2022-04-11_The_Future_of_Bitcoin_-_Lessons_Learned_from_Bitcoin_2022
00:00:00.000 | Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge,
00:00:04.320 | skills, insight, and encouragement you need to live a rich and meaningful life now while
00:00:08.240 | building a plan for financial freedom in 10 years or less.
00:00:11.160 | My name is Joshua Sheets and today I want to talk about Bitcoin.
00:00:14.640 | This past week I have just been in Miami attending the Bitcoin 2022 conference, perhaps the largest
00:00:23.440 | Bitcoin conference in the world at the moment.
00:00:26.520 | And it was indeed quite large, to give you a context of scale.
00:00:31.040 | The organizers of the conference said that they had 25,000 attendees.
00:00:35.200 | What I found most impressive was simply visiting the exhibit hall.
00:00:39.640 | And I've been to a lot of conferences over the years.
00:00:41.960 | I find conferences a very efficient way to come up to speed quickly on a topic.
00:00:47.040 | And so I'll routinely attend a conference that I'm trying to get a lay of the land.
00:00:50.520 | And what I find useful is certainly the speakers, yes, listening to the talks and getting an
00:00:55.800 | idea of the ideas that are presented at a conference I find very useful.
00:00:59.760 | Also the people, yes, some of the people you meet at a conference are often leaders in
00:01:04.360 | an industry and it can be a great chance to meet some of the creme de la creme of an organization.
00:01:11.640 | But I find the exhibit halls often quite useful.
00:01:14.360 | And especially more when I was younger, I would go to an exhibit hall and I would routinely
00:01:17.920 | just simply visit every booth.
00:01:19.720 | Here are people who have paid money to get their message in front of you.
00:01:23.300 | And if you simply go from booth to booth and ask them about their product, about their
00:01:26.960 | service, you can quickly grasp an overview of an industry based upon hearing what people
00:01:35.560 | are presenting and then asking them about their competitors and letting them educate
00:01:40.500 | you on their particular business.
00:01:43.520 | Well most of the time you need a few hours to cover an expo hall.
00:01:46.740 | There are some exceptions.
00:01:47.740 | You might have a huge consumer electronics show or something like that where it's huge.
00:01:52.460 | But in this case I found the expo hall so big I didn't even get through a third of it
00:01:55.720 | myself.
00:01:56.720 | It was huge in terms of the number of exhibitors.
00:01:59.400 | And that's one of the things that I'll talk about today because I was extraordinarily
00:02:03.000 | impressed with how entrepreneurs have been systematically solving the various problems
00:02:07.520 | that exist with Bitcoin.
00:02:10.160 | And that really has increased my confidence in the offering.
00:02:14.160 | So let's talk first about Bitcoin and I'll tell you what my takeaways were from the conference.
00:02:18.920 | Long time listeners of Radical Personal Finance know that I was not early on the Bitcoin bandwagon.
00:02:24.560 | And I regret that.
00:02:25.560 | I should have been early.
00:02:27.880 | And there's a whole episode of Radical Personal Finance wherein I apologize to you for not
00:02:32.100 | advising you to buy Bitcoin and I explain some of the reasons why I think I was not
00:02:37.000 | early.
00:02:38.280 | And while that has continued to bother me that I wasn't an early adopter of Bitcoin,
00:02:42.920 | what's done is done and all I can do is press forward and try to get an idea of what to
00:02:46.520 | do today.
00:02:48.100 | And so as I've looked at Bitcoin and studied it and tried to think about its integration
00:02:52.680 | in the modern life, I have been personally most interested in the ideological aspects
00:02:59.420 | of Bitcoin.
00:03:00.420 | Big surprise, I know, that Joshua Sheets would be interested in the ideology of something.
00:03:05.000 | But hey, that's the truth.
00:03:06.760 | There's some people get involved in Bitcoin just because they want to make a quick buck
00:03:09.680 | hopefully or they want to trade it or something like that.
00:03:12.320 | But I care about the ideology because I care about freedom.
00:03:14.800 | I care about personal sovereignty.
00:03:16.320 | I care about liberty on a global basis.
00:03:18.680 | And I see that freedom in the monetary system is one of the foundations of really excellent
00:03:25.000 | global freedom.
00:03:26.800 | And I think that there should be a system where people can freely compete with one another
00:03:31.600 | and where currencies can compete with one another in the free market.
00:03:35.800 | That's my belief.
00:03:37.320 | I think that competition is one of the most ethical systems.
00:03:43.560 | Excellent non-coercive competition is one of the most ethical systems that's out there
00:03:47.480 | for allowing good ideas to bubble up to the surface and allowing for us to advance forward
00:03:53.320 | as a human race, continuing to live in an increasingly prosperous and increasingly free
00:03:59.760 | and increasingly righteous society.
00:04:02.500 | And so at every level, I want to be one who supports freedom.
00:04:05.720 | And monetary freedom is an important component of that.
00:04:09.320 | I think for me, what started me on that bandwagon was when I was in college, I read, I think
00:04:14.120 | it was Perkins, right, who wrote the book, The Confessions of an Economic Hitman.
00:04:17.800 | And it just opened my eyes to the evil done by my own native country, the United States
00:04:23.480 | of America, and how the United States of America has manipulated the world in a really horrific
00:04:28.600 | coercive faction just using the monetary supply, not to say nothing of the actual involvement
00:04:35.120 | in war and violence, which of course is abundant, but simply using the monetary supply, using
00:04:41.200 | loans, using systems of economic coercion and control.
00:04:46.160 | And I consider it to be really, really awful and something that should change.
00:04:50.480 | The challenge has been that there often hasn't been a great alternative.
00:04:53.920 | People have wanted alternatives for quite a while.
00:04:57.360 | If you look around the world and you study history, you see that a fundamental component
00:05:01.480 | of history is monetary crises, monetary failures.
00:05:07.280 | And many nations, those monetary failures are quite obvious, whether it's right now
00:05:13.640 | the Russian ruble, right now the Venezuelan bolivar, and over the last decade, the Venezuelan
00:05:21.880 | monetary system.
00:05:22.880 | Or you could go back and you could see the Zimbabwe hyperinflation.
00:05:26.400 | You could go to the hyperinflation in Mexico in the 1980s.
00:05:28.880 | You could look at the, what, three crises, two, two, three, four crises in Argentina
00:05:33.120 | over the last decades.
00:05:34.680 | And you could see how these monetary crises again and again and again affect the history.
00:05:39.800 | And some of the countries that we're from, they're harder to see, right?
00:05:42.320 | In the United States, we've had four or five significant monetary crises, totally
00:05:48.480 | new currencies or just simply adjustments of the currencies.
00:05:51.760 | But these weren't as big of a deal in our nation, in the United States, as they were
00:05:57.840 | in some other places, while they're still a big deal.
00:05:59.800 | And so you look at history and you realize that throughout history, monetary crisis has
00:06:03.560 | been a major component of what has happened in a country.
00:06:07.440 | And that monetary crisis has often led to good things, bad things.
00:06:13.920 | It's a mixed bag, right?
00:06:14.920 | As history always is.
00:06:16.880 | And so you look for an alternative.
00:06:18.960 | And when I was younger, I was convinced that there should be competition in the realm of
00:06:23.960 | currencies, that there should be free and easy competition, that you should be able
00:06:28.840 | to use any currency that you want to and currencies should compete with one another.
00:06:33.120 | There's no reason why the government, which has a monopoly on violence, should also have
00:06:38.800 | a monopoly on money creation.
00:06:40.320 | It doesn't make any sense.
00:06:42.160 | And those two things, when they go together, lead to very bad results.
00:06:47.720 | And so why not have competition?
00:06:50.240 | When you look at it and you realize the trend in the United States, the growth of government,
00:06:54.960 | you realize that politicians control the money supply and politicians control tax dollars,
00:07:01.440 | leads to massive levels of control over society.
00:07:05.240 | And a lot of really dumb things are being done.
00:07:08.000 | Sometimes they're just dumb.
00:07:09.480 | Sometimes they're evil.
00:07:10.480 | I guess, to be fair, maybe sometimes they're good.
00:07:15.060 | But a lot of dumb things are done over time because politicians can create the money.
00:07:19.960 | And we're heading towards a significant crisis in the United States and in most countries
00:07:26.560 | of the world that have built a welfare state.
