[00:00:00] Preston Pysh: Hey everyone, welcome to this Wednesday’s release of the Bitcoin Fundamentals Podcast. Boy, there has been a lot of news coverage on Sam Bankman-Fried and the FTX disaster and all the pieces that led to its final meltdown. But it’s been a little bit of time and a lot more facts have been learned about everything that’s happened.
[00:00:19] Preston Pysh: More importantly, what are the broader themes and key interests that are materializing from the government, big banks, the crypto exchanges, and other key players that were all involved? Well, to cover that topic and much more is the editorial director for the print Bitcoin Magazine, Mr. Mark Goodwin.
[00:00:38] Preston Pysh: Mark is the writer of the newly released article covering all the ins and outs of this major financial news story. And we cover it all in this episode. So sit back and get ready to hear some interesting and crazy stories.
[00:00:56] Intro: You are listening to Bitcoin Fundamentals by The Investor’s Podcast Network. Now for your host, Preston Pysh.
[00:01:15] Preston Pysh: Hey everyone, welcome to the show. I’m here with Mark Goodwin. Mark, welcome to The Investor’s Podcast and Bitcoin Fundamentals.
[00:01:22] Mark Goodwin: Thank you, Preston. It’s absolutely an honor to be here. Huge fan of the podcast. You guys always have amazing guests. Super happy to be here representing Bitcoin Mag and yeah.
[00:01:30] Mark Goodwin: Thanks so much, Preston for having me.
[00:01:33] Preston Pysh: This is the first thing I want to start off with is, so I was up in Nashville at a meetup that they had. And I saw the cover of this story just sitting there on the side of the in the room and I was just like, oh my gosh. That is something else. So let’s just start off with the artwork of the magazine cover because it is an eye grabber.
[00:01:54] Mark Goodwin: Totally. We’re a big independent media fans. There’s a huge role that independent media has to play. We’re always looking for opportunities to sort of lampoon and harpoon these legacy institutions that have really failed us. Really, obviously in the last couple years it’s been very apparent that there’s incentives and these perverse economic situations that are really leading to unfair and, and really biased to media representations of these figures.
[00:02:21] Mark Goodwin: Right? Bitcoin Magazine, you know, we’re a freedom money technology media. We really look at our competition as being these, you know, the Forbes types and the Bloomberg. We see ourselves in that echelon and when we see a Forbes cover coming out with this guy, that’s very obvious for Bitcoiners that there’s something clearly wrong here with what was going on at FTX and this just huge explosion.
[00:02:43] Mark Goodwin: Them coming onto the scene and, and absolutely no pushback from any institutional media. We saw this as kind of two stories, right? It’s really the story of fraud and criminal activity and reation of users funds and all of this just literal criminal activity that was going on, whether it’s Alameda Research, FTX with their security exchange token, FTT, they hinted at wanting to come out with a, a stablecoin and all that.
[00:03:09] Mark Goodwin: And so we really saw that as one side of the story. And then the other side, just this complete lack of any sort of media pushback on these figure. We really wanted to okay, how do we really get our point across in a very visual way? The covers are the first thing you see, first thing you interact with.
[00:03:26] Mark Goodwin: And so we wanted to do something shocking. We wanted to do something that would get people’s attention. They’d see it at the airport, see it at Barnes and Noble, and be like, what is going on over there? So we have a wonderful team here of journalists, designers, publisher, president, gma, all the, you know, we all come together when we always talk about the cover.
[00:03:45] Mark Goodwin: It’s a very important part of this thing. And right away, Mike Germano, our president was like, we gotta have SBF on the cover in some form. We gotta destroy this guy. Two birds, one stone. We went at, at Forbes, we went at Legacy Media, and then of course we went at this criminal. We thought it would be really fun to do like a fake cover and just sort of totally just make fun of this Forbes cover.
[00:04:07] Mark Goodwin: It was very ripe. I mean, there was even a quote on the actual original cover that said, I got involved in crypto without any idea what crypto was like. That was literally on the cover of this Forbes list. So we kept that. We left that on as as the quote in full and I filled in all the rest with just kind of funny little insider how to start your own poly cool and all these little things.
[00:04:27] Mark Goodwin: We really wanted to go hard and and again, I’m kind of rambling, but it was so personal. I think a lot of us were lucky, you know, and, and saw ahead and had seen things like this before and knew not to have our money personally invested in it. But it really messed up the industry really bad when all that went down in November.
[00:04:43] Mark Goodwin: We had people in our own company, you know, have to deal with some of the contagion from these things. For me personally, it was a multi-pronged attack, very personal, really wanted to lampoon this guy and the legacy media that really failed us.
[00:04:59] Preston Pysh: You guys stuck a snout on him.
[00:05:00] Mark Goodwin: Yeah.
[00:05:02] Preston Pysh: I mean, that’s, that’s it, right?
[00:05:03] Preston Pysh: It was like his face with literally a pig snout on his nose and seeing it, I can tell you, like, you guys nailed it. And that’s, let’s dig into this. Where do you think the story needs to start? Because it, it goes in so many different directions. There’s so many different tentacles, like where in the world do you even start if you’re going to give somebody a foundation on Sam and kind of all these other, there’s, there’s all these other actors that are, in my opinion, just as bad and I don’t know how you can get worse, but they’re just as bad as Sam.
[00:05:35] Preston Pysh: Like where would you start?
[00:05:38] Mark Goodwin: It’s a definitely a difficult job to pinpoint exactly when this all started, when it all went wrong, when they started getting desperate and doing things. But to me it’s really a story, you know, zooming way, way, way, way. It’s really about the dollar and Bitcoin, and I think that’s sort of the era that we’re in right now.
[00:05:55] Mark Goodwin: I think it’s pretty clear with stuff that the SEC is doing, certain moves going on in the, I guess to put it nicely, the extended crypto community space. But really it’s going to come down to this final show between the US dollar system and Bitcoin and how they are going to interact with each other in the future.
[00:06:13] Mark Goodwin: And so much of this has to do with stablecoin regulation, offshore banking reserves, fractional reserves, and exchange tokens. Right. I guess where this story started, I mean, Sam made his money, his sort of first fortune before F FTX was sort of exploiting the arbitrage situation that was presenting itself.
[00:06:35] Mark Goodwin: That’s, we sort of colloquially call like the kimchi premium, taking the, the higher price that people in South Korea were paying for Bitcoin in 2018, 2019 and even a little bit in at the end of 2017. And was doing this arbitrage trade and made up a ton of money, sort of taking advantage of these US dollar pairings and the premium going on in Korea.
[00:06:57] Mark Goodwin: I think there’s a huge coalition here, if you want to look at it in kind of a game theory standpoint. Looking at it kind of this like bargaining problem. The US dollar system and the US Dollar Coalition is, we’ve seen it time and time again. They’ll do anything they can to preserve purchasing power of the net US system.
[00:07:15] Mark Goodwin: And so to me it seems very obvious that a lot of these bigger players, the stablecoin issuers and these big exchanges that could create a token, just an exchange token right underneath them and print billions and billions of dollars of this token, whether it’s FTT, whether it’s b and B, and then of course the stablecoin, issuers circle and tether, you know, now having, you know, plus a hundred billion dollars worth of, of these stablecoin issued to me.
[00:07:40] Mark Goodwin: That’s really where this all starts. Is the US dollar system trying to you know, no pun intended, but tether itself to Bitcoin. So to me, this is really just a continuation of that. I see Sam as being very much so a part of this US dollar coalition being so intertwined with the US government system and, and Congress specifically.
