Noded Live With Pierre Rochard and Michael Goldstein

Pierre Rochard (Kraken), Michael Goldstein (Nakamoto Institute)

[00:00:00] Pierre Rochard: Welcome to a very special edition of the Noded Bitcoin podcast. We're here for the Bitcoin Magazine 2020 Halving party, and we're very excited to be counting down to, what may be the most important  event of certainly, this year, but quite possibly this decade and I'm joined here with my cohost, Michael Goldstein.

Michael, how are you?

Michael Goldstein: Doing well, family has webcam because of quarantine stuff, so people can't see my quarantine, caveman look, or, you know, no haircut until 100,000.

Pierre Rochard: Yeah. 100,000 is I actually think that I will cut my hair if it drops below a thousand dollars. because I'm trying to keep it and, I've  grown a liking to it.

Maybe we'll start like, you know, how historical events impact fashion and trends. we'll see a very strong return of the beard, because of the quarantine. [00:01:00] Gave me an opportunity to grow mine out although it's still, it's very patchy. So...

Michael Goldstein: the state won't let me get a haircut right now. and of course there's the position you hold, which is you should just cut your own hair, but then why not take it further?

It's like if you just don't even cut your hair, you know, you can save that five minutes or however long it takes to, you know, buzz your head and go work more and stack more sats.

Pierre Rochard: Yeah. It's also a sign of vanity too, to care about your appearance. And so I would argue that, the people who are spending lots of time cutting their own hair, it shows poor character.

They're a person of low character.

Michael Goldstein: We need to see more Bitcoin monks that have a, you know, the top of their head shaven off. Yeah. That's it.


Pierre Rochard: Yeah. Repellent.

Michael Goldstein: You see Bitcoiners are purposefully unattractive. It's purposeful, guys.

Pierre Rochard: It's constantly signaling. So, thank you to, Bitcoin Magazine for inviting us to, do this virtual [00:02:00] conference, coming up to the Halving and, I went to the Bitcoin Halving conference in San Francisco last year.

That was a lot of fun. So it was really disappointing to have that be canceled due to, frankly, the communists , if we're going to be blunt about it. I know that there's a lot of people out there who say that we should not criticize communists, but my view is that they've killed a lot of people and they continue doing it.

Michael Goldstein: Yes. Yes. "Which group of communists?," you may ask. All of them.

Pierre Rochard: All of them. Is there a hammer? Is there a sickle?  there's only so many ways to slice and dice that one. But, yeah, so hopefully the conference, will get rescheduled later this year or next year.

Michael Goldstein: Perhaps the communists are taking a sort of like Marxist accelerationist position. You know, Marx kinda saw capitalism as a, a means to get to a, you know, the, the proletariat awakening and uprising or whatever. So it's [00:03:00] like, you know, if we can just tee up  -- we're in a position right now where capitalism is sort of, falling apart in a way because it's just, it's been totally ruined by crony capitalism.

It's not even what any of us are referring to when we use the word, but we're also on the precipice of Bitcoin. Which means like just hyper capitalism, in all of the best senses. So, it would make sense for them to want to bring upon, tee up the greatest, you know, entry for Bitcoin possible so that we can reach that golden age of Bitcoin capitalism.

And then somehow. Do whatever they're trying to do.

Pierre Rochard:  I do think, yeah, Marx wanted peak capitalism and that, that would cause the transition, you know? But  I think the problem and the hole in their logic is that, They are currently the ruling class. And so,  they're going to get overthrown.

because now they're the bourgeoisie right? They're no longer the [00:04:00] revolutionary Vanguard.

Michael Goldstein: So I guess what they didn't see was the Bitcoin plebeian uprising.

Pierre Rochard: Yeah, exactly. I do think that if we look ahead. over the next four years, but also 40 years and 400 years, , the Bitcoin plebes are actually like a political force.

and  quite a powerful one when you look at what they have in their arsenal, both from a, economic perspective, but also from a memetic warfare perspective. There's just nothing like it right now.

Michael Goldstein: Yeah, they've been, they've been battle-hardened and on top of that, they have  pretty strict, you know, kind of, worldviews.

And they have the mimetic defenses for it. . So..

Pierre Rochard: Yeah, nothing and nobody is off limits. I, I've been attacked by plebes, I'm sure you have

Michael Goldstein: I've gotten my share.

