WBD281 Audio Transcription
No Escape from Bitcoin's Gravity with Nik Bhatia
Interview date: Tuesday 24th November
Note: the following is a transcription of my interview with Nik Bhatia. 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.
Nik Bhatia has written Layered Money a book looking into this that will be released early in 2021. We discuss his book, where Bitcoin fits in the monetary system, the history of government control over money and central bank digital currencies.
“It’s just becoming clear to the smartest investors in the room, that denying Bitcoin is like denying the internet 20 years ago and it’s a mistake and you’re going to get left in the dust.”
— Nik Bhatia
Interview Transcription
Peter McCormack: Nik, how are you, man?
Nik Bhatia: I'm doing well, Peter. Thanks for having me.
Peter McCormack: Mate, good to see you. I've been a little bit excited about doing this show because, actually, when was the last time? The last time we saw each other, was that in LA when we did the last interview?
Nik Bhatia: It was. It was in the OpenNode offices. I think it was around probably February, something around there.
Peter McCormack: God, that feels like so long ago.
Nik Bhatia: I know.
Peter McCormack: Was it this year; was it really this year?
Nik Bhatia: Maybe it was late last year when we could still see each other in person.
Peter McCormack: Oh, man, what a different world we're in. Well anyway, man, it's good to see you. So, come on, we've got to get into this. You've been writing a book; tell me about it?
Nik Bhatia: That's right.
Peter McCormack: Why did you decide to write a book, because it's a massive undertaking?
Nik Bhatia: It is. The book is called "Layered Money" and the idea for it really started last year. Now, you know that I wrote some articles about the Lightning Network in 2018, and those articles gave me the sense that the Bitcoin world was looking for an explanation, a more detailed account, of how Bitcoin might become the world reserve currency in the future. And, aside from Bitcoin being an amazing technology and store of value, the details of how it gets there, aside from basically an enormous price rise, were not really there.
So, the book started to take form when I started teaching at USC Business School as an adjunct Professor of Finance, and I was forced to come up with a curriculum for my students that explained the monetary system, as well as the fixed income world, or the bond world, which is where I come from. I'm formerly a US treasuries trader for an asset manager here in Los Angeles.
So, when I was developing this curriculum for my students, I realised that the understanding of the monetary system needs to be explained before I can explain the fixed income market, but the understanding of the monetary system also needs to take place before you can understand Bitcoin, in my opinion. So, the research that I did for my students to explain the monetary system set up a book to talk about where money has come from, where it is today and where it's going in the future, specifically with Bitcoin heavily involved, or even at the centre of the future monetary system of our planet.
So, that's how the book took shape; and, the word "Layer" really came from the Lightning Network as we understood that Lightning Network is a second layer of Bitcoin and how we can transact. I took that layered analogy and applied it to the entire monetary system, and that's where the title, Layered Money, comes from.
Peter McCormack: Yeah. So, first confession is, I haven't read it in detail. I've had limited time with it, but I have skimmed through it, I have read through some parts. One thing that stood out for me, it felt like a history of money; a history of money with a prediction for the future of money. That's what it felt like?
Nik Bhatia: That's exactly what I tried to do. Now, in order to correctly explain Bitcoin, I think that people do need to understand what is money and where did it come from. So, yes, it felt quite natural to spend half the book pretty much explaining the history of money, from gold to gold coins, to the first forms of paper money, to when governments and central banks got involved in the 17th and 18th centuries in Amsterdam and England, and progressing to the Federal Reserve; then, the decoupling from gold in 1971, 1973 depending on how you call it; and then of course Bitcoin today.
There's a lot that's happened in the last 800 years or so of monetary history and I really felt that the Bitcoin world and the general public could use a refresh on monetary history that's really looked at through a new terminology, a new lens, that doesn't really read like an economics text book. I didn't want to write something that felt like where the vernacular was out of reach for people.
Peter McCormack: I think what it highlighted to me, and actually not even just your book, but this whole Bitcoin journey -- I'll tell you something funny actually. Did you see my tweet earlier? Did you know today is the third anniversary of the first ever show I recorded?
Nik Bhatia: I just saw that before we came online; congratulations!
Peter McCormack: Well, that was in LA three years ago today and it's kind of funny because, not only your book, but even just being in the Bitcoin space has made me realise that we don't teach people about finance really until, certainly not unless they make it as a choice to be something they go and study at university.
At school, we teach business studies and economics, but I now look back at my whole economics degree and some of the macro stuff was interesting, but I now know I was being taught a completely different form of economics than I've learn from people like you and Stephan Livera since getting into the Bitcoin world. But, we're very bad at teaching people about what money is?
Nik Bhatia: That's right, and I attempted to get into that a little bit. Now, my book isn't necessarily about the human connection with money. I talk about it briefly in the way that money transitioned from basically a way of keeping track of favours with each other.
Nik Szabo wrote his Origins of Money and really talked about this concept of reciprocal altruism, and how reciprocal altruism is basically one favour for the next. Then, we transitioned from that to physical objects in order that we didn't have to remember all the favours in our brain; we could actually have a token in our brain and keep track of money like that.
So, my book isn't really about the human connection with money; it's more about when we decided that gold and silver were the best forms of physical money, and transitioned from gold and silver, the metal or jewellery, to gold and silver coins where the measurement of money started to be standardised and exact, and we could use those units for accounting. That's when the story of Layered Money really starts.
It starts with coins and how we went from coins to certificates that were good for a coin, and so that's the difference between the first layer of money and the second layer of money. The first layer of money is a gold coin, and the second layer of money is a gold certificate that promises to pay one gold coin.
So, this analogy of first and second layer money, it's basically the idea of a balance sheet, assets and liabilities. The gold coin is on a banker's asset side of his balance sheet and the gold certificate is on his or her liabilities side of the balance sheet. So, assets and liabilities, I've taken that side by side and made it first layer and second layer money; and I go down and talk about the third layer as well.
Really, the conclusion of the book, or the reason I set up this analogy, is to explain that Bitcoin, just like a gold coin, is a first layer money. It does not exist on the balance sheet as a liability of anybody. Now, we have forms of second layer Bitcoin as well, like if you own Bitcoin on an exchange. You don't own first layer Bitcoin, you own a promise to pay Bitcoin, and that promise can be defaulted on. And, it's not a first layer money.
Now, people accept it and actually, part of the book explains that money is naturally hierarchical. There's a natural willingness for people to accept a certificate that says, "I'll pay you one gold coin", and that's why we have layered money. It's not because we forced people to do that in the beginning; it's that people were willing to accept a piece of paper that said, "I promise to pay you". That evolved into a whole monetary system that has multiple layers and the fact that we started with coins has been forgotten.