[00:08:02] Mark Goodwin: And now we’re kind of seeing a lot of the fallback from that now that this is all that the chickens have come to roost to me. Yeah, the story really starts in 2017 after that big explosion. The US dollar system really has no choice but to pay attention to Bitcoin. We see the founding of FTX and Alameda around that 2019.
[00:08:22] Mark Goodwin: So that’s really where the story gets started. And we just see this huge explosion. I mean, FTX just came outta nowhere.
[00:08:28] Preston Pysh: I think that’s the really thing that I think never made sense for. Was just right. The pace at which this became as big as it is because I was in the 2017 cycle, right? We were creating content in the 2017 cycle and Sam was never discussed.
[00:08:44] Preston Pysh: It was, I mean, this guy was a nobody back then. And then is just like 2020 hit and this guy’s got Tom Brady and like these like Bill Clinton billion.
[00:08:56] Mark Goodwin: Yeah.
[00:08:56] Preston Pysh: Like I don’t know how that’s possible without assistance and I think people are just looking at it and saying there’s no way, there’s no way somebody can raise that much money and have access to these types of people and to stand up in a, a national brand from nothing.
[00:09:11] Mark Goodwin: How’s that possible? I think you really nailed it. I mean certainly assistance in, I think a lot of ways, and I think a big part of it was really like kind of social conditioning, right? I mean you mentioned the Tom Brady and the Tony Blairs and the Bill Clintons, and I think. He really understood, Sam did that the media was, and these figures kind of were to be bought and this influenced this sort of like we see as amateur investors or I say we in the, in the general sense, see like, oh, well if it’s good enough for Tom Brady, it’s good enough for Bill Clinton.
[00:09:44] Mark Goodwin: They probably did their due diligence. This is probably fine. We saw these big high profile commercial ads with, you know, very big celebrities and it wasn’t just FTX, but we saw this really explicitly with FTX.
[00:09:59] Preston Pysh: I have a hard time buying some of that. I have a hard time buying that. Sam was this savant that understood that these people were to be bought, he’s in his late twenties, like their form of like messaging inside this company was Signal, right?
[00:10:16] Preston Pysh: Like that was their record keeping. Like, right. I don’t buy it for a second that a person has the, the intellect to be an expert at raising billions of dollars, networking politically running it by themselves. It just, it doesn’t even seem po like, I don’t know. I just, I don’t see that happening with some, and when you look at Sammy so awkward and doesn’t seem like he would be somebody that would understand the social dynamics of some of these things, like getting these people on board for that, that it’s, I don’t know, it just seems like there was a lot of help.
[00:10:50] Mark Goodwin: Yeah, a ton. I mean, and I think a lot of it was from people kind of turning a blind eye. You know? I mean, they were clearly doing just a whole bunch of just illegal things and the way that they were basically taking and counting users’ funds in one pool, be it FTX or Alameda, and then just converting it and really playing with users’ funds.
[00:11:11] Mark Goodwin: Meanwhile, having a meeting every other week with the politician and being so heavily involved in the, the campaign cycle before the midterm election. I agree with you, man. To me, it seemed like a lot of this was sort of a part of this regulatory regime that’s here. We’ve sort of been talking about it for a while, that a lot of these coins are securities.
[00:11:33] Mark Goodwin: Securities law is pretty black and white. I mean, it’s almost a hundred years old now, 90 years old since old, how he was slinging expected profits in a common enterprise on his orange orchards. Right. And now we’re seeing really Gary Gensler’s lead, SEC really cracking down. And so to me, it’s all part of this regulatory regime.
[00:11:54] Mark Goodwin: To me, Sam is sort of an actor in this big movement that’s coming now, and FTX was really the start of kind of the or their collapse was kind of the start of the era that we’re now kind of going into, which is a whole bunch of reaction from these huge industry players like Coinbase and Circle and Kraken.
[00:12:13] Mark Goodwin: And so to me Sam was, was very much so playing a role for the US dollar system to sort of help create a climate that this incoming regulatory regime has, sort of the social consensus to do what they’re about to do. Like please protect us. Look at all this crap that’s happening, look how many people lost, you know, the entire life savings.
[00:12:32] Mark Goodwin: It’s like, Hey, Sam was going in and having meetings with you guys all the time and not one person went to actually look at the books and to check and see if this was. And so there’s a huge failure from this regulatory regime with FTX that’s now trying to pretend like they have a right to say kind of what’s going on.
[00:12:48] Mark Goodwin: And like the day after they filed right? Chapter 11, I think it was literally November 11th. Yeah. The press Secretary for Biden is coming out saying, we, you know, we need to have, we need to establish rules for protecting US investors. And they didn’t even wait, you know, 24 hours to sort of make a comment on it and to come out.
[00:13:07] Mark Goodwin: So to me, yeah, it’s, it’s very obvious that there was a, you know, a big financial incentive for us dollar actors to make this whole industry look corrupt and make it look bad and attack Bitcoin through this sort of adjacent failure of these altcoin secur. and it worked in a lot of ways. I mean, I’ve had more people talk to me, asking me if I’m okay asking me what’s going on in the last three or four months post this FTX thing.
[00:13:35] Mark Goodwin: And so I think unfortunately it was a very successful operation. Obviously, we’ll see what comes downstream, but if I was an exchange that ran a, a security token, like FTT, if I was a stablecoin issuer that didn’t exactly know what this regulatory regime was looking to do next, I would be very concerned.
[00:13:55] Mark Goodwin: So, yeah, I agree with you, man. He totally came outta nowhere, totally exploded, totally got endorsed by a lot of these big media figures. So to me it, it seems very obvious that this is sort of an operation to discredit this booming industry at a really essential time. You know, when inflation’s running so hot and, you know, the, the economy is not looking so great in a lot of ways and some other metrics, it is looking better.
[00:14:22] Mark Goodwin: but you know, at this really crucial time when Bitcoin really should step up and take back that dominance from the extended space. Yeah. It’s a real nasty thing. I think the story is really gross when you really get into it. All the offshore banking, you know, and the co-mingling of users funds. I mean, this guy should be in jail straight up.
[00:14:40] Preston Pysh: So he was a proclaimed effective altruist. What did you uncover with some of that organization and how does that paint? Is that organization what it appears to be on its face or is, or is there something deeper? I’ve listened to some people pontificate on this connection between Sam and this organization, some of the people that are a part of that organization, how well funded that organization is, and then we see at the end, after Sam is talking with some random girl that he’s doing full-blown interviews with, that I never even knew or heard of before.
[00:15:20] Preston Pysh: And he’s saying, oh yeah, all that effect of altruism stuff was just a bunch of crap. I was just purely using it for marketing purposes or whatever. He said that it was for, there’s a lot of strange things that kind of really don’t make sense because he was, he was really deep into this organization and they seem to have really well funded ties to, to various organizations outside of what I think appears on the face of things.
[00:15:43] Preston Pysh: So where did your research take you on some of that?
[00:15:46] Mark Goodwin: I think, I mean, he, he really kind of said it himself, you know, like, this was, this ea this effect of altruism was sort of a seemingly a facade and it was sort of this, a mask to hide a lot of the illicit behavior that was going on and making it, sort of pretending that it was this for the greater good.
