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Speaker 0 00:01:37 When you buy every day, week or month, you channel Bitcoin's volatility to your advantage in the long run, this strategy will outperform every other Bitcoin investment strategy probably except for amazing luck. Perhaps the best place to do recurring purchases is OK coin because they have the lowest fees for recurring Bitcoin purchases. You will find anywhere if you're stacking SATs for the long run, every PSAP matters and the fees with each purchase will add up. That's why I recommend you buy that the lowest cost possible from okay. Coin. Okay. Coin is also the Bitcoin exchange available in the most countries around the world. So it will hopefully be accessible for you wherever you are go to. OK. coin.com to get started with your stacking. Not all one as discussed in the Bitcoin standard. Bitcoin is controlled by the nodes that operated software. It is only through consensus between nodes that the Bitcoin blockchain continues to live and is only by running a Bitcoin node that you are part of this consensus and can verify the validity of the transactions you receive and the ownership of your coins.
Speaker 0 00:02:28 Whenever anyone asks me, what are the most important morning signs that something is wrong with Bitcoin? I always answer the following. If the number of Bitcoin nodes is declining and or the cost of running a node is rising significantly. I believe it is really important to run a node, but I don't recommend running it on your work or personal computer as it can compromise the performance of your computer. And more importantly, the security and privacy of your Bitcoin node a far better solution is to buy a dedicated hardware node. And for that, I highly recommend Knotel manage all your Bitcoin activity, such as lightning or BTC pay server and isolate from your personal computer by putting them into one dedicated device that is always running and does one thing only Bitcoin become a first class Bitcoin citizen by running your own Knotel node
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Speaker 1 00:03:40 Has there any potential for other cryptocurrencies other than Bitcoin to play the role of daily currency, replacing fear? Yes. I mean, I fully see the case of Bitcoin being uniquely different and better than others, but we do have this, uh, need of a currency to replace the Fiat's role in the daily transactions and the daily purchases, et cetera. So somebody told me that if you didn't play this phone well, uh, obviously I don't agree. I'm still thinking what would be a good replacement and a Bitcoin standard yet
Speaker 2 00:04:21 Do to understand the distinction between a settlement network and the payment network. And this is really one key point that I had in the Bitcoin standard. If you look at how many transactions are carried out every day or per second, I did this math in the Bitcoin standard. I think visa processes up to 2000 transactions, a second all over the world. And then a MasterCard does something similar, probably a little bit less, I think, but around the same range. And then you have other networks and other methods of payments that add another few thousand. So probably in a consumer to consumer payment, there's probably, I would say conservatively, at least 10,000 transactions. A second is the total number of consumer transactions. I don't have this number in another Bitcoin stand. I just have the visa number, which I think was 2000. So if you're doing 2000 transactions per second, Bitcoin can do in best cases around seven.
Speaker 2 00:05:13 So if you need to scale that by 1000 fold in order to get to a level where you can handle all consumer things. So we'd need conservatively speaking, at least a thousand Bitcoins to be running their blockchains and making payments in order to scale enough, to allow everybody in the world, to have their consumer payments put on the Bitcoin blockchain. But if you look at the other currencies as well, they don't do much better. It depends on how you calculate the transaction capacity and depends on how much you value the settlement assurance. It's somewhere in the same order around seven transactions per second. They may names about being able to do 10,000 a second or whatever is what many of them will do in their, uh, uh, white papers. But this is all like children playing with their toys and saying, you know, my, uh, fighter jet is faster than the F 35.
Speaker 2 00:06:03 It's a toy. You can't compare somebody running a network on their shitcoin that has 700 users. And then, you know, saying here, look, we've demonstrated 10,000 payments, a second it's nonsense. If you wanted to run it securely. And if you had actual value on the network, that's the key thing. If you had $50 billion transacting on the network every day, you wouldn't be able to achieve it because then, you know, the security problem becomes real. You have actual adversities at trying to attack you wouldn't be able to do anything like the scale. So the point here is that even if you added all the shift coins to Bitcoin, all of them together might be able to scale, but one individual shitcoin has not going to make the difference. You can't just have Bitcoin and then have Ethereum or one of the other coins work as a second layer because no single one of them will be sufficient to scale to visa level, regardless of whatever their stupid advertisements say.
Speaker 2 00:06:56 So then if they can't scale to these 11 individually, which is the case, then with each coin that you're adding in order to make this new modern payment system, you're going to be introducing another layer of complexity in the money. So the whole point of money, or one of the main points of money is that it becomes the medium of exchange in that everybody trades their labor and their goods for money, and then trades money for all the labor and the goods that they have. Everybody chooses one money. That's what allows for economic calculation to happens. That's what allows for trade to expand. It's what allows for people to save. It does all of the things that we talk about an eco 11 in my course. So the idea that we can live in a world with a thousand currencies is ridiculous. And, um, this is something that shitcoin is often say that, you know, we have, I mean, companies, why can we have a million currencies it's profoundly missing the point of what a currency is and why we need a currency?
Speaker 2 00:07:52 The whole point of a currency is that you have a universal medium of exchange, not Bart, adding more currencies is just unsolved. The problem that money solves money is the solution to the problem of lack of coincidence, of wants, and then adding another money is re-introducing the problem with the lack of incidence of once. Now you want to buy something, but I want to get paid and something else we've introduced another layer of complexity. No. So you and I have to go back to a partial barter system where you sell your money for somebody who has the money that I want. And then you take that money from them. And then you Peggy and that's essentially unsolved the money problems. So adding more currencies is not what the free market does. Money is not a market. Good. There's no provider of money. And we see it with gold.
Speaker 2 00:08:40 We go toward the neutral money because people don't want to be using somebody else's money. It doesn't happen in the real world. We see the market is constantly rejecting shit. You look at them, they're constantly losing value against Bitcoin and essentially shit coins. You can think about them as being the acts. We pay for so many stupid people, buying Bitcoin early and getting rich. So people buy Bitcoin early for wrong reasons. They don't know what's going on. They take a bet on it and then it goes up and they begin to become really rich from it. And then they're highly likely to fall for another scam. Like, uh, I should point out and then put their money in it. And there's a lot of these people that are in Bitcoin have a lot of Bitcoin and then try out the next Bitcoin. And so by giving their Bitcoin to that allows the shits corners to make a market in their shitcoin.