That's part of what you're talking about, how money isn't really taught; finance isn't really taught. But, it's not that it's not taught, it's that the origins are not taught. We are given formulas; we are given facts; we are given theory; but, we're not taught how it started and how money went from a coin to a paper layered system.
Peter McCormack: And, or why? Because, I think what's kind of interesting, flicking through the book, I feel like we're living in the dumbest time for money, but the most optimistic time for the improvement of money; because, I think we've all seen the problems, certainly since 2008 and what's happening with the pandemic. But, we've also had a lens of other countries who've had very difficult times, most recently, say, Lebanon.
So, we're obviously living in the most stupid time for money, which almost entirely feels like it can be blamed on government; but as I said, the most optimistic time, because we have Bitcoin, and it's really starting to deliver.
But, I think what we should do, we should work our way through it, because I think working our way through it is the education, but let's not give everything away, because obviously we want people to buy the book, for God's sake.
Nik Bhatia: Yes, please!
Peter McCormack: Yes, please, buy the book. If you're going to listen to this, you buy the book. So, firstly, let's go back, let's talk about the origins of money. Tell me about the starting point for money, where it all came from. I know you mentioned earlier with regard to promises but obviously, these promises and favours weren't things you could really stack up. So, where did the first forms of money come in?
Nik Bhatia: Right, so I talk about the first gold coins. Those took place in the 6th, 7th century BC. The first coin that I focussed on is from the 13th century in Italy, specifically Florence, called the Gold Florin. That coin, struck in the year 1252, was the first coin ever struck that lasted for as long as it did without any changes to its weight or purity. So, the Gold Florin, about a 3.5 gram pure gold coin, remained unchanged in its weight and purity spanning four centuries.
Peter McCormack: Okay, wow.
Nik Bhatia: Now, within 100 years of the florin being very stable, people around Europe started to identify their savings in the unit of florin. So, the florin was the first really international denomination. It was the first really international currency denomination in this so-called modern age. Now, the Roman Empire had some coins that circulated around the world, but we start the story in the 13th century.
Now, within 100 years and this denomination becoming standardised across Europe, merchant bankers started to issue promises to pay, they were called, Bills of Exchange. They were basically promises to pay. And, at least one side of those transactions was always in florin, after a certain point. And so, what we started to see was promises to pay florin were becoming standardised themselves, in terms of people just accepting that this is a letter that has somebody's signature on it, but it's a promise to pay florin, so I'm going to accept it as money.
That was the first form of second layer money, these bills of exchange. They existed before the florin was first struck, but they really started to coalesce around the florin denomination at that time. Bills of exchange -- yeah, go ahead?
Peter McCormack: Do we know why it was gold that was picked. I mean, I know the answer, but do we know why they picked gold?
Nik Bhatia: So, the reason why human beings picked gold and silver is, I think, a little bit beyond the scope of this book; but, what we find out is that over the last few thousand years, it was just consensus. So, we had animal teeth that were used as money; skulls from certain rodents; shells from the sea; even cattle, livestock; iron tools.
There were a lot of things that were used as money, but nothing attracted the global consensus, for whatever properties that gold had, the durability; the divisibility; just the beauty; and the scarcity of it all. All of these characteristics, whatever humans decided that those were the reasons, consensus formed around gold long before Florence decided to strike the florin in the 13th century.
The Roman Empire used gold and silver coins; Ancient Greece used silver as well. So, gold and silver had already reached a consensus of several thousand years by the time we got to the pre-Renaissance.
Peter McCormack: And, in terms of the florin, was there only a single coin, or were there different coins of different sizes with different values?
Nik Bhatia: So, the Gold Florin itself was a single coin with a specified weight and purity. Now, at the time, there were thousands of coins circulating throughout Europe, and this idea of coin multiplicity gave way to the trade of money changers, which are basically your foreign exchange brokers today. They would change one coin into the other, because the odds are you were buying something from somebody; that person was not going to accept the same currency that you were holding in your pocket; so, you needed a money changer in between essentially every single transaction.
That's why finding coins that remained consistent and popular helped money velocity in terms of it helped people change or spend money more quickly, or have money change hands more quickly, because everybody recognised the form. So, it wasn't the only coin at the time; far from it. But, it was the leading coin for a few hundred years.
Once it faded away, there were other coins that stepped in but by that time, paper money had really started to get involved, and the second layer promises to pay.
Peter McCormack: Yeah, I was thinking in terms of the florin, if it's a single coin but you wanted to buy or trade something that was less than a florin, significantly less, what would people do about that? Was it mainly for certain purchase sizes?
Nik Bhatia: Yes, so the florin was used primarily for international commerce; salaries for administrators in government. It was not used for -- so, the florin itself was worth more than the average labourer's weekly wage. And so, exactly what you're saying, the common man wasn't using the florin that much.
Now, we do have evidence that people, the common man, used the florin as a savings tool so that they could literally carry their life savings in their pocket, but it wasn't their daily currency. And actually, florin coins were great collateral in that they could be pawned easily. You could post the coin to a pawn shop and take out silver coins of lesser denomination and use those on a daily basis.
So, the coin was amazing collateral, and there are parallels to Bitcoin today in terms of the properties as collateral.
Peter McCormack: So, what came after the florin then; how did we evolve into paper money?
Nik Bhatia: So, bills of exchange, these promises to pay, it evolved into -- so, these bills of exchange, think of them as static instruments. They weren't really like cash. Although they were pieces of paper, you could really only use them when the date came due and your gold was owed to you. So, it was just a static piece of paper.
In the 16th century in Antwerp, these static pieces of paper found a home in an exchange, called the Antwerp Bourse, that opened in 1531. At the Antwerp Bourse, basically what you had were all these forms of paper money in one room and a bunch of merchant bankers that were ready to trade them with each other. So, for the first time ever, these static promises became live forms of money; tradable forms of paper, with time value, discounting, all these kind of fixed income terms that we think about today in terms of the money market.
The money market was born in the Antwerp Bourse in the 16th century, and that's how second layer money transitioned from a static promise to cash, really; what we think of cash today, where you could trade paper with each other because you're confident that the paper has value to the next person, or that it can be sold. It has liquidity.
Liquidity basically means that it can be sold today for cash. In that day, cash was coin and cash wasn't paper yet, but in the Antwerp Bourse, that's where cash kind of transitioned from coins to these bills. So, that's how we got off the ground in terms of the money market; this idea that second layer money was money also and that it had a market, it had a price.