Pierre Rochard: I think the taco thing is actually against you and Saifedean's carnivory, is what I've [00:05:00] heard.

Michael Goldstein: Yeah. try having like a, you know, vegetarian taco. I can't imagine it's as good.

Pierre Rochard: So you've got to have beef in your taco. I get the, you know, they're not all about, you know, beef only, but you got to have beef in there.

Michael Goldstein: Yeah. And hey, I get tacos. I'm, I'm from central Texas. I am not, I'm not anti taco. I just don't eat them myself.

Pierre Rochard: Yeah. And we don't pretend that they're healthy.

You gotta get your fiber. so yeah, so I think the geopolitically, and, you know, Bitcoiners as a whole and not just the self-identifying plebes. and now I wonder. Is there less Bitcoin ownership per capita in some countries versus others? And especially in countries like China where, you know, the government has tried to, put a damper on Bitcoin adoption.

I think that , once again, the communists are mucking it up and it's going to really hurt the Chinese people that they [00:06:00] don't have as much distribution of Bitcoin through their population. That's pure speculation on my part. They might actually be ahead of us in terms of, ownership.

Michael Goldstein: The interesting thing there is the fact that you know, as Saifedean writes about the monetization of gold and how gold became the dominant force and one of the countries that was hit hardest by this. as he described was China because they were heavily invested in silver as money. And so once again, you know,  if they're going to hold on to their, whatever digital Yuan they're trying to make in light of Bitcoinization, that could be, quite a problem.

And yeah, on top of that, you know, Bitmain  they got rid of so many Bitcoins, like such an enormous opportunity cost of giving up Bitcoins in the sort of fight against, the so-called small block Bitcoin. It's something to consider is that  any big profitable company in China [00:07:00] is likely going to be in some way controlled by the communist party.

And so if that's the case, then

Pierre Rochard: Whoa, hold on. Michael, you're saying that the communist party controls the means of production? What, what?


that's a conspiracy theory.

Michael Goldstein: I mean, it's like China, China, themselves. may have almost like willfully given into a shitty fork of Bitcoin. And given up their future potential because of that.

And meanwhile, I think, yes, I think, likely so that Americans have a much more dispersed, Ownership of Bitcoin. And I think that bodes well for this country's future, our country.

Pierre Rochard: Yeah. And the other thing too is that, even if there are, let's say, Chinese individuals who own a lot of Bitcoin, That doesn't really help with their government if the seizure resistance holds up. and so if these [00:08:00] individuals are able to get out of the country, you know, if the government communist party really becomes even more tyrannical, Or they are able to use their monetary resources to change the Chinese government, and either put in communist party officials who are pro Bitcoin or  in the spirit of decentralization, abolishing the central, Chinese communist party and, instead splitting up into provinces that are, autonomous and, you know, making better decisions, and that perhaps, you know, some of those provinces would've ended up being very friendly towards Bitcoin.

And, there will be Chinese citadels.

Michael Goldstein: Yeah. and, and meanwhile, I mean, I think all of this comes together. This is not off topic for the Halving because, I was listening to the really fantastic, episode of the Stephan Livera podcasts with Saifedean and, planB and [00:09:00] plan B thinks that the sort of next phase in his metaphor now, if the cross asset model of stock to flow, the next sort of phase of Bitcoin, he suspects will have something to do with sort of the, geopolitical awakening of Bitcoin in the sense of all the people who.

you know, it's not just like, it's not just the gold bugs then it's not just like the financial people, but now geopolitical thinkers who are thinking on a macro global scale of how, you know, different resources and, governments effect, these big, international issues will come to realize how important a Bitcoin is. And so these questions matter.

Pierre Rochard: Yeah, absolutely. I mean, it's, it's an asset that just has fundamentally different properties than, any proceeding asset. And, I think any, future asset, I don't think that there's going to be something that surpasses it.

you know, from the [00:10:00] perspective of censorship resistance, seizure resistance, permissionless, and of course the sound monetary policy. And it's just a matter of like these geopolitical strategists catching up to that fact, and also, Bitcoin reaching a certain level of liquidity, to where now it actually is a practical possibility for a government to buy $1 billion worth of Bitcoin, you know, as part of their longterm


Michael Goldstein: Yes. Yes. And that's of course, interesting because, they wait until it's practical, you know, $1 billion might not buy you nearly as many Bitcoins as it would have earlier on if you had the foresight to think in terms of long tails.

