We Study Billionaires - The Investor’s Podcast Network - BTC140: Game Theory and Bitcoin w/ Scott Lindberg (Bitcoin Podcast)

Episode Date: July 26, 2023

One of the most important topics in Bitcoin is this idea of game theory and the mutually reinforcing incentives to keep the entire network balanced and beneficial to all participants. Preston Pysh and Scott Lindberg cover all sorts of interesting ideas around Bitcoin’s overall game theory on today's episode. IN THIS EPISODE, YOU’LL LEARN: 00:00 - Intro 02:30 - An overview of Game Theory. 12:53 - The critical difference between infinite and finite games. 23:21 - What Satoshi had to consider when designing Bitcoin from the start. 38:04 - What are some of Scott's favorite game theory aspects found in Bitcoin? 42:51 - How Scott designed a playable game around Bitcoin. 46:27 - The iteration process for designing games that are playable and balanced. 56:19 - How game designers account for skilled players playing a game with unskilled players. 01:03:28 - What Volatility does to a games design. BOOKS AND RESOURCES Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members. Hodl-Up Game. Scott's Company: Free Market Kids. Scott's book that accompanies the Hodl-up Game. Scott's Twitter. Scott's Nostr. Scott's Book Recommendation: The Infinite Game. Preston's Book Recommendation: The Characteristic of Games.   NEW TO THE SHOW? Check out our We Study Billionaires Starter Packs. Browse through all our episodes (complete with transcripts) here. Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Enjoy exclusive perks from our favorite Apps and Services. Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets. Learn how to better start, manage, and grow your business with the best business podcasts.     SPONSORS Support our free podcast by supporting our sponsors: River Toyota Range Rover Fundrise AT&T The Bitcoin Way USPS American Express Onramp SimpleMining Public Vacasa Shopify Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

You're listening to TIP. Hey, everyone. Welcome to this Wednesday's release of the Bitcoin Fundamentals podcast. So one of the most important topics in Bitcoin is this idea of game theory and the mutually reinforcing incentives to keep the entire network balanced and beneficial to all participants. Despite this paramount concept, I don't think I've ever dedicated an entire show to the idea of game theory.

And as a result, there's no better guess than Mr. Scott Lindbergh to come and cover the topic. Scott has an MBA from Yale, an undergrad and engineering from West Point, and is the founder of the company called Free Market Kids, which is a company dedicated to producing educational tabletop games for families to play. During the show, we cover all sorts of interesting ideas around Bitcoin's overall game theory and then tools that game designers use to balance control, skill, and time within a game. This is a really fun and interesting chat that you won't want to miss. that. Here's my chat with the thoughtful Scott Lindberg. You're listening to Bitcoin Fundamentals by the Investors Podcast Network. Now for your host, Preston Pish. Hey, everyone, welcome to the show. I'm here with Scott. Scott, we've been chatting for since May, really. That was when we first met. We didn't know each other. We played your game down in Miami. We hung out in Nashville last week at Bitcoin Park. What a pleasure. Welcome to the show. Thanks, Preston. Yeah, my pleasure. This is awesome.

It was interesting how we first met down in Miami because I just got, I was doing the thank God for Bitcoin conference. And I got a note from the organizers and they're like, hey, there's this guy. He's a West Pointer. And he built this game about Bitcoin. And he would really like for you to sit down and play it with him. And I was like, that's a new request. That's not a request I've seen before. This sounds really interesting. And we were able to meet up. And we're going to talk about. about the game near the middle or the end of the discussion. But Scott, the game was amazing. The game is so neat.

I honestly have no idea how you were able to piece it together to be able to simplify the game and make it all work. And just, I was very impressed to say the least. But bravo on all of that. Thanks, Preston. I mean a lot. Appreciate that. So we're going to talk game theory because the more that we've gotten to know each other,

the more I came to the quick realization that you are very intelligent and very smart in this particular area. And it's something that I don't think is covered that well in the Bitcoin space. I mean, people talk about it here and there, but we've never, I've never done a show where it was just about like this idea of game theory and how complex a lot of these ideas really are around game theory. Yeah, I think Preston, I disagree a little bit. I think it's more once you see the game theory.

you're going to see it everywhere. Like I hear it in your podcast. I hear it in others. And I actually think that what's fresh in my mind right now is I actually are experience in Nashville. And I'm still buzzing on that. Maybe it would be just to break the ice. Let me,

if I could give like a couple of examples from from that, like I'm just, if you were, in other words, if you were just a game theory guy and you were kind of sitting down watching this two day event in Nashville. You knew nothing about Bitcoin. What would be your, what your observations?

And there were two things that kind of came to mind. And these were, I wanted to share with you. One is that there are a couple tenants in game theory. And they're not super complex. We actually use them all the time. But you just kind of like more formally look at them. And one of those ideas is signaling. A boyfriend tells his girlfriend, hey, I love you.

That's a, that's a signal. But if he puts a tattoo on and says, Susie or whatever on his body, there's a different signal in there. Very much. Very, very different signal, Scott. Yeah. So, but if you take it's business, right, you get into auctions or pricing and imagine that there's, there's a Preston catalog and a Scott catalog and we sell the same type of

things. And I'm worried about what you're going to price it at. Maybe I put up meet the competition clause in there. So now I'm telling the customers, hey, don't switch, you know. go to me, but I can send a stronger message to you without colluding saying, listen, dude, if you come at me, I'm going to, like, this can be like mutually assured destruction. I'm going to have a beat the competition. Like, I don't even care about my margins. Like, I'm just, if you do this, I'm just assuring you mutually assured destruction on this.

So that's a signal. And Nashville, two days of intense lightning discussions, my thought is, like, this is like one of the most high signal events that I can think of. And the reason is like there's there's two parts that one of it is I continue to be blown away. It's I keep underestimating the amount of talent and like the amazing people that are drawn to this space. And I just, I mean, I can't, you know, we're not going to docks anybody. I know we got the chat and rules and that. But I'm just saying like it's pretty like mind blowing. And then on top of that.

So you have a lot of brain power there. And then you look at the attendees and you have 150, 200 people who are willing to shell out some money that they could have spent to invest in some stats. They are away from their family. And by the way, they're going to eat like crap. They're going to go eat some burgers and some fries and they're going to blow their diet and their exercise. And like, why would you pay those kind of costs? And there's something about like, well, it's worthwhile for me to hang out with these intense. and brainiacs on some subject, in this case, Lightning.

And I'm like, all right, as a game theory guy, there's something going on there. Like, there's materially something is moving here. And the second game theory observation that I had is, I think you could boil all of game theory back into like this one idea. Anytime you have more than two players, two entities, you basically have a game. And all you're doing is you're looking forward. And then you're kind of reasoning back and figuring out what should I do, right?

So if my looking forward ideas, I want Bitcoin adoption. I want everybody to get on the Bitcoin standard. And then I kind of reason back. And there's a lot of examples over those two days. The one that's really sticking out for me right now is comparing lightning with the internet. Because we all like, oh, lightning solves medium of exchange. We can scale. But, and I'm not a techie, so some techie can kind of backcheck me on this.

