How Bitcoin Really Works and Why FDR Made Owning Gold Illegal in 1933

Reid Tymcio [00:00:00] You can think of the blockchain and Bitcoin as just this list of accounts and account balances. You know, it's two columns, right? It goes all the way down and all of the money, you know, that exists. It's on that sheet in those two columns, and everybody in the Bitcoin network has a copy of that sheet. This is Jordan Gaul, a senior communications associate living in Minneapolis, Minnesota, and you are listening to the Van Scro podcast.

Vance Crowe [00:00:29] Welcome back to the podcast. I'm glad you're here. Today's interview is with my good friend Reid Tymcio. He is a fascinating character that I met at a Bitcoin meetup many, many years ago. You know, you go to things that you don't know who you're gonna meet or what's gonna happen. And for me, meeting people that I didn't anticipate has been one of the things that's brought so much richness to my life. And I have for well over a year been poking and pestering Reed to come on the podcast. He finally agreed to it and we decided that we would talk about cryptocurrencies. What you will find out is that Reed is an exceptional storyteller and really understands the back end of things like Bitcoin and Ethereum on a level that you'd have to, to be able to explain it to other people. So we have a really deep conversation and I think you'll really enjoy it. And if you wait all the way to the end, you will hear Reed's storytelling ability when he talks about the time when it became illegal for us citizens to own gold. That should give you an idea of just how great of a storyteller re is. I'm really glad you're here, and if you like meeting people like Reed, you might find it interesting to join the Articulate Ventures Network. This is a group that is growing. We are definitely more than I ever thought we could be. People get in there, it's a confidential group where you can share thoughts and ideas, practice exploring concepts that you're not so familiar with.

Vance Crowe [00:02:00] So like today, we are going to hold a speaking gym where people show up and they get a chance to practice a speech and then get feedback from their peers and from myself. And then we do an experience where we ask questions that you don't anticipate, and then you get to try and answer a question and then get feedback on how did you do by answering this question off the cuff. These experiences, along with the book club and movie night, are all things that the community has decided they want to do. And so I'm helping facilitate that. And if you're interested in joining, go to Network, Articulate Ventures, that's network, Articulate Ventures, and sign up to become a member of this group. Alright,

Reid Tymcio [00:02:41] Without

Vance Crowe [00:02:41] Further ado here, we're going to my man, Reed Reid Tymcio, welcome to the podcast.

Reid Tymcio [00:02:49] How's it going?

Vance Crowe [00:02:51] You are one of the most interesting characters I've met in my entire life. We met, I don't know how many years ago, seven years ago or so at a Bitcoin meetup. And while many, many other people have fallen away because the space has become complex, it's not new and fresh and exciting in the news anymore, you have hung with it and have become a financial innovator of sorts. So I thought I would have you come on and give the best shake on cryptographic currencies that, that, that I can do. So welcome to the podcast, man. I'm really excited to talk with you.

Reid Tymcio [00:03:24] I appreciate that, fans, I'm happy to be here.

Vance Crowe [00:03:27] So you're right now teaching a course at the University of South Carolina on financial innovation. How in the world did that come about and what is it that you teach kids about financial innovation?

Reid Tymcio [00:03:38] Well, so that's actually an interesting question. The story of kind of where it came from, and it actually goes back to when we met Vance, you know, 2013, this is Bitcoins at like a couple hundred bucks. This is before it exploded the first time. And I was working at St. Louis, at Wells Fargo Advisors and in, in the headquarters. And so I was an intro financial advisor and one of my clients that I was just kind of helping with his bond portfolio here, and there was an executive at the firm. And so he became, you know, a good friend of mine and kind of my mentor and we're talking, and while Bitcoin is in the headlines and it's like a popular thing, and he happened to be the, the chief credit and risk officer. And so he says, Reid, you know, why don't you, you know, do the best you can and, you know, do some research and give me a report on, you know, what is the risk, you know, that Bitcoin poses to our business, right? And so that was when I, you know, first aimed my brain, you know, at Bitcoin in a big way because, you know, I had, not only is my client, but you know, this, this chief officer at a, you know, big company, big bank, you know, this is a big opportunity for me. So, you know, I tried really hard and poured through, you know, document after document after document until you know I could teach it, right? Because you don't understand it until you can teach it. And so that's where it all began. And so years and years later, that mentor of mine, Dr. Jimmy Lens, he's actually started this course at the University of South Carolina.

Reid Tymcio [00:05:13] He has his DBA, so he, he teaches business school at the graduate level. And I kind of helped him, you know, since we have always had this, you know, relationship where, you know, we talk about the technology and we kind of learned about it together. You know, we've kind of developed a lot of the courses and a lot of the, you know, assignments together along the way.

Vance Crowe [00:05:32] So what do you think, one of the biggest challenges I have with Bitcoin, and I can remember when this was first getting started, that people would just kind of roll their eyes and talk about it as fake money or all of the complaints that people have. But now that you've been teaching it, what do you think is the biggest hurdle to people getting this kind of fascination or sense of awe? Because I think that's what really pulls people through. It is a complicated subject, but when you get to some level, some like peak on the understanding of crypto, then all of a sudden it's worth it to do the, the work to, to get through and understand it on a deeper level. But what's that big hurdle that people can't seem to get over?

Reid Tymcio [00:06:10] No. So this is really hard to describe what I'm, what I'm gonna try and describe, but this is like kind of how I thought about it when I, when I first did it. You know, if you're a normal person and you, and you read an article about something, you know, then you get to the technical part, right? And, you know, I was reading it pretty clearly, and I get to the technical part and I'm not really familiar with how this works, but I kind of get it. 'cause like I can see the context that it's in, so I just kind of read over that part and don't really understand it. Right? And I feel like everybody does that. And you know, the way that you understand hard technical things is you have to read through that like 10 times, you know, before you really get it. And I think what happens with Bitcoin is that most people think about it pretty hard. They get to the technical point, and then they kind of, they either do one of two things. They either say, oh, this is so complicated, you know, this is so hard. And over my head, you know, if I can't, this must be really smart, right? And, you know, I'm not gonna take the time to understand how it works, but it's really smart, I trust it. Right? That's not me, right? I'm the other guy. I'm the guy who says, I don't understand. Why can't I understand this? I'm gonna keep reading it. Why doesn't, why can't I understand why this makes sense? Right? Until I keep reading it and keep reading it. And so what makes me confident about Bitcoin is that, you know, I, I have done all the due diligence. I've read through all this stuff, and you know, I don't trust that guy when he says, you know, it's too hard for you to understand. Trust me, I don't trust him. Right? Because it really isn't hard to understand. And if somebody's trying to scare you and tell you you can't understand it, it's too technical.