Speaker 2 00:09:26 But then after it gets listed, initially, there's the pump phase where they're publicizing and then promoting it, then there's marketing. And a lot of people are being drawn into it. And now all of the new money is being drawn into it. But then, and afterwards, the market will have its way, the demand for this one particular shit going. There's no way that it can keep with, you know, maybe this thing would revolutionize, uh, video streaming and then my currency will be worth ASEAN. There's none of that stupidity in Bitcoin. Well, of course there is, there are still people buying Bitcoin for the wrong reason. And you can see this from institutional investors, institutional investors are putting in tons of money into Bitcoin and practically zero into the shit coins because there's no case for investing in shit coins. There's no coherent case for anybody to invest in share points, but you see it with Bitcoin because there's this constant new money.
Speaker 2 00:10:12 That means that the shit coins are essentially cannibalizing each other. They're not cannibalizing Bitcoin. People used to say that the more shit coins get made, the more you will dilute Bitcoin's value proposition. And the more you will inflate the supply of Bitcoin. And some people said, you know, Bitcoin is not inflationary, but Bitcoin and shit coins on inflation in here because the shit coins dilute the market value of Bitcoin. And I don't think that is the case. I think shit, coins dilute shit coins. That's the problem. So you can pump Ethereum or EOS or ripple or any of these scams initially, and the prices it goes up. And then, because you know, people come in at that point because there's a lot of buzz and you buy, or the press release and you by the Twitter influencers and you get on all the Bitcoiners feeds and you start telling the Bitcoiners about how, you know, Bitcoin is actually slow, but our shit is better.
Speaker 2 00:11:01 There's a peak period for each one of these, where they have this concerted effort. And it is a concerted effort by an organization. That's almost like a private company and you pump it up, but then afterwards you have to compete with all the Oh shit coins for the new turn of the new supply of people who don't know what they're doing. It's, uh, there's still a lot of money coming into the space overall. And so there are a lot of people that will fall into them. We'll still keep getting more money going into shit coins, but there's more shit coins for it to go into. You know, so you have Ethereum as was the, um, was, was the asshole from which going sprang for a very long time. And there was a lot of shit claims coming out of there, but all of their buzzwords are being co-opted by other stupid shit coins like Cardinal and EOS and stuff.
Speaker 2 00:11:49 So the kind of people who fall for Ethereum is going to revolutionize contracts because if theory has blah-blah-blah during complete blah-blah-blah and all this bunch of other buzz words, if you're likely to fall for that, you're also likely to fall for whatever stupid buzz words they're using with Kadana these days. And that continues to cannibalize itself. And so the supply of shit coins overall continues to be inflationary, and none of them can command the monetary premium that continues to increase over time, because none of them has a clear use case. All of their buzzwords make sense. The only use case in the entire space is the Bitcoin use case as a hard money as a sound money as a, as a, as a free market money as a money with a limited supply, that market has been cornered. Like they're not even trying to compete with it.
Speaker 2 00:12:34 So at some point there were a bunch of things, um, influencers who are trying to say something along the lines of Ethereum is better gold than Bitcoin. And Ethereum is better Bitcoin in Bitcoin, but narrative is gone because if you're having a bunch of quarters in charge and they're constantly hard forking, and so they can never claim that, you know, the supply fixed, they could never be able to claim that the supply really is immutable. So the monetary premium for a store, the value for money that will attract value, where people will sit on that value is exclusively going into Bitcoin almost. And he was the decline individually and collectively, they continued to decline except for the fact that there's a very large number of new coins that are being turned out every day, the way to think. But it was Bitcoin now is such a large market around a trillion dollars.
Speaker 2 00:13:26 If you wanted to add to the Bitcoin market cap, you want it to add a few, $2 million. You need to be buying a significant amount of Bitcoin in order to pump the price. Specifically with each dollar increase in the market cap, there needs to be an equivalent increase in somebody demanding Bitcoin in their cash balance. Because if there isn't somebody else will sell. So even if you buy a million dollars, you raise the price, but then raising the price might cause a lot of people don't want to sell. And then the price goes back then now. So with Bitcoin, it's very hard. It's not hard. It's, it's possible to manipulate the price upward because the market is so low. And there's so many people who buy and sell that your only way of money chelating is to actually buy Bitcoin and hold it. And that involves the real costs.
Speaker 2 00:14:13 You know, you have to give up dollars and buy Bitcoin, but with shit coins, it's very trivial to manipulate the supply because especially the smaller ship coins, like if you list the shit going right now, you know, you, you can do wash trading and, you know, you have two bots trading with one another buying at a specific price and you can, and manufacturer liquidity and a prize for a few hours that creates a buzz and then gets a bunch of people to buy in being able to generate this as far far is easier when you have a small, the market, when the whole supply of the coin is controlled by a few people. So if you have currency where, you know, a couple of people control entire spa and then trade a small fraction of the, at an inflated price. And that creates the illusion that the currency has a market cap that is much larger.
Speaker 2 00:14:57 If you go beyond the 100th, shitcoin more or less, maybe in terms of the liquidity size, this is basically what's going on there. There's just a constant churn of tiny little shit coins being pumped with very tiny liquidity with their price rising. And then they show up in the market cap website and they appear as if there's real liquidity there. So because we're constantly adding more of these, it appears the Bitcoin dominance of the ratio of the Bitcoin liquidity to the rest of their liquidity, the liquidity of the Bitcoin industrial complex. It appears that, you know, currently it's around 67%, I think last I checked somewhere in that range, 60, 80%. Um, it appears that, you know, Bitcoin is 60 to 70% of the market, but really Bitcoin is in reality, more like 90, 95% in terms of illiquidity because the, the majority of that liquidity is just wash, trading on exchanges meant to pump up numbers. And that's easy to do with very tiny shed coins. Obviously you can't make a tiny shitcoin into a trillion dollar shit going by manipulating the trading. But if you have, there's like 10,000 coins now
Speaker 3 00:16:02 Out there, if each one
Speaker 2 00:16:04 For a few million dollars, that's a lot of millions of dollars. And that shows up as if it's real liquidity, but reality, you know, all these shit coins that have very little liquidity, they are just being traded as gambling on websites. And you can think about it as basically competing with sports gambling. You know, people bet on obscure shitcoin number 5,328 in same way that they bet on horses or sports events. But you can't really say that this, uh, shitcoin is offering any kind of real liquidity on the market that anybody who holds it is able to sell it easily. Especially if you start holding larger quantities of it. If you start trying to sell it, you were to shift coins around, down to zero, then they should be rounded down to zero to go back to the original scaling question that the other systems can help us. There's no incentive to adopt other's shit coins because of monetary effects. And the easier money is, you know, in the case of shit coins, they can't even credibly demonstrate that their supply is a real, it's entirely plausible that some shit coins will have moments of inflationary expansion that, you know, they get together the miners and the coders, and they hard fork because all shit coins can be hard for you
Speaker 3 00:17:15 Really. And, um, there's guaranteed don't happen.
