BTC Sessions - Bitcoin Explained: Author Jesse Berger Breaks Things Down EP112

Episode Date: October 30, 2020

Jesse Berger is the author of “Magic Internet Money: A Book About Bitcoin”. This book covers Bitcoin from a variety of different angles, including a history of money, the inception of Bitcoin, mining, nodes, and competition from altcoins/central banks (if there even is any). I found it to be quite concise and easy to parse through, so I hope you enjoy this chat! Jesse on Twitter: https://twitter.com/jayberjay Get the book: https://www.magicbitcoinbook.com/ SUPPORT THE SHOW: LEDN offers Bitcoin backed loans – Sign up and get $50 free https://bit.ly/35QKwX0 Get Wasabi wallet and enjoy your Bitcoin privacy https://wasabiwallet.io/ Buy a Cobo Vault to secure your Bitcoin! https://bit.ly/2GgMFlH Cobo Vault Tutorial https://www.youtube.com/watch?v=JnRjvZKulrA Crypto Cloaks: Get the BEST Bitcoin swag out there (code “btcsessions” gets you 5% off) https://www.cryptocloaks.com/shop/ If you value my work and would like to send me a tip, they are always appreciated! LIGHTNING tips: https://tippin.me/@BTCsessions Join my Telegram channel! https://t.me/btc_sessions

Wasabi wallet and fairly private. There are a lot of resources out there when it comes to learning about or teaching others about Bitcoin. However, many of them fall quite short. Still, others are very concise and well put together. And recently, I had the pleasure of sitting down with somebody who I believe has put together one of the better and more concise resources with which you have done. with which you can learn about or teach others about Bitcoin. We discuss the material and we discuss ways in which best to convey the concepts that you come

across when learning about Bitcoin for the first time. I've been with the BTC sessions and this is your daily session. Jesse Berger is the author of a book entitled Magic Internet Money, a book about Bitcoin. and I'm going to read just from the description here on Amazon before we dive into the interview. So the description reads, what is money? The question is simple, but the answer is not. Pulling back the curtain on ideas at the heart of the modern monetary renaissance, magic internet money takes you on a timely journey through the intertwined worlds of money and Bitcoin. Discussing a variety of related topics such as banking, cryptography,

economics and governance, in plain language, this illuminating tale examines many common assumptions about money, challenging readers to rethink its role in society. Packed with striking imagery and descriptions, this book is as entertaining as it is insightful, shattering popular misconceptions and unraveling the promise of sound money, and in particular Bitcoin, to usher in a brighter future for us all. Now I really enjoyed this conversation with Jesse. I hope you do too. Let me know what you think about it and let me know if you've read the book and if you have any thoughts in the comments down below. And of course, before we jump in, please do hit like and subscribe and the little notification icon so that you can notifications of any new videos. All of that stuff really helps the show and it

bumps up these types of videos in front of more eyeballs helping the channel in turn. Without further ado, Let's dive in. Shout out to sponsors of the show, leaden.io. This is where you can use your Bitcoin for a variety of different services. I've been using and loving these guys for the past couple of years now. And they offer a bunch of different things. Of course, they've got their Bitcoin-backed loans where you can use your Bitcoin as collateral to get a Canadian or US dollar loan.

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With that, let's dive into the show. All right, we are recording. We're live. We're live, Anyway, not live, but we're recording. Jesse, welcome. How are you? Hey, Ben. Thanks so much for having me. I'm doing fantastic. Awesome, awesome. So, so you have a book and I read your book and it's fantastic. We'll get into a lot about it today, I'm sure. It is called Magic Internet Money, a book about Bitcoin. So I guess let's start off with the obvious question. Why write the book in the first place. I think because I could, I thought I could. We'll start with that. Yeah, solid. It's, uh, I had the idea to do, actually, I'll correct myself, my friend had the idea for me to write the

book. I started off working on some vague sort of PowerPoint deck project that had no real goal to it. I wanted to help explain Bitcoin the people. And my friend told me, hey, you should, this is a great skeleton for a book. You should consider turning this into a book. And so once I did that, it was sort of like off to the races for me. Once I made the decision like that, that yes, I can write this book or I should try to write this book, it's, it just took off with me. I, I had this idea, which had started with the PowerPoint presentation of trying to come up with a unique way to present the arguments and ideas about Bitcoin to people. And yeah, and I just ran with it in book form.

And now here we are. Well, yeah, that's well, congrats because I'm, I'm sure writing a book is no easy undertaking. How long were you, were you putting? I mean, obviously, you had kind of like had some ideas fleshed out prior. You said you were doing like a PowerPoint presentation, but like from the point where you were like, okay, this is a book that I'm now writing. Like how, how was that process? How long did it take you?

So I had, from the start of the PowerPoint deck, I had like 80 odd slides. So I had effectively the outline for 80 pages. At the time, it was 13 sections, and now it's 12 chapters. So I had the titles for most of them, a couple of them had changed along the way. But I had the big picture idea.

Actually, I had it pretty early on in the process. But the book evolved a lot as I was writing it because I was researching as I was writing. Right. To think of a chapter like governance, I had some vague ideas about Bitcoin's governance, government governance. But then to start digging into the arguments for it and how it actually works. And my understanding is still imperfect for it. But once you start getting into it, that shapes the way the book played out.

