[00:01:45] Then there’s also a Texas strategic Bitcoin Reserve bill that has passed the Senate. And then there was a committee hearing last night that was taking, what would I call, a testimony for and against, and everyone who testified for it. So it has passed the Senate, still needs to pass the House, but it’s advancing along, and we’re also hosting a Texas Energy and Mining Summit in two weeks at Bitcoin Park Austin. So looking forward to that.

[00:02:11] Preston Pysh: So on the strategic reserve side, I have read that the House is pretty concentrated Republican wise, and based on the numbers that we saw in the Senate, they’re locally in Texas.

[00:02:23] It appears like they’ll have the numbers for it to go through the House and that this shouldn’t be an issue and it should all get passed and approved. Is that what you’re hearing and seeing as well?

[00:02:33] Parker Lewis: I have, I watched some of the testimony last night and some of the questions that came up I think would cause me to believe that it might have a little bit of a harder chance. Some of the questions geared toward, this people of Texas’s money, why should we gamble that money? And so viewing it as if you accept that very few people understand Bitcoin, that it’s hard for a consensus of people to get it, that the House is larger than the Senate. So it requires more people to form a consensus.

[00:03:04] So it’s just, those are just natural questions. I’m hopeful that it will ultimately pass. I think that there’s still very limited understanding of why, and I felt like the testimony in the Senate and the senator that brought the bill, which is it is SB 21, he was keying in on more of the, functional reasons why this was important of printing money, which I, there were certain people who testified like Phil Geiger from Unchained, or formerly Unchained on Advisor to Unchained where he talked about the fundamentals of Bitcoin, but I felt like the person who is advancing the bill in the House maybe is more like, “Hey, this is for innovation rather than this is for saving and protecting the holdings that are sitting with the state or the Texas citizens. What’s going to maximize purchasing power in the future?” I felt less of that.

[00:03:50] So I’m hopeful that it will pass. Nobody testified in opposition and no one seemed to pose to it. It’s just, it took a while to get even committee hearing to get past the Senate probably two months ago, or maybe six weeks ago.

[00:04:04] The legislature, Texas is one of the places where the legislature only meets one once every two years. So the legislative session ends in like a month, and then the legislature won’t meet again for two years.

[00:04:15] Preston Pysh: Wow. Do you think that they’re going to get through a vote before that next two year period?

[00:04:21] Parker Lewis: I expect that it will, but there’s a lot of priorities too, so that’s just one of the other questions. It took a while for it to come up in the House. But yeah, I’d probably be handicapping at 50 50 right now.

[00:04:31] Preston Pysh: Wow, okay. Those odds are way lower than I was expecting. And I think I, when I was proposing the question to you, I think I had it in reverse, so passed the Senate first and now it’s at the House.

[00:04:41] Parker Lewis: Yeah.

[00:04:42] Preston Pysh: And there’s like what, 80 or 90 voting members I want to say in the House, if I remember right. Somewhere in that number. Interesting. Okay, well that’s some good information.

[00:04:51] Parker Lewis: It passed the Senate without a lot of. Pushback and that was interesting to me. I’m also just, I come at it from the perspective of knowing that very few people understand it and hearing some of the questions from the committee members last night, which are very logical. Like if you accept probably one out of a hundred or fewer people in the United States understand it, why would more than one out of 90 legislatures understand it?

[00:05:10] So there doesn’t seem to be a lot of opposition to it. But that’s still a lot of wiggle room for someone to say, Hey, I just don’t know why I am doing this. So until it happens, it’s just like, it’s also, I train my psychology, even though I know that Bitcoin’s going to increase in purchasing power over time. I harden my psychology to prepare for a 50% drawdown tomorrow and then plan my life to account for that volatility.

[00:05:34] Preston Pysh: Yeah. Has any of the grid stability talking points come up in the discussions in the House with respect to the strategic reserve as far as the power of Bitcoin from an engineering standpoint and what it does beyond just being a store of value or is it just all store of value, currency to basement type stuff.

[00:05:52] Parker Lewis: Part of it, I’d say it straddled the lines of, it didn’t come into grid reliability, but it did cross the fence of saying, Hey, this is a store of value, but also this will be a sign that Texas is open for Bitcoin. There’s a ton of Bitcoin miners that are coming here investing in Texas energy.

[00:06:07] And that doing this will help create regulatory clarity and have benefits beyond just innovation, beyond just store value, but instantiating Bitcoin in Texas to promote more Bitcoin miners to come. So that did come up. It just, it didn’t get into the level of grid reliability. there’s a specific bill that Gideon Powell is working on.

[00:06:29] Gideon Powell’s not in legislature, but he’s. Somebody who’s been active in the Bitcoin mining space that’s advancing a separate piece of legislation, which is HB3970 in Texas, which is basically creating a methodology as to how to accelerate permitting. For large power projects and to advantage power projects, not with dollars, but to say if there’s generation sites that are above 75 megawatts that bring with that generation a large flexible load, like a Bitcoin miner that sits behind meter and that would be willing to participate in ERCOT controllable load program.

[00:07:12] Then those projects gets jumped to the front of the line of ERCOT permitting to align incentives, to basically say, Hey, if you’re bringing a new generation online and you’re pairing it with large, flexible load, that also participates in ERCOT controllable load programs, that power gets onto the grid first, and at least in the House side in the hearing that was very well received. So those discussions on grid reliability and how things like Bitcoin mining can promote that are happening in the state legislature. They’re just happening on separate bills.

