WBD387 Audio Transcription

The Rise of Bitcoin Nations with Dan Held

Interview date: Wednesday 18th August

Note: the following is a transcription of my interview with Dan Held. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.

In this interview, I talk to Dan Held, the Growth Lead at Kraken. We discuss hyperbitcoinisation, El Salvador adopting Bitcoin, living on a personal Bitcoin standard and the regulatory game theory of Bitcoin adoption.

“Bitcoin hodlers across the world I think only number probably 100-200 million, which is awesome, that’s incredible that we’re in the hundreds of millions era of bitcoin hodlers, but I think the real game begins at a billion, and we’re getting close.”

— Dan Held

Interview Transcription

Peter McCormack: What's up, brother?

Dan Held: How's it going, man?

Peter McCormack: Yeah, good to see you and going to see you in person again soon.

Dan Held: Yeah, we're going to be in Texas soon; think you're coming up to BitBlockBoom!

Peter McCormack: Yeah, Dallas.  For some reason I thought it was in Austin, I don't know why, but yeah, I'm going to go out to Houston first and something that Parker Lewis has got on.  I'm going to fly into Houston and then I'm going to drive up to Dallas.  I think I'm going to do a day, though I haven't got a ticket actually; I've got to ask Gary, I should message Gary actually.  But I think I'm going to be about and then maybe at the end of October, we can hang out, man.

Dan Held: Yeah, we're going to do the Texas typical things, maybe get you on a horse, shoot some guns, get some barbecue.

Peter McCormack: Can we do it all at the same time?  Can I shoot guns while riding a horse?

Dan Held: You are legally allowed to shoot guns while riding a horse while eating barbecue.

Peter McCormack: Can't wait to do that.

Dan Held: When you're birthed in Texas, your mother goes on a bull and then they just pop you out; that's how you get birthed in Texas!

Peter McCormack: I'm going to have to bring my hat that I bought off Jimmy Song, my cowboy hat, and wear that as well.

Dan Held: It's a good look for Jimmy; I like his cowboy hat look.

Peter McCormack: It does.  It looks shit on me, I've tried it; I look terrible, I look like a fucking idiot.  But dude, I'm looking forward to it; you know how much I love Texas and it's your home state.  I don't think we've hung out in Texas; it's always been New York.

Dan Held: Boston, New York, Riga, all over the place.

Peter McCormack: Miami.  We've never actually done Texas.

Dan Held: Yeah, it's good to be back in the homeland.

Peter McCormack: Yeah man.  You glad to be back, are you enjoying it?

Dan Held: Yeah, my girlfriend and I moved about a month ago and Texas feels like Bitcoin country.  I'm originally from Dallas, left Dallas, went to San Francisco and that's where I got involved in the Bitcoin community up there.  But to me, Texas always represented Bitcoin's ethos, I think, most succinctly.  Texas was its own country.  It was one of the only states to be its own country and then join the Union, the United States at a later date.  Texans are fiercely independent; there are more Texas tattoos here than you'd ever expect.  There's Texas tattoos on people's necks, there's Texas tattoos everywhere.  People love Texas and the Texans are so independent. 

Here's a few funny quirks: one is that the idea of succession or succeeding from the Union is very popular, it's a very popular topic of conversation the entire time I've been in Texas.  A couple of other weird quirks: the University of Texas took physical delivery of their gold from the Federal Reserve because they didn't trust the Federal Reserve to manage their gold.  There's no other university system in the United States that would do something like that.  Also, in Texas schools, you pledge allegiance to the Texas flag and then the American flag.

Peter McCormack: I heard this, yeah.

Dan Held: Yeah, you pledge allegiance to the Texas flag too.  I bring this up when I lived in California and people were, "We never do that in California" and I'm pretty sure no other states do that.  So, Texas has this very fiercely independent vibe, and then of course guns and the gun culture are very, very intertwined with everything.  Texas just passed a no licence required for concealed carry; so you can conceal carry a pistol without having a licence; a licence as in special registration requirement. 

So, Texas is a very fiercely libertarian place; there are gold bugs who love guns, which is very similar to the profile of early bitcoiners, kind of gold bugs who were into guns, very libertarian.  But I think the one element, and this is why Texas didn't become really into Bitcoin until very recently, is it's techy.  Bitcoin is considered geeky and techy and Texas isn't as techy as San Francisco, so I think that's what the limiting factor was. 

But I'm super excited to see all the work that the Unchained Capital team have done; they've built up a community here and Jimmy Song and others.  So, it's been awesome being here and there's a very strong Bitcoin community.

Peter McCormack: Every time I talk to Parker Lewis, he's, "When are you coming, when are you moving here?"  I'm "Man, I really wanna come, I really wanna come".  I'm trying to convince my son to consider the University of Texas for college, I've got a good article.

Dan Held: It's a great university.

Peter McCormack: And he'll love it.  The whole idea of the campus and going to the stadiums to watch the sports.  He's grown up seeing colleges in films and thinking that's the best life, so I'm trying to convince him of it.  I've got a feeling next year when he finishes high school, we just call it school, when he finishes high school and he's an adult, I'm going to be spending a lot more time in Texas.  Me and my producer Danny were thinking about early next year, doing a month in Texas and trying to set up a studio, get people in and trying to do it all in person.  So, it's definitely on my radar.

Dan Held: Thanks.

Peter McCormack: Dude, I've loved it every time I've been there.  Let me tell you, this is an interesting set-up for the conversation we're going to have, because we're going to talk about the rise of Bitcoin nations.  You're talking about Texas like it's almost a nation within a nation.  The conversation I had with Parker was in relation to some of the onerous regulations that come down from the federal government. 

But Texas feels like the kind of place that would very much support Bitcoin at a regulatory level, very much support the idea that this is optionality for Texans, this is an option outside of the US dollar, which is being printed at alarming rates.  It feels like, more than any other state, this is the place where they'll put their flag in the ground and say, "Look, Bitcoin.  We're having it here".  It's almost like it could become the El Salvador of the US, "We want Bitcoin here.  We want people to be able to use Bitcoin.  You can do what the fuck you want".  And even if there were really onerous regulations, at least the people of Texas would fight it and say, "No, we'll do what the fuck we want".

Dan Held: I think Governor Abbott has signalled a very big interest in Bitcoin and crypto; he's been very pro Bitcoin and crypto.  Now, I haven't done any work here so I'm not going to speak on behalf of all the others, like Parker Lewis and others, Chris Callicott, who has done phenomenal work trying to spread the word of Bitcoin in the political sector over here.  But from my understanding, I think they just announced that banks can hold Bitcoin, which was the big deal.

Peter McCormack: Yeah.

Dan Held: I forget exactly what it was and that's where again, these guys have done some great work.  I believe that banks can hold gold, and this was under a similar sort of construct for Texas where they legally allowed Texas banks to hold Bitcoin.  Yeah, I think Texas is the perfect culture for Bitcoin; that's where I was so surprised in the early days it didn't catch on, but now we're finally starting to see that happen and it's super inspiring too because it's my homeland, so it's awesome that folks are getting into it. 

It's weird though too.  Now I've got around 400,000 followers across different social platforms, you've almost got the same, and when I walk around in Austin, every other day or so someone says hi to me, "Hey Dan, what's up".

Peter McCormack: Good hit, dude!

Dan Held: Yeah, it's been a bit of an adjustment.  I don't know if that happens in Bedford at all but in Austin it seems like it's definitely Bitcoin country.

Peter McCormack: It doesn't happen in Bedford; no one gives a fuck who I am.  It doesn't happen at all.  I've had it happen a couple of times in New York, which is weird, and it happened in London.  It's always weird, I find it weird.  I found that thing though, "Texas says state-backed banks can offer custody services for Bitcoin, as long as they have the proper tools to manage risk".