Pierre Rochard: Yeah. And it's. You know, it's, part of it is a data problem. So like, because of plan B's work because of others, doing, you know, kind of the price data analysis piece.

It reaches a certain type of [00:11:00] person who, cannot assess qualitative fundamentals and must have numbers, right? and those individuals, a lot of them, like they work in finance because they're attracted to numbers. but they also do work in consulting, type things. .

Once you have the historical price record and you can show, okay, here are kind of the ranges in which the price can go, you transform the, uncertainty about Bitcoin's future value into, price risk. it's something that can be, modeled using statistical methods and further something that can be priced, in the derivatives markets.

And thus, you can actually hedge and get rid of the volatility. and so even a government that is like, "well, you know, Bitcoin is too volatile for us, [00:12:00] we don't want it in our foreign exchange reserves. What we want is a stable asset that is a censorship resistant, seizure resistant, permissionless.

And it does have some scarcity to it." Well, you can still construct that asset without volatility by combining holding, you know, actual Bitcoin, not your keys, not your Bitcoin. And also, buying puts. and so basically what a put would allow you to do is that if the price goes below a certain target, then we're allowed to, sell our Bitcoin for a fixed dollar value, at that target.

And so it eliminates the downside risk. Now, obviously you have to pay, that insurance premium, but. the fact that it is an insurable risk actually is, is really notable because, you know, the Austrians talk a lot about the difference between uncertainty and risk, and, in monetary economics, [00:13:00] holding a cash balance is not about risk because you can actually just go and buy insurance for that, you don't need a whole cash for that, it's about, hedging against uncertainty and uncertain future cash flows. And when you think about like, what causes uncertainty in a monetary system, well, okay, it's not the exchange rate, right?

Because we've already determined that that causes risk. It doesn't cause uncertainty. What causes uncertainty in a monetary system is civil asset forfeiture, you know, banks freezing your bank account, like you can't insure against those risks and -- sorry, you can't ensure ...those are not risks because they are not insurable, right?

They are uncertainties. and, if you look at from the perspective of Bitcoins just fundamental properties, they're all about minimizing the uncertainty. and so when you run a full node and when you've got a Blockstream satellite hookup, and all of this, [00:14:00] uncertainty mitigation in place.

You really have -- and obviously on the private key, holding side and seizure resistance of your seed and hardware wallets or whatever -- what you've constructed as an asset that has, less uncertainty, obviously it still has uncertainty, but it has less uncertainty than any other asset that we know of.

And so I think that, you know, looking at it through that lens, you already have in 2020 the premier monetary asset that everyone should be holding and whether they are worried about volatility or not, it's kind of a separate question about how they're going to manage that very specific risk and what products are available to them for that.

But that's really unrelated to Bitcoin.  Bitcoin's exchange rate volatility exists outside of the Bitcoin system. The only other, uncertainty or risks that I think, is indogenous to the Bitcoin system that we don't discuss enough is the transaction fee risk [00:15:00] or, uncertainty because actually I don't think that we do have enough data, in order to quantify it into being a risk that can be hedged.

Right now we have really primitive form of hedging, with, layer two solutions, right? Lightning and Liquid are, in my view, Bitcoin transaction fee on chain derivatives. and that's something that maybe as we look towards the next reward period of the next four years, now that we have kind of the price exchange rate risk, figured out, it was going to be more about figuring out the transaction fee

risk, and, and the pricing around that.

Michael Goldstein: Right. There's a lot of questions around, you know, sort of at scale when everyone's trying to trade the Bitcoins, how much can you expect to be paying at a given time? as well as, you know, like with lightning and whatnot, find ways to, kind of get around that by like paying a [00:16:00] peak fee up front so that you can do all kinds of transactions rapidly.

And, unfortunately, you know, most of this Halving period, this, this era, the, you know, you could get away with a satoshi per byte, so there wasn't really a pressure to be figuring that stuff out, although it's, it's much better than it used to be and the last bottleneck really helped develop, you know, batching,  understanding the value of SegWit and. other stuff that, you know, there's still actually a big problem with exchanges, basically spending way too much on transaction fees and that kind of, hurting everyone else who was wanting to, put in a transaction.

Although, you know, the exchange, they're willing to pay that price apparently. Rather than either pay the engineers to save them that money. but in the future, that might not be as tenable for them. And, I think at scale, more of those bottlenecks are going to come across and people were going to be able to figure out, the actual fee rates they want to pay [00:17:00] and all what time schedule and how they might want to space out their transactions to best get transactions into blocks when they, when they need them.