Reid Tymcio [00:07:46] They're doing something, they're hiding the ball somewhere. They're lying to you, you know, they're taking advantage of, of your credulity and you know, that is a lot of the cryptocurrency spaces, people being taken advantage of who, who may not understand what they're investing in.

Vance Crowe [00:08:02] Yeah. For me it was, you know, I was kind of along for the interest and kind of the intrigue about it. And I remember sitting with our mutual friend, Rob Long, who goes by Plantables on Twitter and having him, I was like, all right, give it to me one more time. And he, and he gave this explanation where I started to understand how the, these words that you hear blockchain and wallet and like how, how encryption works. All of a sudden there was like a unifying force where I was like, oh, I have enough of it that I can understand it. And, and then that sent me on a wild path for I would say a couple of years investing in it. And, and I'm like a hardcore ler, like everything I've ever bought in Bitcoin, I just, I just hang on to, but for people that are sitting there right now thinking like, all right, give it to me one more time. What is your, you know, generalized description of Bitcoin so that people can get on the train and follow you into the deeper parts?

Reid Tymcio [00:09:03] Yeah, I mean, the, the very, very high level easiest if someone who doesn't know anything about it, right? Is that, you know, the Bitcoin in the blockchain are, are just a, a ledger in the sense that now this isn't right exact at all, but it's right enough that you can think of the blockchain and Bitcoin as just this list of accounts and account balances. You know, it's two columns, right? It goes all the way down and all of the money, you know, that exists, it's on that sheet in those two columns, and everybody in the Bitcoin network has a copy of that sheet, you know, so they all know who owns what. And whenever somebody wants to spend Bitcoin, they, they transfer from, you know, they erase out one little column and they write it in a different little column. And, and, and that's it. That's how it works, right? The real magic, you know, that's simple, right? The question is how, right? Like, like that is like the what is very simple, right? And then you say, well, how, right? And then we need to start going into the tech and, you know, and I think that what people find is the more they learn about it, it's that it's not so clear that you know, that this, that this works the way they say it does. You know, it's, there's a little bit more to it than, than you might, than you might, might expect. Yeah.

Vance Crowe [00:10:24] You have this sort of dunning Kruger effect where when you first start getting on, you're like, yes, I, I'm, I have this spike in my confidence on what I know. And eventually you hit a point where the more you learn, the more you're like, oh my God, I don't understand this. And you kind of plummet all the way down, just like any PhD student trying to study

Reid Tymcio [00:10:41] Anything,

Vance Crowe [00:10:41] Right? You start wondering like, will I ever hit the bottom? So talk about the, the how and why this has been a big enough how to, to make you be, you know, as, as integrated into the crypto world as you are.

Reid Tymcio [00:10:55] Yeah. So I guess the, I think the simplest way to explain it is, is how I explained it back in 2013 to my mentor, right? Because that was, you know, it was brand new at the time. And you know, it, that, that's how most people I guess thought about it, is that you, you think about the new system, something like a Bitcoin versus what we used to use or what most people use, which would be debit and credit cards, right? That you got your name on it, you got a number on it, you swipe the thing at the point of sale to buy something. And what used to happen, or what still happens at the point of sale is that, you know, there, there's not like a little bank inside the card reader machine, you know, it's, it sends a message on through the internet or through the phone lines or you know, whatever they, whatever they got, it sends a message to the bank and says, Hey, bank, does this guy have the money? You know, does he have the money? He says he has, and the bank says yes or no. And it sends that message back, and that's what takes like three or four or five seconds while you're swiping your cart, is you're waiting for that message to go come back, takes a couple seconds, you've been approved, and then, you know, you get to buy the thing and walk away. And so like, what, what made that happen? Why did that work? Right? It works because JP Morgan, or you know, any bank, let's say it's JP Morgan Chase, you know, big bank, my bank has this list, right? Where they have all their clients and they have all their money that their clients, you know, hone and all the outstanding checks that haven't settled yet that, you know, their clients have written that maybe, you know, they can't spend.

Reid Tymcio [00:12:29] And you know, they have all that, right? And so what ends up happening is that basically I'm trusting JP Morgan right? To, to get it right, right? I'm trusting this bank to have gotten it right, and they're regulated by the federal bank, you know, and so Bitcoin, the way, the way that would work is, let's, let's say that JP Morgan isn't, isn't even here anymore, right? That point of sale device that you swipe your card into, let's pretend like every device has a total list of all the money owned by everybody. Every single point of sale device everywhere has, has this list, right? You, you wouldn't need to send a message to anybody when you're, when you're checking out, you know, I don't have to check with JP Morgan to see if you've got money. You know, there's no three seconds, right? It just checks the list and sees that you have the money and boom, right? So who do I have to trust, right? I don't trust JP Morgan, but I am trusting this list. And that's the question. Well then why should I trust the list? And then that's where you get into, okay, well, I need to get into computer science and the hashing and the encryption and all the things that, you know, make it so that I can trust this list. And my point is, the real, my thesis, right, is that you, you, before you had to trust JP Morgan, you, you're not trusting anyone like that anymore, but you are trusting something, right? And, and that's the real thing that I think people don't understand about Bitcoin is that a lot of people, they get enamored with it.

Reid Tymcio [00:14:01] They think, I don't have to trust anyone anymore. You know, this is trustless currency. And really, you know, it's not that you don't have to trust the banks anymore, it's just that you're trusting someone else. Right? Now I'm trusting these miners who are processing transactions and doing these things, you know, so I've moved my trust from the banks to the minors. Is that better? Like, I don't know, Vance.

Vance Crowe [00:14:28] So I mean, then what is the use case? Why? Then if you have this system where it's a trust of a different thing, it's not JP Morgan or Wells or any of those, and now it's trusting miners, what, why even begin down this path, do you think?

Reid Tymcio [00:14:44] Why begin down, like the Bitcoin path, you mean? Yeah,

Vance Crowe [00:14:47] I mean, like, why would anybody, like, what, what is the use case that makes it so you have this gigantic system and people are pouring millions or billions of dollars into it?

Reid Tymcio [00:14:56] Absolutely. So here's the, here's my analogy for this. So everybody knows about mortgage backed security is causing the financial crisis, right? And so, bear with me for a second, this is gonna be a little bit of an example here. But the point is, is that I can, you know, a mortgage-backed security is say like, let's say a hundred mortgages and I pool into one product, and then I slice and dice that product, and I say, out of these a hundred mortgages, I make five different products. I make an A, A, B, a, C, a, D, and an E, right? And each of these products has a different risk, right? And so they have different prices, and basically that's, that's way, one way I can do it is I can take an asset like a mortgage, and I can slice and dice it and give some to this guy and some to that guy. It's kind of the same thing we do with companies, right? I have a company that has all these assets. It's either financed by debt or it's financed by stockholders, by equity, right? It's that the idea is that the trust, no matter what you do, like you can or, or say when in the mortgage backed security, the risk, right? Slicing and dicing them in A, B, C, and D and e isn't gonna change the underlying risk of the mortgages, right? It shouldn't matter how it's slice and diced shouldn't affect the quality of the mortgages. And so that's like a fundamental thing. In finance, we talk about how risk is fundamental. You can't get rid of it, right? All you can do is reallocate it, right?

