Anthony Pompliano: Bitcoin | Lex Fridman Podcast #171

1. 0:00 – 2:31

   Introduction

   1. LFLex Fridman0:00

      The following is a conversation with Anthony Pompliano, entrepreneur, technology investor, prolific writer, podcaster, and Twitter user on topics of finance, cryptocurrency, technology, and economics. I highly recommend his popular podcast and daily letter called the Pomp Podcast and the Pomp Letter. Quick thank you to our sponsors, Theragun Muscle Recovery Device, Sun Basket meal delivery service, ExpressVPN, and Indeed hiring website. Click their links to support this podcast. As a side note, let me say that I'll be having many conversations in the coming months about cryptocurrency with people of all kinds of backgrounds and worldviews. Those who are proponents of Bitcoin, like Anthony, Nick Carter, Robert Breedlove, Alex Glasstein, and many others, and those who are proponents of other cryptocurrency technologies, like Vitalik Buterin, Charles Hoskinson, Richard Heart, Sergey Nazarov, Sylvia McAlley, and many others as well. I'm not framing this as a debate. I'm simply looking to explore exciting ideas in the space of technologies that could very well change human civilization and AGI civilization as well. I appreciate that some communities are a bit more intense in their style of communication than others, but I personally am only interested in open-minded, respectful collaboration in exploring ideas. I personally try to, like to approach conversations by considering that I may be wrong about everything and am looking to learn. I won't engage in group think, social signaling, outrage mobs, mocking, and derision. If you do, I understand. It's just not my thing. I send you my love either way and hope to meet you in person over some drinks, some good laughs, and a good conversation one day. No matter the difference in style or substance, we're all just human after all. This is an amazing ride we're all on together. Buy the ticket, take the ride, as Hunter S. Thompson said, whether you pay for that ticket with Bitcoin, Ethereum, the dollar, gold, seashells, a beer, or just a good old smile. This is the Lex Fridman podcast and here is my conversation with Anthony Pompliano.

2. 2:31 – 10:12

   Army

   1. LFLex Fridman2:31

      You served in the US Army for six years and spent 13 months in Iraq in 2008 and '9. Can you tell the story of why you joined the Army and what were some of the moving, difficult, and maybe lasting experiences from the time you served?

   2. APAnthony Pompliano2:46

      Sure. I joined when I was, uh, 17 years old. Uh, I needed my parents to, uh, basically sign, uh, in order to, uh, to join, and, uh, I graduated a semester early from high school and, uh, thought I was gonna go play football in college and kind of enroll in the spring semester, and when that didn't happen, uh, basically was working at, uh, Chick-fil-A and Quiznos and-

   3. LFLex Fridman3:05

      (laughs)

   4. APAnthony Pompliano3:05

      ... had in my mind, "Look, this is probably not the, uh, the path in life that I want." Um, and so I knew I was gonna go to college, I knew I was gonna go play football in the fall, but I had this window of time. And so I walked into a recruiting office and just basically was like, "I'm assuming you guys need some help." (laughs) And, uh, you know, they gave me the whole pitch and, uh, you know, "Give you a signing bonus. You can go jump out of planes and go do all this crazy stuff." I just said, "Okay, let's do it."

   5. LFLex Fridman3:28

      Th- this was... This was close to 9/11.

   6. APAnthony Pompliano3:31

      This was in 2006, about five years after.

   7. LFLex Fridman3:35

      So what, uh, impact... I mean, do you remember 9/11? What impact did that have on your thinking about this?

   8. APAnthony Pompliano3:41

      So I was, uh, in eighth grade, um, if I remember correctly, and, uh, I remember, uh, being in school when it happened, and, uh, I walked into a classroom and the entire class, uh, it was somebody else's class, they were all talking to the teacher about something. The second that me and a couple other kids walked in, everyone got real quiet and the teacher was like, "Hey, go back to your, like, homeroom." And so it was just kind of a weird, like, "What's going on?" Uh, and then next thing I know, they called all of the students into the cafeteria. And this is back before, you know, every classroom really had a television in it and, you know, cable and all that kind of stuff. And so when we were there they basically just said, "Listen, there's been this, uh, event that's occurred. All of your parents are gonna come pick you guys up, and, uh, they'll explain it to you." And so to, you know, a kid in eighth grade, you're basically like, "What happened?" And so I got home and, uh, and I remember talking to my dad about it, and my dad basically gave me, you know, the, uh, the core American kind of talking points, right?

   9. LFLex Fridman4:36

      (laughs)

   10. APAnthony Pompliano4:36

       "Look, somebody from another country came here and tried to kill Americans and was successful in doing that." Um, and to some extent he just said, "And I'm willing to bet, you know, we're gonna go back after them."

   11. LFLex Fridman4:48

       Did that wake you up a little bit to the idea that there's evil out there, that... You know, even just the idea of terrorism, for many people that was, um... When it hits you in your own land, it's a s- it- it really shakes up your mind. In some sense, World War II, that's why World War II was fundamentally different for Americans than it- it is for the people, like, in Russia, in England, in France, in, uh, in Europe in general, is... There's something about when there's, like, families, women, children, dying on your own land, that's different. And that was one of the first times in America where, like, on your... Uh, of course, there's Pearl Harbor, but, like, this is, like, in recent history. It's like, they hit us here.That was, like, a profound idea.

   12. APAnthony Pompliano5:37

       I think America was very, very good at exporting the violence elsewhere for a long time.

   13. LFLex Fridman5:41

       Yeah.

   14. APAnthony Pompliano5:41

       And, uh, there was this element of, uh, complacency, but also this element of, uh, um, you know, really just American superiority. "That doesn't happen here," right? And, uh, I think that that woke people up, not only to, um, kind of the idea that other places around the world may not like the American ideals, may not like democracy and capitalism and, and that, but also, uh, maybe we aren't as big, tough, and secure as we thought we were, right? And so obviously, I think you see the, kind of the over-rotation with a lot of the kind of security theater that came after that, of almost psychologically, "Let's make our citizens feel like they're safe, even if the things that we're doing don't necessarily, you know, kind of change that apparatus." Uh, but on top of that, I think that it really woke people up to, uh, extremism around the world. And, uh, I don't know if necessarily there was a change in the extremism as much as it just was an awareness thing, right?

   15. LFLex Fridman6:34

       Yeah.

   16. APAnthony Pompliano6:34

       How, how many people, you know, kind of drew a line from, was it '92 or '93 with the, uh, World Trade Center bombing, to, you know, deep levels of extremism and hatred of, uh, kind of the American industrial complex? Probably not that many. 2001, a lot of people. And so I think that was, you know, again, as a, as a young kid, you don't understand a lot of this stuff. You basically just, "Hey, somebody came here and tried to kill Americans, and so, you know, we should go fight back," right, was kind of the, uh, the response I think that I had.

   17. LFLex Fridman7:04

       What role did that have, psychologically, for you when you then, in 2006, joined the Army? I mean, this is a very different joining the Army than in the time when, like, it's more peaceful. Here, you're essentially facing... I mean, I don't know if you see it that way, but, you know, there is a war on terror. And I know that people kind of, uh, criticize that whole formulation framework of thinking. But nevertheless, you are going to Iraq, you are going to Afghanistan. You're, you're going to these places and are fighting these complicated, like... I mean, it's not even clear what you're fighting. (laughs)

   18. APAnthony Pompliano7:40

       Yeah. Well, I- I think that there's a couple of key pieces, right? So one, like one of th- the actual most impactful data points, if you were, or kind of stories for me, uh, was the Pat Tillman story. So, I played football, uh, in high school. I knew I was gonna go play in college. Um, and seeing, you know, this NFL player who basically just one day said, "Hey, I'm gonna go and do this instead," uh, and walk away, I don't know necessarily if it was a, uh, "I want to pursue the same story," right? And obviously he, he ended up dying, and so not exactly the, uh, the end result that you want. But I think it was almost like, uh, he made it okay if you were on a certain trajectory in life to go take this detour, and, and to go do it. Um, but the second thing is, I was 17. You're pretty stupid when you're 17. You're pretty naive when you're 17, right? (laughs) And so, uh, I almost, um, kind of backed into the deployment because I signed up, uh, as, as a, uh, a reserve member. And so basically the plan was to sign up for the reserves. I was gonna go to basic training, get all the, you know, kind of education and qualification. Then I was gonna go to college, and then after college, you know, maybe there's a chance that you will go and serve or, or do whatever.

   19. LFLex Fridman8:44

       Mm-hmm.

