From Wall Street to Bitcoin & The Separation of Money & State | Vijay Selvam

28:15It's, again, to simplify things, it's just easier. It's an easier path follow, then this magic internet money. It's like, it's just a nicer, it's an easier, yeah, path really. Understand why gold and then, hey, then digital gold, right? I mean, gold, but it has all these deficiencies. So why not digital gold? And then you ask this question. So I just like that path better. Yeah, I do think that makes sense. And like, I've never been a gold bug mainly because I never had any money before Bitcoin. And Bitcoin was the first thing that I found that was like a real store of value. And like the thing that I am very bullish on, is it moving to these different, like the medium exchange unit of account?

28:54And I just worry that the digital goal keeps it kind of stuck in that same place. But let's move on to the separation of money and state, because I think this is actually really interesting at the moment, especially with everything that's happening in the US. Obviously, the Trump admin are kind of, I struggle to say adopting Bitcoin, but they're at least pretending to kind of be open to Bitcoin. And this isn't necessarily like the separation of money and state. It's more Bitcoin being integrated into the state. I don't know how you kind of look at all of that. Yeah, I caution against, I mean, it worries me that a lot of people adopt Bitcoin because they hear what the president of the United States or whatever is saying about it, because that can change on a dime.

29:38A hundred percent. panic sell because, okay, like, you know, all the Democrats have come to power. They're going to reverse everything Trump did. And that's, you've not really understood the basic, the, you know, the fundamental reason why you're doing this. So, so it always concerns me. I'm very apprehensive of those types of narratives. Um, but I did, there's a whole chapter in my book about, uh, you know, Bitcoin as a reserve asset. Um, and this was before the recent, when I, when I wrote the book, you know, this wasn't really mainstream conversation. Trump hadn't been elected. it. But I spent some time thinking about it.

30:12So what struck me when I was studying, you know, I guess political history primarily was, you know, the age of enlightenment in Europe was a key period in history, the 17th and 18th century. That was a time when individual liberty started to take precedence over absolute monarchy. It was a key period. It was the first time when those kinds of ideologies came to the fore. And all these ideas of self-sovereignty and libertarian philosophies and so on, I wouldn't say that they were born during that era, but they really came to the forefront during that period. The American forefathers were greatly influenced by those ideologies.

31:04And if you think about, I think, you know, Benjamin Franklin says, it is the first responsibility of every citizen to question authority. It's crazy to think about, you know, that kind of a statement, right? Thomas Jefferson says, it is the natural progression of things for liberty to yield and for governments to gain ground over time, or something I'm maybe butchering it a bit, but something like that, right? And if you just think about it, the Constitution was largely to protect people from the state. Those are incredibly powerful sort of, you know, ideologies. And you think about where we are today, where we've just subjugated ourselves to, you know, the state and unquestioningly, unquestioningly, you know, accepted surveillance and, you know, loss of privacy and corruption of our money, Right.

32:00So when I was thinking about all that, I can go on about it. Right.

32:09The separation of powers within the UK, separation of powers in the UK as well as the US. You know, I think again, Thomas Jefferson or Alexander Hamilton, I think Alexander Hamilton says you need to have ambition to counteract ambition. So it's sort of like different arms of the state challenging one another in order to not allow one arm to become, you know, absolutely powerful. What are all these things? It's decentralization. It's decentralized consensus, decentralized power. I can't help but think, like, I mean, when I read these things about American history, or even English history, political history, these guys would have loved Bitcoin.

32:56right it is bitcoin is in many ways that it's like the digital embodiment of these like american values of uh you know self-sovereignty and and and so on um so so it just made a lot of sense and i really love that and there's a chapter where i talk about that and i talk about why i mean it in in the current environment where where the dollar is is waning in its its power rather than risking another challenging, you know, hostile nation to Western values' currency, you know, coming to the fore, why not adopt Bitcoin, right? I mean, and it looks like gold actually might turn out to be the one that comes to the, you know, fore.

