The Jordan B. Peterson Podcast - 186. Bitcoin: The Future of Money? | Bitcoiner Book Club

Episode Date: August 9, 2021

This episode was recorded on May 13th, 2021In today’s episode, Dr. Jordan Peterson sits down with four vocal members of the #Bitcoin community for an introduction to the world of #cryptocurrencies. Together, they cover a variety of topics ranging from the intricacies of Bitcoin, other cryptocurrencies and #blockchain security, to philosophical opinions on the utility of money, ideal economics, and mapping value.He is joined by John Vallis, host of the Bitcoin Rapid-Fire podcast that brings on the industry's experts to discuss world-changing technology.Richard James, the creator of the film Hard Money which digs deep into the corrupted nature of what money has become. Gigi Der, a software engineer who writes code for Bitcoin, and author of 21 Lessons: What I've Learned from Falling Down the Bitcoin Rabbit Hole. And Robert Breedlove, ex-hedge fund manager, philosopher in the Bitcoin space, and host of The "What is Money?" Show. For more on today’s guests:John Vallis’ podcast:https://podcasts.apple.com/us/podcast/bitcoin-rapid-fire/id1476958861Richard James’ movie:https://www.hardmoneyfilm.com/Gigi’s book:https://21lessons.com/Robert Breedlove’s podcast:https://podcasts.apple.com/us/podcast/the-what-is-money-show/id1541404400The opinions expressed in the video are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry.

Welcome to the Jordan B. Peterson podcast. This is season four episode 40. In this episode, my dad is joined by four highly experienced Bitcoin or content creators who've been invested in the world of Bitcoin for many years. They spoke about the intricacies of Bitcoin, how it works, other cryptocurrencies, blockchain security, philosophical opinions on the utility of money, and ideal economics. The opinions expressed in this podcast are for general informational purposes only. So don't listen to this and then spend all the money you can't afford to lose on Bitcoin.

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and two free pillows for our listeners at helixsleep.com slash Jordan. That's helixsleep.com slash Jordan for up to $200 off and two free pillows. If you enjoy this episode, be sure to subscribe. [♪ OUTRO MUSIC PLAYING [♪ Hello, everybody. I'm trying something a little different today. I'm speaking with a book club set up by John Vellus, essentially centering on Bitcoin, which is a phenomenon that I'm very interested in, but no very little about. I ran across John's podcast partly because their book club also focused on my first book, Maps of Meaning.

And so I looked up Gigi Durr, who's speaking with me today, John Vellus, Richard James, and Robert Bredlov, who make up the four people in this particular incarnation of John's book club. I was interested in their thinking about Bitcoin, and I noticed they were also interested in Maps of meaning, and so I thought we could try a free flowing discussion. I haven't done a podcast, YouTube video with five people before, so we're going to see how it goes, and hopefully we'll have an interesting discussion about money, about Bitcoin, about maps of meaning, about maps of value, about languages of value, about information,

all of that. So I'd like to introduce Gigi Durr, John Vellus, Richard James and Robert Reed-Lovyn. Maybe I can start with Gigi and you could just introduce yourself and we'll move from Gigi to John to Richard to Robert. So Gigi, it's all yours. Yes, I'll do my best. The first of all, thanks for having us. It's a great pleasure. I think we're all great fans of yours. I think that's obvious. And yeah, about me, I think most people know me in the Bitcoin world because I wrote a little book called 21 Lessons. It's basically a short summary of what I've learned from falling down the Bitcoin rabbit hole. And other than that, I've been involved in the Bitcoin space for a couple of years. And I've just, I've learned a lot, I've read a lot about it.

And so I tried to pay the forward and share it with the community. And I think that's what brought me here. Thanks, John. Yeah, my name is John Vales and as you said, Jordan, I host the Bitcoin Rapid Fire podcast. And first I'll echo what Gigi said. It's a pleasure to be here. You know, big fan of your work, have listened to many hours of your stuff and of course read your books. I've been focusing in the podcast over the last year on exploring Bitcoin and what it is and what it

means and speaking with all the different people that are involved in it. But as we told you a bit earlier, I've been placing the phenomenon that's been most interesting to me has been the transformations that seem to be occurring in individuals as a result of understanding and engaging with Bitcoin. And it's a very peculiar phenomenon, of course. And so that's why I found it so interesting. And of course, I think there's the book, Maps of Meaning, and part of the reason why we explored it in the book club is because I think that provides a framework for understanding that phenomenon better. So hopefully we'll get into some of that today.

Well, part of the reason I wanted to talk to you guys was because when I started looking into what you were doing, I was struck by two things that there seemed to be a psychological element to your endeavor, but also perhaps to Bitcoin and the Bitcoin community, such as it is. And then also, I was interested in your philosophical speculations about the domain of value. And so we'll go delve into that. What have you noticed about individual transformation? And do you think it's particular to Bitcoin? Like, it's a strange thing to notice and to bring up. So maybe you could elaborate on that a little bit. Sure. Well, one of the answers, yes. And one of the, you know, the interesting overlaps between your work and you and the changes that are represented in people that get involved in

Bitcoin. I think there's a lot, it's a lot of the instantiation of a lot of the things you talk about are represented in the changes we're seeing in people that engage with Bitcoin. And of course, notwithstanding that your work generally, as it permeates out into the culture, is providing people with ideas to chew on. And that causes some degree of change. But what I've noticed in people in Bitcoin is that it rapidly accelerates this change toward taking more responsibility as it were. Why take that as? Well, there's a couple of reasons. And I think the other aspect, you know,

to sum up and not take up too much time initially here is that is it changes people's time preference as well? It changes the relationship to time. And so the first why I think that is is, it's a very peculiar thing, but I think the genesis of it is that Bitcoin allows you to allow you to exclusively own something for the first time ever. And that is the private keys to your Bitcoin.

So it's an extreme form of ownership that is not represented in any other domain of life. It's an inherent property right. What do you think? What difference do you think this idea of unique ownership makes? And then how do you write that? Or if you do to a difference in time perference? And what does that mean? Well, for one, I would say that because it's the first time to experience something like that, it changes your relationship to responsibility. And I think one of the outcomes from that is it causes you to contrast that extreme form of both ownership and responsibility in that domain

to all the other domains of your life where let's say there's a dependence that exists. And so this is kind of the idea of freedom that Bitcoin seems to engender is that when you take complete sovereignty and control over the thing that most reflects who you are out into the social world at the very least, and that is money, that is the emblem of your time and sacrifice, or what you gain rather,

for your time and sacrifice, once you take control over that, I think it provides a very powerful impetus to look at other areas of your life and see where you might establish greater sovereignty and take the responsibility to do that. Another part of it is once you come into this space and you start to realize basically the impact of the current system of money that we use, and I know this is a term that you use and your reference in the book, but you begin to see how Bitcoin represents the information, let's say the truthful speech that rectifies pathological hierarchies that

evolved as a result of false money, you know, as a result of fiat money, let's say. And I think you could broadly say that money is information regarding your own value hierarchy hierarchies that you, when you use it, everybody else is. Right. Right. And so when you use it, you communicate those. And to the extent that there's an intermediary or that there's anything that's distorting the fidelity of that communication, pathological hierarchies, incongruencies between

what you're attempting to communicate and what you actually are communicating to that market, I think emerge. And, you know, that was what I found interesting about the claims that you guys are making. And I wanted to have this discussion in part to evaluate that claim, to see if there's, well, to see how solidly developed that idea, because it's a very interesting idea that in some manner, Bitcoin is an incorruptible, provides an incorruptible language of value, preferable to gold, say. So maybe you have to buy the argument first that gold is preferable to a currency that

isn't dependent upon something like gold. And that's also a separate argument, but you're making the case then that Bitcoin is superior even to gold. And so we'll go into that. What's your background, John? I started my career in finance. I lived in Shanghai, China for about a decade. And then while I was there, I got out of that because I didn't enjoy the incentives

that, you know, the behavior that came from the incentives in that industry. And I went into natural medicine and did a degree in that and worked in that capacity for a couple years. And then all the while I had been interested in Bitcoin and studying Bitcoin. And in 2019, it just kind of became overwhelming. So at the time, I was living in Thailand, and I decided to start the podcast. And as everyone on this current podcast will attest, once you go down the Bitcoin rabbit hole,

it's very, very difficult to claw your way out. You know, you're attempting to find the bottom rather than back to the surface. So that kind of characterizes my pursuit since 2019. What's your background? So I have a heavy tech background. I studied computer science and I studied a little bit of physics and I've been a computer programmer for the last like 15 plus years. So yeah, I think that sums it up. I grew up with computers and I grew up online. And so I know a thing or two about distributed systems and those kind of ideas that are very helpful to make sense of Bitcoin.

