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02:41Bitcoin is such a loaded question because Bitcoin is everything, right?
02:46Bitcoin is a unconfiscatable decentralized store of value.
02:52Bitcoin is better money that will help us build a brighter future.
02:55Bitcoin is digital gold.
02:57So it's digital in the sense that it is, you know, very quick to transfer over space.
03:05People ask me all the time, do you have a Bitcoin with you that you can show me?
03:09And there is no Bitcoin you can show anyone.
03:12That's like saying, let me see your email mailbox.
03:15I can't show that to you and I can't show Bitcoin to you.
03:18Bitcoin is a distributed ledger technology that allows for the transference of value peer
03:25to peer across the network.
03:27It is decentralized and distributed across the globe and allows people to participate freely themselves.
03:34Bitcoin is the first time that civilization has ever been able to create something specifically like a money type of
03:43thing that you could actually trust.
03:45It has a perfect scarcity of 21 million, meaning that you you can, you know, it's going to hold value
03:55much better than something that is expanding quickly, kind of like the US dollar or lots of other assets.
04:03Pretty much anything else, if there's a large demand for more of it will be produced.
04:09So if we started using aluminum as cash today, like people would just produce a lot more aluminum and that
04:18would drag down the price that the stock of it would would increase.
04:22But Bitcoin is not like that.
04:23Our money throughout history has time and time again been co-opted by individuals or a small group of individuals
04:30at the detriment of the society that they're governing or ruling.
04:35And the same thing has happened with the dollar that has been basically taken control of by the Federal Reserve
04:42Bank, which is a small group of individuals that make decisions about how the global reserve currency works and most
04:48importantly about its monetary supply.
04:51It's digital gold.
04:53It's perfectly scarce.
04:55It's decentralized and it is digital.
04:58So giving it sort of like the best of all worlds.
05:01It's like fiat money in the sense that it's very convenient to transfer across space.
05:07It's like gold in that it has scarcity and no permission required, meaning that it it has sale ability across
05:15time.
05:16So it's it's digital gold.
05:19Gold was probably the first hard money we've had.
05:22And when I say hard, it means hard to replicate, hard to create more of.
05:26But Bitcoin is hard money because, like I said, it's provably limited.
05:30So it's a whole different idea of what money is.
05:34And most people don't even understand money.
05:35We can build a better future using a money that is less corruptible, I guess.
05:43And money being the foundation or one of the most important foundations of civilization, Bitcoin is a beacon of hope.
05:51A lot of people think that Bitcoin started with the launch of the network in January 2009.
05:58But really its origins lie, you know, decades before that with a group of computer scientists, cryptographers called the Cypherpunks.
06:08It really started with the Cypherpunks and you can go read the Cypherpunk manifesto.
06:12And this was an email list back in like 1992.
06:18A lot of people that you might have heard of were on that list, including people like Julianna Swange, Adam
06:24Back, Zuko Wilcox, Mark Andreessen.
06:28These were all part of that original Cypherpunk mailing list.
06:32And and one of the things that came out of it is the Cypherpunk manifesto.
06:38And it was sort of like a clarification of the values that this group held.
06:45And among them were privacy, the ability to transact with each other.
06:49And in the Cypherpunk manifesto paper is this clear call for some sort of electronic money.
06:58They recognize that cryptography could be used to create a money built on the Internet that could be peer to
07:07peer.
07:07It could be more private and it could be less prone to capture by a small number of people.
07:14And the attempts had been made many times over the decades, but there was one problem that persisted.
07:21They all had the same flow.
07:23They all were centralized.
07:24There was a single point of failure.
07:26There was a place that somebody can go and regulate.
07:29There was a there was a way in which the government could, you know, interfere with it just by going
07:37to one organization.
07:39All of those attempts had failed because they did not solve a computational problem.
07:44A computer science problem called the Byzantine generals problem.
07:48And essentially this is a problem of collaboration or a way to achieve consensus across a network without a central
07:56point of failure.
07:58And this problem was solved by Satoshi in Bitcoin using a couple of inventions that were created by Adam Back
08:06and others called proof of work.
08:08And then combined with a peer to peer networking system that was created, you know, made made most popular by,
08:15let's say, BitTorrent and Bram Cohen.
08:17And it really wasn't until 2008 when Satoshi Nakamoto dropped the Bitcoin white paper to the same email list and
08:25said, hey, you know what, here's a system that I think, you know, like corrects the flaw of all these
08:31other things.
08:32The genesis of it really comes on October 31st, 2008 on a cryptography website where Satoshi Nakamoto published a white
08:40paper describing the Bitcoin Core Protocol and the idea behind it.
08:44It then evolved and sort of became an open source project.
08:49And it is what we have today.
08:50It was created by someone named Satoshi Nakamoto.
08:54Now, nobody knows who Satoshi Nakamoto really is in real life.
08:57That was a pseudonym he used as his name.
09:00He's pseudonymous.
09:01We don't really know who are anonymous.
09:02Actually, we don't actually know who he is.
09:05All we have is the proof of his work.
09:08He built Bitcoin on the back of a lot of other projects which were kind of similar, which wanted to
09:16be what Bitcoin eventually became.
09:18But they weren't decentralized enough, which ended up being the key and one of the problems he was able to
09:25solve.
09:25But but yeah, we don't really know.
09:28The more important thing there is that it doesn't really matter who Satoshi is.
09:33The thing is, the system already exists.
09:36It is decentralized.
09:37And the person of Satoshi, while we should be grateful for the contribution, doesn't have any particular influence over everything.
09:49And, you know, the ethic of Bitcoin and the culture of Bitcoin has evolved to the point where it really
09:57does put a very strong emphasis on the decentralization and keeping the rules as they are.
10:04And, you know, Satoshi is not going to change that.
10:07But it was created by him, has gone out into the wild world of the Internet.
10:13And to this day, it's still going and growing and gaining more use and more value every year.
10:19Now, Satoshi Nakamoto owns the first million Bitcoin of the 21 million Bitcoin that's been created.