Reid Tymcio [00:16:29] And so my argument and theory about Bitcoin is that trust is the same way. It's that, you know, you cannot get rid of trust, right? You need to have trust. The question is who are you going to trust? Who will you allocate your trust to, right? And so I can specifically say, JP Morgan Chase, I'm not gonna trust you. I'm only gonna trust people. You know, these miners who have done these very specific things, right? And so it's the same type of thing. It's that, you know, why Bitcoin? So are you Bitcoin, right? Yeah. It's kind

Vance Crowe [00:17:01] Of a challenge. Big point, like a challenge on the, the fractional reserve banking, right? Where, where, you know, a bank has a certain amount of money, but then if you, if, if you put money into that bank, and then that bank says, okay, we're gonna take your money and say that Vance has a hundred dollars in this account, but then we're gonna take 80 of those dollars and we're gonna loan them out to somebody. And most of that money that they loan out to stays at the bank. The person takes that loan and they put it back in the bank. So now they're counting $180 or on their bank sheet, and you can just go on and on and on. And the difference then, between the banking system that you're describing and blockchain is when you use a, a, we'll just say Bitcoin, you are not accepting the risk of fractional reserve banking. So it's not that you're able to take those out. Somebody has to have that money in a wallet for it to exchange, as opposed to the, the regular banking system where somehow they've magically made $80 in the fractional re reserve

Reid Tymcio [00:18:00] Banking. Yeah, it's, I I, I mean that's something that definitely needs to be talked about in difference, say, between those, those two systems. But the, I think the simplest, like, you know, elevator speech way of saying it is that, you know, say with financial products, when I slice and dice something into A, B, C, D, and E, the A is like a really not very risky, right? The e is like extremely risky. You, you, it yields 10 or 15%. The A is yielding 1%, right? And so the type of person who wants to take that risk, who only you know, who you know in a retiree, right? Who doesn't wanna have a lot of volatility in their holies, right? They're gonna take the A. And so the beauty of slicing and dicing this securitization is that I'm allowed to take the risk and give it to someone who wants to bear it, right? Someone who wants the risk, who you know, it's appropriate for it. The analogy then with trust is I'm taking the trust and giving it to someone who deserves it, right? Like someone who's just trustworthy, right? Instead of, you know, just whoever's regulated by the government, right? And so it's more of like a community voting reputation, you know, process with, with crypto is who, who should we trust? Not who do we trust?

Vance Crowe [00:19:12] So as you've gone deeper into this rabbit hole, you know, there's people that are behind Bitcoin, right? They're the ones that wrote the code. They're the ones that now keep that code up and keep it updated. Like what do you know about those people? Now that you've spent

Reid Tymcio [00:19:28] Time? I'm so happy, I'm so happy you asked that question, man, this is one of the, like, things that I'll bring up in my, my classes sometimes. And I, I try not to talk too much on it because really, I just wanna point out how strange it is, and then, you know, silence, you know, let that sink in for a second. So here it is. You know, the person or persons who created Bitcoin, right? They have a million Bitcoins, about a million Bitcoins, a Bitcoin costs about $10,000, maybe more. I haven't checked today. It might even be 11 or 12 today, right? But that means that the person who created Bitcoin has about $10 billion worth of value. And they've never touched it. Ever.

Vance Crowe [00:20:17] Wow.

Reid Tymcio [00:20:18] Right?

Vance Crowe [00:20:19] Wow. 11,

Reid Tymcio [00:20:21] Right? 11 years. Now Bitcoin has existed, and whoever created it who has not been unmasked, there is one guy who says that he is, you know, Satoshi Nakamoto. But now, and I don't wanna take political sides, you know, I don't know, I don't wanna get sued by him, but you know, a lot of people think that he's, he's a scammer and that, you know, he hasn't proved it yet. 'cause theoretically, you know, how would you prove that you're Satoshi Nakamoto? It would seem that, you know, you should be able to move that $10 billion. You should, you should be able to move some of it, you know, have, and to sign a transaction that anyone else can see on the blockchain can see that it was moved. Well, it's never happened, right? And so why, how can that be? And especially, why would someone go and buy a Bitcoin, you know, when $10 billion with a Bitcoin at any moment could be sold, you know, on, on the exchange. You know, nobody knows. It's a very risky proposition. And so I don't know if your writ listeners are familiar with the foundation.

Vance Crowe [00:21:28] No, don't, I mean, like, I could, I I've been so far out of it. Once I got it once, I was like, all right, this is an investment. We're calling it a wild card investment. It's, I'm hold, I'm just gonna leave it there. Then I have walked away and, and know very, very little about the current state. I know for a while there was tumultuous politics. There were people going to jail, there was all

Reid Tymcio [00:21:49] Kind of

Vance Crowe [00:21:49] Craziness. So I don't know anything at all about who's running it now.

Reid Tymcio [00:21:54] Yeah, I was just gonna, the foundation, I, I'm not referring to like a foundation. I'm the foundation, the book. Oh,

Vance Crowe [00:22:01] Yeah. Isaac Asimov. Oh, yeah,

Reid Tymcio [00:22:02] Yeah, yeah,

Vance Crowe [00:22:03] Yeah, yeah. I have a book club and we read Asimov. Yeah, of course.

Reid Tymcio [00:22:06] Yeah. Well, well, Rob Long, your, your a guy you've had in your podcast, he actually recommended the book to me, and, and he was right. I loved it. And see, I'm still talking about it, right? But in, in the foundation, there's this character, you know, or, or there's this, the second foundation who are able to like, hack people's brains and kind of, you know, find out what, what are their motivations and the things that they, they think of. And just in that context, I'm just trying to imagine the psychology of this person. Satoshi Nakamoto, you know, so they haven't spent any of their $10 billion, right? So like, physical wealth is meaningless to this person, right? So, wow. Already this is like a philosopher king, you know, whoever this is, like, they, you know, their wealth, they don't care. But the other thing is they don't care about glory either. You know? Nobody knows who they are. Like, it's one thing if you don't wanna spend any of your bitcoins because you think that, you know, people would be scared, like you have too many of them, you don't wanna risk it, but what kind of man a person, you know, woman, anybody, you know their ego, you know, you created Bitcoin and you don't need everyone to know that. Like, you know, who is this person? Like,

Vance Crowe [00:23:19] I mean, it defies reason. And in fact, like in many ways it, it, the, the even more surprising thing is, let's imagine it's not a person. Let's imagine it's five people think about how much harder it would be to keep five people's egos in check. Yeah. And like, even if you signed a contract, even if they never told a single person that let that secret leak out, like it's, it, it, it, I can't think of any other example. It'd be like going and building the pyramids and then not taking credit for it.

