1 00:00:00,000 --> 00:00:12,000 If I could hope for but one thing for you, so you'd be curious in all that you do. 2 00:00:13,420 --> 00:00:19,060 Cause love like a flower just wants to grow. 3 00:00:19,060 --> 00:00:26,500 Oh, and knowledge like your heart just wants to be known. 4 00:00:26,500 --> 00:00:32,980 If you like, please subscribe. This is Bitcoin Study Sessions. 5 00:00:36,980 --> 00:00:38,040 Do you have to poop? 6 00:00:38,560 --> 00:00:40,660 I do not. I'm ready to go, man. 7 00:00:41,100 --> 00:00:44,040 Today, we're going to continue our conversation of the Satoshi paper, 8 00:00:44,140 --> 00:00:48,120 Reflections on Political Economy After Bitcoin. 9 00:00:48,120 --> 00:00:53,680 This is an anthology edited by Natalie Smolenski of the Bitcoin Policy Institute. 10 00:00:53,680 --> 00:00:56,400 we talked about the introduction 11 00:00:56,400 --> 00:00:58,380 Lucas and I last conversation 12 00:00:58,380 --> 00:01:00,540 which kind of gave a broad narrative framework 13 00:01:00,540 --> 00:01:02,460 for all of these disparate 14 00:01:02,460 --> 00:01:04,160 essays that are going to center 15 00:01:04,160 --> 00:01:06,340 something kind of 16 00:01:06,340 --> 00:01:08,520 the narrative thread that was given to us 17 00:01:08,520 --> 00:01:09,780 the introduction is that 18 00:01:09,780 --> 00:01:12,300 is Bitcoin a sort of refounding 19 00:01:12,300 --> 00:01:14,460 of America based on the values 20 00:01:14,460 --> 00:01:16,180 that have been lost since 21 00:01:16,180 --> 00:01:18,300 the original founding we've had 22 00:01:18,300 --> 00:01:20,200 increasing financial surveillance 23 00:01:20,200 --> 00:01:21,460 restriction of civil liberties 24 00:01:21,460 --> 00:01:28,360 inalienable rights have been alienated and given to the state. So we are now into the first essay 25 00:01:28,360 --> 00:01:35,780 proper, which is What Satoshi Did by Anderan Bailey and Craig Warmke. These are two philosophers, 26 00:01:36,280 --> 00:01:40,820 two authors of Resistance Money. There's a third author, I forget who that is. 27 00:01:42,020 --> 00:01:46,700 But these are actual academic philosophers. And it shows in this essay, which is incredibly well 28 00:01:46,700 --> 00:01:51,980 written, incredibly coherent, incredibly well argued, very tight in the best sense. 29 00:01:52,160 --> 00:01:56,220 Like philosophy can be something that you have to muddle through sometimes. 30 00:01:56,220 --> 00:02:00,280 But this is philosophy in the best sense where it's just crisp and clear writing. 31 00:02:00,420 --> 00:02:07,440 So what Satoshi did by Andrew Bailey and Craig Warmke, there's a lot of ideas in here, but 32 00:02:07,440 --> 00:02:10,940 I think we can summarize it and condense it down to three ideas. 33 00:02:10,940 --> 00:02:24,120 So those are that Bitcoin has a social layer, that Satoshi operating on this social layer is able to solve the bootstrapping problem of starting a new network through marketing, greed, and departure. 34 00:02:24,940 --> 00:02:37,000 And that the way Bitcoin bootstraps in this way reveals it to be a particular type of institution, more like a natural language than a state or a church, a feral institution, as the authors say. 35 00:02:37,000 --> 00:02:39,860 So those are like the three, I think, overarching ideas. 36 00:02:39,860 --> 00:02:44,360 I'll unpack them a bit and then Lucas and I will discuss this essay. 37 00:02:45,120 --> 00:02:47,320 So first, that Bitcoin has a social layer. 38 00:02:48,480 --> 00:02:54,240 We can say that layer one of Bitcoin is like the machines, the protocol itself, the Bitcoin 39 00:02:54,240 --> 00:02:55,760 asset, all of that. 40 00:02:56,260 --> 00:02:59,700 Layer zero, then the authors say we might consider to be a social layer. 41 00:02:59,800 --> 00:03:06,240 The people that coordinate the machines in layer one, node operators, users, all the 42 00:03:06,240 --> 00:03:10,220 social stuff that goes on, the adoption in El Salvador, the Central African Republic, 43 00:03:10,760 --> 00:03:16,620 things like that. The social layer is not obviously a computer layer. It resists easy 44 00:03:16,620 --> 00:03:23,100 duplication. You can just copy layer one and hard fork and just start your own iteration of the 45 00:03:23,100 --> 00:03:28,480 Bitcoin protocol. You can't as easily, or you can't do that with layer zero, which is the social 46 00:03:28,480 --> 00:03:34,800 layer, the people that shape and constrain the actual development of all the layers on top of it, 47 00:03:34,800 --> 00:03:39,080 the actual Bitcoin protocol and the machines as they kind of develop and unfold. 48 00:03:39,800 --> 00:03:41,180 So Bitcoin has a social layer. 49 00:03:41,860 --> 00:03:46,560 Satoshi then operating on the social layer solves the bootstrapping problem. 50 00:03:46,940 --> 00:03:48,320 You know, you have a new network. 51 00:03:48,840 --> 00:03:51,060 A network of one person is not a network. 52 00:03:51,320 --> 00:03:56,880 Networks without many nodes on the network don't have any power. 53 00:03:56,880 --> 00:03:59,520 Network effects is the idea. 54 00:03:59,640 --> 00:04:02,620 The network increases in power the more people join the network. 55 00:04:03,260 --> 00:04:15,440 So how do you start a new network when you have a rival network, the US dollar, all of the legacy financial system that is already very, very powerful and which everybody is already participating in? 56 00:04:15,700 --> 00:04:22,280 So Satoshi solves the bootstrapping problem in three ways, we could say. 57 00:04:22,900 --> 00:04:24,720 Marketing, greed, and departure. 58 00:04:24,720 --> 00:04:43,720 So marketing. We don't often maybe think of Satoshi, he, she, they, whoever, as a marketer. But what Satoshi did when starting launching the Bitcoin project, the authors break this down, they kind of made branding decisions. 59 00:04:43,720 --> 00:04:48,620 decisions Satoshi first considered, should I call it net coin or Bitcoin? They went with Bitcoin. 60 00:04:49,060 --> 00:04:53,380 There was consideration about a logo first being a gold coin, the BC in the middle, 61 00:04:53,600 --> 00:04:59,420 and then later the dollar sign B that we're all familiar with. There was deciding to launch it 62 00:04:59,420 --> 00:05:04,900 through the cryptography mailing list to appeal to cypherpunks and technologists. There was the 63 00:05:04,900 --> 00:05:11,360 use of a white paper, which is not really a technical specification, a formal specification 64 00:05:11,360 --> 00:05:18,400 of the BTC protocol as much as kind of an introduction or teaser of what Bitcoin is or 65 00:05:18,400 --> 00:05:26,280 could be. So that's marketing. Satoshi started as a marketer of Bitcoin. Satoshi also used greed, 66 00:05:26,720 --> 00:05:31,460 which, you know, just another name for kind of a very deep and vital human incentive that we have, 67 00:05:31,540 --> 00:05:39,740 something very ingrained in human nature. Bitcoin, Satoshi prominently notes in forum responses and 68 00:05:39,740 --> 00:05:45,640 the Bitcoin white paper, limited supply, a difficulty adjustment that's going to make 69 00:05:45,640 --> 00:05:50,500 it more difficult to attain Bitcoin as more people try to get it through the mining process, 70 00:05:50,860 --> 00:05:56,760 and an emission schedule that is going to, in stepwise fashion, have every four years. 71 00:05:56,960 --> 00:06:00,780 So early adopters get more Bitcoin, and there's only a certain number of Bitcoin. 