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Feb. 23, 2021 - Freedomain Radio - Stefan Molyneux
01:32:50
Freedomain Investment Roundtable 7: BITCOIN CRASH!
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Time Text
Hi everybody, this is Stefan Molyneux from Freedom A and hope you're doing well.
We are here with a varied group of individuals.
Some are on screen, some are simply using hand puppets, smoke signals, and other things.
Don't forget to unmute yourself if you want to chat.
So generally what we do is, certainly for the people who are visible, we'll just do a little quick thing here to say, hi, a little bit about yourself, hobbies, do you want world peace, do you like long walks on the beach at sunset, all that kind of stuff.
And then I've got a couple of things to say about a good friend, Elon Musk.
And hopefully that will be a utility to people.
I believe it will be.
I believe it will be.
So, all right. I'm Stefan Molyneux, host of Free Domain.
And do you guys want to give a little go from sort of clockwise?
Jared over to Red Pill. Sure.
Him hiding in a car.
And Juan Galt. Go ahead.
Hello, folks. My name is Jared Woodard, and I've been into crypto since about 2012, 2013.
I bought my first Bitcoin in 2013.
I've worked for a couple of exchanges.
I've been trading it over the years.
Currently, I'm working with the crypto funds I have to kind of get over most blasphemously into real estate a little bit, but I have a good reason.
Real estate is...
I don't know. For our younger listeners, they may not even be familiar with the term.
Real estate is what your parents had and are hanging on to like grim death.
Real estate is really keeping up the value of real estate is the basic driver behind mass immigration because we had a baby bust.
And so you've got to prop up the value of real estate because we all saw what happened in 07, 08 when the value of real estate went down a little bit.
So real estate is, you may see rich friends on Instagram posting pictures of things.
They may own them, they may not.
But real estate is when you actually own something rather than living in a shed, a cardboard box, or your parents' basement.
So yeah, ask your parents.
They may remember this. In fact, they probably do, but you may not.
So Red Pill Songs, you are muted.
Yeah, so I'm Red Pill Songs.
I'm a father. I'm an entrepreneur.
And I've been listening to The Roundtable.
I got the first couple episodes, thought they were awesome, and I caught the last one.
As well as some of the rants along the way and thought maybe I could add a perspective.
I come from a very much, I've been through the whole rabbit hole and out the other side.
Started with Bitcoin, went into the whole alternative thing and now I'm back to Bitcoin.
So I thought that position could be advocated for, which is kind of why I decided to participate tonight.
And thanks for inviting me. Are you guys ready for an obscure reference?
Are you ready? Are you ready?
Who's going to get this? Hands up if you get this first.
I believe that Google-Eyed Bowie is correct.
Anybody. Anybody.
Bowie. David Bowie.
David Bowie, yes.
Google-eyed Bowie. So David Bowie has two different, or had two different eye colors.
Oh, yeah. I'm telling you, it's obscure.
I'm not saying I'm proud I know it.
I'm just saying how to do it. All right. It's heterocomia.
Tim, do you want to unmute and introduce yourself?
Yeah. So I'm just a regular guy who got into...
Crypto in 2014 and I discovered Stefan's show through that and I've checked the price like 50 times a day for the past six years and I've read like every single you know thing on Reddit for all that time and I'm not an investor like I don't buy and sell like this whole time I've just been buying and trying not to sell So,
I don't really think of it in terms of investment.
I'm like trying to flip over the table of, you know, the banks and everything.
Like, I'm more into, you know, like, it's not about the money for me.
It's about making some change in the world.
Tim, sorry to interrupt you. I just wanted to introduce you to Jared because Jared is interested in real estate and you appear to be living in your car.
So the two of you might have a very productive conversation as far as all of that goes.
I mean, since you got into Bitcoin so early, I assume it's a car on a yacht or, you know, mounted at the top of your own personal airplane.
But nonetheless, if you want a house, Jared, the guy to go to.
Juan, would you like to fill us in?
Welcome. Sure. Thank you.
Yeah, so I got into Bitcoin, I think it was around 2012.
Thanks to you, Stefan, actually.
I bought a few around $7 and then proceeded to lose access to them because I was a 20-year-old noob who didn't know anything about technology.
So... I stayed on the game and I became a journalist, did a lot of journalism, and I've been teaching people, you know, how to do Bitcoin and how to not make the most common mistakes, which is basically lose your private keys since about 2014.
I've been doing consulting now for about six years and trading everything from altcoins to NFTs to Bitcoin.
Very much, you know, I prefer Bitcoin overall for many fundamental reasons.
And yeah, I mean, I'm basically a professional trader now and consultant and educator.
Fantastic. Is there anybody who's not on the video who would like to say hi?
I know it's a bit odd because it's a bit of a visual medium, but is there anybody there who'd like to say hi?
Going once. Going twice.
Okay, feel free to jump in.
You guys can, of course, watch as you like at dlive.com forward slash free domain.
And we've got a couple of highs from everyone.
I'll get to those in a bit. I just want to start with a little rant.
Well, well, to really rant about the socialists.
So the socialists now Bitcoin is the people's currency and Bitcoin is currently in the process of transferring Hundreds of millions of dollars or more from the owners of the means of production.
The fundamental ownership of the means of production is currency, it's not capital goods.
Like it used to be you own a factory, then it was like you own a bank, now it's your own currency, which is like Federal Reserve and government stuff, right?
So you have this elite financial class that is owning everything, owning the means of production of currency.
And you have Bitcoin, which is transferring wealth from those guys to people like you and I, people who often grew up poor, people who are generally excluded by license and other things from participation at the elite levels.
Of the financial stuff.
You think that the, insert expletive here, socialists would be like all over this.
People's currency, man, sticking it to the man.
We're helping the poor get out of poverty.
We're transferring the ownership of the means of production.
They don't care!
Oh, it drives me crazy.
And I shouldn't because, you know, do they really care about the poor or is it just flexing the Nietzschean will to power, but they don't care.
Another thing that bothers me too, I just wanted to get this off my chest.
It's my personal moment of therapy.
Thank you for being a witness. But here's the thing, man.
You know that what's going to happen, of course, down the road is people are going to say, oh, you know, Bitcoin, it's white privilege, it's white male, it's blah, blah, blah, blah, right?
Now, here's the thing, right?
This is for all of the expletive here, people out there who call me a racist and a misogynist and a blah, blah, blah, blah, blah, right?
So what you've effectively done is kept the message of financial independence, of income, You've kept that message from women.
You've kept it from Blacks.
You've kept it from Hispanics.
You've kept it from a whole bunch of people.
So it's really sad to me.
I was really eager and happy.
And I talked about this with some Blacks and Hispanics and other minorities back in the day, back in the day of Bitcoin, in conference, in person, online.
And to all of the clusterfrax of nihilistic, communistic, utopia wannabes who've just wrapped this whole message, oh, it's racist, it's sexist, and then you're going to complain, well, there aren't enough Blacks and Hispanics, look in the mirror.
Look in the mirror.
It's you who kept the opportunity, not just of a lifetime, Not just of a generation, but all of human history, I believe this is the greatest opportunity that there is, because this is the only time that the people have actually gained and could maintain control over a currency.
So the opportunity of human history That the world, I believe, in the future will be divided between those who have crypto and those who work for them.
I don't know how it's going to be divided, but it's going to be something like that.
And all of you people who are just out there lambasting people like me with all of these negative pejoratives, all you've done is you have denied a lot of minorities an opportunity to one of the great opportunities in human history.
And I damn you to hell for it.
I just, I damn you to hell for it because, you know, there are Blacks and Hispanics and other poor groups really need help.
They really could have used. This liftoff, and you denied it to them.
You denied it to them.
So all of you socialists out there, you claim to care about the poor, you don't care about the poor.
All the people out there, all you want to do is hate the successful, not actually help the less fortunate, which I've been doing consistently for 15 years as a public figure.
So damn you all the hell.
I just hope that you, it's enough of a pause for you to look in the mirror and say, wow, I really did help to deny a lot of amazing opportunities to a lot of poor people, some of them Blacks, Hispanics, some of them very race.
I've been doing my best to proselytize this stuff and you kept people away from the message.
It's time to look at the mirror and figure out what the hell you've been doing with your life.
All right. So does anyone have any yearning burnings?
I don't want to monopolize the beginning here because I can monopolize later.
No, but if there's a yearning burning, Jared, I feel I'm an expert in human body language.
They got me in to figure out Lacey Ford's tales.
And when you're doing, I have a sense that you have something you wish to share with the group.
Go for it. I'd like to add to the point you were making there.
Andrew Sansenopoulos made this case back in the day, like 2014.
No, 2015, I think, is when I heard him say.
But basically, he was saying that one of the bigger problems for people in third world areas is, like, for one, access to banking, but also Access to good record keeping.
Okay, so if someone has like a war goes on in their area, and they get displaced, well, when they come home, oftentimes, there's someone else living at that property, because there's nobody there.
And it's like, and no one has good record keeping for who owns what property, when, where, and why.
The record keeping might have been bombed or exploded or whatever, right?
Yep. Yep. So between cryptocurrency's ability to give those people access to good record keeping and banking, essentially, that's just, that's, I forget the number he gave, but it was a great deal of basically humanitarian aid, you could say.
Excellent. Excellent. All right.
Anybody else yearning burning?
Something that's something you'd normally see a doctor for?
