Pubkey’s Place in Bitcoin Culture with Thomas Pacchia

23:10Alex Thorn:They bought Bitcoin six months ago. Maybe they bought the dip in April, right? It went down to 74.5. Well, since then, you know, if you just huddled and opened it up, you're only up slightly. I mean, the block clock is, I guess, offline at the moment, but you're only up slightly. Meanwhile, if you bought the equity dip, if you bought these other dips, like there's an opportunity cost to capital, of course. And so, yeah, I think whales have been – they were distributing throughout the year. We've seen that come down a little bit now, I think, because people that own a lot of Bitcoin tend to be smart and they want to sell into an uptrend, not into a downtrend that's selling into weakness.

23:47Alex Thorn:But I think there's real questions about like on a shorter term horizon, will or not, where are you meant to allocate your capital? And if you bought Bitcoin six months ago, you're just up slightly. If you bought it a year ago, you're down and you're looking like, what do I have to show for this one year of capital allocation, right? I mean, a loss when S &P is basically at all time highs? It seems like why are you trying so hard? I think that's a reasonable question for people to ask. It'll flip at some point. and those are levels you're thinking about as well. Yeah, absolutely. All right, well, Bimnet Abibi, my friend from Galaxy Trading, as always, thank you so much.

24:24Thanks for having me.

24:26Alex Thorn:Let's go now to our guest, Thomas Pacquia, founder of PubKey. Thomas, welcome back to Galaxy Brands. Thank you. It's always good to be back. I always love having you on. It's got to be your fourth appearance, maybe? Yeah, three or four. I think it might be on four. Yeah, well, if we count the bus in Miami. Then it's definitely four. I forgot we did that episode. That was a great episode. It was you and Drew Armstrong. It was so hot in that bus. And we're all just like sort of like a little moist. I was very exuberant coming back from that Miami. I remember because I asked Phineas. I had some B-roll footage.

24:57Alex Thorn:We put it up. I did a rap song about it. I said, Colin Zav loves me. I forget what the line was. It's like the main road in South Beach. Yeah. I think it was me, you, and Drew Armstrong. That was a fun one. It was fun. But it's always good. This is my favorite podcast. Well, that's very nice of you. And that was the last year in Miami. That was a great conference. That would have been like May 23 or so. You guys had the PubKey pop-up at Mac's Club Deuce. Yes. That's a crazy bar. So I actually just went back. So I was in Miami for the Cantor Conference a couple weeks ago. And Mac's Club Deuce is my favorite bar in the world, even more so than PubKey.

25:36So we hosted our very first event at Mac's Club Deuce for that conference. That was the first thing that we hosted. And then when we hosted President Trump at PubKey September of last year, I asked, I was like, do you want me to suit up for the president or should I be like dive bar authentic? And they were like, authentic.

25:53Alex Thorn:Like you asked your team? Yeah, like the advance. And I was just like, how should we make this look? And they said, definitely go authentic. Like, you don't need to wear a suit. I was like, okay. So I wore a Mac Club Deuce members only jacket that says cash only on the front. Yes. So when I went back for the Cantor Conference, the guy saw I was wearing the orange pub key hoodie, and he was like, oh, you're the guy. Just like rounds on the house. Oh, let's go. Yeah, it was good. I love that bar. One of the things that is great about it is, well, one, you can smoke cigarettes inside there. Very rare in the United States.

26:27Alex Thorn:Yeah. But also great drinks. Very central location in South Beach. It's great. It's the oldest bar in Miami. Yeah. And it's just an institution. It has this giant, awkward bar layout, though. Wouldn't you knock out the bar and redo the bar? No, the W is amazing. It's so annoying. It wastes a lot of space, but the dynamic, it's really conducive. It's a great conversation bar because you're not at the same table. You're at this big, winding bar, and that's what makes it so special because it really facilitates conversation. There are a lot of bar seats because of how it winds, so it's like a lot, whereas if it was straight across, they only have the one TV or maybe two.

27:01like you know it's it's it's a classic dive bar yeah it's really good talk to people and put your

27:07Alex Thorn:put your phone away so that was your the first obviously non at pub key nyc event i mean uh but you've done many since um one recently that i think was really notable was the show you guys put on in las vegas the hot style takeover hot style takeover vegas one vegas and nashville we started that in nashville right it ends up being because it sounds like a hostile takeover but i love Bitcoin magazine. It's not hostile. It's just funny. Yeah. But, yeah, we started that in Nashville. That was successful. Unfortunately, I couldn't be in Vegas last year. You were at the Human Rights Foundation in Oslo.

27:41Yeah, there was the overlap with the two. And we do a pop-up there as well for the activists. They're heavy days in Oslo, so you need to blow off a little steam.