72 00:06:01,160 --> 00:06:06,220 Hal Finney notes early on that in a forum, or I think in response to the cryptography 73 00:06:06,220 --> 00:06:12,100 mailing list that he thinks Bitcoin could get to $10 million a coin if you consider all household 74 00:06:12,100 --> 00:06:17,820 wealth in the world. And then in response, Satoshi says, quote, it might make sense just to get some 75 00:06:17,820 --> 00:06:24,900 in case it catches on. So there's this notion that greed helps to bootstrap Bitcoin from zero 76 00:06:24,900 --> 00:06:32,760 into something. And I think it's worth saying that it's not cynical in the sense, talking about greed 77 00:06:32,760 --> 00:06:39,640 in this sense. Bitcoin, as I kind of alluded at the beginning, depends for its value as a network, 78 00:06:40,220 --> 00:06:45,140 as having more people join it. And at first, there's not people on it, you have to bootstrap 79 00:06:45,140 --> 00:06:50,800 into value, you need to get people to defect from an established network into a network that has 80 00:06:50,800 --> 00:06:57,440 kind of, quote, unquote, less value. To quote the authors, in such cases, some perceived benefit 81 00:06:57,440 --> 00:07:03,260 must attract new users by outweighing the disadvantages of unplugging capital from a 82 00:07:03,260 --> 00:07:09,480 stronger monetary network. The authors speculate that Bitcoin is designed to generate price 83 00:07:09,480 --> 00:07:16,220 volatility through this emission schedule, which increases publicity, and that also Satoshi very 84 00:07:16,220 --> 00:07:22,960 cannily used a four-year halving cycle, drawing from things like the Olympics and presidential 85 00:07:22,960 --> 00:07:29,120 elections, there's like this four-year cycle that's kind of ingrained in a certain type of 86 00:07:29,120 --> 00:07:34,680 media reporting. And so four-year cycles for elections and Olympics, why not for money as well? 87 00:07:35,280 --> 00:07:41,280 So that's, again, we have marketing and greed are helping to bootstrap the network from zero, 88 00:07:41,880 --> 00:07:46,560 but not, the authors note, not Satoshi's greed. And in fact, they're going to go on to describe 89 00:07:46,560 --> 00:07:52,740 the third way of bootstrapping, which is Satoshi's departure from the project. 90 00:07:52,960 --> 00:08:05,180 Satoshi could have sold his coins. They did not. Could have pre-mined coins, as so many other projects do, did not. Could have mined aggressively and tried to shoehorn the market. Satoshi did not. 91 00:08:05,180 --> 00:08:27,740 And then Satoshi then through greed, through kind of harnessing the greed of users through the nature, the limited nature of Bitcoin, through marketing Bitcoin in the correct way, and then through Satoshi's own departure, Satoshi divests in an orderly way from the Bitcoin project, transitions out and then disappears. 92 00:08:27,740 --> 00:08:42,100 And at the time of Satoshi's disappearance, the network has matured in a certain sense. There are developers, defenders, evangelists, and it's begun to garner kind of media headlines because of that price volatility. 93 00:08:42,100 --> 00:09:06,080 So Satoshi, there's a social layer zero that the Bitcoin protocol has. Satoshi operating as kind of the leader, the social architect of layer zero, markets, harnesses greed, and then departs, leaving and enabling a shift from a leader position to a leaderless protocol as social layer zero. 94 00:09:06,960 --> 00:09:24,020 The authors use game theory in a very interesting way to really, in detailed fashion, explain how this bootstrapping works from a network of no value competing against the most valuable network, the financial system, how Bitcoin can gain traction. 95 00:09:24,020 --> 00:09:38,780 So within a game theoretic simulation, even if there is kind of a better alternative network, such as a financial network, even if we could say that Bitcoin is like better money, there's still psychological precedent is sticky. 96 00:09:39,420 --> 00:09:41,060 Equilibrium is sticky for people. 97 00:09:41,340 --> 00:09:48,080 And it's hard to get people out of an established network into a rival alternative network that's better in some sense. 98 00:09:48,440 --> 00:09:50,440 A new money has to be a lot better. 99 00:09:51,380 --> 00:09:54,220 And for some people, the authors can see Bitcoin is not better. 100 00:09:54,460 --> 00:09:58,440 Some people benefit a lot from the financial system the way it currently is. 101 00:09:58,580 --> 00:10:02,060 But the key point, Bitcoin is better for some people. 102 00:10:02,060 --> 00:10:10,000 And they give a theoretic person, Boris, a Russian dissident who is completely excluded from the banking system by the country he's in. 103 00:10:10,700 --> 00:10:13,980 And so for Boris, Bitcoin would have an advantage. 104 00:10:14,780 --> 00:10:15,920 That's not enough. 105 00:10:15,920 --> 00:10:22,940 What it also needs in order to bootstrap, of course, is you have to have Bitcoin. 106 00:10:23,020 --> 00:10:26,940 You have to have an inventor and you have to have people who are going to use it with Boris. 107 00:10:27,460 --> 00:10:33,720 And so that's what Satoshi does, uses signal to overcome precedent. 108 00:10:33,920 --> 00:10:38,300 So again, the psychological precedent keeps people in an established network. 109 00:10:38,300 --> 00:10:56,020 But if you can signal that you're going to use a different network, then people who don't benefit from the legacy network will defect to the new network. And so that's what Satoshi did. He or they signaled that they were going to use the network. 110 00:10:56,020 --> 00:11:21,040 They signaled in a provably costly way by mining that they were invested in this network. And of course, their own marketing network began to signal the advantages. And so with high signal, you can break out of the kind of game theoretic framework, break the psychological precedent that keeps people stuck in an equilibrium in a suboptimal monetary system for them. 111 00:11:21,040 --> 00:11:28,760 And so now Boris and Satoshi can participate in a new network that is at least bootstrapped from zero to one. 112 00:11:29,860 --> 00:11:41,480 So Satoshi visibly signaling his defection, provably costly support, and then departure from that project has enabled the Bitcoin network to bootstrap and begin in earnest. 113 00:11:41,480 --> 00:12:02,740 In this way, the authors ask, so what is Bitcoin then, given the way that Bitcoin develops through this peculiar form of bootstrapping where it begins as an invented thing and then bootstraps into something where the leader is now gone and the social layer zero is distributed? 114 00:12:03,660 --> 00:12:07,740 To go from leader to leaderless, what type of institution is this? 115 00:12:07,740 --> 00:12:13,420 the authors respond it's a feral institution and this is a coinage of theirs and it's very 116 00:12:13,420 --> 00:12:18,720 interesting a feral institution in their estimation their definition is an institution that 117 00:12:18,720 --> 00:12:24,420 at one point was engineered but now released into the wild is now released into the wild and has a 118 00:12:24,420 --> 00:12:30,720 life of its own so these are they get into they really do analytic philosophy in its best sense 119 00:12:30,720 --> 00:12:35,820 here they look at the definitions of what an institution is and the constituent parts of an 120 00:12:35,820 --> 00:12:42,820 institution to describe Bitcoin fully as an institution. So institutions are groups of people 121 00:12:42,820 --> 00:12:48,100 structured by conventions. And conventions are just rules that motivate cooperation. 122 00:12:48,820 --> 00:12:54,540 For example, they can be arbitrary rules. The fact that in some countries we drive on the right side 123 00:12:54,540 --> 00:12:59,500 of the road is just an arbitrary convention. We could do it on the left, but we all have to agree 124 00:12:59,500 --> 00:13:06,860 either on right or left. So conventions motivate cooperation, and then institutions then use these 125 00:13:06,860 --> 00:13:13,280 conventions to solve coordination problems. Again, they can be arbitrary conventions, 126 00:13:13,380 --> 00:13:17,640 but people have to coordinate around them and agree on them. Some examples of institutions, 127 00:13:17,840 --> 00:13:22,720 we have like churches, Westphalian states, corporations, families. But again, what type 128 00:13:22,720 --> 00:13:28,440 of institution is Bitcoin? And as I noted at the outset, the authors think that it most closely 129 00:13:28,440 --> 00:13:34,580 resembles a natural language. As a feral institution, it most closely resembles a natural 130 00:13:34,580 --> 00:13:41,700 language. Languages are collections of conventions. And again, conventions are just rules that we 131 00:13:41,700 --> 00:13:50,280 follow and that motivate cooperation. Languages can be arbitrary. The word tree does not necessarily 132 00:13:50,280 --> 00:13:56,920 have to mean tree, but we do have to coordinate or agree that the word tree refers to the thing 133 00:13:56,920 --> 00:13:58,920 that we all think that it does. 134 00:13:58,920 --> 00:14:11,798 Languages also another aspect of languages as an institution they more valuable the more users that they have because you have more potential conversational partners with which to exchange 135 00:14:12,318 --> 00:14:14,518 Bitcoin resembles a language in that sense. 