --> 00:41:13.680
And
575
00:41:14.060 --> 00:41:14.560
interestingly,
576
00:41:16.540 --> 00:41:19.520
the United States over the last 3 years continues
577
00:41:19.900 --> 00:41:22.965
to be the biggest buyer of Venezuelan oil.
578
00:41:24.645 --> 00:41:26.025
And so the
579
00:41:26.885 --> 00:41:27.945
the sanction
580
00:41:28.485 --> 00:41:32.070
narrative is really an, a a a a fabrication
581
00:41:32.849 --> 00:41:34.390
of the Venezuelan regime,
582
00:41:35.330 --> 00:41:36.150
to essentially
583
00:41:36.849 --> 00:41:38.790
paint the US as a boogeyman
584
00:41:39.385 --> 00:41:40.125
that prevents
585
00:41:40.745 --> 00:41:42.685
better people from thriving,
586
00:41:43.225 --> 00:41:44.125
but is actually
587
00:41:44.665 --> 00:41:45.705
very, very,
588
00:41:46.105 --> 00:41:46.605
misunderstood
589
00:41:47.305 --> 00:41:48.445
in the sense that
590
00:41:48.820 --> 00:41:54.280
the United States does not fully sanction the country. McDonald's is still there. Coca Cola is still there.
591
00:41:54.820 --> 00:41:57.640
You know, Procter and Gamble, Oreo is still there.
592
00:41:58.235 --> 00:41:59.135
It's really
593
00:41:59.755 --> 00:42:00.335
a a facade.
594
00:42:01.035 --> 00:42:05.215
595
00:42:05.920 --> 00:42:10.740
Like, can we unpack that? I don't even know if it's that relevant to this conversation, but I'm curious.
596
00:42:11.839 --> 00:42:15.665
597
00:42:16.145 --> 00:42:16.645
expert.
598
00:42:16.945 --> 00:42:18.865
What I will say is that,
599
00:42:19.665 --> 00:42:20.165
Venezuela
600
00:42:20.545 --> 00:42:22.565
is is is a unique oil producer
601
00:42:24.050 --> 00:42:25.190
for a few reasons.
602
00:42:25.890 --> 00:42:26.390
1,
603
00:42:26.770 --> 00:42:27.270
so
604
00:42:27.650 --> 00:42:35.675
before this whole mess with Chavez started, there there's actually a a pretty tight link between the US and Venezuela, and and it's broadly
605
00:42:35.975 --> 00:42:37.675
because of a company called Citgo,
606
00:42:38.055 --> 00:42:42.315
c I t g o. And you probably have seen the Citgo gas stations throughout the US.
607
00:42:42.970 --> 00:42:50.349
Citgo is actually a Venezuelan company, and Citgo used to be a joint venture between the Venezuelan state company and some US,
608
00:42:50.650 --> 00:42:51.470
oil companies.
609
00:42:52.035 --> 00:42:52.535
Now,
610
00:42:53.155 --> 00:42:57.255
because of that, the the other interesting point there is that Venezuela doesn't have refineries,
611
00:42:57.714 --> 00:43:00.535
so Venezuela actually cannot process its own gasoline.
612
00:43:00.870 --> 00:43:01.770
So it's dependent
613
00:43:02.470 --> 00:43:03.930
on exporting its oil
614
00:43:04.310 --> 00:43:04.810
to,
615
00:43:06.310 --> 00:43:16.995
yeah, so so I see the comment here, Citgo is Venezuelan oil, if you see one we have their oil. So, yes, he he Narwhal is, like, Narwhal is exactly right. Sidgo is Venezuelan oil. And there was at one point,
616
00:43:17.910 --> 00:43:23.130
a a a Sidco ad that had pictures of Chavez and other politicians back when he was in Vogue,
617
00:43:23.589 --> 00:43:25.885
which actually made me wanna throw up when I saw it,
618
00:43:26.445 --> 00:43:29.485
but, but that that did happen. And so that is,
619
00:43:29.885 --> 00:43:32.625
largely, I believe, why the link is still there.
620
00:43:33.245 --> 00:43:36.410
I think in in many places in politics, you will see,
621
00:43:37.830 --> 00:43:41.770
groups or entities that's that that that seem to have a a
622
00:43:42.550 --> 00:43:45.210
public sort of narrative of not being friendly,
623
00:43:45.565 --> 00:43:49.265
but in the background, they're actually, you know, never stop doing deals with each other.
624
00:43:49.725 --> 00:43:51.905
And and I think that's very much the case,
625
00:43:52.365 --> 00:43:54.545
with the kinda US Venezuela relationship.
626
00:43:56.290 --> 00:43:57.510
627
00:43:58.050 --> 00:44:04.470
Yeah. Well, you're absolutely correct that it's a common misconception because I did not realize the sanctions were
628
00:44:05.325 --> 00:44:06.385
specifically targeted.
629
00:44:06.685 --> 00:44:08.145
I thought they were more broad.
630
00:44:08.525 --> 00:44:09.425
I I
631
00:44:09.725 --> 00:44:14.710
I mean, I don't know if you guys know. I I my understanding is the sanctions on Iran
632
00:44:15.010 --> 00:44:16.390
Iran is for
633
00:44:17.010 --> 00:44:17.910
all their people.
634
00:44:18.450 --> 00:44:32.530
635
00:44:33.390 --> 00:44:35.570
but there are others like Venezuela,
636
00:44:36.190 --> 00:44:36.690
where
637
00:44:37.230 --> 00:44:38.290
the rogue
638
00:44:39.195 --> 00:44:39.695
criminals,
639
00:44:40.635 --> 00:44:42.895
which actually are elected officials, ironically,
640
00:44:43.595 --> 00:44:48.095
are the only ones that are sanctioned. The rest of the people are not. And the intent here
641
00:44:48.600 --> 00:44:49.240
was really
642
00:44:50.040 --> 00:45:03.315
the the the intent of the US was to say, you know, they were trying to be as explicit as possible that this was not meant to hurt the Venezuelan people, only the bad people in Venezuela. But, of course, the Venezuelan government is gonna try to paint a completely different picture.
643
00:45:03.615 --> 00:45:09.820
Right? And so one group was trying to say, hey, this is how we did it. The other one was trying to say, you know, completely
644
00:45:10.120 --> 00:45:12.460
a lie, but as you can tell,
645
00:45:13.800 --> 00:45:17.885
once any regime whether it's Venezuela or any other actually,
646
00:45:18.345 --> 00:45:23.724
this is something that is not talked about enough, in Venezuela, but so Chavez, when he came in,
647
00:45:24.105 --> 00:45:26.045
he the first thing he did is rewrote the constitution. The second thing he did is he
648
00:45:26.420 --> 00:45:28.760
the second thing he did is he dismantled
649
00:45:29.299 --> 00:45:33.400
every single media outlet that was against him. So in Venezuela,
650
00:45:33.780 --> 00:45:38.235
in the 4 years after Chavez was selected, Ale, do you have the number? But I think it's over 1,500
651
00:45:38.935 --> 00:45:40.555
radio licenses were revoked.
652
00:45:41.495 --> 00:45:47.400
653
00:45:51.540 --> 00:45:55.645
Yeah. Look. I I and I guess it related to what Mauricio was saying.
654
00:45:56.905 --> 00:46:03.870
You know, the the problem with with Venezuela, and it's all related back to, you know, what we were we were just discussing
655
00:46:04.250 --> 00:46:04.750
this.
656
00:46:06.730 --> 00:46:08.110
It's it's basically,
657
00:46:10.095 --> 00:46:10.835
the government,
658
00:46:12.095 --> 00:46:12.595
swallowing,
659
00:46:15.375 --> 00:46:16.434
you know, limitlessly
660
00:46:18.089 --> 00:46:24.910
the different economic apparatus in in parts of the industry in the country. So the broad a huge problem with with, Venezuela
661
00:46:25.210 --> 00:46:25.710
and
662
00:46:26.075 --> 00:46:29.375
and the bad administers policies with the was that essentially,
663
00:46:30.234 --> 00:46:32.654
you you know, Chavez started
664
00:46:33.194 --> 00:46:33.694
expropriating,
665
00:46:35.299 --> 00:46:39.400
companies in in Minnesota. So Chavez, for example, took,
666
00:46:40.020 --> 00:46:40.839
made public
667
00:46:41.539 --> 00:46:44.280
the national state oil company, PDVSA,
668
00:46:44.725 --> 00:46:48.425
right, that we were just talking about that has its subsidiary or a Cinco in the US.
669
00:46:48.725 --> 00:46:52.470
That was it used to be a private company, man. I mean, like,
670
00:46:52.950 --> 00:46:56.250
over the 30 thirties and forties, the the first
671
00:46:56.869 --> 00:46:57.770
main highways
672
00:46:58.390 --> 00:46:59.210
in Germany
673
00:46:59.885 --> 00:47:02.465
were were built using Venezuelan
674
00:47:02.765 --> 00:47:03.265
asphalt.
675
00:47:04.285 --> 00:47:05.345
Right? So,
676
00:47:06.285 --> 00:47:08.625
during during Chavez's presidency,
677
00:47:10.160 --> 00:47:11.060
over $1,500,000,000,000
678
00:47:15.359 --> 00:47:16.099
679
00:47:18.175 --> 00:47:19.635
680
00:47:20.575 --> 00:47:21.635
And so, essentially,
681
00:47:22.494 --> 00:47:22.994
completely
682
00:47:23.454 --> 00:47:28.570
into the hands of the government because it it became a public company. Then Travis started nationalizing
683
00:47:29.110 --> 00:47:29.610
banks,
684
00:47:30.150 --> 00:47:30.650
nationalizing
685
00:47:31.350 --> 00:47:31.850
factories,
686
00:47:32.405 --> 00:47:33.145
you know,
687
00:47:33.765 --> 00:47:35.865
whatever, man. You you name it. So,
688
00:47:37.045 --> 00:47:39.785
it's just to say that the more
689
00:47:40.670 --> 00:47:44.130
the the more control over the money supply
690
00:47:44.990 --> 00:47:45.490
and,
691
00:47:46.350 --> 00:47:47.650
you know, the revenues
692
00:47:47.950 --> 00:47:49.810
of a certain country or whatever,
693
00:47:50.655 --> 00:47:52.755
the more you give to the state,
694
00:47:53.695 --> 00:48:01.900
the the more greed that you will just get, man. Honestly, that's that's that's part of what I live in a in a short summery sway
695
00:48:02.360 --> 00:48:03.980
in in Venezuela do.
696
00:48:04.760 --> 00:48:06.700
697
00:48:07.964 --> 00:48:11.825
so in a lot of ways so so we see these countries, they move to dollars,
698
00:48:12.684 --> 00:48:13.184
because
699
00:48:14.045 --> 00:48:17.070
that is what they know. It's accessible. It's, you know,
700
00:48:17.370 --> 00:48:20.350
the undisputed world champion in fiat currencies.
701
00:48:21.690 --> 00:48:23.150
Aren't they kind of just
702
00:48:25.265 --> 00:48:30.885
are are are we ending up in a situation I know Mauricio said earlier, like, we shouldn't expect, like, a hyperinflationary
703
00:48:31.505 --> 00:48:33.680
event in the United States anytime
704
00:48:35.579 --> 00:48:40.400
soon. But we are seeing, you know, the official inflation numbers are coming out of, like, 7%,
705
00:48:41.660 --> 00:48:42.400
which is
706
00:48:42.925 --> 00:48:53.299
historically pretty high for the United States, and that that's, you know, a discounted number for all for all intents and purposes is probably much higher. That's the one they're willing to admit. Are we, like
707
00:48:54.240 --> 00:49:03.184
is is the world putting all of their eggs in one basket, so to speak? Like, is it are we just compounding risk instead of you have all these countries that mismanage
708
00:49:04.045 --> 00:49:05.424
their treasuries, mismanage
709
00:49:05.724 --> 00:49:07.184
their currencies, and then
710
00:49:08.125 --> 00:49:09.184
if we're all moving
711
00:49:09.559 --> 00:49:11.420
towards a single country's currency,
712
00:49:15.160 --> 00:49:18.380
when that eventually collapses, it's gonna be
713
00:49:19.385 --> 00:49:20.605
way worse. No?
714
00:49:22.025 --> 00:49:25.405
715
00:49:25.945 --> 00:49:26.605
You know,
716
00:49:27.000 --> 00:49:31.740
the way the way I see this the way I I kinda see the the the transition
717
00:49:32.280 --> 00:49:33.500
and to say it, like,
718
00:49:34.485 --> 00:49:37.465
from one fiat to the other is is really,
719
00:49:40.885 --> 00:49:43.305
it's hard to kinda put it to words, but it's almost
720
00:49:43.610 --> 00:49:54.475
a Fiat is nothing more than a belief. Right? Like, the the the the the power of the dollar is just as good as the or as Europe belief in that the United States will be able to manage
721
00:49:55.335 --> 00:49:56.635
their finances accordingly
722
00:49:56.935 --> 00:50:06.619
and and meet their obligations. Right? Like, that is really all that backs fiat, is the belief in whoever the operator is of that fiat. Right? Like,
723
00:50:07.260 --> 00:50:08.070
you know, the the
724
00:50:08.885 --> 00:50:17.465
how you manage the issuance of that fiat relative to your reserves and and relative to, like, you know, the the the other value that you can create within your economy.
725
00:50:18.180 --> 00:50:18.680
Now
726
00:50:19.300 --> 00:50:20.359
what what happens
727
00:50:20.740 --> 00:50:23.720
what I see happens when a when a country's currency
728
00:50:24.020 --> 00:50:27.319
fails and it moves to, say, a different country
729
00:50:29.225 --> 00:50:30.445
is, that country loses
730
00:50:30.825 --> 00:50:33.085
a tremendous amount of independence
731
00:50:33.465 --> 00:50:35.565
because it loses its right to do seniorage.
732
00:50:36.220 --> 00:50:42.160
So it it essentially is now bound by the the monetary policy that the United States has.
733
00:50:42.619 --> 00:50:46.135
It it puts the US government at a massive advantage
734
00:50:46.515 --> 00:50:48.055
relative to other governments
735
00:50:48.515 --> 00:50:52.215
because it can control its monetary policy and and others cannot.
736
00:50:52.840 --> 00:50:53.340
So
737
00:50:54.200 --> 00:50:54.520
I
738
00:50:55.240 --> 00:50:55.980
it it really,
739
00:50:57.080 --> 00:51:12.740
whether we're making the problem bigger, I mean, we're just trading one problem for another. Right? Like, we're we're training the the what what we're basically saying is this particular group is unable to manage their books, and we're going to use the currency of the group that we believe can manage their books.
740
00:51:13.760 --> 00:51:16.020
To your point, if we start seeing
741
00:51:18.055 --> 00:51:23.915
concerns or doubts start to emerge around the US being able to maintain its book,
742
00:51:24.230 --> 00:51:28.650
then you might see people interested in other monetary instruments and that might be Bitcoin,
743
00:51:29.110 --> 00:51:44.110
you know, or that might be the country that is doing things better, you know, come 10 years from now or 5 years from now if if the US stops or, you know, starts creating doubts. So do you do do you think it's a valid perspective that the way we've seen dollarization
744
00:51:44.570 --> 00:51:45.070
745
00:51:46.010 --> 00:51:48.750
in these other countries is the way we will see
746
00:51:49.205 --> 00:51:49.705
Bitcoinization
747
00:51:50.005 --> 00:51:50.505
happen
748
00:51:51.125 --> 00:51:52.265
as the dollar fails,
749
00:51:52.805 --> 00:51:55.225
or is it not a complete analogy?
