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expect. Thank you guys very much for being here.

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This is a seminar on money, inflation, and Bitcoin.

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It's a big enough topic that today we're just going to cover money.

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Next time we'll talk about inflation. After that we'll talk about Bitcoin.

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We'll get into some of each of them as we go because it's impossible to talk about one

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without talking about the other.

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But I want to make sure that you leave here

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with a grounded understanding

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of what money is.

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I want you to leave with a definition.

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I want you to understand what money represents,

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what are the purposes of money,

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and what are the characteristics of money.

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So we'll get into that.

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We'll see some examples.

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We're going to start with just a little bit of a pop quiz, I guess.

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And I hope you enjoy.

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Thank you very much for your attention.

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The first thing is, I do believe that this is the highest leverage understanding that you can have in life.

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you're going to spend approximately 100,000 hours of your life

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trying to earn money.

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It would be very wise to understand where you should put that money

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so that you could keep it.

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You don't want to save your money in beanie babies.

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We've seen that that's not a good idea.

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You don't want to save it in the Deutschmark,

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Argentinian peso.

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Japanese yen, the U.S. dollar, gold.

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All of these things have failed.

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We'll talk about why and how.

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And we're so lucky to be living in a time where we have access to and cannot be denied from

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not only having the choice of the best money, but the ability to actually own it.

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the dollars that you have in your pockets or in your bank account,

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the pesos, the yen, those are not money.

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Those are currency.

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It's a very different thing.

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A currency is an IOU.

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It represents money, but it is not money.

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It's also not yours.

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Your money in a bank account is the bank's money.

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What you have is a promise.

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That promise has been broken by every institution to have ever existed.

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It will continue to be broken because it is a feature of the system.

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It is not a bug.

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It was designed this way.

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And as long as we participate in that system, then we will continue to be taken advantage of.

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So my goal here is that you leave with a conviction of what money is,

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what the best money is and why you should always choose the best money that exists.

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So kick it off. We've got five true or false questions. We're going to go through them quick.

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First one, housing, insurance, food, education, everything, cars, shoes,

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they're going up in price. Raise your hand if you believe this is true.

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false they're not going up in price the thing that you use to purchase it with is going down

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in value therefore it takes more of them to buy it this is the u.s dollar purchasing power

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starting in 1913 this is where the united states went broke this is where the united states went

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broke they went broke before that and that's the best one to have ever existed in modern times

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prices do not go up your purchasing power goes down

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i need you to start thinking about things in terms of this when you buy something you are not

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buying the thing you're selling your dollars you're selling your bitcoin you're selling your

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ethereum you're selling whatever it's a two-way street but we only think about

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buying in terms of when I give money for something, and we only think about selling in terms of when I

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get something, when I get money for something. So you're losing purchasing power. Prices are not

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going up. True or false? Inflation is an issue caused by supply chains and corporations greedily

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trying to maximize profits. True? Yeah, I think I can't fool you guys anymore.

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false inflation by definition is an increase in the supply of money

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the blue line this is the m2 money supply this is basically an accounting as best we can

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of the global amount of money that exists something kind of scary that should terrify you

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is that literally no one, no government, no database, no entity,

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has any idea how much money exists in the world.

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At any given time, no one can pin it down.

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We do not know.

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There are options upon options.

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If you include the M2 money supply, you're in the trillions.

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If you include the options upon those, you're in the quadrillions.

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When the interest rate goes down, the money supply increases.

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When the interest rate goes up, the money supply decreases.

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It's constantly changing.

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This is going to be very important when we talk about unit of account.

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And I think it will be very clear when we discuss that.

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True or false?

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Investing in retirement through the stock market will protect and grow your savings over time.

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The S&P, which is the red line, these are the 500 most valuable companies in the world.

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Compared to the M2 money supply, barely keeps up with inflation.

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And in fact, out of the S&P 500, there are approximately seven, maybe eight companies that account for all of the gains.

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The other 493, 492 are actually dragging it down.

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The average S&P company exists for 30 years.

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The average S&P company exists in the S&P for four.

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So if you're going to be picking individual stocks in order to try to choose a retirement, you've got to be shockingly good.

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And we've proven time and time again that you're going to find that you're just not that good.

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Unfortunate, right? Unfortunate.

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True or false, I can protect myself against inflation by earning more.

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If you made the average wage in 1971, which was $6,000,

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in order to have the same standard of living,

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which is to say, in order to keep up with inflation,

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by 2024, you'd have to be making $180,000 a year.

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We predict that by 2030 it'll be $360,000.

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Probably that's an undershoot.

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I would assume that that's a very low number.

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Probably closer to $500,000 would be my guess.

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This red line is actually what adjusted full-time wages have done since 1971.

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They've gone nowhere.

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We've had some people that make all the money.

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And most people make none of the money.

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The average person has gotten exponentially poorer since 1971.

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True or false?

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There's one way to protect your savings, your livelihood against inflation, and anyone can do it.

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Regardless of how rich or poor they may be.

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That is true.

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You can basically pick any time during Bitcoin's existence.

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Compare it to the top earning assets.

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This is from about a year ago.

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These numbers could be adjusted.

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It would actually be higher now.

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But if you'd have put $100 into gold 10 years ago, more like $11.

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You'd have about $110, probably closer to $120 today.

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real estate 162, S&P,

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put into Bitcoin you have about 15 million.

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What we're seeing is a global revolution

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as an innovation in technology

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takes over money.

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Much like we saw a global revolution

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in how the telephone took over communications,

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how internet took over information,

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how cell phones have taken over attention, I would say.

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We're coming to the point where we're going to start hitting

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what's called hyper-Bitcoinization,

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just like we saw hyper-Internetization in the late 90s,

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where we hit the spiky part of the S-curve and we shoot up high.

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so i can give you the what and the how i can tell you about bitcoin i can tell you about how these

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things work but without the why we're going to have a risk the risk is that you see the potential

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and the power and then you do nothing my goal is that you walk away with an understanding and

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conviction that allows you to make very wise choices for your future the reason i do this

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is because I want this for you.

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This is something I learned when I was 16 years old.

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There's a guy named Zig Ziglar who was a famous salesman.

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He became a philosopher after that.

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And he says, if you have the ability to share a good or service or information that will

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change lives, it's your moral obligation to do so.

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So I view this as a moral obligation.

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I view this as a duty that I have to humanity, and I hope you find value in it.

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What's my why? My why is that I want to live a good life.

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I retired when I was 38, normal salary, no inheritance, grew up poor, grew up in a trailer house, no lottery.

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And my goal is to spend my life focused on music, nature, fitness, and time with loved ones.

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Those are things that I find far more valuable than chasing exits and being someone else's exit liquidity.

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So our job here is to uncover and exploit something about the money system that will open your eyes.

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It is intentionally difficult to understand.

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That's why we're breaking this up into three parts.

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But it's actually not hard to understand once you get a grounding of the definition, the representation, the purposes, and the characteristics.

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So we're going to learn from cartoon cows.

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I think this will work well.

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I love cartoons.

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So what are the rules?

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Money is a game.

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You're going to play it just like everybody else in the world.

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We're going to go over these rules one by one.

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at the end you should be able to look at this and not mess it up.

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So when we're done here, you're going to understand money better than Warren Buffett.

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You'll understand inflation better than the Federal Reserve.

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And you'll have everything that you need to secure your financial future.

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Oh, the important part here, I'm no guru.

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I just read a lot.

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And I found that by reading a lot, you can take the wisdom that other people have spent the rest of their lives dedicating to.

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And you can take that and do something great with it.

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My background, I've got an undergrad and a master's in economics.

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I used to be a financial advisor during the global financial crisis, which was an interesting time.

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I used to manage an $80 million loan portfolio, and I also have a degree in engineering, and was a National Communications Award winner when I did that as well.

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None of that, by the way, gave me any sort of background for what we're going to talk about today.

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So that actually doesn't matter at all.

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So what was the best performing asset in the last decade?

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It was Bitcoin.

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This is not to scale because it would not fit.

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It would go through the roof if we were to put this to scale.

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You want to be able to save yourself from greed, poor security, fear, lack of follow through, and not acting fast enough.

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The orange line at the top is Bitcoin as a constant.

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The S&P 500 priced in Bitcoin, real estate gold, the Nigerian Naira, and the Turkish Lira.

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The best one is the S&P.

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It's hung on.

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It's only down 94% compared to Bitcoin over the last decade.

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Gold's down 95%.

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We'll talk about this later, but when things go down by a percentage,

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they have to go up by a lot more.

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If it goes down by 50%, you have to go up by 100% to get back.

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If it goes down by 75%, you have to go up 400% to get back.

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What do you have?

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Yep.

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So there's currently around $900 trillion worth of wealth in the world.

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Bitcoin represents about $2 trillion of that.

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You can figure that about half of that is utility value

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and about half of it's investment value.

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There's about $450 trillion worth of investment value.

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So $2 trillion out of $450 trillion.

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We've got about $448 trillion yet to go.

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You're not going to see 15,000% gains probably next year.

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But if you keep your money in these, you will see 15,000% losses, especially these.

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Any sort of government money.

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There's been 4,000 government monies to exist.

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3,840 of them are defunct.

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They are gone.

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They are worth literally zero.

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Of the 160 so that remain,

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every single one is down 99% from its original value,

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which means that it has to go up 9,900% just to get back to parity.

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And all the other ones are down more than that.

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This is by design.

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We'll talk about this later.

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John Maynard Keynes, who is the father of the modern economic system,

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very famous for saying that inflation is a mechanism by which governments can secretly

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and slowly confiscate wealth from people without them knowing it.

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This is a person who designed the system that we live in.

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This is not an accident.

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This is by design.

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This is a money that was designed not to do that.

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So yes, we can only deal with the situation that we have.

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This is not for prediction, but we're going to compare

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first understanding money as a technology,

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and we'll take a look at some other technologies as well.

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So three things that we'll try to cover today.

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How to view money as a technology,

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what we have over here on the board,

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the four purposes of money,

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and how to understand the 10 characteristics.

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Be curious about this. Learn how to flip your mind. Learn how to invert, as Charlie Munger would say, and try to view things from a different direction.

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And I think that this will be very valuable to you.

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What is money? So we're going to start not by defining money, but by trying to define something else to understand just how difficult that is.

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So, I have cowboy boots on.

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You've got sandals.

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You've got some slip-on shoes.

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Your shoes have laces.

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Can someone define for me what a shoe is?

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I think that's actually what I figured I would struggle to get done in 10 minutes.

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That's, I think it's perfect.

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What's a shoe?

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The definition of a shoe, we're going to say it's tech to protect feet.

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That work?

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Because my boots are fireproof, so I can weld and sparks can fall and I won't burn my foot.

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But you can't do that, and you can't do that.

236
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My boots are tall to keep rattlesnakes from biting me, but you can't do that and you can't do that, so that's not constant.

237
00:18:14,920 --> 00:18:19,480
Laces don't define a shoe because hardly any of the shoes here have laces.

238
00:18:21,280 --> 00:18:26,380
High heels serve another function, right? They make us taller.

239
00:18:26,380 --> 00:18:29,340
so it's really hard to define

240
00:18:29,340 --> 00:18:32,320
a shoe based on

241
00:18:32,320 --> 00:18:34,240
a whole bunch of different things

242
00:18:34,240 --> 00:18:35,940
because there's so many different iterations

243
00:18:35,940 --> 00:18:37,860
and they do so many different things

244
00:18:37,860 --> 00:18:40,820
but it is a piece of technology

245
00:18:40,820 --> 00:18:44,000
and it protects our foot

246
00:18:44,000 --> 00:18:47,020
it allows us to go places

247
00:18:47,020 --> 00:18:48,220
we otherwise couldn't go

248
00:18:48,220 --> 00:18:54,900
well that's another

249
00:18:54,900 --> 00:18:58,540
that's another one that I'd debate you on

250
00:18:58,540 --> 00:19:02,540
because nobody here is wearing Crocs, but...

251
00:19:02,540 --> 00:19:04,200
Are Crocs fashion?

252
00:19:04,960 --> 00:19:05,740
Yes, they are.

253
00:19:05,860 --> 00:19:07,080
They're hideous.

254
00:19:08,660 --> 00:19:10,660
Well, they have a problem with the book.

255
00:19:11,720 --> 00:19:13,720
Some shoes are designed for fashion, right?

256
00:19:14,720 --> 00:19:18,100
But then you've got insulated boots that have steel toes in them.

257
00:19:18,500 --> 00:19:20,740
Are they designed for fashion or are they designed for function?

258
00:19:21,900 --> 00:19:24,220
So, yeah, they can have other purposes.

259
00:19:24,220 --> 00:19:25,600
They can do other things.

260
00:19:26,660 --> 00:19:32,240
But really, all we can say is that they're technology that we put on our foot,

261
00:19:32,540 --> 00:19:35,920
and they alter what we can do with our foot, right?

262
00:19:36,460 --> 00:19:38,820
So I can put on my steel-toed boots, and now I have weapons.

263
00:19:39,260 --> 00:19:41,740
I can put on my high heels, and now I'm fashionable.

264
00:19:42,640 --> 00:19:48,360
I can put on my rubber-soled boots, and now I can walk across an electrified floor and not get shocked.

265
00:19:48,520 --> 00:19:50,400
So what about money?

266
00:19:50,560 --> 00:19:53,600
It's a technology, right?

267
00:19:54,220 --> 00:19:55,080
Money is a technology.

268
00:19:57,640 --> 00:19:59,120
What does money protect?

269
00:20:00,540 --> 00:20:01,100
Value.

270
00:20:01,540 --> 00:20:01,800
Cool.

271
00:20:02,100 --> 00:20:03,140
Money protects value.

272
00:20:04,760 --> 00:20:05,640
What's value?

273
00:20:05,840 --> 00:20:06,720
It's like time.

274
00:20:07,520 --> 00:20:08,040
Time?

275
00:20:09,880 --> 00:20:21,460
So, I think the best definition for value is that it's desirable and scarce.

276
00:20:21,660 --> 00:20:23,660
Coffee is desirable, but it's not scarce.

277
00:20:23,660 --> 00:20:24,920
so it's not really valuable.

278
00:20:25,060 --> 00:20:26,620
People give it away for free all the time.

279
00:20:26,880 --> 00:20:28,640
Boogers that come out of your nose

280
00:20:28,640 --> 00:20:30,320
that are the size of quarters

281
00:20:30,320 --> 00:20:31,740
are scarce.

282
00:20:34,280 --> 00:20:35,480
But they're not desirable.

283
00:20:36,600 --> 00:20:37,800
So they don't have value.

284
00:20:38,000 --> 00:20:39,840
Time is one component of value.

285
00:20:42,480 --> 00:20:43,400
There's another one.

286
00:20:44,520 --> 00:20:45,380
What's the other one?

287
00:20:45,540 --> 00:20:46,860
Kind of, in a way.

288
00:20:47,240 --> 00:20:48,100
Yeah, close.

289
00:20:49,280 --> 00:20:51,540
You and I both work on the same project.

290
00:20:51,540 --> 00:20:55,080
We both spend the same amount of time doing it.

291
00:20:56,100 --> 00:20:57,120
I work harder than you.

292
00:20:57,380 --> 00:20:57,640
Effort.

293
00:20:58,480 --> 00:20:58,900
Effort.

294
00:21:00,100 --> 00:21:01,500
What's another word for effort?

295
00:21:01,920 --> 00:21:02,320
Energy.

296
00:21:02,560 --> 00:21:02,840
Energy.

297
00:21:03,100 --> 00:21:05,140
When you combine these two things, what do you get?

298
00:21:05,380 --> 00:21:07,800
The literal mechanical definition.

299
00:21:10,240 --> 00:21:11,300
Energy and time.

300
00:21:11,760 --> 00:21:12,080
Work.

301
00:21:13,040 --> 00:21:13,440
Physics.

302
00:21:13,860 --> 00:21:14,140
Power.

303
00:21:14,440 --> 00:21:15,160
Ever heard it before?

304
00:21:16,020 --> 00:21:16,980
Money is power.

305
00:21:16,980 --> 00:21:21,920
Money, it would be best said, is a representation of power.

306
00:21:22,480 --> 00:21:26,820
Because money is what I get in exchange for my time and my energy.

307
00:21:28,360 --> 00:21:32,700
And there's a skill component to that, but that skill is merely a function of time and energy.

308
00:21:33,180 --> 00:21:36,600
There's an effort component to that, but that's merely a function of time and energy.

309
00:21:38,340 --> 00:21:41,360
Power, by definition, is energy and time.

310
00:21:43,000 --> 00:21:44,060
Yes, physics.

311
00:21:44,060 --> 00:21:47,400
So we're talking like we are very much talking about physics.

312
00:21:49,960 --> 00:21:56,940
Because if you don't understand physics, then you can't understand one sort of money compared to another.

313
00:21:57,880 --> 00:21:58,340
Right?

314
00:21:58,620 --> 00:22:02,060
There's no physical cost to creating fiat money.

315
00:22:03,100 --> 00:22:08,160
It's just some people that decide something and then another guy walks in a room and he changes a number in a database.

316
00:22:08,980 --> 00:22:11,860
And you exchange your time and energy for that.

317
00:22:11,860 --> 00:22:16,700
he didn't exchange anything for that, right?

318
00:22:17,660 --> 00:22:19,160
Gold has to be mined.

319
00:22:20,620 --> 00:22:23,220
And I'm not going to mine gold

320
00:22:23,220 --> 00:22:26,640
and expend my time and energy

321
00:22:26,640 --> 00:22:30,640
unless I get more for that than the time and energy I spend.

