Speaker 1: Hello, and welcome to another episode of the Mark Moa
Speaker 1: Show where we're talking about bitcoin. We're talking about cryptocurrencies,
Speaker 1: and we are talking about the decentralized revolution. Each and
Speaker 1: every week, we are coming to you bringing you what
Speaker 1: I believe to be the most important thing, that the
Speaker 1: biggest transformation in humanity. The word witnessing right now. And
Speaker 1: so you've got to understand what this you. You have
Speaker 1: to understand what bitcoin is. You have to understand what
Speaker 1: the decentralized revolution is and how it's going to change
Speaker 1: the world. I try to bring you not just the
Speaker 1: most up to date news. Um, you can go read
Speaker 1: the news yourself. Now I can bring you and I
Speaker 1: will bring you the most important pieces of the news.
Speaker 1: But more importantly than just bringing you news, I want
Speaker 1: to explain to you what's going on. We'll talk with
Speaker 1: some of the biggest names, some of the special some
Speaker 1: very special guests in the bitcoin space I'll bring to
Speaker 1: each and every time, and then I want to teach
Speaker 1: you something because there's a big learning opportunity here, and
Speaker 1: to understand what's happening with bitcoin, it takes a lot
Speaker 1: of different disciplines, It takes a lot of different skills,
Speaker 1: and I'm kind of uniquely situated to help you with
Speaker 1: this journey. You know, my my career has sort of
Speaker 1: been this jack of all trades, master of none. I
Speaker 1: have a very wide depth across multiple different disciplines, including
Speaker 1: ones that are necessary for bitcoin, including monetary history. You
Speaker 1: notice I use a lot of history because I love it. Economics,
Speaker 1: I love it, finance of course. Technology. Um, I've been
Speaker 1: in I've been in technology since their late nineties, investing
Speaker 1: into these things known as internet stocks. It was kind
Speaker 1: of funny back then, seeing at the time I remember
Speaker 1: being an investor already in My roommate quit his job
Speaker 1: and he became a day trader, day trading these things
Speaker 1: called internet stocks, and nobody knew what they were back then. Um,
Speaker 1: and we would, you know, get together talk about these things,
Speaker 1: talk to other people and know what about this one
Speaker 1: and this one and these internet stocks, and it's it's
Speaker 1: just funny because today here we are in the cryptocurrency
Speaker 1: space and it's like the same thing happening all over again. Um.
Speaker 1: But I was around at that time, and uh, it
Speaker 1: was it was a bit different back then, of course,
Speaker 1: because we didn't have the Internet yet. I mean, obviously
Speaker 1: the Internet was working, don't get me wrong. UM, but
Speaker 1: we didn't have like e trade, we didn't have robin Hood.
Speaker 1: We couldn't trade stocks from our phone. Um. And so
Speaker 1: it was a much different world back than having to
Speaker 1: call your broker and so forth. Um. And today, of course,
Speaker 1: obviously we have robin hood, we have the smartphones. We
Speaker 1: could trade cryptocurrency from our phone, So it makes it
Speaker 1: much different. But I've been around in technology. I started
Speaker 1: e commerce business in two thousand and one at the
Speaker 1: bottom of the dot com crash. So the dot com
Speaker 1: boom famously rose from really from is when it took off,
Speaker 1: when the Netscape I p O happened. As a matter
Speaker 1: of fact, let me just give you a little background
Speaker 1: on that, just to bring in from some perspective. Of course, UM,
Speaker 1: if you understand how technology cycles work, it'll better help
Speaker 1: you understand what's happening with bitcoin and cryptocurrencies overall. So, um,
Speaker 1: they all work the same, So the way that technologies
Speaker 1: rollout is always about the same, and so understanding this
Speaker 1: is very key to understand how to play this. So
Speaker 1: if we look at um, let's actually go back a
Speaker 1: little bit further. Let's go back to the early let's
Speaker 1: go back a hundred of years, more than a hundred years,
Speaker 1: and so um, one of the biggest technologies at the
Speaker 1: time was the automobile. We had the rise of oil
Speaker 1: and automobiles, and there was new technology not only the automobile,
Speaker 1: but also the assembly line. And so we saw automobile
Speaker 1: and we saw a mass production. And of course, once
Speaker 1: the first few automobiles rolled off the line, a couple
Speaker 1: of things happened. One UM, a lot of people thought
Speaker 1: they were ridiculous, and they thought they were stupid, and
Speaker 1: they thought they were a joke, and they thought they
Speaker 1: were pointless. And look at these noisy automobiles. They're noisy
Speaker 1: and they're stinky, and they're dangerous, and they're going too
Speaker 1: fast and they're gonna hurt people, and they're unnecessary because,
Speaker 1: of course, horses and buggies have worked just fine for
Speaker 1: hundreds of years. As a matter of fact, walking and
Speaker 1: horses has been the primary mode of transportation for five
Speaker 1: thousand years. Why do we need an automobile? Right, they're noisy,
Speaker 1: they're stinky, they're slow, they break down, they're expensive, they're dangerous.
Speaker 1: It's time familiar. Anytime there's a brand new technology, it's
Speaker 1: something that's called creative destruction. And so when there's something
Speaker 1: new that's created, it destroys the old way. And it's
Speaker 1: important now what happens is the entrenched people that are there,
Speaker 1: they don't like that. The buggy makers at the time,
Speaker 1: they didn't like that, right, Hey, we want to sell horses,
Speaker 1: we want to sell buggies. You don't need those stupid cars.
Speaker 1: So anyway, there's always this fight and and and that's
Speaker 1: setting the stage for what I'm about to jump into
Speaker 1: in a minute. But that was happens. But but then
Speaker 1: when the car rolled out, you know, some people saw
Speaker 1: the visionaries and they want to jump into it. And
Speaker 1: so all of a sudden people start buying these cars.
