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April 2, 2023 - Freedomain Radio - Stefan Molyneux
54:00
THE (NEW) TRUTH ABOUT BITCOIN - OBJECTIONS!
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Hi everybody, this is Stefan Molyneux back again for common objections to Bitcoin, which I respect, I understand, it's absolutely essential that we get this stuff squared away.
I'm going to start off with a whole bunch of practical good cases, some economic analysis, and finally, the moral wallop one-two punch to hopefully get your mind on straight when it comes to this incredible technology.
So... We just did a presentation, the new truth about Bitcoin, an update from a presentation I did about 10 years ago.
And now, of course, the objections have been rolling in.
I think it's wonderful to have these objections.
Opposition means that you're doing something particularly in the world of virtue.
So let's dive straight in and deal with this.
Okay, major objection to Bitcoin.
It's no tangible. You can't touch it.
It's... Bits and burps, numbers in a computer somewhere, squirting around the ether, and it's not a tangible thing.
You can't take it with you. You can't put it under your bed, at least not very easily.
So that we'll be wrestling with.
It relies on electricity and the internet.
Boy, if I had a tenth of a bitcoin for every time somebody said to me, yes, but if the whole electrical grid goes down, your bitcoin is useless.
We'll deal with that one as well.
Oh, it's too volatile.
Boy, given my show's history, the last thing I'd ever want to be complaining about is something or someone else too volatile, but we'll deal with that as well.
It's not dual use.
Not dual wield.
It's not dual use.
Gold you can use for electronics.
You can use it for a store of value and currency.
You can use it for jewelry and so on.
Bitcoin is dedicated to being a store of value and an ease of transferring that value, so it's not dual use.
We will, of course, be doing a comparison with gold as well.
It's environmentally destructive.
Boy, you know, it used to be that spikes in your energy bill were just because you were doing some sort of illegal grow-up.
Now, it's probably because you've got Bitcoin mining going on.
So we will look at whether it is or is not environmentally destructive.
Ooh, Bitcoin, just for criminals and terrorists, because Lord knows, fiat currency has never been used for anything immoral in the entire history of the world.
So is it for criminals and terrorists, and what's the ratio?
And governments, if it should succeed, you know, in the modern world, like success is failure in the moral area.
So states won't let it compete.
They won't let it compete with fiat.
They won't let it compete with central bank digital currencies and so on.
So they're just going to squash it like a bug.
We'll talk about that as well.
So, let's talk about intangibility.
So, I cannot trust something I cannot see and touch.
All right. Okay, here's something really, really important.
This is going to be a central theme of what I talk about here.
One way that people manipulate you is when you're faced with a choice that is complex, and there's no particular solution, there are only trade-offs in the economic sense.
When someone is trying to get you to do something, they will show you the pluses of one choice against the minuses of another choice and think that they've given you some kind of favor or some kind of objective information.
They haven't. They're just trying to shut down or bypass your free will and your judgment.
By saying, well, here's the pluses of one thing and compare it only with the minuses of the other, which is how you know you're being scammed.
Like, honestly, this is how you know you're being scammed.
And I'm going to do my very best, of course, to be honest about the pluses and minuses of various systems.
So a sort of typical example is somebody says, well, you could buy a house or you could invest in the stock market.
But if you buy a house, you have some place to live.
And a stock market, you still have to rent a place to live, so that's bad.
It's like, okay, well...
But that's just comparing the pluses of real estate with the minuses of the stock market.
Pluses of real estate, you have a place to live.
Minuses, you don't.
You could, of course, compare the pluses of stocks with the minuses of real estate.
Well, you know, you get to say your down payment goes into something that's going to go up in value.
It's much more fungible. You can divide it up.
It's much easier to sell and transfer, and therefore stocks are way better than real estate.
So I'm not going to do that.
I'm not going to compare the strengths of Bitcoin with the weaknesses of everything else, but acknowledge the various strengths and weaknesses to give you a more objective view.
So I just wanted to point that out.
So yeah, I cannot trust something I cannot see and touch.
Lots of things are abstract and vague and ephemeral, you know, love, meaning, virtue, passion, attachment, all of these things.
They're not particularly touchy, but they make up the meaning of life.
So things that you can't see and touch, I get from a sort of raw empirical sense, we need shelter, we need food, we need heat and so on.
But the idea that you're never going to trust anything you can't see and touch.
I mean, you do business based upon reputation.
Can you see or touch reputation?
Nope. The virtue of your lover, you can't see or touch that, but it has great meaning for you.
So I really want to disconnect this idea that if we can't see or touch it, it can't possibly be trust.
Trust is when you sort of Trust is when you accept that somebody has fairly consistent behaviors and therefore, since the best predictor of future behavior is relevant past behavior, how they are in the future is going to be likely how they were in the past.
So there is a certain amount of trust that is built up through consistent virtue over time.
So we'll talk about that as we go forward.
And of course, here's the thing too.
Gold requires either paper notes or some sort of electronic marker.
So you don't just carry around bars of gold when you need to do transactions, right?
You store it somewhere and then there's markers for that gold.
So you're not actually seeing or moving the gold itself usually.
This is where paper currency came from, was markers for gold.
So when you use gold, you don't carry around like sort of bags of shavings and dust and so on and scoop it out and, I don't know, snort it or whatever.
So gold is not something that you generally see in touch if you use it as a currency.
So this is just one layer of abstraction removed.