Something interesting that is in the book is that the birth of the financial press happened in Antwerp at this time, not because of stocks or anything else; it was because of the commodities that were traded there at Antwerp, which attracted the bankers, right, and then prices of money themselves, interest rates, were first published in Antwerp in the 16th century. I thought that was fascinating.
Peter McCormack: Yeah, that is. Okay, so these bills, these promises to pay, could anyone issue one, or were they issued by banks; and, how would you validate them?
Nik Bhatia: So, think of it the same way today, Peter, if you had a bank that issued you a deposit. If you've heard of the bank and you've seen them advertised, you're more likely to trust it. If you haven't heard of the issuer, you're not likely to trust it.
So, especially at the birth of the money market, flushing out who is to be trusted and who is to not be trusted is going to take decades, even centuries, to flush out who are these issuers that are trustworthy, creditworthy and reliable. And, defaults happened all the time and people learned their lessons.
Also, this is exactly why people chose to hold first layer money instead of second layer money, or first layer money as a hedge against their second layer money, so that if somebody defaulted on their paper, they weren't wiped out. And, it reminds us of Bitcoin exchanges today, and there are so many parallels.
Peter McCormack: Yeah, I was just thinking. "This is not your key; it's not your Bitcoin".
Nik Bhatia: That's right. It's exactly the same thing; it's just a promise. And so, promises in the olden days and promises today made by Bitcoin exchanges, they're not really different; they are liabilities on somebody's balance sheet and they can be defaulted on.
Peter McCormack: And this is all before government involvement? Was this all just organically something that built up?
Nik Bhatia: That's right, it was organic. In the 17th century, at the beginning of the 17th century, the money market transitioned from Antwerp to Amsterdam as a result of the Dutch Revolt and basically, the Dutch closing off Antwerp's access to the rest of the continent. Amsterdam took over and the government got involved.
So, the Bank of Amsterdam's founding in 1609 is the first time where the government, the state, gets involved in the second layer issuance of money, where they realised that if they are the ones that issue second layer money to the public, they can actually use the currency to their own benefit. That's what happened, starting in Amsterdam, and compounded with the founding of the Bank of England, which was done to finance a war against France.
Peter McCormack: Okay, so I should know that, being British, and I didn't know that; I know it now. So, the Bank of England was created for us to have a war with France? You've got to tell me that; that's fascinating.
Nik Bhatia: So, the Glorious Revolution of 1688, when England transitioned from one monarchy to the next, it also coincided with an ambition of the English people to be more represented in parliament than they already were. So, the Glorious Revolution was a little bit of a -- I wouldn't even say "little bit"; it was a shift in power, or a shift in the balance of power, away from the monarchy toward parliament, to some degree.
Along with this, the people of England and the parliament looked to what had happened in Amsterdam and the Bank of Amsterdam and they were jealous. They were like, "This is a good deal. We can start getting involved in creating money really for ourselves and use it to our own benefit".
So, when England needed to rebuild their navy after they had lost a war, they started the Bank of England and issued bonds in order to borrow and rebuild their navy. Those bonds were purchased by this new Bank of England and it was only supposed to, or the Bank of England initially had temporary charters that lasted approximately a couple of decades each. But, they kept getting renewed as parliament and the people found that the Bank of England was helping the country along and finally, in the 19th century, became a permanent institution.
But, it took a while for the Bank of England to become permanent and to get their monopoly on paper currency. Private entities in England were still issuing notes that circulated as currency during the 18th century.
Peter McCormack: In terms of thinking, you know, I think of the monarchy, historically, in terms of when America kicked us out, because our king tried to tax Americans to pay for, I don't know which war; I'm just going based on having seen Hamilton. So, how were the taxes paid in those days? Were they paid in gold; were they paid in notes; how did it all work?
Nik Bhatia: So, the tax laws of England, I'm not so sure how exactly they were collecting taxes, but the legal definition of pound sterling was, "A unit of silver", until the year 1717, when it became, "A unit of silver and gold", and gold kind of replaced silver as the currency of choice in England. So, the legal currency itself was pound sterling, so I'm assuming that taxes were collected in pound sterling, but pound sterling were promises to pay gold.
So, again, the interaction of people and their governments was all on the second layer of money. Coins weren't used as a functioning government currency. The currency was a Bank of England note and deposits.
Peter McCormack: Okay. Is there a slight difference though between, say, silver and the notes themselves? Did silver, even though it was a promise to pay gold, did it still have a more intrinsic value, or was that just not relevant?
Nik Bhatia: Are you talking about sterling?
Peter McCormack: Yeah.
Nik Bhatia: The pound sterling; the currency unit?
Peter McCormack: Yeah.
Nik Bhatia: Yeah, so pound sterling, the word "sterling" means 92.5% silver purity. So, it actually comes from -- the pound sterling is a unit that was a millennium hold. But, in 1717 when Sir Isaac Newton, as Master of the Mint, changed the exchange rate between gold and silver, what he had done essentially is, he had incentivised the melting down and exporting of all the silver in England, because people were able to profit by this arbitrage trade between gold and silver.
During that process, silver left the monetary world of England and gold replaced it. But, in the end, the pound sterling was still a bank-issued currency. So, the Bank of England actually suspended convertibility to gold altogether in the late 1700s for 20 years, because they were in financial crisis and, if people had bought all the notes that the Bank of England had issued and demanded gold, they would have been wiped out.
So, they said, "No more. You cannot have our gold. We are suspending convertibility between the second and the first layer of money". So, this is the one of the first major examples of the government's power once they get involved with the issuance of money; they can basically say that, "You all have our second layer money; you're not going to get our first layer money. You're not going to be able to convert it to gold and we can do that because we're the government". So, maybe that answers your question a little bit more?
Peter McCormack: Yeah, it does. And, it's fascinating, because it just shows how, I guess, there's a long history of examples whereby as governments can control the money, they can destroy its value, because they have no incentive themselves to run a balance book essentially?
Nik Bhatia: That's right.
Peter McCormack: So, when did the UK convert to the pound note; when did the actual tender of the notes and coins that we're aware of today come in play?
Nik Bhatia: So, those notes started upon the founding of the Bank of England in 1694; they started issuing notes. Those notes became the only currency allowed to circulate in England after 150 years or so, where pound notes were circulating in the public as well as other private notes. Now, pound notes were promises to pay gold; the private notes were promises to pay gold; but eventually, the Bank of England got their monopoly on notes in the 19th century.
