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May 3, 2021 - Freedomain Radio - Stefan Molyneux
49:51
Why Your Friends Won't Buy Bitcoin!
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There we go. All right, all right, all right, all right, all right.
Hey everybody, Stefan Molyneux from Free Domain.
And yes, so...
A friend of mine and I were having a chitty chat.
He goes by the name Zyrol because Zorro was taken.
And we actually did meet on a tour.
And a friend of mine who was saying that when he tries to talk to his friends about Bitcoin, he gets a whole bunch of repetitive questions and issues and so on.
So I was like, hey, we should probably just do this as a show.
And if you have people you're trying to sort of get interested in Bitcoin...
What we should talk about, what they should talk about, and common objections.
So thanks for taking the time, Big Z. And yeah, what do you get when you head out into the normal world of investment?
Well, I've got some friends of mine who, you know, like there are people who work in the same industry I do.
They're in IT, so they're quite intelligent people.
And they obviously are looking for ways to, you know, hedge themselves against, you know, the government manipulation of currency.
But they seem to have a very different view on cryptocurrency, which is that they think that, you know, cryptocurrency is highly speculative and prone to inflation and rapid deflation and has unpredictable pricing.
And it makes it really hard for anyone to rely on it as a stable source of investment, like something that they, you know, that they're very worried about.
Like, you know, one of the things that they complain about is that, you know, they could go in to buy something and very rapidly at the point of checkout, you know, the price has gone up significantly.
Significantly, and they need more of the currency in order to buy it, because they perceive it as very volatile.
So instead, they tend to buy a lot of precious metals, like gold.
buy some stocks in precious metals mining companies because they see them as more stable because they see, well, if you've got a block of gold at home and you're safe, Like that's going to always have some value because, you know, we need it in society and civilization to manufacture things.
And it's also sentimental value attached to it.
And it's always had some value throughout human history in terms of, you know, jewelry and whatnot.
So they see those as safe investments but not cryptocurrency.
And so they're very worried about putting any significant kinds of sums of money into cryptocurrency because they're really worried about losing their investment or it being worth nothing the next day.
And even though I've talked to them, hey, but this stuff's been around for a decade, it doesn't really seem to sway them.
And I really don't know how else to push the envelope further with these guys.
Right, right. So, yeah, there's sort of three scenarios that I see this investment stuff kicking around in, and this is just a framework.
It's not, you know, A to Z. So, if things are fine, then Bitcoin is not Quite as necessary.
If things go bad, but not too bad, Bitcoin has significant value.
If things go to complete hell in a handbasket, then I can understand the argument for gold, right?
So, I mean, there's a lot of international trade and you're not exactly going to send gold by the mail to pay for something over Amazon.
So gold is like the port of last call.
It's like one step above frozen meat or something like that or, you know, selling your children.
So... If things continue to go well-ish, then the fiat currency is a reasonable thing.
If things go bad, but not too bad, Bitcoin has the greatest value.
If things go to complete hell in a handbasket and we're hunting zebra through downtown Brisbane, then yeah, I can see gold having some significant value.
And I guess the first scenario that everything's just going to kind of trundle along is not Possible.
Fiat goes to zero, right?
Historically, the only people who don't believe fiat goes to zero are people who've not studied history.
Fiat goes to zero all the time.
You know, as I said before, the one exception being the British crown sterling, which has lasted for a couple of hundred years, but has lost 98% of its value.
So... Fiat goes to zero.
So that first scenario is not really valid.
Now, the second scenario is, you know, things go bad, but, you know, there's still electricity, there's still the internet, you know, Elon Musk's space mafia, whatever it is that's still beaming data around, that people find a way to keep things going during a time of wrenching economic change, which to me is historically the most likely scenario.
You know, when currency goes to hell, You know, the Weimar Republic style or Revolutionary France style or Zimbabwe style, when currency goes to hell, it's pretty horrible, but it's not like everybody loses everything and you end up hunting game through the downtown corridor, Fight Club style, right? So now there's the scenario where things go to complete hell in a handbasket and there's no internet and there's no electricity and so on.
Well, I'm not sure that gold is going to do you a massive amount of good because it's probably just going to be barter trading at that point anyway.
But I can certainly understand that.
Now, the issue of price volatility, maybe it's just an age thing, because younger people haven't seen the kind of inflation that I've seen.
So as I said before, when I came to Canada in 1977, you could buy a candy bar for 10 cents.
And then by the 90s, it had gone up tenfold, and it's remained somewhat stable since then.
So younger people haven't seen the kind of inflation that I've seen, which is like in a 20-year period, you get a tenfold increase in the price of some pretty significant things.
And so it might just be, if you've been around for that rollercoaster, Then you kind of get how unstable fiat is.
But things have been more stable.
Inflation is 2%, 3%, 4%.
I mean, at least that's what's reported.
And if you take out things like...
The deflationary aspects of computers or the inflationary aspect of housing, that it's got some stability that is relative to Bitcoin over the last couple of years, I can certainly understand.
But once we understand fiat's going to zero, then we look at the alternative.