322
00:22:30,800 --> 00:22:32,720
So there's a time and energy component to gold.

323
00:22:34,120 --> 00:22:35,640
Bitcoin, when it is mined,

324
00:22:35,640 --> 00:22:39,700
is quite literally a power competition between miners.

325
00:22:39,700 --> 00:22:43,340
the one that supplies the most processing power

326
00:22:43,340 --> 00:22:45,660
is the one that wins the competition for the block

327
00:22:45,660 --> 00:22:48,100
and they, in reward, get money.

328
00:22:49,640 --> 00:22:51,820
Not always. There's a chance of probability.

329
00:22:52,160 --> 00:22:54,600
Yep, yep. There's a little bit of probability involved.

330
00:22:55,880 --> 00:22:58,220
But money is basically power.

331
00:23:00,180 --> 00:23:01,720
That's what it represents.

332
00:23:02,440 --> 00:23:04,780
But by definition, what is money?

333
00:23:04,780 --> 00:23:08,360
This is money. Person A has this much of it.

334
00:23:09,700 --> 00:23:11,520
Person B has this much of it.

335
00:23:12,400 --> 00:23:13,760
C has this much.

336
00:23:15,040 --> 00:23:16,000
D is poor.

337
00:23:17,640 --> 00:23:18,420
Here's Elon.

338
00:23:18,820 --> 00:23:19,620
All of the money.

339
00:23:21,840 --> 00:23:23,700
And we each have a portion of it.

340
00:23:25,080 --> 00:23:25,200
Right?

341
00:23:27,600 --> 00:23:28,980
So what does that represent?

342
00:23:29,920 --> 00:23:32,600
It represents our contribution to the world.

343
00:23:33,060 --> 00:23:33,580
Right?

344
00:23:34,040 --> 00:23:35,480
As valued by the world.

345
00:23:36,980 --> 00:23:38,880
We can inherit it too, of course.

346
00:23:38,880 --> 00:23:41,720
but represents somebody's contribution to the world.

347
00:23:41,840 --> 00:23:45,380
And now I'm the person that has access to it.

348
00:23:45,520 --> 00:23:48,440
So money truly is a ledger.

349
00:23:48,760 --> 00:23:51,560
Money is a, you can think of it like a spreadsheet.

350
00:23:52,080 --> 00:23:53,120
Everybody in the world,

351
00:23:54,400 --> 00:23:56,340
and this guy owes me this much,

352
00:23:56,380 --> 00:23:57,500
and I owe this guy this much,

353
00:23:57,520 --> 00:23:58,440
and I have this much,

354
00:23:58,480 --> 00:23:59,980
and this guy owes that guy that much.

355
00:24:00,740 --> 00:24:02,900
It's just a way to keep track.

356
00:24:03,600 --> 00:24:05,520
It's a scoreboard, okay?

357
00:24:05,520 --> 00:24:09,380
But this is such a huge concept.

358
00:24:10,680 --> 00:24:10,780
Yeah.

359
00:24:11,060 --> 00:24:11,400
Ledger.

360
00:24:11,540 --> 00:24:11,960
Yeah, yeah, yeah.

361
00:24:12,020 --> 00:24:18,120
So a ledger, if you're keeping track of your business, I'm going to erase.

362
00:24:18,240 --> 00:24:19,760
Is everybody okay if I erase this?

363
00:24:20,220 --> 00:24:20,400
Okay.

364
00:24:21,040 --> 00:24:25,100
So a ledger, anybody ever watch any Marvel movies?

365
00:24:26,280 --> 00:24:26,520
Yeah?

366
00:24:28,140 --> 00:24:31,100
The Black Widow, she's always saying, I got red in my ledger.

367
00:24:31,100 --> 00:24:35,380
It means she's done evil and she has to make up for that.

368
00:24:36,180 --> 00:24:38,220
A ledger is nothing more than this.

369
00:24:38,940 --> 00:24:39,620
I got 500.

370
00:24:41,420 --> 00:24:42,560
I sent 200.

371
00:24:43,220 --> 00:24:43,940
I got 100.

372
00:24:44,300 --> 00:24:45,060
I sent 300.

373
00:24:46,100 --> 00:24:46,780
What do I have?

374
00:24:47,540 --> 00:24:48,380
I have 100.

375
00:24:50,780 --> 00:24:52,700
A ledger is just a way to keep track.

376
00:24:53,660 --> 00:24:54,800
It's just a scoreboard.

377
00:24:55,040 --> 00:24:59,140
And the first ledgers, the first ledgers are still around today.

378
00:25:01,740 --> 00:25:04,520
And they're inherently more dangerous than they used to be.

379
00:25:05,520 --> 00:25:07,380
Trust me, bro.

380
00:25:09,840 --> 00:25:10,840
That's a ledger.

381
00:25:11,400 --> 00:25:22,215
I giving you my word Right My word is my bond right I owe you something I pay you

382
00:25:22,915 --> 00:25:23,895
Here's another one.

383
00:25:26,355 --> 00:25:28,255
Handshake, right?

384
00:25:28,715 --> 00:25:29,555
Handshake deals.

385
00:25:31,415 --> 00:25:33,135
That's a way we keep track.

386
00:25:33,135 --> 00:25:39,635
But when we had societies that grew beyond the number of people that are in this room,

387
00:25:39,635 --> 00:25:42,175
we couldn't keep track of all that.

388
00:25:42,995 --> 00:25:44,875
There was too much interaction going on.

389
00:25:46,435 --> 00:25:49,295
And we started to have this problem.

390
00:25:49,535 --> 00:25:50,355
Have you ever heard that term?

391
00:25:51,075 --> 00:25:52,795
Non-coincidence of wants?

392
00:25:54,435 --> 00:25:54,755
Okay.

393
00:25:55,715 --> 00:25:57,215
You sell apples.

394
00:25:58,135 --> 00:25:59,575
I sell bananas.

395
00:26:00,275 --> 00:26:01,395
I want apples.

396
00:26:01,515 --> 00:26:02,155
You want bananas.

397
00:26:03,155 --> 00:26:06,235
We'll decide what's the proper exchange rate.

398
00:26:06,875 --> 00:26:08,155
Three apples for two bananas.

399
00:26:08,515 --> 00:26:08,675
Cool.

400
00:26:09,635 --> 00:26:13,235
I come back tomorrow, and I want more apples.

401
00:26:14,335 --> 00:26:15,995
But you don't want any more bananas.

402
00:26:17,675 --> 00:26:18,975
Now we have a problem.

403
00:26:19,735 --> 00:26:22,095
Now we have a non-coincidence of wants.

404
00:26:22,875 --> 00:26:25,975
There is not a coincidence between the things that we want.

405
00:26:28,355 --> 00:26:29,995
So we have to resolve that.

406
00:26:30,915 --> 00:26:35,115
And what we did is we created a mutually agreed-upon belief system.

407
00:26:36,075 --> 00:26:37,895
And we said, trust me, bro.

408
00:26:37,895 --> 00:26:45,975
we did the handshake that didn't work very well so we had to have something that could stand in

409
00:26:45,975 --> 00:26:53,835
between so we needed something to represent the trust me bro we need something to resent that

410
00:26:53,835 --> 00:26:59,475
resent that represent represent that credit the first thing that we had big stones

411
00:26:59,475 --> 00:27:05,335
and they were milled from a island very far away and it took a lot of work to get to them

412
00:27:05,335 --> 00:27:14,875
And we brought him back and they said, Rami owns this stone, but he owes Lucas.

413
00:27:15,275 --> 00:27:18,955
So now this stone is Lucas' stone.

414
00:27:21,255 --> 00:27:23,015
And so on and so forth.

415
00:27:23,655 --> 00:27:26,435
And different stones represented different amounts of owing.

416
00:27:26,575 --> 00:27:28,635
These are what are called rye stones.

417
00:27:29,555 --> 00:27:36,495
Rye stones are the, near as we can tell, probably the first representation of money.

418
00:27:37,655 --> 00:27:38,795
You didn't put them in your pocket.

419
00:27:38,895 --> 00:27:39,455
They were huge.

420
00:27:39,535 --> 00:27:44,135
They sat at the edge of the island, and the village would come together, and they would

421
00:27:44,135 --> 00:27:48,015
meet, and somebody would stand up, and they would yell out in front of everybody, this

422
00:27:48,015 --> 00:27:49,515
stone is now this person's.

423
00:27:49,575 --> 00:27:51,055
This stone is now this person's.

424
00:27:52,835 --> 00:27:57,895
And that worked great until some white guys showed up.

425
00:27:58,635 --> 00:27:59,875
Which is usually what happens.

426
00:28:02,115 --> 00:28:10,735
Some white guys showed up and they said that these guys are valuing these stones.

427
00:28:11,735 --> 00:28:15,035
And we've got better ships and better mining tools, etc., etc.

428
00:28:15,755 --> 00:28:20,335
We'll just go get a bunch of stones and we'll bring them back and we'll be able to buy everything.

429
00:28:21,555 --> 00:28:24,535
They did that and of course they ruined the entire system.

430
00:28:24,535 --> 00:28:36,975
People would no longer accept their stones because they weren't representing the amount of work that it took to get them for the other people.

431
00:28:37,475 --> 00:28:40,235
We're going to see this happen again and again.

432
00:28:40,355 --> 00:28:41,535
We're going to see this happen with seashells.

433
00:28:42,415 --> 00:28:44,095
We're going to see this happen with glass beads.

434
00:28:44,495 --> 00:28:46,615
We're going to see this happen with fiat money.

435
00:28:47,635 --> 00:28:48,955
Over and over and over.

436
00:28:49,835 --> 00:28:59,375
A ledger, by the way, this accounting, this appears to be the creation of writing.

437
00:28:59,855 --> 00:29:04,975
The oldest known writings that we can find are ledgers.

438
00:29:05,675 --> 00:29:12,895
And they're showing farmers who owed for seed or fertilizer or something like that.

439
00:29:13,075 --> 00:29:15,395
They're written on clay tablets in Sumerian times.

440
00:29:15,395 --> 00:29:21,815
and every once in a while things would get so bad that they would clear the ledgers they would break

441
00:29:21,815 --> 00:29:27,055
the tablets and they would start completely over but we're going to go with a ledger as a definition

442
00:29:27,055 --> 00:29:34,275
of money it's just an account that's all it is fiat is a word that means it exists because we say it

443
00:29:34,275 --> 00:29:42,915
exists yeah which is kind of terrifying but that's truly what it means fiat fiat literally means it

444
00:29:42,915 --> 00:29:50,655
exists because we say so. In practice, that's not true. In practice, fiat exists because

445
00:29:50,655 --> 00:29:54,415
if you don't use fiat, we'll kill you. And how does that make it more real?

446
00:29:54,875 --> 00:29:55,675
No, it doesn't.

447
00:29:55,755 --> 00:29:59,895
Okay. Yeah, you could actually hang on to it. Yeah, yeah. This is, by the way, yeah,

448
00:29:59,955 --> 00:30:05,655
this is the huge danger of central bank digital currencies, right? If your government creates a

449
00:30:05,655 --> 00:30:10,835
money that you can hold, they have to go through the trouble of putting a gun to your head to get

450
00:30:10,835 --> 00:30:16,275
it. Or they have to seize your bank account, which means they have to have power over the

451
00:30:16,275 --> 00:30:22,855
banking system. If they have a central bank digital currency, then you just walk across

452
00:30:22,855 --> 00:30:28,415
the wrong street, you jaywalk, and they freeze your accounts. You get a message on your phone

453
00:30:28,415 --> 00:30:34,835
that says, we are trying to stimulate the car economy. If you don't spend $20,000 on a car in

454
00:30:34,835 --> 00:30:40,155
the next two months, we're just going to take it and give it to the car economy. This is happening

455
00:30:40,155 --> 00:30:40,555
already?

456
00:30:41,275 --> 00:30:41,715
Yes.

457
00:30:42,035 --> 00:30:42,155
Yeah.

458
00:30:43,395 --> 00:30:44,135
Well, yeah.

459
00:30:44,255 --> 00:30:47,395
And the reason is because you can't track bills, right?

460
00:30:47,795 --> 00:30:48,415
This is well known.

461
00:30:48,515 --> 00:30:52,535
Like, it was really funny when they came out and started talking about how Bitcoin was the

462
00:30:52,535 --> 00:30:53,775
money preferred by criminals.

463
00:30:54,815 --> 00:30:56,975
Because cash is the money preferred by criminals.

464
00:30:57,435 --> 00:30:57,875
Always.

465
00:30:58,515 --> 00:30:59,775
Because you can't trace it.

466
00:30:59,815 --> 00:31:03,055
Bitcoin, you can eventually figure out where it came from.

467
00:31:03,155 --> 00:31:06,795
And you can say that wallet address is doing some nasty stuff.

468
00:31:07,275 --> 00:31:08,855
We're not going to work with them anymore.

469
00:31:08,855 --> 00:31:14,755
But dollars, unless you track every single one, and you still can't track every single one.

470
00:31:14,815 --> 00:31:15,595
I can hand it to you.

471
00:31:15,675 --> 00:31:16,455
You can hand it to him.

472
00:31:16,495 --> 00:31:18,215
It goes through a billion people, right?

473
00:31:18,735 --> 00:31:20,195
It's completely anonymous.

474
00:31:20,555 --> 00:31:20,655
Yeah.

475
00:31:20,935 --> 00:31:21,875
I think it's Latin.

476
00:31:22,115 --> 00:31:23,135
I believe it's Latin.

477
00:31:23,255 --> 00:31:24,895
Let there be.

478
00:31:25,415 --> 00:31:25,595
Yeah.

479
00:31:26,435 --> 00:31:33,655
The explanation, by the way, of violence, your president, Javier Malay, does a beautiful job of explaining this.

480
00:31:34,575 --> 00:31:37,935
When he talks about how taxation is theft by governments.

481
00:31:39,775 --> 00:31:40,855
And he says, understand this.

482
00:31:40,875 --> 00:31:41,555
It's very easy.

483
00:31:41,855 --> 00:31:46,335
I come to your door and I say, give me 20% of your money.

484
00:31:46,675 --> 00:31:48,195
And you say, you can go to hell.

485
00:31:49,355 --> 00:31:53,155
And I come back the next day and I say, give me 20% of your money.

486
00:31:53,255 --> 00:31:54,115
Here's a piece of paper.

487
00:31:54,275 --> 00:31:54,955
I signed it.

488
00:31:56,095 --> 00:31:57,675
And you say, yeah, you can go to hell.

489
00:31:58,955 --> 00:32:01,795
The third day I come back and I say, give me 20% of your money.

490
00:32:01,975 --> 00:32:02,715
Here's a piece of paper.

491
00:32:02,795 --> 00:32:03,215
I signed it.

492
00:32:03,275 --> 00:32:04,035
Here's a guy with a gun.

493
00:32:06,415 --> 00:32:08,615
And if you don't give it to me, we're going to put you in jail.

494
00:32:08,615 --> 00:32:20,475
or worse. This is taxation. And here, by the way, is a thought that I think should send your head

495
00:32:20,475 --> 00:32:26,515
spinning. If governments can create money out of nothing, and they can, do we all agree that?

496
00:32:26,975 --> 00:32:31,895
We all agree they can create money out of nothing. Why do they need to tax you? Couldn't they just

497
00:32:31,895 --> 00:32:38,495
create that money? What's inflation? Inflation is just printing money. They're the ones printing

498
00:32:38,495 --> 00:32:50,035
money. Exactly. Exactly. Right. So the amount of tax receipts is a minuscule portion of the entire

499
00:32:50,035 --> 00:32:59,895
monetary supply. What's the point? Control. Yeah. It's just control. They don't need to.

500
00:32:59,895 --> 00:33:09,175
right? Income tax in the United States is less than 120 years old.

501
00:33:11,575 --> 00:33:18,675
Ever played the game Monopoly? Anybody? Monopoly was actually created in conjunction

502
00:33:18,675 --> 00:33:23,235
with the government. You know, there's a spot you land on that says income tax.

503
00:33:23,235 --> 00:33:29,915
it was created as a way to get people used to the idea that you have to pay income tax

504
00:33:29,915 --> 00:33:34,975
because before they never did yeah that's a great question how do i think governments should pay for

505
00:33:34,975 --> 00:33:40,435
roads health care etc first is i don't accept the premise of your question the reason being is that

506
00:33:40,435 --> 00:33:45,295
governments pay for nothing governments don't pay for anything right where do governments get money

507
00:33:45,295 --> 00:33:47,675
huh

508
00:33:47,675 --> 00:33:52,995
Yeah. There's no such thing as government money.

509
00:33:56,075 --> 00:34:04,175
They print it. Yeah. But when they print it, what happens? Borrows from Fed. And where does the Fed

510
00:34:04,175 --> 00:34:13,895
get the money? Not anymore. Yeah. Here's the way to think about it. This is all the money in the

511
00:34:13,895 --> 00:34:21,175
world. Okay. Here's my portion of it. If we make more money, let's say my portion is 17%.

512
00:34:21,175 --> 00:34:27,735
What this means is I want you to stop thinking about money in terms of quantity and start

513
00:34:27,735 --> 00:34:34,815
thinking about it in terms of buying power. If I have 17% of the money in the world,

514
00:34:34,895 --> 00:34:42,095
I can buy 17% of the stuff in the world. If you increase the amount of money, my share goes down.

515
00:34:43,895 --> 00:34:47,835
Every new dollar, every new yen, every new naira that's created

516
00:34:47,835 --> 00:34:52,535
makes every single other one in existence worth proportionately less.

