Hi, I'm Max Keiser.
This is the Keiser Report.
The Bitcoin protocol, it's more than just money.
It's more than just revolutionary.
It's a freaking black hole that's sucking in every asset class known to the history
of humanity into one glorious pop to who knows where.
Stacey.
Who knows?
Who knows?
But you know what?
All our gold bug friends who are naysayers, naysayers, naysayers about Bitcoin, they
are joining the frenzy.
And in fact, this first headline, this gold fund is joining the Bitcoin frenzy.
Max you'll recognize the name of this gold fund, gold and silver fund actually.
The old mutual gold and silver fund, which manages $220 million of mostly precious metal
equities, is jumping on the Bitcoin bandwagon.
And wait until you hear the name in this next paragraph here.
It's an old friend of the Keiser Report.
The fund started buying in April with a mandate to allocate as much as 5% to cryptocurrencies,
according to its manager, Ned Naylor Leyland.
The idea is to take profits from Bitcoin as it advances to reinvest in gold and silver
assets, he said in an interview.
Ned Naylor Leyland.
Right.
Yeah, I saw the story.
Ned is talking about Bitcoin as being effectively gold.
It was designed to be gold.
And now he's invested in it.
He's put money to work in it.
You know, he's been on our show many times, going back many years.
We talked to him about Bitcoin.
He's been very reluctant, very hesitant, resisted the idea that it was gold 2.0.
But now he's been swept up into the vortex, into the black hole that is Bitcoin.
This has also taken over gold money, our good friends at gold money.
You know, they were like, bad, Bitcoin bad.
Now they're humbled by this asset class.
And to their credit, they're adapting, as any sharp business people do.
They now offer great Bitcoin solutions over there at gold money and other crypto solutions.
And now the old gold mutual fund, you know, has become the new crypto fund.
Ned Naylor Leyland is now a convert.
I'm sure Jim Rickards is yet to fall.
Peter Schiff will fall.
All these names have been crypto skeptics will get sucked up into the Bitcoin vortex
and black hole and they will become converts.
And that's the way it's going to happen.
I'm guaranteed it's going to happen.
Before I continue with the story, the fact that you mentioned the old becomes the new.
We are in Durham, D-U-R-M as they pronounce it here.
That's why I got the Durham shirt Durham, North Carolina.
And of course, this is the city that Duke built that tobacco, the great American tobacco
sort of companies built this city.
It is now one of the hottest cities in all of America for millennials to move to.
It's actually like a lot of tech jobs are in this research triangle, more so than say
Silicon Valley and all the new jobs are coming to this sort of area.
And in fact, Google Fiber, this is their last place that they're building out their fiber
thing.
So, you know, it's reinventing itself as this new tech hub.
It's an old fashioned monopoly of tobacco industry making, you know, new with the tech.
Yeah, we're talking new Jameson Lopp in the second half.
He's a third generation North Carolinian and he's a crypto guru, early adopter, getting
ready for 10,000.
We're going to have a big 10,000 crypto Bitcoin party right here in Durham.
This hotel.
What's the name of this hotel?
The Durham.
The Durham Hotel.
Ask Jameson Lopp about that.
The big party, the 10,000 party.
He's got a lot of friends.
So it'll be wild.
Yes.
We actually sat in the reception with him and everybody knew him.
It was pretty crazy.
But going back to this Bitcoin story, Ned Naylor Leyland, an old name in the UK, the
United Kingdom, an old English name.
He hangs out with Prince Harry and, you know, his family, I think was making the cars, Leyland
automobile or some old ancient historical nonsensical, no longer, you know, relevant
industry.
He's sitting behind his desk with his glasses and his fine, you know, Savile Road tailor
suit and tie and shirt with the cufflinks talking to our friend, the Brahmin, the very
prominent intellectual.
Oh, Sandeep Jaitley.
Sandeep Jaitley.
And they're sipping tea over there at Harrods and they're discussing gold and economics
and we've been telling them, you've got to get into Bitcoin now for five or six years.
They've been, ho, ho, ho, no way, old boy, we're only buying gold.
Well.
Now they're begging to buy Bitcoin at 10,000.
OK.
They're begging to buy it at five.
Five.
Well, they've been doing their research and everybody should do their research.
What?
What are they?
Geriatrics?
Like they got cement in their veins?
They need to do it.
OK.
Let's move on to the story, back to the story, because here's some quotes.
So I think it's interesting here, this, you know, old mutual gold and silver fund.
