Robert Breedlove: Philosophy of Bitcoin from First Principles

00:00:00.000 | The following is a conversation with Robert Breedlove,

00:00:03.100 | someone who caught my attention and was recommended highly

00:00:06.800 | as a rigorous scholar and thinker

00:00:08.560 | in the space of decentralized finance and Bitcoin.

00:00:12.160 | His podcast titled "What is Money?"

00:00:15.200 | is a good representation of the way his mind works.

00:00:18.280 | He's willing to talk through ideas for many hours,

00:00:21.600 | willing to listen, willing to think,

00:00:24.080 | which makes him a great companion and conversation

00:00:26.800 | to explore the history, philosophy, and future of money.

00:00:31.060 | Quick mention of our sponsors,

00:00:33.760 | Fundrise, Element, MonkPak, and BetterHelp.

00:00:38.240 | Check them out in the description to support this podcast.

00:00:41.800 | As a side note, let me say that I'll have a number

00:00:44.360 | of conversations in the coming months

00:00:46.040 | on Bitcoin and other cryptocurrencies.

00:00:49.360 | None of these conversations are financial advice.

00:00:52.320 | That's not a legal warning.

00:00:53.660 | That's a genuine description of my goals

00:00:55.400 | and approach with these chats.

00:00:57.480 | At least for a while, I personally won't actively invest

00:01:00.560 | in Bitcoin or any other cryptocurrencies,

00:01:03.360 | except to learn about the technology itself.

00:01:06.480 | I don't think this should be a journalistic standard

00:01:08.920 | like the New York Times trying to establish,

00:01:11.320 | which I very much disagree with.

00:01:13.120 | In my humble opinion, I think journalists should be free

00:01:16.640 | to invest in Bitcoin if they want to.

00:01:19.240 | Luckily, I'm not a journalist.

00:01:21.460 | I just know my own psychology and I feel

00:01:23.660 | that my thinking will be muddled by excitement

00:01:26.360 | if I invest before I understand.

00:01:29.000 | I feel the same way about Tesla, for example.

00:01:31.340 | I still don't own any Tesla stock,

00:01:33.840 | and I am still indeed fascinated by Tesla Autopilot

00:01:37.340 | as an artificial intelligence system.

00:01:39.500 | I work hard to be cognizant of the biases

00:01:42.620 | that arise in my mind and always try to choose the path

00:01:47.280 | that maximizes or maintains a freedom of thought

00:01:52.040 | as much as possible.

00:01:53.740 | Also, let me say that I try to be very careful

00:01:56.180 | in selecting guests based not only on the contents

00:01:59.420 | of their ideas, but the richness, complexity, music,

00:02:03.020 | style of their mind and character.

00:02:05.140 | Yes, I will talk with people with whom you

00:02:08.020 | and I may disagree, people who some may call bad

00:02:12.080 | or even evil human beings.

00:02:14.820 | I want to understand them because I believe that,

00:02:18.100 | as Solzhenitsyn said, the battle line between good and evil

00:02:22.500 | runs through the heart of every man.

00:02:25.140 | I think if you always run from evil,

00:02:27.020 | you become blind to the truth of human nature.

00:02:30.460 | This is the Lex Friedman Podcast,

00:02:32.780 | and here is my conversation with Robert Breedlove.

00:02:36.320 | Rousseau opens his 1762 book, "The Social Contract,"

00:02:41.460 | with the following statement, "Man is born free,

00:02:45.300 | "and everywhere he's in chains."

00:02:47.460 | So you talk about freedom and sovereignty quite a bit.

00:02:50.800 | What do these ideas mean to you, the idea of sovereignty?

00:02:54.640 | - Freedom and sovereignty,

00:02:57.280 | I think they're very closely related.

00:02:59.120 | It started just focusing on sovereignty,

00:03:01.740 | which is a word I don't think we talk about enough.

00:03:04.820 | And the general definition of that I would give

00:03:07.100 | is the authority to act as you see fit.

00:03:10.080 | And it's a word that's etymologically associated

00:03:15.840 | with words like monarchy, money, reign.

00:03:19.260 | So historically, it's referred to whatever the locus

00:03:23.540 | of supreme power is in the sphere of human action.

00:03:26.220 | So whether, if you go like back in ancient Egypt,

00:03:30.140 | the pharaoh had absolute sovereignty,

00:03:32.420 | and everyone else was pretty much

00:03:34.380 | operating according to his interest.

00:03:36.820 | You fast forward to today, modern Western democracy,

00:03:40.180 | we have more decentralized sovereignty

00:03:43.380 | in that we all get to go vote and elect officials

00:03:45.380 | that make decisions on our behalf.

00:03:47.700 | So the theme of sovereignty across history

00:03:50.980 | is that it's been gradually decentralizing

00:03:52.780 | across our different models of socioeconomics.

00:03:55.400 | And it's largely, you could say it's rooted heavily

00:04:01.100 | in the money, I would argue,

00:04:03.100 | which is something we'll get a lot into here,

00:04:04.700 | where if you have money, you have the authority

00:04:08.320 | to act as you see fit in the world.

00:04:10.060 | And even in our current political sphere,

00:04:14.180 | if you have enough money,

00:04:15.000 | you can actually reshape the rules, right?

00:04:17.020 | You can reshape laws, you can lobby Congress.

00:04:19.220 | If you're in a certain situation, like many billionaires,

00:04:24.660 | you can negotiate your own tax treaty,

00:04:26.660 | such that you can get favorable tax treatment

00:04:28.540 | with certain jurisdictions in the world.

00:04:30.460 | So this concept of sovereignty,

00:04:32.720 | which today we call, it's common to call states

00:04:38.460 | or nation states or governments sovereign,

00:04:41.100 | meaning that they have power over people.

00:04:43.140 | But as I argue in a lot of my writing,

00:04:46.100 | I actually think that sovereignty

00:04:48.060 | and here's within the individual,

00:04:49.980 | and that we each have our own interiorized space of choice,

00:04:54.740 | which is something like Viktor Frankl called

00:04:56.580 | the final human freedom.

00:04:58.140 | And that we, no matter what our circumstances are,

00:05:00.460 | no matter what exogenous situation we face,

00:05:03.380 | we always have this endogenous power

00:05:05.420 | to choose how we respond to it.

00:05:07.700 | - That's one of my favorite books is "Man's Search

00:05:09.860 | for Meaning."

00:05:11.180 | Maybe we can break that apart a little bit.

00:05:14.980 | So you've kind of spoken about sovereignty

00:05:16.900 | as closely linked to power,

00:05:20.020 | but is there something about your own mind

00:05:22.260 | being able to achieve sovereignty,

00:05:25.420 | no matter what the monetary system is,

00:05:27.300 | no matter what, who has the control

00:05:29.260 | over centralized power, the money,

00:05:30.720 | or whatever the mechanisms of sovereignty

00:05:34.100 | at the societal level.

00:05:35.340 | You as an individual, isn't ultimately all boiled down

00:05:39.260 | to what you can do with your own mind,

00:05:41.100 | how you see the world?

00:05:42.620 | - Yes. - How you interpret it.

00:05:43.660 | - Yeah, I agree.

00:05:45.060 | And as we get a little bit deeper into this,

00:05:47.580 | I think we'll come to see money as an extension

00:05:49.660 | of your mind.

00:05:50.620 | So there's a feedback between money and mind.

00:05:52.620 | For instance, you think in dollars today,

00:05:54.880 | almost guarantee it, most of us do here in the US.

00:05:57.480 | And it's a tool, right?

00:06:00.260 | It's a tool we're using to decomplexify the world around us,

00:06:03.340 | to deal with it, to understand the sacrifices

00:06:07.700 | and successes across an entire history

00:06:09.780 | of economic transactions.

00:06:10.900 | We can boil that all down to the price.

00:06:12.460 | So it's data compression.

00:06:14.380 | And if you can change, if there's a central body,

00:06:19.380 | or central governance mechanism that can manipulate

00:06:21.500 | that money, it can have an impact on your mind.

00:06:23.860 | For instance, today, so I agree with you on the first hand,

00:06:28.220 | say that I do believe in free will.

00:06:32.180 | I do believe in individual autonomy.

00:06:34.900 | But I also think that there are certain devices

00:06:38.700 | and powers in the world around us

00:06:40.000 | that can actually influence how we think.

00:06:42.140 | And it's fascinating to think about the fact

00:06:44.260 | that money might be actually deeply integrated

00:06:46.940 | into the way we think and into our mind.

00:06:49.860 | Like this is, you think about what are the core aspects

00:06:53.100 | of the human mind?

00:06:54.100 | What influences cognition,

00:06:55.980 | the way you reason about the world?

00:06:58.340 | You have the Chomsky-like languages

00:07:00.180 | at the core of everything.

00:07:02.100 | But you're kind of placing money as pretty close

00:07:06.880 | to the core of what it means to be

00:07:09.620 | an intelligent, reasoning human.

00:07:11.960 | I think money is a direct derivation of action

00:07:15.020 | and speech, actually.

00:07:16.100 | It's another expression of the logos.

00:07:18.060 | If we even think of what it means to think,

00:07:22.140 | is that we are generating two different courses of action,

00:07:26.880 | potential courses of action,

00:07:28.620 | and we're populating them with avatars, right?

00:07:31.140 | Maybe ourselves or others.

00:07:32.660 | And then we're comparing how we may act in each situation

00:07:36.020 | and what we think the result would be.

00:07:37.420 | So actually, it's comparison.

00:07:40.220 | Basically, it's comparison and contrasting

00:07:41.880 | of possible courses of action.

00:07:44.280 | And that's the same thing with words themselves.

00:07:47.400 | Most words, the vast majority of words,

00:07:53.180 | only have meaning in relationship to other words.

00:07:55.760 | It's all contextual definitions of a word or more words.

00:07:59.520 | Now, people have argued with me about this

00:08:01.120 | because there is a first word, right,

00:08:02.800 | where you pick up rock and say rock.

00:08:04.920 | But most other words, in higher abstraction,

00:08:08.300 | tend to be relative.

00:08:10.400 | And what's funny about action and speech,

00:08:15.400 | and this gets, I got into a bit of this in our paper here,

00:08:18.400 | is that it's linked to evolutionary biology,

00:08:21.760 | and that once human beings adopted upright stance,

00:08:26.400 | we freed our hands.

00:08:27.920 | We no longer needed our hands for locomotion.

00:08:30.280 | So we started to evolve more dexterity,

00:08:33.100 | and notably, we have opposable thumbs.

00:08:35.920 | So this gives us an ability to manipulate

00:08:38.540 | and particularize the environment

00:08:39.960 | in a way that most other animals cannot.

00:08:42.360 | And what's interesting about this is that

00:08:44.120 | as we gain this ability to manipulate natural resources

00:08:49.020 | and count, point, pointing was a big deal,

00:08:52.040 | and that we could indicate prey or items

00:08:55.720 | that are far off distance, and we could organize ourselves,

00:08:58.560 | we, at the same time, we co-evolved this fine musculature

00:09:04.220 | in the face and tongue.

00:09:05.960 | So it's as if speech developed,

00:09:07.940 | co-evolved really with our dexterity.

00:09:09.960 | And as a natural extension of that came us making tools.

00:09:15.840 | We started to create things

00:09:18.400 | to better satisfy our wants over time.

00:09:21.280 | And the most tradable tool in any society,

00:09:24.960 | or the most tradable thing is money.

00:09:26.680 | So I really, I argue that action and speech

00:09:31.240 | are quintessential modes of self-sovereign expression.

00:09:35.220 | And the money is just sort of a tech layer

00:09:37.260 | we've put right on top of that,

00:09:38.860 | and that it's a natural derivation of action and speech.

00:09:42.260 | - Okay, that's fascinating to think about sovereignty

00:09:44.940 | from the evolutionary perspective.

00:09:47.220 | And then ultimately, money is the technology layer

00:09:50.180 | that enables sovereignty.

00:09:51.980 | So, you know, it's really fascinating to think about

00:09:56.980 | our modern human society as deeply rooted

00:10:01.100 | in these evolutionary roots

00:10:03.260 | from the very origins of life on earth.

00:10:05.380 | So what, you know, some of the ideas you just mentioned,

00:10:09.780 | what do you see are some interesting characteristics

00:10:13.080 | of just life on earth that propagated to us humans?

00:10:17.120 | Like what ideas propagated through,

00:10:20.940 | have roots in the evolution?

00:10:23.540 | - Yeah, I think one of the deepest impulsions in life

00:10:28.060 | is the territorial imperative.

00:10:30.760 | So all life is seeking to expand

00:10:34.460 | its dominion over space and time.

00:10:37.220 | And we think about, you know, again, physically with space,

00:10:40.940 | it's advantageous to an animal or an organism

00:10:43.720 | to have more territory under its control to raise offspring.

00:10:47.920 | So it's all about reproductive fitness

00:10:49.660 | at the end of the day.

00:10:50.860 | And then we'd also think of reproduction itself

00:10:53.820 | as the genetic impulse to have more,

00:10:57.000 | to replicate oneself across time.

00:10:58.880 | So it's territoriality across time in a way.

00:11:02.140 | And this is very common in most animals.

00:11:04.040 | Not all animals are territorial, but many are.

00:11:06.380 | And you see very interesting behaviors

00:11:09.980 | resulting from territoriality.

00:11:11.560 | This is like animal combat.

00:11:13.780 | You know, the reason birds sing is territoriality,

00:11:16.640 | a number of other things.

00:11:19.660 | And it's my hypothesis,

00:11:22.420 | and others have shared this hypothesis as well,

00:11:25.260 | that mankind is clearly, I think,

00:11:28.640 | would argue a territorial species,

00:11:30.280 | and that he expresses this territoriality

00:11:32.940 | in property rights.

00:11:34.140 | So property, when we hear that word,

00:11:38.200 | we typically think of an asset.

00:11:39.480 | We think of, oh, this house or this stock or whatever.

00:11:42.240 | But property is actually the socially acknowledged

00:11:45.080 | relationship between a human and an asset,

00:11:48.160 | such that you have exclusive rights and responsibilities

00:11:51.100 | to a particular asset.

00:11:53.860 | It is not the asset itself.

00:11:55.520 | So property, it's information, it's a relationship.

00:11:59.520 | - By the way, my mind was just blown.

00:12:01.160 | Property is information, it's not the actual asset.

00:12:04.240 | That's really important.

00:12:05.600 | - Very important.

00:12:06.600 | - That's really interesting.

00:12:07.560 | - Yeah, and then it comes down to

00:12:10.120 | how do we organize ourselves such that

00:12:13.600 | property, that the contributions people are making

00:12:19.440 | are commensurate with the consideration they're receiving.

00:12:22.200 | So if you're adding value to a piece of property,

00:12:24.740 | you're developing a piece of land for use,

00:12:27.920 | in theory, to be fair, you should have the rights

00:12:31.880 | to that fruit, right?

00:12:32.820 | If you go out and plant a garden or whatever it may be.

00:12:35.580 | And this is very, this is rooted in natural law,

00:12:41.620 | where we have rights to life, liberty, and property.

00:12:44.420 | Those are kind of just the base,

00:12:46.000 | the fundamental layer of morality and capitalism, frankly.

00:12:49.920 | And you could think of, to get really primordial with it,

00:12:54.340 | the first capitalist in the world,

00:12:58.020 | just to kind of get some definitions out here,

00:12:59.740 | I'll say capitalism versus communism or socialism,

00:13:03.980 | as the spectrum I'll speak on.

00:13:06.100 | The first capitalist in the world would be the guy,

00:13:09.440 | the caveman that maybe dug a little hole for himself

00:13:12.420 | to shield himself from the elements, right?

00:13:14.960 | Maybe there was a rainstorm or a snowstorm

00:13:17.260 | and he dug a little enclave and he protected himself.

00:13:20.620 | - I thought you were gonna go, 'cause you said primordial,

00:13:22.900 | I thought you were gonna go back

00:13:23.820 | to earlier biological systems.

00:13:26.180 | - I guess primordial for human, perhaps.

00:13:29.100 | - For humans, yeah.

00:13:30.580 | Okay.

00:13:31.420 | - And then the first communist or socialist

00:13:34.060 | would be someone that decided the fruits

00:13:36.220 | of his labor belonged to him.

00:13:38.780 | So he would have violently encroached on that individual

00:13:41.260 | and taken his plot for himself, for his own use.

00:13:45.140 | And that's the spectrum across which capitalism

00:13:50.140 | in the pure sense and communism in the pure sense operate

00:13:53.540 | in that capitalism, each individual has the exclusive rights

00:13:57.620 | to the fruits of their labor.

00:13:59.180 | So anything they spend their time, effort, energy,

00:14:02.140 | creating in the world, they own the rights to that

00:14:04.960 | and they can trade those rights with others,

00:14:07.100 | other self-owned people that have done similar things.

00:14:10.380 | Communism or socialism would imply that other people,

00:14:13.740 | typically the state, have the rights,

00:14:16.040 | at least some rights to the value you've created.

00:14:19.580 | - So there's this interesting moment

00:14:21.380 | when that first caveman, that first capitalist,

00:14:23.820 | drew a line, a circle in this cave and said,

00:14:28.300 | this is mine.

00:14:29.940 | You could say it was free to be claimed

00:14:32.260 | at the time he claimed it.

00:14:33.660 | But it's an interesting moment when asset becomes an asset,

00:14:39.620 | when space-time, as you were referring to it,

00:14:43.600 | becomes something that's now,

00:14:45.980 | can be possessed by a human being.

00:14:47.940 | Is there something special about this moment?

00:14:51.100 | Because it feels like, first of all,

00:14:53.820 | in terms of space and time,

00:14:55.300 | it feels like there's a lot of available space-time

00:15:01.060 | yet to be claimed.

00:15:02.660 | So if we just look at like the universe, right?

00:15:05.380 | We're talking about, there's a funny thing

00:15:06.940 | with Elon Musk and Mars.

00:15:08.940 | I think they sneaked in there for SpaceX

00:15:12.700 | that nobody on earth has any authority on Mars or any,

00:15:17.560 | this is a very interesting question.

00:15:18.980 | It seems almost like humorous at this time,

00:15:20.980 | but perhaps not.

00:15:22.600 | Perhaps there'll be sections of space,

00:15:25.200 | not just on planets, that are gonna be even fought over.

00:15:29.020 | So is there something special about this moment?

00:15:31.000 | Because in discussing sort of violence

00:15:35.160 | and respect for property,

00:15:36.680 | it feels like this is a special moment

00:15:39.280 | because ultimately conflict arises

00:15:42.740 | when you make claims on a particular territory.

00:15:46.620 | It's not always in conflict where people say,

00:15:50.220 | when you look at Hitler or something, for example,

00:15:52.820 | his claim would be in many of the lands

00:15:55.660 | that he attacked and invaded,

00:15:58.220 | that this is ultimately,

00:15:59.740 | this has always belonged to Germany.

00:16:01.780 | So is there something you could say

00:16:04.920 | as to what it means to own an asset or a property?

00:16:09.480 | - Yeah, so in the ancient days of hunters and gatherers,

00:16:14.000 | we could say that property was mostly a loyal title,

00:16:19.000 | which meant it's just whatever you can defend.

00:16:21.600 | So if you've got knives and daggers and satchels

00:16:25.640 | and maybe some pelts you've hunted,

00:16:28.760 | whatever you can hold and defend is yours.

00:16:32.160 | And there's not like there's a government

00:16:33.920 | to appeal to, you're just sort of a free agent

00:16:37.780 | operating in the wild,

00:16:39.140 | defending the assets you can protect on you more or less.

00:16:42.720 | And what really changed the nature of property

00:16:48.380 | is when we get into the agricultural age.

00:16:50.780 | So there's a big flip where we went from just foraging

00:16:55.260 | and hunting all the time, constantly moving,

00:16:57.300 | trying to stay alive to deciding we're gonna settle here.

00:17:00.420 | We figured out how to cultivate crops.

00:17:03.200 | We can create, we can increase the population

00:17:06.100 | 'cause we can harvest more energy from the sun

00:17:08.500 | and we can establish a longer term civilization.

00:17:11.300 | What happens in that transition

00:17:13.600 | is that we begin creating economic surplus.

00:17:16.500 | So for the first time in history,

00:17:17.660 | we have grain, stock houses of grain to defend

00:17:22.020 | or maybe meat or cattle or whatever it is we're creating,

00:17:25.260 | we now have savings.

00:17:27.040 | And it's at that time when government emerges as well.

00:17:33.440 | Because once you have savings,

00:17:35.120 | so you have an economic surplus,

00:17:36.340 | you have something that other people want to steal.

00:17:39.320 | This one thing we'll touch on a lot today

00:17:41.800 | is people always want something for nothing.

00:17:44.320 | People are always seeking the path

00:17:47.480 | to get something for nothing.

00:17:48.400 | And I think that drives a lot of our decision making.

00:17:51.640 | And it actually encourages us to be innovative

00:17:53.720 | in a lot of ways.

00:17:54.560 | We're trying to, you could say it's our laziness

00:17:58.100 | that's helping us be inventive in a way.

00:17:59.800 | We're trying to accomplish greater results

00:18:01.440 | with less efforts over time.

00:18:02.960 | But we can cross that line

00:18:05.280 | in seeking something for nothing

00:18:07.480 | where we start to violate the life,

00:18:08.960 | liberty and property of others.

00:18:10.320 | And that's where we shift from kind of capitalistic society

00:18:13.200 | to something more communistic.

00:18:15.600 | And so that's what government is.

00:18:18.880 | It's a protection producing enterprise

00:18:21.720 | for the economic surplus generated by a trading society.

00:18:25.900 | So when people begin to trade,

00:18:28.500 | they create what's called the division of labor,

00:18:30.960 | which is a very common economics term.

00:18:33.040 | Basically means you're better at making hats,

00:18:35.440 | I'm better at making boots.

00:18:37.440 | If you specialize in hats, I specialize in boots

00:18:39.840 | and we trade, we've created a positive sum game

00:18:42.600 | where you and I both benefit.

00:18:43.840 | So we become collectively more than the sum of our parts

00:18:47.000 | through trade.

00:18:48.320 | And that's why human beings do trade

00:18:51.360 | because we become more energy efficient as a result.

00:18:54.020 | We create more outputs per unit of input.

00:18:56.560 | And you can think of government in that respect,

00:18:59.280 | if we're looking at it, maybe in a tech sense

00:19:01.240 | that the economy is the trade network

00:19:03.920 | that generates wealth, generates innovation,

00:19:06.380 | generates all this whole lap of luxury we live in today

00:19:09.120 | that we've inherited from our forebears is from the market.

00:19:12.680 | It's not from a government.

00:19:14.120 | The government is the network security, if you will.

00:19:17.500 | So we're paying expenses to a vendor to protect peace,

00:19:21.880 | to preserve life, liberty and property in that network

00:19:24.480 | so that we can have,

00:19:25.760 | when there's inevitably disputes over private property,

00:19:28.120 | we can have nonviolent dispute resolution

00:19:30.720 | in the rule of law.

00:19:31.960 | And we can have a reasonable expectation

00:19:36.040 | of being able to conduct commerce without violence.

00:19:39.440 | The problem has been that the protector tends to,

00:19:43.960 | they're in a monopolistic position, we'd say.

00:19:46.080 | They tend to start abusing that position

00:19:49.260 | to obtain property for themselves.

00:19:53.040 | Again, trying to get that something for nothing.

00:19:55.840 | When you control, you are the security guard

00:20:00.320 | for the economy,

00:20:02.200 | the first thing they tend to monopolize is money.

00:20:04.680 | Because if you can control the money,

00:20:05.840 | you're effectively controlling people,

00:20:07.220 | their energy, their perceptions.

00:20:09.240 | And that becomes a, particularly through inflation,

00:20:14.560 | becomes an avenue to get something for nothing.

00:20:17.520 | And that you can just print more money

00:20:20.000 | that everyone else is forced to sacrifice

00:20:22.360 | their time and energy to obtain.

00:20:25.080 | - What are your thoughts about anarchism?

00:20:27.560 | So I talked quite a bit,

00:20:29.440 | he'll be here in a few days actually, Michael Malice,

00:20:32.220 | about ideas of anarchy and his idea,

00:20:36.800 | or the idea of anarchists is that

00:20:39.400 | any amount of government will eventually become

00:20:42.080 | the very kind of thing that you're referring to.

00:20:45.660 | So there's almost no way to have a government

00:20:48.480 | that doesn't then try to monopolize power,

00:20:52.200 | money and all those kinds of things.

00:20:54.360 | Do you think it's possible to have a government

00:20:56.900 | sort of on that spectrum of like anarchy,

00:20:59.760 | maybe libertarianism,

00:21:02.000 | I'm not sure how exactly the spectrum goes,

00:21:04.600 | but where you have a small government

00:21:07.160 | that protects the liberty and property rights

00:21:09.040 | and those kinds of things,

00:21:10.680 | and doesn't expand to then also control

00:21:13.600 | the monetary system and all those other things?