   20. APAnthony Pompliano8:45

       For me, I ended up getting deployed when I was a junior in, uh, college. Literally got pulled out of school. And so at 20 years old, uh, it's not exactly what you thought you were signing up for, right, especially to kind of leave school to go do it. And then on top of that, uh, I probably had an advantage over most people, both on the, uh, entry to combat and the exit to a, kind of a combat situation, which was football. So I always explain that, um, in hindsight, you're in a male-dominated, testosterone-driven kind of combative sport where it's us versus them and, and, uh, there's training and, and, uh, you know, injuries and just kind of all of the things that go into playing a combat sport like football, to now they give you guns. But you still have a uniform on. It's still male-dominated. It's just a little bit, you know, more serious in terms of the injuries and, and, uh, potential death and things like that. But also on the exit from that deployment, most guys I was there with, they're going back to being, you know, prison guards, police officers, working at the lumber yard, you know, just kind of everyday Americans. And so I had the fortunate ability to go back into a kind of that combative environment, go back to play football. And so it was almost this like de-escalation on the way out, uh, where they take your guns away. We still got a uniform, still male-dominated, uh, still combative, and then eventually you're just a normal citizen. And so I think that in some weird way, I was, you know, very fortunate to kind of on the in- entry and exit have that experience where other guys didn't.

3. 10:12 – 17:51

   Iraq

   1. APAnthony Pompliano10:12

   2. LFLex Fridman10:12

      So what... You were deployed to Iraq. Were there any memories, experiences that changed you? Or in general, like, you're probably a different man on the other side of it. How did that time change you?

   3. APAnthony Pompliano10:26

      I think there, there was two main takeaways that I took, right? So one was, um, not a specific moment, but on multiple occasions, uh, I remember we were driving down the road and I would look and there would be a 10, 12, 14-year-old kid. And if you've never seen somebody who literally has hate and disdain in their eyes-

   4. LFLex Fridman10:43

      Towards you?

   5. APAnthony Pompliano10:44

      J- just... Not necessarily to you personally, just to the uniform, to what you stand for, to all this stuff. When you see it, you see it, right? And I always think of, um, if you've ever, uh, watched the movie, uh, 12 Strong. And in it, uh, they've got this Afghan- uh, Afghanistan warlord, and he's talking to a bunch of soldiers and he says, you know, "You don't have killer eyes. You do, you do." And he's just like, he can just tell, right? He's, he's seen so many soldiers. And so I think that that was a, a memory on a number of occasions where I just saw young kids and I just said, "They hate us."Right? And- and it's not you personally, it's what you stand for. But the- the really big event was, um, when you first get to, uh, these combat zones, a lot of times what will happen is, uh, you basically... Your unit teams up with a unit that's leaving, and there's a handoff. And it happens over a couple of weeks. And so you can imagine almost... you know, 1% of our team goes out with 99% of their team. Then five, 95, ten, 90, all the way til it's 50/50, and then eventually it rotates, and then it's the majority of our team and a small number of their team. And so what a lot of people will explain is, the two most dangerous times in war are actually the first two or three weeks and the last two or three weeks. When you first get there, you don't know who the people are, you don't know the terrain, you don't know, you know, kind of the local cultures and- and, uh, who to look out for, what signs, all that kind of stuff. In the last two or three weeks is you basically think you've survived the deployment. You're looking forward to going home, so you become complacent, things like that. And so we made it through that transition period with no issues, uh, but the- literally the very first mission, uh, that we went out as a team ourselves, 100%, um, there was two separate incidents. Uh, one was we were driving in the middle of the night, and, uh, what we think was a sniper shot at, uh, a truck that I was in. I was standing up outside of it, uh, along with a, uh, another guy, and that was kind of just a wake-up call, again, of, I'd never been shot at before, right? And so I'll never forget, uh, you kind of heard this whiz go by, and the guy next to me was from, uh, rural Pennsylvania, and he just said, you know, "Look, I've never been shot at before either, but I've done a lot of hunting. Get the fuck down."

   6. LFLex Fridman12:44

      (laughs)

   7. APAnthony Pompliano12:44

      (laughs) Right? I said, "Okay." And so, uh, we kept driving that night, um, and, uh, later on in the night, uh, an IED went off. A guy ran over an IED, uh, who was at the front of the convoy, and when that IED went off, uh, again, I had never been in a convoy that had been blown up before. But the training kicks in. And so immediately, every single person starts screaming out, "IED, IED," and they start looking and trying to figure it out. And- and you realize, the United States military did a fantastic job training us before we went, because in that moment, nobody thought about anything. You just did what you had been programmed to do. Um, and so ultimately, kind of through the end of that event, uh, there was a US soldier that ended up dying. He was, uh, shot in the head. And, um, when we got back to the base, uh, kind of after that entire event, I think it just hit us. We are at war, and if we make mistakes here, that is the cost of, you know, kind of those mistakes. And this was somebody who I didn't know. Uh, it was somebody who literally showed up, uh, kind of as secondary support, uh, for our unit and basically, uh, was there to help us, right? And so it was one of those weird situations where, uh, you have this emotional connection because it's somebody who, uh, shared an event with you, but you didn't know them, right? And you learn their name later, and you understand that they have a family and they have young kids and all this stuff. And so again, as a 20-year-old kid, you're kind of processing all this, and you just realize, like, the gun I have in my ar- my hands, it's real for a reason, right? And we better take this seriously. This is not, you know, us joking around in kind of the barracks, and, you know, all the things that you would expect-

   8. LFLex Fridman14:19

      Yeah.

   9. APAnthony Pompliano14:19

      ... you know, guys who join the Army. So I think that was, like, the moment where I said, "Hey, I'm gonna learn a lot here. Uh, and I gotta make sure I get home."

   10. LFLex Fridman14:27

       And you snap into the training. But nevertheless, I mean, you're somebody who thinks philosophically about this world now, right? You're, uh, very intelligent and think deeply about the world. So looking back, you mentioned hatred in the 14-year-old kid's eyes. There's death. So the way you kind of described this whole story, is like training kicks in. This- this shit is serious. Like, this is, uh, you know, there's a reason there's a gun in- in your hand, so there's a strategic element. There's like, you have to get the job done, there's a task at hand, but at the same time, if you zoom out, there's a kid who has hate for you. Uh, some of those kids would probably, if they could, would kill you for the thing you stand for in the uniform. And then there's bullets flying at you, and then there's people that, some of them you might, uh, already care for deeply are dying. What the hell do you make of that? D- do you think about that? Does any of that haunt you? How do you think about the world having witnessed that?

   11. APAnthony Pompliano15:34

       Yeah. A lot of times, when we would talk about it, we were there. If I was that kid, I would want to kill that person too, right? I- I would have hatred as well, right? Imagine if, in the United States, tomorrow you and I woke up and there was tanks rolling down the street from another country.

   12. LFLex Fridman15:50

       Yeah.

   13. APAnthony Pompliano15:50

       And they were basically imposing their rules on us. Whether they thought it was the right thing to do or not, if the soldiers were there and they were doing this, we would probably feel not so great about it, right? (laughs) At- at- at kind of a minimum, and at a maximum, we'd be really, really, pissed off and we would fight back. And so what you don't understand when you're in the heat of the moment is, why does this person feel this way? And so what's very weird is, well, what happens if a year ago, US soldiers came through, they got shot at, they returned fire, and they killed that kid's uncle? You'd be pissed off, right?

   14. LFLex Fridman16:24

       Yeah.

   15. APAnthony Pompliano16:24

       And so you just start to understand, like, we look at war very black and white. We look at it very much, uh, from a clinical perspective. We're gonna go, we're gonna go, um, kind of invade somewhere. Uh, we are the most dominant military in the world. We're very good at invading. Uh, and we will crush wherever we invade. But when you're actually on the ground, what you understand is the humanity of it all, right? And so what becomes very interesting is, um, pretty much every veteran I know that comes back, they're some of the largest pacifists in the world. And I always revert back to, uh, Marcus Luttrell, uh, who was a famous Navy SEAL, um, and, uh, there's a movie made about him and his story. Uh, he gave a speech one time, uh, that I saw, and he basically said, "Listen, if you're a politician, your job is to be- be the diplomat. Do everything you possibly can not to send me and my friends anywhere, 'cause when you send us, we're gonna bring hell with us," right? And understand, that is the business that we are in.... but every single other person up until we get sent has a job to do to prevent having to send us. And I think that ultimately, that's where you see a lot of kind of this generation that has fought in Iraq and Afghanistan that says, "Listen, maybe we shouldn't be running around the world being the police. Maybe we shouldn't be going and invading all these different countries." Because when you actually get to see firsthand what happens, it's just something that we should avoid at all cost, but if we have to go or we have to actually send soldiers somewhere, understand what happens when that occurs. And, you know, the United States is the best in the world at doing

4. 17:51 – 25:04

   Will there always be war?

   1. APAnthony Pompliano17:51

      it.

   2. LFLex Fridman17:52

      Do you think... I'm thinking about that kid with the hatred. Do you think there will always be hatred in the world? Do you think, uh, from another perspective, do you think there'll be war always? Is that a fundamental aspect of human nature or is that something we can escape?