Speaker 1: And then of course the venture capitalist the investors, they
Speaker 1: came out and they saw this massive money making opportunity,
Speaker 1: of course, and so they jumped in, and they jumped in.
Speaker 1: They started building all these different automobile manufacturers, and in
Speaker 1: a very short amount of time there was over two
Speaker 1: hundred and fifty automobile manufacturers that were out in the market.
Speaker 1: But there's a problem. There was actually two problems. The
Speaker 1: first problem was that there was no market for all
Speaker 1: those automobiles, meaning there was two automobile manufacturers. Lots of
Speaker 1: people wanted to sell cars, but there weren't that many
Speaker 1: people wanting to buy cars because it was at the
Speaker 1: very beginning of this this new technology. But the second
Speaker 1: problem was that there was no infrastructure. So that means
Speaker 1: that there was no roads, there's no gas stations, there's
Speaker 1: no service centers. So even if you bought the car,
Speaker 1: what do you do with it? And so what happened
Speaker 1: is then the automobile manufacturers all went bust, and they
Speaker 1: all went bankrupt. Three remained for Chrysler GM, and then
Speaker 1: the market started to grow again. Now that didn't mean
Speaker 1: cars were done, didn't mean they were dead, but the
Speaker 1: market had to catch up. The money, the venture capitalists
Speaker 1: and the money got ahead of where the technology was,
Speaker 1: ahead of where the market was, and then eventually they
Speaker 1: all went out of business. And then eventually the market
Speaker 1: caught up. And now there's probably automobile manufacturers today. I
Speaker 1: don't know the exact number, but there's a lot. It's
Speaker 1: important to understand the technology always rolls out the same way. Now,
Speaker 1: if we're looking at bitcoin and cryptocurrencies, we can see
Speaker 1: that it rolls out very similar in the same way.
Speaker 1: Before we jump to that, let's just take a pit
Speaker 1: stop and we'll look at the Internet boom very similar.
Speaker 1: By the way, you're listening to the Mark Moa show,
Speaker 1: we're talking about bitcoin and cryptocurrencies and the decentralized revolution.
Speaker 1: Trying to give you some perspective on how technology cycles
Speaker 1: always roll out the same way. That way you can
Speaker 1: better be better position for where we're at right now
Speaker 1: in this cycle. So we talked about autobiles. Now back
Speaker 1: to the Internet. So I started talking about the Internet
Speaker 1: and want to I got caught in this little tangent,
Speaker 1: little rabbit hole, so stick with me here. So in
Speaker 1: the Internet had started, you know in the seventies and
Speaker 1: eighties with the with the government, Darbonet, etcetera. But really
Speaker 1: it was in is when the first website went live,
Speaker 1: the first WWW, and the first purchase happened online and
Speaker 1: that was for pizza Um, same as the first purchase
Speaker 1: for a bitcoin. And then is when things changed, and
Speaker 1: that's when we had the first I p O Internet
Speaker 1: Um initial public offering and it was for Netscape and
Speaker 1: it brought all the investors in all the venture capitals
Speaker 1: in similar to the automobile boom, and venture capitalists do
Speaker 1: what venture capitalists do, They start throwing a bunch of
Speaker 1: money at things, trying to create this to blow up,
Speaker 1: and I did by by the year two thousand. From
Speaker 1: two thousand, the internet boom happened and anything with dot
Speaker 1: com in its name would instantly just get hundreds of
Speaker 1: millions of dollars or millions of dollars thrown at it.
Speaker 1: And it was crazy and by the end famously you know,
Speaker 1: in we had the pets dot com, the web band
Speaker 1: dot com, and everything dot com you can imagine. But
Speaker 1: the same two problems existed that happened in the automobile boom.
Speaker 1: That was the same two things. One, there was no
Speaker 1: market for that, meaning you could buy web band dot
Speaker 1: com they could deliver your groceries, or pets dot com
Speaker 1: you could buy your pet stuff online, but there was
Speaker 1: no market. There was nobody buying anything online. As a
Speaker 1: matter of fact, by the year two thousand, less than
Speaker 1: ten percent of people had ever bought any thing online,
Speaker 1: so there was no one to buy all that stuff.
Speaker 1: The second problem was that there was no infrastructure, meaning
Speaker 1: the Internet was too slow. You couldn't you couldn't use
Speaker 1: it for all those things that they wanted to. As
Speaker 1: a matter of fact, Netlix had come out, but Netflix
Speaker 1: didn't stream movies over the net. They mailed you a
Speaker 1: DVD to watch, and so it was too slow. The
Speaker 1: infrastructure wasn't there. So all those internet businesses went out
Speaker 1: of business. Didn't mean they were wrong, just meant there early,
Speaker 1: and early is the same as wrong. So they all
Speaker 1: went out of business. A couple remained, obviously, And now today,
Speaker 1: of course we have you know, millions of websites that
Speaker 1: are out there today, and so you can see this
Speaker 1: pattern of how this works. And so we had this
Speaker 1: big boom. Now, I thought in two thousand one, that
Speaker 1: would be a grand idea to start an e commerce
Speaker 1: business at the very bottom of that market, at the crash,
Speaker 1: when nobody wanted to throw money around. Um, it was tough.
Speaker 1: It was a long road. And when I went I
Speaker 1: started selling e commerce products and I went to these
Speaker 1: companies to sell their products on my website and they
Speaker 1: laughed at me and they said, come on, Mark, no
Speaker 1: one's ever gonna buy anything online. That's where ridiculous. And
Speaker 1: I said, well I think they will, um, And of
Speaker 1: course I was right. They were wrong, But it was
Speaker 1: a long road ahead. And I heard the same thing
Speaker 1: with cryptocurrencies. Come on, Mark, that's ridiculous. No one's are
Speaker 1: gonna use it, just like no one's ever gonna take
Speaker 1: a car because we have the buggy, and no one's
Speaker 1: ever gonna use electricity because we have digital can we
Speaker 1: have candles? Right, So, same story, over and over and
Speaker 1: over again. Now I want to explain to you the
Speaker 1: West the rest of the way this rolls out, and
Speaker 1: I'm gonna apply it back to bitcoin and cryptocurrency so
Speaker 1: you can understand where're at in the cycle. Um, you're
Speaker 1: listening to the Mark Ma Show. We're talking about bitcoin
Speaker 1: and cryptocurrencies and the decentralized revolution. I'm trying to give
Speaker 1: you the perspective you need to to survive. So stick
Speaker 1: with me, all right, Welcome back. You are listening to
Speaker 1: the Mark Ma Show, and we're talking about bitcoin and
Speaker 1: cryptocurrencies and this decentralized revolution that we are witnessing right now.