00:21:17.640 | - Agreed, agreed completely.

00:21:19.860 | It was not possible until Satoshi Nakamoto.

00:21:24.120 | So for the first time in history,

00:21:25.600 | we have a money that cannot be monopolized,

00:21:29.180 | cannot be corrupted, cannot be changed,

00:21:32.020 | cannot be weaponized, frankly.

00:21:34.440 | Our current monetary system is weaponized

00:21:36.680 | by those who can print money against those who cannot.

00:21:39.400 | And I think when you have,

00:21:45.080 | at the heart of every modern economy,

00:21:46.880 | which even we could say the US,

00:21:48.600 | we pride ourselves as free market capitalist,

00:21:51.800 | we out-competed communism in the 20th century,

00:21:54.320 | we think that this is the superior model.

00:21:56.440 | Most business people will tell you

00:22:00.540 | that the free market is the best allocator of resources,

00:22:03.800 | all of these things.

00:22:05.280 | But what we have at the heart of every modern economy,

00:22:07.520 | including the US, is an anti-capitalistic institution,

00:22:10.760 | which is the central bank.

00:22:12.060 | The temptation to monopolize money throughout all of history

00:22:16.360 | has been too strong for anyone to resist.

00:22:18.680 | So any, even benevolent, quote-unquote,

00:22:21.520 | dictators that have taken over,

00:22:23.400 | many dictators have inherited, say, an inflationary regime,

00:22:26.960 | where society's coming apart

00:22:28.280 | because someone was clipping the coins

00:22:29.560 | or someone was printing too much money,

00:22:31.240 | and they'll commit to going back to a hard money standard.

00:22:34.160 | So they'll keep society on a gold standard, for instance,

00:22:37.840 | such that they cannot violate

00:22:39.400 | the money to benefit themselves.

00:22:42.120 | But inevitably over time,

00:22:44.400 | because it is a political institution,

00:22:48.720 | there's an incentive there, right,

00:22:50.680 | for, again, to get something for nothing,

00:22:53.160 | to spend more than you're making through tax revenues.

00:22:57.280 | And with that incentive,

00:22:58.720 | people typically ultimately end up pursuing

00:23:01.140 | that inflationary path.

00:23:02.560 | So we get deeper into that about,

00:23:06.720 | inflation is a term that we've been conditioned

00:23:09.440 | to think today is just something normal,

00:23:11.000 | the prices just go up,

00:23:12.160 | and then it's pertinent to a healthy economy,

00:23:16.600 | but it's actually,

00:23:18.880 | if you look at it from real first principles,

00:23:20.360 | it is just theft integrated into the money.

00:23:22.600 | It's a technology backdoor,

00:23:24.040 | is another way to think about it.

00:23:25.480 | You wouldn't buy a cell phone

00:23:27.000 | knowing that someone could siphon your data

00:23:29.560 | off of your private calls and sell it into the market.

00:23:32.080 | Now, I know we do that with a lot of social media stuff

00:23:33.760 | today, and that's something else we can get into,

00:23:35.280 | but you wouldn't do it willingly, right?

00:23:37.360 | You would prefer that your cell phone and your data

00:23:40.360 | was monetized by you,

00:23:42.080 | or if you're gonna sell it,

00:23:43.200 | you would be able to selectively sell it.

00:23:45.480 | Inflation is that, it's similar, it's a tech backdoor.

00:23:49.120 | So it's a money that only a few people

00:23:53.520 | can siphon value off of surreptitiously,

00:23:56.280 | typically slowly,

00:23:58.360 | but eventually as we've seen throughout history,

00:24:00.120 | that slowly builds up into a rapidly

00:24:02.600 | and then causes the monetary system to collapse.

00:24:05.840 | - Do you think there's a benefit to inflation possibly?

00:24:08.440 | So when you have perfect information,

00:24:12.360 | but perhaps you don't need inflation,

00:24:14.280 | perhaps it is purely theft,

00:24:16.040 | but I think of inflation as like the snooze button

00:24:18.600 | on the alarm.

00:24:19.560 | So if you have a hard standard,

00:24:23.520 | you better wake up when the alarm rings,

00:24:25.880 | but all of us kind of like, probably shouldn't,

00:24:29.400 | but use the snooze button.

00:24:30.760 | It's like, okay, well, five more minutes,

00:24:32.320 | 10 more minutes.

00:24:33.160 | And then you're saying there's naturally a slippery slope

00:24:37.000 | where it becomes a drug that you fall in love with

00:24:40.160 | and you abuse.

00:24:41.840 | But nevertheless, the usefulness of the snooze button

00:24:46.280 | is that you don't know how you'll be actually feeling

00:24:48.840 | when the alarm rings.

00:24:50.320 | You might be able to ready to pop up.

00:24:52.200 | It might be like, you really need those few more minutes

00:24:55.240 | like to psychologically get yourself out of bed.

00:24:57.560 | This metaphor is just not working at all.

00:25:00.520 | - No, no.

00:25:01.360 | - Do you think there's a use to inflation sometimes

00:25:05.000 | from like an economics perspective?

00:25:07.000 | - I think the drug metaphor is a little more apt

00:25:09.760 | in that inflation does provide

00:25:12.400 | an immediately stimulative effect when used early on.

00:25:17.400 | But what it's doing is it's, again,

00:25:23.120 | we talk about the balance between incentives

00:25:26.280 | and disincentives, right?

00:25:27.480 | That being necessary for a system to function properly.

00:25:31.040 | With inflation, you're essentially giving

00:25:34.080 | the people that can print money

00:25:37.280 | a way to dampen the disincentives they face.

00:25:40.760 | So it destroys feedback loops, I guess you might say.

00:25:45.760 | And another way to look at this is when you,

00:25:49.360 | so using inflation, using quantitative easing,

00:25:52.280 | you can decrease short-term volatility in the marketplace.

00:25:56.880 | So the market is basically this idea,

00:26:01.120 | this form of free exchange

00:26:02.440 | that's trying to zero in on the best ideas.

00:26:04.480 | And the ideas are those that are most fit to reality,

00:26:07.040 | to satisfying the most wants.

00:26:08.800 | It's gonna overshoot, it's gonna undershoot,

00:26:10.360 | you have these little business cycles.

00:26:12.000 | But when it's undershooting

00:26:13.520 | and you're experiencing a business recession,

00:26:16.840 | in a capitalist environment,

00:26:19.160 | the market needs to clear that malinvestment,

00:26:21.960 | that misallocation of capital.

00:26:23.280 | That means someone made a bet on a certain idea

00:26:25.440 | that it would satisfy wants in a particular way,

00:26:27.840 | and that bet did not pan out.

00:26:29.440 | If you then paper over the losses that business is creating,

00:26:33.000 | you're now delaying and exacerbating the volatility

00:26:36.840 | that that idea created.

00:26:39.160 | So this is kind of a Talebian concept

00:26:41.400 | where you can dampen short-run volatility,

00:26:46.080 | but volatility is truth.

00:26:48.320 | Volatility is us matching our ideas to reality.

00:26:53.320 | We're constantly, again, overshooting and undershooting.

00:26:55.200 | So you delay volatility,

00:26:57.640 | you're just amplifying it

00:26:58.880 | and exacerbating it in the long run.

00:27:01.160 | And that's what central bank is doing.

00:27:02.720 | The central bank mandate is low unemployment

00:27:06.880 | and low unexpected inflation, basically.

00:27:11.280 | And so they're trying to achieve economic growth

00:27:16.840 | in a stable way, quote unquote stable way.

00:27:19.520 | This is their ostensible purpose.

00:27:21.220 | And that's just not possible.

00:27:23.960 | Growth is an inherently instable process.

00:27:26.700 | Can you elaborate a little bit

00:27:29.400 | about the nature of volatility?

00:27:33.360 | Why is it communicating truth?

00:27:35.820 | That's something that a lot of people are afraid of,

00:27:39.040 | is the volatility.

00:27:40.320 | Almost like it's a sign of chaos.

00:27:44.240 | And so they want to escape chaos.

00:27:48.240 | But you're saying that that's actually,

00:27:51.720 | whether it's chaos or not, I don't know,

00:27:53.640 | but it's getting us closer to the fundamental reality

00:27:57.600 | that we should not be trying to escape.

00:28:00.080 | - Yeah, so if we consider that the universe

00:28:04.960 | is pervaded by entropy, right?

00:28:06.960 | This is the second law of thermodynamics,

00:28:08.760 | is that every closed system tends

00:28:10.560 | towards greater disorder over time.

00:28:12.600 | And that life itself, again, I would argue,

00:28:15.880 | expressed through the logos,

00:28:17.720 | we, life, is the anti-entropic principle.

00:28:22.160 | It's the only thing that's converting entropy into order,

00:28:24.720 | chaos into order.

00:28:26.480 | And that's what entrepreneurs are doing, right?

00:28:29.940 | We're living at the edges of the known,

00:28:32.680 | and we're trying to, we're testing ourself

00:28:36.040 | against the entropy of nature,

00:28:37.200 | trying to figure out new and better ways

00:28:38.880 | of saying, doing, or making things.

00:28:41.000 | And then if we do crack a code or figure something out,

00:28:44.240 | we then have a big incentive.

00:28:45.640 | The incentive is to get rich, right?

00:28:47.120 | Because then you have a new idea

00:28:48.360 | that you could then sell back into the marketplace.

00:28:50.880 | So it's this sequence of courageously

00:28:56.640 | confronting the entropy of nature

00:28:58.680 | and converting it into good and useful order,

00:29:00.800 | which by the way, is like the ancient idea of God

00:29:03.280 | and Genesis, which I think is interesting,

00:29:05.380 | that actually enables us to construct civilization

00:29:10.080 | in these layers of anti-entropy or order, you might say.

00:29:14.880 | So today we live in a bubble of anti-entropy or order.

00:29:19.880 | You know, like the coastlines are guarded by the nation

00:29:23.280 | and the city has a certain police force

00:29:26.360 | that keeps it in order.

00:29:27.680 | Even the way we talk, like clearly the words matter,

00:29:32.800 | but also the nonverbal cues, all these things are like order

00:29:35.440 | that has been established over many, many, many thousands

00:29:38.920 | of years of human evolution.

00:29:40.760 | And I think that when I say volatility is truth,

00:29:46.640 | what I'm saying is that the experience of uncertainty

00:29:50.280 | is something that's ineradicable from life, right?

00:29:53.560 | Uncertainty, like it's kind of a paradox

00:29:57.040 | because we're fighting against it, right?

00:29:58.960 | We're trying to innovate our way away from uncertainty

00:30:01.440 | to give us, to create more capital,

00:30:03.600 | which capital is very simply a way of mitigating uncertainty.

00:30:08.600 | So this is why you might have like a stash of food

00:30:12.320 | in case the power goes out or a generator,

00:30:14.560 | like it helps you overcome uncertainty over time.

00:30:17.760 | But uncertainty is also where all the sweetness of life is.

00:30:21.400 | So there's gotta be this balance

00:30:22.640 | with one foot in, one foot out.

00:30:24.240 | - So human society is this kind of bubble of order

00:30:27.480 | that we've constructed and slowly expanding,

00:30:30.460 | but at the edges, you're always going to have that chaos,

00:30:33.160 | that volatility, and that the entrepreneurs

00:30:36.160 | are kind of like jumping into that chaos

00:30:39.480 | and some of them die and some of them succeed.

00:30:42.000 | And so like, if you wanna grow this bubble of order,

00:30:46.360 | you have to be embracing the volatility at the edges.

00:30:51.360 | - Yes.

00:30:52.200 | And reverence for entrepreneurship,

00:30:55.080 | because these are the people putting their neck out,

00:30:58.960 | so to speak, risking themselves.

00:31:01.280 | And they're gonna contribute to society, by the way,

00:31:03.200 | whether they go up in flames or not.

00:31:05.080 | If they go up in flames,

00:31:06.320 | society has witnessed their experience

00:31:08.560 | as something not to do,

00:31:09.600 | or something that doesn't work in a particular time and place

00:31:12.360 | so that you could say they're,

00:31:13.680 | them going up in flames

00:31:14.800 | is a way of enlightening the rest of us.

00:31:16.800 | Or if they figure something out,

00:31:19.000 | Steve Jobs creates the iPhone,

00:31:20.840 | it changes the world forever.

00:31:22.760 | - Enlightening the rest of us.

00:31:24.400 | (laughing)

00:31:25.800 | - And Taleb would say--

00:31:26.640 | - With the fire of their failure, okay.

00:31:28.600 | - Yeah, exactly.

00:31:30.040 | Taleb would say,

00:31:31.460 | individual fragility is inseparable

00:31:36.240 | from ensemble anti-fragility.

00:31:38.600 | So this means that, again,

00:31:40.660 | every time that entrepreneur goes up in flames,

00:31:42.800 | or say a restaurant goes out of business,

00:31:46.080 | when a restaurant goes out of business,

00:31:47.440 | that particular cuisine strategy they were implementing

00:31:50.280 | in that particular time and place,

00:31:51.620 | that's a signal to all the other restaurants in the area

00:31:53.560 | that that doesn't work.

00:31:54.940 | So restaurant food improves from bankruptcy to bankruptcy.

00:31:59.720 | So it's this death of the individual components

00:32:02.480 | that contributes to the growth of the ensemble.

00:32:05.520 | - As a small aside, maybe you can guide me through it.

00:32:07.920 | I don't know if you're paying attention,

00:32:09.360 | but there was some chaos around Taleb

00:32:13.800 | and the Bitcoin community.

00:32:15.600 | I wasn't quite paying attention,

00:32:17.960 | but from my outsider's perspective,

00:32:20.200 | I thought it seemed Taleb was a supporter of Bitcoin.

00:32:24.520 | And then a lot of people were very upset about something.

00:32:26.880 | I'm sorry if I don't know the details,

00:32:28.240 | but can you pull out some profound philosophical ideas

00:32:33.040 | from the disagreement of the chaos?

00:32:34.880 | - I admittedly don't know too much about it either.

00:32:37.960 | I'm a big fan of his writing.

00:32:40.160 | He's always been a little different in person.

00:32:45.800 | Like I actually, he signed one of my books,

00:32:47.520 | I met him in person.

00:32:48.360 | He's got a very abrasive personality.

00:32:50.640 | He's kind of known for it.

00:32:52.320 | I don't think I'm passing any judgment here.

00:32:54.120 | He sort of embraces it.

00:32:56.000 | But he had written the forward

00:32:59.000 | to a really important book in Bitcoin

00:33:00.680 | called "The Bitcoin Standard" for Safetine Amoose.

00:33:03.800 | And then I think they had a little Twitter beef

00:33:06.880 | because Safetine is very much against COVID mask

00:33:10.880 | and state intervention,

00:33:12.720 | whereas Taleb's on the other side of the fence.

00:33:15.360 | And so, and then after that beef,

00:33:17.920 | Taleb came out against Bitcoiners saying,

00:33:19.600 | "Oh, Bitcoiners are crazy and wrong."

00:33:21.840 | - I think the great mask debate of the 2020

00:33:24.680 | will probably be the thing

00:33:25.840 | that ultimately leads to World War III.

00:33:28.360 | I've been very surprised how tense, how much like division

00:33:33.760 | this one little arguably silly thing has led to.

00:33:38.760 | I think a lot of people sort of project their,

00:33:41.560 | like it's almost like not wearing a mask

00:33:44.000 | is a statement of sovereignty, of freedom,

00:33:46.480 | of like saying, "Fuck you" to the man, the government,

00:33:49.320 | the centralized power, or the dishonesty,

00:33:53.160 | or in the scientific community, all those kinds of things.

00:33:56.240 | And then wearing a mask is a sort of kind of signaling

00:33:59.520 | of various kind of social aspect.

00:34:03.600 | I don't know, I'm not paying attention to it.

00:34:05.520 | I actually tuned out.

00:34:06.840 | I was part of a group of scientists

00:34:08.480 | that were looking into like, do masks work?

00:34:10.600 | This very interesting question.

00:34:12.000 | To me, it was an interesting question.

00:34:13.880 | I sort of roll in to ask that very interesting question

00:34:17.600 | 'cause I think it is an interesting scientific question,

00:34:20.520 | but then I quickly realized that just as I was doing this,

00:34:23.840 | like scientific exploration of this very interesting

00:34:26.800 | question about Viron particles, like what kind of things,

00:34:30.320 | like from a scientific perspective,

00:34:32.320 | how do we prevent the spread of a pandemic?

00:34:34.400 | Forget COVID, any pandemic, super deadly or not deadly.

00:34:38.040 | Like there's tools, there's testing, there's masks,

00:34:40.680 | there's all these tools, how well do they work?

00:34:43.200 | And then I realized, in April or so,

00:34:46.760 | it became a tool of politics, a tool of philosophy.

00:34:49.960 | And that's when I sort of pulled out.

00:34:51.920 | So it's fascinating.

00:34:52.740 | I think it's a canvas on which people project

00:34:56.740 | their emotions and I guess,

00:34:58.520 | until I got caught up in that kind of,

00:35:01.000 | so there's nothing fundamental,

00:35:02.480 | I suppose, to their disagreement.

00:35:04.540 | - Not that I'm aware of, but he is,

00:35:07.040 | he's written some about, in his books,

00:35:11.320 | the problem with centralization.

00:35:13.200 | I mean, a lot of his writing addresses that

00:35:15.840 | and he actually points to, I think Switzerland

00:35:18.600 | is the best government in the world

00:35:20.280 | because it's decentralized.

00:35:21.720 | So there's that.

00:35:25.120 | I don't think he has any, not to speak for him,

00:35:28.420 | but I don't think he's voiced any specific critiques

00:35:32.840 | on Bitcoin per se.

00:35:34.640 | Could be wrong about that.

00:35:35.720 | - It's just maybe his flavorful language

00:35:37.800 | and the way he likes to communicate.

00:35:39.560 | - And the other theory is that maybe he's playing 4D chess

00:35:42.280 | and having a Twitter boating accident.

00:35:44.600 | So he's, I don't believe in Bitcoin,

00:35:46.160 | I've sold all my Bitcoin.

00:35:48.140 | - Oh, I see.

00:35:48.980 | - Yeah.

00:35:49.800 | Sorry, the boating accident in Bitcoin is this,

00:35:53.780 | I guess it's proverbial by this point,

00:35:56.720 | where it's the way you lose your Bitcoin.

00:35:59.360 | So if someone comes after you and says,

00:36:00.880 | hey, whether it's a government

00:36:02.880 | or an individual's coming after you saying,

00:36:04.200 | give me all your Bitcoin or pay these taxes in Bitcoin,

00:36:06.760 | you go, oh, I had a boating accident and lost them all.

00:36:09.040 | - Lost them all.

00:36:09.880 | - So, yeah.

00:36:10.720 | (laughing)

00:36:13.400 | - But back to the fundamental nature of space-time.

00:36:16.480 | Let me ask you, 'cause we're kind of left it,

00:36:20.200 | I'd like to go back to this idea of,

00:36:24.200 | that you said that everything we think, say, or do

00:36:26.880 | occurs within the bounds of space-time.

00:36:29.100 | So first of all, maybe you can comment on

00:36:33.600 | what do you mean in this context about space-time,

00:36:37.120 | but also about the nature of truth.

00:36:40.640 | Like how much of all of this is knowable?

00:36:43.480 | How much of this is accessible to us humans?

00:36:46.400 | How much uncertainty, like we're talking about,

00:36:49.160 | is there in the world?

00:36:50.680 | Are you, do you fall in a place where

00:36:53.360 | we can reason deeply about this world and it's knowable,

00:36:57.000 | or is it mostly chaos and we're just holding on

00:36:59.360 | for dear life?

00:37:00.200 | - Yeah, I think I said that all action occurs

00:37:04.160 | within the bounds of space-time.

00:37:05.480 | The other thing, everything we say, do, or make,

00:37:08.120 | the other thing is that everything we say, do, or make

00:37:10.320 | starts out as an idea.

00:37:12.400 | So there's this concept of universal Darwinism,

00:37:15.440 | which basically applies Darwinian principles,

00:37:20.000 | but outside of the biological sphere.

00:37:21.880 | So we could say that this kind of gets

00:37:23.600 | into Richard Dawkins' memetics,

00:37:25.080 | that even ideas are competing, reproducing, recombining.

00:37:29.120 | - That idea is so powerful, by the way.

00:37:30.800 | I don't think it's been understood fully.

00:37:33.540 | I think in the digital, in the 21st century,

00:37:38.840 | in the digital world, from my perspective,

00:37:40.520 | in artificial intelligence, there's yet to be

00:37:43.520 | some profound things to be discovered

00:37:45.160 | about this whole construct.

00:37:47.160 | - Agreed completely.

00:37:48.800 | It's been called an acid, actually,

00:37:51.480 | in that it strips away all of the non-informational

00:37:55.560 | components of something, just strips it down

00:37:57.120 | to its bare bones.

00:37:58.360 | I have a quote in there somewhere about that.

00:38:02.080 | - I'm sorry, which is called an acid?

00:38:03.480 | The ideas?

00:38:04.320 | - The universal Darwinism.

00:38:05.840 | - Darwinism applied broadly, outside of the--

00:38:08.160 | - Applied broadly, and I will condition all of this

00:38:12.700 | with saying that most of my thinking is shaped

00:38:15.000 | by a book I read recently called "The Case Against Reality,"

00:38:18.000 | which introduced me to this concept,

00:38:20.600 | but it tied into Darwinism that I've used

00:38:23.360 | more broadly in the past, looking at things

00:38:24.740 | like money and economics.

00:38:26.320 | So the book "The Case Against Reality" by Donald Hoffman,

00:38:30.640 | he has a quote in the book that describes

00:38:33.760 | universal Darwinism.

00:38:35.760 | It says, quote, "Universal Darwinism can,

00:38:37.560 | "without risk of refuting itself,

00:38:39.260 | "address our key question.

00:38:41.420 | "Does natural selection favor true perceptions?

00:38:44.760 | "If the answer happens to be no,

00:38:46.700 | "then it hasn't shot itself in the foot.

00:38:49.080 | "The uncanny power of universal Darwinism

00:38:51.200 | "has been likened by the philosopher Dan Dennett

00:38:54.040 | "to a universal acid."

00:38:55.740 | And Dan Dennett says, quote, "There is no denying

00:38:58.860 | "at this point that Darwin's idea is a universal solvent,

00:39:02.320 | "capable of cutting right to the heart

00:39:03.920 | "of everything in sight.

00:39:05.620 | "The question is, what does it leave behind?

00:39:08.420 | "I have tried to show that once it passes

00:39:10.100 | "through everything, we are left with stronger,

00:39:12.100 | "sounder versions of our most important ideas.

00:39:15.700 | "Some of the traditional details perish,

00:39:17.840 | "and some of these are losses to be regretted,

00:39:20.340 | "but good riddance to the rest of them.

00:39:22.180 | "What remains is more than enough to build on," unquote.

00:39:25.180 | So the way I would interpret that is that life itself,

00:39:31.380 | I've come to view life as information

00:39:34.060 | propagating through flesh,

00:39:35.600 | and that we are, I guess, DNA is a quadratic code.

00:39:42.060 | I think it's four letters, maybe,

00:39:44.260 | versus a binary, zeros and ones.

00:39:46.580 | And we are ideas, we are strategies

00:39:49.120 | competing with each other.

00:39:50.800 | And nature is that which selects.

00:39:54.320 | It's what selects the winning ideas,

00:39:56.480 | the ones that are most fit to environmental conditions,

00:40:00.960 | frankly.

00:40:02.400 | - You know, talking about sovereignty and individualism,

00:40:06.280 | there might need to be some rethinking here

00:40:10.680 | about what is actually the basic individual entity

00:40:13.940 | that is to be sovereign.

00:40:15.600 | Like maybe our biological meat vehicles

00:40:20.600 | were like way overly attached to them.

00:40:23.380 | Like maybe, especially with genetics

00:40:28.040 | and all those kinds of things,

00:40:29.000 | or artificial intelligence,

00:40:30.160 | or living more and more in virtual worlds

00:40:32.760 | will become detached from that kind of idea.

00:40:35.860 | So for example, if I can clone you,

00:40:38.320 | you know, make 1 million robbers,

00:40:42.280 | and, you know, but you'll all have the same idea.

00:40:46.160 | What is your real value as the,

00:40:48.880 | like I could just shoot you,

00:40:50.000 | and there'll still be 999 of you,

00:40:52.840 | but the idea is the important thing.

00:40:54.800 | - Yeah.

00:40:55.640 | - The things you believe, so.

00:40:57.120 | - I would argue that, I don't know,

00:41:00.200 | even if you clone someone perfectly,

00:41:02.080 | I don't think you can reproduce the individual themselves,

00:41:05.500 | because we're all a product of nature and nurture, right?

00:41:09.000 | So my particular concourse of experience is

00:41:12.380 | the path dependence that I represent cannot be replicated,

00:41:15.440 | as nor can anyone's for that matter.

