Every single person that I met, including myself, starts with
this is a scam and a Ponzi scheme and then you discover
that it's not. And that's the journey.
And Bitcoin really does sit uniquely in its own place as you
know, digital hard sound money because everything is changing.
People are out flowing into gold and Bitcoin because gold and
Bitcoin, you know what it is. The rules don't change.
But Bitcoin even has less things that change.
Most people have IOU gold. There are way more claims on
gold than there is gold. Very excited you're here.
You are a true OG and I think one of the few people I'd say
that can really explain Bitcoin eloquently.
And I reached out to you after I listened to to what I think is a
legendary Bitcoin explanation during a discussion you had with
with Peter Schiff back in February, which, you know, some
people might know Peter Schiff. He's like a well known gold bug
and he, but he tweets about Bitcoin a lot, which is, which
is interesting, you know. And so today I was thinking it
would be interesting for my audience and and also your
audience to kind of like dive deeper into Bitcoin as a
paradigm shift that it is and how it helps us like reshape
value and and money in the world.
And and kind of like go down to anti Bitcoin arguments with you
and see if we can unpack them and help people better
understand Bitcoin. OK, let's do it.
I do think with Peter Schiff, there's an element of 'cause I
remember like back in, I think he was really early.
Like so I got in in 2011, he was around in 2012.
And there's an element of he committed to a decision early,
and then he built this whole marketing strategy out of
sticking to that decision. So I do think he actually knows
the difference. I think there was an element of
as the Bitcoin community got bigger, he ended up in this
really weird situation where he thought rather than capitulating
and joining the community, I'll do this anti Bitcoin thing.
So I get all the marketing and I'll just stick to my original
investment thesis and business model.
And he just never adjusted it and just ended up as the last
man standing against Bitcoin. You know in in in somebody that
gets all the reasons for Bitcoin but pretends that Bitcoin
doesn't solve them. I might as well be, but that's
an interesting shtick for 13 years, don't you think?
Well, I mean, I mean, if you're a an advisor and he is in the
wealth management business, you know, he's got his, he gets his
theses right. He bets against the Fed, but
betting against the Fed cost you a lot of money.
You end up in gold for many years.
You end up in foreign stocks and foreign currencies.
And then eventually you are right, which is he is right
today. But then you get that one moment
and you've missed everything that could have happened in
between and so many people are in that and and Bitcoin was the
highest performing asset in history and a lot of people
listen to him and so didn't buy and they he must get a lot of,
you know, hate from that really I.
I would agree. Yeah.
It's it's an interesting figure in, in in this space, to to say
the least. But that I mean, when I hear
him, you know, debate you, he does share his anti Bitcoin
arguments with quite some conviction, I'd say.
And again, yeah, I think how how you are you your rebuttals
against it were actually, I think very clear and rational,
just as I've experienced explaining Bitcoin right, like
it just is a certain thing and there are certain, you know,
characteristics and also values that emanate from it just being
the thing it is. And yeah, you can recognize them
or not. You know, I think it's, it's
more that's why people I think also say that Bitcoin is an ego,
ego test to that degree, right? Like, are you able to, you know,
see this different truth and kind of compare it to what you
think is the truth? And if you, if you can, you
know, you can obviously have a benefit from the asymmetric
opportunity that Bitcoin is, but it's not for everyone in that
sense. Yeah, and every single person
that I met, including myself, starts with this is a scam and a
Ponzi scheme, and then you discover that it's not, and
that's the journey. All right, perfect.
Yeah, let's let's just dive into the first argument that that or,
or the topic that you talked about.
So my idea here is that I have the anti Bitcoin argument, I
have your rebuttal from the discussion.
I also link to the discussion in the description so people can
check it out for themselves. And then I'll have a question
for you to kind of unpack that further.
So the first anti Bitcoin argument is Bitcoin isn't unique
as there are other cryptocurrencies that can also
be self custodied and transferred globally, often
faster, cheaper and more anonymously.
And your rebuttal was Bitcoin uniquely combines secure self
custody, global transferability and a reliable fixed monetary
policy protected by the largest decentralized proof of work
computer network in the world. No other cryptocurrency
replicates these combined strengths.
So my question for you is what specifically makes bitcoins
fixed supply and the proof of work network uniquely resilient
compared to other cryptocurrencies?
Well, we have this concept in Bitcoin.
In the early days, no one cares about us.
Like we were such a niche community.
You know, we were a bunch of cypher punks.
We were trying to figure out how to do transactions outside the
banking system. And, you know, before I got
involved, the very, very early, early people, you know, had this
Immaculate Conception, which is that Satoshi and the cypherpunk
mailing list. Some people got involved with
it. You know, you had some early
miners like Hal Finney and various other early Bitcoin
community members, and no one believed it would succeed.
There were previous attempts, You know, they were trying to
make it work, code it together, but there was only one person.
There were a couple of people that were willing to mine.
And so they started mining. And as the market continued,
more and more people started mining.
And then they transferred a few transactions.
And then people started to decide, well, how do we create a
market price for people that want to buy and sell?
And so more and more people were mining and it went on.
People were doing it from their laptops.
And then as the network got more popular, you know, it is built
into the protocol that the more people that are mining, the more
difficult it is to mine, which means you have to consume more
electricity, which is why it's called proof of work, because
you have to prove that you're doing the work.
And the more people that are contributing to proving that
they're doing the work, the more difficult it gets to, you know,
receive a, a block. And so eventually so many people
were doing it that people decided, well, why can't I
compete with everyone else and create a graphics card?
So they then started doing it with GPUs, which is, you know,
for more intense gaming types of console consoles.
And then eventually it hit a stage where as the, the
ecosystem grew, people started to speculate on the prices.
People started to use it in the dark web.
People started to use it for online gaming.
And then people started slowly to recognize that they could,
you know, own their own money, spend their own money, and the
money supply doesn't change. And so over time, it went up in
value and it was very, very volatile.
And so more and more exchanges were created.
The ecosystem just grew and grew and grew very organically until
eventually it hit the stage where the price of Bitcoin was
worth so much that, you know, a group of people in China said,
let's plug some, you know, some semiconductor chips from Taiwan
and manufacture a special machine, an ASIC and let's plug
it into the cheapest form of electricity in China.
And let's see if we can mine these things and, and out
compete all the GP US. And then they decided, well,
let's create an industry out of it.
There were more people that want to mine as well.
And so as the price went up organically, as we went through
more halving events, more people started to mine and we just
bootstrapped through this Immaculate Conception where
Satoshi, you know, I believe that Satoshi is no longer with
us. So they can't move their coins,
but it doesn't really matter anyway because they never
actually move their coins. And it would only, you know,
they mined all those coins. The the work was done.
It wasn't pre mined. It wasn't, you know, done
connected to a character Satoshi when some of the early
developers were invited to speak at ACIA conference around
Bitcoin, Satoshi decided to leave the product the project.
You know, when Julian Assange decided the banks won't let me
run WikiLeaks, decentralized media, can I use Bitcoin?
And you know, it just organically went through this
this thing and, and in the end, nobody controlled it.