Speaker 2 00:17:19 I think, you know, people learn that lesson eventually, and it's happened with some of the smaller coins that, you know, people are holding it. And then suddenly they print the people behind the print that enormous quantity, and they start dumping in on exchange and then the price collapses. And then the people that are holding it ended up holding nothing. This has happened many, many times. So there's no reason to trust any of the monetary policy behind any of them. And the real monetary demands are going to continue to flow
Speaker 3 00:17:42 To Bitcoin and to go back to the issue of scaling, ultimately
Speaker 2 00:17:46 What's going to happen, whether it with Bitcoin or gold or with, um, government money is that the consumer payments are going to be separate from the settlement payments. This is just always going to be the case. There's not going to be a monetary system. According to the inventions that we've seen, where you buying a coffee for $3 from the store, next door is going to move actual physical, or, you know, move the actual monetary unit in final settlement, complete and final sentence from your hand to the hand of the recipient. That's not possible with any technology. Yeah, it was possible when people use gold coins and silver coins, but that's, these days are gone. Nobody's going to be using silver and gold anymore. Physically for reasons discussed extensively in the Bitcoin standard and in the field standard in the, uh, early chapters, which you can get it by subscribing seventeen.com.
Speaker 2 00:18:42 So nobody has a reason to be, we're not going to be using physical, uh, gold and silver. If we were to go on a gold standard or a silver standard today, it's not going to be with physical coins. It's going to be gold or silver coins and bars stored at banks. And when you were going to make your payments, it's going to be with a, uh, with your phone or with checkbook or with a credit card over the debit card. And your bank will take the $5 from your account and the recipient's bank would credit them the $5. And then two banks will settle amongst each other on depending on what kind of arrangement they have. And then maybe at the end of the week or month, or maybe even at the end of the year, there will be a movement of physical gold from one bank to the other.
Speaker 2 00:19:27 It's not going to happen. We're not going to physically move gold every time you buy coffee. Similarly with government money, when you give your, uh, when you give your card card or your debit card to the coffee place, and they take four, $5 from your bank, again, not government credit, that's going to be allocated immediately. It's not going to be finally settled in that moment. You know, you are going to lose the $5 from your account. They're going to get $5 in their account, but it's still going to be another phase or weeks or months before the two banks finally have finalized the settlement between one another. They're going to batch it with a whole bunch of other transactions. And, you know, the accounts being debited, the deal with the federal reserve or the, or the central bank will take some time. You're not going to get final settlement with Fiat or with gold or with Bitcoin in my mind, it's false advertisement.
Speaker 2 00:20:21 So it's, and it's, you know, a lot of the early Bitcoin, uh, evangelist MIS evangelize Bitcoin on the basis that it's just going to read you all of the inconveniences of credit cards. That Bitcoin is just a better user. And I think that has really set us back a long time. Well, not really set us back because, you know, nothing can stop it going, but it's that a lot of people backing down understanding of Bitcoin because they keep expecting it to just be a cheaper, perfect visa with no trade offs. And it isn't, we're not it's, it does nothing to solve the problems of visa. Well, maybe not nothing. It helps. Um, but you know, ultimately
Speaker 4 00:20:59 Whatever we're going to be doing with the
Speaker 2 00:21:02 Base money, Bitcoin can't do it. None of the shit coins can do it. Gold camp do it, silver camp, but for government money, even can't do it. We're going to need a settlement layer as exists in the VR system today. You know, you have the fed wire or you
Speaker 4 00:21:16 Have the, uh, Swift, uh, the
Speaker 2 00:21:18 Fed wire or there's the, um, the European one is called the, I forget RTGS Euro RTVs or something like that, but this is the settlement layer. And then there are the consumer facing layers. We're going to have something similar with Bitcoin inevitably, and no shitcoin can, um, claim differently. Like there isn't the shitcoin where that they can have final settlement with each golfing transaction. And the only ones that claimed us are basically just lying straight up. We can't have finals testaments on the shitcoin. If they're going to help Bitcoin scale, they're still going to be utilizing second layer solutions, but why would anybody want to build a second layer solution on an inferior shitcoin that doesn't have Bitcoin's monetary assurance? I mean, at that point, the original argument about the monetary aspects and the monetary properties is what makes, uh, makes this even more pronounced at this point.
Speaker 2 00:22:10 Why would anybody want to build a payment network on a monitoring system that is easy for a small group of people to change? I mean, government money is better, at least because even government money, it's not very easy for people to manipulate it. Like, of course, you know, central banks and governments do a terrible job of managing it, but it's much harder for central banks and governance, even in dysfunctional places. It's much harder for them to use the currency than it is for a couple of guys who programmed a shift going in their basement. It's just much easier, uh, for shitcoin. So there's not going to be any potential in my mind for scanning through shit coins scaling for
Speaker 4 00:22:47 Bitcoin and consumer later transactions are going to
Speaker 2 00:22:49 Come from the question is, is
Speaker 4 00:22:51 To be native Bitcoin native solutions,
Speaker 2 00:22:55 Or is it going to be an importation of the Fiat native solutions with Bitcoin integrated at the backend, a visa said this in a press release a few weeks ago, visa said that they're considering adding a Bitcoin and they make a very good point and I've spoken to the visa crypto team. They get it. They're very much understand the Bitcoin value proposition. And they've gone through, they're studying the shit coins phase and the press release said, we already clear 160 currencies. We have 160 currencies where we can accept payments with them. Adding Bitcoin would just be another one. And
Speaker 4 00:23:27 So if they move from 160 currencies
Speaker 2 00:23:30 To 161 currencies, they can accept Bitcoin. Now they'll need a custody solution and they'll need to carry out their own transactions. And there'll be settling Bitcoin with people. Um, you know, the, there are a lot of questions to be answered about how that's going to be arranged and how send them Bitcoin on how they send you a Bitcoin, but all of these transactions, which are going to be done on the blockchain with, on the Bitcoin blockchain are going to be an infinitely tiny percentage of the number of Bitcoin transactions that you can do with visa. So these already does the 2000 transactions per second. All of these could become Bitcoin transactions, you know, and you'll have a much smaller amount of settlement transactions being done between visa and other financial institutions. And between them and individuals, this is one possibility that a Fiat payment rails like a visa MasterCard, and then more on PayPal will install Bitcoin.