00:41:17.520 | - Well, that's a hypothesis, so.

00:41:19.800 | That's of course a human meat bag would say.

00:41:25.720 | - Good point.

00:41:28.040 | - So, like desperately trying to preserve himself.

00:41:31.920 | You know, I think it reduces

00:41:33.960 | to some fundamental questions about what is consciousness,

00:41:36.440 | and whether that can be cloned,

00:41:38.000 | all those kind, you know,

00:41:39.200 | it gets to the core of what it is to be human.

00:41:41.860 | What are the things that make you particularly you?

00:41:45.160 | - Yeah, I think it would assume

00:41:46.880 | kind of a materialist viewpoint on reality,

00:41:49.200 | and that if you could reproduce every atom of an individual,

00:41:52.160 | that you would have their experience encapsulated in that.

00:41:55.160 | And you know, Hoffman's, which is a book, is very radical.

00:41:58.640 | He argues that space and time is not an objective reality,

00:42:03.600 | it's a biological interface.

00:42:06.040 | So we are scanning our environment for fitness payoffs,

00:42:11.040 | and this space and time is the rendering

00:42:13.520 | specific to human beings

00:42:15.040 | that allows us to navigate reality effectively.

00:42:18.960 | So the further argument would be

00:42:20.860 | that we all have pretty similar interfaces,

00:42:23.240 | but they're all slightly different too,

00:42:25.000 | 'cause we're all, you know, adapting in different ways,

00:42:27.120 | and that different animals have their own unique interfaces.

00:42:30.280 | So we have a certain amount of photoreceptors in our eye,

00:42:32.780 | whereas I think the number's three, might be five,

00:42:35.920 | or something like the mantis shrimp has like seven or nine.

00:42:39.320 | So they can see, and we only see

00:42:42.680 | 1/10 trillionth of the light spectrum.

00:42:46.000 | So talk about a tiny fraction.

00:42:48.660 | I mean, 1/10 trillionth is a very minuscule number,

00:42:51.640 | and that makes up all of the light

00:42:53.360 | that we can interpret with our eyes.

00:42:55.320 | But something like a mantis shrimp

00:42:56.480 | could see much more of that.

00:42:58.760 | So I think there's this,

00:43:01.860 | we're very conditioned to have

00:43:04.400 | a fully materialist viewpoint on reality today,

00:43:07.280 | where we think, you know,

00:43:10.280 | the atomic clockwork kind of universe.

00:43:12.920 | But I think there's, I don't think that's true exactly.

00:43:16.440 | And another school that goes into that

00:43:19.720 | is actually Austrian economics,

00:43:22.000 | where we could say that, you know,

00:43:24.640 | we mentioned earlier that an asset is not property.

00:43:27.580 | It's actually based on the relationship

00:43:29.120 | between the individual and the property.

00:43:32.720 | There's this whole realm of relevance associated with,

00:43:36.920 | we're all moving through life

00:43:41.600 | in the course of a goal-directed action.

00:43:43.520 | So when we walk across a room, I go from A to B.

00:43:47.400 | It's because I valued B more than A.

00:43:50.160 | So value is inseparable from human action.

00:43:52.920 | We have a rank-ordered value system in our mind, each of us,

00:43:56.960 | and we're constantly taking action

00:43:58.340 | in accordance with those rank values.

00:44:01.500 | Anything that accelerates us on the course

00:44:04.560 | of our goal-directed action towards our goal is useful.

00:44:08.480 | Anything that impedes us, or we could say is valuable,

00:44:12.720 | anything that impedes us is actually obstructing to value,

00:44:16.200 | and anything that's irrelevant is just valueless.

00:44:19.160 | So this table that we're using right now,

00:44:23.880 | like this is a, it's an accessory to you and I,

00:44:26.360 | 'cause it's holding this paper

00:44:27.480 | that's holding the information

00:44:28.480 | that's guiding our conversation.

00:44:30.320 | But we could pay someone $100 to jump over this table,

00:44:34.340 | and this table could simultaneously be an accessory

00:44:36.540 | to you and I and an obstacle to someone else.

00:44:39.500 | So it's this domain, this silent contention

00:44:43.100 | of willpower and agendas occurring

00:44:44.900 | across the face of the Earth

00:44:46.740 | that is what Austrian economics really looks at.

00:44:50.060 | It's the realm of human action, as they call it.

00:44:54.020 | It's called praxeology.

00:44:55.560 | So it's a non-materialist viewpoint on reality,

00:44:58.540 | in that things, we think in terms of matter being reality,

00:45:03.220 | but it's often more so in the sphere of human action,

00:45:06.160 | what matters that is reality.

00:45:08.620 | It's the relevance of a thing

00:45:10.220 | to the course of one's goal-directed action.

00:45:12.420 | - And that's ultimately, it exists in the space of ideas.

00:45:15.960 | - Yes.

00:45:16.940 | - Not in the space of physical matter.

00:45:19.060 | - And just to jump back to this line here,

00:45:20.400 | I think his fundamental line here is,

00:45:23.340 | the question is, talking about universal Darwinism

00:45:26.260 | as an asset, what does it leave behind?

00:45:28.360 | I've tried to show that once it passes through everything,

00:45:30.760 | we're left with stronger, sounder versions

00:45:32.900 | of our most useful ideas.

00:45:35.320 | That's the key point to me,

00:45:36.520 | in that ideas and information, so far as we can tell,

00:45:40.420 | are the most fundamental substrate of reality.

00:45:43.240 | And information itself, back to entropy,

00:45:47.580 | information is the resolution of entropy.

00:45:50.340 | That's what the bit is, right?

00:45:51.540 | It's a one or a zero.

00:45:52.460 | Whatever reduces your entropy by half is a bit,

00:45:55.060 | and we measure information in bits.

00:45:57.500 | So, and you're right, people don't have ideas,

00:46:00.840 | ideas have people.

00:46:01.960 | Honestly, it's a really profound idea,

00:46:05.880 | or a statement about reality, a reframing of reality.

00:46:11.640 | If we're actually being deeply honest about it,

00:46:15.340 | it's quite painful.

00:46:16.440 | I do appreciate that you defended

00:46:19.280 | your biological meat bag earlier,

00:46:21.760 | but it seems like ideas are the things that have power.

00:46:26.020 | That me, Lex, for example, is worthless.

00:46:31.020 | And relative to the ideas that used my brain

00:46:35.820 | for a bit of a time.

00:46:37.620 | - But so far as we know,

00:46:39.780 | only human beings can generate and share ideas.

00:46:42.400 | So you can't say Lex is worthless.

00:46:44.460 | Like, you are the node of the idea sphere,

00:46:48.380 | the newest sphere.

00:46:49.220 | So I'm, what is it?

00:46:52.020 | From a Bitcoin perspective, I'm like, I'm mining,

00:46:55.180 | I'm solving the cryptographic problem,

00:46:57.380 | and I'm a use, in that sense, I'm a useful node.

00:47:02.380 | - Yeah, you're competing to solve the puzzle of entropy,

00:47:06.580 | right, and when you do solve it,

00:47:07.780 | it benefits the entire network.

00:47:09.620 | - But I guess from my perspective,

00:47:13.340 | just because just working in AI,

00:47:15.420 | I'm looking at the long-term vision.

00:47:17.620 | I see us humans and AI systems as really the same,

00:47:22.500 | and AI systems ultimately as something

00:47:24.980 | that supersedes humans.

00:47:27.140 | - So what is intelligence?

00:47:28.580 | - So in the context of our current discussion,

00:47:36.780 | I think intelligence is very closely linked

00:47:41.060 | to this notion of ideas.

00:47:44.520 | It's the ability to generate ideas, to mold ideas,

00:47:49.540 | to compress seeming chaos into something

00:47:54.580 | into some model, into some theory

00:47:58.660 | that efficiently compresses the chaos

00:48:01.420 | in a way where you can then integrate it with other ideas,

00:48:04.860 | and they can play and all those kinds of things.

00:48:07.060 | So in that sense, it's the turning chaos into order.

00:48:11.820 | It's the molding of ideas

00:48:13.460 | such that our human brains can work with it.

00:48:17.820 | And just from my perspective,

00:48:19.580 | I don't see any reason why that cannot be algorithmatized,

00:48:22.860 | converted into computational systems.

00:48:25.580 | - I would agree.

00:48:26.420 | - Which is scary.

00:48:28.220 | - Scary or potentially really promising, right?

00:48:33.380 | It's kind of the case with all novelty.

00:48:34.820 | It's terrifying as much as it is promising.

00:48:37.140 | That's why you're pursuing it so heavily.

00:48:39.460 | I would maybe take it a step further

00:48:42.500 | and say that intelligence,

00:48:44.740 | and maybe its most simplistic form is error correction.

00:48:48.260 | So we, humans have wants.

00:48:53.260 | Again, we're constantly expressing our value through action.

00:48:56.220 | There's no other way to express it, by the way.

00:48:57.980 | It's whatever you choose to do in any moment,

00:49:00.380 | you are expressing the values you hold

00:49:02.260 | in your mind and your heart.

00:49:03.660 | As we move from less valued A to more valued B,

00:49:09.540 | entropy happens, uncertainty happens, we fall off course.

00:49:16.140 | And it is intelligence that enables us

00:49:19.300 | to render information from that experience

00:49:21.660 | and error correct, right?

00:49:23.740 | So that we can move slightly,

00:49:25.900 | shift our trajectory slightly more towards B

00:49:29.140 | that we're trying to move towards.

00:49:30.860 | So I think that there's something there

00:49:35.580 | that I don't know that we can make synthetically.

00:49:40.580 | And that if we define intelligence as error correction,

00:49:45.780 | it's like error correction to what?

00:49:47.460 | Error correction towards what we find is valuable.

00:49:50.580 | So we're trying to satisfy human wants.

00:49:52.500 | Might not just be our own, could be others as well.

00:49:54.220 | If I'm an entrepreneur,

00:49:55.060 | I'm trying to solve the wants of others, not just myself.

00:49:57.500 | And I'm trying to error correct myself towards that goal,

00:50:00.340 | using intelligence and processing environmental feedback

00:50:04.620 | through intelligence to error correct.

00:50:06.500 | So I don't know how, if you eliminate

00:50:09.980 | the human element completely, who's doing the wanting?

00:50:13.660 | Right, where does value come from?

00:50:15.300 | I know machine learning people who are listening

00:50:18.180 | are saying that's exactly what machine learning is,

00:50:20.220 | which is error correction,

00:50:21.460 | because you have a loss function, objective function

00:50:24.020 | that measures how wrong your thing is.

00:50:28.300 | And you wanna make it less wrong next time.

00:50:30.220 | That's the whole process of machine learning.

00:50:31.980 | But you're saying what humans are able to do

00:50:35.540 | is in a world where there's no,

00:50:38.900 | maybe objective values, absolute values,

00:50:44.300 | you're generating that very loss function,

00:50:46.460 | that objective function, that function that measures

00:50:50.060 | the error comes from the human mind.

00:50:53.440 | Some aliens might disagree with you,

00:50:57.260 | 'cause they might have a different objective function.

00:51:00.020 | - I would say purpose comes from consciousness, I think.

00:51:02.780 | And without purpose, there's not error correction.

00:51:05.540 | - Yeah, I mean, this is, again, a hypothesis.

00:51:07.980 | Like, where does purpose come from?

00:51:09.540 | It seems to come from consciousness, you're right.

00:51:13.140 | That's where suffering comes from,

00:51:15.140 | and you want to lessen suffering.

00:51:17.020 | That's where pleasure comes from.

00:51:20.100 | It seems like it's consciousness.

00:51:21.900 | Maybe there is something to this biological meat bag.

00:51:25.180 | - So to take it one layer deeper on this,

00:51:27.340 | and the reason I like this book so much,

00:51:29.140 | again, "The Case Against Reality,"

00:51:31.660 | so he's making the case that space and time

00:51:33.580 | are not fundamental.

00:51:35.180 | - Yes. - Which I started

00:51:37.340 | my intellectual explorations in physics, actually,

00:51:39.540 | astrophysics, so for the longest time,

00:51:41.660 | even the way I describe money,

00:51:42.660 | as I talk about space and time, so that blew my mind.

00:51:46.580 | But this dovetailed nicely with another book called "Lila."

00:51:50.020 | The author is Robert Persig, so he wrote

00:51:53.900 | "Zen and the Art of Motorcycle Maintenance,"

00:51:55.580 | which is a very popular book.

00:51:57.260 | 20 years later, he wrote "Lila,"

00:51:58.740 | which no one's heard of, which is crazy.

00:52:01.380 | And he basically says he was wrong about his first book.

00:52:03.920 | And he lays out this entire other

00:52:06.380 | metaphysics of quality, he calls it.

00:52:08.900 | So it's the metaphysics, I think it's

00:52:10.500 | the metaphysics of quality.

00:52:12.500 | But his supposition is that it's not physical reality

00:52:17.500 | that's fundamental, it's not information that's fundamental,

00:52:22.260 | it's value.

00:52:23.240 | So he actually, and it's a beautiful book,

00:52:26.980 | I highly recommend it.

00:52:28.360 | He essentially is refuting causality itself.

00:52:33.180 | We think A causes B.

00:52:36.180 | This book makes the case that B values precondition A,

00:52:41.180 | so that we are actually creating our future

00:52:45.980 | through our value systems.

00:52:48.440 | And this goes back to something,

00:52:50.900 | I think Solzhenitsyn said this,

00:52:52.260 | that the line between good and evil

00:52:54.300 | runs down the heart of every man.

00:52:56.220 | So it's as if our moral decisions are actually

00:52:59.520 | what's creating the outcomes in reality over time.

00:53:03.260 | And then that gets into all the wisdom traditions

00:53:05.540 | related to religion, where it's always talking about

00:53:08.100 | loving thy neighbor and loving God

00:53:11.340 | and all of these other things that are good morally

00:53:13.880 | to create the best outcomes.

00:53:15.300 | - So values are fundamental.

00:53:17.900 | - Value, yes.

00:53:19.300 | - Value is fundamental.

00:53:21.360 | Oh boy, yeah, that's interesting.

00:53:24.140 | It does feel like physics is not capturing something.

00:53:31.180 | There's some people, panpsychists,

00:53:34.940 | argue that consciousness might be one of the fundamental

00:53:38.340 | properties of nature,

00:53:39.700 | like from which emerges everything we see.

00:53:42.860 | So that could be just other words

00:53:46.500 | for this same notion of value.

00:53:49.460 | And then the basic laws of physics

00:53:51.740 | are not capturing that currently.

00:53:54.100 | So maybe humans, in order to understand

00:53:56.540 | from where humans came from,

00:53:57.860 | we have to understand these other properties of nature,

00:54:00.620 | which are yet to be discovered at the physics level.

00:54:03.500 | - And it's, we contend with that underlying nature,

00:54:08.140 | whatever it is, with the logos.

00:54:10.780 | So we're looking at uncategorized nature,

00:54:15.780 | and then we're assigning a word to it.

00:54:18.540 | So we're slicing up chaos into little boxes of order.

00:54:23.260 | And then we're establishing this social consensus

00:54:25.740 | as to those labels, which we call words.

00:54:28.860 | And we're using that to communicate.

00:54:30.780 | And when we communicate,

00:54:32.180 | we can start to build these other things.

00:54:35.260 | This is like the Yuval Harari imagined orders.

00:54:37.980 | So we can create these useful fictions, right?

00:54:41.060 | Whether it's the nation state or human rights or money.

00:54:44.060 | And that allows us to cooperate flexibly in large numbers

00:54:48.580 | so that we can better contend with reality.

00:54:50.500 | We can produce more complicated things.

00:54:53.740 | We can enlarge that bubble of civilization against entropy.

00:54:58.340 | And that's what capitalism is all about.

00:55:01.060 | It's about further specializing knowledge,

00:55:04.500 | further enriching mankind's treasury of knowledge,

00:55:07.540 | and doing it.

00:55:09.540 | But to do that, the communication media that we're using,

00:55:14.220 | the words have to have stable meaning.

00:55:16.740 | The money needs to have value that's dependable, right?

00:55:21.500 | It needs to be something that's,

00:55:23.100 | it's not dictated by any one group.

00:55:26.900 | It's reached by consensus of the entire group.

00:55:30.620 | That's how, so you can think it's like optimizing

00:55:35.580 | for error correction again,

00:55:36.740 | where a free market would be harnessing the intelligence

00:55:39.980 | of all market actors.

00:55:41.420 | And a central planning or a centrally planned market

00:55:45.340 | would be harnessing just the intelligence

00:55:46.780 | of a small group of bureaucrats.

00:55:49.860 | - And it's not obvious how to achieve

00:55:51.260 | this kind of consensus mechanism.

00:55:53.460 | I mean, there's obviously,

00:55:55.020 | we'll talk about sort of Bitcoin as an idea.

00:55:57.900 | Ultimately, the idea of Bitcoin is connecting it to physics.

00:56:01.900 | So like you can trust that physical matter won't change,

00:56:07.740 | but there could be other ideas that will yet,

00:56:12.940 | maybe physics could be changed.

00:56:14.660 | If Eric Weinstein has anything to say about it.

00:56:17.420 | Like it's, we right now believe that physics

00:56:20.540 | can't be changed, the physical matter of the world,

00:56:23.140 | but maybe it can in a way

00:56:24.860 | that we're totally not understanding.

00:56:26.460 | You mentioned sort of reality

00:56:28.460 | from Donald Hoffman's perspective.

00:56:32.460 | Like if we don't have even close to direct access

00:56:35.420 | to the fabric of reality,

00:56:38.180 | maybe we're living in a world that's very like

00:56:40.980 | many dimensions that the notions of space and time

00:56:44.020 | is just like a silly, useful construct

00:56:46.500 | that's not at all connected.

00:56:48.500 | You're starting to look at like Stephen Wolfram's,

00:56:51.020 | I don't know if you're familiar with his view of the world,

00:56:54.180 | that it's like hypergraphs underneath it all,

00:56:57.140 | like these mathematical structures

00:56:58.660 | from which everything emerges.

00:57:00.460 | Like there are like many, many, many orders of magnitude

00:57:05.460 | smaller than what we think of as,

00:57:10.140 | they're even smaller than like strings and string theory.

00:57:13.220 | So like those are the basic mathematical objects

00:57:15.300 | from which it emerges.

00:57:16.540 | I don't, I think that's an interesting philosophical

00:57:19.700 | framework, it's also, people should check out,

00:57:22.380 | a cool way to play with beautiful hypergraph

00:57:26.500 | mathematical structures.

00:57:27.700 | So he has, I don't know if you know Stephen Wolfram is,

00:57:30.020 | but he created Wolfram Alpha and all these tools

00:57:34.220 | that you can actually visualize and play with.

00:57:36.340 | So you can play with physics in a visual way,

00:57:39.260 | which, or at least discrete mathematics,

00:57:43.500 | which I think is incredible.

00:57:45.060 | He doesn't get enough love.

00:57:46.820 | One of the reasons he, I think doesn't get enough love

00:57:50.420 | is because of this little quirk of human nature,

00:57:53.340 | which is the ego.

00:57:54.780 | And he sometimes frustrates a few folks

00:57:59.860 | because he's very, let's say, proud of his work.

00:58:03.980 | - I guess.

00:58:04.820 | - But it's interesting to think about a world

00:58:10.380 | where we don't have direct access to reality,

00:58:13.580 | as Hoffman argues.

00:58:14.980 | And maybe, I don't know if you can comment,

00:58:17.300 | I don't know if you're familiar with Ayn Rand's work

00:58:19.380 | and her whole philosophy of objectivism,

00:58:21.980 | or her whole contention is that, we do have access.

00:58:26.980 | I don't want to misstate it, but at least

00:58:30.500 | she will claim that it's not useful,

00:58:37.500 | or I think she'll probably say it's not correct

00:58:41.580 | to argue that we don't have access to reality.

00:58:44.180 | We have, hence objectivism,

00:58:46.020 | we have direct access to reality.

00:58:49.100 | That's the only thing we can reason about.

00:58:52.340 | And the only way to live life morally

00:58:55.100 | is to reason through everything,

00:58:57.700 | starting with the axioms of reality,

00:58:59.580 | which we do have direct access to.

00:59:02.020 | You have thoughts about her work?

00:59:04.540 | - I am slightly ashamed to say I have not read Ayn Rand yet.

00:59:08.860 | So she is high on my list,

00:59:10.460 | and she's been recommended a number of times.

00:59:14.100 | But, so I don't know a lot specifically

00:59:16.260 | about her philosophy or objectivism,

00:59:18.260 | but to me, it resonates closely

00:59:21.580 | with what the American pragmatist commented on truth.

00:59:25.740 | And they distinguished, what you could say is absolute truth,

00:59:29.660 | which is at the bottom of reality,

00:59:31.260 | whether it's Mr. Wolfram's mathematical formulas or value,

00:59:34.300 | whatever it may be, it's something ineffable,

00:59:36.980 | something beyond the reach of epistemology, perhaps even.

00:59:42.300 | And maybe that's why religion just sort of points to it,

00:59:45.340 | right, is trying to use,

00:59:46.740 | I think Joseph Campbell said something like,

00:59:50.620 | "Religion is using stories

00:59:55.620 | to point towards the same transcendental mystery

00:59:58.420 | we all experience but cannot articulate."

01:00:01.220 | So something like the artist uses lies

01:00:05.860 | to point to the truth, something like that,

01:00:08.060 | that kind of thing.

01:00:09.020 | - That's really good.

01:00:10.980 | - But the American pragmatist said that,

01:00:13.740 | because at the end of the day, this is all about,

01:00:16.300 | when we say truth, we need something that is socially,

01:00:21.300 | close to social consensus

01:00:23.460 | and is not shakable by political action.

01:00:26.020 | So that's what physics and mathematics are.

01:00:28.420 | It's an unshakable point of reference,

01:00:33.420 | I guess you might say.

01:00:35.140 | So the American pragmatist defined truth

01:00:39.460 | as the end of inquiry.

01:00:41.220 | And in markets, we could say that the market itself

01:00:47.500 | is a forum that generates truth.

01:00:50.660 | We call this pragmatic truth,

01:00:51.980 | to separate pure objective truth

01:00:53.980 | that we can't even talk about without polluting it

01:00:56.620 | versus pragmatic truth, which is something that's useful.

01:00:59.380 | So the example here would be,

01:01:01.980 | if I give you a map and you're trying to go

01:01:05.620 | from your house to the local brisket restaurant,

01:01:09.100 | and the map gets you from your house

01:01:10.780 | to the brisket restaurant, is that because the map is true?

01:01:13.940 | Or is that because the map is useful?

01:01:15.780 | They're very hard to disentangle

01:01:18.620 | when you're just looking at it pragmatically.

01:01:21.420 | And in markets, markets, I argue,

01:01:23.900 | generate three forms of pragmatic truth.

01:01:26.460 | One is the price.

01:01:28.420 | So this is the collective subjective demand

01:01:33.420 | and purchasing power of humanity

01:01:35.860 | running up against the objective supply of capital

01:01:39.860 | and resources in the marketplace.

01:01:41.820 | So there's demand overlaid on supply.

01:01:44.380 | The result of that is the price.

01:01:46.060 | So that is the most truthful exchange ratio,

01:01:51.060 | which is the closest approximation to the value

01:01:54.180 | of any good in the marketplace.

01:01:56.100 | So it gives us a data point on which we can operate.

01:01:58.660 | It's compressing all known market realities

01:02:01.420 | down into a single actionable number.

01:02:03.860 | You know, based on the price of bread or copper,

01:02:05.980 | whether you wanna buy more of it,

01:02:07.580 | you wanna abstain from buying it,

01:02:09.060 | or maybe you wanna try and find substitutes.

01:02:11.420 | And you can think of that price signal,

01:02:13.940 | it's like an economic nerve signal

01:02:15.580 | that's coordinating human action across time.

01:02:17.620 | So if we're one socioeconomic superorganism or collective,

01:02:22.620 | that the price signal is the nerve.

01:02:24.620 | And that's the first form of pragmatic truth

01:02:27.060 | that markets generate.

01:02:28.460 | The second form would be tools and innovations themselves.

01:02:32.300 | So entrepreneurs are experimenting across time.

01:02:35.700 | They're trying to satisfy the wants of consumers.

01:02:37.700 | Consumers are sovereign in the marketplace.

01:02:40.540 | Whatever the consumer wants, the consumer gets, right?

01:02:43.940 | I'm trying to satisfy that.

01:02:44.980 | I'm trying to do it at a profit.

01:02:46.460 | So I'm trying to take,

01:02:48.260 | viewing the existing price signals

01:02:49.740 | of goods in the marketplace,

01:02:50.700 | I'm trying to assemble those in a way

01:02:53.260 | at a cost lower than the final solution

01:02:55.780 | I'm delivering to my customer.

01:02:57.380 | I'm selling it at a price higher

01:02:58.700 | than the productive factors I combine to create it.

