#13 - Jason Calacanis

26:13When you set this as a goal of getting to the stars, then you can use technology to mitigate the downsides, right? and, but it's whether people have that can-do attitude, they're aligned on the goal, right? So my view is that the thousand city system, as opposed to the two-party system, is how you get genuine diversity. And actually, you know what? There's already a prototype of this. We've actually been doing this for 20, 30, 40 years. You know why? So imagine if at age 18 or age 21, you picked your country like you pick your college. Right. But that's actually already the case for millions of people from Asia.

26:44Why? Asia, India, at age 21, they would apply for their master's degree at MIT or Stanford or what have you. And they would have the F1 student visa for college. They'd have the H1B visa for their company. And then they'd get a green card or permanent residency and then eventually citizenship at the country level. So college, company, country were like this. It was a labyrinth that an immigrant, tech immigrant has to navigate. But it was a stack. It's a stack. That's right. So college, company, country, right? And the thing is, nobody has packaged that together. That's one of the things we're doing in network school.

27:15We want to, just like with cryptocurrency, part of the reason you bought cryptocurrency is to get more fiat currency. In a sense, people would get BTC to get more USD. That was one important metric, right? Part of the reason to come to a crypto society or a network society is to improve your fiat passport. So lots of people who come from countries, they're meritorious, they're smart, right? We can get them worker visas. We can get them maybe to buy golden visas, things like that. we can let them see the world right because people don't understand that if they're born without what people call passport privilege they're basically like in prison they're locked right it's very hard to see the world to get to other countries and so we can upgrade that we can get them you know employment passes and so on and so forth and they're hard working and they deserve all of that right and and they'll do a good job with that right you know it's this is my first trip internationally well first time in singapore okay what do you think i am really fascinated by places that are like startup cities, because this is a 60-year-old city.

28:12They're having their 60th anniversary in August, I found out. And I was like, this is one of the few times I've gone to a country that is younger than America. Usually when Americans go abroad, they're going to a country that's much older, typically. And I have the same experience when I go to the Middle East, which is Dubai. And these are new cities that in 1950 were deserts, right? So it's fascinating to see those countries and the enthusiasm that people have for them. And also, it was also a little bit sad for me because as an American, as a high-profile American who has an opinion that sometimes people listen to, or at least they hear it, but they don't have to agree with it.

28:52Sure, sure, sure. But, you know, there were a lot of people asking me to explain what's going on in our country and asking me to explain it because they're perplexed and saddened by how America is interacting with the rest of the world. So putting aside my belief system, just the candid feedback I got, I would say I've been heartbroken, crestfallen at how people were talking about America. And it's the first time in my life I've ever had it. It's actually kind of heavy on my heart the last three days because people were saying, why don't you want - Why is it doing this stuff? Why are you doing this to us?

29:31Why can't we come to the country? Why don't you want us to come to America on vacation? I was talking to some folks who were extremely successful. These are the most, the 0.1 % of the 1%, the 1 % of the 1 % were telling me, my kids can go anywhere. And on vacation, they want to go to China because they believe it's the future. They don't want to go to America for college. And they don't want to go to America because they feel like they might get harassed at the border. And then we want to do business with your country. And we thought that the new administration would be embracing the rest of the world, getting rid of regulation, and that we'd have this great era of interoperability.

30:09And we'd have like an acceleration in business. And now you're just rattling the cage constantly. And we want to do business, but you're sending us to go do business in other places. And we can't rely on you anymore. And that actually, I think maybe is the most heartbreaking thing is that they feel like we're not a reliable partner is what they were telling me. This is not my position. This is the input from people in Singapore who I think represent a certain level of sophisticated, globalistic, world savvy people. And so maybe you tell me how, as an American, so you're an American who lives abroad now, like you, what do you think of what's happened?

30:53You know, and we can't get away from politics. We can't get away from Trump because it's defining a lot of what's happening in the world right now. So tell me the perception and your perception. Here's how I think about this. And I actually did shed a single manly tear when writing the Network State book because I had some of the same emotions that you're talking about. And the way I look at it is Britain, America, the internet. Britain was an amazing, amazing thing, honestly, for the world. The British Empire, a lot of people attack it and they had a lot of faults, but it did on net advance civilization.

