📖 Episode Transcript

Cody Ellingham (00:00.17)
I just went to the cafe, did some writing, so just got back. So I've been working on my book. awesome. Yeah, a bit of a labour of love. I don't know if you've ever tried writing at length, but it takes a lot of effort. no, that's awesome. I'd love to read it when it's done. Yeah, thank you. It's not really to do with Bitcoin. It's more of fiction. I call it creative non-fiction. It's kind of based on my life and my travels.

I don't know, it's sort nice to just kind of spend a bit of time in the morning working on meaningful stuff, you know, and having conversations and doing the busy work later in the day, I find sort of works for me quite well. Yeah, that's cool. Yeah. But how have you been, man? Great. Yeah. New Zealand's had a cracker, a banger of a year with Bitcoin. I mean, Bitcoin in general has had such a great year. So it's awesome now, like with summer arriving here in New Zealand, things are winding down and people are being a bit more relaxed and

Cody Ellingham (02:11.682)
bit more social and it's been really good. Yeah. How would you describe the vibe up where you are? Exciting. So we just had a, one of those pub meetups, some monthly Auckland meetup, and we had like 20 or 30 people this time and half of them were people who had never met before, which is really cool. Yeah. And a lot of excitement, a lot of, like now that it's even more accessible here in New Zealand because of the ETFs and stuff, there's a lot more just general interest in it as an investment.

which is getting people talking about it in the mainstream a lot more. And I mean, we've got yourself doing some excellent reporting. And so all the Kiwis are learning from all the world leading Bitcoin experts. Thanks for your interviews. thank you. Yeah. And we've even had the New Zealand Herald did that markets of medicine piece where they went over to interview Sailor. So the New Zealand scene, we're definitely learning a lot from the rest of the world. Yeah. Interesting. I mean, that's, that's an optimistic lens. I mean, the other side of it though,

is I do feel as if New Zealand may be sleeping on Bitcoin a little bit. I mean, I had a quick look, and forgive me, but I had a quick look on the mainstream media just yesterday. And the two top stories were that the best regions to avoid because of rain this Christmas and the Hakka in regards to the All Blacks and the Hikoi were sort of the leading.

And I thought, know, this is quite disappointing when, you know, there's a global monetary revolution and many other things in the world taking place. And these are the leading stories, you know? Yeah. Yeah. But I think that it's still a very important story in New Zealand. And the people that need to be learning about Bitcoin are listening and learning about it. And we are seeing a direction change in New Zealand, which I think in the long run will benefit us from a Bitcoin point of view. So we're seeing

a huge support from the government towards geothermal energy. They announced, I think it was $60 million of grants going towards that area of research and development. And they also preliminary findings of something like 30,000 megawatts of power could come online through geothermal alone in New Zealand. And so once we get that developed, big infrastructure like that takes time. But once that gets developed and we start

Cody Ellingham (04:25.166)
domestically generating our own Bitcoin supply that should help alleviate the current kind of downward pressure on the Kiwi dollar versus the US dollar. Cause at the moment we're importing all our Bitcoin from America. So it'd be good to make some at home. Yeah. Well, James actually just going back a step though, something I wanted to ask you and I hope you don't mind, but that you're doing a lot of different things. How would you describe yourself and what you're working on these days, man? is there like a, do you have a pitch or like how would you, how would you?

How do you explain it? One way I could answer it is my business is my business and it's not your business. way, more generally speaking, a couple of projects that I'm involved with, the nature of them being Bitcoin is that they're always open source, they're always community driven. And so a lot of my work is volunteer. I'm not getting paid for a lot of it, but like everyone in Bitcoin, I am reaping the rewards because I'm, you know, we're all owners of Bitcoin.

So it's like we've all got equity in the same startup. But yeah, to formalize my work a bit more, I guess it is just kind of Bitcoin research and then using that research to help other people move forward with their projects and ideas. Yeah. It's interesting because I guess I've selfishly, I asked that question because I often think what is it that I do here? And it's sort of strange because you talk to people and it's often focused on the job, you know, and

Someone mentioned to me recently there's this concept of the slasher. Have you come across that before where it's sort of, you know, you're a designer slash photographer slash business consultant slash whatever. And you kind of describe yourself as this like string of fiat job titles. But I think that sort of implies that there's this deep connection between, you know, your role and your...

your title and what it is that you do, which feels like a very late stage kind of concept. It's not really a vocation as such. And, I dunno, I've just been grappling with that a little bit because I'm a bit like you. just sort of basically the way I say it is I work for myself and yeah, and then they sort of then they can ask questions, but I just wanted to sort of see what your thoughts were because I mean, it sounds like, you know, more broadly, this is, this is kind of a larger change in terms of, you know, what, what it is that we do with our days. Right.