And if you look at the things like email, social media, video games, even this presentation.
I'm just bits and burps in a computer.
I'm just photons on a screen.
I'm waveforms in your ear.
And so if you're getting value out of this presentation saying, well, I can't trust something I can't see in touch, you can't see in touch me.
This recording is days or weeks or months or years ago in the past.
Digital stuff can have great meaning.
It can have great value.
If you look at email, social media, video games, they're all virtual.
They all have great value.
Video games are bigger than movies in terms of income.
Do you trust the currency, the fiat currency that you have now?
Paper currency is a tiny fraction.
Of what is going on.
Most of fiat currency is bits and burps inside a computer somewhere.
It is virtual. 90%, almost 90% of US currency in circulation is not in the form of cash.
So again, the idea that, well, you know, Bitcoin is just beeps and burps on a computer, but fiat currency is all paper.
Nope, nope, nope, not at all.
So 90% almost is not in the form of cash.
And there's $2 trillion in cash throughout the world versus $330 trillion of debt.
So that is a very, very big deal.
You've got $2 trillion in cash, $330 trillion in debt.
So the idea that cash is tangible but Bitcoin is not, 0.6% of the debt is in cash.
The rest of it is all beeps and burps and obligations on a computer.
In America, only one in four people say they use cash on a weekly or monthly basis.
And, of course, you can also, if you want, you can get physical Bitcoin currency.
You can get Bitcoin coins.
You can get Bitcoin USB, where there's a seal, and if the seal is broken, then it's spent out.
So you can get hologram stickers.
You can get lots of ways that Bitcoin can manifest In a physical way, so the idea that fiat is tangible, Bitcoin is ephemeral is just false.
You may be subject to a whole lot more faith in the world than you actually know when it comes to fiat currency.
So yeah, we can't see the virtue of others, but we experience it.
Hopefully I have generated over the last 17 or 18 years of doing the show, hopefully I've generated some trust in you about the objectivity and reliability and value of what it is I present.
Can you see it and touch it?
Hopefully it's a kind of feeling and a trust that I've generated over time.
So if you look at your relationships, a lot of stuff that's intangible.
So this is what I'm saying.
If you look at daily transactions in the U.S. in particular, we've got 12% in cash and 88% of them are data on a computer.
So the idea that money has to be physical for exchange and trade, not the case, right?
Exchange and trade, that's relationships, reputation, which is another level layered, abstracted, and so on, right?
So, if you're going to say, well, I'm fine with almost 90% of things being digital, but boy, it'd be crazy to go 100%.
If you've accepted almost 90%, the idea of going to 100% may not be as far off as you think.
So, people say, ah, but it's not backed by anything.
Well, it is backed by something because bitcoins require energy to generate and the entire system requires energy to maintain, right?
I mean, if gold was just lying around, easy to access, then gold wouldn't.
We don't use gravel as a form of currency or grass because it's everywhere, right?
So it is limited. It is backed by the energy required to produce it, the dedication, the machinery, the investment of people.
It's backed by the virtue of people involved in Bitcoin, many of whom for which it's a real moral crusade to free the world from predatory currencies controlled by some fairly amoral people.
So yes, it is backed by limitation.
It's backed by the restrictions of the energy required to use it.
It's backed by the people who find value in it.
It's backed by The virtue of the people, and not everyone, but most people involved in the Bitcoin community that I've met over the past decade plus are really committed to this as a moral ideal as much as it is an economic value.
Ah, well, fiat, right?
What is fiat? Fiat generally is paper or some simulacrum thereof.
What is fiat backed by? Well, it's backed by force.
Fiat literally means by government decree.
So fiat is backed by force and debt and the legal requirement that most people have to pay their taxes in fiat.
So what is fiat backed by?
Would you rather something be backed by virtue and energy requirements and anti-inflationary restrictions on currency, or would you rather it be backed by force and debt?
So if you're concerned about a currency not backed by anything, I think you want to look a little harder at fiat.
Bitcoin can't be created out of nothing.
This is really the foundational concept to understand.
Governments can create whatever currency they want.
As a result, inflation has to be controlled.
They end up managing and controlling interest rates and restricting trade and requiring licenses to make money.
So there's a huge amount of Potential for corruption and actual corruption in fiat currency, Bitcoin can't be created out of nothing.
And that really is its most central value proposition, that it can't just be created on a whim.
It can't just be printed.
You know, the meme sort of money printed go...
Because, I mean, you've heard of the Weimar Republic, the French Revolution, Zanzibar, tons of places where people have just printed the money into oblivions happening in Argentina.
As we speak, and Venezuela and other places, so you really, really have to look at that limitation aspect as a central value proposition.
It's backed. What else is it backed by?
The fact that it's very easy to use and getting easier as you go forward and ease and cheapness of transferring value.
So that's a backing, right?
So think if you want to be entertained by a story.
What could you do? In the past, of course, maybe you had a great storyteller in the family or maybe there was a local troupe of Hamlet-style players coming through the town, or maybe your kids would put on a puppet show or something like that.
But the most tangible thing in the modern world, if you want to watch a story, is to hire the actors and watch them, right?
It's immediate. You're paying them directly, and you're not sharing the cost with anyone else.
It's a one-to-one economic relationship.
Alternatively, slightly less tangibly, you could go and watch a play.
Someone else has produced, and someone else has hired the actress, and so on.