27:50Alex Thorn:I can imagine. I haven't been able to go yet, partly because I was in Vegas last year. I wanted to go. They won't overlap again this year, I'm told. No, no, no. Yeah. Yeah. But but so you weren't there. But I know Mike Germano hosted and it was a little different, though, than the Nashville style. It had some overlap. There was some panels and stuff, but and some roasting that was done. That was quite funny. Just like in Nashville. But also there was there was some like genuine sort of show aspects. The one that's really coming to mind and you can see this. You guys published the video of the show is really great.

28:18Alex Thorn:was walker and carla's a bit where they're um like a deranged couple that starts off like flirting and walker plays fiat currency and carla plays bitcoin and yeah they sort of took you through like every part of a relationship like at first like he's hitting on her and like because they're gonna get married and then later they're married later they're getting a divorce right like it's very i dude i was dying they were great yeah we had that like it was almost like the elder the old guys in the muppets i forget their names yes yes the critics though that are up there yeah yeah Yeah, a little like interlude.

28:49There's a lot of show business at PubKey. I mean, even the launch party in D.C., like it was a barrage. And thank you so much to Galaxy for stepping in and sponsoring all the entertainment. We had a lot of entertainment. Yeah. So, you know, the media house with the bar, the event space that we have in D.C., there's just so much we can do with it. And we're going to use it. You know, we have a lot of, you know, crazy ideas. You got big plans? We'll talk about those in a sec, too.

29:13Alex Thorn:But let's talk about the D.C. launch party. So you have, there is Pub Key DC, a new restaurant in DC. It's not quite open yet. Not yet. You did that event, I guess now we're recording on Wednesday, December 2nd. That was what, two weeks ago? Yeah, just before Thanksgiving. Yep. The 18th. And it was packed and the place looked great. It didn't look like it was far from opening. No, we're close. We're in the frustrating phase. We're waiting on permits, right? We're ready to open. But it's, you know, the certificate of occupancy, health inspection, business license. So it can operate as like a private club for now or something like that?

29:49Yeah, private events. And we have to get caterers. We're not serving our food. We're not serving our drinks. But I really wanted to get something in before Thanksgiving. And we're ready, right? So hopefully December 8th, if not that, maybe the next Monday, the 15th. I'm assuming that's the city of Washington, D.C.

30:03Alex Thorn:that does those approvals? Yeah. Yeah. All right. Let's go, Washington. You know, this important cultural. But that was a great event. We're trying to employ Washingtonians and get open for Washingtonians. Exactly. Let's go. That was a great event. It's a really cool space. Yeah. And you guys made it look great, and it was well-hosted. But it was also very well-attended. Yeah. I saw you were speaking with Treasury Secretary Scott Besson was there. Yep. Congressman Richie Torres I saw there. Yep. A smattering of government, Treasury, and regulatory officials. I think we had like 30 people from Treasury, which is hysterical.

30:37Alex Thorn:I mean, those Treasury guys, they're busy, man. They got to blow off some steam. I get it. I get it. But just like at the high level, having, you know, Treasury really show up and force to the Bitcoin bar is we've come a long way. We really have. I couldn't imagine Janet Yellen and, oh gosh, I'm trying to remember who's the FinCEN guy. Whatever. The prior Treasury would not have been so inclined, I don't think. No, I don't think so. Look, this administration is unique. It's definitely the first one that has a level of competency and understanding around the power and potential of Bitcoin from a lot of different levels.

31:10right national security protecting of the dollar yeah um so it is cool to see and that's the focus in dc um and dc is a little bit more event-driven so in new york it's a dive bar it's 2200 square feet um dc has dive bars but you know dc is more about summits round tables you know fundraisers things like that meetings yeah yeah so we're tish's meetings yeah journalists meeting with

31:35Alex Thorn:Yeah. Leakers. Palantir's probably already in PubKey DC at this point. So we found an amazing location. It's 12 ,000 square feet, so it's six times the size. And we have two bars, a full restaurant. There's going to be a classic American shop house on site. The headquarters for the Bitcoin Policy Institute, a podcast studio, a karaoke room, a bouncy castle. Podcast studio, nice, by the way. Was that where the DJ booth was set up back there behind glass? Yeah, exactly. It's very cool. So you have the fish tank and then Video Village is there. Yeah, the fish tank. And James O 'Bearn DJed for us towards the end of the night.

32:11It's sick. We can throw a lot of different looks because of the space.