Yeah, it's a great set up for what we're about to talk about, because the rise of Bitcoin nations is such a fascinating subject.  And, do you know what; I've talked about this on the pod before, Dan.  When I was first getting into Bitcoin and reading about it and reading the articles that Pierre Rochard, etc, produced on the Nakamoto Institute and this idea of hyperbitcoinisation, I was a bit, "Yeah, whatever.  Yeah, I get it.  Bitcoin's cool, censorship resistant and I can hold it and it's digital gold, but come on, let's be serious, we're never going to usurp a fiat currency or we're certainly not going to see one as a legal tender, etc.  I get it, I get your hype but no". 

And now here we are, it is legal tender in El Salvador, I think it's 7 September, so we're about a month away from that.  Is it 7 September or 9 September, one of the two; I think it's the 7th from that passing, and I don't think it will be long until we see other countries do it.  Hyperbitcoinisation is a happening, the cat's out of the bag, Bitcoin isn't going away.  We've seen every single attack be fought back.  We can ban miners in China, they moved to other locations.  You can create tough regulations; people can move to other places.  We have that regulatory arbitrage, we're at that hyperbitcoinisation phase and it's fucking fascinating especially for you, man.  Dude, you've been doing this what, since 2012?

Dan Held: Yeah, it's been a long time.  I set up my Mt. Gox account in 2011, really got into it in 2012 though and then I think 2013 was when I built my first company.  So, yeah, it's been crazy to see it come this far.  If someone would have told us that Bitcoin was going to hit $10,000 some day, I think people would have been surprised in the early days.  We look back and history seems so linear and so sure, but it wasn't that sure at the time.  The bottom of the 2015 bear was pretty dismal; Bitcoin printed at $180 a Bitcoin.  It had fallen from $1,200 a Bitcoin, so that was a pretty dismal moment. 

There wasn't content, there were almost no podcasters, there were barely any industry news sites, there was basically no YouTube content, so it was really hard to feel like you were still believing in this trade.  So, to see it come all the way here where you've got institutions going, "Yeah, Bitcoin is definitely gold 2.0" it feels weird, it doesn't feel real because we've been saying this for such a long time, and the fact that it's actually happening is this weird moment of, "Oh shit, I was right".

Peter McCormack: Yeah, well it's going to be a wild time over the next few years seeing how states will respond to it.  It is a bit of a shit show over here in the UK and Europe.  I think the US is way ahead of Europe, which I think is why you see a high concentration of Bitcoin hodlers there, all the Bitcoin companies there, and it's always been a great place for innovation anyway.  But actually, even with some of the tight regulations you have, at least you have it, you know where to stand. 

But it's a bit vague here at times and we've got banks not allowing people to get Bitcoin or not allowing them to transfer to exchanges.  These regulatory arbitrage opportunities are existing and I think you can take a look at Estonia, Malta, Texas, Wyoming, El Salvador, these flags are being put in the ground and these places are saying, "We're in, we're on board".  So, it's going to be really interesting to see how this plays out.

I want to run through it a little bit with you to imagine the hyperbitcoinisation scenarios, because I've just done an interview earlier today with Knut Svanholm, I always pronounce his surname wrong.

Dan Held: Yeah.

Peter McCormack: One of the discussions he said, he said there is no actual point of hyperbitcoinisation, it's just always happening.  I kind of came to a realisation and discussed with him that hyperbitcoinisation isn't a collective thing.  The gold standard was a collective, it worked because nations signed up to it and when a nation signed out of it, it just didn't work.  But the thing about hyperbitcoinisation is that I think it's actually more an individual thing. 

When you said a Bitcoin standard, you said it for yourself; you don't need everyone to be on a Bitcoin standard.  It works when you're on your own; when you price things on Bitcoin, when you consider your investments in Bitcoin, when you consider your purchases, your savings, all in Bitcoin, then you are on that Bitcoin standard and you don't need everyone else to be on it.

Dan Held: Yeah, money is a belief system; gold, dollars, Bitcoin, it's all the same thing.  It's a belief system.  Now, Bitcoin has superior traits as a money, it's objectively a better type of money.  I don't want to get into those, but Bitcoin has objectively better traits; but it doesn't matter if it has objectively better traits if no one believes that it does, and so that doesn't happen in a binary moment when people all wake up and go, "Oh, I see why Bitcoin's valuable".  It happens in ebbs and flows. 

I think about it too from a marketing perspective.  There's something in marketing called last-touch attribution and multi-touch.  So, last-touch is okay, you saw a Facebook ad and that ad is the ad that we can attribute to you becoming a customer of ours because you clicked on the button, "I want to sign up" and came over.  But in reality what happened was you began your journey to become a Kraken customer far before that.  You probably saw a chat and you probably saw a blog post of ours and all these other touch points, so that's multi-touch attribution.  Your final convincing to become a customer happened over time; it wasn't this binary moment.

So, with Bitcoin it's probably the same thing.  They heard about it in 2013, they didn't buy; they heard about it in 2017 and they didn't buy; one of their friends or family members definitely bought it at some point and told them about it.  It's these multiple-touch points where I think we do this spin into greater and greater adoption at a faster rate because of the multi-touch nature, because people have had repeat exposure.  Whereas before, your first exposure you're, "No, that seems like a scam, for sure.  It seems like a Ponzi scheme; it seems like a scam". 

But after the 50th exposure, you're "Why isn't this thing going away?  I don't understand how it works but it's not going away and more and more people I know are buying it and more and more institutions are buying it".  So, that's where I think we do see hyperbitcoinisation isn't a binary moment but I do think it's an exponential growth moment where Bitcoin's entire existence has been exponential growth. 

I think at the end here, the repeat exposure will have saturated people's consciousness so much to where there'll be big catalyst moments where there might be a big level step-up on Bitcoin adoption.  We usually see this happen in the bull runs or maybe we see this happen at different catalyst moments of trust, where people have lost trust in their government.  I think COVID was an example of what that might look like, but there might be others in the future where there's a really big breach of trust by a government or bank and people go look at Bitcoin and they're, "You know what?  I've heard about this thing for the last ten years.  This seems like a good solution". 

So, I think that basically people's probability of converting to become a bitcoiner grows increasingly over time because they can't ignore it; they can't ignore all their friends and family and all these different indicators and, "Maybe I should get into this".

Peter McCormack: I think you also have to think geographically as well, because maybe a lot of the conversations we have with people who aren't convinced are based in New York or Texas or London, etc.  But I think you have to look at the wider net that Bitcoin brings in, because it is a truly global currency.  Is it the only truly global currency?  It probably is, because anyone can accept any currency in any country.  If I go into any country, people can accept dollars; but digitally speaking, it is the only certainly final settlement global digital currency. 

So, if you look just purely at your own geography and you consider it, maybe if you're in the UK or Europe or the US, it doesn't make as much sense; but certainly if you're in Lebanon, we know it makes sense, if you're in Argentina it makes more sense.  So, I think sometimes people miss that, sometimes people don't truly understand it to begin with. 

I think another one of the off-putting things is the volatility.  Now, we understand volatility is the risk you pay for the reward; we understand that.  But also, whilst we have multiple sovereign currencies, Bitcoin is always going to be volatile against at least one of them.  When it's stable in one place, it's volatile elsewhere because those currencies themselves are volatile.

Dan Held: Volatility is so interesting to see how people react to it where they would rather choose losing 2% a year, which is consistent, than take a bet where you've a very high probability of making many multiples over your initial principle, just because volatility scares people away.  That's where I think Bitcoin's the perfect instrument of risk/reward, where Bitcoin rewarded the early believers because you got in before others and that's not a Ponzi scheme, that's not a scam.  It means we had the guts to do it and we were the ones who deserved it the most. 