33:36At least first. Yeah, at least first. So then again, like, why not digital gold, right? So, and especially given it aligns so well with Western values and so on. So I think people need to, well, when you talk about Trump, everything, people, you know, the Bitcoin strategic reserve and all these things, people should, it's great that we're having these conversations and the Overton window. It's amazing that, you know, I mean, you and I have been around during a period where it would be, it would have been inconceivable. It would have been laughed out of the room for saying these things. And now it's - Not even that long ago.

34:08Yeah. So, I mean, it's great that we're having these conversations, but I think people need to, the important thing is that people need to, um, be pushing this for the right reasons. Right. And that requires asking those basic questions.

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36:00Rates for fully insured custody start as low as 0.55 % and are available for individual and commercial customers located in the US. Speak to AnchorWatch today for a quote and for more details about your security options and coverage. Visit anchorwatch.com today. That is anchorwatch.com. Going back a little bit in the conversation, memes and narratives are very, very powerful. And the narrative that I got into Bitcoin for was Bitcoin as freedom money. And it's a narrative that I'm unwilling to change. Like, that is what Bitcoin is to me, is freedom money. And when you look at what's happening at the moment with, you know, privacy developers going to jail, we have like, basically the only way of realistically buying Bitcoin for the vast majority of people is through these sort of KYC exchange choke points.

36:44There's also like government started to stack Bitcoin or stolen Bitcoin. Like, are we truly separating money and state? You know, there's so many attributes of, you know, there's permissionlessness, censorship, resistance, unconfiscate ability, and absolute scarcity, right? These are the four core properties of Bitcoin, right? And they're They're all very, very valuable, but I think I'm one of those people that would say that the one property that is a little bit, everyone's created equal, but some are more equal than others. There's one property more, a little bit ahead of everyone else, and that is the absolute scarcity.

37:24It's more important. It's a little bit more important than censorship resistance. It's a little more important than, you know, unconfiscated by permissionless. It's a little bit more important because that is at the core of it. And as long as that cannot be corrupted, Bitcoin cannot be co-opted. Like, I don't care. I mean, Hal Finney was talking about Bitcoin banks, right, in the first few months of coming across whatever, for a couple of years or whatever, coming across Bitcoin. None of this is new. He didn't see that. He was cypherpunk, like as cypherpunk as it gets, right? And he didn't see a problem with that.

37:57the key piece that needs to be incorruptible is the 21 million. And I don't think any of this co-opting and so on and so forth is a threat to that. Because people can always, I mean, look, if you're just going to put all your money in a Bitcoin treasury company or something, then I mean, I'm sorry, that's just, that's on you. Okay. Like, you know, if you understand Bitcoin, you need to have a significant portion of it in cold storage because you're, and then maybe, okay, you have a little bit in these other leveraged products, right? You get more Bitcoin, but with a view to ultimately, hopefully selling that and getting more Bitcoin, right?

38:37That is the kind of, you know, idea. So that's on you. And as things stand, nothing is stopping you from, you know, selling your Bitcoin treasury companies or whatever and just buying cold storage Bitcoin, right? So I don't think there's any, at least I don't see a major risk to co-option or corruption of it. I think the greatest risk to Bitcoin is from within. I think throughout Bitcoin's history, like the fork wars, you know, the block size wars was probably the greatest threat that ever existed. I don't think any government banning it or co-opting and all of that was ever a risk to Bitcoin.

39:15But if there ever is a risk to Bitcoin, I think it comes from within. So a bit earlier in the conversation, you were talking about the ramifications that Bitcoin has on both politics and philosophy. I know that you have a large part in the book about both of those things. Can we go through them one by one? What are the ramifications this has on politics? I think the biggest implication of politics is, well, it's the greatest tool that has ever existed against authoritarian states. And you take, what is it? I think, I mean, Alex Gladstein, who was very kind to write the foreword for my book, I think, I mean, he's written a lot about this and he has some great stats, but I think it's something like 75 % of the world lives under some form of authoritarian regime, you know, kind of system currently.