Third, you could, I guess, get a DVD, go out and get a DVD. Fourth, you could get the DVD delivered to you so that other people are bringing it to you.
Or fifth, you could just order it and watch it online.
So what are people doing these days?
Are they choosing physical and tangible and immediate?
Or are they choosing digital for their value?
And of course, some people do go and watch movies and it's kind of fun to go and watch a movie.
Particularly comedies are better in a movie theater in many ways because you get that sort of collective laughter thing.
So why do you? So many people watch online.
Why has Netflix, the streaming service, completely displaced Netflix, the DVD delivery service?
Well, of course, it's cheaper.
It's easier. You get better quality.
You can watch it on your TV. You can then continue it on your tablet or your phone or whatever.
And you can rate and store and get recommendations and all of that.
So there's a lot of real advantages.
And this is what I'm saying.
You can't compare the strengths of one solution to the deficiencies of another.
Are there drawbacks to ordering online?
Absolutely. There could be censorship.
Things get pulled.
If the server goes down, you don't have access to your movies and maybe issues with passwords and hacking and all this kind of stuff.
Your movie history could get leaked.
Any number of things. So yes, there are weaknesses to the online.
We might have a slow data connection.
It could be any number of things.
So we wouldn't want to compare just the strengths versus one of the weaknesses.
And right now, people are choosing digital.
Like, would it be better if...
I knocked on your door and said, hey man, I want to talk to you about common objections to Bitcoin.
And I just talked to you about it.
We had to sit in two easy chairs, maybe having some fireball whiskey or something.
And we're just talking about Bitcoin.
Yeah, that would be better for you, right?
You could ask me questions.
I could gauge your level of knowledge.
You could bring up objections and we could have a debate.
And we could take as much time as we wanted.
Would it be better for me to be in your house?
Well, of course, it depends. How good the coffee is and whether you have excellent carrot cake.
But it would be better for you if I was in your house in terms of just knowledge exchange.
But it being virtual is better because, you know, much though I love you, I'm not coming to your house to talk Bitcoin.
Maybe. Well, let me know.
But this way I can reach hundreds of thousands of people or more over time and...
It's reproducible. So this presentation is only happening because it's digital.
And of course, you are consuming it because it's digital.
Otherwise, I wouldn't be in your house.
So yeah, you can compare the physical to the digital and you can find advantages to the physical.
No question. You can find advantages to the digital.
No question. So you've got to balance these things out, right?
So we talked before about buying a house versus investing in stocks.
And again, this is digital and this is where the value is for you.
So if you can accept the value in this, at least be open to the value in Bitcoin.
Ah, yes.
Bitcoin relies on electricity and the internet.
Boy, if the internet goes down, if electricity goes down, if there's no power anywhere other than leftover Diet Coke, man, we are toast.
Yes. Well, believe it or not, the internet can go down and Bitcoin transactions can continue.
We'll get to that in a second, right?
And you can generate electricity relatively easily at a personal level.
I would love NUGs, non-utility generators, to be attached to every house.
A lot of regulations that prevent that kind of stuff.
But you can. Look at this.
We've got 3 billion, there's 8 billion people in the world and 3 billion solar panels.
You can generate electricity locally, even on a personal level.
And here's the thing. You just need one computer.
One computer. It could be a cell phone.
Anything that processes. Cell phone, tablet.
All you need is a simple computer to create the transaction.
Then you can send that out, you can go by radio, you could do Starlink satellite, some sort of mesh network, or even you could write it down on paper until it gets to a machine that is connected to some sort of central planning processing place like the internet.
So even if the internet's down, transactions can still continue.
And then when the internet comes back up, then it can all be processed.
You know, we've got...
Oh, yeah. So the graphic for power generation, you've got 8 billion people, 20 billion computers, 3 billion solar panels.
This doesn't count gas.
Diesel, liquid propane generators that are all around the world.
We've got millions of radio towers, billions of radios, hundreds of thousands of long-range hobby radios that can reach around the world at least.
And so the Bitcoin blockchain is already operating on satellite technology.
You've got millions of communications towers around the world.
There are more radios capable of communicating with these towers than there are people.
So, the idea that we're just going to face a future with no power whatsoever is like, well, yes, and I suppose a black hole could spontaneously emerge in the sun and go superman over tomorrow, but that's not particularly a problem.
We have to assume that there's some kind of energy in the future of humanity.
Otherwise, 90% of us aren't going to make it because the amount of energy required to grow and transport food for the cities is prodigious.
And so if there's no, I don't mean to laugh, but if there's no power in the future of mankind, the absence of Bitcoin is going to be the least of your worries.
And the best way to ensure there will The power in the future is something like a Bitcoin, so I'll make that case in a second.
So, yeah, it does in fact rely on electricity and the internet at some point, but there's a lot that can be done, and what is can be bypassed by many alternatives until things get restored for whatever reason.
So, yeah, there are more computers capable of processing Bitcoin than there are people on the planet, so...
Probably going to make it.
Probably going to make it. All right.
So, if a region or even the entire planet loses access to electricity or the internet, again, larger catastrophe than any other.
We got some interstellar EMP device or something like that.
I mean, we're all hunting for rabbits in the wastelands of New York or something like that.
So, whether Bitcoin is up or down, at least for a time, is probably not everybody's key interest at that time.
And you're not engaging in trade during some unbelievable catastrophe like the end of the energy grid completely.
You're just trying to survive. What are you going to do?