750
00:51:55.845 --> 00:51:59.150
751
00:51:59.450 --> 00:52:03.950
yeah. Like, if if I I look. I I I lived the hyper dollarization
752
00:52:05.210 --> 00:52:13.775
process of Venezuela and had been, you know, in mind in the country back in 2013, 2015. And then I I had some hope that more
753
00:52:14.335 --> 00:52:23.050
you know, we would we would have seen more retail adoption, although it's pretty big in in in in Venezuela. We could dive more into that. But but, truly,
754
00:52:24.025 --> 00:52:26.925
it it went already through a hyper dollarization
755
00:52:27.305 --> 00:52:28.365
process, and
756
00:52:28.825 --> 00:52:29.885
that's what,
757
00:52:30.905 --> 00:52:32.045
eventually starts,
758
00:52:32.905 --> 00:52:33.485
you know,
759
00:52:34.140 --> 00:52:36.000
ground grinding down towards,
760
00:52:36.700 --> 00:52:37.600
hyper Bitcoinization
761
00:52:37.900 --> 00:52:39.520
and more usage of Bitcoin,
762
00:52:40.300 --> 00:52:45.195
as people just some people start understanding Bitcoin in this country as a more,
763
00:52:45.495 --> 00:52:48.635
you know, rapid and less costly medium of exchange
764
00:52:49.015 --> 00:52:49.755
to reach
765
00:52:50.215 --> 00:52:55.309
other local currencies and make international payments. Because because the other problem is okay. Right.
766
00:52:55.769 --> 00:52:57.390
The problem with hyper dollarization
767
00:52:57.769 --> 00:52:59.150
is if it's done in cash,
768
00:52:59.690 --> 00:53:00.190
sweet.
769
00:53:00.495 --> 00:53:01.235
But then
770
00:53:01.535 --> 00:53:02.995
it's it's a dollarization
771
00:53:03.455 --> 00:53:04.355
that will live
772
00:53:04.975 --> 00:53:10.610
just if if if if the banking system of that particular country does not embrace
773
00:53:10.910 --> 00:53:14.530
the dollar as legal tender and does not abide
774
00:53:14.990 --> 00:53:17.330
to the rules and the regulations
775
00:53:17.710 --> 00:53:19.184
of of of US,
776
00:53:20.045 --> 00:53:24.464
then and and if you're not essentially a green or or a goodwill
777
00:53:24.845 --> 00:53:27.025
trading partner of of the US,
778
00:53:27.840 --> 00:53:32.020
then there's there's no way to, you know, provide, like,
779
00:53:32.560 --> 00:53:33.700
real global
780
00:53:34.000 --> 00:53:35.700
exposure to that dollarization.
781
00:53:36.000 --> 00:53:38.845
And so it's just a it's just a closed door
782
00:53:39.325 --> 00:53:42.285
it's closed doors economy. You know what I mean? Like,
783
00:53:42.765 --> 00:53:48.760
and and and so that's and then and then we'd have to speak about, of course, the problem of confiscation.
784
00:53:49.620 --> 00:53:50.120
Right?
785
00:53:51.780 --> 00:53:52.920
England confiscated,
786
00:53:54.394 --> 00:53:55.375
Venezuela's gold.
787
00:53:55.914 --> 00:53:59.934
If you don't use dollar and and if you don't have access to
788
00:54:00.394 --> 00:54:11.200
using dollars and the global banking system, what are you gonna use other than gold? You just you just have Bitcoin. You know what I mean? And so I'll I'll let Mauricio give his stake on that.
789
00:54:13.645 --> 00:54:16.625
790
00:54:17.565 --> 00:54:31.674
if if you look at, you know, if I try to look at things as as as sort of human events, and I think when you when when somebody thinks macro and how this happens or how that happens, I like to think of macro events as a as a combination
791
00:54:31.974 --> 00:54:33.835
of just individual actions.
792
00:54:34.135 --> 00:54:36.730
K? And if if you look at how,
793
00:54:37.130 --> 00:54:40.670
or why people drop the bolio out of for the dollar
794
00:54:41.130 --> 00:54:45.790
or why somebody would drop the dollar for a bolio out or sorry, the dollar for Bitcoin,
795
00:54:46.155 --> 00:54:52.655
In my view, it would happens a little bit like this and and for this, I I wanna give a quick story about mining in Venezuela, which I think can illuminate
796
00:54:53.275 --> 00:54:57.160
a lot of things about how how this transfer of knowledge happens.
797
00:54:58.660 --> 00:54:59.640
So the way,
798
00:55:00.660 --> 00:55:02.920
people don't find out about dollars or hyperinflation
799
00:55:03.225 --> 00:55:05.565
or inflation all at the same time. They do this,
800
00:55:06.265 --> 00:55:15.680
by by, you know, living certain experiences and seeing people do certain things. So I'll give you an example. When we first started setting up mines and build and installing miners in Venezuela,
801
00:55:16.220 --> 00:55:17.119
we were using,
802
00:55:17.900 --> 00:55:20.619
the electrical contractors that would that came from the,
803
00:55:21.285 --> 00:55:34.580
from from residential construction because that's what my dad used to do. And so we started calling up our electricians to help us do the the sort of electrical upgrades that we did to run the power, feeds to to our miners and to set up our our networks and to bring in our sort of Internet,
804
00:55:34.880 --> 00:55:38.180
to to to our our Internet networks, like our LAN networks.
805
00:55:38.725 --> 00:55:54.720
And in the first time around they came, they were like, oh, this is cool. You know, we were we were installing miners and building something in the time where everything else in Venezuela was falling apart. So naturally they were curious and they were like, oh, what are you doing this big installation for? And we said, oh, it's who gonna install these machines, they mine these things called Bitcoin.
806
00:55:55.525 --> 00:55:57.865
And, and so the second time around,
807
00:55:58.165 --> 00:56:00.025
we called them up for a second installation.
808
00:56:01.205 --> 00:56:07.360
And when they came to do the second installation, they saw that we were growing and that we were installing more and they said,
809
00:56:07.740 --> 00:56:17.335
hey, what is this Bitcoin thing? Where can I learn more about it? You know, can you can you tell me a bit more about it? And there was very little Spanish resources, but we kinda pointed them out in a few in a few directions.
810
00:56:17.875 --> 00:56:18.275
And,
811
00:56:19.075 --> 00:56:21.575
a few months later, we called them back for a 3rd installation.
812
00:56:22.450 --> 00:56:25.270
And when they, when they came in for the 3rd installation,
813
00:56:25.570 --> 00:56:26.310
they said,
814
00:56:26.930 --> 00:56:29.865
this time I wanna get paid in Bitcoin. And,
815
00:56:30.645 --> 00:56:36.265
and they had their addresses and they were able to receive Bitcoin for payment. Again, what I'm trying to say is
816
00:56:37.339 --> 00:56:37.839
people
817
00:56:38.220 --> 00:56:38.720
emulate,
818
00:56:39.500 --> 00:56:41.759
when people see other people doing well
819
00:56:42.059 --> 00:56:51.965
and they're doing a certain action and that action leads them to them doing well, people emulate that action. So the same way these people saw us installing miners and gotten interested in Bitcoin,
820
00:56:52.425 --> 00:56:55.650
other people will see other people spend and hold dollars over Bolivariz,
821
00:56:55.950 --> 00:57:13.270
and they will then start emulating that. And they will benefit from it. They'll run their their math at the end of the week and they said, holy crap. I am better off. And then they start moving on to dollars. And eventually, I think the migration to Bitcoin is actually gonna be very similar to your point, Matt, because it's gonna start out of necessity
822
00:57:14.130 --> 00:57:21.434
and governments are likely going to fight it at first. But there will be a government or a group in that government that says,
823
00:57:21.815 --> 00:57:22.954
this is inevitable.
824
00:57:23.335 --> 00:57:29.620
So they get behind it and they rally the population and then it becomes law. And so I I think we're gonna see
825
00:57:30.500 --> 00:57:33.240
that that's how I picture it, and transitioning,
826
00:57:33.700 --> 00:57:34.760
but I do not,
827
00:57:35.435 --> 00:57:46.150
I do not think that, that governments are gonna do this without a fight. I I do think that there will be some contentious part of this journey, and we just need to be ready for it.
828
00:57:46.850 --> 00:57:51.110
829
00:57:54.685 --> 00:57:57.265
which I I think is lost on most Americans
830
00:57:58.205 --> 00:58:01.105
and and probably Europeans as well and Canadians
831
00:58:01.740 --> 00:58:04.640
and is this idea of of necessity,
832
00:58:05.340 --> 00:58:10.400
this idea of actually realizing there is a need for something better and going out and seeking it.
833
00:58:12.405 --> 00:58:12.905
834
00:58:13.445 --> 00:58:19.865
835
00:58:20.200 --> 00:58:21.900
and we basically just need to be ready
836
00:58:22.680 --> 00:58:24.060
with tools, resources,
837
00:58:24.760 --> 00:58:25.260
education,
838
00:58:26.920 --> 00:58:30.974
for people when they realize that need rather than necessarily trying to
839
00:58:31.675 --> 00:58:35.055
convince someone to use Bitcoin that doesn't necessarily need it.
840
00:58:38.330 --> 00:58:39.390
841
00:58:39.770 --> 00:58:40.170
And,
842
00:58:43.210 --> 00:58:43.850
it's it's
843
00:58:44.725 --> 00:58:54.185
it it happened to me that way. Right? Like, I died with Bitcoin because of necessity. My family lost its savings, almost all of its savings in in 2008 with the great financial crisis.
844
00:58:54.690 --> 00:58:55.190
And,
845
00:58:56.369 --> 00:58:58.869
the only thing that allowed me as a Venezuelan
846
00:58:59.170 --> 00:58:59.670
after
847
00:59:00.130 --> 00:59:04.705
after that and the whole, you know, depression of the Venezuelan economy,
848
00:59:05.244 --> 00:59:10.065
the they completely wiped out all of our savings and local currency as well.
849
00:59:10.740 --> 00:59:12.360
Jurisdiction doesn't work.
850
00:59:12.900 --> 00:59:19.390
It's only based on, you know, trust and pay somebody nowadays. It's it's it's been Bitcoin. So I do,
851
00:59:20.325 --> 00:59:21.865
and and then the other thing,
852
00:59:23.125 --> 00:59:26.505
you know, in the in the case of Venezuela that creates a need,
853
00:59:26.885 --> 00:59:28.345
it's like if you
854
00:59:28.720 --> 00:59:29.460
if you
855
00:59:30.240 --> 00:59:31.140
leave the country
856
00:59:31.760 --> 00:59:33.060
and you go to, say,
857
00:59:33.520 --> 00:59:34.020
Spain,
858
00:59:34.560 --> 00:59:38.175
whatever, right, You still have to go through this bureaucratic
859
00:59:38.475 --> 00:59:46.339
normal process of establishing yourself as a resident of that of that country. And until you don't do that, you don't have access to banking,
860
00:59:46.640 --> 00:59:51.779
you can have a job, you can't do anything, and you continue living in the informal economy.
861
00:59:52.480 --> 00:59:52.980
And
862
00:59:53.485 --> 00:59:54.865
what I learned by that
863
00:59:55.325 --> 00:59:56.065
is that
864
00:59:56.445 --> 00:59:57.425
the best way
865
00:59:57.965 --> 00:59:59.105
to, like,
866
01:00:00.125 --> 01:00:08.250
best way to monetize the informal economy is through cryptocurrency peer to peer markets. And so, essentially, I made a living out of, you know, peer to peer arbitrage
867
01:00:09.165 --> 01:00:09.825
by arbitrashing
868
01:00:10.125 --> 01:00:12.465
different different currencies and and
869
01:00:12.925 --> 01:00:14.865
and South America by using,
870
01:00:15.165 --> 01:00:17.185
you know, local Bitcoins or whatever. So
871
01:00:17.565 --> 01:00:18.065
So
872
01:00:18.510 --> 01:00:23.490
873
01:00:23.790 --> 01:00:26.050
who is only a buddy because he's a Bitcoiner,
874
01:00:26.855 --> 01:00:28.075
and he's from Columbia.
875
01:00:29.575 --> 01:00:32.715
By the way, this is, you know, one of the coolest aspects
876
01:00:33.175 --> 01:00:37.329
of being active in the Bitcoin community is that I just feel like I have
877
01:00:37.630 --> 01:00:41.329
friends around the world who I have not met yet in person,
878
01:00:43.135 --> 01:00:46.835
but that I can just have these these great conversations with. And
879
01:00:47.375 --> 01:00:49.155
he mentioned that in Colombia,
880
01:00:50.150 --> 01:00:54.089
the main way people are buying Bitcoin and selling Bitcoin trading
881
01:00:54.470 --> 01:00:56.809
is through Binance peer to peer marketplace,
882
01:00:57.395 --> 01:01:01.415
which is something that was just not even on my radar at all. Like, we all know LocalBitcoins.
883
01:01:02.435 --> 01:01:03.734
We know PAC's full.
884
01:01:04.115 --> 01:01:13.180
But apparently, Binance's p p market is blowing the fuck up. Do you guys have any insight on that? Oh, you hear the Latinos giggling. You hear the Latinos giggling.
885
01:01:14.714 --> 01:01:17.295
886
01:01:18.954 --> 01:01:20.575
Binance fear to peer market.
887
01:01:20.875 --> 01:01:22.974
The Binance fear to peer marketplace started
888
01:01:23.300 --> 01:01:27.800
booming in South America after, you know, SurveyCoin, Paxful, LocalBitcoins,
889
01:01:28.340 --> 01:01:29.640
whatever. There's so many.
890
01:01:30.475 --> 01:01:31.695
Because they introduced
891
01:01:31.995 --> 01:01:33.695
the 1st peer to peer marketplace
892
01:01:33.995 --> 01:01:34.815
that used
893
01:01:35.115 --> 01:01:36.095
stable coins.
894
01:01:36.475 --> 01:01:38.539
In this case, dollar tether.
895
01:01:39.319 --> 01:01:46.619
So the problem that most of this, let's call them informal OTCs or, again, the term that it's, you know,
896
01:01:47.454 --> 01:01:51.875
generally used in the financial world and the banking and the banking world is,
897
01:01:52.815 --> 01:01:54.435
informal money transmitters.
898
01:01:54.940 --> 01:01:57.280
The problem that crypto this cryptocurrency
899
01:01:57.900 --> 01:02:02.905
informal money transmitters or informal OTCs had with Bitcoin
900
01:02:03.285 --> 01:02:05.785
peer to peer marketplaces was essentially volatile.
901
01:02:06.325 --> 01:02:10.510
Right? So it was a problem that you were charging somebody someone between
902
01:02:10.810 --> 01:02:11.710
1 or 2%
903
01:02:12.650 --> 01:02:14.730
or even 3% sometimes, right,
904
01:02:15.210 --> 01:02:21.715
to associate receive the local currency and make a payment for them in dollars wherever. Right? And so,
905
01:02:23.615 --> 01:02:30.619
you you made 1% to 2% on one side of the trade, and then you made 1% to 2% on the other side of the trade by selling
906
01:02:31.079 --> 01:02:34.805
by selling Bitcoin to a Bitcoin buyer in another country,
907
01:02:35.665 --> 01:02:38.805
right, to access dollars in the other country. So,
908
01:02:39.425 --> 01:02:45.110
or or whichever whichever currency. It could be Colombia Colombian pesos or Peruvian soles or whatever.
909
01:02:46.210 --> 01:02:50.710
Again, the wrong with that was volatility. So whenever you were carrying on a trade
910
01:02:51.315 --> 01:02:53.095
and within a matter of hours,
911
01:02:54.035 --> 01:02:57.095
Bitcoin dropped, like, 5% or 10%, whatever,
912
01:02:57.555 --> 01:03:00.295
you were essentially losing all of your profits.
913
01:03:00.849 --> 01:03:02.630
So it was a thing about speed
914
01:03:03.170 --> 01:03:11.405
and liquidity in the market. As peer to peer marketplaces started started booming and and and and being more used,
915
01:03:12.425 --> 01:03:13.565
in South America,
916
01:03:14.105 --> 01:03:14.605
then
917
01:03:14.905 --> 01:03:15.405
Binance
918
01:03:15.945 --> 01:03:16.445
Binance
919
01:03:17.240 --> 01:03:18.540
really understood that,
920
01:03:18.840 --> 01:03:21.420
and they really cashed in that opportunity.
921
01:03:21.800 --> 01:03:26.140
And and they really solved the volatility problem by essentially essentially
922
01:03:27.715 --> 01:03:31.415
just pegging dollar tethered to a peer to peer marketplace.
923
01:03:32.195 --> 01:03:34.270
And so that's essentially
924
01:03:34.730 --> 01:03:38.270
why Binance is currently functioning as the back end
925
01:03:38.970 --> 01:03:40.670
for peer to peer trades,
926
01:03:41.370 --> 01:03:41.870
especially
927
01:03:42.925 --> 01:03:44.385
being done in South America.