Pierre Rochard: Yeah. And it's interesting to note the parallels between, the, I want a word for a Fiat shills whose hang-ups are about volatility.

So like they're, stablecoiners. I don't know, we've got to think of... Normies?


Michael Goldstein: we could call them turkeys, like the  turkeys who think like everything's stable until it's not. And so it's, it's, which is, is more about their own perception of their currency rather than

bitcoin. So it's like they, they overestimate how stable their currency is.

Pierre Rochard: Yeah, that's right. And I think that what they're doing is that they are more risk averse then they are uncertainty averse. [00:18:00] And so for them, like they want to minimize risk at all costs. Well, they don't understand is that the at all costs part creates tremendous uncertainty.

and, we're going to see , this Fiat monetary experiment, you know, display some uncertainty, but I want to draw the parallel between those anti- price volatility people and the anti on chain transaction fee volatility people, right, where  their main critique of Bitcoin is that they're worried about, the future costs of on chain transactions.

And I think that it's kind of the same, risk aversion problem, is that they are so risk averse that they, they want to minimize the transaction fee risk at all costs. Despite that increasing like uncertainty, you know, about Bitcoin's scalability, right? And, and the, the ability to stay decentralized.

Michael Goldstein: Yeah. That's a very [00:19:00] good point.

Pierre Rochard: so I think that, they gotta get over it. And the only way they'll get over it is, with time, as more data comes in, more price points come in. And at that point it'll be too late. You know, there'll be like, all right, now that Bitcoin is -- I can hedge away the price volatility, I can hedge away the transaction fee volatility. Now I'm ready to get into Bitcoin. you know, at that point, maybe there won't be an exchange rate. Maybe, you know, we'll be at full adoption.

Michael Goldstein: Yeah. There's a, , a set of people who like to, you know, troll Bitcoin maximalists from an Austrian position. not that I think that they have a good  Austrian position, but  they're trying to use the same literature that we've read and that made us Bitcoin maximalists in the first place and try to use that against us. And they'll pull up stuff from, you know, Menger and I was revisiting Menger because I was thinking about these, these types of arguments.

And you know, he looks at the saleability of a [00:20:00] currency as covering many dimensions, which I think is, is very much true. And I think what happens is -- and I think they don't even understand this when they're making these arguments -- it's like they're hyper focused on one particular dimension of that, while I would argue that Bitcoin maximalists, tend to have a more holistic view, which is like, yes, like, you can increase

the dimension of, the sort of time aspect and in the sense of being able to get a transaction in at a given time. But we also want to have the, certainty over all time that my proportion of the Bitcoin economy is actually what I think. and I'm willing to wait longer for a transaction knowing that.

And so this is like the, that's an uncertainty that we can get rid of. And yes, it has a higher cost, but that might be totally fine.

Pierre Rochard: Yeah. And I, on the saleability [00:21:00] argument, like, my view is that, again, it goes back to like what you're trying to accomplish with money, and if holding a balance is about minimizing uncertainty, then saleability you're going to want to have the least amount of uncertainty about saleability.

Right? And so, in terms of time, like to me, that means that you're going to have, the highest chance of finding a buyer for that asset at some point in the future. And with the internet, like, yes, you can find a buyer for your Bitcoin 24/7,  365, you know, and, you can send those Bitcoin with final settlement, you know, an average of 30 minutes.


Michael Goldstein: but they're saying, I mean their, their point is that that price of doing that will become so absurdly high that you wouldn't be able to do it.

Pierre Rochard: That's a risk, not an uncertainty.

Michael Goldstein: Right. because you can pay that [00:22:00] price.

Even if you say, Oh, the transaction fee is more than a cup of coffee by orders of magnitude even, technically you can still do it. It's just, is it actually worth it to you to have to pay that big of a fee?

Pierre Rochard: It would be an uncertainty if it was like miners randomly ignore 20% of transactions and you can't resubmit.

So like, alright, here we go. Let's go play the transaction lottery. but no, it's, it's a market, you know, and, and, getting outbid by someone else is a risk.  if you look at the history of Bitcoin, like, okay, we don't have a lot of great data. And so that's why I hesitate to say that it's insurable at this point because there's just not enough numbers to run through an actuarial model, essentially.