Cody Ellingham (06:43.116)
Yeah, it's actually crazy how empowered our generation is to be self-employed, to take responsibility for covering our own cost of living rather than signing up to a salary where someone else pays for it for us. And the tools available to us now where you can run multiple projects and do multiple endeavors as an individual without being overwhelmed because of the support network that

things like AI actually provide. I have a positive view on things like chat GPT because I use it every day to help me scale what I'm doing. Otherwise it take me days to write emails. So there's a lot of opportunity, thanks to Bitcoin, to whatever value you can put out into the world. And in your example, you're putting out amazing value by sitting down and chatting with all these experts and providing that for free for people to listen to.

that value you're putting into the world, the way the Bitcoin ecosystem or economy is developing is that that value should come back to you as well. Whether it's through people making sure they boost your podcast, does that be some sense, or even just through the knowledge that you're sharing is helping Bitcoin adoption and that's helping your equity, your stake in Bitcoin to appreciate in value. Yeah. Well, you're referring to a kind of value for value approach, which is also quite, I think, new, but it's also kind of old as well. I mean, you go back to

the olden days and you had systems like this. But it seems as if in the modern era, this kind of wage slavery described, I mean, it has become commonplace and there's necessarily a lack of agency when you do that. You're signing up your time to be a worker or to labor away. And I think that's not necessarily a bad thing. People want to be part of something bigger, but when it's out of necessity and it's not something you're particularly

enjoying, for example, then that's sort of like a lack of, it's a failure of a system to enable self-development, I feel. Not to say we're working for someone's a bad thing. think, you as I said, you can be part of a larger project, but yeah, the sort of widespread discontent with the nature of work itself is quite telling. Yeah. Yeah. I think I feel like if I was starting out again right now, like leaving high school,

Cody Ellingham (09:08.846)
I would actually be, if I was starting out again right now, leaving high school and I was aware of Bitcoin and understood its promise, then I think I would just suck it up and just grind at whatever job I can find enjoyment doing day to day. It doesn't have to be a job that necessarily provides you with that ladder career path to eternal glory, or how they try to pitch it when you join a big corporate firm. Because with Bitcoin savings, it doesn't really matter what job you're doing. If you're able to spend less and you earn

then you are building wealth, you are building savings. And then that can help you invest in yourself and your own education, your own upskilling to keep doing what you want to do for the rest of your life. Yeah. And I mean, New Zealand doesn't even have any big companies anyway. sort of, yeah, we're the, we're the homeland of small businesses, right. And self-employed people already. there's sort of a sense of self-sovereignty there, I think, you know, working for yourself and

taking it on, which is actually quite a foreign concept in a lot of places, certainly larger countries. There's more of this capture from large corps and it's sort of this perversion of capitalism, which is quite often talked about, but it's not real capitalism. It's sort of aligned with the state and regulatory capture, et cetera. And so you end up with these mega kind of, in many cases, zombie corporations and especially as it relates to the financial sector, which I know you're familiar with, but.

There's not really a free market there for innovation, right? Well, yeah, yeah, you're right. That is definitely true. There is also, but there is like, if we want to give a specific example, a project that I have no vested interests in, just friends of ours, Lightning Pay, you've met the team from there. I would say they are massively disrupting the New Zealand financial system, but they're not doing it in an abrasive way.

I don't even think the banks realize what's happening. But because of the open banking API system we have here, where all of your bank accounts in New Zealand have an API that is open and there's providers that link them all together, Lightning Pay has basically meant that Kiwi dollars in any Kiwi bank account can within 30 seconds a minute be converted into Bitcoin in your own custody in your own Lightning wallet. So the capital flight, the ability to get capital out of New Zealand

Cody Ellingham (11:28.256)
is instant and it's quick and that actually alleviates concerns people might have about investing their capital into New Zealand because we've opened the gates to let the capital flow out as fast as it wants to flow out. And now the next issue is capital coming into New Zealand. We want to encourage capital inflows into the country. We want to encourage people to invest in our country. And that's where there's a bit of a hold up from the incumbents, the big banks.

they don't have necessarily the motivation, inspiration, innovation to actually come up with creative solutions. But at the same time, the regulations that have built over the last two decades have absolutely made it hard for people to challenge them in the fiat side of things. And that's actually where the disruption is coming from the regulator. It's coming from the central bank saying, we're going to take the windfall that you have right now, which is your

deposit accounts, your checking accounts, but basically the New Zealand dollar digital cash system we currently have. And right now it's a select group of banks that are allowed to provide that. And so that's how they get their cheap funding to do all their lending because they just don't have to pay you much interest because you don't have much choice in who you give your Kiwi dollars to. You're to pull that out of the banking system and make that available to everyone through the central bank digital cash. So like,

Even though over time we might get industries that build up and build regulatory modes, all of a sudden that regulation can be changed. And I think that's what we're about to see as well in the US where they are coming hard and fast pro Bitcoin. And now they've got like their parliament, their house, their Senate and their executive, their presidency, and also the Supreme Court is stacked. They're all in the same camp at the moment.

which means they can push through radical reform. And so you can create competition and it can, even if it requires state intervention, it can create more competition. There will be opportunities there. It's interesting. You mentioned the U S situation. And for me, that's kind of a gradually then suddenly example where it really has, I think it's, it's locked in now. I mean, it's in the prices of the exchange rate of Bitcoin is reflecting that confidence from the market. But

Cody Ellingham (13:47.008)
It seems as I before, New Zealand is still sleeping on it because it's not, it doesn't feel like it's a topic that is in the mainstream yet. I mean, maybe in a little while, maybe next year, but certainly for me, things are locked in now and we're on the way to a sort of symbiosis between what was as a Bitcoin vision and now this kind of actual reality of it taking over and interfacing with the legacy system. Because I think there is a...