00:07:28.880 | The welfare state in the United States is completely underfunded.
00:07:33.000 | It's bankrupt now.
00:07:34.360 | It's just going to take time for that bankruptcy to express itself to where it's obvious to
00:07:38.840 | people.
00:07:39.840 | I've done several shows on that.
00:07:42.080 | If you haven't listened to those, go back in the annals of Radical Personal Finance,
00:07:45.760 | search for the ticking time bomb that no one wants to discuss, which is a deep dive analysis
00:07:51.040 | that I did on the financial system in the United States and the welfare state.
00:07:56.520 | And I showed how, and this was prior to the pandemic, I showed how unless massive changes
00:08:01.000 | happened very quickly, it was impossible that there would be any change whatsoever.
00:08:06.040 | And then just as was predicted, no massive changes happened of any kind except in the
00:08:10.760 | worst direction, where borrowed even more money, building even more government programs,
00:08:14.880 | etc.
00:08:15.880 | And so this is bankruptcy of the United States government.
00:08:20.520 | Bankruptcy of the welfare systems is inevitable, as I see it, in coming in the future.
00:08:27.680 | And the monetary system is going to be a component of that.
00:08:31.320 | So I've been interested in free market alternatives.
00:08:33.920 | And I've looked for free market alternatives.
00:08:35.960 | When you want to get out of the Federal Reserve Note system or you want to get out of the
00:08:41.320 | fractional banking system, you have a number of alternatives.
00:08:44.440 | One alternative, of course, is to go into international banking and to simply choose
00:08:49.240 | different countries in which to bank.
00:08:50.760 | And I've been a strong and loud proponent of that because I believe it solves many of
00:08:54.720 | the problems that people are concerned with.
00:08:58.640 | The reasons why they want alternatives can usually be most easily solved by simply accessing
00:09:04.200 | the international banking system.
00:09:06.920 | In one sense, I think that accessing the international banking system is simply a validation of the
00:09:11.080 | concept of competition over currency competition, banking competition, etc.
00:09:17.080 | Countries are in competition with one another.
00:09:19.880 | And you can choose to go to the countries that treat you best and give you the best
00:09:24.520 | options and simply choose to bank there.
00:09:26.940 | For many people around the world, that means going to the United States and banking in
00:09:30.120 | the United States.
00:09:31.360 | Many wonderful benefits for that.
00:09:32.880 | For some U.S. Americans, it means going to other places and banking in other places.
00:09:36.720 | The challenge is that most of the leading banking jurisdictions of the world run on
00:09:40.640 | the same basic principle of fractional reserve banking, fiat monetary standards, as does
00:09:47.000 | the United States.
00:09:49.160 | And so while there are many good reasons to participate in those countries' banking systems,
00:09:53.960 | if you're trying to create something fundamentally new, that hasn't worked as well as many people
00:10:03.680 | of hope, because there's very rarely been a country around the world that has said,
00:10:08.120 | "We're on a gold standard," for example.
00:10:11.280 | Some countries have hinted at it even recently.
00:10:13.480 | Countries have made announcements of it.
00:10:15.480 | Countries will do that.
00:10:16.640 | But in general, you know that a gold standard in and of itself is just a statement that
00:10:21.840 | a country makes, and the country can revoke that really at any time, just like the United
00:10:25.400 | States did.
00:10:26.760 | And so it's a convenient thing to bring clients and customers to your country for a time if
00:10:31.960 | people are looking for a gold standard, and then it's convenient to revoke that in time.
00:10:37.520 | So you say, "What can be another solution?"
00:10:39.680 | Well, maybe I could exit the fractional banking system entirely.
00:10:42.800 | I remember years ago I first came across the concept of some people who were trying to
00:10:47.240 | start an old-fashioned silver bank, and I thought, "That's really interesting.
00:10:51.560 | You could bank in silver."
00:10:52.800 | The way it would work is they basically created a repository.
00:10:56.040 | You would make contributions to that bank in the form of fiat money.
00:11:00.260 | They would purchase silver, and your account was measured in ounces of silver that you
00:11:04.160 | owned, and then you would simply pay a custodianship fee to the bank for managing the silver.
00:11:11.240 | In some cases, they would give you a debit card, and you would actually be able to spend
00:11:13.840 | your silver on your debit card.
00:11:15.960 | And I thought, "That's a great idea."
00:11:18.000 | The problem is it's an old technology that doesn't really work so well in the modern
00:11:22.440 | age because so much of what we do is digital, and while you can appreciate the fact that
00:11:27.400 | I might have silver deposits held at this old bank, and that's great, you look around
00:11:31.700 | and you say, "Is this really what's necessary?
00:11:33.760 | And is silver really the right solution?
00:11:36.360 | This seems really unwieldy.
00:11:37.360 | Wouldn't it be great to have a digital solution to this?"
00:11:41.880 | And since the dawn of the Internet, when people realized the power of the Internet, having
00:11:45.960 | some form of reliable digital money or digital gold has been a basic component of what people
00:11:52.600 | have wanted to make the Internet work more effectively.
00:11:55.880 | There have been many efforts made.
00:11:57.920 | eGold, digital gold has been promoted by various people.
00:12:02.480 | But Bitcoin has broken through in a powerful way all of the other competitive ideas with
00:12:08.560 | some really ingenious thinking, a really ingenious way of developing a new system.
00:12:15.600 | And so the question has been, "Well, is it real?
00:12:18.440 | Can it work?
00:12:19.440 | Will it work?
00:12:20.440 | What's the future?"
00:12:21.440 | I think most thoughtful observers have recognized that there could be a wide range of outcomes.
00:12:29.440 | And many people would say you could go either to zero or it can go to the moon.
00:12:34.440 | There's a wide range of potential outcomes available in Bitcoin.
00:12:40.080 | Since we don't know the future, we don't know which outcome will happen.
00:12:44.120 | It's not certain.
00:12:45.920 | We all have our guesses.
00:12:47.200 | We all have our opinions, but we don't know which outcome will happen.
00:12:50.960 | I think that now the outcomes are starting to narrow, meaning that I don't think myself
00:12:58.560 | that there's much case at all that Bitcoin will go to zero, for example, and be totally
00:13:04.960 | worthless.
00:13:06.200 | We see – in fact, this is one of the reasons why I wanted to go to the Bitcoin conference
00:13:09.160 | because since the initial success of Bitcoin, we've seen thousands and thousands of new
00:13:12.940 | cryptocurrencies created, many of them saying that we're going to compete with Bitcoin.
00:13:17.440 | We've seen some wacky stuff happen where people have said, "Hey, this thing doesn't
00:13:21.320 | exist anyway.
00:13:22.320 | It's just a meme.
00:13:23.320 | It's just a joke.
00:13:24.320 | It's just a mathematical formula.
00:13:28.200 | So let's go ahead and create new jokes."
00:13:29.880 | And then those jokes become popular, a la Dogecoin, etc.
00:13:33.640 | And people look at it and say, "Well, what's the future?
00:13:37.560 | What does the future hold?"
00:13:39.600 | And I think that even over the last year, there's been some significant stress testing
00:13:43.160 | of Bitcoin specifically being banned multiple times by many countries, right?
00:13:49.560 | China banned it multiple times.
00:13:51.120 | You see the Canadian government trying to ban Bitcoin transactions coming hard after
00:13:55.280 | Bitcoin custodians with the trucker convoy protest.
00:13:59.840 | Right now, I think the use of Bitcoin in Russia and in and out of Russia is a really interesting
00:14:05.520 | stress test to watch.
00:14:07.080 | New legislation in the European Union over cold wallets, even just this last week, is
00:14:12.400 | really important to watch.
00:14:14.120 | And so we're seeing a stress testing happen significantly, but we're seeing Bitcoin work
00:14:19.680 | in many, many ways.
00:14:21.760 | And so as the years go forward and as more and more of these stress tests happen and
00:14:26.400 | as there's more and more development, we see that Bitcoin is showing itself increasingly
00:14:31.320 | resilient.
00:14:32.320 | I want to talk for a moment about some metaphors that I use.
00:14:35.480 | I'm going to give you my takeaways from the conference and why going to the conference
00:14:41.080 | impressed me so much.