01:03:02.360 | And in that iterative process,

01:03:05.120 | we're constantly discovering new and better ways

01:03:09.000 | of solving problems or satisfying wants.

01:03:11.440 | So we could say to go out and dig a hole, right?

01:03:14.920 | Someone wants a hole dug,

01:03:16.560 | that a shovel is gonna let you do it much faster per hour

01:03:20.280 | than you would with your bare hands.

01:03:22.480 | So what is the pragmatic truth of digging holes?

01:03:24.920 | It's a shovel, right?

01:03:27.400 | It's the best way we know how to solve

01:03:30.020 | any particular problem based on

01:03:33.040 | the existing treasury of knowledge.

01:03:35.360 | So every tool, again, we're back to ideas being fundamental.

01:03:39.180 | The shovel itself is just a knowledge structure.

01:03:42.160 | We've figured out a way to create this particular implement

01:03:45.640 | and then we've indexed the raw materials

01:03:47.800 | we found in nature to this knowledge structure

01:03:50.000 | to create a shovel, which allows us to better satisfy

01:03:53.240 | human wants faster, cheaper, better, effectively.

01:03:57.280 | - I'm trying to generalize,

01:03:59.460 | you're blowing my mind a little bit here.

01:04:01.180 | I'm trying to generalize the idea of tool

01:04:03.660 | to how to think about it.

01:04:04.780 | 'Cause I keep just, when you say tool,

01:04:07.780 | I keep imagining different,

01:04:09.540 | like specific instantiations of a tool.

01:04:12.220 | I'm trying to see, so the price is a pragmatic truth

01:04:16.060 | that's communicating value in this network.

01:04:21.780 | - Subjective demands against objective supply.

01:04:26.660 | - Subjective.

01:04:27.500 | - So it's an economic democracy.

01:04:29.280 | - Got it.

01:04:30.120 | So that's the demand supply.

01:04:32.280 | And then the tools are the ways of extracting

01:04:35.440 | or solving problems is the more general kind of.

01:04:39.520 | - Or satisfying wants.

01:04:40.880 | - Satisfying wants.

01:04:42.760 | So wants are somehow,

01:04:45.480 | that's part of the supply and the demand.

01:04:48.080 | - And what wants are back to value, right?

01:04:49.920 | 'Cause everything someone wants,

01:04:51.160 | they're expressing their value.

01:04:53.240 | - Okay, yeah, so the shovel is a pragmatic truth.

01:04:57.480 | The shovel is truth.

01:04:58.880 | It feels like a good book title.

01:05:00.580 | Okay, sorry.

01:05:01.420 | So what other, what is the third one?

01:05:03.240 | - And then the third one, I would argue,

01:05:04.880 | is virtue, actually.

01:05:08.560 | - Oh, wow.

01:05:09.760 | - And another way to maybe think about this

01:05:13.360 | is competitive competency,

01:05:14.740 | but it's also cooperative competency.

01:05:17.160 | So we're learning over time what characteristics,

01:05:20.740 | what patterns of action, what mindsets,

01:05:24.760 | what mental tools, what heuristics are most useful

01:05:27.980 | to satisfying customer wants.

01:05:30.660 | So I think that becomes, over time,

01:05:32.780 | becomes sharpened into virtue.

01:05:34.500 | We know it's best to be honest,

01:05:36.480 | because if you lie, it's very energy inefficient.

01:05:39.320 | You're creating this little fork of reality.

01:05:41.700 | And then if someone else asks you about that lie again,

01:05:43.460 | you have to put another layer of lies on top of it.

01:05:46.140 | Where if you just tell the truth,

01:05:47.220 | you're just recollecting what happened.

01:05:49.300 | And so that sort of keeps,

01:05:50.900 | again, when we're talking about delaying volatility,

01:05:55.660 | if you lie, you're delaying short-term volatility,

01:05:59.260 | but you're increasing long-term volatility.

01:06:00.900 | - What about murder?

01:06:01.740 | I haven't been able to figure out why murder is bad,

01:06:04.180 | 'cause I just keep wanting to murder people.

01:06:07.180 | And I've murdered many, sorry.

01:06:08.380 | - You should see someone for that.

01:06:09.700 | (laughs)

01:06:10.620 | - Well, that's why I'm trying to get an interview

01:06:11.820 | with Vladimir Putin.

01:06:13.420 | So that's fascinating, virtue in this market

01:06:17.020 | with the supplies and demands, and there's the tools,

01:06:19.780 | which is also a pragmatic truth, and there's virtue.

01:06:23.340 | It's a pragmatic truth.

01:06:25.020 | - Yeah, and if we interfere with that free market process,

01:06:28.260 | again, if we overstep, which this maybe ties into murder,

01:06:31.380 | if you start to be coercive against life,

01:06:34.620 | liberty, or property,

01:06:36.020 | so if you're forcibly taking someone's life,

01:06:38.940 | you're breaking down the trust in that market

01:06:41.380 | that generates these pragmatic truths.

01:06:44.100 | If you forcibly infringe on someone's liberty, right,

01:06:47.500 | for any reason other than them originally breaking

01:06:52.220 | or infringing upon life, liberty, or property,

01:06:55.060 | then that's not gonna work either.

01:06:56.860 | And then if you violate private property rights,

01:06:59.340 | if you steal property from others,

01:07:01.160 | you're breaking down the trust

01:07:04.340 | that the intersubjective fabric of money and markets

01:07:08.780 | and the rule of law, all of these useful fictions

01:07:11.120 | are meant to preserve,

01:07:12.140 | you're corrupting it and breaking it down.

01:07:14.780 | - What's kind of interesting to think about the market

01:07:16.500 | is helping evolve the virtues.

01:07:19.540 | It's sharpened into virtues,

01:07:22.980 | and then these virtues can then go into motivational posters

01:07:26.220 | or like in books that we all agree on

01:07:30.340 | and then eventually take for granted

01:07:32.740 | as if they were somehow fundamental to human nature,

01:07:35.340 | but they're not perhaps fundamental,

01:07:37.720 | they're just pragmatic truths.

01:07:40.460 | - Yeah, another way to consider competition itself

01:07:45.460 | is that it is a discovery process.

01:07:48.420 | So entrepreneurs are competing with one another

01:07:52.660 | and they're trying to best satisfy consumer wants

01:07:56.500 | at the lowest possible price.

01:07:57.740 | So they're placing bets of time, energy, and capital

01:08:00.500 | on themselves, on their idea, their business plan,

01:08:03.780 | and then the market decides, right,

01:08:06.420 | the consensus of market actors decide which one was better.

01:08:10.300 | One lives, one dies.

01:08:11.800 | So competition itself is helping us get closer to truth,

01:08:16.940 | to pragmatic truth.

01:08:18.100 | So we're discovering what is the right price for this asset.

01:08:21.400 | And that price, by the way, is derived,

01:08:23.340 | again, in the sense of data compression.

01:08:26.540 | Everyone in the world can see that price.

01:08:28.980 | Everyone in the world can then put their skin in the game

01:08:31.640 | by choosing to buy or sell or short or go long

01:08:34.340 | or do any number of financial actions on that price.

01:08:38.260 | And that information is then propagated back out

01:08:40.460 | to everyone else.

01:08:41.300 | So it's this feedback loop between market actor and price

01:08:45.020 | that makes it so useful.

01:08:48.180 | And that's what carries us.

01:08:52.540 | So it's these collisions of interest that carry us,

01:08:56.100 | it removes the unuseful aspects of ourselves

01:09:00.940 | or of our tools or of a price

01:09:02.980 | and reveals pragmatic truth to us.

01:09:05.460 | - Can you play my therapist for a second?

01:09:08.220 | And if we talk about creative destruction,

01:09:11.340 | I think Bukowski, Hunter S. Thompson has a quote,

01:09:16.340 | something like, "For all instances of beauty,

01:09:20.900 | many souls must be trampled."

01:09:22.900 | - Wow.

01:09:24.880 | (laughing)

01:09:27.220 | - But it, there does seem to be an aspect of competition

01:09:32.220 | that destroys, you were talking about

01:09:35.060 | entrepreneurs sort of on the outside

01:09:39.020 | of the circle of order,

01:09:40.540 | striving to make sense, to compress volatility

01:09:45.100 | of the chaos of the universe.

01:09:47.840 | Is there some way to protect a little bit

01:09:53.440 | against the pain of that destruction

01:09:55.420 | of that creative destruction?

01:09:57.140 | That entrepreneur screaming on fire

01:10:00.380 | as he enlightens the rest of us,

01:10:03.680 | is there some role for us humans together

01:10:06.780 | in the togetherness of it?

01:10:08.300 | Also government, but any kind of collectives

01:10:15.100 | in helping that entrepreneur who's on fire

01:10:18.300 | maybe after a few minutes to spray him with some water

01:10:22.900 | and put him out of his misery?

01:10:25.140 | - I would say that, you know, pain

01:10:30.520 | is the inarguable basis of being, right?

01:10:34.420 | Pain is, no matter how you try to explain it away

01:10:39.420 | or describe it, or,

01:10:42.040 | it's not something you can rationalize away, right?

01:10:46.700 | It's no one, I think, ever,

01:10:50.660 | like someone may want to cut themselves

01:10:52.300 | to have an endorphin high,

01:10:53.220 | but no one wants to suffer, we'd say, right?

01:10:55.100 | So pain in that sense,

01:10:56.980 | it is what we're constantly trying to deal with.

01:11:00.540 | And to move away from, or create buffers between us

01:11:04.820 | and potential pain or potential uncertainty.

01:11:07.660 | And that pain is information.

01:11:11.900 | When we experience something that is misfit

01:11:15.100 | to the outcome we desired, that pain is what puts us,

01:11:18.700 | it encourages us to change our trajectory,

01:11:21.780 | to get back on course towards our valued aim.

01:11:24.980 | So as far as, you know,

01:11:28.600 | you need entrepreneurs that are exploring,

01:11:31.920 | and you're trying to do something new,

01:11:33.240 | if you're a pioneer of any kind,

01:11:34.720 | you are courageously facing pain.

01:11:37.040 | You're willfully confronting it.

01:11:38.920 | So I don't think it's avoidable in that sense.

01:11:41.720 | It's not like we can have pain-free economic growth,

01:11:45.320 | like what the central bank would maybe have us

01:11:48.120 | lend to believe that we can just run these experiments

01:11:51.000 | and when they fail,

01:11:51.840 | we'll just paper over all the losses and continue.

01:11:53.680 | Or you're just delaying and exacerbating

01:11:56.860 | the inevitable volatility back to reality.

01:11:59.000 | But what I would say is that capitalism,

01:12:03.380 | 'cause we're building,

01:12:04.560 | we're increasing the capital stock of the world,

01:12:07.340 | which again, capital is the mitigation of risk.

01:12:09.860 | So we're reducing the overall risk of existence

01:12:12.220 | by accumulating more capital in the world.

01:12:14.380 | And that's what protects that entrepreneur

01:12:16.740 | that's deciding, hey, I saved up a million bucks,

01:12:19.420 | I'm gonna go try this business idea,

01:12:21.860 | I'm gonna put all my money on the line.

01:12:24.120 | And if he goes up in flames,

01:12:26.260 | then his cost of living, when he comes back to reality

01:12:28.960 | and he's starting over from zero,

01:12:30.100 | his cost of living is substantially lower

01:12:32.820 | starting over from zero

01:12:33.820 | than he would be out in the wilderness on his own.

01:12:36.980 | So it's the accumulation of capital stock

01:12:40.000 | is the buffer against uncertainty for everyone.

01:12:43.260 | And it gives you actually more potential

01:12:47.020 | to go out and experiment,

01:12:48.380 | to go out and confront the chaos of nature

01:12:51.160 | because you are better healed effectively.

01:12:53.900 | - So I think we're speaking

01:12:56.500 | in sort of idealistic terms about the power of capitalism,

01:13:03.060 | when it works well.

01:13:04.740 | Is there any aspects that you think

01:13:07.020 | that don't work well in a free market?

01:13:10.500 | In all the basic pragmatic truths

01:13:12.460 | that we were talking about,

01:13:13.580 | is there ways it can go wrong?

01:13:16.900 | - So I would first argue that we have never seen

01:13:21.900 | an actual purely free market.

01:13:25.480 | Closest example would be,

01:13:30.880 | kind of geopolitically we have a free market

01:13:35.760 | and that governments are not necessarily governed.

01:13:38.620 | But they are premised on governing large groups of individuals

01:13:47.500 | so that's not, doesn't exactly--

01:13:49.940 | - You mean between governments?

01:13:52.100 | - Yes.

01:13:53.140 | - See, but isn't there still,

01:13:54.620 | so a free market, maybe you can correct me,

01:13:57.780 | is the free market still grounded in the ideas

01:14:00.420 | of property rights and all those kinds of things, right?

01:14:03.960 | So governments tend to also sometimes

01:14:06.260 | be violent towards each other.

01:14:07.780 | - That's right.

01:14:08.620 | - So they don't respect all the basic aspects of capitalism.

01:14:11.820 | - That's right.

01:14:12.660 | So maybe another way to look at this is that

01:14:14.980 | gold is the original governor of government, actually.

01:14:19.980 | And this is the reason governments have abused

01:14:24.100 | and gone off of the gold standard.

01:14:26.940 | So historically, if you are a bank or a nation state

01:14:31.940 | and you produce more currency

01:14:37.780 | than your gold reserves can justify,

01:14:40.020 | then people, then gold will flow out of your bank

01:14:43.820 | or out of your country.

01:14:44.980 | So there's this natural check

01:14:46.740 | via the money that, via capitalistic money, which is gold.

01:14:54.140 | Gold was selected by the free market,

01:14:56.060 | it's not decreed by government.

01:14:58.380 | It provided this natural check on government action.

01:15:02.460 | So my, I guess to get back to the original question is,

01:15:07.460 | we've never seen a pure free market

01:15:11.500 | because money has always been monopolized

01:15:14.540 | and coerced, frankly.

01:15:17.900 | So to try and answer what goes wrong with a free market

01:15:21.820 | is really difficult because we've never actually seen it.

01:15:24.620 | And I would define free market as one

01:15:28.700 | in which government only protects life, liberty,

01:15:31.660 | and property, and so that has a very minimal role in society.

01:15:35.900 | Again, just as network security

01:15:38.300 | for the economic trade network.

01:15:40.780 | And anything that, any government function

01:15:44.500 | that goes beyond those three core functions,

01:15:47.300 | which by the way are pretty much

01:15:48.620 | the core tenets of morality as well.

01:15:50.420 | So government's just really intended to preserve

01:15:52.980 | natural law, if you will.

01:15:55.940 | Anything that goes beyond that

01:15:57.580 | is moves us closer to an unfree market.

01:16:01.460 | So every regulation, every act of coercion

01:16:06.140 | is actually a gradation closer to a purely unfree market,

01:16:11.140 | which would be a monopoly.

01:16:13.140 | So in terms of what I guess theoretically

01:16:15.940 | we could say goes wrong in the free market

01:16:17.860 | is that it's volatile.

01:16:20.780 | It's trading off, it's accepting short-term volatility

01:16:25.660 | in exchange for less long-run volatility.

01:16:29.340 | - Yeah.

01:16:30.380 | - And this tends to be the way of nature, by the way.

01:16:32.860 | So if we look at something like

01:16:35.940 | there's a region in North America called Baja, California,

01:16:40.580 | and it runs into the United States

01:16:43.460 | and it runs down into Mexico as well.

01:16:45.220 | So the same topology, but two different jurisdictions.

01:16:49.140 | In the US, we very heavily manage forest fires.

01:16:55.140 | We're trying to manage nature effectively.

01:16:57.700 | Whereas in Mexico, it's much more unregulated.

01:16:59.780 | It just, when wildfires spring up, they let them burn off.

01:17:04.060 | In North America, when wildfires spring up,

01:17:06.260 | we're actually extinguishing them.

01:17:08.220 | So we're constantly trying to dampen

01:17:09.740 | the short-run volatility of these small brush fires.

01:17:12.340 | Whereas in Mexico, we just let them burn.

01:17:13.740 | We let nature do its thing.

01:17:15.580 | The consequence of this is that

01:17:18.300 | the wildfires still occur eventually,

01:17:20.100 | but they're much larger and much more devastating

01:17:22.380 | in North America where human intervention has occurred.

01:17:25.240 | Because it's dampening nature's natural corrective mechanism

01:17:31.900 | of clearing this underbrush with these more frequent

01:17:34.700 | and smaller fires at the cost of much larger fires.

01:17:38.100 | So again, we're delaying short-term volatility

01:17:39.900 | and exacerbating long-run volatility.

01:17:42.620 | And in Mexico, it's the opposite, right?

01:17:44.380 | Just these wildfires burn much smaller

01:17:46.500 | and more continuously over time.

01:17:49.360 | The further effect of that in North America

01:17:51.020 | is that the fires can get so big and so hot

01:17:53.220 | that it burns away the topsoil.

01:17:55.140 | So it actually destroys the fertility of the soil itself.

01:17:58.500 | So the point of this is that human intervention, right?

01:18:02.980 | Even the intention behind North American authorities

01:18:06.580 | managing that forest fire is to create less destruction.

01:18:10.300 | That is the intention.

01:18:11.980 | But the intention is divergent from the outcome.

01:18:15.340 | So in Talebian speak, he would say that human intervention

01:18:18.940 | moves us from mediocristan into extremistan.

01:18:23.940 | So mediocristan would be something much more like nature

01:18:27.380 | where, for instance, you can't double your body weight

01:18:30.180 | in a day, probably can't even do it in a year, right?

01:18:33.740 | But in extremistan,

01:18:34.780 | which is something much more information-based,

01:18:37.180 | you can double or send your net worth to zero

01:18:41.940 | in a single trade, in a single moment, right?

01:18:44.800 | So when we try and intervene with natural biological systems

01:18:48.660 | that have these feedback loops,

01:18:51.780 | we actually start to push the system more,

01:18:53.880 | to behave more like an extremistan system.

01:18:57.340 | That has less short-run volatility,

01:18:59.900 | but more extreme long-run volatility.

01:19:03.580 | - But the question is where you look at capitalism

01:19:07.140 | or communism, for example, and by the way, yes,

01:19:10.600 | I will talk to somebody who's a Marxist or a communist.

01:19:13.260 | Richard Wolff is a pretty eloquent defender of these ideas

01:19:16.620 | 'cause it's always good to really understand ideas

01:19:19.940 | as opposed to just reject them offhand.

01:19:22.240 | When you look at the system of capitalism

01:19:26.300 | or the system of communism,

01:19:27.900 | there's ideals and a lot of people argue

01:19:32.140 | in this perfect form would actually be good for the world.

01:19:35.780 | The question is how resilient are they

01:19:38.620 | to the corruption of human nature?

01:19:42.220 | And I mean, you're saying that there's never been

01:19:45.900 | a free market, it's a very true statement.

01:19:48.820 | The question is how resilient is capitalism

01:19:52.940 | or whatever implementations of capitalism

01:19:54.700 | we had up to this point to human nature

01:19:57.340 | where one person would become successful

01:19:59.380 | through legitimate means,

01:20:03.200 | then starts to try to manipulate the system

01:20:06.100 | that takes it away from a free market

01:20:07.740 | or takes it away from the things

01:20:11.100 | that gave them the riches in the first place

01:20:14.060 | and then try to through corruption, get more,

01:20:17.380 | get this, the thing you said, the lazy human ways.

01:20:20.940 | Now try to figure out how to get something for nothing.

01:20:23.140 | - That's right.

01:20:24.380 | So how resilient do you think is capitalism to that?

01:20:26.980 | - Well, the best implementation we've had of it

01:20:31.460 | really has been the United States,

01:20:35.020 | I think up until this point,

01:20:36.620 | but it's still the central banking itself.

01:20:41.620 | This was in the 1848 Manifesto to the Communist Party.

01:20:45.820 | Measure number five reads,

01:20:47.900 | an exclusive state monopoly

01:20:49.760 | and centralized control over cash and credit.

01:20:51.900 | So the central bank is a Marxist or communist institution.

01:20:56.660 | It is antithetical to the free market principles

01:20:58.820 | on which the United States was founded.

01:21:00.620 | And indeed the United States resisted

01:21:02.140 | the implementation of a central bank.

01:21:04.540 | I think it was Andrew Jackson.

01:21:06.560 | I know there was the first national bank,

01:21:08.500 | the second national bank were both disbanded.

01:21:10.900 | And then Andrew Jackson, which is my favorite Tennessean,

01:21:14.140 | he has some famous quotes about routing out the bankers

01:21:18.260 | like a den of vipers.

01:21:19.580 | I think he punched one of the central bankers in the face

01:21:23.100 | back when our leaders were a bit more badass,

01:21:27.020 | I guess you might say.

01:21:28.860 | And finally in 1913, the Federal Reserve was implemented

01:21:33.860 | and it's been kind of all downhill from there.

01:21:39.500 | - So what is, can you, oh, sorry, go ahead.

01:21:41.980 | - I was just gonna say that communism and capitalism,

01:21:45.660 | it's also a matter of scale.

01:21:48.700 | The ideal behind communism is from each

01:21:51.580 | according to their ability to each according to their need.

01:21:54.140 | Sounds beautiful, right?

01:21:55.460 | Sounds like a great, peaceful, harmonious way

01:21:58.420 | to organize ourselves.

01:22:00.060 | The problem is, and by the way,

01:22:02.700 | I am a communist in my family, in my home, right?

01:22:05.540 | - At that very smallest of scales.

01:22:07.180 | - Yes, in your very small circles of trust,

01:22:10.260 | you're much more likely to behave selflessly

01:22:13.980 | towards one another.

01:22:14.820 | - By the way, I look forward to the Bitcoin community

01:22:17.300 | clipping out that part, saying that Robert Breedlove

01:22:20.900 | is a communist and the ideals of communism are beautiful.

01:22:23.980 | - Yeah, context matters, people.

01:22:25.580 | - Sorry, go ahead.

01:22:28.440 | - But to your point, it does not scale, right?

01:22:32.900 | As we move into this larger system

01:22:37.900 | of socioeconomic cooperation, which is necessary

01:22:41.580 | to deepen the division of labor, to generate more wealth,

01:22:44.740 | right, we need to interact with one another

01:22:46.580 | on much larger scales than this communistic utopian ideal,

01:22:51.580 | we get into the realm of capitalism,

01:22:54.380 | where we need really sound rules, hard rules,

01:22:58.060 | consensus, verifiability, and frankly, prices.

01:23:03.060 | 'Cause the other thing in Soviet Russia

01:23:06.420 | is they tried to replace the profit motive

01:23:08.820 | or the price signal with this devotion

01:23:12.460 | to this nationalistic faith and devotion,

01:23:15.460 | where it's like you don't need self-interest anymore,

01:23:18.380 | you don't need prices or profits,

01:23:20.340 | you can just protect Mother Russia, right,

01:23:23.300 | and serve Mother Russia, and that would create wealth.

01:23:26.460 | And what happened?

01:23:27.900 | Right, they destroyed price signals,

01:23:29.820 | there were shortages, there were famines,

01:23:32.240 | there's all levels of corruption.

01:23:36.020 | Because to your point, it's once you,

01:23:38.440 | people have to run the system no matter what.

01:23:42.560 | So when people are always pursuing something for nothing,

01:23:45.480 | and you put someone in a seat of much closer

01:23:47.960 | to absolute power, where they're making

01:23:49.880 | all the pricing decisions, they own all

01:23:52.680 | of the productive factors in the economy,

01:23:54.840 | they're not beholden to any market force,

01:23:57.840 | there's no market check on their action,

01:24:01.720 | that that institution tends to become more corrupt.

01:24:04.840 | And further, it's an inferior resource strategy.

01:24:10.720 | And I alluded to this earlier, where the other way

01:24:12.880 | to think about free market versus central planning

01:24:16.040 | is it's decentralized or distributed computing

01:24:20.520 | versus centralized computing.

01:24:22.840 | So each one of us, I think that the number

01:24:26.220 | is 120 bits per second of active awareness.

01:24:29.520 | So we can take in, clearly we process a lot more than that,

01:24:32.300 | but our active awareness, I think, is 120 bits per second.

01:24:35.200 | In a centralized planning body like in Soviet Russia,

01:24:40.400 | they had the pricing czar, maybe they had 10, 20,000 people

01:24:43.880 | deciding the prices for the entire country,

01:24:46.160 | you're only getting that much data throughput,

01:24:49.000 | 20,000 people times 120 bits per second.

01:24:52.400 | Whereas in a free market, if everyone is free

01:24:55.440 | to interact with deep capital markets

01:24:57.480 | based on an accurate price, you're getting

01:24:59.600 | the data throughput of 120 bits per second

01:25:02.120 | times the entire economy.

01:25:03.580 | So you're getting, it's a more efficient means

01:25:08.840 | for disseminating knowledge effectively.

01:25:11.840 | And then again, knowledge is just,

01:25:14.080 | the more knowledge a socioeconomic structure can contain,

01:25:17.360 | the more wealthy it is, right?