And all along I had the idea of, A, you know, trying to be a charismatic storyteller. Like that was part of it. I wanted the book to be an enjoyable reading experience. That for me was something that I learned fairly on in the process, having a couple family and friends read from very early drops of chapters that initially I was sort of writing it for me using words that they wouldn't have known and then calling me out and saying, you just, you said this word. What does this mean? I don't know what consent this means. Like define this. Tell me what this is. So after a little bit of early feedback, I very quickly realized that the book isn't for me. Like I need to put myself in other. people's shoes and the reader shoes. And once I started doing that, I was, I really, you know,

focused in on making it for them, but enjoyable for them. Like that was a big thing for me, was to make it an enjoyable reading experience. Yeah. And so again, it's very, and we'll get into this, but it's very well compartmentalized and

concise and there's, the sections are easy to get through. I found like reading through it. It was again like here's an idea here's the presentation of of the arguments for it and now we're on to the next iteration of that within this chapter and it was very um we were just saying this before we dove in here uh before we started recording but again i'd see a sentence or or a paragraph and I'd say oh there's that thing that I stumble over for 20 minutes trying to explain to somebody put into a paragraph.

And so, like, what was the process for taking a concept and whittling it down to these very, like, well-refined pieces of knowledge, just like, you know, that is a couple pages that you can just get through and then move on? Yeah. So that was arduous, you know, tough work. Because, like you said, you know, the ideas are out there, right? They're out there. What I was focused on was the delivery of the ideas was definitely I wanted to make it concise and compact because I didn't want to waste leaders time, frankly.

Like I wanted curious people want to get to the point, I think. So I didn't want to waste their time as a reader. But then, yeah, to take the ideas and make them as concise as I did, I would go back and forth, you know, a single paragraph. could take days or weeks to work out. And obviously I'm working on multiple pages and paragraphs at a time. But you could come up with a rough idea of how an argument works, but then to literally stitch together sentences and phrases, I can't tell you how many times I rearranged entire sentences,

entire paragraphs, trying to see what just the right flow was to correctly get to the point that I wanted to get while still hitting all the important notes of the particular argument. It was arduous, it was stressful. I lost for sure a lot of sleep over it. And ideas, you know, I'd be trying to go to bed in the middle of the night and I can't sleep because I'm stuck on something that I just wish I could solve. And suddenly an idea would hit me for a completely different chapter and I'd have to jot down a note and want to, you know, my blood starts racing about, oh, I should get up and put this to paper now. So it was pretty intense, but it was all, like, it was just me.

It was just me in my little bubble putting this pressure on myself to condense it. And yeah, it was, it was super fascinating to see as things would come to life. Like as an idea starts to form, suddenly it would open up to the next idea or flow into the next thoughts. So when things come together, like what, you know, when the ideas click, it was magic. Like I would be walking around like I was on a cloud when I would, you know, stitch something together just the way that I would have hoped. But it took a lot of sort of tense deliberation to get there sometimes. Yeah. Did you find in, I must imagine, but in this process, did you find that your ability to to concisely break down these arguments or or or make a point to somebody that you now know

is it is it a little bit more concise when you talk to somebody now too like if if they're like well what about this are you able to having gone through all this give better arguments yeah like the great thing about having written the book is that I had to think about all the argument so much. And obviously sort of knowing the book backwards and forwards the way that I do, if I do start to engage with someone on any particular topic, in my head, I can start to go, okay, what did I say in this chapter or this section? And oh yeah, this is how that argument went. Okay, so it can start to come out, you know, in a more logical coherent way than it would have a year ago. It's still a tough, I mean, I think for anyone explaining Bitcoin, because,

there are so many moving parts and aspects to it for anyone who's trying to explain it, it gets complicated. And that goes precisely back to why I wrote the book so that, okay, I would have these concise thoughts down on paper. And if I stumble, I can just say, you know what? You know what? I'm getting off track. I'm losing it.

But here, check out this book or check out this page. I'll send it over, whatever. Yeah, yeah, absolutely. And I, so initially, like, reading it, what I found as I was getting into the first few chapters, I'd say. I'd say chapter one and two, like the narrative and the origins. It was, you know, stuff that is pretty familiar for myself. And, and I was like, oh, this is going to be like a book just geared towards absolute

beginners. And I mean, it is. It is broken down that way where anybody can pick up that book. But I was thinking like, oh, well, I won't, you know, maybe this won't. have as much value for like a veteran. But then as I got into it, it actually became very much like almost like an easy reference implementation for me to concisely pull an argument and say like, well, this is this is pretty concise about why this works or why this in traditional finance does not work. And so like the way that you've broken it down, once you get past the, you know,

kind of what is Bitcoin, why is Bitcoin? And then you get into like, you get into actual, you get into money and sound money and and fiat currency. And you start breaking it down very well from there and move into like, I'm just going to list off a few of the chapters here. So, you know, you get into like what the innovation is, like, you know, how a blockchain works. But and, and, It's funny because as you were talking about blockchain, I was like, oh, no, he's going to go down the road. Like, blockchain solves everything or he's going to like, you know, blockchain is the real innovation. And then you, and then you like did a 180 on me and you started like being like, but this is why

this is the only blockchain that matters. And it really, it kind of threw me for a loop because I thought you were going to like Don Taps got me or something. And you did not. And so you get into like the resilience of Bick. Bitcoin and again, like it's, you know, absolute scarcity and the implications of that. And again, competition. One of the thoughts on scarcity that for me, that may have taken the longest to put together

was to explain how, okay, Bitcoin as 21 million coins, that's the thing a lot of people think of is scarce, that, oh, there's only 21 million. But it's also very much that the 21 million belongs to this singular net. network and it's that network that is the thing that cannot be replicated. And that, to make that point and explain how it reinforces and proves its own scarcity, to get to that, that was one of, I think, the bigger challenges for me. I went back and forth on that argument a lot. And I'm so glad that I got it to where I got it.