00:14:43.520 | I believe that it's possible to have, in many cases, a superior solution to a problem that
00:14:50.880 | simply doesn't take on, that doesn't work because there's not widespread adoption.
00:14:56.560 | And this is one of the problems that faces Bitcoin, which I think it's overcoming, but
00:15:00.840 | it's one of the problems that it faces Bitcoin.
00:15:03.480 | A currency is valuable to the extent that it is universally desired and acceptable.
00:15:11.760 | When you think about what money is and you try to clarify and define what money is, my
00:15:16.920 | favorite definition is simply that money is the most marketable commodity in existence.
00:15:21.460 | It's the thing that everybody wants.
00:15:24.640 | That's what money is.
00:15:25.760 | You could have various forms of money.
00:15:28.680 | You can have conch shells used as money.
00:15:32.000 | You can have beads used as money.
00:15:33.680 | You can have gold and silver coins used as money.
00:15:37.120 | You could have US dollars or euros or Canadian dollars or Deutschmarks or francs or any number
00:15:45.420 | of things used as money.
00:15:49.040 | You can have money that's used in certain places.
00:15:52.120 | I thought it was fascinating watching the various video game forms of money that were
00:15:56.520 | used as currency and traded in Venezuela over the last year because people were looking
00:16:01.440 | for something.
00:16:02.440 | They said, "Hey, I can trade this digital currency, this currency that exists only inside
00:16:05.480 | this certain game."
00:16:07.680 | It's no different than trading credits for iTunes or Warcraft credits or all the stuff
00:16:13.760 | that's needed in the digital world.
00:16:16.480 | Money can really be anything, but in order for it to be money, it needs to be desired
00:16:20.960 | and accepted by people as being universally valuable.
00:16:25.920 | That's why a US dollar can be so useful.
00:16:29.680 | You can go almost anywhere in the world and people know the value of the US dollar because
00:16:33.320 | it's so large.
00:16:34.760 | That same currency that is valuable in one country may not be valuable in another country.
00:16:39.240 | If I brought to you a Colombian peso and you're living in Canada, it's going to be more difficult
00:16:45.680 | for me to convince you to accept that Colombian peso than it is a US dollar.
00:16:50.000 | It's going to be far easier if I just simply have a Canadian dollar.
00:16:53.640 | Money is useful and valuable to the extent that it's desired and that it is usable by
00:16:58.980 | many people.
00:16:59.980 | Do people want it?
00:17:01.480 | Now, just because something is technically superior or better doesn't necessarily mean
00:17:06.840 | that people will want it.
00:17:08.600 | As I was at the conference, I was thinking of examples of this and I thought maybe a
00:17:11.720 | good example to consider this is a language example.
00:17:16.760 | I do think there are some good parallels between languages as we understand them today and
00:17:21.520 | currencies as we understand them today and what will happen in the coming years.
00:17:27.160 | Here's a question for you to consider.
00:17:29.720 | What is the most important language for you to speak and for you to teach your children
00:17:34.800 | today?
00:17:38.300 | The answer is obviously English.
00:17:40.880 | English is the most widely spoken in the world, not by native speakers of course, but as a
00:17:46.780 | second language.
00:17:48.100 | It is the international lingua franca, the international language of exchange, the language
00:17:53.900 | that is used by virtually all educated international people if they don't as their common language.
00:18:03.060 | Even in countries that don't use English as a language, as an official language, you'll
00:18:08.580 | have people use English as their lingua franca even if it's not an official language.
00:18:13.140 | Here I'm thinking of a place like Switzerland, right, where there are four official languages,
00:18:17.780 | German, French, Italian, and Romance.
00:18:21.580 | And yet if a German-speaking Swiss goes to a French-speaking region of Switzerland, there's
00:18:29.300 | a good chance that they'll use English to interact with one another because the German-speaking
00:18:35.060 | Swiss and the French-speaking Swiss are taught English in school and that will be a comfortable
00:18:40.940 | lingua franca that perhaps doesn't have the baggage of their German and Swiss arguments
00:18:45.860 | and culture, etc.
00:18:47.900 | The same thing happens all over the world.
00:18:49.380 | If a Japanese businessman goes to Hong Kong to meet with a German businessman, they're
00:18:54.740 | going to be doing business in English even though one is from Japan, one is from Germany,
00:19:01.040 | and they're meeting in Hong Kong.
00:19:02.260 | They're going to be doing business in English.
00:19:04.740 | And so all thoughtful, educated, thinking elites around the world make sure that their
00:19:14.140 | children speak English well.
00:19:16.140 | They educate their children in English, they hire tutors, they make sure that they teach
00:19:19.660 | their children English because that is the language of the future.
00:19:23.700 | Now, of course, there can be local lingua francas as there always has been throughout
00:19:28.100 | history but today English is the dominant player.
00:19:32.460 | But English is not the world's best language by any stretch of the imagination.
00:19:38.060 | English may not be as bad as many people allege it to be.
00:19:41.620 | English can be pretty easy to learn in many contexts, but English has its own intricacies,
00:19:47.100 | its difficulties, its things that make it hard to figure out and hard for people to
00:19:51.860 | learn.
00:19:52.860 | And so over the years people have invented other languages, languages that are designed
00:19:57.860 | to be easy to learn and easy to use.
00:20:02.220 | My favorite of these, or at least the one I know the most about, is a language called
00:20:05.820 | Esperanto.
00:20:06.820 | Esperanto is a brand new language that was developed and it was designed to be easy.
00:20:15.380 | It had no native speakers, it was a completely made up language, made up in the late 19th
00:20:21.780 | century, and it was invented to be a universal second language for international communication.
00:20:29.100 | It was supposed to be similar to many natural languages, they call it naturalistic.
00:20:36.460 | And it pulls a lot from European languages, but its grammar is created to be very easy
00:20:44.620 | to learn, very simple, very consistent, etc.
00:20:47.820 | And today Esperanto has a wide group of users.
00:20:52.900 | Estimates are that today there's something like 100,000 people that speak Esperanto.
00:20:58.380 | All of these 100,000 people have been attracted to the concept of a superior language and
00:21:05.540 | they've learned Esperanto and they get together with other people around the world and they
00:21:08.740 | speak Esperanto with those other people.
00:21:12.180 | And yet here we are, more than a century after the language was invented, and you have virtually
00:21:17.740 | no one who speaks or uses the language, and you have virtually no practical application
00:21:23.040 | of this language.
00:21:24.580 | 100,000 people, when compared to a global population, is a laughably small number of
00:21:30.820 | people.
00:21:31.820 | And Esperanto enthusiasts are quite often quite passionate.
00:21:35.780 | They're quite passionate about their subject, it's great.
00:21:38.460 | And yet, point remains that I personally have virtually no interest in learning Esperanto.
00:21:43.820 | I would rather spend my time learning a language that is spoken more broadly in a natural setting
00:21:51.120 | because I think it's more useful than speaking this artificially constructed but superior
00:21:55.540 | language called Esperanto.
00:21:58.020 | And so when I think about that, I see a lot of parallels between Esperanto and Bitcoin.
00:22:04.860 | Let's pretend for a moment that Bitcoin is a superior solution.
00:22:08.080 | Let's pretend that the basic concept of Bitcoin is a better solution.
00:22:16.580 | And I would say in some ways, I'll use the word undeniably, it's a strong word, but in
00:22:20.680 | some ways it undeniably is, at least from my perspective.
00:22:25.160 | Words like Esperanto is, in some ways, undeniably better than English, or better than Spanish,
00:22:32.580 | or better than Chinese.
00:22:33.980 | It's just undeniably better.
00:22:35.740 | It's created to be better.
00:22:38.040 | But that doesn't, just because something is created to be better, doesn't mean that it's
00:22:41.900 | going to gain widespread use, that it's going to gain widespread adoption.
00:22:47.540 | And even if I came to you and I said, you're in Canada, and I said, "Look, my Swiss franc
00:22:54.300 | is undeniably better than your Canadian dollar," you would look at it and say, "But I want
00:23:00.380 | the Canadian dollar because that's what's used around me."
00:23:03.500 | Just like if I came to you and I said, "You should educate your children in Esperanto
00:23:08.100 | because it's undeniably better than English," you would say, "Yeah, Joshua, we're going
00:23:11.500 | to teach our children English because that's the language that is used."