Reid Tymcio [00:23:48] So I should mention, you know, 'cause I don't want anything to get blown out of proportion, is that it's, you know, there's a possibility that this guy Craig Wright is actually, is, is, you know, Satoshi, I mean, there's this, this guy named Hal, who, you know what one of the denominations of Bitcoin is named Apprehend? A Finney is, you know, a certain amount of decimal points. He, he is like the se first the second developer to work with Satoshi. And so he's like the guy to talk to him. And so he died a couple years ago, and it's, the lawsuits with Craig Wright are between, or from his estate, or no, this isn't from Pho. I'm being confused. That's Ira Kleiman. Now I'm, now I'm getting really confused my, anyway, all I wanted to say is that just to ma maybe, maybe Satoshi is Craig Wright and he lost the keys, you know, and this would be a tragedy, right? You know, this is like, you know, the classic Shakespearean tragedy is imagine that your hero Satoshi Nakamoto invents Bitcoin and then loses his car keys, you know? And so no one will ever believe you, you know, it's like, you know, that's like a Greek tragedy or something. It's, you know, that could be happening right now. Right?

Vance Crowe [00:25:01] So you mentioned the foundation, and this is kind of a non-sequitur, but have you heard of the book series, the Three Body Problem? It is written by a Chinese author. It was, it was, it became a phenomenon in China, and then it was translated into English. And I'm halfway through the second book called The Dark Forest. But it is like Isaac Asimov slammed into Tom Clancy, and you have this like, magical thing that comes out of it. They even make references to Selden crises and, and, and the, the foundation. But the reason I bring this up is in the second book, they put forward a, a fascinating premise. And it is essentially, without going into all the details that they choose four human beings, where whatever they decide to do, everyone thinks that it is a plan that they can't tell anybody about, that it's all about deception. And so these characters end up, you're, you're watching the characters lose their mind because everyone in society thinks whatever they're doing is the most clever thing that, that, you know, wins this war. And they end up losing their minds because no one believes anything at all that they say. And it's kind of like what you're describing with

Reid Tymcio [00:26:19] The

Vance Crowe [00:26:20] Imagine having created something, losing it, and then not being able to prove it. And you've created something that could be, you know, not, could be already is a world changing technology.

Reid Tymcio [00:26:30] Yeah. I mean, so that was a big, you know, question. 'cause you know, Bitcoin first split into Bitcoin and Bitcoin Cash in 2017, and that was over the choice of the block size debate. And then later Bitcoin cash broke into Bitcoin cash and Bitcoin sv, which was, you know, basically backed by this Craig Wright guy. And so for a time it was like really important, like, you know, we, Craig Satoshi. 'cause if he is, maybe you could make a lot of money, right? That was basically it. Like, and so that's kind of when I, I did this research and, but yeah, just coming back from it is that, that one idea that, well, maybe he's telling the truth and that no one will ever know, you know? And so the poet, the

Vance Crowe [00:27:12] Core question comes down like, and I, I don't have a way around this, this discussion, and there's kind of some obvious paths that people go on when people are like, all right, but what is Bitcoin backed by? Why, why is it that it has value? And you get into this discussion and it becomes ideologically instantly. And even me, even my belief that Bitcoin does have value becomes ideological. How do you, how do you swim through these waters?

Reid Tymcio [00:27:39] I'm so happy you asked this question. 'cause this, this is the most important question. And it's also like when I talked to my father, you know, was born in 1949, you know, pretty, pretty, a atypical boomer, that's like his first thing, you know? Well, it's my backed, you know, as if like that makes any sense, you know, backed, you know, what is it backed by? Like, well, but so Mo most of them think, you know, or a lot of people are accustomed to the idea that the US dollar is backed by gold. That we have, you know, Fort Knox has all this gold in it, and you know, we, that's actually false. Like, you know, a lot, most people, I feel like most people know that now. But, so the question is, what is it backed by is actually a very interesting question. And how I would answer it is would be to his use history. Because the oldest anthropological evidence that we have of civilization, like basically ancient Sumeria, you know, they had money, right? And their, their system was based off of the silver shekel. And those Q Formm tablets that were written on were basically all contracts denominated in, in shekels or in barley, or in whatever, which was all also had an exchange, right? With shekels. And so what we find on very early on is that money, you know, wasn't really ever a thing, is that even though it was the silver shekel, that was just the accounting unit that the Temple bureaucrats used to keep track of all their resources.

Reid Tymcio [00:29:21] People weren't paying one another in silver shekels. You really, that was just the inch, right? It was a measuring tool. And so what was that backed by? Right? It wasn't a real, it wasn't even a physical object in, in most cases it was backed by the government, right? It was backed by the temple, by, by the gods themselves, right? And

Vance Crowe [00:29:44] Basically saying that if you, if you had a shekel, then you could exchange it in for this amount of barley or wheat or whatever. But that in, in effect, it is only worth whatever. Somebody will give you something in exchange for it. Is that what you're saying?

Reid Tymcio [00:29:58] Well, something, I mean, that's always true. That something's only worth what someone will give you in exchange for when I, but, but the question is, what is it backed by? And, and a lot of people, you know, wanna say, well, is the US dollar, it's backed by gold, right? The answer is an object, right? The thing that backs it is an object, right? But in, in true history, it's never an object. It's always an entity. It's always an organization or a government, right? Because you cannot trust an object. It's not a person, you know, you can't, you cannot trust it, right? It needs to be an, a political authority, right? And that, when you go back to the oldest history, money has always been come from the political authority. And it's only recently until Adam Smith's time, 1789, he publishes the wealth of na or 1776, he publishes the Wealth of Nations. And only then does he say, no, no. Markets are separate from government. They evolve separately. And you know, that's why he says governments should keep their hands off the economy and hands off those things that the economy and the market came first. And that's why we're allowed to have society. But when you actually look at the historical record, it's the other way around. You only really get economies after you have big strong states that people can trust, that can enforce property rights and laws and, and money. Right.

Vance Crowe [00:31:26] Well, so now you've just opened up a whole nother element of the blockchain and the concept of property ownership, which is like the one of the mind bending parts. So if you, if you put aside the currency part of this, and then you just say a, a term that gets tossed around all the time, smart contracts.

Reid Tymcio [00:31:45] Oh yeah. What is

Vance Crowe [00:31:45] It that the blockchain allows you to do regarding property? And like, and, and start from the beginning? 'cause I actually don't know this very well.