[00:07:44] Preston Pysh: Got it. So Parker, if you go back like seven to eight years ago, I just remember Texas was having all sorts of issues with the grid. There was power outages popping up all over the place, and it seems like there hasn’t been as much of that lately. And as a Bitcoiner, you want to point to this and say, it seems like the grid’s getting more reliable down there. Is that actually true, first of all? And then second of all, is there any way that you could point to Bitcoin mining being a core source to that reliability.

[00:08:16] Parker Lewis: So I would say that if you went back seven years, I think, and again my, I reference my friend Gideon Powell because back in 2017, he was the first person to build a greenfield substation that was, I believe, 50 megawatts expressly for Bitcoin mining.

[00:08:32] Since then and there, there was bitcoin mining happening in Texas, but not at that scale. And that was around a time where the Bitcoin hash rate in total was about five extra hashes. If you go back to 2017 and now it’s at 800 extra hashes. So the Bitcoin hash rate has increased by 160 times, and that’s not, the machines have gotten more efficient, so that’s not power increasing 160 times, but it’s grown significantly. And one of the things that happened unrelated to Bitcoin mining was in 2021 in Texas, there was winter storm uri, which would genuinely a hundred year storm. And a lot of the generation units in Texas had not been weatherized like they might be in the northeast because we just do not have snow like this regularly.

[00:09:14] So that problem is separate and apart and something that the Bitcoin mining can’t fix. That has been addressed. Then also in the last seven to eight years, there’s been about, I don’t know what the baseline was, but it was probably less than a hundred megawatts on the Texas grid of Bitcoin mining specifically that we’re now somewhere between three and four gigawatts based on estimates, and there’s actual evidence to show that at times of scarcity when energy is scarce from the grid, that greater than 90% of Bitcoin miners are shutting off.

[00:09:47] There’s just a pure economic incentive to do that yeah, when energy prices get expensive and you are only mining for the purpose of getting Bitcoin, which is a monetary good, that you are making a pure monetary economic decision. Now, if for some reason you have some contract that says you have to have uptime that you’re hosting. That might be a bad contract.

[00:10:09] So that might be a reason why certain miners might stay up or they might just not be as sophisticated. But we do have hard evidence that Bitcoin miners are responding to the incentives that everyone would expect them to respond to purely from a profit loss standpoint and that promotes grid reliability.

[00:10:26] So it is clear based on testimony from ERCOT that what I would say is the current state of play is that ERCOT, which is the grid operator energy, reliability, or electricity reliability, council of Texas. They’re the one who’s responsible for ensuring the reliability of the electric grid in Texas. And in the United States there’s East, west and Texas, or East, west and ERCOT, and there are interconnections between ERCOT and other parts of the United States energy grid.

[00:10:52] But ERCOT is really, it is outside of basically the federal government’s regulation, or almost entirely. And so a lot can happen in ERCOT from an innovation standpoint because it can move faster. It’s deregulated and so ERCOT. Which understands power, understands how, if you have say, a 500 megawatt load on the grid and that you could turn it down when there’s a period of scarcity, that helps promote grid reliability.

[00:11:17] I would say the legislators, the people in the Senate and House understand those dynamics far less. Part of it is a process of Bitcoin miners engaging with legislators. Part of it’s a process of ERCOT communicating to legislators. Also, it seems clear that ERCOT, if they had their way, would want to have more control.

[00:11:38] They’d almost want to force Bitcoin miners into these programs. Because that gives them more control. I think there’s HB3970 that’s being worked through the Texas legislature creates a more voluntary system. There’s an economic incentive to participate because you get your projects greenlit faster, but that at least makes it voluntary to opt into something like control load resource program, which basically puts your power actually in control of the grid operator so that they can turn it down if they want to with the direct mechanism.

[00:12:09] So I’d say that it’s clear that Bitcoin mining is promoting grid reliability. It’s clear that ERCOT understands why Bitcoin mining and why having large, flexible loads on the grid promote grid reliability. There’s still a knowledge gap when it comes to thinking about a representative of the House, understanding those power dynamics, because you have to understand the power dynamics and you have to understand deck Bitcoin mining, which is not as easy for someone that’s just representing a certain district.

[00:12:36] Preston Pysh: It seems though, that you guys are setting in almost like a template in place. If you guys can get it all ironed out and smoothed out, it would be a template for other jurisdictions, state, local, whatever, to really copy and paste the idea. I mean, it seems like you guys are out front way further than anybody else from a policy standpoint on how to like make all this work.

[00:12:57] Parker Lewis: Yeah. I think given the nature of the grid and being, what I would say is more autonomous, able to make decisions with fewer people involved, a state versus many. And then also having a deregulated energy market where somebody could build a power plant and have a behind meter deal with a Bitcoin miner, or just being able to have a private contract that it allows for faster innovation and then that innovation can be replicated elsewhere. And like proving, seeing it work and then saying, okay, let’s take the learnings from that and apply it elsewhere.

[00:13:32] Preston Pysh: Let’s talk about your business. You have an awesome company here, Zaprite? And first of all, just explain it to people if they’re not familiar with it. And then I just want to get into some of the trials, tribulations, wins that you’ve had, and just try to understand it better.