And the alternative, if we're going to say it's gold or it's Bitcoin, the first question, of course, is why not both, right?
There's no reason why you've got to go one or the other 100%.
But for me, the instability with fiat always screws you.
Because the instability with fiat is you're going to lose your money.
Inflation is going to just eat away at your money over time.
And inflation doesn't have to be that high to like half your money in 7 or 10 years.
So your money is bleeding out through fiat anyway.
And yeah, Bitcoin is volatile, but the volatility is generally on the upside.
You know, it's a 200% ROI year over year for 10 years.
There's no performance of any asset class in the history of man that's achieved that.
So sorry, go ahead. So one of the arguments I've heard about the fiat going to zero thing, which is true, that has happened all throughout history, is that the way they see it is that the government will simply just rebase the currency or replace the currency with another new currency.
I mean, the Australian pound got replaced with the Australian dollar at one point, because we used to also use the old...
You know, the old colonial currency as well over here in Australia.
So they replaced the pound with the dollar and they just simply transferred the value along and that the way they see the value of the currency is because everyone must pay their taxes in fiat, right?
So if the government uses force at the point of a gun at you and says, hey, I'm going to take half your staff And you must pay me in this currency.
The way they see it is, well, if we have to do it because there's a threat of violence and we have to pay it in this currency, what choice do we have?
So they see it as as long as there is a government around and they don't see a government ending anytime soon, maybe replaced or changed with something else.
Is that there'll be always some value associated with fiat, even if it's low.
During specific times, they think that there's always going to be some kind of fiat around as long as there's governments.
And I can understand that position, right?
But it does...
What they're saying is, like, it's, you know...
The reality is for them is like, you're not going to be able to live in society without having some form of fiat to exchange to.
And so therefore, it'll always have some kind of value.
Okay, so I mean, even if we take that argument at face value, and they say, well, you got to convert your assets to fiat in order to pay your taxes.
Well, gold is convertible to fiat and so is Bitcoin.
So I'm not sure how gold comes out ahead in that in that scenario.
Or this is the argument against fiat going to zero, right?
Right, right.
Yeah, go ahead. Well, part of what they were saying as well is that, you know, there's a finite amount of gold, which is similar to Bitcoin in that regard.
So they do agree that that shares the same process, but also that, you know, the less, um, so the, the more, uh, the more gold gets extracted from the earth, there's less of it It gets more expensive to continue mining.
And what they see is that at some point, the value of gold is going to surpass the rarer it gets in terms of things like Bitcoin.
Well, okay, so gold generally has 2%, 3%, 4% extraction rate every year.
And that tends to self-regulate because if the price of gold goes up, then they will invest more in mines or expand mines that hitherto weren't profitable.
If the price goes down, the obverse happens or the inverse happens.
And this is one of the things that people like about gold is that it tends to grow with inflation or it tends to go with productivity outputs and so on.
And again, I understand that and that's fine stuff.
But it's not the same as gold.
As crypto. At least, it's talking about Bitcoin, right?
That Bitcoin is hard-coded to limit at 21 mil.
And that you just can't get any more.
There won't be any more. You can subdivide the ones that are there, but you can't get any more.
Now... But mining will end at some point though, right, with Bitcoin?
Well, it depends what you mean by mining.
If by mining you mean the production of new Bitcoins, well sure, yeah, once the Bitcoins have all been produced, then the miners will simply turn to the processing of Bitcoin transactions, which means that as Bitcoin grows in popularity, more miners will focus on processing Bitcoin transactions and there will be Other issues around faster transactions or price stable transactions.
You know, if there is a demand for price stability In the realm of Bitcoin, then entire financial institutions will arise like Phoenix's, like Atlantis.
Entire financial institutions will arise to provide that service.
I mean, it's kind of funny to me that people who are in the market and you say programmers and so on, they buy and sell things in the market.
So they're all involved in satisfying consumer demand at some level or another.
And so if there is a consumer demand for a stable coin related to the Bitcoin network, then it's really not that complicated to come up with something like that, right?
Because all you do is you set up a whole bunch of hedges and swaps and shorts and forwards and just that and the other.
And then you simply say, I guarantee you a stable price, say, for the next year.
And you'll just set up your environment to try and deal with that.
And, you know, for the most part, that will work and people will refine the process and so on.
So if you want a stable Bitcoin, then that's just a market demand.
And you will pay a certain amount in order to get a stable price in Bitcoin.
And it depends on the market demand for all of that kind of stuff.
Generally, people don't mind if the price goes down.
I mean, we love that with computers and stuff like that.
So if there is a market demand for a stablecoin in the Bitcoin universe, it will absolutely be provided because people will be willing to pay for it.
Yeah, yeah. And I mean, another concern they've given is like, so when the network gets quite busy, as in like people want to buy, there's a huge amount of demand for purchasing Bitcoin, is that the transaction costs become, you know, like astronomical.
They get really, really expensive.
And I know this isn't just limited to Bitcoin, but they've seen it with things like Ethereum, where gas prices have massively inflated because there's a heavy use on it.
Whereas they look at things like...