Peter McCormack: And, was that a good thing at that time, to have a monopoly on the notes?
Nik Bhatia: Well, that goes to the larger question of, should the government mandate that we can only use one type of currency or not. So, it is the case today that, with legal tender laws and an inability for us to transition, as an American -- forget Bitcoin for a second, but let's say I wanted to hold a basket of dollars, euro, yen; it's difficult for me to do that as an American citizen, just as it would be, I think, probably easier for you to own euro and pounds at the same time. But, it's difficult for us to own different currencies.
We are made, we are forced, to use the currencies of our government. How governments treat Bitcoin in the future will tell us a lot. Are they going to let us have the freedom of currency choice, or are they not? Right not, it's yet to be seen, and it will differ from country to country.
Peter McCormack: Yeah, it's quite interesting. It reminds me of this, and I brought this up this the other day. When I was in Argentina, I don't know if you've seen this, but during one of their financial crises, it might have been El Corralito, some of the regions actually ended up creating their own notes and their own money, and I've seen some of their notes; it's quite funny. Have you come across that?
Nik Bhatia: No, I haven't, but what you see is that people find a way to exchange with each other based on this idea of reciprocal altruism. All we need is something to agree upon that we agree has value; and, if we agree that is has value, we can use it as a way to exchange with each other. So, it doesn't surprise me that people that live in countries with very unstable currencies will find their own way to transact with each other.
We see Bitcoin being used for that purpose in parts of Latin America today because of the instability of those currencies.
Peter McCormack: Yeah, I'm trying to find them because it's fascinating. I should send you it. But, are there examples of places that have created notes and had a system of notes which hasn't had a convertibility to something like gold?
Nik Bhatia: Oh, absolutely. So, there's one example in the United States, the Greenback, which was used to finance the Civil War. The Greenback didn't have any convertibility to gold and it circulated the same time as gold certificates. This was in the late 1800s before the Federal Reserve was created.
So, that's one major example where the convertibility to gold didn't matter; it still circulated as a currency and people trusted that it had value, or that it could be used in exchange to the next person. Then today, of course, our government issued currencies have no convertibility to anything.
Peter McCormack: It's really interesting, because one of these journeys you go on when you learn about Bitcoin is, you start to question a lot of your previous assumptions; and, I now understand why so many people are libertarian, especially in the world of Bitcoin, because they don't want government interfering in things because most things they interfere with, they're kind of a bit shit with it. Some people may argue about certain things, like they may argue about, well, we need government for roads or border control, defence, and I've never been a full anarchist.
Quite interestingly, I've got Jonathan Haidt's book here, The Righteous Mind, whereby he mentions that wherever groups of people are formed, they've always destroyed individualists; so this natural thing that we always will have groups of people formed together, whether that's small groups, or whether it becomes under the wing of a government.
But, it does constantly make me think, with regard to money, it's the one thing we really should not have the government interfere with, because it really affects every single one of us. You and I, if you can't pay your mortgage, you'll lose your home potentially and, if you run out of money, you can't buy food for your family. We have to run personally balanced books for our homes, so we're incentivised to work hard and we're incentivised to be responsible with our money.
There is no incentive for government to ever do this with the ability to print money. This is the great thing about Bitcoin, is that now we have currency competition, as it starts to be this gravity that sucks money in, I guess we will be running to two options: either governments will have to be more fiscally responsible; or, they'll try and ban Bitcoin?
Nik Bhatia: That's right and some governments will try to ban Bitcoin. But, the beautiful thing about Bitcoin is that it's really difficult to manipulate its price in every currency at the same time. The supply of Bitcoin itself and the delivery of physical Bitcoin when you take possession of private keys, and let's say you withdraw it from an exchange and transfer if into your own wallet; what you are doing by taking possession of the Bitcoin is you are enforcing the prices that you see on the exchange.
Those prices, let's say Bitcoin does go to $500,000, that price is telling you that the dollar isn't worth as much as it was versus this new idea of currency. Now, I'm not talking about going from 1 cent to $500,000, but going from $20,000 to $500,000 after Bitcoin's already 12 years old is telling you something; it's sending a message to the government and to everybody that owns dollar as well, that your currency is actually being devalued in terms of this other currency and so let's look at that other currency and figure out why it's so much more valued by the general public.
Governments and central banks are able to manipulate the price of their currencies relative to other government currencies, because they can just create and buy, create and buy; but, you can't do that with Bitcoin. So, Bitcoin has this ultimate price truth, or this ultimate arbitrage mechanism in the world of currencies. It's going to keep getting stronger and stronger and it's going to make people understand why in fact this new currency has value; not that it's more valuable than the dollar or less, or any other currency, but why does it have value and why does it keep going up in price relative to other currencies. It's all about the price.
Peter McCormack: It's all about the price, but I guess what enforces this is scarcity and the absolute scarcity, which makes it, I guess, one of the reasons that makes it even better than gold. It's the scarcity and the predictability. We all know -- it's kind of two rules of the game: we all know that it's scarce; and we all know there will only be 21 million; and we know the issuance rate. Because of that, it's almost become that game that you need to get as much of this as you can as early as you can, as people transition into the Bitcoin economy?
Nik Bhatia: That's right. Bitcoin is like scarceland; God is not making any more of it.
Peter McCormack: China is!
Nik Bhatia: Yes, they are. They're just building it into the ocean, aren't they! But, yes, the scarcity, Peter; the supply maximum at 21 million; and the schedule; and the price all go hand in hand, because the price reflects people's understanding of that scarcity.
So, you call it scarcity and I'm calling it price, but we're actually talking about the same thing, because it's a scarcity property relative to other government currencies that drives the price, because you can never get it back if you sell it, right, at that same price. The central banks don't have that problem; they can always create more money.
But, if you sell your Bitcoin at a certain dollar price, there's no way -- like, if you're a government and you own Bitcoin for some reason and you sell it, you can't just get that Bitcoin back without creating more of your own money to buy that Bitcoin. So, you're inflating the supply of your currency just to get back that scarce Bitcoin.
What you're describing in terms of scarcity, 21 million maximum supply, they are the characteristics that drive the price and really the qualitative difference between Bitcoin and everything else; and, that includes Altcoins, it includes stablecoins, it includes everything except Bitcoin, because Bitcoin, not only does it have a maximum supply, but it has this tidal wave of energy and mining power from around the world that secures that supply.
When you compare hash power across networks, there's no competition; it's not even close. There is nothing else like Bitcoin.