136 00:14:14,698 --> 00:14:23,038 It also solves a coordination problem by establishing a convention, the Bitcoin protocol, a set of rules that people are motivated to follow. 137 00:14:23,858 --> 00:14:26,558 The coordination problem is similar. 138 00:14:26,558 --> 00:14:30,218 languages are used 139 00:14:30,218 --> 00:14:32,558 a set of conventions to exchange information 140 00:14:32,558 --> 00:14:36,838 Bitcoin is a set of conventions to exchange value 141 00:14:36,838 --> 00:14:39,178 and to route around those who would censor that 142 00:14:39,178 --> 00:14:40,938 exchange of value, would try to 143 00:14:40,938 --> 00:14:45,318 and also like a language, Bitcoin gets more valuable 144 00:14:45,318 --> 00:14:47,838 the more people that use it 145 00:14:47,838 --> 00:14:50,638 something that the authors call a network good 146 00:14:50,638 --> 00:14:54,318 so to quote the authors, to kind of give a full picture of this 147 00:14:54,318 --> 00:15:06,458 To recap, Bitcoin's network is an institution with a defining convention, and its users follow that convention to partake in its associated network good, its native asset. 148 00:15:06,978 --> 00:15:11,998 Bitcoin motivates future users with the benefits of coordinating with those who already play by its rules. 149 00:15:11,998 --> 00:15:27,178 And Lucas, could you pull up, there's a chart, Lucas and I have copied a photo from this essay, which really nicely lays out the author's comparison between language, just here English, and Bitcoin. 150 00:15:27,718 --> 00:15:32,578 So again, they think that Bitcoin as an institution is similar to a natural language. 151 00:15:32,578 --> 00:15:40,458 And here we see the comparison that languages solve the problem of a coincidence of meaning. 152 00:15:40,658 --> 00:15:48,818 We both have to, when we use the word tree, we have to coincide on what that refers to in order for us to benefit to exchanges of information. 153 00:15:51,138 --> 00:15:54,178 And Lucas, I see you're, yeah, we zoomed down on the picture there. 154 00:15:54,298 --> 00:15:55,918 But in any case, I'll describe it here. 155 00:15:55,918 --> 00:16:22,218 There it is. Yeah. So languages solve the problem of the coincidence of meanings. Bitcoin solves a coordination problem, which is the coincidence of wants. When people go to do a trade, they have to coincide in wanting what the other party offers. But Bitcoin is a medium of exchange. So it allows for people to solve that problem because you give them Bitcoin and they can exchange their Bitcoin with other people for the thing that they want. 156 00:16:23,018 --> 00:16:31,058 And then it goes down the list here, comparing, again, the ways that natural languages are similar to Bitcoin. 157 00:16:33,078 --> 00:16:36,658 Natural languages have conventions, which are, again, sets of rules. 158 00:16:36,838 --> 00:16:42,318 Bitcoin is a protocol that has specific rules about exchanging and receiving value. 159 00:16:43,478 --> 00:16:46,118 And so on and so forth down the list here. 160 00:16:46,118 --> 00:16:48,678 The last item on the list is where they differ, though. 161 00:16:48,678 --> 00:16:52,998 So English, a natural language like English is unplanned. 162 00:16:53,138 --> 00:16:54,038 It's not created. 163 00:16:54,378 --> 00:16:57,018 But of course, Bitcoin was created. 164 00:16:57,118 --> 00:16:57,998 It's engineered. 165 00:16:58,518 --> 00:17:03,618 We saw at the beginning how Bitcoin begins with a leader and then Satoshi departs and 166 00:17:03,618 --> 00:17:04,718 it becomes leaderless. 167 00:17:04,938 --> 00:17:06,318 But there is a difference here. 168 00:17:06,678 --> 00:17:07,718 Languages are unplanned. 169 00:17:07,878 --> 00:17:12,098 Bitcoin is engineered, but then becomes leaderless and increasingly distributed over time. 170 00:17:12,098 --> 00:17:17,318 That then is why the authors call it, as I mentioned, a feral institution, which is their 171 00:17:17,318 --> 00:17:17,838 coinage. 172 00:17:17,838 --> 00:17:23,978 something that begins as a domesticated entity but has since that time through subsequent 173 00:17:23,978 --> 00:17:29,438 generations become more and more feral you can imagine a cat which is domesticated the cat 174 00:17:29,438 --> 00:17:35,098 escapes the household over time the cat you know reproduces out in the wild and there's these feral 175 00:17:35,098 --> 00:17:41,058 cats the captain is a domesticated animal it was domesticated it was molded by co-evolution 176 00:17:41,058 --> 00:17:47,818 by its origin. It's still stamped and marked by that origin, but with each subsequent generation, 177 00:17:48,018 --> 00:17:54,438 it becomes something more and more distinct, more feral. Here's a quote that kind of strings 178 00:17:54,438 --> 00:17:59,938 together some of these ideas. The authors say, quote, Bitcoin's network is a feral institution. 179 00:18:00,558 --> 00:18:06,578 English, by contrast, is wild and always has been, so far as we know. It never had an inventor. 180 00:18:06,578 --> 00:18:13,518 Bitcoin did, but then its inventor left and left Bitcoin out of the barn. By altering Bitcoin's 181 00:18:13,518 --> 00:18:18,298 social layer, layer zero in this way, Satoshi unleashed the potential for leaderlessness 182 00:18:18,298 --> 00:18:24,498 that was already present in its protocol layer, layer one. So the authors then conclude, 183 00:18:24,758 --> 00:18:31,478 they bring this essay home in a sense and tie it back to the Satoshi papers, the title of the 184 00:18:31,478 --> 00:18:38,598 anthology, this analogy to the Federalist Papers, to America's initial founding. Last week, we saw 185 00:18:38,598 --> 00:18:43,998 again how that title was an intentional focus on a new founding of our country in light of the 186 00:18:43,998 --> 00:18:49,938 changes that Bitcoin will unleash. Satoshi, the authors say, was like our founding fathers, 187 00:18:50,118 --> 00:18:56,078 Washington and Jefferson. They were also social architects operating on that social layer zero, 188 00:18:56,078 --> 00:19:02,298 creating not just the Constitution, but showing through the example of their own departure. 189 00:19:02,298 --> 00:19:11,118 Of course, Washington, George Washington doesn't take, Jefferson refuses a third term based on George Washington having set that precedent. 190 00:19:12,398 --> 00:19:17,838 They unleashed this idea of building a nation without lifelong rulers. 191 00:19:17,978 --> 00:19:19,198 They set the social precedent. 192 00:19:19,978 --> 00:19:21,738 They also abided by the Constitution. 193 00:19:21,738 --> 00:19:32,858 So there's kind of implicit this analogy that the United States is also a feral institution, having had a leaderful founding, but then unleashed with the idea that we could be, in a sense, sovereign citizens. 194 00:19:33,358 --> 00:19:38,678 I'll read the concluding paragraph because it really does do a nice job summarizing everything, and it's really good. 195 00:19:38,678 --> 00:19:58,198 In summary, Satoshi discovered how money could operate without central authorities, encoded that discovery into software, freely gave it to the world from behind a mask, provably committed his own resource to demonstrate its benefits, bootstrapped a community devoted to its success, relinquished control, and left. 196 00:19:58,818 --> 00:20:02,578 Anyone may now use the feral institution he left behind. 197 00:20:03,038 --> 00:20:04,598 That is what Satoshi did. 198 00:20:05,038 --> 00:20:06,258 He set Bitcoin free. 199 00:20:06,898 --> 00:20:12,238 So again, the three ideas, as I stated at the beginning, one, Bitcoin has a social layer. 200 00:20:12,598 --> 00:20:19,218 Two, Satoshi operating on that social layer solves the bootstrapping problem through marketing, greed, and its own departure. 201 00:20:19,218 --> 00:20:28,538 And then three, the way Bitcoin bootstraps reveals it to be a particular type of institution, like a natural language, which is a feral institution. 