WEBVTT - Former Google Engineer Provides Bitcoin Economic Models | Vijay Boyapati 0:00:13.760 --> 0:00:17.720 I've often said that good ideas when because they're good ideas, 0:00:18.040 --> 0:00:20.599 when you're able to lay out the information in a 0:00:20.640 --> 0:00:24.720 way that's easy to understand, easy to digest, then people 0:00:24.760 --> 0:00:27.720 can change their mind. It's not about shutting people down. 0:00:27.800 --> 0:00:31.600 It's about having open and intelligent conversation. And that's exactly 0:00:31.640 --> 0:00:34.160 what we're going to dig into today. I am joined 0:00:34.200 --> 0:00:37.760 by my friend VJ and he is going to explain 0:00:37.800 --> 0:00:40.240 some concept to us in a very easy two way 0:00:40.479 --> 0:00:43.160 understand UM. He has recently written a new book called 0:00:43.159 --> 0:00:45.199 The Bullish Case for Bitcoin, and he is going to 0:00:45.240 --> 0:00:48.400 talk about some of the biggest objections that people have 0:00:48.440 --> 0:00:51.560 to Bitcoin in a very simple, easy to understand way 0:00:51.920 --> 0:00:53.360 that I think is going to make a lot of sense. 0:00:53.400 --> 0:00:55.920 Some of the biggest objections you might have heard are 0:00:56.000 --> 0:00:58.520 actually very simple when you can understand them at a 0:00:58.520 --> 0:01:01.360 different level. UM, So much to get into here. It's 0:01:01.400 --> 0:01:03.440 a great conversation, one that I really enjoyed, so it's 0:01:03.440 --> 0:01:06.400 going to just jump right into it. Hey, everyone, welcome 0:01:06.400 --> 0:01:08.760 to another episode of The Market Disruptor Show. And today 0:01:08.760 --> 0:01:11.560 I am joined by VJ. Boya Patti and he is 0:01:11.640 --> 0:01:15.920 a former Google software engineer UM and more lately known 0:01:15.959 --> 0:01:18.840 for talking about bitcoin and the book called The Bullish 0:01:19.080 --> 0:01:22.000 Case for Bitcoin. It's actually been out for quite a while, 0:01:22.080 --> 0:01:24.280 something that I've read. I know a lot of people have, UM, 0:01:24.319 --> 0:01:25.840 and I'm super excited to talk to you today. Thanks 0:01:25.840 --> 0:01:31.200 for joining. Thanks Mark, it's great to chat with you today. Yeah. So, UM, 0:01:31.240 --> 0:01:32.920 I think the first time we met in person was 0:01:32.959 --> 0:01:34.680 at Safety's dinner, and I think we got to sit 0:01:34.720 --> 0:01:36.680 across from each other at Big Block Boom a couple 0:01:36.720 --> 0:01:38.600 of years ago, and that was that was pretty fun. 0:01:39.560 --> 0:01:42.760 I remember you asked me specifically what my journey was, 0:01:43.319 --> 0:01:46.839 um into bitcoin, and so, um, why don't you tell 0:01:46.959 --> 0:01:49.800 us what your journey was in from being a Google 0:01:49.840 --> 0:01:52.840 software engineer, how you got in and then what led 0:01:52.880 --> 0:01:56.360 to kind of writing this book, The Bullish Case for Bitcoin. Yeah, 0:01:56.560 --> 0:01:58.280 I'll try and keep it a little bit compressed, but 0:01:58.320 --> 0:02:00.280 I'll stop from the beginning. I'm gonna stray. And I 0:02:00.280 --> 0:02:02.760 was born and raised in Australia. I came to the 0:02:02.840 --> 0:02:05.520 US to do a PhD in computer science, but I 0:02:05.600 --> 0:02:07.960 ended up taking a job and ended up at a 0:02:08.000 --> 0:02:11.640 small startup which you know people probably know now called Google, 0:02:11.800 --> 0:02:14.800 but it was much smaller when I joined. I worked 0:02:14.800 --> 0:02:19.400 at Google until the end of two thousand and seven, 0:02:19.960 --> 0:02:22.320 and I left because I wanted to campaign in the 0:02:22.320 --> 0:02:26.760 presidential election, the two eight presidential election for Ron Paul, 0:02:27.080 --> 0:02:30.480 and that was a great experience. I raised a lot 0:02:30.480 --> 0:02:33.320 of money, I brought hundreds of people to New Hampshire 0:02:33.400 --> 0:02:37.520 to UH to campaign and canvas for Ron. But I 0:02:37.520 --> 0:02:40.640 actually became really disillusioned with the political process when I 0:02:40.639 --> 0:02:43.360 went