[00:03:05] David Bailey: And I feel like when you boil it all down, that’s just in essence, like, are you long free markets or are you long, potentially controlled economies? And I feel like that’s a debate that’s already been. Resolved. Yeah. I’m betting on capitalism. What about you?

[00:03:20] Preston Pysh: Absolutely, 100%. My frustration with like this past event with the Silicon Valley Bank and just everything that the Fed stepped in and did, it just dupes people from actually like digging in and actually having a consequence to the actions of these fractional reserve systems.

[00:03:41] Preston Pysh: So like, there was, I, I couldn’t even imagine the amount of money that should have been burned up in all of these collapses. And I don’t want to see people be harmed, but at the same time, they’re masking the reality of how fragile and how broke this fractional reserve system is by coming in and backstopping things.

[00:03:59] Preston Pysh: And then you’re manipulating the cost of capital. So like, how do you see it manifesting that people will actually ask those questions of like, why they should trust this system that doesn’t have any counterparty risk versus the legacy system that. Always just gets bailed out and they, and people that are using that legacy system don’t even know how fragile it is or how manipulate manipulated is because they keep back stopping it.

[00:04:23] David Bailey: Yeah. I mean, I, I totally agree with you that it’s sad when bad things happen to people, but you know, there is no action that the government can do that is in any way saving people is just distributing the cost of what happened to other people. They’re choosing who bears the cost and who doesn’t.

[00:04:38] David Bailey: And so, you know, in the, in the case of Silicon Valley Bank, it should have been the depositors of the bank that for the cost, which sucks for the depositors, but instead it’s going to be socialized across all Americans that are going to bear the cost. And then, you know, the Silicon Valley Bank depositors, they’re going to get some benefit put on them and they get their deposits out.

[00:04:55] David Bailey: In terms of, you know, how does this like kind of come to fruition? I think what happens is one system thrives. And one system decays. And over time, the difference between the thriving system and the decaying system becomes overwhelmingly obvious to anyone who can pay attention at all. And Right.

[00:05:15] David Bailey: It’s already obvious to some people, but like, as the difference, the divergence grows stronger, it becomes even more obvious. And so a good maybe example of this is like the United States versus the Soviet Union and the United States. Not that the United States was some shining, you know city on the hill of capitalism, but relative to what was the essentially controlled currency that the USSR used much more free market.

[00:05:39] David Bailey: And you saw one society decay and you saw one society relatively thrived. And you know, I feel like if the USSR had ruled the world, it would’ve lasted a lot longer because there wouldn’t have been that alternative, like, I guess the, the TINA, the TINA effect. Like there has to be an alternative to compare your reality against.

[00:05:59] David Bailey: And so Bitcoin is just going to keep moving along, growing over time. The people who are a part of the Bitcoin economy are going to be insulated from different bank runs that happen, financial calamities that happen that will constantly require more and more reaction from regulators, which will require more and more socialization of cost across all the users of that system.

[00:06:20] David Bailey: And the Bitcoin system will see the good actors thrive and grow and, and benefit greatly from being a part of Bitcoin. The people who hold Bitcoin will thrive. Their net worth will grow, their purchasing power will grow, and people will look at the two options. They’ll say, okay, well, you know, the US dollar may still be around, but I’m going to choose into this better system where I see people thriving.

[00:06:39] David Bailey: And I think that that’s a long process and then a sudden process. Yeah, and I don’t know where we are exactly on the, in the time horizon of, of that adoption, but you know, it’s kinda like these, these, these bankrupts, it’s like the bank split deposit slowly. People started seeing the writing on the wall of what’s happening.

[00:06:55] David Bailey: You know, I don’t know if you saw the news report that like the month or two before Silicon Valley Bank failed, there was like a massive amounts of insider loans that were approved. I did at the bank. Yeah. So, you know, it’s like people, the writing was on the wall and then everything accelerates as there becomes this social awareness that the writing’s on the wall.

[00:07:17] David Bailey: And, you know, and I, I think in large part, like, and this was already kind of implicit, but I think Silicon Valley Bank and Signature Credit have made it to my explicit, all deposits of all banks in the United States are guaranteed. And so ultimately all deposits of all banks in the world guaranteed.

[00:07:34] David Bailey: Because if you, if you can have international banks fail, those international banks can bring down your domestic banks. So, you know, since they’re all tied together. Okay. Now ex like implicitly the, all the banks, you know, are too big to fail. And once you’re at that point it’s like, okay, now we’ve nationalized the global banking system.

[00:07:53] David Bailey: Okay, well what does a rational actor do in that scenario? They seek out risk. Like, okay, I, my downside is protected. Like I, I, I benefit from, from taking on excessive risk, having excessive returns, and if things go sideways, you know, passing the buck onto the rest of society, banks will over time trend towards making riskier and riskier decisions under that pretext.

[00:08:15] David Bailey: And the problems in the cost of society are, is going to have to bear, is just going to grow proportionately. And that doesn’t even include the dislocations to what would be a fully functioning free market that we would have in the world. An economy that if capital was deployed, As the free market actually needed, it would flow much differently in a, in a way that would maybe create more growth and more value for society.

[00:08:37] David Bailey: Like, we’re, we’re not going to see that. So that’s the opportunity cost side of it. But then the behavior that we’re going to incentivize is, is risk taking on a grander and grander level to such a point that eventually there will come a calamity that it won’t be possible to bail your way out of. And I mean, I feel like that’s really when you, when you have a, a run on the, on the reserve currency, when you have a run on trust, the trust in the system itself, rather than just the trust in a bank, but truly the trust in the dollar trust in the United States government.

[00:09:07] David Bailey: Like that’s, that’s impossible to recover from. Like, you may be able to use an army to force people to, you know, begrudgingly comply with something, but, you know, trust is something that takes a long time to earn and is, is quickly, you know, is quickly lost.

[00:09:21] Preston Pysh: It seems like when as, as they’ve been using QE for the past decade plus.

[00:09:26] Preston Pysh: That your typical common person doesn’t even understand that, that they’re grossly manipulating markets through that type of tool. When we went through Covid 2020 and they started writing checks to everybody and people could spend it however, whenever, as long as they wanted to because it’s money or it’s currency that doesn’t have a coupon like term limit to it, I think you’ll probably know where I’m going with this question by the way that I’m, I’m phrasing that as all these people got those checks, they were able to go out and spend willy-nilly on whatever they wanted and we saw the prices of everything start to really shoot up because of the tool that they were using, which was a form of UBI.

[00:10:05] Preston Pysh: As we go through the next crisis, whatever it is, however it manifests itself, A lot of people are saying that it’s going to be commercial real estate combined with like regional banks. They’re going to have to do more UBI like activities in order to stimulate the money that doesn’t trickle down through QE or yield curve controller or whatever, which is the tool of choice for them, because people don’t understand it.