You know, like if you're doing transactions over your traditional, you know, like Visa, MasterCard networks, those fees stay pretty much relatively fixed, no matter how many transactions they push through.
And, you know, what they're saying is, well, if we're going to use Bitcoin as an everyday currency for you to trade in, like I'm going to pay my rent or I'm going to Buy a car or I'm going to, you know, like that these, you know, that something like Bitcoin is not going to be suitable for that because, you know, the transaction, like if there's a massive increase, an uptake of Bitcoin, the cost of these transactions is going to exceed even what we've got now.
And people, and there isn't mass adoption of Bitcoin yet, right?
Like, so if it's, you know, they're pretty high now, they're only going to get worse, right?
Yeah. Yeah, for sure.
Absolutely. So I mean, there's a couple of answers to that.
And I don't have all of the answers, because it's just guessing where the market's going to go.
But I would imagine that it's the gold and silver difference, right?
So there'll be Bitcoin for the larger purchases that aren't as time sensitive.
You know, if you need to buy a house, Through Bitcoin, it's not like, well, I've got to have this done in 30 seconds, right?
So there'll be stuff like buying a car, pretty lengthy process, buying a house, buying big contracts, some sort of lease of commercial buildings or real estate or something like that.
Then there's no massive hurry for this kind of stuff.
And I would imagine that that's where the largest and most capped in terms of the block transactions per second will kind of go.
Now, that's the gold, right?
You generally don't buy a cup of coffee with a piece of gold, right?
Even in a sort of biometallic universe.
And then there's other things for smaller and quicker transactions.
And all that will happen is there'll be a parallel network of faster stuff that then will eventually reconcile to Bitcoin as a whole.
And so you've got the Lightning Network, there could be Bitcoin Cash, there's a whole bunch of things that go pretty quickly.
And so again, it's just what they're saying is that there simply is no way for incredibly brilliant people who've been at the cutting edge of financial technology for 10 plus years, there's simply no way for them To figure out how to make this financial system work, even though people have found a way to do it with Visa and with MasterCard and with PayPal and with, you know, you name it, right?
And so they're betting against the self-interest of people who will stand to make millions, billions, hundreds of billions, or even trillions of dollars to solve this kind of issue.
And I mean, from my old days as a computer programmer, we had to synchronize databases in a time when the internet was very slow.
And so we would simply do it offline after hours, right?
And you just send all of your data, you get it all reconciled, you produce a report of any conflicts and have them resolved manually.
And so yeah, you couldn't do live real time updating of databases.
So you simply did it asynchronously offline.
And that's similar to the blockchain as a whole.
And so, you know, you can, if you want, you can bet against the self-interest of people who can make hundreds of billions of dollars trying to solve problems that other industries have already solved.
Or you can say, well, these things are impossible and go straight to gold.
Personally, I try not to bet against the self-interest of incredibly brilliant and committed people with hundreds of billions of dollars at stake.
Yes, I think they're pretty much going to solve it.
But if you think they won't solve it, I can certainly understand that.
Or if you think that none of the...
If crypto coins or parallel lightning networks to Bitcoin are ever going to be able to solve this problem, even though there's a massive market demand for it, then obviously you shouldn't invest in the space.
But personally, having been a computer programmer, I mean, I started when I was 11 and I still occasionally program.
I was showing my daughter how to program and all of that.
So... Having been a computer programmer now for 43 years and having seen how much things have changed over the course of computer programming for my first 2k pet to all the stuff you can do now with supercomputers, you know, thinking, oh my gosh, they can't possibly solve this problem.
You're hedging a lot. If they can solve this problem, you're out a massive amount of money.
If they can't solve this problem, you have to stick with slow trudge along.
Gold. Now, the other thing that I can say is that it seems to me likely that as fiat currency begins to lose its value in a serious manner, and it's going to, without a doubt, I mean, it's mathematically the case, right?
Half of the money, half of the US dollars were printed in the last 12 months, for God's sakes, right?
So if you're a government and the money that people are paying you in taxes is worth much less than you expected...
But Bitcoin is worth much more than you expected.
What are you going to do? You're going to say to people, pay your taxes in Bitcoin.
Without a doubt. I mean, that's going to happen.
There's already indications that that's starting to happen in places as well.
So what you have to do is also you have to believe not only that brilliant computer programmers with hundreds of billions of dollars of profit in stake can't solve these problems, but you also have to believe that governments and our political leaders are so dumb that they'll take crappy, dissolving fiat over appreciating Bitcoin, even though it's very easy and better in many ways for them to track it through Bitcoin.
There are two other major concerns that they write, and I do agree with what you said.
There are two other major concerns related to the cryptocurrency take-up for them that they find quite difficult to overcome.
One of them is to do with exchanges, right?
So the way they see it is, well, if you want to purchase cryptocurrency, you've got two options, right?
Which is you can either mine it Or you can buy it, right, with fiat currency, right?
And some of the concerns they have is that the exchange of fiat to cryptocurrency that, you know, some of the mechanisms that exchanges have been using are flawed.