There was no one dominant miner. There were mining pools that
were set up and it just went more and more decentralized.
And so everybody that joined it didn't have an unfair advantage.
Somebody may have been involved earlier.
So that and and kept it. Some were involved really early
and sold it to somebody else. It was, I would say, Austrian
economics on a blockchain, a pure free market that had an
Immaculate Conception, fair launch.
And ever since then, we've had probably at this stage 22
million attempts at creating any type of some competing proof of
work, some other consensus models and a million different
iterations are cheaper, faster, better, and they all end up more
centralized. They compromise something in
order to achieve cheaper, faster, better, and none of them
end up achieving the properties of Bitcoin, which is kind of
like a network effect. The size of the Internet and
trying to get everybody to rebuild on top of a new Internet
when no one can create a better version and get the network
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It's actually 37 million crypto tokens are out there now, like a
million a month are are getting at it.
I had a great video with Jesse Myers about this where we
unpacked why, you know, we think a crypto is dead.
But yeah, I agree. I think what many people have
forgotten is that is that, and I really like what you said, it
was like a free market, right? It was just like, OK, there's
this protocol on the Internet, you know, the, you know,
protocol for money, computer protocol for money.
These are the rules. You can adopt it.
And then as you said, you know, once people understood, hey,
this is interesting, they were actually putting real world
assets, energy, time, money, machinery towards expending
energy to create this digital, let's call it the token for now.
Yeah. And very importantly, there was
no price for a long time. So people are doing it for the
technology. And then the price kind of was a
function of a market wanting to figure out whether they could
buy and sell. Yeah, I agree.
So do you think we should talk about Bitcoin as not even part
of of of crypto? I don't know what you think when
people conflate Bitcoin and crypto with each other, but I'd
say they are totally different. Yeah, I do think crypto has been
a massive psyop for the industry.
It's a free market, so anyone can create in the thing and I
don't believe in, you know, stopping anyone.
But I think it's been such a distraction for the industry
that everyone that I know that hangs around for the long time,
they come in, you know, they come into crypto and hopefully
they end up at Bitcoin. And most people do, but some
people, they come in crypto, you know, they, they're basically
investing in these characters like a stock.
And slowly but surely they find out why Bitcoin is different.
And Bitcoin really does sit uniquely in its own place, as,
you know, digital hard sound money.
I do think that the analogy of digital gold is useful and
everything else is like a, you know, more like a stock that
depends upon the management of certain communities that have
almost like a foundation or a company and a bunch of pre mined
tokens that they're looking to monetize over time and
eventually have to sell those on to you if they create enough
perception or value. And very, very few of them
actually end up with anything like Bitcoin.
There's a massive premium for it will never change in a major in
a significant way without hitting massive consensus on a
network that has got significant adoption from competing players,
whether it's nodes, whether it's miners, whether it's exchanges,
whether it's users, you know, they, they all, you know, have
the, the way that it was designed is, is significant.
And if you look at everything today, even the environment
we're in today, you know, people thought they understood the US
government, the Trump administration comes in, it
rages a tariff war. And now the rules of investing
in the US government through treasuries and bonds completely
changes. If you're investing in stocks,
you know you're dealing with humans and boards and decisions
and wrong decisions and changes. If you're in dealing and
anything other than a commodity, you've got all these
counterparty risk, human risks. Things can change.
And so people like gold right now because everything is
changing. They don't know whether the US
empire is going to be there. They don't know what the value
of the dollar is relative to other currencies.
And because everything is changing, people are out flowing
into gold and Bitcoin because gold and Bitcoin, you know what
it is, the rules don't change. But Bitcoin even has less things
that change because there is still the possibility.
Like there was an announcement recently that I think El
Salvador said it's got $3 trillion of gold under its
ground that it could try and extract.
And so you always have these these changes that can happen.
And while it's not common in gold, which is why it's
preserved its value with Bitcoin, it never changes.
The rules are identical and enforced by the community on,
you know, backed up on nodes all around the world and enforced by
the largest distributed supercomputer in the world that
is hosted in many different countries by anyone that wants
to fire it up with countries that hate each other and can
never geopolitically strategically align to take down
the network. And it would cost them billions,
if not trillions, to try and execute such an attack.
We talked about speculation. I also think you know, like if
you invest in Tesla, you speculate on Elon waking up in
the morning, right? Like if, if Elon doesn't wake up
in the morning, guess what happens with with the stock,
right? I think that's also the
counterparty risk that you mentioned.
So the the second argument is bitcoins value anti Bitcoin
argument is bitcoins value is driven primarily by speculation.
Bitcoins current market price is mainly speculative driven by
ETFs into institutional investors and leverage positions
risking large liquidation events.
And your rebuttal was though speculation is present, Bitcoins
long term value and adoption are anchored by committed holders
who regularly accumulate Bitcoin regardless of price, providing
stability during volatility. My question for you is how do
speculative activities like ETFs or the leverage positions impact
Bitcoins adoption as a reliable store of value?
And maybe also can you can you see some merit also in in Peters
position maybe maybe we can also mention that in like the other
arguments that that we come across?
Yeah. So I mean, it's a bit of a a
nuanced term because people have a different definition.
So for me, I, I, I distinguish between a trader and investor.
I think a trader is somebody that has a certain unit of
account IE dollars and says I would like to invest in this
asset class short term because I believe that it's going to be,
it's going to make me more dollars and I could even short
it or something. And so speculation is what
drives markets and speculations. Even in the most liquid markets
in the world, let's say U.S., Treasuries and bonds, you know,
they, there is a massive rampant amount of speculation that makes
these markets. And then you have different
types of products that are built around that in order to get
exposure to them in different ways.
But in the end, the fundamental value prevails.
And so with a stock, you know that it has key person risk, it
has counterparty risk, it is there to achieve a goal.
It has quarterly reports. If those quarterly reports are
better than expected, the value goes up.
If it's worse than expected, the value goes down.
People make fake news and they speculate and they try and do
all sorts of stuff. Some people accumulate massive
positions and they use the fact that they can gain access to
leverage to short the stock, manipulate it.
This happens in every single market, and Bitcoin is no
different. In fact, because Bitcoin is so
volatile, it's got a rampant community of speculators that
are always either looking to make more dollars or make more
Bitcoin. And so this is the the market
dynamics. But the real question is, of all
the assets in the world, which one is the hardest to manipulate
long term is the real question. And I'd argue to you, the one
that has a fixed supply is probably long term the hardest
to manipulate provided that it has a sufficient amount of
liquidity. And so with all the shit coins,
because liquidity is so low, one person can come along and
completely corner and manipulate the market.
With Bitcoin, you have to be a serious player to be able to
impact price. So you you've eliminated all
those that have access to low capital or pre mines or various
other things in the stock market.
You know that at any one time there is an authorized share
capital and someone could increase the number of shares.
They could do a rights issue, they could do a split, they
could decide to do a share buyback, they could engage in.
So there's all these human things that can happen that make
it more subject to having to have rules around it, like
insider trading rules and Chinese rules and, you know,
having to disclose if you're going to be doing a public bids
at the company and you have all these different rules.