Peter McCormack: So, it comes back to that point that, I think it was Vijay Boyapati said is that, "We eventually always convert to the best form of money". And, the reason Bitcoin is performing so well, especially, let's say, compare it to gold right now; I mean, it's obviously performing very well against the dollar; it's performing very well against gold right now. We saw a small boost in gold earlier this year, but Bitcoin is performing really well, because there are enough people who right now want access to Bitcoin, who believe it is superior to gold.
So actually, in some ways, Bitcoin is actually, if you think about it, it's actually priced quite cheap at the moment, because very few people understand this?
Nik Bhatia: Well, it's actually incredibly cheap when you think about Bitcoin as potentially the digital gold of the future, because gold's total market value in the form of gold, bullion and jewellery around the world is about $10 trillion. Bitcoin isn't even at $0.5 trillion. So, there is a 20X in there in Bitcoin's future if it does continue on its current path and people continue to view it as digital gold.
People like myself, that are going to publish books that make the case that Bitcoin is digital gold, I'm not the first one to do it and I won't be the last one to do it. We don't use this analogy lightly. I wrote five chapters about why gold was the way it is, just so I can set up calling Bitcoin digital gold and it makes a little bit more sense to people. So, it's not an analogy that people just pick out of nowhere; it is real.
So, using Bitcoin's market capitalisation versus gold's, I think is a fair way to assess. I know that you've had the Winklevoss brothers on; they've made similar comments. I'm not the first one to say this, that gold's market size is a legitimate target for Bitcoin, and it puts Bitcoin around $0.5 million. If you multiply 20 million coins by $0.5 million, you get up to $10 trillion, so that's where that $0.5 million number comes from.
I don't think it's unreasonable, we don't know when it's going to happen, but in terms of getting there, I think it's something that, if Bitcoin continues on its current trajectory, we'll see it trading on par with gold.
Peter McCormack: Well, I think if it gets that far, I think it actually shoots beyond it and I'll tell you why. Just like an experience of my own, and I've talked about this a couple of times on the pod, as the coronavirus thing hit, I started just to make a few plans for disaster scenarios, and I just tried to wonder all the scenarios I need to be prepared for. Bitcoin was one in terms of protecting my money. I knew there was going to be a massive amount of government borrowing.
I also planned just to have some cash in the house, just a small amount that's hidden away if, for some reason or other, banks are closed, you can't get to the banks, there's a cash problem; I had some cash. I also thought, I just want to have some gold too; I just want to have a bit of gold. And, the reason I want to have a bit of gold is that, whilst I have a lot of conviction buying Bitcoin, it isn't 100%; it's, say, 95%, whatever.
So, I just thought I wanted to have a bit of gold, so I looked into buying gold, and there were a couple of things that really stuck out. Well firstly, some people said, "Well, do you want to get an ETF, or do you want the physical gold?" and I thought, well, if I'm buying this as an alternative to Bitcoin, my conviction is around the possession, therefore I need to possess it like I can possess Bitcoin.
Nik Bhatia: You want first layer gold!
Peter McCormack: I want first layer gold, absolutely; I wanted first layer gold. But, the secondary point was somebody said to me, "What are you going to do when you want to sell it?" I said, "I'm assuming someone wants to buy it from me". He said, "Yeah, but have a think about right now. If you want to sell some Bitcoin, what do you do?" I was like, "I just send some to an exchange and I sell it". He said, "You've got instant liquidity".
With gold you haven't. He said, "You look around. Look at all the people you know who own gold and all the people who own Bitcoin. Which one's in growth?" He's like, "Have you got friends trying to buy gold?" and I was like, "No". "Have you got friends trying to buy Bitcoin?" I was like, "Yeah, you're right". So, actually, I just skipped the gold phase and I bought more Bitcoin.
That, to me, was the message that Bitcoin does so much more. Bitcoin is so much more accessible, it's so much more easy to use, basically all those things Vijay Boyapati talks about in his Bullish Case For Bitcoin; they're all true and it suddenly becomes very clear that it's a much better form of money that can do much more.
So I think, if you're heading towards the gold, I think you end up actually crashing through it because so many more people will have an interest in owning Bitcoin than they will do in owning gold.
Nik Bhatia: I really agree with that and, you know, my book doesn't speculate beyond approaching gold in terms of the market value, but it does speculate beyond the current monetary system and to a world where central banks not only have to own Bitcoin, but have to have their own Bitcoin trading desks in order to make sure that their currency's value, relative to Bitcoin, doesn't get out of hand.
So, again, Bitcoin being this arbitrage mechanism for the currency world, I think that central banks will have to manage the price of Bitcoin versus their currency just to maintain a stable value relative to Bitcoin. So, yeah, I think that Bitcoin is definitely the next iteration of money and it does obsolete gold in a lot of ways, but it is hard to just immediately dismiss several thousand years of monetary history.
I'm not going to be the one to do that and say gold is trash and Bitcoin is the only thing going forward. But, the writing is on the wall that the properties of Bitcoin exceed gold when it comes to, here we are in the year 2020; there's just no doubt about it.
Peter McCormack: Well, that's a really interesting point you've just made in terms of central banks having to manage their currency in relation to Bitcoin and Bitcoin, I guess, will become the ultimate measure of monetary policy responsibility?
Nik Bhatia: That's right. It rises to the first layer of money across the entire spectrum of all monetary assets in the world. That happens with a progression from the traditional rails to more of a crypto currency type of rail at the central bank level. So, that's where we see central bank digital currencies coming in. And, we don't know what they'll look like yet, but in my book I do speculate and make some light recommendations to central banks that want their central bank digital currencies to have value in the market and international demand; even potentially, a way for them to claw back some of this momentum that they've lost because of Bitcoin.
People have lost their belief in central bank currencies, starting around this 2007 to 2009 financial crisis, right when Bitcoin was invented. So, the decay in trust in central banks, they will try to claw some of that back with these digital currencies and my book outlines how I see CBDCs playing out; what types of digital currencies these central banks will issue; and, how they will interact with Bitcoin in the future.
Peter McCormack: Okay, I'm going to want to come back to CBDCs, because I've got a few things I want to ask you about those. I just want to keep on this. It's really interesting. Sometimes I do interviews and during it, my brain starts ticking over slowly and I start to have these lightbulb moments; but, what's really interesting in terms of this, so if we're talking about Bitcoin being the ultimate measure of central bank monetary policy and with Bitcoin being relatively easy to send between people, certainly on the base, I know it can take a bit of time sometimes, but this is what makes the second layer so important. I'm going to come back to that; sorry, my brain's ticking over!