You know, they're not two separate things. They have necessarily a flow between them, right? And that capital flight you talked about, that is because there is a symbiosis. And I think that's now confirmed, right? We've got that situation being led by the US. So, yeah. So we all are used to think that Bitcoin was about disrupting the US dollar. But it turns out if you look at all the fiat currencies, the US dollar is the one that's embraced Bitcoin the most.

And by going hard and fast early into Bitcoin, developing a huge local supply of Bitcoin, huge energy industry devoted to Bitcoin, and also their financial markets around Bitcoin with their exchanges and their liquidity, they've basically secured the dollar's place as a dominant government fiat currency. And there is definitely a place in the world for having both Bitcoin and a government fiat currency.

And then the debate is around, how many government fiat currencies do you need to choose between? I personally don't want to see the one world CBDC outcome where there's one empire with one government fiat currency. Cause then when you interface with that legacy system, it's completely surveilled, completely controlled and can be completely abused by people in power. So I liked the idea that we are not, we are an independent country with our own central bank and our own currency. And I want to see it.

try to strengthen itself and defend itself a bit by embracing Bitcoin too. Well, I think that's not going to solve the risk of government currencies over time lose their value. That's the reality of running a country and people debase the currency to pay for things. So that's still an issue that Bitcoin solves by being savings. Yeah. I mean, often you talk about the cider of the extinction of the Kiwi dollar.

Cody Ellingham (16:10.376)
And I thought maybe we could expand on that because as you mentioned earlier, the exchange rate right now via compared to the US dollar is quite weak and it seems to be, you know, there's this kind of malaise in New Zealand towards, you know, everything. mean, maybe summer and nice weather is taking the edge off that. But I mean, what is the reality of that longer term and the New Zealand dollar? Yeah, well, 10 years ago in 2014.

A New Zealand dollar was almost worth a dollar. It was worth like 92 cents. And in that 10 years since then, it's just gone down and down and down. And now it's like 58 cents or something. One of the main reasons for that, in my opinion, is because we buy a lot of things from the US. We buy our Bitcoin from the US. We sell our New Zealand dollars every time we try to buy Bitcoin. And instead of giving those New Zealand dollars within our circular economy to a Bitcoin miner in New Zealand,

We're exchanging them for US dollars to buy Bitcoin in the US. We're backing their currency with Bitcoin. So that trend, and then also we were really reckless for a couple of years with how loose we were with our monetary policy, how willing we were to debase it, to do social programs or whatever it is we spent it on. It's an ebb and a flow. The tide can be changing now. This might be the bottom, but it might not. It might keep losing its value. And one of the reasons

a lot of Kiwis might use it less and less going to the future, is just how easy and accessible the US dollar is compared to the Kiwi dollar. It's far easier for a tourist coming to New Zealand to just swap their Bitcoin for US dollars tether than it is for them to actually swap their Bitcoin for New Zealand dollars. We don't have a digital New Zealand dollar yet. And you can't go up to a New Zealand ATM and withdraw Kiwi cash paying with Bitcoin. I can do that in Thailand. Go up to

basically any of the major bank ATMs and I can pay that ATM with Bitcoin and withdraw cash. It's because there's a middleman service in the middle, but we don't even have that yet. But we are building that infrastructure now. Lightning Pay could help facilitate that. But another thing that could really help it is actually the central bank digital cash. If they do it in a private way where it's actually a digital version of cash, then a digital version of cash should be able to be purchased by a tourist.

Cody Ellingham (18:35.362)
without a tourist requiring a bank account in New Zealand, just like how they can walk up to a money exchange and get out Kiwi dollars and pay with US dollars. They should be able to get out Kiwi cash and pay with Bitcoin. And if it's digital, well, it's even more convenient. They don't have to carry that on them for their whole trip when they're touring New Zealand. They don't have to carry physical cash. can carry digital version. So that would really help the inflow of capital back into New Zealand if we actually understood that we want people to spend their Bitcoin on Kiwi dollars.

And another thing holding people back from spending their Bitcoin on Kiwi dollars is the unfair tax treatment that it currently has. It's the only foreign currency that when you convert to Zealand dollars, it's treated like it's a speculative investment. When really it's Salvadorian sats. It's a national currency of El Salvador. Why is it treated differently with preferential tax treatment, with worse tax treatment than the US dollar? Yeah, interesting. The exchange rate thing.

is kind of strange because New Zealand doesn't have a capital gains tax per se on Bitcoin, right? so they have income tax, income tax. I mean, what does it even higher? It's up to 30, 40%. What does that mean? I mean, has there been any, I mean, as far as you know, has there been any challenges to that given that it is legal tender and, it could be considered a foreign currency via El Salvador? Well, speaking of the US, if they are about to remove the taxes on Bitcoin, then

Tax competition theory would say that if we don't follow suit, then the capital outflows would be so much worse. So we have to follow suit of the US through that. So taxes reform could happen. But in the meantime, the way that I view it is try... The other annoying thing is they've created a loophole right now where you actually can avoid the tax if you buy Bitcoin through the New Zealand ETF, as opposed to holding physical Bitcoin.

which is a weird incentive structure they've created because in New Zealand when you buy shares, there is no capital gains tax on the shares, particularly when you hold them for a number of years. And there's no income tax on those shares either if you make a gain. And so in New Zealand, Bitcoin ETF is a share. And so you can bet on that, make a gain and not pay taxes on that gain. If you do the exact same thing with Bitcoin, it's going to be subject, it's going to...