517
00:34:54,555 --> 00:34:56,775
This never changes.

518
00:34:57,355 --> 00:34:59,115
All the money always equals all the stuff.

519
00:34:59,115 --> 00:35:03,795
Any amount of money, as long as it meets the characteristics of money,

520
00:35:04,295 --> 00:35:08,395
any amount of money is sufficient to run an entire world economy,

521
00:35:08,515 --> 00:35:10,915
a global economy, a galaxy economy.

522
00:35:10,915 --> 00:35:21,275
If you had one dollar, but you could split that dollar and put it back into pieces and reconstitute it, one dollar would be enough.

523
00:35:22,115 --> 00:35:24,075
If you had a trillion dollars, it'd be enough.

524
00:35:24,215 --> 00:35:24,735
Let's say that again.

525
00:35:24,815 --> 00:35:26,655
What happens to the buying?

526
00:35:27,415 --> 00:35:28,975
This is called deflation.

527
00:35:29,715 --> 00:35:33,255
Deflation is a natural occurrence of technology, right?

528
00:35:33,735 --> 00:35:35,715
Technology allows us to do more with less.

529
00:35:36,495 --> 00:35:44,975
And so the natural order of things, as we have more technology, better technology, should be that prices go down.

530
00:35:44,975 --> 00:35:49,775
And you saw this in Roman times when you had the Roman, it was called the denarius.

531
00:35:50,895 --> 00:35:54,135
It was the consistent money for a thousand years.

532
00:35:54,875 --> 00:36:02,275
And during that time, prices continuously went down until the government started screwing with things.

533
00:36:02,275 --> 00:36:06,275
And they started screwing with things first by what you call coin clipping.

534
00:36:07,215 --> 00:36:08,095
Do you have a gold coin?

535
00:36:08,875 --> 00:36:12,155
I'm just going to clip a little off of it, just a tiny bit.

536
00:36:13,135 --> 00:36:19,215
If I do that to 100 coins, I probably have enough clips to make five more, right?

537
00:36:20,515 --> 00:36:24,115
So now I can increase the money supply without anybody knowing it.

538
00:36:24,795 --> 00:36:28,875
By the way, this is why your coins have ridges on the outside of them.

539
00:36:28,875 --> 00:36:33,795
that was a protection mechanism to try and keep people from clipping coins.

540
00:36:35,315 --> 00:36:36,535
Then they got sneakier.

541
00:36:37,355 --> 00:36:39,715
They would take the coins and they would melt them down

542
00:36:39,715 --> 00:36:43,695
and they would add a less valuable material to them

543
00:36:43,695 --> 00:36:45,195
and then they would recast them.

544
00:36:46,035 --> 00:36:48,175
Take 100 gold coins, add some tin.

545
00:36:49,275 --> 00:36:50,975
Now I've got 200 gold coins.

546
00:36:51,075 --> 00:36:52,415
Now I'm going to put them back into the market.

547
00:36:52,795 --> 00:36:56,195
They're going to buy the same amount until people start to figure that out.

548
00:36:56,295 --> 00:36:58,275
This is where we got the term sound money.

549
00:36:58,275 --> 00:36:59,475
Has anybody ever heard that term?

550
00:36:59,975 --> 00:37:00,675
Sound money.

551
00:37:00,795 --> 00:37:01,595
Do you know where it comes from?

552
00:37:02,955 --> 00:37:09,135
The term sound money comes from people taking a coin that they know is pure

553
00:37:09,135 --> 00:37:12,775
and flicking it with a piece of metal to hear the tone

554
00:37:12,775 --> 00:37:16,915
and then taking one that they're suspect of and flicking it.

555
00:37:17,135 --> 00:37:22,675
And if the tones don't match, then they know that this one has been messed with.

556
00:37:22,835 --> 00:37:24,275
They know that this one's been altered.

557
00:37:24,935 --> 00:37:26,155
You still see this by the way.

558
00:37:26,155 --> 00:37:27,395
It's a cool little tool, actually.

559
00:37:27,395 --> 00:37:35,015
It holds the coin, and it's got this little metal fling, and you just swing, and this is how jewelers verify coins.

560
00:37:36,155 --> 00:37:39,915
The only true way to verify a coin, by the way, is to melt it down.

561
00:37:40,355 --> 00:37:44,875
It's the only true way, which makes it really costly.

562
00:37:46,735 --> 00:37:50,035
But this is a concept that I want you to understand.

563
00:37:51,075 --> 00:37:53,535
All the money always equals all the stuff.

564
00:37:53,535 --> 00:38:00,375
And if the amount of money grows and the amount of stuff doesn't grow, then the stuff just costs more.

565
00:38:01,015 --> 00:38:03,515
Because all the money always equals all the stuff.

566
00:38:04,955 --> 00:38:08,695
This is the unit of account purpose of money we'll get into shortly.

567
00:38:09,995 --> 00:38:10,835
Good with this?

568
00:38:11,355 --> 00:38:11,635
All right.

569
00:38:11,875 --> 00:38:12,715
I'll throw this off.

570
00:38:12,895 --> 00:38:13,215
All right.

571
00:38:14,055 --> 00:38:16,275
I think we can start to move into this a little bit.

572
00:38:17,155 --> 00:38:18,155
Money's an innovation.

573
00:38:19,395 --> 00:38:22,455
Innovation means an entirely different new way of doing things.

574
00:38:22,455 --> 00:38:24,575
There's two types of technology.

575
00:38:25,375 --> 00:38:27,175
There's iteration and there's innovation.

576
00:38:28,035 --> 00:38:30,715
Iteration is we take something that exists and we make it better.

577
00:38:31,155 --> 00:38:31,955
We've got a car.

578
00:38:32,435 --> 00:38:33,475
We're going to put a radio in it.

579
00:38:33,535 --> 00:38:34,735
We're going to put cup holders in it.

580
00:38:34,815 --> 00:38:36,355
We're going to put headrests in it.

581
00:38:36,415 --> 00:38:38,655
We're going to put airbags in it.

582
00:38:39,475 --> 00:38:42,015
Innovation is we're going to do this entirely different.

583
00:38:42,595 --> 00:38:44,435
What if that car flew, right?

584
00:38:45,235 --> 00:38:47,155
What if that car drove itself?

585
00:38:49,815 --> 00:38:52,175
Innovation is solving a problem the better way.

586
00:38:52,455 --> 00:38:57,555
Technology is the tool that you use to solve it. I love this one. The upside-down

587
00:38:57,555 --> 00:39:04,095
ketchup bottle. You know we had ketchup for like 150-200 years before somebody

588
00:39:04,095 --> 00:39:08,075
finally decided that we should put it upside down?

589
00:39:08,075 --> 00:39:12,635
We had shampoo like that for decades.

590
00:39:12,635 --> 00:39:18,335
I remember growing up and everybody had that trick. It's like oh if it's Heinz

591
00:39:18,335 --> 00:39:23,095
57, then you have to turn it and hold it at this angle, and you have to tap with a spoon

592
00:39:23,095 --> 00:39:28,435
on the logo. That's how you get it out. And we're just waiting for somebody to flip it

593
00:39:28,435 --> 00:39:35,915
upside down. This is the thing that I want you to understand, because so many of us get

594
00:39:35,915 --> 00:39:44,175
caught up, and we play the mid-twit game. You've seen that, right? You've got the mid-twit,

595
00:39:44,175 --> 00:39:47,515
and you've got the idiot

596
00:39:47,515 --> 00:39:50,435
and then you've got the genius.

597
00:39:51,995 --> 00:39:53,875
By definition, most of us are in here.

598
00:39:54,215 --> 00:39:55,675
We're always going to be in the middle of the curve.

599
00:39:56,375 --> 00:39:58,655
And we're always going to think that we know something better.

600
00:39:59,455 --> 00:40:01,975
We're always going to think that what if?

601
00:40:02,475 --> 00:40:03,535
What if aliens show up?

602
00:40:04,655 --> 00:40:07,015
What if there's a solar flare?

603
00:40:07,875 --> 00:40:10,015
What if there's war, etc., etc.?

604
00:40:10,015 --> 00:40:12,155
And we're going to talk ourselves out of understanding

605
00:40:12,155 --> 00:40:15,475
something that is clearly blatantly better.

606
00:40:15,755 --> 00:40:18,015
When talking movies first came into existence,

607
00:40:19,015 --> 00:40:21,155
the world's largest movie studio,

608
00:40:22,715 --> 00:40:23,955
the co-founder of it,

609
00:40:25,255 --> 00:40:27,795
said, who the hell wants to hear actors talk?

610
00:40:28,715 --> 00:40:30,775
Why would we ever have movies with sound?

611
00:40:30,875 --> 00:40:32,355
That's such a stupid idea.

612
00:40:32,355 --> 00:40:34,315
In 1993, Bill Gates,

613
00:40:35,015 --> 00:40:37,215
he said, the internet,

614
00:40:37,955 --> 00:40:39,695
we're not interested in it.

615
00:40:39,695 --> 00:40:43,055
We don't think that there's a purpose to that.

616
00:40:43,275 --> 00:40:45,315
Internal memo from Western Union,

617
00:40:45,415 --> 00:40:50,095
the world's largest communications company in the 1800s.

618
00:40:50,875 --> 00:40:53,195
The telephone has too many shortcomings

619
00:40:53,195 --> 00:40:55,915
to be seriously considered as a means of communication.

620
00:40:56,075 --> 00:40:57,855
The device is inherently of no value.

621
00:40:59,475 --> 00:41:00,895
These are the experts.

622
00:41:02,895 --> 00:41:03,875
It keeps going.

623
00:41:04,755 --> 00:41:05,415
Thomas Edison.

624
00:41:07,575 --> 00:41:09,395
Everything that you see here, all this power,

625
00:41:09,395 --> 00:41:10,595
this is all alternating current.

626
00:41:12,135 --> 00:41:13,295
Thomas Edison said,

627
00:41:13,555 --> 00:41:15,015
alternating current is a waste of time.

628
00:41:15,235 --> 00:41:16,195
No one will use it ever.

629
00:41:16,775 --> 00:41:18,015
There was an implicit bias

630
00:41:18,015 --> 00:41:20,915
which is all needs of measuring electricity.

631
00:41:20,935 --> 00:41:24,135
These are all implicit biases, right?

632
00:41:24,515 --> 00:41:26,855
Because every one of these are stakeholders

633
00:41:26,855 --> 00:41:29,095
that have a reason for the existing technology

634
00:41:29,095 --> 00:41:30,215
to remain as is

635
00:41:30,215 --> 00:41:32,235
and for them not to make a change.

636
00:41:34,555 --> 00:41:35,595
I like this one.

637
00:41:36,095 --> 00:41:38,135
Movie producer at 20th Century Fox.

638
00:41:38,895 --> 00:41:43,095
Television won't be able to hold on to any market share it captures after the first six months.

639
00:41:43,975 --> 00:41:46,475
People will get tired of staring at a plywood box every night.

640
00:41:48,335 --> 00:41:49,535
That didn't work out well.

641
00:41:50,895 --> 00:41:54,335
Warren Buffett talking about Bitcoin.

642
00:41:55,215 --> 00:41:57,175
Stay away from it. It's a mirage.

643
00:41:58,275 --> 00:42:00,115
Charlie Munger talking about Bitcoin.

644
00:42:00,495 --> 00:42:01,815
Rat poison. It will go to zero.

645
00:42:01,935 --> 00:42:05,495
He later changed and he said it's rat poison squared.

646
00:42:05,495 --> 00:42:09,955
Their company is down 96% against Bitcoin since that quote.

647
00:42:11,115 --> 00:42:14,235
Here you're making the point that these people misunderstood the technology.

648
00:42:14,395 --> 00:42:14,515
Yeah.

649
00:42:14,595 --> 00:42:16,715
They did those things, so other people did it unestablished.

650
00:42:18,915 --> 00:42:21,555
If that was the case, then they would have adopted it personally.

651
00:42:21,755 --> 00:42:23,595
If you understand it, you'd adopt it personally,

652
00:42:23,795 --> 00:42:27,075
and you're trying to just be nefarious and get other people not to adopt it.

653
00:42:28,475 --> 00:42:29,775
No, they own no Bitcoin.

654
00:42:30,575 --> 00:42:31,675
They have more cash than anyone.

655
00:42:31,675 --> 00:42:37,335
They have $500 billion in cash that's wasting away at 13% a year, destroying shareholder value.

656
00:42:38,975 --> 00:42:41,435
And they're down 96% against it.

657
00:42:41,515 --> 00:42:44,115
It would take over 9,000.

658
00:42:44,395 --> 00:42:50,215
Berkshire Hathaway would have to gain over 9,000% just to get parity with Bitcoin.

659
00:42:51,595 --> 00:42:53,975
There's something that's really consistent with all these people.

660
00:42:55,115 --> 00:42:57,895
Bill Gates might be an exception because he actually changed his mind.

661
00:42:59,115 --> 00:43:00,375
All these people are old.

662
00:43:01,675 --> 00:43:03,035
Right?

663
00:43:03,435 --> 00:43:04,675
Have you ever heard the term

664
00:43:04,675 --> 00:43:07,555
science advances one death at a time?

665
00:43:08,255 --> 00:43:09,175
Special effects.

666
00:43:09,535 --> 00:43:09,695
Yep.

667
00:43:10,115 --> 00:43:11,095
And medicine.

668
00:43:12,155 --> 00:43:12,275
Right?

669
00:43:12,395 --> 00:43:13,955
Technology is always misunderstood.

670
00:43:15,235 --> 00:43:16,695
That's the Berkshire Hathaway.

671
00:43:16,835 --> 00:43:17,395
Oh, yeah, sorry.

672
00:43:17,455 --> 00:43:19,295
It's actually down 99.1%

673
00:43:19,295 --> 00:43:20,495
compared to Bitcoin.

674
00:43:20,935 --> 00:43:22,435
It's more than that now.

675
00:43:23,835 --> 00:43:25,355
That's Berkshire Hathaway

676
00:43:25,355 --> 00:43:26,495
priced in Bitcoin.

677
00:43:27,875 --> 00:43:29,515
The world's most famous

678
00:43:29,515 --> 00:43:31,055
investing company.

679
00:43:31,675 --> 00:43:36,955
Those who study it say, technology does not negotiate.

680
00:43:37,735 --> 00:43:39,355
This is my favorite quote ever.

681
00:43:40,615 --> 00:43:42,315
Technology does not negotiate.

682
00:43:42,695 --> 00:43:43,395
What does this mean?

683
00:43:44,195 --> 00:43:47,835
This means that if I had a stable of horses,

684
00:43:48,455 --> 00:43:52,275
when horses were the taxis and the transportation for everybody,

685
00:43:52,375 --> 00:43:56,415
and the car came out, and I said, not going to do it, I believe in my horses.

686
00:43:57,835 --> 00:43:59,195
Five years later, I'm broke.

687
00:43:59,615 --> 00:44:02,295
I've got a bunch of horses nobody wants to ride because everybody's in a car.

688
00:44:03,395 --> 00:44:06,355
It means if I'm the world's best piano tuner,

689
00:44:07,135 --> 00:44:09,255
and the radio comes out,

690
00:44:10,155 --> 00:44:13,155
and I decide I'm going to stick with what I'm doing,

691
00:44:13,255 --> 00:44:15,515
I'm going to tune these pianos, I'm so good at it,

692
00:44:16,555 --> 00:44:19,235
five years later, I have no job.

693
00:44:20,035 --> 00:44:22,735
I'm basically a circus oddity at that point.

694
00:44:24,435 --> 00:44:27,675
If I'm a milk delivery man and the refrigerator is invented,

695
00:44:27,675 --> 00:44:32,095
and I don't understand that people no longer need to have milk delivered,

696
00:44:32,995 --> 00:44:35,415
I'm going to be walking around carrying sour milk.

697
00:44:36,995 --> 00:44:38,475
Technology does not negotiate.

698
00:44:38,675 --> 00:44:40,175
You adopt it or it destroys you.

699
00:44:40,875 --> 00:44:43,675
The reason I have this picture here is this is a throwback.

700
00:44:44,755 --> 00:44:46,855
So it's a Roman citizen.

701
00:44:47,515 --> 00:44:48,395
I forget his name.

702
00:44:49,075 --> 00:44:51,795
He invented this thing called the explosive projectile machine.

703
00:44:52,495 --> 00:44:53,155
It's a cannon.

704
00:44:53,155 --> 00:44:58,095
And he took it to the Roman emperor, who was an old guy.

705
00:44:59,235 --> 00:45:02,655
And he said, this thing, fucking rules.

706
00:45:03,075 --> 00:45:07,995
You can put stuff in it, light it, and it blows up everything in front of you.

707
00:45:08,995 --> 00:45:13,215
And the Roman emperor said, our shields are strong and our swords are sharp.

708
00:45:13,315 --> 00:45:14,695
We have no use for your toy.

709
00:45:14,695 --> 00:45:18,915
this guy took it down the road

710
00:45:18,915 --> 00:45:21,095
to the next emperor

711
00:45:21,095 --> 00:45:23,335
a young guy in Constantinople

712
00:45:23,335 --> 00:45:25,175
and he showed it to him

713
00:45:25,175 --> 00:45:26,075
and the guy goes

714
00:45:26,075 --> 00:45:27,195
this thing is awesome

715
00:45:27,195 --> 00:45:28,795
you pointed at stuff

716
00:45:28,795 --> 00:45:31,395
and then that stuff no longer exists

717
00:45:31,395 --> 00:45:32,615
and you can go where you want

718
00:45:32,615 --> 00:45:35,215
and a year later they used the cannon

719
00:45:35,215 --> 00:45:36,935
to destroy Rome and burn it to the ground

720
00:45:36,935 --> 00:45:39,975
technology does not negotiate

721
00:45:39,975 --> 00:45:41,395
in all forms

722
00:45:41,395 --> 00:45:43,715
you adopt it or you die

723
00:45:44,715 --> 00:45:46,855
That quote is by Jason Lowry.