[00:10:27] Preston Pysh: So I guess when we’re talking about acceleration, is the CBDC, the thing that really starts to accelerate people’s understanding of, of the power of Bitcoin. That’s been pretty much lost on them for all these years because they really just don’t understand how the markets are being manipulated.

[00:10:46] Preston Pysh: Because with the CBDC, they’re actually able to control the duration of money, and I think that that’s going to be important for them to kind of try to control the order of all of this.

[00:10:56] David Bailey: You know, I have a hard time predicting what’s going to happen with CBDCs, because I’m still of the mindset that I think they’re going to struggle to ever get them deployed into the market and get people to actually use them.

[00:11:08] David Bailey: I don’t really think that there’s a use case for CBDC from the perspective of the end user. And, you know, I think that a lot of the excitement that central banks have, well, okay, of course there’s the, the totalitarian excitement of like, hey, we can have monetary policy tools that we currently don’t have, but is like they look at stable coins and they, they think that that’s somehow like a validation of the idea that people want some stable digital currency.

[00:11:33] David Bailey: But in reality, the use case for stable coins is actually regulatory arbitrage. Like stablecoin are just a wrapper on a bank account. And so, you know, they pay no interest. They have no FDIC insurance, so they’re, they’re really an inferior bank account. So why would anyone ever hold a stablecoin?

[00:11:49] David Bailey: Well, they hold a stablecoin because they can’t touch a bank account for whatever reason. Maybe there’s currency controls, maybe. There is, they don’t want to have the tax authorities tipped off. Maybe they want to buy un strip securities overseas. There’s a whole list of reasons, but none of them come down to, oh wow.

[00:12:04] David Bailey: The technology is just so great on stablecoin that I’m willing to give up what my bank can do in order to hold this. That’s just money sitting in a bank account somewhere else. So, I, I think, you know, at the end of the day, those are all use cases that I don’t see any CBD c being like, unless they’re saying, Hey, we’re going to waive the restrictions that we applied and put on bank accounts in the first place.

[00:12:25] David Bailey: Yeah. Which we could just do. Like, who’s getting, why is someone going to be using CBDC? You know, they, they would really need to. Keep you from using a bank account to force the adoption of it. And you’ve seen so many nations now, like people still think these CBDs are just like purely in beta mode. But you know, this stuff has been around for a while.

[00:12:43] David Bailey: I mean, China has started working on CBDCs in like 2017, 2016 in Nigeria. I mean, there’s lots of nations that have rolled them out. Like you can’t find one where they’ve been successful at all. Like it typically ends in them trying to ban Bitcoin and trying to force people to use CBDC that it still doesn’t work.

[00:13:00] David Bailey: So, I don’t know, I, it’s hard for me to predict what is a practical policy outcome, a monetary policy for cbd, cs, if they can never solve the problem of how do they get the end user to have trust in the system.

[00:13:14] Preston Pysh: Yeah. And it, it almost seems, especially here in the us, like they just can’t find a contractor or somebody to actually stand it up and in the, in a technical way that is trustworthy.

[00:13:24] Preston Pysh: They just seem to be so far behind the power curve in the execution of it.

[00:13:29] David Bailey: You know, they’re, they’re launching like, FedNow. I think like, let’s see what happens with FedNow. I, I think they’ll find that they’re going to suffer from all the same problems that, you know, every API based banks suffers from.

[00:13:43] David Bailey: I think like there’s a reason why this problem hasn’t already been solved and just centralizing it at the Federal Reserve, which I don’t know how many people work at the Federal Reserve, but I think that that’s just like doom for failure.

[00:13:54] Preston Pysh: Caitlin’s done a good job of talking about the need for higher capital requirements at the banks, but whenever they speed up the settlement and have APIs that, you know, can settle over the weekend, like all of a sudden if you were sit a bank that was sitting on 10 billion, you might need 30 billion now in order to have enough capital to handle the speed at.

[00:14:16] Preston Pysh: The settlement will happen under this new system. It, it just seems like it’s a Fed wire that’s just faster and it’s just going to require them to hold more, more cash on hand, which I don’t think helps them control does that help them control the amount of money supply or make it make it harder?

[00:14:32] Preston Pysh: Right.

[00:14:33] David Bailey: I feel like actually the, the slowness of the payment system we have is a feature, not a bug. Yeah. You know from their perspective. Yes. So it’s like, yeah. I. Well, I’m just kind of a wait and see on, on how that plays out. Yeah. You know, I do agree with your opinion on, in terms of like where financial calamities coming from.

[00:14:50] David Bailey: Like, you know, that there’s a fairly straightforward cause and effect of like okay. The, the, the government injected a lot of liquidity into people, into the banks and the pe certain people’s bank accounts. Okay. You can go through the list of people that benefited disproportionately during that time period.

[00:15:06] David Bailey: So you mentioned UBI for individuals, which was the unemployment checks. There was the PPP program which pumped a ton of money into small businesses, medium sized businesses. There was massive underwriting of junk bonds of corporate debt that was done as at, well, during that time.

[00:15:25] David Bailey: And when they dropped the interest rates to zero junk bonds, like the, just the trash of trash companies were able to finance their debt, lock in multi-year debt offerings at extremely low rates. And you know, when everyone that was flushed with cash in their bank account, everyone wanted to buy real estate.

[00:15:41] David Bailey: So you had a, a massive pump in crypto tech, real estate. Like those were the things that most outperformed, let’s say, of, of all assets. Okay. So what banks are under stress right now? The banks that banked tech companies. Okay. The banks that banked crypto companies, the banks that banked real estate companies.

[00:16:02] David Bailey: I’m willing to bet you that where we see the next banks that are distressed are going to be like merchant banks that bank the companies that are having to refinance their debt. You’re going to have, I mean, you just basically have to see where the cash came in. Then the banks had to do something with the cash, so they had to deploy it into you know, held to maturity securities. They had to loan it out. They had to do something. So like, I’m Silicon Valley Bank. My, my customers are tech companies. Now they’re flooded with venture investment. They’re flooded with cash from, you know going public or whatever. And now I’m holding their cash.

[00:16:32] David Bailey: I’m having deployed in some way. And then now, like I’m on the front lines of the change in interest rate policy of those investments that we made as a bank going underwater as well as my customers that were flushed with cash at when I made these investments now burning cash. And now I’m being, having to like pay out those customers.

[00:16:51] David Bailey: So like, I think you can just like basically map out 2020 of who did well. And you can, you can correlate that to 2023. Who’s going to do poorly? Mm. And the sequence of who’s going to do poorly? This is a multi-year process that’s playing out. Like, I mean, you, there’s some pretty good graphs out there in terms of just like, what is the net interest margin for these financial institutions?