31:28There was a lot of good things Britain did. But eventually the British Empire exhausted, handed the torch to America and it's no longer an empire. The British Empire is just a country. It's just a country. That's right. And the start of the American empire was arguably 1939. There's this great book called Tomorrow the World by Stephen Wertheim that actually documents that the fall of France was actually the moment. It wasn't actually post-World War II. It was at the beginning. The fall of France was a moment that the Americans at that point, they had been happy to let the British do all the empiring and just build up their country.

32:00But once they saw that the Nazis or maybe the Soviets could build an empire that was bigger than the British, they're like, oh, we have to do this. So that moment was when America turned truly into a global empire, and they set out to be a global empire. That's why there's 750 military bases worldwide. That's why the headquarters of the UN is in New York. That's why, like, for example, Harvard Kennedy School of Government alone has 20 heads of state that were trained there, right? That's why the U.S. has regulatory harmonization. All these countries around the world use U.S. regulations. There's like a Hungarian FDA.

32:31That's why there's U.S. multinationals everywhere. And I could go on and on, right? The number of internet searches being done at Google. Google is the number one search engine in every country, except for like Korea, China, Russia, and maybe still Japan. And maybe it's 50-50 in Japan now. Yeah, I don't know. So I think it's maybe four countries. It's like four countries. That's right. But here's the thing. The issue with empire, any empire, is you get this global footprint, but it also ends up sort of eating away the core of the empire, right? And it does so in two ways. the left is mad because they feel that your people are oppressing people around the world, which is sometimes true.

33:08And the right is mad because they feel that your people are bearing a burden of the rest of the world, which is also sometimes true. So eventually the left and right basically get tired of empire and shut it down. And then they often regret it, right? So that happened with the British empire, that happened with the French empire, and it happened within our lifetime with the Soviet empire, where we thought that the aftermath would be something great. And it was actually, it was mixed. That, you know, Eastern Europe was free and it did well and so on. Estonia did well. Russia itself did very poorly for a long time.

33:35And then it's like someone started to recover, but you know, fine. Point being, we are in the last stages of American empire. Okay. Because four forces, you know, the red America doesn't, is against the deep state. Blue America is against the Trump administration. Tech America is against the regulatory state. And China is against US hegemony. So all four of those vectors are pointed down. So nothing is keeping the current establishment up. Every day there's another hit to it going down. It's like a solar eclipse. It's never happened in our lifetime before, right? And you can't cut off foreign trade and foreign travel and foreign tourism without also eventually cutting off foreign capital flows into the dollar.

34:15And then without the reserve currency, American shares of living will fall very rapidly. I don't know how much, 50%, 90%, 99%. But this is similar to what happened after the fall of the Soviet Union, the ruble hyperinflated. Now, one thing, we're actually in the middle of something ever you know being in a tesla is actually very noticeable acceleration ever being in a bullet train yeah so if you're in a bullet train it can accelerate in such a seamless way that you don't even realize how fast you're going right right so do you know how much the u.s dollar is devalued against bitcoin since inception 100 million x because bitcoin started 0.1 cent yeah actually you wrote honestly one of the best early articles on bitcoin where actually there are a lot of things that were...

34:56I said it's the most dangerous open source project I've ever seen because it could destabilize the entire world because the sovereignty of countries is military and their currency and this could change history forever. Yeah, I was shook when it was at 12 cents. So the thing is that as soon as Bitcoin appeared, capital started flowing into it. Yeah. And it's gone up 100 million X against the dollar and there's only like another 10x to go or 100x but that last 10x will be felt in a different way see the thing is at a hundred thousand dollars per bitcoin everybody's happy but a million dollars per bitcoin people understand like empire is over there's something about that as like a round number and so and so people are like wait a second and one way of thinking about it is like normal inflation is supposed to be like two percent a year that works out to like 0.2 percent a month it's an arbitrary figure it comes from new zealand it should really be zero percent but let's say okay Hyperinflation is 50 % a month, right?