Everyone else heard about it and they were too scared by it.  So, Bitcoin rewarded the risk-takers and those risk-takers are the only ones who should be rewarded for that behaviour.  No one was granted this, no one was given this by the government, these Bitcoins weren't handed to them.  You bought in because you believed and the only ones who still have coins are the ones who stuck through it. 

Peter McCormack: Dan, sorry to interrupt; it's you who always says hodling isn't easy.

Dan Held: It's actually the hardest thing to do because you have to resist your emotions.  You're resisting fear when it goes down and you're resisting FOMO when it goes up, because with the FOMO you might go, "Oh, I could buy that car, I could buy that boat, I could buy that house".  It's not necessarily a bad thing if you do sell, but just don't do it in a frivolous manner.  If you bought ten years ago, five years ago and you're, "Cool, if it hits this price then we can go and buy a home, me and my partner have talked about that", and it's totally okay to do.  I'm talking more of the emotional trading where someone puts it in two months ago and then they pop it right out. 

Bitcoin is the most phenomenal bet of the 21st century and just to take it for a short ride, it's such a long, crazy journey; you get to hop on that train for at least a couple of years.  For me, it's been almost nine and I wasn't a perfect hodler, I don't think anyone's a perfect hodler.  I think you've been pretty open with some of your experiences.

Peter McCormack: Yeah!

Dan Held: We all look at those transactions or those trades and we're, "Oh, why didn't I just hodl?"  In 2013, I figured it out and I was, "Okay, the only way to survive this thing is to hodl". 

But it's this really interesting journey of self-discovery internally, of recognising these human emotions of fear and greed and trying to resist those.  It's going down the rabbit hole and discovering things about energy and energy FUD and how energy FUD is tied with environmental concerns and it goes really deep down these different -- and then government and governance.  So, people who can govern me, why can they govern me and why are they able to dictate other aspects of my life like what I can do with my body? 

The hodler's journey is like a hero's journey.  There was an author who wrote this, and I forget his name off the top of my head but he had a really good piece on Bitcoin being the hero's journey, where you go through this phased life of becoming a hodler, you goes through pits of despair and realisation and awakening.  Price is a huge component of that; I think everyone going through a bull/bear run, I get people -- if you've gone through a bull and bear market, I think you're an OG, I think that gives you the title of OG, because it's a lot to go through.  When you think about March 2020 last year, Bitcoin went $3,400, it was either $3,400 or $3,800, I forget, but that was intense.  I think everyone remembers that.  It was a 40% plunge in one day.

Peter McCormack: Yeah.

Dan Held: I mean those moments.  There are so many of those, because you had Mt. Gox getting shut down, Silk Road getting shut down.  You had China banning Bitcoin 100 times and so it's been a long journey.  Yeah, that's where I think Bitcoin is the most feared distribution out there, because the folks who risked it, held onto it are the most deserving of it.

Peter McCormack: Yeah, you've given me PTSD from the last five years.  Man, the mistakes I've made.  Yeah, whatever, people always say that thing, "If someone had told you one thing that you'd learned before all this, what would it be?"  For me it's Bitcoin is a game, the number of sats you hold is your score and just try and constantly increase your score for when you need it later in life.  That's the game to me; just keep stacking those sats. 

It's funny, I do enjoy bear markets more now.  I'm on my second, kind of my third bull market, the first one doesn't count, but I'm definitely on my second bull market and I've been through a bear market.  Weird as it sounds, I enjoy the bear markets more.  I've said this before, I do, I do.  You work harder, you get more done, you learn more, your conviction grows strangely.  It's a really strange experience to go through.  But even for you, Dan, did you honestly have the conviction that all this would happen, something like El Salvador?

Dan Held: Yeah, is the short answer, but I can put it into more bullet point reasons why.  For me, I knew it was risky.  Did I think it might happen?  Yes.  Did I think it was very probable?  I'd say I hoped it was probable, but I wasn't sitting there going, "This is for sure going to happen".  I thought about it more of, "I want to help build this world to make that happen and I think we've got a shot at doing it, and I'm going to hodl and see it all the way through".  So, that's more of my thought behind it.

I knew that we had discovered something that most other people had written off.  Bitcoin was this beautiful, beautiful creation that has all sorts of different aspects that are incredible in terms of how decentralisation makes it stronger and the monetary policy breakthrough.  I realised I spent all this time going down the rabbit hole.  I spent a long, long time, years, it took me years to get to these sorts of levels.  I wasn't talking about Bitcoin like this back in 2013, no one was.  There was content built on top of content that enabled all of us to develop stronger convictions in Bitcoin.

So, for me I think it was this gradual levelling up of understanding, but I felt responsibility to go write content that was simple.  I don't think a lot of my ideas are original; I'm just making them simple.  I just took existing bitcoiners' content and I was, "Okay, no one reads this because it's too complicated" and I took that, refined 15, 20 authors and put that all together and refined it into different pieces.  My gift is making things simple.

The reason why I thought I might have an edge here is it took me that long to get here and I was obsessed with Bitcoin; that means there's very few of me.  Others, who haven't come to my realisation, when they do, they'll likely buy Bitcoin.  In all likeliness, we're early and I think that they'll agree with my logic once they get there.

In the early days, we thought Bitcoin was inevitable or had a good chance of succeeding or a decent chance of succeeding because we were the only ones who had spent the time to learn it.  So, if others did, then we hypothesised that Bitcoin had rising value and more and more people would come to the same conclusion we did.  We were proven right and I think we're still very early.  Bitcoin hodlers across the world only number, I think, probably 100 million or 200 million which is awesome.  That's incredible that we're in the 100s of millions era of Bitcoin hodlers. 

But I think the real game begins at a billion and we're getting close.  At the end of this bull run, and the next six months I think we still have more room for a bull run, if that happens we could easily hit a billion by the end of 2021 or middle of 2022.

Peter McCormack: We said we were going to talk about the rise of Bitcoin nations.  El Salvador has been the big story over the last few months, I've been there a few times.  I'm going to drag you down there like you want to drag me to Texas at some point.  What's your take on El Salvador?

Dan Held: I think it's cool.  There's a lot of folks who are really positive about it, there's a lot of folks that have done a ton of great work down there.  I think it's great that we're seeing -- and it's all an experiment.  That's what the United States was founded on, was the idea of these different states would be able to experiment with policy and see what their customers wanted.  Did they want legalised marijuana?  Did they want XYZ banking protections?  That was the whole point of different states; is that they allow for experimentation of policy. 

I think this is a really cool experiment of moving to the Bitcoin standard.  I'm really thrilled to see how it goes and I wish everyone the best on their journey, and I can't wait to go and spend some time down there.  At the same time, it might be a little too early or we might be looking at it with rose-coloured glasses where there might be incentives for different government officials to control the population.  So, I'm not approaching it in a negative or positive way; it's more like I see pros and cons and I wish it all the best and I'm really excited to see how it plays out.

Peter McCormack: Let's work through it.  I'm mostly positive, I think it's a great idea, because it's an opportunity for many more people to get Bitcoin in their hands, to learn about it, to get hold of it, hopefully understand it, manage it, store it in the right ways.  But I also do have certain reservations myself and I think that's a fair point to say, are we a little bit early for this?  But look, someone has to take that bold first move and they're the ones to do it and I'm fully supportive of this.