Yeah, absolutely. And again, like you also take a look at things the future may hold in terms of not only like our current financial system, but like the things to worry about with Bitcoin or that we should keep our eyes on and everything. So you really do the full gamut here. But I actually went through and I pulled some topics and some quotes from the book that I, that kind of jumped out to me and helped me. form better arguments around them. So like, if you don't mind, I'm going to kind of dive. I've even printed them out and everything. I've got them in front of me.

Yeah, I love this. Let's do it. So early in the book, again, you're talking about sound money. And you're talking about the quote here says, fundamentally sound money allows for fair and fluid trading by accurately measuring prices, creating conditions for productivity to improve, and generating economic growth, like a rising tide lifting all boats. If defective, however, money can have the opposite effect,

confusing trade markets by distorting the pricing mechanism, causing valuable resources to be misallocated, thereby weakening an economy's efficacy. And this is a point that a lot of people, they don't dive deep enough into economics to appreciate the fact that that money itself is meant to be just like a measuring stick of value for society. If you're, and again, I was talking about this. I was chatting on the news on my news show earlier with somebody, good friend Adam.

And we got to the topic that, again, this idea of Bitcoin has a measuring stick for value and for your time and effort and productivity and how if you, if you really break it down to like its lowest common denominator and you start thinking of like a small town of a hundred that had a currency in their own central bank, you could you could be looking at that and say, well, those hundred people can only offer so many goods and services with the limited resources at their fingertips. And the money is just meant to be kind of a measuring stick of the total productivity of the whole. And so when you're distorting that money by changing the size of the measuring stick, you're really distorting people's view of value. And that's kind of what

Bitcoin was meant to do was to give an accurate measurement of value. Yeah, I think people, people, we as a society have forgotten that money is not the end goal in itself, right? Money is a means to an end. We want money because it allows us to spend our time the way we want to enjoy, whether it's the finer things in life or to give to people that we want to give to, to uplift people, whatever it may be. It's the thing that allows us to do things

because it becomes easier to trade with it. And so the goal of the society should be to have the best money because the best money will make us better at all the things we're trying to accomplish. With Fiat being the defective money I was obviously referring to, we are distorting our ability to perceive value. We are, right?

And that causes, you know, the inflation in financial assets or whatever assets it may be directed towards, you know, today it's, you know, the assets that we have financialized. But it creates distortions. We can't see reality for what it is. Sound money just helps us see reality more clearly. And reality goes through edge and flow. right. Economics go through economies go through

ebbs and flows depending on our personal preferences, on conditions, on the weather, like all sorts of natural phenomenon and human phenomenon affect the ebs and flow of how we do business and what we're interested in. And money is supposed to be that, like you said,

that measuring tool that just helps us gauge where things currently stand. But when this one entity controls it for all of us and they you know, we don't know what to expect from them. It's unpredictable, right? We get too fused.

We become uncertain and we start to do things that we would not otherwise do because we can't see clearly. Yeah, 100%. And I guess to further tag onto that, there was one other quote in the same vein about exactly kind of what you said. It says, unlike Fiat, Bitcoin cannot respond to economic turmoil by increasing supply or reducing interest rates. In stoic fashion, it can only adhere to its predetermined issue and schedule and then simply let the aggregate effort of markets determine its value. The absence of the ability and therefore the temptation for central bank or government to manipulate

money protects its credibility. Furthermore, this condition assures that Bitcoin as a standardized scale for measuring value is always precise. And so I like the point that you talk about in regards to the temptation to manipulate money. And so, you know, even in an instance where you have a governing body that's calling the shots and saying, oh, if this is what we need, we need sound money, the fact that they can do anything with the money, that they have any sort of control over that naturally occurring measurement mechanism, it's not a question of whether the current person is acting in good faith, but whether or not anybody will ever act in bad faith. Yeah, we've assumed, you know, this argument that we need steady 2% inflation.

I think I remember hearing a little while ago. I think it was Parker Lewis who spoke about this. It's like, well, why not 1.75%? Why not 3%? Like, how do you know, how do you know that 2% is just the right number? Like, how do we know that that's the right number that's going to create just the right economic conditions for us? We don't. We don't.

No one does. What we need is clarity on what's coming. You can, you, I mean, theoretically, you could set up a fiat system, I suppose, that says, okay, we're going to present print a quadrillion dollars. So long as everyone knows how much is coming and when it's coming, assuming it does ultimately reach an upper limit as well and doesn't actually go on to infinity. So long, again, it's like the 21 million. It doesn't matter that it's the 21 million.

It's the number. It's that the system is predictable and steady and everyone has the same amount of information. Right. So if there's a quadrillion dollars in society, so long as everyone knows that that's the number, everyone knows exactly the schedule that we're going to take to get there, then we have this public scoreboard that everyone can look up or look up on their phone and just check at any moment and say, okay, yes, I have X amount out of one quadrillion. This is my wealth score out of one quadrillion or my money score out of one quadrillion.