35:53So 0.2 % a month, normal inflation. Hyperinflation, 50 % a month. What if we define superinflation as 5 % a month, right? If you work it out, the compounded rate at which the dollar has been devaluing against Bitcoin is like 10.41 % a month for 16 years. Okay? So we're actually already in the middle of the global run on the dollar. It's like that bullet train that's been accelerating without people seeing it. Like the alternative is already here. And you're seeing BlackRock saying Bitcoin is an alternative to the dollar, right? The other alternative, by the way, is gold, physical gold. That's also at all-time highs.

36:24So gold and digital gold are the things that will be obvious warning symbols in retrospect that this order is changing, right? And so then what comes on the other side, right? My view is that the future is China versus the internet. And the heirs to American empire, China has the military and the manufacturing. and it's one of these things where guys like Peter Zaihan will say, oh, China's going to fall into a ditch. It's going to get old before it gets rich. The U.S. can blockade China, et cetera, et cetera, et cetera. And in actuality, a lot of those things are happening in reverse. For example, China's blockading the U.S.

37:01China's proxy Iran has its proxy, the Houthis, that's blockading Suez, right? And in many ways, U.S. demographics are worse than Chinese demographics. Why? Because you've got this polarized society. They're everybody fighting each other. You have all of this ethnic conflict. You have young minorities expected to pay for old people's social security. And on and on, you have men and women hating each other and whatnot, right? So US Democrats are a cauldron of ethnic, gender, political, economic conflict and resentments waiting to bubble over, right? China, for its faults, has like a homogeneous society, right?

37:32And so the problem is China is very strong, right? I think of the people who downplayed China as the stealth on the Chinese stealth bomber, right? They're not doing anybody any favors. China is extremely strong and it's very competent. And if we can't build an alternative, then it will just be dominant. You believe what Trump is doing in terms of shutting the borders and changing this sort of tariff regime is an isolation and then getting rid of immigration largely. This is a very dangerous strategy. It's a very dangerous strategy. It's not going to work. Well, it's It's like not it's not even like it's like, you know, the thing like a nice strategy caught and let's see if it works for them.

38:12Right. Just take the tariff thing alone. OK, those were simultaneous tariffs on the entire world. Right. So Vietnam got hit. Cambodia got hit. All the strays. Go ahead. They're strays. They're strays. Stray bullets. Exactly. Like I analogize it to like firing into a crowd to like get China. Right. Everybody who got hit by the stray is not going to care that you were trying to get China. They're going to care how careless and random you are with the lives of all these people. And just to talk about the tariffs for a second. First, everybody who is pro-American in all these countries, they're the ones with American customers, with American vendors, American suppliers.

38:46All those people who were the political faction in those countries that pushed for good relations with America, that pushed to travel to America, to trade America, all those people just got discredited. Right. They just got economically harmed. They got absolutely nuked because they trusted in the stability of the United States of America. They trusted in the stability of the trade system. They trusted in the stability of - Yeah, exactly. That's right. And when you add it up, it's basically the U.S. no longer wants to be the hub of this global financial empire. They don't want the foreign workers.

39:12They don't want the foreign trade. There's a faction of MAGA that is incorrect in their own way as economically irrational as the far left that actually thinks that 77 million MAGA can compete with 1.4 billion China, let alone the entire world. It's simply not true. Well, no, I was going to say the idea that Americans want to rush in and make iPhones in a factory is like so farcical. It's not that iPhones can't be made in America. They could. When you bring this up on X, people will say, they'll get really mad. And then they'll say, well, I want someone else to be able to work in a factory. Right.

39:43But you can't find anybody in your family who said, wow, wouldn't it be great if I could do that? Now, listen, we do make Teslas in factories in America. It can be done. We're making rockets in America. It's not the question of if we can make them there. But if we're going to close the border and we have 4 % unemployment, who's going to work in these factories? Yes, but let me give also the Steelman case for MAGA because I understand where their worldview comes from. So first is they would say, okay, sure, maybe I as a white-collar worker or whatever don't want to work in a factory. They would say that.