But still it took me a very, very long time to make sense of Bitcoin, like many years and multiple touchpoints, because I liked the economic knowledge that is required to understand this beast. And so the last couple of years, I read up on my economics and discovered Austrian economics and that was most helpful to make sense of Bitcoin and what. Right, so that's another touch point because I've become interested in Austrian economics and going to be discussing Austrian economics with some Austrian economists, while they're not actually Austrian, but they're from that school. You also have a profound sense of sartorial splendor just so that you know it. Hey, Michaela here, interrupting your podcast.

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can help you wake up as well. And if you're trying to ditch coffee, go to magbreakthrough.com, slash JBP, and enter code JBP10, JBP10 to try their magnesium today, enjoy the rest of the episode. Richard, over to you. Oh, thanks very much, Dr. Peterson. So, yeah, my name's Richard James. I'm a filmmaker by trade, although in more recent years sort of have worked in other areas and

and just been running a small business in a completely unrelated area. But, you know, I've had a almost a lifelong interest in economics. And I studied that through school and into university, but sort of fell out of love with it, I suppose. You kind of dropped out of economics at university, but yeah, maintained an interest in that, and then I also came across the Austrian School of Economics, and I found that to be particularly eye-opening, and it led me down this path of asking that question of what is money, and as we've already mentioned gold plays such an important role in that and I think that gold understanding gold is the first step to understanding Bitcoin.

And so, you know, in the last couple of years I've sort of turned back to filmmaking and trying to link that interest to Austrian economics and Bitcoin. And last year I sort of set myself a goal for a project to make a film, and relate to Bitcoin, and it had two particular parameters. One was that I wasn't allowed to spend a dollar, and it had to cost zero dollars, and the other thing was I wasn't allowed to leave my desk. So I sort of basically put this thing together, using content that it already been created by people, you know, working in Bitcoin and talking about Bitcoin and the film is called hard money. It's a valuable free online. So that's sort of been my contribution I suppose. But I'm more interested in the philosophy of money, the history of money,

and particularly the phenomenon of inflation and the way that links to things like time preferences as we've already talked about. And also I suppose political philosophy or and libertarianism and these ideas that there's a certain and way of thinking and these ideas that there's a certain way of thinking in Austrian economics called praxeology, which is about human action and the way that, you know, really analyzing the way that people sort of pursue, it's very general, general in the way that they use means to pursue ends. Like, that's the very first kind of axiom of the system. And from that, we can draw a whole lot of deductions. And it's interesting the way that leads you down an ethical,

being able to create an ethical framework as well. And that's where, I guess, your own work came into it where, you know, I found that, found myself interested in this libertarian system of ethics or morals and maps of meaning I think is essentially a book about morality as well, in that it's a book about how to act. So I found some very interesting parallels there. And what was it about? How would you define the Austrian School of Economics, why was it of particular interest to you?

Well, the Austrian school is, I would say, it's a way of thinking that is about logical deduction rather than empiricism. I think the problem with economics in its current form, you know, modern economics can't, can't, you know, economics because it's largely influenced by the work of John Maynard Keynes. I think it, it has a problem where it has this desire to imitate a physical science, you know, it wants to analyze data, you know, get, get complex in a mathematical sense. But there's a fundamental problem there in that when you're trying to analyze something in economics, you know, we can't set up an experiment and, you know, run, run a test on a parallel universe. We're dealing with real world.

You can't isolate the independent variables basically. So it makes that kind of analysis fraught with a lot of danger. Where it's not- To be heaver economists are trying to deal with that to some degree, right? By running actual economic experiments. They're more like psychologists.

They are so- Exactly, just fundamentally. And the Austrian school takes a very different approach, which is to say, you know, we'll take a certain set of fundamental axioms, you know, and then we'll just we'll build our our philosophy based on on logical deductions. So it's sort of all done from from the armchair basically, rather than trying to validate anything via real world data. I guess the relationship between action and economics and value, I suppose is that people choose to act

in relationship to those things that they value and that the manner in which they act is actually an indication of what they value. And so money becomes an index of people's value preferences and value preferences associated with their preferences for action. That shapes even such things as perception, right? Because perception, we think about that

as something that's automatic, essentially, because the world just appears to us in some sense. But you move your eyes constantly and you're in your head so that you can hear one thing rather than another and you pay preferential attention to one thing rather than another. And you do all of that as a consequence of comparative value. And I was reading a book on Austrian economics last night and they were talking about trying to define economics, and it struck me that the most suitable definition was something like the science of comparative value. It looks like that's what economists concentrate on, and then money becomes an index of comparative value. And then that leads, that leads, well, I'm going to talk to Robert Naxdal, get him to introduce

himself, but I know Robert has written a fair bit philosophically on the implications of money in general as a signal of value and of Bitcoin in particular. So Robert. Hey, Jordan. Yeah, my name is Robert Breedlove. It's a great honor to speak with you today. I'll just say that your work is at a profound impact on my life that I'd probably struggle to put into words. So I'll just leave it at thank you. I'm a lifelong student of philosophy and economics.

Although more recently, thanks to Bitcoin, I actually was introduced to Austrian economics. I've been going down that rabbit hole for the past four years. My background before that is I have a master's degree in accounting and finance, I was a CPA for a number of years, so I did tech strategies for high-network individuals, investment partnerships. From there, I moved on to be pretty much a career CFO focused in technology, and then most recently, I was operating a hedge fund before. Last year, 2020 was transformative for a lot of us. And this quote from HG Wells really struck me and resonated. He said that civilization as a race between education and catastrophe.

And my realization is that the world is so poorly informed about the socioeconomic significance and even philosophic significance of Bitcoin, that it was incumbent upon me to take what I think I see as the solution to many problems in the world and just pour all my energy into education. And to that end, I started the What Is Money Show. I called it this because I do believe that question, what is money? This is the gateway to this rabbit hole that we've all fallen down. It is the key to unlocking a lot of the untruths in the world. And I

think it's also the key to perceiving the corruption that's embedded in our current socio-economic system at the core of which is central banking, which I'm sure we'll get into a lot today. And yeah, I would just echo a couple of the things that were mentioned earlier. That question, what does money has a lot of answers? One of which is I think you've related in the past is that money is essentially a contract with the future. And today, Fiat currency, it's a violated social contract.

So we have a money by which an institution effectively robs our future. They're compelling the demand for this money and they're violating its supply to enrich themselves and dispossessing everyone else, mostly people economically vulnerable. And to the point about morality is like if we don't have a secure social contract in the most important market in the world, which is money, then we can't possibly have a foundation for a sound social morality. So it causes people to be more short-term thinking when your money doesn't hold value over

time. You can't plan. You can't create trusting long-term relationships. And then the last piece to that is with central banking violating the supply of money, they are twisting our perceptions. We perceive the world economically through prices, and when that perceptive, that perceptual mechanism is twisted, it breaks down your valuations, your goal orientations.