An example of it being there's a currency called USD Tether, which is being heavily used to purchase Bitcoin and Bitcoin.
Supposedly, they're supposed to have a US dollar for every fiat currency transacted into the network to purchase the Bitcoin, right?
And what they're saying is that there's reports where a whole bunch of these equivalent vehicles like USD Tether actually don't have the equivalent fiat that they claim they have to actually support the purchase of Bitcoin.
So if people suddenly want to transact back into fiat from Bitcoin, that actual currency won't be there.
And it'll basically collapse the price of things like Bitcoin.
The other thing being that they see exchanges as being an attack vector for governments who want to ban cryptocurrency.
And so if people hold a lot of their funds In exchanges, they're worried that if, let's say, the US government suddenly goes, hey, we're banning all cryptocurrencies or we're banning some cryptocurrencies but not others, things like privacy coins or whatever, they could literally just raid exchanges and go, hey, hand over all your stuff.
Otherwise, we're shutting you down completely.
And they see that as a potential barrier for them to be willing to invest, right?
Now obviously I know there's alternatives for all that stuff, but that's the kinds of arguments I hear from them as well.
What are your pushbacks to those arguments when you talk to people and they bring those up?
Well, basically, when it comes to exchanges, one of the things I do is I go, well, A, you shouldn't keep your money in an exchange for a long period of time.
It's okay to transact on a temporary basis because you might want to exchange Ripple for Bitcoin or Bitcoin for Ethereum or whatnot.
But unlike a bank, which people do tend to trust because they're backed by all kinds of insurance and the government will destroy the economy to prop up the banks all the time, which has been done time and time again by the US government.
You know, that, you know, exchanges aren't really a safe a store for your cryptocurrency as a bank might be to people.
And they do get hacked and it has happened time and time again.
So what you should do is basically, you know, do your transaction on the cryptocurrency exchange and then withdraw it to your wallet.
So that you can be assured of its safety and no one can take it just by virtue of the design of the cryptocurrency and blockchain system, right?
So that's one thing I do tell them about, you know, things like, you know, exchange hacking and government seizing cryptocurrency assets and things like that.
But the concern for them that also then comes as well, if I want to sign up for an exchange, I have to do a know your customer, you know, process, which normally will involve you handing over transactions.
Your private, you know, information to the cryptocurrency exchange, which then the government could use to basically chase after you personally and seize those assets directly from you.
And that one's a much harder one to push back against because, yes, that's true.
And that does put you at significant risk.
That one, I'm not 100% sure how I normally will push back against that, but...
Yeah, that one's a hard one because, you know, once the government has your details, even if you offloaded the money to someone else and just passed the hot potato, they'll ask you who did you hand it over to, right?
And that one's a hard one to kind of figure out how to handle, right?
Well, I mean, we also have to figure out which one of these issues is...
Only applying to Bitcoin or cryptos, right?
So, as we all know, the governments have regularly confiscated gold in the past, chased down gold holders.
A lot of people who buy gold have to also provide their information to the dealer and so on.
So, I'm not sure how that would simply apply to Bitcoin.
They're not your keys, not your coins.
Yeah, I get that.
You get convenience by trading on a central exchange.
And there is an element of risk involved in that.
It's not just tax or government things, but what was in Turkey?
There's reports that maybe some guy ran off with a bunch of money after Turkey, not Turkey, but the central bank ban stuff.
When governments have banned crypto, generally the crypto trading has increased.
It's, you know, the searches for Bitcoin, understanding of Bitcoin went up way after the Turkish central bank had issues with Bitcoin.
So, yeah, the government can come after your stuff.
Guess what, right? There's eminent domain.
They can seize your house, right?
They can jack up property taxes to the point where you can't pay it and they can seize your house.
They can swoop into your bank account and take stuff if they think that you haven't paid your taxes or something like that.
And I can't remember, was it Malta or Cyprus, where they went in and just took like, what, 10% out of everyone's bank account?
So yes, the government can take stuff, for sure.
And that's an issue.
It's certainly not central to Bitcoin or crypto.
And some of the privacy coins have other solutions that they claim about that kind of stuff.
I don't know the legality, but I do know that there are some privacy coins that have tried to deal with that.
So, yeah, but I don't know why that would be something peculiar to crypto.
I mean, the government can take your liberty, the government can take your rights, the government can take your speech, the government can take your stuff.
Sure, absolutely.
I mean, yeah, go ahead.
I mean, for me, the argument I have used is, well, that actually should, instead of you going, hey, no, Bitcoin's really risky, you should be encouraging everyone to take it up because then the blast radius of a government decision of that kind is so much greater than And it's more likely to bring upon the government a whole lot more angry people than just the odd few nerds who might,
by the way, that's not my terminology, it's theirs, that, you know, it's not just a whole bunch of angry nerds who've had their, you know, Bitcoin stolen from them, right?
Like, it now becomes a general population thing.
Well, sure. Now, again, I think that was, and I talked about this some years ago, so there's a tipping point with Bitcoin where it gets embedded enough in the financial superstructure of the world that banning it is...