01:25:19.240 | Prices, tools, all these things are just knowledge.

01:25:21.840 | So in that respect, that's why something like capitalism,

01:25:26.840 | even in its marginalized form, state capitalism,

01:25:30.780 | outcompetes communism.

01:25:33.160 | It's distributed computing versus centralized computing.

01:25:38.320 | - You know, we kind of brought up religion

01:25:40.640 | and Joseph Campbell and myth and the propagation of ideas.

01:25:45.640 | And it kind of, before I forget,

01:25:48.040 | I wanted to ask your thoughts about this.

01:25:50.600 | You know, Jordan Peterson, I haven't really understood

01:25:55.080 | exactly, like be able to pin him down exactly

01:25:58.600 | what he sees as the role of religion in human society.

01:26:03.760 | But it feels like he's describing it

01:26:08.600 | as having value for us.

01:26:11.520 | The ideas of myth are valuable.

01:26:15.520 | They're valuable mechanisms toward,

01:26:18.680 | I think you mentioned kind of directing us

01:26:21.560 | in this world as a human society.

01:26:23.840 | Do you think about myth?

01:26:26.280 | Do you think about religion?

01:26:27.660 | What's the use of it in this construct of markets

01:26:32.040 | in this framework of where ideas are ultimately

01:26:37.040 | the fundamental thing that makes societies work?

01:26:43.080 | - Yeah, I think Jordan Peterson, who I'm a huge fan of,

01:26:49.720 | he's been very influential on my thinking

01:26:51.960 | and influential on my own religious views as well.

01:26:58.760 | I think his position would be, and he's said this before,

01:27:02.800 | that he acts as if God exists.

01:27:06.460 | And I've had some arguments about this before,

01:27:11.060 | but to me that points towards the preeminence of action

01:27:15.240 | and how important action is

01:27:16.720 | versus your cognitive beliefs necessarily.

01:27:20.180 | And I think there is a lot of utility in that,

01:27:23.400 | that if you follow the moral code

01:27:25.900 | of something like the Bible,

01:27:28.400 | you do reap benefits from that.

01:27:30.480 | Society reaps benefits from that.

01:27:32.520 | And this is not, and sometimes I bring up this point

01:27:37.040 | and people are like, oh my God, are you kidding me?

01:27:38.560 | Have you read the Old Testament?

01:27:39.720 | They're clobbering people with rocks

01:27:41.640 | when they do the wrong thing.

01:27:43.580 | The Bible doesn't claim to be this,

01:27:46.560 | like do everything that was done in the Bible.

01:27:48.520 | It's more like charting this moral progression

01:27:50.960 | where we came from this very barbaric society

01:27:53.620 | into something more like the New Testament

01:27:56.040 | where we're honoring individual sovereignty

01:27:58.680 | above the state and things like that.

01:28:00.080 | So I think that mythology itself

01:28:04.920 | is another form of data compression.

01:28:07.460 | If you look at these stories,

01:28:10.120 | Cain and Abel is a good example,

01:28:11.880 | or Peterson makes the point that it's a tiny story.

01:28:14.920 | It's a paragraph-ish long,

01:28:17.880 | but it contains so many layers of meaning

01:28:20.160 | in regards to violence, to evil, betrayal, work.

01:28:25.540 | The divergence between intention and result,

01:28:29.300 | 'cause I think Cain is actually making,

01:28:31.620 | he's making the effort to sacrifice for God,

01:28:36.380 | but the sacrifices he's making are not,

01:28:38.740 | God doesn't find them useful, right?

01:28:41.180 | And so he sort of rejects them.

01:28:43.500 | For a, again, we're organized by these useful fictions,

01:28:49.900 | these Heraurian imagined orders.

01:28:53.420 | I think mythology is kind of the original version of that

01:28:56.820 | where we were learning to organize ourselves around stories

01:29:01.820 | to best coordinate our action across space and time.

01:29:08.340 | And so I think it's very foundational.

01:29:12.420 | And back to what we were saying in the beginning,

01:29:16.180 | that if value truly is fundamental,

01:29:18.420 | I think it's interesting that all these stories

01:29:20.900 | point towards often common moral values.

01:29:24.620 | They're not perfectly aligned,

01:29:26.360 | but it does speak to just the evolutionary

01:29:31.420 | importance of morality and the subjectivity of morality,

01:29:34.600 | where morality sort of evolves over time

01:29:37.100 | based on, frankly, the capital stock we've accumulated.

01:29:40.900 | The more capital stock we've accumulated,

01:29:42.580 | the easier life is, the less barbaric we have to be.

01:29:45.700 | Whereas if we're living in conditions of true scarcity,

01:29:50.360 | then we tend to be a bit more barbaric towards one another.

01:29:54.120 | And that too, to dovetail this into something

01:29:58.360 | largely unrelated, but I think is really important,

01:30:01.160 | is inflation.

01:30:02.120 | Inflation by artificially increasing the prices

01:30:07.380 | of goods and services in the world, right?

01:30:09.240 | We're injecting more dollars,

01:30:12.060 | chasing the same level of goods and services.

01:30:15.000 | We are artificially increasing scarcity.

01:30:19.440 | Perceived scarcity, right?

01:30:21.680 | And when you increase perceived scarcity,

01:30:24.760 | you are amplifying divisiveness.

01:30:27.640 | The natural state of man is when everything is scarce

01:30:33.280 | and you really have to fight hard

01:30:34.680 | just to eat or drink water that day.

01:30:37.560 | So it's de-civilizing in a way,

01:30:40.520 | by artificially amplifying the perceived scarcity

01:30:43.520 | in the world.

01:30:44.760 | - Can you elaborate, how does inflation

01:30:46.800 | increase the perceived scarcity in the world?

01:30:49.200 | - So we can think the price itself is an indication,

01:30:52.960 | it's a data packet, if you will.

01:30:54.600 | The price is a data packet on supply and demand, right?

01:30:57.760 | It's telling you how much supply there is

01:31:00.400 | of something in the world relative to the demand.

01:31:03.520 | So when you print money and artificially increase that price,

01:31:08.520 | it's diverging away from supply and demand.

01:31:10.800 | It's becoming just more of a product of policy

01:31:13.800 | than it is of free market fundamentals.

01:31:17.840 | The more expensive something is,

01:31:19.920 | that is a signal to the marketplace

01:31:21.840 | and to market actors that it is scarce, right?

01:31:24.640 | That's why a Leonardo painting might sell for $16 million.

01:31:29.640 | There's only one, there's a lot of demand for it.

01:31:32.920 | Maybe my numbers are off, but you get the point.

01:31:35.960 | It's the reason mask spiked in price

01:31:38.360 | after the COVID announcement, right?

01:31:39.880 | There was not enough supply,

01:31:41.840 | toilet paper, et cetera, et cetera.

01:31:43.640 | So inflation, and by inflation,

01:31:47.720 | I specifically mean arbitrary fiat currency

01:31:50.920 | supply inflation by legal monopoly,

01:31:53.920 | not inflation's a commonly misunderstood word.

01:31:57.360 | That is amplifying the perception of scarcity

01:32:01.400 | among market actors in the world.

01:32:03.600 | And I would argue that it actually amplifies divisiveness.

01:32:07.880 | I think this is the key maybe to looking at

01:32:12.080 | the connection between the monopolization of money

01:32:15.160 | and things like cancel culture,

01:32:17.200 | because it's increasing our natural predilection

01:32:22.200 | to be combative with one another

01:32:24.360 | because we think there's more scarcity in the world

01:32:26.760 | than there actually is.

01:32:28.000 | Versus in a world where you're not increasing

01:32:29.960 | the money supply, prices are declining every year.

01:32:33.280 | As prices decline, this is a signal to market actors

01:32:36.480 | and the market that scarcity is declining.

01:32:39.060 | There's less need to fight over things.

01:32:41.980 | And all of this ties back into the old Bastiat saying

01:32:46.240 | that if goods don't cross borders, soldiers will.

01:32:50.320 | So if we're not trading with one another,

01:32:52.080 | if we're not acting interdependently

01:32:54.000 | and we're not becoming more intelligent as a market

01:32:59.000 | and that increased intelligence or increased knowledge

01:33:03.840 | is reflected in decreased prices,

01:33:06.640 | because prices are just the exchange ratios of things.

01:33:11.040 | So the smarter we can solve problems,

01:33:13.020 | the better we can solve problems, the less prices would be.

01:33:15.920 | So it induces more cooperation.

01:33:18.840 | - I love how you tie inflation cancel culture together

01:33:21.680 | as essentially artificial creation of increase of conflict,

01:33:26.680 | increasing artificially increasing scarcity

01:33:30.440 | and thereby artificially increasing conflict.

01:33:33.320 | That's really fascinating.

01:33:34.920 | You're short-circuiting my brain

01:33:38.520 | many times throughout this conversation.

01:33:40.520 | Okay, I'm struggling.

01:33:42.240 | This robot is struggling to keep up.

01:33:45.360 | Okay, maybe to step back at the useful fictions

01:33:50.360 | or pragmatic truths, let me ask the question

01:33:55.400 | that you've answered in many ways already,

01:33:57.520 | but let's explicitly look at what is money?

01:34:01.940 | - Oh, as you know, that's my favorite question.

01:34:04.240 | (laughing)

01:34:06.480 | Is the name of the show I just launched,

01:34:10.000 | the "What Is Money?" show.

01:34:11.520 | Clearly, we could say the Bitcoin rabbit hole

01:34:17.040 | is what's led me to explore a lot of these ideas in depth.

01:34:20.680 | And I think as we've demonstrated today,

01:34:23.960 | it goes well beyond just the economic sphere

01:34:26.720 | when you start to think about things like exchange

01:34:28.840 | and morality and time preference and civilization.

01:34:33.220 | So I love the question, what is money?

01:34:36.040 | I think it is the key to incepting a deeper understanding

01:34:40.440 | of the world into people, that if you actually

01:34:42.360 | just start to ask the seemingly simple question,

01:34:46.680 | it surfaces more and more layers of truth.

01:34:50.680 | And I recently, I just wrote a piece,

01:34:55.920 | I think I have 30-something answers to this question.

01:34:59.760 | - So sometimes it's actually a more systematic way

01:35:03.460 | of asking the question of what is the meaning of life?

01:35:06.640 | There's some questions that are almost unanswerable,

01:35:11.320 | but in their asking allow you to get closer to truth,

01:35:16.320 | deeply understand the nature of our human existence.

01:35:21.520 | And the meaning of life is almost like this

01:35:23.680 | initial philosophers striving towards that.

01:35:28.160 | If money is indeed as fundamental,

01:35:32.240 | as you've described, especially in the context

01:35:35.600 | of value being fundamental, then that is a really,

01:35:39.680 | that's a more, let's take a 21st century way

01:35:42.040 | of asking the same question about

01:35:43.360 | what is the meaning of life?

01:35:45.080 | You mentioned that it's a meta property

01:35:47.760 | out of the list of many ways to answer that question.

01:35:51.080 | How would you help people to think about that?

01:35:53.280 | - Yeah, the first most serious answer

01:35:58.280 | comes from the School of Austrian Economics

01:36:01.460 | and it defines money as a universal medium of exchange.

01:36:06.460 | So this would be any good that is used,

01:36:11.520 | held and used purely for purposes of facilitating exchange.

01:36:17.560 | So in the configuration of demand for any particular asset,

01:36:22.560 | it's bifurcated between its utility,

01:36:26.820 | which is something, a service that it can render to you

01:36:29.720 | in real time, whether it's, if it's water, you're thirsty.

01:36:34.720 | That's the utility of water is that it can quench your thirst

01:36:38.100 | whereas the marketability would be the expectation

01:36:41.920 | of future exchange, that other people would want

01:36:44.460 | this asset in the future to trade it

01:36:46.060 | for whatever they may have.

01:36:47.460 | Money is just going to be the good in any trading economy

01:36:53.660 | that has the highest proportion of marketability

01:36:56.020 | relative to utility.

01:36:57.920 | So today that would be gold.

01:37:00.580 | Gold has utility, it's used in electronics,

01:37:03.460 | it's used in dental, dentistry and whatnot,

01:37:06.540 | but it's largely used as a store of value across time

01:37:09.920 | and that's what it's been used for for 5,000 years.

01:37:12.180 | So if we say gold has a $10 trillion market cap,

01:37:16.700 | maybe 2 trillion of that is its utility value

01:37:19.380 | or it's actually demand for use in computers and dentistry

01:37:22.620 | and then 8 trillion of that is demand

01:37:24.500 | for its use as a store of value.

01:37:27.240 | Money, the marketability aspects of money

01:37:32.240 | boils down to five services that money can render.

01:37:35.820 | Money needs to be divisible, it needs to be durable,

01:37:40.340 | it needs to be recognizable, it needs to be portable

01:37:42.820 | and it needs to be scarce.

01:37:44.280 | So I'll gloss over a lot of history with this

01:37:47.220 | and just say that historically,

01:37:50.020 | money's always been a technology,

01:37:51.900 | still is a technology or a tool.

01:37:53.700 | I use these terms interchangeably

01:37:55.180 | and you can think of a technology

01:37:56.740 | as just a more sophisticated tool effectively.

01:37:59.000 | To best satisfy those properties,

01:38:03.940 | monetary metals were determined

01:38:05.580 | to be the most satisfactory tool,

01:38:08.300 | the most divisible, most durable, most recognizable,

01:38:10.020 | most portable tool in the marketplace.

01:38:13.140 | Of the monetary metals, gold was the most scarce

01:38:17.020 | as quantified by either its stock to flow ratio

01:38:20.580 | or its inflation resistance.

01:38:22.240 | So simple way to say this is that

01:38:24.560 | people always prefer the money most resistant to inflation.

01:38:27.920 | - That's a nice definition of scarcity in the context

01:38:30.740 | of money is if you were to measure it,

01:38:33.980 | the resistance to inflation.

01:38:35.980 | So how hard is it to artificially increase the supply?

01:38:38.900 | - That's right.

01:38:39.940 | That is the hardness of money.

01:38:41.820 | And that's why gold is hard money.

01:38:43.380 | - 'Cause the alchemy is hard.

01:38:44.860 | - That's right.

01:38:46.100 | 'Cause no one cracked the alchemy, so gold became money.

01:38:49.780 | So that's such a nice, clean explanation of what is money

01:38:54.780 | with the five elements and gold ultimately won out

01:38:59.280 | because of the last piece of scarcity.

01:39:01.680 | - That's right.

01:39:02.520 | And to get to maybe dig a little deeper there.

01:39:04.600 | So scarcity, we commonly think of scarcity

01:39:08.400 | as strictly a supply property,

01:39:12.400 | where if there's not much of something, then it's scarce.

01:39:15.200 | But it's not actually true.

01:39:16.580 | Scarcity occurs when demand exceeds supply.

01:39:20.780 | So when there's more demand than the supply can justify,

01:39:24.380 | the thing becomes an economic good

01:39:26.300 | and it establishes itself a market price.

01:39:30.060 | So there's more demand for the thing

01:39:31.580 | than the supply can satisfy.

01:39:33.800 | The unique thing about money as a concept at least

01:39:37.060 | is that demand always exceeds supply.

01:39:40.800 | There's never enough money to satisfy everyone, right?

01:39:43.500 | Because another definition for money,

01:39:46.380 | it's the most marketable good.

01:39:48.600 | So it can be traded for any other good,

01:39:52.340 | service, piece of knowledge in the marketplace.

01:39:55.160 | So humans being what we are, we're never satisfied, right?

01:39:58.240 | We always want more of something, whatever it may be.

01:40:01.220 | So money as the ultimate token of obtaining that something

01:40:04.980 | is always scarce as a concept.

01:40:07.280 | But the problem with money is that if you can,

01:40:12.560 | as you alluded to, easily increase its supply,

01:40:15.480 | then all of a sudden you can compromise

01:40:17.040 | the scarcity of it over time

01:40:18.520 | and you can rob people through inflation.

01:40:22.160 | So that's why the market settled on gold as money.

01:40:26.560 | - And robbing is reallocating the value that,

01:40:30.600 | so essentially the one property,

01:40:34.320 | like why scarcity is important is it adds a lot more

01:40:39.320 | friction to the reallocation.

01:40:44.600 | Like through essentially violence or implied violence.

01:40:48.880 | - Well, it prevents it through cost of extraction too.

01:40:51.360 | So if you want to go out and dilute gold holders today,

01:40:54.440 | you have to go out into the world and mine gold.

01:40:57.400 | It's a very expensive process.

01:40:59.680 | That process tends to find equilibrium

01:41:02.680 | where production cost equals the market value of gold.

01:41:05.160 | So if market value is $2,000 an ounce today of gold,

01:41:08.480 | its production cost is gonna be around there.

01:41:10.920 | That's the natural market equilibrium.

01:41:12.360 | So that way gold miners cannot just dilute people over time.

01:41:16.800 | Whereas if you look at something like fiat currency,

01:41:19.680 | which we're jumping ahead a little bit,

01:41:21.140 | but its production cost is zero.

01:41:23.800 | So there's a reason the market value of fiat currency

01:41:26.520 | historically has always converged to zero

01:41:29.480 | because its production cost is near zero.

01:41:31.440 | So the extension to that question might be

01:41:34.040 | how did we get from gold to paper currency?

01:41:37.680 | And again, this is rooted in the properties of money.

01:41:41.560 | As good as monetary metals were,

01:41:43.120 | and as good as gold is as money,

01:41:44.840 | at holding value across time,

01:41:47.620 | it's rather limited in terms of portability.

01:41:50.680 | It is not as useful for moving value across space.

01:41:54.060 | This is another definition of money, by the way,

01:41:55.800 | a social device for moving value across space and time.

01:41:59.040 | So to rectify this technological shortcoming of gold,

01:42:04.840 | we introduced, first of all,

01:42:08.160 | the custody of gold was gradually centralized

01:42:10.920 | into fewer and fewer warehousing operations.

01:42:15.600 | This is because there are economies of scale

01:42:17.760 | associated with using gold as money.

01:42:21.000 | And that if you centralize the custody,

01:42:23.120 | the warehouse owner can then issue a paper receipt,

01:42:26.480 | called a warehouse receipt for that gold.

01:42:28.560 | And then market participants can trade that paper

01:42:31.120 | as if it's good as gold.

01:42:32.480 | And everyone has an option at any time

01:42:34.160 | to go and redeem real gold from the warehouse.

01:42:36.840 | So that system works.

01:42:39.200 | Until the problem with it is that it introduces the need

01:42:42.640 | to trust the custodian.

01:42:44.120 | So it's introducing counterparty risk

01:42:45.840 | in the form of the custodian.

01:42:47.680 | And now should that warehouse choose

01:42:50.240 | to increase the supply of paper notes to gold

01:42:54.140 | beyond its supply.

01:42:55.400 | So if it's got three tons of gold

01:42:57.560 | and it issues six tons worth of paper receipts,

01:43:00.880 | all of a sudden it's participating in a fraud.

01:43:03.440 | It's basically lying.

01:43:04.520 | It's representing that it has more gold

01:43:06.160 | than it actually does.

01:43:08.900 | And this is, that is the pathway

01:43:11.560 | that we got into banking and central banking.

01:43:14.000 | Is we needed a convenience mechanism

01:43:16.560 | to rectify the portability shortcomings of gold.

01:43:19.460 | We needed to be able to move value across space.

01:43:22.200 | Gold is doing a great job at moving value over time,

01:43:24.660 | but not space.

01:43:26.040 | Paper currency gave us the ability

01:43:27.400 | to move value across space.

01:43:29.140 | But it introduced this attack vector

01:43:31.560 | for warehouse operators, which became banks,

01:43:34.200 | which became central banks,

01:43:36.040 | to modify the supply to suit their own political agendas.

01:43:39.980 | - Added the snooze button.

01:43:41.420 | Allows you to do just do a little fraud.

01:43:45.840 | - To get something for nothing.

01:43:47.320 | - Something, just a little bit at first.

01:43:49.160 | - Yeah.

01:43:50.000 | - Just this one morning, just a little bit.

01:43:53.480 | I mean, I don't know if you can speak to

01:43:55.720 | the birth of fiat currency.

01:44:00.120 | Is there some interesting characteristics

01:44:04.160 | to that, those early steps that created it?

01:44:07.600 | Like, could it have been averted?

01:44:09.940 | Or is this the natural progression of governments?

01:44:14.940 | - You know what's funny is that

01:44:18.320 | central banking was initially designed

01:44:21.080 | to be the custodian of gold, right?

01:44:23.480 | So they were going to custody the gold,

01:44:26.560 | issue paper on top of it,

01:44:28.620 | and then they would maintain,

01:44:31.440 | you could trust the public stamp effectively.

01:44:33.420 | You could trust that the central bank

01:44:34.840 | had as much gold on reserve as they said they had.

01:44:37.400 | And they were supposed to be the trustworthy institution.

01:44:39.260 | So we went from placing our trust

01:44:42.120 | in a free market game theoretic process,

01:44:44.700 | or trusting gold,

01:44:45.920 | and we began trusting this institution instead.

01:44:48.280 | That institution would not have arisen

01:44:54.400 | if the portability of gold was really high.

01:44:58.140 | If we could have somehow sent gold

01:45:00.360 | across a telecommunications channel,

01:45:02.280 | there would have been no need for a central bank.

01:45:05.040 | Everyone could have custody their gold

01:45:07.520 | in any information bearing medium, frankly,

01:45:10.700 | and they could beam it around the world at any time.

01:45:13.720 | So this whole institution itself

01:45:16.880 | is rooted in a technological shortcoming of gold.

01:45:21.040 | So I think it's,

01:45:22.220 | another way to think about that is maybe had there been,

01:45:26.400 | all the gold in the world today

01:45:28.560 | fills two Olympic-sized swimming pools.

01:45:30.960 | All the gold mined throughout all of human history.

01:45:32.920 | So there's not a lot.

01:45:34.080 | What if there had been just like way more?

01:45:38.720 | There'd just been, I don't know,

01:45:39.560 | 20,000 Olympic swimming pools worth?

01:45:41.780 | Portability wouldn't have been as much of an issue.

01:45:46.000 | And this is to say,

01:45:46.960 | assuming gold was still the most scarce metal

01:45:48.920 | in all these things,

01:45:49.960 | portability would have been less of an issue.

01:45:54.600 | We would have had less dependence

01:45:55.940 | or need for a central bank.

01:45:57.960 | So I think it's kind of idiosyncratic

01:46:00.200 | in that we just happened to end up here on this planet

01:46:03.720 | with a certain amount of gold.

01:46:05.120 | It best satisfied the properties of money.

01:46:07.400 | - And a certain amount of humans,

01:46:08.960 | the geographic dispersed such that portability

01:46:12.120 | had certain properties that you want to achieve

01:46:14.280 | for humans in the geographical space

01:46:16.080 | to be able to be exchange value.

01:46:18.720 | - It became more of an issue as we globalized.

01:46:20.920 | As we became more of a global society,

01:46:22.560 | we needed money that could move across space really fast.

01:46:26.440 | So we could trade in international capital markets.

01:46:29.640 | So that drove the central bank

01:46:33.560 | to become the dominant institution of the world.

01:46:35.720 | And if you follow the flows of gold throughout history,

01:46:39.120 | you know, I've been watching this documentary

01:46:41.240 | on World War I and World War II on Netflix.

01:46:43.680 | I think it's called World War II in Color.

01:46:45.880 | - Oh yeah, that's really good.

01:46:47.720 | - So good.

01:46:48.560 | When I say gold has been the governor of governments

01:46:53.520 | or gold is geopolitical money,

01:46:55.120 | like it is the base layer operating system,

01:46:59.160 | has been the base layer operating system for analog society.

01:47:02.160 | So it's always been about who controls the gold.

01:47:04.560 | It's who makes the rules.

01:47:06.960 | And that's in that context

01:47:11.200 | is why Bitcoin is so interesting

01:47:12.720 | because it is the disruptor to

01:47:16.440 | this base level operating system

01:47:18.840 | that's functioned for all of human history.

01:47:22.040 | - I think this is a good place to ask.

01:47:24.440 | We asked the what is money question.

01:47:27.880 | What is Bitcoin?

01:47:29.080 | - That's a question as complicated as what is money.

01:47:35.120 | I think if you get a general understanding of money

01:47:39.120 | from a number of angles

01:47:42.800 | that we could say Bitcoin is the most superior

01:47:47.800 | monetary technology that has ever existed.

01:47:50.480 | - So one of the most superior implementation

01:47:54.760 | of the ideas of money that you talked about,

01:47:56.720 | you talked about money as speech,

01:47:58.320 | you talked about money as an idea.

01:48:00.080 | We talked about money as sovereignty.

01:48:04.000 | - Yeah, so we're attaching the concept of money

01:48:06.440 | to your point to whatever tool best satisfies

01:48:11.440 | those properties of money

01:48:13.720 | or best renders those services we need for money.