You know, with Treasuries, you've got, you know, kind of
your understanding of the creditworthiness of the US
government. But the feds can make a
decision. They can decide to change
interest rates. the US government could increase the
debt ceiling and therefore there's more treasuries in the
market. A bank could suddenly have a
bunch of assets go into distress, have to sell those
assets in distress. There could be a carry trade
where Japan is trying to control their inflation.
They, they increase rates and suddenly that creates A
speculative attack and people have to liquidate from their
hedge fund the assets that were purchasing all these different
stocks. So all of these things exist and
they, they also exist in Bitcoin.
And the same with gold. You know, gold is because the
asset is held by central banks. For decades, central banks have
been planning what a change of empire looks like, like we're
experiencing today. And so they can use futures
markets to oppress prices, and then they can accumulate more
and more gold based upon people getting bored and going into
different asset classes. But eventually, as we are seeing
today, the manipulation stops and it returns to its
fundamental value, which is that no countries are trusting each
other, so they don't know what the next World reserve currency
is. So they're going into gold right
now. Now with Bitcoin, I'd say that
there is the least number of variables that can change.
And it is the, the, the only asset in the world that I know
of where you can guarantee a fixed supply.
Even gold inflates at 2% per annum.
And so therefore we would be at, we would be lying if we said you
can't short term manipulate that.
And it always has happened. You know, people Chuck loads of
money into Coinbase, People speculate whether it's selling,
announce something on Telegram, and you know, all sorts of games
are played in order to manipulate the price of Bitcoin.
But fundamentally, if you look at a chart of Bitcoin, if you
zoom out and say it has been alive for 16 years and in those
sixteen years put it on a logarithmic chart and you just
see that it it's not manipulated, you know, long
term. And I believe that it is harder
to long term manipulate Bitcoin adjusted for liquidity than any
other asset class in the world. And as the liquidity increases,
it becomes even harder and harder and harder.
And every four years in Bitcoin, you get new levels of market
capitalization, new levels of liquidity, new use cases, and
more and more people that say, well, you know, I would come
here because this market cap is worth about 10 million, highly
speculative. Then there was the people that
would come in because it's worth a billion market cap.
Then you get the people that will come in because it's a
trillion market cap. And then you get the people that
won't come in until it's worth 10 trillion.
And then eventually maybe a central bank says we got $100
trillion market cap asset here with vast liquidity at that
point will come in. And so I would argue, yes,
there's manipulation. You can't change that.
It is a free market, but it's probably the hardest and as
liquidity goes up, even harder. And that has just been the
trends and I didn't see why that trend would stop.
I agree, like it takes some time, but maybe another
question. What is then speculation
actually? Like why are anti Bitcoin people
using speculation? I mean, when I think about that,
it's speculating on the fact that Bitcoin remains the same,
right? That it fulfills its promises.
That's what I'm speculating on. Or the dollar falling, right?
I mean, are critics using it in the wrong way?
Is it just like simple word to use in an anti Bitcoin argument?
Yeah. I mean, it's not unique to
Bitcoin. That's the whole point here.
There's nothing different in that argument that you could
apply to any other asset class. But what I would argue as well,
I guess what he's what the argument is, is, is it 100%
speculation? And so to me, you know, there
are many people like me and I would argue that when, you know,
an asset class cannot change in terms of its fundamentals, of
course it can change in price and demand and all sorts of
stuff. But in terms of the fundamentals
of it, when you have reliability, I would argue that
more people can make longer term financial decisions around
reliability than you can around something that would change.
And so because of that unique property, I found that once
people get Bitcoin, they, they do all sorts of crazy stuff.
They go around the, the distractions and crypto and all
that stuff. But most people end up realizing
Bitcoin is where the value is. And my job is not to do things
with Bitcoin. My job is to actually I earn my
Fiat currency and I save it in Bitcoin after I've covered all
my expenses with my Fiat currency.
And there are many, many people like just like me that will do
that. And I will buy the Bitcoin every
single month. Not because I need more Bitcoin,
You know, I've been involved since $3, but I'm asking myself
the question, what am I going to save in?
And when I answer that question, the only question I have,
because I know I've got a more than four year time frame, I'm
not trying to, you know, sell it, save it and then sell it to
pay my rent next month. I'm, I'm going to answer that
question. The best place for me to park my
funds if I've got a more than four year time frame is Bitcoin.
And, and, and because throughout the whole history, I can't tell
you it will happen in the future, I believe it will.
But it has outperformed every hedge fund manager, every asset
class, everyone there. So I would argue that this type
of predictability and reliability has only grown the
number of people, the dollar cost average buy at whatever
price it is that month and actually become long term
investors and they can do it in self custody.
So the ability to actually have full financial autonomy and be
able to own your own money and know that if my country gets
authoritarianism or I don't like where it's going, I can
transport my value wherever I want in the world.
So obviously I have to adhere to the, the rules, but that value
can come with me. And there is no, there is no
border around the constraints of trying to ship vast amounts of
gold that can lead to confiscation, taxation, all
sorts of questions that even if you're, you know, all sorts of
problems. And we're, we're experiencing
that right now where there's repatriation of gold and they're
trying to get it insured. They don't have the gold.
They're trying to accumulate the gold.
They're trying to put it in ships and airplanes and all
sorts of stuff. You know, Argentina just sent
all of its gold to London. And you know, London has a
history like with Venezuela of just taking the gold if they
don't like the current leadership of the government.
And so because you have that self custody, you have that
reliability, you have that predictability and monetary
policy, and you can take that value anywhere in the world, I'd
argue that there are way more people that will become
investors and less people that will speculate over time.
And the speculators, what are they?
They're, they're people that are trying to get fancy and trying
to use leverage in order to end up with more dollar value.
And those people haven't quite understood that it's when you
value your wealth in Bitcoin that you actually end up
preventing all those mistakes and speculation.
And, and we've got a community of people that try to impart
these experience and lessons upon other new people to it more
than anywhere else. Because the end rule is just buy
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of your order and chill. I'd say, you know, it's, it's a,
I talk about this a lot. It, it sounds too good to be
true, right, because many people feel that they should play this
investment game and be on top of it in the news and then Powell
and whatever. Whereas, well, of course the
Bitcoin study is, is hard. But once you get it, you that's
already the reward, right? Because then you can chill like
you don't have to to play these games.
And yeah, what what you were talking about?
Bigger market as well, the market of people that don't want
to know what the Fed's doing, don't want to analyze stocks,
don't want to figure out any of this stuff.
They just need an easy where they can get on with their life
and they can have an asset that has historically beats in every
other asset. They can't say it will happen
again, but I believe it will and and there is a lot more people
that want to have a life but want the finances beating the
Federal Reserve and the shenanigans of inflation.
Well, I think that that again is a good bridge to the next one
because I'd say that is actually the use case, right?
That's the value that that people are looking for.
Eventually that's the the the problem or the the need that
they have. And the third argument I wanted
to talk about is anti Bitcoin argument is Bitcoin lacks
intrinsic value. So Peter Schiff said something
like Bitcoin has no intrinsic backing like gold.
It relies solely on collective belief or adoption.