through this, and I started to learn that there 0:02:43.360 --> 0:02:48.240 are much more powerful forces at work, and a grassroots 0:02:48.320 --> 0:02:51.800 campaigning really does not compare to those forces. So, for instance, 0:02:51.840 --> 0:02:55.160 Fox News decided they wouldn't let Ron in the debate, 0:02:55.720 --> 0:02:58.040 and that really had a huge impact on his ability 0:02:58.080 --> 0:03:00.720 to to do well in New Hampshire, and so I 0:03:00.760 --> 0:03:03.919 was I was pretty cynical about the political process after 0:03:04.000 --> 0:03:06.320 that for a few years, and a little bit depressed 0:03:06.320 --> 0:03:08.919 about whether you know, the values that I hold, which 0:03:08.919 --> 0:03:12.079 I think are American values human freedom, the ability to 0:03:12.560 --> 0:03:17.720 pursue your happiness without other people interfering. I was a 0:03:17.760 --> 0:03:20.800 little bit depressed that it would be hard to to 0:03:20.880 --> 0:03:24.800 advance those ideas through the political process. UH. But then 0:03:24.840 --> 0:03:28.799 I came across bitcoin in two thousand and eleven, and 0:03:29.600 --> 0:03:32.840 it was really exciting because it's this new technology which 0:03:32.840 --> 0:03:37.200 I think really promotes human freedom and promotes people's ability 0:03:37.280 --> 0:03:40.960 to to keep the fruits of their labor without debasement 0:03:41.360 --> 0:03:45.160 or confiscation. And I sort of recognize that we can 0:03:45.280 --> 0:03:50.040 change the world through technology, we can change the political landscape. Uh. 0:03:50.080 --> 0:03:53.560 And I've just been so fascinated with bitcoin for the 0:03:54.000 --> 0:03:57.240 last decade. And I had a background in Austrian economics 0:03:57.760 --> 0:04:00.400 and I recognized when I came to bitcoin, this is 0:04:00.440 --> 0:04:04.080 a monetary phenomena. And I've just been obsessed with this 0:04:04.160 --> 0:04:07.680 question of how does this new monetary good which was created, 0:04:07.840 --> 0:04:10.280 created out of thin air, How does it have any 0:04:10.320 --> 0:04:13.400 economic value? Why does it have a price? Why why 0:04:13.400 --> 0:04:15.720 do people value this thing? And so I've been obsessing 0:04:15.760 --> 0:04:18.520 over this question for a decade, and you know, I've 0:04:18.520 --> 0:04:22.760 come across so many misconceptions about bitcoin. In two thousand 0:04:22.800 --> 0:04:25.920 and seventeen, I decided I want to write an article 0:04:25.960 --> 0:04:29.960 to explain why I think bitcoin has an economic value 0:04:29.960 --> 0:04:33.800 and provide an economic framework to think about bitcoin. And 0:04:33.839 --> 0:04:36.159 you know, when I wrote the article, I was hoping 0:04:36.200 --> 0:04:38.000 that it would be read by a few friends and 0:04:38.200 --> 0:04:41.080 maybe a couple of people on Wall Street, but it 0:04:41.240 --> 0:04:44.360 ended up getting read by about a million people around 0:04:44.400 --> 0:04:47.680 the world. It was translated into twenty different languages. I 0:04:47.680 --> 0:04:51.000 didn't pay for that. People just volunteered, which was so 0:04:51.120 --> 0:04:56.680 humbling that people are were as excited about the article 0:04:56.800 --> 0:04:59.479 and that you know that they wanted to talk about 0:04:59.560 --> 0:05:02.159 bitcoin and use this as a resource to share with 0:05:02.200 --> 0:05:05.760 their friends. Uh. So I wrote the article. It was 0:05:05.839 --> 0:05:10.120 received much uh more than I expected it would be. 0:05:10.640 --> 0:05:14.080 Um and then people start asking me turning into a book, 0:05:14.360 --> 0:05:16.280 and I thought it was, you know, the right length. 