The Cost of Capital in the 21st Century

The cost of capital has been completely perturbed over the last 50 years, says Bitcoin founder Gavin Andresen. He explains how central banks manipulate interest rates and governments can issue debt via treasuries. The result is extremely poor capital allocation with far shorter time horizons over which investments are made, he adds.

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Episode notes

Marty sits down with Allen Farrington from Axiom to discuss his perspective on capital allocation and how it is affected by Bitcoin.

Allen on Twitter: https://twitter.com/allenf32

Allen on Medium: https://allenfarrington.medium.com/

5:30 - Introducing Axiom
9:43 - Cost of capital
14:26 - Debt is not universally bad
16:59 - Capital as a tool
18:51 - The goal of capital allocation
22:13 - Affecting individual savings
26:06 - Capital flowchart and long term thinking
37:18 - Bitcoin doesn’t allow fiat games
44:47 - Bitcoin mining illustrating the point
58:09 - Impact of lightning’s instant settlement
1:06:26 - Building a long term company
1:14:46 - Temperance during the boom
1:18:46 - Liquid BTC
1:27:28 - Axiom and further upcoming writing
1:41:04 - Wrapping up

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