928
01:03:45.405 --> 01:03:48.705
929
01:03:49.805 --> 01:03:50.305
get
930
01:03:50.990 --> 01:03:51.490
Tether?
931
01:03:52.910 --> 01:04:03.445
Are they getting Bitcoin first, and then they're just when they want to sell, they're just holding Tether? Or No. So the the it's basically the the way Binance innovated, and I'll let Ale,
932
01:04:04.245 --> 01:04:10.500
933
01:04:10.960 --> 01:04:12.820
what I essentially, Matt,
934
01:04:13.545 --> 01:04:16.845
it it it goes back to this idea of Bitcoin versus dollars.
935
01:04:17.224 --> 01:04:19.325
And what became very clear,
936
01:04:20.025 --> 01:04:21.484
or what Binance saw,
937
01:04:21.840 --> 01:04:26.500
in in in some ways, what we have seen in in in but we we can get into that later. But
938
01:04:27.600 --> 01:04:29.860
Venezuela and Latin America in general
939
01:04:30.164 --> 01:04:33.704
has a huge appetite for dollars on crypto rails.
940
01:04:34.005 --> 01:04:34.404
So,
941
01:04:34.805 --> 01:04:40.070
it's it's hard to to explain because most people in the listening to this will have
942
01:04:40.530 --> 01:04:45.670
likely held dollars and and transacted in dollars and they've never had an issue sending dollars around the world.
943
01:04:46.130 --> 01:04:46.630
But
944
01:04:46.935 --> 01:04:50.234
to to a Venezuelan to be told that you can send a dollar
945
01:04:51.255 --> 01:04:53.355
to Mexico, Colombia, the US,
946
01:04:54.030 --> 01:04:54.530
Spain,
947
01:04:54.910 --> 01:05:08.165
and that you don't have to go through your bank to do that. Most Venezuelans face a world of restrictions to move dollars around, Most people outside of the US do. In fact, I remember, just so that you guys know how terrible this is,
948
01:05:08.785 --> 01:05:09.760
my family had,
949
01:05:10.160 --> 01:05:14.340
some of our dollars in a in a bank account in Panama as did many other Venezuelans.
950
01:05:14.960 --> 01:05:24.025
And there was one time we were trying to pay for a surgery for one of my, relatives, and this surgery was going to the Anderson Clinic in Texas,
951
01:05:24.325 --> 01:05:25.705
and they were the wire recipient.
952
01:05:26.780 --> 01:05:29.840
I was not we were not allowed to wire that money.
953
01:05:30.380 --> 01:05:34.160
It took us 2 weeks to wire that money, and it was an emergency surgery.
954
01:05:35.275 --> 01:05:35.775
So
955
01:05:36.315 --> 01:05:37.454
just to give you
956
01:05:38.795 --> 01:05:39.935
the the excruciating
957
01:05:41.275 --> 01:05:46.480
I don't even wanna use bad words, I'm trying to limit my language, but when you're trying to move dollars
958
01:05:46.940 --> 01:05:50.960
outside of the US, you're made feel you're made to feel like a criminal,
959
01:05:51.420 --> 01:05:53.040
and that is
960
01:05:53.475 --> 01:05:54.215
fucking unacceptable,
961
01:05:55.315 --> 01:05:58.855
in my books. So when you give somebody
962
01:05:59.235 --> 01:06:02.455
in that part of the world a dollar on Crypto Rails,
963
01:06:02.809 --> 01:06:03.710
you are literally
964
01:06:04.650 --> 01:06:05.150
changing
965
01:06:06.170 --> 01:06:13.075
the realm of opportunities that that person ever had a chance to transact with. So, yes, Bitcoin is amazing,
966
01:06:13.615 --> 01:06:19.395
but it takes people a really long time to understand it and why it's important and how it works.
967
01:06:20.240 --> 01:06:25.299
If it's it's much simpler to explain a dollar on crypto rails that you can send to anyone.
968
01:06:25.680 --> 01:06:27.299
And I think that that's why,
969
01:06:28.285 --> 01:06:30.464
stablecoins are gonna be such a great segue
970
01:06:31.005 --> 01:06:31.825
into Bitcoin.
971
01:06:32.684 --> 01:06:36.224
And so, I I think that was They're basically they're basically getting
972
01:06:36.820 --> 01:06:37.720
973
01:06:38.420 --> 01:06:40.760
that Bitcoin provides without having to understand
974
01:06:41.060 --> 01:06:43.720
the necessarily, like, the monetary policy specifics.
975
01:06:44.500 --> 01:06:45.560
976
01:06:47.165 --> 01:06:48.625
977
01:06:48.925 --> 01:06:49.425
how
978
01:06:49.965 --> 01:06:52.545
how is Tether entering that economy?
979
01:06:52.845 --> 01:07:02.440
980
01:07:02.995 --> 01:07:04.215
981
01:07:04.515 --> 01:07:12.790
982
01:07:13.090 --> 01:07:17.670
4 to 5 years ago, man. And so what happened what what happened was essentially this. Look.
983
01:07:18.994 --> 01:07:23.575
Venezuela is still functioning as the heart like, it's the heartbeat
984
01:07:24.675 --> 01:07:25.734
for Latin American
985
01:07:26.460 --> 01:07:29.040
peer to peer vault cryptocurrency peer to peer vault.
986
01:07:29.500 --> 01:07:30.000
So
987
01:07:30.540 --> 01:07:31.520
back in 2019,
988
01:07:32.460 --> 01:07:34.320
if you look at LocalBitcoins volume,
989
01:07:35.260 --> 01:07:36.000
in Venezuela,
990
01:07:37.565 --> 01:07:44.464
was being transacted, like, around 25 100 Bitcoin per week. Right now, that came down to, like, 30 Bitcoin.
991
01:07:45.109 --> 01:07:46.490
Sometimes it's, like, 40 Bitcoin.
992
01:07:47.910 --> 01:07:54.329
Because, you know, you you do have to take into account, the Venezuelan economy shrinking and Bitcoin going up in price, etcetera.
993
01:07:56.345 --> 01:07:57.565
So before Tether,
994
01:07:58.665 --> 01:07:59.805
it was all Bitcoin.
995
01:08:00.185 --> 01:08:01.885
When Tether joined the scenes,
996
01:08:02.580 --> 01:08:04.760
Tether was not a trusted thing
997
01:08:05.060 --> 01:08:07.080
within all of the of these,
998
01:08:08.420 --> 01:08:13.515
you know, again, OTC dealers, whatever. I did this for a living in Minnesota. Right? So,
999
01:08:14.695 --> 01:08:16.395
essentially, at some point
1000
01:08:17.095 --> 01:08:18.315
after the 2017
1001
01:08:18.935 --> 01:08:20.475
bull run-in Bitcoin,
1002
01:08:21.950 --> 01:08:22.930
some of us
1003
01:08:23.390 --> 01:08:25.490
some of us cashed out
1004
01:08:26.350 --> 01:08:30.530
and put some money within exchanges and stable coins or whatever.
1005
01:08:30.975 --> 01:08:31.875
And that's how
1006
01:08:32.415 --> 01:08:43.889
they that's how, really, it started growing this usage and understanding of stable coins. Like, what is the stable point thing? What can I do with it? Whatever. So the problem was that
1007
01:08:44.349 --> 01:08:44.849
before
1008
01:08:45.949 --> 01:08:46.849
they were,
1009
01:08:47.309 --> 01:08:53.365
you know, they became part of this peer to peer markets. And and right now, even Paxful has USDT as well. Right?
1010
01:08:55.345 --> 01:08:58.485
Nobody care about that, honestly. It was mostly
1011
01:08:59.220 --> 01:08:59.960
it was
1012
01:09:00.500 --> 01:09:05.320
mostly a thing that people that were trying to do trading on exchanges
1013
01:09:06.645 --> 01:09:07.525
were getting
1014
01:09:08.245 --> 01:09:13.305
that's how people started getting familiar familiarized with Tether. But right now,
1015
01:09:14.180 --> 01:09:15.080
after seeing,
1016
01:09:15.380 --> 01:09:17.000
you know, the usage of stablecoins
1017
01:09:17.460 --> 01:09:17.960
evolve
1018
01:09:18.420 --> 01:09:21.480
throughout all this past, you know, 5 years what whatever,
1019
01:09:22.595 --> 01:09:24.535
Dude, you go to play soccer
1020
01:09:25.315 --> 01:09:26.775
with your crypto buddies,
1021
01:09:27.395 --> 01:09:29.415
a Bitcoin buddies or whatever in Venezuela,
1022
01:09:29.989 --> 01:09:33.770
and you would see you would see people making payments,
1023
01:09:34.150 --> 01:09:35.929
you you know, between each other
1024
01:09:36.550 --> 01:09:42.705
in in in in dollar Tether, man, and Binance purely. So I guess that it's it's
1025
01:09:43.165 --> 01:09:44.545
a mixture of
1026
01:09:45.005 --> 01:09:46.945
the people that are early
1027
01:09:55.200 --> 01:09:55.700
Argentina
1028
01:09:56.405 --> 01:09:56.985
or Paraguay,
1029
01:09:57.685 --> 01:09:58.185
etcetera.
1030
01:09:58.804 --> 01:09:59.465
And then
1031
01:09:59.925 --> 01:10:00.645
you have,
1032
01:10:01.445 --> 01:10:12.699
you have to add this whole, you know, mon informal money transmitters and OTC deal dealers that were digital dealing with digital assets for their daily operations as the underlying currencies.
1033
01:10:13.985 --> 01:10:15.605
And then you have the traders,
1034
01:10:17.585 --> 01:10:20.165
on experienced traders or whatever you wanna call them.
1035
01:10:20.864 --> 01:10:24.550
And and then you have and now you have
1036
01:10:25.090 --> 01:10:26.230
the layer of,
1037
01:10:26.610 --> 01:10:27.670
you know, businesses
1038
01:10:28.530 --> 01:10:29.910
and day to day people
1039
01:10:30.534 --> 01:10:31.994
that understand that, okay.
1040
01:10:32.375 --> 01:10:34.715
I need to travel all the way to the US.
1041
01:10:35.175 --> 01:10:39.514
I need to have access to an address in the US just to own a bank account in the US.
1042
01:10:39.860 --> 01:10:45.880
My bank account can get frozen. I need to spend sometimes day hours, days, if not weeks,
1043
01:10:46.500 --> 01:10:50.245
trying to reach out to customer support at a at my US Bank.
1044
01:10:50.625 --> 01:10:51.125
Right?
1045
01:10:51.985 --> 01:10:54.725
Sometimes I make a Zelle payment of a $100,
1046
01:10:55.345 --> 01:10:57.765
and my account gets frozen or blocked.
1047
01:10:58.480 --> 01:11:06.165
And yada yada yada, same story, you have to reach out to customer success from the h x y z bank in the US or Panama or whatever.
1048
01:11:06.485 --> 01:11:12.585
So it it's right now, to Mauricio's point, it's just a more comfortable and accessible way
1049
01:11:12.965 --> 01:11:14.505
of moving dollars
1050
01:11:15.070 --> 01:11:16.290
within payment rails.
1051
01:11:16.670 --> 01:11:24.475
That it's pretty much it. And in a digital in a purely digital manner. Right? Because you don't have to travel anywhere. You just need an email, a phone
1052
01:11:24.935 --> 01:11:32.530
number, and set up a TOTP security on your phone or whatever. And so you essentially have access to dollars and your phone,
1053
01:11:33.150 --> 01:11:33.650
and
1054
01:11:34.030 --> 01:11:40.605
that I I think that that's that's how it started evolving, honestly. It was Bitcoiners who brought it in. Exactly.
1055
01:11:40.985 --> 01:11:43.085
1056
01:11:43.785 --> 01:11:44.525
to Tether,
1057
01:11:45.305 --> 01:11:53.880
1058
01:11:54.635 --> 01:11:56.015
right, in Peru.
1059
01:11:56.795 --> 01:11:58.255
Eventually, this dude
1060
01:11:58.715 --> 01:12:00.815
started mining with us in Venezuela.
1061
01:12:01.949 --> 01:12:03.090
And then he said,
1062
01:12:03.550 --> 01:12:04.370
So wait.
1063
01:12:04.909 --> 01:12:06.370
I have a better way
1064
01:12:06.989 --> 01:12:10.850
for doing the same thing that I doing with Western Union,
1065
01:12:11.695 --> 01:12:13.155
but with this LocalBitcoins
1066
01:12:13.695 --> 01:12:20.755
thing that you're showing me. So why don't I try to plug that as a back end for my Western Union business
1067
01:12:21.100 --> 01:12:23.040
just so that I can make more money
1068
01:12:23.500 --> 01:12:27.280
and and and move it faster, move it more times,
1069
01:12:27.660 --> 01:12:34.165
you know, spend keeps keep the wheel spinning, but at a faster pace and just just make more profits
1070
01:12:34.545 --> 01:12:39.284
with the same infrastructure they have. But I'm just I'm just opening myself an account
1071
01:12:39.730 --> 01:12:40.390
at a,
1072
01:12:40.930 --> 01:12:42.070
you know, at a marketplace
1073
01:12:42.610 --> 01:12:45.910
similar to opening an account in Amazon or Mercado
1074
01:12:46.770 --> 01:12:47.270
Libre
1075
01:12:47.730 --> 01:12:52.985
or whatever. Right? So what you're seeing in South America is an increasing
1076
01:12:53.365 --> 01:12:56.425
trend, an ever increasing trend of even
1077
01:12:57.045 --> 01:12:57.545
traditional
1078
01:12:58.590 --> 01:12:59.890
money remittance services
1079
01:13:00.350 --> 01:13:01.970
and money transmit and services
1080
01:13:02.830 --> 01:13:05.490
diving into digital assets because it's just
1081
01:13:06.190 --> 01:13:08.130
cheaper, faster, quicker, better.
1082
01:13:12.975 --> 01:13:14.675
1083
01:13:16.100 --> 01:13:17.960
I appreciate the insight, guys. So,
1084
01:13:18.740 --> 01:13:22.760
I mean, so with this reliance on are are you guys concerned
1085
01:13:24.055 --> 01:13:28.875
are you guys concerned about the reliance on stable coins? Like, they are pretty much all centralized.
1086
01:13:31.449 --> 01:13:32.989
You know, Tethr is a massive
1087
01:13:33.690 --> 01:13:34.909
regulatory target.
1088
01:13:36.489 --> 01:13:37.310
Do you
1089
01:13:38.145 --> 01:13:42.645
or or is is that something that's on your radar, or do you think it's overblown?
1090
01:13:44.705 --> 01:13:49.110
1091
01:13:50.050 --> 01:13:56.625
you know, are we trading one problem for another by letting these countries use a dollar rather than their own local currency?
1092
01:13:57.085 --> 01:13:57.665
I think
1093
01:13:58.445 --> 01:14:00.630
what what I see in this
1094
01:14:01.030 --> 01:14:06.810
in in the way people are are behaving and and the and the the stable coins and and the choices that they're making
1095
01:14:07.350 --> 01:14:08.889
is essentially they're saying,
1096
01:14:09.885 --> 01:14:13.585
yes. You know, I may not know who's behind this Tethr organization.
1097
01:14:13.885 --> 01:14:15.825
I may not know who's behind this
1098
01:14:16.205 --> 01:14:20.389
other group that is that is managing these these other assets,
1099
01:14:21.090 --> 01:14:23.830
but I do know what my option is.
1100
01:14:24.425 --> 01:14:29.885
And my option is staying in my broken system, which will certainly lead me to failure.
1101
01:14:30.185 --> 01:14:30.925
And so,
1102
01:14:31.619 --> 01:14:32.739
again, it's really,
1103
01:14:34.500 --> 01:14:35.079
you know,
1104
01:14:35.860 --> 01:14:53.429
if you think Tether is bad, like, you should see the books of the Venezuelan government. You know what I mean? And and I think that that's what what people are saying. You what the the people that you see going to Tether, you know, they don't have the greatest central banks in the world. They may not have the full information to your point, Matt. And if they did know
1105
01:14:53.730 --> 01:15:02.575
everything they need to know, they may choose to use something else. But I think that they're making this decision based on what they know. And I think what is,
1106
01:15:03.035 --> 01:15:07.340
sometimes missed by by people outside of North America or Europe
1107
01:15:07.720 --> 01:15:08.220
is
1108
01:15:08.680 --> 01:15:10.380
how much fear
1109
01:15:11.080 --> 01:15:12.940
there is and how much power
1110
01:15:13.594 --> 01:15:14.735
a country has
1111
01:15:15.195 --> 01:15:22.655
when it turns against you or your group of friends or or your peers or your industry.