0:05:16.320 --> 0:05:18.560 It was, you know, a long form article, but it 0:05:18.600 --> 0:05:21.520 wasn't as long as a book. Hey guys, let me 0:05:21.600 --> 0:05:24.039 just interrupt this interview real quick, just to plug the 0:05:24.080 --> 0:05:27.440 show sponsor, and that is block Fi. Now. Block five 0:05:27.520 --> 0:05:30.960 is doing amazing things in the bitcoin finance space. As 0:05:30.960 --> 0:05:32.800 a matter of fact, they've cracked some really big news 0:05:32.880 --> 0:05:36.559 by bringing on the x cftc UM chair Chris gian 0:05:36.640 --> 0:05:39.880 Carlo Um and they are one of the most transparent, 0:05:40.000 --> 0:05:43.159 most heavily regulated UM companies inside the United States, which 0:05:43.200 --> 0:05:46.240 gives me a lot of trust into what their services are. Now, 0:05:46.240 --> 0:05:49.039 I've recently did a video talking about how to retire 0:05:49.120 --> 0:05:52.280 off bitcoin, and you can do that by leveraging debt 0:05:52.600 --> 0:05:56.599 and interest against bitcoin and block five is the number 0:05:56.600 --> 0:05:58.440 one company in the United States or maybe in the 0:05:58.480 --> 0:06:01.440 world to go to and use UM. They are leading 0:06:01.440 --> 0:06:03.520 the charge their paying interest on your bitcoin if you 0:06:03.560 --> 0:06:05.960 park it with him, or you can borrow against it. Now, 0:06:06.000 --> 0:06:08.039 as I broke down in that video, you can borrow 0:06:08.080 --> 0:06:11.160 against your bitcoin, and when you take debt against it, 0:06:11.160 --> 0:06:13.320 it's not taxable. It's not a taxable event. You can 0:06:13.400 --> 0:06:15.200 use that debt for anything that you want, including to 0:06:15.240 --> 0:06:17.400 live off of, to leverage up and buy more, or 0:06:17.560 --> 0:06:20.039 roll it into another asset. UM you can do something 0:06:20.040 --> 0:06:22.599 like I've done recently, like sell some real estate put 0:06:22.640 --> 0:06:25.680 that money into bitcoin. Now as that bitcoin price has risen, 0:06:25.760 --> 0:06:27.840 I'm able to borrow against it and go back and 0:06:27.880 --> 0:06:30.280 buy the same real estate or something similar. And I 0:06:30.320 --> 0:06:33.400 still own the bitcoin, and I also own the new 0:06:33.440 --> 0:06:35.440 asset as well. Lots of ways you can do this. 0:06:35.760 --> 0:06:38.400 UM and block five is the company that I recommend. 0:06:38.600 --> 0:06:40.440 Down in the description, I have a link that you 0:06:40.440 --> 0:06:42.160 can click on. If you choose to use that link, 0:06:42.200 --> 0:06:43.800 you can earn up the two d fifty dollars in 0:06:43.880 --> 0:06:46.400 bitcoin just for using that link. So check out block 0:06:46.440 --> 0:06:48.640 by now uh and so I sort of didn't do 0:06:48.680 --> 0:06:54.600 anything about that until when you know, the pandemic happened 0:06:54.640 --> 0:06:59.080 and the government responses around the world was so crazy. 0:06:59.120 --> 0:07:01.960 In my opinion, the amount of money that was created 0:07:01.960 --> 0:07:04.919 as just staggering trillions and trillions of dollars, and so 0:07:05.000 --> 0:07:07.000 they gave a new context in which I thought it 0:07:07.040 --> 0:07:09.920 was worth revisiting the article, and I thought there are 0:07:09.960 --> 0:07:13.040 actually some things in the article I didn't cover that 0:07:13.040 --> 0:07:15.280 are really important I wanted to put into a book, 0:07:15.520 --> 0:07:18.440 and so I spent some of the later part of 0:07:19.160 --> 0:07:21.120 the early part of one writing the book and I 0:07:21.560 --> 0:07:25.640 just launched it. And I'm really excited that people can 0:07:25.880 --> 0:07:29.080 can can get that book now. Well, I launched it 0:07:29.160 --> 0:07:32.000 as a Kickstarter and and the kickstarter campaign has ended, 0:07:32.040 --> 0:07:34.920 but it should be in stores in about a month. 