40:11But it's way better the blue-collar worker has opportunity to work in a factory than dying of fentanyl or whatever. True. Okay. Number two, they'd say factory work produces skills and stuff that, you know, there's all kinds of mechanical maintenance and whatnot, which you don't want to offshore and send overseas. I'd agree with that as well. Third, they'd say, as a red American, they've gotten a hard time from blue Americans. Red Americans have been sitting over and ceased to die, and so on and so forth. Blue Americans have exploited them. There's some truth to that as well. Okay. I could go and I could say quite a few things.

40:41Another thing they'd say is, we're running these trade deficits for so long, we can't run them endlessly, and we need to be able to make things at home. We'll be too dependent on others. We're too dependent on China, too dependent on the rest of the world. There's some truth to that as well. Okay. But what they get wrong is, A, they're in a huge hole, and they think that they can just get out with some sudden move, right? You cannot get out of 45 years of deindustrialization with 45 % tariffs. There's no overnight fix for this, right? Two, maybe, yes, blue America and red America have been fighting.

41:12That doesn't mean Vietnam is the enemy of red America. It also doesn't mean, like, Canadian conservatives are the enemy of red America. What they managed to do by threatening to invade Greenland and Canada and doing these tariffs and so on, is just like the Wokes built the anti-Woke coalition, the Magus have built the post-American coalition. Even Canadian conservatives, who are their natural allies, if Canadian conservatives like Pierre Poilovray and so on are getting crapped on, right? And do you see the graph of the Canadian conservatives? Yeah, so basically, if we are this unpredictable to the rest of the world, the world will look for more predictable partners to partner with.

41:46And it's happening as we speak. That's right. We're five months into this presidency. And already you have China, Singapore, Russia, India, and everybody in between going, well, if we can't figure out how to work with the Trump administration, if we can't figure out how to work with America, I guess we should just work with each other. And that's a very dangerous place to be. Like perhaps we're overplaying our hand and how important we are to China, how important we are to India. Like how important are we? Do they have other customers? I think they have a lot of other customers. They have a lot of other customers.

42:21And in fact, look, in 2015, China was taken aback by the trade war. But over the last 10 years, they're now prepared for it. And like a lot of Trump tactics don't work anymore. They're not surprised anymore. It's just the same kind of thing. And they reduced their share of revenue for the US. It's only 15%, 16 % of Chinese trade goes to the US. 85 % is overseas. They've built up these other markets. So whereas the US needs the parts that are from China. Let me tell you a little story, right? So in the late 2000s, around 2008, with the Beijing Olympics, you remember that, right? So there was pollution in Beijing.

42:52Now they've actually solved it. But there was heavy pollution for a long time, right? The runners would not want to run a marathon there. That's right. So China basically went, they knew all the people who were polluting. And they went to them like a few weeks before. and they told them to shut all their stuff down so they'd have clear skies for the Beijing Olympics. Okay. So I was operating a clinical lab at that time and there was a global shortage of a specific kind of chemical precursor that was used in various biomedical reactions. And the price like skyrocketed like 100X for that time because one of those factories, like China was just the scale supplier of like the whole world, right?

43:28A single pound of failure, yeah. Yeah. Now that meant like research, clinical testing and so on ground to a halt for anything that used this compound, or you had huge spikes in costs just for a few weeks. Now, look, this wasn't the end of the world because it did resume, but a lot of people had lab test interruptions, research interruptions, and so on. And that was 20 years ago. And that gave me a sense of what China is, right? It is just upstream of the physical world. Like the US military is made in China, like Tomahawk missiles. You know, there's a report,$400 million the Pentagon paid Govini to go and study the US military supply chains.