[00:16:05] Mark Goodwin: And to me it’s, it doesn’t stand the stink test when you actually look. If you search FTX and look at the campaign donations that were being made by high profile people in the firm and at the company, and you’re seeing huge amounts of money going to both sides of the, at least of the us, sort of the duopoly, this sort of purple party situation that we find ourselves in now.
[00:16:28] Mark Goodwin: And they were giving money to hand over fist of both sides. It really seems to me like this idea of, you know, hey, we’re effective altruists. We’re here to do the greater good save democracy. There was a lot of money being put in towards preventing another pandemic. They were putting a ton of money into these sort of political industries, very captured already, I think by a lot of these bigger actors in, in this sort of purple party scenario.
[00:16:54] Mark Goodwin: So to me, it always came across as just a total, you know, affinity play and just sort of this way to hide the true motives of just kind of power grabbing. And really trying to make as much money as possible while we sort of effectively, you know, create compromising situations within legislators to now be like, okay, well if we want to go after these people, what does that mean for us?
[00:17:18] Mark Goodwin: We have to claw back these donations. We have to send some of these things back. It was so perverse and across all lines, but really wasn’t this, this sort of like, you know, maybe traditionally liberal effect of altruism. It was really all across the board to me, they’re hiding behind that as a way to sort of buy up regulatory goodwill and we’ll see how well that works.
[00:17:40] Mark Goodwin: We’ll, we’ll see if what his sentence is. And so far it seems to be working pretty well for a guy that stole as many billions as he did. He’s at his parents’ house in Palo Alto, going on VPNs and messaging people and doing all this stuff. It’s, I mean, it’s absurd. You would think someone that committed a crime this large, that hurt this many people would get the full book thrown at ’em.
[00:18:02] Mark Goodwin: And, and so far it’s been anything but that. So to me that was kind of the, the, the idea behind hiding behind this mask was how can I acquire as much social political power as possible while giving away all of this money and, and getting I mean, again, that was a big part of the media play in the way that they covered this guy was look at what he’s doing with his funds.
[00:18:21] Mark Goodwin: You know, he’s, he’s so altruistic, he’s so effective.
[00:18:24] Preston Pysh: This, this just isn’t something that a 20 year old kid knows that hasn’t spent an intense amount of time in the lobbying on the Capitol Hill. Sure. If he would’ve gone to Georgetown, worked in some congressional staffer’s office for five years or any of that type of stuff, that’s not what he did.
[00:18:41] Preston Pysh: He went and worked on Wall Street doing arbitrage, a high frequency trading type stuff on the finance side. He had no political ties. He didn’t know how any of this game, this political lobbying, pay-to-play type game
[00:18:54] Mark Goodwin: works. , I would say that his connection with his folks, so both of his parents are Stanford Prof and his dad is sort of known as one of the, you know, the high profile legal voices sort of within security law and, and banking in the United States.
[00:19:10] Mark Goodwin: And it’s very clear that his parents were pretty involved in the peripheral sense. Signing for real estate and putting up things for bail and whatever. I think he definitely had sort of a family history of, of being involved in some of those fields. So perhaps he had some help. I really think it’s sort of just incentives run awry where, you know, he was kind of forced in a scenario to, Hey, things are maybe not going so great, how can we continue to pretend that it is and that everything’s fine?
[00:19:39] Mark Goodwin: And that our balance at Alameda is not a lion share of it in a token that we issued. You know, I mean, how many billions were just in that FTT token when CZ sort of called the bluff and attacked the peg very publicly? You know, we saw that happen and yeah, I mean, e everything kind of downstream came from this factional fissure between Binance and FTX.
[00:20:06] Mark Goodwin: And so I think a lot of that d does kind of come from let’s, hey, let’s use as much of this money as we have to buy up political power, buy up friends. I’m going to see how long we can kind of take this thing. And I think they did it better than anyone. Better is probably not the best word, but they did it more effectively than anyone and really fooled millions of people it seems like.
[00:20:25] Mark Goodwin: So yeah, it’s really messed up how it all came down, but there is a connection there with his folks and with his father in particular for maybe knowing some of more of the ins and outs of how this stuff works. And I mean, it’s not a mistake that they founded themselves in, in The Bahamas. I don’t think it’s an accident that the first stablecoin to be pegged to the US dollar was this sand dollar.
[00:20:46] Mark Goodwin: Which was the, The Bahamas dollar, which is pegged to the US dollar. So the first really kind of CBDC, you know, government issued US dollar Stablecoin directly was right there in The Bahamas around the time that this whole thing started. To me it seems like a very active unknowing position to try to purchase political capital.
[00:21:06] Mark Goodwin: And I think his father Mo most likely probably helped him with that. And of course that’s speculation, but I think
[00:21:12] Preston Pysh: that’s a strong counter-argument. I just think at the scale they had 456 individual campaign contributions in the span of probably a year. Yep. Right? Like this is the work of a mastermind.
[00:21:28] Preston Pysh: This isn’t the work of, Hey, I’m teaching some classes at Stanford and you know, I’ve got some expertise in how to do offshore tax evasion type things without doing it, quote unquote, legally. Right? Like, that was his expertise. They weren’t like professional, multi-billion dollar campaign runners of, of political contributions and lobbying efforts.
[00:21:49] Mark Goodwin: They kind of were though, I mean, his mom definitely ran a pretty big democratic leaning pack. He had a lot of history with political fundraising, and I think Stanford in general, these huge endowment funds from these huge institutions and universities. And they’re a huge political force in both how they, you know, I don’t know how to word this right, but in how they indoctrinate and educate the masses, they’re very politically important, but also they have billions of dollars, right?
[00:22:17] Mark Goodwin: You know, Stanford, Harvard, some of these Ivys, so they’re, they’re really big political forces on their own kind of by both of those polls. I would say, yes, you’re right. It’s easy to say, you know, kind of like they aren’t these evil political monsters, but at the same time it’s like how hard is it really to buy a US politician?
[00:22:35] Mark Goodwin: You know? It’s like, you’re right. You’re totally right. Not a genius. I agree with you. Obviously this fell and exploded in his face. The market called them out with their FTT sort of game. Right? But I don’t think buying a US politician is that much of a genius move these days. Unfortunately. It seems like they’re all pretty paid to play.
[00:22:53] Mark Goodwin: I think that’s really what we saw When we look at that 400 plus donations in a year, it’s like all across the board. Yeah, I think it’s, it’s, let me push on this one, mark.
[00:23:01] Preston Pysh: It’s just because and I know we’re jumping around a lot and I really want to kind of get to the essence of like how the story unfolded, which we’re going to go to next, but the last thing that just.
[00:23:10] Preston Pysh: I’m looking at this and I’m saying there’s no way in hell that this is just Sam and his mom and dad being like the Mastermind and a couple other people here posting the bond after he comes to the States. Right? Like, what was the amount? I can’t remember the amount. I know it was hundreds of millions of dollars.
[00:23:26] Preston Pysh: Like, what was it? 400 million? For posting bond.
[00:23:29] Mark Goodwin: It was one of the bigger posts ever. And apparently it was paid within a day or so. Yeah. And a part of it came from his parents’ real estate and investments. Apparently they put up their house, but I mean, I don’t think their house is worth $400 million or whatever it is.
[00:23:43] Mark Goodwin: Yeah. Preston, I agree with you, man. How is that possible? How is that possible? It’s, look at this, you really do it. It just blows your brain with all these possibilities of like who really is in this coalition? Yes. Like, like who is really in this US dollar system coalition, this regulatory regime coalition, this, Hey, let’s get everybody using stablecoin.