It's time to share. Yeah, I had some thoughts on that.
I mean, as a Hispanic, you know, who's very close to currencies that are constantly failing and going down, Bitcoin has definitely been a huge, you know, turn of life for me.
I mean, when I started this, I didn't really feel like I had any opportunities.
I was in Canada, right?
I was, you know, at the bottom of the barrel in Canada.
And now I can actually, you know, be a leader in my community and all that stuff.
So I think Bitcoin...
Bitcoin is very interesting because Bitcoin doesn't care what your name is, doesn't care what color you are, doesn't care where you're from, doesn't care what language you speak.
Bitcoin cares that you have the secret, the password to your Bitcoin through public key.
That's all Bitcoin cares about.
And Bitcoin is also the currency of enemies.
This is, you know, the reason that we need such an elaborate consensus machine, which is what powers Bitcoin, is because it's very difficult to scale consensus among humans for the many reasons we've been talking about in this show and many other shows like this for a long time.
It's very difficult to scale consensus.
Bitcoin lets us do that, and that means that we're going to have people that we hate on the other side using this currency, and that's why it's so powerful.
So yeah, this is not any group's currency.
This is the people's currency.
Hopefully, that's what it becomes, you know?
Now, I don't want to say, well, you know, your name's Juan, so you're the only person who can talk to Hispanics.
But how have you found the reception in the, if you've talked to Hispanic communities or Hispanic people that you know, what has the reception been like for Bitcoin?
And because, you know, I can imagine that, you know, the stick it to the man sentiment is pretty common among all communities these days.
So how did it roll? Yeah, I mean, I was raised in a culture that was very much skeptical of government, that they expected corruption from the politicians.
So Bitcoin is something that once people kind of get it, they get curious about it.
But the problem that I've experienced, especially in my country, is that there's a lot of Ponzi schemes here.
And so you have two problems.
Either they think it's a Ponzi scheme, in which case you have to overcome that burden.
It's not an easy thing to overcome.
And the other thing is that they expect this policy scheme.
So the first question is, okay, so how much do I make when and how many people do I have to get in, right?
And those are both very difficult to deal with, right?
But, you know, Argentina has a huge community with Bitcoin.
Very influential startups have come out of there.
And, you know, I think there is, you know, Mexico is also quite big.
I think, you know, my problem is that I've spent most of my time in North America.
So I'm kind of disconnected from the actual grassroots of Bitcoin in Latin America.
And I find that there's not enough sort of translation of the content.
But there's some really big YouTubers that are doing some good work.
And right now, everybody's curious.
And those that got in through my help are very happy, of course.
So I think people are slowly realizing it.
But most people are going to end up buying it much further up.
Well, and juangalt.com, which, by the way, is a great name.
As soon as I saw that, I'm like, that looks familiar.
And we got to have you on the show. Red Pill Songs looks like a legit crypto alpha playboy.
He makes a stream intimidating.
Yeah, that makes total sense to me.
Now, you had, Red Pill, you had a correction that you wanted to get across from a previous show, which is always worth getting in, if that's popping into your brain.
Yeah, I don't know if this was corrected in episode one.
I'm sorry, you're really quiet again, if you can.
Sorry, I don't know if this was corrected in further episodes, but in episode one, Now, can you guys hear him or is it just me?
It's a little low. A little low.
Let me boost that. Yeah.
Yeah, so in episode one you guys talked a little bit about the way the block reward basically goes to zero.
The reward the miners get when they solve a problem, right?
And Steph, you kind of made it sound as if like that went to zero because the complexity of the problem got too high?
Right. But actually, that block reward is pre-programmed in the code since day one.
So is it not that it gets...
Because I thought that you had to apply more electricity to solve the algorithms to generate the Bitcoin as it went along.
No, that's incorrect.
So I think one of the actual innovations that Satoshi put into Bitcoin when he started it was what's called the difficulty adjustment.
What that is, is every approximately two weeks, if the miners have been finding blocks too fast, then it will up the difficulty.
Just to counterbalance so that people can't just hijack the network.
And conversely, if people find the blocks too slow, it'll lower the difficulty.
So you'll notice over time, the hash rate or the difficulty, basically the amount of computers trying to search and search and search for these blocks will be up and down over time.
But it's trending upward over time.
So people kind of assume it's going to keep going up and up.
But the actual block reward the miners get for each block Is pre-programmed in.
Started out at 50 BTC for the first epoch, which is like four years.
Then it cut down to 25.
It's now at 12 and a half.
It's going to go down to 6.25 in about three and a half years.
So that's pre-programmed in.
It eventually does go to zero, but that's just based on the code that was Yeah, I appreciate that correction.
And just for those of you who don't know, any errors that appear to be made by me fall on the shoulders of my evil twin.
Stephen. Stephen? Yeah, Stephen.
Yeah, Stephen, my evil twin, makes errors.
I obviously have to go and pick up the mess.
This also works in my marriage.
No, I appreciate that correction.
So, anybody else with anything they wanted to mention as we start?
We've got some questions piling up, and I want to do a little Elon Musk-y rant.
But if there's anything that people want to share at the beginning, I'm happy to hear.
All right. Some people are here to listen.
You know you can just listen. Dlive.tv slash free domain, but also nice to have you here as well.
So, okay. The Elon Musk thing.
Oh, my goodness.
What can I tell you? Well...
Quite a bit, in fact.
Quite a bit. I wanted to mention.
So people are, I think, having a tough time about the whole Elon Musk tweet-o-rama situation, right?
And look, I obviously don't know.
What on earth is going on with Elon Musk?
I can't read minds, right?
So I'm not going to pretend that I have any inside information.
I'm not going to pretend that I know what he's thinking.
I know what his plans are.
But it doesn't take too much of a smart guy to figure out that the Elon Musk stuff is It has particular economic effects.
So I wanted to talk about some of those particular economic effects because it's pretty important.
So as you know, Tesla sunk, what was it, a billion and a half, a billion and a half dollars into Bitcoin, right?
And then not too long ago, pretty recently in fact, what happened was He began to, well, I wouldn't say exactly talk trash, but it was kind of negative.
And I had this up, and it seems to have mysteriously vanished.
So let me just get this quote back up again.
Because when he starts to trash Bitcoin, it has particular effects, and you've got to think about it in terms of the effects on his portfolio, right?
So let me just grab these up.
You know, I did research all this afternoon and then, I don't know, it's just a mess.
All right, yeah, here we go.
Okay, so what he did, this was two days ago.
So Elon Musk has commented on the rapidly increasing price of Bitcoin and shall we say how it affects one's ability to concentrate.
And our good friend from earlier, who was talking about refreshing 50 times a day.
Yeah, that was Tim, right?
The F5 The F5 roller coaster is pretty rough.
Elon Musk tweeted a graphic of a priest trying to be pure and me trying to live a normal productive life and a woman with her butt out and the butt had Bitcoin on it.
So he said, this is a while back ago, Bitcoin is almost as BS as Fiat money.
This is sort of back in the day, right?
And of course, people are kind of concerned about what's going on with that.
Now, if you own a billion and a half of Bitcoin and the man, I mean, people say he's a legend, you know, and I guess that's a, he is, right?
I mean, it's pretty cool.
You know, the richest man in the world is actually an African-American.
It's kind of cool, right? But he has made a massive amount of money.
Like a staggering amount of money from the Bitcoins, right?
And I would imagine, as a smart guy, he wants to buy into more Bitcoin, right?
That makes kind of perfect sense to me.
That's exactly what you expect him to do, right?
I did note this down here somewhere.
So he bought a billion and a half worth of Bitcoin at around 33,000.
And as of yesterday, he'd made over a billion dollars on that investment in less than 45 days.
Okay? So Tesla bought a billion and a half of Bitcoin at around 33k US. As of yesterday, they'd made over a billion dollars on that investment in less than 45 days.
Okay. So is there a reason why...
Elon Musk might end up talking trash about Bitcoin or promoting other cryptocurrencies.
Well, of course. And, you know, it's kind of funny, too, because Elon Musk and Peter Schiff got into it.
And given that Peter and I have had a relationship for, I don't know, 13 years or something like that, it's just kind of funny.
Because Monday it fell to slightly over 52k today after breaking 58k on Sunday afternoon.
So Musk tweeted Saturday that Bitcoin and Ethereum do seem high.
Laugh out loud, right? So this is Ethereum, of course.
And Why would he say that Bitcoin and Ethereum do seem high?
I don't know, but I can tell you the economic effect is that people will sell.
Because they say, wow, if the smartest, you know, the richest guy in the world, the brilliant businessman, of course, if he says that these prices do seem a little high, people are going to sell.
Now, if you do want to buy more Bitcoin, And you are a big mover and shaker.
You want to buy more Bitcoin, it is to your interest to bring the price down.
It's called buying the dip, right?
And again, I'm not saying he did this.
I'm not saying this was part of his mindset.
I'm just saying that this would be the economic effects and this is the reasoning that would occur.
If you wanted to buy Bitcoin, You want to drive the price down a little so that you can buy said Bitcoins.
And if you say, gosh, it seems overpriced and people start selling it off, then you can swoop up.
And we'll find out whether or not they bought a bunch of Bitcoin after this dip, right?
So... Elon Musk also said, this February 20th, he said, an email saying you have gold is not the same as having gold, you might as well have crypto.
Money is just data that allows us to avoid the inconvenience of bartering.
That data, like all data, is subject to latency and error.