202 00:20:28,538 --> 00:20:37,158 and, as the authors conclude, something like the, by analogy, what Washington and Jefferson did at 203 00:20:37,158 --> 00:20:43,258 our country's own founding. So that's a summary. This is an essay with a lot of, like, all these 204 00:20:43,258 --> 00:20:48,478 ideas are interlocking, but there's lots of interesting novel ideas. Lucas, what did you, 205 00:20:49,038 --> 00:20:51,938 just starting with the first point, because I thought this was really interesting, 206 00:20:52,478 --> 00:20:58,518 the idea that Bitcoin has a social layer, did that strike you as a novel kind of thought 207 00:20:58,518 --> 00:20:59,518 And what do you make of that? 208 00:21:00,298 --> 00:21:05,058 That to me was the biggest takeaway in terms of the novelty of it. 209 00:21:05,858 --> 00:21:24,338 I spoke with some other people about this here, encouraging them to read this book, because just in the first essay, I've gotten a new appreciation for Bitcoin that I didn't have before from that idea of a social layer. 210 00:21:24,338 --> 00:21:41,818 So Bitcoin is, and I guess this is just the natural outcropping of what happens when you have a decentralized anything. 211 00:21:41,818 --> 00:22:11,798 So there's going to be, I think, if we think in terms of all the decentralization that's happening now, there does become some sort of a social layer underneath that, whether it's decentralized societies that are interconnected because they look to each other for cues and tips, successes and failures. 212 00:22:11,818 --> 00:22:26,238 Or it's in this realm of decentralized tools, decentralized products that are just Noster, by the way, for example. 213 00:22:26,918 --> 00:22:35,918 So Noster, they all appear to be a social layer first and then have utility second. 214 00:22:35,918 --> 00:22:42,558 And it's fascinating that Bitcoin provided us utility first. 215 00:22:42,558 --> 00:23:07,778 And it seems to me that it took people with the insight of Andrew Bailey and Craig Wormkey to really discern that there was a social layer underneath, that the strength, the power underneath the engineering is still the people. 216 00:23:07,778 --> 00:23:11,798 it's the people who run nodes and who run miners 217 00:23:11,798 --> 00:23:14,998 and are 218 00:23:14,998 --> 00:23:20,378 using the convention in order to 219 00:23:20,378 --> 00:23:23,578 create a rule set 220 00:23:23,578 --> 00:23:28,078 that enables freedom that when you were talking one of the things that 221 00:23:28,078 --> 00:23:31,858 just bounced into my mind was Jocko Willink's book 222 00:23:31,858 --> 00:23:36,098 I think it's called 223 00:23:36,098 --> 00:23:43,778 extreme ownership or i think it's called extreme i think that's it yeah but his his tagline punch 224 00:23:43,778 --> 00:23:51,818 line for for all of all these things is discipline is freedom um and so discipline um could be 225 00:23:51,818 --> 00:23:59,718 interpreted as following the rules of the convention um and by the more rules of the convention that 226 00:23:59,718 --> 00:24:03,738 you follow, the more freedom you have to operate by using that convention. 227 00:24:04,598 --> 00:24:04,678 Yeah. 228 00:24:05,338 --> 00:24:09,178 The English language is a brilliant example and a brilliant comparison. 229 00:24:11,238 --> 00:24:17,278 The better you know the English language, the more free you are. 230 00:24:17,638 --> 00:24:19,558 Jordan Peterson talks about this all the time. 231 00:24:19,778 --> 00:24:24,278 You know, if you want to truly become dangerous, learn how to speak, learn how to write, learn 232 00:24:24,278 --> 00:24:24,938 how to talk. 233 00:24:25,678 --> 00:24:25,838 Yeah. 234 00:24:25,858 --> 00:24:27,838 And you actually have to be constrained by English. 235 00:24:27,838 --> 00:24:31,538 You can't just like act in total freedom and just like make up your own words. 236 00:24:31,538 --> 00:24:37,498 You actually have to have the discipline to use the words that are already there that we've coordinated upon as having meaning. 237 00:24:37,918 --> 00:24:42,878 Freedom means being constrained by what the protocol and convention rule set has given us. 238 00:24:43,598 --> 00:24:47,378 Yeah, because then you'll – when you use the right word, people understand. 239 00:24:47,878 --> 00:24:48,138 Yeah. 240 00:24:48,138 --> 00:24:52,578 And they are then really bought in. 241 00:24:52,578 --> 00:25:12,578 And if you use a word that the other person has a, if you use something that, talk about how there's, the human eye is so sensitive that it can notice like something that's a half a degree off of plum, right? 242 00:25:12,578 --> 00:25:20,558 So if something is supposed to be at a 90 degree angle and it's at 89.5, that's like blatantly obvious to the human. 243 00:25:20,558 --> 00:25:22,438 and I think 244 00:25:22,438 --> 00:25:26,918 people who choose to use 245 00:25:26,918 --> 00:25:28,658 a word that is not fully 246 00:25:28,658 --> 00:25:31,018 descriptive of what they're trying to get across 247 00:25:31,018 --> 00:25:32,638 then they end up not fully 248 00:25:32,638 --> 00:25:33,998 getting their idea across 249 00:25:33,998 --> 00:25:36,658 and when you do hammer into 250 00:25:36,658 --> 00:25:37,698 the correct 251 00:25:37,698 --> 00:25:40,978 hammer into, that's probably the wrong word to use 252 00:25:40,978 --> 00:25:42,258 when you do 253 00:25:42,258 --> 00:25:44,898 intentionally 254 00:25:44,898 --> 00:25:46,818 choose and 255 00:25:46,818 --> 00:25:48,698 successfully land upon 256 00:25:48,698 --> 00:25:55,198 the best description, um, using the conventions of the English language to convey your idea, 257 00:25:55,198 --> 00:26:05,678 then you're, you're able to, uh, amass a coalition of understanding and support for your ideas. 258 00:26:05,998 --> 00:26:12,898 Yeah. Yeah. I, I, to me, that's the coolest takeaway is like, I never heard Bitcoin talked 259 00:26:12,898 --> 00:26:19,538 about as a social layer? Yeah, we focus definitely on the technology as this kind of the novel 260 00:26:19,538 --> 00:26:25,958 technologies or the not novel, the established technologies that go into and combine to create 261 00:26:25,958 --> 00:26:31,558 a novel thing, the hashing functions, the public key cryptography, this notion of accumulative 262 00:26:31,558 --> 00:26:36,678 proof of work. We think of these types of things, which are very important, but we forget that 263 00:26:36,678 --> 00:26:40,318 it's the importance of Satoshi's departure. 264 00:26:40,818 --> 00:26:47,318 Like, because if Satoshi would be or is like the 11th richest person in the world right now, 265 00:26:47,518 --> 00:26:51,158 this is the person who did the most unprecedented thing. 266 00:26:51,278 --> 00:26:56,018 We can almost, this can also almost give rise to like cultish or pseudo religious aspects 267 00:26:56,018 --> 00:26:57,678 to the idea of Bitcoin. 268 00:26:57,938 --> 00:27:03,578 Somebody who gives up, you know, the most wealth possible, right? 269 00:27:03,578 --> 00:27:14,358 They could have benefited in so many ways, but they forego their own greed, harness the incentive of greed embedded in everybody else's human nature to bootstrap a system that then benefits us all. 270 00:27:14,358 --> 00:27:21,518 Just the importance of Satoshi's departure cannot be underrated, and that's an entirely social phenomena that's separate from the technology. 271 00:27:21,518 --> 00:27:44,738 And yet, what is the Bitcoin network without Satoshi having backed away as the leader, without Satoshi having transitioned the project away from himself, disappeared, and then not moved any coins? Without that, I think Bitcoin is different, right? And maybe it still survives, but I don't think it survives with the strength that it currently has, right? 272 00:27:44,738 --> 00:28:05,658 Yeah. I know this is maybe a swing onto an off-ramp, but I was trying to think about other successful startup ideas alongside of something that was just hugely successful. 273 00:28:05,658 --> 00:28:16,297 So there been a number of runs at creating a new professional football league Donald Trump has done it with USFL back in like 1984 274 00:28:17,257 --> 00:28:17,457 Yeah. 275 00:28:18,097 --> 00:28:19,557 They tried to restart that. 276 00:28:19,557 --> 00:28:33,297 Currently there's I think it's the Live Golf or something like that, which is the Saudi Arabian Middle Eastern attempt to rival the PGA. 277 00:28:33,297 --> 00:28:42,777 there's been numerous fighting type of things that rise up and they all have the exact same 278 00:28:42,777 --> 00:28:53,057 methodology which is they attempt to incentivize people to come there by incentivizing the big 279 00:28:53,057 --> 00:28:59,897 names in that realm by paying them they just pay them more and that's their incentive you know 280 00:28:59,897 --> 00:29:03,457 Herschel Walker was one of the famous ones that signed with USFL. 281 00:29:04,237 --> 00:29:04,597 I can't remember. 