You trust. You trust. You trust, yeah. It really carodes socioeconomic fabric, social morality, and even individually to John's point, I think it really breaks us down. And I've experienced that personally in my life. I've kind of flown high and mighty

on the Fiat currency standard. And I've experienced a certain set of character traits developing myself, and I've experienced an antithetical set of traits, developing myself as a result of studying and interacting deeply with Bitcoin. So I can you elaborate on that a little bit. You're making a moral contrast. It's personal. There's a story there. I'm kind of curious about it. So yeah, I, um, I made a lot of money quickly at a young age. And I would say that I, I walked a bit

of a darker path where I just thought that I had made it. I had arrived. I would just kind of party and cut up and travel. I didn't have a lot of, I had lost that deeper sense of meaning or sense of purpose that you speak so eloquently to. And you know, you don't know it when you're up against it. I still thought that I was doing good things and was more or less a good person, but I was just going further and further off course, becoming more and more short term oriented, more and more pursuing immediate biological gratification, whether

it's drinking or whatever. And Bitcoin and this rabbit hole just gave me the larger lens, which we talk about time preference. And when we say lowering your time preference, what we mean is we're expanding your time horizons. So you're, you gain a greater sphere of concern, let's say beyond yourself. And that that that's fear is made up of space and time. And as you do that, you start to see yourself as increasingly a more humble and infinitesimal piece of the total picture. But somehow it also enriches you to want to really dig into whatever

gifts you have and give back to the whole picture. And why do you think, why do you think the fiat currency, why do you think the fiat currency versus Bitcoin issue is relevant to that conundrum? You know it, we could say it in the very severe original state of nature where we're all just cavemen running around trying to eat and you know, have shelter. That is an environment with a lot of scarcity, right? There's a lot of economic scarcity because we haven't begun to trade. We haven't created the division of labor and specialization that creates wealth. And I would argue that fiat currency,

because it generates arbitrary inflation. So it's artificially magnifying prices in the world, it's increasing prices when prices should be declining as we get smarter. It's actually magnifying the perception of scarcity in the world. And I think that contributes to social divisiveness, up to and including things like cancel culture

and other things we see in the world today. I really believe that artificial, central bank induced inflation is a corrosive moral cancer on society. And I think we under us, let's get some term straight. So that everybody knows what we're talking about. So maybe we start with theot currency. And Gigi, I'm gonna pick on you next because I want you to give us a technical

description of Bitcoin if you would and then we can start exploring its psychological and philosophical implications. So let's talk about theat currency contrast that with a gold standard of Bitcoin and then let's talk also about central banking and inflation and just flesh that out so everybody knows where we're at. That's for you, Robert. Sorry, that's for Robert. I'll get Gigi. I'll turn to you for the technical description of Bitcoin. Let me start with central banking. Sure. Yeah. So to give the very high level description, Yeah, so to give the very high level description, again, the answer to what is money has many questions or many answers, but one of them is we could say that it's a device for moving value or expressing value across space and time. And historically, it's a technology, right?

The free market selects what the best tool for the job is. That's true for essentially every market in the world today, but we've never allowed that to be the case in the realm of money. And the best approximation of the historically was gold. So if we understand that as a technology, money needs to fulfill five critical properties needs to be divisible durable recognizable portable and scarce and I'll gloss over a lot of history, but essentially monetary metals best satisfied the divisibility durability

recognizability and portability properties of money and Of the monetary metals gold was the most scarce and the monetary metals gold was the most scarce. And scarcity of money. So what scarcity means is when demand outstrips supply, but what's unique about money is that demand always exceeds supply. There's never enough people always want more money, right? It's not like you're going to reach a certain amount of apples in your in your kitchen and you're satisfied with apples. You always there's always more demand for money. So we could say that money always has this scarcity property inherent to it. But the market gravitates towards the good,

that best satisfies those first four properties, and then fifthly has the most inflexible supply. So another way to say this is the most inflation-resistant monetary technology tends to be favored by market actors actors because as it turns out, surprisingly enough, or not surprisingly, people don't like to get stolen from via inflation. You want to hold a money that holds its rarity and scarcity across time such that no one can dilute you. And to why do you regard inflation as theft? So inflation, it's just very simple supply and demand economics.

If price or purchasing power in the case of money is where supply meets demand, if someone can arbitrarily increase the supply, they can steal purchasing power from the others using that as a store value. So that's why, again, gold was selected on the market because there was sacrifice necessary to obtain gold. You had to expend time and energy to dig it out of the ground, such that in this game theoretic selection of money, everyone could trust that no one could arbitrarily violate the supply of gold, because if they could, they would just print gold if you could and start out. Deluted it with silver or something like that. Which has to be on occasion.

Which they did. Yeah, they've counterfeited gold and any number of things. The problem with gold though essentially is that it was great for holding value again back to our original definition. Money is a device for moving value across time and space. So gold is excellent at holding value across time. But it's a metals are pretty poor, especially for a globalizing society at expressing value across space.

They're very heavy and difficult to move. They're expensive to move, expensive to secure, etc. etc. So, this is where paper currency was introduced. By abstracting gold into a paper currency, we could now increase its transactability across space. And so long as it was redeemable, one for one, right? One unit of currency for one ounce of gold, for instance, then it maintained its ability to express value across time as well. So we're basically augmenting this free market selected

technology to make it more transactable across space and time. The problem with that, of course, is that it introduced the need, first of all, it made money debt. So now, the sudden, we don't have money. We have a paper certificate that's redeemable for money, which is gold. So this paper certificate becomes a debt instrument. And the problem is you now needed to trust the custodian, the bank, whoever's holding that gold, you have to trust that they will not produce paper currency in excess of their gold reserves. Otherwise, they are then the one artificially inflating the currency and able to steal from everyone else. And as it turns out, you know, again,

money's like being the most important technology in the world, the temptation to manipulate its supply has proven historically to be essentially irresistible. And banks, which tend to become central banks or nationalized banking operations over time, have always violated that trust function placed with them. Can you give us some recent examples of that? Well, sure. In 1971, the infamous Nixon shock, he took the world off a gold standard. You know, subsequent to World War II, we held the Bretton Woods conference where it was determined unilaterally by the United States that the dollar would be pegged to gold.

Every other currency in the world would be pegged to the dollar. So this gave the United States the infamous exorbitant privilege to just basically be able to print whatever amount of money they want, send the world these paper certificates called dollars and then receive goods and services in exchange. But other countries agreed to this one because the US was the dominant military power of the time and two because dollars were redeemable for gold. But from between 1944 and 1971, it reached a point where enough countries that had lost faith in the dollar that they were asking to redeem their currencies for gold, that Nixon decided to spontaneously close the gold

window. So he just moved the world off of a gold standard onto a purely fiat currency standard. And then there's since that point, actually since 1971 through today, it's been about a 50-year experiment, we have had disastrous socioeconomic consequences across a whole gamut of data. There's a great website to this effect. I was just encouraged listeners to check out called WTF Happened in 1971.com. And we've had obesity, suicide, addiction, clearly global debt to GDP is exploded.

It just points towards the devastating force that is arbitrary inflation. So yeah, I hope that answers it. Can I? Yes, go ahead. I just jump in for a sec. Before we move on, we're talking a lot about value. And I think Jordan, you mentioned something earlier

that I just wanted to pull the string on a tiny little bit is, and you talk about this in your work, but when we, in order for value to emerge, we need to define limitations. So things are defined by their limitations. And as a result of that, we're able to separate them. So things emerge out of the void. Their limitations allow us to separate

them. Then the problem is, how do we order them? Right? And then so that is how these value hierarchies emerge. And the internal measuring stick we use to order things is our own limitations of time and energy. So for a very basic example, if I'm going to look at the lamp, then I'm excluding everything else that I could look at. I'm devoting my time and energy. So for a very basic example, if I'm gonna look at the lamp, then I'm excluding everything else that I could look at. I'm devoting my time and energy resources to look at that lamp at the exclusion of everything else. The opportunity cost is infinite to anywhere you place your limited resources.

And so the journey or the evolution of money, of finding a money, has been to try to find something that mimics our limitations, that mimics the sacrifices that we make when we bestow value on something. Why would you say mimics? Well, because we want something to reflect the same limitation, you know, when we're bestowing value on something through our sacrifices, that's basically what value is. I'm sacrificing my time and energy and perception to focus on one particular thing. If I want to express that out into the external world, the ideal way of doing that is to find something that is similarly limited as my own resource.

Right. Right. So that's interesting. So yeah, so money, I mean, it's obvious in one sense that money is a reflection of human value. But I hadn't exactly thought about it as a form of mimicry. So what we want is an arbitrary external agent that's mobile across people that signifies what people value, of course. So that signifies the value structure. So why sacrifice?

Well, that's how we create wealth in the world. We sacrifice our time and energy to create things. So money, that's just another definition. I didn't mean to interrupt it. Money as a measure of sacrifice. Okay. She's, let's go to you now and let's fill in some of the gaps about Bitcoin per se. Do you want to fill us in about what it is and why you think it's significant? What's revolutionary about it?

I'll try my best and I'll try to link it to what's just discussed. We always try to zero in on something that doesn't just melt away and that we can use as money. Historically, as we just discussed, gold and silver, precious metals were very good at that because gold is virtually indestructible. And it's also very scarce and invisible and so on and so forth. The problem is, and that's what computer scientists try to solve, like for, I guess, 50 years plus, is if you want to do that in the informational realm, have something that represents value,

it's basically impossible because you can copy information indefinitely. And that's what's described by the dollar spent problem. Like, if you can read information, you can And that's what's described by the dollar spent problem. Like if you can read information, you can also copy it. So you cannot have a token in the digital realm that can't be copied. If you can read it, you can also write it down again. And that's a basic copying mechanism. And that's how computers work.