The system will involve To that which minimizes both, right?
And, you know, I mean, it's so compressed.
He's such a smart guy and understanding all of this.
I love that phrase. Money is just data that allows us to avoid the inconvenience of barter.
And that is, I mean, I remember reading a kid's story when I was a kid, obviously.
And the story was, you know, a guy just wants a loaf of bread.
And all he has is some eggs.
And he has to go through like 12 people to finally be able to...
Because, you know, the guy who's got the loaf of bread doesn't want any eggs.
So then he's got to go to some other guy who wants eggs.
But then the guy, whatever he trades for that, the guy with the loaf of bread doesn't...
He's got to spend all day just to get a loaf of bread.
And I remember reading that when I was a kid and thinking like, yeah, that makes sense.
All right. One other thing just before we move on.
Oh, and the other thing too, sorry.
If Elon Musk wants to buy Bitcoin...
Then if he promotes an alternative currency, then what happens is people will buy that alternative currency rather than Bitcoin, thus allowing him to buy the dip.
Again, I'm not saying what his plan was.
I'm not saying he has anything to do with this.
I'm just saying that that would be the economic effects of what it is that he did.
So as of the 20th, if the people who hold Bitcoin were their own country, they would be the what number richest nation in the world?
If all the people who held Bitcoin As of February the 20th, 2021, with their own country, they would be the what number richest nation in the world?
Let's just see what people are saying about all of that.
And if anybody here knows, feel free to...
Yeah, fourth is my guest with one.
No, not fourth.
It's the fourth... From what I read, it's past the Japanese yen to become the fourth largest currency in the world.
But if everybody who held Bitcoin with their own country, they'd be the 33rd richest nation in the world.
And that is, I mean, that's just seriously cool.
All right, so let's...
Elon is trolling the fiat system.
Yeah, well, the fiat system's been trolling us for about 10,000 years.
Sorry, you were going to say? Yeah, that is partly his MO on Twitter.
Like, he has a good time. He is a bit of a troll.
And I can see part of it.
I mean, yeah, he's absolutely got a rational interest in...
Manipulating the price with just some playful comments here and there.
But it's also a little bit tongue-in-cheek, like, well, this is what you get for listening to some rich guy on Twitter.
I wouldn't put it down to manipulating.
You and I can say, we like this particular crypto, that's fine.
I don't think he's got any inside knowledge, because that's the amazing thing about Bitcoin.
There is no inside knowledge.
I guess you would have inside knowledge if you knew ahead of time that a big organization was going to buy a bunch of it.
But most times, insider knowledge refers to I don't know, the company has a cure for cancer, but nobody knows yet, so you buy stock in it, but there's nothing like that in crypto as a whole.
Yeah. So I think that's pretty...
Well, yeah, I didn't mean like price manipulation in a legal sense.
Yeah, I mean, my take on this is that, I mean, my just thoughts on this is that, A, he's a guy that likes to have fun, you know?
He's, again, believed to be the richest man in the world, right?
He just went on Joe Rogan, and Joe Rogan asked him why he made a flamethrower, and if there wasn't some executive telling him, you know, maybe this isn't a good idea, right?
And his answer was like, oh, it's a terrible idea.
You shouldn't buy them.
Yeah. I was trying to get people not to buy them.
We still made 50,000 of them, right?
So, you know, he's a guy that likes to have fun.
I think he's having fun with Dogecoin, though it seems like he's a little more serious about it than I thought he was.
He's making some very serious tweets about Doge.
But, you know, and he also got hit by the SEC pretty hard.
Not too long ago when he said something about 420 and so on, like the stock should be 420, I don't know.
And the SEC went after him and he was talking about his Tesla stock, I believe.
I can't remember the details on him.
So he's probably also afraid of, you know, being perceived by the regulators as, you know, trying to influence the market.
So maybe he's sending mixed signals.
I don't know. I mean, it's probably impossible to try to read his mind, even though he's not like, you know, the best poker player either.
But yeah.
Somebody has just posted that Elon Musk loses $15 billion in one day after Bitcoin warning because his shares slid 8.6% on Monday.
And I don't know.
That's interesting. I don't know exactly why, unless, of course, people thought they were going to buy the dip.
And, you know, when somebody who owns something...
Here's the thing. Sorry, this is just Egon 101, right?
So let's just say Bob, because, you know, again, I don't know much about Elon Musk, but right.
So let's say Bob has $100 million in Bitcoin, right?
And then Bob tells you that he thinks Bitcoin is overpriced.
See, if Bob genuinely believed that Bitcoin was overpriced, what would Bob do?
He might sell a bit. Just a little.
He would sell some of his...
He would sell some of the Bitcoin.
Like, that's...
No one... Oh, you know, your mom gives you mother's milk, your father gives you baseball lessons, and after that, man, you're on your own.
You're on your own. There's nobody out there who's like, you know, like, my name is Steph, right?
So there's nobody out there who wakes up in the morning, you know, maybe my wife, maybe my daughter, maybe friends and family, but trust me, there's nobody out there whose first thought in the morning is, how can I make Steph's day better?
How can I just make sure that Steph has the best and most wonderful possible?
Nobody does that.
After you get out of the crib, that's it, man.
Yon yon, as the old Prince song says, right?
And so if somebody says, hey, I think this is overpriced, if they have some genuine belief or knowledge that it is overpriced, They're not going to tell you!
They're not going to tell you!
They're going to sell it quietly and they're going to sell it bit by bit and they're going to sell it as inconspicuously and they're going to shuffle it through 1,200 different transaction chains and they're going to act on that information because the moment you share that information...
You know what? Why would Bob want to say, oh, I think it's $100 million of Bitcoin.
That's way overpriced, man.
Because that's going to drive the price of Bitcoin down, which means Bob is going to be able to buy some more because he sees it go.
It's complete opposite of what Bob would say.
The truth is he believes the Bitcoin is going to go up, which is why he wants to buy the dip.
But he doesn't want to buy it at the current price.
So he's going to say, oh, it's overpriced.
And the price is going to go down.
He's going to buy the dip. So it's the exact opposite.
If somebody says, oh, you know what, I really think that XYZ crypto is going to go to the moon, it's like, if they genuinely believe that, they're going to be buying it and not telling you.
Do you know what I mean? They're going to be buying it and not telling you.
The moment they tell you, They're in a non-market activity, right?
They're in manipulation land, as some of the phrase go.
Not formal manipulation or legal manipulation.
They're just, they're playing.
They're playing with you, and it's no longer, it's a person-to-person, not person-to-product relationship.
So, yeah, just, you know, when people start trash-talking it, oh, and don't you love it?
Don't you love it? The last thing I mentioned, I'll turn it back over to you guys.
Don't you love this? It doesn't matter.
How high the Bitcoin gains go?
It doesn't matter. The moment it dips, every single bear comes out of hibernation.
And all the people who were saying, there's no way they'll ever break 100 or 500 or 1,000 or 5,000 or 10,000 or 50,000, they're never going to break that.
The moment it goes from 58,000 to 57,000, they're like, aha!
It's crashing! And it's like, you've been wrong?
Like, where's your humility?
You've been wrong for 12 years.
Like, this is what amazes me, is people's almost pathological inability to say, whoops, whoopsie, whoopsie, kind of made a mistake there.
And maybe it's because they're kicking themselves for not getting in earlier, or maybe they're mad, maybe their friends are mad at them for saying, don't buy this, whatever you do, right?
But it's like the bears come out the moment it dips down a little, but it is kind of important, right, to keep this stuff in perspective.
I said this on the show the other day.
As of February the 19th, one-year returns.
Gold, 9%. Oil, 10%.
Standard& Poor, 15%.
See, that's pretty good.
You know, I'm the kind of guy, anything over 3% to 5% net, pfft.
You're a business genius, you know, which to me is a dartboard and a stock chart.
But anyway, like to me, anything over 3% to 5% that's net outside of inflation, that's pretty good.
That's pretty good. So all of these, you know, gold's almost double that, oil, double and a half that, sand and the poor, triple that.
Bitcoin, 467%.
One-year return, 467%.
And again, the acceleration has only just begun because people say, well, the price is not stable.
I believe that the price relative to stuff is stable.
It's just that the price relative to fiat currency is not stable because fiat currency is completely insane.
Can we just acknowledge that at the moment?
That fiat currency is absolutely completely and totally mental.
I mean, this is what's going on right now in the American economy under Biden.
$85 million Raytheon arms deal for Chile.
$197 million Raytheon missiles for Egypt.
$245 million Raytheon arms deal in the US. $1.2 billion Raytheon missile defense in talks.
Zero stimulus checks.
Drone strikes in Somalia.
Built a new US military base in Syria.
Sent thousands of troops to Yemen, Syria, Iraq.
Froze price decrease plan on insulin.
Froze price decrease plan on epinephrine.
Cancelled Keystone XL pipeline.
Killed thousands of jobs. Refunded the Wuhan Institute of Virology.
Yay! Sent the World Health Organization 200 million.
They're going back into the Paris Climate Accord.
Texas is apparently, well, just completely froze because they couldn't get the permission from the EPA to increase their output.
And they're charging Americans $5,400 to send them a $1,600 stimulus check.
So the idea that Bitcoin is unstable.
It's just like, you've got to be kidding me.
It's like watching a guy in a pogo stick and an entire bouncing mountain and saying, you know, that pogo stick looks a little wobbly.