10:25But if we assume for a second that the million coins belonging to Satoshi do one day move, they are
10:31spent in terms of the Bitcoin transactions.
10:34And that just means there's more coins on the market, which will have a momentary decline in the price.
10:41But the notion that that presents an existential threat that somehow this will undermine the network is just not the
10:48case.
10:48When you look at the world and you look at billions of people on the planet and then you think
10:52about, OK, active circulation of Bitcoin, by some estimates, there's two to three million on all the exchanges.
10:59So I think I read a statistic. It's about 50 million millionaires in the world.
11:04So if half of those millionaires woke up tomorrow and said, I want to buy a Bitcoin, it's not possible.
11:09There's not enough Bitcoin in circulation. The price would, you know, it wouldn't just be high, it'd be like insurmountable.
11:16You'd have to pay over a million, two million, three million, whatever it is, a Bitcoin, because no one would
11:21part with them if the demand were that high.
11:23So even his million coins, if they enter the market, I bet they'd be gobbled up in a year or
11:28so, minimum.
11:29I don't think it's likely. I think they haven't been sold in 12 years.
11:34Satoshi has, I don't know, $100 billion, $50 billion, something like that worth of Bitcoin.
11:40And obviously the temptation to sell some of that would be great.
11:44I think the keys to those coins have been burned, meaning they're gone forever.
11:49They've been intentionally destroyed.
11:52And Satoshi understands the importance of not moving those coins.
11:55And probably, if still alive, has other coins that were amassed, you know, through the intervening years, you know, as
12:05mining became more popular and more decentralized.
12:09Could have easily been continuing to mine at that point.
12:11So if Toshi is around, I'm sure he, she, they have plenty of Bitcoin.
12:21I think there's degrees of centralization and degrees of decentralization.
12:26So you have to look at it as a spectrum.
12:29There's no such thing where you're just going to hit, this is decentralized or this is, this is centralized.
12:34Having something decentralized means it's prone to capture by a small number of people.
12:38A government could come in and say, shut down those servers, AWS.
12:43You know, we, we, we're making a law or we're a policy that's instituted by the SEC or something like
12:50that.
12:50Shut down those servers and, or we're going to, you know, fine you or punish you in some way or
12:56another.
12:56With a centralized system, you typically have servers.
13:00Let's just say Google.
13:01Google is a good example because it's a big company and it has lots of computers.
13:05So in some ways it physically seems decentralized.
13:09They have computers all around the world that they own, but it has a centralized government governance.
13:15So the CEO of Google or the chief engineer, whoever, I don't know how their hierarchy works.
13:21But the big shots at Google have the authority and the ability to completely control any of those computers and
13:28turn them off.
13:29Or a government can order them to do that.
13:34Centralized is what you have now with the US banking system or the world banking system, I guess, as far
13:39as that goes.
13:40You have banks that control your money.
13:41You put them in there, they control them.
13:43They send them out for you.
13:44If they don't want to give you your money, you can't get it back.
13:47I mean, basically, that's hard to believe, but it happens in other countries.
13:51In Greece, for instance, they took a part of everybody's money.
13:54Just took it out of the bank accounts because they needed more money.
13:58They were going, the country was going bankrupt.
13:59They just took it out of everybody's wallet, everybody's bank account.
14:03With Bitcoin, there is no center.
14:05There is no central party.
14:07Ideally, everybody around the world, individual people are running the software.
14:12There is no central server.
14:14Nobody is in charge.
14:16And through all of the individuals that are running the software, that becomes a network.
14:23And without somehow stopping every single one of them, you cannot stop it.
14:29There's no main office.
14:30There's no president of Bitcoin.
14:32There's no boss.
14:34There's nowhere for the government to go and say, give us all those Bitcoins.
14:38There just isn't.
14:39They make it the Bitcoin network where almost anybody with relatively minimal computer computing power can run a full node,
14:47which is a full copy of the blockchain.
14:49They can validate all their transactions.
14:50They can actually verify that the Bitcoin they hold is theirs.
14:55Right now, we have about 12,000 publicly visible nodes that are all verifying the network independently all over the
15:04world.
15:05And the guess is that there's about 100,000 nodes in total, the rest of those being not visible to
15:12the network.
15:12They're either operating on tour or they're not broadcasting their IP to the network.
15:16And so there's, you know, maybe 100,000 Bitcoin nodes out there verifying the network.
15:23And again, those nodes, those computers that are verifying the transactions on the network can be run on very cheap
15:30hardware with low bandwidth.
15:32And that's important to kind of push Bitcoin far up that decentralization spectrum compared to everything else.
15:39Bitcoin's the only coin, in my view, that matters mostly because of the fact of how it came about.
15:45There was no pre-mine. It was an open source project.
15:49Anybody could have joined the network. Anybody could have gone up and submitted an improvement to the protocol.
15:55And the way it came about, it had sort of this immaculate conception where to recreate that,
16:03you'd have to recreate the unique conditions of that moment. And I don't think it's really possible.
16:07Like many networks on computer networks that are born on the Internet, social networks, for instance,
16:12they gain a certain momentum, a certain share of the network.
16:17And one of the main, I guess, pillars of Bitcoin maximalism is that network effects or network protocols tend toward
16:26one.
16:26And meaning, you know, you have TCP IP, which runs the Internet, essentially, and then you have other protocols built
16:34on top of it.
16:35Once there's sort of this mass consensus about or this mass usage, I guess, of those protocols,
16:43no one wants to go and use another protocol system because this is where everyone is.
16:46The other reason I think it's kind of a unique asset that is not going to be matched is because,
16:52unlike a piece of software, a protocol typically has a very long lifespan.
16:58If it is the dominant protocol, as evidenced by the network effect and people joining into the network,
17:04it can continue to improve. So if there's another coin that emerges or some other protocol that has characteristics
17:10or qualities that you want in Bitcoin, Bitcoin over its course in history has actually implemented it into the protocol.