01:48:16.800 | - And as you said, you're using the word tool

01:48:19.280 | and technology interchangeably here.

01:48:20.680 | - Yes, yes.

01:48:22.280 | And another thing to think about here is that

01:48:24.800 | we think often in terms of goods or services,

01:48:28.480 | but actually everything is a service.

01:48:31.880 | So it's not the physical properties of this pen

01:48:35.520 | that I find valuable,

01:48:36.800 | it's the services that it renders to me

01:48:38.800 | that I want to write a letter.

01:48:40.440 | This serves me by allowing me to lay ink on paper

01:48:45.440 | and communicate information.

01:48:47.880 | So value, humans attach value,

01:48:52.480 | as we alluded to earlier, to services, not goods.

01:48:56.360 | So the properties or the services that money renders

01:48:58.920 | that human beings value are those five properties,

01:49:01.560 | divisibility, durability,

01:49:02.680 | recognizability, portability, scarcity.

01:49:05.080 | Metals best satisfied those services historically,

01:49:10.080 | but Bitcoin as the most superior monetary technology

01:49:13.080 | in human history, essentially perfects them.

01:49:16.540 | It's as close to perfection as we've ever been.

01:49:19.160 | So in terms of divisibility,

01:49:21.760 | each Bitcoin can be broken down

01:49:23.400 | into 100 million subunits called a Satoshi.

01:49:26.180 | If that divisibility were ever a problem,

01:49:31.480 | which actually there was a question that came up recently,

01:49:35.160 | if you divide the world population

01:49:37.440 | by the total supply of Bitcoin,

01:49:38.760 | you end up at like 0.3 Bitcoin per person,

01:49:42.000 | call it 300,000 Satoshis per person.

01:49:46.040 | What if that was not enough

01:49:47.760 | to facilitate economic activity?

01:49:50.560 | And the answer to that is Bitcoin can soft fork

01:49:53.200 | into further divisibility.

01:49:54.560 | So if Bitcoin ate all the money in the world

01:49:57.000 | and the average Bitcoin or wealth

01:50:00.480 | was say 300,000 Satoshis each,

01:50:02.100 | but that wasn't divisible enough maybe to buy coffee

01:50:06.160 | and do all these day-to-day transactions,

01:50:07.560 | what would happen?

01:50:08.400 | Well, we would increase its divisibility.

01:50:09.800 | So Bitcoin's perfected divisibility.

01:50:12.500 | The divisibility of money lets us transact across scales.

01:50:16.240 | All right, we can buy coffee or we can buy a house.

01:50:19.120 | Durability is an interesting one.

01:50:23.120 | So clearly something like gold is very durable.

01:50:25.360 | It's resistant to degradation over time.

01:50:28.280 | Bitcoin is just pure information,

01:50:30.240 | but it's stored in a distributed format.

01:50:33.520 | So information stored in a distributed fashion

01:50:36.960 | tends to be virtually infinitely durable.

01:50:40.800 | The example I like to give here

01:50:41.760 | is something like the Bible.

01:50:43.560 | The Bible is just distributed information.

01:50:46.080 | It's stored everywhere and nowhere, so to speak.

01:50:49.240 | And for that reason, it has outlasted empires.

01:50:52.040 | And Bitcoin's similar, right?

01:50:54.320 | You can't make changes to it unilaterally.

01:50:57.040 | - But to make explicit,

01:50:59.360 | the ways in which it is not durable

01:51:01.920 | is the fact that it relies on computing infrastructure.

01:51:05.400 | Like it needs computers.

01:51:08.360 | So if you were to destroy all the computers in the world,

01:51:11.200 | it needs mechanisms that store

01:51:15.360 | and transfer information.

01:51:16.640 | - That's right.

01:51:17.600 | - And so you could attack it.

01:51:20.040 | I mean, you could attack gold in the same kind of way,

01:51:22.040 | as opposed to the physics,

01:51:23.760 | but it's probably easier to destroy

01:51:26.240 | all the computers in the world

01:51:27.360 | than it is to destroy all the gold in the world.

01:51:30.280 | Maybe not, I don't know.

01:51:32.320 | Anyway.

01:51:33.640 | - Yeah, you're right.

01:51:34.680 | Maybe, I'm not sure which one would be harder to destroy.

01:51:38.440 | But the other thing is there's a dynamic incentive.

01:51:41.880 | So every time you destroy Bitcoin miners,

01:51:44.840 | you're creating incentives for anyone else

01:51:46.600 | with access to electricity to mine.

01:51:48.920 | 'Cause you're making the algorithm easier.

01:51:50.720 | - Yeah, so the destruction is difficult

01:51:54.120 | because of the decentralized nature of the whole thing.

01:51:56.600 | - And the difficulty adjustment.

01:51:57.920 | - Yeah, so you're gonna have to use nuclear weapons

01:52:00.520 | and cover the whole globe.

01:52:02.080 | But anyway.

01:52:02.920 | - Yeah, and by then we've got much bigger problems

01:52:05.000 | than money, right?

01:52:05.840 | - That's right.

01:52:08.560 | So, okay, so that's durability.

01:52:09.680 | - So portability, Bitcoin's pure information.

01:52:12.320 | It can move at the speed of light.

01:52:13.680 | It can't get much faster than that.

01:52:15.920 | Recognizability refers to the ability to verify

01:52:20.600 | the veracity of the money or its authenticity.

01:52:23.400 | So you can actually, when we used to transact gold,

01:52:27.360 | there were time-honored techniques for verifying

01:52:30.040 | that it was gold and not gold-plated lead, for instance.

01:52:33.000 | This is where we get the term sound money.

01:52:34.920 | A gold coin made a very particular sound

01:52:36.800 | when dropped from a certain height.

01:52:38.320 | You know, you've seen people biting coins.

01:52:40.240 | These are all techniques for testing

01:52:42.720 | the authenticity of gold.

01:52:44.120 | And with Bitcoin, we have something unique

01:52:46.480 | in that if you're running a full node,

01:52:48.360 | you can verify that the Bitcoin is Bitcoin, right?

01:52:51.200 | It cannot be tampered with.

01:52:53.440 | It cannot be faked.

01:52:54.920 | And in addition to that, as a node operator,

01:52:57.300 | you can audit the total supply of Bitcoin at any time,

01:53:00.040 | which is unlike any money in history.

01:53:01.600 | So you know with full certainty

01:53:04.200 | if you're holding 1,000 Bitcoin,

01:53:06.840 | you have 1,000 out of a possible 21 million forever.

01:53:10.460 | You have a guaranteed fraction of the total supply.

01:53:13.060 | - Yeah, so a full node contains information

01:53:14.740 | about every transaction that's ever been had,

01:53:16.580 | so you can figure out, yeah, I mean,

01:53:19.140 | all the truth of this money is all right there.

01:53:23.860 | - Yeah, it's like a fractal constituent

01:53:25.780 | of the whole network, right?

01:53:27.100 | The whole Bitcoin blockchain is comprised in a node, too.

01:53:30.820 | Not the proof of work piece,

01:53:32.180 | but the entire transaction history.

01:53:33.880 | And so that's unique as well.

01:53:37.060 | And that's what makes Bitcoin the ultimate store of value,

01:53:39.960 | is that you know with certainty what the total supply is

01:53:43.800 | and will ever be.

01:53:45.100 | And you know that your share of that supply is fixed.

01:53:49.460 | It cannot change.

01:53:50.480 | It can only improve, actually.

01:53:51.900 | If someone loses, you know,

01:53:53.740 | if the Satoshi stash is truly gone forever,

01:53:56.020 | the million Bitcoin never moves,

01:53:58.020 | then we're talking about 1,000 Bitcoin

01:53:59.980 | out of 20 million instead, and so on and so forth.

01:54:03.140 | As more people lose access to their Bitcoin,

01:54:05.780 | they're basically making a contribution to everyone else.

01:54:08.060 | It's anti-dilutive.

01:54:09.560 | - And there's certain properties of Bitcoin

01:54:13.220 | that are sort of a little bit more into the details

01:54:15.520 | that ensure that the full nodes,

01:54:19.080 | like the size of all the transactions that ever happened,

01:54:22.880 | at least currently, can be stored

01:54:24.320 | in a single computer, for example.

01:54:25.720 | So it doesn't blow up too quickly.

01:54:28.040 | - That's right.

01:54:28.880 | - But you know, there's arguments that that's not necessary.

01:54:32.080 | You can make arguments for that to be a very nice property,

01:54:35.660 | but you can also say that there's like drawbacks to it.

01:54:38.280 | That's hence the block size debates

01:54:41.520 | and all those kinds of things.

01:54:42.480 | - Yeah, that was the Bitcoin Cash Civil War, right?

01:54:45.280 | Was that particular piece.

01:54:47.580 | - Yeah.

01:54:48.420 | - And you know, ostensibly they were saying,

01:54:50.760 | oh, we need more transaction throughput

01:54:52.840 | to buy more coffee and do more transactions.

01:54:55.360 | But what they were actually doing

01:54:57.520 | was increasing the size computing power necessary

01:55:01.900 | to run a full node,

01:55:03.340 | which would have theoretically

01:55:04.940 | compromised decentralization.

01:55:06.780 | - So yeah, but it would, in theory,

01:55:09.580 | in theory, it would allow you

01:55:12.660 | to have much more transactions.

01:55:15.100 | - That's right.

01:55:15.980 | - But the drawback, it would,

01:55:18.540 | because no longer can be stored

01:55:20.700 | in a single computer, personal computer,

01:55:22.460 | then it naturally leads to decentralization.

01:55:25.940 | - Yes.

01:55:26.780 | - Same kind of thing we see with gold.

01:55:28.020 | - Which would have compromised its survivability.

01:55:30.620 | - Right.

01:55:31.740 | So, what else is there?

01:55:34.280 | - The last one, which leads straight into this one,

01:55:36.280 | actually is the most important one of money,

01:55:38.400 | which is scarcity.

01:55:39.960 | And that you need to know the supply

01:55:44.340 | is fixed and safeguarded from counterfeiting and inflation,

01:55:49.340 | which counterfeiting and inflation

01:55:51.840 | are the same thing, by the way.

01:55:53.680 | Counterfeiting is criminalized inflation.

01:55:57.440 | Inflation is legalized counterfeiting.

01:56:00.100 | So, central banks today,

01:56:01.720 | when they say they're printing money, they're not.

01:56:03.180 | They're counterfeiting currency.

01:56:05.440 | That's a very important part.

01:56:07.080 | And Bitcoin, as I've argued in some of my writing,

01:56:10.380 | is more than just an invention.

01:56:13.520 | It's actually the discovery of absolute scarcity,

01:56:16.800 | in that we have unveiled a property of money

01:56:20.000 | that we will only discover once.

01:56:22.040 | And it's got really major ramifications

01:56:27.120 | for the world at large.

01:56:28.680 | So, with gold, for instance, as we've covered,

01:56:33.620 | it became money because it was

01:56:35.380 | the most relatively scarce monetary metal.

01:56:37.940 | Its supply was hardest to increase over time.

01:56:41.060 | However, if we could somehow flip a switch today

01:56:44.160 | and make everyone in the world go out

01:56:45.740 | and start mining gold,

01:56:46.880 | we could increase the supply much more quickly.

01:56:49.740 | Its historic inflation rate's about 2%.

01:56:51.940 | We could double that pretty quickly.

01:56:53.740 | Bitcoin, with Bitcoin, it is not possible.

01:56:58.540 | So, no matter how much effort and energy and capital

01:57:02.460 | and operational expenditure we pour

01:57:03.980 | into the mining network,

01:57:05.500 | we cannot deviate from its fixed and diminishing supply curve

01:57:09.980 | from between now and the last Bitcoin being mined in 2140

01:57:13.580 | because of the difficulty adjustment.

01:57:14.980 | It's constantly, it's adapting to human action, actually.

01:57:18.380 | So, the harder we pursue it, the more that it proceeds,

01:57:21.900 | and then the less we pursue it,

01:57:23.300 | the more available it makes itself.

01:57:25.980 | And this is, it's a real major breakthrough

01:57:30.260 | because it's the closest thing to perfect information

01:57:34.580 | we've ever had in an economy.

01:57:37.300 | And perfect information is this,

01:57:39.380 | it's a theoretical but unattainable state of the market

01:57:44.400 | where all market actors have all the relevant information

01:57:48.420 | about everything so that they can compete

01:57:51.340 | as efficiently as possible.

01:57:53.060 | And in this state, in a state of pure information,

01:57:55.420 | we have, I'm sorry, perfect information,

01:57:57.260 | we have perfect competition.

01:57:58.980 | And in perfect competition, we maximize wealth generation.

01:58:03.100 | So, we're competing as freely as possible

01:58:06.400 | from coercive and violent impediments.

01:58:10.100 | And so, I think Bitcoin, in that sense,

01:58:13.180 | is going to pull the world closer to a state

01:58:17.220 | of perfect competition than we've ever been before,

01:58:21.700 | which would increase wealth generation

01:58:24.540 | to an extent we've never seen before.

01:58:26.440 | - Many of the things you said about Bitcoin

01:58:30.420 | also hold for other cryptocurrency technologies

01:58:32.820 | that followed after.

01:58:34.300 | Can you say something to why you think Bitcoin

01:58:40.660 | is the superior technology

01:58:43.860 | from a pragmatic truth perspective,

01:58:46.220 | than say, Ethereum, but also other crypto,

01:58:51.340 | like Bitcoin Cash, like other hard forks of Bitcoin,

01:58:55.340 | and, or maybe things that might yet to be invent,

01:58:59.740 | tools yet to be invented.

01:59:01.380 | - Yeah, so, this is a good point of argument

01:59:05.060 | because a lot of people have countered me and said,

01:59:08.380 | "Bitcoin cannot be absolute scarcity

01:59:11.260 | because you can fork it and create something

01:59:13.220 | with the same properties as Bitcoin,

01:59:15.500 | or potentially even better properties, right?

01:59:17.660 | You create something with a deflationary monetary policy."

01:59:21.220 | That's what Bitcoin Cash was actually.

01:59:23.660 | It forked Bitcoin with all of the same properties,

01:59:26.260 | except for the block size that we alluded to earlier.

01:59:29.300 | The problem is, is that money is valued.

01:59:33.060 | Again, it's the good with a configuration of demand

01:59:36.620 | that is predominantly marketability.

01:59:40.420 | So, it is valued based on its liquidity.

01:59:43.600 | That is how many other trading partners are there

01:59:46.660 | in that monetary network.

01:59:48.820 | So, it is a network valued

01:59:52.540 | because of its liquidity and network effects.

01:59:54.860 | So, any new entrant into the market for money

01:59:58.660 | will always, is incentivized to always choose the money

02:00:02.800 | with the deepest liquidity and the most network effects.

02:00:06.500 | This is why money has tended to be a winner-take-all market

02:00:10.580 | because it's essentially a single purpose tool, right?

02:00:13.500 | It is a tool for,

02:00:16.620 | if we consider that tools are time-saving devices, right?

02:00:19.700 | The shovel lets you dig more holes per man hour

02:00:21.700 | than you can with your bare hands.

02:00:23.220 | Money is a tool, there's yet another definition of money,

02:00:26.300 | that lets us calculate, negotiate,

02:00:28.600 | and execute trades more quickly.

02:00:30.540 | So, that function tends to coalesce towards one solution.

02:00:36.560 | And so, the short answer would be that for the same reasons,

02:00:43.260 | quantifiable reasons, right?

02:00:44.640 | Like inflation resistance and liquidity and network effects,

02:00:48.500 | that we have one analog gold,

02:00:50.660 | we're only likely to have one digital gold.

02:00:53.580 | And I think the Bitcoin Cash Fork

02:00:55.500 | proves that out empirically.

02:00:57.220 | It's a good case study because--

02:00:59.560 | - Well, it's one case study, right?

02:01:00.860 | But okay, so that's really well put.

02:01:02.980 | So, like gold was sticky.

02:01:04.600 | Once it was accepted, the network effects,

02:01:08.460 | the winner-take-all took over.

02:01:11.000 | And here's a fundamentally different kind of like,

02:01:15.340 | analog versus digital is a leap in technologies.

02:01:18.660 | - That's right.

02:01:19.860 | - And you're suggesting that there may not be,

02:01:23.000 | there's unlikely to be other leaps of that kind

02:01:29.060 | into a whole nother kind of space of technologies.

02:01:32.220 | - I would argue that Bitcoin,

02:01:34.660 | it's kind of like the ideological synthesis of gold,

02:01:38.000 | taking the monetary properties of gold

02:01:39.340 | and combining them with the internet itself.

02:01:41.860 | And in doing so,

02:01:43.220 | it has essentially perfected the properties of money.

02:01:47.140 | You can't get more divisible, durable, recognizable,

02:01:49.700 | portable, or scarce than Bitcoin.

02:01:51.780 | So, Satoshi has kind of,

02:01:54.260 | he left no design space for a superior technology

02:01:58.360 | to intercede and out-compete Bitcoin at this point,

02:02:01.320 | now that it's established a liquidity

02:02:02.700 | in the network effects. - Far superior technology.

02:02:04.740 | - Yeah, but it's a combination of the tech itself

02:02:07.340 | and the social layer. - And the social layer.

02:02:09.300 | That is coalesced to it.

02:02:10.140 | - You can't separate those two out.

02:02:11.740 | - That's right. - They're all connected

02:02:13.100 | and then the political as well.

02:02:15.020 | I mean, but the portability, for example,

02:02:17.460 | that's another way to phrase that is the,

02:02:20.060 | what is it?

02:02:20.900 | The scaling.

02:02:21.980 | So, the number of transactions,

02:02:24.400 | that's a limitation for Bitcoin

02:02:27.080 | that many argues a feature, many argues a bug.

02:02:30.900 | You have a bunch of cryptocurrency technologies

02:02:33.500 | that are able to achieve much higher,

02:02:37.020 | much faster frequency of transactions,

02:02:40.420 | much more transactions, all that kind of stuff.

02:02:43.440 | What are your thoughts on that?

02:02:46.400 | The low level of transactions that's possible with Bitcoin.

02:02:51.740 | Do you think that's a feature?

02:02:52.860 | Do you think that's a bug?

02:02:54.480 | - Necessary for security, actually.

02:02:56.860 | And even these other crypto assets

02:02:59.000 | that settle more quickly,

02:03:00.280 | they settle with less assurance of finality.

02:03:03.660 | So, Nick Carter has a great piece on this, actually,

02:03:06.100 | called "The Settlement Assurance is Stupid."

02:03:09.260 | It's really good, where the gist of it is

02:03:11.540 | that there is more work being done

02:03:14.680 | in each block of Bitcoin

02:03:16.780 | that it is less vulnerable to reversion.

02:03:20.700 | So, it's giving you higher degrees of assurance

02:03:23.900 | that your settlement or your trade

02:03:25.460 | has occurred with finality,

02:03:27.380 | whereas other blockchains are much more vulnerable.

02:03:30.140 | And again, with Bitcoin,

02:03:34.220 | the evolutionary path of money with gold

02:03:36.740 | is that it was first used as a collectible.

02:03:40.600 | It then became used as a store of value.

02:03:43.140 | After it had stored enough value,

02:03:44.820 | it began to be used as a medium of exchange.

02:03:48.760 | And then finally, when it was used widely enough

02:03:50.260 | as a medium of exchange, it becomes a unit of account.

02:03:52.580 | We actually start to think in the money.

02:03:54.940 | Bitcoin's following a similar path.

02:03:57.720 | So, it started out as kind of a collectible.

02:04:00.420 | Today, I would argue it's a store of value,

02:04:02.260 | one of the most effective store of value

02:04:04.060 | we've ever seen.

02:04:05.620 | So, that evolutionary path that Bitcoin's following

02:04:08.580 | is similar to gold.

02:04:10.260 | First a collectible, today a store of value.

02:04:12.260 | To be an effective store of value,

02:04:13.940 | it has to optimize for supply cap.

02:04:18.540 | That has to be the first,

02:04:19.900 | and this is all Bitcoin really needs to do

02:04:22.300 | to be successful, by the way.

02:04:23.780 | Exactly what it's been doing for 12 years,

02:04:25.860 | virtually flawlessly,

02:04:27.420 | which is keep creating a block every 10 minutes

02:04:30.340 | and keep enforcing a supply cap of 21 million.

02:04:34.020 | As long as those two things hold,

02:04:35.860 | it is sound money, the ultimate sound money,

02:04:40.620 | the most inflation-resistant money there's ever been.

02:04:44.620 | It's actually completely immune.

02:04:47.800 | It's taken unexpected inflation to 0%.

02:04:50.340 | We know with perfect certainty

02:04:51.620 | what Bitcoin's supply will ever be.

02:04:53.420 | For it to be used more broadly as a medium of exchange,

02:04:59.580 | it can't make trade-offs at the base layer

02:05:03.380 | to increase its portability, for instance.

02:05:05.340 | Even though portability's maybe kind of a misnomer,

02:05:07.980 | 'cause Bitcoin has extremely high portability,

02:05:10.620 | just doesn't have extremely high transaction throughput.

02:05:13.500 | So, we could say you can move it pretty quickly

02:05:16.700 | anywhere in the world,

02:05:17.520 | as long as you're willing to bid up for the block space,

02:05:20.980 | but you can't satisfy all the world's economic volume.

02:05:24.960 | You can't do 300 million transactions per second

02:05:27.100 | like you can on a centralized database like Visa.

02:05:30.740 | But Bitcoin needs to be this,

02:05:34.780 | it has to be a store value first

02:05:36.420 | before it can be a medium of exchange.

02:05:38.780 | So, it has to protect the supply cap first

02:05:42.660 | before making any trade-offs for that.

02:05:44.380 | And I would argue that that's why Bitcoin is so rigid,

02:05:48.380 | is that it's optimized for survivability

02:05:50.180 | and optimized for that supply cap,

02:05:51.780 | and it's pushing experimentation and other features

02:05:56.140 | that would increase its transaction throughput

02:05:57.820 | to higher layers.

02:05:59.460 | So, I think Lightning Network

02:06:01.460 | is something that's very interesting.

02:06:03.500 | It's still early, but there's a lot of throughput

02:06:07.620 | already being used on the Lightning Network.

02:06:10.580 | And it makes some slight trade-offs

02:06:14.300 | in terms of the trust minimization of Bitcoin.

02:06:16.100 | You end up trusting these smart contracts

02:06:18.220 | instead to move the Bitcoin,

02:06:19.540 | but you pick up nearly unlimited transaction throughput.

02:06:22.980 | So, that's how, and that's how biology evolves,

02:06:25.660 | that's how the internet evolved.

02:06:26.820 | It evolves in layers.

02:06:27.900 | So, I think Bitcoin, you can sort of conceive of it

02:06:31.020 | as the latest layer to the internet,

02:06:33.820 | and it's one that preserves this store value property

02:06:36.860 | better than any asset we've ever had.

02:06:38.900 | - Let me ask sort of a critical question of,

02:06:41.820 | if you're wrong about your statements about Bitcoin,

02:06:46.060 | you find out years from now that you were wrong,

02:06:51.860 | what would that look like?

02:06:53.140 | What would be the things that make you realize you were wrong?

02:06:57.500 | Likely ideas or crazy out there ideas?

02:07:01.300 | Do you think about this kind of stuff?

02:07:03.180 | - All the time.

02:07:04.020 | - 'Cause you speak very confidently about Bitcoin.

02:07:08.460 | And one of the things, let me put it this way.

02:07:11.580 | I think certainty, I feel like that's like a stoic statement

02:07:16.580 | certainty leads to ruin or something like that.

02:07:19.780 | Like certainty, I think is an antithesis to progress often.

02:07:26.620 | And especially in your writing,

02:07:28.220 | but this is true for the Bitcoin community.

02:07:29.900 | There's a certainty about the Bitcoin.

02:07:34.900 | And that makes me very skeptical,

02:07:36.820 | no matter how good the ideas are.

02:07:38.820 | Whenever things are good, this might be the Russian in me.

02:07:42.180 | I think like, what are the ways this is gonna go wrong?

02:07:45.860 | So, what do you think are the ways this might go wrong

02:07:48.780 | or you're wrong in your conception of what Bitcoin is?

02:07:53.020 | - Yeah, so science evolves via negativa,

02:07:58.020 | meaning that we're not proving hypotheses.

02:08:04.220 | And that's what becomes the body of science.

02:08:06.940 | Science is whatever is left over

02:08:09.740 | as we disprove hypotheses, right?

02:08:12.540 | Whatever we can empirically through experimentation,

02:08:17.340 | disprove gets discarded and whatever remains,

02:08:22.000 | whatever theory remains that hasn't been disproven

02:08:24.300 | is science effectively.

02:08:26.640 | This process is similar to market actors

02:08:33.060 | zeroing in on a store value, right?

02:08:35.180 | They're experimenting with different forms

02:08:37.740 | of storing wealth across time.

02:08:41.180 | Some do better than others,

02:08:42.540 | and eventually everyone ends up on the one that is best.