The way Bitcoiners look at, I'll have one Bitcoin out of 21 million. And so it's about that fairness and that dissemination of information that's, equal to everyone. And we don't have that right now because monetary policy is just a complete dumb show in the Fiat world. It's uncertain. No one knows what's coming next. We can, right now, we generally predict that interest rates will stay low and that money, more money printing will come. But there's no limit to when it's going to come. And we don't know how much more will come when it does happen. And that's, you know, a big problem.

Now, yeah, yeah, yeah, exactly. Now, in terms of, I suppose, unpredictability, some detractors of Bitcoin or, and some that have created alt coins or, well, I'll just say it, some that have created shit coins.

They'll point to the fees on Bitcoin, in that we've, we've decided, to cap how large our block size can be. And in so, there's been kind of a developing market. And like we see it today, fees are pretty high. Like you're not going to be sending any $10 transactions today and expecting them to get through in short order.

And we saw it fluctuate. We saw massive fees at the end of 2017. And this kind of plays into, the way that Bitcoin development has been going towards advocating for individuals to be able to add a network level, easily self-verify transactions and verify the entire Bitcoin blockchain. But that obviously comes with tradeoffs. And one of them is the base layer. You're not going to have every single Bitcoin transaction published to an immutable ledger access globally.

And so you dove into fees a little bit. really good quote here that you said. You said, it is crucially important that block rewards be designed to create a positive feedback loop for value and trust. Their economics and utility must equitably empower and incentivize users to achieve the common goal of sustaining the network, especially since it exists for their mutual benefit. This is blockchain's most potent utility, the reinforcement of public collaboration. And I know that's not specifically about fees, but you do back into the fact that there's block rewards. And again, those are diminishing.

We've just seen a halving this year. We're down to 6.25 Bitcoin every 10 minutes for miners. The appreciation of the spending power of Bitcoin has helped there. But so too do we see the fees eking up there. And so I just wanted you to maybe touch on your thoughts on Bitcoin fees on the network and kind of how they planned everything. Yeah, so I would say that this is an area that is not my expertise, but I will try to comment as best I can.

Yeah. Yes, ultimately, the block rewards, the block subsidies will dwindle to zero. And at such a time, if the network is going to succeed, the miners still need sustenance to do the work that they're doing. And so we will at some point in the future become, I mean, are becoming more dependence on transaction fees until we ultimately become completely dependent on transaction fees. You know, I don't know what's going to happen with that.

It's not my place to say, but I, having been an observer of the talent that was in the space and the talent that continues to pour into the space, we are building with a low time preference, keeping in mind that we are building this thing not only for ourselves, but for our future generations, right? If we want to build a society and an economy that can be prosperous, you know, in perpetuity, then we need a system that cares deeply about its own integrity and credibility. Yeah. You can't be making non-backwards compatible upgrades, it's constantly and setting that precedent and kind of having a move fast and break things mentality when the future generations that will rely on this are at stake.

Yeah, like, you know, the move fast and break things, sure, you know, if you're experimenting, that's one thing. If you're tinkering with a new technology that, you know, maybe it'll have some utility in the future, maybe it won't. but if you're talking about the thing that you want to base your society around, that you want to be the linchpin of commerce and economic activity, you know, as far as your low time preference will allow you to see,

then you need that consistency and that dedication to print the principle. Yeah, yeah, 100%. And I guess in that same kind of vein, you touched on, And this is the beauty about writing, I guess, a Bitcoin book now when we have like, even though it's only been around 12 years, there's a pretty rich Bitcoin history. And one of the events for me that really cemented in the idea that, man, this thing is really getting to the point where it's almost untouchable.

Like it's so difficult to screw with Bitcoin at this point. And so you touched on Segwit 2X and the implications around the, that. And so for those that are relatively new to Bitcoin, effectively, the top 50 Bitcoin companies, something like 80% of miners, a whole bunch of people got together and said, hey, we're going to change Bitcoin. We're going to do a non-backwards compatible change to the protocol and in doing so implement our own team of developers. And that was by and large rejected. And so I'm just going to read a little bit from the book here. It says, when implementing was attempted, the proposal was firmly rejected by Bitcoin's quiet, disperse, and loyal bookkeepers,

its nodes, which refused to run that proposed version of the software. A similarly powerful consortium would have had their way in just about any other industry, but due to the pivotal role that nodes play in decentralizing authority, they swiftly dismiss this scheme simply by running the same software they always run. And that is so beautiful to me in particular because I've got two nodes running behind me on on the shelf. And I've done tutorials on putting these together. And I've had just so many people send me pictures of their nodes that they're running after watching those videos. And I see other people making material on how to run your own node. And the fact that anybody with like a very, very cheap computer can just spin up a node and be self-verifying a globally distributed ledger and a global money that nobody can screw with and nobody can force you to change your software is truly incredible.