[00:24:05] Mark Goodwin: So we have as much money velocity and as much users on the US dollar system to offset as massive amounts of price inflation that we’re dealing with. And then you see these news stories and we’ve just seen time and time again that it’s like there’s always this hidden hand that comes outta nowhere and drops that bond right, and pays that bail bond.
[00:24:23] Preston Pysh: Yeah, man, it’s I guess, I guess my point Mark is like instead of just putting the snout on the cover, I think he should have been holding like two raw fish with the snout on his nose for the cover of the magazine because it just stinks. It stinks to high heaven. Like I don’t buy any of it for a second people, and you can, you can, you can piece these things together and say, oh, well it could be this, and it could be that.
[00:24:46] Preston Pysh: But at the scale that we’re talking, it is so massive and I think, I think that’s another thing that’s lost on so many people that are just hardworking everyday. People that go out there, they make a hundred, 150,000 a year in their daily life. Like to them, I’m sorry, like 7 billion, 9 billion, like it’s just, it’s unicorn money at those, at those valuations to construct that much and stuff.
[00:25:13] Preston Pysh: That much buying power into something in the matter of like 24 to 36 months is, I don’t want to say it’s impossible because it was done right, but what, I guess what I’m saying is that doesn’t happen through a normal startup founder. Like there is outside help, there is somebody with deep intellectual understanding of how to construct something and hide all of the assistance that, that had to have been helping to do this.
[00:25:39] Preston Pysh: Like, I, I just don’t buy it for a second.
[00:25:42] Mark Goodwin: I just Yeah, totally. I know. I agree with you a hundred percent. I mean, you can look at the VC. These that were behind some of these projects that directly led to these multi, multi-billion dollar valuations were behind the Solana explosion, you know, the pushing Solana stores and Solana phones when the chain is going down every two weeks.
[00:26:02] Mark Goodwin: And you know, it doesn’t really offer anything that Satoshi didn’t sort of solve by taking away the power of these trusted third parties. It’s like FTT and Solana, which were directly connected to these huge dollar valuations coming out for these projects associated with Sam. Who is the money behind all this?
[00:26:21] Mark Goodwin: Well, where is this all coming from? I think it is as much Sam using the media and using these political connections to appear to be in in good. and then also a lot of people using him. Mm-hmm. . And I think that yes, the big, what you’re getting at is that there were clearly these people that are significantly more rich than Sam, that were using these huge bags of these tokens that were issued for basically, literally no cost, no economic cost than these people dumping billions and billions of dollars of Solana.
[00:26:50] Mark Goodwin: Billions and billions of dollars of FTT incentives are, are really wild. They were able to pervert away good custodial practice. One of the big reasons why FTX really took down so many people is because when they partnered with you and they had, you know, hundreds of companies that were sort of under their wing, they made you put all of your funds on their books.
[00:27:11] Mark Goodwin: That was a big they did. And so when they went under, there was 130 or something companies that filed in that same week that were just like, well, if they’re down, they have all of our money. How many startups were preyed on by this coalition? And then they just got their legs kicked out from underneath them.
[00:27:27] Mark Goodwin: I agree with you a hundred percent. It stinks to high. Hell absolutely. Should have had two fish on that cover, . I don’t think this story is close to being over. Yeah, I don’t either.
[00:27:36] Preston Pysh: Mark, let’s go here. Let’s go here. I think this is a key event. 80,394 Bitcoin valued over at 3.1 billion on May 5th, 2022, owned by the Luna Foundation is a top 10 position in the world for Bitcoin Holdings.
[00:27:54] Preston Pysh: Where did it go?
[00:27:57] Mark Goodwin: A hundred percent. To me, that was a huge part of this story, was looking at where did all this Bitcoin go. We know that the US dollar system, us, you know, this coalition is using dollar entities to, to sort of pervert away the normal economic incentives that would exist on a bitcoin. You absolutely see this in the Luna Fiasco.
[00:28:18] Mark Goodwin: You also absolutely see this in the core scientific and some of these bigger mining firms. As hash price is plummeting and they’re making less and less money per hash, we’re seeing the hash rate explode at the same time. So we’re clearly seeing this US dollar subs subsidized almost business model come up overnight.
[00:28:37] Mark Goodwin: To me, I think these huge mining operations and this Luna Fiasco are, are very similar in that it was like, how do we use US dollars to create a yield and to pervert away normal custodial actions? Or how do we, how do we subsidize US mining, use US law to mine thousands of Bitcoin and then file chapter 11 with 11 of them on the books, you know, a year later or.
[00:29:02] Mark Goodwin: where did all that Bitcoin go? Where did the Luna Bitcoin go? And when you actually look at it, we now have, you know, blockchain don’t lie, right? We can actually sort of audit this and look at where a lot of these went and they got market liquidated along with a bunch of other on Binance. There was like 30,000 Bitcoin that were liquidated on Binance.
[00:29:21] Mark Goodwin: Right after that, you know that peg broke and we’re seeing a lot of why did that happen? What were they trying to do? What was Luna trying to do? They were trying to build a stablecoin. They were trying to build a stablecoin. And how many weeks later were they at zero. I think that’s a really interesting thing.
[00:29:38] Mark Goodwin: This is very much so the Stablecoin Wars Luna was trying to create a Bitcoin back stablecoin and someone said, no, someone in this coalition went absolutely not, and they attacked the. Broke it algorithmic way and it created an algorithmic death spiral of let’s liquidate as much of this Bitcoin and other crap that was being held and just instantly liquidated on Binance.
[00:30:00] Mark Goodwin: 30,000 plus Bitcoin, liquidated on Binance. Where did that go? We’re seeing massive outflows from Binance, some of the biggest outflows ever since, since like June of last year. Just huge amounts, you know, six figures of Bitcoin terms being taken off the books in that kind of six month period. You know, you’re looking at that and you’re like, where is this core scientific Bitcoin?
[00:30:20] Mark Goodwin: Where is Luna’s Bitcoin? We know that it got liquidated on Binance, but they’re not holding it now. And then you look into bin’s role and the FTX implosion and you, you know, they were, they didn’t hide it. They were very public. They went out and they attacked a peg. Caroline came out and said, Hey, we’ll buy it all back up at 22 bucks.
[00:30:37] Mark Goodwin: We’ll buy this FTT. Cz said, no, this is exploded.
[00:30:41] Preston Pysh: This is a another example of you’re not a genius. In fact, you’re quite an idiot. To come out and to say that publicly like they were a bunch of amateurs. If they’re so brilliant and they’re able to do all these brilliant things, what in the world is Caroline from Alameda coming out and basically saying where her resistance level’s at literally to the entire planet.
[00:31:05] Mark Goodwin: It’s insane. Totally mind blowing. And then also, you know, you look into the Luna stuff and you see that the Genesis group was behind, you know, they put up a billion dollars of to be on the other side of this Bitcoin trade, and you see their connection with three arrows capital that is all gone Kalu.
[00:31:23] Mark Goodwin: It’s like, how do you lose a billion dollars in value in like a week as you, you know, you do something like that. And now we’re seeing this contagion going through the Genesis group and mm-hmm. and three arrows is out. We’re seeing Barry Silver’s digital currency group going. A lot of the market is just really concerned with things because we’ve just learned a lot of these people we thought were these brilliant masterminds are really no, they’re co-mingling users funds, they’re making bad bets.