   3. APAnthony Pompliano18:08

      Yeah, so war, I think, has, like, very negative connotations in terms of bullets and bombs and death and, and kind of just very morbid type, um, um, understanding. Conflict, on the other hand, I think people look at and say, "Of course there'll always be conflict," right? You, you just can't have billions of people all on the same planet without some level of disagreement, whether that's-

   4. LFLex Fridman18:29

      Yeah.

   5. APAnthony Pompliano18:29

      ... a disagreement of ideas, disagreement over physical, you know, geography, uh, or something else. And so I think conflict will always exist. The question is what form does war take moving forward?

   6. LFLex Fridman18:40

      Mm-hmm.

   7. APAnthony Pompliano18:40

      And so in my mind, you know, it's starting to look a lot more clinical, right? (laughs) A lot more drones, a lot less soldiers on the ground, uh, a lot more use of special forces and kind of these small, highly specialized teams rather than kind of big mechanical armies. Um, and then you get into, like, the information warfare and, and kind of cyberwarfare, and you start to understand that we're at war with a lot of people right now, right?

   8. LFLex Fridman19:02

      Mm-hmm.

   9. APAnthony Pompliano19:02

      Doesn't mean we're necessarily dropping bombs, uh, on their countries. Doesn't necessarily mean we're sending soldiers there. But on a daily basis, we are engaged in these kind of, you know, cyber battlefields, and so if that's where war starts to play out, um, it, one, changes the tools and tactics and techniques that, uh, we need to arm our country and other countries will arm themselves with, but it also changes the way that we think about war, right? It s- it sounds a lot less, uh, worrisome if I say, "Hey, we're gonna go to war with a country. By the way, there's gonna be no death."

   10. LFLex Fridman19:33

       Mm-hmm.

   11. APAnthony Pompliano19:33

       Right? Okay. Like, that doesn't sound nearly as bad as, "Hey, we're gonna go send 10,000 soldiers and, you know, some percentage of them are gonna die on the battlefield, and then we're gonna, you know, basically pipe back videos and articles saying that American soldiers are dying."

   12. LFLex Fridman19:45

       Yeah. E- There does seem to be a fundamental difference between the, the Genghis Khan style. Like, if... I would feel differently if somebody, like, hand-to-hand with a knife murdered my family versus cybersecurity-wise stole all their data, stole all their money, stole everything they own, f- falsified their identity, all that kinda stuff. That, those are both traumatic events (laughs) but they do seem to be fundamentally different, but maybe that's actually very narrow-s- -style thinking, because ultimately you have to think about what is life and what's happiness, and, um... It's like the samurai thinking. I'm not sure what's more painful, if I take it to myself, like, I'm not sure what I would rather live through, being stabbed, like, to death or having my identity stolen, all my money stolen, th- or maybe reputation destroyed, like with lies or something like that. Th- That's very interesting to think about, if you think about quality of life and all those kinds of things. But-

   13. APAnthony Pompliano20:59

       Well, one's finite, right? (laughs)

   14. LFLex Fridman21:01

       (laughs) Yes. It-

   15. APAnthony Pompliano21:02

       One, the pain ends-

   16. LFLex Fridman21:03

       It's just one experience. Yeah.

   17. APAnthony Pompliano21:03

       ... and the other is kind of a long, prolonged almost torture. So-

   18. LFLex Fridman21:06

       So it's physical pain versus psychological pain. Uh, it's really interesting to, it's really interesting to think about. Um...

   19. APAnthony Pompliano21:12

       And I think another key piece to this, um, which I don't have answers to, but, but there is an element of emotion and rage in the physical violence versus-

   20. LFLex Fridman21:20

       Yeah.

   21. APAnthony Pompliano21:20

       ... uh, again, more of that clinical, you know, information warfare. And so, um, it's really easy to show a battlefield where there's death on both sides and bombs being dropped and buildings destroyed. Um, it, it fits very well into propaganda for everyone involved, right? Dep- y- regardless of what side they're on. When you start talking about cyberwarfare, how many times have we seen a big company get data hacked or information hacked and we all (laughs) , you know, read the headlines, maybe throw a tweet out and then move on with our day and don't remember it anymore? And so it's just very, very different, I think, uh, in, in the, uh, emotion and response that it invokes in people when they hear about it as well.

   22. LFLex Fridman22:00

       Given the conflict, do you think people are fundamentally good or are we all sort of, like, blank slates that could be evil given the environment or good given the environment? Or can we kind of... Is there some base that we can rely on that people, if left to their own devices, will be good and trustworthy and honest?

   23. APAnthony Pompliano22:24

       I think you have to separate out intention from action. So if you talk to some of the most heinous criminals in the world, they've rationalized their actions and so you've gotta ask yourself what is the level at which they-

   24. LFLex Fridman22:39

       Yeah.

   25. APAnthony Pompliano22:39

       ... understood what they were doing, that they intended to be malicious, nefarious, um, and, and kind of do bad things versus the actual actions themselves. And so, um, even i- as a society, you know, if, let's say, for example, you were to walk down the street and you were to murder somebody on the sidewalk completely unprovoked, we would look at you and say, "You are a, you know, a sociopath. Uh, you have everything wrong with you, and that is somebody that we do not want in our society, and therefore we will levy, you know, the extent of rule of law against you in order to protect society from you," right? And you become that, a monster or that beast. If in the same situation somebody walks in your house with a knife......and you murder them or you kill them, now we put you up on a pedestal as a hero. And those are two very, very different responses.

   26. LFLex Fridman23:28

       Yeah.

   27. APAnthony Pompliano23:28

       They may be just as morbid, they may be just as violent, uh, in terms of the actual actions. The intentions, the way it's perceived is very, very different. And so, I-I think that, uh, as a world, we like a very black and white, clean cut, you know, good, bad. Uh, I think the world's a lot more messy than that, and I think that, uh, a lot of times when you look at intention, it's hard for us to tell what somebody's intention is. But I've looked at a lot of, you know, people who are both considered very good, and also a lot of people who are considered very bad, and they sound very similar in terms of the motivations for their actions. And so I think that it, it's just a really hard problem that probably doesn't have a perfect solution or an answer.

   28. LFLex Fridman24:08

       Do you give much value to the intention, or do you think is- is- is it better to look at the results of the behavior, uh, as opposed to the in- the un- underlying ideology, the underlying intention of- of the behavior?

   29. APAnthony Pompliano24:22

       I think that intention gets at the question of like, are people inherently good or bad?

   30. LFLex Fridman24:26

       Yeah.
5. 25:04 – 33:33

   Bitcoin maximalism

   1. APAnthony Pompliano25:04

   2. LFLex Fridman25:04

      Mm-hmm. So you're one of the prominent, I would say even the faces of, the- the world of cryptocurrency, Bitcoin, that whole entire world. Let's dive straight in and ask, uh, do you think- do you consider yourself a Bitcoin maximalist?

   3. APAnthony Pompliano25:23

      I think that the way I really look at it is, uh, I work backwards off of, what is the maximalism that I believe in? And the world that I believe in is, uh, kind of an automated world that is run on these open, decentralized protocols, uh, and what we ultimately do is we return sovereignty and individualism and- and kind of, uh, personal responsibility and liberty, uh, to people over institutions. And what we end up doing is we end up, uh, kind of taking what has historically been a very, uh, analog or physical world economy and, uh, geographic rule, and we then kind of put it in the cloud. And this digital economy becomes the prevalent way that we all, uh, conduct commerce, communicate, uh, et cetera. And so it's less about any one single technology to me, right? I- I think that it's pretty stupid for people to, um, almost in a way, uh, put an inanimate object up for, uh, you know, some sort of obsession.

   4. LFLex Fridman26:26

      Mm-hmm.

   5. APAnthony Pompliano26:26

      Uh, to me, it's much more about the ideals, the ethos, uh, and the most rational, uh, and likely path to that kind of end result or- or that world that I think, you know, is at this point just a foregone conclusion.

   6. LFLex Fridman26:37

      So the distinction there, and maybe if- if people don't know the terminology, maximalism is basically saying, "I really think this is a good idea." (laughs) Like, uh, you know, if you prefer a certain kind of diet, you could be a keto maximalist, saying like, "This is probably, maybe it's not 100%, but probably the diet that's healthiest for humans," kind of thing. In the same sense, Bitcoin maximalism is saying, you know, uh, o- of course we don't know, there's a lot of uncertainty, but this particular technology seems to be the best representations of some set of ideals that defines progress in- in the future. But you're drawing a distinction between sort of a cult-like obsession about an object of any kind, whether it's keto, uh, or, uh, Bitcoin, and just sort of believing that a technology is the best representation of a particular set of ideals. And you believe that sort of, uh, this moving into the cloud, uh, eh, both the distributed nature of it, but also just the digital nature of it, is something that's going to, uh, be a positive step for humanity.