Anyway, so that's my thoughts.
I'm happy to hear further what people have to say.
What are your thoughts? For a lot of folks, the gentleman I was talking to, I mentioned this in the last show, is a 70-year-old gentleman.
I was a successful real estate investor and I was explaining Bitcoin to him and crypto and he was explaining real estate to me.
And one of the, I went over the key things that convinced me when I first got interested in it.
And like, I think kind of the transition point that clicked over for him was like, this isn't going to get goofed around with or inflated.
You know, if you look at how much, how many dollars just come out of nowhere on a regular basis, you know.
And that's pretty significant.
It's a small detail, it seems like, but God, it makes all the work.
Or at the very least, the means by which it gets changed is open source and controlled by people and not a special and violent interest, you know?
Anybody else with thoughts, corrections, issues?
Oh, I've got more to say, but I'm here for the team, man.
Go for it. To Jared's point, you know, the The scarceness of it and the ability to not mess with it, I think is the major thing that pulls you in.
Oh, there's only ever going to be 21 million Bitcoin.
That's what kind of perks most people's ears because we don't have a scarce money supply.
There's 20% of the broad money supply was printed last year in the US and something similar in Canada.
So like to beat inflation in three point, you know, three to five percent, you actually have to score like a 23 to 25% investment.
That's insane that those don't exist.
Yeah, I mean, the Fed's balance sheet is completely mad.
I mean, I posted this on social media.
You can follow me at freedomain.com slash connect.
So on social, I just noticed those aren't real glasses, don't they?
I just noticed them drifting.
I'm like, what? Okay, I got it.
I got it. All right.
He's actually the Dogecoin.
He's the Dogecoin logo.
It's just a whole mask, right?
Because on the internet, nobody knows you're a doc.
So I sort of posted this.
So the prior balance sheet, right?
The high of January 2015 was the prior high.
At 4516, right?
I think that's billions, right? 4516.
August 2019, that was January 2015.
August 2019 went down to 3760.
By June 2020, it was at 7169 billion.
Dropped a little bit down, and now it's over 7.5 billion.
I don't even know what the numbers are.
So what I was sort of pointing out, the nine curves goes down a little and it goes completely through the roof.
And I was like, okay, so if you're a doctor and this is someone's weight chart, like this is your patient's weight chart, how long are you going to expect them to live?
If they have quadrupled or quintupled their weight inside of a year and a half.
I mean, what is their long-term life expectancy?
And the answer is, of course, And I think that's pretty wild.
If you had taken a stimulus check, a $1,200 stimulus check in April, if you had invested that in Bitcoin as of February the 20th, it would have been worth $10,000.
And once Bitcoin hits 75k, it becomes worth more than all the silver in the world.
Tasty. Now, I don't know if it's real silver or like fake, weird, creepy paper silver that floats around like a dandruff in the economy.
And here's something that Cameron Winklevoss...
Winklevoss? Those guys are like, you know, like twin Bitcoin Barbie dolls, like Ken dolls, just next to each other.
Pretty neat. Anyway, so he said, if you're reading this, you're early to Bitcoin.
How do I know? Imagine thinking you were late to aviation 10 years after the Wright brothers first flight in Kitty Hawk.
Large sail commercial aviation is still decades away and people are still crossing the Atlantic on steamers.
So that's what I want to remind people.
That it's gone up a lot and it's gone up a lot quickly because people are, I mean, because politics has moved, right?
I mean, politics has moved to straight up just money bombs all over the place, like just helicopters full of money being tossed out, unlike the Argentinian solution.
But that, so you say, oh, it's 10 years after the inception.
Okay. But 10 years after the Wright brothers, I mean, that was nothing, right?
When were the Wright brothers?
19... Was it 1910?
Something like that. So 10 years after, I mean, it was right after the First World War, you still had biplanes.
I think monoplanes were still many years away.
Jet planes were still 12 years away.
Commercial airliners were still 20 years away.
And you were still really early.
Back then, it was just like...
And the connection is actually pretty close, right?
That the Wright brothers, like the...
The Satoshi, right?
I mean, in that it was like a real hobbyist thing for a long, long time.
And cars were the same way.
You know, there was this belief that you couldn't have a car that went more than 15 miles an hour because you'd be unable to breathe.
See, Steph, I think my problem is that the Bitcoin may be analogous to the first Wright Brothers airplane.
And that's why you wouldn't necessarily want to buy 19 million Bicycle-shaped airplanes.
I'm sorry, I just told me that you'd offered me 12 Bitcoins for 19 million bicycle-shaped airplanes.
Did I get that correctly? You were a little quiet.
Just kidding. Okay, no, I mean, the analogy only holds so far, right?
Well, the reason I say that is that technology is advancing so rapidly that Bitcoin is being left in the dust, mainly because of the inability to fork.
My concern is that Bitcoin isn't as static as everyone is led to believe.
Saying that it's algorithmically limited to 21 million or 19 million or whatever that might be is just that.
It's an algorithm, it's a computer program, and it's only limited by the algorithm as it's written in the In the program that people are running on the minors.
Hang on. Sorry, there's a lot of objections in there, and I don't want to let the objections pile up before responding.
And I saw, was it a facial twitch there?
You had one? Yes, multiple twitches.
I might be having a small aneurysm.
You look at the guy in that meme, like when I don't talk about eggs and infertility for 12 minutes.
So go ahead, Juan. Well, I think that there are good questions, right?
And this is a question that any new person to this whole industry is going to ask because there's a history of about 20,000 altcoins that have been created out of which maybe 5,000 have survived.
All of them have websites and marketing teams and probably a stash of 10 to 20% of the coins.
And they're really hoping the price goes up.
So they invest in marketing, right?
And the marketing usually goes like, well, we have better technology.
We have, you know, distribution. We have new blockchain 2.0 tech.
Bitcoin is ancient. Bitcoin is old.
Bitcoin is, you know...
It's a dinosaur, right?
So, I mean, you gotta be cautious about that part, right?
The other thing is that Bitcoin isn't a product.
Bitcoin is a platform, right?
Like, you wouldn't say that contract law or property rights...
Are ancient and outdated because, you know, they were invented too long ago and now we should move on to a new form of property rights, right?
Like, Bitcoin is below the market in a sense.
Bitcoin is, as a currency, you know, currencies are winner-takes-all games.
They're not, you know, they're not a place where you can have, you know, both an iPad and an iPhone, right?
Like, it's the...
It is the rules of the game in a way, right?
And I think that's something that's really not talked about, but I think it makes sense.
I mean, as far as the ability to fork Bitcoin and the ability of Bitcoin to adapt, Bitcoin was seriously attacked by insiders In 2016, right before the run-up, around $3,000.
This was a sort of, let's say, a portion of the community believed that we needed to scale Bitcoin in a particular way.
The rest of the community didn't.
It was like a three-year-long debate at the bottom of the bear market.
But I'm not speaking about this.
I've been in Bitcoin for over 10 years, and I know this story.
Okay, great. Hold on, brother.
Hold on, buddy.
Hold on, man.
Can I just interject something here?
Fight, fight, fight, fight.
Very exciting. Hold on, hold on.
I got this, Tim. You're describing this as Bitcoin Cash or anyone that disagreed with Core was some inside malevolent group trying to destroy Bitcoin.
That's certainly the way it's coming across.
That are not into Bitcoin.
Insider from the perspective of people that don't own Bitcoin, right?
Like you and I are insiders effectively speaking, right?
You work for an exchange. I've been teaching for years, right?
Like we're basically insiders, right?
But yeah, there's no like insiders, right?
To say, like, 2016, like, it sounds like groups, like, the Bitcoin, are you, alright, maybe I misunderstood.
Are you saying the Bitcoin Cash community was trying to destroy Bitcoin?
No, I'm not saying they were trying to destroy Bitcoin.
Okay, I misunderstood. Alright, cool.
I mean, maybe some people within it, right?
Like, I think there's decisions that were made that were very bad.
Right, I mean... Yeah, I mean, I'm not sure that that's the case.
I think that's something that's been happening.
This is like insider baseball, right?
And we can go down that rabbit hole if you really want to, right?
But my point is simply that Bitcoin has proven resistance.
The very adaptability of Bitcoin...
Here's the thing, right?
If something is absolutely certain and set in stone, people say it's too rigid.
If something is adaptive, can respond if they say, oh, it's too flexible, it's too easily hijacked, and so on, right?
I think it's a good balance.
I think it's a good balance insofar as...
It's not just a program.
It's a program that people have to accept in order to run the system, right?
So if somebody comes up with some new radical change in Bitcoin, you've got to convince people to adopt it, just like anything else.
You come up with some new dance.
You've got to convince people to adopt it.
And the fact that it is capable of adapting, but resistant to change, I mean, that's kind of what you want from any kind of system, right?
You want things to be resistant to change because otherwise there's not enough stability to be able to aggregate value.
But you also want it to respond to change because there will be shortcomings or weaknesses or new situations or new circumstances that arise that people are going to need to respond to.
So I like people who have core values.
And stick to their guns, but not people who never change their minds.
That's boring and annoying, right?
So to me, Bitcoin is like, okay, there are these core values.
And that's the distribution of the client, and that's the distribution of the processing of the blockchain.
And guys, correct me if I'm using the wrong language, but this is my sort of outsider understanding of it.
So there is a great deal of stability, but it's possible to change it.
