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  • So what is Bitcoin?

  • How do you tell that to people?

  • How do you tell your grandma?

  • How do you tell people on the streets and for people maybe that are first learning about Bitcoin, they're gonna look at you like you're crazy man.

  • And that this thing could actually change consciousness, sovereignty.

  • Because if you're new to this, it's hard to imagine that something they can't see or touch.

  • It has the power.

  • So how do you start that conversation with people?

  • Well, I'll give you my 32nd elevator pitch from Bitcoin that I think is useful because you know, I've spent five years thinking about this almost exclusively and it's not just, that sounds crazy.

  • People like, what do you mean?

  • You think about this?

  • But it's not just Bitcoin all of this street explained the relationship of man and money and property across history and how it's transformed our socioeconomic systems and sovereignty etcetera.

  • My 32nd pitch on Bitcoin is that it is simply an insurance policy on central banking or fiat currency and the more dollars that central banks produce, the more valuable that policy becomes.

  • So the answer is a very simple introduction to Bitcoin.

  • Um To go a step deeper, we could say Bitcoin is a digital disruptor to gold as we've laid out here because maybe a step deeper.

  • We could say that Bitcoin is the separation of money and state.

  • So again, as we've said throughout all of history, the state has wielded its monopoly on force to monopolize money as a means of economizing their control over human beings.

  • But in Bitcoin we have the first funny or proper right that's independent of the state.

  • Again, we define a property as this relationship between owner and asset.

  • So in the physical world if you're going to own your house, you need an enforcer of some kind, right?

  • There has to be some physical enforcement of your relationship to that house.

  • But with Bitcoin it's just an informational property, right?

  • And the enforcement is done by the Bitcoin mining ecosystem, right?

  • There's this, there's a whole microcosm of capitalism called Bitcoin mining where computers are competing to solve this puzzle, allocating the energy expenditure to security of the network.

  • And it's really ingenious actually.

  • So the larger Bitcoin becomes in terms of market capitalization, the more secure its network becomes.

  • So you can think of it kind of like a safe that gets harder to crack the more money you put into it, something like that.

  • Um and I would also say that, you know, if you people will follow my work to the bottom and again, this is why I go, what is money first you have to get to those services that money renders to you?

  • That's the bottom answer to that question, what is money like what is money?

  • It's the visibility, durability, recognizability, portability, scarcity, These are the properties you need from a good or asset in the world as money.

  • So in that sense, Bitcoin is has virtually perfected the properties of money.

  • So if we look at D visibility each Bitcoin is divisible into 100 million subunits called Sats the code can be updated in a backwards compatible way that increases that visibility.

  • So if that were ever insufficient for economic activity, as if Bitcoin ate all the money in the world and all of a sudden a loaf of bread would you know, cost half a sat.

  • Bitcoin's code can be upgraded to accommodate more div is a bility so it's perfect indivisibility effectively.

  • Yeah.

  • Bitcoin is just distributed information so it's stored everywhere and nowhere, as people like to say every node that runs Bitcoin has an entire uh history of transactions like like I don't this is the ethos and Bitcoin, they say don't trust verify when you run your own node, you don't need to trust anyone.

  • Talk about trust.

  • Minimization is like you have the whole verified recorded history of the entire Blockchain, the whole history of transactions locally and so does everyone else, so no one can cheat, right?

  • It's all these computers checking each other's work.

  • And so in that way I think Bitcoin is perfected durability.

  • Again, durability is just the persistence of money across time.

  • So the analogy I like to use here is something like the bible, what is the bible?

  • Well it's a book.

  • Not really like you can destroy a single bible single book, but no one can destroy the bible, right?

  • Like it's everywhere and nowhere it's been printed a bazillion times and it's distributed information that's embedded in in global human consciousness, right?

  • You can't can't get rid of that.

  • Bitcoin.

  • Similar, right?

  • It's just it's everywhere and nowhere it's in code.

  • Uh you can back it up in any number of formats and and many, many people do to protect the network.

  • Uh clearly Bitcoin is perfected portability because it's just digital information.

  • It can be moved at the speed of light, can't get much faster than that.

  • Recognizability is how easy is it to authenticate the money to verify it is what it is, you know, and with gold gold got the name.

  • Sound money actually what you've probably heard um from the sound it would make when you drop gold from a certain height that would indicate if it was gold or if it was copper plated with gold.

  • So there were these old techniques for saying the authenticity of goal that was related to its recognizability property.

  • And with Bitcoin.

  • Again, if you're running a node, not only thinking, you verify that all the Bitcoins are being sent is authentic.

  • You can also audit the total supply.

  • We've never had anything like this, you can just check, Make sure there's only 21 million.

  • Um and everyone can do the same.

  • So everyone's auditing everyone else and then finally, you know, I think we've banged on a lot today, scarcity is very important, right?

  • The the reliable, predictable nature of the supply of money is really important for its store of value function over time.

  • If there is someone that can violate the supply of money as central banks do in perpetuity, then they have every incentive in the world, the most powerful incentive in the world to do so.

  • So that is what that was the game theoretic process that drove us towards gold as the most the asset most resistant to inflation or the basement.

  • But with Bitcoin we have something even more radically new.

  • And I argue that you know Bitcoin itself is clearly an invention, it's man made.

  • But I argue in a lot of my riding that it has led us to the discovery of absolute scarcity, we've never had anything like this in history.

  • Everything has been relatively scarce.

  • Even with gold.

  • If we could you know magically flip a switch and have everyone in the world go out and start mining more gold, we could get a lot more gold above ground much quickly.

  • So even gold is just relatively scarce to how much labor and energy were allocating towards it.

  • But with Bitcoin we have the first fixed supply asset in human history And that has a fixed auditable unchangeable supply of 21 million.

  • So no matter how much energy we allocate towards Bitcoin mining, we cannot change that.

  • Um And this is the genius of Bitcoin too is that it has this algorithmic feature called the difficulty instrument.

  • So the harder you try to mine Bitcoin every two weeks the algorithm basically adapts to how much effort is being allocated towards its production Such that it always adheres to this fixed and diminishing supply curve towards 21 million.

  • So it's we've this is I mean really mind blowing.

  • It's almost like we've created a living money.

  • Alright this money adapts to our action when we try to mind more that it becomes harder to mind.

  • If we try to mind less of it, it becomes easier to mind.

  • So it's constantly adapting and improvising itself to our action.

  • I mean it's something that's responsive to human action.

  • So an asset that is actually responding to how we respond to it.

  • It's it's very interesting thing to think about but the punchline is with absolute scarcity is that it's the perfect store value Right?

  • If you own 1000 Bitcoin you have a guaranteed 1000 of a possible 21 million that there will ever be.

  • There's we cannot say that for any asset historically.

  • Never before could you own a guaranteed fraction of the total supply of any asset including gold historically.

So what is Bitcoin?

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B1 gold asset supply scarcity bible mining

Bitcoin is the perfect store of value - Robert Breedlove

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    林宜悉 posted on 2021/11/26
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