   7. APAnthony Pompliano27:51

      Yeah, I would even take maximalism a step further, and it's not just the kind of singular viewpoint of, "This is the best." It's also, uh, an element of, it's anti-everything else, right?

   8. LFLex Fridman28:02

      Yeah.

   9. APAnthony Pompliano28:02

      So, you know, take keto, for example. Uh, the keto diet is not only the best diet. All the other diets are bad.

   10. LFLex Fridman28:08

       Yeah.

   11. APAnthony Pompliano28:08

       Right? And so it's- it's a very binary view of the world. Um, I think that what's probably most misunderstood about, uh, let's take Bitcoin, uh, a- as a specific example, is that most of the people who are labeled Bitcoin maximalist, they would be open-minded if they believed that something else came along that was a superior technology or had a- a better, um, kind of probability of achieving, again, that ultimate vision. I think where, uh, there's this controversy and kind of clashing of, uh, ideas is that the Bitcoin community believes Bitcoin is the best way to do that, and has very specific arguments as to why the other things are not, right?

   12. LFLex Fridman28:47

       Yeah.

   13. APAnthony Pompliano28:47

       And so what ultimately ends up happening, which is very weird in, uh, the investing world, right? It's unlikely that you and I are gonna sit down, you're going like, "Apple stock is the best stock and there's no other stock that's worth anything."

   14. LFLex Fridman28:57

       Yeah.

   15. APAnthony Pompliano28:57

       Right? And, uh, and then also, it's very weird if you said to me, um, you know, "This stock is worth zero, and that's where everything that I own I've put, uh, on a short on one single company." Right? There's diversification, there's much more kind of probabilistic thinking in finance in general. Uh, when it comes to this specific world of cryptocurrency and kind of digital assets, if you will, uh, is there's two...... main groups of people who are trying to build two very, very different things at the onset. But when you unpack it and you start to spend more and more time on it, you realize they're actually trying to accomplish the same thing in two different ways. So bitcoin is seen, I think, as a, uh, a digital currency, right? Kind of the idea that this is going to ascend to become the next global reserve currency. It's a programmatic, kind of transparent, um, money and, uh, it's essentially just 180 degrees difference than the inflationary, you know, nontransparent, uh, fiat currencies that exist in the world.

   16. LFLex Fridman29:51

       Mm-hmm.

   17. APAnthony Pompliano29:52

       You then look at kind of everything else, right? And you have a lot of smart contract platforms and various things that they're all going after, right? Ethereum with kind of the world computer approach and you can kinda go down the line with all their other arguments as to what they're trying to build. I think the big difference just comes down to, uh, innovation versus security. And when you simplistically look at it via that lens, you actually understand where both people are coming from.

   18. LFLex Fridman30:17

       When you say security, sorry to interrupt, do you mean financial security or do you mean, like, literally the- the- the security of the- of the particular cryptocurrency?

   19. APAnthony Pompliano30:26

       The- the technical security of a blockchain. So when you look at, let's say, um, bitcoin verse Ethereum, right? Bitcoin has decided, and that community has decided security is the number one thing that you have to optimize for, so decentralization, um, over everything else in terms of transaction speeds, uh, cost, anything that you could come up with that is, uh, something that would be important for a currency, the number one thing to optimize for is security. And as we have seen, uh, with a lot of technologies, right? Facebook's, uh, Libra, or now what's known as Diem is a great example, uh, not having decentralization is susceptible to the nation state. And so a lot of these other platforms and blockchains, uh, they say security is important, but it's not the most important thing.

   20. LFLex Fridman31:11

       Right.

   21. APAnthony Pompliano31:11

       We believe there's a trade-off between, you know, a little less security and transaction speed or composability or- or whatever it is. And so take Ethereum as kind of the second, uh, largest, uh, community in- in blockchain by market cap. It was created because somebody wanted to, or a group of people wanted to do something on Bitcoin, they felt like they couldn't do it, and so they said, "Hey, we're gonna go create something that has these smart contracts that we can then go do here." Again, this is technology, right? So the tribalism of, like, "You're right, you're wrong," to me is a little childish just in the sense of, like, the market is going to decide what is most valuable. And then when you go inside of that community, like there's a lot of dumb ideas people are trying to build around bitcoin. There's also a lot of really, really great ideas that people are trying to build around bitcoin. Same thing in the Ethereum world. And so what you end up getting, I think, is the tribalism really comes out of the idea that there's a ticker price that is attached to all of this. Right? If you go back in history of technology, venture capitalists didn't sit around the table and yell and scream at each other in this, like, religious zealot way, right? Because you bet on one type of cloud computing platform and I bet on another one (laughs) , right? Just the market's gonna decide what we're both gonna work on and try to make ours successful. Uh, here, I think that the sensitivity, and mainly it comes out of the Bitcoin community, is that a lot of this is being funded not only by venture capitalists and kind of professional money managers and asset allocators. There's also this element of including the retail investor and the public.

   22. LFLex Fridman32:36

       Mm-hmm.

   23. APAnthony Pompliano32:36

       And so, uh, whether it's through ICOs or some other forms of capital raising, um, there's arguments for it saying, "Hey, look, uh, this now gives kind of the little guy some sort of access and- and ability to do it." But there's also arguments against it. Some people say, "Hey, it's easier to dupe them and it's easier to run scams," and kind of all this stuff. And so ultimately I think that, uh, crypto is this, like, arena of ideas. It is literally the war of attrition. And, uh, what will end up happening is 10 years from now you and I will talk and we're gonna say, "Well, the market said X was valuable and Y wasn't." And so all of the tribalism, uh, from between, you know, here and there, uh, it's fun, it's, you know, engaging, whatever, but ultimately, it doesn't really matter.

   24. LFLex Fridman33:17

       Yeah, because the public is involved so there's a lot of personalities. And so a lot of times we focus on the ex- extreme personalities that do a lot of maybe, uh, pardon the French, shit talking, and- and so we kind of focus on that. But that's not necessarily representative of the communities

6. 33:33 – 36:04

   Money is a belief system

   1. LFLex Fridman33:33

      involved.

   2. APAnthony Pompliano33:33

      Let's talk about bitcoin first and then-

   3. LFLex Fridman33:35

      Yes.

   4. APAnthony Pompliano33:35

      ... it'll help us use as a kind of comparison to Ethereum or- or whatever else. So when you think about what is money, right? That's kind of-

   5. LFLex Fridman33:42

      Yeah.

   6. APAnthony Pompliano33:42

      ... the first question people really kinda go down the rabbit hole on. And ultimately today, it's a belief system, right? And you may believe that one currency has more value over another because it's backed by a certain military or, uh, a certain government has a- a monetary policy that you believe in or don't believe in. Uh, but ultimately it's a belief system. There- there's nothing backing this, uh, other than, uh, a government asks you to pay your taxes in it, right? And they can have a monopoly on violence, uh, in terms of they can put you in jail if you don't pay your taxes, uh, they can go to other countries and they can invade and do all this stuff. It wasn't always like that, right? It was... Historically, a layer one technology was gold. And so gold was, uh, a fantastic store of value. You knew that if you held gold it wasn't gonna be inflated away. It was sound money. It was outside the system and no one could create more of it. And the reason why that's important is because that optimization for store of value served as the bedrock of the entire stack of, uh, money, uh, for 5,000 years. And so the problem with that, though again, trade-off between store of value, is it was really hard to transact with, right? If I came in here and I- and you said, "Hey, I want a couple of ounces of gold," and I had a whole bar, I'd have to literally shave off the ounces of gold.

   7. LFLex Fridman34:52

      Mm-hmm.

   8. APAnthony Pompliano34:52

      Uh, it's heavy to carry around. If you said to me, "Hey, you're in one city, mail it to me," (laughs) really expensive, you know, there's all these issues with it. And so ultimately what people said was, "Well, let's create a second layer on top of that gold in order to make it easier to transact." And so we created paper claims on the gold. So, hey, don't carry around the gold in your pocket anymore. Put it in a vault or a bank, they're gonna issue a- a paper claim. Now you and I can trade these paper claims around. And then at any point if you want the gold you just show up and you say, "Give me, you know, three ounces of gold or two bars or whatever."And so, that actually made the store of value. It was- it allowed that to be the anchor and kind of the most important part, the security of your, of your purchasing power. But now, it became easier to transact. And then eventually, we built layers even on top of that. So, everything from electronic money, uh, kind of electronic CUSIPS, all the way to credit and other systems on top of that gold. 1971 comes around and obviously we de-peg from that gold, right? And so, it was a temporary measure at the time. We ended up not going back to it. And so, what you moved, uh, or transitioned from was sound money, which was outside the system. No one could create more. To now, the government had full control. They could create as much as they wanted to. Uh, they tried to be responsible and disciplined, but obviously hard to do. Sometimes we've been really good at it, sometimes we've been less good at it. And then you go around the world and some countries have absolutely sucked at it and some have been good at it.