Cody Ellingham (20:56.462)
The gain, the entire gain will be treated like income. So the first 15,000 will be taxed at 10 % to whatever the tax rate is there, all the way up to 30 % plus. So that's annoying. Something that does help this is if you're actually earning Bitcoin as an income online, like I do earn Bitcoin through some of the ventures I do online, I connect my Lightning Pay with Henry, H-N-R-Y, which is just the New Zealand accounting app.

So basically, if I have Bitcoin income, I can send it to Lightning Pay, they convert it into New Zealand dollars, they pass it to Henry, the accountant, who deducts the amount of tax required to deduct, and then they give me the after-tax income. So it makes me feel a bit more like a PAYE, like a salary earner who has their tax removed from their salary before they get it. Yeah, so for actual income, I can understand why if you're earning Bitcoin as income, you should try and treat it like it's taxable.

But it is frustrating where if you've actually saved your money in Bitcoin and now you want to spend it and support the economy right now, which is in a bit of a tough spot, there's a hesitation every time that's like, everything, Zealand dollars cost about 30 % more than they should because there might be a tax when you buy them. Well, I mean, if we flipped it, imagine if there was a kickback or some sort of rebate every time you spent your New Zealand dollars that you had saved and which had lost their purchasing power over the years.

Imagine that. mean, it would never work out. But I mean, that's the concept here that a dollar that I had, a hundred dollars I had saved two years ago is now worth, you know, $93 or $92 or something. that eight dollars should be able to be used as an offset against other taxes or other, you know, other things. And, you know, that would make sense, right? If you're going to apply the opposite, which is that as your money increases in value,

And as savings, I bet you get taxed on that I mean it just seems a bit weird to me But maybe this is the fear thing coming through right? Yeah, creating a taxable event every time you transact is unmanageable Unworkable by any reasonable person and so it's like there's to be a better way and I think that's why the whole tax question is up for debate in the US They're looking at how they can move away from income taxes and to go to tariffs and things like that

Cody Ellingham (23:24.094)
We kind of already do that. We put a 15 % GST on everything you import from overseas. So we already have a 15 % tariff on everything. Yeah, interesting. But coming back then, so when we talk about the regulator, we're talking about the Reserve Bank of New Zealand. Certainly there's been a bit of celebration around their ability to get the price inflation down, which I think is perhaps a bit premature. I know the Governor Adrian Orr.

was just at an IMF and World Bank annual meeting in Washington DC where they were, where he talked about getting it down to 2.2%. And as you and I know, that number isn't really true. It doesn't reflect the true cost of living for every individual. Inflation is a very personal number, but it seems as if there's a bit of celebration there around bringing inflation down. They've righted the ship, so to speak. But at the same time, I think a lot of Kiwis are still.

experiencing the punch. mean, how would you describe that discrepancy in realities? Yeah, the inflation number they talk about is just the one year change in prices. And so if prices were really high a year ago and today they're lower, or you could say we have deflation. And that's actually what we're experiencing right now with most assets during this kind of Black Friday going out of business sale kind of thing that's happening right now is that year on year prices might even be negative. So

That'll become the next announcement from the central bank is that, we called inflation too much and now we've got deflation. So we have to start printing money again. But when you zoom out and you look at your cost of living, the rents only ever go up. Food only ever goes up. Everything only ever goes up and gets more expensive. It's just the speed at which it gets more expensive, which is changing. It can either be really bad years where it goes up 20 % in a year.

or their target where it only goes up by 2 % in a year. It's annoying because if you're a salary worker, bringing it back to that earlier conversation, if you're on a salary where you've agreed to sell yourself for a year for a fixed price, you can't renegotiate that midway through the year. It depends on the nature of your contract with your employer. But it forces workers to be on the back foot constantly, having to fight for a pay rise constantly just to get the same amount of money that they were previously

Cody Ellingham (25:46.424)
getting paid. And it means that people who don't have that power to negotiate, they're not, you know, maybe they're not performing well at their job, their boss doesn't really care to give them a pay rise. They just slowly get paid less and less. And we see that as well with pensioners or beneficiaries. If you're getting a government defined benefit, the greatest way the government saves money is that it just keeps paying you the same amount of Zealand dollars, but it makes those dollars worth less and less. yeah.