Are you going to barter? Are you going to steal?
Are you going to flee and try to use electricity?
And oof, it's just going to be rough.
So what happens?
Here's the other thing too. So let's say the entire electrical grid goes down.
What happens to fiat currency?
What happens to centralized currency?
What happens to your bank account is toast.
The 90% of money that is moving around or stored electronically is toast.
So at least Bitcoin is decentralized, right?
So that it can function when things go back up either locally or globally.
So it's like the difference between hitting a pause and smashing the machine completely.
So It's not like if electricity and the internet goes down, it's not like centralized currencies are going to do any better.
Arguably, they'd do a whole lot worse as well.
When people have enough personal security to work with others, they focus on re-establishing trade, energy generation, and communication.
Right. Could there be some kind of catastrophe in the future?
Well, I mean, statistically, there's probably going to be at some point in the human journey, and that's why I've always talked about, you know, get some food in the house and get a good community going so that you have people that you trust, maybe get some skills that aren't...
Massaging data and writing Python scripts, I think a little more physical.
Okay, so let's talk about dual use.
Absolutely right and fair and useful criticism.
So you've got other assets. You've got gold, real estate, artwork.
They have uses outside of just being a financial asset.
Real estate, of course, you can live in.
Artwork you can use to beautify your environment and or uglify your environment with modern art.
Gold, of course, has more than dual use.
Electronics and jewelry and I guess it used to be teeth fillings and so on, as well as currency.
So yes, it is important that if...
You have an asset having dual use has a value because if it loses all of its value as an asset, it still has value elsewhere.
That is fine, but I want to make the case this is actually a strength for Bitcoin.
So division of labor is very, very important.
If somebody is both, let's say they're an expert cook and a They've spent a lot of time on guitar, learning how to play a guitar, and they're also a certified accountant.
Will they be as good as somebody who's dedicated his whole life just to cooking or playing guitar or being an accountant?
No, because they split their focus.
So the division of labor is quite important.
So I'm going to make the case that Bitcoin not being dual use is actually a strength.
Because Bitcoin is only used as a financial asset, as a store of value, it's not subject to things that could influence physical assets.
Like some new mining technique discovered, the government could seize all of these other assets, a fire or natural disaster.
So let's say there's some social dislocation and you're in your house.
Okay, well, thugs can just come in and take your house.
So people can come steal your artwork and so on.
That's not really the case with Bitcoin.
So... It's funny too, you know, just sort of by the by, those who've listened to me for a while know this stuff, but after high school, I didn't really have any money to go to college, so I went and worked up north as a prospector for gold and a panner for gold and so on, and I spent... I was 16, 17, 18 months up there in the middle of winter.
It was just blindingly cold and exciting and raw and physical and all of that.
And so I really got a sense of just how hard it is to find gold, how much energy has to go into it.
And it's just, it's wild.
So the idea that gold is just this magic thing that's wonderful and perfect and answers all questions is like...
I'm really, really aware.
If somebody said to me, you can either go and become a gold pen or a prospector again, or you can become a Bitcoin miner, pretty sure I know which way I would go.
So it is a strength.
And the more the marketplace is freed from coercion, corruption, manipulation, the more Bitcoin can relay pure market signals.
So I'm going to talk a little bit over the course of the presentation about the efficient allocation of resources.
So if some particular industry is kind of struggling or firing people and the government gives huge tax breaks or subsidies to that industry, then capital and resources will flow to that industry.
But that industry might be dying off and is not chosen by the customers, doesn't really have much value.
And of course, that prevents other industries from being born, from growing, from emerging.
And so when you have the coercion of money printing, of control, of interest rates, and so on, there's a lot of malinvestment.
There's a reason why, although profits have gone up, worker wages haven't gone up, and that's because the government is propping up a lot of dying industries.
I mean, in the entire Japanese economy, they're called zombie corporations, just these businesses that don't change or grow because the government protects them or subsidizes them.
And, you know, our scarce, incredibly valuable capital that comes out of the blood, sweat, and tears of our daily grind in existence just gets flushed away to nothing, to be wasted.
And so when you remove the capacity to prop up industries, to subsidize through this kind of stuff, the more you remove coercion from economic transactions, the more blindingly efficient and positive and growth-oriented the economy becomes.
Bitcoin truly facilitates that.
So yes, let's look at gold.
Let's look at gold. So security.
People forget about this.
What does it cost? About 1% to 1.5% plus some additional fees of your gold per year to store gold in a historically reputable fault.
Costs nothing to store Bitcoin.
You can write down your key and put it in a vault or memorize it and chew the rice paper if you want and it costs you nothing.
Nothing. Or you could say that the maintenance of your Bitcoin is paid for by distributed electricity costs throughout the world.
But you can choose to pay nothing.
So people always forget this about gold.
And if you choose to store it personally, it comes with increasing risk.
A friend of mine had some gold stored in his house, had some house painters over, and the house painters left and the gold was gone.
So it wouldn't be possible with Bitcoin.
Now, again, you can have your Bitcoin stolen.
I really want to be clear about that because, again, I want to talk about strengths and weaknesses.
Bitcoin is not invulnerable to being stolen, not because of anything wrong with the network or the cryptography.
People can just, you know, they can grab you, put you in a van, put a gun to your head and make you cough up your mnemonic, your phrase, right?
And so your Bitcoin can be taken in the same way that people can force you to put in your PIN number at an ATM and take your money that way, so...