7. 36:04 – 39:40

   Bitcoin

   1. APAnthony Pompliano36:04

      And so, when you look into the Bitcoin world, I think that when you look at the s- optimization for security, similar to gold, store of value, people hold it. Purchasing power has gone up a lot year over year. It's like a 200% year over year compound annual growth, uh, for over a decade, right? And so, you measure this in kind of the US dollar exchange price, et cetera. But there's still a lot of people who will yell and scream about, "It's slow, it's costly," right? All the things around those transactions that are obstacles or challenges. And so, there's basically two schools of thought, and this is where we kind of get into the bifurcation. Some people just said, "Hey, this technology is antiquated. We can't use it. It doesn't make sense. Uh, and so what we're gonna do is we're gonna go build something new." And so you go get, you know, kind of all of the various versions there. The Bitcoin community says, "No, just like gold had paper claims and other things built on top in layer two, three, four, five, we're gonna do that here." And so they've already started to build kind of this layer two, where it's easier to transact. It's cheaper, it's faster, et cetera. And so, I actually think that both of those worlds are gonna co-exist in the future.

   2. LFLex Fridman37:07

      Mm-hmm.

   3. APAnthony Pompliano37:07

      The big question is just which one has more importance, right? So again, get out of-

   4. LFLex Fridman37:12

      Of course.

   5. APAnthony Pompliano37:12

      ... binary.

   6. LFLex Fridman37:13

      Yeah.

   7. APAnthony Pompliano37:13

      It's just probabilistically. And so, my personal belief is that the security, that the store of value component as the bedrock for, uh, a monetary system is essential, right? Like, that is the, uh, most important thing. 'Cause you can always improve the other components, but you can't go back and fix that kind of core piece.

   8. LFLex Fridman37:32

      So, if money, money is, uh, an idea that we all... it's like an emergent idea that we believe in, you're saying that security is one of the most fundamental catalysts or fuels for that idea to sort of take hold and be stable and sort of take over the world? Uh, the other stuff is really nice to have. But if you don't have the security, you're not going to... like, it's- it's not going to spread in the viral sense in, in our human brains.

   9. APAnthony Pompliano38:01

      Well, and, and especially in light of the, kind of the macro economy, right? So like, what- what's so fascinating about the last 12 months is, um, in investing in general, the best return, so I kinda put that in air quotes a little bit, is something that is different than everything else and right.

   10. LFLex Fridman38:18

       Mm-hmm.

   11. APAnthony Pompliano38:18

       So, being different and wrong just means you're an idiot, right? (laughs) Being different and right means that that's where kind of the outsized returns are. And so, if you look around the world at currencies today, they're all the same. They're all inflationary, unlimited supply controlled by a government, done in, uh, decisions made in a very non-transparent process. And what we've watched is the manipulation of all of those currencies over the last 12 months. In direct contrast to that is this thing, Bitcoin, which is outside of the system, has a finite supply, transparent and programmatic monetary policy. And so, when you see those two systems kind of, um, in comparison to each other, in the United States, there's a lot of people who say, "The dollar works great for me."

   12. LFLex Fridman38:59

       Mm-hmm.

   13. APAnthony Pompliano38:59

       "I can go to the ATM. I can get out physical cash. If I wanna swipe a card, I could do that. My money in my bank doesn't lose 50% of its value in a day in terms of purchasing power. Like, the dollar's pretty good." When you go to other countries, that might not be the case. And so, I do think that there's, uh, kind of a relative analysis that goes on here. If you compare Bitcoin to the dollar, there's all kinds of arguments to make that the dollar is better f- as a medium of exchange today. But if I go and I tell you, "Well, what about in, you know, these kind of extreme examples of, uh, Venezuela, Zimbabwe, Turkey, et cetera?" And so, I think that that's kind of one perspective to view this through, is security versus all of the innovative components of a medium of exchange, et cetera.

8. 39:40 – 44:13

   Censorship

   1. APAnthony Pompliano39:40

      The second thing, though, that I think is really, really important is around censorship. And so, when you look at, again, every currency in the world today, every single financial service, they're highly susceptible to censorship. And actually, I would argue the United States is in the business of censorship in terms of, you know, how many countries around the world do we sanction and cut them off in either a minimal or a very material way from the global financial system?

   2. LFLex Fridman40:07

      So, when you define- when you talk about censorship, do you mean just the censoring your ability to operate freely in the world?

   3. APAnthony Pompliano40:15

      Well, look at it a little bit differently, which is that the United States has, um, kind of the American superiority. Because we have the bombs, the bullets, the soldiers, and, and, uh, that military might, we basically imp- uh, pose our will around the world.

   4. LFLex Fridman40:29

      Yes.

   5. APAnthony Pompliano40:29

      And so, uh, there's a very strong argument to be made that there are certain countries around the world that are being sanctioned, that the people of those countries did nothing wrong.

   6. LFLex Fridman40:40

      Mm-hmm.

   7. APAnthony Pompliano40:40

      Now, the governments are bad, right? In terms of the way that you and I would look at democratic rule or, uh, communism or, or whatever it is. But the people are being hurt as well. So, there's a whole group of people who would just argue, "Listen, we shouldn't hurt anyone at the expense of punishing one person or a group of people." There's other people who argue against that. But I do think that if you really kind of zoom out and you say, "I'm gonna take myself out of the Western worldview and I'm simply gonna look at this as we're all part of the human race," it's censorship. And there might be an ar- argument for censorship, but there also might be an argument against the censorship. And so, what Bitcoin does, um, as that specific, uh, kind of payment network is it says, "Anyone in the world with an internet connection, I don't care where you were born, what language you speak, what religion you are, your wealth status, your education status, uh, none of it matters. If you have an internet connection, you can plug into this monetary system and you can move value around the world to anyone else without asking for permission."And in the United States we basically have that ability in the US dollar kinda traditional banking system. I could pretty much send money to almost anyone I want, unless they're a really bad person that's on some list or something. Most people in the world don't have that capability. And so what you're essentially doing is you're democratizing access to a true store of value and a medium of exchange, right? And so what you see in many of these countries is that when their currency starts to fail, the first thing that a government or a group of people in power and influence do is they lock the citizens into the currency with capital controls.

   8. LFLex Fridman42:17

      Mm-hmm.

   9. APAnthony Pompliano42:18

      Why? 'Cause if you let them out, it exasperates the problem (laughs) . And so now what we're seeing is we basically are giving a tool to billions of people around the world that is a peaceful protest, right? You and I had no say at all when not only the Federal Reserve and elected officials here in the United States, but central banks around the world over the last 12 months decided to create trillions of dollars and inject it into the monetary system, right? They have arguments, and some of them are very good arguments as to why they should do that. They're trying to mitigate short-term pain, long term they'll figure out the other issues, right? They- they have very kind of, um, el- elaborate and well-articulated, um, kind of viewpoint as to why they're doing it. But you and I had no say.

   10. LFLex Fridman43:00

       Mm-hmm.

   11. APAnthony Pompliano43:01

       And so when you start to look at we have a very small group of people in this world, uh, both in our country and in countries around the world, that make these decisions, that have very, very far-reaching, um, kind of impact. And on top of that, in many cases, there's actually not that much, uh, kind of accountability because usually these are not elected officials who are making some of these decisions.

   12. LFLex Fridman43:22

       Right.

   13. APAnthony Pompliano43:22

       These are appointed. And you can argue that, hey, we elected somebody who appointed them. But at the same time, that accountability isn't quite there. And so I think ultimately when you just back out and you say, you know, what is bitcoin and why is it important to the world, it is giving access to anyone in the world with an internet connection to a store of value and a monetary network that allows them to peacefully protest and to opt out of a system that pretty much is not working for a majority of people in the world.

   14. LFLex Fridman43:51

       So it's moving the power from these centralized places, sometimes unelected, to the individuals and to- to the people. So the dollar does seem to work for- for Americans and for many people in the world, but you kind of have a vision. You- you paint a picture of a future where potentially we move to cryptocurrency. So,

9. 44:13 – 53:04

   Bitcoin as main currency

   1. LFLex Fridman44:13

      uh, what kind of trajectory do you see where bitcoin can become the main currency in the world, or at least cryptocurrency become the main way of storing value in the world and basically overtake the dollar?