00:23:15.980 | And so I see the same challenge facing Bitcoin or any other competing currency, is that you
00:23:22.040 | have to gain adoption.
00:23:23.520 | And in order for something to function as money, it has to be widely adopted.
00:23:27.020 | It has to be picked up and it has to be wanted by other people.
00:23:31.920 | So in order for that to work, I think you have to say there has to be various problems
00:23:37.380 | that are met.
00:23:40.140 | And when I came away from the Bitcoin conference thinking, was that I am now profoundly convinced
00:23:47.380 | that Bitcoin does have a future and it can have a very, very strong future.
00:23:57.060 | It can have a very, very strong future.
00:24:00.640 | And it can have a very, very strong future as something, as a global currency, maybe
00:24:05.260 | a global reserve currency, maybe just a global currency, maybe just a useful thing.
00:24:11.600 | I'm not convinced that it's going to sweep away everything else that would violate my
00:24:17.120 | fundamental belief in the concept of competition.
00:24:21.620 | But I think it would, based upon this example I've given you with Esperanto, learning Esperanto
00:24:28.240 | could indeed have tremendous benefit.
00:24:32.360 | But English is still the king for now.
00:24:34.680 | And if you learned English and Esperanto, there would still be value in other local
00:24:37.720 | languages.
00:24:38.720 | I'm not sure that there will be one international standard in the future.
00:24:44.040 | We had an interesting conversation with a couple of listeners on Twitter about that.
00:24:47.440 | And I'm thinking more about that.
00:24:48.680 | Maybe I'll come to change my mind.
00:24:50.280 | But for today, I am confident in saying that Bitcoin can have a future as a strong global
00:24:59.900 | currency, a strong global storehouse of value, and that is also useful as a medium of exchange.
00:25:08.400 | So let me give you some reasons why.
00:25:10.560 | Number one, Bitcoin is already working as a storehouse of value.
00:25:17.240 | It is already working as a storehouse of value.
00:25:23.040 | Now that statement I think can be hard to accept for many people, given the significant
00:25:29.160 | daily, weekly, monthly fluctuations of Bitcoin.
00:25:33.120 | As I record this, it looks like the Bitcoin to US dollar ratio is 40,703 US dollars fiat
00:25:42.360 | to each and every Bitcoin.
00:25:45.080 | And you see that there are significant fluctuations up and down.
00:25:50.120 | This used to bother me a lot more than it does today.
00:25:52.480 | And in fact, if you would go back and find earlier recordings of Radical Personal Finance,
00:25:57.340 | you would hear me make statements like, "These fluctuations have to smooth out in order for
00:26:02.440 | Bitcoin to gain more widespread acceptance."
00:26:06.120 | I have since come to see it differently, that perhaps these fluctuations have been what
00:26:12.440 | is necessary for Bitcoin to actually bridge the divide, to actually gain interest.
00:26:19.920 | I used to say and criticize Bitcoin and say that the only reason people are getting into
00:26:24.840 | Bitcoin is because they want Bitcoin to go up.
00:26:27.080 | They want Bitcoin to go to the moon.
00:26:28.840 | They want 100,000 US dollar Bitcoin.
00:26:30.960 | They want million dollar US dollar Bitcoin.
00:26:33.440 | But what I see happening is I see a lot of people gaining exposure to Bitcoin because
00:26:41.080 | they want it to go up.
00:26:43.360 | That doesn't necessarily mean that's a bad thing.
00:26:46.760 | And so here would be an example.
00:26:48.640 | Back to the language question.
00:26:50.560 | If I look at my children, let's say that I grow up in Mexico, and I look at my children
00:26:54.720 | and I say, "It's obvious that in order to be successful on an international basis and
00:26:59.120 | to be leaders in a company or to be leaders in an industry or in an art or something like
00:27:05.160 | that, my children need to speak excellent English."
00:27:08.080 | The fact that I make sure that my children learn English for economic reasons, that's
00:27:14.880 | not a less...
00:27:19.760 | Some people would say, "Well, I want my children to learn English so they can enjoy the arts,
00:27:23.600 | so they can learn and gain from this vast treasure trove of beautiful English language
00:27:29.360 | literature."
00:27:30.360 | That's a valid reason to learn English.
00:27:32.840 | It's also a valid reason to learn English because I want my children to get good international
00:27:36.440 | jobs and get rich.
00:27:38.000 | Both of those are valid reasons to learn English.
00:27:40.720 | The reason doesn't matter.
00:27:42.400 | What matters is the result.
00:27:43.840 | The result is that they learn English.
00:27:46.680 | And so one person who learns English because they want access to the beautiful treasure
00:27:53.720 | trove of amazing English literature, that person may also wind up having a career that's
00:28:00.760 | advanced and earning more money because of the knowledge of English language.
00:28:06.600 | And the other person who just learns English in order to get a better job might find themselves...
00:28:12.480 | That person might find himself or herself enjoying English literature as a pastime and
00:28:17.520 | really finding a passion for English literature of some kind.
00:28:22.080 | And so I see the same thing happening with Bitcoin.
00:28:24.420 | This is what I didn't see years ago.
00:28:25.880 | I thought, "Well, people have to get into Bitcoin because they want to use it as a medium
00:28:29.480 | of exchange, but there's a bunch of people getting into Bitcoin because they just want
00:28:31.920 | the money to go up.
00:28:32.960 | They want it to go more valuable than they're going to sell out."
00:28:35.120 | The point remains that people are getting into Bitcoin.
00:28:37.360 | And for every person that buys more Bitcoin, then that's creating a stronger and stronger
00:28:41.800 | infrastructure.
00:28:43.320 | And so when I first bought Bitcoin, I bought Bitcoin because I was interested in observing
00:28:48.400 | the market.
00:28:49.400 | And then I was thinking, "Hey, maybe I can make some money on it."
00:28:51.760 | Then I found myself using the Bitcoin more.
00:28:53.680 | I found myself using it to buy and to sell and to exchange with other people.
00:28:57.760 | And I realized it doesn't really matter the reason that I'm buying Bitcoin.
00:29:02.840 | It only matters that I'm buying Bitcoin.
00:29:05.760 | It doesn't matter why your neighbor is buying Bitcoin.
00:29:08.560 | It only matters that your neighbor is buying Bitcoin.
00:29:12.000 | And in the same way that a person who learns English for some romantic language reason
00:29:19.180 | can also find themselves getting a better job, the same thing applies to Bitcoin.
00:29:23.200 | Your neighbor who buys Bitcoin to make a bunch of money might also find Bitcoin being useful
00:29:27.120 | in trading on a daily basis.
00:29:29.240 | Your neighbor who buys Bitcoin to trade on a daily basis might find it useful that it
00:29:32.400 | goes up and down and up and down and up probably over the long term.
00:29:39.040 | And so Bitcoin is already working as a storehouse of value.
00:29:42.480 | And as you look at the world get more intense, you look at the situation right now of inflation
00:29:47.280 | in many Western currencies, you look at uncertainty, you look at increasing monetary controls,
00:29:52.080 | etc., that Bitcoin is now gaining an increased value in most people's minds.
00:29:57.160 | So many people at the conference, of course, and I myself am included in this, I look at
00:30:02.920 | Bitcoin as being more valuable than US dollars because I look at it over the next 10 years
00:30:07.920 | and I say, "Look at the direction these systems are going.
00:30:11.960 | Look at the trajectory of these systems."
00:30:16.000 | And I would compare this back to the language metaphor, which might be imperfect, but I
00:30:21.200 | think is useful.
00:30:22.760 | I look at this and I say, "I can appreciate multiple languages while also being very clear
00:30:27.360 | on the fact that one language is on the uptrend and another language is on the downtrend."
00:30:32.520 | And so maybe a good example of US dollars to Bitcoin might be something like Spanish
00:30:41.280 | to English.
00:30:42.280 | Right?
00:30:43.280 | Spanish is not a dying language.
00:30:44.280 | It's not a little tribal language from some tribe that's disappeared and done.
00:30:48.280 | That's a powerful language.
00:30:50.400 | But yet still, if I speak Spanish, I want to also speak English because the best opportunity
00:30:54.560 | is to have the both of them.
00:30:55.560 | And that's maybe an imperfect metaphor, but it's worth thinking about.
00:31:00.100 | So Bitcoin can have a future and it is already working as a storehouse of value.