What do you see as the potential downsides or risks with this?  You mentioned there someone in government having more control.  One thing somebody raised to me is that if there's a government wallet and everyone's using that government wallet, they have ability to track and see hat every single thing people are purchasing and buying.  Now, you could raise that to the government and they'd say, "Look, this is just the way the wallet works, we're not tracking it, we're not using it".  But we don't know this.  That's a potential crackdown on privacy.

Dan Held: There's also a weird conversion rate mechanism that they have where merchants can exchange Bitcoin with fiat and the government has a certain amount, $200 million of fiat, US dollars, or something like that, so they're acting like a quasi-reserve.  Bitcoin was built because we can't trust governments and we can't trust central banks, so naturally my inclination is not to trust the government. 

So, I like the idea that a lot of people are using Bitcoin; I won't ever completely trust a government's ability to manage reserves or not spy on their citizens.  They're very much in that vein of control.  I'd like to believe that they have altruistic intentions and that everything will work out in a positive manner, but I don't trust and verify.  I think that's my approach here.

Also, I think some of my fear too is that it's too early.  You've heard me champion this many, many times about payments versus store of value.  We fought this battle in 2013, in 2017 and I feel like an ancient, old man in this space, because the payments use case was too early nine years ago, it's still too early now.  I am supportive of people working on projects to enable Bitcoin payments, but if people do that and there's not traction, then I've seen the negative consequences of that after the 2013 and after the 2017 boom where people are, "Bitcoin has failed, it's not been used for payments.  These companies tried it, this country tried it and no one used it". 

I've seen how these experiments can be turned around as a negative narrative to hurt Bitcoin and I hear a lot of people bring this up; friends, family going, "Oh, yeah, but Bitcoin's not being used for payments, so it failed, right?".  These narratives are critical and that's why I pounded that store of value narrative so hard over the years.  I understood that this is the problem Bitcoin is solving. 

Will it be a great medium of exchange in the future?  Absolutely.  It's a good one now with Lightning, but it's not necessarily solving a problem for people.  I don't need immutable payments for my coffee; I need it for things that are quasi-legal, that's the whole point.  It's potentially censored items or if I'm a political party that has been censored, so it's censorship resistant money; that's its value prop.

Peter McCormack: There are niche arguments against that.  Just on the El Salvador example, when I've been there and I've been to El Zonte and spent some time there, we don't need censorship-resistant coffee purchases, but at the same time if I'm there and I want to buy a cup of coffee on my debit card, there's additional payments that I have to pay for.  When I get back and if I check my card statement, for every purchase I'm doing abroad, it's usually 50 cents to $1 every single time just for using my card.  So, there is that issue, whereas if I'm buying a cup of coffee I'm paying under a cent in sats to do it.

The argument might be you should be hodling those sats anyway, but I can spend a few here or there.  I give some away anyway, so buying a few cups of coffee here or there aren't a big issue.  So, generally speaking if I could load up some Bitcoin on my wallet before I go away and because essentially El Zonte has hyperbitcoinised, everywhere accepts it, I can just go there and use that card.  Also, I don't have to worry about getting cash out and getting dollars out.  I can just go there and do it.

The examples are niche, but I do think as payments in that scenario it works, because El Zonte has everyone accepting it.  If it was just one place, it doesn't solve the problem, but because everyone does, it does.

Dan Held: Yeah, there's some interesting network effects that need occur here.  One is wide merchant adoption in a specific geo.  That's why the rise of Bitcoin being used in payments was primarily online, because they didn't require that geo network effect.  Also, local knowledge of how to use it; you've got the supply side with all these merchants willing to accept Bitcoin because, "This is great.  We have no charge-back risk" but you need people who want to spend coin. 

That's where we all hypothesise that store of value era occurred first because then if people own it, then they can spend it.  They have to own it first and so that's where the store of value era comes in first.  But I do want to check my western bias, because certainly I don't understand how people use Bitcoin in various regions and that's why I'm excited to check out El Zonte and other places, because I'm sure there's a lot of different uses cases I haven't thought of and may be I'm overthinking about it from an academic perspective.

Peter McCormack: What about the implication for central banks?  Central banks is always considered the final boss, the big enemy of the people.

Dan Held: Carstens.

Peter McCormack: Yeah, responsible for all the ills of fiat currency and the implications it has for us.  But when do you think we will see the usurping of the central bank, because in some ways, right now I don't think you can operate a country with only Bitcoin; you need to have a sovereign currency alongside it. 

Bitcoin works really well alongside the dollar in El Salvador and when the talks came out recently that the government were considering creating a stablecoin, to me that made perfect sense; it made absolutely perfect sense that you can have a digital wallet which was supported by Bitcoin and a digital dollar.  So, I hope they can get that and at some point we would all love to get away from these fiat currencies, but is that even possible, Dan?

Dan Held: I think it goes back to your point on hyperbitcoinisation.  It's not a binary event, it's an event that happens over time.  I think the first time that we see central banks interact with Bitcoin will be them maybe purchasing it, purchasing it as a substitute for gold reserves.  People forget that China, Russia and the United States and Germany and the UK have gold reserves; they still have those.  The dollar isn't one-to-one backed by gold but technically they still have gold reserves. 

Actually I think Saifedean brought up this subject.  It's an interesting attack vector if all these central banks across the world could try to go back to the gold standard because they have gold to fight Bitcoin.  But they're, "Hey look, we're going back to sound money; we don't need Bitcoin".

I do see central banks that have gold reserves probably recognise the value as a reserve asset; so, I them adding that I think would be the first step.  I don't see many countries going full Bitcoin for a very long time, at least a decade.  I see it as this gradual process of them replacing the gold reserves with Bitcoin instead.  Countries who do it first will be at a very large advantage versus the other ones.  If there's price appreciation of Bitcoin, which at Bitcoin's current market cap is inevitable if more and more folks believe in it.

There's also some interesting game theory.  So, it doesn't matter if a central bank actually buys it or not.  All that matters is that other central banks think that the other central banks might buy it.  That kicks off the game theory, a sort of prisoner's dilemma, where if you act first, you're in an advantageous position.  I think that's where it's not going to happen in a binary fashion but Bitcoin occurs in fits and starts. 

That's where I think this will be more of no central banks have it and then within three weeks, all the central banks are talking about it or they may not be buying it, but they've at least talked about because we're, "Oh, this week Russia announced that they had bought $50 billion of Bitcoin".  It's, "What's the Chinese and American statements on that?"  Then it kicks off the theory, but even before then, it's likely that news would leak.  If that news leaks or if there's a rumour, then the other central banks might be, "Well, we don't know if they are for sure, but we know that they could be, so maybe we should". 

So, I think that could happen and that could be one of the huge price surge moments of Bitcoin.  Central banks are the biggest purchasers in the world; they could allocate $50 billion or $100 billion or a trillion; that will only happen I think in very late stage when Bitcoin's in the multi-trillion market cap, like $3 trillion to $10 trillion.  Then we could see something like that happen where central banks start to FOMO in.  I think we're a little bit away from that stage, but it could occur decently quickly; it could occur in the next couple of years or it could take five or ten years.

Peter McCormack: A nation adopting it as legal tender has happened way ahead of when I thought it would be.  I thought we'd have another cycle until then. 

Dan Held: All the way.

Peter McCormack: I thought this would be a cycle dominated by companies and treasuries, but we now have a first nation and we have others rumoured or certain politicians talking about it.  I think there's a different incentive structure for banks, central banks to announce it.  I think if you're a central bank and you've made the decision, "Actually shit, we need to be holding this", there's no incentive to ever announce that because all you're going to do is push up the price of future purchases. 

We can say that individually but most of us are, "Come on, push the price up.  We want the price higher".  But for actual central banks who have made that decision, my expectation is they're always going to want to increase their holding, so why ever announce that to the market unless you're a tiny nation?