Right. but. I'll tell you what, it was December of 2017 was the only time where it was like, "Oh wow, that's really expensive, you know, to send Bitcoin," and that was like $25, $30 per transaction, which sounds like a lot for people [00:23:00] who don't necessarily have, you know, a lot of Bitcoin, but for, for those who were actively trading and, arbitraging between exchanges, like they're used to paying those kinds of fees all the time, left and right.

Like to them, the bigger costs is going to be the slippage in terms of the price. And so it's more about the cost of liquidity, then the cost of sending an on chain transaction. Now, that was an extreme scenario. Like that was, on the S2F model, you're, you're outside of two standard deviations, you know, like, in, in terms of the parabolic moves.

So.  in their minds, and they still make this argument, they're like, they still think that today it costs $35 to send a Bitcoin transaction, like in their, in their worldview.

Michael Goldstein: well, and they also, the, the wallets that they tend to use are made by people who are not. exactly, fans of the Bitcoin community.

And so they don't do a very good job of fee [00:24:00] estimation and they end up overcharging. So, you know, those wallet developers should also be looked at as like a source of, you know, well, "Hey, are there things that you may be able to do or that I can contribute that would help us like get the fee where it actually needs to be?"

Pierre Rochard: Yeah. Because if you think about fee estimation, you're basically talking about. Okay. how do we create a quantitative model, to forecast, future fees. And so, you know, you might be forecasting fees in the next block. Or, you know, fees in the next day or in the next week. And, right now that forecasting model is very rudimentary. In, in Bitcoin core,

it actually only looks at, as far as I know from the latest I've read, is that it looks at transactions that have already been included in the blocks. If it's not looking at the mempool. part of the concern there is the minors would be able to gain the men pool. but yeah, I think that the, [00:25:00] that, that forecasting model is going to become increasingly sophisticated. Right now,

I think it's still, you know, a  first iteration, no, not, it's not the first iteration because I know it's been improved a lot.

Michael Goldstein: It's also L\like how can you start to model it out so like miners can't game it as well.

Pierre Rochard:  if you use on chain, you know, transactions that are already been included in blocks, miners can't game that because the revenue would go to other miners.

statistically. but what you can do is, if you're looking at both on chain and the mempool, you can you start creating some heuristics about whether to fall back to on chain, if you think the mempool is being manipulated. and I think that  the reason that fee estimation has not improved on the Bitcoin core side, is simply because fees have been so low.

and so there's not really a huge, as you were saying, like not a huge incentive to go and then improve that part of it. but it will improve [00:26:00] as competition to get into blocks, increases over the next reward period.

Michael Goldstein: Absolutely. And the other, you know, egregious error that, people who are risk averse, to transaction fees, they tend to, use dollars as their unit of account when looking at transaction fees. which is also ironic because they accuse Bitcoiners who are obsessed about number go up as being, as not using Bitcoin as their unit of count. It's like, "Oh, you're still in the Fiat mindset cause you just want to make more Fiat."

And it's like, no, that's a proxy for us understanding like how much of the global economy we've eaten up so far, but to, to do that in dollar terms, if you actually look at the transaction fees in Bitcoin terms over time, it's, it's kind of gone down a little bit. It's like a, it's not a very steep,  downward trend, but there is a downward trend.

And the, the example [00:27:00] that I've enjoyed sharing before is the transaction when jercos sold pizzas to Laszlo for 10,000 Bitcoins, that transaction had a fee of one Bitcoin.

We are paying nothing in fees compared to Laszlo.

Pierre Rochard: When I first sent a Bitcoin transaction and paid a fee, I was upset that I was paying a fee. I was like, this is free and open source software. How dare they charge me a fee for using it like this? .

And then I started poking around to figure out how to set the fee to zero, because I was like, I will not let myself be scammed by these developers. because they had like a hard-coded minimum in there. And I was like. I was very suspicious of it, that, you know, they were skimming off the top here. And so I think that there's like a natural, gut reaction against fees because it is this free and open source software that you downloaded from the internet and you never, you know, you might have a donate [00:28:00] button but Not, not a fee button. so I think that part drives some emotional anger against transaction fees and leads to all these rationalizing arguments.

The other thing that also drives that is, people who are very risk averse with regards to transaction fees resent the fact that others are not so risk averse and that others are perfectly willing to self-insure that risk. Right. And, you know, take care of their UTXO set and be conscious of the risk, and properly manage things,

so that they don't have any problems in terms of future spending. But, yeah, so that, that I think upsets, sort of some risk averse people too.