Now, what does it cost to hold on for dear life?
HODL, it's called. What does it cost to hold on to your Bitcoin?
Really nothing. A bit of time maybe researching best practices to make sure that it's secure and so on.
But effectively, it costs nothing to hold on to your Bitcoin.
And of course, even historic reputable vaults have failed to secure gold.
What was that documentary with Matt Damon and Andy Garcia and Brad Pitt and George Clooney?
Ah yes, Ocean's Eleven, that great documentary on theft.
I'm just kidding, right? But yes, there are bank thefts and so on all the time.
So gold is regularly seized through private and public means throughout history.
So it's not bulletproof that way.
Now, what about portability?
It would cost about 2% of your gold to ship large amounts with insurance and security and can take upwards of a week or more.
And of course, there are all the barriers to movement that occurs with all of this stuff, right?
And to move any amount of Bitcoin anywhere, it's about 10 minutes, maybe a dollar or two.
So, no fees to store incredible levels of portability relative to gold.
I mean, look at the basic stats.
According to the FBI, in 2020 alone, there were over 6 million robberies and larcenies in the U.S. So, it can be tough, right?
And to paraphrase a list from Michael Saylor, Alexander the Great seized gold.
The Romans regularly besieged cities and stole everyone's gold.
The Kublai Khan stole gold.
The Pizarra stole from the Incas.
Cortes stole from the Aztecs.
Charles I from the Nobles.
Prussians from the French. In World War I, everyone seized gold.
Lenin stole from the church.
Roosevelt seized it from American citizens.
Stalin seized it from the Spaniards.
Churchill stole from everyone at the outset of the war.
And at Bretton Woods, the US took the world's gold hostage.
And then Nixon killed the hostages.
So yes, there is quite a bit of a theft of gold throughout history.
So the idea that It's bad for it to be tangible.
Well, that which is tangible is easier to identify and steal.
And what's going to happen to the price of gold in the long run?
I mean, of course, there's the asteroid belt and so on.
But even at the ultra-diluted levels of average concentration, the top four kilometers of the Earth's crust alone contain as much as 122 billion metric tons of gold, let alone what's in the seas.
So... If technologies are developed, and they usually are, that allow for profitable extraction of gold, then it's going to be a huge amount more that is going to dilute all of this gold value.
So, that's an issue.
So let's look at 50 years.
You have half a billion dollars in gold and Bitcoin and you move all of that wealth once a year.
For whatever reason, you're shifting around, you're buying, you're selling, you're moving it around, right?
So if you follow half a billion dollars in gold and then in Bitcoin move all of that wealth once a year, how much is left after 50 years?
Assuming no relative price change, right?
So all of that, right?
So what happens if you're actually using the gold?
You're moving it around, you're shifting it around.
Well, you have less than 20% of the gold left after 50 years.
You have less than 20% of your gold left after 50 years.
So from 500 million, you have 95,800,000 after 50 years.
Again, no inflation, no relative price changes or anything like that.
But you still have over 99.99% of your Bitcoin after 50 years, moving it all once a year.
Again, this is for illustration purposes only.
Does that mean somebody's going to be moving $500 million around every year?
It could happen, but not necessarily.
This is just a way of pointing out.
Let's say you only move it once every two years or every five years.
You still have a much better use case for the retaining of value under Bitcoin than you would under gold.
So, let's continue our comparison to gold.
Supply predictability. So about 2,500 to 3,000 tons of gold are mined every year.
About 54,000 metric tons are currently minable, and there are literally cosmic amounts in asteroids and the universe as a whole.
Compare that to there will only ever be 21 million Bitcoin.
So again, long-term big picture view.
Lots of potential gold out there, which could drive hyperinflation on a gold-based market.
So that's not ideal.
What about fungibility, right?
Fungibility is interchangeable units, bits of it.
If you cut a gold bar in half, both of them can still be used and have half the value each, which is more or less true.
So to make gold easily fungible and increase its acceptance, additional effort is required.
You have to shave it or have some sort of paper thing, which again makes it more abstract.
And... You need to, you know, cut it, to verify it, to mint it, to put the stamp on it.
You need to test whether it's good or pyrite a fool's gold or something else.
Whereas Bitcoin is entirely fungible and this abstraction is really where Bitcoin hits its stride in terms of perfectibility.
Durability. So gold is soft and malleable when pure.
So features added to it in order to improve its fungibility degrade as it's used more as money.
Eventually the gold has to be remelted, recast, and reworked.
Reducing its malleability requires compromising its oxidation resistance.
So again, gold is not magic and we don't have to think, oh, it's perfectly fungible.
Bitcoin is perfectly fungible.
Gold has issues with fundability.
And there was a Perth mint that sold diluted gold to China recently.
Quite a risky proposition.
And Bitcoin's fundability is about as mathematically perfect as you could possibly get.
What about uniformity?
Well, a Bitcoin is a Bitcoin, is a Bitcoin, but gold is tough.
You've got to chemically analyze it.
You've got to weigh it.
You've got to x-ray it.
It's got to be minted and stamped by reputable mints that are going to charge for that service and so on.
So that is kind of an issue.
The price to verify Bitcoin's authenticity is baked into the fees and automatically achieved with every transaction.
You don't need a third party to verify the value of it.
Acceptance, absolutely.
Gold has some... I mean, you can't argue that Bitcoin is more widely accepted than gold.