[00:17:16] David Bailey: Like fundamentally, they have deposits that can leave at any time. I mean, that’s the point of a, of a deposit and, you know, they have assets on their balance sheet that, you know, have some sort of maturity timeline to them. So until they can get the, the interest that they’re earning on their balance sheet in aggregate to match what they need to pay out to their depositors, which is variable in real time, it’s whatever the Fed does, they’re going to be losing deposits if they can’t make the interest rate the same or they’re going to be burning money, paying the depositors more money than they have.

[00:17:46] David Bailey: So they have to kinda, basically choose one of two outcomes and like the amount of time it’s going to take for their assets to earn an, an average interest rate that matches the current Fed funds rate is like four years from now. So they’re just going to be bleeding deposits month over month, over month.

[00:18:02] David Bailey: For years. Yeah. And you know, we’re, we’re only one and a half years into this process already, and they’re already bank failures. So there’s just the ma the math like, kind of speaks for itself. There’s no way to balance these two, these two issues. And you’re going to have not just bank failures at the regional banks, you’re going to have bank failures at the, at the big banks too.

[00:18:24] David Bailey: I mean, this is really, it, it, the fundamental issue is deposit flight to higher earning treasuries or money market accounts, et cetera. Yes. And until there’s equalization in the rates, it’s not about the bank runs. The bank runs are just a byproduct of the underlying depositor flight that have been going on for months and months and months and months.

[00:18:43] Preston Pysh: So they want higher, they want higher rates, but they don’t want people to withdraw and, and put them into those types of vehicles. So it’s like you can’t have it both ways. It’s crazy.

[00:18:53] David Bailey: Yeah. And that’s the, and that gets back to the crux of the issue of like, okay, they’re having to pick winners and losers.

[00:18:58] David Bailey: Yeah. But they want everyone to be a winner. And no one to be a loser. Well, it doesn’t work like that. If I, if we just, you know, if I give you a money printer machine and then you’re having to pick winners and losers, but you decide to bail out all the participants in the system. Okay, well, like someone has to bear the cost at the of the day.

[00:19:14] David Bailey: So yeah. I, I don’t, I don’t know how they fix it. And if they cut rates really quickly, they have another issue on their hands because now there’s all these banks that in order to survive, have switched their loan portfolio from fixed rate in securities that they’re holding to variable rate securities so that they could improve their net interest margin position.

[00:19:32] David Bailey: So like great variable rate that makes sense when the rates are rising. But if you cut rates really quickly, they should have actually buying fixed rate now that time. So now they have like the basically inverse problem. And so it’s now like, which banks benefit and which banks get hurt. And it’s really like the pace at which they’re making the changes, which is unpredictable and difficult for banks to plan for.

[00:19:54] David Bailey: So it’s like the banks are caught in a hard place. It’s a tough situation. I honestly don’t. It, it’s difficult to see what the third and fourth order effects of all these changes are because it starts cascading really quickly into the more broad economy, into multiple different sectors. It’s much bigger than just tech and crypto.

[00:20:13] David Bailey: Oh, yeah.

[00:20:14] Preston Pysh: Yeah. Amazing rundown. David. I mean, I completely agree with your point, your point about them having to switch switch over from fixed to variable at the most inopportune time is a really important point and very smart comment. I want to talk to you about the Skull of Satoshi. The I love the response that you have on this.

[00:20:41] Preston Pysh: And, hey, you know what? Come on down to the conference in Miami here in May, and let’s have a, let’s have a real conversation and not some propaganda, you know, pictures and, and, and whatnot. So, tell us about what this thing is for people that don’t even know what it is, tell ’em what it is and then tell ’em what your response was.

[00:20:59] David Bailey: So Skull of Satoshi is an art piece that was commissioned by Green Peace, which is an environmentalist group that took a massive bribe Chris Larson of Ripple. And so they got a, a very talented artist to make something that they thought was going to be like, I guess a dig at a Bitcoin community. And, you know, all things are good for Bitcoin.

[00:21:21] David Bailey: So the community embraced it, loves it, and wants to co-opt it. And did co-opt it. And yeah, so we, we try to get the school to come to the conference. We’ve been in talks with the, the artist cool guy. He’s been, he’s starting his orange pill process now. He’s gone to Greenpeace to try to get Greenpeace to agree to come and do a debate, bring the skull, you know, Greenpeace overall.

[00:21:49] David Bailey: So some inside baseball. Green piece overall was pretty thrilled with the result because Green Piece, as like the larger environmental organization. They only care about like the environment. Like that’s their macro goal. Yeah. You know, Chris Larson’s just a donor that they’re like shilling for that like specific, change the code, you know, thing to get 5 million bucks.

[00:22:10] David Bailey: But like at the end of the day, that does not matter to them. And so when they saw this thing going viral, they’re like, you know, raised awareness about Greenpeace massively on social. This is the biggest thing we’ve done on social in a long time. So they were actually like kind of excited about the response, but we have been unable and, and the artist has been unable to get them to engage with us directly about coming to the debate.

[00:22:32] David Bailey: So what we thought would be kind of cool would be like we do a debate, we have some truly impartial judges and we also throw up like two QR codes, like for both debates. Oh, that’d be awesome. Debate. And like whichever QR code raises the most funds. Yeah. Like that’s the people’s choice of who won. And you know, if they win all the funds go to the charity of their choice.

[00:22:54] David Bailey: And if we win all the funds, go to the charity of our choice. And then it’s like, okay, they’re like, there’s some skin in the game, there’s some, some economic value. My lord, to rig the vote, you can go on there and put 5 million bucks in the vote. But anyway, so we’ll see what happens. We’ll see what happens.

[00:23:11] Preston Pysh: I absolutely love this. This is well, no, because I mean, it really forces, Hey, we want to engage, we want to have a conversation. Let’s, let’s sit down and let’s talk about the facts around the matter. Let’s throw out some stats and like, Hey, let’s do this. And then when it comes to that moment, they cower and hide in the darkness right?

[00:23:30] David Bailey: May maybe there’s a chance they’d be decimated. Yeah. Oh, they would get, be honest. I mean, they would get decimated. Asking the community, like who is, who would be our chosen champions? Like we had so many people reach out and it’s like we could put together like the Avengers of Bitcoiners that like each have a specialty and a different silo of like, you know, Bitcoin’s energy consumption and how it works and why it’s good for the environment.

[00:23:51] David Bailey: It would be like an NFL team, you know, playing against like a peewee, you know flag football team. But anyway, we want to see it happen. And yeah, that’s kinda like the, the point of the conference is like, how do we create a shilling point for the entire industry where we can like focus our attention to get the real world to engage with us.

[00:24:16] David Bailey: So get the real world to see Bitcoin’s about, to get the real world to see what Bitcoin culture’s about, to create a platform for companies that, companies countries that like want to. Let’s say there’s a, a marketing benefit or a PR benefit to them about engaging Bitcoin. We want to give them a platform and be like, okay, this is why you need to make the leap.