17:17It's actually added things to it. For example, things like segregated witness.
17:21This recently, this year, we're putting in taproot.
17:23These things actually improve the Bitcoin core protocol and think of it as like an upgrade.
17:28Because of the technology and the idea that the Byzantine general problem has been solved,
17:33it'll also mean that you're not going to have double spins of this digital asset because digital assets are easy
17:38to copy.
17:39So if they're easy to copy, then that means you need to have a technology and an invention,
17:43which is the proof of work that is in Bitcoin.
17:46It is the only coin that has an incorruptible monetary supply.
17:51And it's the only coin that has the sufficient decentralization to maintain that incorruptible money supply.
18:00Every other altcoin is centralized, essentially.
18:03And that's the big difference is that you either have a controller or you don't.
18:07You're either self-sovereign over your money or you don't.
18:16Our current monetary system is a cesspool of theft, cronyism and corruption.
18:23And I talk about this a lot in my book, thank God for Bitcoin.
18:28But basically, it's a system that steals from everybody.
18:35And this is part of how central banking works.
18:39Essentially, it was originally created like back in the 1600s, back in England, the whole central bank monetary system,
18:49as a way for the government to spend money if it didn't have.
18:53Bitcoin is better than our current monetary system because Bitcoin, unlike the US dollar, can't be increased.
19:02You can't make any more Bitcoin than 21 million.
19:05Now, with the US dollar, I don't think there's anyone on this planet who doesn't realize we're printing that as
19:10fast as we can.
19:11And actually, it's not even being printed.
19:14They're just adding numbers to a computer.
19:16And Bitcoin is better than our current monetary system because it's incorruptible.
19:20The monetary supply cannot be changed.
19:22And because that is the case, we can rely as economic actors on a consistent monetary supply essentially forever.
19:33So we can make economic decisions with confidence that the value of Bitcoin will either be roughly the same or
19:42even more than it is right now.
19:45Our economy, as I mentioned, is built on driving compensation.
19:49So what we see happening right now in our economic system is that the Federal Reserve and other central banks
19:55across the world, they have to print.
19:57They have to print to keep consumption levels high.
20:00And if you want to look at an example of this, look at what happened after the COVID crash.
20:04You saw unprecedented money printing.
20:06The wheels just came off in terms of 20% of the circulation of the US dollars were printed last
20:12year.
20:13That's a statistic that's regularly cited.
20:14And it shows that the only way they can keep the ship afloat is nonstop money printing.
20:19And they're facing these strong headwinds of deflation.
20:22So you have sort of a new paradigm where technology is making things cheaper and faster and more productive.
20:29But you've got money printing that sort of is trying to keep the old paradigm afloat.
20:34You know, with Bitcoin, you know what the rules are.
20:39And that's what it comes down to.
20:41You know the game that you're playing in the current system.
20:45You know, it could change every four years.
20:48Who knows what the rules will be?
20:50Who knows if your savings will be worth anything?
20:52Why should I work my ass off to put money into a system that not only do not have any
20:58control over
20:59and, you know, debatably almost probably no influence over.
21:04But it doesn't really have my interests in mind anyway.
21:08Some of the poorest, the most vulnerable people in the world are being stolen from every time the money expands.
21:15And it is expanding very quickly in the U.S.
21:18The M2 money supply, which is one measure of all the money that exists at the beginning of the coronavirus
21:26crisis.
21:27March or February of 2020 was somewhere around 15.5 trillion.
21:33And about 18 months later, it's about 20 trillion.
21:38So it's expanded by 30%.
21:40And historically, it's gone up by about 7%.
21:45So we have statistics going way back to 1959.
21:48It was around 289 billion back in 1959.
21:52It's about 20 trillion.
21:53Now, if you annualize that, that ends up being about 7%.
21:56So it's expanded in wartime, peacetime crisis or whatever at about 7% all through its life.
22:04So that's how much you have to outrun.
22:07And that's how much value is being stolen from each dollar holder every year, about 7%.
22:13And much more so in, say, the last 18 months.
22:16So it's a crazy kind of like statistic that a lot of people don't really get or understand or have
22:25any clue about.
22:26But really, all of this money is being stolen from the most poorest and most vulnerable people in the world
22:33on a continuous basis.
22:34And rather than try to keep the old paradigm afloat and fight against these headwinds of technology,
22:39in my view, the stronger approach is to adopt the deflationary currency, deflationary money, which is what Bitcoin is,
22:47that embraces the technological growth and technological deflationary forces.
22:52I think in that economic system, you'd see productivity rewarded.
22:57You'd see positive social behavior rewarded.
23:01You'd encourage saving rather than reckless spending.
23:04Right now, as most consumers know, they are tempted nonstop with every gimmick in the world to get them to
23:12part ways and spend their money.
23:14And in many ways, it's actually smart to spend your money because if you have fiat dollars, if you have
23:20cash, it is eroding day by day.
23:23It's becoming worth less.
23:24And anybody who's going to the grocery store now knows buy groceries one month.
23:28The next month, the groceries are actually more expensive.
23:32So it's encouraging you to part ways with your dollars.
23:35It's encouraging you to spend.
23:37It's also encouraging you to take out a tremendous amount of debt.
23:39Bitcoin skips all of that.
23:42Bitcoin itself allows you, you know, it's a cliche that we hear out there, be your own bank.
23:48But it's, it's, it actually isn't meaningful.
23:51It's, it's really, it really is what, what it says.
23:55You are your own bank.
23:57You are your own banking system.
23:58You are your own Visa and your own MasterCard.
24:00You are the entire thing.
24:02And nobody can get between you and the other guy who you want to do business with when you're using
24:08Bitcoin.
24:08So as economic actors, we can be confident in making decisions about businesses and purchases, etc.
24:18Economic decisions that this supply will be consistent over time.
24:23So we can project into the future for, you know, building a business and thinking 20 years ahead or building
24:28a, you know, some large structure, a cathedral, for instance, right?
24:32Um, that would take 40, 50 years to build.