Speaker 1: And I'm just zoomed out a little bit on history.
Speaker 1: We looked at the automobile technology, we looked at the
Speaker 1: Internet technology, and now we're about to use that perspective
Speaker 1: now to dig into the cryptocurrency technology, and so we
Speaker 1: saw the same thing happened. UM. Bitcoin stormed on the
Speaker 1: scene about twelve years ago, two thousand nine. UM, and
Speaker 1: bigcoin kind of grew slowly, nobody really knew what it was,
Speaker 1: kind of like the Internet in the other days. UM.
Speaker 1: Then we had the first I c O sort of
Speaker 1: like the inflection point where the Internet was the I
Speaker 1: p O night, as I said, and it brought all
Speaker 1: that venture capital money, and in UM I think it
Speaker 1: was two thousand fourteen, we had the first I c
Speaker 1: O initial coin offering, I think it was master master Coin,
Speaker 1: and then Ethereum launched after that, and then the same thing.
Speaker 1: The venture capitalists, the investors all rushed in, brought in
Speaker 1: a bunch of money, started throwing that money round everywhere
Speaker 1: they could, just like the automobile boom, just like the
Speaker 1: Internet boom. And they started trying to solve everything, just
Speaker 1: like the Internet boom. Did you know webban dot com?
Speaker 1: That's dot com? And so now we have blockchains for everything.
Speaker 1: We're gonna manage to let us on the supply chain.
Speaker 1: We're gonna sell movie tickets on the blockchain, and we're
Speaker 1: going to do supply chain management. We're gonna do everything
Speaker 1: on the blockchain. Right when you look at under the
Speaker 1: lens of what happened on the the Internet, it kind of
Speaker 1: starts to make more sense. Now they're not wrong, But
Speaker 1: the same two problems existed in the automobile boom internet boom,
Speaker 1: and today two things. One no more market there's no
Speaker 1: one around to use all that stuff right now, and
Speaker 1: too there's no infrastructure. The network is too slow, it
Speaker 1: doesn't work properly. And so what happens is they're not wrong.
Speaker 1: Eventually a lot of that stuff will be built on
Speaker 1: the network. Unfortunately, most of it's going to go bust,
Speaker 1: and then I'll have to get built later. So that's
Speaker 1: kind of how that works, um, And so I'm bringing
Speaker 1: you that perspective somebody who's lived through this. Like I said,
Speaker 1: people laughed at me, literally laughed at me. I had
Speaker 1: to spend about twenty dollars to build out this website
Speaker 1: back in two thousand one because there was no Shopify,
Speaker 1: there's no word press, and I had to hire someone
Speaker 1: to build a custom and so I spend all this
Speaker 1: money and then I went to these stores and they
Speaker 1: they laughed at me. So I know how this goes.
Speaker 1: I think it was Gandhi who said, the first day
Speaker 1: laugh at you, the first day ignore you, then they
Speaker 1: laugh at you, then they fight you, and then they
Speaker 1: join you. And so UM, using that perspective, I want
Speaker 1: to talk about something um that that's come out this week,
Speaker 1: and actually it's been happening over and over. UM bitcoin
Speaker 1: is that thing that was ignored and then they laughed
Speaker 1: at bitcoin. Now they're fighting bitcoin, and event they're gonna
Speaker 1: adopt poin and a lot of people already have started
Speaker 1: adopting bickoin. But we're continuing to see this attack on
Speaker 1: bitcoin continued to rise. And one of the guys who
Speaker 1: talks about um bitcoin very unfavorably, Steve Hankey. UM surprising
Speaker 1: that it comes from him, because Steve Hankey is an economist.
Speaker 1: He's a former advisor to the regular administration. He's also
Speaker 1: part of the Cato Institute, which is supposed to be
Speaker 1: for freedom. And I get it. Like you think something stupid,
Speaker 1: that's okay. That's your prerogative, right, Like you don't like it,
Speaker 1: do you think it's dumb, you think it's a waste
Speaker 1: of time, waste of money, whatever you think it is,
Speaker 1: that's okay, that's your prerogative. But shouldn't take away my
Speaker 1: right to do that. You you know, you don't have
Speaker 1: the right. Nobody has the right to tell me what's
Speaker 1: a waste of my time? Only I do. And so
Speaker 1: Steve Hankey, it's just funny coming from him, being that
Speaker 1: he's part of the Cato Institute talking about freedom, but
Speaker 1: yet he wants to constantly attack bitcoin and say that
Speaker 1: people shouldn't be a to use it. So I don't
Speaker 1: understand that part, but um, you know, he he continues
Speaker 1: to ramp up this rhetoric. And I want to talk
Speaker 1: about something he just talked about this week, because you
Speaker 1: need to understand this key piece. This is a key
Speaker 1: piece to economics. He's talking about bitcoin specifically, but he's
Speaker 1: talking about economics. And remember, as I said, you have
Speaker 1: to understand a bunch of differ disciplines. You have to
Speaker 1: understand history and monetary history and technology and economics. Game
Speaker 1: through economics is one of those. Let's talk about this.
Speaker 1: So he says that as on Yahoo Finance, he says,
Speaker 1: we know the price of bitcoin, but not its value.