[00:24:37] David Bailey: It’s, you know, not just the technology you’re benefiting from, it’s also the, the story you get to tell the world. And, you know, it’s hard to, to get that kind of buy-in unless you can create a platform big enough that, that the juice is worth a squeeze for them. So that’s where we want to turn it. We want it to be, you know, where the biggest announcements, the biggest developments in the Bitcoin world are announced and showcased and, and debated and challenged, and that those kind of conversations drive the energy over the course of the year.

[00:25:08] David Bailey: That’s our goal, that’s our vision.

[00:25:10] Preston Pysh: You know, David, I took my wife with me last year to the conference. We had an absolute blast. It was the first conference she had ever gone to with me. I’ve always just kind of gone by my, she’s like, you go do your thing. I’m staying at the house. I was like, come down.

[00:25:23] Preston Pysh: It’s in South Beach. It’s, it’s a blast. We can go out and, you know, go to some awesome restaurants and just have a good time together. And so she came and she was just like, this is massive. This is, this is unreal. And I don’t, I think the numbers were like 30,000 last year, right?

[00:25:38] David Bailey: 26,046.

[00:25:41] Preston Pysh: My god. 26. 26.

[00:25:43] Preston Pysh: Okay. Okay. 26,000. So David, I guess, I guess where I’m going with the talking about the conferences for me as an entrepreneur, I look at this and I’m just saying when you, when you grow something from the ground up and then you see how massive this is, I mean, you got Shell coming in, you got 26,000 people coming to this conference I want to say Serena Williams was at the one last year.

[00:26:08] Preston Pysh: Some of these like unbelievable athletes, like this is insane. And you grew it literally from nothing to this. Walk us, walk us through this, this process as an, as an entrepreneur. Like what are some of your thoughts on this is crazy.

[00:26:24] David Bailey: Yeah. Well, I, so I will say, you know, every mistake you can make in your entrepreneurial journey I’ve made sadly I’ve made something, many of them multiple times.

[00:26:35] David Bailey: So like, it has been a decade plus long journey to, to build the requisite. Worldview and experiences to, to kind of get us to launching the Bitcoin conference. But we made the decision in 2018 that we were going to go Bitcoin only. And like, you know, when we got into Bitcoin, there was only Bitcoin and then came blockchain and crypto and all this stuff.

[00:26:57] David Bailey: And so it was just kind of a natural progressive progression of our space. Like these things are all children of Bitcoin and then before you know it, you’re doing more stuff that’s not Bitcoin related than you’re doing Bitcoin. And so that was, that was, you know I would say very perspective shaping part of our journey as a company.

[00:27:16] David Bailey: But in 2018, we decided to go Bitcoin only divest everything we had that wasn’t Bitcoin. And you know, our, our kind of belief was like, okay, Bitcoin is the only legit thing here. And it’s humanity’s best chance at escaping the, the. Invisible prison that we’ve been placed in. And so we need to give it everything.

[00:27:37] David Bailey: We have to have victory with Bitcoin. It deserves that. And so, you know, that means like, okay, Bitcoin needs to have a conference. It needs to have a dedicated media publication. Somebody needs to be covering news about it. Like there are things that the ecosystem, the community, the industry users need to help accelerate adoption, interconnectivity, new companies getting started.

[00:28:02] David Bailey: None of these things exist. At the time the Bitcoin community was fractured. They had just gone through the block wars. People hated each other. Mm-hmm. Mm-hmm. And so, so we decided we, we needed to make a Bitcoin only conference. And the, what Bitcoin only meant to us was Nakamoto consensus. So no hard fork.

[00:28:18] David Bailey: You know, it’s just like we’re, but we’re not going to be like re-litigating. The past people were too obsessed with scaling, scaling, scaling, scaling. It’s like, okay, scaling wars are over. It’s been determined. Nakamoto consists, this is what went out. BTC is Bitcoin, let’s just go. And people thought it was an insane idea, thought it wouldn’t work, thought no one would back it.

[00:28:37] David Bailey: Thought crypto was the future, thought it was economic suicide for us to do this. But we just, we forged ahead and the first conference was in 2019. We had 2000 people. And it was an amazing event. And a lot of great companies came together at that event. I think Swan got started to have that conference.

[00:28:55] David Bailey: Got started at that conference. A lot of new people joined Core from that conference. It was, it was, people had not been to a Bitcoin conference before. And, you know, our vision for that event was like Bitcoin 2013, which was kind of what got me really sucked deep down the rabbit hole of, of the Bitcoin conference and it hadn’t happened since.

[00:29:13] David Bailey: So 2020 comes along. We were going to have like a 4,000 person event, but we had to cancel it cause of covid and immediately our focus was like, okay, we have to do this conference. When’s the earliest we can do it? So there was a whole trial and tribulation we had to go through to, to actually put on a conference in 2021.

[00:29:31] David Bailey: And we were the first conference back from Covid in the world to happen. Like, people don’t know that, but like, like our event was the first, and the only reason we were able to do it was because the Bitcoin community is fearless. And we were able to say stuff like, if you’re afraid of dying, don’t come to the conference.

[00:29:50] David Bailey: Like, you know, if the American Revolution wasn’t canceled over yellow fever, we’re not canceling the conference over, over, you know, COVID and-

[00:29:58] Preston Pysh: And you were in Florida?

[00:30:00] David Bailey: Well, we had to move to Florida to do oh, okay. California. Oh, okay. Yeah. So we negotiated with we went to, basically started going to cities and saying, who’s willing to partner with us so that we can do this event?

[00:30:10] David Bailey: And, and Mayor Suarez and DeSantis forged the path for us to do it. And people were like, no one’s going to come to this. You’re insane. You’re killing people. I mean, we had so many people try to stop us. It was like insane. And we’re like, nothing is going to stop us. This conference must happen. And it, it was insane.

[00:30:27] David Bailey: I mean, it was 13,000 people. Yeah. I was there. It was amazing. It was amazing. And so it was just more validation that having a mission of driving a business. And having that being the driving purpose for your team, the driving purpose for what you do like that authenticity gets rewarded by who your, your true community is.

[00:30:50] David Bailey: And it doesn’t matter what the media says, it doesn’t matter what a politician says, like a movement is authentic to the movement. So we did that and that was an awesome event. And then we did 2022 again in Miami. And that was 26,000 people. So we went from four years in effectively three unique events, a 2000 person conference to a 26,000 person event.

[00:31:14] David Bailey: That is, was the biggest finance conference in the world. Not just Bitcoin or crypto, but all finance. I mean, it was an in insane, it’s unreal rollercoaster of growing our team. It’s unreal figuring it out. We got scammed by so many. I mean, it’s been just a, a, a rollercoaster. So this year, 2023, this is going to be like our first bear market conference Yeah.