And your rebuttal was Bitcoins intrinsic value derives from its
secure decentralized proof of work network, immutability of
its Ledger, instant auditability and digital scarcity making it
verifiable and trust minimized compared to physical assets
requiring third party validation.
Yeah. And my, my question to gold box
is always, well, if I buy a gold coin in your little store, how
do I know it's real? You know, and then they're going
to be like, yeah, they're, they're very easy ways.
I just need 4 machines and somewhere, you know, some
chemicals and then I can show you, you know, that it's real.
Yeah. So my question for you is, what
would you consider an actual credible threat to any of these
elements that give Bitcoin its value?
Well, I would say that to me the true value is self custody.
So the ability to own your own and have full financial
autonomy. Not everyone will do that.
The ability to transport value anywhere in the world without
all the limitations of physicality, auditability, you
know, any of that stuff and, and middle people to verify.
And then finally, the reliability of the, the monetary
policy, knowing that there is no central banker that can change
that. And so once you understand all
those rules that you can transport it and move it and
send it whenever you want, you know what the the supply is and
you know the economics of it. Then the real utility for me
comes self sovereignty and the ability to have full financial
autonomy and own your own assets in a, in a very, very scalable
way. And you know, some people will
choose to outsource that. And so some people will make a
bad decision like putting it on an exchange.
And then historically exchanges create, you know, fractional
reserve Bitcoin because when everyone tries to get their
Bitcoin like an exchange like FDX, it turned out that they
didn't have that Bitcoin because they were speculating with it.
And so we, you know, we have about a couple of million
bitcoins on exchanges and you know, those aren't bitcoins,
those are IOU bitcoins. And The funny thing is, is most
people in gold have IOU gold. And we know for a fact, like, I
don't think this is even indisputable, that there are way
more claims on gold than there is gold.
And, you know, it's only in times like COVID when they get
tested and suddenly you can't get your gold.
You're trying to get it from Singapore and you can't get it.
And you, you know, you might be the, the bag holder, the last
man standing. And even then, the government
could just go to the custodian as they did in 1933 and say,
hand in your gold. You know, we'll take it now you
having it in self custody is just removing many, many of
these problems by you having full financial autonomy.
Now there is a downside to that that actually it is an unnatural
process that requires you learning how to set up a device
where you can't rely on anybody and there is no insurance.
And for some people that's petrifying.
And so they end up buying a Bitcoin ETF because, you know,
there may be tax incentives or they may have their money in
their retirement fund. And so they end up in a honey
pot where BlackRock controls your Bitcoin for you.
And sometimes you need to be there.
Then you plan things like inheritance, and you want to
learn when you can own your own money.
There's like, how do you pass it on?
Who do you trust it with? You know, these questions, as
you grow your wealth, become fairly tricky questions.
And we have answers to all of them, but they're not as simple
as just hold it at a bank and hope that the government will
bail it out and then understand it.
The privatizing the profits, socializing the losses.
And that's the reason why you got less money at the end of the
year because of the way the Fiat system works.
So that whole trade off, but I, but I think if too many people
end up with the easy option and then they start storing it at
banks and then banks can do fractional reserve and all that
type of stuff. It does not systemically change
Bitcoin because a Bitcoin and a Bitcoin IU is not the same
thing. But it does change the dynamics
and some people will get stung by that and some people that
self custody tragically, sadly, will not take the correct
security measures and they may end up losing their Bitcoin.
And throughout history that is a a brutal, ruthless reality that
you have the responsibility and the solutions for it are there.
But you know that that is a trade off and some people are
uncomfortable with that. And but that is the utility of
it. And if we ended up just all
giving it to banks, then we'd recreate the system.
So there needs to be, at the moment there's a very healthy
ratio of people that choose full financial autonomy and self
custody. But I think our job is the
Bitcoin community is to ensure that people understand those
features, utilize that utility, because that is what makes
Bitcoin so useful and it also protects you.
I don't know if you saw there was like a press conference of
the Bank of England where they explained why they were so slow
giving out the gold. I don't know if you saw that,
but they had like a presser and they said like, well, yeah, we
have a certain system and they're numbered in a certain
way. And sometimes we move them there
and then we move them there. And yeah, we had a little snafu
in the Excel sheet or whatever. It's them talking.
That's their way of verifying the trust me Bro type attitude,
right? Like I'm the Bank of England and
I have a press conference and now I'm telling you, you know
how it works. Whereas, you know, with Bitcoin,
you can just say, like, do you have it or not?
You know, it just takes away all that nonsense.
Yeah, No, I mean to, to be able to just say to somebody I'm, I'm
good for 100 million, here's my address and I can send a
message. You know, you know that that is
a, that is a use case. And you know, at the moment, if
I, for example, I'm, I was looking at some houses and when
you're in the high value house market, people don't want to
waste time with people just looking at houses.
So you have to verify your net worth.
And, you know, normally you go to an accountant and an
accountant writes a letter, and then they don't actually know
whether you've got a paper contract against that or
something, you know, so the ability to just actually prove
that, yeah, you're good for the money.
This is my wallet address. It is something you can
technically do. And as more people integrate
these technical processes, as it becomes a backbone of a
financial system, you're able to programmatically and disprove
these things. In a trustless network, and
that's the whole point, trustlessness is the key.
I'd say that's the probably the key utility of Bitcoin is, isn't
it? Where else is there an
environment where you don't need to trust?
And that is Bitcoin. I don't know anywhere else where
you click, where you there's an environment where you don't have
to trust. And so the Bitcoin network is
secured obviously by computing power, right?
The the biggest computer network in the in the world and the next
argument I wanted to talk about that chiff used is bit bitcoins
network security is vulnerable to price drops.
So he says a significant Bitcoin price drop like 90%.
We can even debate if that's going to happen anymore.
But you know, that could severely decrease mining
activity, undermining network security and reliability.
And thus, you know, the future promise of Bitcoin of staying
the same being resilient against attacks.
So your rebuttal was bitcoins built in difficulty adjustment
automatically recalibrates mining profitability allowing
network security to rapidly stabilize even after significant
price corrections. Yeah.
And so my question is, I think this answer could also be very
short, but do you think any prolonged low Bitcoin prices
could actually damage network security or the decentralization
and maybe tie in what we talked about in the beginning where,
you know, depending on the attractiveness of being a
Bitcoin miner, there's actually a real world market that adapts
to that's that's called a debt business opportunity.
Yeah. I mean, you know, people from
the beginning, they've always created these theoretical
concepts. And these theoretical concepts
were debated before Bitcoin was actually launched or they, you
know, And so the design of Bitcoin was to factor in these,
you know, these types of events. And I've been through them all.
So I went from a $30 Bitcoin that crashed to $3.00 in a
couple of days. That was a 90% correction.
I've been through, you know, a $20,000 Bitcoin that crashed to
$3000. I've been to a $69,000 Bitcoin
that crashed to $17,000 over time.
And so the way that Bitcoin works is it's secured by miners.
And you know when when you're mining, basically all it does is
it means that a Bitcoin is verified every 10 minutes.
And if there is, you could end up in a scenario where for two
weeks there's a big, big queue to get in a block and then those
transactions take longer to be confirmed.