This is a strength of gold, absolutely completely, in my opinion.
Long history of wide acceptance, of course, across the world throughout time.
It has lost ground compared to notes and fiat, and that is a reality.
I'm not going to...
Bitcoin's acceptance does continue to grow, but of course it's nowhere near gold.
So... Privacy, yeah, with small one-on-one transactions, gold can be more private.
Of course, Bitcoin is a public leisure.
It's easily audited, which has value if you're looking to see whether a company is doing well or not.
But privacy is continually improved and it's optional, right?
So you can work very hard to make your Bitcoin private, even though people can see it.
They don't know who you are or any way to connect what's going on to you.
But with small one-on-one transactions, gold can be more private with larger transactions.
Of course, governments get involved as a whole.
All right. My entire career before becoming a public intellectual was in the environmental sphere, environmental protections for companies.
So Bitcoin, yep, it gets hammered for energy use.
And yeah, the validation of the Bitcoin network uses energy.
That's a feature, not a bug.
And our net is good for the environment given the rampant destruction it displaces.
So again, we want to compare apples to apples here.
Bitcoin, of course, can and now does make use of energy that otherwise would have gone to waste, and it incentivizes technological advancements in energy production and efficiency.
That's really, really important.
Of course, the heat from Bitcoin mining can be used To dry clothes, to warm a colder house and so on.
And of course, half of the electricity that's generated in the world today is wasted.
So if we could just get a tiny percentage of that wasted electricity and use it for Bitcoin, we're not doing anything to harm the environment.
And of course, I would argue this.
Let me sort of get this across really, really clearly.
Fiat. Really came into existence and historically has come into existence.
The degradation of currency comes into existence because of war.
Offensive war in particular.
If countries invade it and the people love their society, love their government, then they'll protect it.
But empires, invasive wars, oligarchical imperialism of every kind, that costs a lot of money and people don't want to pay for it.
It's vanity politics. Map painting for the part of the rulers.
The average Roman citizen didn't want the empire.
The average British citizen impressed into this slave gang of the Royal Navy where he was more likely to die from scurvy than any enemy skirmish.
He didn't want an empire.
So empires, offensive wars, colonialism all paid for through Inflation, money printing, debt, all of which requires fiat currency and cannot be achieved either on a gold standard, which is why the gold standard was abandoned by most countries in World War I. It can't be achieved by the gold standard because you can't just snap your fingers and make gold.
It can't be achieved by Bitcoin because you can't snap your fingers and create Bitcoin.
If you look at...
Debt. You can't monetize Bitcoin into future unfunded liabilities.
You can't just... Because in the future, they're going to tax more, they're going to print money, they're going to borrow, whatever, right?
You can't do that on a Bitcoin because you can't just create it out of nothing.
So, think of how much...
Excess consumption has occurred at the present because of government debt and unfunded liabilities, in particular debt.
The deficit of every government in the modern world is consumption of scarce resources.
Now, at the expense of later.
If you go borrow $10,000 and spend it on buying something right now, then that something is made and delivered to you and you consume it or use it.
And then in the future, you'll have to spend $10,000 or $11,000 or $12,000 less depending on your interest rates and so on.
So we are consuming in the here and now based upon the debt.
Of the fiat currency system.
Bitcoin doesn't allow for that. So if you really want to save the environment, you'll stop offensive wars and you'll stop the massive overconsumption in the here and now.
Only Bitcoin can do that.
Fiat currency does the exact opposite.
It facilitates these things.
And the fiat means the most expensive system, not the cheapest.
I worked in a government office way, way, way back in the day.
I was just a temp... And I heard them.
I heard the managers say, oh, we've got to find a way to spend this money or we're going to lose it from our budget next year.
I mean, they literally were basically throwing the money out of the window, bonfire of dollar bills, just to get the same amount of money next year.
That's not how any private business works in any sane universe.
So, yeah, the idea that Bitcoin uses power, using power is bad, no other system uses power, therefore Bitcoin is bad, is, I mean, that's just straight up propaganda.
I mean, there's some subtle criticisms.
This ain't one of them. Let's look at the annual energy used by industry.
So gray, we got the gold industry.
Orange, we got Bitcoin.
Dark gray, the banking system.
In 2021, Galaxy Digital published a report showing that Bitcoin uses roughly half the energy of either the banking system or the gold industry, or combined, it's a quarter, right?
I mean, about 20 times the amount of energy that the Bitcoin network uses every year is lost via the transmission of electricity over power lines.
This energy could be used to mine Bitcoin.
The capital generated from that could be used to develop energy generation closer to where the energy is demanded, right?
So the gold industry, you've got your mining, refining, gold recycling, uses roughly 240 terawatt hours per year.
The banking system as a whole, banking data centers, bank branches and card network data centers like Visa, Mastercard, etc.
uses 263 terawatt hours per year.
The Bitcoin network, this is minor demand, minor electricity consumption, pool electricity consumption, node electricity consumption, 114 terawatt hours per year.
Now. That is just the banking system, not the central banking system.
How much power do central banks require to maintain all of their servers and their offices and everything like that?
So, really, this is not a fair comparison to look at that little orange slice, that little slice of pumpkin pie from heaven, and say, ah, that's the only problem in the currency system.
Boy, that little slice at the bottom there, that's the big issue and everything else is fine.
You know, that's just straight up propaganda.