Reid Tymcio [00:31:54] Well, I mean, I think it, the, the property on the blockchain, it is just all based off of the, the hashing algorithms, because, you know, it's all based off of public private encryption, which basically the idea is that there's something called a hash algorithm. And in Bitcoin's case, it's, it's called SHA 2 56, that stands for secure Hashing algorithm 2 56 bit. And just interesting side note happens that SHA 2 56 was open sourced, was developed by the NSA and open sourced for patent. They, they uploaded it to the patent office. Anybody can use shot 2 56. And, and ultimately Shoshi Nakamoto, who nobody knows who he is, incorporated it into Bitcoin just saying. But, so the hashing algorithm is something that scrambles an input. You take an input, you put it through this algorithm, it scrambles it up and comes out the other side. So unrecognizable that you can't put it back, I cannot shove it back through and get out what I put in, right? And so that is ownership on the blockchain is that everything on the blockchain is something that's been filtered through a hash. It's called your public key. This is the one everyone can see. There's your private password, and then it goes through shock 2 86, and then it becomes this number. And everyone can see this number, everyone. But, and so the beauty of it is, is that basically if I give my private number to, to the Bitcoin software, it will produce this, this output number every time, right?

Reid Tymcio [00:33:34] And that's how you can own it, right? You can own something because you are the only one who has the password. And that's, that's all you can do, right? Is anything that, you know, you can, you know, create a password protect on your property basically is what you can do with property.

Vance Crowe [00:33:52] And so, like in my, my understanding of it is once you, you can put things in that public, so at this number, I'm gonna upload a file to it and I'm gonna make it so nobody can go take that file down. Doesn't matter. You could be, yeah, A government, you could be somebody that really doesn't want it. And it is a secure way to store digital information in a way that people don't often think about. Like, you know, right now at my house, in, in order for me to say that I own it, I have to go register it with the county, and then the county holds the title, and then that title says, yes, Vance is the owner, he paid this much for it, this is what he pays in taxes. This is when people have put like a lien against it. And, but if that building burns down or the data services go down, or a new government comes in and wipes it out, then that, that's erasable. But what people would say about the blockchain is, doesn't matter what happens, as long as the blockchain stays secure worldwide, then there's no way to change it. It becomes immutable. So if the Venezuelan government wants to say you don't own that house, well, you would have some form of evidence that would say something otherwise,

Reid Tymcio [00:35:04] Yeah, I mean, you're absolutely right in, in, in the, if the blockchain stays secure, then, then that's the case. And that's the real question though, you know, does, does, will the blockchain chain secure? And I mean, there have been examples where, say with Ethereum and, and they had the famous DAO hack, although it wasn't really a hack. So what happened is that they, they created this big smart contract that existed on the blockchain, right? It's this little line of code that everyone could send money to, and people sent like a hundred, you know, a bunch of money to it. It was like 15% of all of the Ethereum that existed was sent to this address, right? And then some hacker who was really smart, read the code of it and realized that it had a bug in it, right? And so he stole a bunch of money from, from that contract, like immediately it was like the next day. And, and then he came out and was like, what do you mean you wanna take it back from me? Like it was in the contract, didn't you read the contract? Right? And so, I mean, does he have an argument? Right? He's right, right. That was in the contract, but Ethereum didn't care. All of the monitors got together and they hard forked the blockchain. They literally rewound the tape. You know, if the tape has all the transactions, they just literally rewound it until before everyone sent all their money to that, to that code, right? And so, I mean, our blockchains secure. Well, they're only as secure as, you know, as you trust them to be.

Reid Tymcio [00:36:38] Right? You know,

Vance Crowe [00:36:39] Well, we have to be careful not to do a, a slight of hand here because we have been talking about Bitcoin, which is,

Reid Tymcio [00:36:44] That's right.

Vance Crowe [00:36:44] Much more the open source, you know, very consistent, done by put, put out, put forward. Nobody owns it. There's a group of people that collectively agree on the code, and then that's how that works. But Ethereum, and there are many, many, many other coins is something different. And maybe it's a good time to talk about what the other systems are that are out there and how do they differ from Bitcoin?

Reid Tymcio [00:37:09] Well, so yeah, just to, you know, end with Bitcoin, you know, what is Bitcoin and what isn't it, right? It's that you have this system of updating blocks and creating this chain that I can kind of see, like if anyone tries to go back and change an old previous record, it'll break the whole thing, right? So I'll be able to tell, right, if someone is tampered with it immediately, right? And so that's the beauty of Bitcoin. I can, you know, see if it's valid in a moment. And so we use that to keep track of this ledger for bitcoins, right? We have this, this chain of code that we've written and we keep track of these coins and you're like, okay, is there another thing I could keep track of besides just these coins in this blockchain, right? Like, and so that I think would be what Ethereum is, is that you say, I recognize that Bitcoin works and that it's the system that, you know, ensures that this chain has never been, been altered, but I'm only applying it to one use case money, right? Or a ledger or balances. Now let's try to apply it to another use case. So the idea is that with Ethereum, it actually has a built-in programming language. So it has all the capabilities that Bitcoin has in the sense that the ledger capabilities right now it does it a little differently, different hashes, different, you know, all, all types of differences. But the main main difference is that it has this programming language so that when I am, you know, updating a block on, on Bitcoin block updates, only involved erasing this entry and writing it over here, you know, transferring of an entry on Ethereum.

Reid Tymcio [00:38:49] When I update the chain, the text, like there's a little text field, and when, when someone has to send a transaction basically that, you know, on Bitcoin, it would say, this guy sends money to this guy to the tune of a hundred, right? It's that text field. Well, in Ethereum, in that text field, you can put this guy does this algorithm, you know, this gets sent to that address and gets divided by four and gets sent over to this forwarded. The point is, is that you can do anything that you could tell a computer to do, you could tell Ethereum to do. And so I'm not just, so

Vance Crowe [00:39:24] What does that mean? So if, if you don't have any, if any idea what it's possible to have a computer do, like what would be a use case

Reid Tymcio [00:39:29] On that? So here's, here's an example, right? Is that let's say, let's say like big data analytics is a really expensive thing to do. You need, you need fast computers, right? And a lot of processing right? Needs to be done. Theoretically, I could create a smart contract that people would send data to, and the smart contract would do the analytics for them, right? And then it would shoot out an output to, to somewhere that they could read, right? The idea being that where Bitcoin only does SHA 2 56, that is the, all the computers that run Bitcoin, they can only do one function. It's like two plus two plus two plus two plus two. It's all it can do, right? Ethereum, it could do anything. So theoretically I could, like my telephone, I could get rid of the processor or the big one anyway. I could have like a tiny one in here. I could make it a lot smaller and I could send a, a transaction to the Ethereum blockchain, pay somebody a transaction fee to do the computations on their computer, right? So it's kind of like mixing the cloud with Bitcoin and like, so any, all of this stuff that I'm saying, like you could make it work with Bitcoin, I could, I could hook it into Bitcoin, I would have to code another like front end or another interface that allows you to, you know, connect to Bitcoin to whatever use case you're doing with Ethereum.

