Bitcoin Bottom Line

Host Steven McClurg and C.J. Wilson open the episode by talking about international bitcoin adoption. Wilson asks McClurg if he believes the criticism that leaders of countries face will diminish after more countries begin to adopt Bitcoin. McClurg does not anticipate this to change. He recognizes that “a lot of people that come into power and want to make positive changes in their country have a difficult time doing it all at once.” He includes an example of Saudi Arabia taking small strides to improve their country, but it cannot change all at once.

McClurg states, “Changing your entire currency system to bitcoin with the hope of financial freedom is one step in the direction to overall freedom.” Wilson says we must look at these situations on a broad, long-term scale; have a low-time preference, and be patient. Like the government, it can be difficult for companies to change quickly, especially if they are public.

Many people have been moving to or visiting El Salvador recently. The hosts believe that this is due to their bitcoin adoption. Over the past two years, many people have been moving to places with like-minded people and fewer taxes.

Texan government officials have become pro bitcoin recently. Texas is looking to attract the mining industry and has great potential because it is an oil and gas energy-focused state. Wilson is surprised that many other states have not followed in Texas and Wyoming’s footsteps of adopting bitcoin, especially with their natural resources.

McClurg states that bitcoin is a movement for the people, and it has been happening organically. Politicians are increasingly becoming pro-bitcoin. Wilson hopes that bitcoin will become a “non-story” because it will be successful and ubiquitous. McClurg predicts that in two to four years from now, candidates that are not pro-bitcoin will be compared to a flat-earther.

McClurg and Wilson end the episode by looking at the nuance of crypto to say that we do not have to make generalizations. We can take a unique look at every leader, state, city, and country to rank them internally.

Hosts Steven McClurg and C.J. Wilson discuss regional and digital banks with the CEO of Fourth Capital, Brian Heinrichs. Fourth Capital believes in combining digital tools with the human touch. They strive to be a type of bank that has never been built before with their creativity, ideas, process, and customer service. Heinrichs explains that Fourth Capitol is unique because they are privately held, single shareholders, and do not plan on going public.

There are two segments of banking today: there are the large incumbent national regional players, and opposingly, there is the community bank player. Fourth Capital believes that banking should be sitting down with your client, meeting their needs, and doing research to make it happen. Heinrichs ensures a “yes” mindset to his clients.

Wilson talks about banks encouraging people to have their stock portfolios attached to their savings accounts to incentivize them to trade more. It is currently challenging to operate in a Bitcoin-only lifestyle with zero cash, but some individuals hope society will progress to this system. Fourth Capital looks at the individual clients and focuses on what they need and options to diversify as they see fit. This allows clients to keep their money in Fourth Capitol and personal relationships with the bank.

Heinrichs discusses how the organization's objective fundamentally changes how they function as a business and treat clients. Traditionally, funded banks have all started from the premise of “how do we make money?” They want your wealth co-mingled with your bank account so they can get fees. They do this to make money without keeping their customer’s best interests in mind. Heinrichs states, “Fourth Capitol wants to be best in terms of what they do and add value to their clients. If we do that long term, there is a mutual benefit of their clients getting rewarded through their business, and we get rewarded through long term relationships.”

Heinrichs states that a segment of the market is not being banked because individuals cannot find the experience they want, or they believe in an alternative financial world that we do not live in yet. Being financially inclusive is a long-term value play that benefits Fourth Capital and clients.

McClurg, Wilson, and Heinrichs all reflect on Nashville's past and the rapid growth of the city over the past ten years.

Heinrichs expands on the values that Fourth Capital holds and how clients are often surprised by how the business operates. Unlike many traditional banks who send applications to a nameless or faceless credit committee to make decisions, there are a handful of employees that sit down and decide together. “Get away from the formula and bring in the human element. At the end of the day, it is a people business,” says Heinrichs.

McClurg asks Heinrichs where he sees Bitcoin going, what it will be used for, and how it will be integrated into our everyday lives or banks. Heinrichs believes you have your very early adopters, the next wave is people wanting exposure and seeing where it goes, and then it will eventually be adopted and used in many different places. He believes that banks need to evolve and begin using better technology.

The episode wraps up with a brief explanation by Heinrichs on the credit facility and how credit has evolved in both private banks and the financial sector.

Listen to the full episode!

Hosts Steven McClurg and C.J. Wilson meet for another episode of the Bitcoin Bottom Line to discuss bonds and crypto. Wilson opens by asking McClurg what changes he has seen in the bond market.