282 00:29:04,677 --> 00:29:09,917 I think it's like Rory McIlroy is the famous golfer that signed with the other two. 283 00:29:13,017 --> 00:29:16,877 But none of them have been truly successful. 284 00:29:16,877 --> 00:29:24,877 The golf one is arguably fairly successful, but it's only successful because they just literally have unlimited money. 285 00:29:24,877 --> 00:29:32,797 and they have insane purses and they have insane pay for the players that is so much better than 286 00:29:32,797 --> 00:29:38,077 than one but there's another example because i was trying to think i was like i don't know that 287 00:29:38,077 --> 00:29:45,397 there is another example ever of someone who was able to launch something that could kill the 288 00:29:45,397 --> 00:29:54,637 existing convention yeah and do so in a way that didn't it wasn't like yield farming shit coinery 289 00:29:54,637 --> 00:29:59,037 type of thing where you're just going to throw money at it. And have you heard of the Savannah 290 00:29:59,037 --> 00:30:04,917 bananas? Do you know what that is? I have no idea what that is now. The Savannah bananas are a 291 00:30:04,917 --> 00:30:10,357 amateur, um, well, not amateur, they're professional now because they're getting paid, but 292 00:30:10,357 --> 00:30:19,437 let's say a, a group of, a group of baseball players who are certainly not at professional 293 00:30:19,437 --> 00:30:21,837 baseball level in some capacity. 294 00:30:23,357 --> 00:30:27,877 They wouldn't be able to probably make a professional baseball team, 295 00:30:28,357 --> 00:30:32,957 but maybe in one realm they are elite. 296 00:30:33,117 --> 00:30:36,397 Maybe they're an elite fielder, but they just can't hit. 297 00:30:36,397 --> 00:30:42,237 Maybe they're an elite runner on the base pass, but they just can't hit. 298 00:30:42,897 --> 00:30:44,397 Usually it's hitting, by the way. 299 00:30:44,897 --> 00:30:49,157 But anyways, the Savannah Bananas, they're kind of like the Harlem Globetrotters. 300 00:30:49,157 --> 00:31:08,737 They have this other team that goes with them, and they go into cities, and they play baseball, and they sell out every single game that they play because they made baseball more fun than what it was. 301 00:31:08,737 --> 00:31:15,557 They have guys doing backflips in the outfield as they catch the ball. 302 00:31:15,717 --> 00:31:21,477 They have a pitcher who pitches while on stilts and hits while on stilts. 303 00:31:22,637 --> 00:31:24,717 You know, the dances and stuff, all this stuff. 304 00:31:24,957 --> 00:31:31,277 But what's fascinating is that they were able to be successful in that mold, 305 00:31:31,357 --> 00:31:35,017 and I think they will be successful for a very, very, very long time 306 00:31:35,017 --> 00:31:37,397 because they changed the convention. 307 00:31:37,397 --> 00:31:50,217 They didn't take the regular approach of, oh, we're just going to go pay the better players to come over here because it turns out that's not the reason why people watch the game. 308 00:31:50,437 --> 00:31:52,417 They watch the game to be entertained. 309 00:31:52,677 --> 00:31:56,297 They watch the game to feel as though they're part of it. 310 00:31:56,297 --> 00:32:16,057 And the approach of the Savannah Bananas has been to literally change the rules, change the convention of baseball so that it is more – it incentivizes people to gather around it because they have more of a stakeholder process in it. 311 00:32:16,137 --> 00:32:20,397 They have more to gain by being entertained. 312 00:32:20,717 --> 00:32:23,157 They have more to gain by feeling part of something. 313 00:32:23,157 --> 00:32:28,017 and I think that's growing. 314 00:32:28,737 --> 00:32:32,397 You're starting to see these ideas of like, 315 00:32:32,477 --> 00:32:34,437 oh, somebody wants to start a football league, 316 00:32:34,577 --> 00:32:37,017 but the way that this football league is going to work 317 00:32:37,017 --> 00:32:40,677 is that the fans on every play are going to vote 318 00:32:40,677 --> 00:32:42,217 for what the next play is. 319 00:32:42,217 --> 00:32:45,437 So if 70% of the people want them to throw a Hail Mary, 320 00:32:45,657 --> 00:32:46,917 then they're going to throw a Hail Mary. 321 00:32:47,297 --> 00:32:47,357 Yeah. 322 00:32:48,117 --> 00:32:51,557 I think that's fascinating because it does add 323 00:32:51,557 --> 00:32:59,617 a social layer to something that was previously just a convention um that that people were 324 00:32:59,617 --> 00:33:06,797 kind of like observing and and being not subjects of but just uh yeah yeah they didn't have that 325 00:33:06,797 --> 00:33:14,677 ownership of it yeah no i think the authors have they do have a section on game theory and they 326 00:33:14,677 --> 00:33:20,737 have three different game theoretic simulations about how to bootstrap new networks essentially 327 00:33:20,737 --> 00:33:26,937 how do you get people from a system where they all already benefit and find value from, 328 00:33:27,017 --> 00:33:32,897 we could say like traditional baseball into a new system or network like Savannah Banana, 329 00:33:33,077 --> 00:33:37,877 a new thing where, you know, you have to get people out of the psychological precedent of 330 00:33:37,877 --> 00:33:44,017 baseball is a certain thing into, okay, baseball can be another thing where it can be more fun. 331 00:33:44,177 --> 00:33:47,917 And you have to like, the equilibria is sticky. It's tough to get people out of their default 332 00:33:47,917 --> 00:33:51,997 psychological framework. It's very tough. I had never heard of Savannah Bananas. I think most 333 00:33:51,997 --> 00:33:58,557 people probably haven't. So the incumbent defender of a network always has huge advantage from that 334 00:33:58,557 --> 00:34:03,997 psychological perspective of precedent. And so that's what makes like Bitcoin super impressive 335 00:34:03,997 --> 00:34:10,477 is it has been able to bootstrap in the way that it has bootstrapped is, you know, to these very 336 00:34:10,477 --> 00:34:15,537 specific things like marketing, maybe Savannah Banana uses certain types of marketing through 337 00:34:15,537 --> 00:34:20,997 greed through a sort of human incentive exploiting or taking, you know, taking into account an aspect 338 00:34:20,997 --> 00:34:26,077 of human nature. Savannah Banana does that, I guess, with like the humans want to have fun or 339 00:34:26,077 --> 00:34:32,377 whatever. So the I mean, what the authors do, again, with the game theory is interesting in sort 340 00:34:32,377 --> 00:34:39,557 of a general application for how you start new networks, how you overcome incumbents, and again, 341 00:34:39,557 --> 00:34:44,937 how Bitcoin is a case study and how that may be happening right now with the biggest incumbent 342 00:34:44,937 --> 00:34:47,237 possible, which is the financial system. 343 00:34:49,157 --> 00:34:54,877 One thing I want to jump in and point out here is that the consistent thing about these 344 00:34:54,877 --> 00:35:00,457 is that they take courage from the founder. 345 00:35:01,297 --> 00:35:10,777 And the courage from the founder is that they are relying on the participation of other people 346 00:35:10,777 --> 00:35:11,817 to make it successful. 347 00:35:11,817 --> 00:35:16,657 The Savannah Bananas game, it's not successful if there is no crowd. 348 00:35:17,357 --> 00:35:22,417 They were able to play baseball games during COVID, and to be honest, not many people cared. 349 00:35:22,837 --> 00:35:25,697 Because it's still the exact same product on the field. 350 00:35:26,457 --> 00:35:29,817 And they could pump in crowd noise, and they could do all that. 351 00:35:29,997 --> 00:35:36,397 But if you take that away from, if you take the crowd away from the Savannah Bananas, 352 00:35:36,597 --> 00:35:39,717 they're coming out of the crowd oftentimes. 353 00:35:39,717 --> 00:35:41,357 They're going into the crowd. 354 00:35:41,357 --> 00:35:56,857 They're participating with the people. And so it takes a giving up of authority, a giving up of control, a faith in the people to make this a success. 