Nik Bhatia: Go ahead.
Peter McCormack: If that's so important, it actually reminds me of something Saifedean said to me once. I said to him, "What's the biggest risk to Bitcoin?" and he said, "Responsible central bank monetary policy"; if you had good money. This then becomes a real test for governments. And, it takes me back to that point I just said a moment ago, that Bitcoin is a real threat to this model whereby they can print and create money themselves; and, if people start to realise that, if this kind of virus spreads, then more and more people will be going into Bitcoin.
Therefore, it does come back to that point whereby they will have a choice, either to improve their monetary policy, which may mean the government finally has to start reducing in size and being more responsible? My brain's ticking over now.
Nik Bhatia: Well, think about it like this; here's an example. So, let's say a country, unnamed country, decides to issue a central bank digital currency, and they do so by issuing it on a distributed ledger that, let's say, you and I can download so we could view the supply. We can't mine transactions; it's not built like that. It's just for us to view and audit, but we can because we have this software.
We can see that this central bank has issued X number of units of currency and they increase their supply by 1% a year, similar to gold, let's say, and they do that for ten years. Meanwhile, everybody that has the free software can see this in real time. Do you think that that country's currency is going to attract value and demand relative to another one that we also have their distributed ledger software and we can see that they're creating 50% growth a year in their currency?
So, this auditable currency idea that comes from Bitcoin, I do believe that we will see some central banks progress toward that type of technology, exactly to claw back that trust that they have lost because of how much money they have created over the last decade or two, or even century or two; it's possible.
Peter McCormack: It's a really interesting thing. Even this conversation alone is increasing my conviction. So, I'd got to the point recently where I didn't like holding pounds, especially with my business. My business holds a balance sheet. So, what I started to do, I started to look at my long-term cash flow projections.
Any money that's not required over the next year goes into Bitcoin; the reason being, I can't do it all right now, I can't go Bitcoin only because we go up to $18,000 then we crash back down to $15,000; I might have bills to pay; and, I could lose 20%. But what I can do is, I do have this longer-term conviction. So, anything I don't need over the next year just goes into Bitcoin and sits there, because I have that long-term belief that that will accrue value.
The volatility is really one of the few downsides I have with Bitcoin right now. Look, I understand it; you can't go from a penny to $20,000 to $500,000 per coin without some volatility; I fully understand that. But I, as an individual, have to manage that process. I have my conviction, but I have to manage that process. I guess there'll come a time where Bitcoin will be seen less volatile; it will be considered that the other currencies are volatile.
Now, people make that point, and I think it's a bit of a joke, you know, "The dollar's crashed 20% today". But actually, the volatility becomes less relevant if we start transacting in Bitcoin and Bitcoin becomes the unit of account?
Nik Bhatia: Yeah. The way I think about volatility is, just like you said, it can't go from 1 cent to $500,000 without some enormous gyrations along the way. But, I'm not the one who came up with this; somebody else said this, I can't remember who, "The volatility scares away enough people for Bitcoin to reach its maturity level", where the people that are scared of the volatility, they won't participate, because it's not the consensus yet.
Bitcoin is still the underground. Even though for us, it's the mainstream; it's not yet and it is still the underground and so it will remain there for the entire time where its volatility is face-ripping. By the time that this interview airs, we could be at $25k or $12k. I mean, that's just the nature of Bitcoin. There's no way Bitcoin settles down in volatility any time in the next few years; it can't on its way to becoming a worldwide monetary asset; there's no way and there's not enough Bitcoin.
So, here's a more nuanced thing, something that I look at. So I, as a former bond trader, I'm always looking at charts and price action. It's something that I always do and I study the Bitcoin price action. I can see, when you see these candles that, we have a $1,000 sell-off in eight minutes, or a $200 move in nine seconds; those types of things show us, from a price action perspective, that the buyers and sellers are way apart on price today.
Any large size moves the price by $1,000; any large trade that goes through. So, those huge moves, those huge candles, 15-minute candles or even the daily candles, they're usually from one trade that triggers a bunch of stop-losses; but, it's one buy or one sell that cascades through the rest of the orders. So, if we're still in a state where one enormous trade can move the market by $1,000, that's just not going to change anytime soon.
So, volatility, as a critique of Bitcoin, I think it's been answered in terms of now we're in our third post-having bull market; third consecutive; three out of three. It's like it's starting to become clear, it's starting to become more obvious that it does follow the seasonality; it does have an insane amount of volatility; and we will have 75% drawdowns when we get to the next peak of the hype cycle. So, I just think it will naturally continue like that.
Peter McCormack: Okay, I'm going to talk to you about the current hype cycle. One other thing I wanted to talk about is relating to this point and then, I just wanted to talk about Lightning; it's the secondary consequences of having this very, very good money. People talk about fiat money and align it to other things, but one of the things that's come out of another experience of becoming involved in Bitcoin is that historically, my own personal monetary policy was terrible, right? I wasn't very good at saving, just spent my money each month and never really planned for the future. Honestly, Nik, I was terrible until I got into Bitcoin and even when I first got into Bitcoin, I was terrible.
I own way less Bitcoin than I did at my peak. But, I had my peak, I had my own volatility, I had my spike and how much I got and then, I had my massive drawdown when I screwed up. But, since I've hit that bottom, I've only ever gone up; I've only ever increased my Bitcoin stack. I give bits away sometimes, I spend little bits here, but generally speaking, month on month, I actually track it; I track how much I've accumulated each month. I'm very, very conscious of doing that, which is making me more responsible myself in my own personal monetary policy, my own spending policy.
But, I know what the influence is going to be, is that it's going to make me be a bit more considerate about the things I buy. You know, if I buy a car, do I need a Range Rover, or will I be okay with, like, a Golf; what is the consequence of that? And, those secondary consequences, I think, are going to drastically change the economy for people. I think we're going to become more productive, but in a different way.
Nik Bhatia: I agree with that and I do point out that in the 1920s in the United States, it's a period called "The Roaring Twenties" before the Great Crash of 1929 and the ensuing Great Depression, that consumerism in the United States, and it would trickle to the rest of the world, had its origins during that decade and the consumerism and the money supply expansion on, let's say, the third layer of money was so excessive and caused such a large financial crisis that we can actually trace a lot of the problems, and even the delinking of the dollar to gold, to the birth of that consumerism era in the twenties.
So, you bring up something important about a future where maybe Bitcoin reverses a little bit of the consumerism culture, it makes saving cooler, it makes saving more desirable and I love Bitcoin as a savings technology. I love that meme.
