Episode Transcript
Speaker 0 00:00:00 So welcome everybody to morals and markets. If you are joining us after the fact, uh, as one of our podcast guests, I encourage you to check out the Atlas societies event, page Atlas, society.org, backslash events to join us live on the fourth Thursday of every month. And please like, and subscribe to the podcast. And if you feel so inclined share with your friends, uh, with that being said, we are going to be talking the economics and politics of cryptocurrencies. There will be plenty of time for those of you who are with us live to ask questions and discuss with Dr. Salzman. And with that, I will hand things over to you, Richard,
Speaker 1 00:00:41 Abby, thank you again. Uh, you're a great host, but is it hostess? You're great. Thank you, Abby. I know a lot of work goes into this. Let me just read from the descriptor we gave for this session in this session, we're going to examine whether cryptocurrencies are genuine or instead fraudulent as monies. Okay. There's Salzman doing his either or binary thing, but okay. There it is. What role have they played in the economy so far? How might they influence the future? What explains their attraction? What are their main risk and might they spread as a contagion globally? Do cryptos differ materially? Uh, and if so, in other words, among different cryptos and if so, why might that matter? El Salvador, uh, has recently designated Bitcoin as legal tender, which really goes together with its Fiat money. Is that a bad thing? So China, I think three times now has tried to ban it.
Speaker 1 00:01:34 Why, what lesson is there, there, what are they really banning too? Is that the use of it? The mining of it. Uh, we'll talk about that. Um, our cryptos and we'll focus mostly on Bitcoin tonight because of our special guests, but are they an alternative, a competitor to government Fiat money or instead of possible model for well-run public digital currencies, public digital currencies, meaning are central banks likely to just take over. Co-op not killed, but co-opt cryptos and, uh, used them themselves. Um, now I just want to give you a little background because I'm going to introduce a special guest Ray soon. Who's going to basically, I, I hope he knows that he knows that his talk most of the time, because he knows more than I do about this, but I'll tell you why this interests me and why I talked to our special guests so much recently.
Speaker 1 00:02:24 It was almost three more than three decades ago that my first work in economics and politics was on money and banking. And my first book was called breaking the banks, central banking problems and free banking solutions. 1990 I'm dating myself. There was a financial crisis going on at the time. My general theme was central banking was awful. Central banking, meaning a government monopoly on money. Am I conclusion from a lot of empirical work was that central banking was in place not to replace a market failure banking system, but to help the government finance itself cheaply. And in the process of doing that, the, of you wrote it, the financial prudence in the private banking sector and undermined the financial integrity of banks to the point where they would be precarious and prone to being bailed out. Um, in 1995, I focus more on the issue of the gold standard, not so much the banking system, but what monetary standard historically had seemed to hold up as efficient, practical, moral, and, and the gold standard shown, uh, sh really shown in that regard.
Speaker 1 00:03:32 Now, if you know the history, we have not been on any form of gold based money for now 50 years. And if you go back 300 years, there isn't a 50 year period where that's been true. So we're truly in uncharted waters. And to the extent that the governments of the world can issue money almost without limit, not restricted to any tangible thing, couple of other things, um, to this day, uh, I think the last thing I wrote for the Cato journal was an appeal for the federal reserve to at least adopt a gold price rule. But my cynicism about central banking over the years really undermines my own argument. When you think about it, because why would central banks behave? If I'm right, they're not going to Bennett, want to have their hands tied by anything, but, um, just so you know, so I'm on the record for still being a holdout, a gold standard guy, but I really love the whole crypto phenomenon and the debate it brings up.
Speaker 1 00:04:34 And actually it does bring up a debate between free main systems, Fiat money, gold standard, which has a much longer history and this new thing called crypto. There's new, very technologically advanced, very cleverly organized and coordinated system. Uh, so anyway, that's as context and now I have to introduce someone. I just adore. He's a duke student of mine. I've known him for a couple of years. His name is Jack. Kriesel get Jack is on the call here. So, so Jack wave your hand and say hello and unmute yourself. And anything else, you have to do a couple of things about Jack. He's been in some of my courses, but we also have the kind of coffees on the weekends where we gathered together, what I call friends of Liberty. And he's just schooled me on Bitcoin. I mean, I was semi skeptical about it, but he's really, really learned about it.
Speaker 1 00:05:29 He writes for Bitcoin magazine. So make sure you look up his stuff. Uh, the, the one I'm looking at right now, Bitcoin, our only hope to separate money from the state, a fabulous essay, but he's got four or five of them already. He's been writing, I think since was it spring of 2021, Jack, they're just great essays. And, and here's the thing about Jack. He is not just knowledgeable about the technical aspects of Bitcoin. And we'll get into that a little bit. I think what's maybe more interesting is he is knowledgeable about these other things. I've been talking about, namely the long history of money, the use and abuse of money and the banking system by the state, by an overarching state. He's what he's worried about, those kinds of things. And so he's an interesting, um, guest, I think for the Atlas society, because the Atlas society, you know, cares about objective money, objective reasoning, uh, limited government, uh, uh, love of America in its traditions. And I can attest that Jack's that way too. So, um, I think I would, I think I'd like to start with, um, and Jack, what we normally do. Can you hear me? I hope you can hear me.
Speaker 2 00:06:40 Yes, I can make sure you're happy to
Speaker 1 00:06:41 Be great to see you again, by the way. The other thing Jack's doing right now, I hope you don't mind all this praise Jack. I just have to, the other thing, Jack is teaching a Bitcoin course at duke. I mean, it's just incredible. They call them house courses. You can talk about it more if he wants and students are it's, it's standing room. Only students are just dying to get in and he's teaching them a, was it a once a week, two hours, two and a half hours, uh, mostly about Bitcoin, but crypto starting with the techniques, but also going into this history is that there's just a fabulous, uh, he's an expert at duke. I'm sure he's an expert actually nationally. So, um, he asked me, I'm very humbly said, yes, I'd be glad to co-host this, but he's teaching it. He's teaching all, you know, all of it.
Speaker 1 00:07:28 I'm just coming in with this. Fuddy-duddy a perspective on the gold standard. Um, I kid I kid a little bit here, but so that's the other, the expertise is such that you put together a syllabus put together readings and these students are just loving it. So I don't know what Jack's future is, who he could be an entrepreneur in crypto, or he could be a teacher or it could be anything in between. And, uh, Jack welcome. And I thought I would just start with a couple of questions to you, but my hope really, and this is a 90 minute thing, Jackson, I hope it's not too burdensome for you. I thought I would just introductory questions, get it going, get it moving. And then, and then, but then gradually see the floor to you and let you elaborate on any aspect that interests you. And then there's going to be a bunch of questions. There's going to be a bunch of feedback, questions, maybe pushback. And if you're comfortable fielding them, um, I'm sure you are because you've heard them from me Jack. You've heard every objection from me. Right. So, um, anyway, welcome, welcome. Welcome to the Atlas society.
Speaker 2 00:08:35 Thank you. I'm happy to be here.
Speaker 1 00:08:36 What is cryptocurrency? Just what is it?
Speaker 2 00:08:41 Well, I kind of simplest base explanation for cryptocurrency. Well, the crypto in currency comes from the fact that cryptocurrency is basically a digital currency that is cryptographically secure. So basically the computer network that operates the cryptocurrency. I mean, you've probably heard of this thing. It's kind of blockchain. Most cryptocurrencies, they run on, what's called a blockchain and the security that then goes into your kind of account within this cryptocurrency or making transactions. That's all done using cryptography. So now actually a lot of cryptographers in the field, they hate the term cryptocurrency and they hate the term crypto since it's kind of been co-opted by them. Cryptography is actually a fairly small part of cryptocurrency, but that's kind of the basic that cryptocurrency is pretty much just a digital currency that is cryptographically secure and has no central authority. And that's where a lot of debate comes in since
Speaker 1 00:09:44 The, the decent, the de-centralized versus.
Speaker 2 00:09:47 Yeah.
Speaker 1 00:09:49 So the first time I heard crypto Jack, I heard it. I thought, well, that's like code breakers, there's a secrecy. Um, right. And that's a big part of it, right? But not in a nefarious way. The crypto part of it. And this sense is you might put it as no it's security, just like you wouldn't want people breaking into your house or your safe deposit box, the crypto part of cryptocurrency. Good thing. You're a good thing you're saying maybe not the right word.
Speaker 2 00:10:16 Yeah. The cryptocurrency part and crypto is pretty much just with its security. And now from there on, there are obviously tons of different kinds of cryptocurrencies and we'll get into that. But there are cryptocurrencies that are aimed at being private obviously. And one main misconception with Bitcoin actually is that Bitcoin is anonymous. Bitcoin is in no ways, anonymous, I've shown professor Salzman. How I can kind of look through transactions and pretty much it's linked to a pseudonym. So there are a lot of these misconceptions around it. But, um, yes, within cryptocurrencies, that huge big umbrella term, there are obviously a bunch of different kinds and some of them are private and th they kind of all serve a different purpose or at least say that they do.
Speaker 1 00:11:02 Now, the other thing that interests me, Jack, I've told you this before crypto currency. So now everyone knows what a currency is. They have them in their wallets, or they used to those little paper things, you know, with, uh, George Washington and Alexander Hamilton on them. But this is such a high tech thing. Currency is kind of like old fashioned. Like why is that even part of the definition? But I think it's for, for maybe epistemological reasons, unless people think of it in terms of what crypto, what is that it's mysterious, but currency, they know what currency means. And if they're thinking this is a different kind of currency, uh, both of those words are very crypto is like modern and mysterious currency is like, uh, pedestrian old. We've had it forever. So the term I'll come back to this later, when we talk about Bitcoin and mining and things like that and wallets it's to me, Jack, I think I've told you that the terminal all terminology is interesting because it's still uses old terms almost to make it more real to people.