Computers are just basic copying machines. So digital scarcity is kind of an oxymoron and was never possible before Bitcoin. And also in Bitcoin, like the way that Bitcoin works, it doesn't produce anything that can't be copied. Everything in Bitcoin is copied all the time and you can copy every aspect of it. And there is also nothing that is really encrypted. It uses encryption technology, like cryptographic technology, but it doesn't really encrypt anything. It only uses digital signatures schemes to make sure that the ownership of things is clear.

But you can read anything in Bitcoin. It's completely plain text. That's why we also say it's speech. You can basically print out how Bitcoin works and put it in a book and you can actually read it and you can feed it into another computer and just spin it up again. And also the output that Bitcoin produces

is LATURE which records who owns what is completely plain text, like you can make sense of it by just looking at it kind of. And so we have this problem that historically, we found physical artifacts to represent this value. Gold coins, for example. And the gold coins, they speak for themselves. Like whoever has the gold coin is in possession of this value, the stored value. Someone else put work into it to extract the gold

first and foremost. And after exchanges, you know that whoever earned this gold coin or also stole it, like it doesn't matter, whoever has this bare instrument, whoever has this gold coin, is in possession of some value and can redeem it. Go to society and redeem it. You can like whatever goods and services you want to have, you can exchange your gold coin for that. And in the digital realm, doing that without any trusted third party before Bitcoin was impossible because of this double spend problem, because of the nature of information that you can't have any talking that can't be copied. So what Bitcoin actually does is it is this play kind of, it is this intricate dance of computers

all around the world that spin up a system that checks and verifies copies of this lecture and it makes invalid copies useless. So you can copy it and you can kind of transform the copies as well. But everyone who participates voluntarily in this game agrees to certain rules and the rules say that we only accept valid copies according to the rules that we signed up to. And this is what makes all this possible and what comes out of it is simply a list. It's an unbreakable contract of trust. Yeah, it's like unbreakable is a really big word and everything in Bitcoin works kind of probabilistically,

including like cryptography itself. It's basically, it makes use of an asymmetry that some problems in our universe are very hard to solve unless you know the exact solution to it. So that's basically all like the root of all cryptography. Like if I know the secret, I can decide for the message instantly, very easily. But if you don't know the secret, you will have to guess every possible secret. And this is where this asymmetry of power comes from. So cryptography is inherently defensive. And

this is what Bitcoin makes use of as well. Like if you don't have my private key, you cannot spend my Bitcoin period Like the heat death of the universe will come first before you will be able to do that and this is the power of Bitcoin So can you get extremely simple and describe what Bitcoin is? Yeah, that's the 21 million Bitcoin question. I'm afraid there is no simple answer. Like the the best I can give you is it's basically you can think of it as a shared excel sheet, like shared a shared a shared ledger that simply attests to who owes what to whom. Like it has a list of these are the 21 million bitcoins that we have and John on some and Robert on some and it's a list of transfers. So it's a list of transactions.

And if you if you add all this up and make sense of all the transactions, it's the what is recorded is from the genesis of Bitcoin up to the present moment, everything that happened in the Bitcoin ecosystem. And so that's what makes it trade. Exactly. And ownership. That's what makes it so trustworthy. It's like a computerized accountant.

It's keeping track of who owns what and who owns who what and it's distributed everywhere so no one can corrupt it and you can't get access to anyone's store because their key is encrypted in a way that makes it impossible to break. It's because everyone holds their own keys in the best case. Like I hold my own keys and you don't even know, like you can't associate my Bitcoin addresses with myself. That's also why I'm an invisible man. So a lot of Bitcoiners take care about their privacy and that's a big topic in the Bitcoin world as well. And so there is simply no attack vector.

You cannot invade all the homes of all the Bitcoiners across the world and steal the private keys. And that's what you would have to do to break the whole system. So the security is distributed in the sense that the security is at the edges, and the system itself is insanely resilient, and what enables this trust is exactly as you have said, it's transparent, and it's radically distributed.

Everyone has a copy, so I can check it from myself, from the very first block, like the genesis of Bitcoin, up to the present moment, I can verify everything myself. Right, so it's completely transparent, it's completely distributed, there's no centralized authority. It can't be cracked, it can't be stolen, it doesn't inflate, it can't be inflated. It isn't subject to, at least so far, to any form of overt administrative control. So let me ask all of you guys a question, maybe John and Richard conchiamin in this because they haven't spoken too much yet. So one of the questions might arise, especially in relationship to Robert's comments is that

we switched to a fiat currency back in 1971. And obviously you guys are no fans of fiat currencies. But we do have money and it does work. We can still, it still stores value. We can still spend it. And so I would say, please tell me why I'm wrong or if I'm wrong or if you agree, the American dollar has been the currency of record essentially since 1971, perhaps since before that, despite the fact that we've switched to a fiat exchange system. And my sense is the reason that people use the American dollars because the judgment of the world is that by and large,

the social structure of the United States, social and economic structure of the United States is such that it's more reliable than any alternative. And so people trust individual Americans in some sense. They trust the trusted interrelationship they have with each other. They trust the emergent social institutions. And as a consequence of that, they're willing to put the same kind of faith

into the dollar that you guys put into Bitcoin. And so that's working. And so what's the problem exactly? And is there something wrong with my reasoning? Maybe Richard, you could comment on that. And if not, someone else jump in. Well, I think we have we can make a fundamental distinction between a money that is chosen by the free market and a money that is forced upon someone by the use of the threat of force, which is essentially what the US dollar is and any other fiat currency.

Your point is well taken, which is that the US dollar works as money, but I guess the question is in relation to what or compared to what. And I think that because we sort of can't imagine this universe that doesn't exist where the free market was simply allowed to do what it would do. So there's two problems with the US dollar one is that, yeah, it's basically imposed by this legal tender law. So in the United States, and yes, the United States has economic and political dominance, and that extends around the world. But citizens in the United States aren't free to transact in money that they choose. If I wanted to make a transaction in gold, I'm legally not allowed to do that. I'm not allowed to

denominator contract in gold. And I'm also in a technical sense prevented from saving my money in gold. And that's really because of capital gains taxes. If I want to use gold, for example, to protect my savings from debatement because slowly but surely the value of the US dollar does decline over time. If I then want to go and use that saved money to actually make a transaction because I'm legally obliged to, I have to pay a capital gains tax and sort of give back to the state the value I've tried to save. So I think, yeah, there's a utilitarian dimension. Because so you wouldn't regard that you wouldn't regard necessarily any increase in value

that pertain to investment in gold as an actual capital gain. You'd be more inclined, I may be putting words in your mouth, I hope not, but you'd be more inclined to think of that as a hedge against inflation. And so not an increase in wealth, but an actual maintenance of wealth because gold hypothetically is more reliable than the dollar, or you could make that case. So exactly correct. And this is the thing is that, you know, gold, holding gold is, yes, technically it's not an investment because there's no return. But the other interesting thing is that things that we put our money into these days that are investment such as real estate or shares and things like that.

Most people are only doing that in an effort, yeah, not to earn a real return, but only to sort of offset the loss of value that comes from the slowly depreciating currency. That's part of the problem of having a currency where the supplier constantly inflates, is that people aren't able to simply save money in a simple sense. They're not able to hold money. They have to take that money and invest it and take on the inherent risk in investing simply to maintain their purchasing power over time. And then that's

basically that purchasing power is taken away from them again when they try and go rotate out of that investment back into money. Okay, so let me ask you a question about that. So maybe I could make a case that, you know, because we're all interdependent, whenever I generate wealth, I generate it as a consequence of my interdependence with other people. I wouldn't be able to do it on my own. I'm dependent on the infrastructure.

I'm dependent on the government or at least I have the advantages that those things provide me. And so could I not make a case that if I've managed to accrue a substantial sum of excess capital savings, that it's reasonable for the rest of society to expect me to allow some of that to inflate away as attacks on my hoarding, as a consequence of the fact that part of my wealth is generated as part of a shared endeavor.