But like IP4, basically, if there's like a million ways of actually connecting to the internet, how is it that tens of millions or hundreds of millions of people think that they're on the internet? And the answer is in between, they're like, you have your providers. So maybe Verizon or Facebook or Google or whoever they have the connection, but you're kind of going through them, whatever that translation is that they're doing. They're providing the internet. And they're scaling.

And so when you look at FETI, the company, and. what they're doing with Fedemint. So like the way, and I've heard it a couple times, it's still kind of hard for me to just grasp the whole picture, but the sweet, it's like an operating system. And their operating system, you can put something on there that says, hey, this will connect you to Bitcoin. And this one will like, you know, I don't log into iOS or Windows to build a PowerPoint.

I open up PowerPoint, right? So how do I connect to Lightning? Well, I have a Lightning connection. And now they have e-cash. And so you have like this ability to, scale lightning. And I'm just kind of blown away, just from a game theory standpoint, to look that far ahead and saying, this is what we need for adoption, and to be able to back that up and say, what do we need to be working on right now? And then see all the talent that we just talked

about, like focused on these problems that I just never even would have thought about. And so the conclusion I would come to, if I knew nothing about Bitcoin, it's like, holy crap, like, get ready because there's something going on here. Number one, number two would be, we're not ready for like even as much progress has been made, we still have like these massive challenges like the scaling issue. And those are my thoughts. Like if you just try to think, okay, what is the use of this game theory idea and whatnot? It's looking forward to your reasoning back and you can do all kinds of fancier things with different tools on it. But in a nutshell, that's a couple of examples that I would use to help explain what we're talking about. Yeah, that helps a lot. And this idea,

of a person rationally looking into the future and then trying to position themselves today to have the most advantageous position as we progress in time, you look at Bitcoin's open network. And so just for people, a little bit of context. So like last week we were in Nashville, Bitcoin Park put off this lightning summit. There was, what do you think, Scott, like 200 people there? I think it was close to it. Yeah. We had like 200 people that came into town. And I mean, it was, it was some heavy hitters in the space, really kind of providing presentations on what they're doing on top of lightning, whether it's gaming or whatnot. And just being able to see Fetty was another example that was there. So using that framework of how do I position myself today for this potential future event that's coming, the thing that I keep going back to is this open network.

And you hear Jack Mahler's talk about this, the open network, how can anybody compete? with this idea of anybody in the world being able to build on top of this open network versus you look at the legacy financial rails and everything's closed. You have to ask for permission. You have to be in a privileged spot in order to do it. And when I'm looking at deducing whatever type of model you want to use when you're talking about game theory. And I know you can get into all these various models. You have some of them laid out here like the John Van Newman. You got super theoretical, you got simulations, and I mean, the list goes on and on and on. But when you really kind of like look at what's the one thing if we were going to deduce it down to, it's the idea

of open networks and good luck trying to compete against that on a global scale. What are your thoughts or what would be, what would you say in addition to that, Scott? No, I think you nailed it. I think the, you just, there's no way of competing with more minds working on something. The more people who, who are working on this, the better. And when you're in a closed environment, like you work at Microsoft or whatever, and you're in a little thing, you're going to develop whatever this program is that, that I'm told by like developers, like, they really hate it, right? It's cumbersome and can't do whatever. And yet, you know, you take Nostra, for example, in six months or less than a year or whatever, like all these people coming in.

And so I think you nailed it with that. But part of it also is it's almost like there's a couple things there. One is co-opetition, right? Because you're competing with other developers. And if you put your time in that, but you can't feed your family, like, you know, there's got to be something there. I think what it gets to is kind of the whole idea of Bitcoin is it's an idea bigger than ourselves. It's kind of like one of the things that I know we're going to get to in a little

in a moment, but it's why are people even in the space? Like what's attracting them? And look at like the Declaration of Independence. That's an idea that's going to go on forever. It's a much bigger idea. And I think that highly motivate, like if you're at Microsoft and you're saying, we're going to develop the next version of whatever, like, how tight are you to that? You know, compared to the massive amount of passion that people have for freedom, freedom tech, I don't see how you can compete with the motivation, the incentive to work on it. And I don't think you can compete with what you're talking about, where you're just, you're just leveraging the synergy of multiple people working on the same problems and working together.

They're not even comparable. The closed system will never be able to keep up with that open source. I think it's just a brilliant way of accelerating technology. I think it's just brilliant, actually. I know there's a lot more that we could go into on the introductory. in part, but you gave me a reading assignment on my way back from Nashville. I didn't come. A little risk there.

I didn't complete my assignment, but I got started on it. I'm probably halfway through, maybe 40% through. And I have to say, I really, really like this book. It's called The Infinite Game. It's by Simon Seneca. And you said that you think that this is a really important discussion point when we're talking about game theory. So I'm going to throw it over to you.

I agree with you after reading the first part of this book. I completely agree with you. And I think it's something that a lot of people don't realize that they're playing. They don't make the delineation between I'm playing a finite game versus an infinite game and why that's important. So I'll get into some of that with the audience so that they can understand this important concept. Yeah, that's perfect. Like the concept is this. And just so everybody knows, like he's, he doesn't even mention Bitcoin or hard money in this, in this book.

I personally found that this book really, really helps solidify the framework. Like, if you would divide up game theory about Bitcoin into three, like to the elephant in three bites, the first bite would be, while you've been talking about Bitcoin, what led to it. To me, the second big bite would be what is in Bitcoin. And that's kind of like how I developed the game and all the different layers of how it works. And then there's the bite number three, and that is the long-term incentives that are in play now with game theory with energy, with social media and freedom of speech, with education. Like, there's just so much there.

And I think this book addresses bite number one of why are we even talking about it? And if I were to put it into Bitcoin speak, what I would say is we talk about high time preference and low time preference, right? This is like absolute zero time preference. Like, if I'm looking out to infinity, like there's no winning because the game doesn't end. There's no like end of the quarter, end of the end of the year kind of metric like you would have in evaluating a company. You're looking a really long time. That's why like the Declaration of Independence, like it's timeless. Like you're, if all men are created equal, that's pretty significant.

Like that's a big long term type of thing. And so the book outlines a couple examples we could probably use to help with that. Like there's, I thought the Vietnam War example was pretty powerful. He had an example in there with Microsoft. I think they called it Zun. which was like the competitor or iPod. We could probably take those and then come back to what does it mean for money. And in my mind, what it does is it lines this up and it says, okay, well, if you take an infinite look at money, it's really an infinite game. And, you know, we've been, you know, for our lifetime, certainly,

but over 100 years, we've been playing with this, these kind of finite, but a finite playbook. And it doesn't end well when you play an infinite game with, a finite playbook. So, you know, Satoshi basically says that's not the game we're playing. We're actually playing this other game and I'm going to do a playbook that makes sense with how money works. So historically, like this isn't the first time that somebody or government has debased their money. It's taken us 100 years to get to where we're at. But it was kind of inevitable if you look at it with this kind of infinite mindset that we're going to get to where we are.