It's going to destroy the economy.
In other words, people have enough assets invested, there's enough money, there's enough powerful people who have it that, you know, there's the people we see in the government, and then there's the people who control the government.
This is something Vladimir Putin said some time ago.
He was saying, you know, like, it's the same everywhere.
You get into power, you're an American president.
And then the guys in suits sit you down and say, well, it's nice that you said all the things to the people, but now here's how things really work.
And so you have to go along or you're not going to have a very good time of it, right?
So he was saying Barack Obama wanted to close down Gitmo, but, you know, just didn't get around to doing it.
Well, why is it? Because he didn't want to?
No, of course he wanted to, right?
So the people behind the puppets that we kind of see with the state, they are in possession of much better knowledge and much better data about the state of the state's finances than we are.
And certainly they know about the real inflation numbers and they know about the real M1 and M2 money supply and all of that.
So those people, the more that you get generally wealthy, powerful, financially acute people who have great connections to government, And that tipping point has already happened.
It happened really over the last 6 to 12 months that you have a lot of powerful people with a lot of close contacts to government going all in in Bitcoin.
Now, there's two reasons that that's important.
Number one is that they don't think it's going to be banned.
And number two, if there is any kind of movement to ban it, it would simply be a populist movement to appease the left.
It would not be a serious thing because there would be too much money at stake and too many powerful people who have the ears of government who will keep it going.
And so I think that the people on the inside know how close.
Currency crisis is.
And this is why there's been such a move and why Bitcoin has gone up like, you know, four or five times over the last sort of six to 12 months, because there is knowledge about what's going on.
And there are a lot of people jumping ship.
I mean, I think even the threats to ban it sometimes are actually government ploys for them to plunder and buy a whole heap on the cheap, right?
I think China's mentioned several times that they were going to ban cryptocurrencies, and then people flooded the market in fear of trying to sell all their...
Bitcoin and all their cryptocurrency only for the Chinese government-related organizations to snap it up on the cheap, right?
And now they've amassed giant amounts of it.
So, yeah, I absolutely see what you're saying.
That totally makes sense to me.
And it's also not just mining and buying.
You can trade for it, right?
You can do labor and get paid in Bitcoin.
You can trade in kind. There's lots of ways that you can get a hold of it.
A couple of comments here, completely unverified, but I will say somebody said price of crypto is usually around 20% higher in countries where it's been banned.
That's interesting. Mine it yourself and trade on Dex Anonymous.
Somebody says Detroit used to overestimate the value of houses so residents couldn't pay property taxes.
Then they would repossess the house and sell it.
So, yeah, I mean, I get where people are coming from, but this is a fallacious thinking, right?
It's thinking that, you know, well, if I live in this country, I could die.
It's like, well, you die in every country, right?
And if I have Bitcoin, the government could seize it.
It's like, well, you tell me an asset, including your own body, that that's not the case for, right?
I mean, look at Julian Assange, right?
They seized a lot more than his money, right?
So, that is...
A fallacious thinking. You think it's only going to affect Bitcoin as opposed to everything else.
In fact, if the government wants to seize property, what they'll do is, well, what they're doing right now, it's like they're jacking up the inheritance tax so that the wealth comes from the boomers.
To the millennials or to the Gen Xers is going to get taxed at, like, ludicrously high rates, right?
So they'll do that kind of stuff because they want to shave.
I mean, there's all this 401k stuff and all the boomers' retirement plans.
There's all this big, ripe carcass that the state wants to peck at.
But they'll do that kind of stuff before they'll start.
They're doing that. They're doing that exact thing right here behind me.
Like, there's a whole bunch of properties.
The government's basically just said, we're taking this over, we're putting a highway through it.
And there's nothing you can do about it.
And they'll basically offer you whatever sum of money they offer you.
And if you don't take it, they'll just keep dropping the amount of money they offer you and no one else can buy it because they know it's going to get seized by the government anyway.
So you have to take their first offer and run because that's the best offer you're going to get.
And that's completely legal and they can do that under our country's laws, right?
And I'm sure that that's the case in Many countries, right?
Where they can just go, hey man, we're taking stuff, whether you like it or not, and we're going to offer you funny money in exchange for it, and good luck to you, right?
Right. And the case is also that, you know, obviously whatever you feed thrives and whatever you starve fails.
And so if people want to continue to work in fiat, they're simply propping up an unsustainable system for longer.
And the longer the government is in control of this kind of stuff, the worst things are going to be for society as a whole.
Like if you have concerns about mass immigration, Then propping up the fiat is a way that the government pays people to come to your country who may not, you know, exactly believe the same things that you believe or have a value for the same freedoms that sustain your soul.
So, yeah, I mean, a vote for fiat is a vote for war, is a vote for welfare, is a vote for the military industrial complex, is a vote for national debt.
And so, yeah, I mean...
Every dollar you give to the government is used as collateral to borrow many multiples of that dollar against your future earnings.
So, I don't know. It just seems to me that don't we want to see if we can get a soft landing and a transition to something more rational sooner rather than later?
And there is a sort of social element to it as well, like a moral element to it as well.