24:36We can be confident that one Bitcoin will equal one Bitcoin 40 or 50 years from now, which allows us
24:43to make these long-term decisions.
24:44That's why Bitcoiners always talk about long-term thinking.
24:46And that fundamental change in, you know, being able to rely on the monetary supply and be able to think
24:53long-term versus thinking quarter to quarter or trying to get rid of my dollars now, because I know they're
24:58going to be worth less in a couple of years.
25:00Um, and making these short-term decisions, uh, you build a fundamentally stronger, um, maybe even some argue morally more
25:09sound, uh, economy and society.
25:12I think that in the long run, we will have a better society that has more pro social behavior.
25:19If you fix the money, um, there's the old adage money is the root of all evil.
25:24And if you fix the money, you fix everything.
25:26Bitcoin fixes the money and our money is broken.
25:31Um, and that means a lot.
25:34Uh, it has such down, like massive downstream ram ramification.
25:39So when you get into Bitcoin, um, it'll fix your finances because the thing is, is that when you start
25:45to accumulate Bitcoin and understand it for what it is, you'll probably not spend as much money on frivolous things,
25:52things that don't really add value.
25:53In the Bitcoin community, you'll often see people talk about, there's a meme Bitcoin fixes this.
26:00And the idea is that Bitcoin fixes everything.
26:04Right.
26:04And that's, you know, I, I don't, I hesitate to drop, you know, such like hyperbole, right?
26:08Because, you know, our absolutes.
26:10Uh, but I do agree that there are massive downstream effects for society and for individuals.
26:17And therefore for the world as a whole, for humanity as a whole, if we can fix the money, I
26:23think it's a basic pillar of civilization.
26:26It's been that way from the beginning.
26:28It's, you know, solve the problem of barter, which is I've got to have something you want at the same
26:33time you have something I want in order for that to work.
26:36So money is what really binds us all together in an economic sense and in a social sense really too.
26:44And so that's how it begins to fix things and begins to fix your mentality.
26:47It also puts you into a position of low time preference, which means it creates more patience in you because
26:53you're willing to wait.
26:54You're not willing to have to get it right now.
26:56It actually increases your delayed gratification.
26:59So these, some of these virtues that we have in the world that people will look up to like patience
27:04and those kinds of things.
27:05It's like Bitcoin actually fixes that when you finally understand.
27:08Any parent can tell you what's better for a kid's character is making them save and then get their toy
27:14later instead of get their toy now.
27:16And then you have to pay me back like that.
27:17That doesn't improve character at all.
27:19In fact, that usually engenders bitterness and resentment, which obviously anyone with a lot of student loans for useless degree
27:28knows very, very well.
27:31So it fixes society because ultimately when you do have more saving and low time preference behavior, what you get
27:43are people that are creating, you know, goods and services so that they can save or, you know, so that
27:49they can make more money and so on.
27:51And that builds up civilization, consuming things now that breaks down civilization.
27:57I like the idea that, you know, this is kind of the birth of a new asset class, the birth
28:02of the foundation of a new economy.
28:04We're not there yet, but you have to have the mindset of someone in the 90s thinking what the Internet
28:11would be in 2021.
28:13I'm in 2021.
28:14I'm thinking of what the global economy will look like in 2035.
28:18And I think Bitcoin is at its core.
28:20Yeah, I think that's ultimately what Bitcoin fixes.
28:23It gets us back on the right track.
28:26I think that it depends on the approach taken by policymakers.
28:31I think there's an amazing potential for Bitcoin to be integrated fully into the economy and monetary system in a
28:40very peaceful and positive way.
28:42The question is, is there going to be people with vested interests who don't want to make that transition, who
28:49will fight every step of the way, not in a violent way, but just through policies that make it more
28:54difficult to transact in Bitcoin and difficult to store Bitcoin and make it more cumbersome.
29:00I personally don't think that's going to happen.
29:02My view is that I think people will turn to Bitcoin organically as the population understands the problems with fiat
29:09money that we're experiencing in the world.
29:10And I think that ultimately Bitcoin has the potential to remake our monetary system for the better.
29:17I almost feel like the U.S. dollar is doomed whether Bitcoin is around or not.
29:23I don't think Bitcoin will kill the U.S. dollar.
29:25I think the U.S. dollar is killing itself fine whether Bitcoin is here or not.
29:34Bitcoin is both a peer to peer currency and it's a store of value.
29:40The reason that we're not seeing it used as much as a currency right now, though, is because of the
29:47fact is how fast it's rising in value.
29:49The vast majority, I think, of individuals using Bitcoin and part of the Bitcoin network are using it as a
29:56store of value.
29:58There are, you know, early days, there were many people that were using it much more often for peer to
30:03peer transactions.
30:04And I think we return to that after a while.
30:07But in my view, in the history of an asset like this, Bitcoin needs to first establish itself as a
30:14very reliable, very trusted store of value with wide adoption.
30:19So the idea is, is that price and value are two different things, right?
30:23I think people don't get it all the time, but I truthfully believe they don't when I say it, they
30:28don't get it, but they get it in practice.
30:31Because if they go to the store, they easily will say this is too expensive or man, that's cheap.
30:37Let me buy more. Right.
30:38Which basically lets you know that if you can use the word expensive or cheap, that means the value of
30:43whatever it is you're purchasing is not equivalent to the actual price.
30:46And there are some times when the value is exactly equal to the price and that's when you buy it.
30:50I have a friend who bought a pair of sunglasses, oh, eight years ago.
30:56Now those sunglasses are worth $60,000 in Bitcoin if you take the amount of Bitcoin you paid for those
31:02sunglasses.
31:03So do you want to spend $100 of Bitcoin today when in 10 years it could be worth $100,000?
31:13Or do you want to spend your fiat money which 10 years from now will be worth half?
31:19So it is both. It's just people do not want to spend their Bitcoin right now as a currency.
31:25With Bitcoin, it's much easier and it's a much more superior store of value asset.