Dan Held: Yeah, there might have been a decision that this is the max we're going to buy, and they want to pump their bags, so they would announce it.

Peter McCormack: It's such an easy and obvious move.

Dan Held: They try to completely control the economy, they're used to pushing the economy one way or another, so why wouldn't they do that with Bitcoin?  Yeah, I can see a central bank doing that especially if they want to start a -- the world now is like an economic warfare environment.  I'm not sure if we'll see full-scale wars as we have done before and we certainly won't see wars between super powers, but what we might see are economic wars and wars of culture and wars of governance, like socialism creeping up in the US and the UK.  That's a cultural war and China and Russia are behind that mindset. 

I think the economic war, Bitcoin represents a very important tool where it's "The enemy of the enemy's your friend" and Bitcoin is that; it's the tool of enemies because we don't have to trust our enemy and it's great because I don't need to trust them and they don't need to trust me.  So, Bitcoin is this game theoretic coordinating function for folks to FOMO in, because if you don't buy in and Bitcoin becomes the next world reserve currency, then your country would be significantly disadvantaged.  

That's where I do hope countries like the United States, which with all its flaws I think is still a great place to build and is still a great place for freedom.  Again, there's a lot of flaws in that and I'm not saying it's a perfect world.  I hope countries like this buy into it earlier before other countries, because I certainly don't want to see a world dominated by China with their totalitarian policies and concentration camps and stuff like that.

Peter McCormack: Yeah, and the spread of Chinese ideals throughout the world, which we are starting to see with them, with the Belt and Road Initiative with them investing in countries and creating debt obligations.

Dan Held: It's much more insidious than that too.  They're funding a huge portion of Hollywood films and so they censor what can be put in those Hollywood films.

Peter McCormack: I know.

Dan Held: Did you see John Cena apologised for a statement about China?

Peter McCormack: Yes, I did.

Dan Held: It was so gross; it was this grovelling to this totalitarian regime.

Peter McCormack: It happened with the NBA as well, right?

Dan Held: Yeah, the NFL too and the NBA as well.

Peter McCormack: Yeah.

Dan Held: They stand up there and they fight for things like kneeling at a football game, they fight for transgender rights, and they fight for all these things that are important.  Then when it comes to an actual totalitarian state that has concentration camps, they're, "Oh, I don't know enough about the issue to comment".  Who said that, LeBron James?

Peter McCormack: Please buy my shirt.

Dan Held: Yeah, it's just so disgusting to see the far-left virtue signal about these other issues, and then when it comes to a really, really serious issue that's life and death…  I mean, concentration camps are about as bad as it gets, then they're, "Oh well, I can't comment on that".  It's, "What the hell do you stand for then?  If you can't talk about things that need to be talked about, then why do you pick on the issues that you don't get a ton of flack for?"  

But being principled and for someone to have integrity, it means speaking up when there's costs to speaking up.  It's easy to speak up when everyone else speaks up and there's no cost to it, but that's the whole point.  We have to stand up against totalitarian regimes like that by speaking up and their voices are big and to see them do this, is just disgusting, I think; it's really gross.

Peter McCormack: I don't think they understand the full implications as well.  They're certainly not looking at the things we're looking at, they're not seeing.

Dan Held: I think they do.

Peter McCormack: I don't know if they're looking at CBDCs and tying that to social credit scores and realising that you are completely under the control of the government.  They can completely debank you and take your money from you, they can set expiration dates on your money and if you don't follow specific rules.  

Do you know what's really interesting, I've interviewed two people, two westerners based down in China in the last year, and both of them after the interview wrote to me and said, "Actually, can you not release that" because I asked challenging questions.  They were so scared of the conversation being public and I was, "Why the fuck do you live there?  What are you doing?"

Dan Held: Yeah, in the United States I think a lot of people are afraid to say certain things.  I'm, "Well, then, what the hell's the point of living in the US if you can't say whatever you want?"  Well, not whatever, obviously there's gradients but there's this whole point of freedom of speech.

Peter McCormack: There's two types of cancelling, Dan.  In the US you can get socially cancelled, and in China you can get cancelled by the government financially and your ability to operate in society can be cancelled.

Dan Held: It's not necessarily true; the IRS went after a certain political party member of the Tea Party a little while ago, really specifically targeted.

Peter McCormack: They did?

Dan Held: Yeah, the IRS specifically audited certain political party members.  So, the US has a long history of going after certain political dissidents, but not at the degree of China, of course; a very, very tiny amount of that compared to China.  Yeah, that's where Bitcoin I think is that catalyst, that mind virus where you wake up and you're, "You know what?  This is where I'll fight, this is where I'll put a line in the sand.  When it comes to other things, I've given that up to the government because it wasn't worth fighting for". 

But then you get to Bitcoin which is your money, your heard-earned life energy, the time and the effort you spent to earn it.  You're like, "This is the moment where I'll fight, this is the moment where I'm going to say no, I've had enough; you've taken all control of my body, you've taken control of my money in various other ways, I've had enough" and I think Bitcoin is that.  I think Bitcoin is that libertarian seed where, when that gets planted, that changes the way you think; you get orange pilled.  Then you start to go, "Wait a second, why are drugs illegal?  Why are we fighting these wars?" all these sorts of different other aspects of government and how it intersects my life.

Libertarians, for a long time, have slowly seen people accept a more and more authoritarian style of government in the western world.  I think that Bitcoin will be the bounce-back moment, the moment when people go, "Okay, you know what?  This is where I'm going to stand and fight" and then that changes everything else.

Peter McCormack: Damn.  When's it going to happen, man?  Hyperbitcoinisation.

Dan Held: I think it's when a large portion of the population owns Bitcoin, 30% or 40% and then it becomes a political party, and then it becomes a bigger movement than that.  It's a rebellion, right.  You go, "I disagree with these rules that you set, I didn't vote on them, and I don't like what you're doing with the economy and my body and everything else and I say no".

Peter McCormack: What's that statement about who controls the guns, controls the country but it could be who controls the money?

Dan Held: Or maybe who controls the gold maybe in the old time, like an old saying.

Peter McCormack: The situation in New York, I saw the speech from de Blasio about mandating.  We're going off on a complete tangent here but fuck it.  I've been very clear and very honest, I'm vaccinated and I'm cool with that, and I am pro-vaccinations but completely support 100% that people can make their own decisions.  I even emailed my ex-wife today to discuss our son, because they're making vaccines available to 16 and 17-year-olds in the UK and I don't think or want him to get vaccinated; I don't think he needs it.  I completely support free choice on it and I wish we could have a reliable source of information with regards to vaccines and their efficacy.  It feels like a war of narratives between those who are pro and those who are against.  It's very hard to get to the exact truth of them. 

That said, I watched that speech by de Blasio where he was trying to sell the idea of vaccines.  So, essentially they're not mandating a vaccine, they're coercing a vaccine by saying, "If you don't have it, your freedoms will be restricted, you won't be able to do X, Y and Z".  I was, "This is fucking crazy".  It's not just crazy because they want to mandate a vaccine to be able to access certain services, but the fact that they're actually just fucking destroying New York, one of the top five cities in the world, top three cities in the world.  It's basically London, New York, Singapore, Sydney, San Francisco.  You know all this and they're destroying it, they absolutely destroyed it during COVID and now they're going to destroy it further.

Dan Held: That's why I left San Francisco.  50% of the stores are still closed and there's homeless people running around and literally trash everywhere.  It's like a Third World country; it's crazy.  We just couldn't stand that vibe anymore.  I'm from Texas and also it's for tax reasons and also cultural reasons and also the mindset of San Franciscans is insane, the far-left liberals are just out of their mind, believing that censorship is okay, all sorts of wacky things like that.  They don't prosecute burglaries in San Francisco.