32:15Alex Thorn:Yeah, the space is quite large. It's a double-sided bar. So there's plenty of bar space, classic bar space. But they have a big open room that you can put tables in. Yep. You know, normal nights, a restaurant, you can put tables down. It's got a big stage. Yep. um what was the band the cover band that played there was wild bill no that one and then parrot fish both from nashville yeah yeah they were fantastic they were both but i just cannot i cannot get out of my mind as a dyed in the wool millennial parrotfish was just pumping out the millennial bangers dude yeah hot chili peppers sublime like hitting everything yeah it was so good they're really good they are very good i was like they even do the voices of the bands really well they're they're unbelievable and it was perfect we wanted something that was going to be fun they're just a classic like frat house like cover band um and just amazing energy we had the lion dancers because we're in chinatown you did in dc so you know a nod to the neighborhood we also had lion dancers bless pub key new york city that's one of our things every party we throw has mariachi in some capacity you did have mariachi here this is the first time we had mariachi since the hakeem jeffries chuck schumer mariachi meme that the administration threw so we were a little nervous about that but there's continuity we i didn't i was there i didn't feel that there was any like sense that that was the reference no no definitely not um vibes were high um and we're excited to get open like it's going to be really interesting and then on the media side we're going to do the same thing in dc that we do in new york so every thursday in new york it's free and open to the public bitcoin programming covering all aspects of the bitcoin ecosystem bitcoin adjacent topics you know free speech like we were just talking about when we had preston and yes and burn um so uh wednesday night in in dc is going to do the same thing and we're already starting to fill up that calendar the bitcoin policy institute's going to take one one night a week i'm sorry uh one wednesday a month uh for something more policy oriented um you know the gemini series is going to be there as well uh it's going to be exciting it's really an interesting i think it's a great place to do it there's so much happening in dc in bitcoin and bitcoin policy and D.C.

34:25Alex Thorn:is a big city, so it's also ripe for it. Are we meant to expect now a pub key in every big city? Every city except for Boston. Yeah, why no Boston? This pains me as a long time. No, I like Boston. I was up late one night and I was trying. I thought you said that. Yeah, I was trying to come up. It was a good tweet. It is a good tweet. I was trying to figure out what city would be the most. Angry if you said that. The highest potential to rage bait. And I was just like, it's Boston. It's definitely Boston. Especially for a New Yorker. And for a New York headquartered, do you have a head? Is the New York still the headquarters?

34:59D.C.'s so huge. We bookended, right? So I don't imagine we're going to get bigger. Bigger than D.C. is going to be like a hotel or something. Yeah, it's a big space. It's a really, really cool space. So we're bookended there. If we go to, you know, I think Austin is a high-value target for us because that's the podcast and comedy capital of America. That's good synergy with the media house side of things. San Francisco would be fantastic. Bitcoiners are everywhere. And there was a really interesting dynamic already in D.C. where in New York, at least, you have lots of companies, right? Galaxy is here.

35:35I dig, like, you know, Coinbase. Everybody has offices here. Chaincode Labs has been doing BitDes for a long time. There's enough of a Bitcoin community in New York where PubKey was additive. But in D.C., there's really nothing yet. So we have people from all over the DMV area. coming out of the woodwork um so in a in a way maybe it's because pubkey nyc has been around for three years at this point but the groundswell of support from the dmv bitcoiners is you know has been really um just a a pleasant and shocking surprise yeah i know a lot of people and i see

36:09Alex Thorn:this on the internet as well that they say like oh my gosh i've never made it to pubkey yet yeah and you've you've now obviously created another touch point for them to be their first yeah and it's a big region. There's a lot of people there. For sure. And people roll through. There's lots of conferences. There's a lot of reasons for Bitcoiners to be there on the policy side. You know, the miners are in and out all the time. Galaxy's in and out all the time. Coinbase. So one of the things that we want to try to do, you know, the big firms have lobbyists that they can pay, right? And they're in decent, decent shape.

36:41They can host fundraisers. PubKey wants to look out for the end user, like the little guy, and make sure that, you know, some of these protections, If we're going to be writing, you know, laws, you know, regulations on Bitcoin, we got to make sure that somebody is a champion for the end user. And I think I think PubKey slots into that nicely. PubKey lobbying firm. Soft power. I was going to say, soft power. Yeah. With a beer and a shot. Taverns have been hugely important with this for a very long time. That's where Thomas Paine dropped off common sense. that was the you know distributed the uh dissemination of information mode at the time

37:17Alex Thorn:before you know newspapers yeah the bell in hand in boston was where the the uh um the sons of liberty met which is green dragon those are the in the green dragon those are the folks that dumped the tea in the harbor um the stonewall in for lgbtq rights in new york was like revolutionary meeting place yeah that's probably goes back a lot further i mean russ's tavern in new york There's probably like some communist Bolsheviks that met and smoked cigarettes and decided to do their revolution, I'm assuming. This is old technology. We're talking about a couple of beers. A couple of beers. A couple of beers.

37:48Alex Thorn:Let's go overthrow the government. Yeah, it's pretty common in old technology. I love that. So what can we expect in the next year that you might be willing to share? You said some big things coming, some wild ideas. Yeah, it's going to take a little bit of time. We've got to get D.C. on solid footing. We're close to opening. And then when you open up a place like this, you don't know how people are going to flow through the space. Training up staff, you know, getting the restaurant out is going to be a big one for us. We're going for the lowest tier of fine dining. This is going to be a classic American shop house.