31:31And it has a major advantage over other players in the market.
31:35So it's for that reason that I think a lot of people use it as a store of value because
31:39there really aren't that many alternatives.
31:41Bitcoin is a great store of value because there are 21 million.
31:46That's all they'll ever be is 21 million. As I said earlier, there's 21 million Bitcoin.
31:51Actually with gold, most people use gold for a store of value.
31:54But how much gold is there? Nobody knows. Nobody has an idea how much gold is there.
31:59How much gold is there left in the world? Nobody knows.
32:03I mean, we haven't even started mining the bottom of the ocean yet.
32:06And 75% of this planet is water.
32:09Now they're saying asteroids will be coming by to have gold in them.
32:12So Bitcoin is a better store of value than gold because we know how many there will be now in
32:19a thousand years from now.
32:2121 million.
32:21You also want to see in a store of value the ability, I think, to make it divisible.
32:26You know, every Bitcoin is divisible to the millionth.
32:29And you think of it like, OK, gold, there's only a finite amount of gold in the world.
32:33We don't know how much, but there is a finite amount. Bitcoin, we know there is going to be only
32:3821 million because it's in the code.
32:40But if I have a gold bar in my hand, obviously that's a bearer asset.
32:44I have the gold bar.
32:45But if I want to chip off a little bit of the gold, that becomes very cumbersome.
32:49Having to do that, have to like divide it and make sure you're, you know, you're only segmenting a certain
32:54amount.
32:54Now, with the Bitcoin, I can give you point zero zero zero zero zero one Satoshi.
32:59Exactly.
33:00Finite amount I could send to you.
33:02You can't really do that with gold.
33:03That's just too clunky.
33:04I also think the fact that it's unconfiscatable makes it the apex predator, as Michael Saylor would say, of a
33:12store of value.
33:12And what I mean by that is all assets in existence, whether it's gold, whether it's real estate, whether it's
33:19stocks, bonds, collectibles, they can be confiscated.
33:23You can walk into somebody's house and if they have gold buried in their basement, I can go take it.
33:28If you secure your Bitcoin and you hold your own private keys, which is how the network is designed to
33:33be used, no one can take your Bitcoin.
33:37It's not possible for them to confiscate your Bitcoin.
33:40They can take your person.
33:42They could actually put you in jail, but they, of course, cannot force you to transfer over the Bitcoin.
33:48As long as you safeguarded your private key, it is unconfiscatable.
33:52And that's really a game changer.
33:53That's different from any asset that we've seen in human history.
33:57There's there's really been nothing like it.
33:59Bitcoin is currently already being scaled out for use around the world as a currency.
34:04As I said, the problem is not a lot of people want to spend their Bitcoin right now.
34:10I think it's going to take a long time to do that.
34:13And when I say a long time, I mean half a decade before it gets there.
34:17I think you need to get people comfortable with how the network operates.
34:21I think you need to establish it as a store of value first, a recognized store of value.
34:27I think the price needs to get much higher.
34:29You need to be well north of a $10 trillion market.
34:32Right now we're still not at a trillion.
34:36Once it gets up to those levels, I think there's going to be enough support in the network and enough
34:42development by companies and entrepreneurs that are trying to fund development on layer two and layer three solutions for it
34:50to scale.
34:50So the big one that everyone knows about is lightning network.
34:54And and that's what's used in El Zante and El Salvador.
34:58Or you can you can use lightning to go buy fruit from a fruit stand guy or get surfing lessons
35:05or something like that.
35:06There's all sorts of ways in which, you know, that can work.
35:09But that's not the only layer two that needs to exist.
35:11There are perfectly fine like second layers that can be run by companies.
35:16And it will be centralized, obviously.
35:18But but, you know, there there's motivation for a lot of these companies to provide that.
35:23The only analogy I can think of is like the Internet.
35:25Right. In 1995, the Internet existed.
35:29There were chat rooms.
35:30People would go online and, you know, they'd be able to send emails to one another.
35:35The basic functions of the Internet.
35:37But in 1995, there was no way you could stream live video every night.
35:44There's no way you could watch Netflix on the Internet every single night and have high definition video.
35:50Bitcoin is kind of how I see like that.
35:52Now we have an early phase where there's early adopters, innovators, people in the space that are trying to drive
35:59adoption generally, getting people to buy into the network.
36:02And once you get sort of a peak threshold where you sort of cross a chasm into broader adoption,
36:10then you're going to have a lot of more institutional money, a lot more developers, a lot more brainpower on
36:15the network that can help it scale.
36:23Bitcoin mining is pretty simple.
36:26It's really just using computers to confirm transactions on the blockchain.
36:31And it's important to point out that this is done according to a very strict set of rules that has
36:36been laid out since the very beginning.
36:38This doesn't change and nobody's in charge of this process.
36:41And blocks are just come around every about 10 minutes.
36:44They're added to the chain.
36:45That's why you have a thing called the blockchain.
36:47And it basically earns the right to create that block of transactions.
36:53So it's a competition between all of these computers that are running, basically solving a hashing algorithm.
37:02If they happen on the magic number that solves this hashing algorithm first, they win the right to add the
37:10block.
37:10Bitcoin miners are essentially securing the chain.
37:13Nodes are the real backbone of the network.
37:17And I think of miners as kind of slaves to the nodes.
37:20The nodes are distributing transactions, validating transactions, and miners are supporting that validation.
37:27Now, why would they be incentivized to do this?
37:31They get a block reward.
37:33And this is how new Bitcoin is added into the system.
37:37And every four years, the number of Bitcoin that the miners win in each block is cut in half.
37:44And so we're at about 18 and a half million Bitcoin that's been issued so far and 6.25 Bitcoin
37:52per block happening now.
37:53That cuts in half every four years moving on into the future when in about 2140, the last little bit
37:58of Bitcoin will be released into the system.
38:00Until it's zero.
38:01And at that point, there will be exactly or actually not actually exactly.
38:06It's a tiny bit less than 21 million Bitcoin ever made.