[00:31:35] David Bailey: Since the cycle started. So like, you know, there’s, there’s pressure on us from that perspective. We’re expecting, like we, we planned on a 50% reduction in attendees. So like, I think that’s basically where we’re going to be. That would be like 13,000 people. But the attention, the attendees, it’s, it’s a derivative of the price.

[00:31:53] David Bailey: Like the price definitely dampers, all of these things. So I also think that when you’re focused on like the blue market side, there’s so much glam, there’s so much speed, speed, speed, speed, speed. That the things are the most valuable things don’t get enough attention. And the things that are less valuable but more fun.

[00:32:11] David Bailey: Get too much attention. This is a bear market conference. This is a conference for builders. So like, you know, instead of lobster, we’re eating like mayonnaise sandwiches, like instead of staying other words, Carleton, we’re sleeping in the tent city. But it is going to be a fantastic conference and it’s focused on the most interesting things happening in Bitcoin, the most interesting projects being built in Bitcoin.

[00:32:32] David Bailey: We have really a souped up open source stage that we’ve, we’ve given a lot of passes to the open source developers to get them engaged and involved and give them a platform. We have an entire part of the conference that’s focused on what has happened over the past 24 months as an industry and what changes need to happen to our industry going forward as a reflection upon a lot of mistakes that were made, A lot of things that were allowed to happen that shouldn’t have been allowed to happen.

[00:32:56] David Bailey: What’s going to happen with the GBTC Trust? You know, what’s going to happen with the restructuring of the dozen bankruptcy estates that are out there representing millions of people? Some of the kind of. Issues of our day, let’s say. And try to suss out what the future looks like and what, what needs to happen.

[00:33:14] David Bailey: And then we have our, our main stage where we’re bringing in a lot of awesome announcements. We have some really big ones planned. We have some big ones in the works that we’re, we’re hoping materialize, like the, the best juiciest stuff that comes in, in like the last, you know, 50 days or so. So, but we have a couple presidents that are going to be there.

[00:33:33] David Bailey: So I like, it’s, it’s dope. I mean, it’s, it’s, wow, it’s very, it’s very cool to. Get to see like what happens behind the scenes because the public only gets to see like 10%. It’s like an iceberg. Yeah. So like for, for everything that gets announced on stage, there’s nine other deals that were being worked where we’re trying to make it happen.

[00:33:52] David Bailey: And no, almost happened, but it didn’t get quite there. And so yeah, I mean there’s just so much exciting stuff going on with Bitcoin and it’s interesting to see like those who have the stomach to go through the, the price decline. Yeah. And those that don’t, which I understand, the people that don’t like it, that’s part of the journey of, of building conviction is like watching the volatility from afar and realizing, oh, I could survive that too.

[00:34:15] David Bailey: But it definitely, you know, there’s definitely a lot of bodies along the way. So I’m, I’m very appreciative of our, of our corporate sponsors that are, you know, sticking up to the, maybe. Slack that they’re getting from different, different parts of the mainstream world and participating. I’m, I’m very bullish on energy companies in general getting involved in Bitcoin.

[00:34:36] David Bailey: I think that’s going to be a very big trend of the next cycle is, is yeah, household names, having divisions focused on that in the same way that Intel has a division now focused on a six. And yeah, I’m, I’m excited to see some of the more controversial discussions too. I mean, we have Casey Rodarmor is giving a keynote on Ordinals and we’re going to have a debate around ordinals.

[00:34:59] David Bailey: Are they, are they technology, are they graffiti? But, you know, we as like an event, we try to have, we try to be a platform for people to unite under common. Ideas. And, you know, people have many different worldviews, Bitcoiners, but there are things that unite us. And so we try to be a platform for as many ideas as possible and, and let people share their perspective, battle it out, let the good ideas thrive, let the bad ideas die.

[00:35:25] David Bailey: And we try not to be editor in chief of what is and isn’t Bitcoin our, our editorial standard is like, if it happens on Bitcoin, if it touches Bitcoin main net, it’s Bitcoin. Okay. Whether something is valuable or should be done or whatever, that’s for the community to suss out for themselves. Yes.

[00:35:40] David Bailey: But like, you know, if, if it’s on Bitcoin, it’s, it’s relevant, it’s topical, and it can be a part of the conference. If you’re a company that has a Bitcoin product and you’re there to only talk about your Bitcoin product, you can be a part of the conference. If you don’t have a Bitcoin product, you can’t be a part of the conference.

[00:35:54] David Bailey: So that’s an objective standard. We make mistakes, but it’s like that’s the, the point of the event is how do we accelerate hyper Bitcoin? How do we bring people together? So I, I think we’re, we’re doing our best to stay aligned to that North Star. Love it.

[00:36:09] Preston Pysh: And I’m really looking forward to the a, a conference here in May.

[00:36:14] David Bailey: Your wife got spoiled for last year’s events, so I don’t know, maybe be like, Hey, wait until you know, the Hal Conference come. I want her to like, be like, oh, there was a huge rock concert here last year. Where’s that? It’s like no, she, you know what she loves.

[00:36:28] Preston Pysh: She just loved the being there in South Beach, just trying out the different foods and just running into various people that I’ve talked about in the house that she’s never like met in real life.

[00:36:38] Preston Pysh: And so it was just, it was fun to be able to, like I hung, I hung out with Jeff Booth a lot. She got to meet Jeff’s wife and in person. And so, you know, stuff like that is just what, what it’s all about. And really just to kind of enjoy the company while you’re down there.

[00:36:53] David Bailey: Yeah. Hey, you’ve been talking. Hey.

[00:36:55] David Bailey: Hey. It’s about meeting. It’s about meeting your, your next founder. It’s about co-founder. Yeah. It’s about meeting your next investor. It’s about coming up with the next idea to improve Bitcoin. It’s about learning how Bitcoin works so that you can evangelize it to others. It’s really a unique pilgrimage for Bitcoiners.

[00:37:11] David Bailey: And that’s a good word for it. It’s just getting started. I mean, like, our vision for this event is something where a hundred years from now, it will be Christmas, mass, it will be, you know, a journey to Mecca and we’re going to bring it to every continent. And you know, we’re going to orange kill the world.

[00:37:29] David Bailey: I mean, that’s the, I love it. I love it.

[00:37:32] Preston Pysh: Hey, you’ve been, you’ve been very outspoken on the GBTC, Barry, DCG. I think the, the comments you’re making are, are so important to kind of cover. Walk us through GBTC, just so people understand. I think most people listening to the show understand it. But then talk to, talk to us about like some of your, your gripes and concerns.

[00:37:56] Preston Pysh: I know you’ve got a, a campaign redeem GBTC campaign Yeah. That you’ve started. So talk to us a little bit about this.