Because you know, you could pause at a wealth tax, right, that might address inequality so that there's a 2% wealth tax or something like that on fortunes over $500 million. And so they decay with time to restore that hoarded wealth back to the general community. What do you think of an argument like that? Well, there's a problem. A lot of this comes back to, you know, we have to go right back to first principles about what we think about the nature of the government or the state. Like, do we think that that institution helps or hinders? Do we think that that institution can actually helps or hinders, do we think that that institution can actually redistribute resources in a way that's fair and equitable and can't do that efficiently? That's almost an entirely different question. You know, I tend to be very skeptical of what the state can do in that respect. And I think that

freely acting individuals would possibly be able to do a better job. So you have a free market response to that objection that the free market is going to do better as a calculating device. Absolutely. And the only other thing I'll quickly say before I think of handing over is that the problem with using inflation as a redistributive method is that it actually unfairly works against the poor people in society because those that have wealth, you know, you're talking about a wealth tax or that sort of happens through inflation. But the way that it generally plays out is those people who are wealthy, they don't store their money as dollars, they store it in assets. And those assets appreciate in value as a result of the inflation, whereas those people who are living on fixed wages, salaries, living week to week with a bank

balance, they're, and because they're spending a larger proportion of their money on goods and services, they're the ones who are actually most unfairly targeted by inflation. So it actually has the effect of increasing inequality. And, dude, why do you guys have any faith in the idea that there is actually measurable inflation? Because, is it reasonable? I don't understand inflation. There's a basket of goods and services that are calculated,

the price of them is calculated every year, but what's in that basket of goods and services seems to me to be a relatively arbitrary choice. I mean, what makes you think that there has in fact been objectively reliable inflation, say over the last 30 years, given, for example, that many, many manufactured goods and so forth have got dramatically cheaper. Now, I know housing in many places is skyrocketed, you know, to a tremendous degree,

but do you really feel that the currency has become corrupted and that you can, you can, and what do you rely on to make that case? What data do you rely on? and what do you rely on to make that case? What data do you rely on? I could jump in here, I think. I would say unquestionably, debasement of the currency, it is an arbitrary harvesting

of the economic surplus, a productive free market economy is creating. So as an economy gets more efficient, it generates more wealth that's passed back into market actors in the form of declining prices. So we're getting smarter at making chairs, smarter providing services, electronics, all these things. But by printing money, you're basically stealing claims

on that productive, on that economic surplus and doling it out arbitrarily. So we could say another way to think about this is that the free market itself, as you've described Jordan, is a distributed computing system. So we all have our 120 bits per second conscious attention span. You multiply that out by 8 billion market participants. That is the cognitive power of the free market. Right, I want to emphasize that because it's such an important point

and it could easily be skipped over because, you know, there are people who admire the ideas of central planning and you think, well, maybe there's 40 people doing your central planning and so maybe they're the smartest people in the world and they're doing your central planning, but they have to calculate on the fly a virtually infinite amount of information. If they don't have free market prices at their disposal, they have to calculate what metal is worth, what nails are worth, what labor is worth,

what rubber is worth, what cleanup is worth, what nursing is worth, et cetera, et cetera. And they have to do all those comparisons, and they have to do those computations. And there's actually no way even technically of doing that. And the alternative is to distribute that calculation across a virtually infinite number of actors or actors in the billions, at least, and let every single person act as a computational device and sum all that. And that's what the free market does. It's not, it's not even in principle replaceable by a logical cognitive mechanism. I can't see how it is. That's exactly right. It's not even possible that a centralized bureaucracy, a centralized computing model can compete with a distributed computing model of the free market. We could actually, in fact, say that the free market is a pure economic democracy. People are voting by buying and selling. And whatever price

is generated on any given asset, that's effectively the truth of what it trades at. Any intervention on that, any intervention, any regulation, any pricing czar as they had in the USSR, you move towards, you move along that spectrum towards an economic tyranny, where we have now the arbitrary wishes of a few overriding what the free market democracy is selecting. And to tie this back to the problems with dollar, the dollar is, you know, the dollar was gold. By the way, Fiat currency never emerges on the free market. That distributed computing model never selects a Fiat currency by itself. It's only when natural law is violated. When they step across the line

of life, liberty and property and say, I'm going to impose this technology on you or else. That's the only time Fiat currency has ever emerged. And in fact, the dollar itself was just kind of a bait and switch. It was something redeemable for free market money gold that was in replaced with this compelled money. And again, if money is speech, we could say then that Fiat currency is effectively compelled speech. It's the same thing. They're forcing a language, a language of value, they're forcing its use on you. And though, if you boil it down to brass tax, the US dollar a day and all Fiat currencies, they

are mechanically, they're pyramid schemes. So pyramid scheme is a system of network marketing, basically, that's useful for enriching those in higher tiers at the expense of those in lower tiers, and you're constantly recruiting more lower tiers to enrich the top. Okay, so let me draw an objection to that just briefly. So I'm going to accept the pyramid scheme hypothesis, but I'm going to accept the pyramid scheme hypothesis, but I'm going to say that it's a pyramid scheme that sacrifices the future to the present. But that doesn't matter because the future is going to be so much more productive than the present

that we can afford that leverage. It would be so to make, this is the kernel of economics, right? Is that I can delay consumption or gratification today, invest for the future, and then enjoy more in the future. Fiat currency and central planning more generally reverses that. It actually induces you to consume and take on debt today and disregard the future. This is the raising of the time preference that we spoke to earlier. the raising of the time preference that we spoke to earlier. And that's arbitrary nature. Again, as Mises would describe, all centrally planned action is it runs countervailing to what the free market would choose on its own. So no matter what you do, the government cannot make a good decision if they're coercing

people to do it because they're withdrawing productive factors from the economy to fund that decision. If they want to go to war, for instance, the market may have not selected to go to war, but a government has decided that no, we're going to pull these productive factors from the economy and push us into warfare. So it's contradictory to the essence of democracy itself. So you guys really see that Bitcoin, as it just, you really do see it as a distributed form of government as well. It's disruptive to centralize government, yes. Yeah, and I think one of the elements of inflation, and again, this is the string back to what we were talking about earlier. And I do think it is a fundamental point to make, but if money is how we express our sacrifices

and therefore our values into the matrix of value hierarchies that exist in the market, then inflation is doing so without the commensurate sacrifices that everyone else needs to make into it to allow them to communicate that to the market. And so this is where the idea of pathological hierarchies is applicable, is because a naturally emerging market where the fidelity between one's actions, one's choices, one's valuations, and the signal that they send out into the market is pristine.

And I would make the case that's what Bitcoin represents. Whenever that is diluted in whatever capacity, you know, to a small degree or to a larger degree, that's what creates incongruencies between the matrix of value hierarchies that are out in the market. If they are pristine, if we are all able to communicate with perfection, our value hierarchies to the market, we will see, in my opinion, emergent order. I don't see how it could be any other way. Where that gets thrown off is when that signal that we're sending carries alternative information,

not information that we, you know, through our divine process of, you know, mediating chaos in order to bestow value on things and then express that through our actions, not that process, but through some other process of someone who controls the mechanism by which we communicate that. And so inflation is just is changing the relationship between the matrix of value hierarchies without the commensurate sacrifices. And that is what creates pathological hierarchies. And that's what creates, you mentioned, you know, the inequality and the devices and stuff. Okay, so why do we allow this? Now, we're not going to degenerate into conspiratorial thinking, and I'm always wary of any conversation that involves they, you know, an external actor. Like, we've allowed this as a global community. And if what we've done is flawed in the manner that your analysis indicates, why have we allowed

it to happen? I could say who benefits, and we could go there to begin with, but again, as I said, I'm very leery of conspiratorial thinking. I tend to think of large scale social problems as everybody's problem, you know, but so what do you think about that? Why have we allowed this to happen? And let's say who benefits and why? Well, and who suffers? I'm with you. And 99% of the time, I attribute the things that we see in the world that we might term evil or bad to incompetence and not, it's not right.

I'm not. I'm not. I think, you know, there's many factors here. But one is it happens kind of, it happens in slow motion. And so people end up not being able to see it. For example, like you would say today, hey, I got my iPhone, I got Netflix, we're talking on Zoom, things are good and right in the world. And I know oftentimes you discuss not to discredit, not to go out and try to change the world,

not to be too critical of the state of the world because the order that we experience is almost miraculous. But I would say that there's an element of that that may cause you not to see how things have become disordered. I mean, it's difficult to see that. And so when we talk about the disruptive, effective inflation that I just alluded to, a lot of people have a difficult time seeing that. We can objectively isolate problems that are going on in the world, inequality and social

problems and all the craziness that we see in the world. And we can attribute that to fill in the blank cause. Whereas I think what we attribute most of that to is the disordering that results from this fractured congruence of value hierarchies that are being communicated in a market. That's where I think most of that comes from, but it takes time to play out. It's a form of faulty information. Right.