38:20Yeah. And we want to we're doing that intentionally. Like a dive bar is really accessible and approachable. But, you know, irrespective of socioeconomic status, we're shooting for something that's going to, you know, invite the broadest breadth of individuals to come and enjoy that shop house. So that's going to take some time. We're going to shift focus a little bit in Q1 back to the media house side of things. It's going to be a lot, right? You know, two weekly events in two different cities plus podcasts. And that media house is the connective tissue across, you know, all pub key locations, just the two now.

38:54So we're going to tool that out a little bit. but we have a couple of cities that we're looking at for either like longer term pop-ups like residencies um some international yeah we'll start to attack sort of like the next location as soon as we feel like you know we're on solid ground in dc and the media house is um operating in both locations well new york's kind of on autopilot at this point yeah i mean i kind of

39:19Alex Thorn:great yeah i i um i used to try really hard to go a lot now it's just kind of like in my normal flow Like, I don't always go, but anytime I do, it's great. I go sometimes at obscure times, and it's a normal functioning good bar. It's just a good bar. Yeah, like I used to go like every Thursday. I got to do the Bitcoin programming, and I still try to go, of course, and it continues to be great. But, you know, on like a Monday afternoon, it's pretty good still too, you know? And the food continues to be excellent. I have to continue to praise the food. You do have a great, I know you have to sign up and buy a ticket, but the Danish Christmas.

39:52yeah so a waist slice the the guy that does a beefsteak that i've been rocking for the last three years as my uniform yeah i'll molt eventually um but uh yeah so a waist slice does a really special uh you know tradition at pub key it's the danish christmas lunch um you got to take off work it's a lot i was gonna say you said you guys posted something about this it was like yeah

40:12Alex Thorn:no he posted actually yeah he was like you know it's it's great the food's amazing the people are great it's an awkward time and that's on purpose because you're meant to come to this great danish lunch and step out for smoke breaks while you're supposed to be at work. And he's like, and that attracts the exact type of person we're looking for for this lunch. It's a fantastic community event. We launched the Mug Club. The Muggers are kind of like the social club within PubKey. Disclaimer, I'm a member. Disclaimer. And, you know, bringing them together with these special things, I mean, tickets are still available.

40:47I think that it's an intimate event. I think only like 10 tickets are left. but it's special and you know doing this three years in a row a waste ice is a beast and you know it's a cool I think I managed to go last

40:58Alex Thorn:year I went I've been once and I think I missed the first one so I made sure to stay you gotta come come this year I don't think I can I'm not sure I don't have a ticket I know I'm gonna think about it if you look back Thomas at this year because it's been quite an I guess you know I don't want to go we already talked to you after you hosted the president for the for his Bitcoin burgers. Yeah. But if we look just at 25 and everything that you guys have done at PubKey, what stands out maybe for events at the New York space? What stands out to you the most, either specific events or trends that you've seen?

41:31The most special aspect of PubKey, it's become kind of like a bad day place for people. Like a lot of folks that are regulars will go to PubKey when they're having a bad day because it turns it around. So that ends up being extremely special. Death in the family, like we've had those things and that's always been very, very touching. The events continue to be incredible. Like the partnership that we have with the Human Rights Foundation pulls, you know, activists from all over the world to come in and share stories that don't get nearly as much attention as they deserve. so continuing that drumbeat has been has been really you know unbelievably special now that now that bitcoin is on the political scene in a big way after the election and you know the current administration we're getting a lot of inbound from politicians where this is really their first touch pubkey is light-hearted accessible it's a perfect place to have hard conversations to come in and ask you know the questions that you would probably get bashed asking if you're on Twitter or something like that.

42:35So creating that environment and seeing that vision, you know, come to life has been really special. And I'm hoping that we can make a lot of progress on the Democrats right now, because we are in an environment where, you know, our favorite internet communication protocol is becoming a bit of a partisan issue, which is quite silly. So that's our top goal in D.C. and New York to help sort of bring a little bit of like, you know, rational thought to the conversation.

43:08Alex Thorn:You're talking about the bifurcation between like X.com and Blue Sky, like and on the Internet, like and so there's not a good meeting place now for the sort of the split American politic? 100 percent that. I mean, you know, there's no real nuance or discourse happening across, you know political spectrum you know on X or blue sky blue skies wild but no it's also a bit partisan because you know it's gonna take a hundred two hundred hours of research for a policymaker to come up the curve and understand Bitcoin power and potential and promise and all that so when you have party leaders saying Trump likes this thing therefore this thing bad that effectively buys a policymaker 100 hours in resources for the team for the staffers the interns and everybody else to dive into the issue yeah so it's really effective we want to be able to pull that apart because you know i've said this a bunch of times you know saying that you know bitcoin is republican is like calling a hammer democrat or like a table saw you know libertarian it's it's very silly don't yeah don't talk about a pitchfork or a yeah or a shovel i don't know which ones those would be.