1112
01:15:24.020 --> 01:15:26.920
In in in in Latin America, we've seen the government
1113
01:15:27.620 --> 01:15:31.320
expropriate our savings from the bank. That's happened many times.
1114
01:15:31.675 --> 01:15:32.735
We've seen governments,
1115
01:15:33.595 --> 01:15:34.095
expropriate
1116
01:15:34.555 --> 01:15:35.855
assets like factories,
1117
01:15:36.635 --> 01:15:37.775
houses, farms.
1118
01:15:38.235 --> 01:15:40.735
So we have very shaken
1119
01:15:41.719 --> 01:15:42.860
property assurances.
1120
01:15:43.960 --> 01:15:44.780
And so,
1121
01:15:45.960 --> 01:15:49.820
so what what you see is people have have very little trust
1122
01:15:50.295 --> 01:15:53.835
in in the tools that are at their disposal, and they're willing to place
1123
01:15:54.135 --> 01:15:55.355
blind faith almost
1124
01:15:55.735 --> 01:15:56.715
on these options
1125
01:15:57.489 --> 01:15:59.510
that other people are using. So
1126
01:15:59.969 --> 01:16:12.615
I I I don't I I think it's basically training one problem for the other, But what I think is is important to highlight is as bad and as scary as we think some operators of these coins might be,
1127
01:16:13.679 --> 01:16:15.940
the people that are switching to these operators
1128
01:16:16.880 --> 01:16:20.420
see way scarier boogeyman and way scarier outcomes
1129
01:16:20.825 --> 01:16:27.805
1130
01:16:28.500 --> 01:16:31.320
against the fact that using something like Tethr,
1131
01:16:32.659 --> 01:16:33.400
gives you
1132
01:16:34.420 --> 01:16:39.205
additional censorship resistant guarantee. Like, Tether has been frozen and seized,
1133
01:16:39.665 --> 01:16:41.445
but compared to something like Zelle
1134
01:16:41.905 --> 01:16:45.350
or a traditional bank wire or something, it is obviously
1135
01:16:45.750 --> 01:16:48.170
a massive improvement on that trade off balance.
1136
01:16:49.030 --> 01:16:56.655
1137
01:16:57.675 --> 01:17:10.480
there is no privacy in Venezuela. If the Venezuelan government knows everything you do in the banking system, They have a system that knows how many times you've been to the doctor, how many cars you drive, how many pets you have, how many kids you have.
1138
01:17:11.405 --> 01:17:18.065
So the surveillance state is already here. I I think a lot of people just don't really appreciate that.
1139
01:17:19.920 --> 01:17:21.140
1140
01:17:21.440 --> 01:17:25.220
there was a lot of there was a lot of writing and articles about
1141
01:17:28.525 --> 01:17:31.985
the Venezuelan government seizing Bitcoin mining operations.
1142
01:17:32.525 --> 01:17:33.985
Mhmm. I was one of them.
1143
01:17:34.500 --> 01:17:37.460
That was one of them. You wanna talk about that at all? Or
1144
01:17:39.619 --> 01:17:40.119
1145
01:17:41.945 --> 01:17:42.445
So
1146
01:17:43.784 --> 01:17:45.804
how do how do where to start?
1147
01:17:48.344 --> 01:17:49.724
So as many Venezuelans,
1148
01:17:51.449 --> 01:17:56.270
back in the day, when when many when the first type of group of Venezuelans got into Bitcoin,
1149
01:17:57.370 --> 01:17:57.870
we,
1150
01:17:58.805 --> 01:18:01.465
you know, many quickly saw this connection,
1151
01:18:02.405 --> 01:18:02.905
between
1152
01:18:03.685 --> 01:18:04.185
Venezuela
1153
01:18:04.565 --> 01:18:06.185
and subsidized electricity,
1154
01:18:07.150 --> 01:18:08.370
and our
1155
01:18:08.750 --> 01:18:13.730
strict currency control that enabled us or or prevented us from from protecting our savings.
1156
01:18:14.405 --> 01:18:17.065
And they saw Bitcoin, and they saw mining,
1157
01:18:17.365 --> 01:18:23.820
and connected the two dots, and in a very similar way that that China did, and we get that get into that in a second.
1158
01:18:24.599 --> 01:18:26.060
They started using Bitcoin
1159
01:18:26.440 --> 01:18:27.900
to essentially extract
1160
01:18:29.855 --> 01:18:33.075
an incentive that was being provided by the government by way of subsidies,
1161
01:18:33.615 --> 01:18:34.675
and essentially,
1162
01:18:35.935 --> 01:18:37.475
use Bitcoin to
1163
01:18:40.160 --> 01:18:43.440
be well better off in a system that,
1164
01:18:43.760 --> 01:18:46.355
did not let you acquire dollars at the time.
1165
01:18:46.915 --> 01:18:51.735
So a lot of people start mining Bitcoin, and they start doing really well.
1166
01:18:52.835 --> 01:18:53.085
And,
1167
01:18:53.830 --> 01:18:57.850
at first, it was a bit secretive. People were scared. They didn't know how the government was gonna react,
1168
01:18:58.710 --> 01:19:08.014
but it wasn't illegal. So me my family and I, we just got we were so excited. We were just telling everyone that would come to us and helping them how to mine, set up facilities,
1169
01:19:08.635 --> 01:19:11.090
figure out the electrical work, and essentially,
1170
01:19:11.870 --> 01:19:14.210
started helping many people set up their mines.
1171
01:19:14.830 --> 01:19:18.530
And, and mining starts getting quite viral in Venezuela because,
1172
01:19:18.830 --> 01:19:19.790
you know, you were getting
1173
01:19:20.415 --> 01:19:26.114
I remember back in the day, you were getting a 3 to $400 a month from a rig, and minimum wage in Venezuela was about $20.
1174
01:19:26.494 --> 01:19:29.155
So people were getting, like, 20 times minimum wage
1175
01:19:29.520 --> 01:19:31.540
by by just setting up a rig,
1176
01:19:31.920 --> 01:19:36.180
even if it was a GPU or or a basic, they were kinda at the same revenue at the time.
1177
01:19:36.495 --> 01:19:36.995
And,
1178
01:19:37.535 --> 01:19:38.195
and so
1179
01:19:38.895 --> 01:19:39.555
what happens,
1180
01:19:40.094 --> 01:19:44.340
and and the the the the this is where the Petro comes into the story. And,
1181
01:19:44.880 --> 01:19:48.020
what happens is this is happening in the middle of an ICO boom.
1182
01:19:48.640 --> 01:19:54.525
The Venezuelan government oh, man. This is gonna be a long story, but I I have to tell it. So the Venezuelan government,
1183
01:19:55.625 --> 01:19:58.685
once they once Chavez died and they started facing issues,
1184
01:19:59.065 --> 01:20:01.325
they they they they got on this trend
1185
01:20:01.719 --> 01:20:18.935
that every year towards Christmas, when when people were most upset, because usually by then, you know, people were just mad that they didn't have money going up to Christmas to buy gifts and and the country was just in shambles. So they would they would find a way to give to get to do freebie, to do giveaways. So in 2017,
1186
01:20:20.130 --> 01:20:21.990
they they took the largest,
1187
01:20:22.450 --> 01:20:22.950
electronics
1188
01:20:23.410 --> 01:20:27.190
company, in the country. So like equivalent to like Venezuela and Best Buy,
1189
01:20:27.605 --> 01:20:30.505
and they went into Best Buy and took all of their stores
1190
01:20:31.205 --> 01:20:32.665
countrywide and said that
1191
01:20:33.125 --> 01:20:33.865
these stores
1192
01:20:34.965 --> 01:20:36.825
had been bringing in goods
1193
01:20:37.350 --> 01:20:42.810
at, at speculative prices and that the government has essentially slashed all of their prices by like 70%
1194
01:20:43.430 --> 01:20:47.034
and they were going to distribute them to the people, for Christmas.
1195
01:20:47.335 --> 01:20:50.795
And so, of course, people lined up to get 40 inch TVs for $20,
1196
01:20:51.335 --> 01:21:01.330
and, and they absolutely raided the inventory and stock of this company, and this company, essentially crashed and and seized existing. It could never recover from from that. But the government,
1197
01:21:02.110 --> 01:21:05.255
had happy voters for another year for another few months.
1198
01:21:05.875 --> 01:21:10.215
The the year after that, they, did the same thing with a big shoe company.
1199
01:21:10.540 --> 01:21:11.280
They essentially,
1200
01:21:12.219 --> 01:21:21.595
basically seized all their inventory, sliced, like slashed it in prices and gave it away to people and again, you know, photo ops for people walking out with 7 pairs of shoes for $7.
1201
01:21:22.455 --> 01:21:22.955
And,
1202
01:21:23.815 --> 01:21:27.035
obviously, as companies caught onto this, they stopped bringing inventory.
1203
01:21:27.860 --> 01:21:28.360
And
1204
01:21:28.660 --> 01:21:29.480
come Christmas
1205
01:21:29.940 --> 01:21:32.280
2000 and I believe this was 2017,
1206
01:21:33.940 --> 01:21:42.650
right around the peak of the market, nobody had inventory. Nobody had been bringing inventory of the year because they wanna be they wanna be the idiots that that we're gonna be giving away free Christmas gifts.
1207
01:21:43.130 --> 01:21:43.630
And,
1208
01:21:44.330 --> 01:21:47.870
basically, the year was coming to an end, there was nothing to give away,
1209
01:21:48.330 --> 01:21:50.670
and, I I don't really have,
1210
01:21:51.210 --> 01:21:54.974
specific data for this, but I think what went down was something like this.
1211
01:21:56.394 --> 01:21:56.894
Maduro
1212
01:21:57.355 --> 01:22:05.090
is is trying to keep his crony officials happy. Crony officials are getting upset because they're looking at Christmas and they're not gonna get free money,
1213
01:22:05.550 --> 01:22:16.475
and, and so they say, what are you gonna do for us? And Maduro says, bring me all the importation records for what's been brought into the country this year. And there was a name that kept recurring
1214
01:22:16.820 --> 01:22:18.680
throughout 2017 as importers,
1215
01:22:19.460 --> 01:22:22.520
of shipping goods into Venezuela, and that name was Bitmain.
1216
01:22:24.180 --> 01:22:30.955
And so they dug a little bit deeper in Bitmain, and they saw that these machines literally printed the dollars or Bitcoin.
1217
01:22:31.574 --> 01:22:33.435
And they said, oh my god.
1218
01:22:33.900 --> 01:22:37.280
There are machines that print dollars, and they are in this country.
1219
01:22:37.820 --> 01:22:38.720
How can we
1220
01:22:39.260 --> 01:22:41.520
redistribute these machines to our cronies?
1221
01:22:42.425 --> 01:22:44.765
And they advised this marvelous plan
1222
01:22:45.465 --> 01:22:46.765
that, involved
1223
01:22:47.545 --> 01:22:49.485
announcing a fake new cryptocurrency,
1224
01:22:51.790 --> 01:22:54.690
so that by promoting this fake new cryptocurrency,
1225
01:22:55.550 --> 01:22:57.329
they could educate their cronies
1226
01:22:57.630 --> 01:23:01.975
on what these mining machines look like and basically instruct them,
1227
01:23:02.515 --> 01:23:03.495
that they could go,
1228
01:23:04.594 --> 01:23:08.135
take them from these people and then start mining dollars for themselves.
1229
01:23:08.790 --> 01:23:11.130
And so this is where the Petro push starts.
1230
01:23:11.590 --> 01:23:13.370
And if you look at the Petro,
1231
01:23:13.910 --> 01:23:15.350
and if you look at the,
1232
01:23:15.830 --> 01:23:20.555
promotional materials that were done for the Petro, they all revolved around mining,
1233
01:23:21.095 --> 01:23:24.955
mining equipment, and they would show ASICs and they would show GPU rigs.
1234
01:23:25.255 --> 01:23:26.795
And you wanna hear something funny?
1235
01:23:27.220 --> 01:23:28.840
The Petro was never,
1236
01:23:30.580 --> 01:23:34.935
there were never any miners for the Petro. The Petro could not be mined. It's a closed network.
1237
01:23:35.495 --> 01:23:36.635
So what these,
1238
01:23:38.455 --> 01:23:39.355
Petro advertisements
1239
01:23:39.815 --> 01:23:42.555
were was in fact education campaigns
1240
01:23:43.170 --> 01:23:51.429
for so that people could identify miners, understand miners, and then go seize them from the people that were legally mining in the country.
1241
01:23:52.905 --> 01:23:54.125
Right after the Petro
1242
01:23:56.265 --> 01:23:56.765
promotion,
1243
01:23:57.225 --> 01:24:03.139
we and many other miners around the country started seeing new strange visitors into our mining facilities,
1244
01:24:04.159 --> 01:24:05.760
and they would come dressed as,
1245
01:24:06.159 --> 01:24:10.245
utility people, they would come dressed as mostly utility people.
1246
01:24:11.745 --> 01:24:12.245
And,
1247
01:24:13.265 --> 01:24:13.765
surely,
1248
01:24:14.465 --> 01:24:19.380
few days later, these utility people revealed themselves as not utility people,
1249
01:24:20.159 --> 01:24:27.060
and they started essentially harassing miners, threatening miners to to seize equipment, threatening miners to to shut down their facilities,
1250
01:24:27.795 --> 01:24:29.335
and then miners essentially,
1251
01:24:30.435 --> 01:24:32.775
you know, reneged and and they were basically
1252
01:24:33.315 --> 01:24:34.135
all the,
1253
01:24:35.270 --> 01:24:37.770
miners like ourselves that did not,
1254
01:24:38.230 --> 01:24:42.410
wanna accept that and would not ever get in bed with that type of government.
1255
01:24:42.795 --> 01:24:45.934
We basically rolled rolled up our facilities and left.
1256
01:24:46.954 --> 01:24:55.030
But what the government did is they continued seizing machines from a bunch of people, in fact, some of the machines that were shipped to Venezuela
1257
01:24:55.410 --> 01:25:04.245
were actually stolen from us at the dock and the shipping company called us to tell us that they had been stolen. And when we asked what we could do about it,
1258
01:25:04.865 --> 01:25:06.965
we were told that the last person
1259
01:25:07.270 --> 01:25:13.590
that had gone and asked about what happened, with their mining equipment was told never to go back to the,
1260
01:25:14.310 --> 01:25:16.810
army office where they went to pose the question.
1261
01:25:17.385 --> 01:25:17.885
So
1262
01:25:18.985 --> 01:25:20.445
fast forward until today,
1263
01:25:21.145 --> 01:25:22.844
what ended up happening is the government,
1264
01:25:24.025 --> 01:25:26.284
of course, they saw something that could benefit
1265
01:25:26.770 --> 01:25:28.150
people or themselves
1266
01:25:28.690 --> 01:25:30.469
and they decided to
1267
01:25:30.929 --> 01:25:31.750
help themselves,
1268
01:25:32.369 --> 01:25:35.670
of course, they've created this entity called Sunakrip.
1269
01:25:36.565 --> 01:25:38.585
Sunacrip is the national cryptocurrency
1270
01:25:39.125 --> 01:25:39.625
body,
1271
01:25:40.324 --> 01:25:47.699
of course, it is one of the sanctioned bodies, one of the few fully sanctioned bodies in Venezuela is the Sunacrip, and another fully sanctioned,
1272
01:25:48.639 --> 01:25:52.739
part of Venezuela is the Petro and anyone that has to do with the Petro, ironically enough.
1273
01:25:53.215 --> 01:25:55.955
So so Nakrip created a national pool,
1274
01:25:56.495 --> 01:25:59.235
and it forces every Venezuelan miner
1275
01:25:59.695 --> 01:26:00.195
to
1276
01:26:00.900 --> 01:26:03.080
send their payouts to the government run pool,
1277
01:26:04.020 --> 01:26:08.760
and then they have to trust the government to disperse your Bitcoin back to you as a miner.
