Jeff Booth is a visionary leader, technology entrepreneur and best-selling author of The Price of Tomorrow โ Why Deflation is Key to an Abundant Future. With his expertise in technology, system thinking and design, he is at the forefront of a transition from an economic system built for the past, and one built for the future. Jeff has been featured in Forbes, TechCrunch, Inc.com, The Globe and Mail, BNN, Fast Company, Entrepreneur, Bloomberg, TIME, and The Wall Street Journal. In 2015, he was named BC Technology Industry Associationโs (BCTIA) Person of the Year, and in 2016 Goldman Sachs named him among its 100 Most Intriguing Entrepreneurs.He is a Founding Partner of ego death capital, Co-Founder of addy and NocNoc. He has been a Young Presidents Organization member since 2004 and contributes time as a Founding Fellow at the Creative Destruction Lab. Jeff currently sits on the boards of Core Scientific, Scoop Solar, Fedi and Breez. Read Jeff’s article Finding Signal In A Noisy World
Jeff Booth, Investor ego death capital
Jeff Booth is a visionary leader, technology entrepreneur and best-selling author of The Price of Tomorrow โ Why Deflation is Key to an Abundant Future. With his expertise in technology, system thinking and design, he is at the forefront of a transition from an economic system built for the past, and one built for the future. Jeff has been featured in Forbes, TechCrunch, Inc.com, The Globe and Mail, BNN, Fast Company, Entrepreneur, Bloomberg, TIME, and The Wall Street Journal. In 2015, he was named BC Technology Industry Associationโs (BCTIA) Person of the Year, and in 2016 Goldman Sachs named him among its 100 Most Intriguing Entrepreneurs.He is a Founding Partner of ego death capital, Co-Founder of addy and NocNoc. He has been a Young Presidents Organization member since 2004 and contributes time as a Founding Fellow at the Creative Destruction Lab. Jeff currently sits on the boards of Core Scientific, Scoop Solar, Fedi and Breez. Read Jeff’s article Finding Signal In A Noisy World
Stablecoins
Jeff: I think first of all, you have to think about what a stablecoin is, right? What and where does it gain its stability? A stablecoin is just a peg to the US dollar! It’s a US dollar derivative, and it gains its stability by losing money against Bitcoin, right? So you could actually call it a guaranteed loss coin, because it’s losing value at the exact same rate as the US dollar to Bitcoin. So it’s still an inflationary system. It’s pegged to the U.S. dollar and they’ll buy treasuries or other instruments to keep it stable against the U.S. dollar.
Bitcoin is its own currency! Why do you really need to have it related to a fiat currency? Does it just make it safer?
Jeff: No, actually it’s more dangerous. Like I say, it’s a guaranteed loss coin, right? But the perception, as you know my thesis, is that Bitcoin, as long as it stays decentralized and secure, you have an open, decentralized, secure protocol bounded by energy. And that protocol, what we call Bitcoin, is repricing the entire world. And from it, all prices will fall forever. So you don’t use a currency to measure another currency. You use a currency to measure things. But what I just described essentially, is the first global free market that has ever existed and Bitcoin being outside the system that we know, imposing new constraints which force the free market. It means all prices fall. But most people aren’t measuring Bitcoin like that. Most people are measuring Bitcoin from the system they’ve always known. So from that system, it would appear that the U.S. dollar was a better fiat currency than other currencies. And around the world, people would think, oh, I want the U.S. dollars rather than my Nigerian ones etc so it would make sense that people would be almost lulled into a false sense of security on a stable coin, especially if you called it that it would mirror the dollar! Because they were measuring the system change from the system that was being changed.
But the reality now is that the US dollar actually is falling, and it has been falling for quite a few weeks?
Jeff: Yeah, the short term noise of all of this is, it’s the US dollar in fiat currencies. The US dollar is still the best currency because there are a whole bunch of weak ones. But they’re all losing value. The US dollar over the last 100 years has lost 99% of its value. So it’s just that others have lost more value. So everybody’s playing this relative to the U.S. game. While all currencies, all fiat currencies are losing value. And that’s why it feels safer. And it’s a relative value that people are confused about, whereas Bitcoin is repricing that entire system. So it would be, under those circumstances, really easy to see people get fooled or believe a stable coin was safer than Bitcoin because it’s a confusing topic.
The other issue that I just keep reading about is Michael Saylor’s Bitcoin purchases, which are putting himself and his company Strategy into incredible risk apparently? Mainly because he’s taking out loans to buy Bitcoin. As you know I love Bitcoin and I’ve been a follower since 2008 and supported other FinTech startups. But why would you put yourself in the red like that? I know one investor, who I don’t have much respect for, said that it’s people that don’t have business models that have to do this. What is your overview on this?
Jeff: So with Saylor specifically and and what he’s done is essentially he’s doing fiat attack using leverage in a system that must debase the currency. He’s taking those loans and he’s converting it to the heart of the asset round. And so he’s engineering, he’s financial engineering as a way to get more Bitcoin on the balance sheet, which is actually incredibly brilliant! And In fact, all of the different securities that he offers allows different players who believe that bonds are safe because they haven’t done the work on Bitcoin to buy his stock. So he’s offered a whole bunch of different instruments to down up and down the capital stock to be able to drive money into his company and buy their Bitcoin. I suspect that strategy over the long term will play out exceptionally well then!
And what about all the countries that are starting now to have a reserve of Bitcoin? I think that’s sort of fabulous compared to 2008 when it was first discovered. Am I correct? Is it a great thing for countries to have a base of Bitcoin?
Jeff: So my personal view on this, and I think you know this, is this is an open monetary network that any single person on the planet can move to. And most people are stuck in a jail cell yelling at the jailers! When, they can move their time and energy into Bitcoin. They don’t have to wait for their country to do so. They don’t have to wait for their country to say yes! They can just move. But it would make the same sense as it does personally. Essentially, my purchasing power goes up forever rather than go down forever. It would make the same calculus personally as it would for a corporation, as it would for a country. So countries that do this earlier, their citizens will be wealthier because they’ll have more to be able to spend on citizens than the countries that go later. But this is, like I said, this is imposing upon, and you know this discipline across everyone and everything, And some nations are going faster than others, some are going slower, and that means their citizens will likely suffer or do well to any degree that it looks like that.