38:11And that can never make more than that because this amount is known.
38:16We all have agreed on these rules.
38:18And I say all of us collectively, the entire network, these are the rules of the network that nobody can
38:22change.
38:24There will only ever be 21 million.
38:26Once all the coins have been mined, there are a lot of kind of hypothetical or, you know, none of
38:34us can read the future, of course.
38:35But whatever's going to happen isn't actually going to happen when all the coins are mined, probably.
38:40We're going to get to a point in the next 30 years or so, maybe 40 years, where pretty much
38:46all the coins are mined.
38:47Well, we were talking, you know, you'll only be receiving a tiny fraction of a Bitcoin every 10 minutes.
38:52So you might as well say that all the coins are mined at that point, but maybe not.
38:56I mean, maybe the Bitcoin are so valuable by that point, millions of dollars each, that that tiny portion becomes
39:02a very meaningful amount even then.
39:04When all the coins are theoretically mined, I think the network is going to look a little bit different.
39:10I think it's going to have the same core elements.
39:11I think it's going to have the same supply.
39:14But I do think that the vast majority of transactions are going to be driven by layer two, three, maybe
39:20even four solutions.
39:21Transactions will be batched into single transactions that'll happen on the blockchain.
39:26And second and third layer networks will have, you know, hundreds, thousands, millions maybe of transactions that happen back and
39:34forth on this second network.
39:36And when they want to settle companies, you know, bigger companies or banks or something like that, nations were ready
39:43to settle all of these transactions.
39:45They'll, you know, run that on the blockchain and it'll be fine, you know, finally settled.
39:49So it's akin to the way that, you know, the economy works now.
39:53The payments are a separate layer than the settlement final settlement.
39:57You know, interbank settlement can take a very long time in the current system and it's extremely expensive.
40:03So as Bitcoin's, you know, usage grows, it'll still be way more efficient to have final settlements and democratized for
40:13that matter, because anyone can still do it, even though it might be expensive.
40:18Then it would then this current system is at all far more efficient.
40:21So I'm not worried.
40:22I want the fees to go up.
40:24We want, you know, fee market to develop so that we can transition safely away from this block subsidy or
40:33block reward that miners are getting this, you know, essentially free Bitcoin awarded to them to issue into the network.
40:38And I have every confidence in the world that that will happen and we're seeing it happen.
40:44And it's not going to be a problem.
40:46Bitcoin security will be fine on a fee based incentive model.
40:51Bitcoin does take a decent amount of energy.
40:53No one can deny that.
40:55The question I think is, is it an appropriate level of energy?
40:59And I think to understand Bitcoin's role in the energy space, what you need to do is you need to
41:05understand energy, how energy works generally.
41:07So Bitcoin mining uses electricity and there is a narrative out there that it uses way too much electricity.
41:16It's going to boil the oceans.
41:17There was a Newsweek headline several years ago that said by 2020 Bitcoin network will use all the electricity in
41:23the world because of the trajectory that it's on.
41:27This is nonsense.
41:28You've got to realize miners who are mining Bitcoin, first of all, they want to make as much as they
41:33can.
41:34They're using as inexpensive of energy as they can, which means they're using renewables, water, solar, whatever they can get.
41:41They're trying to get the best price to make the biggest profit they can.
41:44We have miners who voluntarily publish their energy usage and the mining network is mining.
41:52The miners are in, you know, this extremely fierce competition for one thing because there's two inputs into their business,
42:02right?
42:03One is your capital, your cost for infrastructure and for the computers, etc.
42:08The other one is cost for the energy and the cost for the computers and the infrastructure are relatively the
42:13same.
42:14There's not a lot to be gained over your competitors in that, in that market, right?
42:18In that way where you gain and where you profit is finding the lowest cost energy.
42:22So that means moving out to the edges of the energy grid, finding stranded energy that's otherwise not being used
42:30because there's too much being produced.
42:31Maybe at peak times, you, you build, you know, your energy grid infrastructure for peak usage.
42:37So, you know, in the summer, on the hottest day in Texas, you've got, you know, you've got AC for
42:43everybody, for instance.
42:44Same thing in winter where you need heating.
42:46And so you overbuild that infrastructure and there's a lot of wasted and stranded energy on the grid.
42:52And this is where the real part of it not being expensive comes in.
42:56If you take, if we switch over this economy someday to more of a Bitcoin cryptocurrency economy,
43:01think of the money that's saved by banks hauling around money in big armored cars.
43:07All the people have to drive to work at the bank.
43:09All the people who work at the bank and build a building and electricity used in the bank.
43:14More energy by far is used in the banking system than will ever be used in the Bitcoin system.
43:22So every time Bitcoin makes a headway into the banking world, less electricity has been used by the banking world.
43:29And Bitcoin is not replacing electricity or energy at the rate it was being used by the banking system.
43:35You know, the biggest reason, really, the biggest reason why anybody has ever complained about Bitcoin's energy use is just
43:40because they don't value it.
43:42They value their clothes drive, so they don't complain about it.
43:46They don't understand or value Bitcoin, so they do.
43:48Wouldn't matter if you got Bitcoin down to $10,000 a year of energy cost.
43:53It's going to be people that say it's $10,000 you're wasting a year on Bitcoin money because they just
43:58don't understand or value Bitcoin.
43:59Yeah, China just banned cryptocurrency.
44:01This may be the third time they've done it since it was created.
44:05And mining machines started moving out of town and, oh, tons of fear, uncertainty and doubt was created by the
44:11people who want you selling your Bitcoin.
44:13But, you know, until they banned Bitcoin, the fear, uncertainty and doubt or the FUD that was going out was
44:21that Bitcoin controlled too much of the mining power.
44:24And it was bad for the world because Bitcoin was being controlled by China.
44:27So now other Bitcoin miners move out of China and it's bad still.
44:33But actually, it's fantastic.
44:34It's fantastic in two ways.
44:36Number one, it shows that a country banned Bitcoin.