44:17Alex Thorn:No, you're right. It's a tool, right, in your mind. It's a utility. It's a nonpartisan, decentralized network. It's not inherently political. It's a psychological mirror for a lot of people. You kind of see what you want to see in Bitcoin, right? There are progressive values embedded therein. There are libertarian values embedded therein. It depends on, you know, your perspective and how you approach the tool, the protocol. And you can kind of see whatever you want in it. It's something for everybody. Let's talk about Bitcoin culture a little bit, which has been yet another interesting year in the Bitcoin land.

44:48Alex Thorn:I think, you know, to what extent, I've got a couple of interesting questions here, but to what extent do you think Bitcoin culture is now dominated by the plebs and the cypherpunks versus the suit coiners? Oh, that's a great question. I mean, with the ETFs and the treasury companies, you know, miners, you know, doing less mining, the more interested in HPC, there is a lot of bandwidth, I guess, for mainstream media talking just about these treasury companies and the ETFs, BlackRock and everything. The protocol falls apart without the individuals, without the nodes. That's where the strength comes from.

45:24So, you know, that's our primary focus. We cover the entire space with the media house side of things. But it's about the individual and what Bitcoin can do for a person, a family, a small business. It's nice that these things are happening. I mean, And, you know, in a way, when governments and sovereign wealth funds and ETFs and treasury companies see the value in the thing, that's good. But I didn't get into Bitcoin for, you know, an ETF in my Fidelity account. Nothing against Fidelity. But, yeah, cultivating the culture and, you know, really focusing on the individual, you know, self-sovereign aspects of Bitcoin, I think, is tremendously important.

46:09Alex Thorn:Yeah, I think, and is it still alive? I mean, is it threatened by the rise of the suit corners? Well, we'll see. I mean, you know, with centralization, you know, most of the ETFs use Coinbase. It's not great, right? We would like to see a lot of different custodians in the mix here so that you're sort of decentralizing risk and not having these, you know, centralized attack vectors. We're talking about order 6102, a lot more than we were between, you know, micro strategy and the ETFs. And, you know, Washington's now paying attention, which is good and bad, right, for a new technology like Bitcoin.

46:49It'd be a shame to see too much regulation stifle innovation because it still is very much an experiment. It's quite young.

46:54Alex Thorn:Yeah, we'd like to see a government, Washington in particular, but a government act more like a Gandalf, shepherding the hobbits along and setting them off on their path. You don't want it to be the eye of Sauron pointing its eye on you as an industry or protocol. And we're in the Gandalf phase. Yeah, exactly. The Palantir. But yeah, there is that risk, right? I mean, you know, I used to get this question about the ETFs all the time. People would ask me, like, is it bad for Bitcoin, right? And it seems like, you know, and I don't believe that they are, but the fears that engender that question, frankly, I think are bigger than ever now with the DATs and the strategies and the governments.

47:36Using the protocol is tremendously important, right? Like the way the protocol was designed, transaction fees have to take over for the, you know, block reward subsidy. Right. And, you know, using the protocol is strengthening the protocol, right? more products and services to interact directly and not just offload it to you know fidelity jp morgan coinbase whatever um you know it's something that we need to keep pushing on because otherwise it's just another financial asset and it could be so much more than that so when i was last at pub

48:05Alex Thorn:key i did buy uh my beers with bitcoin oh yeah um when i was actually hanging out with one of my probably my oldest best friend ever um from when we were you know two or three years old was in new and i brought him to pub key and so you know i don't always spend bitcoin but uh uh you know i but i do i used to but i still do too um and and so that the payment flow that you have set up there you guys built with zeus right which is yeah zeus i've included stepped in and really got it done for us it was tremendously grateful for great by the way um but i wanted to ask you now that blocks uh i guess that's what they're called blocks square the square terminal yeah has turned on the ability for, I guess, all of its U.S.

48:46Alex Thorn:merchants to accept fiat and receive Bitcoin, accept Bitcoin and receive Bitcoin, accept Bitcoin, a whole bunch of ways. Not that whether or not you guys would do it because your flow works great. But what as a merchant yourself that accepts Bitcoin, PubKey, what will be the impact of merely the option? Like, do you think, and then how does it step up? Is that really consequential? They are the largest payment terminal provider in the U.S. The functionality is huge. It's not just for the payments. I believe merchants are able to toggle like, okay, we receive credit card payments or cash payments.

49:19Right. I want this to automatically go into Bitcoin. I think it's like all the ways you can think of it. They can receive it. They can take fiat and convert it. Yep. Yeah. It's incredible. Like more of that is kind of what we need to help, you know, bolster what we were just talking about. Individuals using Bitcoin is tremendously important. Whether that's the Lightning Network or Liquid or, you know, the base layer, more is good. Yeah. Yeah. I think it's quite something I've been waiting for for years, to be honest. Yeah, and, you know, there's frustration there, too. I don't believe Block is able to activate in New York because of the BitLicense.

49:54Other locations they would be able to, you know, to activate for us.