And again, I sort of can't think of...
It's sort of like the English language, right?
Or any language for that matter.
There's a great deal of stability, because if there wasn't, we couldn't have this conversation.
But it still grows and changes over time.
But if you want to...
Oh gosh, what's that old...
It's an old movie about valley girls.
Oh, fetch! Stop trying to make fetch happen.
Oh, that's so fetch. I'm embarrassed that I know this, but I'm just telling you that I do.
And so a girl is trying to get the word fetch to become a cool thing.
Right, the word fetch. And it works with thumb, like bling became a cool thing for a while and all of that, right?
And sick got reversed like sick.
It became a good thing because millennial mysteries.
But anyway, so this girl's trying to make fetch happen and it doesn't happen.
Now, other things people don't even try to make happen, right?
I don't know if you've ever seen this meme of the girl who pretended to have a dating video where she said, you know, I have this MBA and I really love cats.
I don't really love cats.
She starts like really bawling about how much she loves cats and how she wants to hold all the cats in the world.
But that would be crazy. And she wants to have cats with rainbows.
And, you know, that actually became kind of a meme.
She wasn't even trying. She was actually just trying to send it to her sister and it happened to leak out because she thought it was kind of funny.
So you want stability.
Like organisms, right?
And the last thing I'll say, and I don't want to...
So organisms, like evolution, right?
You want kind of a core stability in your DNA, right?
Because otherwise, we come out with tentacles coming out of our foreheads and Lord knows what, right?
Full-on Chernobyl-style whatever, right?
So you want kind of core stability in your DNA, but you also want the capacity to evolve.
Because if you didn't, we'd all just be single-celled organisms, and this would be a whole lot less of an interesting conversation, right?
So, I mean, this is to the listener's point...
The fact that it has core stability and every dollar that gets invested into Bitcoin adds to that core stability.
But should something arise that threatens the value for the majority of people, they will adapt to a new circumstance, a new environment, whether that's a fork or a complete transition to a new direction, leaving just about everybody else behind.
I think that's what you want.
That's exactly my point, is that it is flexible to the point.
It's a political system.
No, don't just say these things like you've just made an argument.
It's a political system. No, it's not.
How is it a political system?
Right. That's making an argument.
What I'm saying is that the core developers, the people that have produced the source code and have distributed it and called it Bitcoin Core, Are effectively creating a trust system with the people saying, if you run this code and this code has this hash on it, it's the stuff that we believe is the most equitable, as far as the most Austrian form of monetary system that we can devise.
That's what people have bought into.
Well, no, it's not what they believe.
They propose it, but you have to believe it.
You're proposing an argument, which I don't think people are believing here.
The Bitcoin guys don't just say, well, we believe this.
It's like, if it is valuable to the consumers of Bitcoin, then they will accept it as serving their value.
But it's based on the principles that they've espoused through the white paper.
Yeah, and there's some people who...
Their opinion is based on them doing their own research and thinking deeply about it.
And then there's other people who their opinion is just based on listening to people that they think are an authority.
And I think in the Bitcoin ecosystem, there is a lot of trust in the core developers, like authority.
They know what they're talking about.
And then I'm completely convinced that they're totally compromised.
And are at working to make, actually disable Bitcoin as much as they can.
But in the last call...
I'm sorry. Again, you're just blowing past this stuff like it's not even remotely controversial.
A lot of the core developers have Bitcoins themselves, which is beautiful because they're not going to do anything to destroy the value of their Bitcoins.
So what are the arguments to say?
I didn't say they don't believe it. But, like I was going to say, it doesn't even matter to me anymore.
Even a hobbled Bitcoin is still much better than the dollar.
And I'm going to root on Bitcoin anyway.
So what you kind of said about AOL, like being the thing that broke down the barrier to the internet for everybody, I think Bitcoin could do that.
I used to hate Bitcoin, but now I'm rooting it on because at least it's opening the door.
You know what I mean? Well, this is the fundamental question in philosophy, which is, you know, it's a philosophy show.
Compared to what? Okay, Bitcoin, yeah.
Is it ideal? I don't even know what that means.
I don't know what ideal means in these circumstances.
It's like, what is ideal health?
I don't know. I mean, can I also get to enjoy my life and eat some good food and sit on the couch eating Cheetos once in a while?
Because that's kind of enjoyment of my life, right?
What is ideal health?
What is the ideal life?
I don't know. I mean, once you reach it, you just change your particular position and reach for something else, right?
So... Yeah, but I would say that, to me, the fundamental characteristic of Bitcoin that really is the golden attribute is its peer-to-peer.
And then it looks to me like the core developers are doing everything they can to make it not a peer-to-peer system.
It'd be great for bank-to-bank.
Or, you know, a few other use cases, but not, like, people on the street with other people on the street.
Now, I don't know, Red Pill, you've got some head shaking there.
I don't know anything about this particular topic, so I'm throwing it wide open to anybody who wants to chime in.
I just... There's a discussion that happened in 2016, 2017.
I tried to articulate it.
I want to be as fair as possible to their side.
But basically, what it was was, A religion was going one way, and we decided to split off and go our separate ways, basically.
It's probably the most fair way to put it.
A religion? Come on, man.
Oh, it's a religion. Absolutely.
On both sides or the other sides of religion?
I don't know about the sides thing.
I'm trying to be fair to both sides here.
Is the side that split off a religion?
The other side's not? I think there's true believers on both sides.
Oh, gotcha, gotcha. But it's not faith.
I'm making rational, economic, principled Like, calculation.
And people on the opposite side are as well, and they would think the same thing.
So we both disagree about the fork in the road that happened back then.
The market has pretty much established two different prices for those two different choices that were voluntarily made, and that's a beautiful thing.
And I celebrate the fact that, you know, that choice was made.
But when you get the kind of trolly questions like blah, blah, blah, blah, blah, like, I kind of make it sound like Kirk was a beginner initially, and that's why Juan answered the question and kind of, well, you know, you're new to the space.
But don't we want disagreement and competition in the realm of currency?
Totally. I mean, to me, saying, well, it could go more than one way, it's like, yeah, good.
That's exactly because currency can only go one way if it's run by the government, which is into the ground.
Yeah, like, if there's not argument, then you know there's, like, suppression and, like, of course there's going to be argument.
Yeah. Unless it's being suppressed.
Let me just say a few things that I think might help this conversation, because I think it's a difficult topic, right?
And, you know, it does take time to sort through a lot of these issues.
But first of all, I don't think there's anything, I don't think perfection can be achieved, you know, and this is something that Stefan has talked about before.
There's, you know, compared to what, right?
You know, what are you aiming at?
Those kind of questions will define whether you can achieve the perfect money or not.
The other thing is that there's no such thing as perfect security.
I think it's much more likely that we live in a universe where juggernauts exist rather than a universe where the blob exists.
You know, the blob is the unmovable object, the juggernaut is the unstoppable force, right?
I think we're more likely in the universe where there's juggernauts and not blobs, right?
And so perfect defense is not possible.
You have to kind of figure out which monsters are a real threat to you and deal with those one at a time.
That's how I think security in general works.
And I don't think this is a controversial statement for anybody that's concerned about security or really interested in the topic.
Something else that That Bitcoin has is that it's the most transparent governance structure that has probably ever been conceived.
And this is not like they didn't invent it.
I mean, this is open source, right?
I think it was one of the core developers said, for every thousand lines of code I write, I have to write 10,000.
I'm defending my argument because they have to go and debate on GitHub and on the IRC channels and argue.
Anybody can join. If you want to be a corporate, you can get in there.
Most people won't because being an engineer is like being a freak of nature to some degree.
But you could if you wanted to, and you don't have to be the only...
Engineering isn't the only skill you need to bring value to Bitcoin open source.
So, I mean, there's that issue, right?
I mean, part of the problem is that sometimes there's disagreements that can't be resolved because there's, like, this epistemological blind spot, right?
Like, if you're... Maybe not epistemological.
There's this blind spot. Like, if you make a choice today, the consequences will play out in the future, and you have no idea if you're right or wrong.
And you just have to make a bet.
And that's what happened with this fork back in the day, which proved that miners don't control Bitcoin.
Actually, this is a post somebody made on DLive.
It proved that even though you had 90% of the hashing power signaling or 80% signaling to Bitcoin, Take Bitcoin in a particular way, the users of the currency actually had enough power to hold them back.
And they did this by running their own nodes, which is something that they can do thanks to, you know, the scaling path Bitcoin took.
Running their own nodes, putting their money on the line and saying, we're not going to go along with this new consensus proposed by the counterparty.
And that's how that got resolved.
So Bitcoin isn't rigid in that it can be changed if you have enough, if you have a majority of hashing power, of wealth, of nodes.
If you have consensus, you can't fork it.
But it's also not so easily malleable that it's a company where some executive McDouchebag can basically change the rules on a whim like we have in all of Silicon Valley.
So yeah, I agree with Steph.
I think it's a great balance.
I love the issues and the criticisms and the pushback.
I mean, that's great if there's more Kirk did bring up a good point.
It's one I've made before in the past, that all of these cryptocurrencies, not just Bitcoin, none of them, they're no better than the people controlling them.
That's developers, that's all of us, and that's going to be no greater.
But is it fair to say the developers control Bitcoin?
They propose whether the Bitcoin community wants it or not, it's up to them.
I'm not saying just the developers.
I mean, everyone involved in the ecosystem.