They have gold and silver investors, older money, people interested in gold and silver
and they have a plan and that is, as he mentioned, you know, to take as much as five percent
invested in cryptocurrencies, take their prop, stay at five percent as the profits, as the
prices continue to rise and buy more gold and silver with it.
It's an interesting, unique plan for their investor class.
It's numbnuts.
It's a numbnuts plan.
OK.
Well, you know, everybody has a different portfolio tolerance and whatever.
But here he is what he says, Bitcoin was explicitly designed to be digital gold, said
Naylor Leyland.
So if you're going to have a small proportion of a fund in Bitcoin, it should be in a gold
fund because that's exactly the point.
It's about bringing the ownership of disciplined money into the modern world.
Bitcoin is paving the way for the reintroduction of gold as global money.
So you had said this first, I think he stole that from me.
So let's let's talk to a lot of our audience might not know Naylor Leyland.
So, you know, they might not know the backstory to this.
But let's, you know, let's talk about this notion of Bitcoin paving the way for gold
to be reintroduced as global money.
No, I kid him about Ned, you know, but he's a nice guy and he's a, you know, he's a gentleman.
And you know, you have to be when you're underperforming to the magnitude.
OK, so what do you have to do?
OK, so as far as introducing gold back into the global currency, yes, because I've said
this and I'm glad someone else is picking up on this.
Gold, Bitcoin is helping gold by shattering the matrix of Wall Street that is incurring
the naked short selling and the financial manipulation that going on in the futures
market of gold, since, you know, you've got T zero, you've got the settlement is the trade
date of the contract, et cetera, that we see guys like Patrick Byrne pioneering over there
at Overstock.
We're going to obliterate all the machinery that's killing the gold price.
This will open up.
They're like parting the sea of derivatives like Bitcoin is Moses, parting the sea of
derivatives and through the gap will gold price will finally get to two, three, four
thousand dollars an ounce thanks to Bitcoin.
The ungratefulness of the Peter Schiff's of the world and the Jim Rickards of the world
who don't understand what we're doing to make them look good is mind boggling.
So let's move on because into his come to Jesus moment, how he studied it.
Like he's been slow thinking about it, watching it, studying Bitcoin.
And again, I do implore you, you know, one can look at the hyper mania of Max Keiser
and the hyper bitcoinization or, you know, and just pilot and everything you've got.
Or you slowly you have to study it and understand what you're getting into, what you're the
reason why you want to own Bitcoin, the reason why you want to get involved in Bitcoin.
And that's a good, sensible, healthy thing to do.
But here he's like why he likes Bitcoin and the block chain, what he has studied as a
gold investor, as a long term gold investor, Ned Naylor Layland says Bitcoin and block
chain resolve gold's problems of divisibility, ownership and speed of transmission, said
Naylor Layland, who's investing through a Swedish listed exchange traded fund.
We're going to revert to sound money, he said.
If you imagine sound money and block chain together, there's quite an exciting potential
outcome.
His fund has about 80 percent in gold and silver equities and most of the rest in physical
metal.
Well, he's referring to Aristotle's four conditions of money.
They got scarcity, fungibility, portability and desirability.
Bitcoin, it fulfills all of those, has since day one.
Anyone who's a student of gold should have picked up on that five or six years ago.
Yes, it does fulfill all the conditions, as Aristotle pointed out, of sound money that
gold qualifies, so does Bitcoin.
And he's correct.
It's infinitely divisible, it's portable, it's scarce and it's desirable.
The condition of scarcity is the one that people have trouble with.
They don't understand how you can have digital scarcity.
But this is the genius of the protocol.
It creates, for the first time ever in the history, digital scarcity that's scalable,
immutable and fulfills all the characteristics of money.
And there were, I mean, Peter Schiff had a valid argument and concern when he was looking
at it and seeing that there's Bitcoin, then there's Bitcoin cash, then there's Bitcoin
gold, then there's Ether, then there's Dash, then there's, you know, all these cryptocurrencies,
all these ICOs.
And their notion was, well, this is infinite inflation.
And yet what we've seen is that despite Bitcoin gold, despite Bitcoin cash, the price continues
to rise.
I think all in, it's like well over $10,000 at this point, if you add in all the forks.
The Peter Schiff argument is nonsense because, you know, there is gold and then there's silver,
there's bronze, there's diamonds, there's collectible art.
There's a DaVinci that sells for $150 million.
Anything that's scarce, people want to buy and it goes up if they are looking to preserve
their asset values.
So the fact that there's more than one crypto out there doesn't diminish the argument for
Bitcoin whatsoever.