Reid Tymcio [00:41:03] It's all on the same platform. It's all in the same place. You know, it's easier to develop and to build applications and use cases on top of it. And so here's an example, and I know I'm, I'm rambling a little bit, but this is important, you know, for anyone who's been paying attention for a couple years, Bitcoin had this thing called the Lightning Network that we were all really excited about. You know, the Lightning Network was gonna solve all of our problems four or five years ago. I'm sure you remember it, right?

Vance Crowe [00:41:28] Well, because the problem is, if the blocks are only updated every 10 minutes, when you go to do your original example of paying your credit card to, for buying something, you go to get a cup of coffee, you put it in there. Now you gotta wait 10 minutes for that block to clear. And so, you know, you're just gonna be standing there waiting in line to make sure that that ledger has that money. It's just, it was not built for speed, it was built for strength.

Reid Tymcio [00:41:52] Well, and then this, this is honestly an, an interesting thing to discuss because, so the Lightning Network is what's called a second layer solution. You have your first layer, which is those blocks that all the miners are keeping track of. And the second layer is people who are like, okay, since the blocks only happen every 10 minutes, or because they're really expensive to do transactions in, I am gonna be a guy up here. I'm not on the blockchain, and you guys can, can trade with me up here and I'll like have my own little bookies where people can buy and sell each other on my little exchange privately, right? And then when they leave my exchange, then I'll send it to the blockchain and then we'll update it. And so the point is, is that this second layer, right? Who's to say, you know, I'm trusting that guy, right? He's not, I'm not mine, he's not mining, right? I'm just trusting for him to him to keep track of who owns what, who, and I'm trusting him until he actually, you know, filters it through the blockchain. The point is, is that that that lightning network thing, you know, very immediately collapsed and Well, no, my point is that Bitcoin collapsed immediately. Bitcoin was too expensive and that whole trustless thing, everyone was like, it's all trustless, well collapsed immediately and it, it became too expensive to do transactions. Like,

Vance Crowe [00:43:11] But you're talking about, so, so let me just clarify for people that aren't familiar with this. So what would happen is it was actually, I believe, free to add something to the blockchain. It's just that you got priority based on whether or not you bid for, for the spot. So, so to clarify this, I'm going to buy a cup of coffee and let's say that coffee is $3. So I go to pay that, and then it's gonna be 10 minutes before it's updated to the block. But actually you have all kinds of transactions that have to go one at a time, bang, bang, bang, bang. Because if you, if you take all those actions at the same time, somebody could make claims against one wallet, you know, like 15 times and, and, and get rid of all that money. So you have to put it in an order. And the way that you would prioritize your order is that you would bid for, hey, I'm willing to pay $3 or $5 Yeah. Or $50. And I think at one point in time just to get a transaction, it was $50 or something like

Reid Tymcio [00:44:04] That. Yeah.

Vance Crowe [00:44:04] And so if you were thinking about, oh, the value of Bitcoin is you can denominate it as a satoshi a 0.0 0 0 0 0 0 1 Bitcoin, you might be spending 20, you might be sending somebody 20 cents, but it costs you $50 to send it. So that became a real problem.

Reid Tymcio [00:44:19] Problem. Yeah. And so, yeah, the my point though is just that it's almost like the Bitcoiners themselves were like, this system isn't gonna work unless we bring someone in here to trust, right? Where they're like, the system as it is right, is too expensive. We need to bring someone in here to trust. And that's the second layer that's these, these lightning guys. And so this is why I kind of wanna fundamentally get back to this, is that they're trying to hide the ball and they're like, you're not trusting anybody. You can just trust math and computers. Oh, by the way though, you have to trust these guys on the second layer and they're totally unaudited and we have no way of keeping control of them, right? It's like they're hiding the ball. Like they're, they're trusting something. It's, it's just like the old system where you had to trust JP Morgan. It's just that the person you're trusting is differently and do you even know who you are trusting? Like that's the difference with ours with, you know, money. I know that I have to trust the banks with Bitcoin. Who am I trusting some minor somewhere, doing some, like, I, I don't even know, right? That's, I think

Vance Crowe [00:45:24] That that was one of the biggest values of Bitcoin for me was that because money was ubiquitous, right? It was always around, it was something I'd always been a part of. There was so much of it that I just didn't understand about how the dollar works or about how the, the, the yen works. Like I just didn't understand it at all. And that's when you start uncovering things like, oh, wait a second, our, our money's not backed by gold. And Oh, wait a second, this is how fractional reserve banking works. And, and maybe I knew these as disparate ideas, but when you start looking at them as a whole picture, you start saying like, wait a second, money is nowhere near as simple as I think that it is. The idea of credits and debits and using credit cards and how all of this banking system works is not, it's, it's been made so simple for me that I never had to understand any aspect of it. And if that's all Bitcoin did for the world was to reveal what's kind of going on beyond the curtain, I think that that, that that would be enough. Oh

Reid Tymcio [00:46:26] Yeah, absolutely. I mean that, that's huge. I, and I cannot stress that enough. Like this blockchain technology, you know, I, I might sound like I'm down on it, but you know, you

Vance Crowe [00:46:39] Back

Reid Tymcio [00:46:40] That I'm somewhat of

Vance Crowe [00:46:40] Cynic,

Reid Tymcio [00:46:41] Right? I'm somewhat of a cynic, but you know, it's not that I'm against it, it's more that I am, I'm of the mind where, you know, there, there, there's this really good song, right? And it's been overplayed, right? It's just overplayed. But like me saying it's overplayed, it doesn't mean I don't like it, it just means I feel like people like it too much than they should, right? And that's how, kind of how I feel with, with these cryptos is that, I mean, I like it, but like you guys are a little too stoked on it. Like, you know, then it's justified, right?

Vance Crowe [00:47:12] Yeah. I think, and that kind of goes back to that Dunning Kruger idea we were talking about before of like when you first learn about something and you're like, oh absolutely, this is so fascinating. But when you get down into the weeds and you start to actually have to look at the flaws or look at the challenges that it has to overcome, then all of a sudden you start being like, I should probably slow my role and I'm probably more guilty of that than than anybody else because at some point I just have to let go of my alright. Not, I don't have to, I chose to just let go of, I don't know how this works, but I am gonna lay a long bet on it. And that long bet is, you know, it's, if I were to sell out right now, it would've paid, paid out many times over. But I consider that money gone, right? Yeah.