[00:38:03] David Bailey: Okay. So there’s a lot to this. So I’m going to like, and I was describing it from the start to someone the other day, and it was like, wow, this takes a really long time to like, to walk through.

[00:38:11] David Bailey: So we’re going to go with like the most consolidated version, but basically GBTC is a trust that you can buy in your retirement account that holds Bitcoin in it. And it’s run by a company called Grayscale, which is owned by a company called dcg, which is run by a guy named Barry Silbert. And it operate other trusts too, for Ethereum and other cryptos.

[00:38:30] David Bailey: But the B Bitcoin one is the biggest. In fact, the trust is the biggest single holdings of Bitcoin in the world. So it has about 620 630,000 Bitcoins in it, which represents, it’s about three point something percent, 3.3% of the world’s Bitcoin supply. So that’s like what it is. What’s going on with it is that this vehicle that is a trust that the Bitcoins are parked in, has shares of the trust that you can buy and sell in your retirement account.

[00:39:00] David Bailey: You can trade to other users just like a stock in a company, and they marketed and sold this product. The reason you’d want to buy it is because the shares should reflect the value of the Bitcoin sitting in the trust, and so that way it’s like a proxy for Bitcoin that you can get in your retirement account.

[00:39:17] David Bailey: Well, for a long list of long list of reasons, we can get into the most important. The value of those shares relative to the amount of Bitcoin sitting in the trust has not performed well. In fact, as recently as a month ago, it was trading at a 45% discount to the actual value of the Bitcoin in the trust.

[00:39:38] David Bailey: So you bought this thing thinking, Hey, I’m buying one Bitcoin and I’m buying one Bitcoin worth of Bitcoin in my retirement account. And then you check back in a year later and now you’re, you only have half a Bitcoin in your retirement account. What happened? And so that’s the, that’s the current situation.

[00:39:57] David Bailey: There’s about a million people that own this trust across all the trust. It’s even more, and collectively they’re down about, well the, because the price of Bitcoin’s gone up. I don’t know the exact number, but let’s just call it roughly 12 billion in value. So in terms of the scale of losses that have, have been realized, those losses are greater than, than FTX and Alameda.

[00:40:21] David Bailey: And the number of users affected is on a similar scale, but actually the collateral damage is much worse because what also went down with Grayscale was Genesis. The lending desk of Barry and Genesis took in deposits from users as basically a bank, and it had, let’s call it another million users that deposited its money there, and it went bankrupt during this process as well, and lost all of those users, their deposits.

[00:40:46] David Bailey: So the really, the collateral damage is more like maybe 2 million people. And the, the reason that these two things are tied together is because Genesis took in deposits from all these users promising a fixed rate of return. There’s some parallels to maybe some things happening in life here, but a fixed rate of return, Hey, we’re super safe.

[00:41:05] David Bailey: Come give us your Bitcoin or your USD and we’re going to pay you 8%. Completely safe. These are completely collateralized loans that we’re making. Trust us. People said, okay. They take the, the money that their Depositers gave them, they give the money to effectively Ponzi schemes. So Alameda, Three Arrows, Voyager, Babel, Celsius, every company you’ve heard of that’s gone bankrupt in 2022.

[00:41:33] David Bailey: They were giving massive loans to, on the condition that they used those loans to deposit to, to basically buy Bitcoin from them to deposit into the Grayscale trust. So they used depositor’s money at Genesis to subsidize sketchy ass Ponzi scheme institutions that they didn’t really do any, you know, risk controls on, or, or credit quality checks obviously, so that those institutions would then put money in a different vehicle that Barry owned Grayscale.

[00:42:08] David Bailey: And once the Bitcoin goes into the trust, the way they’ve structured the trust is such that the Bitcoin can never lead. So at the end of the day, Genesis depositor’s money ended up in Grayscale’s. Trust Genesis is bankrupt, and those users aren’t getting paid back. And Grayscale is trading at a massive discount to value because they pumped so much.

[00:42:33] David Bailey: So many shares out these institutions that dumped them. Thinking that they’d be able to dump them on a retail for a profit. And now we’re in a bad situation where a lot of people are hurt, but Barry still has control of 630,000 Bitcoins that he’s sucking two 2% out of per year and putting in his pocket when you know, in reality what he did was criminal and he needs to go to jail and the Bitcoin that is in the trust needs to be returned to the shareholders.

[00:43:01] David Bailey: So that they can real realize the value of the investment that they were sold. That’s really the only equitable way to afford, and they’re, they’re claiming that they’re going to turn the trust into an etf. You know, first off, I’m very skeptical that, that that happens given all the other circumstances around this case.

[00:43:18] David Bailey: Second off, I’ve been told that even if they did get s e c approval for an etf, they would not convert to an ETF intentionally for several years because if they convert into an ETF and people were able to remove their money, their AUM would drop massively and the fees that they would have to charge would drop massively.

[00:43:37] David Bailey: And so they might lose 80%, 75% of their fee income that they’re generating from the trust if they actually became an et. So Barry needs that money because that’s the only way he’s going to keep DCG, his parent company from going bankrupt. So this whole SEC lawsuit is just, it is just, it is just a cover story.

[00:43:58] David Bailey: So they can delay making any changes to the trust, allowing anyone to take their Bitcoin out or reducing the fees while he sucks the money out from the trust and puts it in a DCGS pocket. And like, this is, I ultimately, like, he’s not going to be successful in doing this. There are, are a lot of people trying to stop this and like, let real quick, redeem gbtc.com.

[00:44:21] David Bailey: If you are a shareholder of Grayscale, please go to redeem gbtc.com, sign up for updates, let us know how many shares you own. But there are a dozen plus organizations companies, institutions that are driving forward a campaign. To get the trust redeemed and the fees reduced. And there are many different tactics and strategies that are being deployed.

[00:44:44] David Bailey: You know, our campaign redeemed, GBTC has now well over 3000 shareholders that have signed up representing over 30% of all the shares of, of Grayscale which is at 8 billion bucks or whatever right now. And our role is, is coordinating all these different efforts with the, the relevant shareholders that are needing to be included in.

[00:45:06] David Bailey: We’re going to have some news on this front soon. I was hoping we’re going to be able to, to go into detail on it today. There are some class action lawsuits that are coming that we’re going to need to have people sign on to in order to hit certain thresholds that are required. I can’t share more detail about it yet, but I highly recommend people sign up for redeem gbtc.com if they would like to redeem their shares at some point in time in the future and see the discount go away.

[00:45:32] David Bailey: And if I’m a creditor at Genesis. And I have a restructuring plan that I’m looking at that’s been presented by DCG about what Genesis should look like in the future. I highly recommend that you reject that restructuring plan. You put forward a new restructuring plan in which you put DCG in the bankruptcy and you take control of DCG.