Peter McCormack: I love that meme.
Nik Bhatia: It's one of my favourites because there is no such thing as a "savings technology" in this world, until Bitcoin. It really is a great analogy and so, yeah, I think Bitcoin as a savings technology drives maybe some of that anti-consumerism over a time horizon; but, not something that I philosophically dive into.
Peter McCormack: Right. So, I want to move onto Lightning now. So, I've had my period recently of just not caring about Lightning. I don't care, I don't need it, I don't use it. And again, this interview is another one of those where I've realised how important actually Lightning is; but, it's not important right now, it's important for the future.
When people start talking about how much Lightning is used now, I've realised it doesn't really matter right now. What matters is the technology improves, it becomes easier to use, etc. Because essentially, Lightning, they're basically kind of like the notes, right; kind of like the notes. Whereas gold is your base layer, Lightning is like the notes. But, they're so much better than the traditional notes that you were talking about previously.
Nik Bhatia: Right, they're so much better because they don't have that counterparty risk. It's not an issued liability at somebody. It's still your Bitcoin, it's just suspended in these payment channels and so, with all due respect to the whole Lightning Network world, I do agree with you that Lighting doesn't matter that much yet from this world reserve currency path, but it matters so much, Peter, because of the hashed time lock contracts that make up the Lightning Network.
These contracts and what they started as and what they're evolving to prove to us that Bitcoin is not just this static asset, but it's an entire monetary and financial system embedded into the network protocol. So, what Lightning Network shows us is that standardised financial contracts within Bitcoin and programmed into Bitcoin have the potential to let us transact Bitcoin in a zillion different ways, relative to send and receive.
Bitcoin started as send and receive, but it's way more than that today. And, Lightning Network is so exciting because it transforms Bitcoin from this static, again to use that same static and dynamic analogy, Lightning Network makes Bitcoin dynamic because you can instantly transact it; you could even stream it; you could use it for micropayments. Those are all things that you can't do on the base layer of Bitcoin.
So, I don't really view Lightning Network as a form of notes; I think of it more as a little bit of a delayed settle on your Bitcoin, so that you can use it at light speed and hence, Lightning.
Peter McCormack: Okay, interesting. This whole interview has completely changed my view on Lightning. I get it now, because when you hear people saying, "No one's really using Lightning", I'm like, "Well, yeah, you're kind of right". But actually, it doesn't matter; but when it matters, it will be ready.
Nik Bhatia: That's right.
Peter McCormack: I guess, especially if Bitcoin becomes a unit of account, Lightning becomes so much more important?
Nik Bhatia: That's right. Lightning is just part of Bitcoin's improvement; it's the same story, it really is. In the Bitcoin world, we think about Lightning as separate because it's its own protocol; it's a second layer; if you're a Bitcoin user, you don't have to have anything to do with Lightning to use Bitcoin. So, that's why we kind of think of it as this segregated world.
But really, it's about the contracts; it's about these HTLCs; it's about what they can do for Bitcoin. And, keep in mind something in the book that I won't go into much right now, but Hash Time Locked Contracts are going to be used by central banks; they're going to be used by banks that issue stablecoins for atomic swaps.
Atomic swaps using Hash Time Locked Contracts will be the future of the monetary world, and those Hash Time Locked Contracts; guess where they came from? The Lightning Network; so the Lightning Network is so foundational to what will come, how we can customise financial contracts on these distributed ledgers or Bitcoin's blockchain.
Peter McCormack: What do you think about other second layer technologies, things like Liquid then; and, do you envisage a scenario where maybe we will have, I don't know, other second layers whereby they offer certain benefits, but there is a different value, given to the denomination of the coin?
Nik Bhatia: Yeah, think of it in a traditional analogy, okay, all the forms of dollars that you can hold. You can have cash in your hand, which is a second layer money in my context; you can have bank deposits, which is a third layer money; you can have money suspended in your Venmo account, which would technically be a fourth layer money, because it's connected to your bank account, your bank deposits. And, between cash, bank deposits and Venmo and even a new, let's say, Amazon coin.
So, you have Amazon coin, you have bank deposits, you have yoru Venmo and you have cash; you have four different ways to hold dollars. All four of those issuers are going to have different incentives for you to use their money. The bank will pay you an interest rate, and that's why you would keep the money in the bank, versus cash. Venmo gives you the advantage of being able to send it to your friend in one second; that's an advantage over a bank deposit.
The Amazon coin might give you discounts on Amazon, which gives you an advantage over your Venmo coin. And so, each and every form of money can have their own benefit and it can have their own detractors, and that's why people choose one form of money or the other. If you are fine in keeping all your money in your PayPal account, you might have a benefit that accrues to you, because PayPal will issue you a reward, or issue you interest rate.
If that's not interesting to you, you can keep a stack of paper in your bedside drawer. Hopefully, I answered your question there?
Peter McCormack: No, you did. It's so fascinating. Okay, I just want to switch gears a bit. I do want to talk about CBDCs; you mentioned them earlier. I've done one show on it so far with Raoul Pal and I came out of it thinking, this is just a horrible, dystopian nightmare.
The thing that I dislike most about CBDCs -- well, there's a couple of things. Firstly, you never take possession of the money. That's the thing that really freaked me out because unlike Bitcoin, ultimately they can censor, steal, inflate or whatever they want to that coin. To me, it's just a worst form of -- because we have digital money now, right? I mean, yes, we have notes and such, but really we're all operating digitally and we're just moving numbers around in spreadsheets.
But, this is a version where because you can't have the cash version, it can be taken from you. I had to pay a fine today, a speeding fine; bastards! I actually had to pay slightly more because I forgot to pay it. I got a letter through the post; that was quite frustrating. But, those types of fines could just be automatically taken from you, automatically deducted, and that really quite freaked me out.
So, the future of money for me really is, I kind of think of it as CBDCs versus Bitcoin. They can work in unison but, depending on how nefarious the government or central bank is, they could be at war with each other?
Nik Bhatia: Yeah, so I do think that CBDCs present a lot of problems; surveillance being one; seizure being another; negative interest rates being another one that I think is more of a monetary policy discussion, but it can happen. You can also have helicopter money. I'm talking to people in central bank research departments that are convinced that CBDCs are the best way just to give people money.
Peter McCormack: Yeah, Raoul covered this.
Nik Bhatia: So, in terms of fiscal stimulus and stepping over the government, or taking charge away from the government in terms of that distribution of handouts.