Speaker 1: It's probably zero. M hm. We know the price but
Speaker 1: not its value, but it's probably zero. That's what Steve
Speaker 1: Hanky says, Now, remember he's an economist and former advisor
Speaker 1: to the regular administration. Right, he's he's he's an expert.
Speaker 1: I say that with air quotes. He's an expert. So, um,
Speaker 1: let's dig into this and let's see how little this
Speaker 1: expert is expert really knows and how you could understand
Speaker 1: this with just an elementary understanding of things. So let's
Speaker 1: dig into this a little b So, um, you know
Speaker 1: what happens is if you just read headlines, you don't
Speaker 1: really understand what's going on. Then people start repeating these
Speaker 1: headlines without ever really grasping the information. So let's break
Speaker 1: it down. So um, he says that bitcoin has a price, which,
Speaker 1: by the way, the price is rallying a little bit today. Um.
Speaker 1: I don't talk about the price a whole lot. I
Speaker 1: think price is a distraction. But we are rallying. We
Speaker 1: had got as high as sixty nine thousand, and then
Speaker 1: it had dropped all the way down, um, you know,
Speaker 1: into the fort range, and we're up above fifty thousand
Speaker 1: right now. So it's rallying just in time for Christmas.
Speaker 1: I guess go back to Steve Hanky and what he said.
Speaker 1: He said, we don't know its value, which is probably zero.
Speaker 1: He says that there's a difficulty deriving value for the
Speaker 1: for the for the bitcoin. Um. He says, quote, from
Speaker 1: a high theory perspective, you end up with a bitcoin
Speaker 1: that does have a price that is objective and we
Speaker 1: know what it is, which at the time it's over
Speaker 1: US dollars. But he says, we don't know it's fundamental value.
Speaker 1: And my guess is it's probably zero end quote. So
Speaker 1: what are you saying? The professor fact and I was
Speaker 1: questioned how the value of bitcoin can be derived when
Speaker 1: deciding it's a rate of exchange with national currencies such
Speaker 1: as the dollar and the pound, and he says, quote,
Speaker 1: there is no exchange rate model that would actually rationalize
Speaker 1: the bitcoin US dollar exchange rate. So he's saying that
Speaker 1: we know the price obviously, right, So fifty U s D.
Speaker 1: There's um lots of people that be willing to give
Speaker 1: you that exchange rate. As he's quoting exchange rate the
Speaker 1: amount of dollars that you've trade for the amount of bitcoin.
Speaker 1: And as a matter of fact, there's UM twenty six
Speaker 1: billion with a B six billion dollars of bitcoin traded
Speaker 1: every day. Every twenty four billion so there's billion dollars
Speaker 1: worth of volume of people that would go gladly give
Speaker 1: you fifty U S dollars for a bitcoin or a
Speaker 1: fraction thereof. Now, but but but let's dig in a
Speaker 1: little bit more so what he's saying here, Uh, And
Speaker 1: I'm gonna go back to this quote from a high
Speaker 1: theory perspective. Okay, Well, we don't live in a high
Speaker 1: theory world. We live in a real world. We live
Speaker 1: in a practical world. We live in a world of
Speaker 1: real things where I really need real goods and services,
Speaker 1: and people have to be willing to trade me those
Speaker 1: goods and services in exchange for other things. The medium
Speaker 1: of exchange. Now, um, you might be willing to trade
Speaker 1: me a thing for my labor if I come and
Speaker 1: paint defense for you. You might be willing to exchange
Speaker 1: my dollars or my pacos or my bitcoin or whatever.
Speaker 1: We live in a real world, not in a place
Speaker 1: of as he says, high theory perspective. The piece that
Speaker 1: he's also talking about is we don't know its value. Well,
Speaker 1: here is where these economists get this completely wrong. Peter
Speaker 1: Schiff is one of them. Peter Shiff is someone that
Speaker 1: i've I've respected for a really long time. He's a
Speaker 1: very smart economist, Austrian school that economy economics um very
Speaker 1: instrumental in my development a dozen years ago. But the
Speaker 1: problem is he's dug in on this thing of what's
Speaker 1: called intrinsic value. And so a lot of you listening
Speaker 1: right now might be saying, way, how bitcoin doesn't have
Speaker 1: any intrinsic value, right, And I think that's what he's
Speaker 1: saying here. There's no value. There's no intrinsic value. That's
Speaker 1: what Peter Shift says, there's no intrinsic value. But what
Speaker 1: if I told you there's no such thing as intrinsic value?
Speaker 1: What come on, Mark, you gotta be kidding me. You
Speaker 1: weren't an advisor to President Ronald Reagan. You don't know
Speaker 1: what you're talking about. Of course, there's intrinsic value. Really,
Speaker 1: what if I told you there's no such thing? And
Speaker 1: what if I could explain it to you in a
Speaker 1: way that an elementary kid could understand it? And that's
Speaker 1: exactly what I want to do. I wanna, I wanna
Speaker 1: explain it to you, And I'm gonna tell you the
Speaker 1: rest of what Hanky said, because you need to learn
Speaker 1: to look through what he's saying. And when I finished
Speaker 1: telling you the second half of what he said, it's
Speaker 1: going to make the first part of what he said
Speaker 1: look completely ridiculous. That's how crazy these people are. By
Speaker 1: the way, you're listening to the Mark Mashow, we're talking
Speaker 1: about bitcoin. If you didn't know, we're talking about bitcoin, cryptocurrencies,
Speaker 1: and the de centralized revolution. We're talking specifically about the
Speaker 1: value of bitcoin. We know the price, as Stinky Pinky says,
Speaker 1: what's the value. I'm gonna come back with that and
Speaker 1: tell you don't go away, all right, welcome back. You
Speaker 1: are listening to the Mark ma Show, and we're talking
Speaker 1: about bitcoin. We're talking about cryptocurrencies. We're talking about the
Speaker 1: de centralized revolution that's happening right now. I don't talk
Speaker 1: a lot about the price on a regular basis, as
Speaker 1: far as what the price is this minute and what
Speaker 1: I expect the price to be tomorrow. But we are
Speaker 1: talking about the price, and we're talking about the price
Speaker 1: specifically in regards to something that Steve Hankey came out
Speaker 1: and said this week, and he said, quote, we know
Speaker 1: the price of bitcoin, but not its value, and it's
Speaker 1: probably zero. Now. I would choose to ignore what this
Speaker 1: guy says. Here's someone you know, kind of well known,
Speaker 1: I guess, I mean he's the economy. He was an
Speaker 1: economist and former advisor to the Reagan administration. Well, that
Speaker 1: also means he's really old. So maybe that has something
Speaker 1: to do with his misunderstanding the bitcoin, But it's it's
Speaker 1: it's bigger than his misunderstanding bitcoin. He has a misunderstanding
Speaker 1: of what economics is, which is rich for me to
Speaker 1: say because he was advised of Reagan and I wasn't.