Speaker 2 00:24:27 And then they will allow their clients to start making payments with Bitcoin. That's one possibility, but then there's the other possibility which is Bitcoin native solutions. And I think probably in the long run, you can see why this is likely to have the advantage. So particular lightning seems to be the most promising in this regard. It's a very smart idea. And I talk about it in the fiance standard, and I'll be talking about it in the forthcoming chapters. It's in my mind, better suited as a scaling solution for Bitcoin because it's native on Bitcoin. And because it's likely to attract more and more liquidity because it is Bitcoin native over time. I think the payment processors have a much bigger advantage in terms of the starting, you know, first mover advantage. They already have networks of billions of people signed up to all of these services and used to the interface used to the way things work.
Speaker 2 00:25:19 The most important thing about Visa's business is the tens of thousands of merchants. They have relationships with all over the world, like this is what their business has been doing and the merchants and the customers and the millions of customers all over the world, that they have records for that they know how, you know, how much you buy, how much you spend. And you've been dealing with them for 20 years and you're used to dealing with them and the merchants that deal with them. You know, they've managed to build all of these networks of liquidity all over the world with businesses, and that's enormously valuable in terms of the network effects and it's enormously valuable for consumers and for retailers, but, you know, in the long run, I think you can see how as people become more and more familiar with Bitcoin, we'll, uh, move towards things like lightening. In fact, visa will probably be running a lightning. This is how I see it. You can think about visa as being a good example of what a lightning nodes would be like. Visa would run enormous number of lightning nodes all over the world, and it would essentially onboard its customers and its relationships and its business capita and business expertise. They would onboard that onto Bitcoin lightning network as the liquidity on the network increases. And I can't really see any role for ships going from that.
Speaker 5 00:26:31 After listening to you, an idea came to my mind, which is maybe we can think of visa, MasterCard, American express, and so on as altcoins of sorts in the following sense, when you go buy coffee using your credit card, you are not really moving dollars or euros from one party to another sure. In the network, there are dollars in euros and so on, but at the very moment of the transaction, we are moving, let's say visa tokens or something like that. There are digits numbers, bits, and bytes that correspond to certain amounts of dollars. And that's what we do at the very moment. And then afterwards there is a settlement. So in a sense, in the loose sense, the work kind of like altcoins already, they already have a very robust system which uses cryptography, for sure, not the very best cryptography, nothing compared to Bitcoin. It's not the thing that any amatory can go there and break the code, right? And it's being used all over the world already in other, for any shit going to do the same, that should coin would need to have a size of the supply, which is known and immutable because otherwise the exchange rate between Bitcoin and that outgoing is anybody's guess so that outgoing would need to have an immutable supply size and a very robust security, safe, uh, network, which everybody can trust. This is not the case of any shit going out there.
Speaker 4 00:28:13 Let me just interrupt for a second. I think I disagree with that. You can't really say that Visa's an altcoin for a very important difference, which is that visa is effectively like a stable coin of the dollar because you're paying me in your visa coins, but your visa coins are redeemable for dollars and redeemable for dollars outside of visa. So I receive the money from visa because you paid me and I take it out in dollars, whereas without coins. And what you said is we'd need to have the supply effects. Plus if we have, if we have the supply for altcoins fixed and it was credible, it's still not going to be stable in value compared to Bitcoin, it's going to oscillate against Bitcoin. So in that case, it would not be able to use serve as a visa, like a network because visa runs on the fact that it is that it is 100% redeemable in non visa dollars.
Speaker 4 00:29:03 And that's not the case for altcoins. What might make sense for altcoins is if they would become Bitcoin stable coins. I think economically, I think this makes sense because a lot of these altcoins, the way that they launched is that they sold their own token for Bitcoin. And so the founders are sitting on a ton of Bitcoin out coins are out there trading. And the interesting thing here is that many of these altcoins now their market valuation is much smaller. The total market cap for the altcoin is much smaller than the entire, the, the market value of the Bitcoin that they have. And there's treasuries because all these shit coins are losing value, bleeding value next to Bitcoin. And so therefore there comes a point at which the value of all the coins in circulation is smaller than the Bitcoin behind it. So in that situation, the people who are running the ships going could actually significantly pump its price by simply making it redeemable in Bitcoin.
Speaker 4 00:30:01 In other words, if you, if you just say, all right, we have say 100,000 Bitcoins and we have an outside, an outstanding supply of 100 million of our coins. So then 1000 of our coin is equal to one Bitcoin. And if you give us 1000 of our coin will send you one Bitcoin. If you do that, you immediately raise the price of the shitcoin. I imagine for many of these shit coins that you would actually raise the price because the shitcoin is not worth as much as the Bitcoin that is backing it. Well, it's not really backing it now. So if you were to make it back in, if you would have a shitcoin stable coin for Bitcoin, when it makes sense in economic terms, I think the impediment for this is legal and practical, which is in order to make this peg enforceable, you need to have somebody managing the treasury of the Bitcoins and making a market in the shitcoin and Bitcoin.
Speaker 4 00:30:57 And so, you know, you're sitting there and you're telling people, I will always buy Bitcoin from you at 1000 and always sell Bitcoin at 1000 of my coin. But if you do that and you're basically issuing a security, I think in that situation is going to likely look like a security. And I think he would probably get in, you might get into trouble with the sec. I think that might be the problem there, because then you can't really pretend that that the altcoin has decentralized or maybe you wouldn't able to, maybe it would, you know, if you set some of these coins aside for lawyer fees, you might be able to do it. I'm not so sure this is feasible, but I think this is the one example to go back to Ahmed's question. This is maybe the one example where you could say they could help in scaling in a sense, because you could have, you'd have the shit coins CERN. And of course, you know, the security is not as good as the Bitcoin security, but maybe it's a trade off. Like some people are willing to have because nothing is going to have a security of a Bitcoin transaction and nobody can afford not nobody, but we won't have a lot of people being able to afford the Bitcoin security. So people will look for alternatives and maybe this is one of them.