And I really don't think enough people appreciate that. No, the scope of what Bitcoin is, it really, really is incredible. incredible, right? And the reason, you know, we'll go back a little bit to the book's format, because the, you know, to think of Bitcoin as one idea is so vast and has so many implications, it's hard to just, you know, you'd be drinking through a fire hose, right, to try to take it all in at once. And that comes back to part of the reason that I broke it down the way I did into these tiny little segments where I don't want or I don't expect you to understand absolutely, everything all at once, just take in the little bit that you can and slowly build your knowledge

up little by little by little. Take those baby steps. And before you know it, you'll have a much clearer image of what Bitcoin is than, you know, if you had started with nothing. And you just saw it as magic internet money. Yeah. It's, it's really, again, to the node point, it's, it's like the equivalent of a central bank saying, hey, we're going to inflate the money supply and individual people being like, nah, and that's sticking. Exactly. I mean, that's pretty well exactly what Bitcoin is, right? It's all of us banding together saying, you know, we like this ledger. We're going to stick with this ledger, which we're not allowed to see and we're not allowed to edit or contribute to.

I shouldn't say edit. We're not allowed to contribute to. You go and play into your corner and you do that, but we're all going to be over here and we're all going to band together and say, we all are openly looking at and contributing to this same ledger. You can come in and try to mess with it, but we're all watching. So if you try to mess with it, we're just going to say, you know, get out of here. Like, we see what you're doing and we reject it.

Yeah. Yeah. It's great. And it kind of beckons to the fact, again, that you don't need somebody pulling strings with the rules. You just need to know what the rule set is and have that be out there. Everybody has access to the same information and opts into using that rule set. And to the flip side of the coin, right? part of the Fiat playbook is obscuring the rules, right?

That's part of what they do to make people feel intimidated by, oh, how does money work? I don't understand money. The central bank makes it? I don't know, right? Like, people feel confused by it. You go to, you know, a business news show and you see all these numbers scrolling by, oh, a GDP grew by 0.3% this year.

Is that good? Is that bad? Is that ahead of expectations? it behind of expectations? Why do we have expectations? You're all these things that are really distracting you from the core principles of money. And so it creates that that obscurity and that confusion that we don't need. We really just don't need it. Yeah. Yeah. And I guess as we're talking about people's ability to opt in or out of a monetary system or a monetary standard,

you get to touch on alt coins. And so you start talking about all coins. And again, as I was going through the book, I was like, oh, no, oh, here we go. It's going to be like, well, this one has a look. But you took quite a different, you know, you took the Bitcoin-centric stance on things. And I'm going to read a couple quotes and then maybe you can kind of expand on what it was said here. you say, curiously, few understand the degree to which any attempt at creating a similar system necessarily lives in Bitcoin's shadow. An idea and instrument as resounding as Bitcoin is unlikely

to be unseated by any imitator no matter how flattering. And then later on you go on to say, within the broader crypto landscape, some projects are clever and well-intentioned, Some are outright scams and some are just electronic Rube Goldberg machines, overly touted and complicated systems that provide little real value. Generally speaking, crypto produces users to elements of decentralized networks, driving speculative interest, but their incentive mechanisms may be suspect susceptible to arbitrary modification or worse. failed to align the interests of all stakeholders. Whether or not any crypto can ultimately challenge Bitcoin's market dominance remains to be seen, but unless proven otherwise, Bitcoin is the de facto monetary standard and preferred reserve asset of the global crypto economy. I don't know what I can add to that. Yeah, really. I mean, again, all of the

stuff that we've talked about up until now kind of draws you into that conclusion. And parts that we didn't talk about the book, like the Immaculate Conception and the disappearance of the founder and things like that that also necessarily contribute to the further decentralization of the project with no one person in charge and thus no one that can really be incentivized to to screw with the system because it's not possible, you'll be rejected. You just don't see that in anywhere else. No. And maybe going back just a second to the altcoins that or the comparison and the challenges faced by all coins.

You know, I was able to write that because I, you know, my financial interest in Bitcoin and crypto started in 2017. I, for background for listeners, I, was. was red-pilled on sound money and Austrian economics and sort of libertarian principles in 2007. So before Bitcoin was even existed, I was working in retail banking at the time. So a lot of the principles of Bitcoin are things that have been resonating with me for a very long time. And when I entered the crypto, quote crypto financial markets, I knew that Bitcoin was the king of the jungle here. Like that, I knew that, but I was, as many are, you know, you get tempted.

You're, you know, the ICO boom in 17 was, you know, something to behold. It was quite the spectacle, quite the bubble. Yeah. And it became a teacher of sorts, right? It, I started really, I couldn't help but continue to fall back on Bitcoin and ultimately realized that there's a reason that it is the king. There's a reason that it is the dominant, you know, dominating in this domain and will continue to dominate in this domain, almost in perpetuity, probably in perpetuity. There's a lot of reasons for that. And it took

a few years of educating myself and learning about things like blockchain, things like crypto, how these work, how do their governance mechanisms work, how do their monitor policies work, who decided them? Why did they decide them? Can they change them? What are the ramifications of that? Again, thinking back to those core principles, the sound money principles that I'd been working on, you know, or thinking about going as far back as 2007, everything just sort of came full circle for me. And that's what led me to write, you know, a passage like that is because, okay, I've been indirectly sort of thinking about these things for a very long time. and obviously directly thinking about done for the last couple years.