724
00:45:47,375 --> 00:45:52,695
Jason Lowry is a Department of Defense fellow with the United States military.

725
00:45:53,835 --> 00:45:59,055
His job is to determine with which weapons we will fight the next war.

726
00:46:00,055 --> 00:46:02,635
They sent him to MIT to do a Ph.D. thesis.

727
00:46:02,635 --> 00:46:07,435
He came back after three years, and here's his thesis.

728
00:46:07,655 --> 00:46:12,915
It's called Soft War, a Novel Theory on Power Projection and the National Strategic Significance.

729
00:46:13,715 --> 00:46:14,555
Of Bitcoin.

730
00:46:16,615 --> 00:46:20,315
Jason believes that war is easily defined.

731
00:46:21,075 --> 00:46:24,555
It is a power projection competition over resources.

732
00:46:24,915 --> 00:46:29,795
And the goal is to gain access to resources and deny access from resources.

733
00:46:31,275 --> 00:46:37,275
And he says if you look at warfare, it always moves to a level of higher domain.

734
00:46:37,575 --> 00:46:38,515
We started on land.

735
00:46:39,435 --> 00:46:40,875
I was just fighting people.

736
00:46:40,975 --> 00:46:41,775
Then he got a club.

737
00:46:41,775 --> 00:46:43,095
Then you got a bow and arrow.

738
00:46:43,095 --> 00:46:44,115
Then he got a spear.

739
00:46:44,255 --> 00:46:45,615
Then he got a rifle.

740
00:46:46,075 --> 00:46:46,855
Then he got a cannon.

741
00:46:48,075 --> 00:46:49,975
Then we took all that stuff and we put it on a boat.

742
00:46:50,595 --> 00:46:51,595
And we conquered the world.

743
00:46:52,355 --> 00:46:54,535
Then somebody put a boat underwater called a submarine.

744
00:46:54,695 --> 00:46:55,615
And they conquered the world.

745
00:46:55,955 --> 00:46:57,235
And then somebody got an airplane.

746
00:46:58,035 --> 00:46:59,675
And they dropped stuff on the submarines.

747
00:46:59,815 --> 00:47:00,815
And they conquered the world.

748
00:47:01,795 --> 00:47:04,775
And then we started shooting missiles into space and coming back down.

749
00:47:04,835 --> 00:47:05,755
And they conquered the world.

750
00:47:06,715 --> 00:47:12,355
So the domain of warfare has constantly escalated from land to sea to air to space.

751
00:47:13,095 --> 00:47:14,855
to cyberspace.

752
00:47:16,655 --> 00:47:18,355
And you can actually plot out

753
00:47:18,355 --> 00:47:22,295
if war is a power projection competition,

754
00:47:23,095 --> 00:47:26,695
how much power can your weapon project?

755
00:47:26,975 --> 00:47:27,655
I can project.

756
00:47:27,935 --> 00:47:30,035
I know how much force I can punch with.

757
00:47:30,475 --> 00:47:32,255
I know how much force a bullet hits with.

758
00:47:32,255 --> 00:47:35,635
I know how much force a nuclear bomb expels.

759
00:47:36,875 --> 00:47:40,235
It's all energy over area.

760
00:47:40,235 --> 00:47:47,975
Bitcoin is energy over no area. It's infinitely powerful. It cannot be hacked.

761
00:47:48,775 --> 00:47:54,255
Only way that you can take control is to have more power than everyone. It makes it very fair.

762
00:47:55,615 --> 00:48:02,835
This, by the way, was the cost of this thesis. He put it on Amazon. It's published as a free press. It's open source.

763
00:48:02,835 --> 00:48:11,855
About two months after he published it, the United States military classified it and they made him pull from Amazon.

764
00:48:12,215 --> 00:48:17,455
Now you can find a copy online from somebody selling it.

765
00:48:17,595 --> 00:48:19,255
It'll probably cost you around $5,000.

766
00:48:21,255 --> 00:48:30,975
Jason Lowry is now in charge of leading the strategy for the United States military to use Bitcoin to defeat China and Russia.

767
00:48:32,835 --> 00:48:40,995
Whenever you hear someone testify in front of the U.S. Senate that's from the military and they're talking about Bitcoin, he's the guy writing it.

768
00:48:42,915 --> 00:48:44,495
Mark Yusko is a good guy.

769
00:48:45,055 --> 00:48:49,555
Investor, he says, the greatest wealth is created by being an early investor in innovation.

770
00:48:50,375 --> 00:48:51,795
Remember, innovation, not iteration.

771
00:48:52,755 --> 00:48:53,855
You have to make that investment.

772
00:48:53,975 --> 00:48:56,255
You have to believe in something before other people do.

773
00:48:57,255 --> 00:48:58,535
You have to have conviction.

774
00:48:59,375 --> 00:49:00,775
People are going to make fun of you.

775
00:49:01,375 --> 00:49:02,515
They're going to laugh at you.

776
00:49:02,835 --> 00:49:04,575
It is 100% worth it.

777
00:49:04,835 --> 00:49:08,615
BRICS nations, UAE, Argentina, Ethiopia,

778
00:49:09,795 --> 00:49:12,335
they're mining Bitcoin with government resources.

779
00:49:13,135 --> 00:49:15,895
Russia's sovereign wealth fund is investing in Bitcoin mining.

780
00:49:17,015 --> 00:49:20,435
By the way, this was a year and a half ago, a year ago, a little over.

781
00:49:21,495 --> 00:49:24,815
And this is just accelerating, right?

782
00:49:25,535 --> 00:49:28,455
Four years ago, we had one public company in the world

783
00:49:28,455 --> 00:49:30,135
that had Bitcoin on their treasury sheet.

784
00:49:30,235 --> 00:49:31,075
Now it's like 300.

785
00:49:31,075 --> 00:49:34,335
I would assume by the end of the year, it'll probably be closer to a thousand.

786
00:49:35,195 --> 00:49:39,295
United States has a Bitcoin sovereign, a Bitcoin treasury.

787
00:49:41,915 --> 00:49:42,815
It's exploding.

788
00:49:43,695 --> 00:49:46,435
People are starting to understand the true value.

789
00:49:48,275 --> 00:49:49,775
Michael Saylor, the guy.

790
00:49:50,395 --> 00:49:55,035
Once you understand Bitcoin, you will realize it's the most powerful force for good in the world today.

791
00:49:55,695 --> 00:49:56,615
I love this quote.

792
00:49:56,735 --> 00:49:57,655
I'm going to describe it.

793
00:49:57,655 --> 00:50:01,055
throughout all of history, if I wanted what you had,

794
00:50:01,895 --> 00:50:03,875
and I had a way to get it from you, I had a gun.

795
00:50:05,255 --> 00:50:06,675
I could put that gun to your head,

796
00:50:07,195 --> 00:50:09,195
and I could force you to give it to me,

797
00:50:09,375 --> 00:50:11,175
or I could kill you and I could take it.

798
00:50:13,915 --> 00:50:16,975
But now you have Bitcoin, and I put a gun to your head,

799
00:50:17,635 --> 00:50:20,955
and if you do not give it to me, and I kill you,

800
00:50:21,255 --> 00:50:22,775
I don't get your Bitcoin,

801
00:50:23,495 --> 00:50:26,695
and I proportionally enrich everyone else in the world

802
00:50:26,695 --> 00:50:47,030
who owns Bitcoin the same amount right Have you guys heard of the wrench attack You know what this is So the wrench attack just means that the fault of Bitcoin is that you can have a billion dollars in Bitcoin and I can go to the store and I can buy a wrench for and I can beat it out of you

803
00:50:47,030 --> 00:50:48,870
What's wrong with the $5 wrench attack?

804
00:50:50,030 --> 00:50:55,630
I can beat you up and I can beat you up and I can beat you up, but I can't beat you all up.

805
00:50:56,170 --> 00:50:57,130
It doesn't scale.

806
00:50:57,790 --> 00:51:00,970
You can't individually kill everyone.

807
00:51:01,130 --> 00:51:04,330
You can't individually imprison everyone and take everything.

808
00:51:04,810 --> 00:51:06,870
The $5 wrench attack does not scale.

809
00:51:08,010 --> 00:51:13,910
This is why it's so, like, you look at the world today and see what the trends are.

810
00:51:14,970 --> 00:51:15,450
Go ahead.

811
00:51:16,350 --> 00:51:19,450
It doesn't scale, but it doesn't need to scale if I just...

812
00:51:19,450 --> 00:51:22,010
Yeah.

813
00:51:22,970 --> 00:51:23,450
Yeah.

814
00:51:23,950 --> 00:51:25,190
It doesn't need to scale.

815
00:51:26,210 --> 00:51:27,430
Yeah, you can do it.

816
00:51:27,430 --> 00:51:28,230
You can do it once.

817
00:51:28,410 --> 00:51:32,370
But when you do it to him, I'm going to do it to you.

818
00:51:33,590 --> 00:51:35,190
And he's going to do it to me.

819
00:51:35,190 --> 00:51:35,750
Yeah, yeah.

820
00:51:36,330 --> 00:51:37,950
Because you know where the wallet is.

821
00:51:38,170 --> 00:51:38,290
Yep.

822
00:51:39,030 --> 00:51:39,230
Yeah.

823
00:51:39,890 --> 00:51:48,430
One of the things that's really fascinating is, so if you read the Network State book, Balji talks about decentralization, recentralization.

824
00:51:49,210 --> 00:51:50,430
We're in a period of decentralization.

825
00:51:51,950 --> 00:51:56,390
We reached the maximum centralization back in probably like 1950.

826
00:51:57,170 --> 00:52:00,230
And now we're starting to see countries, nation states lose power.

827
00:52:00,390 --> 00:52:01,170
Why do they lose power?

828
00:52:01,250 --> 00:52:05,490
They lost power because the internet came around and it democratized information.

829
00:52:05,630 --> 00:52:07,950
They could no longer hide stuff, right?

830
00:52:07,990 --> 00:52:13,830
You can't just go into a town and storm it because somebody is going to take a video and put it on the internet.

831
00:52:13,970 --> 00:52:14,970
It's going to live forever.

832
00:52:16,190 --> 00:52:20,570
Also, you can't just take people's money because now I have Bitcoin, right?

833
00:52:20,570 --> 00:52:26,490
You can put somebody in prison, but unless they give you their Bitcoin access, you can't have their Bitcoin.

834
00:52:27,070 --> 00:52:28,410
So they're losing power.

835
00:52:28,510 --> 00:52:30,730
So we're reaching this period of decentralization.

836
00:52:31,450 --> 00:52:33,370
Decentralization has a trend throughout history.

837
00:52:35,250 --> 00:52:39,150
During times of decentralization, individual crime rises.

838
00:52:39,670 --> 00:52:40,990
Person-on-person crime rises.

839
00:52:41,250 --> 00:52:43,810
Because there is the benefit of taking out the whale.

840
00:52:44,190 --> 00:52:46,490
There is the benefit of taking one person out.

841
00:52:46,490 --> 00:52:51,950
But nation-state violence is actually decreasing because there's less return to violence.

842
00:52:52,230 --> 00:52:53,610
Do you think Russia will be proven right?

843
00:52:53,910 --> 00:52:54,070
Yeah.

844
00:52:55,210 --> 00:52:57,370
Nobody really wants to play with Russia, though, right?

845
00:52:59,090 --> 00:53:00,090
The Chinese do.

846
00:53:00,610 --> 00:53:00,850
Yeah.

847
00:53:01,470 --> 00:53:02,850
Chinese believe in violence.

848
00:53:03,610 --> 00:53:03,810
Yeah.

849
00:53:05,810 --> 00:53:10,910
If you come to my class often, you'll find that one of the things I talk about very often is that

850
00:53:10,910 --> 00:53:12,590
there are two ways to lead.

851
00:53:12,870 --> 00:53:15,450
You can lead through fear, and you can lead through love.

852
00:53:15,450 --> 00:53:21,030
If you lead through fear, you will always be subject to an uprising of the people.

853
00:53:21,390 --> 00:53:26,290
You're always only as in power as the amount of power that you can exert.

854
00:53:26,890 --> 00:53:33,570
And you're always going to be waiting for the hammer to fall, for the shoe to drop, for someone else to rise up and take over.

855
00:53:34,510 --> 00:53:37,030
I don't think it's going to work out well.

856
00:53:37,030 --> 00:53:41,610
the thing is that if I can no longer take your stuff

857
00:53:41,610 --> 00:53:45,510
and if we both have Bitcoin

858
00:53:45,510 --> 00:53:48,010
and that Bitcoin increases in value

859
00:53:48,010 --> 00:53:51,090
with the more value that's put into it,

860
00:53:51,150 --> 00:53:52,770
the more power that's put into it,

861
00:53:52,810 --> 00:53:54,110
the more time and energy,

862
00:53:54,610 --> 00:53:56,090
the more work that's put into it,

863
00:53:56,090 --> 00:53:59,930
if it increases proportionately because of that,

864
00:54:00,490 --> 00:54:04,270
I'm actually encouraged to collaborate with you,

865
00:54:04,690 --> 00:54:06,330
not compete against you

866
00:54:06,330 --> 00:54:09,530
because by collaborating, we all go up,

867
00:54:09,970 --> 00:54:12,570
and by competing, we all suffer.

868
00:54:12,570 --> 00:54:16,150
You'll create a half that doesn't like you, right?

869
00:54:16,770 --> 00:54:19,290
You'll probably be a short life, right?

870
00:54:19,650 --> 00:54:22,890
I mean, you'll be looking, like, that's the thing about,

871
00:54:23,110 --> 00:54:25,670
I called this, we had this in one of my presentations before.

872
00:54:25,810 --> 00:54:26,750
It's called the bully problem.

873
00:54:27,510 --> 00:54:28,970
What's the problem with being a bully?

874
00:54:29,590 --> 00:54:31,810
There's always a bigger bully, right?

875
00:54:32,870 --> 00:54:36,250
But being someone who rules by force, by fear, by power,

876
00:54:37,130 --> 00:54:38,450
That's never a good idea.

877
00:54:39,310 --> 00:54:40,470
It works in the short term.

878
00:54:40,810 --> 00:54:42,230
It does not work long term.

879
00:54:42,890 --> 00:54:43,790
So what is money?

880
00:54:43,910 --> 00:54:44,850
We have our definition.

881
00:54:45,210 --> 00:54:47,610
It's a ledger of who owns what.

882
00:54:48,730 --> 00:54:51,270
It's a non-material good.

883
00:54:51,710 --> 00:54:52,710
That's really interesting.

884
00:54:54,170 --> 00:54:56,110
It's a good that does not have matter.

885
00:54:58,110 --> 00:55:01,230
Like you can say gold is money, but gold actually isn't money.

886
00:55:01,230 --> 00:55:03,170
Gold is just what we use as money.

887
00:55:03,730 --> 00:55:06,390
Gold has a utility value as a conductor,

888
00:55:06,950 --> 00:55:09,310
has utility value for jewelry.

889
00:55:11,050 --> 00:55:13,470
But the actual value of it as money

890
00:55:13,470 --> 00:55:15,310
is just that we're passing it between us.

891
00:55:16,090 --> 00:55:20,050
So everything in the world is a spectrum, right?

892
00:55:21,150 --> 00:55:23,930
So how do you account for the infrastructure

893
00:55:23,930 --> 00:55:27,570
that's needed to keep the fiat system running, right?

894
00:55:27,570 --> 00:55:29,570
So what is the infrastructure

895
00:55:29,570 --> 00:55:30,970
that keeps the fiat system running?

896
00:55:30,970 --> 00:55:36,050
It is ever-escalating power and violence and militaries.

897
00:55:36,930 --> 00:55:43,070
Yeah, but that's not exclusive to fiat money.

898
00:55:43,310 --> 00:55:45,570
We had roads when we used seashells, right?

899
00:55:45,630 --> 00:55:47,570
We had roads when we used tobacco, right?

900
00:55:47,630 --> 00:55:48,790
That's not exclusive.

901
00:55:49,410 --> 00:55:53,010
The exclusive part of fiat money,

902
00:55:53,710 --> 00:55:56,350
the thing that exists in a fiat monetary system

903
00:55:56,350 --> 00:56:00,110
that does not need to exist in the other type of money system,

904
00:56:00,110 --> 00:56:02,070
which is called a commodity money system.

905
00:56:02,950 --> 00:56:04,650
The thing that exists is violence

906
00:56:04,650 --> 00:56:08,570
because you have to have violence to enforce the fiat.

907
00:56:08,570 --> 00:56:09,050
Yeah.

908
00:56:11,490 --> 00:56:12,010
Right.

909
00:56:12,890 --> 00:56:13,450
Yeah.

910
00:56:14,190 --> 00:56:18,010
So those who see value in mining Bitcoin will turn their miners on.

911
00:56:18,290 --> 00:56:22,610
By the way, this is why we're seeing a revolution in energy prices.

912
00:56:23,390 --> 00:56:24,990
So Bitcoin is a commodity.

913
00:56:25,390 --> 00:56:26,290
I grew up on a farm.