And what he does is he kind of breaks it down. You can apply this anywhere. I'll test you that if you apply it to yourself personally, it'll it'll humble you. Like if you apply this to your career, your kids' education, if you're running up business and you apply this, it's, it's very humbling. But here's an example. Like Vietnam, if you look at it from a finite mindset, you're basically saying, we're going to win all these battles. How do we have less casualties than the other side?

We're going to win the battles. Well, we decimated the other side. And if you want to look at casualties, it was like 58,000 lives lost for us. and 3 million lives lost for the Vietnamese. And it's staggering. And in terms of a percentage is even worse. As a percentage of their population, it would be as if the U.S. lost 27 million people.

And you're like, well, what happened? And basically is they weren't fighting a proxy war. Like, we're in this little finite mindset. They're in it, they don't want the Japanese there. They don't want the French there. They don't want the U.S. there. They don't care. They don't want imperialism.

like they're playing a different game and it doesn't end well obvious for for us. So the business example, there's a couple in there. There's also like Kodak. Kodak was the first to have a digital camera and then they delayed it. Well, if your metrics are your stock price, your earnings per share, your share of market, your growth, some other thing and we're going to beat the competition. Well, that means that's a finite mindset. And when you do that, it doesn't end well long term.

The other example, you have it was the Microsoft Zoom, which was competing with the iPod. And he had a, I guess he consulted both companies. And he basically, when he's talking to the executive of Apple and says, this Zoom thing is way better than your iPod, your iPod. And Microsoft was like, their strategy was to beat Apple. So that was her finite mindset. We're going to go beat Apple.

And Apple is like, yeah, it's a good product. Like their mentality was, we're going to go beat ourselves. Because long term, it's going to go up and down. Sometimes you're ahead. Sometimes we're ahead. And so coming back to Satoshi, he's he's looking at this thing says, okay, long-term money. Like, we're not playing the right game.

We're playing with these Fiat games, this kind of finite thing. And that's not the way to look at it. So to me, what the book does is it helps give a framework of the significance of Bitcoin and like why we're even talking about it. It just helps with a lot of different things with incentives and perspectives. And for me, like it's literally I went from, yeah, low time preference is great to holy crap. Now we're at zero time preference. And like, it just kind of helped me realize like how big of a deal.

This is so much bigger than ourselves. And that's the reason that I recommended the book. It's just a framework of why we're even talking about this. Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending three days in Oslo at the height of the summer. You've got long days of daylight, incredible food, floating saunas on the Oslo Fjord, and every conversation you have is with people who are actually shaping the future. That's what the Oslo Freedom Forum is.

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And I think for a person who's hearing all that and they're saying, okay, I kind of get the delineation. I think that quote on the on the back of the book is really the so what of this whole infinite versus finite games. And if Scott, read the quote for people so that they know what it is. and then from your own point of view, tell us your thoughts on why you think it's so profound. So the back is we can't choose the game. We can't choose the rules. We can only choose how we play. That's the quote you're assuming.

Yeah. Yeah, that's it. I mean, I just think that that's just so profound. I think that Bitcoin, when you think of it through that lens, it's Satoshi saying, like, we're in this infinite game. It's not like somebody can pin me to the wall and say, nope, this is how you're going to play the game no matter what. He's basically saying, you might think you can do that to me. But here's a whole different thing that I'm going to introduce. And I think the world's going to prefer to play according to these rules as opposed to your rules.

And there's nothing you can do to prevent people from playing by my set of rules. And the only reason that that's possible is because there's no end to the game. It's not like we're sitting down. playing your hoddle up game or playing monopoly or you name it. And we know that in 45 minutes, there's going to be a winner declared because this is the set of rules, which is the definition of a finite game. And this is just different. This is something, Steve, they gave a great example with Steve Balmer in the book. Like when he left Microsoft, I love this part. He leaves Microsoft, right? And at the end, he's like, because he was really upset that Apple had, because he had made the comment

that the Apple iPhone was going to take a sliver of market share, like, one or two percent, and it wasn't going to be a big deal, right? And right before he left, I think he left like one or two years after the iPhone was introduced. The numbers were like gangbusters beyond what he had predicted. And his comment was, well, in the last 15 years while I was running Microsoft, we made more money than any company in the entire planet. And Cynix's point in the book is he was playing a finite game. He was playing a game defined by his own set of rules that, like, the person who made the

most money at when he pulled the chalk line and said, this is the end of the game, is the winner. And he was basically declaring himself a winner. And the games just keeps on going, right? Like, he's not looking forward to where this is going. He's saying, well, this is my departure and I'm declaring I'm the winner, right? No, I think in that connection with what you're describing, too, is it actually gets to the, if you're Satoshi and it's 2008 and you just, you say, you know what, this isn't the right game or we have the wrong playbook. Well, Bitcoin doesn't exist yet.

And so that's like you're basically touching on how do you design the incentives, figure out the different players to design something that can take on this behemoth, this entrenched behemoth. that is our Fiat system. And you're going to have to have incentives that are self-reinforcing so that this thing can grow. So from a game theory standpoint, to think through that, never mind the programming, everything out, even when we can get into some of the, you know, when we get to the next stage here in the discussion, but it, that's incredible. Like it sets up, like, it actually sets it up and saying, okay, I don't want to play by those rules, but so what?

What are you going to do about it? Like, that's not. I mean, for me, just designing a game I find to be challenging. And that's just a simple little tabletop game. I mean, you're talking about like basically saying, I don't like the whole way. I don't like our Fiat playbook that we're playing with that. I'm going to change the rules. The magnitude of taking on that and saying, no, I'm going to, I'm going to develop this thing.

And I'm going to create the right incentives with my rulebook and my game. So when you play the Bitcoin playbook, it wins. Like getting, well, I can't say wins because I kind of go against that. But it is, it basically, it grows and is adopted. And then basically human flourishing is going to be the result. When you frame it that way, you quickly come to the realization that anybody who understands the magnitude of such mission statement or a problem statement that you cannot take that on in short order.

It has to be something that's drawn out at least a decade or more. in order for it to even have a shot, right? And so as we get into this next part of the discussion, and this is how brilliant Scott is. Scott and I sat down when we were in Nashville, and he's like, I would really like to just like reverse engineer what Satoshi must have been trying to think about, right, in order to design a game of epic proportions

to take on the whole global financial system. So you have all this list. This is amazing, the thought process that you went through on this. So lay it out for people, right? So, like, how can a person design a game that's going to last a decade or more in order to slow drip this thing into existence? All right. So, like, from a game theory standpoint, we got to keep in mind the tenant. We're going to look forward and reason back.

