Welcome back to Outside The System. Today’s episode is with Nik Bhatia, the founder of The Bitcoin Layer and the Author of Layered Money. We spent a good amount of time in this episode talking about the foundations of money, monetary hierarchies, historical money like gold, and where Bitcoin fits in. We also spoke about Nik’s opinions on self-custody, Bitcoin vs Ethereum and how Bitcoin’s fee structure compares to other forms of base layer money.
Nik is also doing a lot of work around Bitcoin education including teaching at the university level so his insights there are fascinating. Make sure you check out Layered Money and subscribe to The Bitcoin Layer! Links below.
Timestamps
(2:11) The concept of layered money and the how forms of money are ranked. Layer 0 money has no balance sheet
(3:34) Nik's background and how he got into currency analysis
(13:07) How currencies stack against each other and what happened when the dollar-gold peg disappered
(18:52) What made gold the commodity that every society gravitated towards as a store of value
(24:45) Ethereum vs Bitcoin as money and why the Ethereum Foundation dimishes Ethereum's case
(25:30) Bitcoin's fee incentives to maintain the network vs the cost to using gold as the underpinning of the monetary system. How it took the German central bank years to get its gold back from the Federal Reserve - vs ~10 minutes with Bitcoin for final settlement
(29:03) Why just seeing the balance in a Bitcoin wallet isn't really that valuable. Why proof of reserves is misleading
(30:40) Why you should take your Bitcoin balance off exchanges if its not there for trading purposes. Not your keys, not your coins
(33:00) How to get your grandmother to self-custody - or get a third party custodian. More information about custodian services
(39:15) Companies holding Bitcoin and the implications
(42:12) Nation-state adoption of Bitcoin and how that affects their trajectories. How Bitcoin creates a more multi-polar world
(50:22) Nik's work in Bitcoin education
Links and Resources
Germany paid 6.9 million Euros to get its gold back from the Fed and Bank of France