914
00:56:28,210 --> 00:56:29,950
Farming products are commodities.

915
00:56:30,110 --> 00:56:37,450
wheat, cattle, grain, milk. They're effectively homogenous, right? Like I'm going to raise a cow,

916
00:56:37,530 --> 00:56:42,610
you're going to raise a cow. Cows are cows. Commodity markets are what are called price

917
00:56:42,610 --> 00:56:52,650
taker markets. I don't go to the market and say, this cow costs $5,000. I go to the market and you

918
00:56:52,650 --> 00:57:00,070
all decide by bidding against each other what that cow is worth. Just like we all decide by

919
00:57:00,070 --> 00:57:06,830
bidding against each other what Bitcoin is worth, right? It's a commodity. Commodity markets

920
00:57:06,830 --> 00:57:14,690
always favor the low cost producer. If you're raising cows and I'm raising cows and it costs

921
00:57:14,690 --> 00:57:20,610
me $500 to raise a cow and it costs you $1,000 to raise a cow and we sell the cows for $1,200,

922
00:57:21,450 --> 00:57:26,930
very soon you'll be working for me, right? Because you'll go out of business, right? I'll get all

923
00:57:26,930 --> 00:57:33,290
the profit. It forces all of the inefficient producers out of the market. So what does this

924
00:57:33,290 --> 00:57:40,050
mean in terms of Bitcoin? This is fantastic, by the way. This is incredible. When China outlawed

925
00:57:40,050 --> 00:57:47,690
Bitcoin mining, where did everybody go? Texas. They went to Texas because there was access to

926
00:57:47,690 --> 00:57:54,370
power that was currently being wasted. That power is flare gas. So Texas has a lot of oil wells.

927
00:57:55,070 --> 00:57:58,110
Oil wells have natural gas that comes out of them.

928
00:57:58,730 --> 00:58:04,410
And it's not in sufficient enough amounts to capture and be profitable, but there's a lot of it.

929
00:58:05,170 --> 00:58:08,010
And so when you drive through Texas at night, it's kind of interesting.

930
00:58:08,170 --> 00:58:13,530
You see just flames because what they do is they light it and it just burns off into nothing.

931
00:58:13,630 --> 00:58:14,890
They're wasting that energy.

932
00:58:15,690 --> 00:58:17,970
And the Bitcoin miners came there and they said, here's what we'll do.

933
00:58:18,670 --> 00:58:23,510
We'll take that natural gas and we'll use it to mine Bitcoin with.

934
00:58:24,450 --> 00:58:31,050
And by the way, when the power grid needs it, when the cost of energy goes up enough,

935
00:58:32,010 --> 00:58:37,570
it'll be advantageous for us to shut off our Bitcoin miners and use that power and sell it back onto the market.

936
00:58:38,430 --> 00:58:45,170
In 2022, in 2021, Texas went through a series of rolling brownouts.

937
00:58:45,370 --> 00:58:46,650
Their energy grid was failing.

938
00:58:46,910 --> 00:58:47,510
People died.

939
00:58:48,290 --> 00:58:49,630
They had a bad winter.

940
00:58:50,570 --> 00:58:54,890
A bad winter in Texas is not a bad winter anywhere else, but for Texas, it was really bad.

941
00:58:56,690 --> 00:59:00,810
And the next year, all of these Bitcoin miners had moved in and they sustained the energy grid.

942
00:59:00,950 --> 00:59:02,030
It's called load leveling.

943
00:59:02,930 --> 00:59:05,370
So now you can capture that energy.

944
00:59:05,550 --> 00:59:07,690
When it's profitable, you can mine Bitcoin with it.

945
00:59:07,790 --> 00:59:09,670
When it's profitable, you can sell it to the grid.

946
00:59:09,830 --> 00:59:13,510
The Human Rights Foundation is led by a guy named Alex Gladstein,

947
00:59:13,670 --> 00:59:19,570
who took his charity that existed to free people from oppressive regimes

948
00:59:19,570 --> 00:59:21,750
and he learned about Bitcoin and he said,

949
00:59:21,910 --> 00:59:25,070
this is the greatest freedom technology to have ever existed.

950
00:59:25,730 --> 00:59:27,810
This is how we free people from oppressive regimes.

951
00:59:27,930 --> 00:59:29,830
We give them access to their own power.

952
00:59:30,810 --> 00:59:32,650
Not power in terms of electricity,

953
00:59:32,810 --> 00:59:34,930
but power in terms of time and energy,

954
00:59:35,150 --> 00:59:36,430
in terms of their own value.

955
00:59:36,510 --> 00:59:37,350
They can now hold it.

956
00:59:37,450 --> 00:59:38,150
They can keep it.

957
00:59:39,050 --> 00:59:40,790
So what they do is they go into Africa

958
00:59:40,790 --> 00:59:44,650
and they set up Bitcoin miners on stranded energy,

959
00:59:44,910 --> 00:59:46,490
wasted energy and stranded energy.

960
00:59:46,990 --> 00:59:48,350
Stranded energy is like a waterfall.

961
00:59:49,350 --> 00:59:51,350
It's out in the middle of nowhere, lots of energy.

962
00:59:52,610 --> 00:59:54,290
Let's just put a generator on it.

963
00:59:54,530 --> 00:59:55,910
Let's hook it up to a Bitcoin miner.

964
00:59:57,310 --> 00:59:58,970
And we'll mine Bitcoin.

965
00:59:59,350 --> 01:00:03,510
And we'll also supply energy and electricity to a place that's never had it before.

966
01:00:04,130 --> 01:00:07,030
We get a Starlink and now all of a sudden we are creating capital

967
01:00:07,030 --> 01:00:12,330
in a place that previously has been under the threat of a very oppressive regime

968
01:00:12,330 --> 01:00:14,130
that takes all of their money, etc., etc.

969
01:00:14,130 --> 01:00:22,770
It's driving the cost of energy down because you cannot compete as a Bitcoin producer because it's a commodity market.

970
01:00:22,870 --> 01:00:24,870
You can't compete unless you're the low-cost producer.

971
01:00:25,350 --> 01:00:27,570
So you have to go to the cheapest source of energy.

972
01:00:28,210 --> 01:00:29,710
You have to go to the stranded energy.

973
01:00:30,690 --> 01:00:32,490
El Salvador is going to do it with volcanoes.

974
01:00:32,850 --> 01:00:40,530
There's places that are doing it with waves, with waterfalls, with rivers, with wind.

975
01:00:40,530 --> 01:00:49,150
this is going to be the thing that revolutionizes the world we're going to drive the cost of energy

976
01:00:49,150 --> 01:00:56,570
to nothing and when energy costs nothing we all have infinite power we can all do everything we

977
01:00:56,570 --> 01:01:01,810
want because energy is everything energy is the food we have energy is the cars we drive energy

978
01:01:01,810 --> 01:01:07,150
is how we get to places it has a cost it's not that it's worth nothing it's worth everything

979
01:01:07,150 --> 01:01:15,970
cost. Yeah. So you're driving the cost of it down because you are accessing parts of,

980
01:01:16,110 --> 01:01:20,510
you're accessing energy that's never been accessed before. So like when you go to a

981
01:01:20,510 --> 01:01:27,570
stranded energy spot, like a waterfall and you take that energy, you're. So think about this.

982
01:01:28,790 --> 01:01:35,190
This is all the, all the factories that produce. I don't know. That's a,

983
01:01:35,190 --> 01:01:37,390
probably looks like a weird penis.

984
01:01:37,550 --> 01:01:38,150
Sorry about that.

985
01:01:39,870 --> 01:01:42,910
But let's just say this is an energy factory, right?

986
01:01:45,930 --> 01:01:46,930
That's even worse.

987
01:01:48,450 --> 01:01:51,170
We're burning coal, right?

988
01:01:51,490 --> 01:01:54,350
And we're burning natural gas and oil.

989
01:01:55,870 --> 01:01:59,770
And just like what we had before, remember all the money, right?

990
01:01:59,930 --> 01:02:01,510
This is all the energy.

991
01:02:01,510 --> 01:02:06,510
But then out here we've got waterfalls.

992
01:02:09,870 --> 01:02:11,650
Yeah, yeah, yeah.

993
01:02:11,910 --> 01:02:21,790
And natural gas that's currently being burned off and rivers and solar and wind, nuclear, etc., etc.

994
01:02:22,750 --> 01:02:24,110
This is additive.

995
01:02:25,070 --> 01:02:30,130
It adds to the entire energy of the world.

996
01:02:30,130 --> 01:02:41,450
And you can take the standard of living for people and you can plot it and it's basically a one-to-one match between how much energy people consume.

997
01:02:42,090 --> 01:02:54,930
This is why the 1970s are referred to as a decade of lost generation because it's the only time in modern history when energy consumption per capita, energy consumption per person, went down.

998
01:02:57,490 --> 01:02:59,410
Things started getting really bad.

999
01:02:59,410 --> 01:03:01,370
There's a website that I hope you check out.

1000
01:03:01,550 --> 01:03:02,250
I'll write it here.

1001
01:03:04,630 --> 01:03:10,410
WTF happened in 1971.

1002
01:03:10,950 --> 01:03:12,070
Check that website out.

1003
01:03:12,590 --> 01:03:16,690
There was a report that if you dig around really hard, you can find it.

1004
01:03:17,650 --> 01:03:20,150
In the 50s, I believe, or the 60s.

1005
01:03:21,470 --> 01:03:24,110
There was a think tank that was given a task by the government.

1006
01:03:24,230 --> 01:03:26,430
The government said, hey, we've got a problem.

1007
01:03:26,890 --> 01:03:28,430
We've exited World War II.

1008
01:03:28,430 --> 01:03:33,650
we've entered a period of peace and we're finding we're having a really hard time controlling the

1009
01:03:33,650 --> 01:03:38,670
people because if you don't give them a common enemy then all of a sudden they start to think

1010
01:03:38,670 --> 01:03:43,090
for themselves and they said what what are some things that we could do in order to control these

1011
01:03:43,090 --> 01:03:47,550
people they came back and they said well there's a couple things you could do one of them would be

1012
01:03:47,550 --> 01:03:52,670
like a global global pandemic that would probably do it everybody would be scared of maybe like a

1013
01:03:52,670 --> 01:03:58,250
virus that could probably do it one of them would be like aliens like everybody might be scared of

1014
01:03:58,250 --> 01:04:04,030
aliens. They actually tried that out. So tons of shows in the 60s about aliens, and they found that

1015
01:04:04,030 --> 01:04:08,990
it was just so far out of the realm of people's imagination that even if they were real, they

1016
01:04:08,990 --> 01:04:12,090
wouldn't believe it. And there's a couple other things, and they finally said, well, what about

1017
01:04:12,090 --> 01:04:18,270
climate? I said, what if we told everybody that because they're consuming more energy, they're

1018
01:04:18,270 --> 01:04:25,130
killing the planet? Well, maybe then we could control them. Maybe then we could stop this

1019
01:04:25,130 --> 01:04:31,330
progression. And maybe then we could change things. And I mean, is the world less polluted

1020
01:04:31,330 --> 01:04:40,470
or more polluted? Right? Has it really changed anything? Interesting to think about. Money,

1021
01:04:41,090 --> 01:04:45,330
non-material good. It's time and energy. It's power. It's an idea that we agree upon. It's

1022
01:04:45,330 --> 01:04:55,010
a collectively agreed upon technology. It's a solution. So yeah, I mean, Jason Lowry

1023
01:04:55,010 --> 01:05:01,410
talks about this in the software thesis a lot. So there's two types of hierarchies in the world.

1024
01:05:02,030 --> 01:05:07,030
There's two ways by which we can say, I'm in charge of you or you're in charge of me.

1025
01:05:07,390 --> 01:05:16,630
One is a power hierarchy. A power hierarchy is very simply, I can beat you up. So I'm in charge

1026
01:05:16,630 --> 01:05:21,170
of you. And that doesn't work very well for a society. Like we don't want people fighting to

1027
01:05:21,170 --> 01:05:25,990
the death over every ham sandwich, right? That doesn't work. So we have what are called

1028
01:05:25,990 --> 01:05:34,690
abstract power hierarchies. And abstract power hierarchies are why military officials wear

1029
01:05:34,690 --> 01:05:40,950
ribbons and medals and badges and stuff. And it says, well, you've got this thing that says you're

1030
01:05:40,950 --> 01:05:44,350
a colonel. I've got this thing that says I'm a private. Therefore, I have to listen to you.

1031
01:05:44,810 --> 01:05:50,610
You're my president. I'm your citizen. Therefore, I have to listen to you, right? Abstract power

1032
01:05:50,610 --> 01:05:58,090
Power hierarchies are built upon a collective belief, and we do have to have them to organize a civilization,

1033
01:05:58,430 --> 01:06:04,130
because we can't just have anarchy, we can't just have chaos, we can't just have people going completely,

1034
01:06:04,310 --> 01:06:08,630
and everybody doing things for themselves. We have to have some type of organization.

1035
01:06:09,990 --> 01:06:12,630
But there's a problem with abstract power hierarchies.

1036
01:06:13,510 --> 01:06:18,170
The problem with abstract power hierarchies is that they're a popularity contest, right?

1037
01:06:18,170 --> 01:06:20,970
Like democracy is a popularity contest.

1038
01:06:21,370 --> 01:06:28,650
And the reward for winning the popularity contest is that you get power over people that you didn't earn.

1039
01:06:29,710 --> 01:06:32,290
That you're not, you didn't earn by merit.

1040
01:06:32,910 --> 01:06:38,230
You earned by cleverness and by marketing and by saying the right things, right?

1041
01:06:38,390 --> 01:06:40,250
So what type of person does that attract?

1042
01:06:42,030 --> 01:06:44,030
Jordan Peterson talks about this a lot.

1043
01:06:44,690 --> 01:06:45,170
Sociopaths.

1044
01:06:45,650 --> 01:06:46,430
Dark traits.

1045
01:06:46,430 --> 01:06:47,150
Dark traits.

1046
01:06:47,270 --> 01:06:48,010
The dark triad.

1047
01:06:48,170 --> 01:06:56,050
right? This is bad, right? Why would somebody want to do that? The reason that you're asking

1048
01:06:56,050 --> 01:07:00,230
that question, or not, by asking that question, you're probably telling me that you're not a

1049
01:07:00,230 --> 01:07:07,030
sociopath, right? Because somebody that was would be like, oh, obviously, I can get power that I

1050
01:07:07,030 --> 01:07:13,290
didn't earn, right? You maybe don't have those traits, and that's probably a good thing, right?

1051
01:07:13,290 --> 01:07:20,330
But, yeah, it's a problem because you always attract the worst of the worst, right?

1052
01:07:20,650 --> 01:07:24,830
When we vote for president of the United States, we don't vote for the best candidate, right?

1053
01:07:25,290 --> 01:07:27,690
We take the best worst option.

1054
01:07:28,150 --> 01:07:29,030
That's what we always do.

1055
01:07:30,950 --> 01:07:32,970
All right, let's get into the real cool stuff.

1056
01:07:33,990 --> 01:07:35,010
Four purposes of money.

1057
01:07:35,210 --> 01:07:39,050
Medium exchange, unit of account, store of value, and means of payment.

1058
01:07:39,850 --> 01:07:40,950
Medium of exchange.

1059
01:07:40,950 --> 01:07:44,430
This is what we did to replace barter.

1060
01:07:44,610 --> 01:07:48,350
Barter was, I'm going to give you the chicken, you're going to give me the bananas, right?

1061
01:07:48,910 --> 01:07:51,530
Barter only works for very small societies.

1062
01:07:52,650 --> 01:07:58,390
In fact, this aspect of money is why we have eye doctors.

1063
01:07:59,230 --> 01:08:00,950
This is why we have nuclear physicists.

1064
01:08:02,070 --> 01:08:05,590
This is why we have people that read your crystal and tell you what your chakras are.

1065
01:08:05,590 --> 01:08:11,890
because by doing this, by having a medium of exchange that we could exchange between each

1066
01:08:11,890 --> 01:08:17,570
other that represented value, so I didn't have to give you half of a chicken every time I wanted a

1067
01:08:17,570 --> 01:08:25,390
shoe, or I didn't have to, what if I'm a cobbler? What if I made shoes and I wanted bread?

1068
01:08:25,390 --> 01:08:34,570
I can't just go to the store every day and give you shoes, right? So it allowed us to specialize,

1069
01:08:34,570 --> 01:08:40,570
because by having this, then I had something that I could take to the store and I could buy my bread

1070
01:08:40,570 --> 01:08:44,930
and then I could go home and I can make my shoes. Then I can go home and I can study and I can become

1071
01:08:44,930 --> 01:08:51,490
an eye doctor. I can't go to Burger King and trade one twentieth of an eye surgery

1072
01:08:51,490 --> 01:08:59,010
for burger and fries, right? We had to have this in order for society to develop and this is what

1073
01:08:59,010 --> 01:09:05,770
allowed society to flourish. We needed this thing to pass between us. A medium of exchange.

1074
01:09:06,590 --> 01:09:12,190
The dollar's a medium of exchange. Gold's a medium of exchange. It's whatever we use.

1075
01:09:12,270 --> 01:09:19,730
We've used seashells. We've used tobacco. It's the tool that we use to transfer value. It's

1076
01:09:19,730 --> 01:09:24,390
easily the most widely understood function of money because it's the one we do all the time.

1077
01:09:24,390 --> 01:09:25,590
We understand this.

1078
01:09:26,930 --> 01:09:28,270
It makes it easier.

1079
01:09:29,130 --> 01:09:31,710
In prison, money is ramen noodles.