It should not all just be about how can I maximize the numbers in my statements in the short term.
You know, this is not how we got a free society, was people just hoarding and doing what was maximal for them in resource acquisition in the short run.
There's a moral element to it as well.
And if you're going to trade in stocks, then you're simply giving money to corporations with a woke agenda that are interested in destroying you and undermining your freedoms.
And if you go into bonds, then you are giving money to governments that are going to use its collateral to borrow against your children's futures.
And same thing if you go to banks, then you're also reinforcing the fiat system.
And if you go to gold, yeah, sure.
I mean, doing some great things, but gold is pretty tough to transport.
It's pretty easy... To take and with regards to it's tough to trade with, well, you know, people don't trade with gold, right?
They'll have notes that represent the gold and they'll use that to trade and it will be settled at some time later, which is exactly the same in a way as the Lightning Network or other things which resolve Bitcoin issues much more quickly to be settled later, right?
So they can bypass the sort of megabyte limit on block size and so on.
So yeah, there's exactly how it works in gold will work.
And of course, the other thing too is that if the price of gold starts to become really high, like in other words, if gold follows the same pattern eventually as Bitcoin does, then they'll have exactly the same complaints about the volatility of the price of gold that they currently have about the price of Bitcoin.
So I don't really know how that solves that either.
Got it. No, I agree.
Absolutely. And...
I did notice that I did skip over one of the points I made, which is around the exchanges.
For the common everyday person who's not going to be mining, because mining can be quite costly, and the hardware is getting more and more difficult and more expensive to buy, obviously, because it's high demand.
That's just your usual supply and demand problem.
You know, things like video cards and mining, you know, ASIC mining rigs and all that stuff are getting more and more expensive.
So a lot of people, their ramp into cryptocurrency is going to be through a fiat exchange at some point, right?
And the concern they've got is that a lot of exchanges have come and gone.
I know I personally, like I didn't lose a lot, thankfully, because I use my own methodology of Putting in money, buying some cryptocurrency, exchanging and pulling it out.
But I did lose, I think it was one or two thousand dollars on an exchange that actually got hacked and was then made bankrupt and they're going through these proceedings that have lasted multi-years to be able to even get any of my cryptocurrency back, right? Because they I think the amount that got stolen was superior to the amount of actual cash they had.
And so there doesn't seem to be a whole lot of security when it comes to exchanges.
If they do go bust and what happens to your currency that's being held with them, and I think that that's one of the concerns that they mentioned as well.
Sure. And of course, as you point out, you make your trades and you get your coins out.
I mean, it's pretty easy to remediate.
The odds of it being hacked five minutes after you've made your trade before you transfer your coins are pretty low.
You're going to get hit by an asteroid too, right?
So there's lots of ways to remediate that kind of stuff.
And here's the thing too. So is there risk in crypto?
course there is right but there's no such thing as high reward without high risk or higher risk and i think that the rewards in crypto now that it's proven itself as as pretty pretty stable certainly over the last couple of months annoyingly stable in a way um that's you know that we're past the age of really really early adoption and from here the risk goes down and the reward will go down relative to if you buy it now so
So the people who want, well, give me something that's got a high reward and a low risk, it's like, well, that's Bernie Madoff territory, right?
Anybody who tells you that is not being particularly frank.
Do you see, and this is a question, something I've been wondering, is do you see that maybe in the future, like in the financial services industry, which is by no means anything but a flawed vehicle at the moment, that Do you see the possibility of exchanges adopting things like insurance instruments against these kinds of things,
like where they're paying for insurance policies to guarantee or at least attempt to guarantee some kind of Financial safety net for the exchanges themselves.
So I mean, I know banks, for example, will take out insurance against you.
So they'll have to do that kind of stuff as more widespread adoption happens.
Because like really, really early on, you know, there's in the business world, right?
In the business world, I always got this analogy.
And it's a pretty good analogy when it comes to understanding the business cycle of a new company, right?
So in the business world, you have scouts, soldiers, and policemen, right?
So the scouts, like let's say you want to go and take some town that's on the seaside, right?
So you've got your navy, and you send in your scouts first to just, you know, where are the gun placements?
Where are the soldiers? Where are the barracks?
Where's the weaponry? Where are the bullets kept?
All this kind of stuff, right? And they're just scouts, right?
And they're just out there sussing things out to see if it's possible to take the town, right?
And then you send in, assuming it is, right?
Then you send in your army and there's a big battle.
And then the army moves on and all you leave behind are your policemen, right?
And this analogy works, I think, pretty well for Bitcoin as well, right?
So there's been some scouts, right?
Is it proof of concept? Does it work?
Is it stable? Is it hackable?
Is it spreadable to a large degree?
Can we break through the ignorance factor and the indifference factor to, you know, can it get to some real value and so on?
So the scouting, because, you know, obviously the city here or the town here by the seaside is the existing...
Murder coin financial structure, right?
So the scouts, they're done, man.
And now the waves of soldiers are coming on, right?
Which is more mainstream adoption.
1% adoption around the world is huge.
