Summary: Bitcoin "The B Word" w/ Cathie Wood & Elon & Dorsey

hey everyone kevin here here are my

thoughts and breakdowns for what was

said

during the b conference or the bitcoin

conference with elon musk kathy wood and

jack dorsey from twitter and square all

right let's get into it the show really

got off as a calling

bitcoin and cryptocurrency and open

source platform

and this is exactly what we need for

money and banking

elon got right into calling ach

transfers like checks

not secure and ancient he says that

credit cards are like handing your

username and password to a waiter at a

restaurant which i know there's a zip

code that you sometimes need but

most of the time we can guess it from

local folks right it's not that hard

but anyway then he goes on to say that

most banking is just slow and that most

transactions

are batched and handled over time and

this causes a very slow banking system

it's kind of like what we see with

settlement in stocks is my guess because

in terms of his reference because in

stocks he sees

where we see uh settlement taking two

days right t plus two settlement time

frames so that's why we have

sometimes this massive lack of

transparency when it comes to short

interest or borrowed shares versus naked

shorts right

kathy then talks about how money and

she's talked about this before but quick

recap of what money is in her opinion

store value means of exchange and unit

of account that you have sort of a

balance between these two three

these three things i'm sorry that it's

like a triangle uh and mentions that hey

maybe

maybe bitcoin is like a store of value

uh and a unit of account and

and maybe uh ethereum is kind of like a

unit of account and a means of exchange

and

there's you can sort of have a balance

between the three things here she kind

of refers to the ultimate unit of

account

as a stable coin but what she really

seems in most interested in

is that you can kind of build apps on

top of

the reality of cryptocurrencies

that basically you can take uh and build

infrastructure or systems

on cryptocurrency networks like ethereum

or whatever

and you can solve problems that we

actually have later she ends up

likening cryptocurrency to

the internet so she's kind of comparing

crypto

to what the internet was like back in

2000

where we weren't really sure what the

internet was going to do

for us but excuse me oops

i'm choking on myself but we had a good

feeling that the internet was going to

do

something potentially good or

potentially unlock some doors

she has that same feeling now now the

here is probably the craziest argument

and i haven't heard this one before this

one was crazy in my opinion

but i kind of honestly i kind of really

liked it okay

her argument is that hey you know how

people

are worried about deflation happening in

the united states i'm actually in that

boat as well i think that we're going to

see negative inflation next year

and i know 50 of folks aren't but i've

actually thought of that as a little bit

concerning potentially for crypto

because well

if we have deflation then do we no

longer need the inflation hedge of

crypto right

and so i've just had that as a concern

uh and now don't get me wrong still

investing in crypto

but kathy's response here was really

interesting she says

look if we have deflation in the united

states it could actually mean that

more people are flowing into the us

dollar

uh and and basically the dollar becomes

stronger

and that you have yields go down kind of

like you have in europe where you have

negative yields and you end up seeing

lower prices

and this transition actually ends up

leading to potentially hyperinflation

in other less stable parts of the world

where government regimes and monetary

policies just aren't as strong as they

potentially are in the united states

so you could be in a situation where you

see deflationary pressures in the united

states

but hyper inflationary pressures

elsewhere and those hyperinflationary

pressures elsewhere might move people

into cryptocurrency

that was pretty incredible like that i

had not thought of that before

so shout out to kathy for that one i

thought that was pretty cool uh but then

she also i'm sorry then we go to jack

dorsey and he kind of mentions that hey

look

there's going to be a huge and i think

he's sort of piggybacking off what kathy

mentioned here

that there's going to be this huge

opportunity for you to transfer money

from other foreign countries with

cryptocurrency

that just isn't possible or easy right

now

elon musk then got on and he said

something he probably

shouldn't have said but he he referenced

that he might

pump but he doesn't dump

cryptocurrencies

i definitely tweeted that because it's

pretty notable quote

uh so follow me at realme kevin on

twitter if you want to like that tweet

but anyway that was very interesting and

he kind of said this around the same

time

that he talked about this potential use

case of having a

crypto mining heater now i thought this

was really interesting because a crypto

mining heater like a space heater

might be something that you might plop

down and then say okay hey

i'm cold in the room because kevin

always keeps at 65 in a studio

you know i'd like to have a space heater

let me put my space heater over here

plug it in

and then rather than just you know

running electricity through coils

and creating warmth why don't we just

have that machine be a cryptocurrency

miner whether it's ethereum or bitcoin

or other

and the heat it gives off heats up the

space

and so now you have this duality of hey

you got space heating and a crypto miner

he actually he thought the idea was

extreme and kind of far-fetched

and he called it furnace e like i'm not

sure if that's like the childish like

as if you're putting a y at the end oh

it's my furnacy or if it's like

furnace e with like a capital e for for

like i don't know maybe i don't ethereum

electric

who knows right but anyway that's that's

what he called it

and so he believes that not only are

there opportunities for things like this

but he does see

a huge shift towards renewables for

cryptocurrencies

and he actually thinks that renewables

in the future will be a lot less