Speaker 1 00:12:02 What the heck we're talking about. And I think we have some philosophers in the room who were interested in the use of concepts and where their concepts are tied to reality or not. And when it comes to money, money can be pretty abstract, but if you can concretize it down to barter and gold and representations of gold and then Plaza and credit cards, and that all the way up to crypto, we're talking about more and more abstract forms. And I think the question from some of the philosophers will be, is this thing tied to reality in the way that people thought the gold standard was? All right, let's go to Bitcoin where you're really a specialist fair to say, Jack, is Bitcoin a type Bitcoin, particularly a type of cryptocurrency? Or is it something else?
Speaker 2 00:12:44 Yeah. So Bitcoin Bitcoin is the first ever cryptocurrency. It's kind of what started this whole thing off and kind of just to touch on a bit of what professor Salzman just said about whether cryptocurrencies can kind of be called currencies. We're going to, we I'm sure we're going to talk about that more, um, later on, but I personally believe that the term cryptocurrency is a misnomer misnomer.
Speaker 1 00:13:07 I don't think I've heard you say that. I don't think I've heard you say about that before. That's cool.
Speaker 2 00:13:13 Well, the reason is that most people in cryptocurrency would completely agree since I'd say 99.9% of cryptocurrencies are not actually trying to be money of any, they're just simply these tokens that are, and this. So we'll go more in depth on this one. So kind of move off to Bitcoin. But most cryptocurrencies aren't actually trying to be big, trying to be money. Now, Bitcoin is trying to be money and that's where people disagree on it. I personally don't know if it can be called money yet. And obviously with all the philosophers here, I can be an interesting discussion, but yeah, so Bitcoin was the very first cryptocurrency. It was pretty much now it was founded in 2008. It was finally launched in 2009. The founder, some of you probably heard Satoshi Nakamoto. That's the pseudonym. And no one knows who it is. No one knows who founded Bitcoin.
Speaker 2 00:14:09 I think that's personally one of the greatest parts of Bitcoin. The fact that there's no founder, there's no target associated. Since imagine you just created this currency that if successful threatens the strength of every government in the world, you would probably have quite the target on your back. So whoever's Satoshi Nakamoto is they stayed pretty smart by being silent. And without that leader, Bitcoin has been able to thrive, but yet Bitcoin is the first ever cryptocurrency. But what it really is, is the culmination of about 30 years of work in the fields of cryptography, even economics. And it really ties together these different fields. And then 2009, once the kind of technology enabled it, um, Bitcoin came into existence.
Speaker 1 00:14:58 It's interesting Jack, that, that the founder is it is himself or herself, a crypto secretive.
Speaker 2 00:15:06 Exactly. Now I've obviously got my theories about who it is, kind of everyone in Bitcoin has their theories. And it's fun. Since when Bitcoin was founded, it was founded on the internet and Satoshi Nakamoto, whoever is creator, whoever they are, they, you can track their progress with Bitcoin since they constantly were uploading their thoughts to this forum and interacting with the very first users. So you can look through the history of it and you can see kind of piece together details about Satoshi and you learn that sotoshi had very political motivations for creating Bitcoin and the very first block of Bitcoin that was mined a technical term that we'll get into. Um, there was a newspaper clipping from the, I believe it was a newspaper in England and it was a headline of banks on the brink of second bailout. So this was obviously following the oh eight crisis and just that alone in there as well as Satoshi's other kinds of writings that we can see on. You can tell that there's a political motivation for creating Bitcoin and as such many supporters of Bitcoin come from that political or philosophical thing.
Speaker 1 00:16:25 Yeah, we'll talk about that more, by the way, the room, the listeners, they're not all philosophers, so you need not be intimidated by, there are some economists here, political scientists, business people, commercial people, uh, artistic people. Um, why 2008? I mean, you mentioned the bank bailouts and by the way, one of the things Jack provides in this house course at duke, that initial paper really fascinated me, Jack, there's a paper by this pseudonym or this person laying out what, what he, she is doing, right. That was that a collective effort that it's not very long, either it's less than 20 pages. Right. But they they're writing out what they're doing and there's this document, right? It was one of the readings.
Speaker 2 00:17:14 Yeah. This, the white paper that was
Speaker 1 00:17:17 Released.
Speaker 2 00:17:19 Yeah. It's called the Bitcoin white paper. And it was released in 2008. And then Bitcoin, the very first transaction or the network itself was then launched in 2009. But the white paper was what it got, got it all started. And when Satoshi wrote this white paper, he sent it out to this mailing list. It was called the cypherpunk mailing list. And now this
Speaker 1 00:17:41 Not cyber, but cipher cypherpunk. Yeah.
Speaker 2 00:17:46 The individuals who the motto was cypherpunks write code. Basically. What that means is that they were people mainly again, cryptographers programmers who were focused on ways to use technology, to increase privacy, um, protect individual rights, things like that. So Satoshi must've been a member of this mailing list. And this mailing list had individuals who had been working towards Bitcoin. One person who could be Satoshi, who was on this mailing list. He invented this thing called bit gold. There's another one called be money. Now these were things that came around in the early two thousands, but they didn't solve this thing called the double spend problem, which Bitcoin was the first ever to do. And it's why it is now the largest cryptocurrency and what really started cryptocurrencies. But Satoshi sent this white paper then to this mailing list. And very few people responded back. I mean, I'm sure if you saw this paper explaining this brand new global currency, you would think it would be a scam too. And so did everyone on that mailing list except for a small few who then working with him or her it's taken off since that,
Speaker 1 00:19:04 Uh, Jack told me once I hope this is not telling tales out of school. Jack told me once, maybe three, four years ago, first time he heard about it, he said something like, that's the dumbest thing I ever heard in my, according to you correctly. And it must be a scam. Okay. But now he you'll, you can tell, he thinks it's one of the most amazing things ever invented. So that journey, that journey alone, Jack, from an intellectually curious and smart guy, like yourself, is a lesson to all of us. Any idea that initially if strikes us as that's just crazy, um, then you think about it more and you research it more. And I know you had, I know you have, it's kind of interesting just as in term, it's not just intellectual curiosity, Jack. I think one of the things I admire in you is the open-mindedness of thinking, well, let me look at the evidence, but not so open-minded that your brains fall out. Um, so that's a hard thing to, to balance. Now, do you get any impression of Bitcoin by the way, the language Bitcoin is, I mean, coin is more concrete than currency even cause currencies were created as convertible into coin, into actual weights of precious metals. Bit, bit, I assume comes from bits and bites. Is that why they chose bit?
Speaker 2 00:20:21 And I had a great little, um, mammalogy behind Bitcoin, but I'm forgetting, but pretty much it is just a computer term and that's, and then pair it with coin. Okay.
Speaker 1 00:20:32 That's kind of clever. It's like two worlds that I dunno. It's like Reese's peanut butter cup. It's like chocolate and peanut, but it's a wonderful calm. All right. So say, say a little more, why you write for Bitcoin magazine? I read all essays twice. They're just brilliant. So I highly recommend anyone on this call go to Bitcoin magazine and just search for Jack Kriesel K R I I E right. S you know, they're just brilliant. Why are you particularly enamored of international way Bitcoin, because there's many others, right. A theory. Um, and so make the case. Why, what is unique about Bitcoin versus?
Speaker 2 00:21:13 Yeah. So this is a question that I'm often asked and a lot of people within the cryptocurrency space are asked this and my beliefs about this stuff would differ greatly from any other people involved with this. And I just certainly have a lot of different opinions than people in this space, but I strongly support Bitcoin. And it's the only one that I hold. And there's a reason why it's the only one that I hold when it comes to all these other cryptocurrencies, because what I'm focused on mainly, and why Bitcoin interests me or cryptocurrencies in general is because I think our money is broken. I think the Fiat, current Fiat standard from talking with professor Salzman and then some of my own research, I think that system is broken and out of all of these cryptocurrencies, Bitcoin is the only one that even has a shot at having any impact on that changing the current system or being money.
Speaker 2 00:22:07 The reason I say that Bitcoin is the only one with that was the circumstances that came together for Bitcoin's creation. Can't be replicated by any other cryptocurrency. It's either going to be when it comes to a cryptocurrency threatening, any current paradigm, it's either Bitcoin or bust. Bitcoin is the first ever example of kind of absolute scarcity in history. Bitcoin is when Bitcoin was created. Since I see this question, um, in the chat there own, when Bitcoin was created, they're only ever going to be 21 million Bitcoin currently about 19 million Bitcoin have been mined every 10 minutes, new Bitcoin is released and just circulation. And every 10 minutes, that number is about 6.25 Bitcoin. Now that number progressively gets slower. Every gets cut in half every four years. The closer we get to that 21 million. Now these rules, this Bitcoin's monetary policy has been set in stone from the beginning.
Speaker 2 00:23:12 It's never changed. It's had the same exact graph. In fact, I could write out the equation that spells out Bitcoin's monetary policy. You can't do that with us dollars. You can't do that. Even with gold. I know exactly how much Bitcoin there will ever be. Now, obviously 21 million that can never be used as a worldwide currency. We have a lot more than 21 million people, but each Bitcoin, you can't really think of it as one Bitcoin, since it's perfectly divisible into a hundred million smaller units, that's how you can micro-transactions. And I noticed that question in the chat that said, well, obviously, Bitcoin it's cap 21 million wouldn't you have deflation. And that's a conversation we'll probably get to later when we start debating this. So I won't touch on that now, but for now why Bitcoin is special. It's because of those things that came together to create Bitcoin, every single current cryptocurrency.