Yeah, 100%. Now, it's towards the end of the book, and I'm going to kind of do this out of order a little bit, but you start, there's a couple times where you took the opportunity to dunk on banks and central banks, which I thoroughly enjoyed. And so you got into, there's a common narrative, although it's becoming less pronounced now, but there was a narrative for a long time

that Bitcoin was basically effectively useless unless you're a criminal. And you took the opportunity to say that, well, I mean, it depends who you're looking at and who's allowed to do illegal things, even within the banking system. And so you mentioned in regards to illegal activity within banking, you said today,

monetary penalties are not effective, deterrent. Instead, they have seemingly been embraced as a licensing fee for engaging in illicit activity. To wit, in a famous exchange from 2013, U.S. Senator Elizabeth Warren told J.P. Morgan's CEO, Jamie Diamond, I think you guys are breaking the law, to which Diamond slightly replied, so hit me with a fine. We can afford it. And it very much, again, shows this double standard where not all rules are applied equally across the board. And it kind of leans to the idea of why are we punishing the medium rather than the crime? And I just wanted to kind of get you to think, I guess, think outwardly about what you're talking about here.

Yeah. It's a really important point for sure, because like you said, there's sort of a double standard, right? if I, as this little individual, commit a crime, they throw the book at me. But if me, but if as a large corporation you commit a crime, well, you're faceless, you're personless, you have a representative, but you can't hold a representative responsible for the organization, and we can't jail an organization, or, I mean, they could, they could revoke their various licenses, but they choose not to. it creates an environment of complete unfairness and, you know, inequity.

And it's just plain wrong is what it comes down to. How can I compete with someone who can do things that I cannot do? And not only can I not do them, they're morally wrong and allowed to get away with it. The fines are, again, like you said, it's a licensing fee. Like it's a portion of the proceeds from the illegal activities they've committed. Yeah. So by that same token, you know, let's instead of jailing drug dealers, just take a cut of their action. You know, like, what's the difference?

What's the difference there? And then, you know, further in the book, I don't know if we're going to get to this after. I zoom out about the fact that the financial system, whole is just a hotbed for illegal activity and the fines that have been paid by financial institutions over the last decade or so, I think it amounted to over $300 billion. It's greater than the entire market cap of Bitcoin. Why do regulators care at all about the tiny percent of illicit activity that may or may not happen on Bitcoin when their whole system is there's one to two trillion dollars a year in money laundering going through the legacy financial system and that was an estimate

from a couple years ago like that's a problem let's let's tackle that one yeah yeah it's mind going you need to put things in context it puts things in context yeah absolutely and and so we touched on banks here and then and then kind of like one of the last sections I wanted to touch on is when you start talking about central banks and and um more accurately, first here talking about central bank digital currencies. And so about these, you say in monetary terms, they are new digital representations of the same old fiat currencies. They treat a symptom of financial woes, namely payment convenience, without addressing

the root problems caused by reckless monetary policies and trusted third parties. Second, from a technological standpoint, their designs are akin to. to private blockchains, which in all likelihood will be run by central authorities that retain censorship privileges. All told, this concept is like a paint job for a car in need of a new engine. Yeah, that was a fun one when that idea hit me about the car in the engine. I mean, it's accurate, right? Because they're not, they're not really changing much. Like, you, I guess speed of payment might be moderately quicker cross-border if you're allowed to do so. Yeah. Well, I mean, think about, so we're in Canada. You and I, if I wanted to send you $100 right now,

I could log into my Canadian bank, send you an e-transfer, and you'd have it within minutes. I'm always a central bank digital currency, you know, going to improve on that. Okay, maybe I don't need your full email. You'll have some handle. And maybe it won't take a few minutes. It'll take 10 seconds. But, you know, does that solve how an economy grows and becomes resilient? Like, does that really solve the key social issues that are plaguing us?

No, not even close. It's just another tool for the, central authorities. It's just another means of control. You know, they're at the helm. One positive is it might make peer-to-peer purchases of Bitcoin a little bit easier. If they allow it. That's true. That's true, I guess. Yeah. Yeah. Yeah. I mean, like, yeah. Maybe I won't dive down that rabbit hole.

but I did want to touch on two final quotes here. And one of them was, I put it on Twitter the other day because it was probably the one where I was like, oh, bam, that was one of my favorites. Okay. So the first quote here was when it comes down to it, government needs to control money far more than money needs to be controlled by government, which I love. And then to tag on to that, the authoritarian approach of fiat currency leaves much to be desired for the good governance of a monetary system because it is fundamentally biased. Bitcoin, by comparison, is impartial because it is based on code that incorporates elements of both meritocracy and democracy. So let's focus in on that first one, how governance. needs to control money more than money needs to be controlled by government.

It's funny. You know where I got the idea for that line from? I got that from V for Vendetta. He has a line in the movie where he goes, governments shouldn't, or people shouldn't be afraid of their government. Government should be afraid of their people. And I mean,

I quoted V for Vendetta in the book as well with a different line. And obviously I thoroughly enjoy that movie. but I remember just sort of thinking on that line and wishing I had a spot for it and basically I ended up twisting it to be about money instead of people in government it was about money in government so when I came up

so that that's sort of how that came about and then sure just remind me for the second part of the question what well I guess for for that particular quote I just like the idea that And again, this is kind of why Bitcoin was created, is that it's the idea that money doesn't need to be control. You don't need to be pulling levers and pushing buttons with a monetary base. It will function on its own.