[00:31:50] Preston Pysh: They’re doing legacy things. They’re doing legacy things on the new future rails where none of that can be tolerated for any type of long duration or period of time.
[00:32:02] Mark Goodwin: I think one of the things that’s been really interesting with this whole process for me is unlike a lot of the legacy stuff, there are, there are receipts for all of this looking at tweets.
[00:32:11] Mark Goodwin: You know, all these people are very open, they’re all younger, maybe they haven’t done their homework, but they’re saying things publicly that’s really insane. There’s cryptocurrency receipts. Right. You know, whether it’s, you know, looking at, okay, where did the Luna liquidation go? It’s like, well, we can just literally look at it and see that it went to Binance Hot Wallet four or whatever, and they liquidated it and then, then it left.
[00:32:34] Mark Goodwin: It’s a lot harder to commit fraud and crime at this high of a level when there’s literally receipts for pretty much everything. But yeah, man, I, I really do think the stablecoin war is really a huge part of all of this, and I think Luna was a big part of that. They tried to do this algorithmically independent from these privatized issuers, these banks.
[00:32:55] Mark Goodwin: These people that are, you know, shareholders of the Fed of the US Dollar Coalition. Then they obviously saw Lunas in some way as taking away some of their privilege. So they were like, how do we attack this? Let’s break this. Peg liquidates out, you know, a couple days before a lot of this stuff went down with FTX, Sam was on a podcast talking about how they were waiting to find the right partner to start a stablecoin.
[00:33:17] Mark Goodwin: That was a couple days before a, a lot of this stuff went down. Obviously, I think the coalition didn’t want that to happen to some degree. FTX was basically going to do what Binance did. In Binance, I believe in September, put out a statement that was like, Hey, in a week we’re liquidating all of our USDC positions, all of our tether positions, and we’re, we’re going to replace them all with this Binance USD, this BUSD, which was their stablecoin.
[00:33:44] Mark Goodwin: So now that stablecoin is up to multi, I think like 6 billion or something. There’s a relatively big issuance there. Now we’re seeing some issues with Binance, you know, some market faith being lost in Binance. We’re looking at some of their funds. We’re beginning to kind of see a similar situation to FTX, where it’s, what percentage of the afu, you know, the SE U fund is in Bmb and in BUSD.
[00:34:07] Mark Goodwin: I mean it’s, I think it’s almost like 70%, and then the remaining quarter is in Bitcoin. Then that doesn’t even come close to covering their actual liabilities, if anything was to go down right. You can’t create a, a stable coin or create an exchange token and then have that be a, you know, a lion share of your assets on books.
[00:34:29] Mark Goodwin: That’s what caused the whole lock. The lack of trust in FTX in the first place was a coined desk reporter. Ian did a piece where he was like, Hey, like 40% of Alameda’s books are in this token. And then like five days later they filed chapter 11. I mean, it was basically that fast. What did you, so how many exchanges are doing that?
[00:34:47] Mark Goodwin: How many other people are messing around with stable coins are fudging their books and thinking they can kind of get away with it when, you know, we have cryptographic proof that this is how much cir, you know, USDC, they have, this is how much BUSD they have. So, interesting times for sure.
[00:35:02] Preston Pysh: There was a really strange event that happened right before all this happened that Sam’s company blew up.
[00:35:09] Preston Pysh: The name is Nikolai Munchkin, I think is the name. Tell us who this guy is, what happened and why he may be important.
[00:35:20] Mark Goodwin: So Nikolai, again, back to Stablecoin, a stablecoin innovator, mostly sort of in the, the Ethereum ecosystem. But he was the, I believe the co-founder, if not the founder, it’s a Dow. So obviously I’m sure there were multiple founders, but of Maker Dow, which was one of the bigger DAOs, and they were a big part of the, they had a stablecoin, I believe it was d a i die algorithmic stablecoin.
[00:35:45] Mark Goodwin: That was, you know, billions of dollars again, in sort of this alternative take on, on this new type of bearer instrument, this like digital dollar, this is quote unquote stablecoin. They had actually created a, a pretty robust system with some users. And again, you know, this is all, it’s very away from Bitcoin.
[00:36:05] Mark Goodwin: And how much of this is decentralization theater? What’s hard exactly to say? But this sort of prominent cryptographer and stablecoin innovator. And he had come up and basically posted and said that there were government intelligence agencies that had strict him and his girlfriend had set him up and his ex-girlfriend was a spy working for this US intelligence and Israeli intelligence.
[00:36:26] Mark Goodwin: And he basically posted and said, Hey, these guys are after me, they’re going to kill me. And around the exact same time that that happened, two really important things happened. And one was that Maker Dow as an entity had a vote to stake billions of dollars of USDC, which was part of their stablecoin situation with Coinbase.
[00:36:47] Mark Goodwin: So basically put, you know, $2 billion or so into Coinbase as coffers, which was voted on as sort of a community proposal. Meanwhile, he’s tweeting about these intelligence operations sort of closing in on him, and then he was found on the beach, sort of washed up with all of his clothes on, and he had apparently gone for a swim with all of his clothes on and, and then passed away, raises a ton of flags again in this sort of this Caribbean aisle, this stablecoin coalition.
[00:37:17] Mark Goodwin: So I think a lot of people got really kind of spooked out by that. And they were thinking maybe that there is, again, this is sort of a, a hint or an inkling at this bigger picture, this hidden hand of these people that US dollar is a really important instrument and it’s really important for the preservation of, of the US government and of a lot of these.
[00:37:36] Mark Goodwin: Again, this dollar coalition. So we see someone that actually created a product that sort of took away some of these special privileges from the Federal Reserve, from Congress, and then you know, winds up dead on the beach and billions of dollars worth of this community that he was a part of, decides to completely give up any sort of decentralization and literally just split their billions of dollars into Coinbase.
[00:37:59] Mark Goodwin: I think that raised a lot of spider senses on a, on a lot of folks out there. Just kind of looking in at the situation knowing that there were bad actors and just seeing this, like, and again, who knows?
[00:38:09] Preston Pysh: I mean, I don’t know this guy, he was down on the, he was down on The Bahamas and I think it was, what, two days before he died.
[00:38:16] Preston Pysh: This was the tweet that he sent out. Intelligence agencies and Pedo Elite are running some kind of sex trafficking, entrapment, blackmail ring out of Puerto Rico and the Caribbean islands. They’re going to frame me with a laptop planning by my ex-girlfriend who was a spy. They will torture me to death.
[00:38:33] Preston Pysh: And that’s the end of the tweet. I don’t know if that was his last tweet, but it happened two days before. I think it was two days before he died.
[00:38:40] Mark Goodwin: You know, for someone who I very much so understand there’s a lot of evil in this world. I think the world’s great. I love humans, but I know there’s a lot of nasty, perverse economic incentives that have been going on for years and years and years and years.
[00:38:53] Mark Goodwin: That’s much bigger than me. But when you see something like that, it definitely does. It’s very concerning. All while this is going on and we’re seeing, you know, more public facing sort of psychological operations of destroying public trust and cryptocurrency. And then we’re also seeing, you know, okay, this is, that’s some evidence that there’s something really disturbing going on here and that maybe this dollar coalition is violent.