40:05And these are states where, I mean, it's like, you know, you think about the bankings, the financial banking system that works. It's kind of the backbone of our day-to-day existence, right? And when that system is weaponized against you, it's just not only that it doesn't work for you, and what is it, one in three people are unbanked, or one in four people of our fellow humans are unbanked. They don't even have bank accounts. And a much larger share of those people have the banking system weaponized against them, right? Parts of the Middle East or, you know, Africa and so on. For such people, Bitcoin is hope.

40:51You know, it's the only thing they have to fight back. I mean, it's like, you know, sort of, what's that? There was, I think Alex Gladstein talked about this new law that was proposed. I'm not sure if it was passed, but this law that was proposed in Iran where if any woman who's seen not wearing a hijab or just dressed in appropriate attire, it would be fined by an automatic deduction from their bank accounts. So there's no room for it. You know, paying a fine is one thing where you can either ignore it or challenge it or whatever, but waking up one morning and looking at your bank account and half of your money has disappeared because you apparently, you know, were seen without your hijab.

41:38What recourse do these people have? And people, you know, in the United States and the UK and so on sit on their high horses and their, you know, privileged worlds and poke fun at Bitcoin. What solution do they have for that woman in Iran? And now imagine a digital asset that is permissionless, censorship resistant, you know, unconfiscatable and absolutely scarce where she, you know, she can just store the fruits of her labor, um, beyond the reach of, of anyone. Um, so that's, you know, I think that is the biggest political, um, implication of, um, um, Bitcoin. Um, I talk about that. The other one, I think in the political realm is, and this is what I think needs a lot of, a lot more work and it hasn't been explored sufficiently, is Bitcoin's impact on violence.

42:40And this is actually, Trace Mayer has written a lot about this, or he talked a lot about this back in the day. But if you think about throughout human history, the majority of violent acts have been committed in order to acquire or defend physical property, right? These wars for or to defend against physical property have shaped the maps of nations and the course of human civilization. The vast majority of human strife through history has been driven by the acquisition or defense of physical property, right? The resource curse is, you know, this thing where countries that are resource rich have been the ones that have faced the most conflict, right?

43:32I mean, colonialism, right? You know, Western Europe, the UK went to India and parts of Europe. Why? Because of physical resources that they wanted to take, right? Now, what happens when you move from physical wealth to dematerialized wealth. I think people have just not appreciated the power of that. You don't need vast armies and fighter jets and tanks and naval forces to defend your physical property. You just need cryptography. So the cost of defense of your property it's just plummeted right and you could use those resources for other uh purposes in your you know in in your respective countries um so that is that is really huge and and really um underappreciated um yeah so so so that that i think to me that is the biggest political implication of dematerialized uh wealth which is bitcoin it's funny you bring up alice gladstein so i'm i've just got into Bali this morning, there's a conference happening out here.

44:43And I'm really curious to hear what the conversation that they're having in a place like this will be. Because you go to a conference in the US and everything is just talking about the financialization of Bitcoin in general. And Alex will be out here. He's bringing a whole squad from the Human Rights Foundation. And again, kind of back to narratives, I think that is one of the most powerful narratives. When Alex talks about the things that Human Rights Foundation are doing, and obviously it's not just Alex, he's amazing leader there, but like Arsh and CK and all the people working there. It's impossible to ignore.

45:15And when you look at like the background you've come from going through like Harvard and Goldman Sachs, do you think that is one of the reasons that people from those kind of backgrounds find it so hard to understand Bitcoin because they are coming from a very privileged position? I mean, so this is why I actually asked Alex to write the foreword for my book because I, yeah, I agree. That is one of the most underappreciated and just, and people are shocked. Most people would be shocked when you say Bitcoin and human rights, the same sentence, they probably just go like, what are you talking about?