[00:13:48] Parker Lewis: Yeah. And then also there’s a natural overlap because a number of the companies that we help serve are Bitcoin miners, some here in Texas, but particularly Bitcoin miners that are providing hosting services and are wanting to take payments in Bitcoin and Fiat, and wanting to gravitate to a platform where they can have one system that facilitates.

[00:14:08] All of that. And so to think about Zaprite? We’re a Bitcoin payments company, like a Bitcoin payment gateway. We enable both Bitcoin payments and fiat payments through one interface. We’re never actually in possession of anybody’s funds either on the Bitcoin side or the fiat side. We’re building commerce tools that sit on top of wallets and custodial accounts, or non-custodial lightning nodes and custodial lightning service providers, as well as giving people the ability to seamlessly integrate the ways that they’re already accepting fiat, like Square and Stripe and PayPal, authorized.net.

[00:14:44] So that for people that value Bitcoin, they can have a way to request payment in Bitcoin or accept payment in Bitcoin that has one operating flow, one payment workflow that presents both Bitcoin payments option to pay as well as fiat options to pay such that if somebody understands Bitcoin and we’re really targeting the audience of people that understands Bitcoin, that has a priority of Bitcoin and that has the understanding that they need to invest in dual rails to have redundancy, and that their expectations are also aligned, that when they first turn on Bitcoin payments, they’re going to be expecting to receive a small percentage that will grow over time, and they’re going to invest in that as a channel, but that if they wanted to accept Bitcoin payments and they had to have a second workflow.

[00:15:30] That they would be much less likely to do it. So our goal ultimately at Zaprite, is to bring down the barriers to accepting Bitcoin by creating a unified checkout with Bitcoin and Fiat, and then targeting those markets and the commerce templates where we believe the most likely adoption of Bitcoin payments early will be.

[00:15:50] Then we build out the commerce tools that match those markets. We’ve got invoicing templates, so anybody that’s selling their good of services and issuing an invoice to be paid, we have an API. That’s incredibly powerful that a lot of companies that are Bitcoin centric are utilizing and building into their custom applications.

[00:16:09] We’re working, we support a lot of people that do Bitcoin events, so we’re working on a native tickets feature that will be, people are already using Zaprite? Or essentially selling tickets to smaller events. But we’re going to be releasing in the next few weeks a Zaprite? Native ticket solution. So just trying to meet the Bitcoin economic system where there is demand for payments and growing that system by providing more seamless tools.

[00:16:32] Preston Pysh: So we’re a business podcast with Bitcoin focus, and so my question for you is, as an entrepreneur, building something from nothing, what’s your best advice going through the whole Zaprite? Just as a business owner and somebody that’s starting from literally scratch, what kind of advice can you give for people that are trying to do the same thing?

[00:16:52] Parker Lewis: So I would say vision is critical and testing your assumptions around that. So it’s like, is there a market for this? Is there a need? If you build the tools, will they come? And then being incredibly focused and really knowing who your customer is. And so what I would say is from day one, building Zaprite, our customer are people that understand Bitcoin. And that might seem obvious, but a lot of early tools for Bitcoin payments we’re really geared towards saying auto conversion to fiat. Thinking that people are going to demand Bitcoin payments for the cheaper cost. But if somebody doesn’t understand Bitcoin and under doesn’t understand its volatility, or doesn’t understand actually how to incentivize or communicate to their customer base aligned values to actually drive payment in Bitcoin, they don’t realize the benefit of it.

[00:17:40] So in our case, but what I would say extending to somebody else is like knowing who your customer is and making sure you’re delivering the product in a focused way that actually provides the best solution for whatever that sub-market is. Because if you try to be everyone, for all people, you end up not having the ability to have focus with limited resources, but then you ultimately deliver a worse product that doesn’t solve the problem, the bar that it needs to actually drive the adoption of what you’re intending to do.

[00:18:12] Preston Pysh: Yeah. How much have you guys been using AI to assist, and how much of this is a game changer in the entrepreneurial space as far as startups go?

[00:18:22] Parker Lewis: So we are, I’d say it’s very early in trying to figure out how much efficiencies actually gained today versus how much we invest in it today to gain efficiencies in the future. And so one example of that is, our engineering team relies on AI not to vibe code, but, and it does require significant training to be able to get output that doesn’t actually slow you down, but that actually accelerates.

[00:18:55] So thinking about using it, a senior engineer, using it as a tool of the equivalent of having junior engineers sitting below, but relying on an AI tool to write code and then be able to review it and make edits to it in a way that actually accelerates rather than slows you down. And so I think we’re very much still in the learning process of that, but fine tuning it so that it actually can i s being operationalized today.

[00:19:23] So, it is an investment because the first, it requires an investment of time and the first output of it doesn’t actually accelerate. But, Nate Kitzke, who’s our CTO, could speak more to. It might be worth having him on the show at some point, but we are leveraging it and we’re leveraging it to be able to write code and basically accelerate development with fewer resources, limited resources. And getting more throughput and output.

[00:19:51] Preston Pysh: Yeah, that’s a great point on the training and just like it’s an investment in time and effort to get the model performing the way you need. It’s also a consideration of like, do I host my data locally?

[00:20:04] Do I just ingest it into these mammoth cloud based, call it ChatGPT or whatever, and let them basically organize this and as their models get updated that they can continue to just ingest all of my data. It’s a lot more challenging to do that locally. Curating your own data set so that you’re not giving up all that information to the big conglomerates. But man, what a time that we’re experiencing with all this AI stuff. It’s getting wild.