Reid Tymcio [00:47:54] Like to,

Vance Crowe [00:47:54] To me, that's not even a part of my portfolio that I actively manage. I don't include it in, in the overall picture because I just wanna let that thing ride and, and, and the lessons that I learned off of it have already pa paid themselves. Oh

Reid Tymcio [00:48:09] Yeah, absolutely. And I mean, on the one hand that's a wise move, you know, to never touch it. 'cause then like your emotions can't get in the way. But then on the other hand, like that's also the worst thing you can do, right? Is to, is to just the whole, that no matter what, right? Because you know that, you know when you should, if you ever should sell it, then you'll, you're guaranteed to not right to miss it. And I mean, that meme, that hot old meme, like that's a perfect example of this silly, this silly idea where like, I'm such a hardcore believer I'm never gonna sell. You know, that's basically being like, I am inflexible, I don't update my beliefs when I get new information, I'm a child, right? It's, but really what it was, is that all these people in the Bitcoin industry had a financial interest in pumping the price and therefore they, so they created this meme that, you know, made every encouraged everyone to hold and to not sell. Right? And, you know, just like how when the market crashes, we ban short selling, you know, same, same type of thing.

Vance Crowe [00:49:15] Well, I mean, I would say in my defense, I, I figured out that like the amount of money I put into it, I've already received it back. And

Reid Tymcio [00:49:24] Like

Vance Crowe [00:49:25] Now, if it does make, it's like, it's like playing with house money at this point.

Reid Tymcio [00:49:29] Absolutely. So yeah, in your case it's, it's a little different. But you know, you still hope, you hope.

Vance Crowe [00:49:36] So let let me ask you this, where do you think cryptocurrency goes by let's say 2025? Where, where is it in society and, and how do you think it plays out?

Reid Tymcio [00:49:47] So yeah. Yeah, I think that, I mean, I think we're gonna have a central bank digital currency at some point. If, if you're just paying attention to the journals and just the publications by, by the central banks and, you know, everyone's talking about it. Everybody wants it. These, you know, Bitcoin and Ethereum basically, you know, they were like the, the dry run test. And now that can sound extremely cynical when we realized that we do not know who created them, right? And I'm calling it a, a test, right? It makes it sound like it was intentional, but, you know, maybe it wasn't. But I, I think, think that yeah, you're gonna have a digital currency and here's why, right? It's that everything is, is, you know, the government is with big data, you know, big data is going to change the way society is governed now that we have the potential to have the internet of things and have sensors everywhere informing us on things and efficiencies, everything. And so with blockchain, one of the big benefits of it is that I can, you know, I can monitor every transaction, right? So I'm say the government makes a central bank digital currency, or they're called treasury dollars or something, and everyone has to use them. You have to, right? It's illegal to not use them so that if you get caught transacting with other things, you get fined, you get, you get, you know, jail time, something like that.

Reid Tymcio [00:51:21] If that's the case, if everyone uses them, doesn't that change everything?

Vance Crowe [00:51:26] Oh yeah. There's no more the guy that mows my lawn for, for me throwing in some cash under, under the table

Reid Tymcio [00:51:32] Or, well, or, or even politics, right? It's fundraising in politics, it's, you know, everything, right? Once everyone can see every what's in everyone's wallet, right? That is revolutionary, right? You can no longer, you know, pretend that these differences in wealth don't exist. You can no longer pretend that you know, this, this particular company isn't, you know, dealing with, with bad guys, I can see the trail, you know, I can see that they're transacting with bad actors, or I can see that they're not paying their taxes over here, or you know, that they're doing this or that. Like, if you have everything transparent, and this means there's no privacy, right? In this, in this world, there's no financial privacy at all. But my question to you is, Vance, now that we have the capability to get rid of financial privacy, what do you think? Should we,

Vance Crowe [00:52:27] I I mean I, you know, you know me very well. Like, I, I am of the mind of, of liberty first, and then, and be very, very careful what liberty you give up, because I don't even think the government might would set out necessarily to be like, Hey, we're gonna go ahead and do this so that way we can track, track every single transaction.

Reid Tymcio [00:52:45] But at the same time though,

Vance Crowe [00:52:45] But once you have that power, you wouldn't be able to resist it.

Reid Tymcio [00:52:48] But at the same time, I can use it against the government as well. I can say every dollar the government spends has to be on this blockchain. Where are you spending your money? Where are my tax dollars going? Right? Like, and so I'm, I'm saying that you are right right. I used to think like you, you know, where I would say, look, you know, privacy is really important and I'm, 'cause I'm afraid, right? I feel like the privacy argument is, it comes from fear. It's right. Why do you want privacy? It's not that, you know, I don't want people to know what I'm doing, it's just that I don't want them to like, you know, if they're hostile to me or if they would use what I'm doing against me, me, right? That's what I wanna avoid. That's the point of the privacy, right? And so I understand that that's looking at like the potential bad things. You know, I want privacy to stop potential bad things. But then when you really start to think about it, you're like, well what about all these good things? You know, and you can't embezzle money anymore. And you know, I can see where they're spending our money and, you know, money, money, the IRS, you know, I'll be able to write a smart contract that'll do your taxes for you, right? Wow. And, you know, suddenly all these benefits,

Vance Crowe [00:53:54] I mean, I see what you're saying, but like for me privacy is, is, is sacrosanct, right? Like there are within your circle of, of inside of your mind than inside of your, your primary relationships, your spouse, your children, then like you have spheres where you can go further and further out. And the, the more that you allow other people to see inside of those spheres, then there's something about the individual that gets degraded. And I think it's more than just what is beneficial or easy. I think there's a degradation of the individual that comes in that regard and not worth probably any of the benefits that that would come, come from that

Reid Tymcio [00:54:36] Potentially. This is a, so this is a thing I've been thinking about a lot, obviously, and, and like the answer, the why I started talking about this was the question, you know, what do you think is gonna happen with this, with this blockchain technology and stuff? And at the end of the day, I think this is the main thing. You know, there are all these smart contracts and this and that and the other, but we've had that type of stuff for a long time. Like contracts or like, things like that. The only, the real difference, right, is the transparency and you know, that's really what it's gonna be. It's that we're gonna have everything we used to have plus this potential for transparency. And, you know, there are people who don't want this, you know, when the CIA, you know, is, is, you know, trying to send money to some, you know, dissident somewhere, you know, 'cause it's been approved at the highest levels of government. But you know, it never made it out to congress. Congress never passed some bill that said requisition money for the, you know, Nicaraguans or whatever it was. You know, the CIA, they wanna be able to make private transactions. You know, that's the type of thing like that, your ability to do that to clandestinely fund someone, you know, that's good, right? And so at the same time, you know, the powers that be, you know, they may want to maintain the privacy as well, right? Like, let's not pretend that, you know, they want, you know, to, to have transparency for everyone. You know, there's, there's, there will always be some room for cash, right? Anonymous cash.