McClurg states that when it comes to bond yields, the FED tightens and makes it more expensive to borrow. More prominent institutional investors must have a certain amount of their assets in fixed income for safety; therefore, large institutions will push the yield down for companies issuing debt that should go out of business. Sears and Toys R Us survived longer than they should have, while Nordstrom is struggling to keep their doors open and cannot get credit to buy inventory. As the FED begins to tighten, they increase the size of their balance sheet by continuing to upper growth of purchasing. He believes that the market is finally starting to price in tapering but has failed to price in interest rate heights. This year, the FED has mentioned three types of interest rate heights, meaning they will increase short-term rates.

McClurg predicts that with a 10-year going to 188, which was previously down around 1%, it will cause the refinance rates for borderline companies not to afford their Debt Service; meaning they cannot afford the interest payment on their new debt, causing them to refinance continually.

McClurg explains that the U.S. government’s treasury department is selling and buying the bonds. They are issuing debt to pay for government spending, but nobody else is buying it so the FED is needing to step in and buy it to keep rates down. If the FED stops buying, that means there is an open market for treasuries and for debt and market pressure pushes yields upward causing debt on spending programs to be even higher.

Wilson asks McClurg to explain the triangle trade between spending, lending, and the debt service.

When it comes to Banks and borrowing there's a FEDs fund window. This window is the rate at which the FED will lend overnight to the bank. The bank is getting cheap money that they are supposed to lend out to their customers for items like cars and mortgages. This has led to a rise in housing prices. The bank's price is spread based on their overnight lending window which is set up by the FED. McClurg believes that the low mortgage prices will rise back up to three and three quarters all the way up to four percent, which can be devastating to people.

As interest rates go lower insurance companies charge higher premiums to new customers to offset the lack of yield that they are getting. As interest rates lower, premiums rise.

Willson questions when Bitcoin will be allowable in pentiant plans or charity funds. McClurg talks about the risks that individuals take while investing in Bitcoin and other areas. McClurg has a long term mindset when it comes to investing that not everyone has. Willson states the value of looking five to ten years ahead while investing.

Willson discussed with McClurg if Barry Bonds is a hall of famer.

Wilson says that America leads many countries when it comes to bonds and discusses debasing money around the world. McClurg states that many countries are co-mingling with America’s manufacturing. Every country is forced to stay up with the dollar whether they are debasing or not.

The biggest opportunity for China is to have a strong currency that remains strong. There are different mentailites about Bitcoin depending on location. The independence that comes with Bitcoin challenges authoritarian governments, which is why we need it.

McClurg believes that people are generally more optimistic when markets are going higher. Wilson says that the best move is to assess all the different things tha

Host C.J. Wilson opens the episode by talking about the mystery of Bitcoin’s fixed supply. There are only twenty-one million Bitcoins that will ever exist, giving folks a grasp on how much Bitcoin there will be in supply at any given time.

In May 2022, the block issuance went from eighteen hundred to nine hundred. People did not know how to address the supply being different. How much were folks willing to pay due to the psychological mechanism of the fear of missing out?

About 18.9 billion Bitcoin has already been mined, but early Bitcoiners did not know what to do with the money because it could not be traded and was not yet worth much.

The total worth of the world is roughly six hundred trillion dollars. There are 100 billion pieces of one Bitcoin called Satoshi. If you were to take one dollar, you would get about seven hundred Satoshis. People view it as an added saving mechanism.

You can be a Satoshi millionaire for a couple of hundred dollars. You will see growth in the value of Satoshis, as you do with one Bitcoin. If you were to multiply one hundred million Satoshis per Bitcoin times twenty-one million Bitcoin, you would get two point one quadrillion Satoshis. Theoretically, if a Satoshi was worth one dollar, you would have three and a half the total market capitalization of every asset on the planet. There is room for Bitcoin to absorb and convert elements of the world economy.

Wilson explains how to buy Bitcoin and where the money goes. Theoretically, you sign up for an exchange and send them your currency. The exchange has some liquidity, so if someone makes a withdrawal, they have the cash to do so. An exchange functions similar to a currency exchange kiosk at an airport that will sell you British pounds for too expensive and buy them for too cheap. Therefore, exchanges like Coinbase Pro are doing a billion dollars in Bitcoin volume daily. If you are going to be a heavy trader, you want to chase the most significant liquidity. Bitcoin moves through exchanges because of scarcity.

Bots can be up on Twitter to monitor when significant moves happen in Bitcoin. If there is five thousand Bitcoin leaving an exchange, everyone can view it. Once someone takes the Bitcoin personally, it has the potential to be a one-way trade because of the fixed supply.