1278
01:26:09.225 --> 01:26:09.725
So,
1279
01:26:10.264 --> 01:26:14.125
yeah. I'll pause there, but I'd love to hear your thoughts on that pool, Matt.
1280
01:26:16.665 --> 01:26:17.565
1281
01:26:18.110 --> 01:26:18.690
this is,
1282
01:26:20.910 --> 01:26:21.969
I I appreciate
1283
01:26:22.270 --> 01:26:22.770
the
1284
01:26:23.230 --> 01:26:29.485
this that's some story right there. So so a couple things to unpack there. First of all, you said
1285
01:26:30.025 --> 01:26:32.364
your family disbanded their mining operation
1286
01:26:33.409 --> 01:26:37.670
and moved it out of the country. You literally got the mining rigs out of the country.
1287
01:26:38.369 --> 01:26:41.830
1288
01:26:43.005 --> 01:26:46.065
1289
01:26:47.005 --> 01:26:56.470
1290
01:26:57.365 --> 01:26:58.585
They threatened us
1291
01:26:58.965 --> 01:26:59.945
to, you
1292
01:27:00.405 --> 01:27:03.625
know, to extend us, or or, you know, place charges
1293
01:27:04.199 --> 01:27:04.800
against us.
1294
01:27:05.239 --> 01:27:08.699
They they they tried to threaten with all these weird scary sounding,
1295
01:27:09.719 --> 01:27:10.860
charges and allegations.
1296
01:27:11.735 --> 01:27:21.680
Of course, legally, that's all been you know, they you know, we won that case. There's you know, we set the record straight. There's absolutely nothing wrong with what we did. But at the
1297
01:27:22.140 --> 01:27:22.960
time, as
1298
01:27:23.260 --> 01:27:31.655
as as Ale will and then many other Venezuelans will know, like, Venezuela is a very lawless place. So everyone's gonna try to bully you into something. And it's really a dog eat dog,
1299
01:27:32.195 --> 01:27:32.695
world.
1300
01:27:33.074 --> 01:27:33.554
So,
1301
01:27:34.195 --> 01:27:45.489
basically we, we did not play ball with with those guys at the time, with the cronies at the time, and we, instead, decided to take it up in court and and clean it up that way, and and that's what happened.
1302
01:27:47.545 --> 01:27:48.585
1303
01:27:49.704 --> 01:27:55.244
What I mean, the other I mean, there was a lot there. The other thing I wanna unpack, the Petro still exists. Right?
1304
01:27:56.210 --> 01:28:04.290
Like, aren't they is it true that they're, like, giving it out as welfare as well? Like, you get you get Mhmm. If you register, you get free Petro? Or
1305
01:28:05.455 --> 01:28:12.515
1306
01:28:13.550 --> 01:28:20.190
a government ran social program. So there's, like, this special ID in Minnesota, which is like,
1307
01:28:21.655 --> 01:28:29.515
you know, if if you if you issue yourself that ID, then you have the ability to register in the Petro app,
1308
01:28:30.030 --> 01:28:32.290
which is essentially like a national
1309
01:28:32.909 --> 01:28:34.130
a national wallet.
1310
01:28:34.590 --> 01:28:42.645
So similar to, like, the Chivo wallet in El Salvador, but in this case, it's, like, you know, connected to the the the Venezuelan government's
1311
01:28:43.825 --> 01:28:48.005
monetary network, so so to speak. So it's more like a a a
1312
01:28:48.530 --> 01:28:56.310
put it into context, I I think it's it's kinda like a national PayPal. You know what I mean? So that's like the Petro doesn't have any blockchain.
1313
01:28:57.125 --> 01:28:59.065
You can make Petro payments
1314
01:28:59.445 --> 01:29:01.545
with within the natural app.
1315
01:29:02.085 --> 01:29:07.370
1316
01:29:07.830 --> 01:29:08.650
just completely
1317
01:29:09.750 --> 01:29:12.170
1318
01:29:12.630 --> 01:29:17.195
1319
01:29:17.815 --> 01:29:24.954
it's it's not it hasn't even hit Shitcoin status. Right? Like, it doesn't have a blockchain or You can run a node. You cannot run a node.
1320
01:29:25.400 --> 01:29:32.220
1321
01:29:32.605 --> 01:29:33.425
and, essentially,
1322
01:29:34.125 --> 01:29:39.105
the initial white paper of the El Petro that came out back in 2017
1323
01:29:40.420 --> 01:29:40.920
was
1324
01:29:41.780 --> 01:29:45.320
a hard fork of Dash. So it was built on x11
1325
01:29:45.620 --> 01:29:49.935
it was supposed to be built on x11 on the x11 algorithm. Right?
1326
01:29:52.635 --> 01:29:55.685
That never happened. And then just the the,
1327
01:29:58.290 --> 01:30:14.870
government body that Mauricio was talking about, it was it just changed the the dude that was, you know, like, the the minister of of this government body. They changed them, like, 2 twice or or 3 times or whatever. And so plans would just would just change.
1328
01:30:15.570 --> 01:30:18.950
It's it's mostly based on purely lobbying.
1329
01:30:19.730 --> 01:30:23.755
You know what I mean? And and and it it it essentially became just like,
1330
01:30:24.715 --> 01:30:27.054
the closer you got to Sunacrip,
1331
01:30:28.510 --> 01:30:33.010
the closer you had the opportunity of being granted a permit
1332
01:30:33.710 --> 01:30:34.449
to become,
1333
01:30:34.975 --> 01:30:35.795
you know, a cryptocurrency
1334
01:30:36.415 --> 01:30:38.675
exchange in Minnesota so that you could legally,
1335
01:30:39.695 --> 01:30:58.744
build a platform to onboard users and then, you know, receive their their ball of ours. And then you could you could, you know, legally go to to private banks or even public banks in the country and and open up a a corporate treasury account to receive, believe it is, under your Venezuelan Corporation.
1336
01:30:59.445 --> 01:31:02.660
And then there's some, like, very but this is really sketchy
1337
01:31:03.520 --> 01:31:06.260
little Petro thing, which is, like, you know, like, Petro
1338
01:31:07.040 --> 01:31:08.340
Petro Arbitrage
1339
01:31:08.805 --> 01:31:11.545
traders, which is essentially people that would buy
1340
01:31:12.165 --> 01:31:15.225
that would buy Petro at a discounted
1341
01:31:16.005 --> 01:31:16.505
prices
1342
01:31:17.440 --> 01:31:23.300
from from other people because they would pay them in cash or whatever. And so you would you would essentially be buying Petros
1343
01:31:23.760 --> 01:31:25.585
at, you know, like, 70%
1344
01:31:26.045 --> 01:31:27.425
discount or whatever.
1345
01:31:27.725 --> 01:31:28.385
And then
1346
01:31:28.925 --> 01:31:34.350
and then these people's these people would change would either change petrol for
1347
01:31:34.810 --> 01:31:38.430
gas at gas stations because you can get you could get,
1348
01:31:39.050 --> 01:31:39.950
discount rates
1349
01:31:40.415 --> 01:31:40.995
at at
1350
01:31:41.375 --> 01:31:45.155
at, at the gasoline gas stations if you pay with the petrol, essentially,
1351
01:31:45.615 --> 01:31:54.050
1352
01:31:54.555 --> 01:31:57.695
1353
01:31:58.555 --> 01:31:59.295
and again,
1354
01:31:59.675 --> 01:32:01.695
it it all comes back to optics.
1355
01:32:02.890 --> 01:32:04.990
So if you have 2 currencies
1356
01:32:05.770 --> 01:32:06.750
at the same time,
1357
01:32:07.290 --> 01:32:19.625
you can inflate the 2 of them and you'll have 2 separate rates of inflation, and you won't pile on the whole inflation onto one of them. Does that make sense? It's so fucked up. It's all optics, bro. It's all a game of optics.
1358
01:32:19.980 --> 01:32:23.520
And the Petro was nothing more than a tool to manipulate
1359
01:32:24.460 --> 01:32:24.960
optics.
1360
01:32:25.340 --> 01:32:37.620
But you keep talking about it in the past tense, like, it still exists. Right? Like, people are I've I've already written it off with some bullshit token, like, you know, whoever whoever is using it, I can't help you if you're still using the Petrobrill, like, you're lost. Like
1361
01:32:38.180 --> 01:32:39.560
1362
01:32:40.020 --> 01:32:46.985
1363
01:32:47.545 --> 01:32:49.245
people that are getting complete misrepresentations
1364
01:32:49.625 --> 01:32:52.285
about what this thing does. The people that are using
1365
01:32:52.750 --> 01:32:58.369
Bitcoin today or, sorry, the Petro today are the same people that still believe in Chavez's government plan.
1366
01:32:58.989 --> 01:33:02.545
So Yeah. Like, you will still have those people. They're just hopeless.
1367
01:33:03.245 --> 01:33:09.425
1368
01:33:10.810 --> 01:33:11.310
Bolivarian
1369
01:33:11.610 --> 01:33:22.565
wallet or whatever, but you can cash out of that thing. And nobody get wants to get near that thing. To the point that Are are there no, like, Bitcoin Petro markets?
1370
01:33:23.505 --> 01:33:42.125
1371
01:33:42.665 --> 01:33:45.725
and most likely they're gonna get cut. There's a saying in Spanish
1372
01:33:46.300 --> 01:33:48.239
that I remember oftentimes it says,
1373
01:33:48.699 --> 01:33:52.719
if you like butter, it's been butter in Venezuela used to come in a tin can
1374
01:33:53.155 --> 01:33:53.554
So,
1375
01:33:53.955 --> 01:33:54.455
there's,
1376
01:33:55.075 --> 01:34:07.380
there's a saying that says, if you like eating if you like dipping your your finger into the butter can to eat the butter, you may cut yourself when you do that. And so what that is meant to say is if you like
1377
01:34:07.920 --> 01:34:15.415
easy money and if you look at easy things, like, you will get cut. Like, there is a very good chance you'll get cut because it's very risky.
1378
01:34:19.440 --> 01:34:22.100
1379
01:34:22.640 --> 01:34:23.140
1380
01:34:25.195 --> 01:34:28.415
1381
01:34:29.595 --> 01:34:31.355
from your story is,
1382
01:34:32.450 --> 01:34:34.150
the Venezuelan government mining.
1383
01:34:35.010 --> 01:34:37.190
So you said there's a government mining pool.
1384
01:34:37.650 --> 01:34:38.150
Presumably,
1385
01:34:38.610 --> 01:34:40.070
that mining pool is
1386
01:34:40.505 --> 01:34:46.285
is not a public mining pool, so it's registered in the unknown if you look at one of the mining pool charts.
1387
01:34:49.400 --> 01:34:51.980
Would you agree with the statement that
1388
01:34:52.600 --> 01:34:55.820
the Venezuelan government is the single largest
1389
01:34:57.745 --> 01:34:58.645
government based
1390
01:34:59.025 --> 01:35:01.445
mining operation that exists in the world today?
1391
01:35:04.740 --> 01:35:07.480
1392
01:35:09.300 --> 01:35:11.880
1393
01:35:13.375 --> 01:35:16.355
1394
01:35:17.695 --> 01:35:19.075
1395
01:35:19.870 --> 01:35:21.489
1396
01:35:22.110 --> 01:35:23.570
A a a mining pool on Turkey.
1397
01:35:25.310 --> 01:35:27.570
1398
01:35:29.315 --> 01:35:42.330
Hit us. Like, look look, Matt. It this all brings this all of this amazing conversation that we've had so far between the 3 of us, it all brings back, if you notice, if you go deep into it,
1399
01:35:42.870 --> 01:35:43.610
to 2017.
1400
01:35:44.395 --> 01:35:47.055
2017 was the year of hyperinflation in Minnesota.
1401
01:35:47.515 --> 01:35:49.535
2017 was the year that dollarization
1402
01:35:49.915 --> 01:35:51.855
started, like, ticking up in Minnesota.
1403
01:35:52.310 --> 01:35:57.929
2017 was the year that the Venezuelan government introduced their plans to, you know, launch El Petro.
1404
01:35:58.469 --> 01:35:58.969
2017
1405
01:35:59.755 --> 01:36:04.575
was the year when the Venezuelan regime got sanctioned by the US, and 2017
1406
01:36:05.755 --> 01:36:07.215
was the same year
1407
01:36:07.950 --> 01:36:10.130
because of all that scene of events
1408
01:36:11.390 --> 01:36:14.370
that the Venezuelan government started, you know, seizing
1409
01:36:14.830 --> 01:36:15.330
mining
1410
01:36:15.710 --> 01:36:16.210
equipment,
1411
01:36:16.785 --> 01:36:20.565
you know, from people that were essentially mining Bitcoin in the country. Because
1412
01:36:21.185 --> 01:36:29.270
for for a great period of time, that was like a black hole year, dude, in in Venezuela. And, you
1413
01:36:29.650 --> 01:36:32.310
know, the government not being able to move
1414
01:36:32.850 --> 01:36:33.750
their dollars,
1415
01:36:34.485 --> 01:36:35.305
their euros
1416
01:36:36.005 --> 01:36:36.505
deposited
1417
01:36:36.885 --> 01:36:38.425
in EU bank accounts,
1418
01:36:38.965 --> 01:36:39.785
their gold
1419
01:36:40.325 --> 01:36:42.265
deposited in gold vaults,
1420
01:36:42.725 --> 01:36:43.705
right, in England,
1421
01:36:44.180 --> 01:36:44.920
They're dollars
1422
01:36:45.460 --> 01:36:46.840
deposited at Citibank
1423
01:36:47.699 --> 01:36:49.960
in in in the US. I'm sorry.
1424
01:36:50.340 --> 01:36:53.160
So what else what else could you do
1425
01:36:53.815 --> 01:36:54.955
to finance yourself
1426
01:36:55.975 --> 01:36:56.635
other than
1427
01:36:57.015 --> 01:36:59.035
using the already almost,
1428
01:36:59.735 --> 01:37:01.755
like, wiped out local currency?
1429
01:37:02.910 --> 01:37:03.410
Mine
1430
01:37:03.950 --> 01:37:04.450
Bitcoin
1431
01:37:04.830 --> 01:37:07.010
with your cheap electricity
1432
01:37:07.470 --> 01:37:07.970
rates.
1433
01:37:08.510 --> 01:37:23.720
And before you started figuring out, you know, as a government, right, like, how how am I gonna buy this mining equipment? Where does this actually come from? How do I set up this? What if it was essentially trying to tap
1434
01:37:24.100 --> 01:37:27.385
into the already existing mining infrastructure that was
1435
01:37:27.784 --> 01:37:35.885
that was built in the country. And so tapping into private individuals that would try to agree to go rogue,
1436
01:37:36.890 --> 01:37:42.429
to Mauricio's point, and did not agree, your your mining equipment was just seized. So
1437
01:37:42.890 --> 01:37:44.429
1438
01:37:44.865 --> 01:37:48.245
individuals or pressure individuals than start from scratch.
1439
01:37:48.705 --> 01:37:56.590
1440
01:37:56.970 --> 01:37:58.350
They are the most inept
1441
01:37:58.730 --> 01:38:01.630
and incompetent group of people I have ever come across.
1442
01:38:02.135 --> 01:38:18.139
So I do not know that they even have the capacity to organize themselves to mine for their own collective good. I have a feeling that a lot of these miners were ad hoc assigned to their top cronies so that they could mine for themselves, and they would have to and they would basically come off the payroll.
1443
01:38:18.440 --> 01:38:22.265
Right? So I think they've given a bunch of,
1444
01:38:22.965 --> 01:38:34.580
generals or army this or army that, like, a a set amount of minors to sort of, you know, keep them happy, but I I I I there are 2 things that I know to be true. 1, is these are
1445
01:38:35.120 --> 01:38:41.344
very short term oriented and and not very sort of intelligent in terms of financing.
1446
01:38:41.724 --> 01:38:43.105
And the second one is
1447
01:38:43.565 --> 01:38:47.025
they I don't think they have the capacity or the resources
1448
01:38:47.490 --> 01:38:48.390
to have invested
1449
01:38:48.770 --> 01:38:49.590
or grown
1450
01:38:50.050 --> 01:39:03.074
beyond the machines or the assets that they, extorted from people that have already done that work. Basically, is they saw something that was working and they took it, but they are incapable of building something that works from scratch.