Sorry, the way I look at it is sort of like this.
And it may be nonsense.
So, you know, I try to stretch these analogies to the breaking point.
So, you know, you have a whole set of tracks being laid and they're a certain width, right?
And someone comes along and says, hey, man, if we make them six inches wider, the trains can go 20% faster.
Okay, yeah, but we do have to rip up all that track, and we have to change all of the track.
So there is stability there, and there is also the capacity to change, but change is slow.
There's a lot of resistance to change as well.
On that note, I was actually listening to Michael Saylor and this gentleman.
I wish I could remember his name.
Michael Saylor is the CEO of MicroStrategy.
He's a big Bitcoin bull. He's the guy who helped this recent pump when his company bought X number of billion.
There's something about them buying another 600 million.
But anyways, in the show he was talking, he's going through the evolution of man and how he's used energy.
He's coming up to Bitcoin, but he was talking about how the actual railroad track standards we have now are the width of a Roman carriage because that's how much the standardization has kept along through the ages.
Right. So You can propose changes to Bitcoin in the same way that you can propose changes to the width of train tracks.
But getting people to implement it, that's a whole different thing.
And there has to be such a benefit that people are willing to take the risk.
And it's not like getting a vaccine out in 12 months.
It's not that bad.
Where I was going with that is...
Crypto is great.
Crypto is great. But it's like a constitution.
It's going to be no better than the people that enforce it.
Same for any crypto. And I don't mean just the developers, but the whole community.
And that's where the value of philosophy and your work comes into play.
Raising that virtue is how we'll get to a much better place.
There's not going to be one magic button that does it.
There's going to be some really helpful technology.
Someone has asked, SEC taxing coins, is that responsible for the dip?
Does anybody have any thoughts?
And please remember, no lawyers, no investment advice.
We're not legal experts.
We're not accountants.
So this is all just a bunch of people with their opinions.
Don't do anything based on anything you hear.
Talk to an expert. But as anybody, Jared, you had another facial twitch going on.
I'm not sure what they're referring to.
The SEC taxing coins?
They've always taxed crypto.
Well, I'm sorry. The IRS has always taxed crypto.
I don't know. I don't know if there's something new that came out.
Yeah. Well, at the beginning of the year, you might need to sell some in order to cover your taxes for this year as you file.
I think that happens at the beginning of the year. That's always been the case.
Yeah. Okay.
Here's another one.
It's a good point. I personally think that selling Bitcoin for fiat, this guy says, is wrong.
We need more stores educated in Bitcoin, then it will inflate massively.
Where's that audio coming from?
Hello? Hello, hello.
Oh, Sparrow. Sorry, I'm going to have to mute him.
Yeah, so somebody says, I personally think selling Bitcoin for fiat is wrong.
We need more stores educated in Bitcoin, then it will inflate massively.
There's a real truth of that. I said that a couple of shows ago, so I'll just very briefly here.
We want to think about Bitcoin to stuff, not Bitcoin to fiat to stuff, because that still puts fiat as the primary way that you measure the value of Bitcoin.
Now, right now, the websites are all Bitcoin.
It's worth this much fiat.
I want to know, you know, I saw that there are two bars for sale in New York City for 25 Bitcoins.
You know, that's what I want to start thinking Bitcoin to stuff, not Bitcoin to fiat to stuff.
And so, yes, if you sell Bitcoin for fiat, everybody's got to diversify, and I'm all fine with that.
I'm not saying don't sell, right? Obviously, nobody should listen to anyone who says sell or buy or don't buy or sell.
But yeah, the more that...
Well, first of all, I like making the big financial institutions pay more for Bitcoin.
I think they deserve that pain.
I think they deserve that hurt.
And I think that the common people who've been shafted by the financial elites for approximately...
Ever, I think is the technical phrase.
So I think that the more people hold, the more that the financial institutions have to pay for it.
That would be fantastic. But somebody else said, minus 100% control Bitcoin.
If they don't mine, Bitcoin won't work.
Anybody want to take that one on?
Right, but they're distributed across the entire world, across tens of...
Sorry, can you lean in a bit?
They're distributed across the entire world.
The game incentive for that is never going to happen.
Yeah, so miners are not a Borg.
It's a bunch of people who are heavily invested in the success of Bitcoin.
So, of course, they're going to mine.
And mining means also processing the transactions, right?
So, of course, they're going to process the transactions.
Why on earth would you set up this big giant Bitcoin rig and then say, well, I'm not going to use it to process transactions.
I'm going to use it to pay doom.
Yeah, and Bitcoin is...
Sorry, Bitcoin has something called the Difficulty Adjustment Algorithm, which is one of the most interesting parts of Bitcoin and one of the big innovations.
And what it means is that if a majority of...
Somebody has just said that your mic is quite a bit louder than everyone else's.
If you can move it a bit further away or turn it down a bit.
Yeah, sure. Is that better?
Mic check? Mic check, mic check.
In between? Alright, so that's the middle.
Yeah, go ahead. Okay, yeah, so that means that if, let's say, the internet split in half or something or, you know, something terrible happened and 50% of the hashing power disappeared from the network, within some time, I believe it's on average about two weeks, the difficulty of mining would actually go down and it would make mining more profitable.
The less miners that there are, the lower the difficulty algorithm goes and the more profitable it is to mine.
And so that incentivizes the market to return, right?
Bitcoin is governed by economics and incentives.
It's not governed by any specific sort of category within the Bitcoin ecosystem.
And so I think that argument is just, you know, it's, yeah, I mean, it's just wrong.
It's false. The other thing that people will attach to this is that, oh, well, you know, the miners can censor people in Bitcoin, right?
Well, as far as I've heard, Iran now has about 4% of the hashing power of Bitcoin.
Russia is big in it now, right?
China has been losing a majority hashing power.
Texas is mining, right?
So the distribution, the geographical distribution of mining has been...
The decentralization of mining has been, you know, expanding, right?
And so, if the American, if the Silicon Valley decides to censor your Bitcoin transaction, some Iranian will probably mine it and not care, right?
And that's how it works, and that's the beauty of Bitcoin.
Sorry, anybody else wanted to add to that?
Because I've got two questions that give me facial tics, which I wanted to spurg out on.
Okay, so the first one, somebody says, is Ethereum Classic undervalued?
Okay. Annoying Economics 101.
Okay, there's no such thing as undervalued.
There's no such thing as overvalued.
It is... You know, you see these movies where there's this girl, right?
And she's a nerdy girl, and she works in a library, and, you know, she's just not popular, and she wears baggy clothes, right?
And then from the beginning to the end of the movie, she takes off her glasses, she puts down her hair, she puts on some makeup, she puts on some, and she's got a killer body, and she's hot, and, you know, okay, that's a transformation.
And was she undervalued before?
Was she overvalued later?
It doesn't mean anything.
She's valued exactly as people look at her and want her or don't want her.
That's it. There's no objective value that exists outside of your mind.
So the example I use is if you've just drunk two bottles of water, how much do you want to pay for another bottle of water?
Well, the answer is nothing, really.
In fact, you'd probably pay to keep it away.
Whereas if you're dying of thirst in the desert, You would give everything you own for that bottle of water or that glass of water.
So is it worth zero or is it worth a million dollars?
There's no value that's attached to things like, you know, objects have mass, they have gravity, they take up space.
Those are properties innate to matter.
There's no such thing as value innate to anything.
Now, yeah, a lot of people value similar things, but that doesn't really matter, because it's the value in the moment that counts.
Yes, people need stuff to drink, but that doesn't tell you how much they're going to pay for stuff on average in general, because there is no in general.
Some people are thirsty, some people have just drunk, some people, whatever, right?
Some people are on that weird kick that was going on a couple of years ago where you had to drink half a swimming pool a day in order to stay healthy, because apparently your entire life peeing is a quality life.
There is no such thing as undervalued or overvalued.
And if anyone disagrees, I'm happy to be corrected on this, but I just, thinking that there's some objective thing out there that it's below or above, you know, it's like, what is your value as an employee?
Is there an objective value to you as an employee?
If you think you're worth $100,000, then you should try and get $100,000.
And if somebody will pay you $100,000, great.
If somebody will only pay you $80,000, you can think that you're underpaid, which I guess everybody thinks, right?
But it doesn't mean anything.
It doesn't mean, it's like saying I'm under-dated if you want to date more, or I'm under-traveled, or like there is no objective thing called value that floats around in the universe.
It's an entirely subjective.
Now that doesn't mean arbitrary.
Subjective and arbitrary are two different things, right?
So subjective is, there's no such thing as subjective value, but arbitrary is people would just as much want to eat Ash and lava as burgers, right?
That would be completely arbitrary, right?
So, because here's the thing that I'm concerned about with this, is that if you think something is under or overvalued, it's a bit of a fantasy statement.
It's worth exactly what people think it's worth, and nothing more and nothing less.
Value is simply the act of...
Transmission of one value for another.
Some money for a car, a date for sex, whatever it's going to be.
That is all that's occurring.
It's a relationship. It's not a thing that exists outside of that relationship.
If you think you can get $5,000 for your car, great.
If you get 5,000, you're happy.
If you get 4,000, were you underpaid?
No. It just means that you were mistaken about the value of your car and the actual value that you could attain and achieve in the marketplace.
And value is a thing, too. You can't figure it out.
Because if you...