Michael Goldstein: , I mean, I can understand the, not enjoying middlemen, because you know, you, you start to look at how middlemen are everywhere and it gets really upsetting, realizing like, you know, this person skims off 2% and then someone else is skimming off 2% of that and so on and so forth.

[00:29:00] And you realize like, how much money is lost because of complete nonsense like this, and it's just like, it's very parasitical. However, you know, to, to think of, even, you know, things like, you know, visa or, you know, other payment methods and all this thinking of their fees versus how Bitcoin operates.

Bitcoin is a very straightforward thing. Like, you know what you're paying the fee for and over time, hopefully we'll be able to model out what that fee actually is better. . But like, you know, Visa, you have like the, the fee on the merchants and then like that fee itself is built on all kinds of other like baked in stuff.

It's just like this, like endless, mass of people trying to skim fiat off one  another. And bitcoin is just like, here's the fee. It's in a block, now it's done.

Pierre Rochard: Yeah. Good luck finding like what the fee rate is for Visa, you know, like in figuring out...

Michael Goldstein: Goldbugs

can't even tell you what the fee rate is for moving [00:30:00] gold across continents.

Pierre Rochard: Let's get into gold. Let's get into gold, yeah.

Michael Goldstein: Right. Finally.

Pierre Rochard: Okay. So I wouldn't go so far as to say that, but I, I do think that, you know, we were talking about China and silver getting demonetized back in the day. I think the gold is going to be demonetized by Bitcoin as well. Now, obviously, I think that the dollar is also going to be demonetized by Bitcoin, along with bonds, stocks, real estate, insurance, you know, name it.

I think that Bitcoin is going to have, Hyper deflationary effect on it. And so, people were like, Pierre, you should be nice to the gold bugs because they are so close to us ideologically. And it's like, all right, but I'm still going to make the argument that Bitcoin is better than gold. You know, like that's still the reality and I'm still going to defend that.

and I'm not going [00:31:00] to like put on the kid gloves for a specific asset, due to ideological affinities.

Michael Goldstein: Right. And it, you know, they, they're not afraid to, like,  I'm sure they try to talk about the, the ways in which gold is better, which I assume just comes down to the physical nature of it. well, actually, I'll also add the, because it's hard to transport, that doesn't make it harder to steal.  once you've, once you've accessed, if you've accessed the private keys of gold, that is to say the vault, it is much easier to steal than Bitcoin. But with Bitcoin, it's much easier to conceal those private keys.

Pierre Rochard: Yeah. Yeah. We could get into heist logistics too. That would be,

Michael Goldstein: yeah, that's an interesting topic. But the point is we have to sit here and think of the ways in which gold is like actually better.

Pierre Rochard: and it's funny because like, that what kicked off this animosity, was that Dan Held tweeted out. Gold is old, which, Hey, that's a great, [00:32:00] that's a great meme right there.

And it's not wrong.

Michael Goldstein: so that's the argument for gold?

Pierre Rochard: Yeah. Right. That's, that is the argument they make

Michael Goldstein: Dan, why you pumping gold?

Pierre Rochard: it's been around for thousands of years, so it'll be around next year. now, Dan, Dan, Tapiero, who is like, associated with, Real vision and, Oh, I forget his name, Raoul Pal.

so he was offended by this because he's like, he is, he's a gold guy, but he also likes Bitcoin. So he's, you know, big tent, "hey, let's have, let's have lots of gold and lots of Bitcoin and this is going to be a really great future." And so he  replied to Dan, listing out the, the, the advantages of a gold and

you know, I think that anytime someone lists out advantages of gold, of real estate, of altcoins of USD or stocks, like they are putting [00:33:00] themselves out there, you know, and, and opening themselves up for criticism. So,

Michael Goldstein: by line criticism.

Pierre Rochard: Yeah. Yeah, absolutely. They've made a substantive argument.

That's my favorite thing in the world. Let's engage on it. now things started falling apart when...

Michael Goldstein: I didn't think you were going to bring back a substantive argument against me.

Pierre Rochard: suddenly, Twitter becomes the inappropriate place to debate this and a good day, sir. you know, and they're also, I like when they, they get offended and they're like, you should show some more respect towards me.