   2. APAnthony Pompliano44:25

      Yeah. So I always go first to we don't need to have competition, like in terms of like a direct competition between the dollar and bitcoin, right? Um, if you look at most technologies in the world, uh, the really valuable ones are actually market expanding technologies rather than simply just market share stealing technologies, right? So if you look at Uber, for example, Uber didn't just say, "Hey, I'm gonna go take out all the taxis," right? It actually drastically expanded the market for people. Now there's literally millions of people in the United States who don't have cars 'cause they use Uber, right? And so I think that bitcoin is very similar in that, um, yes, there is a component of medium of exchange, uh, in terms of the dollar, but also there is this component of just store of value assets in general. And so when you start to look at bitcoin specifically, I think that what you're seeing is you're seeing a- a generational gap where young people say, "I grew up with a phone in my hand. I'm digitally native." The whole idea of going to the bank and sending a wire or going to an ATM and getting physical cash is an antiquated idea in their mind, right? I- I one time asked my brother, he's 24 years old, and I said, "Hey, how do you send money to your friends?" And he gave me one answer which I expected, which was Venmo, and the second answer I didn't expect. He said, "Uber." And I said, "How do you send money via Uber?" He said, "Well, we get in a car together and at the end we split the ride." And so again, you and I have probably both done that.

   3. LFLex Fridman45:44

      Yeah, yeah.

   4. APAnthony Pompliano45:45

      But I never thought of it as a way to send money to each other. And so it- it is a, uh, psychological difference between even me who's only, you know, a decade older than him or so, uh, and his peer group. And so I think as we're watching kind of bitcoin continue this ascent, ultimately what we're seeing is an entire generation of kids are saying, "Listen, if I look at financial assets across the board, I have stocks, I have bonds, I have currencies, and I have commodities. I know that bonds, from a real rate return perspective, is flat to negative," right? "I'm gonna make no money on this because I have a belief that my dollar is being devalued." And actually what we're starting to see is, again, the internet has broken down these walled gardens and kind of these centralized, uh, hubs of information in that if you were to look at, let's say, the stock market, from 1971 to today in dollar terms it's a 45 degree angle right up and to the right, right? You know, it's kind of 7%, 8%, 10% growth, uh, every year and it's amazing. Just get invested in the stock market and you'll make money over a long period of time regardless of the dips along the way. If you denominate that same stock market in gold, the stock market is down since 1971. And so is it so much that the stock market is accruing true value or is it that the underlying currency in which it is denominated in is being devalued, right? And now it's being devalued in a very disciplined way, right, in terms of it's not like it went 50% devaluation, uh, in a short period of time, but it's still being devalued. And so I think that people are waking up to this idea that a traditional 60/40 type global portfolio doesn't work anymore, right? 40% of it, uh, in bonds, uh, is just not going to get it done. And so when you start to look at this, people first look at bitcoin via two main ways, in my opinion. They look at it, one, as a store of value. Should I actually go and- and put some of my wealth there, use it as a savings technology, right? We ask people, uh, in the traditional world, if you're a teacher, a fireman, uh, an accounting, you know, mid-level manager, uh, we say, "Hey, go do your job. Be the best in class as a fireman or as a teacher."

   5. LFLex Fridman47:45

      Mm-hmm.

   6. APAnthony Pompliano47:45

      "And then, oh, by the way, you have to be a professional investor as well because if you just put your dollars in your bank account, you're literally going to have your wealth devalued away over time. So you can't just save. You have to invest."... that is a really tall task for people. They have a hard enough time just doing their job right, (laughs) taking care of their family, right? Now they gotta go be an investor. So I think savings technology for, from a Bitcoin standpoint is if you buy Satoshis or, or, or Bitcoin, over time it will, uh, increase from a purchasing power standpoint because there's a fixed supply and demand continues to rise. But then you start to look at, well, what other assets do people put in their portfolios, whether it's art, it's real estate, it's precious metals, or something else! Most of those assets are not because people actually think that they're gonna go up in value over time, they're usually gonna store value, right? The reason why somebody buys gold is 'cause it's a store of value, right, historically. That's a narrative-driven, uh, type asset, though. Right? We tell people it's scarce. We tell people that it is a store of value. When you look at it, though, we don't know how much gold exists in the world. We have a good estimate, right, but we don't actually, we can't prove how much there is. We don't know how much is coming out of the ground every day. Again-

   7. LFLex Fridman48:54

      Mm-hmm.

   8. APAnthony Pompliano48:54

      ... great, uh, fantastic estimate, but we can't prove it, and we don't know what the total supply is.

   9. LFLex Fridman48:58

      And that's what you mean by narrative-driven, we can't really prove it, like mathematically?

   10. APAnthony Pompliano49:02

       We, you, I, and everyone else in the world has lived in a narrative-driven world for the last couple of decades, right? And what the internet and digital technologies have done is it opened up the possibility and the desire from people to have a world now where I can validate things. So when I see that headline, I want to see you say whatever happened in the news, if you're the subject of the news, rather than have somebody else tell me the story. If I see that you say something is scarce, prove to me that it is scarce. And so I think that's kind of a psychological shift the younger generation is starting to understand, because ultimately, you and I probably grew up in a world where our parents could tell us a story and we just believed it. You know, Dad or Mom says it, it must be true. (laughs)

   11. LFLex Fridman49:44

       Yeah, yeah.

   12. APAnthony Pompliano49:45

       If my brother heard a story, what does he do? He goes to Google and he looks it up. (laughs) Right, and he comes back and usually tells my parents, "Oh, you got the story wrong." Right? And so I think that that, that provability or that, that validation ends up becoming really, really important. And so, you know, look at something like gold. I, I think that people are drastically underestimating the shift that's underway right now. Gold is, one, down in value since April, or I'm sorry, August of 2020. And so in a timeframe where central banks have had historic quantitative easing, literally $6 trillion in the United States, the one asset that historically has been the best store of value and has, uh, you know, in 2008 financial crisis hit an all-time high based on the, the government response, has actually suffered, uh, f- uh, for a main part of this, uh, financial crisis.

   13. LFLex Fridman50:31

       Hm.

   14. APAnthony Pompliano50:32

       You then look at central banks around the world who have been very large holders of gold for a long time and net buyers on a monthly basis. For multiple months over the last six months, they've been net sellers of gold. And then you start to look at jewelry demand, so the actual non-monetary value of gold, and that demand for gold jewelry peaked in 2013, and has continued to fall since. And so what you start to say to yourself is, take just the asset of gold, which about $10 trillion market cap, and you say, okay, well if jewelry demand continues to fall, even if it's at a slight rate but it's continues to contract, you have central banks that now at some times are net sellers and sometimes net buyers, right? So, okay, again, contraction there. And then from the investment standpoint, the actual price, the, the daily, uh, price of this continues to fall, which is, uh, a signal that there's a contracting demand from an investment perspective, that's 93% of all use of gold. Only 7% of it's used for actual technology and metal conduction and things like that.

   15. LFLex Fridman51:32

       Mm-hmm.

   16. APAnthony Pompliano51:32

       And so you have a $10 trillion asset that it appears, and again, maybe data changes and I'll change my mind and other people change their mind, but it appears is on the decline. And so if that happens, you're gonna get the contraction of a $10 trillion asset. Well, where does all that value go? And what you're seeing is at the same time that that asset is contracting, you're also seeing a massive influx from not only retail investors, not only, uh, kind of the wealthy and the elite, but also from financial institutions, corporations, pension funds, et cetera, into this kinda digital sound money.

   17. LFLex Fridman52:04

       So you're saying that there's a kind of shift from gold to Bitcoin, because they have a lot of the same properties except one is in the physical space, the other's i- in the digital space. So do you see, like, central banks, uh, quietly potentially switching out, uh, from sort of go- gold to Bitcoin? Like naturally just d- doing, eh, s- seeing the pattern that you're referring to now, but more drastically into the future, where there's a complete shift?

   18. APAnthony Pompliano52:32

       If you line up the gold community and the Bitcoin community next to each other, they'll agree on all the problems-

   19. LFLex Fridman52:38

       (laughs)

   20. APAnthony Pompliano52:38

       ... that they, that they see in the, uh, world, right?

   21. LFLex Fridman52:40

       Yeah.

   22. APAnthony Pompliano52:41

       They'll actually agree on the solution that sound money is the solution. Where they differentiate is the gold communities believes that it's the analog application of sound money, right, the physical gold, that is the solution. The Bitcoin community believes the digital application of sound money, Bitcoin, is the solution.

   23. LFLex Fridman52:57

       Can you define sound money, by the way?

   24. APAnthony Pompliano52:58

       Sound money's just outside the system and no one can create more of it, so nobody controls it, um-

   25. LFLex Fridman53:02

       It's the scarcity is fundamental.

10. 53:04 – 54:45

    Scarcity creates value

    1. LFLex Fridman53:04

    2. APAnthony Pompliano53:04

       Exactly.

    3. LFLex Fridman53:04

       Why is scarcity important in money?

    4. APAnthony Pompliano53:07

       Well, I think scarcity just has this very high correlation to value across all assets, not just money, right? Money happens to be the, the unit of account that we use in terms of, uh, daily commerce. Um, but whether it is, um, you know, as we're seeing now, (laughs) uh, sneakers, art, you know, what, whatever it is, uh, scarcity ultimately is that signal of value, I think, and that's just been the way that humans, uh, derive value for literally, you know, thousands and thousands of years.