[00:45:53] David Bailey: That’s how you’re going to maximize the value that you get returned. There are three parties involved in this situation. Genesis Grayscale, DCG. Okay. There’s only one thing of value at the whole, the whole situation of real value Grayscale. Okay? There’s a deal to be had to redeem Grayscale and distribute part of the cash during that redemption to the other parties involved.

[00:46:20] David Bailey: Genesis and and DCG, if they don’t reject Barry’s restructuring plan. The money from that transaction, that settlement that’s going to occur at some point in time in the future is going to flow to Barry. And so maybe Barry collects a billion and a half dollars and he turns around and pays out the Genesis creditors 500 million of it.

[00:46:37] David Bailey: So he can make good on his debt coming up in a few weeks, but he shouldn’t get to keep the other billion. So, you know, I’m of the mindset that Genesis creditors and grayscale shareholders should be working together. We should be sending Barry Silver in the bankruptcy. And we should be working on a deal between these two parties so that any value that can be captured through a redemption process of the grayscale trust can go to the victims of Genesis, not to the perpetrator of the crimes.

[00:47:05] David Bailey: So that’s, wow. That’s yeah, that’s a concise version of what went out. I can, I can go in a lot more detail about some of the things that were done, crimes that were committed, unethical behavior tactics, people’s legal approaches that they’re taking to bust the trust.

[00:47:21] Preston Pysh: So David, that’s like questions I’ve, I’ve read about it on the fringes. I’ve seen the posts. I’ve seen your posts and I mean, the whole thing just smells like rotten fish, like when I’m looking at it. But, but I could never piece together how it all fits together in such a sim simple way that you just described it. I, I want to foot stomp the redeem GBTC link. We’re going to have this in the show.

[00:47:46] Preston Pysh: If you’re listening to this and you hold GBTC, it, it’s probably in your best interest to click on to open the show notes right now. Click on the link, go there, have it open in your web browser. If you don’t have time to fill it out right now, open it up in your web browser so that you can go back to it.

[00:48:00] Preston Pysh: But we’re going to have a link in the show notes for what David just talked about.

[00:48:04] David Bailey: Take 10 seconds to sign up. And you know the, there is a great lawsuit. You can find it on the Redeem GBTC site just recently filed by Alameda, the bankruptcy estate of Alameda against Grayscale, where they go into detail on violations of the trust documents, breach of fiduciary duty, breach of breach of contract.

[00:48:21] David Bailey: Very well articulated case by arguably the best law firm in the country. And, you know, there’s some, some stunning, some stunning items in there. But one of the actions that they’re taking is they want to claw back. Ill gotten fees from Grayscale, which, you know, Grayscale has charged the trust almost $2 billion in fees over the past several years.

[00:48:43] David Bailey: And so if we’re able to claw back those fees, which by the language black and white in the trust documents are excessive and bad faith, that’s a direct, tangible benefit that could pay out to all of the shareholders beyond just their ability to get redemption. And so it really behooves you to sign up on the website to get to say, up to date on this.

[00:49:03] David Bailey: You can see just from the clawback of Ill gotten fees, you know, several percent benefit on your GBTC position. And that’s just that piece. And then you have the redemption piece, which is the discount. Like if we’re able to make redemptions happen, you can close that discount entirely. So please, please, please sign up.

[00:49:21] David Bailey: You have nothing to lose. You have a lot to gain. And you know, frankly, Barry Silver is a, and the Michael Shig are bad actors, that are criminals. And that a lot of the, the pain that’s been felt in our industry over the past several years, they are at the source of the Alameda. Celsius, you name it, would not have been able to happen without the loans given by Genesis using depositors’ money so that Barry could enrich himself at Grayscale.

[00:49:54] David Bailey: The guy’s gotta go. We, he’s, he’s an anchor around our industry, the neck. He funds coins that are out there. He puts them in trust and he sells them to retirees. The guy’s gotta go.

[00:50:04] Preston Pysh: So when, when I look at the, what’s happened in the last year and a half, the amount of selling pressure and, and fierce volatility through all that selling pressure, I kind of feel like we’ve produced a super oler through, through that painful, you know, process.

[00:50:21] Preston Pysh: You’re a Bitcoin OG, you are around during Mount GOs. Is this, is this akin to Mount Go? Is it more, is the Hoer pressure that’s happened over the last year and a half stronger than Mount Go? Or like, how, how would you equate this to previous periods?

[00:50:37] David Bailey: So I would say like, okay, Mount Gox is what’s known. From that period.

[00:50:42] David Bailey: But in 2013, in 2014, exchanges went down like, like, I mean, power almost every exchange. Yeah. Like almost every exchange got hacked, exit scammed, whatever. So, you know, while maybe like this go around, only, you know, I, if you say there’s 50 million or people that own Bitcoin, you know, maybe 20% of those users have been affected, like in the early days.

[00:51:11] David Bailey: I really don’t know anyone who has ever avoided getting hit on at least one exchange that went under and they lost all their Bitcoin under, like, not your keys, not your coin that came from Yes. A very rough period of bitcoin’s. So I think like in terms of the percentage of people affected, it’s probably lower now than it is then.

[00:51:32] David Bailey: What makes this one more brutal is that there for, at least for the OGs, there’s a lot of OGs that felt like they had learned that lesson. And kept that lesson very, you know, was very well ingrained, and then it got allured by the power of borrowing against their Bitcoin. Which is a, you know, if you’re a hardcore Bitcoin, you know, and you have tens or hundreds of millions of dollars in Bitcoin, like you don’t want to sell your Bitcoin, but you, you got all this value, you want to be able to make investments or run a company or what, buy a house, what.

[00:52:08] David Bailey: And so a lot of OGs borrowed against their Bitcoin thinking that, Hey, these are fully collateralized position, and I don’t really have counterparty risk, you know, I’m working, especially with Genesis as an example, it’s the adult in the room. It’s the best institution in our space. And so a lot of OGs got decimated, crushed in this, in this cycle.

[00:52:29] David Bailey: And I mean, people with huge Bitcoin holdings got decimated. And it’s, it’s been brutal to watch. I mean, I will say, like I’ve talked, like, you know, the good thing about Bitcoin is that it gives you a good ability to what’s it called? Recuperate from your losses because you have, you know, a promise about the future and you think, okay, I’ve made it before.

[00:52:49] David Bailey: I can make it again. But dude, some of the best OGs that have just lost their entire stack in a way that I’ve never seen before in a way that was much worse than, you know, 2020 14, 20 13. So that’s been sad to watch in a good, a good. A good reminder that it doesn’t matter how long you’ve been around in Bitcoin, there’s always the new flavors to scams and, you know, not your keys, not your coins.

[00:53:13] David Bailey: Yeah. That’s just the bottom line. Very well said.