[00:20:30] Parker Lewis: Yeah. What I would say is like from, I see what’s clear is that it doesn’t replace engineers. But it can help accelerate engineers. You might need fewer of them, but especially when you’re building something that hasn’t existed yet. When we’re thinking about data architectures, that what it is good at or seems to be increasingly proficient at is, known surface areas. But that you still need good engineers looking at a problem to try to create an efficient solution.

[00:21:00] And then guiding whatever those tools are to then write code and being able to manipulate it to understand what is actually underlying so that you’re not bringing things into your code base That aren’t well understood. And that could create problems that you don’t know. they’re creating until it presents in a bug that then creates an out. So it definitely, straddles a line, but it’s certainly an accelerant and I, only expect it to be improved over time.

[00:21:26] Preston Pysh: Yeah. Recently you gave a presentation, it was called Bitcoin, Not Crypto. I have a bit of a contra take on this, but it’s not, I guess it’s not much of a contra take, but I have a nuance to this that I want to discuss with you, but I first want you to explain what you were trying to accomplish with this presentation and why you think it’s important. And I guess another name for it could be Bitcoin, Not Blockchain, but go ahead and take it away. Give us the summary of it and then we will get into some of the nuance.

[00:21:55] Parker Lewis: Well, this was a presentation that I did in collaboration with Dr. Bonil from Unchain. We gave the presentation in person at University of Austin, which is a new university in Austin that is designed to promote a different model of education more. Freethinking more challenging of norms. So it, they’ve started a Bitcoin endowment.

[00:22:16] So just as an ethos, university of Austin aligns very well with Bitcoin generally, and so that was a logical place to give it. But most people that understand Bitcoin or people who are listening to this podcast that don’t understand Bitcoin. There is a massive sea of noise that makes Bitcoin more difficult to understand, and the specific noise that makes Bitcoin difficult to understand.

[00:22:41] And it’s not exclusive to this, but what I would say is that it’s set back significantly is all of the noise that’s created by the other 1000, 2000, 50,000 cryptos. I referenced in the presentation that there’s probably 2000, I think if we’re being more honest, there’s probably 50,000. Yeah. Different variants that people have copied Bitcoin and then there has historically been this trend of Fortune 500 companies or Fortune 100 companies that have tried to develop blockchain tech to no avail.

[00:23:15] And that if there wasn’t this narrative of blockchain tech and there wasn’t these other 49,999 cryptocurrencies and there was Bitcoin vis-a-vis stocks, bonds, fiat currencies. Gold, understanding Bitcoin’s role for the average population would be far easier to distill and, but also it’s a market test and people oftentimes learn through the market and the existence of that noise also provides an education and what we were intending to present.

[00:23:50] Educate through this presentation. Bitcoin, not crypto or Bitcoin, not Blockchain is helping people understand why Bitcoin was the real signal, but relative to those other 2000, 5,000, 50,000 copies or different variants of Bitcoin, as well as why blockchain tech is. A false promise, and in order to do that, we had to help people understand what is a blockchain in the context of Bitcoin.

[00:24:15] How does it solve the problem, and how could it or might, maybe why it can’t solve other problems. That through helping people distill down that noise, that they would be able to understand Bitcoin and find the signal through them.

[00:24:28] Preston Pysh: Do you think that maybe all of the noise has helped Bitcoin be more like a Trojan horse without governments stepping in and shutting it down?

[00:24:38] I mean, if it was the only thing that was out there, you might have this very large target and it would’ve never gotten to where it’s at today, where you literally have governments embracing it as opposed to fighting it. Do you think that maybe it was a bit of an advantage to have all of this noise in the background?

[00:24:54] Parker Lewis: Yeah. I think that is a fair take, it allows Bitcoin to continue to advance in a way where all of the focus isn’t just necessarily swear on that. And that also I’m somebody who believes not just everything happens for a reason. Is that inevitably. And unavoidably when Bitcoin was presented into the world, that people would try to copy it.

[00:25:17] That part of that is just a natural inclination for people that genuinely have curiosity to try to innovate when they see new innovation come along to say, I want to figure out how to make this better or perceive a limitation in it. But then the other side of it that makes it natural and avoidable is that.

[00:25:35] For the entire span of human history, people have been trying to recreate gold without the work alchemy. There’s also snake oil salesman. So part of this is unavoidable when I talk about the education. Some of the way that people come in to understand Bitcoin is that they got lost in the noise and they started buying crypto, and then they learn that Bitcoin is different by the market test.

[00:25:57] That it might be harder to understand if that market test wasn’t there, if they didn’t have to touch the hot stove, that they touched the hot stove and they learned not to do it again, and that there’s something different about Bitcoin through that. At that same time, we still need people to understand Bitcoin and that it might be best inevitably that all that noise existed so that Bitcoin could advance and not just be the one thing that is more clearly competing with all these other currencies, that it could have attracted more attention earlier that potentially could have stymied. I think that’s fair.

[00:26:29] However, if the world remains in the dark about Bitcoin and the light bulb doesn’t actually turn on for. People that are producing real things of value, that their ability to continue to be productive and to produce those things and to produce the basic necessity that we need will not continue in the way that we’ve taken them for granted if people don’t start to understand sound money.