Peter McCormack: I saw this dude running out of a TJ Maxx with $100 of clothes, because basically they don't arrest or prosecute under a certain level.  Is it $1,000?

Dan Held: There's homes that have been burglarised and they won't charge them on assault; they'll charge them on misdemeanour or theft when they burglarise a home too, which is insane because in Texas… it all goes back to property rights.

Peter McCormack: You're going to get fucking shot!

Dan Held: It's an interesting law in Texas.  You're allowed to shoot to kill if they're stealing, not if your life is threatened, which is an extreme length of property rights.  That property right extends not just on your property, but also on the property like yourself as a human, as you extend yourself into the world.  So, you have the right to defend but you also have the right to defend your property; which, I would rather have an extreme version of that than one where you have no property rights and no authority over your body or any of your property.  

I've seen what happens in SF and it's horrible; people are getting robbed all the time, people are breaking into homes.  The business, Target, Target's moving out of San Francisco because there's so much theft at the store.  Most people won't start a store.  It's a good example, it's an experiment of bad policy.

Peter McCormack: How bad does it need to get, dude?

Dan Held: I know.  Well, I would say a good 20% of people I know in San Francisco left.  It's getting pretty bad, maybe 20% or 30%.  They make you feel bad.  They go, "Oh, you're a privileged white male.  Everything in your life was handed to you on a silver platter.  Everything, all your success can just be attributed to your race" and I'm, "That's not true.  Certainly yes, have I had privileges that others might not have had?  Sure", but we can't boil every single possible issue and inequality on a race and sex, it's just absurd; there's a lot of other factors in life. 

We can recognise that and try to fix them but don't make me feel bad.  My family didn't even do anything, we fought on the side of the North and stuff too.  We weren't racist, we emigrated 150 years ago to fight for the North and to fight for freedom.  Why do people have to pay for their great, great grandfather's sense?  It's absurd.  How far back -- when does liability stop?  That's the question: when does liability stop?

Peter McCormack: When personal responsibility takes over.

Dan Held: Exactly.  I think Bitcoin brings that back around, learning private key management, learning that you have to take your own risk in your own hands.  Yeah, going back to New York and COVID and vaccines, my thoughts on it are if it's actually about the science, then they would construct things very, very differently.  Instead, it's this bullshit version of the science where they're, "Oh, these restrictions come in a month from now".  If it's actually that deadly and that big of an issue, wouldn't you have the restrictions occur immediately?  In New York, these happened in September, these restrictions.  What you're really telling me is that this is about control.

Also I got COVID, it wasn't fun and it's like the flu.  COVID's a real disease, I think COVID's real.  I think our assessment of how risky it is is very bad, because it's not that risky at all; it's like a bad flu.  And yes, it's more lethal than the flu, but I don't believe in shutting down the economy for that or restricting human freedoms.  I think we're on the same page there.

Peter McCormack: It's a fair, nuanced approach.

Dan Held: But here's where the whole bullshit, this science thing doesn't make any sense because I'm, "Okay, I've got an antibody test.  I'm immune. I'm exactly like a vaccinated person.  I've got the OG style, I'm OG vaccinated.  I got it, I got it and my body produces antibodies because they give me resistance".  They're, "Yeah, but that doesn't count". 

In New York you can't walk around and instead of a vaccine card show an antibody test; they don't allow that.  So, then it's not about the science at all; it's about some sort of just objective thing.  That's what really triggers me with this stuff is, if I didn't have COVID, I probably would have got the vaccine; but I got COVID so I don't need the vaccine and I got COVID five months ago.  So, I definitely don't need it, because eventually some resistance wears off. 

But we had a family friend who was a doctor, a doctor at Johns Hopkins, and he's an epidemiologist and he's telling us natural immunity works, it's what kept humans alive for millions of years.  This should last a long time.  So, the CDC and others are FUDing natural immunity and saying, "Oh, we don't know how long that's going to last?"  Well, it's going to last a whole lot longer than your vaccine and it should be considered equivalent.  Instead, they're going, "It's basically worth nothing". 

I think that's just where, "Cool, now you've lost my trust in science again or your science, because you're not recognising legitimate immunity that exists, that is natural.  Instead, you're saying, 'Well, we don't know', which is bullshit because we know that it lasts longer".  Some people from 2020 who got it say they still have antibodies.  So, yeah, if you had a recent antibody test or a vaccine card, then it would be about the science. 

I don't agree with these restrictions at all, by the way, so I'm not saying that I'm advocating for vaccination cards or that those should even exist; I'm very against that.  But if they were to do this scientifically they would (1) implement it immediately because it is such a threat, (2) they would allow antibody tests to be used, and (3) this only covers certain types of businesses.  I think that it's not required for grocery stores.  So, this COVID stuff is…

Peter McCormack: This is like the fucking airplanes, man, because I'm back flying now and you have to wear a mask unless you're eating or drinking.  Well, what happens when I start eating and drinking?

Dan Held: Right.

Peter McCormack: It doesn't spread all of a sudden?  I know what it is; it's because some of the airlines sell drinks, certainly on the short haul.  I just think it's morons in rooms making decisions or making compromises.  If you need to wear a mask on a flight, then it should be the entire flight and that's it; there's no middle ground, it doesn't make any sense.  Yes, maybe you can take a sip of water but it just doesn't make sense. 

One of the things that's on my mind, well a couple of things.  Firstly, I actually read a really good Mises Institute article that Stephan Livera sent me that actually, why isn't this stuff, these decisions, made at an individual level.  I had to go to a florist in Bedford the other day and pick up some flowers.  When I got to the store, she's, "Have you got a mask?" and I said, "No".  She said, "Well, we've got my mother working here.  She's 83.  Do you mind if we serve you at the door and you wait outside while we arrange the flowers?"  I'm, "Absolutely.  That's totally fine, I'll wait outside.  I totally respect that.  That's your decision, that's your business, I get that". 

But the mandating across all businesses should be exactly the same is ridiculous, because it's economically restrictive without the correct trade-offs.

Dan Held: There's a couple of things to touch on here.  One is that ultimately, the decisions around COVID are about risk.  The flu existed before and we don't walk around with flu vaccine cards and no one asks you, "Hey, did you get your flu vaccine this year?"  Literally no one, no one had ever asked me that.  We allow people to drive.  Driving introduces a lot of fatalities due to someone being sleepy, intoxicated or just a mistake.  We allow and we accept that that risk exists. 

So, COVID is just another form of risk.  It's a disease like STDs; STDs are a risk and we just accept that's okay, but we don't force people with HIV positive status to walk around with a card!  I think things like that in the 1980s and 1990s were discussed but rejected, because at that time because this is really, really… even though HIV is way more serious than COVID, they were, "Well, we can't do this, because introduces a really weird status and really weird way to operate the world". 

What I struggle with too is masks.  N95 masks; those are the only masks that fit tightly and are made to filter out the particulate, the aerosol that COVID exists in.  No one wears a 95, they all wear their shitty little cloth masks that their mum made them or something.  Yeah, sure it has some protection, but it's all just a charade.  They're all ill-fitting, they have gaps around the sides, they have gaps around the nose.  How useful is that?  Probably very minimal.  I think that it's these moments where you just go, "What the hell's this all for?"

So, we get the risk component which is okay, society has accepted these risks as okay, but COVID is not an acceptable risk.  I think that's a fundamental argument of CVOID is, how risky is this thing?  Then there's also the ROI.  Do these different measures of vaccinations and mask-wearing save lives?  Yes.  But at what cost?  So, there's of course a cost to this, suicides have gone up. 