Speaker 1: But let's think through this in just you know, something
Speaker 1: called common sense, all right, So he says in theory
Speaker 1: in his quote, he said from a high theory perspective.
Speaker 1: But again, we don't live in a high theory perspective, right,
Speaker 1: we live in a real world. So let me let
Speaker 1: me explain to you that a elementary kid can understand
Speaker 1: there is no such thing as intrinsic value. There is
Speaker 1: only subjective value. So what do I mean by that?
Speaker 1: So Peter Scheft says that no gold has intrinsic value.
Speaker 1: Those gold cuff links that I have, they could be
Speaker 1: melted down and turned into jewelry. Okay, that's that's true.
Speaker 1: But that doesn't mean there's any value there. Value is
Speaker 1: only derived because people put value into something because collectively
Speaker 1: we value it. So like being babies or something, all
Speaker 1: of a sudden gets this crazy high value because everybody
Speaker 1: wants it, and then it's gone. Nobody wants it, so
Speaker 1: all value subjected. Let me give it. Let me give
Speaker 1: you a thought exercise. If we were stranded on a
Speaker 1: deserted island and we had two briefcases, one briefcase with
Speaker 1: a billion dollars of dollars, a billion dollars of cash,
Speaker 1: and we did another billion dollars of let's say gold bars.
Speaker 1: Remember person per shift that gold bars have intrinsic value.
Speaker 1: But we're deserted on on on island. I mean I
Speaker 1: got no boat, I got no cell phone, I got
Speaker 1: no food, no water, I got no nothing. How much
Speaker 1: is that billion dollars of cash or billion dollars of
Speaker 1: gold worth? It's worth of zero? Does me no good?
Speaker 1: I can't buy anything? I need goods and services. Goods
Speaker 1: and services are wealth money cash currency is not wealth.
Speaker 1: Goods and services are wealth. Cash or money or currency
Speaker 1: measures wealth. It measures how much wealth I can acquire.
Speaker 1: Wealth is goods and services back on that proverbial desert island.
Speaker 1: If there was a guy with a hut who had
Speaker 1: a couple of fish and some coconuts, he would be
Speaker 1: way richer than I would be with a billion dollars
Speaker 1: of cash, because I can't do anything with my cash
Speaker 1: or the gold. There's no intrinsic value. There's nobody that
Speaker 1: believes that has any value. Does mean no good. Now,
Speaker 1: last night I went to dinner, I had leftovers. I
Speaker 1: didn't want to take him home with me. They threw
Speaker 1: him away. Those leftovers were worth zero dollars to me.
Speaker 1: But if I was on that deserted island and I
Speaker 1: had a billion dollars of cash and I was starving
Speaker 1: to death, I would give all billion dollars for that
Speaker 1: leftover food if I was dying. You see what I'm saying.
Speaker 1: All value is subjective. So when he talks about his
Speaker 1: high theory of value, well, I'm sorry, man, I know
Speaker 1: that in a classroom you can come with some crazy
Speaker 1: economic formula that made make sense on a piece of paper,
Speaker 1: But it's not the it's not the real world, right.
Speaker 1: The real world is value of subjective. We value things
Speaker 1: at certain times, and that is why bitcoin has value.
Speaker 1: No different than anything else as value. Why do other
Speaker 1: things have vue? Why does a certain watch or a
Speaker 1: certain uh, you know, purse, or a certain piece of clothing?
Speaker 1: Why does it have more value than another? Because we
Speaker 1: perceive that it has more value And he's saying. What
Speaker 1: he's saying is that um, Because the professor of economics
Speaker 1: questioned how the value of bitcoin can be derived when
Speaker 1: deciding it's rate of exchange for national currencies such as
Speaker 1: the dollar. We'll already know what the dollars. There's twenty
Speaker 1: six billion dollars a day every twenty four hours traded,
Speaker 1: so we already know that's a pretty well function in market.
Speaker 1: So we already know. And so we already know what
Speaker 1: the US dollar equivalent of bitcoin is. And then he
Speaker 1: says it is. He went on to say it is
Speaker 1: difficult to know the purchasing parody of bitcoin. Well, not really,
Speaker 1: because twenty six billion dollars a day has been traded
Speaker 1: in US dollars and that puts a value. So I
Speaker 1: know I can trade the bitcoin for dollars in the
Speaker 1: dollar for a Gucci watcher purse, So we know that. So,
Speaker 1: you know, don't listen to these guys. They're they're really
Speaker 1: smart in a classroom, but it makes no sense to
Speaker 1: us in the real world. That's the thing. He also
Speaker 1: says cryptocurrencies hang on. He says, you've got the purchasing
Speaker 1: power parody that can't be used for bitcoin, and you
Speaker 1: have got interest rate parody that also can't be used
Speaker 1: for bitcoin. Well, okay, so you've got purchasing power that
Speaker 1: can't be used for bitcoin. Really because, as I said,
Speaker 1: there's twenty six billion dollars a day being traded and
Speaker 1: unsed dollars, so I could so I know exactly what
Speaker 1: it's worth. I mean. He also says there's no interest
Speaker 1: rate parody rarely, because there's also billions of dollars being
Speaker 1: um borrowed and loaned on a daily basis. As a
Speaker 1: matter of fact, I just borrowed against some of my bitcoins,
Speaker 1: So there's there's active Um, there's active exchange is happening
Speaker 1: for that. But let's talk about the second part of
Speaker 1: what he said here, which I think blows apart what
Speaker 1: he's saying here. So um, he says Milton Friedman one
Speaker 1: of the intellectual leaders of the Chicago School of Economics.