[00:26:52] So I think both of those things are true at the same time. And just like podcasts exists or books exist that. People benefit from being in person and being able to have a dialogue about it, and then also to distill down otherwise very complicated concepts. Because one of the things that, that I described in the presentation was if you try to understand Bitcoin and you had to individually go to Bitcoin, crypto one, crypto two, crypto three, crypto four, crypto to a thousand, and you had to evaluate each one of those individual projects.

[00:27:25] Rather than distill it down to a few guiding concepts that are foundational to the way that money works and the way the economic systems works, you’d never be able to arrive at a coherent answer. And so through that presentation, we were helping to distill down the core concepts. To allow people to better evaluate Bitcoin vis-a-vis the field, and to have those guiding principles, then say, okay, these things are true.

[00:27:51] The ideas like money does converge to one due to the nature of trade. The best form of money is one that has a fixed supply. And then on the technical side that it was actually the fixed appliance. An idea that Dr puts forward, that I believe to be true as well. The fixed supply was actually the thing that allowed the technical architecture to work and the absence of that fixed supply being what caused prior iterations of attempts at digital money to fail.

[00:28:17] And so getting those ideas out there so that we can create whatever the universe of people that understand Bitcoin is to double and triple and quadruple over time so that the economic system can actually be built is necessary.

[00:28:29] Preston Pysh: One other like maybe contrarian take on a lot of this is the tokenization of fiat has been a pretty important role in the growth of Bitcoin itself.

[00:28:41] We’re now seeing like Tethers trying to put stablecoins on lightning and some of that’s being built on top of Bitcoin and I suspect it’s going to be built a lot more on top of Bitcoin and moving forward. But from what, 2017? When did we start getting stablecoins? 2016. 2017. They started popping up.

[00:28:59] Parker Lewis: Yeah, around that timeframe.

[00:29:00] Preston Pysh: So in that timeframe, they started popping up and the only reason that they started popping up is because of these other less decentralized, less secure blockchain, quote unquote blockchains. And in a way it’s, I mean, I look at it like this. The state is very pro stable coin at this point because they see it as the buyer for all their sovereign debt issuance the world needs.

[00:29:25] They need Bitcoin, but they don’t realize that yet. And going to your comment earlier about know thy customer and know thy user, first and foremost, the world thinks that they need stablecoins and all of this blockchain stuff, right, was a core enabler for like bridging this gap to people eventually understanding what real sound hard money is that will actually hold value without some government entity being able to step in and stop it.

[00:29:53] So I guess. I get everything you’re saying, Parker, but at the same time, I’m looking at how things have unfolded and I’m just looking back and I’m saying, wow, this was somewhat serendipitous the way that so much of this has like fallen into place because there’s no other use case for any of this. Call it Ethereum, Solana. And so that we’ve seen so far is just the tokenization of sovereign debt. That’s pretty much the only utility that we’ve actually seen pop out of it to date.

[00:30:18] Parker Lewis: I would disagree. I accept the premise that the existence of all the noise has allowed the Trojans worse to advance without maybe a more clear distinction of where it’s actually headed, and that allowing it to advance in that way might credibly have prevented somebody from trying to, stamp it out sooner on the other side, I’d say that in 2017 or 2018, I think that Indian Central Bank banned Bitcoin. I was later reversed and overturned into being unconstitutional. And then Bitcoin mining was banned in 2021 in China or 2020. Can’t remember which one.

[00:30:56] Preston Pysh: Yeah, I think it was 2020 in that. Well, it was banned multiple times, but yeah, the big mining ban was I think 2020.

[00:31:02] Parker Lewis: But what I would say is it is a sort of viable fact, incontrovertible fact, at least in my own experience, that if I start somebody fresh. It has not gotten their mind worked around a narrative of stablecoins or blockchain tech, or it’s going to be crypto. That’s the real innovation. Then I can help that person understand Bitcoin about 10 times faster than if I have to unwire their brain from this. False reality or false hope that the innovation is blockchain tech and that crypto and the thousand cryptos are going to be solving a problem.

[00:31:37] So that’s just individual to individual use case. That has proven to me in the eight years I’ve been explaining Bitcoin to people. To be the case. Then the other thing I would say is when it comes to stablecoins and like the tokenization of fiat, I personally don’t, and we can debate this back, I don’t buy this idea that it creates demand for treasuries.

[00:31:57] That dollars, the Fed creates reserves. Those reserves move between banks and then other constituents that sit on top of banks, create demand for dollars, and then dollar reserves change between banks. But if there’s 36 trillion US treasuries, 36 trillion US treasuries need to be demanded. So it’s not creating demand, it’s shifting demand, say, shifting demand, potentially say if JP Morgan is holding fewer reserves because the reserves are flowing to the bank, whether cancer Fitzgerald has access to the fed window, but and if they’re banking tether.

[00:32:35] So it’s just transferring where that source of demands coming from and that ultimately. The Fed is the backstop to the demand because it’s still going to have to create more dollars and stablecoins can’t solve an actual problem because they devalue as dollars are printed. And I’m somebody that also happens to believe that we have a lot less time. Than most people believe. We have to have Bitcoin working as a system that needs to work independent from fiat. That if you think about where Bitcoin’s come.

[00:33:06] Preston Pysh: Yeah. What do you mean by that? Dig into that idea more.

[00:33:08] Parker Lewis: I mean that I don’t think that the fiat system has another 10 years and so it’s like we can build out all these fiat stablecoins and I don’t even think it’s necessarily bad. There’s stablecoins on Heather, even though to try to conceptualize what that actually means is difficult, but. If you think about, you mean on the lightning network? Is that what you Yeah. Okay. If you think about what stablecoins are, they’re really like a different method of payment for dollars, right?