All right. Now, the single greatest environmentally significant aspect of Bitcoin is often overlooked, even by most Bitcoiners.
And I was doing speeches on this like eight or nine years ago, Bitcoin versus war.
Bitcoin is freely chosen.
It doesn't rely on state monopoly and aggression, all of which have energy costs.
When the government subsidizes an industry, I mean, think of all of the stuff that happened under various administrations for clean energy and all these companies that built up Theranos-style and imploded or went out of business, all misallocation of resources.
Absolutely terrible. You can't do that with Bitcoin.
You can't just create subsidies and hand them out to your political friends and Punish your political enemies.
It's an objective, universal, incorruptible in terms of the system.
People will always have the temptation to be corrupted, but the system can't be corrupted.
Huge energy costs.
Energy required to go after counterfeiters, etc.
That's important as well.
Fiat currency requires banks, government buildings, Visa, Mastercard, Venmo, American Express, offices, servers, armies, police, extra courts and prisons, etc.
You don't think those are costly in terms of environmental impacts?
And what is the environmental impact of yet another law or politician, another bureaucrat or administrator?
Huge. The market does not want fiat, right?
The proof is that everyone has to be forced to accept it and surrender their taxes in it.
It's by government decree.
Call me crazy, but I think less coercion in the world is very good.
It is financially and ecologically expensive to force people, as opposed to trading with them for what they want, voluntarily.
Right, so the world debt is 10 times or more the world's GDP, which means that we've consumed 10 times Earth's scarce resources than we would have under a Bitcoin system.
So fiat currencies have eaten 10 planets.
And you're sitting there going, yes, but, you know, Bitcoin uses electricity.
Oh, dear. So fiat drives malinvestment through false market signals, which we've sort of talked about.
Subsidies, tariffs, interest rates, tax incentives, price controls, and so on.
Governments force winners and punish losers via regulation.
Industry and the economy responds by reallocating resources.
But when reality finally reasserts itself, the falsely propped up industry has to be reallocated, if not abandoned in the previously abandoned or neglected industry industry.
And that's just the visible, right?
It's always the hidden cost, right?
So when the government props up an industry, as I mentioned before, it's all the other industries that don't develop because of that prop up that really is the cost.
Global debt is over $300 trillion.
That's $37,500 of average debt per person compared to $12,000 of GDP per capita.
Per capita, not per taxpayer, not per taxpayer in the private sector.
So yeah, tell me all about how Bitcoin is bad for the environment.
So government debt to GDP leverage skyrocketed by 76% to a total of 102% from 2007 to 2022.
So this has led many people in positions of power to call for a great reset when the existing financial system is too indebted.
Now in the past, when governments ran out of money to pay their debts, they'd just go to war.
War has become progressively less possible because of weapons of mass destruction.
So now they're talking about a great reset.
This is nothing new. It happened in ancient Sumeria 5,000 years ago.
It happened in Rome. It happened in France.
It happened in Germany. It's happened all over the place.
It's a great reset. Very dangerous and very unstable time within society and, of course, a great time for totalitarians to extend their reach and power.
And, I mean, we've seen this malinvestment before, 07-08.
What happened? Well, the U.S. government, for a variety of reasons, Forced, encouraged, incentivized, bribed banks to get more people into homes, to put out more mortgages, so they lowered borrowing standards, and then when interest rates went up, people couldn't afford their homes, and at 1.10% of U.S. housing was lying empty.
A huge, huge mess for the economy as a whole, so that's not good.
The environmental destruction wrought by wars of aggression, which is the lifeblood of state expansion, the war is the health of the state, as it's been said, is enabled by fiat currency.
So if you compare Bitcoin to fiat currency, the choice is clear.
If you're genuinely interested and concerned about protecting the environment, the last thing you'd want to do is have massive extra consumption of scarce resources as a result of the creation of fiat currency on a whim.
Is Bitcoin used for criminal behavior and terrorism?
Well, let's look at money laundering, for instance.
So there's a high estimate and a low estimate of the amount of money that runs through private fiat banks in money laundering.
The low estimate is $800 billion.
The high estimate is north of $2 trillion per year.
And for Bitcoin, not $800 billion, not $2 trillion plus.
$2.9 billion.
$2.9 billion.
Boy, if only we could get the legacy fiat system to achieve the levels of integrity and honesty that Bitcoin represents, that would be a huge plus.
So over 99% of total cryptocurrency transactions are run through AML-regulated exchanges.
Bitcoin mixing services, where many transactions are mixed with each other to improve anonymity, are overwhelmingly used for personal privacy by non-criminals.
So for the first half of 2021, Funsen estimated ransomware, which is by far the largest illicit Bitcoin by volume, made up only 1% of the Bitcoin that was mixed.
Banks have paid $321 billion in fines since the 2008 financial crisis.
$321 billion in fines, whereas we're talking $2 billion in change for money laundering for Bitcoin.
Billions of dollars worth of weapons, vehicles, and equipment were left to the Taliban in 2021.
Remember, they were the bad guys that America was fighting, so you can't really do that with Bitcoin.
So when we account for morality as well...
I'm a moral philosopher.
This is not inconsequential to me.
It shouldn't be inconsequential to you either.
There's no comparison. Fiat demands and serves coercion.
Bitcoin is virtuous by displacing coercion with voluntary, peaceful interactions.
So, governments just won't let it compete.
Governments will ban Bitcoin. It's going to zero because governments won't let it run.