It doesn't mean you can still send it instantly, but to get a
miner to confirm your transaction, it could take
longer than 10 minutes. And when that happens, the
difficulty rate adjusts. And you don't need to know any
of this stuff, but it's useful if you're, if you're interested
in understanding it. And what that means that as the
time to confirm a block extends, it means that you we need to
adjust the difficulty rate. And so therefore, it either gets
easier to mine or harder to mine.
And as it gets harder to mine, those that are less profitable
miners may need to switch off their equipment deshelf if
they're completely out of business.
And only those that are more efficient are able to mine.
But in an environment where the price radically corrects, if a
business has managed, you know, a mining business has managed
their expenses, they can ride through it.
Another business will go bust because they didn't have enough
cash flow to sustain the lower prices because a lot of their
costs of electricity are in dollars and they're going to
sell some Bitcoin to pay for it. And you just get a re
collaboration of some businesses that go bust, others that are
efficient. And as less and less people mine
the difficulty, the IT becomes easier and easier to mine a
Bitcoin, which creates a new profit opportunity for another
new miner to come along and set up a business or that business
that switched off his miners and de shelved can then switch them
back on and you just get a re collaboration.
So there's, there's a corrective mechanism designed for, for
that. And people, every time people
have talked about this death spiral thing and I, I've been
through all the crashes and it, it, it never happened.
It's a it's an ultra efficient market that we call anti
fragile, where every time there is a disaster, the market just
adjusts to that new reality and Bitcoin just carries on and, and
everyone else panics and some people sell, other people buy,
but the, the, the, the network just continues because it's
already factored in these these different mechanisms.
I think this ties into what we talked about before.
There are so many say, market and psychological elements that
work together that create certain incentives well before
you adopt Bitcoin, when you adopt Bitcoin, even when you're
mining Bitcoin, right, that all play into your contribution to
Bitcoin in in that sense, right? Like even if we would drop to a
level where you can mine with a GPU again, maybe even in a day,
100,000 miners would come online, right?
Because there are that many people that then see an up an
economic opportunity to then start mining, which then
increases difficulty adjustment, which then eventually makes
mining with GPU's obsolete again, right.
And then so it's, it's just that cycle.
I, I, I think, yeah, I don't know, like, I, I, I think this
is a great answer. I don't think there's anything
else to to to say to that. Right.
Like it's just economic incentives that align or that
that adjust based on in, in this context, the the how, how easy
it is to mine Bitcoin. Yeah, I don't, I don't know what
else to add to that. All right.
The next one is Bitcoin wealth is concentrated.
So the argument is Bitcoin ownership and wealth are highly
concentrated among a small number of early investors,
exchanges, and large institutions, raising concerns
about manipulation. Your rebuttal was significant.
Bitcoin holdings among large entities often represent
millions of users, like on exchanges, and are transparently
auditable. The distribution becomes more
decentralized over time as adoption grows.
And yeah, I think this is a really good question to tackle
because people conflate the decentralization of the the
proof of work network that the security of Bitcoin with the
ownership. And so yeah, do you think
Bitcoin wealth concentration poses any meaningful risk to
decentralization or governance? Maybe I already answered this
question, but. Yeah.
I mean, so to me, ideologically, I would like Bitcoin to be in
the hands of as many people as possible.
But the reality is you're dealing with human psychology.
And so there's nothing fundamentally different about
Bitcoin than any other asset class.
In fact, there's less things. You know, when you create a new
company, you create some private equity, you end up with 100% of
that company. And over time, you give little
chunks of it to investors and employees and share schemes and
various other things. But most companies have a
massive concentration of wealth, and eventually it goes public.
And when it goes public, it distributes to more people.
But, you know, even gold, I mean, gold is hugely
concentrated in the hands of central banks, you know, because
they are the natural accumulators of the vast amounts
of gold. The interesting thing about
Bitcoin is the fact that you even know how to ask that
question because you can go on the website and you can pull all
the data, that which is backed up on 10s of thousands of nodes
all around the world. And you can see the exact
concentration of wealth and how much Bitcoin is in every single
wallet without necessarily knowing who it is.
But the larger wallets, we tend to know who they are because
people have reverse engineered it over time.
Like we know the term Satoshi and those wallets have about a
million Bitcoin. I personally believe that
Satoshi's no longer with us, so it won't move.
But we know that, and that's factored into the equation.
We know that the Chinese government confiscated, you
know, a bunch of Bitcoin. We know the US government
constantly confiscated a bunch of Bitcoin.
And certain players decide to disclose their wallet address
for verifying reasons like exchanges.
So, you know, Binance or Bitfinex or Bitstamp or
Coinbase, they reveal the wallet addresses because they want to
do proof of reserves. And so you can see this is a
Coinbase wallet and a Coinbase wallet probably represent, you
know, I know, I mean a Binance wallet, there's like 260 million
users on Binance. How many of those make up, you
know, that that wallet, who knows, but there's a lot of
people. And so the point is that, yeah,
concentration of wealth is something that I would love for
Bitcoin to be more distributed, but we're not changing human
psychology here. There are people that will
accumulate Bitcoin as a free market.
There are people that will get it earlier.
There are people that will join later.
And every single asset in the world always has a concentration
of wealth of certain people that were a part of the game, created
the game or or whatever it is. But with Bitcoin is completely
different to all of the other cryptos where they pre mined the
coins and there was massive concentration through an unfair
mechanism. Bitcoin launched fairly and that
ended up concentrating wealth in those that were that believed in
it were around it. And many of them though have
sold them. I, I know people, I spoke at the
first Bitcoin conference in Prague, 2011 and I know a person
there that was around had a lot of Bitcoin and doesn't have a
lot of Bitcoin today. Like, you know, there's, there's
people that have sold it, traded it, done stuff with it, lost it,
various other things. So the reality is, is we'd, I'd
love it to be more, I'd love more and more people to do it.
And that's why we do these podcasts 'cause we want more and
more people in, more and more people to, to get in and
distribute that wealth. You know, I, I, I make a point
of distributing some of my Bitcoin in areas through charity
work or whatever it can be and various other things over time.
But the point is, is it's not unique to Bitcoin.
It's not systemically risky. And the fact is it's probably
the only asset class where it was launched fairly.
And you can verify without revealing people's identity, the
exact concentration and the, the they tend to focus on the large
wallets. And those large wallets tend to
be services that are appalling Bitcoin for lots and lots of
people. So pretty, it's pretty constant.
It's pretty concentrated. I, I would love it to be, you
know, more distributed. But human psychology doesn't
change, you know, most many people know how to accumulate
wealth, and some people don't. Well, Bitcoin is for anyone, but
not everyone will get it right. Like that's the point.
And I agree with you. Like I, I also hope, and I mean,
this is, This is why we're talking right to, to just reach
more and more people. And I agree.
I think Bitcoin is especially now compared to, you know, when
you got in, when I got in 2014, I got in, by the way, I also
bought at between 100 and 300, sold it all at 4000.
You know, like I, I didn't get it then, but but now I'd say,
yeah, this is kind of my thing now.
