Jake welcomes Hubertus Hofkirchner, Austrian economist and founder of BitCredit, to unpack Austrian economics, monetary history, and the next evolution of Bitcoin as money. Hubertus, with a career spanning Citibank, early prediction markets, and monetary protocol design, challenges some of the most popular narratives in Bitcoin and offers a practical vision for Bitcoin-backed credit and commerce.

The conversation starts with a critique of the common Bitcoin belief that a fixed supply base money can function in isolation. Drawing on Austrian insights from Mises and Hayek, Hubertus explains why a functioning economy also requires a breathing, elastic credit layer—what he calls “good credit money,” not “fiduciary media” backed by government bonds or unproductive collateral. This need, he argues, is not inflationary, but essential for commerce, especially where time, perishability, and production chains are involved.

Enter BitCredit: an open-source protocol designed to allow businesses to issue Bitcoin-denominated credit instruments (bills of exchange) for real-world goods, which can then be fractionalized into e-cash using a cashtoken mint. These instruments act as a decentralized, non-custodial layer of medium-of-exchange on top of Bitcoin. The result: businesses can grant trade credit without requiring volatile spot payments, and economic activity can flow without relying on fiat intermediaries.

The episode also explores the historical dangers of monetary deflation, like the 1465 bullion crisis and the Great Depression, why Jeff Booth’s “deflation equals abundance” thesis needs better nuance—distinguishing falling prices from monetary contraction, the future of free banking and whether deregulated mints could form the monetary layer atop a Bitcoin base, and BitCredit’s roadmap.