355 00:35:56,857 --> 00:36:17,317 And that is, it seems at first counterintuitive because we say, well, Satoshi did this great thing by not cashing out his coins, by not pre-mining, et cetera, et cetera, and doing all of these things. 356 00:36:17,317 --> 00:36:26,637 But in reality, I think he knew that if he had done that, then the protocol would have died and he would have ended up with nothing. 357 00:36:26,857 --> 00:36:34,097 Yeah. And so not only would he have ended up with a sure he would have had cash, but what's that going to be worth? 358 00:36:34,397 --> 00:36:41,137 You know, like, I mean, if you if you understand Bitcoin, then you understand that having a lot of cash is not a good idea ever. 359 00:36:41,437 --> 00:36:49,377 Yeah. Yeah. Like it makes you subject to all kinds of all kinds of issues, even in the present and in the future. 360 00:36:49,377 --> 00:36:59,337 but to just have the foresight to say look that in order for this thing to live now it has to live 361 00:36:59,337 --> 00:37:04,257 forever yeah and i think that and there's something in that no there's something in that that's also 362 00:37:04,257 --> 00:37:11,937 a deep lesson about maturity in human nature so the authors give they make the analogy between 363 00:37:11,937 --> 00:37:16,137 satoshi as a founding father with our nation's founding fathers who also 364 00:37:16,137 --> 00:37:21,737 kind of relegated or delegated, backed away from power, right? So they create something and then 365 00:37:21,737 --> 00:37:27,277 they kind of get the project going and then they back away. That's also kind of just the archetypical 366 00:37:27,277 --> 00:37:32,097 notion, not the founding father, but the father in general. And the authors have the analogy in here 367 00:37:32,097 --> 00:37:37,377 of like the father who helps someone ride a bicycle at first, they're, you know, holding them and 368 00:37:37,377 --> 00:37:42,317 letting them go. But there comes a point where the father has to back away to let the child flower 369 00:37:42,317 --> 00:37:47,657 and grow on their own. And so it's just, again, a mark of maturity. And it's almost like this 370 00:37:47,657 --> 00:37:54,177 archetypical thing where that's what the father does is they create and set a project in motion. 371 00:37:54,177 --> 00:38:00,657 But if they stay there, always overbearing, always looking over the project, they're going 372 00:38:00,657 --> 00:38:07,377 to oppress and smother it. And so the father has to let go. And that's what a founding father is. 373 00:38:07,377 --> 00:38:13,197 the founding father is not somebody who creates something and then centralizes power and locks it 374 00:38:13,197 --> 00:38:18,237 down. And then that's the thing that they have. I mean, that's a corporate model that makes profits 375 00:38:18,237 --> 00:38:22,437 fine. But the idea of the founding father is something more benevolent, somebody who lets 376 00:38:22,437 --> 00:38:30,357 the project go. Yeah. Yeah. I, uh, I've been feeling this lately because I've been running 377 00:38:30,357 --> 00:38:38,017 this man camp thing and i've been teaching these guys that that my big takeaway was that i i did 378 00:38:38,017 --> 00:38:44,437 not assume that the competence bar would be so low where i thought i would teach you how to use power 379 00:38:44,437 --> 00:38:48,277 tools i didn't know i'd have to teach you what a screw was i didn't know i had to teach you 380 00:38:48,277 --> 00:38:55,517 you know uh how to put a screw or how to put a bit into a drill yeah and last just to give just 381 00:38:55,517 --> 00:38:59,057 to give context just to give context you're around a bunch of very tech oriented people 382 00:38:59,057 --> 00:39:01,737 and you're kind of teaching a practical skills oriented course. 383 00:39:03,037 --> 00:39:10,437 Yeah. Yeah. And last week we took it to a whole nother level, um, where I brought out a chainsaw 384 00:39:10,437 --> 00:39:18,277 and I had guys using a chainsaw that had never used a power tool in their life prior to last 385 00:39:18,277 --> 00:39:26,857 week when they used a hand drill. Like, yeah. And, um, you know, my, my personal past has been that 386 00:39:26,857 --> 00:39:30,737 I've always been on the front. 387 00:39:31,017 --> 00:39:34,717 I've always been at the front of the stage. 388 00:39:34,817 --> 00:39:39,757 I've always been a singer in a band, a student body president at a university. 389 00:39:39,757 --> 00:39:41,997 I've always been the guy in front of the camera. 390 00:39:41,997 --> 00:39:54,097 And I have been having these moments of just utter pride, utter satisfaction, utter contentment, utter enjoyment. 391 00:39:54,097 --> 00:39:58,737 in taking something that is very simple for me 392 00:39:58,737 --> 00:40:01,437 and giving it to someone else 393 00:40:01,437 --> 00:40:05,957 and watching them go from a negative one to a five 394 00:40:05,957 --> 00:40:08,817 in terms of competence with some realm. 395 00:40:09,137 --> 00:40:11,537 And that there is a fatherly aspect to that. 396 00:40:11,617 --> 00:40:13,497 There's a big brother aspect to that 397 00:40:13,497 --> 00:40:16,377 that just makes you so proud. 398 00:40:16,377 --> 00:40:20,697 And I can only imagine if Satoshi is still with us. 399 00:40:20,697 --> 00:40:27,817 like yeah and i hope i hope he is because if satoshi is still with us like god what a great 400 00:40:27,817 --> 00:40:35,437 feeling to be able to walk around every day and know um all of the good that has come about as a 401 00:40:35,437 --> 00:40:42,217 result yeah the you know the political political dissidents that have been able to move freely 402 00:40:42,217 --> 00:40:48,077 people that have been able to leave countries with their money intact in order to start a better life 403 00:40:48,077 --> 00:40:55,057 to not have to go from being a neurosurgeon in Ethiopia to being a cab driver in the U.S. 404 00:40:55,597 --> 00:40:59,097 You know, so I think there is just something. 405 00:41:00,177 --> 00:41:01,597 It seems counterintuitive. 406 00:41:01,597 --> 00:41:09,037 It seems like there should be this short-term greed incentive of I've got my money, I should cash out. 407 00:41:09,197 --> 00:41:17,357 But we know that there are things that money cannot buy and that those things are far more important than money. 408 00:41:17,357 --> 00:41:20,537 that if you have those things, it's more likely that you'll get money. 409 00:41:20,997 --> 00:41:24,017 If you have money, it's not necessarily a given. 410 00:41:24,337 --> 00:41:26,477 Depression rates, anxiety rates, et cetera, 411 00:41:26,597 --> 00:41:28,757 are very, very high among the wealthy. 412 00:41:30,937 --> 00:41:34,737 And so it perhaps is a precursor to wealth, 413 00:41:34,837 --> 00:41:37,077 and it's a sense of wealth in its own meaning. 414 00:41:37,717 --> 00:41:37,937 Yeah. 415 00:41:39,177 --> 00:41:43,277 It's not just that Satoshi forewent an immense amount of wealth 416 00:41:43,277 --> 00:41:45,037 by leaving these coins locked up. 417 00:41:45,037 --> 00:42:01,217 It's also that Satoshi forewent the glory of I am the inventor of Bitcoin, which is huge and which is also something that the oppressive father does, that all that my son or daughter has good about them is something that I taught them or did for them. 418 00:42:01,217 --> 00:42:06,217 And so again, it's like this is very – we can pattern it on as benevolent. 419 00:42:06,297 --> 00:42:07,697 Who knows the reasoning behind it? 420 00:42:08,037 --> 00:42:09,817 Maybe we shouldn't go too far down that road. 421 00:42:10,617 --> 00:42:21,475 But again it just the notion that on social layer zero Bitcoin started out in a very specific trajectory that we shouldn take for granted 422 00:42:21,775 --> 00:42:25,395 And that does define the Bitcoin network as it is today. 423 00:42:25,395 --> 00:42:33,775 And it would be very different if a Satoshi was still here weighing in on every controversy that arose on Twitter arguing with people. 424 00:42:33,975 --> 00:42:34,995 A very different world. 