But I'm saying like Bitcoin is an asymmetric opportunity based
on publicly available information.
You know, like anyone can study this like it's all out there.
There are no secrets to learning about Bitcoin.
And even when you start using the tech, you can verify
everything for yourself. You can verify the rules of the
of the money protocol for yourself.
Like there is no, you don't. You do not have to trust anyone
else. That's a trustlessness that you
mentioned, right? And so there isn't anything else
that you can actually do that with.
So the opportunity is there, but you just have to, yeah, do the
work. I'd also argue from direct
experience, haven't been here since $3 and met you know worked
with hundreds of thousands of people I mean that have got into
Bitcoin. I'd argue that I think it's
easier to risk adjusted hold Bitcoin at $90,000 with the
current understanding of where Bitcoin is going than holding
Bitcoin at $3 and and holding on to that all the way to today.
Very few people like the level of certainty that exists today,
which is why it's lower returns relative to the level of
uncertainty back then. I mean, we were, you know, a
bunch of crazies the, you know, just had zero chances of
success. It's Bitcoin is a miracle, quite
frankly, like it should not have succeeded.
It really shouldn't because it it's just such a wacky concept.
It's actually remarkable that it's got here, but the level?
Of signal by itself. You have today relative to risk
adjusted. Back then, you were way more
likely to sell your Bitcoin than you would be today.
Yeah, I'd say that's the signal by itself, right?
The fact that it still exists after 16 years, you know, All
right, argument number six. The, the, the, not the last one.
I have 7. Bitcoin is not effective for
privacy. So the argument Schiff used is
Bitcoin leaves an extensive digital drill undermining
privacy, making it unsuitable for users needing protection
from oppressive regimes. Your rebuttal was Bitcoin
prioritizes censorship resistance and secure self
custody, not complete anonymity. Privacy can be enhanced through
supplementary methods, but Bitcoins primary strength
remains secure global transferability.
And my question for you is, do you think enhancing bitcoins
privacy features would fundamentally improve its
utility or would it induce new risks?
And maybe to add to that, if you download the white paper, you
search for privacy, the Satoshi talks about not exposing here
public key. So if we're really honest,
there's not that much about privacy in the in the white
paper. But my personal idea is that,
yeah, well, we we can build many technologies on top of Bitcoin
as a base layer that eventually helps people.
But yeah, what? What are your thoughts on this?
Yes, and my thoughts on this is that bitcoins not private is
pseudonymous and and everyone should know that you can have as
many wallets as you want. You can engage in types of
mixing activities. If you're a bit more
sophisticated, you can get wallets that will do lots of
things to try and obfuscate transactions, but it's not
perfect because every transaction is on a public
blockchain and services will get ever more sophisticated to try
and reverse engineer those. And when you buy it at an
exchange, you have to KYC. So then you have to reveal
identity to that exchange and then if that exchange gets
subpoenaed, then they may be able to attach your wallet
address to that identity. These are all things that are
known and are understood. And so for me, the important
part is that that is the rules. And so if you want complete
privacy, then you know they this isn't the solution for you
because you've got all of those flaws.
You can try and work on those flaws, but this is the rules of
Bitcoin and I would argue that changing that at layer one might
introduce uncertainty that ruins the fundamental principle of
what Bitcoin is. And that's not a risk because it
would only have the, the, the ability to fundamentally change
Bitcoin is incredibly hard. So you have to get massive
consensus amongst miners, node operators, the community, you
have to propose Bitcoin improvement protocols.
It has to go through a process, a code testing and all this
stuff. And that is why Bitcoin is, is
is is very, very hard to get these changes.
And privacy was always something we've been debating the whole
way through. Some people really think it's
important, other people don't. But the rules are the rules
today and what the community reached consensus on after a
massive, massive public debate where there was a public war.
And This is why I love Bitcoin because you're not going to get
a major change without a massive public war that involves all
people that want to be involved in that, which was the block
war, you know, block size debate.
The consensus that we ended up upon and there was a massive
battle to achieve it is that some changes were made where you
can have a layer 2 network and a layer 2 network meant that you
can lock up Bitcoin and companies can do it.
And then you can create what's called a lightning network.
And within that lightning network is not the same as
Bitcoin, but you can transact instantly and privately between
something called channels. Now that technology exists and
that's factored into where we are right now.
So if you do want private Bitcoin, then you have to either
wait for companies to make solutions around Lightning
Network channels. It does exist today, but it may
not exist in the form that you want, or you need to invest in
businesses or create businesses that creates the solution that
you want. So Bitcoin layer one, I would
say is a finished product without, you know, with tweaks
to enhance layer 2. And then layer 2 is a technology
play where we can make Bitcoin way, way, way more useful, but
we don't fundamentally change the principles by which people
said I'm committing my savings to this commodity knowing the
rules that exist today. So I think anything that
fundamentally changes layer one where the rules change, because
if you think about it, if you made it all private, now an
exchange might say or an ETF might say, yeah, we can't work
with that. And so you might get lots and
lots of exchanges saying as a regulated company, we are unable
to work with a private coin. And so therefore you
fundamentally change why people are saving in Bitcoin.
And I think avoiding that, I think, I think we're there now
the privacy solutions exist. The rules are understood in
layer one and anything that fundamentally changes layer one,
firstly it will probably not get through and secondly, you know,
if it's a drastic change then I think it would have a hit to
people's faith that Bitcoin is a commodity that will never
change. Yeah, all right.
And the last argument that the shift used was the uncertainty
around Satoshi's roughly 1,000,000 coins.
And you already mentioned it before that that represents
persistent market risk as selling them could severely
affect Bitcoins price and confidence.
I think we also heard or what's his name, Jamie Dimon say, you
know, when Satoshi comes back or, you know, he even set the
wrong name. I think, you know, he's going to
sell all that stuff and then it's going to 0, blah, blah.
You said if Satoshi, if Satoshi's coins move, the market
would quickly adapt. Bitcoin has historically
recovered from large sell offs due to its underlying
fundamentals of decentralization, scarcity and
global adoption. And yeah, my question for you is
how significant is the risk of Satoshi's coins being sold and
how could the market realistically adapt?
I think you mentioned you think Satoshi is no longer with us.
I I don't think so either. I wonder who you think it is.
But yeah, is there really any risk here?
Yeah. And I think it's factored into
the equation already. And so there are 1,000,000
Bitcoin approximately that belong to the, that were mined
through proof of work fairly by the group of people or people
that identify as Satoshi, that nobody has been able to prove
categorically who they are yet. That I have my own theory around
who it is. And I personally believe that,
that, that that person is no longer with us.
But the risk of those keys being found is a, a genuine risk that
exists within the market. Now, what does that actually
mean? How do you factor that risk into
the equation? Well, the answer is Bitcoin's
been through Black Swan events. So multiple occasions like, you
know, we had, we, we at one stage almost 60% of all the
mining hash power was in China. And China implemented a Bitcoin
mining ban and that crashed the price significantly.
And then it took like probably three to six months.
And then suddenly people started distributing those mining
machines all around the world. And industry evolved in Texas in
the US, where they saw a massive opportunity in supporting
Bitcoin mining because you could repurpose wasted electricity and
you can make the mining grids more efficient.