1451
01:39:06.110 --> 01:39:07.889
1452
01:39:09.869 --> 01:39:11.730
I guess in a lot of ways, probably
1453
01:39:12.665 --> 01:39:20.605
even excluding Bitcoin. Right? When when someone says, like, the Venezuelan government, it's really a collection of cronies, right, rather than,
1454
01:39:21.550 --> 01:39:24.530
1455
01:39:26.750 --> 01:39:29.490
1456
01:39:29.965 --> 01:39:33.505
especially how it relates to Bitcoin and the broader ecosystem there,
1457
01:39:34.525 --> 01:39:35.665
where it's, like, almost
1458
01:39:36.445 --> 01:39:40.210
it's a story of the people getting fucked by their local,
1459
01:39:42.750 --> 01:39:43.889
their their local,
1460
01:39:44.510 --> 01:39:51.465
you know, their local economy, and then it's a story of the government getting fucked by the global economy. Right?
1461
01:39:52.245 --> 01:39:56.185
Like, the global financial system. Like, the local financial system failed
1462
01:39:56.680 --> 01:39:59.580
the individuals, and then the global financial system
1463
01:40:00.280 --> 01:40:01.580
failed the government
1464
01:40:01.960 --> 01:40:07.155
both at the same time and both kind of moved towards Bitcoin and the greater ecosystem?
1465
01:40:08.895 --> 01:40:16.100
1466
01:40:16.480 --> 01:40:16.960
was,
1467
01:40:17.600 --> 01:40:19.060
Venezuela was responsible
1468
01:40:19.360 --> 01:40:20.420
for their own
1469
01:40:21.200 --> 01:40:21.700
failure.
1470
01:40:22.455 --> 01:40:22.955
They,
1471
01:40:23.494 --> 01:40:31.070
they had they still have all the resources to do things right, but they just chose not to. And Well, I meant, like, specifically,
1472
01:40:31.770 --> 01:40:34.190
1473
01:40:35.770 --> 01:40:38.110
European bank accounts, stuff like that. Right?
1474
01:40:38.645 --> 01:40:46.425
1475
01:40:49.440 --> 01:40:51.140
When you are in a country
1476
01:40:51.520 --> 01:40:54.670
and and you see a a a a government
1477
01:40:55.345 --> 01:40:55.845
literally
1478
01:40:56.545 --> 01:40:57.045
chase
1479
01:40:58.385 --> 01:41:01.125
a group of people out of the country and
1480
01:41:01.905 --> 01:41:03.365
rob every opportunity
1481
01:41:03.790 --> 01:41:13.685
that they had, take away their factories, make it impossible for them to hire people, make them unable to access financing, make them unable to buy dollars. You are essentially
1482
01:41:14.545 --> 01:41:16.965
kicking people out of their own country,
1483
01:41:17.825 --> 01:41:22.690
and you're doing this not through democratic means, you're doing this by force.
1484
01:41:23.550 --> 01:41:32.494
You're doing this as you're getting millions of people on the street protesting and when people go out and protest, what did you do? Maduro went out and shot them. I had friends
1485
01:41:33.034 --> 01:41:38.335
literally, and this is gonna sound dramatic, but I actually had friends, people I knew died in protests
1486
01:41:39.010 --> 01:41:43.350
trying to get a recount of our election that was clearly stolen.
1487
01:41:44.770 --> 01:41:46.790
When you see a group of criminals
1488
01:41:48.535 --> 01:41:49.035
chase
1489
01:41:49.735 --> 01:41:53.355
a group of hardworking, honest individuals out of their own country,
1490
01:41:55.760 --> 01:41:57.699
and you see what they're trying to do,
1491
01:41:59.520 --> 01:42:00.020
I
1492
01:42:00.400 --> 01:42:00.880
do not
1493
01:42:01.599 --> 01:42:06.905
I have a really hard time, even though I am a Bitcoiner and even though I believe in open permissionless
1494
01:42:07.285 --> 01:42:08.345
access to transactions,
1495
01:42:09.525 --> 01:42:11.865
I do think that there is the possibility
1496
01:42:12.810 --> 01:42:14.510
that very, very bad
1497
01:42:15.050 --> 01:42:15.550
agents
1498
01:42:16.730 --> 01:42:17.470
can get
1499
01:42:17.850 --> 01:42:18.350
circumstantially
1500
01:42:19.130 --> 01:42:20.270
a lot of power
1501
01:42:21.035 --> 01:42:23.855
And we, as a global society,
1502
01:42:24.875 --> 01:42:25.614
should have
1503
01:42:25.915 --> 01:42:26.975
checks and balances
1504
01:42:27.435 --> 01:42:35.370
so that we can bring that bad agent or prevent that bad agent from create causing damage in other parts of the world.
1505
01:42:35.990 --> 01:42:36.490
And
1506
01:42:37.395 --> 01:42:38.055
I thought,
1507
01:42:38.595 --> 01:42:39.735
as I've been a student,
1508
01:42:40.595 --> 01:42:43.255
we have been going through this for 20 years.
1509
01:42:44.275 --> 01:42:44.775
20
1510
01:42:45.410 --> 01:42:50.949
5 years, this has been going on for it. Or it's not as came in in 99. It's been 23 years.
1511
01:42:51.650 --> 01:42:53.085
23 years, man.
1512
01:42:53.645 --> 01:42:54.545
In 2017,
1513
01:42:54.925 --> 01:42:56.465
that was 5 years ago,
1514
01:42:56.925 --> 01:43:00.065
after we had already been going through the grind for
1515
01:43:01.085 --> 01:43:02.065
18 years.
1516
01:43:03.140 --> 01:43:04.840
For the first time ever,
1517
01:43:05.380 --> 01:43:14.875
the US government stood stood up and said, what you are doing is wrong. The the government of Venezuela should not be called the government, they should be called a group of terrorists
1518
01:43:15.815 --> 01:43:19.355
and they sanctioned them. And you know how that made me feel?
1519
01:43:20.050 --> 01:43:22.390
Like there was a little bit of justice in the world.
1520
01:43:22.929 --> 01:43:29.110
And of course, it didn't work because they're still there, they kicked out my family, they kicked out Ale, they kicked out all of us,
1521
01:43:29.645 --> 01:43:36.385
and they separated all of our families, they broken our finances, they've given us a new life, sure, in a different country, all separated.
1522
01:43:37.220 --> 01:43:37.720
But
1523
01:43:38.740 --> 01:43:39.400
I worry
1524
01:43:41.620 --> 01:43:42.120
about
1525
01:43:43.140 --> 01:43:45.320
the the world losing its ability
1526
01:43:46.100 --> 01:43:46.600
to,
1527
01:43:48.095 --> 01:43:55.475
I would say without the use of force because you can still coerce somebody by twisting their arm financially without having to go use force,
1528
01:43:56.620 --> 01:43:57.120
but
1529
01:43:58.220 --> 01:44:00.320
we were unable to do that and
1530
01:44:01.260 --> 01:44:03.600
the Venezuelan government because they have this
1531
01:44:04.375 --> 01:44:07.115
magical thing that comes from the ground that is oil,
1532
01:44:07.655 --> 01:44:09.275
they can literally sit there
1533
01:44:09.815 --> 01:44:13.889
and have zero popular support from their voting population,
1534
01:44:14.190 --> 01:44:15.730
but they still have the resources
1535
01:44:16.269 --> 01:44:23.155
to keep them all down from rising up. And they will stay that way until someone's willing to do something,
1536
01:44:24.094 --> 01:44:28.675
and we won't. So for us in Venezuela, that just means we have to write off the fucking country,
1537
01:44:28.980 --> 01:44:30.199
and we have to leave,
1538
01:44:30.500 --> 01:44:33.079
because we knew nobody was gonna come in and do things right.
1539
01:44:33.460 --> 01:44:35.079
So I I
1540
01:44:35.780 --> 01:44:43.905
I do not think that Venezuela not being able to access their gold or their dollars is necessarily all that bad because if they had,
1541
01:44:44.284 --> 01:44:46.739
I don't know what would have happened in Venezuela.
1542
01:44:49.679 --> 01:44:59.545
1543
01:45:00.790 --> 01:45:03.290
whenever Travis precedent and you were,
1544
01:45:03.670 --> 01:45:11.225
you know, a government contractor or you did some project with the government or even if it it was the state oil company or whatever, right, or or public bank,
1545
01:45:11.685 --> 01:45:12.905
the perception
1546
01:45:14.245 --> 01:45:17.225
was that you were you were doing business
1547
01:45:18.190 --> 01:45:24.770
directly or indirectly, whatever, with the Venezuelan government. Right? Which was okay. But right now,
1548
01:45:25.655 --> 01:45:29.595
to be completely honest, the perception and the vibe is that
1549
01:45:30.375 --> 01:45:32.235
you are doing business
1550
01:45:32.855 --> 01:45:33.355
with
1551
01:45:34.349 --> 01:45:41.010
the most powerful families in Venezuela, which are 5 families, which are essentially the 5 families
1552
01:45:41.665 --> 01:45:43.445
that divide between themselves
1553
01:45:43.985 --> 01:45:44.645
with $25,000,000,000
1554
01:45:45.745 --> 01:45:46.405
in revenue
1555
01:45:46.785 --> 01:45:49.525
coming from oil that Venezuela receives
1556
01:45:49.905 --> 01:45:51.920
every single year. So it's $5,000,000,000
1557
01:45:52.780 --> 01:46:02.465
going to each one of these families, and you're no longer doing business with Venezuelan government or you're no longer being paid with the with, you know, the country's
1558
01:46:03.085 --> 01:46:07.085
money, the the the citizen's money or whatever, you're being paid
1559
01:46:08.204 --> 01:46:10.545
their mentality is that you're being paid
1560
01:46:12.389 --> 01:46:13.449
with their money.
1561
01:46:13.750 --> 01:46:15.290
You know what I mean? So it's like
1562
01:46:15.670 --> 01:46:33.369
various I've got to it's like all the cards. Honestly, they're they're all the cards, dude. And then it's it's fucking crazy. It's similar to, like, this rushing all the cards thing or whatever. By the way, just side note comment, Matt. I sent you via private message on a Twitter chat with Mauricio some screenshots of CryptoLago. CryptoLago
1563
01:46:34.185 --> 01:46:37.405
is essentially the only cryptocurrency exchange in Venezuela
1564
01:46:38.105 --> 01:46:40.205
that has a marketplace
1565
01:46:41.304 --> 01:46:42.205
for Petros.
1566
01:46:44.040 --> 01:46:46.200
I send you, like, a screenshot of my
1567
01:46:46.600 --> 01:46:55.075
there. I only have a user just to peek into that some from night. You will see that it's it it it only has a liquidity of 20 Petros.
1568
01:46:55.775 --> 01:47:03.969
20 Petros. 20 Petros by $90 that what's what's currently more or less trading the the the barrel of oil right now in international markets.
1569
01:47:04.510 --> 01:47:05.489
What is that like?
1570
01:47:06.030 --> 01:47:07.170
Nothing, dude. Like
1571
01:47:07.805 --> 01:47:08.705
like, not even
1572
01:47:09.165 --> 01:47:15.345
$2,000, man. Right? Worth of liquidity and petros that I at a national exchange. So it's a complete failure.
1573
01:47:18.949 --> 01:47:21.530
1574
01:47:22.150 --> 01:47:22.650
shortly.
1575
01:47:23.805 --> 01:47:27.105
Before I do that, first of all, I mean, obviously, this whole
1576
01:47:30.525 --> 01:47:34.170
it's complete fucking tragedy what is what happened to your country.
1577
01:47:35.270 --> 01:47:36.970
I absolutely hate to see it,
1578
01:47:37.510 --> 01:47:39.770
but I I feel like Mauricio
1579
01:47:40.150 --> 01:47:41.610
touched on a very interesting
1580
01:47:43.055 --> 01:47:45.155
conversation there in terms of sanctions.
1581
01:47:48.175 --> 01:47:48.835
I mean,
1582
01:47:49.695 --> 01:47:50.995
if Bitcoin's successful
1583
01:47:52.350 --> 01:47:53.969
as we expect it to be,
1584
01:47:56.350 --> 01:48:04.344
that cat is kind of out of the bag. Like, how do you circle that how do you circle that square? Like, there Right. I mean, to
1585
01:48:04.965 --> 01:48:08.664
to protect to the way I always looked at it is to protect
1586
01:48:09.900 --> 01:48:11.440
a dissident or opposition
1587
01:48:12.460 --> 01:48:14.080
or protester or refugee
1588
01:48:15.420 --> 01:48:15.920
from
1589
01:48:17.755 --> 01:48:19.614
exclusion from the financial system,
1590
01:48:20.315 --> 01:48:22.014
from a dictator or an authoritarian,
1591
01:48:23.275 --> 01:48:23.775
the
1592
01:48:24.960 --> 01:48:28.100
the trade off there is that a dictator and authoritarian
1593
01:48:28.560 --> 01:48:30.900
is also gonna have that same type of access
1594
01:48:31.235 --> 01:48:33.335
in terms of the global financial system.
1595
01:48:34.435 --> 01:48:37.975
And this is a topic that I think is just not often discussed
1596
01:48:38.410 --> 01:48:40.830
in Bitcoin land just because it's so sensitive.
1597
01:48:41.610 --> 01:48:42.110
Yep.
1598
01:48:42.570 --> 01:48:46.510
How do you feel about that? Like, do you think it's a net benefit? Do you think
1599
01:48:47.485 --> 01:48:50.364
it it it it ends up in a worse situation? Or
1600
01:48:51.405 --> 01:48:54.385
1601
01:48:55.190 --> 01:48:55.690
answer.
1602
01:48:59.510 --> 01:49:01.130
There's one thing that I believe
1603
01:49:01.670 --> 01:49:07.705
that I that is true, and that is that there are more good people trapped in bad regimes
1604
01:49:08.165 --> 01:49:09.305
than bad people,
1605
01:49:10.645 --> 01:49:12.640
you know, that need to be,
1606
01:49:13.260 --> 01:49:14.560
that that can be empowered
1607
01:49:15.100 --> 01:49:16.640
by, an open currency.
1608
01:49:17.020 --> 01:49:18.560
So I do think
1609
01:49:18.915 --> 01:49:22.614
at a base level that this will have a net benefit
1610
01:49:22.995 --> 01:49:25.655
to the world because I think that there are more people
1611
01:49:26.240 --> 01:49:28.980
being treated unfairly under these wild regimes
1612
01:49:29.520 --> 01:49:30.340
than there are,
1613
01:49:30.800 --> 01:49:33.060
than there is an absolute number of bad regimes.
1614
01:49:33.485 --> 01:49:41.184
Right? It it's kinda similar to the to the, to the Internet theory, which is, you know, if you put it out there, people are gonna start spreading bad information,
1615
01:49:41.660 --> 01:49:49.840
but they're gonna be spreading good information too, and the good information is gonna outnumber the bat by multiples. And so that that's kinda why that works. There are obviously trade offs.
1616
01:49:50.925 --> 01:49:52.465
As a as a Bitcoiner,
1617
01:49:53.085 --> 01:49:56.225
I to me, it was a very, very difficult time,
1618
01:49:56.925 --> 01:49:59.745
2017 when when people were raving about the Petro
1619
01:50:00.440 --> 01:50:03.180
and where, you know, in in many ways,
1620
01:50:04.600 --> 01:50:08.940
I've I've I I thought that the Venezuelan government was using
1621
01:50:09.285 --> 01:50:10.665
in some ways, Bitcoin
1622
01:50:11.045 --> 01:50:11.545
to,
1623
01:50:12.485 --> 01:50:15.865
circumvent some of the challenges that were that were posed by the sanctions.
1624
01:50:16.620 --> 01:50:17.120
And,
1625
01:50:18.220 --> 01:50:25.200
and and and so much so that, you know, a lot of people would reference the p to p volumes in in local Bitcoins in Venezuela.
1626
01:50:25.925 --> 01:50:33.705
And and I always thought that that was interesting because I would look at the math and I would speak to my friends, and I would try to understand who was on the other side of those trades.