Just like gold is the perfect element on the periodic table that attracts the physical
attributes according to Roy Sebag, makes so genius an argument for, same thing can be
said about the protocol.
For Bitcoin, it's unique in this way, it's entrenched, it's a monopoly.
It follows Metcalfe's law.
It's expanding exponentially.
It also follows Thayer's law for all you freaking couch economists out there where you've got
good money pushing out bad money, plus it's got the effects of the other effects.
But I might want to say also in the last minute here that it's been basically an analysis
has found that a million, four million Bitcoin are missing.
You speak of DaVinci.
They found a DaVinci after hundreds of years, it's worth $450 million.
I reckon those four million Bitcoin might be found in another 100 years, 200 years.
Somebody might find the keys, find them, access them, and it will be worth $450 million for
one Bitcoin.
Yeah, it's in my sock drawer.
I know, I left it in a sock.
The left or the right?
I think it was a left sock.
It's a Christmas sock that I had with little Santa Clauses and Christmas trees.
How many of the four million missing Bitcoin are there?
About 3.8 million.
And it's in a laundromat somewhere on 16th Street, the last scene.
I put the paper wallet in there and I went through the wash cycle.
So yeah, it's like 3.8 million times 10,000, you do the math.
It's worth maybe investigating, but don't go away.
Much more coming your way right after the break.
At RT, we have a great team, but we needed to strengthen before the FIFA World Cup.
And who better than a legend to keep it tight at the back?
In 1992, Denmark qualified for the European Championships at the very last moment.
No one believed in us, but we won.
And I'm hoping to bring some of that winning spirit to the RT team.
Recently, I've had a lot of practice so I can guarantee you that Peter Schmeichel will
be on the best form since my last World Cup.
I can film that.
Taurus, Taurus, please.
That was an old joke.
I was only kidding.
Here I come, Russia.
Right, right, right, right.
No, no, left, left, left.
More left.
Okay, stop.
Thank you.
That's really good, that.
There is no center in the United States political discourse.
It's all center right.
Ever since the Clinton people came into power, the center has become the right.
And there is no peace party that exists in my country.
I don't see any evidence of it except this third party that is so criticized, the Green
Party.
The village of Kolachi has been nicknamed Sleepy Hollow because for some unknown reason
its local residents have fallen victim to a sleep epidemic.
What, you fell asleep?
Wake up!
I'm fine.
I'm fine.
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I'm fine.
Welcome back to the Kaiser Report.
I'm Max Kaiser.
Time now to turn to Jameson Lopp.
Jameson, welcome back.
Great to be here.
Jameson Lopp, you are in the Bitcoin space, have been so for a long time.
You know, I've been in the space a long time.
And it's hard to find wisdom in this space.
It's hard to find people with a level head that have a certain zen quality.
I would say you're the only one that I have found that actually has an even perspective.
So we're talking about Bitcoin.
And you know, one of the things you say about Bitcoin is that, you know, we don't really
know yet what this is all about.
You know, people are theorizing.
Is it a replacement for money?
Is it the new money?
Is it going to take?
Is it evil?
Is it great?
You know, you feel that there's things on the horizon still to be discovered.
And can you just talk a little bit about this philosophically before we talk about prices
and stuff?
Absolutely.
I mean, we're learning more about this system every day.
You know, Satoshi Nakamoto created this thing in 2009.
And people have been joining this open collaboration of this project.
And they've been arguing, they've been building, they've been tearing each other's ideas apart,
sometimes tearing each other apart.
And it's this weird sort of new type of human consensus.
I mean, it is crypto-anarchy.
It is a system where no one rules.
And as a result, it's very hard to decide what are the rules or how do we decide what
the rules are?
How do we evolve the system?
People are, I would say, experimenting.
They're poking the system.
They're trying different things.
A lot of times they're trying, you know, traditional political or governance methodologies.
Most of the time those fail.
And people are just going to keep poking the system and trying to understand it better.
And the grand experiment is going to continue.
So you mentioned a phrase there, human consensus.
And this is a phrase, a key phrase in the whole Bitcoin ethos is consensus.
And so it's interesting that throughout the human history, there's always been a need
to figure out how to govern, you know, as humans come together, you know, from the going
from the hunter gatherer phase to the agricultural village phase, the domestic phase.
You know, you have to have some kind of social contract, as we call this in the 18th century
between the governed and the ones being governed.
And here in Bitcoin, it's the consensus is completely distributed and it's frictionless
and you don't need a government.