[00:53:16] Preston Pysh: Yeah. We covered on this show. We, we had Zach Prince on from blocky and like the one question that I just could never wrap my head around was you have, you have retail investors that are over collateralized, which means there shouldn’t be any risk, but you also have institutional investors with sizable positions that are not over collateralized, and you’re co-mingling the two within your company veil.

[00:53:42] Preston Pysh: And so like, how do you protect the retail, the retailers that are over collateralized, if these other ones run into issues with their counterparty risk and they’re, they touch the, the legacy system in a major way. And I talked about the idea with Jason Williams wants, and then I also talked about it at the end of one of the podcasts I did with, with Zach Prince and.

[00:54:05] Preston Pysh: It’s one of the main reasons why I didn’t have any money on in any of these things, because it was just like, if I can’t quantify these people that are under collateralized, how do I know the whole thing? It was almost like a CDO I, I guess that’s how I, how I viewed it as they were doing this is like in the 2008 crisis, the consolidated debt obligations is like, you just don’t know what’s in that basket and if you can’t audit it, like, you know, if you’re putting funds in here, it better be a

[00:54:27] David Bailey: small amount.

[00:54:29] David Bailey: It, it’s only as good as their weakest counterparty. Yeah. And that’s right. You know, it’s like, oh, our portfolio is 95% solid. You just got a couple liabilities that are not good. And it’s like, okay, well those are liabilities that implode the whole thing. So, yeah. The and the, some of the behavior, like Unchained Capital has product where you can borrow against your Bitcoin.

[00:54:50] David Bailey: But each loan is segregated. And like the counterparty risk is unique to your specific loan, and they’re over collateralized. They haven’t had the default on any of them. So like there’s a, there’s an idea there that has substance. And I hate to like throw the baby out with the bath water when talking about this, but when you are blending the risk as you were describing, where you have some parties that are, that are over collateralized and you have un other parties that are a much bigger size that are under collateralized dramatically that I, or when you have a collateral that you say makes them over collateralized, but the quality of that collateral is not good and you know, it’s not good.

[00:55:29] David Bailey: Yeah. Like that, that’s an issue. And that is the footnote detail. That brought down every one of these businesses and turned out to be the only detail that mattered. And at the end of the day, no matter how clean your business was, your yield came from a Ponzi scheme somewhere else. And it was a daisy chain of firms that had quote different credit qualities that at the end of the day, the yield all derived from the Ponzi.

[00:55:54] David Bailey: And when that one blew up, it just cascaded to the slightly not as bad Ponzi. The, the Ponzi slightly not as bad as the one before that, to the one slightly, not as bad as the one before that. And so all we get all the way to the source of the Ponzi, which is DCG, which is the last one to go down.

[00:56:09] David Bailey: And, and of the biggest scale. And yeah. It’s, it’s, it’s going to leave an impression and, and imprint on our industry forever. Like, just like how Mount Gox is something that still is talked about today and is not forgotten, this will not be forgotten. 10 years from now, it’ll take new flavors where we’ll get, we’ll get taught the same lesson, but never again will the lending markets in, in Bitcoin look and act like they did in this cycle for the better.

[00:56:37] David Bailey: And that’s the power of the free market. And that’s the power to go back to the very beginning of our conversation about the cost and who bears the cost and how our how are cost who’s the winner and who’s the loser. Yes. And you know, fundamentally the losers here are the people who made the wrong decision.

[00:56:57] David Bailey: To trust count, to trust institutions that lied to them and they didn’t do their diligence on. Yeah. And in the future, they’re not going to make the same mistake, at least in the same way again, and that’s the behavior that we need ingrained from this. It can’t be, imagine how catastrophic it would be if there was an entity that came riding in to save the day at Alameda and bailed out FTX and Alameda’s Ponzi scheme and bailed out Barry Silbert’s Ponzi scheme and allowed them to keep running the show.

[00:57:25] David Bailey: And they didn’t have to bear any of the consequences of the fraud that they ran. That would be, you just enable them to run the fraud bigger and bigger and bigger.

[00:57:34] Preston Pysh: Amen. David. That’s it. And, and that is the fiat system that we just described, right?

[00:57:39] David Bailey: The fiat system? Yeah. Yeah, exactly.

[00:57:42] Preston Pysh: Oh, we got to end it. I have more questions.

[00:57:46] Preston Pysh: I could talk to you all day, man. Let’s wrap it up. That, that, you, you can’t end it on a better note than that. That that is the fiat system. We we’re not bailing anybody out. If you make poor decisions, the Bitcoin falls out to your hands. No matter how bad you want to keep holding them, it’s going to leave and it’s going to find smarter, more risk averse people who are making sound decisions right? That’s, that’s just what it does.

[00:58:10] David Bailey: And when you talk about which system do you trust when Bitcoin recovers from what just went down and we went through our own OA financial crisis and we handled it in, in a year and a half time. Yeah. And only the people who took the risk paid the consequence. And we built back stronger.

[00:58:26] David Bailey: Yes. What an indictment of the fiat system where it’s bailout after bailout and perpetual crisis that can never be cured. And here we are, the illegitimate currency, and we’re able to restructure ourselves and build back like a free market should. Yes. Yes. All right. Preston, thank you for having me on.

[00:58:46] Preston Pysh: Thank you so much.

[00:58:47] David Bailey: Let’s do it again, dude.

[00:58:48] Preston Pysh: Thank you so much for making time. We’ll have a link in the show notes to the Redeemed gbtc campaign. We’re going to have a link to the Miami Conference, which I hope to meet. I’m going to be there, David, you’ll be there. Hopefully we can meet some of the people listening to the show if they decide to come on down.

[00:59:03] Preston Pysh: Is there anything else you want to highlight? I know you’re active on Twitter. Anything else?

[00:59:06] David Bailey: Yeah, redeemgbtc.com. We gotta bust the trust. We have no choice. And even if you could include that in the title of this podcast, that domain. But thank you for having me on and I hope your listeners got some value from the conversation and hold your Bitcoins.

[00:59:22] David Bailey: This journey’s just beginning. We got a lot more painful lessons to learn in the future, so thank you. Hold on tight. Thank, thank you, sir. Appreciate that.

[00:59:29] David Bailey: Cool. All right, Preston. Thank you.

[00:59:31] Preston Pysh: If you guys enjoyed this conversation, be sure to follow the show on whatever podcast application you use. Just search for, We Study Billionaires. The Bitcoin specific shows come out every Wednesday, and I’d love to have you as a regular listener if you enjoyed the show or you learned something new or you found it valuable.

[00:59:39] Preston Pysh: If you can leave a review, we would really appreciate that. And it’s something that helps others find the interview in the search algorithm. So anything you can do to help out with a review, we would just greatly appreciate. And with that, thanks for listening and I’ll catch you again next week.

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