    5. LFLex Fridman53:33

       Yeah, I gotta say, that's my view on life and love in general, is scarcity is what makes it, m- uh, valuable. People talk about immortality. I, you know, I would like to be immortal, but it does s- it does seem that, uh, when you let go of the finiteness of life...... I feel like that m- meals and the experiences you have get devalued significantly. Like, the longer you live, the less value th- there are in- in- in infinity if you live forever. I worry that all the meaning will- will dissipate and the same thing with love. A- a- a quick criticism of sort of dating culture and all that kind of stuff, like I haven't, uh... a shocking revelation that I've never been on a Tinder date or any of those things. I- I believe that scarcity and dating and- and- and interaction is like intensifies the value of when the interactions do happen, so when the... like, when love does happen and s- so in that sense, there's something magical about scarcity in the more subjective psychological, social world as well. And perhaps money is just another version of that, right? It's just... it's all about the stories and ideas we tell ourselves.

11. 54:45 – 1:03:11

    Money is time

    1. LFLex Fridman54:45

    2. APAnthony Pompliano54:45

       I think they're actually more interconnected than you're giving it credit for, right? Which is, what is money? Money is time ultimately, right? The- the pursuit of the acquisition of money, right? Of- of whether it's a currency or true money, is because that should give you more time.

    3. LFLex Fridman55:05

       Mm-hmm.

    4. APAnthony Pompliano55:05

       And so one of my favorite movies ever is, uh... and it's funny because Justin Timberlake is in it, uh, is this movie In Time.

    5. LFLex Fridman55:11

       You lost me.

    6. APAnthony Pompliano55:13

       (laughs) I lose most people at that part.

    7. LFLex Fridman55:15

       Okay. In Time?

    8. APAnthony Pompliano55:15

       I- In Time. And basically the premise of the movie is that, uh, everyone has a clock that's embedded into their arm and so, uh, if you go to work, you basically put your arm underneath when you leave and there's time that's deposited into your clock. And if your clock ever hits all zeros, you're dead.

    9. LFLex Fridman55:32

       Mm-hmm.

    10. APAnthony Pompliano55:33

        You die on the spot. And so there's a number of scenes where people are basically running, you know, to get to you and I give you a little bit more time so that you can get to work on Monday and then you work to acquire time. And so basically time becomes this currency. But what becomes very fascinating about it is there are sections in society where literally there's physical places. If you only have, let's say, 72 hours or less, you're allowed to go to section one. Section five though is 'cause you have years and years and years on your clock. And in this movie everyone at the age of 25 freezes from a biological aging standpoint.

    11. LFLex Fridman56:09

        Mm-hmm.

    12. APAnthony Pompliano56:09

        So everyone stays the same, but you may have lived for 1,000 years and so what becomes so fascinating about it is that rich people have time, poor people do not have time. And so in it, Justin Timberlake, the- the main character at one point, uh, essentially acquires a bunch of time and he's able to go to, uh, one of the higher levels, um, and now he's attending all these galas and, you know, poker nights and all that stuff. And one of the first things that he learns is that in the lower end of society, everyone is running everywhere at all times in the movie because time is so finite and it is so scarce, and so therefore, why would I walk down the street? I must run down the street. In the highest level of society, no one runs anywhere and in fact if you run, you are seen as lower class.

    13. LFLex Fridman56:59

        Yeah.

    14. APAnthony Pompliano57:00

        Because wealth is time. And so that movie is... you know, it's got a ton of kind of, um, things that you can pull out of it, but to me is the perfect epitome of money is time. And so when you start to think about the, um, acquisition of money, right? It goes to this whole idea of time billionaire and I- I know that, um, there's probably a lot of people who have, uh, heard about this already, but if you think of a million seconds, it's about, uh, 11 days. A billion seconds is 31 years. And so if I said to somebody, "You have to switch lives with Warren Buffett," would you do it? Some people would say sure, and that'd be their initial reaction. I say, "But you gotta have to be 92 years old." Is the money worth the lack of time? Most people would say no, right? And there's this guy Graham Duncan, uh, who really articulated this well, um, and ultimately what ends up happening is you realize time is more valuable than the money, but the... y- you acquire the money to gain more time.

    15. LFLex Fridman57:59

        And bec- the reason it's valuable is because of the scarcity of time. We currently have the bi- the biology, the physics. It means that, um, this is not just the narrative we tell ourselves. Maybe it is, I don't know, but it- it feels like pretty sure we're mortal and in that sense, the scarcity there gives value to time. It's fascinating to think about all the thought experiments here of if that could actually be on the economy, if you can actually convert time f- in a frictionless way to money.

    16. APAnthony Pompliano58:33

        Well, and- and if you start to pull on this a little bit and say, okay, a young person today, let's say somebody in their 20s, has about two billion seconds left in their life, right? Kind of 60 years give or take, um, based on life expectancy. They usually, until they start to understand this concept, think of wealth in dollar terms. But dollars are being devalued and so, you know, a million dollars doesn't get you what it used to get, right? It's kind of (laughs) an old adage. And so what you're doing is you're pursuing something that ends up losing value and so it's the constant rat race. It's how do I constantly try to get more? How do I get more dollars? How do I get more dollars? Because even if I say to myself, you know, "I'm going to retire when I get $100,000." When I get the $100,000, the $100,000 five years from now doesn't buy me what I thought it did. So now I need 500,000 or 200,000 or a million or wha- whatever the number is. And so ultimately what ends up occurring is that the bitcoin community and many people in- in kind of this idea of sound money is you want to be able to acquire an asset that not only will hold the value, right? The store of value over time, but it will actually appreciate over time. And so when you look at something like bitcoin against the dollar, against other types of assets, all of these assets are down compared to bitcoin-Right? Now, some of that's just in the early days of, um, kind of the pricing of an asset. You go from very small to something much larger. But now what you start to look at is, well, if you have a finite supply of something, what ends up happening is people begin to value it more. And so in a world where dollars are infinite and other fiat currencies are infinite, Bitcoin becomes very, very interesting, very special, uh, and something that is very aspirational. And so I think that's where you're starting to see people say, "Wait a second. This is something where that finite, secure store of value is essential to wealth generation and preservation over a long period of time."

    17. LFLex Fridman1:00:34

        And if, uh, Sam Harris is right, that free will is an illusion, this is really interesting to think about maybe, uh, time as a kind of blockchain 'cause you can't change anything. And then, uh, the physical spacetime of the universe is a, is a ledger. Uh, so m- maybe, uh, it won't be Bitcoin that replaces gold. Maybe it'll be time once we crack open that, in fact, the universe is fully deterministic. So maybe that's what, like, Eric Weinstein is afraid of. Once you figure out the theories of everything, of physics, we'll be able to then start trading, create a market out of, like, the very fabric of reality and that way break it.

    18. APAnthony Pompliano1:01:20

        Well, if you look at infinite inflationary-type currencies, you can't do that, right? Because it constantly is losing value.

    19. LFLex Fridman1:01:28

        Right.

    20. APAnthony Pompliano1:01:29

        When you look at a finite asset, again, that has the provability of the actual finite, uh, element to it, ultimately the wealth is that marketplace.

    21. LFLex Fridman1:01:40

        Yeah.

    22. APAnthony Pompliano1:01:40

        And so, you know, I, I always, uh, kinda try to highlight for people, the top 55% of Americans understand something that the bottom 45% don't. They invest, right? The bottom 45% consume, the top 55% invest, and that's why we have a wealth inequality gap, and it continues to get wider and wider and wider, is because the people who are holding the devaluing assets and saving are watching their wealth be devalued away. And there's arguments and controversy over how fast that's happening, but it's happening. The people who are holding the assets that have any level of scarcity, right? Real estate may not be finite, but it's scarce, right? Art may not be finite, but it's scarce. Gold may not be finite, but it's scarce. Those assets continue to appreciate against the devaluing currency. And so when you then say, "No, I have complete finite supply with provability and this transparency around it where everyone knows how much is there and, and what, where it's going," now all of a sudden you and I can transact back and forth that value, and it is a representation of time. Because what I can essentially do is if I gather or acquire more of that wealth, I then can apply leverage to my life.

    23. LFLex Fridman1:02:56

        Mm-hmm.

    24. APAnthony Pompliano1:02:56

        I can use machines, humans, or some other resources and basically now free up my time.

    25. LFLex Fridman1:03:05

        Yeah, and it's so funny about the way you are trading time. Maybe it's a little bit indirect, but maybe not.