425 00:42:34,995 --> 00:42:41,555 um when we focus when we overly focus on the tech on the tech of bitcoin that's i think where some 426 00:42:41,555 --> 00:42:45,955 people get into shit coinery the idea that bitcoin is just blockchain right and so that 427 00:42:45,955 --> 00:42:51,355 we can build a better blockchain because if all bitcoin is is technology then technology progresses 428 00:42:51,355 --> 00:42:55,815 now we're at a better state we can build a better bitcoin but when you know that there's a social 429 00:42:55,815 --> 00:43:01,455 layer zero when you begin with satoshi it's different than beginning with a corporation 430 00:43:01,455 --> 00:43:04,315 like a ripple or something that still sticks around. 431 00:43:04,895 --> 00:43:10,915 You can't, you know, the better tech does not make up for a deficient social layer zero 432 00:43:10,915 --> 00:43:16,535 at the outset, which again is the true genius, one of the true geniuses of what Bitcoin is. 433 00:43:17,375 --> 00:43:17,555 Yeah. 434 00:43:18,215 --> 00:43:26,675 There was a group of people here that were working on a blockchain and they're proof 435 00:43:26,675 --> 00:43:27,135 of work. 436 00:43:27,135 --> 00:43:28,895 You know, they're all Bitcoin. 437 00:43:29,655 --> 00:43:30,975 They understand Bitcoin. 438 00:43:31,455 --> 00:43:39,295 yet they were still trying to do this thing where they claimed that it was decentralized. 439 00:43:39,795 --> 00:43:42,955 And I would talk to them about it and I say, well, what's decentralized about? 440 00:43:43,055 --> 00:43:44,515 Oh, you know, we're going to have miners and stuff. 441 00:43:44,635 --> 00:43:45,775 I said, well, do you have a pre-mine? 442 00:43:46,035 --> 00:43:47,635 I'm like, of course, we have a pre-mine. 443 00:43:47,795 --> 00:43:49,675 There's investors and they want to get their money back. 444 00:43:50,155 --> 00:43:50,375 Yeah. 445 00:43:51,215 --> 00:43:58,735 But that's kind of like if you believe in the thing, then you're not holding back. 446 00:43:58,735 --> 00:44:09,195 you know you don't michelangelo didn't do two do two sistine chapel paintings and keep one for 447 00:44:09,195 --> 00:44:19,935 himself right there there is a value and in fact it could be the value in that it is out there it is 448 00:44:19,935 --> 00:44:26,675 for the world um one of the things that i wanted to ask you about because this is i can actually 449 00:44:26,675 --> 00:44:37,415 I can get to, and it makes me think that Satoshi was a father in order to have that type of long-term outlook. 450 00:44:38,535 --> 00:44:41,215 I'm not saying that you have to be, but I think it probably helps. 451 00:44:41,215 --> 00:44:58,475 But settling on the four-year halving cycle, to me, is that I could actually see with my little brain and a lot of time getting to most of Bitcoin eventually. 452 00:44:59,055 --> 00:45:01,775 I don't think I would ever make it to the four-year halving cycle. 453 00:45:02,135 --> 00:45:07,755 That, to me, is so revolutionary, so inventive. 454 00:45:07,755 --> 00:45:19,955 Yet, as you note, there's precedent for that. There's a pattern for that, that somewhat exists in the natural order, the World Cup, the Olympics, the presidential cycle. 455 00:45:20,615 --> 00:45:27,595 We could also say like spring, summer, autumn, winter. I mean, cycles are like have four quadrants. 456 00:45:27,595 --> 00:45:45,935 Yeah. What I don't know. I just want to kind of get your take on that on the on the four year halving cycle, the inventiveness of that, how unique it is, what it does to contribute, because it does create a forcing function. 457 00:45:45,935 --> 00:45:56,195 And I would say that it only creates a forcing function for people to own Bitcoin once you're like 98 percent of the way into Bitcoin, because it takes a while to kind of understand that. 458 00:45:56,195 --> 00:46:04,775 It is what entices the media to report on Bitcoin. 459 00:46:05,115 --> 00:46:12,955 It gives a discrete event that the media can be enticed to report on. 460 00:46:13,175 --> 00:46:15,335 We can say, oh, there's this Bitcoin thing. 461 00:46:15,475 --> 00:46:20,115 Its schedule is going to have as far as its emissions. 462 00:46:20,115 --> 00:46:40,055 And so you should, the article talks about Satoshi conferring with other people on a listserv or a forum about how to get Slashdot to report on the upcoming halving cycle, like how they should frame it and formulate that so that the importance to the protocol is noted to Slashdot. 463 00:46:40,055 --> 00:46:56,895 So it provides a discrete event that the media can then report on and that with anticipation can kind of be prepared for. And so it's not just like a forcing function for people who are already in Bitcoin, who see the importance of the having cycle for the protocol. 464 00:46:56,895 --> 00:47:09,415 It also is maybe the first time that a normie is going to hear about it is a news outlet that they read all of a sudden has a novelty article about, oh, Bitcoin, the emissions are going to halve. 465 00:47:09,535 --> 00:47:11,055 And so there's going to be less of it in circulation. 466 00:47:11,375 --> 00:47:13,795 So implicitly, maybe you want to get some. 467 00:47:13,795 --> 00:47:30,175 And so I think that the author's note is part of the marketer aspect of Satoshi to have included this four-year halving cycle and to have had the foreknowledge that publicity was going to be important. 468 00:47:30,695 --> 00:47:39,435 And again, I don't know how the four-year cycle is not something I would have alighted upon naturally, like the Olympics, the presidential elections. 469 00:47:39,435 --> 00:47:41,915 I wouldn't have found that pattern necessarily. 470 00:47:41,915 --> 00:48:02,035 But I do think, again, there is something archetypical about it. It's like spring, summer, autumn, winter, you know, the rebirth, renewal, maturity and death, and then the rebirth, renewal, and like the cycle that I think there's something built into the human psychology. Maybe that goes to unnecessarily deep. 471 00:48:02,035 --> 00:48:20,395 The important part for this article, again, is just that it provides a recurring point where there will be publicity on Bitcoin in a way that favorably reports on its volatility and emphasizes its aspect as a limited resource in a world of inflationary assets. 472 00:48:20,395 --> 00:48:27,395 yeah the uh the authors do a great job i think of discussing and kind of laying out the game 473 00:48:27,395 --> 00:48:36,035 theoretic implications of yeah uh you know expanding it to more in a more complex uh 474 00:48:36,035 --> 00:48:42,135 version of game theory than most people are used to seeing and they do it walks you through it 475 00:48:42,135 --> 00:48:47,135 step by step yeah if you if you hear game theory yeah if you hear game theory thrown around you're 476 00:48:47,135 --> 00:48:52,115 kind of curious what does it look like to walk through an iteration of game theory and then to 477 00:48:52,115 --> 00:48:56,275 redo the game with a different set of rules and see how it plays out differently the authors do 478 00:48:56,275 --> 00:49:00,135 it very lucidly here you can read through it without having any sort of specialty background 479 00:49:00,135 --> 00:49:07,155 and understand game theory and see it applied very well yeah yeah no i think um yeah this one 480 00:49:07,155 --> 00:49:13,915 i haven't read i haven't read any further um but just this me neither yeah so far just this essay 481 00:49:13,915 --> 00:49:17,575 so far has been worth the entire thing. 482 00:49:18,195 --> 00:49:26,035 The idea of a social layer is to me so unique, so novel, yet so intuitive and so obvious. 483 00:49:26,195 --> 00:49:26,395 Yeah. 484 00:49:26,735 --> 00:49:28,175 On that, I do want to note one thing. 485 00:49:28,175 --> 00:49:33,275 So the idea of a social layer is not necessarily novel, although I think the importance that 486 00:49:33,275 --> 00:49:34,335 they place on it is. 487 00:49:34,455 --> 00:49:40,455 They note at the beginning that, in fact, detractors of Bitcoin in the literature have 488 00:49:40,455 --> 00:49:42,155 commonly made a two-step argument. 489 00:49:42,155 --> 00:49:48,275 Step one of the argument, a detractor of Bitcoin will say Bitcoin claims to be one thing on the outside of the box. 490 00:49:48,415 --> 00:49:51,295 Bitcoin claims to replace people with machines. 491 00:49:51,635 --> 00:49:53,595 There's no trusted third parties who create money. 