Speaker 2 00:24:10 Um, for example, a theory of Ethereum is the second largest cryptocurrency by market cap. Um, when I talk about their monetary policy, I have no idea what it really is because it's going to be, it's going to change in a few months in their history. Their monetary policy has changed. I think it's been seven or eight times since they have a group called the Ethereum foundation that has, um, that pretty much has a lot of sway or power over the network. Bitcoin has none of that. There's no Bitcoin foundation. Well, there is, there are people who call themselves the Bitcoin foundation, but they don't actually do anything. And so Bitcoin, more so than any other cryptocurrency has a chance at being money. And now we're talking about whether it can actually be money. Obviously. I don't think it can be considered money by any means. In this instance, even though I have used it as a currency and I, as I told professor Salzman, and that's how I was initially introduced to Bitcoin in the first place,
Speaker 1 00:25:07 Um, a couple things, um, uh, there's a, you know, that job is a part of the current course I'm teaching where we talk about whether things are organized by spontaneous order, still order or deliberate design. Bitcoin's kind of interesting, cause there's a little of both, isn't it, Jack, we haven't really talked about this, but it was designed by Satoshi. It has an algorithm. And as it has, I never heard you use this phrase before. I love it. It has a monetary policy, but, um, uh, we usually think of only central planners having that, but I, I was in banking for many years. They had a credit policy, they had a lending policy, they had a cashflow balance sheet management pause at what, what did it mean rules, rules by which to govern themselves prudentially and you're saying, and I think it's true. The more I've investigated it.
Speaker 1 00:25:59 And you've taught me, Bitcoin has a very interesting embedded a series of algorithms that, that give it, these features that look by the way, suspiciously like the gold standard. So we can talk about that, but talk about the 21 million and the fact that 19 million have been created so far. I think the forecast I heard from you is even though in 12 years, 19 of the 21 million have been mined, you expect it to take a hundred years for the next 2 million to be my, is that something, is that kind of a mathematical thing about the ACM tonic, you know, that has of where it goes slower and slower over time giving it more stability potentially.
Speaker 2 00:26:48 Yes. So while professor Salzman was talking about that, I decided just to sketch out the exact equation, not sure if that's the exact equation that specifies Bitcoin's monetary policy, it's been that same way since the beginning. And that basically says that every 10 minutes, X amount of Bitcoin is released through the process called mining and then every four years worth of that, or every 200,000 blocks, that number is cut in half now. Asymptotically, if you were to sketch that out on a graph, it would have that asymptotic shape and most Bitcoin will be mined by 2030. After that very little new Bitcoin will really enter circulation. The final Bitcoin is going to take, I think it's something like 60 years to mine that last of the 21 million Bitcoin. So the idea and speaking with professor Salzman a little bit about this, one of the main criticisms of Bitcoin is always that it is so volatile.
Speaker 2 00:27:50 Well, I think that's one of the worst criticisms of Bitcoin because it's inherently designed to be volatile. It has no intrinsic value, every all its values, just from what the free market determines its price to be at the time. So when you have a good like that, you're obviously going to have fluctuation based off economic condition people oh, sentiment. But then as I just said about Bitcoin supply schedule, imagine every four years it's inflation rate where suddenly cut in half, that's going to lead to even more volatility. And because of that, every four years, Bitcoin is incredibly volatile. And that's when all of us start hearing about Bitcoin. The first time many people heard about Bitcoin was back in 2017. That was one right after one of those having events and the price of Bitcoin skyrocketed. Since that, um, since the amount of Bitcoin entering the ecosystem cut in half, that's going to change the supply demand dynamics.
Speaker 2 00:28:53 And at that time, many people weren't under aware of what was happening with Bitcoin. So it became an easy thing to trade since the price suddenly became incredibly volatile and that process happens every four years. That's why, again, in 2021, after four years after 2017, we had the next big spike in Bitcoin's price since, um, it con the, the housing cycle creates these incredibly volatile, just hype cycles, which was in the design of Bitcoin from the very beginning. So Toshi could have designed Bitcoin to just gradually B get to that 21 million number. Instead, he decided to have the supply, the new Bitcoin entering, just get cut in half and half. That's a pretty dramatic Shift. So it's designed to be volatile in order to just get people talking about it since if they weren't volatile, no one would care. No one would be gambling on it. No one would be doing all the things that they are doing with it.
Speaker 1 00:30:02 I then to die the first time you told me that I remember the first time you told me that I am, my head was I, I can't believe that was designed, but I get the idea. You launch this thing. It ha it has embedded rules in it. And you don't have any marketing department, uh, you know, any PR firm promoting it. The idea that someone would say, no, this will attract attention. If there's volatility. On the other hand, those of us who know the principles of money say, well, re the only people, the only reason people converge on money in the past is that it has some stability. So what's going on here with Bitcoin, but Jack I've studied the charts. And I saw the same thing relative to this principle of having, having cutting and half the mine. It goes up to 60,000. It comes down to 35.
Speaker 1 00:30:54 It goes up to 60,000. It comes down to 45. But if you drew a line through the trend, the trend is upward. The trend is undeniably upward. Of course the bubble people would say, yeah, that's true of all bubbles. And then it crashes. But I do see that fluctuation in there. I remember one time at coffee. I asked you if that every four years cutting in half is in the system. Doesn't the market know that, and couldn't you train around it. And I think your remind me of your answer. I think your answer was yes, but that's a good thing.
Speaker 2 00:31:24 My answer for that one was that it was certainly a tray that you could make a few years ago since there was not much information around Bitcoin. Not as many people knew about it. Obviously most people who had bought Bitcoin didn't even know that about this process called Halfin, which was leading these
Speaker 1 00:31:40 Cycles by this,
Speaker 2 00:31:42 By this point, all that information is going to be priced in. Now you may see some difference. The next housing will be in 2024. So you may see some difference there, but a fairly popular opinion in the Bitcoin community is that there's no, we're kind of done with these four year, every four year, this crazy insane hype cycle. And I saw on the chat that there were a lot of questions about where this 21 million number came from. Kind of, there's a reason why Satoshi chose 21 million. I'm not fully sure what that reason is. I need to do more reading on that, but that number has been in Bitcoin source code from the very beginning. So that has never changed. It will be 21 million. And the way that that number is just set in stone is that that process of mining, the new Bitcoin that's released, it keeps getting cut in half. It's gone that way 12 years without any hitches. So I expect it to continue to do so. And until we get to that 21 million.
Speaker 1 00:32:44 Interesting, I want to mention two things, Jack, and then get back to you. I, I want to mention two things to the audience, connecting other things to Bitcoin. That might be interesting. One is which is more recent and Milton Friedman who won the Nobel prize in 76 Chicago school known as for free market guy, which he generally was. But interestingly in money where he specialized, he was not all that free market. He, um, was against the gold standard. He wanted Fiat money. He wanted central banks, but he wanted them to behave themselves. I think he was kind of naive about whether they would, nevertheless, once they went off the gold standard in 71, which he wanted them to do, he had a rule that said, please, please increase the money supply 3% a year, every year. And don't vary from that that's Bitcoin. That's what Bitcoin does.
Speaker 1 00:33:42 So whether it's a Toshi is a gold standard guy or a Milton Friedman goal, um, money supply growth rule guy, that Milton Friedman type stuff is in there. It's it's basically, I think Jack we've talked about that. Um, it's in there and of course Friedman would say by the time he died in 2006, he'd say I never did get any central bank willing to just increase the money supply 3% a year or whatever he wants. So Friedman's view was the economy goes 3% a year. If we get money to grow 3% a year, there'll be no inflation or deflation. We just can't get these people to follow that rule. A 0.1 0.2 crypt, uh, Bitcoin also has a gold standard principle in it. And I don't know whether it's a Toshi knew this either, but here's the principle. And one of the reasons the world converged on gold as a standard over thousands of years, not just a hundreds of years gold.
Speaker 1 00:34:44 And you could say silver as well. Gold is the only come on. Think of this. Now is the only commodity ever mined by humans that is mind accumulated and not used up. Think of that. It's it's produced and accumulate it piles up. You will have gold. All the gold that's ever been mined out of the earth still exists above ground. Now some of it's been lost at sea, but people spend billions lots of money going to find loss gold. Okay. What does that mean? Like if oil is produced, we burn the oil. If wheat is produced, we mill it and eat it as bread gold, just acumen. Now, what does that mean? It's also a depletable resource. It's hard to find gold. The more gold you find. It's harder to find the next load of, and there've been gold rushes and things like that. But, but think about the math of this.
Speaker 1 00:35:41 Now, if the base or stock of gold is going up every year, it is because it's accumulated not used up. And the mining, the increment, so to speak is just a small increment. Every year. The last time I checked, it was something like 2%. Meaning the amount of gold that came out of the ground was only 2% of the above-ground gold stock. Now, what does that mean? Over time? Over time, that number is going to go down 20 years from now. The increment might be one and a half percent, 40 years from now. It might be 1% 50, a hundred years from now. It might be a half percent. You see the idea. It has the same. Interestingly, it has the same asymptomatic principle that Bitcoin does. It's it's remarkable. So I named this only because I named the two schools of thought, if you will, the Freedman monetarists and call it the Austrian gold-standard folks who want sound money, who have identified this principle and it's actually in Bitcoin, but Bitcoin is an entirely different kind of medium. I recognize I just want to tie it back to those two, because two of the ex I would say Jack, to the extent Bitcoin has credibility and put it this way. Metaphysical credibility anchored in the facts of reality is because it shares either. And maybe both the Friedman principle and this very interesting gold principle, but, um, back to your story, well, let me leave it to you jet, where do you want to take this next? Having said what we've said, what do you think the next most important points to make would be?
Speaker 2 00:37:18 Um, I think I can look at a few of these questions in the
Speaker 1 00:37:22 Chat
Speaker 2 00:37:24 Maybe about since I think maybe a good place to start would kind of just be talking about why Bitcoin has value since that's obviously one of the first people, things people wonder, and I thought it was completely worthless again, as professor Salzman said, the very first time that I ever interacted with Bitcoin the first few years, even hearing the word Bitcoin, it was the dumbest idea ever.
Speaker 1 00:37:45 Jack, Jack, Jack. Why did you think that? Why did you think that at the time?