Vance Crowe [00:56:00] I remember a, a long time ago you had told me something that blew my mind and I actually didn't believe you for a while, which was that at one point in time the government outlawed the ownership of gold. And it, it, it like blew my mind because then I was like, wait a second. Because then that brings up all these weird things. Like if you are in possession of gold that you owned, while it was illegal to own it, is it now illegal to own that gold?

Reid Tymcio [00:56:30] Yeah, that's a, that's a mindblower. I, that's what I was talking to my students just a couple weeks ago. I was like, I know, you know, everybody thinks that the world is going to hell in a hand basket and you know, the, the president is a tyrant and you know, we have executive powers out of control, but like, you know, FDR literally robbed every one of their goal. Like, you know, like, let's not forget that. So

Vance Crowe [00:56:55] Tell the story. 'cause I don't know it all that well. I just remember being like, oh no, that really did happen.

Reid Tymcio [00:56:59] Well, so this is a, this is a big story, but it, you know, it's the election in 1932 and FDR wins, but back then inauguration and like when they were sworn in was different. It, it wasn't, it was like three months staggered. I think they became president like March. And so there was like six or seven months there where everyone knew, or there were several months there where everyone knew FDR was going, was gonna be president, but they didn't know what his position was on gold. And so this is 1932, great Britain has gone off the gold standard and it's like the first country, you know, this is like a major problem. You know, we had the gold standard before World War I, and then they all went off the gold standard since they couldn't, you know, they didn't have enough money to back it all in gold. And then so England goes back on the gold standard and they, they're able to keep it together for a little while. But the fact of the matter is, is that they actually went back to the standard at a parody at a value for gold that was much too high because that was before the war. You know, billions of people were dead like assets. All the value of the economy blown up, right? You know, it wasn't as valuable as it was before. So, long story short, England goes off gold and this is the biggest deal, right? And then the whole world is, you know, in the throes of this great depression, and the only country in the world whose economy is expanding in 1933 is Great Britain because they're the only one who's not on gold standard, right?

Reid Tymcio [00:58:30] They're inflating and printing money and their, their currency is getting weaker so their exports are going up. And so exports are going up. There's more employment, you know, booming England has actually recovered from the Depression, right? And basically FD R'S policy, ev it's on everybody's lips. It's what will FDR do? Is he going to, you know, save the gold standard or will he trash it for his own benefit, right? In order to lower his currency, increase his exports, increase his employment, his political prospects, right? And so he, he, he refuses to, to say what he'll do, he, he won't say what his plans are on the gold standards. Everyone starts getting scared, right? And, and a lot of British who, you know, they're, they're off the gold standard. A lot of money that's in, in invested in New York, it starts to run, right? Because it thinks that a is going to devalue. And so you get all this gold, billions of dollars flowing out through New York and draining out of America, out of the country because it's anticipating this. And then so there's this big bank run, and this is a dramatic story, which is why I'm gonna go into it. It's kind of interesting. There's this big, you know, banking panic and Michigan, all the banks have to shut down in Michigan and, you know, all, all the, it, it's spreading to different states. And these governors are emergency, you know, shutting down all their banks and having bank holidays and they're on the phone with FDR and Herbert Hoover is like, you know, FDR you, you've gotta make a joint statement with me that we're going to prop up the economy together and FDR r's like, you know, screw you guy.

Reid Tymcio [01:00:04] Like if, if you're not willing to do it yourself and make the announcement yourself because you don't want to eat it, you don't wanna be politically responsible for it. If you're not willing to do it yourself, I'll wait until you're not president and then I'll take all the credit. And that's exactly what he did. And so he doesn't say what his position is on the gold standard. He becomes president and then the first thing he does is he closes all the banks in the country. And while that's going on that he passes the, what was it? The Thomas amendment I think is what it's called. And that is what makes it illegal for all private citizens to own gold. Now why did he do that? Right? I was just, I started off with all the gold was flowing out of the system and back to England 'cause it was fearing the devaluation. And so a lot of the gold, it wasn't all going to England, some of it was going to mattresses, right? People, if you thought FDR was gonna devalue the gold by 35%, you would take your gold and put it in your mattress too. And so FDR knew that, right? That was people's last veto, right? If you did not approve of what the financial system was doing as a citizen, you could take your gold out, right? That was your veto. And the less gold they had, the less loans they could make. Dammit, right? That was how the system worked. And so he said, no more vetoes, right? The people aren't allowed to have gold anymore, right? And boom, he, okay, you're allowed to have some jewelry and you're allowed to have like rare old coins. But like any bullon, you know, got, got bought by the government at the price of, you know, $20 and 67 cents an ounce.

Reid Tymcio [01:01:39] And then like six months later he raises the price. Now, I mean they, they did it in steps, you know, 'cause they were buying down the open market, but at the end of all the buying on the open market, it gets to $35 an ounce. And so the difference was from 2067 to $35. So they made $14 off of every ounce of gold in the country, right? Because they bought 'em all and then sold 'em back. And then where did they take that money? 'cause this, this is still with us today. And whenever I tell the story about the seizing of the gold, it has to end with the exchange stabilization fund. It's called the ESF. You can look it up on Wikipedia. FDR took all that money that he made devaluing gold and he put it all in an account kept by the treasury. And so he basically created a massive slush fund, right? That was, you know, at the time was like $250 billion, $200 billion in today's money at the time. And that fund has been used by the treasury to say, bail out Mexico. It happened in the nineties. Bob Rubin, a big wall, Streeter head trader of Goldman Sachs became treasury secretary. And as soon as he was treasury secretary, he used that money to bail out Mexico with nobody's approval right there. Congress didn't pass some bill that said the United States was gonna bail out Mexico. Bob Rubin just had this slush fund, right? And so this is the point, the point of the story is that isn't this interesting how this long thing from, from the ancient past, you know, when FDR took everyone's gold, it's still affecting us today.

Reid Tymcio [01:03:17] You know, your power, your representation in what's going on in government right, has been diminished from, from this, this movement. So interesting story,

Vance Crowe [01:03:28] Reed, you never disappoint in the storytelling department. And I think the best part about this is if anybody hung all the way through the podcast and they got to this story, they know that you, like, they should know that you could do this for hours and hours and hours. Hours and hours. So what I would love to do is just say, let's have you on the podcast again. Let's not wait so long. This was long overdue. I would love to have you on again, we can talk about all your crazy innovations, but now we've gotten the core base, you know, of cryptocurrencies down and now we can go and have some fun on your, on your wild stories. And, and thank you man so much for coming on.

Reid Tymcio [01:04:05] Thank you. It was great. Great to talk, Kent. You know, I'm fired up. I wanna keep going, but you know, I'll, I'll have to pin some things down and excitement things to talk about next time. We'll

Vance Crowe [01:04:16] Do it again. Let's just do it in a couple weeks.

Reid Tymcio [01:04:18] All.