00:31:06.000 | It is already working as a medium of exchange right now, albeit on a relatively limited
00:31:13.120 | basis compared to the world's transactions.
00:31:15.960 | And so this is, again, another problem that I have faced in the past.
00:31:20.760 | One of the issues when you look at alternative forms of banking that don't involve the
00:31:23.640 | fractional reserve system, i.e.
00:31:25.920 | silver banking, one of the problems you face with precious metals collections is the people
00:31:30.000 | who buy and own precious metals often don't want to spend them.
00:31:33.340 | And because they don't want to spend them, they don't wind up going around and thus
00:31:38.080 | the whole idea of banking in that currency or banking in gold and silver often doesn't
00:31:42.440 | work.
00:31:43.440 | And so they're so valuable, there are people perceive them to be so valuable that they
00:31:48.760 | often don't spend them.
00:31:49.760 | They don't want to part with them.
00:31:51.240 | And this is a problem, right?
00:31:52.600 | People are gold bugs or silver bugs.
00:31:54.400 | They have this basically this dogmatic idea that, well, this is just the ultimate thing
00:32:01.160 | of value and nothing else has value.
00:32:03.960 | And I think that's a mistake.
00:32:05.160 | I think that when you buy gold coins, you should be ready to sell gold coins.
00:32:07.880 | When you buy silver coins, you should be able to sell, ready to sell them.
00:32:10.120 | And when you buy Bitcoin, you should be ready to sell it.
00:32:12.440 | And so in order to do that, you need to use it as a medium of exchange.
00:32:15.600 | Now the limiting factor for Bitcoin has been very significantly the fact that you always
00:32:22.240 | had to get into Bitcoin from fiat and get out of Bitcoin from fiat.
00:32:27.120 | And I think this is a powerful argument against Bitcoin.
00:32:29.940 | People say it's not really a currency because you can't buy and sell in that currency.
00:32:35.400 | That is changing.
00:32:36.840 | Maybe it was that way 10 years ago, but that is changing.
00:32:39.240 | And I think today you see that more and more people are happy to accept Bitcoin directly,
00:32:46.360 | to hold Bitcoin and to spend Bitcoin.
00:32:48.680 | And I think in the years to come, I see that trend increasing significantly.
00:32:53.480 | The big news last year was that El Salvador passed a legal tender law stating that people
00:32:57.920 | should accept Bitcoin for transactions.
00:33:00.400 | And so today you can go to El Salvador and you can spend your Bitcoin directly, making
00:33:05.380 | instant transfers to purchase goods and services in local stores.
00:33:09.640 | I see that continuing over the last few days.
00:33:12.520 | There have been major announcements of these efforts.
00:33:15.520 | There was Lugano, Switzerland, I think, passed a legal tender law for Lugano for Bitcoin.
00:33:22.440 | The governor, I'm not sure which title to use, but the governor of Madeira, the little
00:33:27.920 | Portuguese set of islands out near the Azores in the sea, they are moving forward with broad
00:33:34.520 | Bitcoin incentives in Madeira.
00:33:36.960 | Honduras has been threatening to pass a legal tender law.
00:33:40.840 | Mexico is making noise of trying to figure out how to integrate Bitcoin.
00:33:44.560 | And I think that this trend is probably going to continue.
00:33:47.400 | And in my opinion, I think it will continue.
00:33:49.240 | I think there's powerful reasons for a country to move towards Bitcoin adoption.
00:33:56.400 | And there are many people who are working to encourage nation state adoption of Bitcoin
00:34:01.240 | as an official currency and as something that is useful.
00:34:05.360 | When you realize the incredible stranglehold that many countries have on their finances
00:34:11.120 | due to the fact that big countries like the United States that control the US dollar can
00:34:17.920 | control and affect their financial situation, you can see how attractive it is to a country
00:34:23.520 | to be decoupled from that form of imperialism by a large international country.
00:34:30.360 | I won't go deeper into that.
00:34:33.040 | Countries have made various decisions.
00:34:34.420 | Some cases they've pegged their currency to the dollar.
00:34:36.320 | Some cases they've used dollars to get the benefits of the dollar.
00:34:39.160 | But it becomes a point of control when a country is beholden to the dollar.
00:34:44.400 | And so having access to a globalized system that's not controlled by a nation state can
00:34:52.080 | be a major competitive advantage for a country.
00:34:55.960 | And that may be something that continues to develop in the coming years in the Bitcoin
00:34:59.840 | space, which would be very exciting.
00:35:01.120 | It would be exciting to see small countries able to compete on a global basis by having
00:35:07.480 | access to a large currency, if Bitcoin indeed becomes a large currency, but yet having a
00:35:12.320 | large currency that's not controllable by or controlled by or controllable by a big
00:35:18.720 | international imperial power and where they don't become basically a colony of that country
00:35:25.680 | by jumping onto that country's currency.
00:35:28.480 | That would be cool because it's a major disadvantage for a country to have its own currency that's
00:35:33.360 | not internationally strong.
00:35:34.680 | It can subject them to major difficulties on the global basis, but it can be an advantage
00:35:40.160 | if they could have access to an internationally stable system that wasn't based upon imperialism
00:35:45.480 | like the US dollar or like some other large country currencies.
00:35:50.240 | Back to the fact that Bitcoin is already working as a medium of exchange.
00:35:53.820 | It does work.
00:35:55.320 | And I have bought and sold various things directly for Bitcoin, many of those things.
00:36:01.560 | And today it's already working.
00:36:03.200 | And so the solutions that are already out there, there are at least eight, I didn't
00:36:07.720 | count perfectly, but there are at least eight different custodians of Bitcoin who are now
00:36:13.200 | offering a debit card directly for your Bitcoin reserves that allow you to buy and sell locally
00:36:21.400 | and have the money drawn from your Bitcoin balance.
00:36:24.320 | With that plus the integration in the digital world, things like Apple Pay, Google Pay,
00:36:29.400 | et cetera, bringing those debit cards into those systems means that you can today effectively
00:36:34.600 | bank in Bitcoin even if Bitcoin itself is not accepted.
00:36:39.040 | And I used to think that this was going to be a big problem, but in my travels around
00:36:42.960 | the world over the last couple of years, I don't see why it is a problem anymore.
00:36:47.640 | I do most of my banking in US dollars.
00:36:51.240 | But when I travel the world, the fact that I do my banking in US dollars doesn't really
00:36:55.360 | matter to me on a global basis about spending dollars.
00:36:59.480 | I just simply go and I buy the stuff that I need and then I click the button on my watch
00:37:04.460 | and use Apple Pay or I swipe a US credit card.
00:37:07.720 | And behind the scenes, the credit card company settles the whole system and my US dollars
00:37:12.400 | go and pay my foreign currency.
00:37:14.360 | And I don't really care what the foreign currency is or even what the local price is.
00:37:18.520 | And that's an amazing feature of the modern world.
00:37:21.220 | Why do I say I don't even care what the local price is?
00:37:23.200 | Pretty much everywhere in the world you go, the prices are set by the free market system.
00:37:27.160 | And so the free market system is setting the price.
00:37:29.640 | You can go into virtually any store in the world, at least a store that includes prices,
00:37:34.880 | not some local bazaar where haggling is a major component, but you can go into any grocery
00:37:40.120 | store all around the world and you can be confident that the prices you're getting on
00:37:43.800 | your goods and items there is simply the market price.
00:37:47.680 | It's what it costs there, factoring in, paying for the transportation, paying for the purchase
00:37:52.680 | of the raw materials, paying for the manufacturing, paying for keeping the lights on the store,
00:37:56.760 | et cetera, and a little bit of profit for everyone in between.
00:37:59.080 | And you're going to get a fair just price there.
00:38:01.300 | And then the international competition for foreign exchange rates is what's setting the
00:38:05.840 | exchange rate between your local currency and the US dollar.
00:38:08.520 | And so the whole system is extremely efficient.
00:38:12.240 | It's extremely fair.
00:38:14.160 | And you could just walk into any store in the world, pay with your Apple Pay or Google
00:38:17.360 | Pay and be on your way.
00:38:19.040 | It's fast, easy, and simple.
00:38:20.940 | And so why can't Bitcoin play a role in that?
00:38:23.600 | It is already possible with a system of debit cards and I think will be increasingly possible
00:38:28.660 | in the future.