0:07:35.840 --> 0:07:38.320 So you took the article that got the million news 0:07:38.400 --> 0:07:41.000 and was translated all the languages, and then you've taken 0:07:41.040 --> 0:07:43.080 that and expanded on that and then turned it into 0:07:43.120 --> 0:07:45.040 a book, so you goil deeper into the different subjects 0:07:45.080 --> 0:07:48.920 and stuff. Exactly right. I updated it because some of 0:07:48.920 --> 0:07:51.200 the things were tied to that time period in two 0:07:51.240 --> 0:07:53.160 thousand and seventeen when I wrote it, and I thought 0:07:53.160 --> 0:07:55.960 there was definitely enough changes in the market that it 0:07:56.080 --> 0:07:59.280 needed to be updated, and I significantly expanded it as well. 0:07:59.400 --> 0:08:01.320 So there were pup of things that I thought were 0:08:01.360 --> 0:08:04.400 incredibly important that I needed to to to discuss that 0:08:04.440 --> 0:08:06.760 I didn't in the article. So what was the historical 0:08:06.920 --> 0:08:10.880 context in which bitcoin came about? Uh, there would be. 0:08:10.960 --> 0:08:14.320 There's been people working in the cipher punk community for 0:08:14.320 --> 0:08:17.080 at least a decade before bitcoin came about, trying to 0:08:17.120 --> 0:08:20.560 create digital money but actually having not succeeded, many of 0:08:20.600 --> 0:08:23.560 them were skeptical something like this was possible. But so 0:08:23.600 --> 0:08:26.760 I wanted to provide that historical context. I also really 0:08:26.760 --> 0:08:30.200 wanted to tackle the question of what is bitcoin. There 0:08:30.280 --> 0:08:32.600 was a huge debate in the bitcoin community in two 0:08:32.640 --> 0:08:35.640 thousand and seventeen about you know, it's bitcoin a payment system. 0:08:35.720 --> 0:08:38.320 Is it kind of like PayPal, ex a bit decentralized 0:08:38.559 --> 0:08:40.040 or is it kind of like goal? Is it more 0:08:40.120 --> 0:08:43.000 like a digital you know gold where you keep your 0:08:43.040 --> 0:08:46.520 savings in that um And that that question was so 0:08:46.559 --> 0:08:49.560 important it resulted in a split of the bitcoin network 0:08:50.040 --> 0:08:54.400 really very hostile, and there's a lot of contention and 0:08:54.480 --> 0:08:58.719 people really upset with each other. And I have a 0:08:58.800 --> 0:09:00.880 view on what bitcoin is, and I really wanted to 0:09:00.880 --> 0:09:03.480 explain why I think bitcoin is the way it is, 0:09:03.760 --> 0:09:06.720 why it can only be the way it is, uh, 0:09:07.000 --> 0:09:09.880 and how that development played out. So there's a number 0:09:09.880 --> 0:09:11.559 of things like that that weren't in the article that 0:09:11.559 --> 0:09:14.200 I thought were really important that I should cover up. Yeah, 0:09:14.280 --> 0:09:16.920 they sound like important things. Um, I wanted to dig 0:09:16.960 --> 0:09:18.439 into some of that, But I would like to hear 0:09:18.559 --> 0:09:20.839 just about the kickstarter piece itself, because that's kind of 0:09:20.880 --> 0:09:24.200 an interesting thing. Um. Maybe there's people listening that have 0:09:24.200 --> 0:09:26.440 thought about writing a book and I'm one of them. 0:09:27.280 --> 0:09:29.520 I and honestly, I hadn't thought about doing a book 0:09:29.520 --> 0:09:31.240 to a kickstarter. Um, I've talked to a couple of 0:09:31.240 --> 0:09:33.920 different publishers. I've talked to some people that assist you 0:09:34.000 --> 0:09:36.480 with self publishing things like that. Tell me how that 0:09:36.520 --> 0:09:40.360 process went with the kickstarter and how it ended up. Yeah. 0:09:40.360 --> 0:09:42.520 So I've never written a book before. And the first 0:09:42.520 --> 0:09:45.000 thing I did was I contacted a number of people 0:09:45.679 --> 0:09:48.079 in the bitcoin space who had written books and who 0:09:48.120 --> 0:09:50.920 I respect a lot of people like Sayer Dean and 0:09:51.040 --> 0:09:54.520 Yeah Pritzka and Nick Bartia who had written great books 0:09:54.559 --> 0:09:56.960 in my opinion, have them all on my shelf. And 0:09:56.960 --> 0:09:58.800 I said, should I what should I do here? Should 0:09:58.840 --> 0:10:00.800 I just go find a public a share or should 0:10:00.840 --> 0:10:05.400 I self published? And uniformly, every single one of them 0:10:05.400 --> 0:10:08.160 said self published. Do not use a publisher, And they 0:10:08.160 --> 0:10:10.840 gave you know a few reasons. One is you don't 0:10:10.880 --> 0:10:15.440 control the rights, and that dramatically reduces your flexibility of 0:10:15.480 --> 0:10:19.160 creating derivative works, whether you can do translations. There are 0:10:19.160 --> 0:10:22.320 all sorts of issues around that where, uh, it makes 0:10:22.360 --> 0:10:25.160 it harder for you to control your work, and publishers 0:10:25.160 --> 0:10:28.000 tend to be very very slow in reacting to requests. 