1080
01:09:32,030 --> 01:09:32,890
That's what you trade around.

1081
01:09:33,610 --> 01:09:34,470
Trade it for cigarettes.

1082
01:09:34,750 --> 01:09:36,490
Trade it for, actually, cigarettes are more money.

1083
01:09:36,690 --> 01:09:37,450
Money and ramen.

1084
01:09:37,870 --> 01:09:38,690
But you price them.

1085
01:09:39,230 --> 01:09:41,290
You watch prison documentaries, and they're like, you know,

1086
01:09:42,010 --> 01:09:45,150
a pack of ramen is 17 cigarettes or something like that.

1087
01:09:45,190 --> 01:09:47,050
They have like a standard for it.

1088
01:09:48,190 --> 01:09:49,090
A unit of account.

1089
01:09:49,210 --> 01:09:51,990
This is my favorite because this is the least understood.

1090
01:09:51,990 --> 01:10:09,010
So, again, all the money, all the stuff, stuff, goods and services, anything that you can purchase with money, goods, services, entertainment, cars, houses, haircuts, right?

1091
01:10:10,050 --> 01:10:11,450
All the money equals all the stuff.

1092
01:10:13,590 --> 01:10:17,690
If I make the money bigger, it costs more.

1093
01:10:18,690 --> 01:10:20,310
Money is a standard.

1094
01:10:20,310 --> 01:10:22,070
It is a unit of a count.

1095
01:10:23,590 --> 01:10:26,170
The kilogram is a unit of a count.

1096
01:10:26,950 --> 01:10:29,410
The meter is a unit of a count.

1097
01:10:30,290 --> 01:10:32,670
These things never change, right?

1098
01:10:32,930 --> 01:10:45,670
In fact, it's in World War II, so I think it's in France, is where they store the kilogram, like the kilogram that we base all of the other kilograms off of.

1099
01:10:45,670 --> 01:10:51,130
and supposedly Hitler strategically did not bomb that

1100
01:10:51,130 --> 01:10:55,730
because he knew how disastrous it would be for the world to lose their unit of account.

1101
01:10:56,470 --> 01:10:59,290
Because if I change the unit of account,

1102
01:10:59,890 --> 01:11:02,370
then we no longer have a way to measure things.

1103
01:11:02,830 --> 01:11:05,770
If I weigh you and you weigh 75 kilograms,

1104
01:11:06,190 --> 01:11:07,790
and then I change the kilogram,

1105
01:11:07,970 --> 01:11:09,950
and next week I tell you you weigh 90 kilograms,

1106
01:11:09,950 --> 01:11:12,290
and the week after you weigh 120 kilograms,

1107
01:11:12,770 --> 01:11:15,090
you didn't gain weight.

1108
01:11:15,670 --> 01:11:18,810
the thing I used to measure your weight with changed.

1109
01:11:19,870 --> 01:11:21,910
You come stand next to me and I measure you,

1110
01:11:22,610 --> 01:11:25,650
and I say, you're 172 centimeters tall.

1111
01:11:26,510 --> 01:11:28,190
And then I take that meter stick.

1112
01:11:29,970 --> 01:11:32,770
So you can think of money as this.

1113
01:11:33,430 --> 01:11:37,290
Think of it as a meter stick that you use to measure all the stuff.

1114
01:11:38,351 --> 01:11:40,930
If I take that meter stick and then I add more marks to it,

1115
01:11:41,330 --> 01:11:42,530
and then I add more marks to it,

1116
01:11:42,790 --> 01:11:44,470
this is me printing more money, by the way.

1117
01:11:44,750 --> 01:11:46,310
I'm increasing the money supply.

1118
01:11:46,810 --> 01:11:48,890
I'm increasing the amount of tick marks.

1119
01:11:50,510 --> 01:11:53,210
I measure you this week and you're 172 centimeters.

1120
01:11:53,630 --> 01:11:55,810
I measure you next week and you're 300 centimeters.

1121
01:11:55,930 --> 01:11:57,750
And the week after, you're 1,000 centimeters.

1122
01:11:58,830 --> 01:12:00,390
You did not get taller.

1123
01:12:01,550 --> 01:12:04,430
The thing that I measured you with got smaller.

1124
01:12:04,430 --> 01:12:06,851
This is disastrous to the world economy.

1125
01:12:08,210 --> 01:12:09,370
Why is it disastrous?

1126
01:12:10,650 --> 01:12:14,390
If the supply of money is unknown, remember we said that no one in the world,

1127
01:12:14,470 --> 01:12:20,150
knows how much money there is. If the supply of money is unknown, it's no longer an accurate

1128
01:12:20,150 --> 01:12:25,310
measure and you end up with shortages of things you need and surpluses of things that you don't.

1129
01:12:26,370 --> 01:12:35,750
Why? Because a unit of account is pricing. When I go to the store and I buy a steak,

1130
01:12:35,750 --> 01:12:40,610
they price it in dollars. They don't price it in every other good in the world.

1131
01:12:41,590 --> 01:12:47,030
Like if we didn't have a unit of account, if we didn't have a standard by which to measure these things,

1132
01:12:47,270 --> 01:12:51,310
we would have to price every single thing in terms of every other single thing.

1133
01:12:51,550 --> 01:12:57,130
A house would cost eight cars or 300 cows or 1,200 laptops, right?

1134
01:12:57,450 --> 01:12:59,610
You'd have to compare every single thing.

1135
01:12:59,690 --> 01:13:03,630
But instead, we have this unit of account, and it's a signal.

1136
01:13:04,490 --> 01:13:08,010
And that signal is to producers.

1137
01:13:08,910 --> 01:13:13,250
When the price goes up, the producers get a signal and they say, we're going to produce more.

1138
01:13:13,430 --> 01:13:18,230
When the price of housing goes up, people who make houses make more houses.

1139
01:13:19,890 --> 01:13:25,510
But if the price of housing is going up because you're measuring it with something that is going down,

1140
01:13:26,510 --> 01:13:29,650
then that's an inaccurate signal to the price market.

1141
01:13:29,890 --> 01:13:31,851
This is why we had the global financial crisis.

1142
01:13:31,851 --> 01:13:34,750
We overproduced. We ended up with too much supply.

1143
01:13:35,750 --> 01:13:38,490
All of a sudden, we had all these empty houses that no one could afford.

1144
01:13:39,851 --> 01:13:42,290
Unstable money supplies cannot measure prices.

1145
01:13:43,390 --> 01:13:44,390
And what happens?

1146
01:13:44,910 --> 01:13:45,930
You end up with scarcity.

1147
01:13:47,390 --> 01:13:49,730
That's why central planning committees never work, right?

1148
01:13:49,970 --> 01:13:50,710
You can't guess.

1149
01:13:51,170 --> 01:13:56,710
You can't say, oh, this year we're going to need 5,000 tons of grain and 200,000 cattle.

1150
01:13:57,670 --> 01:13:58,410
Good luck.

1151
01:13:59,290 --> 01:14:00,830
That's why markets do this.

1152
01:14:01,110 --> 01:14:03,670
Markets are a clear signal to producers to produce.

1153
01:14:03,670 --> 01:14:06,530
and they're a clear signal of what consumers want.

1154
01:14:08,750 --> 01:14:09,690
Store of value.

1155
01:14:10,010 --> 01:14:12,130
So the first one, medium of exchange.

1156
01:14:12,230 --> 01:14:13,690
The second one, store of value.

1157
01:14:13,970 --> 01:14:15,370
Store of value is really simple.

1158
01:14:15,650 --> 01:14:16,650
I'm going to work one day.

1159
01:14:16,790 --> 01:14:19,630
I'm going to get X amount of money.

1160
01:14:19,870 --> 01:14:22,970
20 years from now, what do I want that money to be able to buy me?

1161
01:14:23,090 --> 01:14:24,510
One day's worth of work.

1162
01:14:25,470 --> 01:14:25,570
Right?

1163
01:14:25,750 --> 01:14:27,170
Money is like a battery.

1164
01:14:27,730 --> 01:14:29,890
The store of value part of it is like a battery.

1165
01:14:30,950 --> 01:14:33,630
You charge it with your time and energy.

1166
01:14:33,670 --> 01:14:35,170
and you want it to stay charged.

1167
01:14:38,170 --> 01:14:40,630
Inflation is that charge leaking.

1168
01:14:41,590 --> 01:14:43,430
You charge it to 100%,

1169
01:14:43,430 --> 01:14:45,690
they print 10% more money,

1170
01:14:45,790 --> 01:14:47,390
and now you've got 90% charge.

1171
01:14:47,470 --> 01:14:48,310
And you didn't do anything.

1172
01:14:49,170 --> 01:14:49,990
You just hung out.

1173
01:14:50,830 --> 01:14:52,410
But now you're losing charge.

1174
01:14:53,270 --> 01:14:54,950
And it happens so fast.

1175
01:14:55,530 --> 01:14:56,770
Who knows the rule of 72?

1176
01:14:57,550 --> 01:14:58,851
Yeah, doubles or halves.

1177
01:14:59,490 --> 01:15:01,010
So you have a percentage,

1178
01:15:01,851 --> 01:15:02,690
up or down,

1179
01:15:03,670 --> 01:15:07,130
So let's do it this way.

1180
01:15:07,590 --> 01:15:15,110
Since 1971, on average, the United States dollar has increased in supply by 1% per month,

1181
01:15:15,950 --> 01:15:19,430
compounds to about 13% per year, but let's just call it 12%.

1182
01:15:19,430 --> 01:15:20,370
That's 1% a month.

1183
01:15:21,030 --> 01:15:26,870
So if you have 12% inflation, you use the rule of 72,

1184
01:15:26,870 --> 01:15:30,730
and you say 72 divided by the percentage

1185
01:15:30,730 --> 01:15:35,610
is the time that it takes for that value to be cut in half,

1186
01:15:36,050 --> 01:15:36,830
the buying power.

1187
01:15:38,030 --> 01:15:41,650
So 72 divided by 12 equals 6.

1188
01:15:42,750 --> 01:15:54,505
So if you have a million dollars six years later that buy you worth of stuff Six years later that buy you worth of stuff Six years later that buy you worth of stuff

1189
01:15:54,965 --> 01:15:56,826
Six years later, $125,000.

1190
01:15:57,226 --> 01:15:59,426
Six years later, $62,500.

1191
01:16:00,206 --> 01:16:00,406
Right?

1192
01:16:00,626 --> 01:16:01,126
What is that?

1193
01:16:01,326 --> 01:16:03,386
Six, 12, 18, 24.

1194
01:16:03,985 --> 01:16:07,445
So before you're done with your working career,

1195
01:16:08,746 --> 01:16:13,886
you went from a million dollars in buying power to $62,500.

1196
01:16:14,185 --> 01:16:20,266
you have 6.25% of your buying power in 24 years

1197
01:16:20,266 --> 01:16:25,226
by holding your money in the strongest currency that exists today.

1198
01:16:25,685 --> 01:16:26,005
What's that?

1199
01:16:26,105 --> 01:16:28,826
Where does it come from?

1200
01:16:29,166 --> 01:16:31,945
It's just a mathematical rule.

1201
01:16:33,346 --> 01:16:33,886
Yeah.

1202
01:16:34,806 --> 01:16:36,306
And it works the other way too.

1203
01:16:38,085 --> 01:16:40,706
If your money goes up in value,

1204
01:16:40,706 --> 01:16:48,166
Let's say Bitcoin goes up around 50% a year.

1205
01:16:49,126 --> 01:16:50,485
So it's 50%.

1206
01:16:50,485 --> 01:16:54,626
So, well, let's call it 36 because that will make it easier math.

1207
01:16:55,286 --> 01:16:57,426
72 divided by 36, you get 2.

1208
01:16:57,866 --> 01:16:58,505
So you got a million.

1209
01:17:01,045 --> 01:17:02,465
In two years, you got 2.

1210
01:17:02,645 --> 01:17:03,806
In two years, you got 4.

1211
01:17:03,965 --> 01:17:05,145
In two years, you got 8.

1212
01:17:05,505 --> 01:17:06,766
In two years, you got 16.

1213
01:17:07,025 --> 01:17:08,246
In two years, you got 32.

1214
01:17:08,246 --> 01:17:12,545
That's 2, 4, 6, 8, 10, 12.

1215
01:17:13,545 --> 01:17:16,685
So in half the time, you increase your money 32x,

1216
01:17:17,206 --> 01:17:21,286
as opposed to the other one where it went down 94%.

1217
01:17:21,286 --> 01:17:33,605
Would it have been speculation in the mid-1990s if you could have bought the Internet?

1218
01:17:33,886 --> 01:17:34,945
Yes, it would have been.

1219
01:17:34,945 --> 01:17:36,105
Yeah, it would have.

1220
01:17:36,105 --> 01:17:41,605
But speculation, just by definition, is that you believe you know something other people don't know.

1221
01:17:43,166 --> 01:17:43,406
Right?

1222
01:17:44,145 --> 01:17:46,185
So you can say it's speculation.

1223
01:17:47,025 --> 01:17:53,465
I mean, yes, but the thing is, it's not...

1224
01:17:53,465 --> 01:17:59,306
No, but it is for sure that your money in dollars is going to be worth zero.

1225
01:18:00,666 --> 01:18:01,185
Zero.

1226
01:18:01,706 --> 01:18:01,945
Right?

1227
01:18:02,565 --> 01:18:04,426
So this is not a static thing.

1228
01:18:04,545 --> 01:18:05,485
This is a trajectory.

1229
01:18:06,105 --> 01:18:10,706
Right. You're not measuring it at a point in time. You're saying, here's the line.

1230
01:18:11,126 --> 01:18:16,145
And over time, every fiat in the world looks like this. And over time, Bitcoin looks like this.

1231
01:18:16,746 --> 01:18:23,666
At any point in time, I can take a look at it. But what I'm really concerned with is my trajectory.

1232
01:18:23,926 --> 01:18:28,306
What I'm really concerned with with your health and your trajectory is not what you weigh now.

1233
01:18:29,226 --> 01:18:33,746
What did you weigh five years ago, 10 years ago, 15 years ago? What's the trajectory that you're on?

1234
01:18:33,746 --> 01:18:37,866
If you gain two pounds a year and you live 50 years, you're going to gain 100 pounds.

1235
01:18:39,085 --> 01:18:45,545
If you lose two pounds a year, it's trajectory that we're concerned about.

1236
01:18:45,626 --> 01:18:47,145
We're not trying to say anything's definite.

1237
01:18:47,965 --> 01:18:53,806
But what we are trying to say is this is a guarantee that your fiat will be worth zero.

1238
01:18:54,426 --> 01:18:55,726
And this is replacing it.

1239
01:18:56,906 --> 01:18:58,386
And it's moving in a trajectory.

1240
01:18:58,386 --> 01:19:04,766
I'm going to try and convince you of this other than to say this is the model by which every technology is invented.

1241
01:19:04,985 --> 01:19:10,985
If you take the price chart of Bitcoin and you set it over Amazon and you put it on a logarithmic scale, it looks the same.

1242
01:19:11,206 --> 01:19:14,326
If you set it over Internet adoption, it looks the same.

1243
01:19:14,525 --> 01:19:19,605
If you set it over the rise in the number of cars in the world, it looks the same.

1244
01:19:20,326 --> 01:19:23,206
It goes and it stops and it goes and it stops and it goes and it stops.

1245
01:19:23,286 --> 01:19:25,025
But where does it go? Up, right?

1246
01:19:25,025 --> 01:19:29,706
Because it takes over everything because it is better.

1247
01:19:30,685 --> 01:19:33,706
It's faster, it's cheaper, it's stronger, right?

1248
01:19:33,906 --> 01:19:36,226
It's all, in all aspects, it's better.

1249
01:19:37,786 --> 01:19:38,565
One more.

1250
01:19:39,685 --> 01:19:41,166
By the way, so yeah, store of value.

1251
01:19:41,525 --> 01:19:46,445
This is the hardest part that no one has ever been able to achieve.

1252
01:19:46,766 --> 01:19:48,786
So by the way, inflation.

1253
01:19:49,485 --> 01:19:53,866
In the United States, it's commonly believed that inflation should be 2% per year.

1254
01:19:53,866 --> 01:19:55,826
That's just the number that everybody knows.

1255
01:19:56,605 --> 01:19:57,545
Like we're born with it.

1256
01:19:57,585 --> 01:19:58,185
We don't know how.

1257
01:19:58,926 --> 01:19:59,945
Where does that come from?

1258
01:20:01,226 --> 01:20:05,185
It comes from gold was mined,

1259
01:20:05,945 --> 01:20:09,806
and approximately 2% of the world's supply of gold was mined every year.

1260
01:20:10,166 --> 01:20:13,485
So you increase the amount of money by 2% every single year.

1261
01:20:15,025 --> 01:20:20,266
And by the way, remember, rule of 72, 36.

1262
01:20:20,266 --> 01:20:26,426
So if you save in gold, you lose half your buying power every 36 years.

1263
01:20:27,445 --> 01:20:31,005
That means by the time that you die, let's say you live to be 100,

1264
01:20:31,766 --> 01:20:34,585
you will have approximately 25% of your buying power.

1265
01:20:35,105 --> 01:20:37,206
This is just how inflation works.

1266
01:20:39,206 --> 01:20:41,005
The final thing is a means of payment.

1267
01:20:41,985 --> 01:20:45,366
Means of payment is just how do we exchange this.

1268
01:20:45,886 --> 01:20:48,706
You can have a check, a credit card, cash, handshake.