12. 1:03:11 – 1:17:01

    Eric Weinstein vs Bitcoin Community

    1. LFLex Fridman1:03:11

       Uh, so just 'cause I brought up Eric, and, uh, you're on Twitter, I'd love to hear your opinions. Uh, I g- I talk to him a lot. He seems to have stepped into the beautiful dance of human communication and the social dynamics that is the Bitcoin cryptocurrency community. Do you have, uh, do you have thoughts on, uh, uh, engaged theoretic concep- conceptualization of the world or just Eric in general? He's got a lotta love in his heart, and he's got grace in the way he communicates. (laughs) But he's also, uh, loves to play with ideas and seems to have touched a sensitive point with the Bitcoin community. Is there anything you could say, uh, that's hopeful, inspiring about that whole dynamic that went down?

    2. APAnthony Pompliano1:03:56

       I, so I, I don't know all of the details, um, but what I will say is, uh, I've listened to a number of his podcasts, um, and him and there's a whole bunch of people like him. I basically put them in the bucket of they're an independent thinker who are courageous enough to speak their truth, whatever that may be. Uh, they are humble enough to, uh, revisit their ideas and say, "I got this right. I got this wrong. Information changed. I'll change my mind." It's obviously a sign of intelligence to be able to do that type of stuff. And I actually think that one of the most scarce things in our society are those independent thinkers-

    3. LFLex Fridman1:04:31

       (laughs) Yeah.

    4. APAnthony Pompliano1:04:31

       ... who are able to do all this (laughs) , right?

    5. LFLex Fridman1:04:33

       Speaking of scarcity, yeah.

    6. APAnthony Pompliano1:04:34

       And, and so to me, uh, I put Eric and a whole host of other people kind of, uh, if you look at, like, the intellectual dark web as kind of a, a label that's, uh, been used. They're actually some of the most important people in our society because they're the people who are willing to stand up against the mass kind of, um, thought process. They're willing to, uh, talk about things that others may think are taboo, right? They're willing to, uh, change their mind, which all of a sudden has become a bad thing rather than a good thing. And so when I see the exploration of ideas in public, I actually think that those are the people who are most open-

    7. LFLex Fridman1:05:10

       Yeah.

    8. APAnthony Pompliano1:05:10

       ... to the kind of vehement blowback as well.

    9. LFLex Fridman1:05:13

       Mm-hmm.

    10. APAnthony Pompliano1:05:13

        Right? Because that's part of what they're doing is that they're eliciting, "Hey, I'm gonna throw an idea into the arena." If it doesn't get attacked, they actually may be more nervous than if there is some level of, you know, kinda war of attrition, if you will. And so what I've seen with a number of the people who have done this, everyone from, uh, some of the best, you know, hedge fund managers and kinda money managers in the world, all the way to what I'll consider some of the most, uh, intellectual people in the world, is they play with these ideas, and they play with the ideas, and they play with them, and they play with them.

    11. LFLex Fridman1:05:40

        Mm-hmm.

    12. APAnthony Pompliano1:05:41

        And they all arrive at the same conclusion. And sometimes it takes a month, sometimes it takes years, but they arrive at this Bitcoin thesis. And what's so interesting about it is it highlights something that, uh, many people view as a bug...... but I think people in the Bitcoin community view as a feature, which is that community. And so what ends up happening is when you have something that is as ambitious as creating a global reserve currency, doesn't mean it needs to unseat any of the existing ones, but become the global reserve currency of the internet, right? This digital economy. You need shepherds of it.

    13. LFLex Fridman1:06:15

        Mm-hmm.

    14. APAnthony Pompliano1:06:15

        And so just like a technology company wants to find those loyal fans that are willing to go out and market and word of mouth and- and kind of not only, uh, promote it, but also, uh, protect it. This technology that is this decentralized thing, which uses a financial incentive in order to elicit the buy-in, uh, not from a financial perspective, but from a mental energy standpoint, has built one of the most rabid, powerful, and engaged communities on the internet.

    15. LFLex Fridman1:06:45

        Mm-hmm.

    16. APAnthony Pompliano1:06:45

        And what ends up happening is those people have thought more about these ideas and actually challenged those ideas more than anyone else in the world. And so I've got a lot of folks who will just say, um ... There's this guy Marty Bent who will talk all the time about the Bitcoin critics haven't done their homework in a lot of cases.

    17. LFLex Fridman1:07:04

        Mm-hmm.

    18. APAnthony Pompliano1:07:04

        So they show up, and sometimes it's super intellectual, lazy arguments, sometimes it's actually very well thought out arguments, you know, on- on the counter to the Bitcoin thesis. But ultimately what ends up happening is you're talking to somebody who's an expert. They've been thinking about this for five, seven, eight, 10 years, right? They've gone through every simulation you possibly can, and they show up with data, examples, um, and responses. Now, they're not always right, but they've just done the work. And so what I actually, uh, like about folks like Erik and others is, as they're kind of going through this journey, they're incredibly smart, right? And they provide, uh ... Or- or they, um, apply a lot of intellectual rigor-

    19. LFLex Fridman1:07:40

        Mm-hmm.

    20. APAnthony Pompliano1:07:40

        ... to some of these arguments. And so what it does is, what does it do? It's a marketplace. It keeps people honest.

    21. LFLex Fridman1:07:45

        Yeah.

    22. APAnthony Pompliano1:07:46

        (laughs) Right?

    23. LFLex Fridman1:07:46

        So, uh, let me sort of make a few comments. It's kind of interesting, as you're exactly right. Uh, maybe the blowback is part of the mechanism that actually develops these ideas and so on. I do wanna kind of speak to a little bit of the toxicity that I've experienced in the Bitcoin community. I kind of see it, the Bitcoin community, I think he paints a really nice picture, which I kind of see it as an immune system (laughs) that protects against sort of, uh, the viruses that are bad ideas. Uh, that said, the immune system can destroy a body, right? Uh, and, uh, the thing you mentioned about Erik and maybe about myself, uh, and in general, just people exploring ideas, is there is a Dunning-Kruger effect, which is when you first start exploring ideas deeply, you have, um, o- o- overblown level of confidence about, like, how much you understand. And that's actually the process about learning, then you realize you don't understand much. What I've noticed with the Bitcoin community is, uh, they're not as, uh, patient with the- the basics of the Dunning-Kruger effect. Like, if I step in and make declarative statements about Bitcoin, like I ... You know, I read (laughs) a long time ago, uh, the white paper, like at the cursory level, I felt, uh, that I- I understand the technology. This is basic intuitions. You know, I di- I didn't think about the social dynamics. I didn't think about any, like, financial implications and a lot of the deep, actually the ongoing innovations and all that kind of stuff. But I thought I understood that technology, and so I step in and make declarative statements. I think those are the- the first time you say, "Okay, what's the role of Bitcoin in the world?" You start thinking about it deeply, and then you make statements. The toxicity that you get in those first few statements is really off-putting to me. I'm somebody that tries to communicate love and live that with everything I do, and, uh, there is a level of disrespect that I've experienced, not directly, just observing others. People have been mostly kind to me, and I- I appreciate that. But if you're going to criticize me about my exploration of ideas in Bitcoin, you have to also acknowledge that I'm a human being that got, like, a PhD in stuff. Like, I did some hard shit, uh, that it could be in farming or it could be in whatever. Like, I've lived life and I've really thought deeply and I really care. Like, I know a lot of shit. And it's possible that I actually have a lot of ideas that you can learn from. Now, if it's agriculture, fine, or if it's artificial intelligence, fine. Like, I know what I'm talking about, about certain things, and I could be wrong about a lot of things. And there's like an exchange of ideas that's, that makes the, that mechanism that you talked about, um, more efficient. Sometimes when the blowback is too strong too early on, the development of ideas is just inefficient. And I'm not sure if- if there's a ... You know, the way it was explained to me is that for so long that community was, like, bombarded with just, like, bad ideas, like criticisms. They're just overly sensitive now to, like, to bullshit, to s- ... They- they're, like, triggered by statements, like, th- they've heard it all before and they're like, "Oh, there they go again with the same old arguments." But that doesn't mean that, um, you know, you have to sort of, I guess, develop patience and so on, especially when you feel, like in my case, that the person is coming from a good place, right?

    24. APAnthony Pompliano1:11:20

        Yeah.

    25. LFLex Fridman1:11:20

        I don't know if there's something you could say-

    26. APAnthony Pompliano1:11:22

        Yeah. W-

    27. LFLex Fridman1:11:22

        ... that's positive about the future of this kind of ... Overcoming this toxicity.

    28. APAnthony Pompliano1:11:26

        I- I think there's a couple of trends that are all kind of coalescing here, right? In- in these types of experiences. So one is, uh, when you look at a community, there's always, um, a spectrum, right? In terms of-

    29. LFLex Fridman1:11:36

        Right. Of course.

    30. APAnthony Pompliano1:11:36

        ... there's some people who overindex on kindness, uh, and stupidity, right?

Episode duration: 3:02:15