Bitcoin will not stop mining until 2140. People will still be running a form of Bitcoin mining system 120 from now to compete for fees, which are paid to miners.

There will be between 1,000 and 3,500 transactions in a block. If multiplied out, some of the blocks will not only be 6.25 Bitcoin, but there can be an additional .2, .3, or .4 Bitcoin in mining fees. The winner of the block will get all of it, incentivizing folks to participate in mining.

Bitcoin can be considered rarer than anything because it is fixed and ruled by rules instead of rulers. Folks should view it as “stacking sats” and not just buying part of Bitcoin.

Host and Valkyrie CIO, Steven McClurg, met via livestream with five special guests, all experts in the Bitcoin space.

Bitcoiner C.J. Wilson begins the round table discussion about the hopes and expectations of the new year. Wilson gives a short recap of the terrible flood attacks, adoption of Bitcoin from El Salvador, creation of the Bitcoin Football Club, as well as the action of mining reaching all-time highs during 2021.

Justine Harper of Unchained Capital speculates that adoption will be a significant focus of 2022 after seeing notable institutions adopting Bitcoin, while Kristy-Leigh Minehan of OhGodAGirl discusses hash rates and mining. Minehan believes that this will be the year that some mainstream guys join the ASIC development business due to all of the mining moving into the United States after China’s ban and the increased market saturation.

Charlie Lee, Founder of Litecoin agrees with Harper and Minehan that the adoption of Bitcoin will be prominent this year. He discusses Tonga’s interest in following El Salvador’s plan of making Bitcoin legal tender and the potential of a Spot ETF.

Peter McCormack of What Bitcoin Did discusses the benchmarks of the Bedford Bitcoin Football Club for 2022 and the focus on next season. One of the benchmarks will be commercial revenue proving that having an international base of Bitcoiners who support the team will allow a revenue model that matches lead clubs in the UK. Another benchmark will be strengthening the club's infrastructure, processes, and protocols to take a tenth division team through the leagues. McClurg speaks about the adoption of Bitcoin as payment by sports teams worldwide.

Author, Jimmy Song, discusses releasing his third book and seeing a trend of Bitcoin as a political issue in current and future elections. Two democrats and three republicans in the Ohio senate race have all expressed positive thoughts on Bitcoin. Song speculates that 2022 will have positive effects on Bitcoin despite potential adversity.

McClurg brings up the recent news that Rio De Janeiro is adding one percent of Bitcoin to its city treasury, similar to Miami. These two cities are now competing for forces with El Salvador. Wilson speculated that El Salvador would win due to its current Bitcoin infrastructure and commitment.

McCormack asks the other's opinions on the pegasus software in El Salvador. He describes the issue of thirty activists and journalists having information compromised on their phones due to this state tracking software. A variety of authoritarian problems have occurred in El Salvador over the past eighteen months. He challenged whether we are being objective enough regarding this issue.

Minehan states that the NSO group that created the Pegasus software was running a subsidiary of an American venture capital firm to create it. She has seen a trend of giving people a pause because they are in the Bitcoin community, which is happening in El Salvador. With the

excitement surrounding them adopting Bitcoin, people are not paying attention to what is happening with the pegasus software. Over thirty percent of the IOS population had the pegasus software installed until the IOS 14.2 update.

Song agrees and discusses the issue of tech companies having more information than they should.

McClurg suggests looking at the issue from a macro perspective. He acknowledges what they are doing is bad, but they have been an authoritarian regime for a very long time. It takes time to become a democracy, and he believes that aspects of democracy and freedom will emerge into the government.

Harper agrees that it is vital to be objective and that the people of El Salvador are benefit

Host C.J. Wilson joins us again for a solo episode to break down the topic of Open Source.

Open Source says that everything about Bitcoin must have visibility and auditability, meaning that anyone, including average non-coders, has access to download the entire language.

This encourages folks to participate in an open socratic manner, having conversations with logic and not necessarily emotion.

Wilson explains the BIP Process, which is a Bitcoin Improvement Proposal run on Github by core developers. The developers are working on Bitcoin Core, posting the proposals written by Bitcoiners to the network. After these are posted, a formative argument is made to discuss the process and decide whether or not it should pass.

Since all bitcoin iterations are reverse compatible, if a BIP is approved, each user can choose whether or not to upgrade to that version.

Another aspect of Open Source includes the transparency of all transactions on the blockchain. This explains that there is a lever of power between the developers, nodes, and miners. Developers work on the programming, the nodes are validating the programming and agreeing to run the programs.