But, in the future, if you have freedom of choice between your central bank's digital currency or a bank coin, which might have a higher interest rate than your CBDC, and then you have Bitcoin and any other cryptocurrency or digital asset; if you have choice, then you don't have to keep your money in an account with a central bank that is liable to just have the money taken away from you if you have a speeding ticket. So, you could liquidate that account.
Peter McCormack: The interesting thing about that then is, will they allow CBDC pounds to be used to buy Bitcoin with?
Nik Bhatia: None of those things are things that we know yet, and we are still very early. The European central bank just put out a huge study about what they're planning to do and really, the whole thing is filled with questions to themselves: how is this going to affect the banking industry; how are we going to give money to people; are we going to completely stop the issuance of paper notes or not; will CBDCs and paper notes exist side by side with each other, or will CBDC slips replace notes altogether? We don't know any of these things yet.
I do believe that different central banks will have different rules and we might see some central banks completely have a closed loop in terms of their central bank digital currencies, where you can only use it in certain circumstances. I do believe that China's DCEP, their digital currency project, will resemble something of a retail-facing central bank digital currency that is very closed off; won't be able to be owned by foreigners; you won't be able to necessarily send them to Bitcoin exchanges in China. They'll be very restricted.
And then, other central banks, I do believe, will make an effort to have their digital currencies be freely traded and used as proper money, with more of a freedom perspective. Now, I'm not saying that there will be central banks that won't surveil you or limit you from transacting, or even just monitor for criminal activity. All of that stuff will take place, just as they currently do with banks and credit cards and just tracking everything.
Peter McCormack: Interestingly, firstly, I just don't know if they'll be able to technically do it, they'll probably fuck it up; but interestingly, in some ways, CBDCs might end up teaching people how to use Bitcoin and why they need Bitcoin, in terms of getting people to transact with a digital currency?
Nik Bhatia: I think that that's a fair assumption, once they see how a digital wallet works on their smartphone, that this idea of private keys and receive addresses is very easy to use. The downfalls of it are this privacy invasion, or potentially negative interest rates, or asset seizure might drive them to figure out, how do I get out of this coin and into a better one.
Peter McCormack: And if you can't, I guess, if they don't allow you to buy Bitcoin with a CBDC, it might put a premium on Bitcoin, which is something to think about. Well listen, look Nik, this has been fascinating. I think, in some ways, this is probably the most important interview I've done this year in terms of what it's done for me. Occasionally I'll do one and I'll leave it with like a "woah" moment; I've just got to go, "Woah, that's just changed everything. Fuck, I need more Bitcoin; I'd better sell my house!"
But, what I would just want to close out on, because we haven't spoken properly for a while, we've been talking over Twitter and such, but how are you taking in this year because I expected a bull market to happen at some point? But, the things that have led into the bull market: Michael Saylor coming in and just wiping the floor with Bitcoin and what he's done in terms of his conviction; what we've had in terms of Square putting money in; but, even in the last few weeks, we've had Druckenmiller, is it Druckenmiller, his name?
Nik Bhatia: Yeah, Steven Druckenmiller.
Peter McCormack: Yeah, we had Paul Tudor Jones; a couple of days ago, Ray Dalio admitted he might even be wrong; Nouriel Roubini saying it might be a store of value; I mean, we'll probably get Peter Schiff at some point; we've had this Mexican guy come out and said he's got 10% of his liquid assets in Bitcoin; the momentum is there. And, the momentum is there with a broad range of people, from billionaires to companies to individuals. It's really fascinating and it's happening even without the FOMO yet.
Nik Bhatia: Well, to answer your question, Peter, Bitcoin's time has arrived. I think that wasn't the case in 2017, but post-pandemic and what's going on with central banks and just trust in currency and, let's be honest, just like the zoom movement, the internet work from home and the internet central role in everything, I do believe that what is happening this year is that people are realising that Bitcoin is the same thing as the internet, in terms of what it will do to our planet; change it, end industries and start new ones.
People are realising that this year and next year, but smart investors are realising it this year, and corporations; PayPal coming in is enormous, and PayPal didn't make that decision this year. They've been doing R&D for a long time, right. Fidelity, when they launched their product, had been mining for several years.
So, Bitcoin's time is now and people that are in denial about Bitcoin's role in the future are literally making the same mistake that people that denied the internet's role were doing in the late 1990s. It's just becoming clear to the smartest investors in the room that denying Bitcoin is like denying the internet 20 years ago, and it's a mistake and you're going to get left in the dust. I think that's what we're seeing and to the moon.
Peter McCormack: What a way to end it! We put these little intros into music into the start of the show; you killed it with that one! All right, listen, we're recording this before the book's coming out officially, but when it is out, everyone should go and fucking buy it and can we give any kind of details; do you know, and obviously we're speaking in advance, but where will people be able to buy it?
Nik Bhatia: Sure, so the book will be published in January, I'm thinking sometime in late January. It will be available on Amazon worldwide and Kindle, so hopefully that gives the majority of the world the opportunity to buy. But, it will also be available on other book distributors, but I'm just saying Amazon, because I think it's where people will find it first.
Peter McCormack: Will there be a paperback?
Nik Bhatia: There will be a paperback, there will be a hard-cover version and there will be a Kindle version, so we're working on all those right now. They will be published in January and will be available for sale on Amazon in January. I'm hoping to get a pre-order Kindle page up on Amazon before Christmas, so I'll be working on that. I'll tweet it out when it's out there but basically, search for Layered Money on Amazon toward the end of this year and the beginning of next year. Please buy the book and let me know what you think of it.
I think that this layered money terminology has the potential to shift people's understanding of Bitcoin and money as a whole, and I'm really excited for people to read it. I've been working all year on the book and just can't wait to get it out. And thank you, Peter, for having me on.
Peter McCormack: Dude, anytime; I love talking to you. Do you know what it's going to retail at?
Nik Bhatia: I don't yet, but it will be in the range of your typical current events type of hardcovers.
Peter McCormack: Well, listen, put me down for like 10, 20 copies, I'll give a bunch away. I'm a big fan of what you're doing. It was your previous work and your previous writing with regards to Lightning is why I reached out to you and it's why we ended up meeting up the first time, but this has blown my mind. I've absolutely loved this interview.
Brilliant, look, I wish you the best and anything I can do, you're always welcome on the show. If you want me to tweet out about the book, anything, you just let me know, I'll throw my full support behind it, Nik.
Nik Bhatia: I really appreciate that, Peter, and I look forward to coming back on to promote the book in 2021, and you take care.
Peter McCormack: And you, man. Take care, brother.