45:49That, you know, how is this, this is, you know, because it's internet Ponzi. Like, what are you talking about? How is that? I have anything to do, uh, you know, with, with human rights. And that's why I wanted him. And I'm very glad that he agreed to do it. Um, because it is the most underappreciated aspect. but it's the permissionlessness, the lifeline that it offers to unbanked people around the world. You know, what is it? 90 % of South Sudan is unbanked. Can you believe that? I mean, that's a country where 90 % is unbanked. You know, 200 million people plus in India are unbanked. 60 million people in Mexico or something like that are unbanked.

46:27And all these people have cell phones. And so, yeah, you just connect to the internet, open a wallet, and you're banked. That's huge. But people, it's massively underappreciated because... But I can only blame the media for that, right? You have the media constantly talking misinformation. The only thing they say about it is volatility. You know, Aaron, what's his name? Andrew Sorkin or CNN, just constantly obsessed with It's volatility. Cannot see beyond volatility. It's just a complete obsession. Yeah. And I've spoken about this before on the podcast. But again, with the Human Rights Foundation, a couple of years ago now, I was out in Malawi, which by many metrics is the poorest country in the world.

47:14And a few days before we got there, their currency was devalued by 40 % overnight. And if you want to talk about volatility, that is volatility. Bitcoin is very stable comparatively. And this is the place where Bitcoin can truly be a lifeline. And don't get me wrong. I think this is coming to the rest of the world. But right now, they're the places that need it most. The tricky thing is kind of the education and infrastructure to get Bitcoin to those people. But, I mean, that's why it's important to have people at the Humor Acts Foundation doing what they're doing. Yeah, yeah. And the volatility argument, honestly, is something that has, you know, again, the obsession with it, it blows my mind.

47:52Because, like, there's such cognitive dissonance over it, right? Because if volatility is about, like, what is Bitcoin? What is Bitcoin disrupting? Bitcoin is disrupting money, right? Of course, it's going to be volatile versus what it is disrupting. What were you expecting, right? I mean, you talk about, like, okay, so if volatility versus fiat, volatility versus the dollar is bad, by extension, then no volatility should be really good. That's a stable coin. What are you talking about? So, you know, if Bitcoin was successful in disrupting money, of course that the path to achieving that disruption was going...

48:36I mean, disruption is always volatile. The path to disruption is always volatile. It is not going to be linear or incremental. It's got to be volatile because, you know, it takes time for Bitcoin to permeate through the, you know, the psyche of humanity. People need to understand it. It takes time for people to understand it. And human understanding is volatile. Human, you know, emotions are volatile. So until a critical mass of humanity understands Bitcoin, of course it's going to be volatile, right? And I don't know why that surprises people. And on the other hand, volatility is falling, right?

49:22And this is the other thing. Like if you just need to take the right time horizon, if you take a four-year time horizon, look at a four-year moving average of Bitcoin, the 200-week moving average, which Adam Back really loves to talk about, because that is a smooth up, you know, 45-degree line that has never had a single down day. It is the most non-volatile sort of line. And if you're a young person, you should be taking at least a four-year investment horizon on your investment. You should, why are you looking at it on a minute by minute basis or an hourly basis? You should be taking, you know, invest in it and come back five years later or 10 years later for that matter.

50:02Right. So it's just, it's, it's really frustrating, but, but yeah. I mean, that, I do think that's interesting though, because like my time horizon when it comes to Bitcoin isn't four years, it's 20 years, 30 years. Like this is something I'm putting away for a long time, but on the positive side of that, I do think the time horizon that we're going to have to push again as like a narrative in this is going to reduce. Like it seems like volatility is reducing. I think that's a good thing for the adoption of Bitcoin. I think give it a few more years and we could be talking about just put money away for two years and then maybe it's one year and then maybe like you just put money away.

50:33And I think that's going to be a massive positive. And it's funny, like this conversation unintentionally has been kind of all about narratives. And one of the things you talk about in the book, and I know other people have written about this, is Bitcoin being like a mirror, like whatever you want to see in Bitcoin, you kind of can. And I think that is one of the most interesting parts about it. If you're a very progressive person, Jason Meyer wrote books on this, you can see your progressive ideals reflected back to you in Bitcoin. If you're very conservative, you can. If you're anarchist, you can.