492 00:49:54,055 --> 00:49:58,915 The governance flow, take custody along the way, trustless, no third parties, etc. 493 00:49:59,235 --> 00:50:04,235 But then step two, they say, but Bitcoin inside the box, Bitcoin is just people. 494 00:50:04,235 --> 00:50:10,815 They claim one thing, but actually there's this social layer, people who decide what code to execute, when and how. 495 00:50:10,815 --> 00:50:16,815 machines just veil the influence of the people in control trusted parties remain so it's actually 496 00:50:16,815 --> 00:50:21,755 like the social layer thing is something that detractors have used in the past the authors 497 00:50:21,755 --> 00:50:28,015 don't purport to like directly respond to that they say we respond to that in our resistance 498 00:50:28,015 --> 00:50:32,395 money book but i think they do provide a good response to like actually describe the operation 499 00:50:32,395 --> 00:50:38,635 of bitcoin social layer and like through satoshi's invention of bitcoin marketing of bitcoin harnessing 500 00:50:38,635 --> 00:50:44,795 of greed and an eventual departure, we see the operation of social layer in a way that 501 00:50:44,795 --> 00:50:52,155 goes from a system with a leader to a leaderless system, where we get this idea of a feral 502 00:50:52,155 --> 00:50:57,655 institution, an institution that begins domesticated, is released into the wild and continues to 503 00:50:57,655 --> 00:50:59,555 grow more and more wild with time. 504 00:51:00,155 --> 00:51:04,295 And so the idea of a social layer, what this essay does, I think, is really brilliantly 505 00:51:04,295 --> 00:51:09,755 use that idea to know that this is actually a huge strength that Bitcoin has. If you're looking at 506 00:51:09,755 --> 00:51:18,055 why is this network able to bootstrap from zero into something that's worth more than Amazon? 507 00:51:18,535 --> 00:51:26,955 How is that possible? Yeah. I loved everything about it. It brought me to an understanding. 508 00:51:27,155 --> 00:51:32,195 But yeah, it's really, really important. I think you're right to point that out, that 509 00:51:32,195 --> 00:51:40,095 the fact that there is a social layer was viewed in the beginning by people who saw it as a negative, 510 00:51:40,335 --> 00:51:47,055 who saw it as a, not a negative, but saw it as a, oh, this is just a wolf in sheep's clothing. 511 00:51:47,055 --> 00:51:47,875 Yeah, right. 512 00:51:48,475 --> 00:51:53,515 It's just more of the same with a little, with a Bitcoin miner in between. 513 00:51:54,435 --> 00:51:54,635 Yeah. 514 00:51:54,995 --> 00:51:56,735 Yeah, people are everything at the end. 515 00:51:56,735 --> 00:52:10,595 Yeah, I guess a final point I want to make is part of the value I found in this essay and that I found in the introduction that I hope I keep on finding here is the memetics or rhetoric of the argument. 516 00:52:10,595 --> 00:52:34,415 In the introduction, we get the meme, the rhetorical device of the banker revolution, a new way to kind of encapsulate meaning, to re-describe, to give narrative to the past in a quick and easy, intuitive way so that people can understand it themselves but also convey it to other people how the founding has gone astray through the dominance of finance, through this banker revolution. 517 00:52:34,415 --> 00:53:02,575 Now we get the idea of a feral institution, the idea, what does it mean for Bitcoin? What is Bitcoin? It doesn't seem to be like any other thing. And then you can describe, begins with a leader, becomes leaderless through provably costly signaling and departure of the person that invents it, making it completely different than any other thing, something akin to a natural language and with just as much sticking power for those that join the network. 518 00:53:02,575 --> 00:53:30,275 And so I hope like subsequent articles and this is like the kind of the characteristic of a gifted writer. They don't just explain by kind of walking you through an argument. They give you concepts that compact all that meaning into a neat phrase so that you can walk away from the essay with this idea, feral institution, and then explain Bitcoin, unpack that later on in your own mind and to other people to help convey insight. 519 00:53:30,275 --> 00:53:35,375 and help people understand kind of why Bitcoin is revolutionary. 520 00:53:36,595 --> 00:53:38,995 Yeah. Yeah. Fantastic job. 521 00:53:39,215 --> 00:53:40,535 What do you say? We put a bow on this one? 522 00:53:41,295 --> 00:53:43,615 I think that was a decent job here. 523 00:53:43,735 --> 00:53:46,315 I think that I'm super excited to go on to the next essay. 524 00:53:46,315 --> 00:53:48,155 So we'll next time. 525 00:53:48,835 --> 00:53:49,915 What is the next essay? 526 00:53:50,155 --> 00:53:51,815 Yeah, yeah. Next time we're going to be discussing. 527 00:53:52,655 --> 00:53:55,795 And I don't want to say that I wasn't excited for all the other essays in this, 528 00:53:55,855 --> 00:53:58,895 but I was actually coming into this most excited for the next essay, 529 00:53:58,895 --> 00:54:04,195 which is toward an anthropological theory of money by Natalie Smolenski. 530 00:54:04,415 --> 00:54:08,755 I just always like different perspectives from, you know, 531 00:54:09,115 --> 00:54:10,375 kind of academic schools. 532 00:54:10,555 --> 00:54:13,975 We saw Jason Lowery, military theory, what Satoshi did, 533 00:54:14,075 --> 00:54:15,115 kind of analytic philosophy. 534 00:54:15,715 --> 00:54:17,995 Now we're going to get an anthropological theory. 535 00:54:18,135 --> 00:54:21,295 We've seen financial theories, you know, economic theories. 536 00:54:21,835 --> 00:54:23,455 We're going to, yeah, right, exactly. 537 00:54:23,655 --> 00:54:26,535 So now we're going to get an anthropological theory of money. 538 00:54:26,535 --> 00:54:30,335 And so super excited for next conversation we have. 539 00:54:31,115 --> 00:54:37,135 I started following Natalie on Twitter as a result of you bringing this to me because you told me about her. 540 00:54:37,575 --> 00:54:43,855 And so I find that what she tweets out, very refreshing, very deep, very thoughtful. 541 00:54:44,835 --> 00:54:45,195 Absolutely. 542 00:54:45,455 --> 00:54:49,295 She recently – yeah, definitely follow her. 543 00:54:49,295 --> 00:54:56,315 She recently tweeted, you know, something that people don't often do is defend privacy in kind of a developed way. 544 00:54:56,315 --> 00:55:01,415 If you will just say privacy is good, other people kind of are left thinking, I'll cede my privacy for gain. 545 00:55:01,415 --> 00:55:07,455 I would rather get Facebook for free and give up my privacy than have to pay for it. 546 00:55:07,635 --> 00:55:13,495 But in a recent tweet, Natalie notes that the human mind, our personality develops. 547 00:55:14,155 --> 00:55:16,915 We need a cocoon of privacy in order to explore. 548 00:55:17,635 --> 00:55:22,815 The human mind has to be able to explore iterations of itself, to feel itself out. 549 00:55:22,915 --> 00:55:25,455 And we need a sphere, a cocoon of privacy to do that. 550 00:55:25,455 --> 00:55:28,775 and just like defending privacy from first principles. 551 00:55:28,775 --> 00:55:30,975 She's really good at kind of first principles, 552 00:55:31,095 --> 00:55:32,235 as you would call it, to use a lingo, 553 00:55:32,355 --> 00:55:33,095 thinking like that, 554 00:55:33,155 --> 00:55:34,955 where you get a defense of something 555 00:55:34,955 --> 00:55:36,915 that people usually just throw around the label. 556 00:55:37,095 --> 00:55:39,455 So definitely follow her on Twitter, engage. 557 00:55:39,695 --> 00:55:40,715 And hopefully, you know, 558 00:55:40,795 --> 00:55:42,455 I hope if you've listened this far 559 00:55:42,455 --> 00:55:44,095 that you read the book, 560 00:55:44,115 --> 00:55:46,135 but also engage with these ideas. 561 00:55:46,815 --> 00:55:47,635 Shout at us on Twitter, 562 00:55:47,815 --> 00:55:49,175 shout at the authors, you know, 563 00:55:49,235 --> 00:55:50,395 agree or disagree. 564 00:55:50,635 --> 00:55:51,995 This is the Satoshi papers. 565 00:55:52,055 --> 00:55:53,535 This is supposed to incite a dialogue. 566 00:55:53,695 --> 00:55:54,535 And I hope we get that. 567 00:55:55,215 --> 00:55:55,335 Yeah. 568 00:55:55,455 --> 00:55:58,235 Fantastic. All right. I think we're out. 569 00:55:58,935 --> 00:56:00,775 Cool. All right, Lucas. Thanks. I appreciate it, man. 570 00:56:01,315 --> 00:56:01,795 Later, gang.