1269
01:20:48,706 --> 01:20:49,945
It can be your word.

1270
01:20:51,226 --> 01:20:53,166
That's the fourth purpose of money.

1271
01:20:55,366 --> 01:20:58,846
I'm going to burn through the next 10, and then we'll get you out of here.

1272
01:20:59,326 --> 01:21:05,366
So just quick review, four purposes of money, medium of exchange, unit of account, store of value, and means of payment.

1273
01:21:06,206 --> 01:21:08,286
Now let's talk about what is good money.

1274
01:21:09,426 --> 01:21:11,666
So I'm a fan of football, American football.

1275
01:21:12,246 --> 01:21:17,626
And the way that you determine whether somebody's going to be a good football player is when they come out of college,

1276
01:21:18,085 --> 01:21:22,985
They go through this thing kind of like what you guys did when you got here, the NS Combine, remember?

1277
01:21:24,266 --> 01:21:29,605
So football goes through a combine, and they don't measure football skill.

1278
01:21:30,206 --> 01:21:36,306
They measure how big is your hand, how high can you jump, how far can you jump, how fast can you run,

1279
01:21:36,786 --> 01:21:40,025
how quickly can you go back and forth and back and forth and back and forth and around.

1280
01:21:40,826 --> 01:21:44,045
It's all these things that, like, they're not really football,

1281
01:21:44,045 --> 01:21:49,585
but it turns out that there's a high correlation to being good at those things and being a good

1282
01:21:49,585 --> 01:21:53,826
football player. These are the characteristics that make a good football player. So we're going

1283
01:21:53,826 --> 01:21:58,985
to talk about the characteristics of good money. Money is good that is acceptable.

1284
01:22:01,226 --> 01:22:05,525
We want our money to be accepted. If you take Nigeria and Naira to the U.S., no one wants it.

1285
01:22:06,145 --> 01:22:11,706
If you take the U.S. dollar to China, they don't want it, right? We want our money to be acceptable.

1286
01:22:11,706 --> 01:22:13,866
Here's an idea of things that aren't acceptable.

1287
01:22:14,866 --> 01:22:18,386
You can't buy a hamburger with airline points, but it is money, right?

1288
01:22:18,766 --> 01:22:19,326
It exists.

1289
01:22:19,706 --> 01:22:21,005
It represents money.

1290
01:22:22,246 --> 01:22:25,525
You can't buy fried chicken in Arkansas with the Chinese yuan.

1291
01:22:26,766 --> 01:22:27,306
Cows.

1292
01:22:27,945 --> 01:22:30,025
Cows are not really widely accepted as money.

1293
01:22:30,585 --> 01:22:31,166
They used to be.

1294
01:22:31,746 --> 01:22:33,065
They used to be like chattel.

1295
01:22:33,666 --> 01:22:38,426
The term for property, chattel, comes from that, cattle.

1296
01:22:38,426 --> 01:22:41,005
The term for salary comes from salt.

1297
01:22:41,706 --> 01:22:44,445
we used to pay people in salt.

1298
01:22:45,426 --> 01:22:47,126
It's no longer an acceptable form.

1299
01:22:49,185 --> 01:22:50,666
Your money has to be divisible.

1300
01:22:51,346 --> 01:22:53,786
It has to be able to break it apart and put it back together.

1301
01:22:53,945 --> 01:22:56,685
Take a dollar, make it into 100 cents, put it back into a dollar.

1302
01:22:57,766 --> 01:22:58,886
Cows are not good for this.

1303
01:22:59,126 --> 01:23:00,826
You can't take a cow apart and put it back together.

1304
01:23:02,005 --> 01:23:03,246
Gold is not good for this.

1305
01:23:03,246 --> 01:23:08,226
You can take gold apart, but it's really difficult and it's very costly.

1306
01:23:08,226 --> 01:23:15,866
right? Uniform. Your money needs to be uniform. This one needs to be the same as that one.

1307
01:23:16,766 --> 01:23:20,945
Cows are not good money. Seashells are not good money. The dollar is pretty good money in that

1308
01:23:20,945 --> 01:23:26,706
aspect because it's uniform. This dollar is the same as that dollar, right? It needs to be uniform.

1309
01:23:26,906 --> 01:23:31,746
It needs to be the same. This is why you can't, you like, I come tell you that I want to buy

1310
01:23:31,746 --> 01:23:37,126
from you and I want to use cows and I show up and I've got 20 cows that are old and they don't have

1311
01:23:37,126 --> 01:23:42,465
teeth and you can see their ribs. That's not like somebody showing up with two-year-old

1312
01:23:42,465 --> 01:23:50,945
heifers that are strong and virile, right? That's not uniform. Portable. This is why

1313
01:23:50,945 --> 01:23:58,266
gold failed. Gold is not portable. Gold's a bearer asset, which means if I hold it, it's

1314
01:23:58,266 --> 01:24:08,025
mine because you can't identify that gold. But that makes it a risk. So I had to store it somewhere.

1315
01:24:08,985 --> 01:24:13,065
And it's really costly to store it. So we all agreed that we would trust

1316
01:24:13,065 --> 01:24:17,905
a government to store it. This is why the United States built Fort Knox.

1317
01:24:18,766 --> 01:24:22,166
After World War II, there was an agreement between all the allied countries and they said,

1318
01:24:22,266 --> 01:24:25,005
we're going to have one form of payment for the world. It'll be the dollar.

1319
01:24:25,766 --> 01:24:27,645
The U.S. will supply the world with dollars.

1320
01:24:27,846 --> 01:24:29,405
We'll give our gold to the U.S.

1321
01:24:29,426 --> 01:24:30,605
That's why they built Fort Knox.

1322
01:24:32,045 --> 01:24:38,206
In 1968 or 69, Charles de Gaulle, president, prime minister of France,

1323
01:24:38,966 --> 01:24:41,185
he figured it out and he said, this is a bad deal.

1324
01:24:41,666 --> 01:24:45,366
We give you guys goods and services that we gave our time and energy for

1325
01:24:45,366 --> 01:24:47,645
and you give us dollars that you created out of nothing.

1326
01:24:48,445 --> 01:24:49,746
It's not a good deal for us.

1327
01:24:49,826 --> 01:24:50,545
We want our gold back.

1328
01:24:50,626 --> 01:24:53,386
He sent his warships to the United States to get his gold back.

1329
01:24:53,966 --> 01:24:54,466
He did.

1330
01:24:55,005 --> 01:24:57,306
And then Germany wanted their gold back.

1331
01:24:58,926 --> 01:25:02,025
And then President Nixon said, we're closing the gold window.

1332
01:25:02,246 --> 01:25:04,286
You can no longer exchange dollars for gold.

1333
01:25:04,866 --> 01:25:06,105
It's a temporary thing.

1334
01:25:06,685 --> 01:25:09,826
That temporary thing has now lasted 54 years.

1335
01:25:11,786 --> 01:25:14,185
Remember, WTF happened in 1971.

1336
01:25:14,405 --> 01:25:19,485
That happened in 1971 when the United States declared bankruptcy and went off the gold standard.

1337
01:25:19,485 --> 01:25:26,126
If your money's not portable, then it's a threat to be taken.

1338
01:25:26,726 --> 01:25:31,766
Think about being a Jew in Germany in the 30s and trying to leave.

1339
01:25:32,966 --> 01:25:38,226
And at first it would cost you about $100 to leave, and then it was like $1,000, and then it was just literally everything you had.

1340
01:25:38,826 --> 01:25:40,565
Because you couldn't get past the gate.

1341
01:25:40,685 --> 01:25:43,846
You can't carry a billion dollars of gold through an airport, through a border.

1342
01:25:44,185 --> 01:25:46,565
But you can carry a billion dollars of Bitcoin anywhere.

1343
01:25:46,565 --> 01:25:53,985
your money needs to be durable right it needs to be able to last this is why

1344
01:25:53,985 --> 01:26:01,185
china has a period of history called i think it's called the century of shame we used to be on a

1345
01:26:01,185 --> 01:26:07,306
bimetallic standard which meant that we had a fixed rate between gold and silver and what happened

1346
01:26:07,306 --> 01:26:13,166
was that people started hoarding gold and only using silver because it was worth less because

1347
01:26:13,166 --> 01:26:17,926
gold never is destroyed. You can blow it up, you can put it in the ocean, you can bury it,

1348
01:26:18,025 --> 01:26:22,985
you can expose it to the elements, nothing's going to happen. Silver tarnishes. Silver

1349
01:26:22,985 --> 01:26:29,645
chemically becomes something different. Average year, you discover 2% more of the world's gold

1350
01:26:29,645 --> 01:26:34,926
supply and it just grows, right? Average year, you discover 50% of the world's silver supply

1351
01:26:34,926 --> 01:26:40,706
and it's consumed. So the world decided, ah, this is not a good idea. It was actually,

1352
01:26:40,706 --> 01:26:42,185
It was Florence.

1353
01:26:42,426 --> 01:26:46,326
Florence created the world's first standardized currency.

1354
01:26:46,565 --> 01:26:47,866
They said, we're going to have a florin.

1355
01:26:48,166 --> 01:26:49,005
That's what we're going to call it.

1356
01:26:49,346 --> 01:26:53,945
It's going to have X amount grams of gold in it, 0.69 or something like that.

1357
01:26:54,985 --> 01:26:58,005
And the world soon adopted that, except for China.

1358
01:26:58,565 --> 01:27:00,246
China decided to stay with silver.

1359
01:27:00,626 --> 01:27:05,145
They lost about 30% of their buying power against the world in a period of a couple decades.

1360
01:27:05,886 --> 01:27:08,065
And then they entered what is called the century of shame

1361
01:27:08,065 --> 01:27:11,145
because they lost so much buying power compared to the world.

1362
01:27:12,485 --> 01:27:14,045
You need your money to be durable.

1363
01:27:14,306 --> 01:27:15,405
Cows aren't durable, right?

1364
01:27:15,466 --> 01:27:15,826
They die.

1365
01:27:16,545 --> 01:27:17,346
Houses aren't durable.

1366
01:27:17,466 --> 01:27:18,085
They fall apart.

1367
01:27:18,746 --> 01:27:19,605
Cash isn't durable.

1368
01:27:19,866 --> 01:27:20,386
It decays.

1369
01:27:20,466 --> 01:27:21,886
You can set it on fire, right?

1370
01:27:23,525 --> 01:27:24,905
It needs to be verifiable.

1371
01:27:26,045 --> 01:27:28,525
The only way to verify gold is to melt it down.

1372
01:27:29,005 --> 01:27:29,666
Very costly.

1373
01:27:30,706 --> 01:27:32,846
Very easy to counterfeit dollars, right?

1374
01:27:35,685 --> 01:27:36,126
Seashells.

1375
01:27:36,126 --> 01:27:37,505
when they

1376
01:27:37,505 --> 01:27:38,445
had

1377
01:27:38,445 --> 01:27:39,466
so

1378
01:27:39,466 --> 01:27:40,585
there was a

1379
01:27:40,585 --> 01:27:41,346
form of money

1380
01:27:41,346 --> 01:27:41,905
in Africa

1381
01:27:41,905 --> 01:27:42,485
and it was

1382
01:27:42,485 --> 01:27:43,206
glass beads

1383
01:27:43,206 --> 01:27:45,266
very hard to produce

1384
01:27:45,266 --> 01:27:45,966
with the technology

1385
01:27:45,966 --> 01:27:46,565
that they had

1386
01:27:46,565 --> 01:27:47,145
and the Europeans

1387
01:27:47,145 --> 01:27:47,685
came there

1388
01:27:47,685 --> 01:27:48,065
and they saw

1389
01:27:48,065 --> 01:27:48,405
that they were

1390
01:27:48,405 --> 01:27:49,266
trading with glass beads

1391
01:27:49,266 --> 01:27:49,846
and they went back

1392
01:27:49,846 --> 01:27:50,226
to Europe

1393
01:27:50,226 --> 01:27:50,585
and they

1394
01:27:50,585 --> 01:27:51,826
used their

1395
01:27:51,826 --> 01:27:52,505
much more

1396
01:27:52,505 --> 01:27:53,485
modern technology

1397
01:27:53,485 --> 01:27:54,685
to literally

1398
01:27:54,685 --> 01:27:55,466
load ships

1399
01:27:55,466 --> 01:27:56,266
with glass beads

1400
01:27:56,266 --> 01:27:57,525
and they brought

1401
01:27:57,525 --> 01:27:57,866
them back

1402
01:27:57,866 --> 01:27:58,226
and they bought

1403
01:27:58,226 --> 01:27:58,565
everything

1404
01:27:58,565 --> 01:27:59,085
they flooded

1405
01:27:59,085 --> 01:27:59,666
and destroyed

1406
01:27:59,666 --> 01:28:00,266
the economy

1407
01:28:00,266 --> 01:28:02,206
those were

1408
01:28:02,206 --> 01:28:02,746
counterfeit

1409
01:28:02,746 --> 01:28:03,126
but they were

1410
01:28:03,126 --> 01:28:03,806
hard to verify

1411
01:28:03,806 --> 01:28:04,346
right

1412
01:28:04,346 --> 01:28:05,985
you can verify

1413
01:28:05,985 --> 01:28:08,985
every single sat on the Bitcoin network.

1414
01:28:10,085 --> 01:28:12,126
Really hard to verify dollars.

1415
01:28:12,426 --> 01:28:13,926
Really hard to verify gold.

1416
01:28:14,045 --> 01:28:14,466
Corruptible.

1417
01:28:16,185 --> 01:28:19,726
This is just like common sense, I think.

1418
01:28:20,666 --> 01:28:21,786
So if you're a government

1419
01:28:21,786 --> 01:28:23,826
and you can make your own money,

1420
01:28:24,366 --> 01:28:26,366
how much money are you going to make?

1421
01:28:27,886 --> 01:28:29,206
As much as you can.

1422
01:28:30,585 --> 01:28:31,786
What's stopping you?

1423
01:28:32,666 --> 01:28:35,005
So there's an inherent moral hazard

1424
01:28:35,005 --> 01:28:38,666
that exists has to be incorruptible.

1425
01:28:40,246 --> 01:28:42,005
Gold's pretty incorruptible, by the way.

1426
01:28:42,185 --> 01:28:44,126
That's like one of the good things about it, right?

1427
01:28:45,286 --> 01:28:45,766
Private.

1428
01:28:46,626 --> 01:28:48,426
Your money should be private, right?

1429
01:28:50,306 --> 01:28:51,605
Have you ever bought something

1430
01:28:51,605 --> 01:28:53,366
that you don't want people to know you're buying?

1431
01:28:54,746 --> 01:28:54,945
Right?

1432
01:28:55,886 --> 01:28:58,426
You go into a treatment center for addiction.

1433
01:28:59,945 --> 01:29:03,886
You buy a magazine that maybe is a little illicit.

1434
01:29:03,886 --> 01:29:07,025
You don't want your transactions to be public to the world.

1435
01:29:07,485 --> 01:29:11,145
So your money should be private and immutable.

1436
01:29:12,505 --> 01:29:13,445
This is cool.

1437
01:29:14,905 --> 01:29:18,445
So if I ask someone to tell me,

1438
01:29:18,826 --> 01:29:24,246
where have all the dollars been spent in the last three minutes in the world?

1439
01:29:25,626 --> 01:29:26,786
No one can tell me.

1440
01:29:27,266 --> 01:29:31,266
Or the last 30 years, or the last second, or the last whatever, right?

1441
01:29:31,266 --> 01:29:41,045
The Bitcoin ledger, you can trace where every single transaction has ever occurred from the beginning of Bitcoin to now.

1442
01:29:41,206 --> 01:29:42,065
Every single one.

1443
01:29:42,985 --> 01:29:45,966
There's nobody that can go in there and rewrite the ledger.

1444
01:29:46,346 --> 01:29:47,585
There's nobody that can change it.

1445
01:29:47,666 --> 01:29:48,985
There's nobody that can wipe it away.

1446
01:29:50,286 --> 01:29:54,145
You want that to exist because you want that constant record to be there.

1447
01:29:55,585 --> 01:29:56,985
The bail-in, by the way.

1448
01:29:57,626 --> 01:30:00,645
So in Cyprus, in the United States, we're a big fan of bailouts.

1449
01:30:01,266 --> 01:30:06,926
That's when the government prints money and they give it to an industry that failed because they were immoral.

1450
01:30:07,826 --> 01:30:09,306
In Cyprus, they had a bail-in.

1451
01:30:10,145 --> 01:30:17,626
The government went broke and they said, hey, I can't remember what it was, like 30% or something.

1452
01:30:18,645 --> 01:30:21,366
30% of the money in your banking accounts, it's ours now.

1453
01:30:22,326 --> 01:30:23,626
So we're just going to take that.

1454
01:30:23,806 --> 01:30:24,226
And they did.

1455
01:30:24,985 --> 01:30:26,605
They just took it from everybody.

1456
01:30:26,886 --> 01:30:27,685
Why does it matter?

1457
01:30:28,025 --> 01:30:28,786
I love this one.

1458
01:30:28,786 --> 01:30:34,525
Why does it matter that you need to be able to track where money went?

1459
01:30:35,386 --> 01:30:36,806
This is a quote by Donald Rumsfeld.

1460
01:30:37,466 --> 01:30:39,145
He was the Secretary of Defense.

1461
01:30:40,045 --> 01:30:40,666
Note the date.

1462
01:30:41,685 --> 01:30:44,065
September 10th, 2001.

1463
01:30:46,626 --> 01:30:49,025
He was testifying before the Senate and he said,

1464
01:30:49,126 --> 01:30:50,786
our financial systems are decades old.