44:40And within weeks, miners were moving all their Bitcoin miners to other countries.
44:45That's how portable it is showing no one country can shut down Bitcoin.
44:50Bitcoin is going to continue.
44:53So how quickly it was shut down, but it moved to other countries.
44:58The great thing number two is many of those mining companies move their mining machines to the United States.
45:05Bitcoin obviously doesn't care about borders.
45:07It moves very swiftly internationally with a few clicks of a button.
45:13So I think the Chinese government doesn't like that.
45:16The Chinese government doesn't like what they can't control.
45:19So attacking mining was perhaps a way to try to keep capital in China, which they're very focused on.
45:31The thing about Bitcoin is that Bitcoin solved the double spend problem.
45:36And the way I think about that is Bitcoin is not copyable.
45:40Every Bitcoin is unique, one of a kind.
45:43It'd be like if you had a rare, unique Babe Ruth baseball card or 21 million Babe Ruth baseball cards
45:49that ever existed.
45:50You wouldn't say that that, because it's printed on paper, is not valuable.
45:54It has value, right?
45:55Everybody would say, I'll pay you thousands of dollars, hundreds of thousands of dollars for that rare card.
46:00Bitcoin is kind of the same.
46:01It's a digital good that is unique, one of a kind, backed by code, backed by the computing network.
46:08People say that Bitcoin is backed by nothing.
46:10And usually it's people my age.
46:12They have a real hard time understanding e-currency or Bitcoin.
46:16But Bitcoin is backed by something.
46:19It's backed by the blockchains.
46:20It's backed by the largest computer network on the planet.
46:25Unlike our money now, which has been taken off the gold standard back in the early 70s.
46:30It is perfect money.
46:32It is pure monetary value.
46:34It has no intrinsic value because it doesn't need it.
46:37People found Bitcoin interesting as a collectible because it was pure money.
46:44So maybe it's intrinsic value then, if you want to put it that way, I guess, is that it's pure
46:51money.
46:52Right?
46:53I mean, it's 100% intrinsically money.
46:56I mean, there are people to this day that still believe that you can take a dollar bill, go to
47:02the Federal Reserve and redeem it for gold.
47:04That's not the case, right?
47:05Like the dollar is literally backed by nothing but the full faith in credit, which is basically just saying you
47:12put your faith in the United States government because of its military and economic might, that it can, you know,
47:17settle its debts.
47:18That's really what the dollar is.
47:19All value is subjective and there is no intrinsic value to anything.
47:23There is only subjective value that human beings subscribe to it.
47:28And there is definitely value to Bitcoin because people find it useful, especially for transferring value all over the place
47:36or as something to appear modern or more hip or something like that.
47:41There's all sorts of ways in which you can ascribe subjective value to something like Bitcoin.
47:47And it doesn't even have to be monetary.
47:49It could be, hey, like, I just think this is kind of cool.
47:53Bitcoin has value because the network primarily that's driving adoption and that is driving people entering into it, believe it
48:01has value.
48:02And that subjective belief combined with all the objective factors that we've talked about, about, you know, the finite amount
48:08of them, the network, the decentralization, that has value.
48:12Those characteristics, I think, are critical.
48:22I think people say Bitcoin is for criminals, again, because that's a popular narrative that has been driven purposefully by
48:33those who don't want to see Bitcoin succeed.
48:35There's no doubt that some people on the Bitcoin network use it for illicit purposes.
48:42There's also no doubt that the vast majority of illicit activity in the world is funded using the dollar.
48:47Criminals definitely do use Bitcoin, ransomware, you know, darknet markets and so on.
48:54But criminals also use cash, right?
48:56Like they use whatever.
48:59The big thing is that everyone is self-sovereign over their own coins.
49:04And, you know, you can't prevent market transactions from happening no matter what the monetary regime is.
49:11But I think overall, on balance, the vast majority of the network is not doing anything besides trying to store
49:18value, transacting Bitcoin in lawful ways.
49:21And I think that it doesn't make a whole lot of sense to use Bitcoin for illicit purposes because of
49:29the fact that it is an open ledger.
49:31It's not anonymous.
49:32It's actually very traceable.
49:34You can see where every single Bitcoin moves.
49:36And if you were a criminal and you were trying to commit a crime, why would you use Bitcoin to
49:43commit the crime when you could use the dollar?
49:46And it is far more anonymous than the Bitcoin open source ledger.
49:52So that that whole flood about criminals is crazy because the majority of transactions that happen in this world still
50:00happen with U.S. dollars, still happen with the euro.
50:07I don't think the U.S. government will ever ban Bitcoin because I don't think the U.S. government can
50:12ban Bitcoin.
50:14First of all, you've got to realize Bitcoin is a worldwide phenomenon.
50:18There's about from from last study, I saw 42 million people, I think, in the United States have Bitcoin.
50:24So as a politician, why would you go against that many of your constituents?
50:27Bitcoin as it's constituted is merely computer code.
50:33It's merely communication being sent over the Internet.
50:36If there's no criminal activity or nefarious activity, I don't think a ban would be constitutional.
50:42I think it would be protected by the freedom of speech.
50:44A government cannot stop Bitcoin completely.
50:48You cannot kill the network.
50:49It's beyond that at this point.
50:51It's too big.
50:52It's too broad.
50:53And it would take a coordinated effort of, you know, 100 plus countries or whatever around the world to fight
51:02the Bitcoin network simultaneously, which is never going to happen in terms of people.
51:06We've got India and China who both have banned Bitcoin and nothing happened.
51:12People still use Bitcoin in China.
51:14People still use Bitcoin in India.
51:17They also tried to stop it in Nigeria.
51:18Now they've turned around and now they're embracing it because their people use it.
51:22And they're talking about all the wonderful things that it's enabling the youth to do through their own merits, through
51:30their own efforts.
51:31Now that they have this tool of freedom is real money.
51:34They no longer tie it down by whatever arbitrary restrictions and bureaucracy that the government wants for their system.