Speaker 1: So Milton freedom was was an economist somebody that I
Speaker 1: recad some of that I respect, has written a lot
Speaker 1: of good stuff. And I agree with Milton Friedman read
Speaker 1: his stuff, not Steve Hanky. Milton Freedman was a colleague
Speaker 1: of steam Kay Steve Steve Hankey um, and he said, uh.
Speaker 1: Milton Freedman told us in there would be a new
Speaker 1: medium of exchange that would that was a prescient description
Speaker 1: of the rise of bitcoin. Ten years later, he forecasted
Speaker 1: there would arise a digital currency indigenous to the Internet
Speaker 1: that would disintermediate the middleman in global finance through peer
Speaker 1: to peer transactions. And so that's what bitcoin does. Bitcoin
Speaker 1: has disintermediated the middleman. It's it's eliminated the third party,
Speaker 1: eliminated the middleman. So for example, if I want to
Speaker 1: pay with Venmo, well, my Venomo account is hooked to
Speaker 1: my credit card, my credit card is hook to my
Speaker 1: bank account. My bank account sends it to your bank
Speaker 1: account with sends to your credit card, sends to your Venmo.
Speaker 1: There's like six people in the way, and any one
Speaker 1: of those people can stop that transaction. And each person
Speaker 1: also extracts a little bit of value along the way.
Speaker 1: So if they say, hey, I don't like this, person,
Speaker 1: this person is a bad actor, this person is a terrorist,
Speaker 1: this person is a whatever. You don't have the right
Speaker 1: to send them money. So they're censoring my transactions. And
Speaker 1: like I said, they each rent seek, they each take
Speaker 1: a little piece along the way. So as he forecasted,
Speaker 1: there would be a way that it would cut out
Speaker 1: the middleman in global finance and go peer to peer.
Speaker 1: And that's what bitcoin does. That's the that's the one
Speaker 1: of the big revolutions of bitcoin. It goes peer to peer.
Speaker 1: If I want to send bitcoin to you, it goes
Speaker 1: for me to you with nobody in the middle, which
Speaker 1: means two things. One nobody can stop it, blocking to
Speaker 1: prevent it, and two nobody takes a piece. There's no
Speaker 1: rent seekers in the middle. So he predicted that. Freeman stated,
Speaker 1: quote the one thing that is missing but will soon
Speaker 1: be developed, is a reliable e cash, a method whereby
Speaker 1: on the internet you can transfer funds from A to
Speaker 1: B without knowing them, without without them knowing each other.
Speaker 1: End quote um. And so that's what Freeman said a
Speaker 1: decade before bitcoin came out. Well, Hanky goes on to
Speaker 1: say that, yeah, he was right, but that's what C
Speaker 1: B D C S are for central bank digital currencies.
Speaker 1: Hanky believes that it's inevitable that we will see some
Speaker 1: version of the US dollar being produces a digital currency
Speaker 1: by the Federal Reserve, but he says this will not
Speaker 1: create the revolution in banking that has been touted in
Speaker 1: media headlines, because he says, quote, most of the US
Speaker 1: dollars that are produced are produced by electronic means right now,
Speaker 1: and the federals producers only ten of the money held
Speaker 1: in the hands of the public. The rest comes from
Speaker 1: a commercial banks. So he's right, He's right. The dollar
Speaker 1: pretty much is already digital. All transactions are already done digitally.
Speaker 1: He is right, But here's what he's saying. He sees
Speaker 1: it's inevitable that will see some version of the US
Speaker 1: dollar being produced as digital currency, remember the central bank
Speaker 1: digital currency, and of course the government's already told us
Speaker 1: that they'll do that. Um, he says, uh. Quote, we
Speaker 1: talk about digital currency as though it is some new thing,
Speaker 1: but most of the currency in the world is produced digitally. Again,
Speaker 1: he's right. But here's the part that when I read it,
Speaker 1: I just can't help but laugh because it just contradicts
Speaker 1: what he's saying. He he rails against bitcoins so much.
Speaker 1: And then this next part what he says tells you
Speaker 1: everything you need to know about bitcoin. It's like, how
Speaker 1: can he not see this? He's literally giving you the
Speaker 1: value prop So he starts, what's I was saying, there's
Speaker 1: no value? And then he lays out the value proposition
Speaker 1: for us, like he can't connect the two dots. This
Speaker 1: is what happens when you're too smart. This is what
Speaker 1: happens when you study theory of economics your whole career
Speaker 1: and you don't live in the real world like you
Speaker 1: and I do. You know where we actually have to
Speaker 1: earn money and pay our bills kind of thing. When
Speaker 1: you don't live in that real world, you just can't understand.
Speaker 1: You sit there and talk about theory all day. So
Speaker 1: I want to tell you what he said. When I
Speaker 1: tell you what he said, I mean, you're gonna think
Speaker 1: it's incredible, just like I did. By the way, you're
Speaker 1: listening to the Mark Moa show, we're talking about bitcoin.
Speaker 1: If you didn't catch on already, we're talking about bitcoin, cryptocurrencies.
Speaker 1: We're talking about the decentralized revolution. We're talking about the
Speaker 1: economist who thinks there's no value but he proves it
Speaker 1: in this next statement. I'm gonna tell you what that
Speaker 1: is when I come back. Don't go away, everyone, Welcome back.