The only person that needs that to happen is the government itself to subsidize itself. Yeah, exactly. It is a tool that they control. And so they use it to further their own agenda. But actually, you know, let me zoom out just for a little, a second. What, when we think about government, you know, people use the word government a little too much as like a magic bullet or they look, government said this, government thinks that government is just a collection of people, right? They're not, you know, Milton Friedman talks about who are these angels that are sent to, you know, the guy that's, right? we really, really, really need to stop thinking of government as this magic entity that can solve things

because they are just their people, they're human, they have incentives and motives like the rest of us, and that, you know, theirs are, you know, and just because they have a certain mandate to help people doesn't mean that their actions can actually help people or that they have the tools of their disposal to help people. what they should be promoting is let people help themselves as best they can. How do we create an environment where people become resilient and strong in their own right? And government doesn't have to be there to catch everything because they don't have the resources. They don't have the know-how. We, you know, and when we think of, oh, government is going to subsidize it, you know,

we need more affordable housing. Government, write a check for government housing. We forget that. every action has a cost right if they are subsidizing housing can they write a blank check yes but it doesn't magically create more lumber for the houses it doesn't you know it's not that magically new workers you know appear from nowhere standing ready on site to build you you have to mobilize actual land labor and capital to get stuff done and unfortunately the government the government track record of mobilizing resources is extremely ineffective and inefficient.

And it's the people. It's private citizens and businesses. These are the people who get shit done. Can I say shit? I just said shit. These are people who get shit done. Yeah. And we don't understand that anymore.

We're just looking to these, oh, help me, help me, help me. Like, if that's going to be our approach, we're going to have nothing. Yeah. Well, and again, people think that when a government funnels money into something, even when it's printed money, that money is not necessarily, it doesn't have an impact on other people. But even when you're printing new money, creating new money and funneling that into the economy, that's not just like a net positive for everybody.

That pulls value from elsewhere, as you were saying, you know, like, It's the stuff. Yeah, that stuff doesn't come from nowhere, that lumber, that labor, that doesn't come from nowhere. And it's somebody saying, we know better than individual human action and individual human incentive where value should go. And quite often they don't. Yeah, like there's a reason that the market is the most efficient mechanism for clearing and moving around value. It's, you know, government is this tiny little entity that thinks it knows best and

wants to redirect capital because it thinks it's best, even though it's usually for, I need to get reelected, so I need to satisfy this contingent. The market is the mechanism that moves resources around most effectively. And we've completely just forgotten about that. I mean, in Canada, more so than maybe some other countries. Well, and this is the second quote that I had mentioned. Again, the authoritarian approach of fiat currency versus the meritocracy and democracy of Bitcoin. And so I figure let's maybe touch on just quickly where you see a meritocracy and where you see elements of democracy within Bitcoin.

Yeah, I almost I struggled a little bit with using the word democracy. I kind of didn't want to use it and I ended up using it. Yeah, and I recognize when you were saying democracy, I was like, ooh, he's going with that word. But then the way you explained it in the book, again, you kind of went down the route of elements of democracy in a way, shape, or form, I suppose.

But, you know, let's let you touch on it. Yeah, I know. It wasn't meant to be that, you know, there's a democracy. It's certainly different than that. But the meritocracy part, so that was in the section having to do with governance and how changes are made in Bitcoin, how proposals are pushed forward in Bitcoin to update the protocol or update features. And that, you know, if someone, one of the things that stuck with me, I know,

well, you know, Tony in Toronto, Tony Sy from Atomic Finance. When I first met him a year and a half or so ago, he was telling me how he had put forth a BIP and Jimmy Song had picked it up and liked it and sort of started running with it for him. And it gained attention. And in my head, that was one of the examples I was sort of leaning on thinking back, yeah, like an idea can come from anywhere. And if it's good, people will notice it, right? Eventually, I mean, hopefully, eventually people will notice it. And if it's good, people will run with it. So that's the meritocracy aspect of it.

The cream of the crap rises to the top when it comes to ideas and implementations. And then the democracy part had to do more so with nodes acting as, I think I call them, like the Congress of Bitcoin, where they're casting votes. this is the set of rules for this block and then next block we're going to vote again and agree that this is still the same set of rules or maybe we're doing an upgrade so we're going to change and now we're voting on this new set of rules. When I say rules, I'm not referring to changing 21 million. I'm referring to those tweaks to the margins. Yeah. And so that's sort of what I was referring to there. Yeah. And it sort of again, even if like the word democracy kind of just loosely applies in the fact that you're kind of in a way.

voting for the money that you believe is a soundest. And I guess that democratic view of that is, is the market kind of democratizing, well, what money are you going to use? And so we've seen people vote and the network effects that have played out with Bitcoin as opposed to a lot of alt coins. But it's also, it's interesting because,

should a majority fork of, you know, Bitcoin or should somebody choose to go with an alternative, unlike democracy, the will of everyone is not imposed on them necessarily. They're able to go off and use whatever they like. So it's also decidedly different in that you can do whatever you want. It's just whether or not it's in your best economic interest. Yeah, for sure. And I also sort of distinctly remember settling on, okay, I'm just going to throw that word in. I knew when I put it in that I was making myself vulnerable to it, to the people who are going deep enough down into these topics. So you're the first to call me out. It didn't take long to get called out on it. But I distinctly remember saying, okay, I'm going to do it mostly because the word, would be perceived as a little bit more friendly for the non-bitcoiners.

Part of the book, right, as you said, I do, even though the first couple chapters are kind of setting the tone of what Bitcoin is, how it came about, the story, and that is basic for the Bitcoiners. You know, if you've been in Bitcoin for any period of time, you could skip over those chapters. It gives you a taste of what's become, but you're not going to learn anything so new from that. But I had to set the stage for those that are not familiar as well.