And we are leveraging right now. We are still benefiting from the order, the structure that was imposed as a result of, let's say, being on a gold standard, and the political and social dynamic that that fosters, in many cases, we've been living off the stability that that fosters for the last several decades. I think you could make a case that, despite technological advancement, that might cause us to think, hey, things aren't so bad or may cause to distract us, I think you can make the case that the equity that we've been living off of of that stability is coming to an end. And I think we're seeing that in many different cases. But I think that's why. It happens in slow motion

and people are not educated enough or necessarily paying attention enough to notice the relationship between all the different things that are going on. Okay, so let me ask you guys a question about what happened in 2008. And so, and I may be completely wrong about this, but my understanding was that the 2008 crisis was fundamentally produced by a technological revolution. And the technological revolution was something like the realization that you could take investments of a certain

risk level Mortgages, let's say, substandard mortgages. And by bundling them together in huge tranches and huge groups, you could quantify the risk and as a consequence of quantifying the risk, you could discount you could make the group of investments more valuable than they would be as the sum of the individual investments, which I thought was a brilliant innovation. And so now the companies banks traded these huge tranches of subprime mortgages because they could quantify the risk. And that means that

that could be accounted for financially. And so the risk was ameliorated. And the the flaw was, well, no one realized that doing so on mass would increase the probability that housing prices would become correlated across time across huge geographical regions, for example, across the entire United States. And so the housing market could collapse all at once. But so, so I you could make the case that that was actually a flaw so the housing market could collapse all at once. But so so I you could make the case that that was actually a flaw in the free market computing prowess because a technological innovation came along, warped the entire system. And then what had to happen was the political system had to rescue it. And so I watched that and I thought well did I was the political system embedded in

the economic system, which is I think the political system embedded in the economic system? Which is, I think, the argument you guys are fundamentally making, or is the economic system embedded in the political system? Is what's wrong with my analysis of what happened in 2008? Wasn't it the case that the market was rescued by the, by the political actors? Is that incorrect? It's the arsonist putting out the fire. Sorry, go ahead. Yeah. No, I could start and you guys feel free to jump in. So I would first encourage you To look into what's called the euro dollar system, which is essentially these this

We control the pyramid scheme in the US the domestic dollar supply, but there's this offshore derivative system We're ever trying to peg the dollars that the central bank doesn't control. That's actually been considered to be at the root of the 2008 crisis, and then this was kind of a cover story. But if we just get back to error, so we could say risk is error, right? So there was this embedded risk that we thought we had calculated and contained. But what was actually happening is because we have centrally planned money, it's pushing hidden risk into the economy, right? Because the free market distributed intelligence, intelligence being defined as error correction,

it's mitigated by the central planning of money. So these hidden risk accumulate, and that's why we've had increased volatility since 1971. We have these huge economic booms. We print a bunch of money. Inflation runs hot, but so do assets. Everyone thinks they're doing really well. And then we have these catastrophic retracements back to economic reality. And actually because incremental, incremental reaction to risk is not, is not being implemented.

That's what you've described. We're diverting perceptions from reality. Effectively. So even the correction March 2020, that was the sharpest liquidity collapse in the history of markets was faster than 1929. So we would expect as more fiat currency, which is artificial liquidity is pumped into the system, it's further distorting this economic perceptual faculty and creates even more volatile boom and busts.

This is the Austrian business cycle theory in a nutshell. And the only way to resolve this is to let the free market clear errors. That's what it does. That's what consciousness does, too, by the way. So you think of the free market as our interconnected consciousnesses mediated by the price signal. When you disturb the price signal, our consciousnesses become divided and we have increased errors and blowups. That's right. Suggest people that they don't engage in deception because they distort

the value signals that they warp their own consciousness. It's a very dangerous thing to do. That's right. Because you only use deception to exactly what money does. That's exactly what Fiat money does. Fiat currency is a living lie. That's it in a nutshell. And maybe to bring this home, the question you asked could also be rephrased to pick a more like an example that people might be familiar with. You could also ask like, was the drug addict or was the person suffering from alcoholism saved by alcohol because he suffered withdrawal. And that's like a very similar question.

And then you could argue, yes, we gave him the substance and he survived. So it was a good thing. And he made it through. But what would actually be necessary is kind of, you know, like that's not the cure. You would need to quit cold turkey. And that's what Bitcoin As are arguing or just in general people advocating for sound money or arguing that we need to get off the fiat standard That can be arbitrarily manipulated and manipulates the price signals manipulates the whole economy. Okay, so that's a fundamental tenet of Austrian economics is essentially that

central planning in essentially that central planning in relationship to the monetary supply that isn't informed by incremental free market decisions produces error that accumulates and produces cyclical booms and busts. That's very interesting because there is a psychological analog to that. That psychological analog to that is failure to react to error when they're committed incrementally to store the errors up which compound across time and to collapse. psychological analog to that is failure to react to error when they're committed incrementally to store the errors up which compound across time and to collapse and the oldest myths some of which I talk about in maps of meaning talk about for example the re-emergence of Tiamat in the mispetamian myth which is

the consequence of corruption accumulates and produces catastrophes the The flood myth idea essentially. So the business cycle, Siri in Austrian economics is a recast of the flood myth and the Tower of Babel. Is that right? Because those are the two parallels, the two mythological parallels. Tower of Babel is administrative overload essentially and the corruption of systems and the flood is,

you know, the catastrophe, the downside of the, of the, or the natural catastrophe, I would say. So I think you hit on one of the main points of this discussion generally, is that truth is represented across scales. Maybe that's a part of the definition of truth, is that you can see it across scales. It's represented in different forms. It certainly a part of the definition of deep truth. Right. And so when we look at maps of meaning, I think this is part of the reason why we're so interesting and interested in talking about it, is because we take those truths that are seemingly entirely unrelated to markets and money. It's all about mediating the forces of nature, the structure of reality and conjunction with the social relationships that constitute life and trying to figure out what behavior is most the most optimal balance between the two.

And I think we could carry that been called maps of value. And obviously money is a map of value, but I hadn't drawn the analogy between a map of value and money, although in retrospect, that seems like an obvious thing to do, which is why I got interested in your idea about unincorruptible money. Yeah, well, yeah. And so you think of incorruptible money as a computational advantageous, essentially.

That's the basis of the idea. Yeah, and I think, again, to pursue this, I think Bitcoin is the regenerative hero in different form. It takes the forces of nature. It digs into chaos, into pure entropy, into pure energy, and let's say mathematics and spits out the greatest form of order that we as human beings use in the social realm, which is money. And it does so in the archetypal way, in the maximal possible way of doing so. And it does so in an incorruptible manner.

And so if you take a lot, you know, if you take those things, you could easily, you know, that could easily have been talking about the regenerative hero as described in maps of meaning. And I think it's represented in Bitcoin. It's instantiated in Bitcoin. And that's why it's having such a revelatory effect on it. Provides a really weird bridge between the objective world and the world of value, too, doesn't it? Because all the computation occurs in objective, like that's objectively real. And that objectively real, incorruptible computation produces an unhearing signal of value, or that's the theory, at least. Okay, so let's talk practically for a bit. So, then we'll return to the central discussion.

I mean, Elon Musk is recently objected to Bitcoin on the basis of, and maybe this is this a flaw, Bitcoin becomes more and more expensive to produce as we proceed through time. And the consequence of that is that we do, in fact, use up more energy, or at least that's in one form, which is computational energy. Maybe we gain that back and, you know, efficiencies within the market itself, you could argue that. But what do you think about Musk's recent decision with regard to Bitcoin?

I would love to jump in on that because I have written about it extensively and I think what you said is exactly right that Bitcoin is a map of value, so to speak. And what's so interesting about Bitcoin is that Bitcoin is both the map and the territory. And as I've said before in the informational realm, we cannot link, usually, we cannot link the map to the territory. And as I've said before, in the informational realm, we cannot link, usually, like, we cannot link the map to the territory. You cannot do it. Like, if you have something in the real world, writing something down about it, you will always have to trust the person that wrote it down. And what's so ingenious in the world of Bitcoin is Bitcoin uses the only thing you can do with information, which is to transform it to anchor it to the real world.