02:08:45.540 | That's what gold was.

02:08:46.780 | In terms of understanding Bitcoin,

02:08:51.260 | I look at it as a similar approach.

02:08:53.440 | And that is the main question I'm asking myself

02:08:55.680 | is how do you stop this thing?

02:08:57.580 | How do you turn it off?

02:08:59.240 | How do you end it?

02:09:00.300 | If you're a nation state particularly

02:09:02.240 | who has the most to lose in this transition,

02:09:05.200 | what is the attack vector by which they neutralize Bitcoin?

02:09:08.520 | I mean, that is the $250 trillion question.

02:09:12.140 | And I've spent five years

02:09:15.680 | thinking about this thing very deeply.

02:09:17.320 | I've read everything on monetary history

02:09:19.400 | I can get my hands on.

02:09:20.760 | The general thought of how it is stopped,

02:09:27.840 | and this is the snag point that a lot of people get to

02:09:31.320 | in their explorations down the rabbit hole

02:09:32.800 | is they just say the government will never allow it.

02:09:35.160 | And that becomes kind of their bottom.

02:09:36.560 | It's like, all right, Bitcoin's interesting,

02:09:37.760 | it's superior money, blah, blah, blah,

02:09:39.120 | but the government will never allow it.

02:09:40.720 | - Was Ray Dalio, did he say that?

02:09:43.280 | - Dalio is currently stuck there, yeah.

02:09:45.760 | - So Ray Dalio said that Bitcoin seems to be too promising.

02:09:50.760 | If it is in fact as promising as it looks,

02:09:55.840 | governments are going to,

02:09:58.220 | I don't forget what the exact quote is,

02:10:00.840 | but not allow it, ban it.

02:10:03.600 | Governments will ban it.

02:10:05.280 | So how do you get Ray Dalio unstuck from your perspective?

02:10:09.920 | - Well-

02:10:10.760 | - And how do you get unstuck from that idea

02:10:12.720 | that governments, will governments,

02:10:14.840 | how do you prevent governments from stopping a thing

02:10:18.440 | that threatens centralized power?

02:10:21.280 | - Well, Bitcoin is an idea.

02:10:24.500 | So governments that are really good

02:10:30.280 | at fighting centralized threats to their power, right,

02:10:35.080 | whether that's a currency counterfeiter

02:10:36.680 | or a competing nation state or business they don't like

02:10:40.400 | or an individual they don't like,

02:10:42.520 | you know, they can kill them, they can throw them in jail,

02:10:44.960 | they can use any number of coercive

02:10:46.760 | or violent tactics to suppress it.

02:10:49.320 | But how do you point a gun at an idea?

02:10:52.600 | How do you, how do you coerce an idea?

02:10:56.560 | And that's, you know, there's some anecdotal history here

02:11:03.400 | where there's the PGP case, which in the United States,

02:11:08.400 | the court was trying to classify it as munitions

02:11:12.320 | when we were shipping this pretty good privacy software

02:11:15.720 | overseas, government wanted to classify it as munitions

02:11:19.440 | and restrict that exportation.

02:11:21.140 | But, and this was a circuit court case precedent,

02:11:25.360 | when the PGP attorneys actually printed out the source code

02:11:30.000 | on paper and presented it as evidence in the court,

02:11:33.560 | all of a sudden it became protected under freedom of speech

02:11:36.400 | and that it's just code is speech, code is language

02:11:40.360 | and therefore at least in the United States,

02:11:43.120 | it's protected under the first amendment.

02:11:45.120 | I think a government ban would be largely unenforceable,

02:11:52.800 | frankly on Bitcoin, being that it's pure information.

02:11:56.960 | If you suppress market actors

02:12:00.480 | from using it in one jurisdiction,

02:12:02.200 | you're just creating incentives for them to go elsewhere.

02:12:05.880 | And you're actually increasing the incentive

02:12:07.480 | for other jurisdictions to be favorable towards it

02:12:11.320 | because then they can create,

02:12:12.880 | they get to benefit from the tax revenue

02:12:14.440 | and the businesses and the innovation

02:12:16.400 | that's occurring in and around Bitcoin as a result.

02:12:19.360 | - So you don't think if a particular central bank,

02:12:21.880 | like in Europe or United States bans it,

02:12:25.920 | not maybe using those terms, but in some kind of way,

02:12:30.440 | you think that provides a really strong incentive

02:12:32.760 | for the other big players to enable it?

02:12:36.320 | - That's right.

02:12:37.160 | And that they're more likely, by the way, since,

02:12:40.600 | and governments know this, by the way, too.

02:12:42.520 | The other thing that causes a government

02:12:46.160 | to shoot itself in the foot is that if they ban something,

02:12:48.320 | they draw a lot of attention to it.

02:12:50.520 | People are smart.

02:12:51.520 | I mean, people ask why, why would a government ban it?

02:12:53.920 | Why can't I use this?

02:12:55.220 | So that's kind of typically be the last arrow

02:12:57.640 | in their quiver.

02:12:58.480 | They may try to ban it if Bitcoin

02:13:02.280 | really starts to monetize very quickly

02:13:04.080 | and the power structures that they impose today

02:13:06.640 | start to dissolve faster than others might think they will,

02:13:11.640 | then they might try and ban it.

02:13:13.440 | But I think that ban will be largely unenforceable.

02:13:16.640 | They're more likely to tax it,

02:13:19.480 | which they already do tax it.

02:13:21.480 | They're likely to increase taxation of it.

02:13:23.600 | They're likely to try and make it more white market

02:13:28.520 | by actually tracing Bitcoin, seeing who has it,

02:13:32.400 | attaching identities to Bitcoin ownership,

02:13:35.040 | and making sure that they're getting their pound of flesh

02:13:38.280 | on all the transactions it results in.

02:13:41.600 | But I don't think, the other thing about this is,

02:13:45.760 | so we saw the internet out-compete intranets,

02:13:50.460 | in that we'd say that open source networks

02:13:55.160 | tend to out-compete closed source networks.

02:13:57.080 | And there's a really good reason for this.

02:13:59.280 | And it's because in a closed source network,

02:14:02.240 | there are costs associated with defending

02:14:05.880 | the network itself.

02:14:06.920 | So you have to, the network owners,

02:14:12.120 | the owners of the closed source network

02:14:13.400 | have to expend resources protecting it from competitors,

02:14:17.520 | and they have to expend resources imposing its rules,

02:14:20.960 | because people, they're not voluntarily adopted rules,

02:14:23.160 | so you actually have to impose these rule sets.

02:14:25.320 | Whereas an open source network,

02:14:26.800 | which is something much more akin to capitalism,

02:14:28.840 | in its pure sense, these are voluntarily adopted rules.

02:14:32.960 | So all market participants have agreed

02:14:34.840 | and consented to this rule set.

02:14:36.680 | So there's no enforcement cost,

02:14:38.360 | and there's no turf protection,

02:14:39.600 | 'cause anyone can freely enter or exit the open network.

02:14:42.960 | For that energetic reason, I think open networks

02:14:46.320 | out-compete closed networks, typically.

02:14:50.520 | And in the digital age, that's why I think,

02:14:53.600 | that's why internet out-competes intranet,

02:14:55.200 | and that's why open source networks

02:14:57.240 | are gonna eat closed source networks.

02:14:58.840 | So what Bitcoin would be in that lens

02:15:01.200 | is the ultimate open source monetary network,

02:15:04.240 | devouring closed source central bank monetary networks.

02:15:08.480 | And I just don't see how,

02:15:12.000 | there's no possibility of unilaterally stopping Bitcoin

02:15:16.200 | or destroying it.

02:15:17.560 | So then they're more likely to regulate or tax it.

02:15:21.480 | And again, the other fallacy here is that a lot of people

02:15:25.800 | tend to think of governments as these singular,

02:15:27.640 | indivisible entities that just move under one plan,

02:15:32.640 | but in reality, it's a lot of people, right?

02:15:35.000 | A lot of people with loosely coupled interests

02:15:36.920 | and agendas and whatnot.

02:15:38.160 | Regulators and others,

02:15:43.120 | when they're wearing their citizen hat,

02:15:45.680 | they're gonna see this thing monetizing.

02:15:47.360 | They're gonna be on the front lines

02:15:48.680 | of trying to regulate it, trying to control it.

02:15:52.160 | And I think what's likely to happen

02:15:53.520 | is they're gonna start to adopt it

02:15:55.640 | to buy some of it even as an individual

02:15:59.520 | or possibly even ultimately at a central bank

02:16:02.080 | or sovereign wealth fund level

02:16:03.800 | as an insurance policy against its success.

02:16:06.080 | And once you start to acquire something

02:16:09.680 | and then you have a vested economic interest

02:16:12.800 | in its monetization, I think it kind of dissolves

02:16:16.440 | any of the power structures that are arrayed against it

02:16:18.720 | from the inside.

02:16:20.560 | So I've written a lot about this

02:16:22.760 | in a new series called "Sovereignism,"

02:16:24.520 | which is based loosely on a book

02:16:26.680 | called "The Sovereign Individual."

02:16:28.800 | And that's the general thesis

02:16:30.280 | is that microprocessing technology

02:16:33.000 | would devour our organizational models,

02:16:35.840 | the most important of which is the nation state.

02:16:38.320 | So I think we're going into this world

02:16:40.000 | where coercion and violence is just much less rewarding.

02:16:44.460 | You can't, the economics of violence are declining

02:16:50.440 | because of the low cost of protecting property, right?

02:16:54.480 | You can now protect your monetary property in Bitcoin

02:16:59.480 | at orders of magnitude less costs

02:17:02.040 | than is necessary to run a banking network.

02:17:04.280 | So it changes the way we organize ourselves.

02:17:09.280 | And again, if we, zooming back to gold

02:17:12.520 | as kind of the original governor to governments,

02:17:15.000 | where if they manipulated the money,

02:17:16.480 | gold would leave their country.

02:17:18.320 | That's why governments have taken relatively concerted action

02:17:23.440 | to go off of the gold standard.

02:17:25.600 | There's a great book on this called "The Gold Wars"

02:17:28.960 | that outlines how governments have been waging a cold war

02:17:32.880 | against gold for the past 50 years.

02:17:34.880 | Bitcoin sort of renews hope

02:17:39.280 | for that free market governor of governments.

02:17:41.640 | And that is this digital gold

02:17:42.880 | that governments cannot stop or co-opt.

02:17:45.560 | So I think it's something,

02:17:47.720 | that's why I think it's such a big deal

02:17:49.520 | is that it is changing.

02:17:54.480 | It's a new useful fiction, you might say.

02:17:56.800 | A useful fiction that's superordinate

02:17:58.560 | to the mythology of the nation state and government

02:18:02.240 | as the dominant institution in the world.

02:18:04.240 | - Well, I hope you're right

02:18:05.400 | that all forms of centralized power

02:18:08.920 | start breaking apart naturally.

02:18:12.640 | So governments, the more and more power

02:18:14.960 | is given to the individual,

02:18:16.520 | whatever the technology is.

02:18:18.400 | And Bitcoin seems to be a promising technology

02:18:20.720 | that empowers that, enables that.

02:18:22.880 | That seems to be the trend.

02:18:24.720 | And that's a promising trend,

02:18:26.160 | at least from a perspective of somebody

02:18:29.120 | who values this particular biological meat bag

02:18:33.400 | that's full of consciousness.

02:18:34.760 | - I think Bitcoin is exposing the greatest scam

02:18:37.680 | in human history, which is political authority.

02:18:40.720 | Like who gives anyone the right to be politically,

02:18:43.880 | have political authority over anyone else?

02:18:46.080 | People should be free to adopt the rules

02:18:49.040 | and systems and tools that best suit their needs.

02:18:52.040 | And that arc of history we covered earlier,

02:18:56.160 | where as socioeconomic systems have become more favorable

02:19:01.160 | towards individual sovereignty,

02:19:03.400 | the more wealthy we have become,

02:19:06.080 | the more we have given the individual,

02:19:07.840 | we've maximized individual choice,

02:19:10.480 | the more wealth that society has created,

02:19:12.400 | and the more it has out-competed

02:19:14.400 | the systems that have come before it.

02:19:15.800 | The latest would be capitalism triumphing over socialism.

02:19:19.320 | - Before maybe we eat, you are in Texas,

02:19:23.880 | you brought over some brisket.

02:19:25.680 | Before we maybe indulge in that,

02:19:27.960 | let me bring up one quick topic,

02:19:29.960 | and then we'll take a break.

02:19:31.680 | And the topic of what some may term

02:19:35.720 | the toxicity of the Bitcoin community.

02:19:37.720 | That you've written that Bitcoin toxicity is tough love.

02:19:44.360 | Do you wanna break that apart a little bit,

02:19:46.600 | sort of the idea, the philosophy of the toxicity

02:19:51.600 | that seems to be present in part in the Bitcoin community?

02:19:57.280 | - Yeah, we were talking about this a little bit

02:20:01.360 | before we recorded, and I've been through the gauntlet

02:20:04.800 | with Bitcoin toxicity as well.

02:20:06.680 | I came into this space professionally in 2017.

02:20:12.920 | I was originally running a multi-strategy

02:20:15.040 | crypto asset hedge fund.

02:20:17.200 | And my initial investment thesis on the world was that,

02:20:22.200 | Bitcoin was a big deal, but there were all these other

02:20:24.360 | exciting coins and projects and ways the technology

02:20:26.960 | was going to be used.

02:20:28.920 | And that view of reality met this immune,

02:20:33.920 | I guess you could say as an ideological immune system,

02:20:38.000 | this Bitcoin toxicity, and that it's kind of a filter

02:20:40.960 | that's trying to catch bad or useless or even scamming ideas

02:20:45.960 | that this space is very well known for.

02:20:51.120 | As we've touched on today, Bitcoin, in my opinion,

02:20:55.200 | is this world shattering innovation,

02:20:57.960 | but it's in a sea of the most scammy stuff ever.

02:21:01.560 | People, anybody can go and create a coin.

02:21:04.400 | So you can go and launch one immediately online,

02:21:09.520 | and you can throw up a website, an advisor page,

02:21:12.920 | post a white paper talking about how great

02:21:15.400 | your technology is going to be and how it's going to change

02:21:17.240 | the world, and you can raise $30 million in Bitcoin

02:21:20.280 | or Ethereum in 30 seconds kind of thing.

02:21:22.720 | So it's drawn in a lot of this scam artistry,

02:21:26.280 | you might say.

02:21:27.560 | And I think people living through that,

02:21:31.240 | because there is this natural predilection for people,

02:21:33.560 | when they first come into Bitcoin, you're excited about it,

02:21:35.960 | then you get lost in the shit coin universe.

02:21:39.480 | And then just looking at the market success of Bitcoin

02:21:43.960 | versus, and when I use the word shit coin, I'm just--

02:21:47.080 | - You say with all the love in the world.

02:21:49.080 | - All the love in the world.

02:21:50.680 | I guess you could call me a toxic maximalist in some ways,

02:21:53.220 | although I consider myself a freedom maximalist,

02:21:55.440 | not a Bitcoin maximalist.

02:21:56.280 | - Yeah, I saw that line.

02:21:57.280 | That's a good line.

02:21:59.760 | - Bitcoin, tracking the market success of Bitcoin

02:22:03.160 | versus alternative crypto assets,

02:22:05.320 | the signal is very clear that Bitcoin

02:22:07.920 | has out-competed all of them.

02:22:09.520 | So I think that Bitcoin cultural toxicity has evolved

02:22:13.160 | as an immune response to those bad ideas,

02:22:15.680 | which is actually, if you think about it,

02:22:17.840 | kind of is a tough love, right?

02:22:19.160 | You don't want new entrants to the space

02:22:21.700 | to get lost in shit coin jungle and learn the hard way,

02:22:26.180 | the way many Bitcoin maximalists have,

02:22:28.080 | that the real innovation is Bitcoin.

02:22:31.360 | But like an immune system, I think it can also go too far.

02:22:36.520 | And so I think it's useful when it is defending the space

02:22:40.880 | from false narratives, we might say,

02:22:43.480 | but it becomes detrimental when it's attacking people

02:22:48.200 | that are inquiring about Bitcoin

02:22:50.120 | or people that are approaching Bitcoin

02:22:52.280 | with a good spirit and good intention and a desire to learn.

02:22:57.280 | Because then at that point,

02:22:58.400 | it's actually impeding the free flow of ideas,

02:23:01.760 | which the example in your clip

02:23:04.640 | was totally taken out of context.

02:23:06.480 | And then you're literally just saying,

02:23:07.880 | "I'm here to learn and contribute.

02:23:09.200 | I think I've got some stuff to do."

02:23:10.800 | And then people attack that.

02:23:11.880 | Like that doesn't make any fucking sense.

02:23:13.920 | It's like you're attacking someone who's approaching it

02:23:16.160 | in a good spirit and asking questions.

02:23:18.400 | - Yeah, and I think sometimes talking about it,

02:23:21.500 | the toxicity in the Bitcoin community as an immune response

02:23:26.480 | has a negative effect of giving it a pass.

02:23:29.620 | Because like, it almost says,

02:23:32.600 | "Look, it equates it with the human immune system,

02:23:36.000 | which seems to do a really good job."

02:23:38.680 | And so you could say that the toxicity has a lot of features

02:23:42.560 | in the sea of fraudulent projects

02:23:47.560 | that steal money from people.

02:23:52.240 | It's really useful to make sure

02:23:53.920 | that you give people the harsh truth

02:23:56.480 | about who is and isn't a scammer.

02:24:00.080 | You have to take it away from that metaphor

02:24:03.640 | of the immune system and look at basic human nature.

02:24:06.680 | And human nature can go to some dark places,

02:24:09.200 | which is, it's sad to say that some people,

02:24:14.120 | maybe many of us can enjoy for its own sake, the toxicity,

02:24:20.240 | the mockery, the derision.

02:24:23.320 | And you stop being part of the immune system

02:24:27.980 | that makes a successful idea propagate

02:24:31.040 | and start being a sort of a destructive virus yourself.

02:24:35.160 | And that's something I think about

02:24:37.720 | 'cause I am new to this particular immune system,

02:24:42.720 | but I've explored other immune systems.

02:24:46.000 | And I think you understand this world much better than me,

02:24:54.800 | but I tend to prefer sort of love

02:24:57.780 | as a mechanism for spreading ideas,

02:25:00.340 | to err on the side of love and kindness,

02:25:06.200 | and almost like an open-mindedness

02:25:09.260 | in a way where you're constantly lowering yourself

02:25:13.160 | in the face of other ideas, constantly questioning yourself.

02:25:16.840 | But I think I understand that that might be more applicable

02:25:24.140 | in certain contexts, like maybe in the space of science

02:25:26.540 | or something like that.

02:25:28.040 | But in the space of Bitcoin as it currently stands,

02:25:31.240 | there's so many people that are trying to scam others

02:25:33.960 | out of their money that the kind of harshness required

02:25:37.520 | is different.

02:25:39.060 | Nevertheless, I do want to put it on people like yourself

02:25:44.060 | and others who I know you wouldn't consider yourself this,

02:25:48.120 | but you're one of the faces or leaders in this space

02:25:51.400 | to call people out a little bit,

02:25:53.640 | to inspire them to be more loving, I suppose.

02:25:57.180 | But it's difficult 'cause you want to walk

02:25:58.860 | that line carefully.

02:26:00.200 | You don't want to be too loving and open-minded.

02:26:03.200 | Otherwise, your brain falls out.

02:26:04.520 | I get it.

02:26:05.360 | It's a difficult balance to walk.

02:26:06.960 | - It is subtle and it's nuanced,

02:26:09.600 | and it is difficult to walk.

02:26:11.100 | And I think that, that's why I try to say tough love

02:26:14.200 | because when we're young, we may have certain ideas

02:26:19.160 | about the way we want our life to go,

02:26:21.640 | but then maybe our parents are not letting us

02:26:24.520 | do certain things and we think they're,

02:26:26.400 | I know when I was a kid, I wanted to get my,

02:26:27.960 | when I was in fifth grade, I wanted to get my ear pierced.

02:26:30.220 | My mom wouldn't let me do it.

02:26:31.600 | And I was, oh, come on, Mom.

02:26:33.560 | I thought it was so cool.

02:26:34.480 | And then two years later, I'm like, thank you, Mom,

02:26:36.680 | for not letting me get my ear pierced.

02:26:39.480 | I think it comes from a place of good intention

02:26:41.680 | that they are actually,

02:26:43.400 | they have asked themselves that question, right?

02:26:46.800 | That they've been inquiring in why not this crypto asset

02:26:51.160 | or this crypto asset, and they've done the exploration.

02:26:53.400 | They keep coming back to Bitcoin

02:26:54.960 | and they've seen people being taken advantage of.

02:26:57.860 | But to your point, it's like it can,

02:27:03.920 | this tough love can become detrimental,

02:27:06.800 | just like the immune system can become detrimental, right?

02:27:09.040 | It can overreact and it can actually harm the human body.

02:27:12.480 | So I would say that it's such a tricky and nuanced topic

02:27:16.280 | that even biology hasn't figured it out, right?

02:27:18.200 | A lot of people have autoimmune diseases.

02:27:20.960 | And then there's the other thing that we have this natural,

02:27:24.720 | I agree with you about love.

02:27:25.840 | I think love is like the deepest value.

02:27:28.720 | That's a whole nother philosophical thing,

02:27:30.560 | but we're biologically programmed to pay more attention

02:27:35.560 | to things that are adversarial or harmful, right?

02:27:38.880 | That's part of us protecting the meat suit, so to speak.

02:27:42.360 | So there is some maybe better delivery method

02:27:48.080 | by being a little bit toxic to really get the point across,

02:27:51.000 | like, hey, don't get lost over here.

02:27:53.640 | These things can hurt you.

02:27:55.640 | Really try to focus on Bitcoin,

02:27:57.200 | but the toxicity of that message,

02:27:59.680 | I guess it increases its ability

02:28:01.160 | to penetrate the individual, but it can also go too far.

02:28:04.200 | So it is-

02:28:05.040 | - It's interesting, but I,

02:28:06.600 | almost to push back a little bit,

02:28:08.840 | toxicity is a funny word.

02:28:11.160 | I think maybe another way to say it is,

02:28:15.160 | I brought up like Christopher Hitchens

02:28:17.720 | and somebody who like, okay,

02:28:21.040 | you might say is toxic or something like that.

02:28:23.720 | 'Cause he's basically a intellectual powerhouse

02:28:27.160 | who's also a troll.

02:28:28.800 | So he's constantly, it's like guerrilla warfare

02:28:31.240 | in the space of ideas.

02:28:33.400 | He's very harsh in his disagreements and criticisms,

02:28:37.080 | but it's done with incredible grace and skill and poetry.

02:28:42.080 | So-

02:28:43.280 | - We could use more of that.

02:28:44.480 | - We could use more of that.

02:28:45.840 | So toxicity just like,

02:28:49.000 | these are just words.

02:28:53.600 | They can mean a lot of different things,

02:28:55.240 | but disagreement doesn't have to be done with love,

02:28:59.100 | but it should be done with skill if it's to be effective.

02:29:04.400 | So there's a lot of ways to be effective in guerrilla warfare

02:29:08.400 | but you want to learn how to shoot

02:29:10.200 | or whatever the weapon you're using and to do it well.

02:29:12.880 | Some people do it better than others

02:29:14.560 | and it's worthwhile to learn to do it well.

02:29:17.800 | Again, I prefer love, but even love,

02:29:20.140 | just because you think you're communicating a good idea

02:29:25.400 | which you very well may be,

02:29:26.760 | doesn't mean it also doesn't require skill

02:29:28.840 | to do the communication well.

02:29:30.280 | Whether it's disagreement and harsh

02:29:33.200 | or more agreement and loving and so on.

02:29:36.880 | - Yeah, I think very fundamentally

02:29:39.840 | that all of our decisions,

02:29:42.160 | we alluded to earlier that every decision

02:29:44.520 | is an expression of value, every action we take.

02:29:47.120 | They ultimately come from fear or love.

02:29:49.400 | Fear would be something much more in the biological domain

02:29:53.680 | where it's like we're trying to protect ego,

02:29:56.840 | we're trying to behave selfishly.

02:29:58.440 | This is the domain of sin.

02:30:00.100 | I don't know all the sins, gluttony, greed, sloth,

02:30:03.400 | wrath, lust, pride, envy.

02:30:05.340 | These are all selfish behaviors.

02:30:07.680 | Whereas something like love,

02:30:10.920 | it's morally superior in that it's more selfless.

02:30:14.480 | I don't know that we can properly define love

02:30:16.360 | with words at all, but I would say maybe like selfless action

02:30:19.720 | could be kind of a generalization of it.

02:30:22.680 | And that way, it is really hard, to your point,

02:30:25.640 | it's hard to love in a world that has a lot of conflict

02:30:30.640 | that might make you fearful

02:30:34.520 | if you're really focused on your meat suit.