[00:39:18] Mark Goodwin: Maybe there is a conspiracy here in the literal sense of you know, hurting people and killing people and spying on people. And obviously there’s an insinuation there of some sort of sexual abuse. I don’t know what that, how that necessarily plays in, but this is a hint at sort of this bigger coalition that may be behind some of the, the more perverse actions of this regulatory regime.
[00:39:41] Mark Goodwin: It’s really scary. It’s really disturbing. Obviously I, you know, my heart breaks for his family, but it seems like he was clearly going through a lot. I don’t know how much of, it was hard to say what’s rooted in reality and what’s not. Mm-hmm. As you know, just being so far away from all this, You know, we know a lot about what goes on.
[00:39:57] Mark Goodwin: It’s another data point. Yeah. Yeah. We know a lot about what goes on just right over there in the, in the Caribbean islands, whether it’s through the Epstein, Maxwell, little St. James Island. We know that there’s some stuff that hits some of those boxes that Nikolai was talking about, unfortunately, right there in that area.
[00:40:15] Mark Goodwin: There’s a big, we have a lot of just offshore Tom Foolery going on. We know about that. So when we get a data point like this, it’s definitely it’s concerning for sure. And that’s why, you know, we included it in talking about the story. Not that we want to insinuate, you know, that Sam is working for intelligence agencies, or Sam is doing any sort of this direct, you know, abuse.
[00:40:36] Mark Goodwin: Obviously we don’t have any evidence of that. There’s nothing that we couldn’t possibly say. . But when you’re trying to piece together understanding that something bigger than what we really know on the surface is going on and you see something like that happen, it’s really hard to kind of look at this as, as a coincidence all the time.
[00:40:52] Mark Goodwin: There’s just too many coincidences that happened here in the span of kind of, this story sort of takes place really over kind of like three months and that happened very, very prominently in that. So yeah, it is sort of disturbing.
[00:41:05] Preston Pysh: Mark, let’s talk about OFAC compliance and ETH and how, yeah, this relates to stable coins because you keep bringing up the Stablecoin Coalition idea and I think that it’s really important for people to wrap their head around 70% of validation happening on E is OFAC compliant and it’s exchanges that are basically the ones doing all this validation.
[00:41:30] Preston Pysh: Maybe talk about some of the more recent news that that’s come out with respect to the SEC and and how they’re treating some of these exchanges, but give people a big overview of some of those ideas.
[00:41:43] Mark Goodwin: Yeah, totally. I think stablecoin are sort of the endgame of how the US dollar system wants to see the digital currency revolution sort of take place.
[00:41:55] Mark Goodwin: I just finished writing a book called The Bitcoin Dollar, and it talks a lot about, the first half of the book is really about the history of kind of the modern dollar system, talking about some of these instances of cent coordinated central banking, whether that’s the Plaza Accord, Brenton Woods, a couple of these other things.
[00:42:14] Mark Goodwin: We’re beginning to see kind of how interest rates run things, how the dollar system is this reserve currency, how there’s very clearly an attack from non-dollar fiat coalitions, you know, against the US dollar reserve currency status. Bitcoin in many ways was obviously created directly as a reaction to the great financial crisis right there in the Genesis block.
[00:42:34] Mark Goodwin: You know, there’s the Chancellor on the brink inscription there. To me, stablecoin are playing this role where the US dollar system is again trying to connect itself to an energy commodity. In this case it would be Bitcoin. My thesis is sort of that in, in March of 2020, that was sort of when the petro dollar died and when the, the US dollar system sort of moved to this Bitcoin dollar system.
[00:43:00] Mark Goodwin: We want to be able to print money. We want to be able to dilute these inflationary effects from monetary inflation, like increasingly the amount of units. So how do we do it? We tie it to an ever demanded energy system that we basically force a monopoly for people to have to go through the US dollar to, to be able to get access to this commodity.
[00:43:19] Mark Goodwin: Petro dollar was obviously that system before. You know, you see us go off the gold standard in the seventies with the Nixon shock, and then we spend the next three decades, you know, just mucking around in the Middle East and creating this petro dollar system. So my argument is that sort of in 2020, we pull out of Afghanistan, we revert to a new energy system, a new pegging, where we’ve created basically a monopoly.
[00:43:45] Mark Goodwin: Certainly in the high 90 percentage of all Bitcoin pairings are done in US dollars. Now you want to buy Bitcoin, you basically gotta buy dollars first. Again, the petro dollar wasn’t a monopoly a hundred percent in that same way. Neither is this, but you know, the lions share. The vast majority of Bitcoin trading pairs are US dollar denominated.
[00:44:06] Mark Goodwin: And then we’re seeing, you know, like Cash App and Strike and some of these bigger kind of institutional Lightning players. I think Strike just came out yesterday with the new API for sending dollars on, on the Bitcoin network. There’s obviously a huge incentive for US Dollar system to get as many users as possible.
[00:44:23] Mark Goodwin: They love stablecoin. That’s sort of my argument. I don’t see Tether and circle as competitors to the Fed as much as potentially partners in this coalition. I think Stablecoin have a huge role to play in sort of Bitcoin’s future and then us as kind of sovereign individuals figuring out how to sort of navigate this digital world.
[00:44:44] Mark Goodwin: So to me, I don’t think stablecoin are going away at all. Obviously the SEC is is beginning to sort of King make and so that’s kind of where the situation that I think we’re in right now is obviously in regards to the Ethereum situation, which was kind of the point of, of the question. We saw a massive swell around the same time, 2020 to 2022 of stablecoin on Ethereum.
[00:45:08] Mark Goodwin: Huge swell. And so what actually kind of happened there was sort of this backdoor co-option where the US dollar system kind of drank Ethereum’s milkshake and actually created a, a situation where the, the lion share of the wealth on the system was actually in the form of these stablecoin. And so what that really did was it sort of took away the lever of these decentralized agents within the Ethereum system from really being able to break out of the US regulatory regime.
[00:45:38] Mark Goodwin: Clearly, the majority of e validators are based in the United States. The regulatory regime has said as. and by creating, you know, a hundred billion dollars worth of stablecoin on Ethereum, you sort of you’ve put the validators in sort of this standoff where it’s like, Hey, if you want to try to slash people out, you want to try to fork off and, and get rid of some of this OAC compliant heavy portions of stake on the system.
[00:46:03] Mark Goodwin: You no longer have that lever. Because if you try to fork away from USDC, you try to fork away from tether, you’re leaving 50 billion worth of value. That’s a non-native asset that they can choose to blacklist and censor from the, hey, let’s call it team good guys. Team good guys want to fork away from Ethereum.
[00:46:22] Mark Goodwin: They no longer can because there’s this like financial difficulty bomb that’s, that’s basically being upheld by again, a hundred billion worth of stablecoin. We’re seeing all the people that want to participate in the Ethereum system have to go along with O F A C and yeah, we’re seeing 70 plus percent of, of blocks coming out on the the Ethereum network.
[00:46:43] Mark Goodwin: It’s caption being totally aligned with this blacklist. And so we’re seeing, again, this is sort of a, it’s a decentralization in, in kind of name only. And these guys really lost the ability to have any sort of power over the US regulatory regime that’s coming, and that’s here by allowing the US dollar system to create such a a stash basically on the Ethereum system.
[00:47:05] Preston Pysh: I, I kind of went there, there, and I, I think what, what, I’m just trying for people that aren’t intimately familiar with the technology or even what Ethereum does and all that kind of stuff, I, I think in the essence it’s just there’s regulatory capture now at this point. And if the US government doesn’t like the way that one of these large stablecoin operators are functioning or what they’re doing, they kind of have a huge amount of influence through the exchanges that are providing the staking service to get what they want.