So this is what proof of work does. That's what the energy expenditure is for. And the energy is used for various things. So it's used to secure the system. It's used to distribute new coins. It's used to make sure that the history becomes incorruptible. So it also secures the past. So it does a couple of things.

It also makes sure, like, it even decentralizes time itself, which sounds kind of weird, but it's very hard to keep a decentralized system synchronous because of relativity and other effects. So you would have, if you wouldn't have something like physical proof of work, you would need to trust a central authority in terms of time, because the order of things, like the order of transactions, needs an absolute order of time.

And all these things combined are solved by the proof of work system that Satoshi Nakamoto introduced. And so, like the energy expenditure, the basic question becomes, once you realize that the basic question becomes, is it worth it? And society in general... That's the worst question. Society in general asks this question about all kinds of things. Our cars worth it, our smartphones worth it, is the internet worth it. All these things, they take up a lot of energy. And Bitcoin has argued that Bitcoin is definitely worth it for this for the sound money aspect alone

Musk is determining by fear that it isn't well. I mean letting the market decide. It's very hard to decipher What what Musk meant with his recent comments because Tesla is still holding like A lot of Bitcoin on their balance sheet. I think it's about $2 billion worth in Bitcoin. And they don't intend to sell any. And so it's a political game to... So let me ask you this.

If you guys are right, tell me if I'm leaping somewhere I shouldn't be here. But what should happen is that whatever energy is expended in the production of Bitcoin and the maintenance of the system should be more than recouped by the increased efficiency of every system that used Bitcoin as a transactional device. And so the net energy, there'll be a net energy gain, not a net energy loss if you calculated it across the entire system. And so it's a mistake just to look at the cost of generating Bitcoin in the absence of considering the efficiencies that Bitcoin would produce. And the same is true for gold as well.

You know, like it takes a lot of energy to extract gold from the ground and historically, society in general, answer this question in the affirmative. Yes, it's way worth it. Like, it's worth to dig this up. Right, but there were limits, because once the ore becomes insufficiently rich, at some point, you stop refining it. So there's a limit. But according to your logic, at least the limit on the energy expenditure that Bitcoin produces should be produced by the market response to Bitcoin, not by some fiat judgment about whether or not it's like ecologically sustainable, because that's just a guess. And the best indicator that we have for ecological stability is going to be cumulative free market decisions, even though those aren't necessarily very good. They're better than anything else we

could possibly generate rationally. And just to clarify one point, and then I let Robert dig into this, Bitcoin doesn't take energy because the production of Bitcoin takes energy the production of Bitcoin it's an emissions schedule so it's constant We know when the last Bitcoin will be mine. It's it's gonna be around in 2140 and it doesn't matter how much energy you Expand it won't be it won't go quicker. It won't go slower So if you if you dig harder for it, it will be harder to find. And if you stop digging for it, it will get easier to find. So that's the genius invention of the

difficulty adjustment. So there is no one to one link of Bitcoin production and energy expanded. And the energy is used for different things for it's security, for example. And Robert, I think you want to say a few things. Yeah, yeah, I'll try to dovetail and tie some things together. So the general tenant here is there is no value in money without sacrifice. We, there has to be an energy expenditure to secure the supply of money or the network of money. That's what ensures against its corruption, basically. And if we do not even more. That's right.

And someone would just arbitrarily suck value out of it by printing it. That's what the central bank is designed to do. So if we zoom out a little further, we could say the entire purpose of the world economy is to increase collective energy efficiency. That's why we are treating and specializing. That's what profits are. Actually, right. It's an indication that we've provided,

we've satisfied a want more efficiently. And that rewarded profits to the entrepreneur that then invites more competition, more production, et cetera, et cetera. So back to John's point, the entrepreneur, this is the individual element that courageously faces the chaos of nature, right? With his skin in the game, his own capital plans, et cetera, trying to convert it into good and useful order. The entrepreneur is the living hero myth.

And that's what the free market honors. It honors the sacrifices that entrepreneurs go out into the world and make for us, whereas something like a bureaucracy is antithetical to that. So to get back to your point about why central banking, how did we allow it to happen? I boil it down to this, is that even the entrepreneur, he's pursuing something for nothing. He's trying to find a way to satisfy wants more cheaply, more efficiently, to enrich himself and to enrich others. That axis you talk about between chaos and order good and evil, right? We're all pursuing something for nothing, but there's a point where you can cross that axis into the domain of evil, where it's intentionally harmful to others to benefit ourselves.

I think that's what central banking has done, right? It's the entrepreneur wants something for nothing by figuring out how to provide a good or service, but so does the central bank. But it's across that divide to where it's actually economically harming others to give its shareholders, its private shareholders, a perpetual economic free lunch. It has no sacrifice in the money creation process. It pays a dividend to undisclosed shareholders. It's a parasite on the productive economy effectively. And I would say that no one is better than their incentives. Right. It's not like how did we let this happen? It's like there was just an attack vector on gold. There's technological shortcomings of gold that allowed it to be corrupted.

That's how we got the central bank built on top of gold. So I think by introducing Bitcoin, a money that's really hard to steal in terms of inflation or confiscation, it pushes us to be more hard working as a society because that is the only profitable strategy we become entrepreneurial, whereas if money is easy to steal, like it is under the central bank model via inflation, we slide towards club talkercy. And that's what you see that even Elon, he's very close to the field. I like the weed turning all the way to, you know, because it does, you make a case there. You make a case for a kind of technological inadequacy, is that as a species, we haven't been able to generate a sufficiently incorruptible language of value, and that has produced all

sorts of negative consequences, some of which you're outlining. It's a problem that we all have. Okay, so practically speaking, guys, Bitcoin, it's not easy to spend. It's not, you can't go into a store and spend it. Like, it doesn't have that portability that you described Robert as a cardinal element of a necessary currency. And it isn't obvious to me that it's been rapidly moving in that direction, but that may be a mere consequence of my ignorance or my timescale. Maybe it'll do happen in 10 years and that's virtually instant from a historical perspective. How do you think, do you think Bitcoin can leap the gap between what would you say somewhat

store the energy? Yeah, yes, that's right, exactly. Can I just hop in real quick on the last point before we answer this and then we'll get to it? But, Jordan, you mentioned, is this energy expenditure and the environmental issues around Bitcoin? Is it worthwhile? Right, and as you said, the market is the best thing

to determine whether something is worthwhile or not. I tend to think of our impact on the planet, not as a planet in isolation, but as in human flourishing. I mean, isn't that what we should be looking at when we talk about the environment? Not just, is the natural world harmed in some way, but is our relationship? Well, otherwise, we're just talking about maximizing

someone's ideological perception. Exactly. This is what the environment should be. Right. So I think our question should be, what is basically the ratio between the consumption of resources and the human flourishing that it nets. And I think that money, because it's the thing that allows you to

determine the relative worthwhile of worth, worth, wildness of everything else, it means that there is nothing more important than that object. So whatever the free market selects as the money, the resources used to instantiate that, to perpetuate it, are definitely worthwhile because it permits the relative valuation of everything else to the extreme of it. I just wanted to get that piece out. Yeah, yeah, fair point, a fair point.

If I might jump in in terms of like, uh, you can't go to the corner shop and spend your Bitcoin, I, I would say, you know, that's a fair criticism, but that was through 20 years ago for e-commerce and, uh, other technologies. So it, it happens, gradually, then suddenly, like that, that was the same criticism was like, what, what am I going to do with a smartphone? What am I going to do with the internet?