Speaker 2 00:37:50 Because why wouldn't I think that it's this, I, it's not real. I can never touch it. Why is this, how does this
Speaker 1 00:37:58 Tangible?
Speaker 2 00:37:59 That's a big barrier for people. And then I thought, well, who can control it? What if I just decided to create a Bitcoin who gets to create Bitcoins? That's another question people have, but then kind of, as I did more reading and research, um, I then saw that Bitcoin does have a value. And the first time I ever got on, I told professor Salzman this story. But I first, my first, the reason why I started on this journey towards understanding Bitcoin and becoming a supporter of Bitcoin was that I actually used it on,
Speaker 1 00:38:36 Oh, this is the girl. This is Jack. This is a great story. Yeah. Cause I, I remember telling you, it's not like you looked at some price charts and said, Hey, I think I'll take a flyer on this crazy investment. Yeah. Tell this story. Cause it's, uh, it's almost like a bottom up story Jack, right?
Speaker 2 00:38:53 Yes, definitely. So my, the reason why first needed or refers use Bitcoin was because I needed to use it. Now I didn't necessarily need to use it, but the only way for me to deposit money onto this online poker site was through Bitcoin. And this is actually a very similar story to most people who got into Bitcoin. Since again, the very earliest people who got involved with this were the people who use Bitcoin since they couldn't use any other currency. You couldn't use dollars with your credit card to send to this offshore poker site. I use Bitcoin since again, no one can censor or restrict any transactions. So Bitcoin is a perfect currency for that. So once I bought Bitcoin, it took me forever to figure out how to do it. And then once I sent it to this poker site, I kind of just was amazed.
Speaker 2 00:39:46 I just sent money somewhere, halfway across the world and it didn't go through any bank, no government and forced it. And no one told me I couldn't do it. That was a pretty special thing. That was pretty cool. And then kind of after doing more research on that, I think it was very good that the way I got into Bitcoin was through using it. Most people, not most people involved with Bitcoin or own it, they're only in it because of what's called NGU technology number, go up. They just care about the number and their account balance going up in dollar terms, they're never going to actually buy or sell anything with Bitcoin. They just obviously want to make a profit. They think it could go up, they're speculating it with it. They're gambling on it. That's most people, people who get into Bitcoin through that means I can understand why they're hesitant. They're skeptical about this thing. But if you start, if you get into Bitcoin by kind of using it first and then begin to see the, I hate saying this word investment side of it, and I'll speak more on this later because I do not consider Bitcoin to be an investment in any way, but I think it was a very good way that I got into Bitcoin, but
Speaker 1 00:41:00 That's interesting. And I, uh, and I would add when in the history of gold, the same thing happened. I mean, some people looked at it as a monetary thing, but it was an investment speculation where some people do now, it doesn't necessarily invalidate it as a monetary thing. Jack, I think since you're talking, it might be easier for me to read the chat, but I'm glad you alerted me to the chat. So let me kind of pick off stuff that you might be able to answer quickly. Sharon asks, how is the value of Bitcoin determined?
Speaker 2 00:41:30 Yes. So the value of Bitcoin is determined pretty much as any item in any free market is what one person is willing to exchange that item with another person. And now how do you get to that? Well, first let's talk about gold actually here. Where does Gold's value come from now? Obviously gold has an intrinsic value for its manufacturing use, but is that where all of Gold's value comes from, and this is honestly geared towards you, professor Salzman, as it expert on gold, where does Gold's value come from? It does not all come from the manufacturing purpose. Then there's obviously a monetary premium associated with it. So where does that come from?
Speaker 1 00:42:16 And it's also interesting Jack that people say, well, we went off the gold standard 50 years ago. So why does gold have any value? Notice the premise, the premise is gold. Must've had its value because it was connected to the dollar. Now it's the other way around the dollar had its value because it was connected to gold. Why? Because gold had a basic value that didn't fluctuate much. So no, no surprise. When they went off the gold center, when they delinked, it was not gold, but the dollar that fell in value and that's reflected in the higher dollar gold price, by the way, Milton Friedman predicted that after we went off the gold standard, the gold price would plunge from 35 to $6. It went from 35 to $800. So he was wrong. He too thought that the dollar got its gold. Got it. The value from the link, not the other way around.
Speaker 1 00:43:07 Um, interesting answer, Jack. I think also you might, this might be a good time Jack, to talk about supply. I understand you said it's an algorithm that has a fixed growth in the supply, but say a little bit about what the miners do. And by the way, another concept I find so fascinating using the word miners sounds like gold miners, gold miners, going into the mines, you know, bringing out gold, but there, that word is used in Bitcoin. Kind of explain how that works and maybe include this discussion of the using up of energy of electricity and these farms.
Speaker 2 00:43:45 Yes. So mining is obviously a term in Bitcoin that is very difficult to understand. At first it's not you, you're not using a pickax on a computer to get little golden coins that come out of it. That's what I initially thought Bitcoin, but I was very wrong about that. So Bitcoin mining is essentially a process by which new transactions are added to the network and the network is secured. So in order to explain that just a little bit about kind of the Bitcoin network and how the technology works. So basically Bitcoin is this network of computers running a copy of the same ledger, basically a huge book. Now in that book that all of these computers around the world are running. It has a list of every transaction that has ever occurred on the Bitcoin network. So now when you have a list of every single transaction and you have transactions by sending Bitcoin from one address to another address, and anyone can create an address or do anything like that. So with this list, this ledger of all of these transactions, you can see how much Bitcoin people own. Now, obviously it's not linked to your identity. It's, uh, um, about 16 alpha, um, numerical hash. But after that,
Speaker 1 00:45:09 So Chad, so Jack, sorry to interrupt. It's a combination of letters and numbers. And if I was in the system, I'd have my own Salzman would have his own alphanumeric string, which you can trace through the system. You can't, you can't tell it's me, but you could tell it's this same person or whatever, doing these like a Swiss bank account with a number of
Speaker 2 00:45:33 See that when an address is doing something, but if anyone's even remotely savvy with this, you're able to obscure pretty much everything about your identity. Like me personally, when I'm making a Bitcoin transaction, there's pretty much a 0% chance. Anything would ever be traced back to me, right? Like that. But when yeah, so everyone has an address and most people and obviously their apps and websites and software that has been created to make this a much easier process. Since in the early days of Bitcoin, it was very difficult to use. It was very clunky. You, you had to eat, you had to have programming background to use it. But nowadays there are apps that make this extremely simple
Speaker 1 00:46:15 User friendly. User-friendly another phenomena, another phenomenon Jack of a more widely accepted, uh, serve it, right. Cars in the beginning, you had to hand crank them men, but then they automatic transmission is yeah. The whole point is we need to make this user-friendly. So we sell, we extend the asset, we move it. Yeah,
Speaker 2 00:46:35 Exactly. And, um, Bitcoin's still very, very young. It's only 12 years old, pretty young for something that has had this much of an impact on the economy thus far. But, um, anyways, kind of with our discussion of the technical side. So with your address now, to prove that you are the owner of that address, you have, what's called a private key. Each address has a public key and a private key. The public key makes up that address and is what other people can see on the network. Things like that. But your private key is how you access your Bitcoin. So your Bitcoin that's stored in your address requires a key. Now that key can be held on your computer. It can be held in your phone, or if you want even more security, it can be held offline. So it never touches the internet and kind of a USB thing like this.
Speaker 2 00:47:26 There are a bunch of different, um, kind wallet, ARD where things like that. And I noticed a question in the chat that I wanted to touch on just real quickly, where someone had said that a Bitcoin wallets or the Bitcoin network has been hacked. The network has actually never been hacked and not a wallet native to the network has never been hacked. What has been hacked are companies that have created custodial wallets. So basically their own wallet that holds your Bitcoin for you, but anyone who holds their Bitcoin directly, none of their wallets has not a single one of their wallets has ever been hacked. But obviously there are tons of examples of third-party services that will custody your Bitcoin for you. That had been hacked all the time. So that's a common misconception, but basically the security, the hashing algorithm that secures Bitcoin, it's the same one used by the NSA by pretty much every government agency. So if that were ever hacked with Bitcoin, getting hacked, then we'd have a lot more problems in the world then where your Bitcoin,
Speaker 1 00:48:33 Because everyone would be, you're saying everyone will be happy. The Pentagon would be hacked.
Speaker 2 00:48:37 Yeah, your bank accounts, everything would just be poof up in flames. But now back to our discussion of mining. So we've got all these transactions and how then do new transactions get put on this ledger? There are no banks, there's no third party that decides what transaction gets to put on. Right? Instead there's this perfectly competitive market of computers around the world. Individuals, anyone can participate. Any individual can devote their computing power, the processing power to the network and in doing so, they become involved in this game. The goal of the game is to guess this long string of numbers, every 10 minutes. So every 10 minutes, the transactions that have occurred on the network recently are pulled together. Now those transactions need a home. Those transactions need to get added to the ledger in order to do that one, one of these computers around the world, the very first one to guess this random number they need to guess gets to put that transaction on the network.
Speaker 2 00:49:45 So that's how you ensure this competitive decentralized system for validating transactions to where no one, there's no way to sensor any individual transaction. And to keep up the security of the network. Since in order to hack the Bitcoin network, you need to rewrite basically the book that ledger of transactions and think about it. If you've got a copy of this book stored on thousands of computers all around the world, you would need to rewrite it on all of those computers. That seems fairly impossible or at the very least implausible, but I don't think that could ever happen. So that's why I'm very confident about Bitcoin ever getting hacked or anything like that. But yeah, that's basically how mining works. And now the process for running those computers is what requires the immense amount of energy. And that's where a lot of the debate around Bitcoin is right now, since it's very true.