51:03And I think while that is very important in Bitcoin, it's also one of the things that make it difficult to understand. And how do you look at Bitcoin in that sense? Yeah, I mean, you see yourself in it in a way, but it also forces you to ask yourself who you are. It forces you to ask yourself where you fit on the continuum between left and right. Are you, you know, libertarian versus fascist? Where do you fit? Right? Because those are ideologies. How important is privacy to you? Right? How important is self sovereignty to you? So it forces you to ask those questions. It also says a lot about who you are in the sense that do you have the intellectual humility?

51:55Do you have the open-mindedness to admit that maybe you were wrong about it? Maybe you haven't seen something, you know, sort of... It takes a lot of intellectual humility and intellectual honesty as well. So it forces you to do that. And it reflects back, you know, kind of if you reject it and you're not, it shows you who you are in that respect. And I mean, yeah, I close with that. That's my closing chapter in the book because I think, you know, it comes a full circle. It really kind of, you come back to yourself at the end of the day. And humans, by nature, they prefer the status quo. And that's because, you know, it's risk aversion.

52:45And throughout history, and I have this list of, you know, inventions and what people said about it. You know, historically, you have, of course, Paul Krugman talking about the Internet being a fad in the 1990s. you know, every single major invention was completely trashed by people when it was introduced. Like even the bicycle, you know, it's sort of, it's crazy, but the bicycle was completed. People said that, oh, it's, you know, it leads to all kinds of health disorders. It's going to destroy, because women were riding bicycles around, it's going to lead to the degradation of morality in women and all these types of scam-hongering, which has eerie parallels with Bitcoin, right?

53:31So, yeah, it shows you all these things about yourself. Like, I mean, yeah, kind of, are you open-minded enough? Are you progressive enough to at least explore it? And then maybe adopt it and advocate for it. But at least, you know, be open-minded enough to accept that, yeah, maybe you got it wrong. Maybe there's more to this than what you're hearing on CNBC or reading in the New York Times. it's the freedom virus um so when you talk about the ramifications on philosophy this is one of the most interesting parts to me um i think we kind of touched on a little bit there but do you want to expand on that um yeah let me i can add some context to that um because like bitcoin has definitely changed me as a person and i know to people who may not be like deep into bitcoin that might sound like a wild statement but things like time preference change your life in a huge way and If you have money that you can actually put away and trust that it's going to retain value over time and like increase in fiat amount, like it does change the way that you view the world and the way that you interact with the world.

54:45Yeah. So, yeah, it comes back to the origins of consumerism, Asian economics. So the fiat money depends on debt. It needs debt to keep going because you need to be able to spend, you know, future productivity today. today. You need inflation, you need all those things to work in order for it to be sustainable. So it encourages debt, it encourages overconsumption, which in turn leads to environmental degradation and the destruction of civilization and culture along the way. So I talk about that and I talk about, I mean, it's visible everywhere, like architecture, You know, it's sort of, you just look at the modern architecture, which is built to be, you know, made redundant in a few years when it's not fashionable anymore, um, as opposed to, you know, really a robust, um, beautiful architecture from a few hundred years ago.

55:45I mean, I feel like you being in London, there's probably no clearer city to see that you see like a beautiful 15th century churches and then just horrible glass buildings everywhere. Yeah, exactly. Exactly. So these are all, um, you know, byproducts of fiat. They're all the byproducts of consumerism. They're all byproducts of debt and just moral degradation in society that, you know, that is that has resulted from this system that we live in. So what Bitcoin offers is a way to go back to a bygone era of hard money. And if you think about it, I mean, that's why there would have not... There wouldn't have been a way to do that.

56:30You know, it's so powerful, Bitcoin, because it empowers individuals. It's this nonviolent, you don't need a war. You don't need to have any kind of conflict. You don't need to have a revolution. It's a silent, peaceful revolution that all you need to do is transfer your value into this new, unconfiscatable, permissionless, censorship-resistant, you know, asset that just exists in the ether. And that's all you need to do. You don't need to pick up a, you know, like, you know, whatever. Like, you don't need to revolt against the state and pitchforks and all of that, right? So that's incredibly powerful.