Electricity. It doesn't work yet. Yeah, electricity, a lot of bitcoins or some bitcoins like to use this metaphor because Bitcoin is also a network and electricity is also a network. So you have network effects and they take a while to grow. But Bitcoin is very usable already and there are a lot of people already living on a Bitcoin standard. So they are earning Bitcoin, they are spending Bitcoin, they are using Bitcoin day to day. Currently, because we are still in this early adoption phase, and Bitcoin is an exponential technology built up on other exponential technologies. So it it lives on the internet and it uses like smartphones and other devices that are exponentially

nature to propagate itself. Then it will just take a while until it is ubiquitous, but I think also it is unstoppable, just like the internet was. The internet dematerialized all kinds of things, and it just took a little bit to play out. Netflix wasn't possible from day one, and video zoom calls that we are having right now weren't possible from day one. And very similarly, Bitcoin is evolving and building itself up in layers. And currently, its main use is as a censorship resistant money. If you are not allowed to have a bank account for whatever reason, Bitcoin serves you very well. And if you want to have a long-term store of value, Bitcoin is an excellent choice of store of value as well. And just look at the data, like historically, year over year, Bitcoin compared to the US dollar

gained 200%. So if you put some money in Bitcoin, if you have done that in the past, you are better off than having money on the bank account or under your mattress because of the inflationary nature of fiat currencies that we discussed. And I think it will just continue to evolve just like the internet and people will find it useful for various different reasons. Now you regard it as unstoppable and so on what basis do you make that claim? Why do you believe that? Bitcoin is pure information. It is pure information and also the system that is running it like the asset itself is pure information. It is pure information and also the system that is

running it like the the asset itself is pure information. I can store 12 words in my head and I've Bitcoin in my head literally. So it is very useful in that regard. That's what makes it that what makes it virtually resistant to to yeah nobody can take it away from you. Like if you secure it properly, Bitcoin has certain properties that allows you to, um, make sure that you and only you can spend the Bitcoin. And on the system side of things, the Bitcoin network itself, it's just computer code. And so it's just information. And we as a society are very good at making sure that important information, information that various people regard as important survives. So we often like to compare Bitcoin to other informational texts, just like the Bible, for example, that outlast empires,

because it is very hard to destroy pure information if it is distributed well enough. And the whole reason for the Bitcoin system to work in a complicated manner that it does is because it maximizes decentralization, it maximizes censorship resistant. The whole idea of the Bitcoin system is to build something that they can't stop and it doesn't matter who they are. So it's to build a system that we as humanity can't stop. Exactly. Right, right.

It's to build a system that we can't. Well, so that's, well, you know, that's kind of an interesting conundrum there or two. You're going to ask yourself, there's no shortage of dire science fiction predictions about the buildings of systems that we can't even stop. Downsides to Bitcoin, well, how about the facilitation of criminal

activity, underground criminal activity, for example? And like if you guys put your heads together and you had to critique Bitcoin as a social danger, what would you say? There's definitely the criminal element, which seems immediately relevant. I would say it's the same as with every powerful tool. Like a chef's knife is a very dangerous weapon, but you can also prepare beautiful meals with it. And we have to kind of make sure to wield these powered full tools directly. But it's also kind of, you know, like the genie is out of the bottle. We kind of have to just like with the internet, you know, like the internet and every other technology before it, it can, it's just a tool, it can be used for good and bad.

And there's plenty of crime facilitated online as well. And you know, like I don't even want to go into bank robberies and cars that were early adopted by bank robber so that they can run away faster. So I think that would be my answer to that question. And Joanne, just very quickly on that one, you know, in your writing and such, you detail how the religious traditions, particularly Christianity in our case, have informed the legal system. And one of the very special ways that it's done so is that it sanctifies the sovereignty

of the individual, even if that individual is, is, uh, has, obviously committed a crime. They are given the right of due process. They are presumed innocent until proven guilty. And this is a technology that fundamentally sanctifies the sovereignty of every individual. And what they choose to do with that sovereignty is their choice. Yes. But you guys are also making a case,

all of you that the very act of Bitcoin sanctifying the sovereignty of the individuals actually tilting individuals towards doing something good rather than something bad, that there is, that it's not just neutral, as Gigi was laying it out, that there's an intrinsic ethic to Bitcoin that is more likely to tilt it in a positive direction, which would be a more, what would you say, a more powerful rejoinder to the Bitcoin equals criminality

criticism? So the question is, is that, see, that's what I'm trying to wrestle with here, is, okay, so let's accept your proposition that Bitcoin is an incorruptible currency. And that seems fair enough. I mean, I can't come up with an obvious rejoinder to that. And then so that means that we have an incorruptible language of value that enables us to make better decisions. Well, we do use money to make decisions. I mean, sometimes look, sometimes when I'm trying to decide whether I'll do one thing or another, I'll do the thing that makes more money because I can't decide any other way, right? It's an obvious way of picking one thing over another

when they're relatively commensurate. Other people seem to value it more because they'll pay more for it. So it's actually helpful as a cognitive, it's a helpful cognitive tool, pricing obviously because it simplifies decision making to a tremendous degree. So it's integrally involved with decision making.

You could make the case that in an economy or in a market that's properly constituted and structured, I.E. people's expression of their values is not corrupted, that you following that signal of something being more financially rewarding is moving toward the good. Because the good is the adcation of all. Now, that's really what's at the bottom of this as far as I was concerned That's what got me so intrigued by what you were thinking because that's a that's an unbelievably radical claim and it doesn't Because my earbillani is corrupted Right, you're basically saying that that you can you could rely on an incorruptible currency as an unhearing signal of value

And so you're doing all your computation externally, You know, in this new book I wrote, Beyond Order, I made the case that a lot of our sanity is distributed. Like we tend to think of ourselves as organized within. That's part of the psychoanalytic tradition. That's psychological tradition for that matter. We sort of keep ourselves sane if our psyches are well structured. But a lot of the way we stay sane is by interacting with other people. And the signals they send us and that we respond to keep us sane. And you can see we're all going off in all sorts of weird conspiratorial directions

as a consequence of being locked down under COVID for so long because everybody's brains are, we haven't been subjected to enough social correction for a while because we're isolated. And we all go kind of off the rails as a consequence. So if the value language is incorruptible, then you can externalize your cognition and you can rely on the market almost completely to make decisions for you. So you'd buy the cheapest car, for example, all other things being equal because the calculation would have already been done for you. I mean, there's going to be a bit of an individuality of syncracy, but fundamentally. The greatest reward would be climbing the value hierarchy of the market in aggregate.

And then the question becomes, what is at the top of the value hierarchy of the market, of the collectivity of all people? And so then, in my opinion, yes, that allows you to outsource some of your cognitive load and determine where you should deploy your resources more easily. But I think that also allows us to contend with what is. And if we can do that, then I think we can solve our problems more easily. And of course, the market is a massive component of identifying those things. And I think it empowers us to say, which is a huge part of your message,

is when we see things out in the world that we don't like or agree with, our action is what changes those things. Our contribution to that market, to nudge or shift, the matrix of value hierarchies and whatever way is how we affect the best way we can affect change. Well, we do affect change because we buy things and then there's more of them. I mean, we do make, we do have that impact every time we make a purchasing decision. So that part of this, I would just add that so sovereignty itself, it's the generative source of sovereignty. It is the logos, right?

So as you've described in your work, we first had thought, I guess you could say, then we had action, then we had developed speech to describe our actions, and that became embedded in something like the Bible, we describe our moral development across time. And then money, we'd say, money is the tech layer on top of that.

It is the natural extension of speech and action that allows us to, as a mode of self-suffer and expression. So when we, and that's rooted in the logos, the logos defined as the word or ratio in Greek prices are exchange ratios denominated in money for again outsourcing this cognitive load to the market. It's the same. Concentration value. Yeah, price is in words. Like the, you could say prices are speech, It's the same. It's the same. It's the same. It's the same. It's the same. It's the same. It's the same.

It's the same. It's the same. It's the same. It's the same. It's the same. It's the same. It's the same. It's the same.

It's the same. It's the same. It's the same. It's the same. It's the same. It's the same. It's the same. It's the same.

It's the same. It's the same. It's the same. It's to corrupt words or prices, as communism did in the 20th century where central banking does to prices today, it destroys the generative principle of order in the world, which is individual sovereignty. So that's what Bitcoin is. It's just a tool that maximizes the freedom and the sovereignty of the individual, empowering them to be entrepreneurial, and then usher in a more wealthy and abundant world as a result. And maybe if I go ahead, if I tag on to that, I think you in your work, you came to the conclusion that free speech is paramount, but it's also dangerous, but it is good. And we would be saying that Bitcoin is free speech money and along the same lines, it is

very powerful and it can be dangerous, but it is also good. So the net benefit outweighs everything else. All right, that is a great place to end, guys. That's a nice natural place to end. GG, John, Richard, Robert. Thank you very much. I can't believe that our time is over. That flew by madly and that's exactly what I was hoping it would do.

So it was a pleasure talking to you guys. We'll do this again. And I really appreciate you taking the time to speak with me. And I hope everybody who's listening or watching found this engaging and useful. And I'll keep reading what you're doing and watching what you're doing. And we'll see how all this transpires. you