It's all run on game theory.
And in the case of Bitcoin, it seems to cleave down, sociologically speaking, the community.
And it's gotten rid of people like Mike Hearn, for example, who was part of the core Bitcoin
group developers and then had a rage quit and flew the coop because he wasn't happy
about where things were going.
Then we had another major break with this Roger Ver Bitcoin cash, which is a fork of
Bitcoin and along ideological lines and who had the true Satoshi vision.
It's quite interesting, sociologically, psychologically.
Can you speak a little bit about what Bitcoin cash is, what people should be aware of it
if they own it before August 8th, they own it, etc.
And then a little bit on the sociological aspect of it that I think you do well.
Bitcoin cash is a hard fork of Bitcoin.
And so there was a snapshot taken at the beginning of August where, you know, whatever number
of coins you had on Bitcoin, you now have on Bitcoin cash.
And all you have to do is get the wallet software that supports that, load up your private keys
and now you can transact on this new network, which is 99% the same rules as Bitcoin.
Just a few changes on the back end of transaction formats and block sizes and whatnot.
And so really what we found here is there's this ideological split between the technical
changes that people think should be implemented in order to scale Bitcoin, to get it to reach
more people.
So the main thing is people arguing about should we scale mostly on the blockchain or
should we scale mostly off the blockchain?
Personally, I think, you know, we need every type of scaling we can get.
The on blockchain scaling to, you know, potentially infinitely large block sizes has a lot of
ramifications that will impact the ability for the average user to retain sovereignty
and to really decide for themselves what Bitcoin is.
And you really do that by running a Bitcoin node and using that to secure your money.
We need to roll that back a little bit because you have to unpack what you're talking about
there.
So the large block size, correct me if I'm wrong, but, you know, would tend to put power
into the miners and it would be a move against the total decentralization of this protocol
of this network.
And this is against what would be the ethos of this totally decentralized protocol.
And so and we've seen that with the apparent conflict of interest between those who sell
mining chips, like over there in China at Bitmain, who are for the big blocks, and they
would be the direct beneficiary of this.
So isn't that a direct conflict of interest, number one, what are your thoughts there?
So I would say, generally speaking, and I hate to, you know, put anybody into a box,
but it seems like a lot of the proponents of Bitcoin Cash believe that Bitcoin miners
are kind of a trusted guardian of the network and they're happy to have nodes that are very
expensive to run and only large enterprises and miners can run them because they believe
that the sovereignty really comes from having your private keys and being able to transact
from that standpoint.
But the miners, of course, are potentially a fairly centralized entity.
I think that proponents of Bitcoin Cash would have a counter argument that Bitcoin Core
is a centralized entity and they see, you know, trade-off of one versus the other as
not being particularly a big deal.
So you know, we could argue minutiae all day long, but the proponents behind, you know,
doing hard forks and changing Bitcoin faster, they're willing to make trade-offs in order
to try to get mainstream adoption as quickly as possible.
All right.
So to get back to our first point here, there seems to be something bigger, forces larger
than anyone can account for operating here, and that is partly attributed to game theory.
So in other words, while these two political camps are battling it out, you have potentially
the whole thing being a moot point, because as far as mining goes, you now have Japan
getting into mining with the seven micron, seven and a half micron size chips.
You've got something Dragon Mint, which I'm just hearing about, which is a mining initiative.
So in other words, good old free market capitalism is still at play here and could trump any
political party.
And any political party so far that's tried to coalesce has been blown out, has been wiped
out.
Is that a fair statement?
And what is Dragon Mint?
I've just learned about it in the last week or so.
I think it's brand new.
What do you know about it?
Tell us about it.
I think there are actually a multitude of initiatives going on behind the scenes, because
this whole ordeal over the past year or two with miners blocking segregated witness activation
and kind of acting like bullies in various ways has really put a sour taste in a lot
of people's mouths.
And the people who got into Bitcoin early on tend to be very anti-authoritarian.
And whenever they feel that any particular entity or group is beginning to amass too
much power, they dig in their heels and they say, no, we're not going to go along with
this.
We're rejecting you.
So I think that there are actually many more initiatives on the mining side where people
have gotten frustrated and they've said, you know what, we're willing to put in the capital
to help further decentralize the mining, to make it a more competitive market.
I think we're going to see more announcements coming in the coming months and that in general
mining is going to become more competitive and the miners are going to lose a lot of
their kind of bargaining chips of their hash power.
So the Dragon Mint from my understanding is really backed by BTCDRAC, who is a Bitcoin
core developer.