Speaker 2 00:50:48 Bitcoin uses a lot of energy. Now, the amount of energy it uses pales in comparison to the current financial system. Since again, what's behind your bank account on your phone, there's a massive computer farm hosting your data. All of that. It's not just magically there on your phone. Bitcoins is just a little bit more visible and people have been caught there. I have a great collection of articles spanning five years back of every single time someone has claimed that Bitcoin mining will use up all of the world's energy by 2020. Obviously we're here meeting the owners. We have used up all of our energy. And so it's good for now, but one thing that I do say, and yes, I see that question in the chat exactly. The current financial system hosts way more transactions in Bitcoin. And even when you break it down to the individual rate, the current financial system uses way more. But remember the process for mining. It's not something that's going to happen forever opposite. Oh, oh, sorry.
Speaker 1 00:52:01 Say it again. Okay. Go ahead.
Speaker 2 00:52:05 Um, on an apples to apples basis, Bitcoin mining and use is incredibly inefficient and it is it's in many ways I in inefficient that's there are people who see the need for it. The market purchases, all the electricity, it uses the free market purchases, that energy. So whether that's an efficient use of resources, that there can be a debate on the cost basis that you were discussing earlier. Yeah. Like on a per transaction basis, Bitcoin uses so much more energy than a financial than a single financial trends.
Speaker 1 00:52:43 Yeah. Okay. Let me just, can I just intervene here? That's a really good point. Let me just intervene here. Contextually. When the gold standard existed, critics said, it's costly. What the hell? Why are we doing? We mind goal. We store it. We move it. This is a cumbersome inefficient clunky system, but it was one of the greatest monetary systems ever created. Milton Friedman said that same thing. He said, this is ridiculous. What and Keynes, why are we spending all this money? Mining gold, putting it in vaults and not, uh, converting it into anything by then, there was not convertible built. And Friedman said, get rid of this gold standard. And the cost of issuing and managing money will plummet. This will be a great boom to the economy. Guess what happened? That he never predicted when you won't, when you go to floating exchange rates, you need foreign exchange traders and forecasters starting in 1971.
Speaker 1 00:53:55 Prior to that, nobody changed traded currencies because they were the same price every day. But also it led to big fluctuations in interest rates, big fluctuations and a whole bunch of other things. So the whole market think of thousands of people devoting their brain power to, uh, predicting futures and options and currencies and this and that only because we went off the gold standard and all just before he died, Friedman said, I never imagined that that would be a car. And he said, I think it's more constantly than the gold standard. So Jack, I just wanted to pitch in here and say, it's not that Bitcoin is costless. It might even be a little more costly than some other says, although Fiat money, you just print it, right? What's the cost. You just print this stuff. And now digital. So it's not necessarily an argument against, uh, an asset because it's difficult to create. I mean, if it was easy to create we'd hyperinflate Bitcoin wouldn't we Jack.
Speaker 2 00:54:58 Exactly. So one of the reasons why Bitcoin needs to needs to use that much energy is that that's the way it's secured. And also when Satoshi was devising, the way that people would acquire new Bitcoin, he had to figure out a way to distribute this currency of the world. The way he came up with doing that was people have to exchange a valuable commodity in this case energy for this new, wow. So
Speaker 1 00:55:25 You
Speaker 2 00:55:27 Actually had to put in work. That's why it's called proof of work. So that's the system. And also when it comes to the individual figures about, um, energy cost, a lot of times it shows the energy cost for per Bitcoin is on a transaction basis. But Bitcoin transactions don't is not what uses up energy. Bitcoin mining is what uses up energy. We could suddenly the whole world could start using Bitcoin and it would use the same exact amount of energy as it does right now. However, if more people start mining Bitcoin, then we'll use more energy. And the idea is that down the road, even if Bitcoin were to become this future global currency, which obviously very slim chance of that. But if it does, it would not use drastically much more energy than it even does at this point, since it is only based in proportion to the amount of people who are mining Bitcoin, since that's where the energy then is expense, not on the transaction basis. And that's where you get these crazy numbers for Bitcoin's potential energy use. When you start extrapolating based off data that you can't really extrapolate.
Speaker 1 00:56:40 It strikes me also Jack, that if we're only 2 million away from the cap, but that doesn't seem like a lot of mining is left to go. And the whole halving process every four years is we haven't said this yet, but how are the miners paid? How are they re remunerated? They're paid in Bitcoin, right? And, uh, but if the re remuneration do them is cut in half, which is, I think of what you taught me, told me, um, wouldn't the use of energy. I don't like the whole use of energy argument that who cares if it's a good product, use more energy, including fossil fuels. I don't care. But is that true, Jack, that you could come back and say, it's going to lose. It's going to use a lot less energy over the next 12 years versus the last 12 years, or is that a, is that wrong?
Speaker 2 00:57:29 It all depends on the amount of people, mining Bitcoin. And obviously as the price of Bitcoin goes up, more people will want to mine it so there to be more people mining it. But again, the profit margins and Bitcoin, since there's less Bitcoin being released every four years, there might be fewer people who want to mine it then. So a lot of people theorize that we might've hit a peak of the amount of computers, mining Bitcoin, and thus a peak in the amount of emissions by Bitcoin. But another thing about Bitcoin and why it can be a force for kind of this force for good, when it comes to energy, is that when it comes to renewable energy sources, a lot of issues that we currently have with renewable renewable sources is that is how to store them with solar batteries. It's incredibly inefficient. But imagine if you had this thing where with any excess energy you had, you can instantly convert and convert it into money. You just have a big mining farm right there,
Speaker 2 00:58:33 Rather than figuring out a way to store that excess energy that is extremely expensive. You instantly convert it into money in doing so. You create a far more efficient energy market. And that's why I like to call it Bitcoin, the energy buyer of last resort. He get all this stranded energy, wow. People that started doing that on oil fields out in Colorado and Wyoming with the flare gas from fracking. They just have these little huts of Bitcoin miners that are immediately converting that otherwise wasted energy into Bitcoin. But yes, Bitcoin uses a lot of energy and I think, and there's a reason why it uses that energy.
Speaker 1 00:59:16 Yeah. I think the other I think the other thing I've heard from you, which is, which is brilliant, is a, in cases where it's shut down or restricted, like in China, you're saying it it's like a squeezing the balloon. They just go somewhere else or they go somewhere else and they might be restricting the mining of Bitcoin, but not the use of it. It goes to the lowest energy cost in the world, which is exactly what a profiteer would do, Jack. Right. They're looking for, how can I mine this with the least, uh, energy costs? Um, I wanted to, um, Jack, if you don't mind, Lawrence asked a great question. It was a little earlier, but Lauren who's at Atlas society and I've worked with before and I love him dearly. So Lauren says cryptocurrencies don't seem to be a proper currency yet, in my opinion, the way people interact with it is more like one treats a stock.
Speaker 1 01:00:08 So this is back to this issue. Jakob, is it a money or is an investment? So here, Jack, I would just interject comment a little bit on the usual standard, traditional properties of money store of value, medium of exchange, unit of account. We all got this in college. These are the three things that money must be there's debates about what must come first. I think your view is sort of value must come. First stability of store of value, medium of exchange is just, what do we use in transactions? Unit of account is what shows up in the accounting in the, in the public, uh, accounting statements. Talk about that, Jack, how it relates to Fiat and gold. I know that's a huge topic, but is it money or just this speculative investment? And are we in a, you know, the internet bubble 1999, are we at the beginning of a amazing new currency? That looks a lot like, oh
Speaker 2 01:01:07 Yeah. Well, first of all, I think that when we think about Bitcoin as money, you have to think about it on a lot longer of a time horizon for when it comes to gold. We didn't just start, suddenly start using gold as money. That was a process that took thousands of years, honestly, to develop into this system that the gold standard became. And now that's something that arose about naturally spontaneous order we've discussed. And I'm your class professor Salzman. And I think Bitcoin is something similar to that. It's not money. It might never be money, but with the properties as it's it's Bitcoin has gone from a value of zero to now close to a trillion dollar market cap. Yeah. That's a pretty fascinating phenomenon. And yeah, as with the, as with gold Bitcoin has a specific narrative attached to it. People wouldn't buy gold and use it as money.
Speaker 2 01:02:04 If they didn't believe the narrative associated with it, we kind of all fell into this shared belief that gold, this shiny durable mark, um, metal rock had the best qualities to be money. And I believe the same is true of Bitcoin. And so I think that Bitcoin and gold will have that similar evolution. Obviously there are things that need to be worked out with Bitcoin just as just using our shiny rock in the ground. Suddenly didn't become this currency, right? So it has to be looked at in a long way, longer time horizon. And I've just think that the work that has been done in 12 years is already remarkable and does give me some hope at where this could potentially lead. But again, it's very difficult to use. Most people don't even use it as a currency. They've never even transacted with it. And it is just a speculative asset, but in becoming a speculative asset like that, it's driving a market value. You can see how much a Bitcoin is worth. It's one of the most free competitive markets that exist in the world. There are all these exchanges and it's very similar to gold. So there is a value to bit coin it's, whatever people are willing to buy or sell it for
Speaker 1 01:03:25 Couple of other questions, by the way, one of the things you have to read his essay called a Bitcoin early hope to separate money in the state. One of the things Jack says in there is very intriguing language. Bitcoin is gold 2.0, so he really has this knowledge of alternative monetary systems. And I think one of the most interesting formulations you had Jack was something like gold is kind of clunky, hard to move men, vast volumes across borders, but it has a stable value. Roy Jastrow many years ago, wrote a book called the golden constant. And he said, if you look closely, the purchasing power of gold has been amazingly constant for centuries, kind of like a yard stick, three feet every day. And he said, that's why they converged on gold as money because it has that property. And, uh, but you said, Bitcoin sell almost right now, the opposite, easy to move around, cross borders and all that kind of thing. But people are still questioning if, uh, the stability of its value. Um, um, what do you mean by it? Also, you say at one point it's the permissionless currency. I love that phrase. What do you mean permissionless and all your other essays on, you know, I kind of love Bitcoin is for the sovereign individual. Bitcoin is the patriotic thing to do. Bitcoin is uniquely American. I love that stuff, Jack, but elaborate. What do you mean by that? What is the connection between Liberty sovereignty and Bitcoin? Yes.