So we just established what we want to do. Another tenant that we haven't really discussed yet. And that is, yeah, so I was in military intelligence when I was in the Army. I wasn't in that long. And I get all the oxymoron jokes that. they come with that. So, but part of that is you have to, there's a tenant where you have to put yourself in somebody else's shoes to do a war gaming and then work backwards and work through and figure out like what should we do with our. And so think about this. It's something called like the

curse of knowledge. If you were playing chess for yourself, how do you play the other player? Like you can know yourself, unless you're, I guess you could be like, you've got some mental issues. Maybe you can be like Gallum or something. Or imagine playing poker, right? You're going to bluff yourself? Like, it just doesn't, like, it's not, not like necessarily easy to put yourself another shoe. That's why, like, that's the reason why a company would take an outsider to come in and say, you help us war game our strategy. It's precisely because they might bring up something that you haven't, you know, thought about. And so here's, here's where I kind of take those two themes, looking forward, reasoning back, and putting ourselves in somebody else's shoes. And that's where,

this is basically what I put in my book. And I'm going to try to do it in like five minutes. So it's 2008. It's, it's 2008. It's, 2008 and we're Satoshi. We've just gone through this big thing. We say we're playing a different game. We want to change it. And like, where the hell do you start? Well, one thing is you can't have,

you can't have this constant like debasement of the money. You can't have, you know, the Romans did it. Everybody's done it. Everybody's done it. So you have this thing called, I think it's called ethical erosion. You'll get to it at the end of the book. But basically it's kind of slippery slope and then eventually something's going to break. So in my mind, okay, the first thing is like, let's cap this thing.

And he could have capped it and said, I wanted to be like 2% like gold or I just want to like he just went absolute. Like eventually there will be no more Bitcoin. That's it. There's 21 million and it's a hard. It's a hard cat. But it actually brings up, okay, well, if I keep working backwards, I have an issue with this ethical erosion. Like we're constantly going to like no one's ever been able to do that. So why would I have confidence that a new set of rules is going to work?

And the conclusion that you get to is you have to do it decentralized. You can't do this with where I'm going to trust that some leader, some country, some banker, whatever it is, some something. You're like, okay, so that's great. Now we've got, we've got to have a hard cap and it has to be decentralized. Okay, that's two things that we have to work into our game. Well, decentralization from a networking standpoint, you get into this thing. Like the game theory, they just love to name everything.

There's the Prisoner's Dilemma and there's the, There's like tragedy of comments. Everything has like some silly little name to it. So the two generals problem or the Byzantine general's problem or the Byzantine fault tolerance. There's like all these different variations of things. Essentially what he did is he said, okay, if we're going to be decentralized, then the solution is proof of work. This is kind of mind blowing in a number of ways. And so for anyone interested in understanding that, I didn't make that up.

That actually comes from the book of Satoshi, Phil Champagne. I think is the author. And he actually collects a lot of the messages that Satoshi sent. So it's this white paper plus all this other correspondence. And he actually says the solution to the two generals problem is proof of work, which has all these implications like with what we're talking about with mining incentives and energy producers versus consumers and all these. It has in the physical world connected to the digital world,

there's so many implications to that. But in the context of kind of reasoning backwards, it's like, okay, we need a hard market. Like our hard cap, $21 million, has to be decentralized. So we have to have proof of work. Got it. Now what? Like, how do you get this thing out there? And you're looking at like adoption curves.

You got like your innovators, your early adopters, your late adopters. You have kind of like the classic S curves. And you're going to want to reward people early. So now your question is like, well, how do I take this $21 million and put it out there? Do I just make all of it once? Like I say, here it is. Do I follow the gold method and say, I want it one and a half? half, two percent a year for however long it takes to get it all out. But if you, if you, like,

talking about game theory, I want to incentivize and reward the early adopters. So I want to have really big rewards up front. But eventually I have to get to zero. Well, so where you end up with this, this reasoning is, is what he has with the headings. You have the issue in schedule. All right. So now we're in our journey. We have a hard cap. We're decentralized. We have proof of work. and we have this issue and schedule and halvings. And then you could even get into the incentive structure after that they're all done with the transaction fees. That's a whole other.

And I think that's one of the most miraculous things that he, she, them would have had to think through is, all right. So like clearly I've got an incentive to push this out. But then like how in the world can I possibly keep some type of incentive flowing as those coins are already issued and still have a hard cap. That's the part that I think is somewhat miraculous, the thing thing. So what it is, it's like an ecosystem. You have like layers of systems.

You have like games within games on this thing. And the last one that I'll mention just to kind of round this out is you have a lot of things. You don't have like a central body there that's going to be able to respond to things. For example, never mind like someone like China, like some policy to ban banning or mining. Just the fact that technology like Moore's law, if every 18 months, the efficiency see of chips is doubling and has been. How in the world do I make sure that everybody sticks to this issuance schedule that I just spend all this time thinking about? And where you end up

with is like, well, I need some kind of, I need like a governor for this, this issuance engine that I have here. Now you end up with a difficulty adjustment. And I'm like, okay, well, holy crap. So now, like, now I need to have a hard cap. It has to be decentralized. I have to have proof of work. It has to have havings. And I need this throttle. I need the governor on this thing. And that's your difficulty adjustment. And you just take it. So to me, that's what I tried to, when I say, let's look forward, reason back and put ourselves in somebody else's shoes. In this case, let's put ourselves like it's 2008. You're Satoshi. And you're saying, how do you crack this thing? You got to, and you hit on it earlier.

Like to think through all the incentives on this, I just, the more I studied it, the more I just, like I wanted to keep telling my wife about it. This is where like I started like had to build a game because my wife was like, I don't really care about your little abstract ideas at first. And this is mind blowing how he put these pieces together. And he didn't like he didn't create shot 256. He didn't create like the thing. He just assembled these things in a way that you could have a game that had rules and no rulers.

And this is phenomenal. It's just phenomenal. When I look at when I look at the original design and they're not being any, type of immediate settlement features in the design. It's very clear to me, but I think others would argue because of maybe the naming convention in the original white paper with cash and things like that being used, that he was going after store value. He was going after a solution to peg global currencies from the basement. And if that means that transactions don't settle for 10 minutes will so be it, because I mean, that was the design was 10 minutes. And he's being as intelligent.

as this person was, they clearly know people aren't going to sit at a coffee shop or wherever for 10 minutes waiting for settlement. And so I think when he was really designing this, it was just all about solving this settlement between large entities. I'm curious if you would agree. I'm assuming you do. Yeah, I do. It actually brings up a point that I kind of skipped.

When you say you have the, you pick your amount, you pick your 21 million, you pick how you want to go out. But another key part of that is understanding the timeline, like what you're talking about. And you have to think through, how long does it take to build up? Let's go back to like the Feddy example. If there are a billion dollars of payments on Lightning today, but $40 trillion a credit card payments a year, like it takes time to do this. So he had to understand, or she, them, whoever, when laying out, like, why go all the way out to $21.40? Like, I mean, to have this thing, and I, my suspicion is that is he understood that this was going to take time to build these other layers.