44:01Tomacop missiles, JDAMs, the supplier suppliers in China, right? The former Secretary of the Navy, Carlos del Toro, in 2023, he says the U.S. Navy, one Chinese shipyard can build more ships than the entire U.S. Navy combined. They have 13 shipyards. In some cases, their shipyard has more capacity. One shipyard has more capacity than all of our shipyards combined. You have Hegseth recently on a podcast, Sean Ryan podcast, and he said Chinese hypersonics can sink every U.S. aircraft carrier. Our whole power projection platform is aircraft carriers, and the ability to project power that way strategically around the globe.

44:33And yeah, we have a nuclear triad and all of that, but a big part of it. And if, you know, 15 hypersonic missiles can take out our 10 aircraft carriers in the first 20 minutes of a conflict, what does that look like? You have basically this U.S. Navy chart that shows China's 200x U.S. shipbuilding capacity. China now has a world's largest AP, right? And people say, oh, it doesn't have the aircraft carriers yet. But that's like saying Netflix doesn't have the water. Yeah, it has the number of ships, but it doesn't have the tonnage. But these are semantic arguments. It's like saying how many blockbuster stores does Netflix have?

45:03They're paradigm shifting. They're going with standoff missiles and hypersonic. Anyway, the point is, to the predictability part, all these countries, it's even worse than them just trading with each other. They're all re-centering around China because it's a global hub for trade. China has ships in every port. It has relationships with every country. Every country needs Chinese goods, right? And so China just has more leverage. And people think that the U.S. has leverage because it's a consumer. But what's it giving? it's giving basically dollars. Why are dollars valuable? Now we have to ask deeper questions.

45:31The only reason the U.S. can maintain its current level of consumption is that there was a global financial empire where the right built the U.S. military and the left did U.S. diplomacy, underappreciated by the right. Look, you and I, we've been on lots of cap tables. We've done lots of deals. Imagine a cap table with 196 people on it. That's a huge pain. Yeah. Okay. Now imagine 196 countries and how hard it is to get them to sign on the line which is dotted. That's a huger pain right yeah a lot of work and so things like the wto or who u.s diplomats got 196 countries to sign on to this stuff yeah okay they got 196 heads of state 100 like all kinds of crazy standouts holdouts u.s diplomats were the best ever and so was the u.s military the best ever and because of this the left and the right state and pentagon work together to build the greatest empire of all time right and is it just over now i mean it's just over now it's just over is your position Or it's ending and people haven't marked it to market.

46:25Basically, hard power is China and hard money is Bitcoin, right? That's the future political axis. CCP is total control. Bitcoin is total freedom, right? Now, total freedom can also be total anarchy, right? So I'm very sympathetic to Bitcoin. I'm certainly more on this side of things. But I think you want some balance between total control and total anarchy, right? And that's where network states, that's where Dubai, that's where maybe India, that's maybe Eastern Europe and other places will have to be. And so to your point about predictability, the problem is lots of countries are now thinking of China as a less unpredictable partner than the U.S., even after the Shanghai lockdowns of 2022 when China put the country, which is crazy, but it's actually really bad.

47:06Well, a dictatorship that will put a million Uyghurs into a concentration camp, a dictatorship that will put their country under surveillance, that will take the entire sector of entrepreneurship and say, we own the companies now and Jack Ma is going to go into re-education or oil painting classes. He's too tough. Yeah, that's more reliable than the United States. Let that sink in, that people are making that choice. And the problem is that basically it'll be there'll be the version 3.0, which which is the V1 is sort of the instinctive conservative reaction, Chinese Communist Party and so on and so forth.

47:41Right. The V2, there's certain kind of sophisticated international commentator who will say something like this. And let me explain it. And then I'll give a counter argument to what they're saying. They'll say, well, the U.S. blew up the Middle East and China's building up Africa. The U.S. got in all these wars, killed these people. China hasn't done that. The U.S. wrecked its cities and China's built up its cities. Therefore, China's peace will rise. China is good. Right. Now, my counterargument to that, accepting that some of that is true, that China did build itself up and so on and so forth, if you think about the US, it was generally the better actor of the US versus USSR up to 1991.