[00:47:36] Preston Pysh: This whole movement, I think this is so important for people. This entire movement is about decentralization of money away from state, the whole thing. And again, Bitcoin seems to be the only thing on the planet that has achieved that. When we look at every other crypto token that’s ever been issued, there’s centralization forces, there’s regulatory capture, there’s state capture that’s taking place, and I agree with you, these stable coins aren’t going anywhere.
[00:48:03] Preston Pysh: I think what’s happening, and I’m curious if you would agree with this, is who’s ever pulling these strings? I think Wall Street banks are pissed that they have been left in the dust and all of this snuck up on them extremely fast. And I think that they’re trying to get back in the game with a lot of the antics that are being played politically and behind the scenes.
[00:48:25] Preston Pysh: And they’re looking at a lot of these founders, call it Brian Armstrong or any of these young tech people that we’re leading these billion dollar enterprises, these exchanges. And they’re saying, these guys aren’t going to be in charge. We’re taking over here and we’re going to do whatever we can in order to throw these people in prison, make them look like fools.
[00:48:45] Preston Pysh: Just take ’em to the woodshed through the means and the financial means that they have at their disposal and all these underhanded games that that are played on Wall Street. And I think that they’re taking full maximum luxury to put all these tech founders that, that were maybe here from the beginning, right, in their place.
[00:49:03] Preston Pysh: And I think that’s what’s playing out right.
[00:49:06] Mark Goodwin: A hundred percent. I mean, it’s money creation or credit creation by these big private banks. You know, again, should they really even be called private when we bailed them out with taxpayer money? You know, a decade? Not really. Why is Bank of America Merrill Lynch, Wells Fargo?
[00:49:21] Mark Goodwin: Why? Why are these huge institutions going to let these young tech upstarts be able to issue their own money in a high rate environment where, hey, the US needs people to buy TBIs. Who’s the best person to buy TBIs and create this money? It’s stablecoin issuers. So what does that mean? Are we going to see tether and circle become trillion dollar companies?
[00:49:41] Mark Goodwin: Or are we going to see Bank of America buy up half a trillion and T-bills and and start making their own, printing their own money basically? And again, I’m using printing loose. But you know, that’s such a privilege of these sort of defacto shareholders of the Fed and these JP Morgans and these institutions that have done the game better than the Sam Bankman Frees and have have purchased political power over the years.
[00:50:06] Preston Pysh: And there’s no better way for them to relinquish control and to have that ownership popped out of their hands than to get some type of political legal reading on what they’ve done wrong with some type of massive billion dollar fine that they can’t afford to pay. And then all of a sudden JP Morgan comes to the rescue and says, oh, well we’ll buy that.
[00:50:27] Preston Pysh: We’ll solve that for you, but you gotta give up control and you gotta give up equity of ownership of Stablecoin X, Y, Z. I think that’s the game that’s being played.
[00:50:36] Mark Goodwin: I absolutely do. I think the US government ultimately needs stablecoin issuers to be happy and healthy and spreading that greenback across the world.
[00:50:48] Mark Goodwin: They need that. They really want it, and they need to offset decade high inflation and then do that as you increase the users of the system and you have as many people using the dollar as possible. I agree with you. It’s like, Hey, okay, let’s take the power away from these decentralized algorithmic attempts.
[00:51:05] Mark Goodwin: Let’s destroy Luna. Let’s destroy Maker Dow. Let’s destroy some of these algorithmic attempts at stablecoin, which again, I think have severe technical flaws. Regardless, I have a lot of issue of this idea of a decentralized stablecoin is sort of ridiculous. It’s like, no, it doesn’t matter how decentralized maybe the issuance is, or maybe the peer-to-peer transfers are.
[00:51:26] Mark Goodwin: It’s still at the whim of 12 Fed governors and, and whatever, right? It’s like, it’s obviously not a decentralized, stable peg. It’s connected to this huge, huge industry and this huge, huge institution of the US dollar, which is obviously pegged to a lot of other things, C P I and all this other stuff. So I agree with you.
[00:51:43] Mark Goodwin: I mean, people need to buy T-bills. The government needs people to buy as much bonds as possible and they want as many users using the dollar. And that to me is just like stablecoin slides right into that little nook.
[00:51:55] Preston Pysh: It’s the only buyer, it’s the only thing that could possibly soak up all of this disaster is a stablecoin.
[00:52:02] Preston Pysh: It’s the only thing that can, that can soak up the treasury markets sell off that we expect in the coming five years.
[00:52:07] Mark Goodwin: Yeah, I mean it’s hard to say, you know, the, the, you know, some of the auditing stuff from some of these bigger, stable coins, you know, maybe there’s some discrepancy there. But they have been in mass, you know, one of the larger buyers of t-bills, short duration bills and I don’t think that’s going to stop.
[00:52:21] Mark Goodwin: If anything, I think once the king makers are sort of made, I think we will see that explode. And when we do see that explode. I think we will see a great appreciation in Bitcoin as well. I think that they are, they’re very symbiotic, I think.
[00:52:35] Preston Pysh: Yes. Mark, let me ask you this. So when we look at the government issuing a central bank digital currency that’s coming from the government versus a private entity that is basically creating a shell that becomes the buyer of last resort, of all the treasuries that that are going to continue to sell off because they can’t get inflation under control and they’re in a debts spiral.
[00:52:57] Preston Pysh: It’s almost like the US government, I can’t speak about all the other G seven countries. It’s almost like they have to have the private entity in place from a legal standpoint as opposed to issuing CBDC.
[00:53:11] Mark Goodwin: I completely agree with you. I actually think the US dollar will be one of the last. If ever countries or fiat systems to actually have a directly government issued CBDC versus basically every other currency.
[00:53:27] Mark Goodwin: I think we’ll see cbd, CS very quickly. Government issued money as sort of a relation to, okay, how do we react to the Bitcoin, the dollar reification of Bitcoin and the dollarization of the world. Mm-hmm. , mm-hmm. and ization of the world. How do we react to that? Let’s print money, let’s create a, a credit scenario where we can create M one and let’s send this out and, and get as many people using our fiat and buy as much Bitcoin as possible.
[00:53:51] Mark Goodwin: I absolutely see that happening. The dollar system though, it’s a little more interesting. It’s like that, that’s never really been the way it’s worked. It’s always sort of flown through these private banks and these big institutional banks. And again, it’s something that we’ve seen the US system do a lot is blur the lines of private and public companies.
[00:54:11] Mark Goodwin: And they generally hide behind private companies that they subsidized with huge government contracts with bailouts. We see these huge banks that are too big to fail. They’re private companies. Well, and these are the one, we issue this points, but then we see it kind of like a, you know, like a Facebook or, or Twitter or some of these big platforms that have had tons of government contract, government meddling in, in them, but they hide behind being this a private company.
[00:54:40] Mark Goodwin: But they’re really intertwined with the US government and with the US government contracts. And so we’ve blurred this line between private and public and I, I don’t see that changing. I think that’s such a huge right to reserve is the right to refuse service to anyone that they want in blacklist.
[00:54:57] Mark Goodwin: Anyone that they want as a private company, they reserve those rights versus if there was a direct issued CBDC, I think they’d actually probably constitutionally have a lot less of rights. I agree with you, man. I, I see the CBDC from the US standpoint coming far later, if at all. And I definitely see the private stablecoin being a huge part of the story.