49:57Alex Thorn:You guys are accepting in a non-custodial way with Zeus, basically. Yeah, so we have Zeus. We use ZapRite as the front end, Zeus for all the channel management and voltage for our nodes. Yeah, and that's to your point, though, because custodial, Bitcoin services in New York need a license from the New York Department of Financial Services. Yes. Yeah. So that's how, so there could be a, I wonder, actually, it's quite interesting if the DFS doesn't, and by the way, Square Blocks has a BitLicense, but when you have one, they do. They do. They know they do. But they have to get every product approved.

50:34Alex Thorn:Yeah, you can buy Bitcoin on Cash App in New York, and they have it. But I believe DFS requires every single new product or new crypto if you're like an exchange. to be approved so if you log in on Coinbase today from New York you only see a few assets whereas like you know they have every asset in the world yeah outside New York so here if New York uh if if Blox has huge success and merchants all over the country ex-New York are stacking Bitcoin and there's all these great stories about how well they're doing and how much how they love Bitcoin do you think like a non-custodial like a like will Evan Kalutis have like tons of business in New York do you think it's possible that like New York could become the hub for non-custodial merchant payments that's like a revolution against yeah look i love that framing in a way you know the regulations really spur uh innovation you know that try to deal with some of the wonky uh dynamics that they've created here with the bit license and there's also an issue with with lightning i think that one of the problems is that's the thing with cash app i can't use lightning on on cash even though you can't everywhere else i i don't know why but it's I believe it's because the NYDFS has not approved that offering or something, which is obviously silly.

51:43The routing of payments, I guess, triggers some money service business, you know. Well, they think so, but we hope it doesn't. PubKey's a cul-de-sac. Like, we have a lightning node, but our outbound would have to be, like, I don't know, 100 Bitcoin or something like that. So we only have the inbound and there's the carve-out. We haven't heard anything from the NYDFS.

52:01Alex Thorn:I think you'd be fine, again, if it's, you know, because you're not offering it to clients, right? Yeah, exactly. We don't tend to hold all the Bitcoin that's spent at PubKey. Yeah, and you've in the past, by the way, offered a discount if you pay in Bitcoin. No, both locations. Well, I mean, D.C. is not open yet, but both locations, if you pay in Bitcoin, you get 21 % off. So you guys are bullish. Yeah, fair to take it. It's only about 7 % of our transactions. If it ends up being 50%, we would probably have to recess. Maybe we'll think about it. But so far, it's so good. Well, it raises another interesting point because you were talking about accepting fiat as a merchant and converting a portion.

52:35Alex Thorn:but you're incentivizing people to pay in Bitcoin. One, because you want it. But it also, say over Lightning, it's going to be cheaper for the merchant almost certainly than accepting a card swipe, which is what, 2%, 3 % they pay. Absolutely. It's crazy. You have to get to tremendous scale to knock that, like Walmart, for example. They have a specific deal with Visa or whatever. Yeah, but small businesses, you're talking about 3 % for a lot of these terminals, a lot of these point of sales. um so you know lightning is a no-brainer um and it's also you know it's a good currency to hold in your reserve yep um let's talk a little bit more about bitcoin culture this year i would say i mean i hate to bring it up because i think it's very stupid but probably the most um potent and heated debate happening in sort of the bitcoin the bitcoin ecosystem bitcoin community like really you know not the now i'm not talking about the etfs i don't think if holders broadly know anything about this but it's the debate over spam and how to handle it and yeah bitcoin core v30 was released by the bitcoin core developers and it relaxed the opera turn field limit uh i think rightly in my view on uh under the theory that spam can't really be prevented so best to siphon it into the least objectionable part of a bitcoin transaction possible yeah which is the opera turn that's given rise to the Bitcoin knots movement.

54:00Alex Thorn:Very vocal on social media. Do you have a take on this just broadly? And maybe also as someone like yourself who's been in Bitcoin for so long, can you give us some perspective on these types of debates that have happened in the past? Yeah. So Core is the dominant implementation. It started with the Satoshi Reference client and it's evolved over time. We've had a lot of fights over the years around the block size wars and other things. This is a new iteration of that. You know, I think that there are valid concerns on both sides. Knotts is a fork of core that's managed by a much smaller team. And, you know, they're trying to address an issue that they, you know, care deeply about.

54:43The core team is the most robust, has the most resources. For a long time, I was working with Eric Bosco in the Libitcoin project because i would like to see um more alternative implementations more client diversity yeah absolutely um i think that would be a good thing and knots again is a fork of core originally so not even a full diverse client offering yeah the only one that would be a full tear down of the satoshi reference client or the one that's the closest would be la bitcoin um but we're talking about very deep in the technical weeds you have to get funding for that stuff yeah um because this

55:17Alex Thorn:open source software development yeah this has been an important debate though in other like crypto l1 communities like for example in eth you had geth and parity yeah and and people have argued for a long time that client diversity is really important for decentralization overall it is um and it seems a bit like what the knots people one of the things that the not supporters or users are also arguing i'm very sympathetic to that but i've been i've been on that with eric for since like 2017. You know, I thought that that was important. Mostly because now we're in a world where it would be trivial for BlackRock or somebody to spool up an alternative implementation.