48:11Like West Germany was better off than East Germany. South Korea is better off than North Korea. Capitalist countries wealthier, freer than communist countries, right? But after 1991, it became so powerful that it lost its way. Hyperpower went to its head. It started blowing up these countries. It started basically like a really wealthy grandkid or great grandkid. Interventionism. For no reason. They put the fortune up their nose, right? Like there's a saying, shirt sleeves to shirt sleeves in three generations. Being born really, really, really rich is actually sometimes a curse because they don't understand the value of hard work, right?

48:41So all these people inherited an empire that they could never build. And the last 30 years of management since 1991 has been some of the worst management maybe of any empire ever in history, right? Okay. The problem is that on the current path, when China wins, meaning the US has its sovereign debt crisis, because all these things on the tariff, what they're doing, they're reducing the demand for the dollar. The demand for the dollar is the only thing that's keeping the US economy afloat because the Fed's plunge protection team, don't know what that is? It basically buys stocks with printed money.

49:12It's upward redistribution of wealth in a sense. This has been going on at least since the 90s. With the Fed's mortgage-backed securities, it's admitted it's buying assets with its own balance sheet. Many of the times it uses like shell entities and so on to do that. It spots people money and so on, but it props up the market with printing, okay? When, and obviously 2022, 2021, up until 2022, the post-COVID market was propped up by printing. When there isn't global demand for the dollar, when you have weak treasury auctions, when people aren't able to trade with the US, why would they want to hold US dollars anymore, right?

49:42They can't send their people in. They can't send their workers in. They can't even come there for tourism. Why would they want to hold US dollars again, especially because they can be frozen with sanctions, especially when there's Bitcoin and gold and so on? They won't, right? So when that happens, you get a markdown and China just rises into the vacuum. People don't understand that it's like number one in many research fields, right? It's number one in many manufacturing fields. It's way stronger than people think. And the problem is China will be even meaner than you think when it's dominant.

50:11Right now, what constrains China, internally, China is not constrained. So it can throw all its people in lockdown for like shanghai 2022 but externally it still feared the u.s and and the u.s is almost the opposite internally there was republican democrats who were somewhat constrained but externally was bombing all these countries because it didn't feel constrained right this is absolute power corrupts absolutely so we need a counterbalance to this completely unleashed china and that is the internet right because with the internet we can actually that's the air to american values right of course it's it's capitalism it's freedom it's a it's a manifestation of democracy.

50:45But it's also that. That's right. It's the libertarian values and the progressive values, right? In the non-corrupted form, right? So it's freedom, it's capitalism, it's contracts, it's cryptocurrency, but it's also democracy, equality, media, science. In a real sense, I'm one of the biggest funders of those things in the world. For example, I fund all this decentralized science, right? I fund all these decentralized media, all these decentralized citizen journalists, things like provenance, you know, the who, what, when, where, why, how of a story. Like the where is proof of location, right? The who is proof of human, right?

51:13And there's all these decentralized ways of doing this to get to truth, right? To get to media, to get to science, to get to equality, because that's what crypto is. It's an equal system for the whole world. Hernando de Soto has written about this. Like all these people in Latin America are artificially poor because they don't have property rights. Now we can deliver that to them over the internet, right? And this is no longer theoretical. 10 years ago, talking about like crypto in poor countries was theoretical. Now it's not. These people need crypto, like in Lebanon, in Nigeria, in like Venezuela, their phones are their lifelines.

51:41They are crypto first. They are internet first people. And when I'm talking to them, it's not theory that we're talking about, it's practice, right? So internet first, I think that is the one thing that can build an economic union that can balance China. Interesting. Let me ask you just as a total aside, it seems like the Bitcoin game that everybody's buying into was based upon it not being centrally controlled. And now you have an actor who has 600 ,000 Bitcoins out of the, well, Michael Saylor, I think has 600 ,000 now. Something like that. Yeah. So he's the largest holder other than, I guess, the dead Satoshi wallets.