Speaker 5 00:32:04 I pretty much, uh, I agree with what you said. Let me just clarify something. When, when I said, well, maybe visa is some kind of altcoin. I said an now coin of sorts, it's really not an altcoin, but it's playing the role of what the best outgoing would be. And as you said, the very best outcome that we could possibly have is an altcoin that has a fixed supply and the network is safe enough. So we trust it. But in order for any altcoin to do that, we need to have this guarantee that nobody's going to mess up with it. And maybe visa can do much better in this regard, centralizing everything, bagging it to Bitcoin, having a network that does all this very fast and efficiently. So the very best altcoin we could possibly imagine is something that visa can do pretty much. So. Yeah,
Speaker 4 00:33:03 No, that's a great point. I think ultimately the, they can't be anywhere near as good as visa at doing what they do. Like this is a business, how old is visa? Anybody know they've been at it for decades. I know that for sure. And for decades, they've been building relationships with retailers and with customers and keeping track of everybody in making, you know, figuring out who's a good credit risk, and who's a bad credit risk and, you know, shit coins up. None of that, they don't have the real world business dealing with this kind of size. And so they don't really have anything to offer in that regard. They can offer a small number of transactions in another unit of account, as it stands. I think if they want it to scale, they would want to switch to a Bitcoin standard basically by backing their currencies with Bitcoin. And then they might have, you know, they might have to offer to in terms of scaling, but it won't be much because there's just not that much capacity on top of them, I think. Yeah.
Speaker 5 00:34:03 Yeah, exactly. So the, the best that an altcoin can do is to be a stable coin for Bitcoin, but visa can do it much better. So that that's about it. But, uh, just one last comment. I liked something. You said, shit, coins are not diluting Bitcoin. They're diluting other shit coins. I agree with that. But I would like to add something. When we look at the total market cap of so-called cryptocurrency market, there's quite a lot of money put into all those shit coins. Maybe it's not diluting Bitcoin, but it's diluting the market cap of other assets to some extent. And of course at first I used to think this was a bad thing. Like, Oh, could you imagine if all this money were put into Bitcoin, it would be so much better, no such nice happening. But now I I'm looking at this from a more optimistic perspective. It's kind of like, okay, the money is getting out of gold and real estate and stocks. And so on. It's going to this scrap does bunch of shit coins, but eventually when people realize that this has no future, all those people are going to migrate to somewhere else. Part of this money is going to go back to real estate gold and so on. And
Speaker 4 00:35:27 Let's be honest, a lot of them are going to migrate to poverty. It's not going to be anyway.
Speaker 5 00:35:33 Sure. Yeah. Yeah. Because, because most of those coins are going to be worth very little, but probably there's still going to be some good chunk of money out there ready to migrate back to stocks or to Bitcoin and the people who were considering having those shit coins, or they have like one or 2% of Ethereum in the portfolio and so on. And they're thinking about increasing the size. They're going to say, oops, no, I'm going to Bitcoin. So maybe in the long run, this is good for Bitcoin. It's, it's the sort of social experiment we need to have. This is kind of competition. It's kind of necessary in order for everybody to figure out that Bitcoin is the real thing.
Speaker 6 00:36:22 Yeah. And I think there's another aspect of, well, maybe I'm not so optimistic about this. This is, it's not that people, I think the amount of money that goes into one would probably be less than comes out to them. No, sorry. More than what comes out of them because they're going to go down and people will learn that lesson after they've lost significant chunk. And then they buy less Bitcoin than they would have bought. Initially. However, the real positive of shit coins is that they're not cannibalizing Bitcoin's market value. In fact, they're probably adding to it because shit coins do their own marketing. Bitcoin doesn't have a marketing department. There's no, there's nobody going around making glossy pamphlets to give out to people and doing giveaways of Bitcoin. Nobody does Bitcoin giveaways anymore, but they do those things for shit coins. And it's, you know, they do incredibly good marketing for a lot of these shit coins, you know, give them, um, to give them their due.
Speaker 6 00:37:17 That's what they have going for them. They've got great marketing that draws a lot of people who otherwise wouldn't have ever looked at Bitcoin that draws them into the crypto space. And I I've seen this happen over and over again that, you know, somebody goes in because they heard about this, uh, you know, their friend told them about this. And then they saw a few video and they got drawn into one of the altcoins and they get into the space. But then after a while that it starts smelling something fishy about the altcoin and they start getting exposed to Bitcoin and they start hearing about Bitcoin and Bitcoin starts to smell different in a Bitcoin's fresh, the altcoins stale. A lot of these people find out about Bitcoin, learn about it properly. A lot of that is because they had heard of the shitcoin recently.
Speaker 6 00:38:02 So I think like everything on this planet, this is good for Bitcoin. You can't do anything that is bad for a honest, hard, best money. Like it's, it's going to win. And so all your moves are basically Bitcoin has the world and checkmate effectively by being the best money. And so, you know, you can choose to submit or you can choose to fight and give it more, uh, fuel to get stronger. It's hard to see something that's bad for Bitcoin happened. I enjoy being in the world of Bitcoin is because you don't need to ask anybody of anything. There's no activism here immediately turned off anybody who likes to treat Bitcoin as a form of activism. I don't find that useful because you know, Bitcoin needed us to behave in a certain way, in order for it to work and succeed, then, uh, failed Bitcoin works because of economic incentives and people buy it because they benefit from it.
Speaker 6 00:39:00 Not because they want to live in a better world than not because, Oh, I'm sure I love them, but that on its own would not be enough to get us where we want to go. Like if Bitcoin didn't have its unique and proprietary number, go up technology, then we're not going to mobilize the planet around all of, uh, you know, taking money out of the hands of government. We're not going to mobilize the planet to do this out of activism. You know, we're not going to manage to pull it off. If it's going to be pulled off, if it's going to happen, if it's going to happen because people are signing up because they benefit from it because they will gain from it. And so it's liberating because you don't have to fight anything. You just go along with it and you watch economic incentives do their things.