Speaker 2 01:05:04 So again, when I say permissionless that relates to the Bitcoin network, the Bitcoin network is completely permissionless. Anyone with internet access or even radio access can access the Bitcoin network. So obviously when it comes to that pretty by this point, pretty much everyone in the world can access the Bitcoin network, even people in countries where Bitcoin has been banned since it's a lot more difficult to ban the internet than it is to ban Bitcoin. And so anyone in the world can then get onto this network. And from there, as we've discussed with this process of mining, which ensures this means of transacting with people all around the world, without going through any centralized parties, that's how I believe it can be this great force for Liberty. Since if you can send a transaction and have no risk or no fear of that being censored, that's a pretty powerful thing.
Speaker 2 01:06:00 But another thing comes from being able to cause custody your value. And that's where I think Bitcoin is really special since Bitcoin, it is really easy to store large amounts of value and you are the full, um, you have full custody over it. If you try to store a million dollars worth of gold, that's going to be very difficult. That's all, it's going to be very difficult to move. You're going to have to find somewhere to bury. It's find somewhere to hide it, or you're going to have to give it to a bank, have them stored in a vault. But with Bitcoin, this little thing right here, this alone can store billions of dollars worth of Bitcoin. Sadly, I don't have billions of dollars worth of Bitcoin on there
Speaker 1 01:06:43 Someday, someday. Hopefully
Speaker 2 01:06:46 Even if you didn't want to store it on here, as long as you remember the recovery code to your wallet address, keep it up there. You're good. So imagine that you have this asset, this form of property that cannot be seized since with gold easily, you can cover rate someone's home, take it from them. You can have your bank account frozen. You can have that done with Bitcoin. So it severely limits government overreach in the sense that if people are able to custody their value, then there are a lot of there's a road that goes down. But
Speaker 1 01:07:28 Yeah, Jason, Jason asks, I assume, you know what a reserve currency means. Yeah. Is Bitcoin going to be the reserve currency among crypto? I think that basically means the alpha dog that wins out versus all the others. All the others become convertible into Bitcoin. I assume that's what you think about Bitcoin. Could you think is the premiere of all the crypto's? Yes.
Speaker 2 01:07:50 I think it's the premier when it comes to S potentially storing value and potentially serving as money, but a lot of cryptocurrencies, they have very different goals. They have very different aims and Bitcoin is just one of them coins. The one with the least amount of problems or issues I've seen associated with them, but who knows what we'll end up winning when it comes to incoming money? I believe Bitcoin is the only one that has up fighting shot. And also just from a psychological perspective, imagine a theory, overtakes Bitcoin. Well, now something's overtaking the top dog. What's going to overtake Ethereum. And then what's going to overtake the one that does that. But then its entire existence. Bitcoin has always been the market leader and you've seen that in the way the market operates when Bitcoin goes up in these, how the rest of the cryptocurrency market follows Bitcoin's housing cycles in 2017, the rest of the crypto currency market boomed in 2021 after Bitcoin's housing in 2020, the rest of the market did fall.
Speaker 2 01:08:59 So Bitcoin is the one that's the leader. And now with that question, when it comes to the reserve crypto asset, a lot of people believe that there will be a different cryptocurrency created that is kind of for everyday use. That's a lot easier to serve as a medium of exchange and a unit of account, but then Bitcoin will kind of just be gold in that sense I'm opinion. I don't think that's a very likely outcome since you're going to have to create that cryptocurrency. And for some of the reasons that I've discussed in this class, I don't think you could ever create a cryptocurrency again, that can serve as good money.
Speaker 1 01:09:39 Wow. Interesting. So, um, Ethereum, by the way, Jack, I mean the way you described the theory them earlier, it has a committee and they've changed it seven times already. If that's what people wanted, they wouldn't be buying Bitcoin. They would be buying federal reserve notes with a committee, ruining the thing every every eight weeks Timothy asks related question will the value of Bitcoin plateau once all the Bitcoins have been mined, well that's the AC asymptomatic point. Isn't it? Jack, would you predict that, that in the next 10 years? Yeah. Go ahead.
Speaker 2 01:10:13 Yeah. So when it comes to that, uh, the, there is some worry that once the, all the Bitcoins have been mined, what's the incentive to mine. Bitcoin, since again, mining is what ensures the network security. It's how new transactions are added. And, but the revenue for miners, it comes from that block subsidy, that amount of Bitcoin that is released from the original 21 million, but then another part comes from on transaction fees. So the idea is that once that block subsidy is all spent up, um, and that's very far down the road, but when that day comes, the idea is that Bitcoin has reached a tipping point to where the revenue generated from transaction fees is enough to support and incentivize miners to could still continue to contribute their computing power. But in that world where all the big point is mind, theoretically, if new Bitcoin is not entering the ecosystem by pure supply and demand, if the demand still remains for Bitcoin and the supply is non-existent crisis.
Speaker 1 01:11:28 Well, it's not, it's not, it's not that the supply is non-existent, it's not, it's not going up anymore. Exactly. Okay. So I would make the case, Jack, I suppose, suppose you knew next year it was at 21 million and all the hand ringers would say, oh my, oh my God, oh my God. And suppose the dollar wasn't being used anymore, another big assumption, they'll say this, all the terrible deflation is coming. What are they used to seeing? They're used to seeing the 1930s collapse of the money supply by 30%, the collapse of the money supply, not no longer an increase in the money supply, but a collapse by 30%, of course you're going to get a deflation. That was the paper dollar going off the gold standard off at, under FDR. So nobody trusted the de-linked dollar anymore. So I think you can make a case as Milton Friedman did.
Speaker 1 01:12:21 If the money supply is fixed Jack and the economy grows 3% a year. I mean just the math of it is so prices go down two or 3% a year. So what we often think of the CPI as the cost of living, the cost of living just went up 7% last year and people are complaining, right? Inflation 7%. What if it was 2% people would say, that's a lot better than seven. I can afford the basket of goods I just bought. But what if I told you with 3% less, the cost of living is going down, most people would love that. And so it's not a massive deflation of the kind that occurred in the thirties, but what's wrong with a George Selgin has argued this as you know, jacket at Jimmy, Larry White, the free banking peak, the gold center B. So what if there's a mild decline in prices over time? That means you can afford more stuff. You don't want to collab. You don't want a 30% collapse, but that is not what Bitcoin is proposing. So to speak. It's it's saying we're increasing the money supply and yes, sometime over the next 50 or 60 years, it might be fixed. But so what, it's not a bad thing.
Speaker 0 01:13:30 I want to just jump in. I don't mean to interrupt, but I want to wind up. We've got about 15 minutes left. I think Jamie has some questions, things I'd like to say. I'd like to open it up.
Speaker 1 01:13:39 Maybe, maybe take some verbal questions. Yeah, go ahead, Abby. Yeah.
Speaker 2 01:13:43 Oh yeah. Dr. Salzman product, a point that I think is really important. Uh, I also just want to say, I think it's so impressive how much Jack knows about Bitcoin, but I started off, I guess, in a similar place maybe as Jack, like a little bit skeptical, but unlike Jack, I think I've grown much more polarized against Bitcoin, specifically Bitcoin, but also cryptocurrency, but mainly Bitcoin for a very fundamental reason that, uh, Dr. Salzman just, just brought up on a very fundamental level from a monitor economic point of view, deflation is very bad. It's much like 7% deflation or inflation. Like nobody likes 7% inflation, but deflation is, is generally so much worse than inflation for the following reason. If you have on a very fundamental level, if you have the expectation of deflation, that means that everything you buy today is going to be less expensive tomorrow.
Speaker 2 01:14:37 That's what, that's what deflation is and that incentivizes and that fundamentally incentivizes hoarding. Um, that's a really big PR that's a really big problem. Uh, for business cycles. Deflation is one of the biggest reasons why, uh, the great depression in 1930s lasted, lasted as long as it did. And the, uh, and rather inflation at a very low rate or 2% is I don't, I don't mean to pose in such hard disagreement, but I think my disagreement is so fundamental. Like, um, if you have inflation, uh, I would, I would pose that it's good to have a low, positive, stable inflation rate to the extent that population is growing. If you don't, if your population grows while you do not have a positive inflation rate, uh, money is becoming more. And if your money is effectively becoming more and more scarce by definition, which is, uh, that's a, that's a fundamental reason why it's good to have a positive, uh, stable, low inflation. I'd say that.
Speaker 1 01:15:42 Yeah. Jake, I just, let me just interject Jake. I disagree with that entirely, uh, to advocate 2% inflation, you're basically advocating an increase in the cost of living every year for people. Why that, that is, that is improper.
Speaker 2 01:15:58 You also have nominal wage growth as well. Like, like when you think about real law, like yes, inflation increases by 2%, but if your wages increased by 2%, you've had no change in real time.
Speaker 1 01:16:09 Uh, that that's what we're facing now under the theater money system, I don't know why that's something you would endorse. Here's the point I want to make that neither the gold standard, nor I would say objective, you want, yah, neither the gold standard nor Bitcoin create inflation or deflation. They just don't why, because at the same principle I named earlier, they have this stock, the stock doesn't dissipate and it's incrementally increased every year. Brilliant. The most amazing monetary system you can imagine if Bitcoin can match what gold did the gold standard did amazing that system you're talking about. Jake is the Fiat money system. That's the one that creates two things, massive deflation and massive hyperinflation.
Speaker 2 01:16:58 And so when
Speaker 1 01:16:59 You say, when you say a 30% decline in prices is disruptive, of course it is, but it has nothing to do with the gold standard. It has everything to do with the feedlots standard and
Speaker 2 01:17:10 Wouldn't have anything. I don't have any, any claims against the boat. I mean, I think there are separate problems wrong with the gold standard. Um, I mean there are, there are, I don't feel very strongly about the gold Goldstein.