[00:33:33] And so if the problem is the printing of money, they don’t solve that. And that if the end game of fiat currencies being printed at infinitum is hyperinflation, that ultimately means that the Fiat system stops working and being able to effectuate trade. And I think most people look at this and say, ah, 50 years down the road we’re going to transition from FI to Bitcoin.

[00:33:56] I don’t know, if you just logically look at the equation and accept that knowledge distributes as a function of time, humans can’t work for money that’s created outta thin air. And that as money is created out of thin air, that’s actually what causes the economic system to fracture and degrade and to break down the ability to coordinate trade.

[00:34:17] Assume Bitcoin has two more havings in the next seven years. Knowledge continues to distribute. Bitcoin is a system. If you look at it, relative traditional assets, it’s something like the fifth or sixth largest asset in the world. If you look at it relative to other currency systems, it’s somewhere between five and 10.

[00:34:35] And then assume that Bitcoin increases in demand by 10 x, it starts to become. Close to the largest currency system in the world, and then assume the Bitcoin demand increases by 20 times over the next seven to 10 years. It’s the largest currency system in the world, and they’re going to be, and central banks are going to have to print a massive amount of money between now and then.

[00:34:57] So what’s more rational that humans don’t figure this out? In the next 10 years and are going to actually need the rails to effectuate the real utility that we get out of money, which is trade or that stablecoins and advancing a different way to pay dollars is more important than figuring out how to get business owners to understand Bitcoin.

[00:35:19] And I don’t. Does you mean Bitcoin owners to understand Bitcoin for the purposes of accepting Bitcoin payments. I’m talking about people that have the knowledge and capital to actually deliver productive resources to the economy, get sound money, so that they can continue to deliver those goods and services that we all generally take for granted.

[00:35:37] Like cheap power, clean water, reliable access to healthcare. so I’m somebody that would say, Hey, in 10 years we’re going to be on a Bitcoin standard, and everybody should be operating under the mindset. The fuse is very short. In the Fiat system, and there’s a lot of evidence out there for that. But part of this, what’s happening in the economic system today, the volatility of the treasuries.

[00:35:58] But another part of the evidence is three years ago when Silicon Valley Bank, a $200 billion bank failed virtually overnight. the, Fiat system is far more fragile than anybody wants to admit to themselves. And that people need to be operating with that mindset because in most cases, a new technology that comes along is a luxury.

[00:36:17] If you think about the advancement of a car when we were on horses, or the advancement of electricity when we were on kerosene, this innovation has happens to be the most foundational, basic necessity of the economic system because money is what coordinates trade. So I just look at it and say, Hey, there’s a 5 0 1 fire and we have a short fuse, and we need to be making haste to make Bitcoin work in a way that is independent of those fragile systems.

[00:36:43] We’re going to need it a lot faster. But I also don’t worry about it because like when everyone hits the exit, there’s going to be a rapid monetization in Bitcoin and humans are survivalists and they’re going to build the tools and access the tools that they need. And good thing bitcoin’s here. But so I just, I view all of those other things that happen on top of Bitcoin, like the tokenization or the demand for treasury, which again, I think is just shifting demand as being so much smaller of a problem to solve. And I just don’t think enough people see it that way.

[00:37:11] Preston Pysh: I love this point ’cause you’re not saying that it’s not important, you’re just saying that like all those things that, that we talked about as far as like the tokenization of dollars and all that, you’re just saying that it’s going to be short-lived.

[00:37:22] All these things are a dying breed. It’s super important for people to understand that and not get caught up in all of that noise as there’s this thing that could save them a whole lot of pain and a lot of grief if they can just figure it out, is basically the premise of what you’re saying.

[00:37:36] Parker Lewis: Yeah. Correct.

[00:37:37] Preston Pysh: Yeah, and I totally agree with you a hundred percent. I’m curious your thoughts on central bank digital currencies versus tokenized dollars or euros or whatever, call it Tether or Circle or whatnot. Is this just a central bank digital currency anyway in disguise, or is there some core differences?

[00:37:57] Is this something that people should be concerned with? If it is in fact just a central bank digital currency wrapper? What are some of your thoughts there?

[00:38:05] Parker Lewis: My view and types of credit Will Cole for some of his thinking on this. That’s, helped me see this more clearly. one way to think about it is, Hey, I just don’t really find this interesting because it’s a different way to move dollars and they’re not really stable.

[00:38:19] They’re just devaluing relative goods and services as fast as traditional. Yeah. The same, beyond rails aren’t. But the other side of it is that the logical, I don’t look at something like Tether or what’s the other one? Circle. Circle, yeah. USDC as being C BDCs. But if you play it out, that’s the logical end game.

[00:38:40] And it’s not the logical end game. Because Tether wants it to be the logical end game, and I don’t even, I don’t believe that’s what tethers building out to. It might be more realistically what USDC is building out to. I think that between USDC and Tether U SDC has definitely taken the approach more of trying to regulatory capture.

[00:39:01] Congress, by the way. I agree to dictate this. Yeah, but it’s interesting because this idea of money converging to one, which I talk about a lot, to help people understand Bitcoin and to allow the sea of noise of 49,999 other cryptos, it’s like if you only need one form of money and consensus and money is necessary to affect trade and the most important property of money is that it can’t be printed, that is what explains Bitcoin.