Speaker 1: You are listening to the Mark ma Show. We're talking
Speaker 1: about bitcoin and cryptocurrencies and the decentralized revolution, and I'm
Speaker 1: trying to give you the perspective you need so you
Speaker 1: can understand what's going on so you can participate. This
Speaker 1: is the biggest opportunity that you'll ever see in your life.
Speaker 1: For they we'll see for multiple generations. It already has been,
Speaker 1: it's already been the best performing asset class, and it
Speaker 1: is not done. I think there's a there's an easy
Speaker 1: ten x in front of us. It's pretty dangn amazing,
Speaker 1: especially when you consider the stock market averages about a
Speaker 1: six percent return. So if I can do a ten
Speaker 1: percent return or a thousand percent return, that's pretty dan good.
Speaker 1: But anyway we're talking about right now, some of this
Speaker 1: we call it fud, fear, uncertainty, in doubt. This fud
Speaker 1: that's been cast against bitcoin by Steve Hankey and uh,
Speaker 1: you know he's uh, he's a mouthpiece for you know,
Speaker 1: traditional media. I think tanks um nobody I take seriously.
Speaker 1: But mainstream media sure takes them seriously. And so we're
Speaker 1: dismantling something that he said. And so if you're just
Speaker 1: tuning in, Um, I'm not going to repeat everything that
Speaker 1: I said. But it started off with the headline saying
Speaker 1: that he said, quote, we know the price of bitcoin,
Speaker 1: but not its value. It's probably zero. So I wanted
Speaker 1: to explain that all values subjective, and I give you
Speaker 1: a thought exercise to explain what that that was, and
Speaker 1: so forth. But here's what, um, this is where this
Speaker 1: article really just uh, it's funny to me because he's
Speaker 1: saying that it has no value, So why would anybody
Speaker 1: value anything? Right? So, typically would have some sort of
Speaker 1: utility or some sort of a need. Right, So like, um,
Speaker 1: I use the example if if we were starving on
Speaker 1: as an island and there's a little bit of leftover
Speaker 1: food that that would have some utility, would save us
Speaker 1: from starvation, it would be worth a lot of money. Um.
Speaker 1: So typically there's some sort of value plus scarcity. And so, um,
Speaker 1: what type of value or what type of utility would
Speaker 1: bitcoin provide that would create that value where people would
Speaker 1: want it or people would actually need it because it
Speaker 1: has utility? Right? So I was on the deserted island.
Speaker 1: We'd have plenty of sand, but I don't need that sand.
Speaker 1: There's no utility, there's no scarcity for that UM, but
Speaker 1: that that leftover food there would be. But back to
Speaker 1: back to what I'm talking about. We talked about UM.
Speaker 1: We talked about how Milton Friedman predicted that there would
Speaker 1: be this rise of this digital currency that could go
Speaker 1: appeer to peer, and Steve Hanky says, yeah, that's that's
Speaker 1: central bank digital currencies. So he says, going back to
Speaker 1: what he's talking about, says, quote, we talk about digital
Speaker 1: currency as though it is some new thing, but most
Speaker 1: of the currency in the world is produced digitally. But
Speaker 1: then Hanky paints a very dark picture of central bank
Speaker 1: digital currencies, or what we call CBDCs. He says that
Speaker 1: in the hands of authoritarian governments, it has the potential
Speaker 1: to create serious privacy infringements. Yeah, no kidding. So central
Speaker 1: bank digital currencies are um currencies. They're they're sort of
Speaker 1: like a cryptocurrency, but not really. It's the money that
Speaker 1: that the central bank makes. And because they're digital currencies,
Speaker 1: they're both programmable and behavioral. So what does that mean?
Speaker 1: So they can program the money. So for example, they say, hey,
Speaker 1: here's your stimmy, here's your bucks. If you don't spend
Speaker 1: it by Friday, it comes back to us. That's one way.
Speaker 1: Or they could say, um, here's your stimmy. You can
Speaker 1: spend it here here, here, but you can't spend it
Speaker 1: here here here, right. They could do a behavioral so
Speaker 1: to cause a behavior, to cause you to act in
Speaker 1: a certain way. So for example, hey Mark, you're saving
Speaker 1: too much money, so we're gonna hit you with a
Speaker 1: negative a negative interest rate meaning they're going to charge
Speaker 1: me to keep money, so they're gonna slowly will pull
Speaker 1: away from me. Or hey Mark, you're not saving enough.
Speaker 1: We're gonna give you a positive interest rate. So they
Speaker 1: can affect my behavior. They could give money to um
Speaker 1: immigrants or um you know, certain ethnic groups or whatever
Speaker 1: whatever you know, division they want to do today. They
Speaker 1: could do that all these different things. Um And, but
Speaker 1: they could also do it to completely surveil to see
Speaker 1: every single transaction. Um. So he went on. He dismissed
Speaker 1: the idea that the US dollar could be challenged by
Speaker 1: China's digital one. Um and he's and and he says, um,
Speaker 1: he's completely unconcerned about Beijing about China's first mover advantage
Speaker 1: of China already rolled at the central bank digital currency.
Speaker 1: As a matter of fact, that central bank digital currency
Speaker 1: is scheduled for a complete rollout by the Winter Olympics
Speaker 1: of next year. He says, quote the yuan isn't even
Speaker 1: a convertible currency, so the idea that it could compete
Speaker 1: with the dollar is ridiculous. And until it can become
Speaker 1: freely convertible into other currencies, forget it. It's not going
Speaker 1: to be a challenge. End quote. He warned that the
Speaker 1: real concern from the digital wand is the quote the
Speaker 1: snoop problem or the privacy problem within China. I'm still
Speaker 1: quoting him. That's why the digital uand is not even
Speaker 1: being accepted by the Chinese on the mainland. They don't
Speaker 1: want to be snooped on. They're smart enough to know
Speaker 1: that the Communist Party is going to be looking at
Speaker 1: every transaction they make. End quote. M hmm. So what
Speaker 1: he's saying is let me, let me just let me
Speaker 1: just add this up here. Hang on, hang on. So
Speaker 1: he starts out by saying that bitcoin has no value.