Absolutely huge.
1% market share of the planet is absolutely enormous.
And that's just not perfect, but it's an adoption.
And so right now, the soldiers are starting to come on board.
And the scouts are moving on to the next thing.
And the next thing is going to be, okay, the next town to be taken is making it more manageable for the coffees and donuts purchases.
So the scouts, they just keep moving on to the next objective, right?
They just keep going, right? So right now, the assault on the fiat currency, the assault on central banking, the assault on the existing financial structure is underway.
And if you understand where you are in that kind of cycle, so, you know, originally there was feelers put out for central banking and then it was imposed.
The existing structure was taken over in these sort of decrees of taking your gold and separating the convertibility of gold and so on.
And now there's just a bunch of policemen.
Now, the thing is, though, that a system that's not used to defending itself because it's had a monopoly is very soft.
And you have incredibly motivated people who are not just motivated by money, but ideology.
Like, as you know, the Bitcoin came out of Satoshi Nakamoto's disgust and loathing at the financial crash and the bailout of the financial institutions and all of that stuff.
Right.
So there's an ideological motive and a hatred of central banking, which people genuinely believe and rightly so is completely destroying their lives.
Right.
It is completely just putting them in debt.
It is giving them endless inflation.
It is bribing and corrupting the entire political system and its intergenerational debt.
It's driving up the price of housing.
It's diminishing job opportunities.
It's funding all sorts of population movements and so on.
So, you know, people are really ideologically motivated to take out this town, so to speak, right?
And of course, the world will be a better place when money is more rational and objective and certainly limited.
So where we are in that adoption cycle, you're going to assume that there's nothing but policemen guarding this town and you have scouts and armies highly motivated to take it out.
And again, I know it's an analogy and analogies aren't perfect, but it's pretty important to know where things are in that cycle.
And the downside risk, of course, is that if you invest in a bunch of fiat-based stuff, and I know people aren't necessarily talking about that in the long run, Investing in companies that are woke and ideological and leftist, that to me is completely crazy.
But whatever you invest in with fiat and corporations is a vote for the existing system which is unsustainable.
Something's going to replace it. If you think gold's going to replace it, I don't think you've understood the whole digital revolution.
Because people associate digital with limitless.
Like you can just copy and paste and have infinity.
But the convenience of digital combined with the limits of the Bitcoin universe, where you can't just keep making more and more and more of it, is such a powerful combo that in the realm of...
I was thinking about this with regards to...
The show I did yesterday that you had some very kind words about Bill Maher's takedown of Bitcoin or whatever.
So Bill Maher has a digital currency, in a sense, or a digital product called his show that he limits with copyright laws, right?
So he's got a show that he can reproduce as much as many people can see it, but it's limited to his profit center through copyright laws.
And that's analogous to Bitcoin, which is digital.
It's kind of like an NFT, right?
Yeah, it's limited, right?
It's limited and it's digital.
And we don't really have a lot of exposure to that except for movies.
But of course, you know, movies and TV. But movies and TV, you can crack them, you can put them up on wear sites, you can put them up on alt media platforms and so on.
So that stuff's pretty easy to crack and copy, but you can't do that with Bitcoin.
At all. The other thing, too, I wanted to mention, all the people who were like, oh, my God, the energy usage of Bitcoin is like, well, compared to, like, the death murder coin of fiat currency, the fact that it's got some higher energy consumption in particularly narrow ways of looking at it is completely ridiculous.
It really is like being held up with a gun to your head that was 3D printed, a 3D printed gun to your head, and you're saying, oh, man, I bet you that 3D printed gun used a lot of energy.
I bet you that really did waste...
Our precious energy resources is like, dude, you're being held up and you're sitting here.
Oh my God, the getaway car is the Prius.
Oh my God. But here's the thing that drives me mental about that stupid argument is that we've made energy production more and more efficient.
So we're using way less resources to produce electricity than we did, say, 100 years ago, and the trend is still going down.
we're looking for more and more efficient ways to produce electricity because it's going to basically mean that, you know, like let's say every ounce of coal that you dig out of the ground, you're going to get more electricity from it.
Therefore you're going to make more money from it.
So every company that's generating electricity has got every incentive to make those operations more and more efficient.
So it's just ridiculous.
Yes, we're using more electricity, but we're also producing more of it at less resource usage, right?
Bill Gates of all people, Bill Gates, you know, it was a lot less energy intensive to do your bookkeeping on pen and paper, but he had no problem selling computers that drove up, right?
Oh, it's a ridiculous argument.
It's a ridiculous argument. Some people says here, once you send crypto, it's irreversible.
With fiat, you can reverse the transaction and get your money back.
Thus, you don't see major fiat hacks.
Well, fiat is a hack, first and foremost.
Fiat is a hack. And also, the amount of money laundering and illegal activity.
And illegal activity that's really bad, that's run through fiat, is ridiculous.
And crypto is not at all irreversible.
If you send money...
To someone, and they can then just send it back.
I mean, it's not at all irreversible.
So I don't know what that is.
It's no different to the gold thing, though.