[00:39:25] That it’s also not a coincidence that Tether is 150 billion. USDC is something like 60 billion, and I don’t know what the next largest is, but Gemini tried to create their own stable coin, and their stable coin is something like 50 million or 60 million that it has this long tail for the same reason that money does converge to one.

[00:39:48] And it’s logical just foundationally to the way that money works, that one of these stablecoins and it might be that there’s. One stable coin for the yen and one stable coin for the Euro and one stable coin for the dollar, but that those currency systems gravitate towards one because what they’re ultimately doing is coordinating economic activity between peers and so that’s already been displayed as happening.

[00:40:16] That’s the explanation for why. And as it becomes more evident that there’s a winner, say it be Tether, the leader, the Fed and the Treasury have every incentive to control the dollar system. Right? And so to give Tether access to being able to even buy treasuries or how those assets are held and that they’re not freeze.

[00:40:38] I think there was something just that came out yesterday that, or yesterday, the day before that 15 million in Tether was seized. It’s tether centralized. So if you imagine tether growing as this quote, separate tokenized dollar, if it was to grow bigger and bigger, the powers that be would not want the powers to sit in this private entity that’s not controlled by the people that are controlling the current dollar system.

[00:41:00] So that as one winner becomes more evident or just becomes larger. It’s natural that it, the end state or the end game is its co-option. It’s being whether fully nationalized, effectively nationalized. Everyone would say, we don’t want a see a CBDC. We don’t want  a CBDC. Well, that doesn’t change the fact that the Fed and the Treasury and the federal government of the United States don’t want a dollar that’s not controlled by them. They have the power to control it.

[00:41:27] Preston Pysh: It even gets more interesting than that when you think about, well, what are they doing with the retained earnings from all the coupons, and what does that treasury look like? And it’s Bitcoin for a majority of it, right. And you talk about this idea of nationalization and how they have to be in sync with the government to continue to play this tokenized sovereign debt game that they’ve been playing. But if at the end of all this, they’re sitting on a ton of Bitcoin, it only further compounds all these forces that you’re talking about, which is a nationalization effort to basically scoop up all that Bitcoin, especially if it’s a privately owned company and doesn’t have millions of shareholders on the public markets. Don’t you think that’s a bit of a, I don’t know. it’s interesting.

[00:42:09] Parker Lewis: Yeah, I think that it, yeah, it accelerates it down that trend, but then also it’s like those treasuries are custody somewhere. I think it’s the DTC, so I don’t know that.

[00:42:19] Preston Pysh: Well, Cantor was, well, one of the biggest custodians I know for Tether, but I don’t know on Circle side.

[00:42:24] Parker Lewis: Well, yeah, but I’m saying like, my understanding, again, someone, this might not be correct, but there’s an underlying entity that actually custodies the treasuries that even like a cantor would use, I believe the DTC, Depository Trust Corporation. You custody like 50 trillion in assets. What my point is hey, if Russia can be cut off of swift and the treasuries that they hold could be cut off, it’s like certainly if you don’t play ball with us, tether, these treasuries that you own or your ability to access.

[00:42:55] The reserves that Cantor holds for you, there are fed reserves sitting somewhere in the system underlying tether, Absolutely. So it becomes a centralized end game that likely is nationalized. I do also agree that hey, strange bedfellows, and hey, you’re buying a bunch of treasuries, but also our interests are in the US financial system, and if more of it is going over to you. We, the Fed, we treasury, we, the federal government still wants control over that. So the larger it gets, the greater the incentive to regulate it.

[00:43:29] Preston Pysh: I wonder, with all this legislation that’s about to go through, that’s then going to allow the major Wall Street banks to start playing in this space and issuing their own stablecoins. If you’re going to get this bifurcation in the global market where it’s basically Circle and Wall Street, JP Morgan, Goldman Sachs coin, right?

[00:43:50] You have that particular market sector, and then you basically have Tether, which is the outside Eurodollar equivalent that for all intents and purposes, I think we both agree is under intense US scrutiny because of all the treasuries that they hold and the US government’s ability to step into the custody market to basically take all the treasuries away from them if they’re not playing nice.

[00:44:12] But it does seem like there’s a bit of a bifurcation that might play out here in the coming year or two in this particular space. And then I guess, what does that mean moving forward?

[00:44:23] Parker Lewis: Right, but even there, I mean, I could see a world where there’s one onshore stable coin and one offshore, like effectively like two different dollar currency systems. That would probably be the one unique one versus say something like the Yen or the Euro. But it’s more difficult to see a world where. There’s JP Morgan coin, Goldman Sachs coin, Wells Fargo coin. Fidelity coining for the reason that money still converges to one. And so if these currencies are going to, or these stablecoins, tokens are going to be demanded, there’s some forcing function as to, why they’re being used.

[00:44:58] An example on our side, we have Bitcoin miners that use tether and request payment solutions for tether because people have tether and they want to pay for things like miners in tether. And then the Bitcoin miner can then either use those tether to buy. The asics that they’re selling them or to convert them back to dollars to get them in their actual bank account.

[00:45:20] But the utility of the system is what will drive demand for it. Not the existence of 50 of them. Yeah. So if they’re being used to actually facilitate value transfer between two parties, that there’s a network effect that drives. There to natural be dominance and one, like what I would expect to see, as people try to create all different versions.