Yes. Well...
States compete with each other and the Bitcoin community is very high productivity, very high IQ, and very valuable to governments as a whole.
So states compete with each other.
Other states will not ban it and will be rewarded with the best and brightest citizens and their capital who are seeking freedom, right?
So it's competition, particularly because Bitcoin is so mobile, right?
And several nation states have tried and failed to ban Bitcoin.
Often it trades at a premium where they try to ban it.
I mean, come on. I mean, people, please.
Governments can't even keep drugs out of prisons.
So even if governments turn society into a complete prison, it's not going to be an issue.
Say, ah, the government or a government could secretly create their own miners and take over the network.
I mean, the level of resources required for that would be unbelievable.
Pretty hard to hide something like that going on, and coordination would be enormous.
You would require specific chip fabrication from plants that are already at capacity, high security clearance level personnel, and if it was done for profit, it would not compromise the network.
If it was not done for profit, it would require massive resources to sustain.
I mean, electricity, of course, in particular.
In the words of Antonopoulos, so they take over and they fork the blockchain.
They've created an alternative blockchain.
Great! What are we going to do?
Who's going to join the NSA blockchain?
Anyone want to jump on FedCoin?
So you just won't follow them.
It's not going to work. If they try to do a double spend where you try to spend the same coins twice, the network could work around them, leaving them with that huge investment for nothing.
Is it possible? Look, of course, right?
But if you're concerned about states banning value, then they're going to ban gold long before they ban Bitcoin.
And so, again, Bitcoin versus other things.
If the government is in the place where they're just banning anything other than their own currency...
Well, good luck. And again, it will create a massive opportunity for some government that will respect these things to get a massive influx of people.
And of course... A lot of government people have Bitcoin.
A lot of government people own Bitcoin.
They won't want to destroy their own investment that way.
Could happen, of course.
Anything could happen, but likelihood seems low.
Here's this general PSA just for a moment.
Please, please, please take the time to research best practices for securing your Bitcoin and maintaining your digital privacy.
And I've got a whole channel at freedomain.locals.com.
You can come and ask people.
There's a lot of experts and knowledgeable people about Bitcoin.
That. Just invest in yourself.
Invest in your knowledge and take people's criticisms very seriously.
Yeah, there's some gold bug trolls out of there, but a lot of people just have genuine concerns and they're right to have those concerns.
This is new technology and there have been a lot of bubbles and scams.
So, you know, take it seriously and accept and acknowledge the strengths that non-Bitcoin asset stores have.
Yes, you can't live in Bitcoin.
It will not provide you any shelter from the rain, and it is not tangible in the way that gold is, and there's value in those things.
Just remember that as a whole.
Also be skeptical, of course, about people out there with their get-rich-quick schemes.
When I was in the business world, I used to get these calls and people would be like, there's a stock that's just about to double next week and you should invest.
I'm like, why would you be calling me?
Some stranger, right?
It doesn't make any sense. If you've got this sure thing, the last thing they do is tell you because they'd want to buy it up for themselves.
There's no real true money-making scheme as a whole, and even if there was, people aren't going to share it with you, right?
So just be careful about all that kind of stuff.
A couple of sites that are interesting and worth looking at.
BitcoinTalk.org.
That's the oldest Bitcoin and cryptocurrency forum where even Satoshi Nakamoto's words can be found.
Nostra, an open protocol that enables global, decentralized, and censorship-resistant social media.
The Bitcoin Stack Exchange Q&A. It's great for technical questions and much, much more at Bitcoin.org.
Now, if you will indulge me full screen for just a moment.
Look. Was it hard for the world to transition out of slavery?
Yeah, of course it was.
And there were, of course, the doomsayers as well.
Everybody across the whole world has used slaves to grow food.
If we don't have slaves...
We're all going to starve to death.
There won't be any cotton. There'll be no food, no clothing.
Ah, we're freezing and starving to death, right?
Look, reducing the amount of coercion in the world has got to be the goal of every rational moralist.
Every rational moralist must wake up in the morning and say, what can I do to reduce the amount of coercion in the world?
This is why I focus on peaceful parenting and voluntary relationships and all of these good things.
The biggest thing we can do is reduce the amount of violence against children.
The second biggest thing we can do is to promote voluntary, peaceful, decentralized currency.
The fiat currency system is at the root of so many evils that finding some alternative, promoting peaceful alternatives has got to be pretty high on your value card.
Slavery was immoral.
the end of slavery was the greatest advance in human society that has ever occurred.
Morality is what matters in these concerns. So people could say, oh yes, well you know, but
if you end slavery it's going to require more energy consumption, whatever it is.
It's like, okay, tell that to the slaves.
You know, we can end slavery because it's immoral.
That's the whole point.
Reduce the amount of coercion in the world.
That's got to be the ideal.
Yes, of course, there are people who are skeptical.
There are people who are opposed to it.
Eh, who cares? They're just the regular flotsam and jetsam of all human history.
Really, really focus on the moral case for peaceful, universal, anti-war, anti-enslavement, anti-debt, anti-corrupt value storage and transfer.
If we can get the foundation of the modern world, which is currency, to a voluntary and peaceful place, the amount of coercion we will reduce in the world can't even be calculated from where we sit or stand.
So thank you so much for listening.
I hope that you will share this presentation around.
I really do appreciate your time.
Have yourselves a wonderful, wonderful day.
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