Speaker 1 01:17:20 No, but no, but Jake, the problems you're naming and deflation are in the Fiat's system. They're not related to gold or
Speaker 2 01:17:28 Where are we on the gold standard? And, uh, we're going to transition every period.
Speaker 1 01:17:34 No, the deflation of the 1930s was due to going off the gold standard Britain went off in 31 and everyone raced to get their money out of the banks. Guess why? Because the gold standard was going to be suspended. They wanted their money in gold. So it was the promise of promise. It was the threat of going to Fiat money that made people run the banks. So anyway, that's more of a historical thing we can argue.
Speaker 2 01:18:02 I think there are two, but there are two issues with that one. I, I agree. I agree with your assessment, but this was long before we had, uh, the invention of, of central, of, of, uh, independent central banking. Um, what independence central banking does. I mean, a lot of, a lot of macro economists retroactively say that if we would have increased the money supply on, uh, on, uh, uh, on the Eve of, or during, during depression that would have alleviated deflationary tendencies, I'd also just want to point out that Bitcoin by definition is deflationary. Uh, because there's a hard cap at 21 million,
Speaker 1 01:18:40 It's a ma it might be a mild deflation, but the difference between prices going down two or 3% a year and going down 30% is a huge difference. Jake and the latter occurred under central banks, mismanaging the gold standard and FDR and others threatening to go off of it. But, um, let's move on. Abby, do you have other,
Speaker 2 01:19:01 It's a pizza in 2010 would cost like tens of thousands of dollars worth of Bitcoin today. That's very fundamentally deflation. Also the deflation from Bitcoin. That's not imposed on anybody. You use Bitcoin at your own free will. You're not forced to use dollars either. No, you're not on the dollars. Then
Speaker 1 01:19:21 If you live
Speaker 2 01:19:22 Here, you're forced to pay your taxes. If you pay taxes, or if you live here, you have to pay taxes, you have to pay taxes in dollars. So in that sense, I guess you would be forced, but you with inflation under the Fiat system, that's then a decision that is being made with Bitcoin. That any deflation, if it exists, it's already been set into that system from the very beginning. And it's only being a not, and every anyone who uses the network has already opted into that network from sure. But that doesn't make it a good, that doesn't make it a good currency. No. Which is why I'm not saying that we should force everyone to use Bitcoin going down there and look and do whatever they want. I don't exactly. I'm just saying, is that a good currency? And my answer is absolutely.
Speaker 1 01:20:08 And let's remind ourselves and Jack May, you might want to mention the El Salvador case. It's not true, Jake, that you can use whatever you want. The legal, we haven't mentioned the legal aspect of this. You have to use the Fiat dollar. You have to that's what legal tender molars mean. They mandate that you use the dollar. You cannot use any other currency. Why do they do that? That's why it's called Fiat. The AAT means force. You must use our money, even though it sucks. Bitcoin doesn't have that Bitcoin doesn't demand that although Jack Jack, to your credit, I seen you writ right on El Salvador, which for some weird reason, just passed legal tender laws saying, you must use Bitcoin. It's ridiculous. No one should be forced to use any money. And if that were true, no one would use this stupid government money. The only reason people use this stupid government money all over the world is they're mandated to legally. It's called legal tender laws. People should look that up. You want to comment on El Salvador? Why did they do that?
Speaker 2 01:21:05 Yeah, definitely. And so what's important to understand about Bitcoin is that Bitcoin is neutral money. People are going to use it. However they wish to use it. Politicians are going to enact mandates a politician in El Salvador, a young politician who, from what I could tell beforehand, did not really understand a lot about Bitcoin saw that there was this huge community around the world who supported it. And so a very easy way for him to kind of build a base for himself. And he's had a massive, massive name. He was just recently in Turkey talking to Eric Rawan about Bitcoin. But a lot of Bitcoin supporters are very opposed to what's happening in El Salvador. But again, it coin is neutral money. So there are going to be bad politicians who force people to use it. Now, the way it's actually worked in El Salvador is that those legal tender laws, um, no, it forced merchants to accept Bitcoin in practice and has not been strictly enforced, but it is still terrible language to have in a bill. But Bitcoin is still a system that you opt into. Politicians are gonna force people to do things. They love doing that. So this is simply a case of what happened in El Salvador. And that's nothing that has nothing to do with Bitcoin. Since Bitcoin's neutral money, bad people are going to use it. Good people are going to use it. And it's important though, that everyone is able to use it and that no one can determine those people that get to use Bitcoin
Speaker 1 01:22:34 Jack. One of the things you said in your essays was the three part banned by China. And maybe I think you mentioned some other countries, you said this is a lesson in look at the countries that try to ban it. That should tell us something. Who are they and what does it tell us?
Speaker 2 01:22:53 Yeah, exactly. Most famous example, China, China has been very against Bitcoin and it's going to hurt them geopolitically. And let's think about China. Do they strike you as someone pro Liberty pro the ideals that Bitcoin stands for know if authoritarian countries were not banning Bitcoin, then I'd start getting worried. But, um, since then it would be seen as a threat. If you start seeing politicians speaking more about banning Bitcoin, that's when you can start thinking that, okay, maybe Bitcoin is actually doing something since once it's a threat, then they're going to ban it. That's why I was banned in China. Although banning the network, again, you can't ban the network. What you can do is you can ban the centralized companies that allow people to buy and sell Bitcoin. You can ban the companies that are mining Bitcoin. Obviously there are ways around that and stuff, but that's what you can ban. That's what you can regulate. You cannot regulate what's directly happening on the network. Since again, that would require rewriting that ledger on all those thousands of computers or
Speaker 1 01:24:03 So Jack, if you're in the CP, if you're put yourself in the CPC, what concretize for me? What is the threat in the, in the councils of the CBC? They're saying, oh my God, oh my God, we gotta get rid of what is the threat? What would they say? The threat is
Speaker 2 01:24:20 The threat that Bitcoin poses, um, primarily
Speaker 1 01:24:25 To the Chinese central planners. Yeah. What would they say among themselves? It's a threat out
Speaker 2 01:24:30 That people are able to send transactions without going through extensively, the CCP since, um, China
Speaker 1 01:24:39 system.
Speaker 2 01:24:41 Exactly. They use money as a surveillance tool. You obviously can't do that with Bitcoin. Another thing which we were talking about is how easy it is to store huge sums of money with Bitcoin. If I had all this money on here, think about how easy it would be to evade taxes. If I just had it purely in my mind where they can't then freeze that bank account, which is why in a lot of countries, um, Alexei, Navalny, he's a huge user of Bitcoin when Putin decided to, uh, freeze all of his bank accounts in Russia, he started raising money using Bitcoin since obviously Putin can do anything to change that. And so that's why obviously a country like China would be very scared of Bitcoin. Since money can be used as a means of surveillance, it can be used as a tool for censorship. And, um, well I noticed in our, in the notes for the webinar, we're going to maybe have a discussion on central bank, digital currencies, and
Speaker 1 01:25:43 Yeah. Say something about that because to me, Jack, that includes not, it's not the central monetary authority saying we're going to kill Bitcoin, but rather we're going to co-opt, we're going to, we're going to issue our digital and just take you take over. Is, is that a fair reading of what they're trying? How do you eat? Cause in one of your essays, you said that is one of the most authoritarian things you could imagine that we end up with. They just co-op the system, they just become the monopoly issuer of digital currency. They just overtake Bitcoin. Like they monopolized Fiat money. All right. Elaborate.
Speaker 2 01:26:24 Exactly. So Bitcoin and central bank, digital currencies, they could not be more different Bitcoin. Its value is purely determined by the free market central bank, digital currency. Exactly. Like the dollar value is just simply what the government says it is. And it's also issued by a government it's issued by a party that decides to, that can manipulate its supply at well. And, but what is very scary and what's very dangerous about, uh, see central bank digital currency is everything is the nefarious things that government could do now that they have money purely digital since think about cash cash. The reason a lot of people like to use cash because there's no paper trail right now. If you had a digital currency, you have a trail of everything that happens. And that trail is perfectly in the government logs. Now it's also concerning is that if you have a currency that you perfectly completely control, you can also restrict where that money is sent.
Speaker 2 01:27:30 Yeah. Groups that are subtly labeled as extremist, or who knows what they could be labeled as then. It would not, you would not be able to send money back and forth. They could easily restrict, they could easily confiscate it since you would hold the model for most central bank. Digital currencies is that you essentially hold an account with the central bank. So it would, it would really having a true central bank currency. Digital currency would really, um, represent a drastic shift in the way the banking system operates. So the most likely outcome, um, when it comes to CBD seas is this thing called a synthetic CBDC, which professor Salzman, uh, George Selgin was actually talking a lot about cloud today. And he recently wrote a new essay on, but in many cases, it's this digital currency, but then it still goes through the traditional banking system. Right.
Speaker 3 01:28:30 Um, Mary come in now. So, uh, we, we discussed most of the most part of our discussion was around currency. What do you think? Uh, if we can fashion this as an asset class and today, most of the assets are as liquid as a clinic currency could be, uh, right. Uh, data. One days of treating it as an asset is that, uh, the fear of the domain to tax the gains from this exchange, uh, transfer of assets will be possible. And secondly, if you, uh, if you look at it, uh, you're basically trying to create a parallel economy where there is no border money can flow from, you know, some, one person in, in, in us to another person in which we're part of geography. Uh, and no government will be confronted with that, I guess. So
Speaker 1 01:29:29 Well on the first one capital gain, there's a bias against using gold because they treat it as an asset subject to capital gains taxes. So the legal tender laws and the tax laws bias against gold. So when people say, well, you can buy and sell gold now. So why aren't we bank on the gold standard? Because there were illegal impediment, legal and tax impediments to going to gold the Jack, I don't know the tax treatment of Bitcoin, but is it similar?