1627
01:50:34.165 --> 01:50:34.985
And I
1628
01:50:35.490 --> 01:50:37.430
I have a pretty strong inclination
1629
01:50:38.130 --> 01:50:40.950
that the government was the one buying
1630
01:50:41.410 --> 01:50:44.070
Bitcoin in those b two b markets with printed fiat,
1631
01:50:44.565 --> 01:50:47.225
and they were using that Bitcoin to then pay
1632
01:50:47.605 --> 01:50:48.105
vendors
1633
01:50:48.405 --> 01:50:53.625
internationally. And so they were flooding the p two b markets with fiat to just acquire Bitcoin in exchange of worthless,
1634
01:50:54.570 --> 01:50:56.670
tokens in a in a in a in a
1635
01:50:57.050 --> 01:50:59.870
1636
01:51:00.330 --> 01:51:01.950
1637
01:51:02.585 --> 01:51:05.965
I was I was I was really struggling because
1638
01:51:06.825 --> 01:51:10.605
I was finding a new career and a new love in Bitcoin,
1639
01:51:11.810 --> 01:51:13.190
While at the same time,
1640
01:51:13.890 --> 01:51:15.270
I I saw Bitcoin
1641
01:51:16.370 --> 01:51:16.870
basically
1642
01:51:17.250 --> 01:51:21.765
being Bitcoin and and being open and permissionless, and and and I couldn't
1643
01:51:22.225 --> 01:51:28.645
stop, even if I knew that it was them, I could have stopped them from using it. And I knew that by using it, they were benefiting.
1644
01:51:32.930 --> 01:51:34.790
As as much as I
1645
01:51:35.250 --> 01:51:35.990
would love
1646
01:51:36.370 --> 01:51:36.870
to
1647
01:51:38.945 --> 01:51:40.885
stop the Venezuela's from happening.
1648
01:51:42.625 --> 01:51:43.284
I think
1649
01:51:44.545 --> 01:51:45.605
if I knew
1650
01:51:46.170 --> 01:51:50.590
that regardless of where in the world you are, the next time a dictatorial
1651
01:51:50.970 --> 01:51:52.190
president comes around,
1652
01:51:52.490 --> 01:51:54.430
you will have the tools to escape
1653
01:51:55.335 --> 01:51:56.955
and that tool will be Bitcoin,
1654
01:51:57.735 --> 01:52:00.635
I I think that's a win because
1655
01:52:01.574 --> 01:52:05.730
I don't think that we'll be able to predict how humans behave.
1656
01:52:06.110 --> 01:52:10.050
I think that we just need to arm and educate people so that they can
1657
01:52:10.590 --> 01:52:12.610
defend themselves against a potential
1658
01:52:13.415 --> 01:52:17.755
attack. Right? So people need to be able to fend for their own. And so,
1659
01:52:19.015 --> 01:52:20.795
as much as I think it's a risk
1660
01:52:21.620 --> 01:52:22.120
that
1661
01:52:22.420 --> 01:52:23.960
globally, we might lose
1662
01:52:24.500 --> 01:52:28.120
some some of our power to kinda whip some rogue states back in line,
1663
01:52:28.855 --> 01:52:30.554
I do think that we only,
1664
01:52:31.335 --> 01:52:33.035
we can regain that ability
1665
01:52:33.495 --> 01:52:36.155
by all coming together and and try to coerce
1666
01:52:37.000 --> 01:52:41.340
potential rogue states in a different way that's not choking them out of the financial system.
1667
01:52:46.815 --> 01:52:48.275
1668
01:52:50.335 --> 01:52:53.235
we're, we're on the same page on that. I mean
1669
01:52:54.060 --> 01:52:57.040
I mean, a lot of ways, the way I tend to look at it is
1670
01:52:57.660 --> 01:53:00.560
maybe it's a little bit different with the Venezuelan government,
1671
01:53:03.324 --> 01:53:11.190
But the way I look at it is it kind of gives individuals the same power that that elites, kind of, already have in the traditional financial system anyway.
1672
01:53:12.370 --> 01:53:19.750
Yeah. When there's a will, there's a way. When there's resources, there's a way, and and the elites tend to figure it out regardless of Bitcoin.
1673
01:53:21.885 --> 01:53:25.025
So to me, I mean, it's a it's a clear massive net benefit,
1674
01:53:25.405 --> 01:53:26.605
and there's no real
1675
01:53:27.630 --> 01:53:28.850
if if if
1676
01:53:29.550 --> 01:53:30.290
I mean,
1677
01:53:32.270 --> 01:53:36.290
let's be absolutely clear here. Like, the US government is not
1678
01:53:38.344 --> 01:53:40.284
is not this bastion of
1679
01:53:40.665 --> 01:53:42.925
of good judgment and
1680
01:53:46.219 --> 01:53:47.840
reason and fairness.
1681
01:53:48.539 --> 01:53:49.760
There's a lot of
1682
01:53:51.340 --> 01:53:57.455
misjustice that has happened that happens in the traditional financial system that is practically run by the US government.
1683
01:53:57.995 --> 01:54:00.815
So if you wanna guarantee individuals rights,
1684
01:54:01.690 --> 01:54:08.030
there's really no way to do it unless you guarantee everyone's rights in a properly permissionless way.
1685
01:54:08.730 --> 01:54:09.230
So
1686
01:54:09.735 --> 01:54:11.115
there's really no alternative.
1687
01:54:11.735 --> 01:54:15.435
There's no alternative where bad people get blocked, but good people don't.
1688
01:54:15.815 --> 01:54:16.635
So, ultimately,
1689
01:54:18.210 --> 01:54:20.390
you just need to build a system where
1690
01:54:20.930 --> 01:54:25.510
no one can control it, period, and anyone can use it regardless of
1691
01:54:26.935 --> 01:54:28.795
where they stand morally or ethically.
1692
01:54:31.575 --> 01:54:41.949
1693
01:54:42.465 --> 01:54:44.245
to what's going on with that asset.
1694
01:54:44.705 --> 01:54:45.205
1695
01:54:46.145 --> 01:54:48.965
So, I mean, we're getting close to the 2 hour points,
1696
01:54:49.505 --> 01:54:51.205
where I like to try and,
1697
01:54:53.900 --> 01:54:57.900
you know, keep our discussions too. But before we do, I mean, I
1698
01:54:58.725 --> 01:55:00.585
El Salvador has been a massive,
1699
01:55:01.285 --> 01:55:03.465
topic of conversation with how they
1700
01:55:04.245 --> 01:55:05.545
adopted legal tender,
1701
01:55:06.405 --> 01:55:07.145
and also
1702
01:55:08.119 --> 01:55:12.940
just, you know, how president Bukele over there is running things.
1703
01:55:14.280 --> 01:55:16.059
I'm curious with, like, your experiences,
1704
01:55:16.375 --> 01:55:18.315
both of your experiences with Venezuela,
1705
01:55:19.015 --> 01:55:26.620
Latin America in general. Like, how do you view the whole El Salvador movement towards Bitcoin? How do you view Bukele
1706
01:55:27.080 --> 01:55:28.780
specifically in his regime?
1707
01:55:29.560 --> 01:55:35.685
Like, what are your thoughts there on on what maybe we might see over the next 2 years? What are your thoughts over
1708
01:55:36.065 --> 01:55:37.925
what we've seen over the last year?
1709
01:55:38.864 --> 01:55:39.685
Pretty curious.
1710
01:55:40.600 --> 01:55:41.580
1711
01:55:42.040 --> 01:55:42.700
I mean,
1712
01:55:43.080 --> 01:55:45.420
Mauricio and I went to solve them to represent
1713
01:55:45.960 --> 01:55:48.060
letting at LaBitcon. Right?
1714
01:55:48.525 --> 01:55:52.465
This was recently in November. I think it look. Look. As a as a Venezuelan,
1715
01:55:53.245 --> 01:55:57.265
right, and and taking into consideration that regarding South America,
1716
01:55:59.550 --> 01:56:00.929
Venezuela is the country
1717
01:56:01.389 --> 01:56:02.449
with the highest
1718
01:56:03.550 --> 01:56:04.050
percentage
1719
01:56:04.670 --> 01:56:07.010
of of of of citizens
1720
01:56:07.695 --> 01:56:09.395
and families, in this case, families,
1721
01:56:09.855 --> 01:56:10.355
owning
1722
01:56:10.975 --> 01:56:11.955
a bank account.
1723
01:56:12.255 --> 01:56:15.795
Right? So in the case of a solid Venezuela has, like, 30,000,000 people.
1724
01:56:16.895 --> 01:56:17.395
Almost
1725
01:56:17.889 --> 01:56:20.389
almost a 100% of Venezuelan families
1726
01:56:20.929 --> 01:56:27.965
own a bank account. So maybe your son doesn't have a bank account. Maybe your your wife doesn't have a bank account in certain cases,
1727
01:56:28.505 --> 01:56:29.725
but as a family,
1728
01:56:30.585 --> 01:56:33.565
you have a bank account. Right? In the case of El Salvador,
1729
01:56:34.570 --> 01:56:35.310
it's completely
1730
01:56:35.690 --> 01:56:41.550
different. Right? So, like, only 1.2 or roughly 1.5, I don't recall the exact number
1731
01:56:42.085 --> 01:56:43.785
of people on a bank account,
1732
01:56:44.565 --> 01:56:47.545
in a country that has over 6,000,000 people.
1733
01:56:48.005 --> 01:56:51.225
Right? Over population of over 6,000,000 people. So
1734
01:56:51.900 --> 01:56:52.960
the thing is that
1735
01:56:53.900 --> 01:56:54.640
El Salvador,
1736
01:56:55.260 --> 01:57:00.000
right, if we take into account the numbers that were being provided from
1737
01:57:00.380 --> 01:57:01.755
the Venezuelan the
1738
01:57:02.135 --> 01:57:03.915
the Salvadorian government. Right?
1739
01:57:04.455 --> 01:57:05.514
You can't use government.
1740
01:57:06.215 --> 01:57:07.915
More more than 4,000,000
1741
01:57:08.455 --> 01:57:08.955
Salvadorans
1742
01:57:09.495 --> 01:57:10.155
right now
1743
01:57:10.990 --> 01:57:11.490
own,
1744
01:57:12.190 --> 01:57:17.010
chi have have downloaded Chivo Wallet. Right? So they have some sort of,
1745
01:57:17.870 --> 01:57:18.930
you know, access
1746
01:57:19.625 --> 01:57:20.445
to the formal
1747
01:57:20.985 --> 01:57:22.125
financial system.
1748
01:57:22.425 --> 01:57:25.405
Right? And and so I think that the powerful
1749
01:57:26.425 --> 01:57:27.165
the powerful
1750
01:57:27.465 --> 01:57:28.605
side of that approach
1751
01:57:29.490 --> 01:57:30.150
is that
1752
01:57:31.170 --> 01:57:33.990
El Salvador achieved in a matter of months
1753
01:57:35.010 --> 01:57:36.470
what South America's
1754
01:57:37.235 --> 01:57:37.975
biggest cryptocurrency
1755
01:57:39.155 --> 01:57:39.655
exchange
1756
01:57:40.675 --> 01:57:41.495
hasn't achieved
1757
01:57:42.115 --> 01:57:45.415
in over 9 years. Like Mercado Bitcoin.
1758
01:57:46.370 --> 01:57:50.550
Right? So so Brazil's biggest exchange and Latin America's biggest exchange
1759
01:57:51.090 --> 01:57:53.830
has roughly over 3,000,000 users,
1760
01:57:54.545 --> 01:58:02.245
and they they launched back in 2013. Right? So so right? So I I think that's it is an interesting approach.
1761
01:58:02.930 --> 01:58:03.430
This,
1762
01:58:04.050 --> 01:58:07.030
the one that El Salvador's government took because
1763
01:58:07.810 --> 01:58:12.635
they literally banked over 4,000,000 people again in just, like, what, 2
1764
01:58:13.255 --> 01:58:13.914
months. And
1765
01:58:15.335 --> 01:58:16.954
and, you know, the the biggest
1766
01:58:17.414 --> 01:58:18.954
the the biggest private
1767
01:58:19.489 --> 01:58:21.750
cryptocurrency company of the continent
1768
01:58:22.530 --> 01:58:25.429
was was wasn't able to do that. Right? So,
1769
01:58:26.875 --> 01:58:35.935
if you ask me, it's it's a it's an interesting way, and it's just the initial state. It's just at its initial stages. Right? Like,
1770
01:58:36.290 --> 01:58:39.110
of course, this like, we could dive into,
1771
01:58:39.730 --> 01:58:42.150
you know, what we already discussed that this
1772
01:58:42.690 --> 01:58:45.190
this part of the world has volatile
1773
01:58:45.955 --> 01:58:47.094
volatile economies,
1774
01:58:47.715 --> 01:58:53.094
volatile governments. Governments can be thrown out or whatever, but it's more of, like, a political
1775
01:58:53.920 --> 01:59:00.739
pure political discussion. Right? So so I guess that, it has positive things. Just like anything, it has trade offs.
1776
01:59:01.965 --> 01:59:08.545
But it it was amazing, man. Honestly, it was amazing seeing this swath of swath of
1777
01:59:09.040 --> 01:59:12.020
Bitcoiners traveling globally in the midst of, you know,
1778
01:59:12.480 --> 01:59:17.540
pandemic times or crisis times or whatever you you whatever the term you wanna use,
1779
01:59:18.155 --> 01:59:22.255
everybody flew there just to see what was happening, contribute to the economy,
1780
01:59:22.795 --> 01:59:27.800
have Bitcoin discussions. How can we further help us solve their what is actually happening in.
1781
01:59:28.260 --> 01:59:29.560
I paid for some
1782
01:59:30.020 --> 01:59:31.880
on the street, like, a dollar of
1783
01:59:32.980 --> 01:59:33.960
using Bitcoin.
1784
01:59:34.755 --> 01:59:40.535
You you know what I mean? Like, these these 2 teenagers that sell pupusas and coffee on the streets
1785
01:59:40.915 --> 01:59:41.975
to make a living,
1786
01:59:42.370 --> 01:59:50.790
they now have access to Bitcoin, and they have their $30 in Bitcoin that was deposited to them by the Salvadoran government. So if you asked me as a Venezuelan,
1787
01:59:51.385 --> 01:59:52.125
I would have loved,
1788
01:59:53.385 --> 01:59:58.205
a long time ago, seeing my my government, right,
1789
01:59:58.665 --> 01:59:59.165
do
1790
01:59:59.660 --> 02:00:00.880
a similar approach,
1791
02:00:01.180 --> 02:00:03.440
right, which which is the complete
1792
02:00:04.220 --> 02:00:07.020
opposite. Right? Like, they tried creating their own
1793
02:00:07.900 --> 02:00:08.720
like, look.
1794
02:00:09.855 --> 02:00:14.755
Venezuela Central Bank is trying to look into ways to custody by themselves
1795
02:00:15.295 --> 02:00:17.715
Bitcoin and Ethereum to make international
1796
02:00:18.015 --> 02:00:19.530
payments through the central bank.
1797
02:00:20.550 --> 02:00:29.935
They even, at some point, evaluated, you know, like, issuing a Petrol, the Ethereum blockchain, the Dash blockchain, whichever blockchain, whatever. You know what I mean? Like and
1798
02:00:30.475 --> 02:00:33.775
and they they came back to the same conclusion that was,
1799
02:00:34.395 --> 02:00:37.055
we can only do this at some point
1800
02:00:37.540 --> 02:00:45.640
with Bitcoin with, like, RGP, smart contracts, or whatever. You know what I mean? But but if we do that, we're just gonna be we're just gonna be
1801
02:00:46.135 --> 02:00:55.890
losing some of our power, and we're gonna be giving that back to the people. And we're gonna be doing free marketing for Bitcoin, and that's not and that's a pretty much
1802
02:00:56.750 --> 02:00:59.409
at least a more democratic approach to it
1803
02:00:59.710 --> 02:01:01.969
than issuing your own sovereign cryptocurrency
1804
02:01:02.350 --> 02:01:11.165
that nobody knows where it lives in and that is backed by your, you know, national reserves that you pretty much control by yourself, whatever. So if you ask me,
1805
02:01:11.705 --> 02:01:12.205
I
1806
02:01:12.600 --> 02:01:12.760
it
1807
02:01:13.560 --> 02:01:14.699
I feel invigorated,
1808
02:01:15.000 --> 02:01:18.380
you know, and and I felt, you know, this this vibrant
1809
02:01:18.760 --> 02:01:19.260
passion
1810
02:01:19.755 --> 02:01:22.574
when it went to El Salvador just to meet other Bitcoiners
1811
02:01:23.355 --> 02:01:25.295
coming from all over the world
1812
02:01:25.755 --> 02:01:30.490
just to do whatever it is that we love doing that. So I think
1813
02:01:31.430 --> 02:01:32.410
it's a net
1814
02:01:32.790 --> 02:01:39.050
positive approach, deal solvers approach so far. Go ahead, Mauricio. I think you could you could expand on this very well.