55:52I think it's better if it comes from the community. Bitcoin was started by Amir Taki back in 2011. It's an original core maintainer, right? Yeah, absolutely. Amir was one of the very first people, you know, working on Bitcoin. Also, by the way, I think fought in Syria against...

56:05Alex Thorn:He's an interesting dude, yes. Against the, like, Islamist... Against ISIS. Against ISIS. He fought with the Kurds. I think he showed up trying to help them with their tech stack and they were just like, that's really cool. They're like, take this gun. We need you over there. He's a very prominent and longtime libertarian activist, generally speaking. Yeah, absolutely. So it is important to keep pushing these things forward because, you know, we're going to have alternative implementations coming out of it could be Facebook. It could be, you know, BlackRock. It could be anywhere. um and it would be really good if it was coming from the community first and figuring out all the consensus issues that people are concerned about and the reason why i think core wants to you know sort of maintain their prominence as like keepers of the flame um but you know uh bitcoin i don't know we were like the original no kings at least in technology do you think that there will be a it is american thing and do you think there will be a consensus uh like a fork or for nots yeah uh i would even just say like for spam mitigation that whole side of the argument i think it's good we're having the debate i think that we're having the debate in a slightly too heated way i'd like to see you know things calm down it's a bit of a flame war right now i don't think this is going to be similar to the block size wars where we had the fork with bitcoin cash um you know back then there was a lot of institutional support for that you had you had relatively big companies that were weighing in now they're sort of hands off with this one at least at least at the moment so i don't see it reaching that point um and forking off is hard right making the wrong decision there it's nice to get the dividends but you know making the wrong decision there can be you know uh ugly yeah if you sell the fork and hold the correct uh version that ends up yeah becoming bitcoin or staying bitcoin yeah you do well if you do what roger veer did which i think what jihan woo did yeah jihan jihan in particular i think yeah notably sold all his bitcoin and for bitcoin cash i don't know if jihon i don't know if it's all but well um but yeah yeah if you do that it could end up quite bad yeah and most of the um etf providers maybe all i don't want to say all because i haven't done a fine to fine tooth comb through all of their filings but most of them uh put clauses in their they reserve the railings yeah yeah really just to decide at the later moment none of them i think intentionally because of lessons from the bitcoin cash fork None of them prescribe exactly like what the thresholds or criteria might be for them to decide which is the real Bitcoin.

58:38Alex Thorn:They all basically formalized a we're going to wait and see if it happens. Yeah, that's the concern. Yeah. Right. So if in the documents they are deciding on behalf of their clients what the true Bitcoin is and they have an alternative implementation for whatever reason, it could be, you know, legal risk, you know, compliance reasons. It could be national security. It could be anything. So I'd like to see us figure out these issues internally before we test it. But, you know, no one's ever really prepared for war when it arrives. You're a longtime New Yorker. Your business is in New York. There was a big election in New York for a new mayor, Zoran Mamdani, a self-described democratic socialist.

59:22Alex Thorn:How is a New York citizen, I don't know, raising your family here, but also even perhaps more relevant to this show, as a business owner, small business owner, you expect Soron Mamdani's mayorship to affect you? I guess there's a concern, right? De Blasio was pretty similar, I would say. He wasn't as vocal about being a democratic socialist, but that was definitely in the background. New York is really resilient. I think everything's going to be fine in the long run. Raising taxes on small businesses like PubKey is going to have a meaningful effect. It's not like small businesses, mom and pop organizations are thriving in the current economic.

1:00:04PubKey is unique because of the Bitcoin community and everything. But you'll see a lot of businesses close if there's more pressure levied on them. He is doing some things that I like. He wants to streamline the permits and the licensing and make that easier. You shouldn't have to go and talk to seven to almost a dozen different, you know, regulatory bodies if you want to open up a barbershop. We are experiencing that right now in D.C. We experience that here in New York. It is painful. And, you know, you need to hire lawyers to navigate the process. And, you know, the fines can add up if you're getting levied with these fines and these taxes.

1:00:41So that is a positive that, you know, I hope to see him make progress on. Some of the other stuff, you know, I hope he comes in. Everybody's welcome at PubKey. It would be nice to talk to him about Bitcoin and what it can do for New Yorkers and the broader community. There are some touch points. Like I said, I think it is a psychological mirror. And there are some things that I think we can spark his interest with if he were to come in. One of the things somebody was pointing out to me is that FinCEN has just allowed or banned, I think, payment firms from facilitating firms from illegal immigrants.

1:01:18Alex Thorn:and as part of the crackdown this administration is doing on illegal immigration, do you think that there's a possibility that Bitcoin will become sort of widely adopted on the left as sort of the way the Canadian truckers did on the right as a reaction to that? You know, we've been waiting for, we've been talking about the remittance potential of Bitcoin for a long time. I think it's there. It's not as widely used as I think we thought it would be back in like 13, 14. When you look at Western Union or MoneyGram and the amount of money that they charge somebody sending money back home, these remittances, the remittance fees are astronomical on people that can't really afford to just take a 20 percent haircut.