52:17Yeah. So full of stories, I'm friendly with all these guys. Sure. Of course. It's not a character thing as much as does it break the game that somebody wants to buy up that much of the supply of Bitcoin? And then just as we wrap, I think we all expected that maybe Bitcoin would be replaced or hacked at some point. It hasn't been hacked. And I mean, I guess you can make arguments about, you know, the, I guess, layer twos, Solanas, the Ethereums, you know, serving a different purpose. But is Bitcoin here to stay? And does this consolidation of Bitcoin into a small number of holders jeopardize that?

52:53Good question. So how should I, how to think about this? First is - It sounds like you're thinking of how to be politically - No, no, there's like 10 different dimensions to it. So I want to give - Okay, well, let's go right at the seller one. Okay, so absolutely. So, you know, I'm actually also like an advisor to one of these Bitcoin treasury companies like Okamoto Holdings just came out. Jack Maulers has done one, 21. It's funny, two of the names that I had, 21 and Nakamoto are both being used for these Bitcoin treasury companies, right? So I think on balance, it's good, but it has risks. Okay, on balance, why is it good?

53:23Because it allows TradFi, all these other people who could not put capital into Bitcoin to put capital into Bitcoin and it boosts Bitcoin. It is quite possible, perhaps even likely, that at some point there will be an attempt for a seizure. Okay? Because Bitcoin at 100 ,000, again, everybody's smiling, Bitcoin at a million, let alone 10 million, that is the flippening, right? A long time ago, my friend Olaf and I calculated that somewhere between 100 ,000 and a million dollars for Bitcoin is the billionaire flippening when most billionaires become crypto. There's about 2 ,000 global billionaires.

53:55Somewhere around that range, there's a flip. Most billionaires become crypto, right? And then, of course, a million dollars isn't worth what it's worth anymore. Faith in the dollar is eroded. And it could go very quickly from like, I don't know, maybe it's 300 ,000 to a million. There'll be a point in which there's a loss of faith in the currency and it just goes like this. OK. Now, at that moment, see, remember 2021 when Trump was not allowed to tweet, right, after Jan 6, right? You and I saw the emergence of social media. And in the year, let's say 2010, remember the Social Network movie came out?

54:25Yep. You know who was absent from that movie completely? The Lincoln Lies? No, they were in it. They were in it. Politics. Oh, yeah. Right? That movie basically treated Facebook as like Universal Studios or like Disney. It was like a playground, right? It was impressive from a financial standpoint and a user-based standpoint. There's not a single mention of politics. No one understood what was to come, right? But over the 2010s, all politics became social media, right? And if in 2010 I told you that in 2021, the president of the United States will be defined by whether or not he's able to tweet, even given that the Arab Spring and other stuff If it happened, you'd have said, Balji, you're just exaggerating.

55:00Social media just isn't that important. Right. It would have seemed surreal. Literally, he was silenced by a cobble of four or five companies. Yeah. And now if I tell you. Deplatformed. I don't know the exact year, but by sometime plus minus maybe 2035, a country will not exist if it doesn't have gold or digital gold. Like it literally will be insolvent. Like you're not the president if you don't have social media. You're not a country if you don't have cryptocurrency or maybe gold. Right. I think physical gold is interesting because it's a complement to crypto. It has different failure modes.

55:32States will go with physical gold, and individuals and startups will go with digital gold. The reason is physical gold requires trucks. It requires guys with guns. It requires like, you know, magnetometers and so on. So like something like China, like a state can protect that because they've got little guys with guns around it. And they go in, you know, like the Korean demilitarized zone. You can imagine something like that between Russia and China where they just hand each other gold bricks every day to do settlement. Right. So something like that could work between countries that basically their embassies become places for gold settlement.

56:02I think that's very possible. But that's too much fixed cost for an individual. Right. And also gold bricks can be detected when you go through metal detectors. That may be the real purpose of TSA, actually. Yeah. OK. So point being, though, to your point, it is possible that seizure orders do happen when Bitcoin gets to a certain level. Then what happens? All the Bitcoin that is not able to be seized, that's free Bitcoin, is actually more valuable. number one number two is i think that um even in an economy which is bitcoin maximalists don't i don't think i'm not a bitcoin maximalist but they don't understand or they don't want to accept this point that there will be other assets besides digital gold right of course yeah because you're you know the bitcoin itself is like uh it's expensive to transact when you're transacting it'll be a small number of daily transactions relatively it's about the scale of fedwire by by the way.