It's like, well. I'm just, I'm just making arguments out here, man. Like, I don't know what to tell you. You need to, you need to show more respect towards me by responding to my arguments. Like, that's how we show respect in my culture. but I think that people log on to twitter.com and they're like, you know what?

I'm a very important person in my world. And so what I log on to twitter.com, I expect to be a very important person there [00:34:00] to and no, the reality is that, everything's fair game. anyone can reply to you and you, you really should not expect any amount of respect on, on, Twitter. what you should expect is an extremely hostile environment.

That Can only be brought into civilization, through a process of blocking and muting. and then eventually you can build your own walled garden there. But it's going to depend on what your culture is like, your wall garden is going to be filled with sycophants and uninteresting conversation if you, you don't want to engage in any substantive arguments, right?

Like there are people like that. They're like, yeah, they don't want to argue on Twitter. Which is fine. But I come onto Twitter to argue with people. Let's be clear. So if you find yourself in my cross hairs, go ahead and block me or mute me or whatever, and then I'll move on and argue with other people.

I'm [00:35:00] not going to insult you. Like, you know, I'm not going to like attack your mother or anything, especially this close to mother's day. but, I am going to argue about whether Bitcoin is better than gold or not.

Michael Goldstein: Yeah. Yeah. And it clearly is.

Pierre Rochard: And I also, I am going to add little insults like calling you a gold bug and saying gold is old like that, that I'm fine with too.

As long as it's somewhat related to the argument,

Michael Goldstein: right. And making fun of someone for holding their bags and being upset about someone else, not wanting to take your bags.

Pierre Rochard: Yeah, that was, that was a good one where basically he was saying, look, "gold is important because central banks own it," and my response to that is, all right, well, I don't want to pump their bags like I don't...


Michael Goldstein: important because we get rid of them.

Pierre Rochard: Yeah. That's an argument for Bitcoin. Bitcoin is not as, you know, owned by  government institutions, and frankly, you're just, you're telling me that a bunch of Keynesians that I despise ideologically own a bunch of  gold, like that is a great [00:36:00] argument against gold. I don't know why you would think that.

I'd be persuaded by that.

Michael Goldstein: Right. That I actually liked that bodes better in a strategic sense for Bitcoin. The fact that you have just this, like normy plebe can tell, I hate to call them normies. I don't mean to call them that they're not in the ruling elite class. All these plebes own Bitcoin versus like the guys that aren't even doing a good job at managing an economy because you can't manage an economy.

They're holding onto to gold and, and running their Fiat show. that gives a strong strategic advantage to a hostile minority, who is extremely intolerant and ready to fight for memetically for what they believe in

it. It also pragmatically is like. Okay. So central banks are going to have to sell gold and buy Bitcoin.

That's, that's what you're telling me here. And if I think about what that does to prices, I'm still in the Bitcoin camp.

Right. And then, and then any order of [00:37:00] magnitude growth and Bitcoin also means an order of magnitude growth in the mimetic strength of Bitcoin, which just, it's just a constant feedback loop and gold,

they're right that it has this sort of Lindy aspect and it has, it has kind of held up, you know, gold is just what it was when Peter was like hating on Bitcoin or whatever, and now Peter Schiff is still hating on Bitcoin and it's way higher, but gold is the same dollar price. So it's like, you know, it's had some kind of hedge opportunities somewhere,

I'm sure.

Pierre Rochard: but only because there was not a better asset.

Michael Goldstein: Right, and now there is,

and it has way better strategy. So given all of this, that gold is just where it is and Bitcoin is where it is. I'm just like, look, Bitcoin is a more interesting, thing. Gold should have had its moment already.

Pierre Rochard: It did, you know, the 19th century, frankly, was,

Michael Goldstein: like,  the last couple of decades,

gold should have had its moment.

[00:38:00] Pierre Rochard: I really do think that, the U S dollar, was better than gold, you know, for, for long stretches of the 20th century. And that's what kind of prevented gold from reemerging.

Michael Goldstein: Here's a thought that I was having about gold and Fiat is, is Fiat actually harder to counterfeit? Now, you can obviously make the argument that, you know, the fed printing money that is

a form of counterfeit that's double spending and thus blah, blah, blah.

Pierre Rochard: It's unauthorized,

Michael Goldstein: yeah,

exactly. So, you know, by, by law, counterfeiting is, you know, everyone who does not have the legal monopoly.  So, and, and in gold, of course, no one has a legal monopoly. Anyone can go mine gold. But it's also very easy to counterfeit in the sense that, like, know, I don't know if I can, like, you know, people say, Oh, you can just like, go.