And I think he's working with some chip fabricators and they're just trying to get the most efficient
miners out there on the market to get them in as many hands as possible to further decentralize
hash power.
Right.
BTCDRAC.
And what's his Twitter handle?
I think it's BTCDRAC.
I believe so.
What's your Twitter handle?
Just LOP.
L-O-P-P.
And also if you go to LOP at Twitter, you have links to fantastic resources.
You have a bit of a library of the white papers and other documents that people, if
they want to learn.
I say to people that, they ask me, should I be buying Bitcoin?
I say, you've got to put in the work to learn about it first because otherwise when the
correction comes and we know that there will be a correction, you need to have an intellectual
foundation.
You don't want to panic sell once you've panic bought.
You need to know what's going on here a little bit.
Talking about price, okay, let's talk about price.
As we speak here now, we're flirting with 10,000 and what are your thoughts on the price?
You started in under a dollar, I believe, right?
I was in single digit territory, yeah.
In the single digits, as we were, so where do you see that going?
Not to hold you accountable to it, I mean, obviously it's a bit of a speculation but
what are your thoughts on the price?
It is and people come up with various calculations of if it replaces so much of the gold market
or so much of stock or bonds or other commodities or what have you.
As I mentioned recently, actually people were asking about buying low, selling high type
of stuff is that it's easy to buy low or buy the dips because we know where the floor is.
It can only go to zero.
It can't go any further below that but where is the ceiling?
Nobody knows where the ceiling is.
$100,000 Bitcoin sounds preposterous but we're 10X where we were a year ago.
I'm not saying we'll do another 10X in another year but in terms of global wealth and global
money supply, six digit Bitcoin is certainly possible in the not too distant future.
Now there's two concepts, hyper-Bitcoinization and the Bitcoin black hole.
Now hyper-Bitcoinization I believe was coined by the fellow who runs the Satoshi Institute.
What's his name?
Do you remember?
Is that Pierre Richard I believe?
No, it's the other guy.
He's even, he's kind of a recluse.
I think it might be Michael but we'll get to it.
I'm sorry we're missing your name.
So hyper-Bitcoinization essentially means that you just abandon the fiat world completely
and we just go totally Bitcoin for everything, right?
That is not going to happen until at least we fix the scalability problems.
So that's what we're really hoping these second layer solutions will do and really that's
going to continue to be an experiment of we're going to see lightning network come online
and possibly even other second layer networks and then Bitcoin as Andreas Antonopoulos has
said it's going to continue to fail to scale and so we're going to hit road bumps, we're
going to have growing pains, people are going to complain about this or that and then we're
going to fix the problems.
I mean it's all software and so the software engineers are going to see the problems, fix
the problems and we're going to move forward.
Right, so in the Bitcoin black hole this is something I thought of just recently that
essentially the money starts to be drawn away from the stock market.
So if you have a stock market crash because people are buying Bitcoin, unlike the 2008
crisis that was met with a wall of money from central banks, there is absolutely no way
to stop a black hole of Bitcoin sucking all the world's capital.
If this thing goes 100,000 plus in a global panic buying, if a sovereign wealth fund like
Abu Dhabi is saying yeah they're going to be buying Bitcoin, if you have game theory
applied to the sovereign wealth funds and this thing goes to 300,000 plus and the stock
market crashes, is there any force in the universe that can stop this?
Jameson Lopp.
Well, I guess nation states with enough nuclear capabilities to blanket the world in EMPs
and shut down the internet for a little while might be able to put a bit of a blip in the
road and the markets but- It sounds like a Bond thriller and James Bond
thriller and is that why Bitcoin Cash attracts so many would be James Bond evil characters
like John McAfee, Roger Ver, Rick Falkvina, these guys could be the evil doer in a James
Bond movie.
Is that what attracts them to it, the sense of unlimited power?
You know, I mean there may be some of that.
I don't think that any of these guys are evil.
I've met pretty much all of them.
I think that a lot of it just has to do with frustration and you know they believe that
the very conservative slow process that Bitcoin Core and the vast majority of users subscribe
to is just not fast enough and that something else is going to subsume Bitcoin.
The unflappable Jameson Lopp, ever the diplomat.
Thanks, can you stay for the segment?
Absolutely.
Alright, super.
Well that's going to do it for this edition of the Kaiser Report.
Being Max Keiser and Stacey Herbert, like I said, Jameson Lopp, you can find him on Twitter
at Lopp, you can find us on Twitter at Kaiser Report and until next time, bye y'all.