That one I debunked pretty quickly with my friends, and they're like, yeah, of course, duh.
Well, if someone gives you a car, and that car happens to be a lemon, and you didn't do your due diligence, right?
Or it was a stolen car and they didn't know it was stolen for whatever reason at the time they bought it and they handed over their gold.
And now suddenly they're like, well, this car's stolen and someone's come back to repossess it.
How are you going to get your gold back?
It's no different to the cryptocurrency argument.
Like, yeah, you're going to have to track this guy down and...
and maybe put a gun to his head and get your gold back, maybe, right?
Like at the worst case scenario. - Right. - It's no different to the Bitcoin thing, which is, yeah, you transfer money to a wallet and they can disappear with it and not give you what you paid for.
Well, now you can just make sure that this person's ostracized from the rest of society and the damage that they've done to you will be repaid a thousand fold, right?
Okay, I'm sorry. I've got to just close off with another question or two because I've eaten almost nothing today.
I've got to get some dinner in me. So somebody says here, when you buy with a credit card, it turns out to be a fraud.
You call the credit card company and get your money back.
If you send crypto, you're screwed.
Okay, first, aren't credit card companies charging like, what, 16%, 18% interest at the moment?
So the idea that you're somehow screwed with crypto in a way that you're not screwed with the credit card company is kind of Kind of ridiculous.
Credit card companies can de-platform you.
And also what you're doing is you're comparing, like if you look at credit cards, they started, what, in the 1950s or 1960s or something like that?
That whole infrastructure was not set up back then.
So what you're doing is you're comparing an industry with 50 or 60 years maturation and widespread adoption with an industry that didn't even exist 10 years ago.
Right? Like the crypto stuff, right?
And it's only beginning to reach its mainstream adoption.
So what you're doing is completely unfair.
You're saying that, well, you know, this guy who's 20 is a way better athlete than this guy who's 10.
Because when they wrestle, the 20-year-old wins every time.
It's like... You don't know if they're a better athlete innately.
You just know that one guy is a lot bigger than the other guy, and it's because he's been around 10 years longer.
So when you start comparing crypto to things like credit cards, you're dealing with an industry that is massively wide-stream adoption, has had hundreds of billions of dollars invested into its infrastructure, charges a massive amount, and is subject to inflation.
So if you want to compare apples to apples, look at how the credit card industry was 10 years after the idea was first thought of.
Not after the first credit card went out.
After the idea was first thought of, look at that, and then look at where the credit card industry was 10 years or so after that.
And that's what you want to look at. You're just comparing this stuff.
It's completely useless and pointless.
And of course, the thing is too, if you want...
If something to be reversible, all that will happen is some company will come and say, oh, by the way, if you want your crypto reversed, we'll do it for you.
And they'll figure out a way to make it work.
They'll buy insurance. They'll have extra crypto.
So there'll be lots of ways for them to do it.
It's just that there's not enough demand yet because the people in the crypto space tend to be experts at the moment, particularly at this point.
People in the crypto space tend to be experts.
So they triple check all of their sends and they've almost never send.
You know, I know some people lose from time to time.
I had a little experience with that.
But the people in it are experts, so it's going to have to be made more user-friendly.
So it's like comparing a cell phone in 2021 with a computer that I was programming with in 1980, which, you know, a cell phone boots up with all these pretty wizards and steps and guides you through this, that, and the other.
And when I was a kid, I first booted up my first computer and it just said, ready.
And that was it, man.
You just had to start typing and figure out what to do from there.
And... So, yeah, you just compare apples to apples and try and be fair on this stuff.
Okay, I'm going to stop here. Sorry, you wanted to close off with the thought?
Yeah, I was just going to add a small statement, which is, like, chargeback fraud is massive as well.
Like, you know, those things, you know, still don't have easy solutions.
If you're a merchant And you've had a customer who you've sent a product to and, you know, they've paid for it and then they've asked for a chargeback.
Like, as a merchant, you're screwed.
Like, you have to go and submit evidence and proof and maybe they'll give you the money back.
The Amex or Visa or Mastercard, they'll just take the money straight out of your account and give it back to the customer.
Like, you know, oftentimes no questions asked.
You end up paying for all of that in higher fees for whatever you buy and sell.
It's like, it's a kind of shoplifting, right?
So... Yep, exactly.
So it's not a perfect system either, and it doesn't...
Nothing is free. Yeah, nothing is free, man.
You get screwed in the end.
All right. Well, thanks, man. That's all I wanted to add.
Yeah, I really appreciate you dropping by.
I'm glad that we were able to take this convo public, and I hope that this helps.
This is a big topic, and this is certainly not the alpha and the omega, the soup to nuts of this issue, but I'd like to get more questions and issues.
You can, of course, email me at callin at freedomain.com.
That's callin at freedomain.com, and I'd love to hear from you.
Thanks, everyone, so much. Nothing's free, that's right, freedomain.com forward slash today.
Really appreciate your time, everyone.
Have a great afternoon and a great pleasure to chat with you.
Thanks for all the great questions, and thanks, Cyril, my friend.
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