00:38:30.400 | Then direct Bitcoin for Bitcoin transactions are increasingly doable.
00:38:34.760 | Today, if someone offers to pay me with Bitcoin, I am more highly incentivized to accept Bitcoin
00:38:41.760 | than the US dollar because I believe that there's a stronger future for Bitcoin than
00:38:46.400 | for the current iteration of the US dollar.
00:38:50.120 | And we'll get to that belief in a moment as to why that is.
00:38:52.360 | Similarly, if someone offers to pay me with a gold coin instead of a US dollar, I'm more
00:38:56.680 | incentivized to offer a discount, to take something from someone to do provide extra
00:39:02.960 | service, et cetera, if someone pays me with something other than a US dollar.
00:39:07.000 | I still do need to have enough dollars to pay my expenses and my bills.
00:39:11.400 | But I find routinely that these kinds of offers are more attractive to me and I can make my
00:39:18.200 | offers attractive to other people.
00:39:20.520 | And as Bitcoin adoption has grown around the world, I think this will be increasingly valuable,
00:39:26.840 | especially when we get to the efficiency of doing direct Bitcoin for Bitcoin transactions.
00:39:32.840 | Let's say that you were selling a house today and somebody came to you and made you an offer
00:39:37.440 | to make a direct Bitcoin transaction for your house.
00:39:40.980 | Would you not at least consider it, even if you own no Bitcoin today?
00:39:45.360 | Maybe five years ago, the percentage of people who would have considered it would be quite
00:39:49.320 | much lower than today.
00:39:50.320 | But today, there are a lot of people who would consider it and who would perhaps consider
00:39:53.840 | it on a higher level than simply dollar for dollar transactions.
00:40:01.240 | So it is already working as a medium of exchange.
00:40:05.420 | And I think it can continue to work as a medium of exchange.
00:40:09.120 | Next point, one thing that was clearly evident at this conference that I attended is that
00:40:15.920 | Bitcoin has a passionate group of entrepreneurs who are solving the problems with Bitcoin
00:40:20.760 | and offering new solutions.
00:40:23.360 | If you look at the Lightning Network that was developed over the last couple of years,
00:40:26.920 | if you look at new systems of simply handling transactions, there are so many entrepreneurs
00:40:33.160 | that are creating solutions to allow Bitcoin use to be more widespread.
00:40:38.120 | And there are entrepreneurs and companies that are integrating Bitcoin more and more
00:40:42.800 | into their daily affairs.
00:40:44.920 | And so our world has moved into an electronic system.
00:40:50.060 | There are benefits, many benefits of that.
00:40:53.040 | There are also disadvantages of that.
00:40:55.760 | But what you see is that for the disadvantages of an electronic system, some of those disadvantages
00:41:03.000 | can be minimized by using a Bitcoin standard instead of a dollar standard.
00:41:08.280 | And so entrepreneurs have been solving that.
00:41:10.600 | Five years ago, it may have been hard to believe that electronic transactions would be the
00:41:14.920 | norm, 10 years ago perhaps.
00:41:15.920 | 10 years ago, it may have been hard to believe because we used cash a lot more.
00:41:20.560 | We were so accustomed to physical cards.
00:41:23.280 | But now, at least in my travels and many places around the world, it's just simply considered
00:41:28.560 | standard procedure to have a point of service terminal that is electronic and that doesn't
00:41:33.900 | even require any kind of physical card.
00:41:35.480 | It's going to be a digital payment from a mobile device.
00:41:38.500 | And so Bitcoin can compete in that space very, very effectively as more and more people choose
00:41:46.040 | to buy with Bitcoin and more and more vendors choose to sell with Bitcoin.
00:41:51.220 | And so there's no technical reason that I can see why Bitcoin can't be used more and
00:41:56.640 | more as a system of exchange.
00:41:59.460 | Even some of the behind the scenes problems dealing with currency conversions to local
00:42:03.520 | currencies for tax reporting, etc. for merchants.
00:42:06.600 | I talked with a number of vendors at the conference who were working on solving that and creating
00:42:10.740 | new bookkeeping systems, etc. to make that automated and simple and easy to stay in compliance
00:42:16.280 | with your local tax authorities while still accepting Bitcoin, doing business in Bitcoin,
00:42:22.080 | etc.
00:42:23.080 | I've already spoken about the fact that Bitcoin has increasing global attention.
00:42:27.200 | Right now, that global attention is primarily limited to small, innovative places that don't
00:42:33.580 | have a lot of other natural resources to work with.
00:42:37.920 | But these experiments that are playing out are important experiments and will drive the
00:42:43.160 | future to see what happens in years to come in terms of the global adoption.
00:42:48.920 | One thing that was clearly evident at the conference is that Bitcoin, and is evident
00:42:53.560 | for many just cursory examination of the market space, Bitcoin has many of the smartest people
00:42:58.800 | in the world deeply invested into it.
00:43:01.840 | It seems to me, I can't remember what the opposite of a brain drain is, but basically
00:43:04.580 | the opposite of a brain drain, a brain collection, a brain vacuum where people are coming to
00:43:08.840 | it.
00:43:10.080 | It feels very much like that's what's happening right now in Bitcoin and in the cryptocurrency
00:43:15.720 | industry writ large.
00:43:17.600 | You have some of the biggest, smartest people with the most success who are actively targeting
00:43:23.760 | it.
00:43:24.760 | And right now, if I'm giving career advice to anybody who's smart and educated, I am
00:43:30.040 | saying go to the Bitcoin industry or the cryptocurrency industry broadly and see if you can find a
00:43:37.100 | problem that needs solving and solve it.
00:43:39.680 | Because it feels very much like we're on the cusp of a transition in the world, in a monetary
00:43:46.600 | transition which has been one of the few areas that have been the slowest to respond to the
00:43:52.640 | technological revolution that we've all lived in.
00:43:55.840 | If you think about many of the areas of life, whether it's communication was completely
00:44:03.340 | disrupted by internet connectivity.
00:44:06.760 | If you look at marketing, it's been completely disrupted by internet connectivity.
00:44:12.760 | Telecommunication has been deeply disrupted by internet connectivity, even just much faster
00:44:17.440 | with the pandemic.
00:44:20.640 | But money has been one of the slower areas to be disrupted.
00:44:24.240 | It has been significantly disrupted in terms of international transfer payments with PayPal,
00:44:28.840 | etc.
00:44:29.840 | It has been disrupted with merchant terminal systems of Stripe, etc.
00:44:34.200 | But the actual basic components of money has been slow to be disrupted.
00:44:38.940 | But it feels like we're on the cusp of a change and it feels like all the smart people are
00:44:43.580 | rushing to that industry to try to solve problems and make a fortune.
00:44:47.840 | And I think that's a smart move.
00:44:49.200 | I have a number of clients that I work with on an ongoing basis.
00:44:53.320 | I walked out of the Bitcoin conference and I called one of my clients who is very smart
00:44:57.720 | and involved in different things and I said, "I would be working very hard if I were you
00:45:04.360 | to figure out how can you be around this industry?"
00:45:07.560 | Because when there's a growth industry, a raising tide raises all boats.
00:45:12.320 | That's the basic concept.
00:45:13.320 | It's that when you're in an industry where there's growth, you have an opportunity, even
00:45:17.740 | if you're middle of the pack, you have an opportunity to experience the growth of that
00:45:20.840 | industry.
00:45:21.840 | And it feels to me, I think that Bitcoin is right on that point where you don't even need
00:45:28.360 | – as an entrepreneur, you don't even need a new and innovative product.
00:45:32.600 | You simply need a good product that solves a problem where there are other competitors
00:45:36.360 | who can come in and you can work in that space as well.
00:45:40.440 | Think about this in terms of – what example to use?
00:45:47.480 | You can go to any industry.
00:45:48.480 | I guess the point is simply that any industry, whether it's everything from cars to computers
00:45:53.160 | to cash registers, it might be great to be the early prime mover in an industry.
00:46:00.120 | It might be.
00:46:01.200 | But it's also excellent to be company number three, company number five, company number
00:46:05.080 | eight that's creating something that's solving a problem for consumers in that industry.
00:46:09.640 | Because one company cannot solve all the problems.
00:46:11.960 | One company can't meet all the needs.