If you spend a year trying to sell a used car, you'll find one guy who's like, hey man, I had sex in the backseat of exactly that kind of car, and I'm going to buy it for nostalgic and sentimental reasons, and he'll pay you an extra $2,000.
Or maybe he's got his brother desperately needs a part from that car.
But then you've just spent a year, maybe you make an extra $2,000.
It's not really worth it. So it's just where you just give up and say, okay, that's fine.
I'll just take this and we'll both walk away content.
But there is no such thing as undervalued or overvalued.
That's a fantasy statement.
If you want something to increase in value, complaining that it's undervalued or wondering if it's undervalued doesn't.
Like if I say, oh, I should be paid $50,000 rather than $40,000, it's incumbent upon me to make the case that I'm worth $50,000.
I can sit there and say, well, I'm just undervalued.
Or I can say, I need to make a case that I'm $50,000.
So the reason I'm saying that, if you think that, what was it?
Ethereum Classic. So if you think Ethereum Classic is undervalued, Buy it.
Buy it and then go out and tell people how valuable it is.
But it's not undervalued in any objective sense.
You've got to go and raise people's interest in it.
If you think it's undervalued, buy it and then go sell.
If you think that you're not attractive enough to women or to men, you know, I don't know.
Do sit-ups.
I don't know. It's been a while since I've dated.
Wear X. I don't know what happens these days.
Just go out of the house without a mask or something, right?
What does it mean to say, I'm undervalued by women, you've just got to go and find a way to make yourself more attractive?
To women. And so obviously that face tattoos for a lot of hot women.
I don't know why, but it's just the way the world rolls.
So again, it tends to make people kind of passive.
You know, go make the case that you're worth more.
And if you can't make that case, go and add value until you are worth more.
But there's no such thing as being under or overpriced.
So that's just a little rant. And it's really important because if you, especially in this field, if you think something's undervalued, oh my gosh, it's got such potential.
Don't wait for this magic value to suddenly attach itself to this thing.
Go out and make it happen, because it's not going to happen without you making the case.
Sorry. I hope that wasn't too long a rant, but...
Hopefully, you learn some risk management along the way because trading is very profitable, if you're right, but it's also one of the only businesses where you can actually lose money.
That alongside entrepreneurship.
Risk management, it's a thing that traders don't talk about, but it saves them because it means you don't risk more than you can afford to lose in the moment and you can control everything.
The only thing you can really control in trading is how much you're putting on the line, how much you're risking.
Because the price could go up forever, as far as you're aware.
There's another big one.
You talked about this earlier, that you can go out and talk about it.
You don't just sit there and stare F5, F5, F5, F5. Go out and talk about it.
Make the case with people.
Help them to understand. Educate people.
I mean, if you're not talking about Bitcoin, I don't know what you're talking about.
Good morning, Bitcoin.
Good afternoon, Bitcoin.
Or whatever. Whatever crypto has got you.
Jimmy's going. But don't be passive.
Because we're passive with fiat.
That's kind of how we're raised. It's like, oh, interest rates up or down.
Well, what am I going to do? Make a phone call to Janet Yellen and say, listen, you scurvy whatever, go change the price of it.
We can't do that. But we can do that with crypto.
We can go out and really make a case.
And it's really, really important, I think, that people do that.
As I've made the case for many years, it could be the end of peace, intergenerational debt, slavery, deficits, exploitation, vote buying.
I mean, it could be everything. It could be everything.
What else have you got to do that's more important, you know?
So, another thing that people said...
Fair enough. I mean, my concern there would be that...
My only concern there is that there's a history of people shilling shitcoins.
Sorry to use the big words, but...
And it's because there's a kind of, like, perverse incentive, right?
Like, if you can get a...
The big bag of altcoin number 350 that's in consolidation and then pump it hard enough, you will make thousands of dollars and a lot of people will lose on the other side, right?
And so, you know, yes, evangelize if you really believe it, but also study it and study the fundamentals because there's enough body of work and analysis of the I mean, the thing that Bitcoin does is it kind of aligns greed in a way that becomes harmonious, which is just like magic, right?
But that's not the case for a lot of altcoins and small It's lower market cap assets.
Something the Bitcoin core community has to work on, though, is that everything else is a shit coin.
It's the Bitcoin maximalist attitude, where it's like, everything's a scam and a shit coin.
Oh, most things are. Yeah, it is.
I'm a minimalist of...
Pretty much, yeah.
Or a scam. Anything beyond Bitcoin is either a direct scam like Bitconnect or a bunch of engineers that think they're going to pull it off.
Very akin to the Elizabeth Holmes that thought she could pull together like Famous?
Not famous, but...
Yeah, I think she legit went into that.
Yeah, she took a ton of investment.
Oh no, that thing was rife with skeptical stuff all the way around.
And rank fraud. In the sense that these engineers think they can pull it off.
And they're going to fail spectacularly.
And the net effect is that it's all a scam when you kind of boil it all down.
You seriously think everything but Bitcoin's a scam?
Yes, it is. Like a scam?
And even if these people are like, let's say they're genuine in their intentions, but they fail, that's still a scam to you?
In a sense, yeah. If you're promising something you can't deliver on, then you're, you know...
What if you're not promising it?
What if you're saying, hey, here's our plan.
It may not work, but invest if you want.
Is that still a scam? It's like a rose by the other name.
It's still a rose. Oh, come on.
He's talking about practical effects, not intentions.
So I go to the playground with my kid and I push him on the swing and then there's some other dad pushing their kid on the swing.
And we're both a little bored sometimes.
And I say, hey, have you heard about Bitcoin?
And then he's like, oh yeah, I heard of it, but I don't really know that much about it.
And then I go, I'll give you some.
You know, it's interesting.
People are really bored, I think, most people.
And then it's an interesting topic.
Almost anybody will talk about it.
You know, I'm also a Christian, and I want to talk about Jesus, and nobody wants to do that.
I've been yammering about Bitcoin, as you know.
I think it's important.
Here's another one that gets me a little twitchy.
How long do you think this bull...
Sorry, go ahead. I was just going to say, but it has to be peer to peer.
If you can't hand him something after the end of the conversation, then he's just going to be like, well, that was kind of boring.
Like, that was a waste of time or whatever.
But if you hand him something, he goes, wow, what's, you know, wow.
You know, that's why Bitcoin Cash is it for me, because I can still hand him something at the end of the conversation and not have it cost me 20 bucks in fees or whatever.
Somebody says, how long do you think this bull market will last before we get another bear market?
Anybody want to take a swing at that Vaseline-soaked ball?
You generally get the alt rise associated with Bitcoin.
The alt's lag.
And then, gosh, I mean, if I could predict where the market's going to top, I'd be a whole lot better off.
Yeah. I always say, find the most skeptical person you know, and when they ask you how to buy, it's time to sell.
When everybody has a Lamborghini, that's the time to sell.
Okay, the beginning of 2016 to the end of 2017, for me, felt like it was a crypto boom.
I know it was really more like the summer of 2017 is when it really started taking off.
And so, gosh, like on that timeline, it could be months before this season's over.
You can look at the history of Bitcoin and see particular patterns, but that was before the institutions got involved.
True. Right? Now, once the institutions get involved, this is what, so once the institutions get involved, it's...
It's got a ballast to it, you know, like the ballast that's supposed to keep a ship stable, right?
It just gets stability.
And also, you get connections.
Once really big institutions and the biggest property owner in the world is now starting to dabble in Bitcoin, right?
So once you get institutions getting into Bitcoin, they can make the kind of phone calls that we just can't make.
So some regulator can start sniffing around and saying, oh man, I don't know, man, this is pretty bad.
We've got to regulate this. I hear terrorists use it, right?
Because they never use fiat, apparently.
But what can happen is the big institution guys, they can get those meetings.
When I ran a software company, we had some pretty hairy times.
I had to take out personal loans of staggering amounts just to make payroll, waiting for big deals to come in.
Now, it's the old thing that says, if you owe the bank $100,000, you're in trouble.
If you owe the bank $100 million, the bank's in trouble.
So in 2007, 2008, there were a lot of people losing their homes.
But they couldn't make a phone call to Ben Bernanke And get the helicopter of cash coming out.
Other people could do that.
The Bear Stearns people, the Goldman Sachs people, they could all be like, hey man, the entire system's gonna come down.
If you don't give us $700 billion, we're holding everybody's milk and bread and cookies hostage.
So those guys, and I don't like the system, but you live in the world it is, right?
Those guys, the big institutions, they can make the phone calls.
And they have a huge incentive.
It's concentrated economic incentive.
Diffuse economic incentive where, you know, everybody has three Bitcoins.
Okay. You can't get the calls.
You can't get the political clap.
The institutions provide stability.
They provide credibility. Oh, Bitcoin, it's a scam.
It's a fad. It's like, well, you know that so-and-so invested in Bitcoin and Elon Musk, the richest guy in the world, is pro-Bitcoin and blah, blah, blah.
You know, it's not an argument, but, you know, it's not bad.
It's not bad. So you get the stability, you get the credibility, and most importantly, I think you get the political connections that these guys aren't going to want to see $100 million or $500 million go tits up if the government tries to screw with Bitcoin.
They're going to get the calls.
They're going to get the meetings that you and I just can't get.
And sad to say, that actually means a lot.
But no one's going to tell you, nobody's going to tell you because nobody knows how long a bull market will last.
We don't know if it is a bull market.
Was aviation a bull market that then just crashed?