He understood the internet. He understood the internet was built on layers. My guess is that the reason that this is going to take so long is because he knew he wasn't solving for medium of exchange. It was a store value, like you said. And that was the first part of it. But he had to give enough time for people to work on all these things. things, you know, if it was ever going to succeed. And if, you know, if adoption happened too fast, like when the, was it WikiLeaks, I think it was WikiLeaks, he actually like said, it's

really. Yeah. Slow down. Slow down. And I think the reason is what you're hitting on there is it's intentionally long because this is not, again, infinite gain, right? He's not looking at, this has to be implemented in a year or five years or whatever. He's saying, I want this implemented. Like, I want this to be implemented. And. And he's not, you know, he's like, yeah, there's going to be other things that have to be developed. How do I make sure they have time to develop those things so that this can succeed? It's like he must have understood that it was going to take, it was going to take time. You had to have a really low time preference on this thing to put these pieces together.

Otherwise, it would go too early and it wouldn't work. Of all those design specs that you just went through, like at a very generic level, which one are you most impressed with and why? Because I know what the, I suspect I know what the general consensus is, but I'm curious to hear your point of view as a game designer. So it's kind of jumping ahead to the next one. The one that I'm still trying to like really grasp this,

and that is this whole connection between I've linked the physical world to the digital world. I think there's a handful of deep thinkers out there that they get it, like a Michael Saylor. You know, there's like there's a handful of first principle people I think they get it. Like I'm just trying to, like the whole idea, for example, of what's going on with Alex's work with like IMF and World Bank and kind of debunking these ideas that we've been basically following with the kind of Fiat playbook. And the incentives that you set up with with energy to go and find stranded energy, low cost energy and a link between energy and human flourish. now you get into like fossil future.

That's where all these other things to me, like I think are pretty, I'm amazed. This to me is like designing Frankenstein or something. He had his design the nervous system, the muscle system, the skeletal system. He had to design everything so it all worked together. The one that I would highlight is, and I'm still like I'm, I still have to do a lot of learning in this, in this regard. It's just understanding the implications of proof of work. That to me is that's kind of where I come down.

I'm not sure where you come down, but that's where my head is. I agree with you. I think that that's, I mean, there's a reason none of this proof of stake stuff, anybody who understands how profound proof of work is, as soon as they hear something is like Ethereum moved to a proof of stake model, any Bitcoiner that really understands why it works was like, oh, well, they're done. Right? Like immediately that's not going to work long term because your incentives are now dislocated

from physical reality. I know I did a conversation with Jason Lowry on, and Michael on that particular point. I think it was like episode 99, 98, somewhere in that range. And they do such a great job of highlighting the nuances of that particular point. The other thing that I would just add on to that is you called it the governor or the difficulty adjustment. I think it's just so important.

And it really goes to whoever this person was that designed this had to have understood Moore's law. and the impact that Moore's law was going to have on this 10 years into the future. And they would have had to have played that out and come up with that solution in order to ensure that the game doesn't become lopsided after four years of play. Right. It's just mind-blowing. It is mind-blowing. I agree with you. That it's kind of fun because, too, like I said when we get to it, we get to the game design. Like, how do you teach that to others that is significant? I was like, I have to have this in the game. But I know that some people are just going to hate it.

Let's talk about the game a little bit. So I get just so people can kind of hear from as a player's point of view. So I go down there. He has the board set up. How many people were playing, Scott? It was like five or six. Foss was supposed to come over. Remember, he kind of dissed us.

And Foss. What are you doing, man? So I sit down at the board. It was really neat. there was this blockchain that was going in the middle of the board. And you can see the Bitcoin that all add up to $21 million. And there's a bunch of Bitcoin on the first set of blocks. And then there's half as much on the next set of blocks.

And then there's half of that as you like play the game. And then you had cards. And you're basically sending your mining blocks. You're highly incentivized to try to mine the blocks early on because there's more Bitcoin. But then you're also sending transactions to, to the other players and you're reordering these transactions and you're able to earn fees through, I mean, the whole game was just so brilliantly put together. And while I'm playing it, the main thing I kept thinking, Scott, is like, how in the world

did this dude deduce this really complex, obscenely complex thing into a playable game that I took the game with me down? and I think it was over the holiday. Right after the Bitcoin conference in May, we went down to my parents' house. So I took the game with me. I taught my son. He picked it up immediately. He's really young, right?

Like, he picked it up immediately and was having a blast playing it. We're like sending transactions. And even my parents, like, my mother knows nothing about this stuff. She enjoyed it. Walk us through, I guess, you sitting down and like trying to make this play. How long does it? it take you to design this, first of all, because there's no way you did this quickly. At the time, I had a Fiat job, and it was two years of the design and back and forth and

playtesting. My brother is not a big corner, but he loves games. We go to a game conference every year. And my oldest son is also not a bickowner, but he's a good gamer. And I would, I would try to go learn something. And I wanted to stick, I wanted to eat those to be true to Bitcoin, right? And I also, you know, this was also helping me communicate with my wife because she, you know, at this point, wasn't Bitcoin her yet. And I originally started with like Majon tiles. I had these things laid out with stickers on them. I'm like, here's what's going on. And it just kind of, I just kept iterating. So one, I love, I love games. I kind of geek out on that. And I'm stubborn. So like, I'm just, I'm like, I'm just going to keep doing this. You know, I have some other

motivations that I can just throw in real quick before we get to some of that breakdown. So it's interesting you brought up your mom. So like I played cribbage with my grandfather and then still play with my dad and especially my sons, but our kids can play with my dad and my old son just got engaged and I have this vision that when he has kids, we'll play too. So like it's, it's this idea that right now, look how much time we spend on the screens, especially the kids. and I don't like that we're missing the human touch. We're missing the fellowship side of this. The COVID thing is just freaking crazy, right?

When I was thinking about the game, I want something that can go across ages so that whether it's your kids and grandkids or whoever it is, that it's playable for everybody. And that means it's not everybody who's going to sit down for a five-hour game. My wife and I tried to teach her kid, but we did. We forced them to use cash flow. I don't know if you know that Kiyosaki game.

Yeah. Really good for teaching financial statements, but we had to bribe them with snacks and threaten them. And like it wasn't fun. And so like for me, what I'm looking for is I want something that you can sit down in 45 minutes-ish, depending maybe an hour, depending on how much you're talking. You have your favorite chips and your drinks or whatever. And anybody across any age or background, even if you don't know anything about Bitcoin

this case, you can still sit down and spend time to get. other. So that, that to me, like, is the first thing out of mind is I want, I want opportunities for fellowship. And then the fun part of it is, and this is where the play testing came in, is I don't want to be like cash flow. Like, I like the game because it helped teach, but it wasn't fun. Like, there wasn't a replayability fun factor in it. It was a pure education tool. You know, here's this Bitcoin thing. All these epiphany is like dopamine hit after dopamine hit. Every time you learn something new, you're like, oh my God. And then you'd like, you know, you want to share that.

And it's just so overwhelming. So I want to be true to that. And I have to simplify it to keep it to 45 minutes. But what is essential to keep in there? For example, when I first plate tested it with my brother, you know, we had this thing where you could take anybody's Bitcoin and move it. And I go, we can't do that because I'm never going to sign a transaction. It just says, here's your Bitcoin.