Yeah, well, mean, as Adrian Orr says here, navigating monetary policy with a one to two year lag between policy action and ultimate outcome is akin to ocean circumnavigation. And we've got these images of Mr. Orr sort of holding the wheel of the ship and kind of ingest trying to explain that he's steering the economy, which we know isn't true, right? There's the reality of the market and economics is that it's

decentralized and everyone is node and a participant. And yet there's still this strong sense of governance, I guess you could say. And New Zealand seems to be holding on to that. We've had recently the Hikoi protests in Wellington and kind of questions around, know, very political questions around the Treaty of Waitangi, etc. Which kind of feels like it's, I find it quite interesting that there's this appeal to the state for something which the state apparently did.

once upon a time and there's this kind of dynamic of central control which feels that for me as a bitcoin it feels quite anachronistic you know sort of out of date but i mean how would you i mean how do we approach this because new zealand really does have a long relationship with the nanny state and with you know appeals to government i mean is there a way that we move forward from that what does it take it's hard because people older than us or even a lot of people our age they don't want to learn something new

that very stubborn and that's fine. know, once you get comfortable and how to navigate life and you have your way of surviving, you just want to survive like that and live your life. And so we can't do anything too radical where we take away, even if the, you know, the wizard of Oz, the central banker is just a talking head to give people confidence and something that there really is not that much control over.

Cody Ellingham (28:07.21)
that's still beneficial for those people who do believe in it. It's like Santa Claus. It's like there is, if you listened to his guidance and his imagery, his imagery recently of him doing full steam ahead with the boat, that was accurate. It was letting us know that the direction rates are going now is lower. That we're in a bull market now where it is time to spend money. Money's going to get cheaper. And it's time to actually pull ourselves out of this

recession that we're in and it's kind of like if we're all in sync like that then we can have a business cycle that there's some element of predictability over not complete predictability that some element and where things go a bit rogue is you get a government that comes in and goes way too far in the borrowing spending direction than they should for the size of economy causing a short-term blip in inflation and then it's like the boats on fire and

You don't want to tell everyone on the boat that it's hit the iceberg. You don't want everyone to panic. And so you just pretend like it was intentional. yes, we want, we wanted rates to go higher to cool things off. Well, no, it's cause no one around the world wanted to lend New Zealand money. Our interest rates blew out because the government had to keep borrowing money. wasn't so much debt, but no one wanted to lend it to us. They had to keep paying a higher and higher interest rate to borrow money. But we don't want people to panic. So we always have to have confidence.

and give the impression that it's a very controlled ocean that we're navigating. But that does help put people at ease and help the economy to move forward. Because if businesses lose confidence in the economy, they don't make decisions. They don't invest. They don't take a risk and borrow money to invest in their expanding business. We need to have that level of stewardship over the economy to give people, I guess, encouragement and motivation to just take action and

grow our way out of this ourselves. Yeah. I think you mentioned looking to the state for answers or something like we shouldn't be hoping that the state solves every problem, but it's okay to let them be like our cheerleader to help motivate us to actually solve the problems ourselves. Interesting. Yeah, that's fascinating. It's like the theatrics of politics now with that lens are so clear, right? There's this sort of act required perhaps for the market to really have stability because

Cody Ellingham (30:30.894)
if you don't say the right things and you don't give this sense of confidence, reality aside, people maybe start stressing out and panicking when you've got the guy coming out and saying, Hey guys, sorry, but we're broke. You know, the ship's sinking. obviously, they can't say that until you're actually underwater. And by that time, you know, they're already on their lifeboats themselves. So sort of,

the theatrics of it come through and it stands out to me that really maybe they shouldn't be hiring economists but they should be hiring actors and people with a creative background to tell that story, you know, and the degree and the kind of hard science of it is less relevant potentially. Yeah, well, I guess the central bank does also have a regulatory role where it's kind of like got a boring role of trying to set the rules for the game of the financial players.

And in that respect, economists or lawyers are important to help to be independent and understand that you're meant to be policing the banks, not writing rules that help them defend their mode. So there's still place for people that are educated in economics and stuff. The image that comes to mind is, know, the clowns that they put into the rodeo to like run around to distract the bull.

It's maybe a bit like that. It's just sort of like they're waving their hands and trying to get a little bit of attention off the bull, but man, it's not really controlling that thing. The beast of the economy does what it wants to do. And especially when it comes up against reality and if there's a way, if there's a pathway at exit valve, a lifeboat potentially in the case of Bitcoin, people start finding that and that knowledge disseminates and people start to understand that there's a way.

out of this, maybe that sense of authority of institutions is still quite strong. And even non-state institutions, things like the media, still kind of have a lot of sway. And even in New Zealand, when clearly they are so biased and so wrong. yeah, I'm sure most people we know in New Zealand still watch the news to some degree, especially family and friends who are maybe not so much into Bitcoin. So it's sort of like, well, at what point do these institutions fully lose validity?

Cody Ellingham (32:49.238)
Or maybe they never do, know, maybe they always stay, you know, as the voice potentially. Yeah. I mean, there's an element of if they're just trying to get attention because the only way they make money is through viewership, through ad revenue. Sponsored content. Yeah. Having a click-baity title that's actually an error. Like whenever someone says something bad about Bitcoin, they get a lot of engagement from the Bitcoiners and that gets them views and makes them add money.