00:46:13.920 | And so there's plenty of room for competition.
00:46:16.160 | And so I think there's tons of room for competition right now in the Bitcoin industry.
00:46:20.280 | And the fact that many of the smartest people in the world are deeply invested into it is
00:46:29.000 | an important component to pay attention to.
00:46:31.640 | There are very smart people who are critics.
00:46:34.640 | But that number of smart people who are critics is a lot smaller today than it was a number
00:46:39.400 | of years ago.
00:46:41.320 | And I find it difficult to understand the arguments to believe the critics more than
00:46:46.820 | I find it difficult to believe the proponents myself.
00:46:54.560 | And so we'll see.
00:46:55.560 | We'll see what happens.
00:46:56.560 | We don't know yet.
00:46:57.560 | We'll see.
00:46:58.920 | When you get a whole bunch of smart people focusing on a problem and then working on
00:47:04.080 | solutions, you're probably going to get better solutions.
00:47:06.160 | Here I think of the classic book by Jim Collins called Good to Great.
00:47:10.040 | One of the points that he made in that book, excellent management book for building great
00:47:14.000 | companies was this.
00:47:16.680 | One of his chapters was get the right people on the bus, then figure out where the bus
00:47:19.520 | is going.
00:47:20.800 | And he said, if you're a company, if you can get a bunch of the right people on the bus,
00:47:25.240 | then you can figure out what direction to take the bus.
00:47:27.960 | Don't say the bus is going here.
00:47:29.880 | First get the people.
00:47:30.880 | And to me, that's what it felt like being at the Bitcoin conference is that all the
00:47:35.600 | right people are on the bus.
00:47:37.800 | So now let's figure out where the bus is going.
00:47:40.080 | And maybe the bus goes where we thought it was going to go five years ago.
00:47:43.200 | Maybe it doesn't.
00:47:44.200 | But you can't have that many smart people on the bus working on problems and then not
00:47:49.520 | have the bus go somewhere good, which leads me to my next point.
00:47:53.480 | One of the things that deeply impressed me at the Bitcoin conference was how ideological
00:47:59.940 | the enthusiasts were.
00:48:04.520 | And I mean that in the sense that if you talk about people wanting free control and sovereignty
00:48:09.680 | over their money, they were there at the Bitcoin conference.
00:48:12.320 | That was why it was.
00:48:13.440 | Yes, I think everyone who was there wants to get rich.
00:48:17.040 | Who among us doesn't?
00:48:18.480 | I think we would all love it if Bitcoin went to a million dollars, everyone who owns Bitcoin.
00:48:22.880 | But I didn't come away with thinking that everyone was focused on the concept of making
00:48:31.240 | a million bucks.
00:48:32.240 | I came away with the impression, listening to speakers and talking to people, I came
00:48:36.360 | away with the impression that everyone was focused on the concept of building a free
00:48:39.680 | currency that's not dependent on government intervention.
00:48:44.280 | And when you have a bunch of people that are committed passionately to an ideology, then
00:48:49.920 | I think you can really move the needle in that direction.
00:48:52.680 | The examples I thought of, I think you could go to an older example like the United States
00:48:55.760 | of America.
00:48:57.280 | The founding of the United States of America was created by a set of committed ideologues.
00:49:04.720 | You had, at its very core, you had the pilgrims going over to the United States for religious
00:49:10.840 | freedom.
00:49:11.840 | It's why there's more religious freedom in the United States than virtually any country
00:49:14.640 | in the world.
00:49:15.680 | And that religious freedom has not subsided over time because it was built into the culture,
00:49:19.760 | this sense of, "I am going to be free to worship God as I want."
00:49:24.320 | And even though there have been massive erosions in religious liberty, at its core, that strong
00:49:33.280 | respect of religious liberty is so fundamental to the American experience and the American
00:49:39.760 | concept that it can't be gotten away from, no matter what.
00:49:44.960 | And so that's kind of how it feels, is that the people...
00:49:47.540 | But the people who did it, they sacrificed their lives, their fortunes, and everything
00:49:52.400 | for that concept.
00:49:54.320 | So you started with religious liberty, then political liberty, as the ethos of the founding
00:49:59.560 | of the country is, "We're going to sacrifice everything for this sense of political liberty."
00:50:04.000 | And that, again, drove a stake into the heart of the American culture that continues to
00:50:07.280 | this day, a deep sense of liberty being the highest thing.
00:50:12.320 | You look at the global experience of the last two years, and the proof of that is stark
00:50:18.060 | in terms of how different the US-American experience of liberty was over the last two
00:50:22.500 | years versus the Australian experience or the Canadian experience.
00:50:25.940 | It's obvious, but it goes back to the very beginning.
00:50:29.380 | And so you have a committed set of ideologues.
00:50:32.460 | Those committed, small group of committed ideologues can make a cultural difference
00:50:37.580 | that endures for a significant amount of time.
00:50:40.300 | And at the conference, all I could hear was the ideology coming through, the ideology
00:50:45.100 | of personal sovereignty, freedom from government coercion, from government control, not building
00:50:50.940 | an inflationary system that benefits a few, but rather giving people an honest monetary
00:50:56.460 | system.
00:50:57.460 | And that ideology really, really impressed me.
00:51:01.380 | It was so obvious, and it came through so loud and clear, that I couldn't walk away
00:51:06.180 | and think that there was anything except, "Hey, here are the right people on the bus,
00:51:10.340 | a lot of them for the right reasons.
00:51:12.500 | This bus is going to go somewhere."
00:51:15.140 | And I think very well, Bitcoin may become the first peaceful monetary system in existence.
00:51:22.020 | I was struck by watching the international opprobrium of Russians and the Russian currency
00:51:31.660 | over the past months, and thinking about how that applies to Bitcoin.
00:51:37.220 | If you look at it right now, holding rubles for most people, given the immoral actions
00:51:43.620 | of the Russian government, has become a deeply difficult thing to do from an ethical standard.
00:51:51.180 | We think about blood diamonds or blood money or something like that.
00:51:54.900 | That's kind of how it feels, the concept of holding rubles.
00:51:57.180 | It feels like, "I'm supporting this regime that's invading its neighbors, and I don't
00:52:03.020 | feel good about this."
00:52:04.700 | Well, I have a similar feeling about the US dollar, and I think that many thoughtful people
00:52:10.060 | who examine the facts would come to a similar feeling.
00:52:12.500 | The problem is, it's hard to promote an alternative.
00:52:17.380 | Even though I have concerns about the US dollar and the behavior of the US government, etc.,
00:52:24.220 | it's a mixed bag, and it's not all bad, it's not all good.
00:52:29.300 | It's a real mixed bag.
00:52:30.980 | You look at it, it's not super motivating to find an alternative.
00:52:34.180 | Then you look at the alternatives, and many of the alternatives are hard to do.
00:52:37.780 | They're hard to integrate.
00:52:39.020 | But if you could come up with an easy alternative that didn't have all that baggage, if you
00:52:43.340 | could create a system that allowed people to hold value and to exchange with their neighbors,
00:52:52.140 | and that system of exchange didn't have all the baggage of a nation-state actor, then
00:52:58.580 | I think in time that's going to be attractive.
00:53:01.140 | You heard that attractiveness loud and clear through so many attendees of the Bitcoin conference.
00:53:08.900 | It was so loud and clear that I think it probably will continue.
00:53:12.820 | As it becomes easier and easier to buy Bitcoin, to own Bitcoin, to hold Bitcoin, to trade
00:53:17.620 | in Bitcoin, to sell Bitcoin, etc., I think you're going to see broader adoption of it.
00:53:23.980 | And I think that I'll wrap up this commentary with this.
00:53:31.620 | Maybe the price appreciation was necessary.
00:53:34.940 | Maybe the price appreciation is still necessary.
00:53:38.580 | That's the thing that bothered me for years, is I thought, "How can this be money if it's
00:53:42.100 | so unstable?"
00:53:43.100 | It's just going up.
00:53:44.100 | But when I got to the Bitcoin conference and I saw the people there who are undoubtedly
00:53:49.100 | there for a combination of make a bunch of money and also support this ideologically,
00:53:55.980 | maybe the price appreciation is not a negative factor.
00:54:00.340 | Maybe it's a positive factor.