[00:55:18] Mark Goodwin: And I think we’ll actually see that this year, man. I mean, the digital dollar, we’re in that pilot right now, BNY Mellon, JP Morgan. We’re, we’re seeing people present these products and projects to the treasury, to the Fed, to the Biden administration. You know, I think we will see a digital dollar, but in the form of a private entity like a JP Morgan or a BNY Mellon.
[00:55:40] Mark Goodwin: And I think that’s the way they’d rather it. I agree.
[00:55:43] Preston Pysh: I think the very last point there is really important from an incentive standpoint, they’re highly incentivized to want to take this on, to create revenues for themselves as opposed to not doing that. And the government itself is basically becoming the buyer of last resort for all the treasuries.
[00:56:02] Preston Pysh: So I think that when you look at it just from a, from a profit standpoint, they’re highly incentivized to lobby on behalf of them taking this over, like you said, the pilot program. This started on November 15th just four days before the SBF tsunami crash to shore. This is from your writing here.
[00:56:19] Preston Pysh: BNY Mellon, as well as a dozen others or so other bank institutions announced the start of a 12 week digital dollar pilot program with the Federal Reserve Bank of New York. We’re in that process. We’re just getting ready to come out of it. And boy, thanks. Keep getting more interesting by the minute around here.
[00:56:40] Mark Goodwin: Crazy. And to me it’s really all the same story, right? I mean, I think we, we, this is the showdown, sort of this currency, US dollar currency versus, I mean, I guess bitcoin’s a commodity. It’s kind of hard to figure out what it is, but you know, we’re seeing this big economic story play out and stablecoin in in the US dollar versus, versus Bitcoin and maybe not even versus maybe it’s totally within the, I mean, I would argue it’s within the US dollar’s.
[00:57:06] Mark Goodwin: Best interest in regards to retaining net purchasing power to tie itself to Bitcoin. You know, we need, our debt service has gone crazy. I mean, we’re seeing it, we’re about to smack into the debt limit again, that old story happening again. And it’s like the US dollar system has to make some choices and, and how is it going to pay this huge debt service that’s just spiraling out of control?
[00:57:28] Mark Goodwin: And it’s like, well, you gotta, you’re going to have to print. You know, you’re going to have to create credit to, to, to pay off this debt. How are you going to do it? And to me it’s like, I really see the only people that can meet that credit demand is stablecoin issuers. And I think the world is willing to take on the, the stablecoin and use them.
[00:57:45] Mark Goodwin: I think there are US dollar users all across the world. I think we’re going to see it in this, in, I really, I think this year, man, I really, I really think we will and definitely into the happening cycle next year. You know, it’s going to be hard for them to continue to raise rates and I think they’re going to have to issue a lot of money.
[00:58:01] Mark Goodwin: So again, I think Bitcoin can always go lower ready and take long. Think always, but eventually, you know, that’s going to have to happen. They’re going to have to deal with this 31 trillion of debt and they can’t exactly just do a Paul Volker and, and make rates 10% because, you know, our debt to G D P ratio is over a hundred.
[00:58:21] Mark Goodwin: Right. Interesting times for sure. It’s, it’s, it’s going to get weird. It’s going to get weird. I like that.
[00:58:26] Preston Pysh: Yeah. I agree with you.
[00:58:28] Mark Goodwin: And I’m very bullish on Bitcoin for a lot of these reasons, because it’s, you know, this is this demand elastic database that is actually arguably, literally designed for this exact moment from the Fiat as a political lever and creating kind of an ideal neutral money where we can relate our inflationary targeting to this sort of neutral database commodity.
[00:58:51] Mark Goodwin: It’s really fun. I mean, Bitcoin is definitely a speed run of monetary policy and macro and political history and all. It’s fun to like, well we’ve been in this space for years and big Austrian economics fans and you know, kind of looking at the dollar system and how it’s all going to play out. And now we’re actually seeing, yeah, these, these mythical entities like making their move.
[00:59:12] Mark Goodwin: You know, it’s like the dollar system. We all know that it exists, the Fed and all this, but it’s like, who’s really the ones being the market makers of the global economy And now we’re kind of, maybe we don’t know who they are, what their names are or whatever, but we’re seeing the coalition, if you just sort of connect all these dots you’re seeing, you’re seeing them make their moves right now, it’s a fun time to be a coiner, you know, if you’re really nerdy about all that stuff.
[00:59:35] Mark Goodwin: You know, because it’s like, you can see the ripples in the, in the water now and just be like, oh my God, look, here we go. There’s another move. There’s, it’s real.
[00:59:43] Preston Pysh: Well, mark, I can’t thank you enough for making time to come on and talk about this amazing article. If people, I believe it’s, if we’re in the airport, where can people find the, the hard print of this, and I know it’s online as well, but give people a handoff.
[00:59:58] Mark Goodwin: Totally, man. You can get it at Barnes and Noble, participating Barnes and Noble, mostly, you know, all across North America. You can find it at some airports. Some other news stands here or there. We also have some international shipping now, so we have a, an EU distributor. But yeah, you can definitely find the print magazine at store.bitcoinmagazine.com.
[01:00:17] Mark Goodwin: Tons of great writing in there. I did this piece, I did the research for this piece, and then I co-wrote it with our managing editor, Peter Chawaga. So he, he was a huge part of that. Obviously Joe Rogers is our GM. Rizzo is our editor-in-chief. Mike Germano, our publisher, and then our amazing designer, AB and that’s kind of our core team there, but you can definitely find it on bitcoinmagazine.com at our store.
[01:00:40] Preston Pysh: How about your Twitter handle? We’ll have that in the show notes too. Give a people a handoff to your Twitter handle.
[01:00:45] Mark Goodwin: Follow me at @markgoodw_in. So Mark Goodwin with an underscore under the between the W and the I and then follow us at @bitcoinmagazine and at the @thebtcmag and that’s our sort of print focused one.
[01:00:59] Mark Goodwin: Yeah, man, it’s a lot of fun. We definitely take it as a great responsibility to serve our community. We love the Bitcoin space. We have like 300 plus contributors that write for us, that have written for us online. You know, a ton that have written for us in the print mag. We’re a very free speech technology platform.
[01:01:15] Mark Goodwin: If you got an idea, send us an email email@example.com. We love Bitcoiners, we want to take care of you guys. You guys have taken care of us so much. So yeah, definitely check out Bitcoin Magazine and yeah, Preston, thank you so much man. It was an absolute pleasure to be here talking to you. I love the podcast, the investor podcast.
[01:01:31] Mark Goodwin: It’s amazing. Absolutely Pleasure man.
[01:01:34] Preston Pysh: Thank you so much for making time and joining us, Mark.
[01:01:38] Mark Goodwin: Cheers brother. Thanks for having me.
[01:01:40] Preston Pysh: If you guys enjoyed this conversation, be sure to follow the show on whatever podcast application you use. Just search for, We Study Billionaires. The Bitcoin specific shows come out every Wednesday, and I’d love to have you as a regular listener if you enjoyed the show or you learned something new or you found it valuable.
[01:01:57] Preston Pysh: If you can leave a review, we would really appreciate that and it’s something that helps others find the interview in the search algorithm. So anything you can do to help out with a review, we would just greatly appreciate. And with that, thanks for listening and I’ll catch you again next week.
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