1815
02:01:41.225 --> 02:01:48.925
1816
02:01:50.350 --> 02:01:52.530
It was crazy to see it in the wild,
1817
02:01:52.909 --> 02:01:59.775
and and it's just amazing to see how the fees are basically 0. So I I came back a very much a lightning
1818
02:02:00.155 --> 02:02:09.469
believer. I I I didn't have a chance to, like, be, interact too much with lightning before the trip, but when I saw how people were using it, I I it really changed my view.
1819
02:02:10.730 --> 02:02:11.869
What I will say,
1820
02:02:12.650 --> 02:02:13.469
as Venezuelans,
1821
02:02:14.255 --> 02:02:15.875
we're very jaded by politics,
1822
02:02:17.375 --> 02:02:18.915
and we've seen politics
1823
02:02:19.455 --> 02:02:19.955
essentially
1824
02:02:20.895 --> 02:02:23.395
look great one day and 6 months later,
1825
02:02:23.850 --> 02:02:32.190
the entire country hates you and you're you know, you can't be voted out. And so that all can change very quickly in terms of politics.
1826
02:02:32.965 --> 02:02:34.265
I think it was,
1827
02:02:35.685 --> 02:02:40.745
it was a very interesting move from their part. One one thing to consider is El Salvador
1828
02:02:41.290 --> 02:02:47.630
did not give up senior rich rights by adding Bitcoin. They never had senior rich rights to begin with because they were dollarized.
1829
02:02:48.250 --> 02:03:01.730
So it's easier in some ways for El Salvador to adopt Bitcoin than it is for someone that has their own local currency. Because by doing that, El Salvador isn't making their own currency look like crap, it's making the dollar potentially look like crap,
1830
02:03:02.190 --> 02:03:04.450
as as its value inflates away against Bitcoin.
1831
02:03:04.910 --> 02:03:10.665
So in that sense, I think it's it's very forward looking. It's it's it's it looks
1832
02:03:11.525 --> 02:03:16.025
like a genuine attempt to help the people of El Salvador because as a government,
1833
02:03:16.860 --> 02:03:20.000
you're introducing a currency that you cannot control or manipulate.
1834
02:03:20.300 --> 02:03:22.480
So I thought that was pretty interesting.
1835
02:03:23.180 --> 02:03:24.220
What I what I
1836
02:03:24.935 --> 02:03:28.955
the only thing that I worry about or one of the things that I worry about is,
1837
02:03:29.895 --> 02:03:32.875
one is this idea of Bitcoin becoming politicized.
1838
02:03:33.710 --> 02:03:36.210
So I I don't think we should have
1839
02:03:36.510 --> 02:03:42.610
politicians lead Bitcoin because what that when that happens, you'll have one political party that is very pro Bitcoin.
1840
02:03:42.915 --> 02:03:56.680
The other one will take the natural opposing view, which is anti Bitcoin. And I think that as the democracy kinda ebbs and flows between the 2, that could hurt Bitcoin in the long term. I would love to see a fully bipartisan support for Bitcoin
1841
02:03:56.980 --> 02:04:07.085
in in any sort of, you know, house of government because that ensures that there's not gonna be this passing of the baton between the pro Bitcoin and the non pro Bitcoin groups. So,
1842
02:04:07.565 --> 02:04:15.160
that that concerns me a bit that we're maybe we could potentially pigeonhole Bitcoin into one side of the political group and and and essentially
1843
02:04:15.815 --> 02:04:19.835
not get the full benefit of having a bipartisan support on the 2.
1844
02:04:21.095 --> 02:04:24.715
And the other one, which is, you know, Matt, going back to this sanctions
1845
02:04:26.020 --> 02:04:26.520
world,
1846
02:04:27.060 --> 02:04:35.955
the the the El Salvador bond is a very interesting development in the sense that it will be if it if it's successful or when it's successful, I do believe it will be successful,
1847
02:04:37.215 --> 02:04:41.315
it will be the first time that a sovereign country has raised debt,
1848
02:04:41.920 --> 02:04:45.940
sovereign debt, outside of the rails of the traditional
1849
02:04:46.240 --> 02:04:47.380
finance world,
1850
02:04:47.840 --> 02:04:51.060
I e the IMF, I e the US controlled bond markets.
1851
02:04:52.685 --> 02:04:53.665
I think that
1852
02:04:54.285 --> 02:05:04.770
right now, it sounds a bit benign when we see El Salvador raising these bonds and blah blah blah, and we all like their sort of project that they're behind. But what that what quickly will follow
1853
02:05:05.150 --> 02:05:07.730
is a every other rogue state
1854
02:05:08.110 --> 02:05:10.850
that has been blocked out of these financial markets
1855
02:05:11.375 --> 02:05:13.315
is going to try to do the same.
1856
02:05:13.695 --> 02:05:17.955
And so going back to the point we had earlier around around sanctions,
1857
02:05:18.390 --> 02:05:20.490
I I think there's a lot of,
1858
02:05:21.990 --> 02:05:25.130
unintended consequences that that some of this could have
1859
02:05:25.430 --> 02:05:28.010
that are you know, it it it warrants a conversation.
1860
02:05:33.094 --> 02:05:33.915
1861
02:05:34.375 --> 02:05:35.915
I appreciate both your insights.
1862
02:05:37.390 --> 02:05:50.665
I'm I made a similar conclusion on the it it's interesting that I mean, it makes a lot of sense to me that, you know, one of the first the first country that adopted Bitcoin as legal tender was already a dollarized country, so they didn't give up their seen senior,
1863
02:05:51.125 --> 02:05:51.625
rights,
1864
02:05:54.330 --> 02:05:56.510
which is that just makes sense to me.
1865
02:05:57.210 --> 02:05:59.230
The Chivo wallet concerns me.
1866
02:06:00.090 --> 02:06:02.590
Reliance on the Chivo wallet concerns me.
1867
02:06:04.105 --> 02:06:07.005
In a lot of ways, that seems, you know, very much
1868
02:06:07.625 --> 02:06:10.125
very similar to, like, the CBDC
1869
02:06:10.505 --> 02:06:11.005
strategy
1870
02:06:11.385 --> 02:06:11.885
or
1871
02:06:14.449 --> 02:06:22.435
if if you're gonna be extreme, like, the Petro strategy, but obviously, it's using dollars and Bitcoin instead of some made up shit coin.
1872
02:06:24.495 --> 02:06:28.995
But there's some concern there. The the bipartisan comment is interesting because
1873
02:06:31.940 --> 02:06:33.400
do you not agree that
1874
02:06:34.660 --> 02:06:39.365
it that might that might that aspect might not even matter because by the time opposition
1875
02:06:39.745 --> 02:06:44.965
gets power, I mean, if if the people are already accustomed to Bitcoin and using Bitcoin,
1876
02:06:46.449 --> 02:06:47.830
it might just be completely
1877
02:06:49.250 --> 02:06:51.350
unpalatable for anyone to
1878
02:06:51.890 --> 02:06:53.909
kind of pull back on that decision.
1879
02:06:54.215 --> 02:07:02.350
Like, I feel like it's really sticky once once they have access, especially I mean, it's not just Bitcoin. Right? Once they have access to Bitcoin and the broader ecosystem, they're able to
1880
02:07:03.230 --> 02:07:04.370
stable coins and whatnot.
1881
02:07:05.550 --> 02:07:09.010
No. But it's it's pretty hard to put that cap back in the bag. No?
1882
02:07:09.445 --> 02:07:17.625
1883
02:07:18.430 --> 02:07:30.775
Bitcoin is the reason that you're being left behind. And with their program to get you free stuff, you won't have to think about Bitcoin anymore because it's you have to work to get the Bitcoin. Whereas with their program, you'll get everything for free. Right.
1884
02:07:31.395 --> 02:07:32.135
Free stuff.
1885
02:07:32.515 --> 02:07:35.015
People vote for free stuff. Believe me.
1886
02:07:35.349 --> 02:07:36.489
1887
02:07:39.110 --> 02:07:44.565
Awesome. Well, I mean, I think this discussion was absolutely fantastic. I hope the freaks agree with me.
1888
02:07:45.765 --> 02:07:49.945
We're past the 2 hour point. I respect and appreciate both your time,
1889
02:07:50.885 --> 02:07:52.824
coming on here and sharing with us.
1890
02:07:54.600 --> 02:08:00.540
Before we wrap this up, you guys, I like to finish this with some final thoughts. So, Salton, final thoughts.
1891
02:08:05.445 --> 02:08:07.625
1892
02:08:10.480 --> 02:08:12.020
listening into our Venezuelan
1893
02:08:12.480 --> 02:08:12.980
story,
1894
02:08:13.679 --> 02:08:17.540
you need to understand that Fiat is a hard bitch to kill.
1895
02:08:18.159 --> 02:08:19.060
It's not
1896
02:08:19.724 --> 02:08:23.985
it's it's not gonna go it's not gonna go away anytime soon.
1897
02:08:25.724 --> 02:08:26.224
So
1898
02:08:26.920 --> 02:08:28.780
you better keep stacking sats
1899
02:08:29.320 --> 02:08:31.580
because you're doing the right thing by doing it.
1900
02:08:32.040 --> 02:08:33.740
And, ultimately, just
1901
02:08:35.435 --> 02:08:37.295
be wary out there, honestly.
1902
02:08:38.155 --> 02:08:40.335
Nobody's coming to save you. And
1903
02:08:41.115 --> 02:08:42.655
I do feel that
1904
02:08:44.380 --> 02:08:45.440
we still haven't
1905
02:08:45.740 --> 02:08:48.400
felt the the true need
1906
02:08:48.940 --> 02:08:52.480
as a, I'd say, as a global community to
1907
02:08:53.045 --> 02:08:54.025
get into a
1908
02:08:54.485 --> 02:08:56.745
we have to build until we die,
1909
02:08:57.605 --> 02:08:58.105
like,
1910
02:08:58.405 --> 02:09:01.700
vibe. But I think that at some point with
1911
02:09:02.080 --> 02:09:06.020
more government pressure and etcetera, that could become a thing.
1912
02:09:07.840 --> 02:09:08.340
So
1913
02:09:08.835 --> 02:09:16.054
keep building out there whatever it is that you're building on top of Bitcoin and understand that education is still needed. And,
1914
02:09:16.610 --> 02:09:18.950
yeah, not only in the US. It's
1915
02:09:19.330 --> 02:09:22.950
it's a global thing, and we need to continue, like, untapping.
1916
02:09:23.410 --> 02:09:25.910
Right? Like, I'm sorry, tapping into those.
1917
02:09:26.525 --> 02:09:36.280
You know, there are some voices out there that need to be heard, and we're not hearing them right now. And we gotta continue doing a better job of doing that. So I'm thankful for,
1918
02:09:36.820 --> 02:09:37.800
you know, approaches
1919
02:09:38.100 --> 02:09:38.600
like
1920
02:09:39.139 --> 02:09:39.800
the Citadel
1921
02:09:40.100 --> 02:09:40.600
dispatch
1922
02:09:42.260 --> 02:09:45.255
that help helped at doing that, man. And
1923
02:09:45.795 --> 02:09:53.175
I say that from, you know, the from the bottom of my heart as a Venezuelan that for many years, I just wanted to
1924
02:09:53.860 --> 02:09:56.840
I just wanted to have voice, and what gave me voice is Bitcoin.
1925
02:09:57.780 --> 02:09:58.760
And thank you all.
1926
02:09:59.380 --> 02:10:01.075
1927
02:10:01.875 --> 02:10:03.415
Mauricio, final thoughts.
1928
02:10:04.595 --> 02:10:05.895
1929
02:10:08.740 --> 02:10:12.680
You know, I I I I think it's easy to think about all the the
1930
02:10:13.300 --> 02:10:19.355
the stuff that is kinda falling apart around the world. But I I what I do love about Bitcoin is that
1931
02:10:19.735 --> 02:10:26.075
it does it feels like it's the complete opposite. It feels like we're actually rebuilding the entire system from the ground up in a way that
1932
02:10:26.500 --> 02:10:27.000
we,
1933
02:10:27.860 --> 02:10:40.735
you know, we wanna see into the future. So I I I just think being in this industry has has shifted my perspective into the world is ending to we're rebuilding the world into a better place. And so I I,
1934
02:10:41.640 --> 02:10:43.260
yeah, I just want to,
1935
02:10:44.280 --> 02:10:49.340
thank you all for for for, you know, making Bitcoin what it is today. And and, you know,
1936
02:10:49.645 --> 02:10:56.864
4 years ago, 3 years ago, we you know, I was I was listening to these podcasts just the same way many people are, and and
1937
02:10:57.410 --> 02:10:59.990
Bitcoin is so new and is so filled with opportunity
1938
02:11:00.530 --> 02:11:06.630
that, I I think the best way to make sure that it goes in the direction that we want is to be involved and stay involved
1939
02:11:07.075 --> 02:11:21.070
and to and to always have a say. I think one of the biggest problems with politics is we've all become so disenfranchised with politics. We always we we feel like it's it's not good enough for us to deal with, someone else has to deal with it. And and when that happens,
1940
02:11:21.530 --> 02:11:39.530
you get that someone else in power, and that and that is much always way worse than if you had stayed and try to try to express your view. So I encourage everybody to to get involved in Bitcoin and continue defending their beliefs so that we can play your role in in keeping Bitcoin in the direction we all want it to be.
1941
02:11:40.150 --> 02:11:42.170
1942
02:11:44.305 --> 02:11:54.130
So I just wanted to thank our guests. Thank you for your time. Thank you for all your work. It is appreciated. I wanted to thank the freaks for joining in for another SIL dispatch.
1943
02:11:55.470 --> 02:11:57.970
Dispatch is is meant to model
1944
02:11:58.750 --> 02:12:01.090
the open source projects that we so much
1945
02:12:02.094 --> 02:12:03.155
rely on today,
1946
02:12:04.415 --> 02:12:08.034
and we will rely on going forward if we want this movement to be successful.
1947
02:12:09.580 --> 02:12:14.560
And with that, it means I'm relying on on you freaks to
1948
02:12:15.420 --> 02:12:18.239
to support the show, to provide feedback, to participate.
1949
02:12:19.405 --> 02:12:21.585
All those links are available at sill dispatch.com.
1950
02:12:22.685 --> 02:12:24.545
Don't hesitate to reach out.
1951
02:12:25.325 --> 02:12:27.665
Join the chat. The link is there.
1952
02:12:28.470 --> 02:12:29.690
Subscribe to the podcast.
1953
02:12:31.750 --> 02:12:33.290
All the archives are there.
1954
02:12:33.670 --> 02:12:36.489
There's links to support the show using Bitcoin.
1955
02:12:37.475 --> 02:12:39.495
At the end of the day, it's all about
1956
02:12:40.035 --> 02:12:40.775
you guys.
1957
02:12:41.395 --> 02:12:47.550
I think together, we can truly make this world a better place. Hopefully, put some of these stories behind us
1958
02:12:48.170 --> 02:12:50.910
rather than relive them over and over again in the future.
1959
02:12:53.565 --> 02:12:56.465
Thanks for joining us, guys. I really do appreciate you.
1960
02:12:59.940 --> 02:13:03.640
1961
02:13:04.260 --> 02:13:07.960
1962
02:13:09.235 --> 02:13:10.375
1963
02:13:10.994 --> 02:13:11.494
1964
02:17:48.715 --> 02:17:49.535
1965
02:17:50.154 --> 02:17:51.135
home back
1966
02:17:51.515 --> 02:17:52.015
to
1967
02:17:52.475 --> 02:17:52.975
you.
1968
02:21:30.295 --> 02:21:31.354
1969
02:21:32.055 --> 02:21:32.555
Meatloaf.
1970
02:21:34.614 --> 02:21:38.875
Love you, freaks. See you next week. Stay on, both stacked sets.
1971
02:21:39.204 --> 02:21:39.704
Cheers.