And he's like, well, your game sucks. Because you're, whoever gets the first few blocks in the first epoch is going to, like, they're done. There's no point in play. And I go, but you can't take it. So we're this, this went, this was the hardest part of the game to develop. It was harder than the difficulty adjustment. And it was basically like, well, I'll split it up.

I'll tell you what. You got this hot and cold side now. And just real fast, he's, he's saying the difficulty adjustment in his game. That's what he's referring to. Yeah, yeah. I don't want people to think that you're saying it's harder than the actual Bitcoin. Keep going. Sorry.

No, no, no, good point. Yeah, I'm in the game land right now. And so your original question was kind of, how do you? you start to develop this? Well, it's got to be true to the ethos, but I want it to be playable in a short amount of time. I want it to be fun. I want the fell. I want all that in there. And being true to the ethos, that was one of the hardest parts of it. And what it led to was, okay, in the game now, for those that haven't played, there's a, when you first mine the transactions or the Bitcoin, you add them to the time chain, the reward goes to your wallet, which is just a

card. But the card split into a hot and cold side. I can attack you as long as your Bitcoin's in the hot side. I actually try not to tease you about the sim swap, but I think I put these different, I put different threats that I had. I think it was a fishing scam, swim swap, and like stolen keys, I think. But then half the other, the other sides of the die where you moved it to cold storage, you could protect yourself. And what's funny about all this is this, this was the hardest part to develop. But there was an influencer we met like in Miami, and he took the game home. And I guess it was like his five and seven-year-olds. And he said, they just kept on playing on their own. and he hears from the other room,

one of the kids telling the other, his brother, you better get your Bitcoin in cold storage. And you're like, making awesome. That's exactly how my son plays it too. So like mine was there in the hot wallet and I'm like buying rigs and like doing all this.

My son, man, the second he had a chance to put it in cold storage, like every turn, it was like boom, boom, boom. Like it was all in cold. Yeah, that's just how. Yeah. So if you learn,

I mean, that's the thing too. So you play with someone who doesn't know. It's like a bridge. You play with someone who doesn't know anything about Bitcoin. You just shut up and play. At the end of that, they're going to associate cold storage with safety.

Yeah. So maybe this can help, I don't know. Maybe we help someone not get rugged later. I don't know. I don't know. Maybe that's a bridge too far. But I mean,

when you think, well, and the other thing is kids will pick it up faster than the adults, just in general. I would agree with that with my personal experience on it. Like my son just like, it was crazy, how fast they would just,

I mean, yeah, it's awesome. And how fast they recognize the incentives too. So he's like looking at the board, he's seeing like all this Bitcoin like at the start on the early blocks. And he's like, oh, I got to get all that. So he's just like playing to meanwhile like some of the older folks that I've played it with. They're just kind of like trying to wrap their head around like all the whole like almost like they're overthinking the incentives. Right.

Yeah. I've had that feedback that it was a, even for people who have been in Bitcoin for a while, It's very, the halvings are in your face. Like they're like literally, you can see it on the board. They're like literally in your face. You can't like, it's part of your strategy to win the game. I kind of like that, especially if I'm talking to like to my wife now because she's a Bitcoiner now.

But when I went to her, she doesn't learn the way I learned. I'm like, oh, I'm going to go listen to podcasts and read books and do whatever. That's not how she takes in information. So there's like being able to visually see something like a having, even though it's not, yeah, It's not a, you know, you can't do it literally in four years. You've got 45 minutes. So how do you get that point across? Well, okay, well, you visually can see it.

Your rewards are getting cut in half and then they're going to get cut in half again. So think about what you want to do. So that was the only hard part about that was trying to figure out how to get 21 million into a nice, evenly divisible number. Yeah, yeah, with your tokens. I can't have, you know, I can't 21 would be too small a number of tokens in a game, but I can't have a million, right? So, like, you're, like, trying to find the balance and have the halvings and, like, meet all those things.

That took, you know, I had all kinds of variations in the spreadsheet trying to figure that out. But the end result is now you can see it visually, and it's kind of fun to watch people's reaction. Let's take a quick break and hear from today's sponsors. No, it's not your imagination. Risk and regulation are ramping up, and customers now expect proof of security just to do business. That's why VANTA is a game changer. VANTA automates your compliance process and brings compliance, risk, and customer trust together on one AI-powered platform. So whether you're prepping for a SOC 2 or running an enterprise GRC program, VANTA keeps you secure and keeps your deals moving.

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2025. Carefully consider the investment material before investing, including objectives, risks, charges, and expenses. This and other information can be found in the income funds prospectus at fundrise.com slash income. This is a paid advertisement. All right. Back to the show. The thing that I really have an appreciation for with it is the game arc and the how the game collapses at the end and how it slowly builds in the beginning. And then you have this gameplay kind of in the middle, which is it might sound really simple for somebody that sits down and plays a game and they're like, oh yeah, that's how all games go. But they don't realize how insanely difficult that is to organize and design so that. And the other thing that I think is really difficult is making sure

that the game ends at like 45 minutes or whatever time that you're trying to design around because you don't want some game that goes four hours because people will never finish it. Talk to us about some of those dynamics as you were playing it because I'm sure like the game at the one year mark had all these flaws and things that like made it not fun to play at certain points. You're like, okay, so like how in the world do I design around that? Talk to us a little bit about these ideas. Yeah, I wish it was, I mean, I love the, I know you're talking about the arc and it worked out, but the way I got there was less of me coming up with this great insight and saying, I want to implement this. And it was much more of, I mean, I'm the Midwest guy. So you can't,

you can't steer a parked truck, right? You got to, you got to be moving. And so the play testing and trying out all these different things. It was literally, I mean, it was sort of like, I'm just going to like, you know, it's Edison with all his light bulbs. I'm just going to try every element I can figure out. And maybe one of these things does something different, right? And I just kept on trying. And some of them didn't work and go, okay, well, we won't do that. I wish I could tell you I had some kind of like wonderful insight with the design on that. It was literally just what we described.

It was just constantly being willing to. And that's where I'm really grateful because like I had people who are willing to play with me. It takes a lot to play test a game. Like you got to, you have to be a really, you have to be a very patient person to sit down and play test with a, it takes a special thing. You got to have good friends. You got to have good friends. Yes. How about this idea?

One of the things that I've read on game theory is just some games are designed for highly skilled players to evolve over time. Chess is a great example of this. So if I play that a lot and I'm playing against somebody who's new, I'm just going to annihilate them. Then you have other games like shoots and ladders, for example, where you spin the wheel. And I mean, it's just total lacquer wins. Like, you really don't need any type of skill whatsoever. And when you look at how a game designer can kind of really balance this skill aspect, the idea of indeterminacy or variance, call it a dice.