Then we look at standard of living.  Millions, hundreds of millions of people will have very negative outlooks on life because their businesses failed and their children will too, and those children might end up doing more crime because they have a worse outlook on life, or suicides.  There are so many dominoes to what happens here. 

When you have central planners make these decisions, this is what happens where they choose one KPI, which is people dying, and they're like, "We have to solve this".  At the same time, they all of a sudden introduce all this other negative externalities that are massive, these are huge.  What happens to kids when they don't go to school for a year or two?  What if there's ten million new kids with PTSD because of this, or with anxiety, and that reduces the economic output and happiness and standard of living by 10%.  No one can calculate this so they ignore those costs and those variables and they're, "Cool, well we saved ten old people".  Great, but everything comes at a cost and you're ignoring everything else.

Finally, in San Francisco during COVID, only eight people under the age of 40 died, eight.  That's it out of a million people.  So, their cost really is, do you want to save people with underlying issues and very old people at the cost of the youth?  That's essentially what this is.  Millennials like myself, I'm 33, middle school we had 9/11.  2008, I was in college.  Then right when we're finally making money, COVID hits and they're, "Cool, we've got to shut all economic activity down". 

Millennials versus the baby boomers own a far less percentage of the wealth in the United States than they did versus the previous generation at this age.  Boomers at the age of 33 versus us at the age of 33, we own a lot less.  Really, this is just like the boomers who made the decision in 2008.  In 2008, they're, "We want to preserve our bank accounts and our retirement accounts, so we're going to bail ourselves out" versus them taking a loss, which is what happened with all previous generations. 

Same with now.  They're, "Well, we're old and we're scared that we could die from this, even though it's a very, very low chance even when you're older, so we're willing to shut down the entire economy".  The young people, unfortunately a lot of them, have gone along with this and are going, "Yeah, this is a huge risk".  This is tying it all back to risk.

As a culture, we've lost our acceptance and tolerance of risk.  Risk used to be celebrated, used to be celebrated like, "Yeah, this is dangerous, but that's the point of living is you take risk.  It's fun, it's exciting.  Hell yeah, it's dangerous; people die from it".  But the whole point of building new things and taking risk is that we build a better world and you push your tolerances and you push what you thought you were capable of doing.  With the economy now we're seeing no risks are accepted; they bail out airlines, they bail out any company that possibly might fail.  We also see this with health risks.  They're, "We can't accept any risk of people getting…"  Now they're like, "Vaccinated people need to wear masks".  So, what level of risk is appropriate? 

We've completely lost our risk/reward mindset as a society and I think we need to return back to a more risk-on attitude; we can't make risk go to zero, we just have to accept that some levels of risk exist.  I think COVID, turning it back on the economy, is an acceptable level of risk.  This is what we should accept as a reasonable level of risk.

Peter McCormack: I can't unpack all of that, there is a lot to unpack in this stuff.  I obviously have a slightly different view on COVID than you; we share mostly the same views.  I think a lot of the vaccinations have actually been about a form of herd immunity and I think that's the way there has been the encouragement.  The stats are out there now; there is certainly a reduction in the spread and there's certainly a reduction in death rates since people have been vaccinated.  The vaccines work to an extent, maybe not as well as everyone says they do, but they work to an extent.  I think what they're trying to put through is some kind of forced herd immunity for it.

But I still think people have to be able to make their own decisions.  I don't want to live in a world where you have to take an injection that you don't want to take.  I think it always should be optional and I think the decision on accepting people into your business is personal.  I fully support the right for anyone to say you have to be vaccinated to come into my business because that's your business, that's completely your choice.  So, I do support that; it's highly complex.

But one of the interesting things is, you can see a state, maybe not California, but I can certainly see somewhere like New York flipping red at some point when they think, "Holy shit, why is Texas getting all the smart people?  Why is everyone moving out to Texas?  Why is the economy booming there?"

Dan Held: In Texas, COVID's over.  No one wears masks anywhere, business is booming, there's not dead people lying around everywhere, everyone's fine.  In fact, I just pulled up the statistics from Statistica, "Death rates from COVID in the United States as of 4 August by state per 100,000 people" so this is essentially how many people died from COVID out of 100,000.  Texas and Florida are right in the middle.  Top states are some of the ones that locked down.  New York is number two, number two most deadly state for COVID is the one with some of the most intense lockdowns. 

This was never about the science, because the science shows this through state-by-state experimentation, Florida and Texas were right in the middle with almost no restrictions or very minimal ones.  You were at Bitcoin 2021.  Bitcoin 2021 was essentially zero restrictions, but there wasn't this giant wave of deaths, we haven't seen that happen.

Peter McCormack: Yeah.

Dan Held: The States are an experiment and with COVID they were an experiment, and the fact that California and New York won't recognise that the Texas and Florida experiments were successful basically means that they don't care about the science; they're very dogmatic and they want to have control. 

That was surprising; someone shared that stat with me the other day and the lowest one was Hawaii.  Hawaii had the lowest death rate, probably because they're an island and they restricted things super heavily.  Same with Puerta Rico.  Puerta Rico's very low, but Puerta Rico could have been because the tests were just too expensive and they just didn't test and they didn't mark those deaths properly.  Yet, Texas and Florida right in the middle and they basically had no restrictions or very minimal restrictions.

Peter McCormack: I am looking at the chart now for Texas; it does look like a third wave is happening.

Dan Held: Not in deaths; in infections, sure.

Peter McCormack: Yeah, infections, sure.  But I wonder why there is that difference in deaths?  Has there been a high vaccination rate in Texas?

Dan Held: I'm not sure, to be honest.  But I would imagine that Texas has a very high natural immunity rate.  Most folks probably got it.

Peter McCormack: Yeah, potentially.  I'm just trying to have a look.  Interestingly, the map I'm looking at here, the high rates are -- it feels like Texas has been greyed out on the map I'm looking at.  There's no data, it's the one place that's got no data.

Dan Held: Nice.

Peter McCormack: I think it's a tricky subject.  One of the trickiest subjects with this is I think we sometimes can or we are guilty of looking for confirmation bias; that's I think something I've witnessed quite a lot with COVID if you're someone who is anti-vaccines, anti-government, don't trust CDC, etc, you tend to look for the data which supports your views; whereas, if you tend to be one of those people who's a bit more scared about COVID, you tend to find the data that supports it. 

I had a massive debate with my brother about it recently and he was bringing in the data of the excess deaths in India, a BBC report; up to four million excess deaths in India.  I think people tend to find the data that supports them.  I just always come back to the point that I prefer people to make their individual decisions and at least have the data. 

If the data proves a vaccine has worked or is more effective and the risks are low and that a government's basically saying we want more of you to get vaccinated because we want to provide some kind of herd immunity, at least say that so people go, "Look, hands up.  I'm willing to be part of this, I'm willing to be vaccinated.  Even though I'm ill, I'll be safe.  I'm wiling to do that because it might help other people".  At least allow people to make those decisions. 

But this mandating in New York, it's just weird.  I'm obviously vaccinated now but I almost wish I wasn't so I could just reject going to New York for that basis.  The idea that I'm allowed to come because I am vaccinated, that doesn't sit comfortably with me.

Dan Held: Yeah, I mean look, vaccines work, they work for many other diseases.  Vaccines work.  The question is, should government have mandated it; and the answer is obviously no, of course not.

Peter McCormack: No.

Dan Held: It should not be a mandated thing.  I don't understand the super liberal mindset of, "I control my body except for this".  The far-left liberals are like, "Yeah, sure.  Forced vaccinations, that sounds good, except for everything else.  I want to control my body every other time".  Do vaccines work?  Yes.  Should the government force everyone to take vaccines?  No.  Does natural immunity exist?  Yes.  Then finally, the government really fucked up here in a lot of different parts, because when COVID first started, the CDC said you don't need to wear masks.