Others said this is an opportunity to transition to a
very efficient renewable form of energy where we think we can
mine better in this region. And, and, and essentially there
is a Black Swan event. There is a big correction in
price. Those that don't want that
Bitcoin anymore based upon that reality sell.
A lot of people will sell. Other people come along and say,
well, I'm in it for the long term, I'm going to buy.
And I know that this isn't systemic because none of the
rules of Bitcoin would change. It just means there's another
million to hit or Bitcoin to hit the market.
So at at the point, let's go to the extreme.
Firstly, I don't think it will happen because the person that I
believe can't move it. But let's say someone else found
those those private keys and was able to move it.
Or where they want to move it, you know?
Yeah, then they know it would or it was someone else that's got
it. Then they would know there would
be a big correction in the price as soon as they move, the market
would see that instantly that would crash the price.
That would re collaborate a lot of, as we discussed, you know,
with minors, some would suck that up and you know, some may
even do it as an OTC trade, you know, whatever it is.
But Satoshi would be known. There would be a whole bunch of
FUD around. Who is that character?
But already it is irrelevant. There's nothing Satoshi can do
to change the rules. So it's a distributed
supercomputer with open source code that is, you know, that has
a, you know, a way of contributing an upgrade in code
that has nothing to do with Satoshi.
So Satoshi has no impact, could not do anything.
The only thing Satoshi could do was move those coins and sell
those coins, which to me just impacts price and doesn't change
anything about the fundamentals of Bitcoin.
So to me, people like me would be like, hey, this is a great
opportunity to buy 10,000 more Bitcoin, you know, and other
people would see I think as an opportunity saying Bitcoin
doesn't change. But if we actually crash the
price down to something radical like $1000, there's so many
people that hold the belief in what that is, that they would
see this as a once in a lifetime opportunity to end up with a
bunch more Bitcoin. So it impacts price.
It doesn't fundamentally change anything.
It's factored into the equation right now, and I don't believe
it will happen, but it could. I fully agree.
I think this is also kind of like a flawed anti Bitcoin
argument because it's I think it's very Fiat thinking
actually, right? Like because what what you're
saying, yeah, it's just a huge supply coming online, but that's
basically it, right? So if you don't fully understand
what Bitcoin is, you might be distracted by this.
And then the price goes down and you'll give it up.
Even if that's why I mentioned quantum, right?
Because people are talking about like, OK, should we let all
these old addresses be hacked and actually have the supply,
the supply coming on to the market?
I, I, I tend to lean towards just that because that would be
the most organic way to get any stock Bitcoin, let's call them
stock Bitcoin back into circulation that that would be
the free market that I think we champion here, right?
So that that would just align and I think the price crash, I
think it would actually be a very interesting event if that
would be an anticipated event, you know, I think that would be
fairly entertaining actually to watch.
Yeah, let's get into it. Let's get it done.
Right. Yeah, I agree.
All right, if you have like 10 more minutes, I'll, I have a few
more fun questions that I think you would be perfect to to
answer. And I think the main one is we
talked about the security and the decentralization, right?
I think in the past there were lots of discussions around 51%
attack. You mentioned, you know how much
it cost for 10 minutes of control of the network.
I think estimates are around 10:10 billion plus, where I
think actually the conversation is interesting because you could
talk about, OK, do I want to spend 10 billion to mess with
the network for 10 minutes and then become irrelevant?
Or should I just buy 10 billion in Bitcoin?
You know, I think that that that trade off a risk reward question
already exists for any actor that would want to jeopardize
the integrity of the network for only 10 minutes, right?
But yeah, do do you think there could be some sort of
simultaneous ban or regulation or attack on Bitcoin by, let's
say state actors or even a commercial actor like, I don't
know, Google or something like is is there a relevant scenario
that goes through your mind there?
Yeah. So the fact that we're even
having this conversation shows the extreme level of
circumstances that people have fact that have to factor into
the equation of why Bitcoin might fundamentally change.
So let's go through one of those extreme circumstances, a known
attack vector called a 51% attack, which means it's more
like a 75% attack to do it in practicality.
But what it means is that if you can accumulate 50% or more of
the hash power, then you can, you can play a game where you
could end up stealing some Bitcoin, you know, writing a
version of the chain, verifying it yourself.
It's a theoretical attack. It has actually happened on all
other chains. It's never happened on Bitcoin.
So everything that tried to fork off from Bitcoin ended up being
51% attack. It's proven out to be a very
effective attack as showing the difference between Bitcoin and
the forks. People that try and a fork is
when you create a copy of Bitcoin like Bitcoin Cash,
Bitcoin SV are the famous examples.
They try and take the community with them, they try and take all
the miners with them and then you end up creating a
centralized mess that's 51% attacked, which is what's
happened every time, but it never happens with Bitcoin.
The reason it doesn't actually happen is because there is no
rational scenario by which you would attack the network to try
and create some fake Bitcoin to per scam an exchange and then
get that money off the exchange and then end up with more money
than the loss of value of trying to perform such an.
Impact. Exactly.
That would cost billions of dollars and you would have to
actually build the infrastructure or control the
infrastructure of over more than 50% of the miners, which at this
list stage, just so you know, we're at about 1000 extra hashes
per second. We are solving 1000 quadrillion
mass problems every second to secure this network.
There is never been anything like it.
It is incomparable to any the largest supercomputer in the
world, which it doesn't quite compare to is 1000 times less
powerful. And then any other proof of work
network is like a small, insignificant amount relative to
the amount that is secure in Bitcoin.
So that makes it harder and harder and harder and more
expensive to perform such an attack.
So then you have to look at the scenarios of, well, what if
somebody was doing it out of just trying to attack the
network? So what type of scenarios could
you imagine? Let's say the United States
government has already released an executive order by Trump to
build a Bitcoin strategic reserve.
So let's say America builds a Bitcoin strategic reserve and it
decides that it wants to own like over a million Bitcoin or 2
million Bitcoin to be to prop up its do a monetary reform and
transition to hard money. It would have to probably
nationalize a company like strategy.
It would have to do an executive order in order to confiscate all
the Bitcoin backing, the Bitcoin ETFs.
Then America could accumulate a couple of million Bitcoin and
control about 4%, not control, own about 4%.
And that's an important word in Bitcoin.
It's not proof at stake, which it's proof of work.
It means owning it doesn't mean control it.
I mean owning it means you can do stuff with it.
You can try and manipulate price, you can try and borrow
against it and create derivatives or whatever you
want, but you can't control it with proof of stake, which was a
competing model. Ownership equals a governance
vote in the network. And so if an, you know, if
somebody accumulates a massive position, they have all the
governance in that network. Bitcoin wasn't designed that
way. It was designed to not let this
happen. Which is Fiat basically, right?
That's that's Fiat basically. And maybe to add in Bitcoin, if
you decide to acquire Bitcoin as a nation or even as a company, I
think as a nation even more, you're also incentivized to
start mining to actually control a portion of the network work
that you can use to do your own transactions that, you know,
yeah, exactly, for example, doesn't have to approve for the
US. Yeah.