0:10:28.040 --> 0:10:31.439 So you know, I want to release an excerpt from 0:10:31.440 --> 0:10:33.720 my book, a chapter to promote, to promote the book, 0:10:34.080 --> 0:10:36.079 it can take months to get approval for that kind 0:10:36.120 --> 0:10:39.320 of thing. So that was one reason. The other reason 0:10:39.440 --> 0:10:41.840 is you don't actually don't get paid very much if 0:10:41.840 --> 0:10:43.760 you if you use a publisher, they do, they do 0:10:43.840 --> 0:10:47.120 pay you upfront, but if you sell a book for 0:10:47.160 --> 0:10:49.920 twenty dollars, you're likely to get a dollar or a 0:10:49.920 --> 0:10:52.880 dollar fifty per book, which is not a very good 0:10:52.920 --> 0:10:55.200 renumeration because that the effort that goes into a book 0:10:55.280 --> 0:10:58.320 is pretty significant. You know, there's months of work where 0:10:58.320 --> 0:11:00.880 you're writing and you're sitting down a loan and having 0:11:00.880 --> 0:11:06.280 writer's block and actually do this. Um so, so you know, 0:11:06.400 --> 0:11:09.360 then I thought, okay, I'm going to self publish. And 0:11:09.559 --> 0:11:11.640 I looked at doing that, and if you self published, 0:11:11.640 --> 0:11:13.280 you've got to do things yourself. You gotta do the 0:11:13.320 --> 0:11:15.840 type setting yourself, the editing, you've got to hire an editing. 0:11:15.840 --> 0:11:19.360 There are all these costs. Uh. But the benefit is 0:11:19.360 --> 0:11:21.920 if you sell through retailers when you're self published, instead 0:11:21.920 --> 0:11:23.960 of a dollar or a dollar fifty, you're probably gonna 0:11:24.000 --> 0:11:27.199 get maybe five or six dollars per per copy per book, 0:11:27.200 --> 0:11:31.040 which is great. But then I thought about Kickstarter. I'm like, well, 0:11:31.080 --> 0:11:33.600 maybe I can launch my book on Kickstarter. And the 0:11:33.640 --> 0:11:36.880 great thing about Kickstarter is it's this website that helps 0:11:36.920 --> 0:11:39.800 people launch projects that may not be fully finished and 0:11:39.840 --> 0:11:42.679 helps them fund those projects to get them out there. 0:11:42.960 --> 0:11:46.720 As typically used for gadgets and electronics and even board 0:11:46.760 --> 0:11:49.200 games where people are dreaming up something they want to 0:11:49.240 --> 0:11:51.679 create and they explain to people what their vision is 0:11:51.720 --> 0:11:54.520 and people get excited and they fund it, but people 0:11:54.600 --> 0:11:57.000 also use it for books, and so I thought, okay, 0:11:57.000 --> 0:11:58.520 why don't I do this? If I if I do 0:11:58.559 --> 0:12:01.880 a Kickstarter and people taught me on this. Instead of 0:12:01.960 --> 0:12:04.640 you know, getting a dollar fifty or five dollars, if 0:12:04.640 --> 0:12:07.920 I self published, I'm selling directly, I'm going to get 0:12:07.960 --> 0:12:10.520 out of twenty dollars, I'm probably gonna get about eighteen dollars, 0:12:11.480 --> 0:12:14.760 So it renumerates me a lot more. And the benefit 0:12:14.840 --> 0:12:16.640 is I really want to get these ideas to as 0:12:16.679 --> 0:12:18.720 many people as possible, So I would love to have 0:12:18.760 --> 0:12:22.520 the funding to get pay for translations myself, to own 0:12:22.559 --> 0:12:25.560 the copyright for those translations, to get this to spread 0:12:25.600 --> 0:12:29.040 around the world, because in my view, when people are 0:12:30.440 --> 0:12:34.640 presented with the reasons why bitcoin is valuable and why 0:12:34.640 --> 0:12:36.280 it's important to the world, and why it's a good 0:12:36.280 --> 0:12:39.200 idea to keep savings in bitcoin, they really get it. 0:12:39.240 --> 0:12:41.560 They just need to have the ideas presented in a 0:12:41.679 --> 0:12:44.480 sort of logical clear way and have some of the 0:12:44.559 --> 0:12:47.800 risks explained to them in an open, honest way. Once 0:12:47.840 --> 0:12:49.840 you do that, I find I haven't had an experience 0:12:49.840 --> 0:12:51.920 where people like, well, I still don't believe in it. 0:12:52.160 --> 0:12:55.880 Most people I found get it. Uh So I'm excited 0:12:56.360 --> 0:12:59.559 to have the control over my work and to get 0:12:59.640 --> 0:13:02.040 it out and to be compensated enough that I can 0:13:02.080 --> 0:13:06.720 fund myself, translations and marketing and all of that stuff. 