51:40Eventually, I believe that the demand to use it, that this consensus will form around Bitcoin as the best money,
51:49you know, globally.
51:50And so people start using in such a broad sense that, you know, every country in the world will be
51:54like, OK, we have to use Bitcoin or we're going to be completely behind.
51:58You have actually seen the government in the United States, at least, embrace Bitcoin.
52:03You know, recently there was this issue over the infrastructure bill and the infrastructure bill was imposing new reporting requirements
52:11on brokers of digital assets.
52:13And what we saw, which I think surprised many, is we saw at least five different senators, even more potentially,
52:23that came forward and said, we need to fix this to protect the innovation that's being found in Bitcoin and
52:28the larger crypto space.
52:29We think that this is the future. We think this creates jobs and we want to change the bill so
52:35that language doesn't impose harsh restrictions and potentially have a chilling effect on this technology.
52:41That's the senators, like the people in charge of our government, some of our elected representatives.
52:46They fought to help Bitcoin. That completely runs counter to the narrative that the government's out to ban Bitcoin.
52:58That's the point.
53:00Risk and reward are two sides of the same point.
53:04If you want reward, you need to take some risk.
53:07And if you if you want reward without risk, which is what central banks try to do all the time
53:13by de-risking assets.
53:14There's so much volatility because it's a brand new asset that the world is coming in and out of, right,
53:19coming into.
53:20But I think it's going to slow down as we get closer to hyper Bitcoinization, right?
53:25Because when you're not trading for dollars anymore, you can't really be volatile.
53:28I don't think it stops anytime soon.
53:31That's the short answer.
53:32Over time, once Bitcoin becomes the dominant store of value and the dominant money in the world, I think then
53:38the volatility may tamper down.
53:40But volatility is healthy. Suppressing volatility is not.
53:46Bitcoin is volatile and a lot of people are concerned with the volatility.
53:49But that's the reason a lot of people buy Bitcoin because it's volatile.
53:52You wouldn't be buying Bitcoin or you wouldn't see the amount of people buying Bitcoin if it didn't rise like
53:57it's rising.
53:58And it can't rise without volatility.
54:00If it just sat still and never moved, well, people wouldn't be going, I got to get some Bitcoin.
54:05It's going crazy.
54:05They'd be maybe putting it in gold or something else.
54:08You know, one of the frequent things that I'll hear from somebody is, you know, well, you know, Bitcoin could
54:14crash 50% tomorrow.
54:16And sure. And that's absolutely true.
54:19If Bitcoin were to go down 50% tomorrow, none of us would think, you know, wow, this is crazy.
54:26Why would Bitcoin do this?
54:28We would we would, you know, those of us who've been around a while anyway, we kind of know.
54:32Yeah, that's what Bitcoin does sometimes.
54:35But that said, you look at the trend, it's clear.
54:39It's very clear.
54:41Bitcoin certainly is volatile, but it's but it goes up.
54:44It's volatile to the upside.
54:46If you want larger returns, then you're going to have to deal with more volatility.
54:52You don't get a steadily climbing asset and like such an asset just doesn't exist.
54:59Like that's what people would like because that means that would mean that they're getting richer without getting without taking
55:05any of the risk.
55:06But that's that's part of the whole thing is you need that volatility in order to get that get that
55:13return.
55:14Basically, nobody could say that Bitcoin hasn't performed well.
55:19In fact, I think by by most measurements, it's the best performing asset there is in our in this in
55:27the time that it's been that it's existed.
55:30You know, once Bitcoin gets to a certain price point as whether that price point is $500,000 per Bitcoin
55:36or a million dollars per Bitcoin, I don't know.
55:39But once it gets to a certain price point, the amount of movement that it'll have like it does now
55:45will cease to happen as often.
55:47There'll be movement, but not like there is now.
55:50Bitcoin is not going to get to $500,000 a million dollars a coin without being extremely volatile.
55:55That's just the way it is.
56:03So I think in 10 years, Bitcoin will be used all around the world.
56:07I think it will have at least a couple billion users.
56:11I think it will mimic the adoption of the Internet itself.
56:14It is a network that has network effects built on top of technology that has network effects.
56:20I expect a lot more people to own Bitcoin.
56:24And I expect a lot more sort of like battles that Bitcoin will have gone through against governments or hedge
56:31funds.
56:32I truthfully believe there are certain moments in history, the television, right?
56:36When you start learning telephone, like those types of moments, the Internet, right?
56:42Not even just the Internet, but the World Wide Web browsers.
56:45Like when you start looking at these transformative technologies, like as they continue to give us more and more democracy,
56:53like the Internet democratized information, right?
56:57The telephone democratized communication.
56:59When you start seeing these things that start to change the way we live and empower us, more people will
57:05learn about it and they will find out about it and they will begin to understand like this is freedom
57:10for me.
57:11And when they get to that point, what's going to happen, they're going to take their value out of other
57:15things that don't give them freedom.
57:16And they're going to trade them for the harder, sounder money.
57:19The long term case for Bitcoin is really simple.
57:22There is only 21 million or a fixed supply and increasing demand.
57:26And they only released out there is price.
57:29So I expect price to go up.
57:30Where do I see Bitcoin in 10 years?
57:32I see Bitcoin as more established, more people using it than maybe 10% of the world's population.
57:40I think in 10 years we enter into the equivalent of the mid 2000s when it comes to Internet adoption,
57:49the advent of smartphones.
57:50There's some data that shows that the users currently on the Bitcoin network is sort of mid 1990s, late 1990s
57:58levels.
57:58And I think we're right at the tipping point where we have broad based massive adoption in the next five
58:05years.
58:06I think in 10 years you're going to see every major financial institution that take Bitcoin.
58:12But Bitcoin in 10 years, in my opinion, is going to be the strongest commodity ever created on the planet.
58:22In 10 years or so, we'll be well on our way toward that path.
58:26And I think 20, 30 years from now, I think Bitcoin will be the dominant global money.
58:31Go for sale.
59:01So to please go for sale.
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