So if we were going to play chess and I was going to, and let's say you're a phenomenal chess player and I'm a beginner, we could introduce maybe a dice roll that after every time you play, you could roll a dice. And if it's an even number, you have to skip a turn. And if it's an odd number, well, then you play it as normal. And by introducing this variance in the game and handicapping your ability to play every turn, all of the sudden, even though I'm very bad at chess, the game just got really interesting. And we're now kind of at a competitive position.

So my question is really kind of twofold. How did you introduce this variance into the game in order to make it more playable between, really great players and beginners. And then how do you think through this idea of variance with respect to Bitcoin itself when we look at everything that's evolved over the past decade? Yeah, absolutely. So from a game perspective, like to me, if you go to game conference, they'll have like entire like entire halls of people doing a Caton competition.

Right. And what you have there is so chess, zero chance, man. it's like you have to build up your skills. That's it versus the other games like you talk about just like pure chance. And what I wanted, what I think is enjoyable in a game is I want someone to have a lot of options. I just think anytime I can add another option in there, that it adds something to it. So in the game we're talking about, do you want to buy more mining rigs and increase your hash power? Well, there's an opportunity cost of that because if it's the last block of the epoch, your opponent might get that.

or your son's strategy of going to cold storage early. Some people just have that and they just go. Some people buy all these rigs and they want their hash power to go up. So I like that there's a lot of, I want to give as many options to the players that they feel like they can actually have a strategy and they can go actually. But I really like games like Catan that kind of shakes it up. So even if you play against, like say you're an experienced player,

I still have a chance against you because there's some element. I like games that have some element entropy in there that kind of shakes it up a bit. And it actually works perfectly with Bitcoin. So I name the cards. I call them the decks, the non's cards. Like if you think about what's really going on with mining, right, that's real Bitcoin. Like, I mean, the whole reason it's proof of work is you can't just engineer it backwards and know what the block is.

You're going to have to keep on trying and try and trying. So for me, the way that I introduced it, it helped with two things. One, it added like what I wanted for the game to have some element of entropy to it. But it gives a whole bunch of opportunities to talk about how important entropy is. Anything from seed phrases to the nonce in mining, the connection to Bitcoin, like entropy is, and generally, you know, where humans are not good at it, like, if you just want to come up with your own seed phrase, like someone's probably going to figure it out. And so the connection there is like those two things.

the mining and seed phrases, I think, are what come to mind that if someone actually was interested in learning more about Bitcoin, that's what I would, you know, I say, because the cold, the hot cold storage like that, I mean, no one's going to really, if you, if you had your life savings at Bitcoin, you're not going to like keep it on the hot wallet. There's no way, right? So that's not, yeah, that element of chance was only to handle that particular gameplay. Yeah, yeah. Hards themselves are meant to be, like, the reason that you can't just do it. what you want is you're taking a chance.

You have to say, I have a one and a three chance that if I draw this card, this will happen. Or I have a 50% chance of getting that. Like there's all these like chances built into the distribution of the different decks. And then you have like the constantly changing difficulty dial too. So you're trying to, it might work now, but it might not work. But it comes around to your turn again because something else happened with another, another player. So it's both playable. It makes it better by having a little bit of entropy in there.

and it's perfect for all kinds of Bitcoin discussions. And something else that I just want to highlight. One of the things that I've realized with the game is the timeline is really consistent relative to other games that I've played. It seems to end in a very consistent manner. And my opinion on why, and you can correct me if you have a different opinion because it's your game, but my opinion why is there's actually a difficulty adjustment in this game. So as blocks are getting mined, you're constantly adjusting this after each turn, each player's turn. You're adjusting this difficulty wheel that either speeds up or slows down the game as you're mining all the blocks on the table, which is really nice because when you sit down to play the game, you know that you're pretty much done at like 45 minutes after you start.

It's pretty awesome. I appreciate that. Yeah. The only time I've seen it different than that is it depends on who you're playing with. I'm playing with Bitcoin. They're competitive. They want to put real sets in there and make all kinds of jokes and whatever else. And then sometimes you play with people who just, they're new to it.

They want to pair up with somebody. They're a little intimidated by all the different elements of it. And they'll overthink it. And so they can sit there. And if you have someone that's going to take five minutes a turn, like I don't know, maybe get a time route or something. But I've tried to kind of look for what you're talking about. And I just don't know yet.

I don't know if it's changing that much or not. I mean, it's funny because some games, the difficulty will go way the heck down. People really are mining. And then there's other ones where everybody's just going to cold storage that things maxed out. And like there's nothing stopping anybody other than the fact that they're just deciding to do that instead of mine. So I, that's an interesting thing. I think I'll have to look for that as I go forward.

I just did it because I wanted it in the game. I want, I like that element. I like that like the mechanism that it creates. I don't know. One other comment I tell you, like, as we're playing the game and like the difficulty adjustment, Like my mother, she looked over at me when we're playing it as a family. And she's like, so is Bitcoin actually do this? And I was like, yes, it does.

And so like there was these nuances in the game that were really subtle that you put in there. But they sparked these discussion points. And it really helped them understand and like just like the halvings that were happening. Like all that kind of stuff just like really solidified some of these like core principles in the game. One of the things I wanted to bring up in reference to the variance. and volatility as it relates to the actual Bitcoin itself. A comment that I hear all the time from people is how in the world are normies or just people off the street front running Wall Street?

How is it that the Wall Street elite haven't figured this thing out after a decade? And my comment really goes to this idea of variance where you're getting the most skilled experts in the world are being pit up against everyday people. And the game is really competitive because of the variance that you're seeing through just the price action alone. I mean, you're dealing with something that has 70, 80 percent annual volatility. For the professional investors, they're looking at that. Like, I can't touch that thing. And if I do, it's going to be with such a small portion of my position size because it has so much volatility. And then you have these players to the game that aren't from Wall Street, but they're looking at it from

just a different lens. Maybe they're looking at it from game theory. Maybe they're looking at it from the mining side of the house because they come out of energy or whatever it is. And you're really kind of exercising this point where variance in the game itself is allowing this competition to really take place between like the extreme experts in finance and people that have no experience in finance. It's just really fascinating. I mean, we don't know what a real free market is just because of how controlled it's been, right? I know that this is a team that's been echoed in a lot of different, you know, conversations. So, you know, I actually, I think it's actually good to see that.

I think with the folks that are in the traditional finance world, my thought while you're asking that or making that comment is look at what they ask what game are they playing. They're playing a finite game. That finite game has rewarded them very well. I mean, if you've been a banker for some number of years, you're probably a millionaire. Like, there's no, like the, what are your incentives to switch? Well, it looks highly volatile. It's different than what I've done in the past. And I'm making a boatload doing this thing.

Why would I, why would I change when I'm doing for that? Whereas the people who are attracted to it, like the talent that you have coming to it, if you're, that Bitcoin attracts people for all their different reasons. And, you know, you go through that. the unbanked versus, you know, the people were just passionate about freedom, and whatever it is. And I think it's, you just ask the question, what game are they playing? They're playing a finite game.