0:13:07.000 --> 0:13:09.440 So I think Kickstarter is a great way to do this. 0:13:09.559 --> 0:13:12.880 I encourage anyone who's thinking about writting a book to 0:13:12.880 --> 0:13:16.600 to use Kickstarter. Safer Dean his new book, He's also 0:13:17.000 --> 0:13:19.319 launched on Kickstarter, And I think this is going to 0:13:19.400 --> 0:13:21.600 be a trend. Actually, I think a lot of people 0:13:21.640 --> 0:13:23.440 in this space are going to recognize this is a 0:13:23.440 --> 0:13:26.880 good way to launch your book. Uh and it's a 0:13:26.880 --> 0:13:29.680 good way to get compensated and keep control over over 0:13:29.760 --> 0:13:32.559 your own work. So it was a success. Then you 0:13:32.600 --> 0:13:34.800 were able to raise enough money up front on pre 0:13:34.960 --> 0:13:37.560 ordered the book to give you the money you need 0:13:37.600 --> 0:13:41.120 to get it written, translated, etcetera. Yeah, so it's sold 0:13:41.160 --> 0:13:45.560 about a hundred fifty dollars worth of books, and that's 0:13:45.720 --> 0:13:48.680 enough for me to start working on other stuff. And 0:13:48.840 --> 0:13:51.240 that's that that that demand is coming from kind of 0:13:51.280 --> 0:13:54.080 the early demanding people who are most excited about it. 0:13:54.160 --> 0:13:57.000 And then eventually it's going to get into Amazon and 0:13:57.440 --> 0:13:59.679 Bonds and Noble and that sort of thing. But it's 0:13:59.720 --> 0:14:03.680 kind of tapping into that early excitement and demand for 0:14:03.720 --> 0:14:07.280 the book, uh and and and monetizing that a little 0:14:07.280 --> 0:14:10.800 bit more than you would through Amazon. Yeah, that's awesome. 0:14:10.840 --> 0:14:12.360 Thanks for sharing that and maybe that I said, there's 0:14:12.360 --> 0:14:15.160 probably a lot of people are interested, and I definitely was. Um, 0:14:15.200 --> 0:14:17.520 so I want to dive into some of these subjects here. 0:14:17.600 --> 0:14:21.040 So um you talked about Um one of the big 0:14:21.040 --> 0:14:24.880 things was like this economic value and framework of bitcoin 0:14:24.960 --> 0:14:27.800 and so, um, you know, why is their value there 0:14:27.800 --> 0:14:29.960 in the first place. And of course that's one of 0:14:30.000 --> 0:14:33.280 the big complaints or or arguments that we might hear, 0:14:33.320 --> 0:14:36.200 which I'm sure what's why you tackled that. Um, there's 0:14:36.240 --> 0:14:38.800 nothing back in it. It's just like fiat or whatever 0:14:38.800 --> 0:14:41.120 it may be, right, So we hear that all the time. Um, 0:14:41.320 --> 0:14:44.200 some people think that, you know, I think Peter Shift 0:14:44.240 --> 0:14:46.280 tweeted today that you know, only it has to be 0:14:46.320 --> 0:14:50.520 commodity money, only commodities or money. Um, So walk us 0:14:50.520 --> 0:14:53.560 through kind of this economic value framework that you said 0:14:53.560 --> 0:14:56.360 you kind of have if you will. Yeah, of course. 0:14:56.480 --> 0:15:00.800 So money is really it's a really difficult object to understand. 