Go buy gold at your local dealer. I was like, yeah, sure I can, but like I have no ability to determine if that's actually gold. I don't have a full node, [00:39:00] I don't have a gold full node. And so they could be totally counterfeiting me and I have no clue. And yet, you know, if someone sends me a Chase quick pay, is that actually like, you know, I kind of have a vague grasp on stuff and I like

you know, there's no, there's no telling, you know what the full, you know, monetary supply of the dollar is or whatever, but it seems like harder to fake outside of the legal monopoly status.

Pierre Rochard: Yeah. Yeah. And something else that I picked up in the threads about gold is that. not all gold is equal. and this is actually something that gets discussed in the ethics of money production, with Hulsmann is that, you, you have mints, right?

And these mints have reputations. And then over time you have different, coins. You have different, coinage, of varying quality and thus with discounts and premiums, to their, you know, face, weight. and, [00:40:00] and so like figuring out all of this complexity. ultimately undermines Gold's liquidity, compared to, for example, Bitcoin.

And so like, even if you go to the gold store, like, yes, the coin might be a hundred percent gold. What if the salesperson kind of sells it to you at a premium when it should have been sold at a discount? You know, like, you have no way of really knowing, or as with Bitcoin, like, there's, there's the price.

you can go look at different exchanges, but yeah, frankly, like no matter how much people talk about taint or, you know, coinanalysis and whatnot, like. I've never had any issues with it, especially if you're just buying it right? If you're just buying Bitcoin from an exchange, you're never going to have problems, with coinalysis,  chainalysis or whatever.

that's only potentially a problem if you're selling on an exchange and thus, you know, sending Bitcoin in.

Michael Goldstein: Right.

And so then, you know, when there's businesses that are doing that don't have [00:41:00] KYC and stuff like, you know, we could imagine that still there's going to be bottlenecks with the, the state where they tried to do chain analysis.

But that taint itself is something that is projected onto the coin rather than a sort of property that. Has to be tied to the coin in order for anyone to make use of it. Whereas with gold, it's like, yeah, if it doesn't have, you know, the, the correct mint from this Royal mint or whatever, you know, I have no way of like being able to figure out, because this mint, they do these kinds of grooves on the side of the coin, so I can see that it hasn't been, you know, worn down.

Pierre Rochard: Imagine if an exchange was like. these UTXOs, they go out to many decimal places. So, really you gotta have like, it's got to end in zero

Michael Goldstein: Round numbers.

Pierre Rochard: Yeah. We need round numbers in the


there, there was a, this, this got split out into dust, several transactions ago. And

Michael Goldstein:  this

is to say that a sort of level of [00:42:00] chainalysis is required with gold.


In order to have a sense of are you receiving gold? It's because of the counterfeit problem. Whereas Bitcoin obviates that, and so any chainalysis is because someone is trying to project on it and get in the middle of people's free trade. Which is totally unacceptable, of course.

Pierre Rochard: Yeah. all right, well, we're at 45 minutes now, so I feel like we discussed the wide range of, of topics related to, Bitcoin, you know...

Michael Goldstein: I think everyone already  knows numbers is going to go up at some point. Of course, if it on Halving day, which I think will, this is when this will air, if Bitcoin is not at a hundred thousand, then all of us were completely wrong about everything we knew about Bitcoin and that you gotta you gotta hand in your card and no more Bitcoin.

Pierre Rochard: No more. It's, it's weird because this having is getting hyped up way more than the previous one. So, I [00:43:00] think it's because there's 10 times more people in, you know, in Bitcoin, in the industry. but it might also be because of Saifedean's work and plan B's work. I'm also contributing to that. So

Michael Goldstein: we've also now had two rounds of Halving and price go up.

Pierre Rochard: Yeah. And you know, there's a common saying, third time's the charm. Right. And I think...

Michael Goldstein: I'll rub my, my rabbit foot and go, rub the belly of the Buddha and,

Pierre Rochard: pray for Hyperbitcoinization.  Thanks for tuning in. subscribe to the noded podcast. go to  noded dot org, N, O, D, E, D. and we're on, the iTunes podcast store.

you can also find us on SoundCloud. On Twitter were, well,  we got Gulaged. but Michael and I were still on Twitter, so congrats to us.