Speaker 6 00:39:45 And this is ultimately why Bitcoiners are perceived to be so toxic and so hostile. It's because you know, people come at Bitcoin expecting that, you know, you're their feelings matter that we need to sit there. And when the mover, no, no, no, no. You have to win me over. I want to join Bitcoin. But you know, you have to, you have to make me feel special. Everybody wants to be made to feel special. And the reality is Bitcoin, doesn't give a shit about anybody and that cleaners don't have to give a shit about anybody. Um, if you join you benefit, if you don't want to join, that's your problem. You know, you can't threaten people, uh, that, you know, I won't join your thing. I'm going to impoverish myself. I'm going to continue to use inferior technology. Unless the people who use the better technology are nice to me.
Speaker 6 00:40:36 A lot of people act like this. And it's exactly as idiotic. I say, you know, the computer community is toxic because a bunch of computer users made fun of me once. And I'm not going to use a computer anymore ever again. I'm going to stick to abacuses and I'm going to bring back my typewriter and that'll show them, that'll show those. Meanies that'll show those awful awful. Meanies that I can't be taken for granted. I'm not just going to join your superior technological revolution just because you guys have the best technology, know that this is exactly what it feels like when you hear people complaining about Bitcoin as being toxic, you may as well be complaining about knife holders and wheel owners and car owners. It's a technology that anybody can use and people don't use it because they're part of a community. You know, we didn't have to, at any point in time, there was no wheel community that went around nicely evangelizing the wheel to others and trying to tell everybody, Hey, you know, if you use a wheel, your life would be much better instead of slaving away all day, you know, come and use the wheel.
Speaker 6 00:41:50 It'll make you better. No. When people saw that wheel, they wanted to copy it themselves. They want it to do it. They want it to use it. And that's the case with Bitcoin. That's why people join. They benefit from it. It's sad to see the people that don't get that, that think that, you know, Bitcoin needs them. And that, you know, I'm not so convinced about Bitcoin because you guys sound rude and you guys are too toxic or whatever it is. And that's why, you know, Bitcoiners respond with have fun. Staying poor Bitcoin is the best technology for fighting poverty that has ever been invented on an individual and local scale. This is our best tool for fighting poverty. So if you can be bullied out of it by a couple of people being mean to you on Twitter, congratulations, you, you win your prize for winning this contest is that you don't have any more Bitcoins. They enjoy it. What else is,
Speaker 1 00:42:51 Um, I was asking him about ETFs. The, I know there's like a couple of across the world, but I guess there's some hype about the U S um, ETS or Bitcoins coming out. Are these types of vehicles in like the stock, like racy or are they even worth holding or is it just build your own wallet, you know, stack that way. I'm gonna just curious of what you guys think about those types of things.
Speaker 6 00:43:16 The way that I see it obviously is, uh, the best thing to do is to have your own Bitcoin have to hold your own Bitcoin. Um, but I mean, well, I, I sh I shouldn't be say that I can't decide for other people what works best for them. So there are, there is that temptation to say that, you know, not your keys, not your Bitcoin, and you should only hold Bitcoin. If, if you have the private keys on your own. And a lot of people, uh, are very, um, strict about this, but, you know, a lot of people also don't want that. A lot of people don't want to hold their own keys. A lot of people prefer to have them with custodians and, um, it's, um, you know, who am I to tell people what works best for them? And there definitely are cases where it is better to be in these, uh, um, situations.
Speaker 6 00:44:07 So institutional investors, can't just a lot of investors have their own charters and, and their own direction for what they can invest in on behalf of their investors. They have a fiduciary duty to invest according to specific standards, and they can't just go and buy a hardware wallet and put, uh, 80% of their holders' money on it. Uh, you know, there are different solutions that you can have custody if you want. But another one of these is an ETF which offers the added benefit of the fact that it is very doable. It's much more liquid than, than having your own coins locked up with custody. So for people who want to get in and out of a position quickly, that might make sense for people who don't have access to other forms of holding Bitcoin. This makes sense. And it's tempting to, you know, do the se say the correct, uh, the Bitcoin politically correct thing, which is, you know, you hold your own keys.
Speaker 6 00:45:04 And I think, you know, obviously there are, there's an enormous case for that in terms of your own security, that, uh, there are risks involved and others hold your keys for you, but they're also risk involved when you hold your own keys. And Bitcoin is growing now to the point where custody solutions that are used in the mainstream financial markets are usable used for Bitcoin. So it's only natural that we'll see an ETF. And we saw the one that opened in Canada has done an incredible job over the last few months. Last few weeks, I think is when it's launched, they're up to about 10,000 Bitcoins already in a few weeks. So I think there's an enormous demand for it because there's a lot of money that can't get into other forms of Bitcoin that will, uh, get into ETFs. But, you know, so far we've not heard, uh, we've not heard anything about what the likelihood of any of the ETFs being approved in the U S we'll see the new se sec seems to hopefully, maybe potentially who knows, seems to be more, uh, more in tune with what is going on with Bitcoin SOC any other questions?
Speaker 6 00:46:10 Yeah. As of yesterday, they're up to 11,394 and the, uh, Canadian ETF, which is a quite something I, you know, currently the, the options for American investors who want to get into something like an ETF, the, uh, the, the options right now, the best one I think is when I didn't know it was the best, but I think, uh, you know, you could go to gray scale, but the way the gray scale is structured and the fees that are on gray scale are pretty, uh, are pretty high. Um, they've managed to get their own fund, uh, through, but most ETF obligations so far have not gone through. So because there isn't an ETF, it is they're able to charge a very high fee. It's hard to see this dynamic surviving long that you'll just continue to have this one entity able to offer Bitcoin to the market while nobody else can do it, because then they're just being, given a massive regulatory edge basically, which they can monetize. So we'll see, I think most likely we're going to be starting to start seeing more of these ETFs pop up in the U S
Speaker 7 00:47:18 You know, in gold walls. The author explains, um, how the IMF and central banks have manipulated the gold price four years in the eighties, nineties, and so on in order to make that look good then and sustainable as a system and so on. And basically if I understand what a user says, that they were able to do that because they had huge gold holdings in the first place. So I am mistaken if I imagine that they couldn't do the same thing with Bitcoin, or do you think it's the case? And, and do you think at some point we could see central banks accumulate big Bitcoin just in order to try to make it crush or makes the market in turmoil?