What are their incentives? Well, their incentives have rewarded them handsomely for playing that. Why change now? And so to me, it's, yeah, I guess there's a, the other thing, too, is that you probably have some closet ones that are, maybe they're probably, maybe they're doing it on the side on their own, they're not telling anybody because, oh, I think you definitely have that. I'm going to do it on. aside, we wouldn't be able to see it. That's like dark matter in the space. Like you wouldn't,

you won't know that right now. But I would, you know, if we had perfect information, I would bet you that some of them are are getting it. But because they live in their Fiat world, but their finite rules set in their framework, that's the framework that they're living by. Like, why would they publicly tell anybody that they're hedging their bets over here? So even if they did get it, they wouldn't tell us. So that's to be, amen. Yeah,

that's right. That's right. And I think that's where I, that's why I really admire Michael Sailor is because he could be totally playing that game. And I've heard through rumor mills that there's people of a similar net worth that are playing the game of, I'm not going to tell anybody.

I'm just going to continue to try to amass as much of this stuff as humanly possible. But I, I really admire Michael going out and really trying to educate the world. and there's, in my opinion, no better educator that can actually define this stuff in such clear and concise and from an engineering standpoint. It's quite impressive to see how much he's really kind of stick his neck out there because he could be attacked through regulatory or policy because he's a publicly traded company and anybody else out there that's doing it from an education standpoint that have a lot

to lose at the same time, but doing it because they feel like it's kind of their duty to the world to help educate. But you meant to that. It goes back to if you have an infinite mindset and this, this is something bigger than yourself. Yeah. Yeah. What would you do?

Well, if they exemplify it, you would want to submit it. You would want to communicate what you learned to others. And, you know, that expression about we'll all hang together like going back to the Declaration of Independence. Like, stick your neck out. I think it's admirable. Yeah. I think it's admirable.

And I think it goes back to the first part. of our discussion. Why are we even talking about Bitcoin? Well, because we're playing a different, we're in a game and these are people who recognize it. And for them, that cause bigger than themselves is going to lead to decisions about what they do to help others. I mean, I don't, I don't know them personally. I'm speculating. But it seems to me that they, when I listen to them speak and then I interviewed, that's what I hear. Like, they get that this is significant. This is a, this is a major shift. There's a major opportunity for like the human flourishing.

Like, this is a big deal. And they want to do their part to help it. That's what I hear when I listen to those, those guys. So, Scott, I want you to recommend resources to folks if they want to learn more about game theory. I'm just going to hold up one of my favorite books. And I know you read this because I recommended it to you in Miami. This is awesome. This book is called The Characteristics of Games.

Richard Garfield, who's the creator of magic. The Gathering is supposedly one of the most complex and sophisticated, smart, intelligent games that's ever been created. He's one of the co-authors in this book, which is one of the reasons why I got it and read it, and it is phenomenal. This book is phenomenal. You have some book recommendations. Go ahead and provide those, Scott.

Yeah, absolutely. And so this will depend on what your interest is. If you're just getting started in all this, the thing that helped me with the framework was price of tomorrow. I think that is a good way of kind of setting the framework. And then also on that same vein, the infinite game by Simon Sinek that we mentioned early to just understand like what, like why is this even significant? That's where I would start there. If you want to go deeper on the Bitcoin game theory, I would go, I actually have them here. I should just hold them up. All right. So that's the first one we were just talking about. Yeah. If you want to go deep on

Bitcoin itself, what I found to be very helpful was the book of Satoshi. Yes. This one, really good. You can go through it. And even if you don't understand all the technical stuff, like, you can pick out the big themes on there, like the two generals problem leading to proof of work as an example. I thought that was pretty good. And then the idea of game theory itself is interesting. This is the one.

I read a couple books recently. This is the one that I think I would, if I had just pick one to start, with Art of Strategy, I think it's a Dixit and Nail Buff. Those would be the, those four books, they'll kind of, you'll understand everything we just talked about if you listen to those four books or read those four books. For people listening. Scott's game is phenomenal. I find it is just a, not only is it this amazing educational tool for family members or

whatever, you get the kids out of the iPads, you have this social. interaction that Scott briefly talked about. Scott, you have two versions of the game, correct? We do. So the low time. So I built the game. The first version is the watch version the way I would want it as a gamer. So we call it the low time preference version. All right. That's the high end one. And then which has like the nice pieces like you would get in a standard. People have to realize when they go to look at the site or whatever. Like you've purchased these in low volume. So the prices are going to reflect that a little bit. It's not like he's making this 10 million copies in every toy store in the country.

But so keep going. I'm sorry. I, no, no, you're dead on. I can just do my sales guy. I think you're doing better.

The other game, though, is so like we had the opportunity, for example, to like talk about some folks from me premiered Bitcoin in Miami. And then we, we actually do want to advance Bitcoin education on this. And just because I'm a geek and I like these.

high-end games, right? That may not be the right thing. So we developed, we call it our school edition. And this would be, so you have cardboard pieces instead of the plastic pieces, for example. It's the same game, same rules. It's just, it's more equivalent to what, if you went to like a Walmart and you picked off a shelf on a game there, it's at that quality level. So you have the high quality original, which on the website is just labeled Deluxe.

And then you have this other one, same game. So especially if you're going to be playing with younger kids or something, maybe you just want the school edition. The book we sell separately, because I realize most people, they don't care about all that. But I basically just said, here's all the things that help me. It bumps them into a book. Here's all my notes. And then so you'll see a book on the website too that's basically teaching through games is what I labeled it. So for those that, you know, maybe you don't have a meetup close to you or you don't have a family member who already knows Bitcoin.

then it's that's for you because you can just pick it up and go I want to learn about this and I'll point you to where I started and you can just take it whichever way, choose your own adventure kind of style. We're going to have links in the show notes to the game to the book that accompanies the game all the other books that we mentioned during the show. Scott, this was such a pleasure. It's been such a pleasure getting to know you and hang out time to time and just yeah, great job. And this is such a cool topic. I really appreciate you coming on.

Well, thank you, President. Can I just have one thing before? Yeah, yeah. I have to publicly say thank you to you. The whole reason that I got in Bitcoin was going back to when I first started, was listening to you and Stig and you're like, what's this Bitcoin thing? Is anybody looking at this Bitcoin thing? And then I don't know, from there, it led to books and other things. And like, I wouldn't, like, none of this would have happened if that hadn't. So I just wanted to say public shout out. Thank you for what happened for everybody. For me personally, it's it's an honor to talk to you because you're the voice in my ears that was like this is a Bitcoin thing.

This is a Bitcoin thing. I don't know. So I just wanted to get that out there. Thank you. You're way too kind, sir. Thank you. Well, this was a blast. And I'm sure we're going to be in contact much more here in the future, Scott.

So thanks for coming on. All right. Thanks, Preston. If you guys enjoyed this conversation, be sure to follow the show on whatever podcast application you use. Just search for We Study Billionaires. The Bitcoin-specific shows come out every Wednesday, and I'd love to have you as a regular listener.

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