Wilson teaches that a node is for folks to run their own transactions, and to receive. A node can also be used as a wallet. In the past, folks would have their node on their laptop also used as a wallet, and if they lost their laptop they lost everything. Now, folks might have a lightning wallet on their phone, node on their laptop, mining equipment, etc.

Bitcoin core developers have decided that the safety of the users is more important than the novelty of the use.

Wilson closes out the episode describing the speed, efficiency, and security of the network, and more.

Listen to the full episode!

Host C.J.Wilson goes solo for a short informational episode answering the question, “What is a Miner?”

Wilson explains that a “miner” is an “asic”, and shows what one looks like in the video version of this episode (on Youtube). It’s a 30 pound shoe box shaped machine with fans and plugins that connects to your laptop.

After purchasing the asic, the next step is joining a mining pool. A mining pool is a group of computers that all work together to share the hash rate. The brand new miners are usually somewhere between 90-110 terra hashes per second, which is a computing speed measurer.

For every 100 terra hashes, you are averaging around .02 bitcoin per month, in terms of how much you will actually win.

There are competing pools that are headquartered in different countries, many of which have been around for about 10 years allowing people to share the winnings. Every ten minutes or so, a block is mined and the winner gets 6.25 bitcoin. So, if you are participating in that pool, you will get your share of whatever you’re putting in the network financially or hash rate wise.

If you were mining with just one asic on your own and not using a pool, you will have a statistically near impossible chance of winning a block. This is because there are so many miners competing.

Wilson explains the conversation around how much energy bitcoin uses, and how much of it is calculated based on the hash rate. However, each machine has a different electrical efficiency- the watts to terra hash ratio has changed over time and throughout the different generations of machines.

As electricity prices change, the miners have to figure out how they will be profitable with the source they are using. He goes on to explain how co-location services work and how these benefit miners.

There is more competition for mining as bitcoin has gone up, causing people to come up with innovative ways of accessing power. One of these ways is using waste fuel. There are farmers extracting the methane from animal waste to convert to electricity. There are others converting natural gas, which might normally be burned, into energy to mine.

Wilson goes on to explain how immersion works, preserving the life of the miner and increasing efficiency.

States like Wyoming, Texas, Nebraska, Pennsylvania, New York might have an energy source that they don’t know what to do with, and bitcoiners are willing to take whatever power they can get and they scale their operations onto that. With bitcoin trading 40, 50, 60 thousand dollars this past year, it’s a really lucrative time to be a bitcoiner.

Listen to the full episode for more!

Host StevenMcClurg and Founder of Tron , Justin Sun, meet over zoom for an episode discussing all things Blockchain.

The two discuss meeting at Satoshi Roundtable in Mexico, and how the event was affected by the Covid-19 virus.

Sun explains how he got into Bitcoin back in 2013, and the inaccessibility of the cryptocurrency in China back at that time. He shares how he would bring cash to McDonalds in exchange for Bitcoin, and how it felt like an illegal drug deal.

He bought his first bitcoin at around 50 cents, and became distracted from studying for the LSAT Test. While his parents warned him to stay focused on his studies, bitcoin rose to one dollar. He continued focusing on Bitcoin, and gave up law school. “Then, it went up to $1,000, which was beyond my wildest dreams”, he says, “I started to realize the response of serious people building our industry.”

“Justin wanted to be a lawyer, Bitcoin fixes that.” McClurg says.

McClurg was also planning to go to law school, but decided he would rather study behavioral economics instead. He found an opportunity to apply that to finance, and even crypto.

McClurg asks Sun to share his expectations from the future, “Eventually, lots of countries will take bitcoin as a reserve. Bitcoin is very neutral and everybody can get bitcoin and protect their assets from inflation.”

He continues, with Aliens in mind. Sun predicts that if aliens are around, they use Bitcoin. “You don’t need to know anything about human knowledge to know Bitcoin, you only need to know math.”

The two discuss the GameFi industry in terms of blockchain technology, how far it has come, and the opportunities that have arisen in international (including metaverse) adoption.

McClurg and Sun close out the episode with more conversations of NFTs, GameFi, the future of Tron, and more. Don’t miss the full episode!