0:15:00.840 --> 0:15:04.160 Most people don't understand why money has any value, uh, 0:15:04.200 --> 0:15:06.160 and they haven't really thought deeply about it. So that 0:15:06.320 --> 0:15:09.080 that that's fine. But the thing that's really hard about 0:15:09.160 --> 0:15:13.400 money is that with other sort of assets, financial assets, Uh, 0:15:13.440 --> 0:15:16.440 they're they're almost always valued on their cash flow. And 0:15:16.480 --> 0:15:19.880 that's that's fairly easy to understand. So stocks or bonds 0:15:20.040 --> 0:15:23.120 or real estate. Stocks have dividends, bonds have interest, and 0:15:23.520 --> 0:15:26.680 real estate has rental cash flow. And you could look 0:15:26.680 --> 0:15:28.400 at a house and say, well, why is this house 0:15:28.480 --> 0:15:32.000 worth a million dollars? Well, it produces seventy thousand dollars 0:15:32.040 --> 0:15:34.520 of rent per year, so that justifies it a little bit. 0:15:34.720 --> 0:15:38.440 Whereas money doesn't. Money doesn't produce cashflow. Gold doesn't produce 0:15:38.760 --> 0:15:43.320 cash flow. Uh, bitcoin doesn't produce a cash flow. So 0:15:43.400 --> 0:15:46.920 why why does something like gold have value? Well, the 0:15:46.960 --> 0:15:50.440 reason is money serves this other purpose in society and 0:15:50.520 --> 0:15:55.760 historically has always these purposes medium of exchange and store 0:15:55.800 --> 0:15:59.520 a value and unit of account. And through history humans 0:15:59.520 --> 0:16:03.560 have value use certain goods ah for their attributes that 0:16:03.680 --> 0:16:06.080 make them good at these functions of money. And we 0:16:06.440 --> 0:16:09.160 really need money in a society because money is this 0:16:09.640 --> 0:16:14.440 incredibly important economic good that facilitates social coordination. If we 0:16:14.480 --> 0:16:16.560 don't if we don't have money, then we don't have 0:16:16.640 --> 0:16:18.800 a division of labor. And if we don't have a 0:16:18.800 --> 0:16:21.840 division of labor, we have a primitive society. We don't 0:16:21.840 --> 0:16:26.040 have civilization. We have a barter based society where people 0:16:26.080 --> 0:16:28.920 are trading you know, sheep for bread or whatever, and 0:16:29.200 --> 0:16:31.920 that really limits the scope in which trade can occur. 0:16:32.040 --> 0:16:36.800 So money is this fundamental innovation that society needs for civilization. 0:16:37.200 --> 0:16:40.640 So what are the attributes that make for a good money? Uh? 0:16:40.880 --> 0:16:43.240 These these attributes have been known for a long time, 0:16:43.280 --> 0:16:46.040 all the way back to Aristotle who wrote about these 0:16:46.320 --> 0:16:49.280 things like divisibility. You want to be able to divide 0:16:49.520 --> 0:16:52.000 the money that you have into small pieces to use 0:16:52.040 --> 0:16:57.920 in trade. Uh. Verifiability it should be easy to recognize 0:16:58.000 --> 0:17:02.400 that this is money, and it's not easy to fake it. Um. 0:17:02.880 --> 0:17:05.600 Fung Ability is another one. You want something which is 0:17:05.840 --> 0:17:09.040 essentially equivalent to any other piece or quantity of that thing. 0:17:09.080 --> 0:17:12.160 So gold is better as money than diamonds because diamonds 0:17:12.160 --> 0:17:15.119 are irregular in shape and quality, so they're not as 0:17:15.160 --> 0:17:20.120 good for trading. Uh. And probably the most important one 0:17:20.240 --> 0:17:22.960 of all the attributes to make for good money is scarcity. 0:17:23.560 --> 0:17:26.480 You want to have you want to keep your savings 0:17:26.520 --> 0:17:31.600 in something that is very difficult to produce. If it's 0:17:31.600 --> 0:17:34.359 easy to produce, then your savings are going to be 0:17:34.400 --> 0:17:37.760 sort of diminished, very quickly over time. So gold is 0:17:37.880 --> 0:17:41.119 much better as money than sand because if sand were money, 0:17:41.200 --> 0:17:42.920 you could take a bucket to the beach and you'd 0:17:42.920 --> 0:17:45.240 be rich. Right, So other people are not going to 0:17:45.280 --> 0:17:47.080 want to keep their savings in it. But gold is 0:17:47.200 --> 0:17:50.840 very difficult to produce. Uh So, if you look at 0:17:50.840 --> 0:17:55.440 those attributes that make for good monetary good, gold does 0:17:55.520 --> 0:17:59.399 really well over those attributes, and if you rank them, 0:17:59.400 --> 0:18:03.280 Bitcoin does even better. Uh And one of the attributes 0:18:03.280 --> 0:18:08.360 I failed to mention was portability. Bitcoin is so much 0:18:08.440 --> 0:18:11.359 more portable than gold. I can transmit bitcoin that I 0:18:11.440 --> 0:18:13.119 have to someone on the other end of the world 0:18:13.160 --> 0:18:17.320 almost instantly at very low cost. But if you're going 0:18:17.359 --> 0:18:19.679 to do that with gold, that would be very expensive. 