That was very important that, you know, I want my mom to read this book and to say, oh, I get big coin more than I did before. Like, this makes sense. So the word democracy was, or democratic, was put in to be like that friendly word a little bit for the nudes. And also on that sort of vein of being, I guess, politically correct wouldn't be the term when it comes the Bitcoin, but just being correct when it comes to Bitcoin, I said, I define Bitcoin Capital B as a network and then Bitcoin's plural, lowercase B as the coins that we trade around. Now, most people in Bitcoin would say capital B Bitcoin, lowercase B Bitcoin. It wouldn't necessarily

be plural. It's sort of an optional thing. But again, for the readability of the book and to avoid confusion, in the glossary or key terms of the back of the book and in my explanation during the book, I went with the plural Bitcoin when I used lowercase B just to create that dichotomy, the separation between capital B and lowercase B, make it that much clearer. Yeah. And I had to make some of those choices, right, as I was going through. I think everybody does as you're, and it's dependent on the audience. It's dependent on if it's a one-on-one interaction, it's dependent on the amount of time that you have with somebody. It's a or how much information you're trying to get through.

And so I think that Bitcoiners would do well to, you know, we're already big into the ethos of low time preference. But, you know, I think that can also be applied to educating others about Bitcoin and having a low time preference. referencing regards to that, take those easy wins, those baby steps and iterate on top of them. Because if you lose somebody in the early innings, you're not going to make it all the way through. Exactly. Yeah. I mean, very much a part of this goal was that the nub can pick it up, feel welcomed into, I'm learning about Bitcoin. It's not intimidating. And, you know, get a a taste of the ideas and the culture and just, yeah, not feel like they're going to get blown out of the water.

If you jump into Bitcoin Twitter, you can very easily get blown out of the water. So I wanted to be a little bit of a warm welcome for them. Also, while also obviously going very deep into a lot of the thoughts and ideas. Yeah, exactly. Well, I wanted to catch them off guard, you know, like there's that warm welcome and then, bam, I just start smashing them in the face. Yeah. Yeah, but in a digestible way.

And that's kind of what I like about it. So, you know, I think overall the book, it's kind of an invaluable resource to not only newcomers, but also veteran Bitcoiners, in that it can help them more concisely convey a lot of the points in and around Bitcoin. and its many kind of schools of thought as far as different topics and areas of Bitcoin that are addressed by a lot of newcomers, it'll help people kind of put their thoughts together a lot better. And so, again, first of all, thanks for writing the book. I thoroughly enjoyed it.

And I guess just lastly, if there's any other things, you wanted to put in or if you want to let people know kind of where to find it or any or anything any other experiences that you you wanted to impart on everybody. Cool. A big, big open-ended finale here. Yeah. Whatever you like, it's all good. Whatever I want. You know, just I'm not going to talk to the hardcore Bitcoiners here because I, you know, they know what's up.

But if you're relatively new or you're still in the shallow end, start experimenting with different facets of Bitcoin. If you've only bought Bitcoin at sitting on an exchange, try opening a wallet, try running a node. Use the BTC sessions tutorial to help you out. Start playing around because that's the only real way to learn. and if you don't have Bitcoin, what are you doing? I think that's an excellent way to sum everything up. Yeah, you know, if I guess to quote, what was it, Joe Kernan on CNBC,

if you're not paying attention, you probably should be. Exactly. So, Jesse, thank you so much for hopping on the show and for writing the book. I had a really good time with it. where can people find you, whether it be Twitter or the book or whatever you like? Yeah, for sure. So you can follow me on Twitter at J-B-B-E-R-J. That's J-A-Y, B-E-R-J-A-Y.

My website is www.w-W-W-W-MagicbitcoinBook.com. And you can search it out on Amazon, on Kobo, on, you know, all the e-book channels and paperback on Amazon's magic internet money, a book about Bitcoin. Yeah, please go out and support the book and I hope you enjoyed. If you've read it, please reach out to me. Let me know what you think. I love hearing from people. It's so much fun getting like the random tweets that are starting to pop up now.

Like that it honestly, it just makes my day that this work is, is that the work I put into it is, you know, making people feel happy and satisfied and that they're learning something from it. It really, really makes, you know, makes my day to hear stuff like that. Absolutely. Everybody, if you're watching, go follow Jesse on Twitter, hit up the book. And if you read it and you got it off Amazon, leave a rating on it because the ratings will help again kind of bump it up and get it in front of more eyeballs. So again, Jesse, thanks for the chat. Thoroughly enjoyed it. Yeah, this is great. Thanks so much. Thank you guys so much for watching and or listening. As always, if you're here on YouTube, please Please do hit like, subscribe, and share. I can't say it enough.

It really, really does help, and I've noticed more of you doing it. So thank you because that bumps this video in front of way more eyeballs than you would expect. Now, if you want to help with the show in another way, of course, you can hit up the sponsors I mentioned down below. That was Leden, Crypto Cloaks, and Kobol, links for all of those down in the show notes. And of course, if you really loved what you saw, you can always drop me a Bitcoin Lightning Network tip at my tipin. me page that is t i p p p i n dot me slash at b tc sessions with that i'm out have yourselves a wonderful day or a wonderful evening wherever you are and i'll see you next time for your daily session