1:02:01With stable coins and Bitcoin, I think that there is a really compelling argument to make there as an alternative. And, yeah, I think the surveillance state is a separate dynamic that there's a concern, you know, in how that's going to be applied to Bitcoin and broader crypto. But that use case is still very much alive. And, you know, Bitcoin is kind of there for anybody that needs it. Sometimes you like the First Amendment. Sometimes you don't.

1:02:27Alex Thorn:Yeah. Thomas, before we wrap here, you know, two more questions. One, I wanted to ask about Bitcoin mining. You've been long involved in Bitcoin mining. Yeah. You were on the board of a public Bitcoin miner. Hash rate has exploded this year. We're over a Zeta hash. Yeah, it's wild. It really is wild, especially given how many Bitcoin miners are either incorporating or fully transitioning to an AI or HPC use case, which we kind of alluded to earlier. Where do you see the future of Bitcoin mining going? We've got this industrial-scale publicly traded Bitcoin miner phenomenon in the U.S. There's plenty of private mining happening both at scale and at small scale.

1:03:06Alex Thorn:um do we hit twos at a hash i mean next year i mean next year no uh maybe i don't think i don't think that quickly um it's certainly possible um it's exponential these last few years a few years it's been you know pretty wild to watch um i think the focus is still on new power right i think you know i think sam altman was saying we need more electrons um and the bitcoin miners were on this aren't there a finite number of electrons in the universe and then how energy works i'm not sure actually. A Dyson sphere around the sun. Something like that. Exactly. Okay. So, you know, Bitcoin miners have been helping with that all through COVID, run the China ban.

1:03:43Like people, you know, there was a shortage of the substations, for example, finding new electricity, new power sources to power the mines. So the miners were in a fantastic position to understand this, you know, rush in demand for HPC. Thomas, you've been an M &A attorney.

1:04:03Alex Thorn:You were a compliance official for Fidelity in Bitcoin. You served on the board of a public Bitcoin miner. You've long been an investor, and I think you had a fund at one point as well. An activist crypto fund, if I recall, which was interesting, very early ahead of its time. It didn't work. It worked out. That strategy, we pivoted to mining. That strategy is hard to execute. Yeah, and obviously you and your wife Megan and other partners and investors have created and launched PubKey now both in New York and Washington, D.C. Would you be surprised, you're 21-year-old south out of college or out of law school where you've ended up?

1:04:42Alex Thorn:And what does a day in Thomas's life look like? Oh, God. I'm quite tired. Yeah. So we had Eric Kaysen at PubKey a few weeks ago. and he and I got into Bitcoin around the same time. And I think that that class of Bitcoiners, I call them the rescue dogs. It was kind of, you know, the 20s were a little bit aimless, I would say for me. I went down the legal path. I was at Cat Wallet or as a swap and derivative lawyer. Sorry, yes. And it just wasn't. Swaps and derivatives, not M &A. Yeah, yeah, yeah. That's okay. It's all legal slop. But yeah, it's surreal. Like Bitcoin found me at a time in my life where I wasn't really sure.

1:05:26I was pretty confident that I didn't want to just, you know, I wasn't the best fit for a legal career. So very grateful to find this thing. And, you know, I think that that rescue dog class, we have a big responsibility. And millennials in general, millennials are the only ones that remember before the digital era and actually know how computers work. I think Gen Z is a little bit more. The app doesn't work. I need to buy a new phone. like we tinker a little bit. So I think there's a lot of responsibility. I think that we're sort of, you know, carrying the torch right now before we pass it off to the next generation.

1:06:01You know, my goal is to foster culture and community for Bitcoiners and for pre-coiners to come in and have an environment where they can learn about this thing and how it can help their lives and their families. And then after that, I don't know. My wife says she's going to divorce me if I run for office, but we'll see. Well, there you have it. Thomas Pacquiao, lawyer, compliance official.

1:06:22Alex Thorn:Yeah. What's the pod conf thing? Compliance is defiance. Bar guy. Bar guy, owner, proprietor of PubKey. Thank you so much for coming on Galaxy Brains. Thank you. Appreciate you. That's it for this week's episode of Galaxy Brains. Thank you to our guest, Thomas Pacquiao from PubKey NYC and PubKey DC. I guess you should say PubKey Media House. And our friend, Bimita BB from Galaxy Trading. As always, everyone have a safe and happy weekend. and we will see you next week.

1:06:54Alex Thorn:Thanks for listening to Galaxy Brains, the weekly podcast from Galaxy Research. If you enjoy the show, please like, rate, review, and subscribe wherever you get your podcasts. To follow Galaxy Research, sign up for our weekly newsletter at gdr.email, read our content at galaxy.com slash research, and follow us on Twitter at glxyresearch. See you next week. Thank you.