56:51Fedwire, about 500 ,000 daily transactions. Bitcoin's about the same. High-denomination transactions that are infrequent. That's what Bitcoin is. Everything else will go to Ethereum, Solana, you know, like privacy coins and so on and so forth, right? And other chains like this, because you just don't want to have all that traffic on just one chain. So already you have, you know, for example, USDC, USDT on other chains. You have smart contracts on other chains. You have privacy on other chains, because Bitcoin is immutable and these other things aren't. Now, what are the risks to Bitcoin? One is seizure.

57:23Two is quantum, right? So we definitely need quantum-resistant Bitcoin. And that's not farcical in your mind. That's not farcical. No. It's completely - It'll happen at some point. It's probable and it's possible in the short term and it's probable in the long term. Yes. The main issue with quantum is not that there isn't a solution on the radar for Bitcoin because with quantum decryption, you can also have quantum encryption. Sure. The key question is, is quantum decryption something where we can put a quantum safe algorithm in place in time? And people think we can. The hard part is moving every coin from the old address to the new quantum safe address could take almost a year.

58:01So a lot of old coins could get raided in that time, right? So then there's various - This is wild to think about that you might even be better off just starting a new product. There might be a QBTC or something like that, right? But in a sense, even if Bitcoin only achieves its objective. Now, one thing you get, by the way, is what's called social reset, right? Social reset could be something where the community just agrees between themselves that we're just going to snapshot the chain at this point in time and move it over to this new chain. Wild. OK. So that is a non-technical but social kind of thing, which I think is absolutely going to happen at some point.

58:38Wow. Right. Because Bitcoin is there's more Bitcoiners than there are Americans. Right. More. many hundreds of millions worldwide, right? And importantly, Bitcoin appeals to a lot of people in China. Why? Because money the party can't seize. So even as American culture, unfortunately, it's becoming less appealing to people in China. Internet culture is still valuable, right? They still need the free internet. They still want GitHub, right? They still want Bitcoin. They still want these things. Hundreds of millions of people in China still like these things, right? That's what I call the Chinese capitalist party, right?

59:09So, you know, as sad as it is to see America lose its soft power. The internet still has it and it's still rising, right? So to your point, I think we're going to see all kinds of crazy drama. Remember with social media, all the edge cases that people talked about? Actually, you remember in the late 2000s when people talked about deplatforming, it was corporate deplatforming. It was like, gosh, what was the company with a Zynga? They got, you know, Mark Binkus' company pushed off Facebook. Or Meerkat pushed off a Twitter, right? So that was corporate deplatforming. Then there was ideological deplatforming, but every possible abuse of social media censorship that said and the other happened and And in the years to come, every possible crazy attack on crypto is going to happen.

59:46But because there's so many coins, it'll be very difficult to take the currency of the people by the people for the people from this earth. On that note, gosh, congratulations on taking a lot of theories and making them into reality. You're six months into this journey, but it's clear you've struck a nerve. And I think that you're doing important work as a backstop against, you know, people being cynical and not thinking that new things can't be tried. So I wish you great success with your network school, state, and the believers in it. I think that's kind of the most interesting part is that you've assembled hundreds of people in person and tens of thousands of people online who actually believe that this audacious project is worth their energy and their time and their geography.

1:00:34So congratulations. Thank you. I'll say one last thing, which is people who are watching is apply to network school ns.com and also if you're an angel investor a vc and so on we have space so personal runway basically eighteen thousand dollars a year like that'll carry you 125k incubator check will go with two founders a couple years more yeah well so actually way more than that right like so basically so if you have if you're if you can't get to the u.s on a visa if you just want to cut your burn apply to ns and if you're an investor we can take your companies We've got plenty of space and so and so.

1:01:07It's a great pitch. All right. We'll see you all next time. Bye bye.