Whenever someone says something positive about Bitcoin, we're starting to engage with it. But most of the time Bitcoin is aren't as engaging as they are with the negative content. So it's self-fulfilling prophecy with feedback we're giving these journalists to keep writing hit pieces because that's what gets you engagement. Because all they're looking for is engagement. Yeah. Well, if it bleeds, it leads. it seems like, I mean, maybe that's a good point because if they came out and said, well, you know, Bitcoin is the answer, you know, this is what you need to be doing with your money. Here's how it works.

get started. That's maybe a little bit too simple or too optimistic for the news. They want something nasty. They want the failures and the crashes and the cryptos and all of this stuff. So yeah, mean, that makes sense when you look at it through that lens that necessarily these media institutions are pessimistic and that's going to rub off on you if you're consuming that stuff. It's kind of like seed oils, I guess. It ends up manifesting in the body, right?

It's interesting with the state funded media, the New Zealand government does support a lot of the media. When it's the left-wing type government in power, the state funded media is just relentlessly positive about everything the government does. And then now when a right-leaning government is in power, because that right-leaning government is trying to cut costs as well, so that doesn't have to print as much money as the previous government printed, because they're cutting costs, they're looking and saying, why should we be paying these people to write these?

this journalistic stuff, why should we pay them? So they cut the funding. And because they're cutting the funding to the state-funded media, during a right-wing government in New Zealand, all the state-funded media is relentlessly pessimistic on the government. It's a total tone shift. Like Radio New Zealand used to love the government, now they hate it. And any opportunity they get to undermine the government, they just jump in. Yeah, they like taking their pot shots. I find it fascinating. The way it's so vapid.

Cody Ellingham (35:11.478)
You know, and as I said, you you look at the leading articles, the leading headlines, and they are just so basic. as I said, mean, New Zealand has this already, just this myopia being at the bottom of the world. certainly it's like, man, there's so much stuff happening. You should be maybe a little bit more aware and focused on what is out there in the world, especially in these times of change. You know, I don't know if conservative slow kind of

sort of ambling along is going to help. think you need to kind of have your eyes open to rapid change and things can change on a dime as we've seen with Bitcoin and everything now taking off in the US. I mean, as I said earlier, this is locked in for me. think we're on the timeline now where this takes place. And that maybe could have been delayed if the election had gone the other way. And again, these are all political actors, but the deck is stacked.

with Bitcoin is right now in the US and that is where New Zealand gets its leadership from in terms of the monetary side. So it's exciting times man, but yeah, I do get the sense that New Zealand is a bit slow to the game and it hurts man. I see it every day and I think man, how many people are just not, they haven't been reached yet. They don't know about it. They haven't been given the information because the places that are going for reporting and truth are not telling them that stuff, you know.

Yeah, but you know the independent media like yourself is growing in popularity So there's voices out there that people can listen to I mean I personally haven't My TV I've not had my TV plugged into the New Zealand area or you know, the freeview TV network for over 10 years I just haven't haven't had the ability to even watch New Zealand television because I'm needed to yeah But it's still a part of a lot of people's lives the older generation in particular, but the younger people get their news online

mostly from social media and social media is actually becoming quite heavily dominated by pro Bitcoin voices. Yeah, everyone seems to be coming out of the woodwork now and it's funny the exchange rate does that. It was kind of, I think, I mean it gives an affirmation to the value proposition that this thing's here to stay. It's going to continue to dominate and...

Cody Ellingham (37:33.816)
you just have to look at the number, know, markets are down and there's a lot of negativity just with the recent US election, a lot of things crashed, but the one thing that didn't crash was Bitcoin. So the market's clearly seeing confidence there and stability there. So yeah, I mean, that's maybe the piece of information people just need to look at, know, look at the number, number go up. Or even getting more people, even within the Bitcoin space, applying their Bitcoin knowledge more.

taking it to the next step of not just having all your Bitcoin in cold storage, but spending a little on NOSTA, know, participating in the value for value economy, getting the Bitcoin circulating in the Bitcoin economy. Like, it makes it so much easier now to onboard new friends and family with their first dollar worth of Bitcoin. You just get them to install a Lightning wallet, get them to create a Lightning address, like an email address. That's how I explain it to people. Hey, what's your Lightning address or email address for money for Bitcoin?

and then I send them a dollar's worth of Getting them to participate and use Bitcoin is like sitting them down with a demo of email when they're in line at the post shop and saying, look how much quicker it is to send an email to someone around the world. Hey, you could set up this email system at home and do it all yourself if you want. Like there's all this potential and it's growing so fast. So the more people we get experimenting with and actually using Bitcoin, the more it just becomes a part of our economy and the fabric of our society.

And I don't think that we can see the New Zealand dollar at all. I think the more we do it in New Zealand, it strengthens our New Zealand dollar. Yeah, interesting. mean, coming back to the Lightning Pay example, I mean, you'll be familiar with their bill pay feature, which is pretty cool. You can pay from your Lightning wallet and it will settle New Zealand dollar bills straight into the account of the other person. And it seems to me that's very interesting because in that situation, I mean, you know, the New Zealand dollar is kind of like a layer two of Bitcoin.

making easy use of the open banking system, which has been kindly built by the state. So we should be a bit nicer. There is some innovation in New Zealand. If we compare it to other countries, our banks are pretty ahead of the game. Yeah, I mean, it's kind of cool. But what it means is you can have a Bitcoin, you can be on a Bitcoin standard and certainly pay your bills, utility bills, things like You absolutely can if you are a fully KYC New Zealand resident.