[00:45:44] There’s going to be one supremacy because of the way that money is used, that there won’t be demand for it if there aren’t people on the other side paying a premium for this.

[00:45:53] Preston Pysh: Very interesting point. Alright, final thoughts. What’s on your mind happening right now that you think is important, maybe missed by many market participants, maybe even a little bit of expectation into the end of the year? If you have it, give us your thoughts, Parker.

[00:46:09] Parker Lewis: I am very focused on one, building out Zaprite of course. And then getting more businesses onboarded to Bitcoin payments and delivering the tools really in a focused way where the market is demanding Bitcoin payments closest to the center of the economic system, the Bitcoin centric people.

[00:46:27] But beyond that, there’s a highly leveraged financial system that is highly unstable, and I don’t know the pace, but as of the last time I checked, the Fed was still withdrawing research from the system and that I. What the Trump administration is doing, rightly or wrongly, and I don’t have a strong opinion on that, I understand arguments on either side of the tariff equation.

[00:46:52] What it certainly does is increase uncertainty and when you introduce increase uncertainty in a highly leveraged system, that it is likely to result in a dollar liquidity crisis. And so I think that is something that everyone needs to be cognizant of because when currently the state of play is, there’s about 102 trillion in dollars denominated debt, which is just fixed liability, fixed maturity, not derivatives, not unfunded pension liabilities, and there’s only 7 trillion in reserves. So if there’s a run on those reserves, everything gets sold relative to them because the system is functioning solvent.

[00:47:29] And then the defend will have to come in to print more dollars. And you see the jockeying that’s happening where Trump is asking how to reduce interest rates and functionally, the only way to practically reduce interest rates, the interest rates that matters is by increasing the supply of dollars. But before that happens, there’s very likely to be, or at least I’d be on the lookout and be cognizant of. A dollar liquidity crisis. And so looking at things like the bond market, but not just the treasury market, the corporate bond market, because those underlying markets are highly illiquid, that when liquidity disappears, it disappears fast.

[00:48:06] And so that from a broader macro, a. As it relates to Bitcoin, it’s something that I’m watching out for because Bitcoin’s a liquid good, and liquid goods get sold first, but Bitcoin could run from here before that happens. And there’s been a lot of selling pressure. So, I think we could see a divergence, but it’s to be aware of the broader setup.

[00:48:26] And then the other side of it is I think that as it relates to the debate of like institutions, I think institutions are good for bitcoin. I do think though that fiat arbitrage is as close to zero sum as trade gets. It’s not zero sum because it provides a pricing function and a capital allocation function to the market, but that not every trade is created equal and that people spending their time building infrastructure that’s important to Bitcoin creates more value than arming fiat and that bitcoin needs more infrastructure to be able to function as a standalone system that exists today and that people need to be focused there, and that number goes up by, I wrote a piece that’s on, my blog that people can check out called Bitcoin’s Exchange Theory of Value.

[00:49:11] That the value of any currency is derived through its ability to coordinate trade. And if you were thinking about the spectrum of creating value, that actual commerce is more productive than fiat arbitrage and to not get, it’s like we all want number to go up. The best thing for Bitcoin is number to go up. But the path that actually gets there is dependent on valuable infrastructure to promote Bitcoin as an economic system.

[00:49:35] And that there’s, in my view, there’s better uses of time than haring.

[00:49:39] Preston Pysh: I love this point. I love that point.

[00:49:42] Parker, give people a handoff to where they can learn more about you or anything else that you want to promote.

[00:49:46] Parker Lewis: Check out the book TheSaifHouse.com /gradually. So it’s the safe House, SAIF, the safe House.com/gradually.

[00:49:55] If you’re interested in Bitcoin paying, and what I tell people is if you don’t understand Bitcoin, if you don’t understand why it stores value over time, if you don’t understand the importance of its fixed supply, and that’s the basis of sound money for the world. Get a book, whether it’s my book or the Bitcoin standard, or listen to more of Preston’s podcast, that’s the most important part.

[00:50:12] But if you already understand that, what I would tell people is make the investment in accepting Bitcoin as payment, or at least evaluating it because if you do, it’s the most efficient way to actually acquire Bitcoin, then you can check us out at Zaprite@zaprite.com, Z-A-P-R-I-T-E.com, and people can follow me on Twitter, Parker A Lewis.

[00:50:32] Then if you go to Unchained YouTube channel, you can find the presentation that we were talking about earlier, “Bitcoin, Not Crypto”, which helps distill why bitcoin’s, the real signal, why you don’t need to worry about all the other cryptos. They’re all losing value relative to Bitcoin for very foundational reasons, and that blockchain tech is a false hope. And that presentation, bitcoin crypto is a great way to distill it down for people.

[00:50:57] Preston Pysh: As a proud user of Zaprite, for our business, I can just say it works amazing and it’s super easy. And yeah, kudos to you and what you’re building and thank you for making time and just your education and the material that you put out there is of the highest quality.

[00:51:14] I truly mean that, Parker. So it’s a pleasure for me to call you a friend and comrade in this space, and thanks for making time and coming on the show.

[00:51:22] Parker Lewis: Appreciate it. Same sentiment for me to you. Preston really value everything that you do and you supporting me, having me on, but then also using the platform and being one of those company’s responsibility for people to pay you in Bitcoin.

[00:51:32] Preston Pysh: It’s awesome. It really is.

[00:51:34] Parker Lewis: Yeah. Thank you.

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