Lamar Wilson, freedom maximalist, OG Bitcoiner, and founder of Black Bitcoin Billionaires (the largest Bitcoin based club on Clubhouse) joins C.J. Wilson on this week’s episode of the Bitcoin
Bottom Line.
The two sit side by side in Austin, TX, taking a break from writing a book together (along with
others) that focuses on how to change the narrative of Bitcoin on Capitol Hill.
Lamar starts off the episode with a bang, mentioning that in regards to Bitcoin, “It’s not about the
price for me, it’s all about the freedom and the sovereignty.”
When asked how Bitcoin has changed his life, Lamar explains how Bitcoin is the freest money
we can have. He goes on to explain that, “It’s money that no one can censor, no one can tell you
what to do with it, you can hold it on your own without having to interact with anyone else, you
can send it.... All kinds of things that you can’t do with the current financial system.”
He goes on to share how he likes to introduce people to Bitcoin by giving them bitcoin, and
there is even a video of him giving out an entire bitcoin, “because it was about trying to get
people in it.” C.J. goes on to explain that in order for beginners, it’s helpful to “show them the
tangibility of it.”
“Bitcoin is just like the real world. It’s about objective truth,” C.J. states.
Lamar talks about reaching out to the black community with Bitcoin. He realized that there was
no intention around sharing information about Bitcoin with the community, and he was going to
change that. He started with friends and family and people at school. One of his classmates
became the 28th employee at Coinbase after learning about Bitcoin through Lamar.
He discusses Clubhouse, and how to keep the information very high level for those who are just
beginning. “Jesus used parables to get across high levels of thinking, I use analogies,” Lamar
says.
“Bitcoin is the strongest- just play that hand. Keep playing your aces,” C.J. explains while
discussing the irony of the creators of other coins wanting to sell their altcoins in exchange for
bitcoin. Lamar follows that with another analogy for Bitcoin: “There’s all these women you can
go chase, but that’s where it ends. Every man wants to get their ride or die. Once they have
their wife, they know that’s their base.”
The Wilsons continue the conversation around the book they are writing, how Clubhouse
brought them together, and how this year has brought many people in the bitcoin space
together.

They finish out the episode with more analogies, expressing their excitement for the direction
the space is headed. Don’t miss the full episode!

Legend Charlie Lee, founder of Litecoin, joins hosts Steven McClurg and C.J. Wilson on the podcast this week to talk about Bitcoin and Litecoin. Lee shares his story about starting out in the crypto space by buying bitcoin at an ATH of $30 before it dipped to $2. Even after this dip, he bought more, explaining that the community didn’t lose faith. He tells the hosts that back in the day, he used to buy bitcoin by meeting up with a stranger at a Starbucks or McDonalds with cash. However, he would wait there for the transaction to confirm which was around 10 minutes, but sometimes it would take up to an hour. He also shares that he’s done cash-bitcoin transactions in bank lobbies and at the steps of police stations, where it felt like a drug transaction. “For certain people who aren’t very technical, being on an exchange is safer,” Lee advises, “For people who are more technical, I would recommend they handle it themselves. For those who can’t do it themselves, I recommend an ETF rather than buying coins and leaving it on an exchange.” Back in the day, Coinbase was making it easy for people to get into Bitcoin, which is why Lee joined them as an engineer and was one of the first five team members. Now, the exchange has grown to around 5,000 team members. In his time at Litecoin, Lee observed that, “90% of new users get in at the All-Time-Highs, and that’s always been the case.” The hosts ask Charlie Lee about Litecoin, which he founded. McClurg compares Bitcoin to gold, and Litecoin to silver. Lee talks about how Bitcoin is almost perfect, except for the fungibility, so that is one thing he is focused on in terms of Litecoin’s evolution. Lee shares how he always thought the 10 minute restriction to mine one block on the bitcoin blockchain was too conservative, and he wanted to create something faster. Litecoin is fast and cheap. Wilson states, “Bitcoin and cryptocurrency in general has been best oriented towards private transactions, even though they’re peer to peer. Balancing that one-on-one, as opposed to the anonymity or pseudonymity is one of the coolest things that’s happened.” He goes on to share how transacting in bitcoin at his car dealership works, and how it’s the next development in the space. McClurg expresses how when people look at an 8% drop of Bitcoin and mention the volatility, he points out how fast the prices of cars, groceries, etc. are going up right now due to inflation or supply chain issues. “If that’s not volatility, I don’t know what is,” he says. “Right now Bitcoin is volatile, but in the long term, it will be less and less volatile,” Lee states, “Before we know it, the dollar will become a lot more volatile than Bitcoin.” The three close out the episode with continued conversations about the future of Litecoin, l “I put in extra effort to make it fair, where everyone had an equal chance to mine blocks. I, just like everyone else, had to mine the blocks.” Lee shares that pretty much all the code for Litecoin is forked from Bitcoin. The only thing Bitcoin didn’t have was the code to create the Genesis Block, which Lee had to create himself for Litecoin. Just like what Satoshi did put a quote from a recent newspaper from the time of genesis, Lee did something similar in the Litecoin Genesis Block. Listen to the episode to find out more!

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