Cody Ellingham (39:57.868)
Yeah, I'm The headache that I'm experiencing right now is all my Bitcoin friends coming to visit New Zealand and then I've got to be the one to go get out cash from the bank and sell it to them because they don't have any other way of getting New Zealand cash and because they can't pay with their Bitcoin at every point of sale yet in the country, although that's being worked on, because they can't do that yet. They just want New Zealand cash. They want to lock in their spending money for their two or three week trip here and just have the cash to spend. And that'll be fantastic when we can make that work a lot easier for tourists.

Yeah, that would be awesome. I mean, I guess on that note, and again, I mean, we've talked about this in the past, but there is a sort of small cadre of people in Wellington working on this with the government, it's all working on something with the government. in terms of the Bitcoin conversation, certainly, don't know if that's in there. It seems like there's still lot of reluctance, a lot of uncertainty. And I certainly haven't seen any real meaningful discussions. I mean, what is the pathway to

some of the stuff we're talking about actually making it through the barrier, through the membrane of the States. I'm quietly optimistic. So we don't have gold in our reserves in New Zealand. So we already have a principle that our central bank doesn't actually back the currency with real money, it just backs it with government bonds of other countries. So getting our central bank to buy and hold Bitcoin is probably a step too far. That might not happen, but getting our central bank to

digitize our cache, create that digital cache with an emphasis on privacy because we want it to be cache. That is in the works. It is very much being researched. They have shared publicly multiple times their emphasis on trying to figure out how to do it privately. That technology now does exist with Charmian eCache. And so

We could see the perfect scenario of New Zealand dollars now become, there's a digital version of them that you can transact peer to peer in a private way. A tourist can arrive and get some digital New Zealand dollars if they want to and pay it at all our businesses. It's like that layer three, that layer on top of lightning, right? That could happen faster than we could even imagine. If there's the motivation, if they're truthful about their motivation to make it private.

Cody Ellingham (42:24.204)
The worst case scenario might be that it gets captured, that whole process gets captured by the banks because they don't want to have that cash out there outside of their system. And so we just get this horrible KY seed digital currency rather than digital cash, which isn't much different than what we currently have now. I think the willpower is there to get it done. I think the technology is there.

And there is the expertise in New Zealand. think that the people in Wellington are listening to your research. They're listening to these conversations. are talking with, potentially talking with places like Blockstream and with Liquid and learning about these side chains and how basically the US dollar has done its digital cash when it went into Tether, which was actually a private company doing that. There's no reason why Kiwi Bank can't offer Kiwi Cash right now as a version of Tether and make it run on the Liquid side chain.

that's still a really positive step. So there is a lot of potential. I don't want to criticize the work they're doing because they have to, as the government, be open and public with it and they have to listen to submissions from everyone. So right now they've got that boring bureaucratic process of having to look at all the bullshit submissions to find the ones that support their thesis of privacy and e-cash. And so they have to go through it all and that takes time.

And also there's the idea of being a first mover can have a lot of political risk and be quite a thing. But now that we've got the pathway kind of being cleared with the US being pro Bitcoin, things can happen in the next couple of years. Yeah. I like your optimism though. I must say, I mean, the CBDC thing certainly is a big topic, you know, amongst the general public as well. There's a lot of concerns about the privacy side and I just...

I don't know man, it's the state we're talking about. Do they really care about privacy? I mean that would be the question. I mean I'm an optimist as much as anyone but I sort of think man... Something that made me believe them was in the recent interview with one of the members of the Reserve Bank, the one who's in charge of the cash system, he emphasized that if we want private cash to continue to exist, we have to start using it more. And the issue is that even if we believe in privacy and we believe that cash is good thing,

Cody Ellingham (44:44.096)
I still find it incredibly inconvenient to use. I hate having to deal with change and dealing with coins. And I also have total empathy for a small business not wanting to have a cash register with a pile of cash that can be robbed. So digitizing that is actually an admirable goal that we should all be hoping for. And that is a separate conversation to...

The CBDC, the traditional conversation around digital currency where it's the banks kind of surveilling everything and controlling how you can spend the money. That's kind of the existing system we have now. We almost should think about it like the central bank can help us. Now, the first time I started learning about CBDCs, I was also very pessimistic because the people I'm talking to about it are Americans. And when they talk about it, the fear that comes over my mind is I don't want to have to be forced to use the US dollar. I don't want...

that to become a global CBDC because the US loves spying on their own citizens. That is like the country to a T. So I wouldn't trust that as a one world global CBDC. So I'm hoping and betting that we can defend ourselves from that by taking our own route without CBDC, emphasizing the cash part of it rather than the censorship part of it. Yeah, interesting. Yeah. I'd like to see how that unfolds, man. I mean, I don't know if I see that sort of vision

from their people, it seems like there's sort of a lumbering along and I don't really see strong privacy advocates or certainly there's no Bitcoiners at the table that I'm aware of. So I'm sort of thinking, well, where are they getting their directive? Because it seems as if Mr. Orr himself, who's now talking at the World Bank and IMF and celebrating...

the inflation target that they've had. It seems as if that's still within this global surveillance system that, you know, I think everyone's aware that it exists and that it's not for our benefit. And so that a few people in Wellington would take a shot at doing something actually good, maybe a bit of a stretch of the imagination. I want to have hope and certainly extend an invitation to talk about it if there is an opportunity.