Speaker 6 00:48:12 You know, ultimately, uh, the most important ways in which Bitcoins in which gold is manipulated, if you want to call it manipulating is through the fact that central banks confiscated the gold when they confiscated it, that means that they can, um, buy and sell in the market. And they have enormous amount of leverage on the market. And currently central banks own about six of the world's gold or around a sixth of all of the world's gold is in, uh, central banks, but maybe the more important way in which they can continue to control the gold market more important than the confiscation. Well, it's not really more important because it is kind of a, it's highly related to the complication. There's the fact that you can't have a, uh, a market for clearing gold outside of banks. And so outside of central banks, that's really what it comes down to in my mind.
Speaker 6 00:49:08 In other words, even after the central banks confiscated gold, well, the reason they could confiscate gold was it because the gold was so centralized and the reason the gold was so centralized is because gold doesn't move easily. And so it's very expensive to move a gold bar across the Atlantic. It's expensive to move it across from one country to the other. And so you end up with payments and settlements happening over banks that effectively have a monopoly over this process. And because they have a monopoly over it, it's not possible for a gold market and gold banks to emerge outside of this. And so without that, it's not possible for people to take the gold elsewhere and use it because your gold without its bank is pretty useless outside of your neighborhood. Um, you know, it's, it's very expensive to pay it. Then I talk about this in the Fiat's standard in chapter, I think it was chapter five on saleability and scale.
Speaker 6 00:50:09 It's a saleability across space. So gold excels in saleability across time, you can move gold easily across time. Uh, you can move value with gold. Well, across time it holds onto its value. Well across time, but it's saleability across space is very bad. You can't, every time you try move gold, it's expensive and effectively it loses its value once it's more. So that means it's clearance. As, as true, Wade began to expand in the 19th and 20th century all over the world. And communication started to expand all over the world. Doing final settlement with gold, um, became more and more expensive, which necessarily led to the emergence of banking networks that you had to keep your gold on it in order to make it fly. So imagine essentially banks are like the Bitcoin payment network, and gold is like the Bitcoin token. You can't run a monetary system on gold without the payment network, without the banks, except something very small and very local, because otherwise it becomes very expensive to move the gold back and forth.
Speaker 6 00:51:11 The lack of scalability across space is why gold ends up being highly concentrated so that when government is wanting to confiscate gold in the 1930s and forties, we don't have many stories about violent confrontations in order to perform the confiscation because the confiscation was pretty straightforward because everybody's gold was already in the bank. And so all that happened was that the government went into the banks that were already under government control and just told the people, well, you can't take your gold anymore. You're just going to be given paper effectively. That's how they confiscated it. So it was very straightforward because the gold was all concentrated. But once you move away from that, once they confiscated it, then what prevented the emergence of a free market and free banking in gold is the fact that you just can't do that. You can't set up a bank that clears gold banking is a monopoly.
Speaker 6 00:52:04 You need a oligopoly, you need a license from one monopoly body, which is the central bank and every government and central banks, all don't run on gold and don't approve banks that don't run on international currencies. So you can't just go to a central bank and tell them, I want to set up a bank and I'm not going to deal with your shit going. I'm going to deal with only. And I'm going to be, um, settling my golden to nationally by taking it bars of gold and shipping them on boats and airplanes. That won't happen. They won't let you. So for me, I think the key distinction with Bitcoin between gold and Bitcoin is that because of gold, much higher saleability across space, it's much harder to confiscate it because it's going to inevitably far more distributed in a central banking era. You know, each country had one central bank, but in the Bitcoin, you know, we're seeing many more per country emerging.
Speaker 6 00:52:58 And so it's much harder to confiscate it because it's not one central bank and it's not all the central banks are not under the government patrol. And secondly, and this is the key, is that unrelated to the fact that it's not centralized because the money is very easy to move around. It's easy to build parallel settlement networks. So even if they do confiscate a whole bunch of other people's Bitcoin, if you still have your own coins, you can still send your own coins on the network and you can still use lightning and you can still use, you can still send money from one person to another without having to go through central bank approved institutions. So that's why I think ultimately Bitcoin has a better chance than gold. Gold's low saleability across space means that you have to get the government to agree to let you run it.
Speaker 6 00:53:52 I agree to let you cross the border. There's no way around that you can't have a monetary system built around going around government. You can't just have people smuggling gold for a monetary system. People get caught and it's unworkable. So you won't be able to do that with gold, but you can still do it with Bitcoin. Bitcoin does half a million transactions a day, and these can be international settlements as actions. So in my mind, this is the, this is the trickiest part about controlling Bitcoin. So you can confiscate people's coins, but then so what other people could continue to operate on a network? And more than just that, like, I think, um, you know, confiscation doesn't just happen overnight. And with Bitcoin, it's very easy to opt out. So in 1934, things were going bad. You couldn't just take your gold and send it to a bank in Switzerland and just sit there.
Speaker 6 00:54:47 You know, it's, it's very hard to do something like this, but today, particularly in democracies where things need to kind of be discussed among politicians and approved before they happen, you're probably going to smell some smoke before the fire of confiscation comes along. And so if people suspect a little bit of the hint of confiscation coming along, a lot of money will be moving out of custodians. And it's much easier to take it out of custodians. You know, you take it out of custodian and you put it on your hardware wallet, you put it in, or you memorize the seed or you send it to a custodian outside of your country. It becomes a much easier, a much easier solution. Really. That's really the key point of the lead. Late later chapters later, LIDAR chapters of the Fiat standard, Markita saying in the chat, this is why Bitcoin will back cold.
Speaker 6 00:55:37 I think that's very, very profound. I think at some point, if gold continues to lose value in real terms, because it kind of is losing value. You know, it's, uh, it's, it's gone various in the last 10 years while the dollar has been increasing in price, uh, increasing the supply and the prices of everything has been going up so effectively gold is becoming less and less of, uh, the monetary value of the world. And if that continues, as I said, in the previous podcast on the stock, the floor a few weeks ago, I was saying effectively, that's how you can democratize gold if the value drops. And then it starts becoming affordable for industrial uses and start getting more used more and more for industrial uses. And then it starts that stuff that goes into industrial use is no longer part the monetary stockpile. And so we can't come to this part of the stock.