0:18:19.720 --> 0:18:24.560 It would be risky. Um. So, if we rank monetary 0:18:24.600 --> 0:18:28.879 goods along these attributes that we know people demand for money, 0:18:29.160 --> 0:18:33.120 Bitcoin comes out really really well. It's superior to gold 0:18:33.160 --> 0:18:37.840 along almost every attribute except for established history. Gold has 0:18:37.880 --> 0:18:40.960 this very long established history, and I think Bitcoin is 0:18:41.000 --> 0:18:44.720 actually superior to feat moneys along every single one of 0:18:44.720 --> 0:18:47.280 these attributes. And in my article, I have a table 0:18:47.320 --> 0:18:49.679 where I list all of the attributes and I ranked 0:18:49.680 --> 0:18:54.280 them as if they're you know, taking a test in college, A, B, C, D, 0:18:54.440 --> 0:18:57.240 E F and I rank all of them. Uh, and 0:18:57.280 --> 0:18:59.800 you can go check out my article and see this ranking. 0:19:00.040 --> 0:19:02.399 Coin I think is superior to feat over all of 0:19:02.440 --> 0:19:08.560 the attributes and it's um that's the reason that bitcoin 0:19:08.720 --> 0:19:13.600 outcompetes these other monetary goods over time, because people slowly 0:19:13.680 --> 0:19:17.720 recognize that bitcoin has attributes that they want in money 0:19:17.800 --> 0:19:20.159 and that they need in money, and so they choose 0:19:20.200 --> 0:19:23.920 to keep their savings in bitcoin rather than these forms 0:19:23.960 --> 0:19:27.720 of money. And I think the thing is understanding. Knowledge 0:19:27.760 --> 0:19:30.600 can be sorry, information can be transmitted very quickly around 0:19:30.600 --> 0:19:34.359 the world, but understanding takes time. And so I've view 0:19:34.440 --> 0:19:38.000 this as like a process of the understanding of bitcoin 0:19:38.080 --> 0:19:44.120 superior superiority spreading around the world, um but inevitably growing, 0:19:44.240 --> 0:19:47.560 which is why Bitcoin's adoption is also growing, because people 0:19:47.560 --> 0:19:51.240 are coming to this understanding and realizing, Hey, it makes 0:19:51.240 --> 0:19:55.000 sense for me to keep some of my savings in bitcoin. Yeah. 0:19:55.080 --> 0:19:58.800 When you talk about the scarcity aspect um and how 0:19:58.840 --> 0:20:00.800 gold has been really good at app you know, one 0:20:00.800 --> 0:20:03.280 thing that I've always thought is I was a gold bug. 0:20:03.320 --> 0:20:05.639 After two thousand and eight, after that market crashed, I 0:20:05.920 --> 0:20:09.840 then found I became actually a sound money advocate, but um, 0:20:09.880 --> 0:20:11.840 you know, with gold, it was always kind of like, uh, 0:20:12.560 --> 0:20:15.560 money has to have a true cost of capital, so 0:20:15.680 --> 0:20:17.280 like you can't just create it from thin air. It 0:20:17.600 --> 0:20:21.639 must represent some form of energy um. And so with gold, 0:20:21.680 --> 0:20:23.280 for example, I have to buy the land and by 0:20:23.280 --> 0:20:25.440 the equipment and expend all the energy to get that gold. 0:20:25.480 --> 0:20:28.800 So there's like a true cost of that capital um 0:20:28.840 --> 0:20:31.680 and so um it's backed by energy, right and so 0:20:32.119 --> 0:20:33.720 um you can like look at bitcoin kind of the 0:20:33.760 --> 0:20:35.479 same way in a sense where it's also backed by 0:20:35.520 --> 0:20:37.800 capital because of the equipment and the energy that's used. 0:20:38.119 --> 0:20:40.000 So sometimes I thought, well, it's back the same as 0:20:40.040 --> 0:20:43.119 gold is backed right there, both backed by energy. Is 0:20:43.160 --> 0:20:45.320 that a good way to look at it? I think 0:20:45.520 --> 0:20:49.080 absolutely correcting. That's that's the way bitcoins it produces in 0:20:49.119 --> 0:20:52.320 this process of mining where the mine is a running 0:20:52.359 --> 0:20:57.360 software which has to expand real energy um to produce 0:20:57.400 --> 0:21:00.080