Sorry, I don't mean aviation crashed, right?
Well, I guess until China, right?
But Bitcoin is not a thing.
You want to think of Bitcoin like it's not a book, it's language.
It's not a song, it's music.
So is music up or down?
Well, a particular artist may be doing well, a particular artist may not be doing well, but music as a whole is pretty constant.
You don't want to think of it as a movie, you want to think of it as movies.
It's not a thing, it's a relationship.
It's an entire, it's a concept.
And it's a measure, as Elon Musk said, it's a measure of the relationship between things so we can bypass Bonner.
So you don't want to think of it like a stock.
You don't want to think of it like an industry.
Even though I just use these analogies, you want to think of it as something much larger and broader.
It's not baseball, it's air.
It's not a song.
It's music. It's not a book.
It's language. And I'm long on language.
That's my whole thing, right?
So is language going to go up or down?
Well, it's not really the right question.
Now, the value, of course, of Bitcoin is going up.
A bear market. For the bear market to occur, in my humble opinion, for the bear market to occur, the dollar would have to get more stable and the traditional economy would have to get stronger.
Everybody knows, deep down in their bones, Biden is going to take a Robert De Niro baseball bat to the economy.
I mean, there's no question of that.
He's opening the borders during a pandemic.
The amount of spending is through the roof.
He's saying, oh, well, you know, if you were deported for violent crimes by Trump, come on back!
They're releasing 25,000 migrants into Texas or illegals into Texas.
They're massively increasing the refugee settlement program.
And he has no economic plan.
At least Trump had spent some time in the free market.
In fact, most of his career was in the free market.
Biden has no clue.
No clue. And Biden is compromised.
Biden, I believe that there's massive amounts of compromise on him and blackmail material.
And I mean, he's in the pocket of China.
I mean, the guy just referred to the genocide of the Uyghurs as a cultural difference.
You try that with the Holocaust and see how far you get.
And right, you wouldn't get very far at all.
So in order for Bitcoin to really lose that, I don't mean like the upy downy stuff, then it would have to because it's in competition.
With the traditional economy, the traditional economy is being absolutely attacked and crippled by the far left through Biden and Kamala Harris.
So that to me is why I still think it's very early days with regards to this.
And remember, of course, for people who don't know, you don't have to buy a whole Bitcoin.
Any more than you have to say, well, I want to invest in IBM. Well, you're going to have to buy this building then.
Nope, nope, nope. That's not how it works.
You can just buy little slices.
The point I made in the last show that if you spend $2 a day buying Bitcoin for the last six years, you'd have over a quarter of a million dollars right now.
National Bitcoin, national crypto, people are asking about, and this sounds like an odd question, but it's not, because Janet Yellen is now starting to explore, don't you know, she's starting to explore the possibility of creating a, let me just, a digital dollar.
Treasury Secretary Janet Yellen signed, signaled the Biden administration Supports research into the viability of a digital dollar, a shift from the lack of enthusiasm shown for the concept under her predecessor, Steve Mnookin.
She said it makes sense for central banks to be looking at it, issuing sovereign digital currencies.
She just said this virtual conference on Monday hosted by the Voldemort paper.
She said a digital version of the dollar could help address hurdles to financial inclusion in the U.S. among low-income households.
See, that's how it's going to help the poor, don't you know?
Apparently, Bitcoin doesn't help the poor, but a national currency Totally going to help the poor.
She said, too many Americans don't have access to easy payment systems and banking accounts.
And I think this is something that a digital dollar, a central bank digital currency could help with.
It could result in faster, safer and cheaper payments, which I think are important goals.
So she's basically saying she's the head of an enormously inefficient organization.
And has been for all of that.
So a number of central banks, including the U.S. Federal Reserve, have been conducting research into how digital versions of their own currency would work.
Officials generally see both opportunity and risks, and many central banks have moved slowly to embrace the idea, while China has proceeded with pilot program tests of a digital yuan.
So, very briefly, can't possibly work.
Because the whole point of government currency is you can print what you want.
The whole point of government currency is inflation because the government doesn't add value to economic transactions.
So the only way it can pretend to add value is by borrowing and printing.
It's like a guy who pretends to be paying for something by racking it up on a visa he can't afford to pay later.
Looks like he's paying something now, but he's really not.
So the idea of...
They may have a digital dollar But it ain't going to be a crypto.
It ain't going to be a, certainly ain't going to be a Bitcoin, because Bitcoins are limited and the entire political structure relies on monetary inflation and debt.
And overprinting and overpromising.
I mean, the whole system relies on bribing people with the money of the unborn.
Can't really do that. Try setting up a contract for some neighbor's unborn child.
Oh, you're pregnant. Let me just go on the blockchain and I'm going to create a binding, enforced contract that your kid is going to be born owing me a million dollars.
You know, I don't care what clients you're using.
Bitcoin ain't going to take that.
It's not going to process it.
It doesn't even mean anything.
And so if you understand that, then the idea that whatever digital dollars created by the central bank is going to have anything to do with Bitcoin or crypto, as we understand it, is not going to be close.
Not even going to be in the same ballpark.
But I'm happy to hear other people's thoughts on that, of course.
Juan, you're muted. Oh, sorry.
Yeah, I totally agree with you. I think what they want is to maintain the power of the Federal Bank, of the Federal Reserve.
But they also like the infrastructure, and they like the cool aspect of Bitcoin, and they like the borderlessness of it.
And so it won't be a Bitcoin, a natural Bitcoin.
It'll be a crypto dollar.
And that already exists.
There's multiple versions. There's the Tether, which is...
I think started by the Bitfinex guys.
There's USDC, which is, I believe, Coinbase or Circle.
It's a big American exchange.
And those are already regulated.
They're compliant. If any transaction gets associated with the blacklist of financial enemies of the West, then that can get blocked.
So it's centralized. But it still moves on the rails of Bitcoin, right?
And it moves on the rails of this technology, the blockchain, right?
And so that is much more likely.
And where it gets interesting there is that they could deploy a dollar that moves with the ease with which Bitcoin moves, right?
Even at $20 a fee, right?
There's other layers of scaling and And velocity that are being developed for Bitcoin right now.
And they can move among those rails as well.
And the dollar doesn't become limited by its banking partners.
It can spread as far as the internet spreads.
And now you can start to expand your jurisdiction into other nation states, right?
You can start to expand it much further than you can with the current infrastructure.
So that's kind of my thoughts on it.
I think that it's very likely to happen.
We'll see if it's one of the big competitors.
I think that FedCoin is inevitable over a long enough time.
They're going to do it. At the very least, it's a lot cheaper than moving dollars and coins all around.
Now you've got the COVID argument.
People aren't transacting hand-to-hand, stuff like that.
It's coming. Let one more pandemic turn the corner and it'll be here before you know it.
On top of that, I'm curious about, I think it will, not investment advice, wild speculation, cause, help legitimize cryptocurrencies, because now they will be copying us, you know, and taking notes from this community.
So I personally, hey, Bring the competition, you know?
And now the downside of that is when they say, oh, but we've also got the guns.
So that'll make things interesting.
Anybody got thoughts on Chainlink technology?
So from my understanding, Chainlink is what's understood as an Oracle.
And guys, please correct me for anything I miss here.
And so an Oracle is when you're trying to get real-world information into a blockchain or a digital medium, something like that.
So let's say I want a contract that calls the price of Ethereum.
And executes something based on that, or looks for an obituary for someone's death so that they can execute something else.
How do I get that information into the blockchain?
And then from my understanding, in the crypto development community, that process is called an Oracle, and Chainlink's process...
Chainlink, from my understanding, their primary delivery is an Oracle service for many multiple cryptocurrencies, Tezos being one of them.
Tezos uses their Oracle service.
So, yep. All right.
So I guess we got an hour and a half.
I really, really appreciate everyone's time today.
And yes, sir, go ahead.
Can I add a little bit? Because we were talking about today about like, is it late?
Is it early? And I've been wanting to bring this up, like where we're at.
You talk about the Pareto principle quite often.
Another interesting thing The concept to take a look at is the diffusion of innovations.
And so basically that is a theory on, it is a theory that seeks to explain how, why, and at what rate do ideas and technology spread.
And so in a quick summary, so basically what it'll kind of give you for some reason, These patterns hold true over time, like in the same way that the Pareto Principle is very interesting and the way it could go.
And here's a wild example of my part.
The figures are probably wrong.
Take it with a grain of salt.
So let's say it takes two years for the total number of people that will end up riding the bicycle.
To buy and purchase a bicycle.
They're the early adopters.
So then it'll take another four years for the middle ground of people.
That's your bell curve, your boom.
And then it'll take a final two years for your latecomers.
So for however long it takes to get to that boom gives you an idea of how long the boom will last and then your final latecomers.
I know I didn't do a great job explaining it, but just check it out, search for it on the web, the diffusion of innovations.
And when I look at that, it really gives me a whole lot of promise for crypto because it just hasn't even warmed up yet.
All right. Anybody else?
Final thoughts? No, all right.
Thanks, everyone. It's a great pleasure to chat.
We got Juan Galt, J-U-A-N, I'm sure for the tidy whities among us.
JuanGalt.com and really, really appreciate FreeDomain.com.
I take crypto and donations.
FreeDomain.com forward slash donate.
If you find this helpful, I would really appreciate that.
Thanks, everyone, for your time today.
A great pleasure. And we'll do this again soon.
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