Peter McCormack: I know.

Dan Held: To me, I'm a prepper.  I had N95 masks because I'm a prepper, I'm ready for the bubonic plague.  I even have a full body suit, I'm serious.  I have a full body suit.

Peter McCormack: Have you?  You can put that shit on for me when I come over and we'll go out for dinner.

Dan Held: I was ready for it, and I remember in San Francisco me walking around with my mask because we weren't sure how bad it was.  I was, "Well, this seems kind of risky and we don't know what this thing is, so I'm going to wear a mask".  I got shouted at and yelled at, "You're stealing from the frontline workers"!  It was absurd.  Then four weeks later, the CDC's, "Oh yeah, actually we were just lying to you.  You definitely need masks" and then everyone's wearing a mask.  Then in San Francisco they weren't taking them off. 

After vaccinations started to roll out, my girlfriend and I would walk down the street and someone would be 50 feet away and yell at us, "Wear your mask!"  We're, "Dude, COVID doesn't spread like that".  COVID, unfortunately, very much like Bitcoin as well, once you get orange pilled, once you go down this rabbit hole of, okay, let's examine rational arguments, most people are very irrational; they operate on gut, emotional feelings and they'll do whatever they're told.  They're very sheep-mindset, most people are sheep, and so I think COVID very much exposes that. 

Bitcoiners inherently are anti-governments and anti-restrictions, so they're the first ones to go, "Wait a second, I don't think this makes sense".  There's a bunch of grey area there too where, "I think vaccines are effective".  I think there are some bitcoiners would argue that they're not that effective, but they are typically effective.  I'm, of course, very anti forcing anyone to do anything, so yeah, any sort of vaccine mandate is horrid; I don't agree with that at all.  Yeah, it's been a very disappointing exercise in seeing how people react.

Then the whole narrative building too of Delta variants.  This whole Delta variant thing, if you have a vaccine you should be okay against Delta variant, no need to worry.  If you have natural immunity, you're okay with Delta variant, that's fine, it's no big deal.  The press feeds off this anxiety and it all goes back to the relationship between people and their state, the people and their government and that's, I think, the beginning of our conversation and what this topic is ultimately about is Bitcoin nations. 

The only way that a nation becomes a Bitcoin nation is if people start to reject what these few folks way up in the government, who have no idea what they're doing, tell them what to do.  I think that starts with money; we're starting to see that with COVID.  I think COVID converted a lot of people into Bitcoin including an old roommate of mine.  He mentioned, "Dan, I didn't really understand your libertarian ideology" because he was super far-left, but he was, "Now, I get it".  He's, "What you said kind of makes sense".  He's seen a lot of things go in a really weird direction that aren't congruent with his former left beliefs.  He's, "Wait a second, this doesn't make any sense". 

Peter McCormack: I empathise with him.

Dan Held: You had the same thing?

Peter McCormack: I clash with a lot of bitcoiners because I'm not a full libertarian anarchist, but usually I think they're American and they don't understand we're quite different in Europe.  I know we speak the same language in the UK, but we're actually very different; we have a much more collectivist mindset.  We don't have places like Texas and Wyoming and Florida and North Dakota, we don't have that kind of republican/libertarian mindset of leave me the fuck alone, we don't have guns really.  The only people who have guns are people who like to go shooting on the weekend and maybe some of the criminals. 

But we're just very different; we're much more collectivist.  In the UK, we have a National Health Service.  Shedding that, it takes time and I'm not entirely 100% sure I always agree that I would ever become -- I always think I'll have differences from you, Dan.  I will always probably always have that small socialist element that sits on my shoulder and thinks about my contributions to helping others.  Wrestling with the idea of getting a second passport and going to a tax-free location does make me think, "Well, maybe I should be making my contribution".  That does exist, I'll always be honest about that; we are very different.  

But at the same time, what Bitcoin has opened my eyes to is the reality of government and is the reality of centralised decision-making and the flaws in it.  I'm not totally sold on having no centralised decision-making, but it does help me recognise some of the flaws and I do fucking love Texas!

Dan Held: It feels free here.  My mood very much changed the instant when we got here.  SF was so oppressive.  Look, I liked the weather; I kind of like it colder, it was kind of nice.  I run hot, so I kind of liked it cooler.  But it's kind of cold and a little dismal, plus the closed stores, plus the homeless people, plus the trash, plus the vibe, plus the super extreme COVID philosophy.  I just couldn't handle it anymore and getting here, people are in shorts at the pool, no masks, it feels like I've hit paradise, a paradise of freedom.  People are, "Oh cool, you have a gun" whatever.  I never brought that up in San Francisco because people would be, "Oh man, you have a gun?  Why?"

Peter McCormack: Seriously?

Dan Held: It's horrible, yeah.  I'm, "Because I want to defend myself"!  It's, "How dare you, how dare you want to do that?"  Yeah, I feel free.

Peter McCormack: We've gone on such a tangent here.  I think the original show title was going to be the rise of Bitcoin nations, but we've gone off on such a tangent, I think we're going to mislead people!  Fuck, I don't care; I'm glad we had this conversation.  You're the person I'd want to talk to about this as well because you're rational and reasonable and I enjoy doing it.  Well, I think the conclusion is buy Bitcoin, right?

Dan Held: Buy Bitcoin and the more people believe in Bitcoin --

Peter McCormack: Move to Texas.

Dan Held: Move to Texas and we'll create the first Bitcoin nation.  If Parker Lewis is listening, I think he's probably thrilled.  I bet he has similar ambitions to create a Texas Bitcoin nation.

Peter McCormack: He does, he recognises the strength of getting more bitcoiners there and creating that base of bitcoiners there working together.  He totally gets that and I support that and I'm going to spend a lot more time there, for sure, dude.

Dan Held: El Salvador represented the first rise of a Bitcoin nation, but a Bitcoin nation rises organically.  The percentage of the population owning Bitcoin needs to hit a certain threshold, 30%, 40%, 50%, 60%.  Then people start to vote and start to move with their feet and defend themselves.  So, I think that's when we'll start to see the rise of Bitcoin nations in its truest form, like a Texas or somewhere else, is when that population ownership percentage increases to a point where the bitcoiners aren't the minority, they're the majority and they go, "I'm not going to stand for this anymore". 

So yeah, I think COVID represents that, the economy represents that, but I think all of that is intertwined with Bitcoin and you buy Bitcoin because trust doesn't require you to make it work.

Peter McCormack: Wicked.  Dan, tell everyone how to find out more of the really cool work you do, educating people about Bitcoin.

Dan Held: If you liked our waxing poetically on various topics, then you'll probably like The Held Report.  The Held Report is a weekly newsletter that I put together, which is my long-form thoughts.  So, if you like hearing me talk in-depth on different topics, you'll want to subscribe there.  If you're on Twitter and you like more fast-based thinking, I'm @danheld on Twitter.  I tweet every day about various Bitcoin things.

Peter McCormack: Awesome.  I'll stick it in the show notes.  Love you, brother.  I'm going to see you in a few weeks.  We're going hang out and we're going to eat some barbecue and talk shit.

Dan Held: We'll get that picture of you on a horse with a gun.

Peter McCormack: Dude, I went to get on that fucking horse, man.  I love horses.  It's my favourite animal but we don't go and do horse riding, my daughter's allergic.  But take me out, get me on a horse, get me a gun.  I'll bring my hat, let's do it.

Dan Held: All right, man.  Lovely to see you.

Peter McCormack: All right, brother. Ciao, see you soon.