00:54:02.340 | And you think about it, I thought a lot over the last years, "Why shouldn't your money
00:54:06.460 | increase in value?
00:54:08.780 | Why shouldn't it happen?"
00:54:10.420 | First, we know that massive fluctuations and instability in the foreign exchange markets
00:54:14.980 | are commonplace.
00:54:15.980 | They're less that the fluctuations between the big currencies are much smaller than they
00:54:20.660 | are on a global basis.
00:54:22.780 | But the fluctuations of the US dollar versus local, the lira, or whatever local currency
00:54:28.580 | you want to do, these are significant fluctuations.
00:54:31.460 | So fluctuation is not necessarily a bad thing.
00:54:35.300 | And why shouldn't your money increase in value?
00:54:38.260 | I think that's one of the strangest things that I've only learned by experience.
00:54:42.180 | And I learned it when I first bought gold and I learned it when I first bought Bitcoin.
00:54:47.100 | You realize that one of the reasons why I spend so much money in US dollars is I fundamentally
00:54:54.100 | believe that those US dollars are eroding in value.
00:54:58.100 | And you know they are with inflation and you know that there's no chance that it's going
00:55:01.940 | to change.
00:55:03.800 | You don't keep money when you think it's going to erode in value.
00:55:06.740 | And this is one of the reasons why inflation is baked into the system at the nation state
00:55:10.780 | level because the government wants to incentivize people to spend their money.
00:55:14.940 | Because on every-- why?
00:55:16.100 | Who knows?
00:55:17.100 | There are many good reasons, right?
00:55:18.820 | An economy with lots of economic movement is generally going to be a healthier economy.
00:55:23.780 | You could take the conspiratorial side and say the government only gets tax money when
00:55:28.420 | money changes hands, which is true.
00:55:30.500 | So you want to generate tax money to increase the power of government, you have to have
00:55:35.860 | money moving.
00:55:37.460 | Other arguments as well.
00:55:39.340 | But it is a kind of a strange scenario when you realize I might actually want to hang
00:55:43.220 | on to my money.
00:55:45.500 | And you find that when you buy gold, you find that when you buy Bitcoin, you think, you
00:55:50.620 | know what?
00:55:51.620 | I think my money is going to be worth more in the future than it is today.
00:55:55.160 | So let me just hang on to my money.
00:55:58.020 | Even if it's not an investment, let me just hang on to my money.
00:56:01.020 | And that feels good.
00:56:03.060 | And that's something that fundamentally went against all of my professional training, goes
00:56:07.100 | against my professional training.
00:56:09.300 | Professional training says you should only hold a small amount of money in cash and you
00:56:12.740 | should hold most of your money in investments.
00:56:15.420 | And that makes sense in a fiat system.
00:56:17.860 | It makes sense in an inflationary fiat system.
00:56:20.660 | But maybe it doesn't make sense.
00:56:22.220 | And maybe it shouldn't make sense.
00:56:24.060 | You go back to a gold-based system and you realize there was actually incentive for people
00:56:27.560 | just to hold money.
00:56:29.300 | You could hold gold dollars and you could just hold money.
00:56:33.500 | You didn't have to go and invest it into a company.
00:56:35.420 | You didn't have to go and invest it into real estate.
00:56:37.580 | You didn't have to worry about getting rid of your money.
00:56:39.420 | You could just simply hold it.
00:56:41.380 | Why shouldn't we have that kind of system in the future?
00:56:46.260 | So in summary, I'm convinced there's tremendous opportunity for Bitcoin from an ideological
00:56:55.300 | perspective, which to repeat is my big thing.
00:56:59.860 | And I'm convinced there's tremendous opportunity for Bitcoin from an investment perspective.
00:57:04.420 | I'm convinced that there's tremendous opportunity.
00:57:07.500 | At this point in time, I have a very hard time seeing the Bitcoin at zero scenarios
00:57:15.460 | being plausible, at least in the short term.
00:57:20.860 | Who knows?
00:57:22.420 | You go out into the long term and it's very hard to be confident in a long-term prediction.
00:57:28.580 | But I have a hard time seeing Bitcoin at zero.
00:57:30.980 | And when I look at the utility to me and to my life, especially from an ideological perspective,
00:57:37.060 | it makes it a strong, strong case.
00:57:39.780 | And when you look at how so many people around the world have, the entrepreneurs have been
00:57:46.060 | developing solutions to the problems, I think it's just going to continue.
00:57:50.460 | And its solutions are already really, really good.
00:57:53.660 | And I think they're going to get even better.
00:57:56.780 | So yeah, I'm in.
00:57:59.940 | I'm in.
00:58:00.940 | I'm convinced that there's a strong and powerful future.
00:58:03.900 | What I don't yet know is I don't yet know how to integrate it properly into good financial
00:58:10.220 | planning.
00:58:11.220 | I've been thinking a lot about that.
00:58:15.100 | And this is where you get into that argument between a currency and an investment.
00:58:20.060 | If you think of Bitcoin as a currency and you were a financial planner, you wouldn't
00:58:24.260 | say to somebody, "Well, go put all your money into a currency.
00:58:26.500 | You still want people to invest."
00:58:27.740 | But Bitcoin is kind of that mixture.
00:58:31.700 | So I don't want to go deeper into that right now.
00:58:33.060 | But I've been thinking about some of the financial planning problems considering that.
00:58:36.740 | There were a couple of, I wasn't going to go into this, but there are a couple of really
00:58:42.420 | innovative solutions that I started to see from the financial perspective at this conference.
00:58:47.740 | There were basically four vendors who were involved in things more related to traditional
00:58:53.180 | financial planning.
00:58:55.420 | Two of them related to real estate where they were developing some cool things about taking
00:59:00.380 | equity from real estate, putting it into Bitcoin.
00:59:02.820 | And I thought that was remarkably smart.
00:59:06.460 | But they're doing, and then a couple of people working on insurance products.
00:59:09.520 | But the insurance products are not yet, nothing is being done in Bitcoin.
00:59:13.180 | And so I think there's going to be a lot of smart finance people over the coming years
00:59:17.340 | trying to think, "How can we use what we know now and how can we move it into a new
00:59:22.580 | direction?"
00:59:23.580 | And that's where we get into the world of smart contracts, DAOs, all kinds of stuff
00:59:27.580 | that's kind of more interesting.
00:59:29.620 | But we're definitely at a pivot point and there's change coming.
00:59:33.340 | So that was my experience from the Bitcoin conference.
00:59:35.500 | If you're interested, Bitcoin 2022, they put all of their sessions on their website.
00:59:42.820 | Just go to YouTube.
00:59:44.140 | It's all available.
00:59:45.140 | You can watch all the conferences, some great speakers.
00:59:47.820 | Jack Dorsey was there.
00:59:48.980 | I really enjoyed the talk of Ricardo Salinas.
00:59:51.180 | He's a Mexican billionaire.
00:59:52.900 | And his comment, he was sharing from his experience of having, living through the Mexican hyperinflation
00:59:59.740 | of the 1980s and how his family got screwed again and again.
01:00:03.780 | He said that his family holdings are now 60% in Bitcoin.
01:00:07.540 | And of course, many of the other Bitcoin people.
01:00:09.620 | But I mean, it was Saylor, Michael Saylor, et cetera, who were there.
01:00:13.580 | But all that's available for you on YouTube free.
01:00:15.860 | So if you're interested in education, that's there and you can watch those talks and more
01:00:21.420 | to come.
01:00:22.420 | I guess I should simply promote.
01:00:24.580 | I have a course.
01:00:25.580 | One of the things that I saw a need in the marketplace for was a course on how to buy
01:00:30.340 | Bitcoin and own it privately and anonymously.
01:00:33.820 | And I think this is one of the most valuable things about Bitcoin is that you can own it,
01:00:37.660 | you can buy it anonymously, you could own it privately and you can do that on a really
01:00:41.920 | effective basis.
01:00:42.980 | And so if you're interested in that, make sure you go and take my course called Bitcoin
01:00:46.460 | Privacy Course dot com.
01:00:48.300 | How to buy Bitcoin, own it anonymously, et cetera.
01:00:51.860 | And done amazing.
01:00:53.580 | Got some great solutions there and even better solutions coming in the days to come.
01:00:58.460 | Bitcoin Privacy Course dot com.
01:00:59.460 | And I'll be back with you soon.
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