57:14I think it was really important to do a very sort of fundamental Bitcoin show. And I know we've only touched on all of these things kind of quite briefly and very sort of high level. You have an open invite to come back whenever you want, and we can maybe get into more depth on them. Maybe the one thing I will maybe, you know, sort of mention is, and this was the basis for the book as well, aside from the first principles aspect of, you know, describing things and asking the basic questions, was also the holistic aspect. And that's what the cover is. It's, you know, technology, economics, politics, and philosophy as a Venn diagram, and then Bitcoin at the center.

57:48And this was, we talked briefly about it, but the, you know, the blind man and the elephant parable. So this is the first page of the book, and I loved this. Honestly, I opened the book, read that page, I was like, right, this is what I'm going to read. So just for your listeners, so this is a, it's an ancient Indian parable, actually. So you've got these blind men, and you have an elephant. And they're asked to touch different parts of the, you know, the elephant, and then try to describe what an elephant is. They don't know what an elephant is. So one guy goes and touches the elephant's tail, and he says, oh, the elephant is like a rope.

58:29Another guy touches the elephant's leg and says, oh, the elephant is like a tree trunk. And then another guy touches the elephant's trunk and says, oh, the elephant is like a snake, right? So I think that's a, I've probably thought that's a good analogy for Bitcoin because you've got, you know, CNBC that's, for them, Bitcoin is only about volatility. Or, you know, the New York Times, Bitcoin is only about the environment, right? So you've got to look at things holistically to see the full elephant, right? It's like the blind men all of a sudden got their sight back and saw the holistic elephant.

59:07And I think that's Bitcoin. And that's the idea that, you know, the whole is greater than the sum of its parts. Humans are wired to see things holistically. So if you look at it in a silo, If you only look at it from its economic aspects, you're going to miss its implications for people living in authoritarian regimes, its political aspects. If you only look at that without understanding its technology, words like censorship resistance and permissionlessness and scarcity are going to be just words. You need to understand where they derive their meaning from. So that was my idea. And that's why I tried to cover all of them holistically, bring them all together, because that's the only way to really see Bitcoin for what it is.

59:54And that's one of the reasons why I think the last chapter being about Bitcoin as a mirror is such a good callback to that very opening parable. Because I think when it comes, I've basically stopped trying to orange pill people, like just random people in my life. I've spoken to everyone I care about. It's been nearly 10 years of this. and some people have got it, some people have chosen to ignore it and that's fine. But now if anyone comes to me and asks about Bitcoin, I always try and start with getting them to ask the questions they want to understand from me rather than trying to explain something to them.

1:00:23Because I think when you try and explain Bitcoin, because it is this huge behemoth of a thing that touches so many different elements, you can end up just describing the rope or you can end up just describing the tree trunk. It's very hard to give a full holistic picture, which is, again, why I I think this book is great. I really appreciate it. Thank you. Thank you, Danny. But like I say, Vijay, anytime you want to come on, I'm more than happy to do it. We should do another one and get into a little more depth. We've kept this quite surface level, but it's an important show. I think for me, like I've been doing a lot of shows on treasury companies and macro stuff.

1:00:58And it's nice to get back to kind of fundamentals of Bitcoin. This is one that I'll share out with friends who are like trying to get interested in Bitcoin. But we should do one where we do more of a deep dive at some point. Yeah, I'd love that. Yeah, perfect. Thank you for having me on. I appreciate the time, Vijay. Where do you want to send anyone who doesn't know who you are, doesn't know where to find you? So my Twitter handle is vjselvamxo. That's probably the best place to find me. And by Principles of Bitcoin, it's a really good book. But yeah, thank you, Vijay. I appreciate the time, man.

1:01:30And we shall speak again at some point. Next time I'm in England, we should do one in person. Yeah, I'd love that. All right. Thank you, mate.

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