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  • when most people think of Bitcoin, they think of the complete opposite of hard money.

  • They would probably think hard money is gold.

  • Or honestly max they'd probably think hard money is dollar us $100 bills.

  • When in fact you would probably tell them that is slowly depreciating to nothing especially as more money is printed.

  • But how would you convince, you know my my I would say my grandma but my grandma passed away, my aunt in Denver colorado That the Bitcoin is something that could really be a game changer for her life if she invested in it.

  • Right well there's you know there's three forms of money really.

  • There's still have money like $100 bills, there's gold and then there's Bitcoin.

  • So the fiat money I think we can easily appreciate is just paper, there's nothing that backs it according to the new york times paul Krugman is the economist over there.

  • It wouldn't ask this question about what backs the U.

  • S.

  • Dollar.

  • He says well men with guns.

  • Okay so if if there wasn't the US army that there was no pentagon forcing people to take the dollar into countries around the world like Iraq Iran Venezuela ever you know um it would have no value in other words that the U.

  • S.

  • Foreign policy is accept our dollars or we send in the marines right?

  • It's just there's no and and we know now printing trillions and trillions and trillions of them and they can print $6 trillion in three weeks obviously that doesn't have any any value.

  • It's interesting that the amount of taxes collected in America last year in total were roughly $3.5 trillion.

  • And um the Fed printed over six trillion in a day.

  • Right?

  • So the question becomes why do we even pay taxes if you can just print trillions of like that?

  • Why why even why are you bothering me for taxes?

  • What's the point point is that they don't need people's taxes.

  • They don't need people to work when they can just print for themselves as they do.

  • So I think the case against fiat is pretty clear and understandable.

  • The case for gold.

  • You know gold has, it's been around for thousands of years and you know why did gold become the store of value and the medium of exchange that it is over the 1000 years because it has great um store of value in that if I get paid goal today that gold I can put it, I can use it to buy something tomorrow Or next year or five years from now.

  • So it maintains its purchasing power.

  • It maintains its value.

  • The cost of a suit 300 years ago might be an ounce of gold and the cost of a suit today would be roughly an ounce of gold.

  • Right?

  • Very nice suit at 1800 bucks.

  • But nevertheless it's maintained that purchasing power.

  • So it has this long story of history to it.

  • Plus it also has properties that were talked about by Aristotle, it's scarce, it's portable, It's divisible and it is desirable?

  • This is what Aristotle's spoke about 2700 years ago.

  • He talked about gold as being the perfect money.

  • So now let's talk about Bitcoin first of all, Does it fit those Aristotle Ian criteria?

  • Is it scarce?

  • Yes.

  • Is it portable?

  • Very very portable?

  • Much more portable than gold?

  • Is it divisible?

  • Extremely divisible?

  • Much more than gold?

  • Is it fungible?

  • That's another property of gold that was talked about at that time.

  • It is fungible.

  • It's probably that's one area where it's not yet as equal to gold.

  • Uh And um it's it's used by people uh as a store of value primarily at this moment because of its scarcity and going forward.

  • As you see the fiat money kind of disappear and people looking for alternatives, they of course they're going to go to gold.

  • But as gold source it becomes harder and harder to source gold.

  • And and that's becoming the case is that it's the premiums on gold start to move up and gold becomes harder to source.

  • Uh what's the next closest thing to gold that you can put your hands on that will offer store value, medium of exchange properties.

  • And this brings you to Bitcoin Now from there you think you kind of dig down into the next layer of the technology.

  • And you have to ask yourself what gives it this this hard money aspect, why is it considered hard money?

  • You have to look at it as the expression of this enormous global network of computers that are working simultaneously.

  • The other protocol To maintain the network and maintain bitcoins monetary policy.

  • It has a very strict monetary policy of certain amount of coins being generated every 10 minutes.

  • That's part of the disinflationary monetary policy that extends from 2009 to the year 21 40 And slowly steeps into the ecosystem, the financial ecosystem these bitcoins every 10 minutes.

  • And as this occurs over time the network because the desirability to obtain those coins goes up as the fiat money world collapses, the network gets stronger.

  • The amount of computer power or hash rate continues to go up every year, every quarter to maintain the solidity and the security of that network.

  • Then you dig into the into the technology a little bit more you say.

  • Well how does the network maintain itself against these outside risks?

  • And you find different layers to the stack of the Bitcoin protocol that are ingeniously um uh engineered in ways that protect uh this our money.

  • One ingenious aspect would be the difficulty adjustment which happens every two weeks.

  • So every two weeks the protocol searches the network of computers to find out what is the capacity out there to continue the network going forward.

  • And if it's become saturated with a lot of of computational abilities, then it raises that difficulty adjustment.

  • If there's a drop off in computer power.

  • It lowers the what's called the difficulty adjustment and it finds the sweet spot within that network to keep encouraging those folks who are quote mining on the network to keep at it, spend money exert energy and there's a lot of energy that goes into creating these coins their limited supply, they are um a store of value that is comparable to gold uh in that um it's it's uh a rare, it's an extraordinarily rare commodity.

  • Bitcoin is actually rarer.

  • It's probably the rarest commodity out there and now that they've had this having event where the coin emission every 10 minutes is cut in half the so called stock to flow ratio has become even better than gold.

  • So the amount of the amount of gold is pulled out of the ground versus the amount of gold above ground Is is roughly 3% or so.

  • Uh now with this having that's gone on the Bitcoin Protocol, that flow of new coins being created to the stock of gold actually out there in existence has become more favorable than gold.

  • So it's become harder than gold on that stock to flow model.

  • Um And at the bottom the bottom line is this money is whatever people say it is, if people use gold as money, it's money.

  • If people use Bitcoin as money, it's money and it's up to the community really has the final say anything can be money over a year, over many, many years, many attempts have been made to establish money whether it's calorie shells Or beads or stones and many things have been money.

  • But gold survived all of different attempts to make all these different types of money and still uses money.

  • Bitcoin is now being used by 50 to 70 million people depending on how you calculate as money.

  • And that number is going up a great deal going up sharply.

  • And when you see what's happening in the banking system, in the central bank system, people are flocking to hard money and they actually, they of course gold is on their list as a place to go.

  • But increasingly more people are realizing that Yeah, my work.

  • Mm my mom.

  • Why for more work?

  • Mhm.

when most people think of Bitcoin, they think of the complete opposite of hard money.

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B1 gold network fiat portable protocol divisible

BITCOIN vs GOLD vs THE US DOLLAR ? Max Keiser (2020 Clip)

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    林宜悉 posted on 2021/10/16
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