1465
01:30:50,866 --> 01:30:51,645
Oh, they're old.

1466
01:30:51,746 --> 01:30:52,286
We can't track.

1467
01:30:52,626 --> 01:30:57,286
According to some estimates, we cannot track $2.3 trillion in transactions.

1468
01:30:58,185 --> 01:31:02,626
At the time, the debt of the United States was about $4.5 trillion.

1469
01:31:03,065 --> 01:31:03,905
This was like half.

1470
01:31:05,045 --> 01:31:06,626
And they said, we have no idea where it's at.

1471
01:31:08,746 --> 01:31:12,105
We cannot share information from floor to floor in this building

1472
01:31:12,105 --> 01:31:14,645
because it's stored on dozens of technological systems

1473
01:31:14,645 --> 01:31:16,346
that are inaccessible or incompatible.

1474
01:31:16,866 --> 01:31:20,005
The building that he's talking about is called Building 7,

1475
01:31:21,266 --> 01:31:25,366
which is a building that was destroyed on September 11th

1476
01:31:25,366 --> 01:31:27,045
that you probably don't know about.

1477
01:31:27,286 --> 01:31:29,605
because it was never publicized.

1478
01:31:30,286 --> 01:31:31,246
There's video of it.

1479
01:31:32,405 --> 01:31:34,326
The official story is that it's a fire.

1480
01:31:34,985 --> 01:31:36,085
If you watch the video,

1481
01:31:36,085 --> 01:31:40,126
it looks exactly like a controlled demolition.

1482
01:31:40,626 --> 01:31:41,405
It comes straight down.

1483
01:31:43,726 --> 01:31:45,286
That's where they stored those records

1484
01:31:45,286 --> 01:31:46,525
that they said they couldn't access.

1485
01:31:48,886 --> 01:31:50,485
And finally, it needs to be scarce.

1486
01:31:51,545 --> 01:31:53,505
If it's not scarce, it has no value.

1487
01:31:55,126 --> 01:31:56,185
Mosquitoes are not scarce.

1488
01:31:57,005 --> 01:31:57,846
Coffee's not scarce.

1489
01:31:57,985 --> 01:31:58,985
Toilet paper's not scarce.

1490
01:31:59,126 --> 01:31:59,866
Doesn't have much value.

1491
01:32:00,985 --> 01:32:04,306
It needs to be scarce for all these reasons that we talked about previously.

1492
01:32:05,226 --> 01:32:07,525
So, quick review.

1493
01:32:07,645 --> 01:32:08,585
Ten traits of good money.

1494
01:32:09,746 --> 01:32:12,905
Acceptable, divisible, uniform, portable, durable.

1495
01:32:13,085 --> 01:32:15,605
If those things exist, then it will be adopted, right?

1496
01:32:16,266 --> 01:32:21,045
Like, if you have in your mind the traits of what a good mate are,

1497
01:32:21,045 --> 01:32:25,426
and you meet someone like that, you will want to be with them, right?

1498
01:32:25,426 --> 01:32:31,726
If you have in your mind what traits of good money are and you're presented with what good money is, then you can recognize it.

1499
01:32:34,025 --> 01:32:34,466
Yeah.

1500
01:32:35,386 --> 01:32:41,145
Nobody's going to use it because nobody, like, I mean, there's literally like 20,000 forks of Bitcoin.

1501
01:32:43,645 --> 01:32:44,605
Which one?

1502
01:32:45,286 --> 01:32:46,926
So, like, it's not acceptable, right?

1503
01:32:47,065 --> 01:32:48,706
Your fork is not acceptable.

1504
01:32:48,886 --> 01:32:50,025
Nobody wants it, right?

1505
01:32:50,166 --> 01:32:50,926
I mean, they can.

1506
01:32:53,246 --> 01:32:53,685
Right.

1507
01:32:53,685 --> 01:32:55,445
And there is one that they have.

1508
01:32:55,926 --> 01:33:00,185
This goes into network effect.

1509
01:33:00,445 --> 01:33:09,326
So the network effect of adoption is that in digital markets, it's a winner-take-all market because there's no obstacles.

1510
01:33:10,726 --> 01:33:17,206
I have the same access to Bitcoin as somebody in Sri Lanka, but they don't have the same access to the dollar that I have.

1511
01:33:17,726 --> 01:33:20,905
By the way, I have the same access to an iPhone that Elon Musk has.

1512
01:33:20,905 --> 01:33:27,886
right and that is a that that means that a network effect occurs is that we all adopt the same thing

1513
01:33:27,886 --> 01:33:35,626
this is why this is why digital markets are inherently monopolist monopolistic is because

1514
01:33:35,626 --> 01:33:40,966
if you can get the best thing and there's no obstacle to it then you'll get the best thing

1515
01:33:40,966 --> 01:33:44,306
if you're in kansas and you want the best apples in the world you're not going to get them you got

1516
01:33:44,306 --> 01:33:49,405
to go to washington they're all like equally powerful i mean if if nobody accepts your money

1517
01:33:49,405 --> 01:33:55,666
then what's the use of it? It has no value. Right? Like if, if I don't accept your money,

1518
01:33:55,766 --> 01:34:02,226
then what's the point of having that money? Right? I mean, it's, it's pretty valuable to,

1519
01:34:02,366 --> 01:34:07,826
to be acceptable, to be accepted at globally. Right? Which question, Sam? Spit it out. What

1520
01:34:07,826 --> 01:34:12,786
do you got? You have VPNs. If you have a VPN, then you can get past all that stuff.

1521
01:34:13,286 --> 01:34:18,226
Quite a bit. Yeah. But then you can take that and you can put it on your strike account. You

1522
01:34:18,226 --> 01:34:19,286
you can put it on your Binance account,

1523
01:34:19,366 --> 01:34:20,545
then you can put it on a cold card

1524
01:34:20,545 --> 01:34:22,045
and then it's gone from the world, right?

1525
01:34:22,065 --> 01:34:24,426
You don't have to have that.

1526
01:34:24,585 --> 01:34:25,426
Like most of the,

1527
01:34:25,525 --> 01:34:28,346
like when you watch all these huge transactions happening,

1528
01:34:28,886 --> 01:34:30,945
a lot of these are over-the-counter transactions,

1529
01:34:31,185 --> 01:34:34,405
meaning that it's just me meeting you individually

1530
01:34:34,405 --> 01:34:37,226
and agreeing on a price and just exchanging it.

1531
01:34:37,306 --> 01:34:39,766
Like it's not going through an exchange, right?

1532
01:34:40,306 --> 01:34:42,105
There's like, that's how Bitcoin started.

1533
01:34:42,105 --> 01:34:43,905
There were no exchanges, right?

1534
01:34:44,025 --> 01:34:47,645
So it actually from infancy grew without exchanges.

1535
01:34:48,226 --> 01:34:50,926
It's much more convenient, sure.

1536
01:34:51,585 --> 01:34:53,585
It's by no means impossible.

1537
01:34:54,326 --> 01:34:55,166
Like, not at all.

1538
01:34:55,626 --> 01:34:57,085
Yeah, this is how...

1539
01:34:57,085 --> 01:34:58,806
You just need to find someone who pays you.

1540
01:35:00,126 --> 01:35:00,306
Yeah.

1541
01:35:01,666 --> 01:35:03,005
Well, you're at the beginning...

1542
01:35:03,005 --> 01:35:06,905
So, again, you're at the beginning of the adoption of a new technology, right?

1543
01:35:07,286 --> 01:35:13,806
If you had a car in 1916, you couldn't go very far because there weren't any roads, right?

1544
01:35:13,945 --> 01:35:16,326
You couldn't get gas because there weren't any gas stations.

1545
01:35:16,326 --> 01:35:18,386
You couldn't get it fixed because there weren't any mechanics.

1546
01:35:19,085 --> 01:35:22,806
But because it was a better technology, the infrastructure builds around it.

1547
01:35:23,246 --> 01:35:26,206
Like, yes, you're in the infancy of adoption.

1548
01:35:26,426 --> 01:35:28,945
Of course there are places that don't accept it, right?

1549
01:35:29,405 --> 01:35:30,706
But what is the trend?

1550
01:35:30,905 --> 01:35:32,545
Again, don't look at the static.

1551
01:35:32,706 --> 01:35:33,706
Don't look at where we are now.

1552
01:35:33,826 --> 01:35:35,105
Look at where we're going, right?

1553
01:35:35,626 --> 01:35:44,326
But on top of that, do you think seeing, for example, transactions, if you do more than 20 years ago, do you want to go?

1554
01:35:44,326 --> 01:35:44,786
Of course.

1555
01:35:45,246 --> 01:35:45,605
Of course.

1556
01:35:45,605 --> 01:35:46,126
Right?

1557
01:35:46,326 --> 01:35:50,166
It is, because money controlled by a government is controlling the people, right?

1558
01:35:50,706 --> 01:35:53,766
You can do, Balaji covers this in one of the chapters of his book,

1559
01:35:54,025 --> 01:35:55,666
Voice, Exit, and Loyalty, right?

1560
01:35:56,005 --> 01:35:57,706
You can vote and try to change it.

1561
01:35:58,366 --> 01:36:02,386
You can be loyal and say, yes, you're the good government, I'll do what you say.

1562
01:36:02,386 --> 01:36:07,806
Or you can literally just leave the country with all of your money on your cell phone and come here.

1563
01:36:08,206 --> 01:36:13,605
Or go to someplace, go to El Salvador, where there's a government that recognizes the power of Bitcoin, right?

1564
01:36:13,966 --> 01:36:16,045
You're going to have people making different decisions.

1565
01:36:16,326 --> 01:36:18,706
I would say that, again, look at the trend.

1566
01:36:19,166 --> 01:36:24,565
Look at the trend of El Salvador versus the trend of, I don't know, Iran.

1567
01:36:25,366 --> 01:36:28,065
Countries that forbid this type of technology.

1568
01:36:28,346 --> 01:36:29,866
Who's on the rise and who's on the fall?

1569
01:36:30,666 --> 01:36:32,985
Again, don't look static.

1570
01:36:33,505 --> 01:36:34,145
Look at the trend.

1571
01:36:34,386 --> 01:36:35,065
Look at the trajectory.

1572
01:36:37,206 --> 01:36:38,246
Yeah, just real quick.

1573
01:36:38,666 --> 01:36:42,666
These are all things that at one point or another were effectively the global money.

1574
01:36:43,485 --> 01:36:49,306
Gold, silver, cash, cows and salt, beads, seashells, and tobacco, cigarettes, digital dollars, and Bitcoin.

1575
01:36:51,905 --> 01:36:54,545
Seashells and beads, they're not very acceptable.

1576
01:36:55,105 --> 01:36:56,706
Divisible, can't chop them off.

1577
01:36:56,905 --> 01:36:57,505
They're not uniform.

1578
01:36:58,326 --> 01:37:00,366
They're heavy, not very durable.

1579
01:37:00,806 --> 01:37:01,866
They're kind of private.

1580
01:37:02,485 --> 01:37:03,886
They have like one thing going for them.

1581
01:37:04,645 --> 01:37:07,605
Cows and salt, kind of private, kind of acceptable.

1582
01:37:07,985 --> 01:37:09,426
Everything else, not at all.

1583
01:37:09,426 --> 01:37:18,405
silver sort of acceptable sort of uniform pretty private all the other things doesn't even come

1584
01:37:18,405 --> 01:37:29,666
close gold it's very durable everything else it kind of fails on cash the good thing about cash

1585
01:37:29,666 --> 01:37:36,966
is that it's uniform it's accessible you can divide it kind of but the problem with division

1586
01:37:36,966 --> 01:37:39,286
on fiat is it goes the other way.

1587
01:37:39,806 --> 01:37:42,145
Is that when you continue to devalue the money,

1588
01:37:42,985 --> 01:37:44,346
like this is why in the United States,

1589
01:37:44,405 --> 01:37:46,326
it costs like seven cents to make a penny.

1590
01:37:47,045 --> 01:37:47,445
Right?

1591
01:37:47,545 --> 01:37:48,286
That's a bad idea.

1592
01:37:48,485 --> 01:37:49,846
So we're going to stop making pennies.

1593
01:37:50,366 --> 01:37:52,905
And now we're talking about making $500 bills.

1594
01:37:53,005 --> 01:37:53,966
If you go to Zimbabwe,

1595
01:37:54,065 --> 01:37:56,545
they printed trillion dollar bills.

1596
01:37:57,866 --> 01:38:00,826
One bill that was worth $1 trillion

1597
01:38:00,826 --> 01:38:04,085
or whatever it was in Zimbabwe.

1598
01:38:04,746 --> 01:38:05,685
You have to go up.

1599
01:38:05,746 --> 01:38:06,746
You have to keep changing it.

1600
01:38:06,966 --> 01:38:08,985
Cash, not good.

1601
01:38:10,045 --> 01:38:21,085
Digital money, digital fiat, not at all private, absolutely incorruptible, definitely not immutable.

1602
01:38:21,505 --> 01:38:23,966
You can just take it and change it, and definitely not scarce.

1603
01:38:26,025 --> 01:38:30,045
Fiat money, again, by decree, it means that there's no asset backing it.

1604
01:38:30,045 --> 01:38:38,926
And every fiat money to exist in history is defunct or has lost at least 97, more like 99% of its value.

1605
01:38:39,685 --> 01:38:45,585
This is the purchasing power of the dollar from 1900 to 2008.

1606
01:38:47,005 --> 01:38:47,945
And Bitcoin.

1607
01:38:48,605 --> 01:38:51,626
The only thing that it lacks is the acceptability.

1608
01:38:51,846 --> 01:38:52,545
It's growing.

1609
01:38:52,746 --> 01:38:54,945
But everything else, it has.

1610
01:38:55,065 --> 01:38:55,866
What about privacy?

1611
01:38:56,286 --> 01:38:56,766
Privacy?

1612
01:38:57,485 --> 01:38:58,085
It's private.

1613
01:38:58,085 --> 01:39:03,145
It's not entirely private because you often have to do KYC, right?

1614
01:39:03,846 --> 01:39:07,185
But you can build layers on top of that that make it private.

1615
01:39:07,426 --> 01:39:09,326
Tornado cash, you can have mixers.

1616
01:39:11,766 --> 01:39:12,685
Okay, okay.

1617
01:39:15,505 --> 01:39:17,706
Yeah, pseudonymous.

1618
01:39:18,786 --> 01:39:24,985
So the way that I think about this is that the most important thing for a money is that it never fail.

1619
01:39:25,966 --> 01:39:29,985
Kind of like for a boat, the most important thing is that that boat never sink, right?

1620
01:39:30,886 --> 01:39:33,565
So we're going to build a Bitcoin boat.

1621
01:39:33,786 --> 01:39:34,846
It's never going to sink.

1622
01:39:35,185 --> 01:39:36,545
It's not going to have a chandelier.

1623
01:39:36,645 --> 01:39:37,826
It's not going to have a swimming pool.

1624
01:39:37,886 --> 01:39:38,746
It's not going to have stairs.

1625
01:39:39,366 --> 01:39:41,685
Layer twos and threes and fours, they're going to build that on.

1626
01:39:42,605 --> 01:39:53,405
But if you have a fiat money or if you have Ethereum or if you have anything that is ultimately corruptible, it's like a boat with a hole in it.

1627
01:39:53,405 --> 01:39:57,166
and the more features you add to it and the more wealth that it gains,

1628
01:39:57,326 --> 01:39:58,966
it's like driving that boat faster.

1629
01:39:59,505 --> 01:40:02,886
And the faster you drive a boat with a hole in it, the faster it sinks.

1630
01:40:03,645 --> 01:40:06,645
Because when you create wealth in something that is corruptible,

1631
01:40:06,786 --> 01:40:10,645
it makes it a target and it makes it more and more valuable

1632
01:40:10,645 --> 01:40:12,786
for someone to take shots at it, right?

1633
01:40:13,366 --> 01:40:16,166
More shots on goal, eventually somebody's going to get it.

1634
01:40:16,166 --> 01:40:18,266
It's kind of like being the bully again, right?

1635
01:40:18,266 --> 01:40:23,366
All right. We're going to end there.

1636
01:40:24,545 --> 01:40:29,485
And next time we'll jump into inflation, which is, I would say, mind-blowing.

1637
01:40:30,966 --> 01:40:34,886
And then we'll cover Bitcoin as well in a couple weeks.

1638
01:40:35,105 --> 01:40:36,326
So thank you guys very much.

1639
01:40:36,466 --> 01:40:37,626
Any questions before I leave?

1640
01:40:38,126 --> 01:40:38,685
All right.

1641
01:40:40,025 --> 01:40:43,005
I really do appreciate your time.

1642
01:40:43,206 --> 01:40:46,426
I do think that this is the highest leverage knowledge that you can have in your world.

1643
01:40:46,426 --> 01:40:49,485
you will spend $100,000 hours of your life working.

1644
01:40:49,905 --> 01:40:51,666
It is worth it to spend some time

1645
01:40:51,666 --> 01:40:54,065
learning where you should keep that money

1646
01:40:54,065 --> 01:40:55,826
so that you can still have it

1647
01:40:55,826 --> 01:40:57,505
and access it for future generations

1648
01:40:57,505 --> 01:40:59,366
because the technology that we create

1649
01:40:59,366 --> 01:41:01,485
is making our lives more powerful

1650
01:41:01,485 --> 01:41:03,605
so they should become easier.

1651
01:41:04,246 --> 01:41:05,045
Thank you very much.