Cody Ellingham (46:55.052)
Yeah, we'll see. mean, time will tell and maybe it doesn't matter anyway, because if the New Zealand dollar goes dead, we're just using US dollars and Bitcoin. won't matter much. Well, let's hope not. I'm in the camp of let's hope that doesn't happen. I think we have to remember that these are employees of the state that we control what the state is and we can effectively fire and replace if it goes in the wrong direction. I know there is a separation of central bank from parliament. So there's that idea that can't fire them, but that's...

BS, absolutely can. So it's kind of like, if it goes in the wrong direction, and we suddenly have this tyrannical Kiwi dollar, first of all, it'll be worthless. So no one's gonna want to use it. But second of all, we as a people would just enact our political power to change the government and unlock the free Kiwi dollar, the Kiwi cash. Or we'll just, you know, we'll just completely opt out of the system. And it's the downfall of the Kiwi. But I think before that happens,

It'll be easy to get the political power to make it right. The ship, as they say, you know, change course. We are, we're great sailing nation. know how to change tech. Yeah. Yeah. That's cool. that's awesome. James. It's interesting stuff to think about as we come into the summer break at the bottom of the world. And, I guess look forward to next year, which speaking of 2025, what is your outlook, man? What are you, what are you looking forward to? What are you, what's on your horizon? I'm trying to remain humble.

and appreciate that 2024 was the bull market year. A lot of people are saying next year is the bull market. But if you look at how well this year has gone for Bitcoiners, this was a bull market year. So next year, I'm looking forward to long-term planning, to secure thinking epoch to epoch, the four-year cycles of Bitcoin's halving, trying to make sure that going into next year, I can hit the ground running for three years or four years straight without having to worry about

You know, the worst situation you can be in is being overexposed to Bitcoin in a bear market and being forced to spend some of your Bitcoin at a depreciated value. So there is the use case of stable coins and of trying to pre-fund your runway. If you don't have an employer like I am my own employer, I need to think about how to position myself to afford my cost of living. Always being humble and having a very minimal cost of living.

Cody Ellingham (49:20.27)
so I can stretch out my savings as long as possible, but trying to plan multi-years. So a few of the projects that I'm working on are unspent capital. That's kind of like my investment philosophy and that's going to become a bit more of like a up-to-date current education on what I would do today in Bitcoin and sharing what I'm doing in Bitcoin, kind of where I share my research and also where I share what I'm spending my Bitcoin on so people can see what my spent capital goes to. Cause I think every Bitcoiner

is really good at spending their Bitcoin. They put a lot of thought into it. So it's worth sharing with people how you think about that. Another project that I'm really ramping up next year is my gamertag is Madden's and I play a game called Rust. And so me and some friends have a Rust community, a server where we have kids come and play and they earn their first little bit of Bitcoin in this digital economy. So really trying to ramp that up and get more people offering their products and services in this economy and experimenting with that. And

I mean, there's actually quite a few other Bitcoin projects like in the NOSDA space, I'm loving ZapStream if you like live streaming. So I want to contribute and help that grow as much as I can. So yeah, it's a big year next year, but I'm not going to be one of those people that keeps expecting Bitcoin to go up forever. So I just need to be realistic and plan four years ahead of time and just be able to be in a position to be building for the next bear market.

Yeah, that's interesting. And just with unspent capital book, that not the company you started a few years ago? Are you saying that's a going concern still? Yeah. So that's the project I started in 2020, but I haven't actually done anything publicly with it, but I've been working behind the scenes to put the pieces in place to go ahead with that next year. But it's not like it's, it's not a, it's not.

I'm not accepting anyone's capital. I'm not trying to start a fund. I don't want to manage anyone else's money and take that risk. But it's more just like providing people with a portal to access me if they want to book in time with me and talk to me, publishing my research in more depth, especially about digital cash and Bitcoin. It's up to all of us to put that out there in a format that people can refer to in sites. They can actually have the arguments to get that developed in the New Zealand.

Cody Ellingham (51:38.028)
That's awesome. And I look forward to that because as you mentioned, you do quite a lot of research into this stuff, which I had assumed was sort of personally, but if you do have a vehicle for publishing that and sharing that, I think that'd be really awesome. And given your background as well with the legacy financial system before and now with Bitcoin, you've kind of got, you you're over both of those, which would be a very interesting perspective, I think.

Thank you and one of my primary sources of information is going to be all of your interviews that you have conducted with all these experts around the world So I'm forward to queuing those up and listening to them over the summer as well. Yeah, cool All right. Well, thank you James and we might we might wrap that one there But now it's good to catch up with you and talk about a little bit about what's happening back in New Zealand and sort of what? What's coming up on the horizon? Awesome.

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