Speaker 6 00:56:26 So the stock, the flow declines, if this continues with gold, then I can see how we could have gold. We could go back to gold, back to gold coins, but there will be gold coins backed by Bitcoin. And so, you know, we'd have something like the open dime, but it would be made out of gold because gold is more, uh, it's, it's, it's the King of the metals it's and there's no questioning that. And, um, you know, you'll see Bitcoin backed gold where the price of the gold is a small part of the, uh, value of the coin. And the private key would be encrypted into it in one way or the other. It could be physical, or it could be digital. It could be something like an open dime inside a gold coin, or it could be something, um, like the, what these called the early things.
Speaker 6 00:57:17 The cask is coins, whatever it is <inaudible> I can't, I can't remember the exact name, but yeah, I think, I think you're onto something. My Quito, I think we're going to have Bitcoin back the gold. Eventually. I can see how we go back to, I can see that whatever happens with Bitcoin, there will be room for physical Bitcoins, one way in which Bitcoin scales is physical Bitcoin, as things like open dime are a great way for Bitcoin to scale. If you have a simple, uh, device that you can verify quite easily, um, then moving this physically around becomes a way in which, um, we can scale Bitcoin for smaller transactions maybe, or maybe even for bigger transactions, like you'd have gold bar equivalents where, you know, one open dime is made out of gold and it's worth say the market value equivalent today of a million dollars. The gold that goes into it would be like $50 or $200 or a thousand dollars out of those millions. So practically nothing. But yeah, I think gold backed Bitcoin. I mean, Bitcoin back gold sounds like a great idea, which would be a fitting, a fitting development for all the people that have spent years telling us. You should back with coin with gold. You should go back with going with gold. No, we're actually going to back gold with Bitcoin. That's the plan. You heard it here first Markita does monetary forum,
Speaker 5 00:58:44 But Hey, you know, I like it, but in order for this to really work wouldn't, we need to have a good degree of certainty about the supply of gold and the supply of gold next year and the next decade and so on. So that the ratio,
Speaker 6 00:59:04 Because on paper, it doesn't matter. What matters is that the paper is redeemable for gold. So like with Fiat money, what matters is that your paper is deemable for the gold that's backing it. So you don't care about the gold self. In fact say if the, if the, uh, if the Bitcoin bar was worth a million dollars and the golden cider was a hundred dollars, like, who cares if it was a hundred or 80, or if, you know, they put a little bit of tungsten inside it and it's actually 60, it doesn't really matter. I think it would matter in terms of just the quality of production. Like if you were going to be using gold, it's going to be, it's not going to be worth it to lie with it because likely going to be continued to become cheaper and cheaper.
Speaker 5 00:59:44 Yeah. But if that is the case, then it doesn't have to be gold. I mean, we need to have, yeah. Not for its monetary purposes. Yeah. But, but then it, it's, it's, it's a fiduciary medium. Right. And if we have a company, a bank or a government or whatever, which we trust and they have a public wallet and we know exactly how many Bitcoins there are and they issue something could be gold coins could be papers or digital units in a network. Either one is going to work fine. It doesn't have to be gold. Right. Yeah.
Speaker 6 01:00:22 Uh, but I mean, uh, it's a, it's like paper, but, you know, instead of putting your million dollars worth of Bitcoin on a paper, you put it on a gold bar. I mean, it's a, it's better. It's not going to burn. It's not going to be ruined by mold. And, um, it's, it's, it's good. Uh, it, it maintains its shape. It looks nice. I mean, I can see it as being, you know, you won't do it for like a small open dime that has the equivalent of $10, but you could, you could build it so that it is very secure and it could also be made so that, you know, you would need to melt the gold in order to get the private key. Like you can see some kind of maybe something being developed like that, where you'd need to melt and process the gold in order to be able to crack the gold bar and get the private key. I can see a lot of, you know, once, once gold is demonetizing, the value is dropped significantly. I can see a lot of, uh, I can see a lot of potential for gold in the monetary industry, just because of its physical properties, not its monetary.
Speaker 5 01:01:27 I see, by the way, another comment on gold, you just talked about scalability across space and time for quite a while those wall street guys keep making fun of goldbugs saying that, Oh, you guys are outdated. Gold used to be a good store of value, but it's no longer that when you look at a window of time, which is like, whatever, 30, 40 years, it sure is a good store of value. But in a window of 10, 12 years, there are many cases where it doesn't hold its value because of the whole complexity of, of the economy. Then I wonder maybe one of the reasons for that is the lack of salability across space of gold because nowadays and the in current times, gold is no longer a convenient medium of exchange when it comes to final settlement. And even for everyday usage, uh, if somebody wants to pay me with a gold coin, I don't know if that gold coin is real gold or not. So it could be the case that the lack of scalability across space of gold is making it over decades is making it less and less of something people want to use as money. And then the value is not being kept as in the 19th century. Right. Is that correct?
Speaker 4 01:03:02 Exactly. This is how I see it developing it's. It's what happened with silver. And I see it happening with gold at a slower rate now, but basically total amount of economic value that is parked in gold as a percentage of the world is declining. And I think this is like the last 10 years. This has been the case in the last 10 years. It wasn't so much the case in the previous 10 years, it was the case between 1918 and 19 and like the mid nineties, but historically the price of gold was going up. And of course it's in the seventies, it went up a lot. So if you want to look at the seventies, eighties, and nineties, and two thousands together, if you want to take out that big spike in the seventies, arguably, you know, except for a few months in 1980, in 1980, it was continuous increase in the market value of gold.
Speaker 4 01:03:54 Since then, you know, in the last 10 years, 2011, 2012, it's just been declining in term in real terms. And the, um, the result of this is that it becomes more affordable to use it in industry. It becomes, you know, if you're building an electronic device, a gold at $1,500 is usable and you want electronic device. But if gold was at $4,000, you wouldn't. So the fact that gold has not jumped up to $4,000 is why it's more likely to use the electronic applications. And that in turn makes it more likely that, uh, if it does use, it does get used in industrial and electronic applications that stuff's taken out of the stockpile. So now it's no longer a monitoring metal, primarily because people are doing things other than stacking golden bars with it. So if they're not stacking gold bars within it, they're using it and they're using it for industry. Then it's, uh, the stockpile is declining. And so the stock to flow ratio is also declining. It would be ironic if this does indeed happen after spending so many years being a developed Goldbug I ended up uncovering the mechanism for how gold gets demonetized. Oh, well, all right. Well, thank you so much for joining guys and I will see you next week. Take care.