expensive

than fossil fuels right now for example

we have if i was going to build a power

plant in california

it would cost me 700 million dollars to

do it with natural gas

it would cost about 1.3 billion dollars

to do it with

solar and about 1.4 billion dollars to

do it with wind

and when you snack up those numbers you

see that we're not quite actually at

cost parity yet

which is a problem and is one of the

reasons we have right now the majority

of cryptocurrency being

mined with uh fossil fuels now i know

that there are arguments that oh well 70

of cryptocurrency uses renewables right

but that is different from

how much actually is is is produced

using renewable energy in full

it's kind of like i can have one solar

panel on my house and make coffee and

air condition my whole house but just

because the solar panel covers one

percent of my energy use

doesn't mean that everything i've

produced is uh done with renewables

right

anyway in fact right now i think i'm

probably using around four and a half

gigawatts of power

but i'm generating somewhere around 4.2

or 4.3 with my solar panels

so like that ratio is something we want

to improve right we want to get to a

very high ratio of

of green energy production and so elon

thinks we're going to get there

especially once we get to better cost

parity and we start getting

utility scale batteries this is

something that's very important

kathy wood uh asked elon musk if elon

musk saw her report with square

so arc invest and and square did a

report

about how they could use crypto mining

to take advantage of extra energy that

comes off of a grid that just isn't used

sometimes it's wasted energy

and this is true this happens in

california a lot especially and elon

musk mentioned

that at some point in the future you can

absolutely keep

24-hour mining rigs going with a

combination of solar

wind and batteries but the problem is in

the square

report with arc invest they mentioned

that if

it costs somewhere around a buck 90 to

2.50 per kilowatt of wind or

um or solar you're probably sitting

around closer to 18 cents a kilowatt

hour

to have battery storage so batteries are

nowhere near that cost

parity yet and so i know the gap was

large i'm not sure if i'm 100

on those numbers but anyway it's in the

square and arc invest bitcoin report

and you can see they literally say one

of their big problems right now

is bringing costs of batteries down

which now if you're gonna say okay well

then so maybe

it'll be cheaper and more efficient to

mine cryptocurrencies in the future and

batteries become more

efficient that's fine maybe but here's

the problem

look around at who's competing for

batteries right now every single

electric vehicle is competing for

batteries

so you've got this really big issue

where right now we're projecting

electric vehicle growth to grow

exponentially

and we're projecting battery growth to

kind of grow more linearly

and so you're going to have this massive

lack of supply of batteries

and trying to get utility scale

batteries to to support crypto mining

it's going to be a while it's it's going

to take a long time

i agree with kathy elon and jack that

hey yeah crypto there's the future in

crypto it's like the internet we don't

know yet what it's going to do for us

but we think it's good and that we're

going to go towards more renewables but

there's a lot of work to do to get that

cost parity correct

they talked a little bit about how

important it is to have your keys on a

hardware wallet

basically if you don't have your keys

it's not your coin this is kind of

really a slam at companies like

robinhood where or honestly quite even

frankly square

where you don't get your keys elon did

go off into a little bit of a tangent

about how he actually thinks that

nuclear power is pretty desirable

and something that can easily be used

and done very safely

even though he believes a lot of people

are opposed to nuclear power but they

shouldn't be

he thinks that fission nuclear reactors

are actually a very good thing

uh kathy and jack dorsey then talked a

little bit about the bitcoin developer

community

and elon musk also talked a little bit

about

how look ultimately cryptocurrencies are

really here to try to make the future

better

and that if for some reason you don't

like corporations where you don't like

cryptocurrency

then uh ultimately you shouldn't like

corporations

i'm sorry let me let me redo that whole

thought here right let me totally mess

that thought up let me redo that thought

here

elon musk said if you don't like

corporations

then you probably should hate government

because government is

the biggest corporation that exists and

he's using this to make an argument

that cryptocurrency is our way of

escaping corporation

and even the largest possible

corporation to exist

the government he also made some

references about how he thought it was

weird that he

literally before his eyes he sees

savings account balances at tesla

declining in europe

because they charge you to park your

money negative interest rates

and so i think elon was kind of taking

the stance here of like yeah no we're

not seeing any inflation

and then we've got kathy wood briefly

talked about how she believes the the

gap rules are unfair that uh when prices

go down you have to mark your accounting

balances down for bitcoin on your

balance sheet

but not up when it goes up she believes

this is unfair

and i think she was really saying this

to kind of prep wall street

for potentially a rough quarter for

tesla because tesla's going to have to

mark

down a large loss for uh

cryptocurrencies potentially

i think they bought around 34 35 000 so

it's possible that you're going to see a

markdown

on the tesla earnings especially on gap

earnings and that could affect

like gap eps and such uh so okay good

so that is the summary of my what i took

away from

the b word now we're going to go into

the market close

live stream so we'll just go ahead and

i'll just modify the title a little bit

i'll just put market close and this

and uh why don't we get into the sticks

and kind of see what's going on with the

sticks

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