Speaker 1: It's probably zero. He said, we know the pribace, we
Speaker 1: don't know the value. It's probably zero, so it's it's
Speaker 1: worth nothing. But bitcoin allows me to have a peer
Speaker 1: to peer money that is censorship resistant, meaning no one
Speaker 1: can stop it. If I want to send to you,
Speaker 1: nobody can stop it, block and prevented, um, nobody can
Speaker 1: create more of it. So with the dollars, they print
Speaker 1: more dollars, which steals the purchasing power for me. So
Speaker 1: there's they're stealing my value through inflation. So they're stealing
Speaker 1: from me. They're manipulating me with interest rates and monetary
Speaker 1: um supply and demand. They are censoring me. They're they're
Speaker 1: saying who I can and cannot send that money to,
Speaker 1: And they're saying and he and he's also saying here
Speaker 1: that central bank digital currencies are coming next he's saying that.
Speaker 1: And then he's also saying that central bank digital currencies
Speaker 1: um as in his own words, he says, will be
Speaker 1: snoop snoop do one. They don't be snooped one. Oh,
Speaker 1: he says, quote the snoop problem or the privacy problem.
Speaker 1: So central digital currencies have that. So m so bitcoin
Speaker 1: gives me alternative, meaning I have the digital currency that
Speaker 1: can't be inflated. It can't be stolen, can't be censored,
Speaker 1: and nobody can snoop on me, nobody can surveil me.
Speaker 1: So he's warning us of this problem. He says that, um,
Speaker 1: he says, it's not even being accepted by the Chinese
Speaker 1: on the mainland. The Chinese won't even use it because
Speaker 1: they don't want to be snooped on. He says. They
Speaker 1: are smart enough to know that the commonest party is
Speaker 1: going to be looking at every transaction they make. So
Speaker 1: if you don't want to use the central bank digital
Speaker 1: currency that your country is going to give you because
Speaker 1: you're afraid of as he says, you're gonna be snooped on.
Speaker 1: I don't want that. Even the Chinese don't want that,
Speaker 1: then we have bitcoin. Bitcoin is an alternative. That's the
Speaker 1: value proposition. He's saying. In his own words, he's telling
Speaker 1: you the problem with the sentence he's so, he's saying,
Speaker 1: they're gonna the banks are already created central bank desercurrencies.
Speaker 1: They're going to roll it out. The US will be
Speaker 1: bigger than China's. People don't want to use them because
Speaker 1: they can be snooped on. Even the Chinese people don't
Speaker 1: want to use it because they know every transaction they
Speaker 1: make will be spied on. That's the problem. So he's
Speaker 1: laying out the future and tell us how bad it's
Speaker 1: going to be. It's an portable, he says, And this
Speaker 1: is how bad it's going to be, and it's gonna
Speaker 1: suck and you don't want it. And we have this,
Speaker 1: we have this other alternative over here. But there's no
Speaker 1: value to that. I mean, what kind of what kind
Speaker 1: of thinking is this? And it just blows me away.
Speaker 1: I mean he's literally laying out the value proposition and
Speaker 1: then saying there's no value. So if these Chinese people
Speaker 1: that he's saying don't want to be snooped on, if
Speaker 1: you don't want to be snooped on, if you don't
Speaker 1: want your wealth stolen away from you through inflation, if
Speaker 1: you don't want your money manipulate, if you don't want
Speaker 1: your money and your transaction censored through the money and
Speaker 1: through their central maank digital currencies that they're ruling out
Speaker 1: in his own words, then what is your option? You
Speaker 1: only have another option, which is to not use it. Well,
Speaker 1: what are you going to use? You have bitcoin, and
Speaker 1: bitcoin beats that. Bitcoin is open, it's borderless, it's transparent,
Speaker 1: it's portable, it's censorship or resistant. Nobody can censor my transactions.
Speaker 1: It's immutable, nobody can steal it, nobody can change it,
Speaker 1: nobody can take it. It. It fixes the very problem
Speaker 1: that he's telling us about. So he you know, he's
Speaker 1: good at throwing shade. He's good at saying this is
Speaker 1: a big problem. Um. He says that the best way
Speaker 1: to solve the current situation is to look at the causes.
Speaker 1: The causes, he says the problem quote is too much
Speaker 1: money in the system. He says, the way to solve
Speaker 1: rise in inflation is to print less slow the rate
Speaker 1: of growth. But how how are you going to slow
Speaker 1: the rate of growth? The only way you're going to
Speaker 1: slow the rate of growth, That's that's his solution, that's
Speaker 1: his proposition. The only way to solve it isn't bitcoin.
Speaker 1: It's is to slow the rate of growth of the
Speaker 1: money supply. How do you do that well? According to
Speaker 1: one of my favorite economists, Hyak, Frederick Hyak says that
Speaker 1: there shall never be another sound money again until the
Speaker 1: thing is taken from the hands of the government. That's
Speaker 1: the only way it can be done. By force, he says,
Speaker 1: only by some sly round about way that you can
Speaker 1: introduce something that cannot be stopped, and that's bitcoin. That's
Speaker 1: the value problem. Steve Hankey lays it out for us perfectly,
Speaker 1: but he just thinks that somehow, magically, the governments are
Speaker 1: going to start operating on on a on a budget.
Speaker 1: They're gonna stop printing trillions of dollars because they just
Speaker 1: don't like it anymore, and that's you're gonna solve the problem.
Speaker 1: The answer is no, The answer is bitcoin. That's the
Speaker 1: value proposition. Hopefully that makes sense for you're listening to
Speaker 1: the Mark Moa show talking about bitcoin cryptocurrencies. Thanks so
Speaker 1: much for listening.