And if you look around the world like it's estimates, you can't
get exact, but about 40% of the hash power is in America,
distributed amongst 20 public companies, private miners and
various other things. About 21 percent is in China.
You know, you don't know who these miners are.
About 11 percent is done in Russia, there's about 6% in
Iran. And so these are all countries
that geopolitically and strategically are on the other
lines. You've got Europe, you've got
South America. So it's distributed where it's
it's impossible to coordinate. Then you have mining pools on
top of that, which is another distribution.
You know, we're, we're always working on trying to be better
and more decentralized. But still it's, it's impossible
to do a 51% attack unless you wanted to take down the network.
So then you would have to be in this scenario, Russia or someone
that wants to strategically take down the Bitcoin network in
order to crash the dollar because they've got 2 million
Bitcoin and America's transition to a hard money standard and
they want to crash the dollar by wiping out Bitcoin.
In this set of scenarios, they would have to print their
currency to accumulate such an amount of power to perform such
a 51% attack. And it would be more like a 70%
attack to get there and go unnoticed, which is impossible
because there's always adjustments to like, you know,
there was one example, a mining pool called G hash dot IO.
They started to approach about 40% of hash power at one time
way back in the day, I can't remember when it was maybe 14 or
something. And immediately once as soon as
it approached, everyone just started reallocating their
mining to a new pool. You know, we it just adjusts, it
adjusts to the reality. So if this were ever to happen,
then in theory, Russia could crash its own currency to try
and crash the Americans Bitcoin strategic reserve, when probably
it would have been just much, much better to actually start
mining and reallocating its energy to mining Bitcoin, build
its own position and compete. But that's the type of scenario
that would need to happen in order to theoretically perform
this 51% attack. And if you're not buying Bitcoin
because that might happen, then you just need to understand risk
rewards. Because, you know, if you think
that's a reason not to own Bitcoin, then you'll be the last
person in the world like Peter Schiff buying Bitcoin when you
realize every single problem in the world has done.
And by the way, there is never any asset class in the world
where every problem and every Black Swan event and everything
could disappear. But the level of extremity
that's required in order to allow for that scenario to
happen, I mean, I couldn't even put a probability on it.
Yeah, I think this is a whole different podcast, but that goes
towards, you know, the whole software theory of Jason Lowry,
you know the whole power projection trade off in this
example that that you are giving right?
Yeah. Should I print my own currency
by hardware to eventually perform this this attack or
should I just buy it conform to the rules of the Bitcoin network
and then, you know, gain value from that eventually?
I think that's very interesting just that that theory by itself.
All right, I think we went through a lot of things and I
want I want to thank you for your time.
I think it's really, really interesting to kind of go
through these arguments that that we hear a lot and hopefully
we unpack them a bit more with with with more rebuttals so, so
people can understand. Can I give the final one?
Can I get a bonus one? Of course.
Did the CIA create it? Well, the CIA did create some of
the cryptography technology that exists behind Bitcoin, but these
are open source libraries that the Federal Reserve, the whole
world relies upon. If you can crack these
cryptographies, then you know there is no back door because
it's a distributed supercomputer.
It doesn't matter who wrote the code.
It's got every type of developer that's been through all of these
audits. And, you know, this is the
entire Internet, the entire foundation of intelligence
agencies that don't want to leak information to each other, IE
the KGB and the CIA are using the same types of technologies.
And so if this is an issue for Bitcoin, it's also an issue for
the KGB. It's also an issue for Mossad.
It's also an issue for the CIA. It's also an issue for the 5IS.
And trust me, they don't want each other knowing each other's
information and so even if it was, we could change the version
of the cryptography. Which brings me to my final one.
What about quantum computing? Quantum computing is a known
Black Swan event that will happen in the future and it is a
global problem for the entire world to fix.
It's not unique to Bitcoin, but once the world has decided what
quantum resistant cryptography looks like, and there are many
people in the Bitcoin community working on this problem, it is
again one of those Black Swan events that would create
adjustments because we'd have to upgrade from SHA 256, which is a
version of cryptography that may not be quantum resistant in the
future. Then you have to adjust it to
quantum resistant cryptography, which is an area of computer
science that everybody's working on, which is used.
You know, it's a problem for everything you're talking about
Armageddon, nuclear power plants, nuclear weapons, the
Federal Reserve, you know, intelligence agencies, the
Internet, Google, everything breaking systemically.
That's when you want to own gold in that scenario.
But even Bitcoin has a mechanism where we would simply, we've
already hard fought. We know what that looks like.
It is disruptive event. It involves a a war, a civil war
online, but you switch to quantum resistant cryptography
and then the miners would actually have to upgrade their
equipment for that new cryptography.
So it would be a disruptive event, but it would be a similar
type of event where it doesn't break Bitcoin, it breaks the
whole world. And then we would adjust as the
whole world adjust to quantum resistant cryptography and it's
a Black Swan event that changes the dynamics and then Bitcoin
moves on. It would especially disrupt your
banking infrastructure. Written in COBOL software
language from the 1970s, right? I think you know, but when you
think about that, I fully agree. Maybe.
OK, I'll add one more. What about a global EMP attack
and or meteor impact? Yeah, well, look, if if the
Internet gets taken down, we've worked on satellites and various
other infrastructure. But at that stage there is a
role for gold. And the role for gold is that if
we move into the whole entire digital system blowing up,
firstly, we're probably dead. We're probably beating each
other up. And rather than using your gold
to store your value, you're probably using it to get people
out of your house and knocking them out because everyone's
trying to steal your gold. So there is a level of you know
and that is there is a role of the physical world in case the
whole digital infrastructure in the world as we know it today
and you just happen to survive that.
Yeah, I agree. I always, I call these like the
end of the road arguments. Whenever people say it to me, I
say like, OK, if I, if I answer this properly, will you get into
Bitcoin, right? Because there is no other bigger
anti argument than the EMP or the comet impact.
And yes, I I do use, you know, there's satellite in satellites
in space that run Bitcoin. So even if we get down to two
nodes that verify the truth letter, the time chain here,
after some time when you know more and more people connect to
this network again, it basically still survived, right?
And I think that's a nice loop back to the beginning.
You have to be able to conceptualize that and connect
that I think also to the probability of the event to then
make your decision, you know, whether Bitcoin will survive
something like that. So, yeah, thanks man.
Thanks so much for for your insights here.
I I hope it's valuable for our audience watching.
And yeah, man, it was great talking.
So thanks again. Awesome.
I just say get off 0 man. The best way to learn this stuff
is to do it. If you're on zero Bitcoin trying
to have all of these problems solved, the best thing to do is
say, what allocation am I comfortable with right now?
Get off 0. Learn what it's like to earn
your own money, spend your own money and have a monetary policy
you can rely upon. Play around with it, send it to
your wife, send it to yourself, secure it for yourself.
And even if all you did is say, I'm going to buy a little bit of
that every month for the next 4 years.
Every single person in the world that has done that has
outperformed every single asset class that has ever existed and
I think is irresponsible not to hedge for.
Maybe Bitcoin may just succeed. Good and agree more.
That's a great enter. Thank you.
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