Speaker 2 01:29:58 Save people are very upset with the tax treatment of Bitcoin. Since when you're sending it, it's treated as money as like when you would send dollars, but when you buy and sell it, or when you even just hold, it it's treated as property. So it has kind of two distinct different classifications for how the government wants to operate it. So when they want their cut, they treated as property that allows them to collect cap capital gains. But then when it comes to reporting requirements for people sending money to each other, it's viewed as money. So that's a huge thing that a lot of, um, people in Bitcoin and crypto want to change, but again, it's very difficult to change laws when it comes from this industry's perspective, since it's a very decentralized industry by its very nature. So it's tough to get that lobbying, push to change any laws. And so, but yeah, that's a huge topic right now and was actually what held up a lot of the infrastructure bill this last summer, the reason why it took so many days to pass that initially was because of this small little provision in the bill where they would raise X amount of money through new ways of taxing Bitcoin written by people who clearly had no idea how any of this stuff works, but
Speaker 1 01:31:22 Well, or, or Jack, they knew. And they wanted to either get in on the advance or squash it. Uh, I could see J Powell calling Congress Ang squash it, squash it by the way. Um, I know we're running out of time here. So I just want to throw in modern monetary theory says the government can issue money without limit and not cause inflation 0.1 0.2. They can issue debt without limit and not have bond prices plummet, which is another way of saying not have interest rates go up that much. Jack I'm tying this back to the central bank digital currency thing, because I think part of the motive for the central bank saying enough of this money creation is let's just be able to access everybody's account and with a, with a touch of a button, put money in their account or take money out of their account.
Speaker 1 01:32:25 How wonderful would that be? We don't have to wait for tax legislation to pass. We don't have to wait for QE to blah, blah, blah, blah, blah. It's a complete takeover of the financial system by the central bank, which it's already doing. I mean, all the major banks are basically in the pocket of the central bank. They're basically a subsidiaries of the treasury. They're not independent entities anymore. I think you're saying Bitcoin allows us to escape that w where we don't have any more years to escape it. So that's one of the reasons you like it, right? You think there's monetary, monetary authoritarianism happening and you don't like it.
Speaker 2 01:33:05 Yeah. And another one, a lot of, a lot of times people ask me, so how does Bitcoin win or what does Bitcoin do to win? And in my opinion, Bitcoin wins simply by existing. As long as people have this opportunity to transact in this money that is completely outside of any control of any individual government or corporation, then Bitcoin has served its purpose. As long as I can still hold large amounts of value and custody at myself and then send money anywhere in the world. Bitcoin is winning. And so in a future where, as I'm sure we all can tell with what's happened last few years, we are all in that trend towards more authoritarianism. So in a future like that, I think something like Bitcoin that allows you to transact value with the world and interact with the world. Um, it's a perfect time for something like this.
Speaker 1 01:34:01 Uh, one last thing, I don't know if a professor Kelly is still with us, uh, David, are you still there? I, uh, yes, no. Richard David, um, Jack, first of all, Jack, I want to introduce you to David Kelly. Uh, uh, just a brilliant philosopher of objectivism, probably the world's premier epistemologist. So you're talking to a philosopher here, but he founded the Atlas society 30 years ago and, and David knows a lot about economics and more about money than he'll admit, but David, not to put you on the spot. David, what do you, what do you think of all this discussion? Does it seem too remote? Does it seem reasonable? Does it seem tied to reality? I really would. I'm kind of anxious to hear your view, so we're not on, we're not on some intergalactic, uh, here. What do you think David?
Speaker 4 01:35:01 Well, I don't think you've been intergalactic. I think you've been down in the, uh, not in the weeds, so to speak here in the, in the details is something I know a little about. Oh, by sense of, um, and I'm, I'm a totally laid person, you know, as an AZ and both theoretically and in, uh, uh, as a individual, who's got retirement funds, not in, you know, money, uh, admitted if they enough Bitcoin. Um, I've always thought that, um, the two things that I understand about Bitcoin or cryptocurrency in general is that you not found money. It's, uh, not government run. That's good. And, but I've wondered about what its basis in reality is. Uh, gold is a basis, um, currency, even today, to some extent we have currency is tied to the productive wealth of an economy. And I've wondered what bid points, um, what is, what the, what the foundation of it is in terms of, uh, uh, real value in reality. Now Jack made a great point and I'm I'm I have to settle this. I have to think about it more that the energy cost of producing Bitcoin is, um, in a sense like the mining cost of gold. Yeah. Um, that's really intriguing. I never thought of that. Um, and you know, as we know from Weinstein matter and energy are kind of interchangeable, so I've opened my eyes. Thank you, Jeff. And, uh I've but that, that's about what I can say at this point. Um, I've got a walk to learn a lot to think about.
Speaker 1 01:37:07 Yeah. And I think David, I think the whole it's always intrigued me that the connection between the call of the Bitcoin community and libertarian thought, it's interesting like Jack Jack, if you were to say, do you come across many people who are socialists who say, Hey, I love a Bitcoin's great. I love Bitcoin. Or is that, is that a rare overlap? And if so, why
Speaker 2 01:37:35 You don't have a ton of socialists in Bitcoin. You have a fair amount of Progressive's though. And there's a common misconception that everyone in Bitcoin is right wing. A lot of the initial people because of the way that they found it, they were more libertarian leaning and most people heavily involved with Bitcoin. Do you lean libertarian? But there was a book written a few years ago by a huge critic of Bitcoin. He titled it Bitcoin software as right-wing extremism. That was a time book. I don't get how a money that does nothing other than simply existing is this form of extremism. But pretty much, as I said before, Bitcoins for everybody. And there's a group of people, um, even Progressive's who they they've started this little, um, not caucus, but they're swelling number of them since they have reasons to support Bitcoin, they see it as this pro democracy tool. They also do not like, um, the way that authoritarian regimes can use money as a authoritarian tool. And so they see Bitcoin as an escape from that. But yes, most people involved with Bitcoin did come from that kind of the same liberal, not libertarian or conservative vein of thinking, but it's still a very diverse community when it comes to thoughts.
Speaker 1 01:39:01 Yeah. And, and Jack, when I think today about if someone stood up like this old professor from duke Saul's have stood up and said, I'm for the gold standard, what would they say? You right-wing whack out, get out of here. And yet, and yet, if you look at the history, how did the gold standard evolve? It wasn't a partisan thing. People just looked at it and said, Hey, that's a good product. I trust that product. I'm going to use gold. Nobody did a partisan, a poll of it. Now eventually as a standard and as a political economic phenomenon, you see it as, wow. That's something that kind of limits and the handcuffs, the fiscal proper currency of the state, Hey, that's a right winger advocating goal. But I like the way you're approaching this Jack, you're saying, listen, look at the underlying bottom-up constituents of this amazing thing who wouldn't want to use it. Why do you, why do you care what political party you're in? But, um,
Speaker 2 01:39:59 Exactly. And going off of that, a common phrase within the Bitcoin community is that Bitcoin is money for enemies. We don't have to agree with each other to use Bitcoin. That's the beauty of it being a neutral money. You can all use it. And we all experienced the same properties from it. No one received special treatment on the network. And that, that's why I think, I think money should kind of have those neutral properties. It's too powerful of an institution to put it on troll anybody. So that's why I support that coin pretty much.
Speaker 1 01:40:33 Yeah. The, the last thing I would say, which I think is very interesting is the goal center. People like myself, the only shot we have had in the last 50 years of getting it re-instituted is when there's been high inflation and high craziness and, and stuff like that. There was a gold commission in 1980. Why? Because inflation was 15% to return to it. One of the things that strikes me as interesting about Bitcoin Jack is, I mean, you talk about Bitcoin ization that might occur when there's a hyperinflation of the Fiat money. Namely people would really race into Bitcoin, but people are already moving into Bitcoin. And when you trace it from 2008, as you did to now, I mean, 2008 until now has not been a high inflation period. It's only been the last year, you know, that we've gone above, uh, two or 3%. So to me, that's another argument for Bitcoin. It's unlike the gold bugs, it doesn't really rely on episodes of scary high inflation. It's kind of chugging along creating its base. You know what I mean, Jack? I mean, it might accelerate under inflation, but it's got something else going for it. Other than fears of VI money inflation don't you would agree. What do you agree with that? Or no,
Speaker 2 01:41:56 There are a lot of reasons to just buy or into Bitcoin. There's obviously a lot of what money is, is just kind of the story that we attach to it. And so there's the inflation hedge narrative with Bitcoin having a scare supply. But then there are also people who demand Bitcoin to use it as a currency or to use it to send value or because they wish to be able to custody large sums of value. And there's no other asset that can do that quite the way that Bitcoin is capable of doing.
Speaker 4 01:42:29 But Richard and Jack, if I could just add one, just peripheral point to Jack thing that, uh, this is a market it's not a, that that people put aside their etiology to participate in, um, Voltaire in the 17 hundreds, Maynard visited England and he made a great point. He visited the stock exchange in England in London and said, you know, year I forget his exact categorization, um, Protestants Jews, and what happens. They all combined because there's only one religion money. And that's a great early observation of the, um, unifying effect of a principle of prayed
Speaker 1 01:43:23 And David David. The other thing he said, I love that quote too. The quote ends with, and the only infidel is the bankrupt
Speaker 4 01:43:35 Even
Speaker 1 01:43:35 Better. The only, the only infidel is the one who doesn't pay his debts. I love that because he's using of course the, the Muslim Islamic, uh, view of infidel, right? Jack, Jack, I could not thank you more. I'm so proud of you. And I know you're going to learn more about this stuff over the years, but I can't imagine this audience and the ones who will see this later. Won't absolutely adore the stuff you're doing. It's really, it's really special. It's really smart, really creative. And, um, you've done a lot of work tonight and I really thank you so much, Jack. It's just been, from my perspective, it's just been fab.