02:30:36.100 | But if you're focused on the bigger picture

02:30:37.800 | and you're focused on others and legacy and life,

02:30:40.960 | that there is a way to do it.

02:30:43.080 | And that's why I actually think Christ,

02:30:44.880 | that is the highest moral aim.

02:30:46.640 | He met all of the vitriol in life,

02:30:50.080 | betrayal, hate, violence, he met it all with love

02:30:53.840 | and he met it with compassion.

02:30:55.760 | And that's why, regardless of if you believe

02:30:58.280 | that he actually lived or any of this,

02:31:00.880 | he is symbolic of the highest moral consciousness possible.

02:31:07.560 | And Carl Jung would say that that was a suitable alternative

02:31:12.560 | to psychoanalysis, was actually setting your moral aim higher

02:31:16.840 | and striving towards it diligently.

02:31:19.040 | So, I mean, I agree completely,

02:31:22.280 | we need more of that in the Bitcoin space.

02:31:24.840 | We need more of that in the world, frankly.

02:31:26.240 | - In the world, yeah.

02:31:27.280 | - And these things, they're all intertwined.

02:31:30.860 | We touched on the beginning, all of us get to decide,

02:31:34.200 | but the world does influence,

02:31:35.840 | kind of if we adopt fear or love,

02:31:37.940 | but it takes, I don't know, it takes good systems

02:31:42.040 | and it takes, I guess, good leaders to set an example.

02:31:45.360 | - Yeah, I do believe that there's like individual people

02:31:48.800 | can have a ripple effect.

02:31:50.560 | So that's what I try to do, sort of embody the,

02:31:53.440 | I'm just one ant, but one of the things I have faith in

02:31:57.480 | is I'm trying to do that more.

02:32:03.320 | I know this is a podcast,

02:32:04.680 | but I'm trying to do less talking and more doing.

02:32:07.940 | I've been disappointed in myself, if I'm being honest,

02:32:13.320 | how much talking I've been doing,

02:32:15.000 | as opposed to like in my own private life,

02:32:20.160 | I live the thing I talk about,

02:32:22.120 | but I also haven't created much.

02:32:24.660 | And I believe in the power of individuals

02:32:29.800 | that create stuff, like create an idea.

02:32:32.480 | Through those individuals that try to create something new,

02:32:34.640 | the world progresses.

02:32:35.680 | And hopefully there's more and more,

02:32:37.100 | more and more of those people.

02:32:39.280 | So you mentioned kind of people who,

02:32:41.560 | what the Bitcoin community might call scammers.

02:32:45.020 | I have a lot of passions in my life

02:32:50.440 | that I focus a lot of my attention to.

02:32:52.700 | You know, Bitcoin doesn't happen to be yet one of them,

02:32:58.800 | Bitcoin and cryptocurrency, you know.

02:33:01.480 | - I'm glad you said yeah.

02:33:02.720 | - I'm always looking for things

02:33:06.520 | to really fall in love with.

02:33:08.480 | So how is a person like me supposed to figure out,

02:33:12.840 | I also happen to have a platform a little bit,

02:33:16.280 | and how am I supposed to figure out

02:33:18.440 | who is an interesting,

02:33:21.440 | what is an interesting set of ideas and what are not?

02:33:25.040 | Because people are financially tied

02:33:27.000 | into a lot of the cryptocurrencies that we're talking about,

02:33:29.880 | certainly with Bitcoin.

02:33:32.000 | You know, their livelihood,

02:33:33.720 | their wellbeing is tied up to it.

02:33:35.320 | So it becomes much more emotional, much more personal.

02:33:37.920 | It's no longer purely an exploration of ideas.

02:33:41.480 | It's really almost like a threat on your property.

02:33:44.040 | Like it's a personal threat

02:33:45.920 | and it makes it very difficult to explore those ideas.

02:33:47.920 | So I understand that,

02:33:49.280 | but it makes it very difficult for somebody like me

02:33:51.900 | to just walk in and be curious.

02:33:55.560 | So how do I proceed in this difficult world

02:33:59.680 | in exploring this landscape

02:34:01.160 | and not give a platform to ideas that may harm others?

02:34:07.240 | - I guess first I'd like to commend

02:34:12.840 | your forthrightness about this,

02:34:15.480 | because I don't think many people

02:34:17.320 | try to walk that line necessarily.

02:34:19.160 | People, again, kind of the territorial imperative,

02:34:22.680 | they'll put whoever on, they'll help expand their reach.

02:34:25.920 | - Oh yeah, that's true.

02:34:27.640 | - Or say whatever needs to be said to expand their reach.

02:34:29.680 | So I think you're coming from a good place, I'll say that.

02:34:32.580 | There's a great piece written

02:34:35.320 | on the topic of scammers and scamming.

02:34:38.680 | I think it was by Goldstein.

02:34:40.240 | He wrote a piece called "Everyone's a Scammer."

02:34:42.580 | And it's sort of back to this, you know,

02:34:44.940 | general human proclivity

02:34:46.280 | to try and get something for nothing always.

02:34:48.680 | Which again, it can be positive,

02:34:51.040 | it can be innovative, or it can be negative.

02:34:53.080 | You can be trying to steal from people.

02:34:55.840 | That might be, I think that's a useful piece,

02:35:00.080 | just to kind of see the crypto world through that lens.

02:35:03.440 | And that's how Bitcoiners are thinking all the time.

02:35:06.280 | They are by nature adversarial thinkers.

02:35:09.120 | So they're trying to minimize the need for trust

02:35:12.000 | in any situation and maximize verification.

02:35:14.800 | As far as sifting through the ideas,

02:35:21.360 | I guess this is back where the cultural immune system

02:35:26.280 | has some utility.

02:35:28.360 | Because there were times when I thought

02:35:30.600 | this particular crypto asset,

02:35:33.000 | you know, Augur was one I was really into,

02:35:34.920 | that it could facilitate prediction markets,

02:35:37.280 | and prediction markets could make,

02:35:39.360 | you know, markets more efficient, et cetera, et cetera.

02:35:41.700 | But when that investment thesis

02:35:45.040 | basically met the cultural filter or immune system,

02:35:49.600 | it forced me to reevaluate my position,

02:35:51.760 | forced me to really look into it more deeply.

02:35:54.280 | And through that exploration,

02:35:55.960 | I realized that it would need to be built on Bitcoin

02:35:58.520 | to work, basically.

02:36:00.000 | So, but it really comes down to like you doing your homework,

02:36:03.580 | but we can't all deeply evaluate every idea out there, right?

02:36:07.560 | - Yeah, one of the things I struggle with,

02:36:09.800 | with Alex Jones, for example, I had dinner with him.

02:36:13.800 | I could tell that would be a very fun conversation,

02:36:19.120 | but like, then I also understand that there's

02:36:22.920 | like consequences to that conversation

02:36:27.880 | that should be explored with care.

02:36:30.760 | And so you need to take on the responsibility

02:36:34.120 | of being a chef or the puffer fish

02:36:35.840 | and all those kinds of things.

02:36:37.600 | That said, just like you said,

02:36:39.600 | it's very difficult to know this ahead of time.

02:36:42.220 | And I will probably make mistakes.

02:36:46.700 | And that's a shitty thing to have to live with,

02:36:49.920 | that I'm going to make mistakes and some of them very large.

02:36:52.960 | Like, yeah, I mean, I can imagine a bunch of different ways,

02:36:57.600 | but all we can do in this world

02:36:59.120 | is once we make the mistakes, we acknowledge those mistakes.

02:37:02.320 | - Yes, learn.

02:37:04.120 | - And learn.

02:37:05.040 | And also, I have to put this on the rest of us,

02:37:09.800 | that you don't take one thing that a person did

02:37:15.280 | and then burn them at the stake for it.

02:37:17.900 | That you realize that we all make mistakes,

02:37:20.660 | that a particular mistake does not make the person.

02:37:23.260 | And this applies to taking stuff out of context

02:37:27.700 | over hundreds of hours of talking,

02:37:30.700 | but it applies to actual, like in context, big mistake.

02:37:35.700 | So what if I murdered somebody at some point?

02:37:39.300 | Just give me a break.

02:37:40.140 | No, there are some things that are too far, of course,

02:37:42.380 | but in general, we need to give each other a chance.

02:37:47.140 | Yeah, but I'm still, I walk with a heavy heart

02:37:51.980 | knowing that I'll probably make a mistake,

02:37:54.180 | especially one that I didn't mean to.

02:37:56.540 | That's the one that worries me most.

02:37:58.340 | - Well, this is human nature.

02:37:59.980 | Like, hamartia, to miss the mark.

02:38:03.940 | That's the root word of sin.

02:38:05.460 | Like, we are sinful by nature.

02:38:07.300 | We can't help it.

02:38:08.300 | There's no way, again, pain is information, right?

02:38:11.020 | There's no way to learn other than trying,

02:38:13.780 | failing, learning, and then you put yourself

02:38:18.420 | in better formation, right, in formation

02:38:21.560 | to better deal with it next time.

02:38:22.900 | So I hope, I don't get the sense that you're actually

02:38:27.800 | afraid of making a misstep.

02:38:30.420 | Like, I think you're just maybe disappointed

02:38:35.060 | is a better word.

02:38:35.900 | Like, you know you're gonna make the mistakes.

02:38:36.940 | - Yeah, that's exactly, that's a much, much better word.

02:38:39.340 | - But we have to embrace that.

02:38:40.820 | - Yeah.

02:38:41.660 | - That's the only way anything,

02:38:42.480 | it's the only way we can advance.

02:38:43.900 | As we're dealing with an incomprehensible reality,

02:38:46.700 | all we can do is throw spaghetti at the wall

02:38:48.500 | and see what sticks.

02:38:49.780 | - Yeah.

02:38:50.620 | - And in that process, we're all inherently gonna

02:38:52.820 | hurt ourselves and hurt others,

02:38:54.140 | and that's where love and forgiveness come into play, right?

02:38:57.780 | And yeah, I think the other thing is that

02:39:01.900 | this culture of reducing people down to a label, right?

02:39:05.420 | Whether it's racism or whether you're calling them a scammer

02:39:07.820 | or any number of terms,

02:39:11.100 | you're discounting their sovereignty to zero, right?

02:39:14.820 | You're taking a super complex human that is vast,

02:39:19.020 | contains multitudes, is changing over time,

02:39:21.940 | and you're trying to put them in a bucket of a word.

02:39:24.540 | And that is just, I think, a cognitive fallacy.

02:39:28.740 | Like, it's not only gonna hurt the person

02:39:30.580 | that you're winnowing down to a word,

02:39:33.020 | it's also gonna hurt you.

02:39:35.180 | In your attempt to decomplexify reality

02:39:38.860 | by assigning this person to a term,

02:39:40.260 | you're actually gonna create bad outcomes for yourself

02:39:42.900 | because you're not gonna understand that person.

02:39:45.220 | - I do also think there's a failure

02:39:46.900 | of our social media technology

02:39:49.580 | that incentivizes that kind of reduction to a label.

02:39:53.140 | It's just the viral nature of that reduction.

02:39:56.820 | So it's not only do we humans naturally do that,

02:40:01.140 | our social media platforms make that easier,

02:40:05.100 | more fun, more effective to do that at scale,

02:40:09.940 | the mass hysteria.

02:40:11.340 | So I think there's actually technological ways

02:40:15.580 | of adding friction to that.

02:40:18.180 | - Yeah, I wonder, I mean, I agree with you

02:40:20.260 | that social media is an amplifier

02:40:22.820 | to this natural way of dealing with one another,

02:40:27.180 | but I wonder, and my thinking has evolved a lot on this,

02:40:30.500 | that there's something below

02:40:32.420 | the way we're treating each other too, right?

02:40:35.180 | We could say civilization sort of advances

02:40:37.860 | in the tools we make and the way we treat each other.

02:40:40.140 | We tend to have better tools, better quality of life,

02:40:42.820 | and better morality, better quality of living,

02:40:46.300 | and ways of dealing with one another.

02:40:49.220 | And I think that when you corrupt the money,

02:40:53.620 | that it really does push us the negative direction,

02:40:56.620 | pushes us away from,

02:40:59.620 | again, encouraging or magnifying scarcity artificially

02:41:04.620 | causes us to be more divisive.

02:41:07.500 | When things are more divisive,

02:41:08.700 | we tend to be less civilized, less nuanced,

02:41:11.660 | more black or white, or this or that,

02:41:14.540 | or you're this, or label A or label B.

02:41:17.980 | So I really think, and this is a harder one to unravel,

02:41:20.620 | but I think if we can fix the money, right,

02:41:24.020 | which again is the base layer operating system

02:41:26.900 | for human moral action in the world,

02:41:29.220 | that it has downstream effects.

02:41:32.540 | So we'd actually maybe start to treat each other

02:41:34.420 | a little better on social media,

02:41:36.300 | despite the fact that it enables this faster communication.

02:41:41.300 | - That's interesting.

02:41:42.140 | So perhaps fixing social media, as I've been thinking about,

02:41:46.520 | is treating the symptom, not the cause.

02:41:49.580 | - Yeah, that is the Bitcoin rabbit hole in a nutshell.

02:41:52.820 | Is it, you know, they say fix the money, fix the world.

02:41:54.940 | You keep tracing these different social malaises

02:41:58.740 | or technological difficulties, lack of innovation.

02:42:03.580 | You know, Weinstein's entire Portal podcast,

02:42:06.020 | "Something Went Wrong in the Early '70s."

02:42:08.500 | We went off the gold standard in 1971.

02:42:11.180 | And there's a great website, wtfhappened1971.com.

02:42:15.940 | Goes through this whole gamut of socioeconomic data

02:42:18.360 | that's completely gone askew since the early '70s.

02:42:22.820 | - Yeah, you had this whole video.

02:42:24.500 | What do you think about Eric Weinstein and Bitcoin

02:42:28.460 | and the gold standard?

02:42:31.540 | Does he, I actually haven't heard him talk about his thesis

02:42:35.540 | about the '70s in connection

02:42:38.100 | to the going off of the gold standard.

02:42:42.020 | Yeah, what are your thoughts there?

02:42:43.500 | What are your thoughts about his general relationship

02:42:46.020 | with the Bitcoin idea and the community?

02:42:49.700 | - Yeah, the first exposure I had to Eric was his,

02:42:52.860 | I think it was his first episode with Peter Thiel.

02:42:55.380 | And they're going through that thesis

02:42:57.060 | that there's been this general institutional rot

02:43:00.900 | and suppression of innovation since the early '70s.

02:43:03.820 | And he's trying to identify what it is.

02:43:05.940 | I don't think they ever pended on the money

02:43:08.060 | on going off the gold standard.

02:43:11.220 | But in recent interactions with Eric,

02:43:14.580 | I've interacted with him on Clubhouse.

02:43:16.580 | We recently released an episode of the show

02:43:19.900 | I did with Chris Espley.

02:43:22.020 | And it was titled "Dear Eric Weinstein."

02:43:24.260 | So we're going through his worldview

02:43:26.780 | that he's expressed in the portal

02:43:27.980 | and tying it back to the money in different ways.

02:43:31.780 | And he's engaged.

02:43:33.300 | Eric retweeted the show.

02:43:35.180 | We exchanged some messages.

02:43:36.740 | He's been very open-minded.

02:43:38.340 | He's asked some really good questions.

02:43:40.420 | So I get the sense that he's approaching this

02:43:42.660 | very wholeheartedly.

02:43:45.940 | He does bring with him his existing worldview

02:43:48.900 | and his existing theory.

02:43:50.020 | The one that really blew up was gauge theory.

02:43:52.140 | They got really popular.

02:43:53.300 | I don't know a lot about gauge theory.

02:43:54.820 | I actually messaged Eric and said,

02:43:56.580 | "I want to learn more," genuinely,

02:43:58.100 | because he seems to be serious

02:44:01.300 | that that needs to be considered in the sphere of money.

02:44:03.980 | And so I want to learn more about it.

02:44:05.820 | But I think overall, it's great.

02:44:08.220 | It's great to see an intellectual heavyweight

02:44:10.860 | of his caliber gravitating towards Bitcoin.

02:44:13.700 | Yeah, he has some gauge-theoretic conceptions

02:44:18.980 | about the world broadly, but also about economics,

02:44:23.900 | which ultimately boils down to just a set of mathematics,

02:44:27.140 | which allows you to more effectively reason about the world.

02:44:30.740 | And he has a certain set of views there.

02:44:32.740 | So it's fascinating to see him grapple with it.

02:44:37.140 | I think he's also kind of,

02:44:38.740 | actually kind of like all of us,

02:44:42.380 | grappling with the idea of what is Bitcoin in this world.

02:44:45.820 | It's a very young technology,

02:44:47.700 | and it's unclear exactly how the ideas of the past

02:44:52.700 | fit with it, integrate, how the two integrate together.

02:44:57.460 | And so it's interesting to explore,

02:44:59.900 | not just Bitcoin in particular.

02:45:01.420 | So for me, what I've always saw Bitcoin as

02:45:06.420 | from the beginning, from a narrow worldview,

02:45:11.020 | is computer science, which is where I come from.

02:45:14.460 | And so I wasn't almost aware in the social,

02:45:18.500 | political, financial aspects of Bitcoin.

02:45:21.620 | But now I see that there's not just power,

02:45:26.420 | but there's fascinating ideas to explore

02:45:29.220 | on that side of things.

02:45:30.200 | Not just the computer science,

02:45:31.500 | not just the technical details,

02:45:33.800 | but the political, the socioeconomic, the philosophical.

02:45:38.800 | - That's where I find all the fascination

02:45:42.500 | in the world, frankly.

02:45:44.420 | I would, one other thing about Weinstein,

02:45:47.940 | and intellectuals more generally

02:45:50.340 | that are skeptical of Bitcoin,

02:45:52.300 | I would challenge them to read the book, "Human Action,"

02:45:55.420 | written by Mises, I think in 1949,

02:45:58.820 | he published the English version.

02:46:00.480 | It's essentially the Bible of Austrian economics.

02:46:04.820 | And I think Austrian economics is a noticeable gap

02:46:09.620 | in most modern intellectuals' worldviews,

02:46:13.780 | that it's not taught in school.

02:46:15.260 | I mean, I have a master's degree in accounting and finance,

02:46:17.540 | studied a lot of economics in school.

02:46:19.260 | There's not one peep of Austrian econ.

02:46:21.340 | - The least, we love talking about all the degrees he has.

02:46:26.340 | - I was a CPA.

02:46:27.840 | (laughing)

02:46:30.220 | But it's, that curriculum that we get in college

02:46:35.220 | is noticeably deficient in Austrian economics.

02:46:38.660 | And I think there's a reason why, right?

02:46:40.100 | It's heavily government influenced.

02:46:44.120 | Again, master's degree in accounting,

02:46:46.640 | they never taught me about what money is

02:46:48.680 | or where money comes from.

02:46:50.000 | All you learn is that the central bank issues money

02:46:53.840 | and the central bank takes money away.

02:46:56.000 | So it's conceived of in the textbooks

02:46:58.800 | quite literally as God, right?

02:47:00.560 | An entity that suffers no opportunity costs,

02:47:03.720 | that basically is the foundation

02:47:06.800 | of the entire Keynesian worldview

02:47:09.080 | that you're taught in economics.

02:47:10.920 | And Austrian economics

02:47:13.560 | is the opposite end of the spectrum of that, right?

02:47:16.040 | It's actually the culmination,

02:47:18.420 | which economics is the youngest science in the world,

02:47:20.760 | by the way.

02:47:21.580 | So it is kind of the front,

02:47:24.960 | it's the frontiers of science in many ways,

02:47:27.000 | like to actually, when I say praxeology,

02:47:29.480 | many people have never even heard of that.

02:47:31.280 | But it's something, it's an a priori study

02:47:35.840 | equivalent to something like mathematics,

02:47:37.360 | that you're building things from first principles

02:47:39.560 | to reason about economic reality.

02:47:42.400 | And I think that book,

02:47:44.800 | it's a very difficult book written by Mises,

02:47:47.200 | 1200 pages, translated from German.

02:47:49.800 | The way he wields English is fascinating and terrifying

02:47:52.840 | all at the same time.

02:47:53.960 | It'd probably take you six months to read it

02:47:56.540 | if you read it daily, seriously,

02:47:58.080 | like it's a beast of a book.

02:48:00.480 | But that will plug the gap, I think in most,

02:48:04.400 | any intellectual that's skeptical about Bitcoin,

02:48:06.120 | I think that will plug the gap

02:48:07.360 | that's necessary for you to see it in a new light.

02:48:10.360 | - Well, I'll take that as a challenge.

02:48:12.600 | Now that we took a little bit of a break,

02:48:14.440 | ate some good Texas brisket,

02:48:15.880 | thank you for that, by the way,

02:48:16.880 | - Oh yeah, quite welcome.

02:48:18.880 | - Let me ask the ridiculous question.

02:48:21.560 | At the core of the idea of Bitcoin is this guy

02:48:25.440 | or this entity named Satoshi Nakamoto.

02:48:28.360 | So the ridiculous question is, who is Satoshi Nakamoto?

02:48:32.240 | And first of all, is it you?

02:48:33.760 | - It's not me.

02:48:36.960 | - I wish.

02:48:38.160 | - And is this an interesting question?

02:48:41.760 | Or is it just something about our human nature

02:48:43.440 | that wants to, that always tends towards mystery?

02:48:47.100 | - Well, as we've touched on a bit today,

02:48:50.560 | you know, mythology, in my opinion,

02:48:53.760 | is something that is intrinsic to how we see the world

02:48:57.320 | in a lot of ways, like it's how,

02:48:59.000 | it's kind of the structure

02:49:00.760 | by which we build these useful fictions.

02:49:05.440 | And so in that way, you could just say that

02:49:08.240 | Satoshi is the Godhead of Bitcoin effectively.

02:49:11.800 | And I think a compelling argument could be made

02:49:15.520 | that his disappearance is what really solidifies

02:49:18.000 | Bitcoin's decentralization.

02:49:20.120 | Because if there were one individual

02:49:23.280 | to personally vilify or denigrate or attack,

02:49:27.340 | you know, to disparage or question the motives of,

02:49:33.360 | you know, if he's out on the Hollywood Hills partying,

02:49:37.800 | everyone knows he's got a million Bitcoin, you know,

02:49:40.520 | it would just kind of tarnish the entire project

02:49:43.520 | in a lot of way.

02:49:44.360 | But the fact that on that theme, something for nothing,

02:49:48.160 | this guy actually gave humanity something for nothing.

02:49:51.160 | And it appears that he didn't profit in any way,

02:49:56.160 | he, she, or they.

02:49:58.240 | Actually heard recently that he identified as a he

02:50:01.840 | in some of his communications.

02:50:03.080 | So it sounds like it is a he.

02:50:04.700 | - See, like his communications being like studied,

02:50:11.040 | like almost like exactly as if he is a religious,

02:50:14.400 | - That's right.

02:50:15.520 | - Like a prophet.

02:50:16.560 | - Yeah.

02:50:18.360 | - I mean, it's fascinating to imagine that he's still alive

02:50:23.360 | and living in this world.

02:50:27.200 | And it's even more fascinating to imagine

02:50:29.120 | that he's perhaps participating in the Bitcoin community.

02:50:32.280 | Because I mean, that's, that takes a special human being

02:50:36.800 | to out of principle do that, to do, to remain anonymous.

02:50:41.440 | That's very much the George Washington.

02:50:43.440 | Yeah, I always wonder like how many people are like that.

02:50:46.480 | There's a cliche that like absolute power corrupts

02:50:48.880 | absolutely like power corrupts,

02:50:51.360 | but it seems like the progress of humanity

02:50:54.560 | depends on the people whom power doesn't corrupt.

02:50:58.060 | - Hmm, interesting.

02:51:00.060 | - And it's enough to have just a small selection of those.

02:51:02.860 | - Yeah.

02:51:04.380 | - And even if most of us are too weak,

02:51:06.820 | we give into power if given the chance,

02:51:12.260 | all it takes is a few.

02:51:14.060 | - That's, I've never thought of it like that,

02:51:15.580 | but Marcus Aurelius immediately came to mind.

02:51:18.340 | You know, the guy that he had the keys to the kingdom

02:51:21.820 | and he apparently adhered to the stoic virtues

02:51:26.340 | until the end.

02:51:28.180 | But yeah, I agree with Satoshi.

02:51:30.100 | The other thing that's interesting is he would be

02:51:33.340 | by far the most wealthy person in the world

02:51:38.220 | on a liquid asset basis,

02:51:39.940 | because he has a million Bitcoin,

02:51:42.180 | which is 60 billion liquid net worth at current prices.

02:51:47.180 | So if he is still alive and just operating in the world,

02:51:51.580 | he is daily and moment to moment resisting massive incentives

02:51:57.060 | to go and just be the richest guy in the world.

02:52:01.140 | - He's the ultimate hodler.

02:52:02.700 | - Yeah.

02:52:03.540 | (laughing)

02:52:04.980 | - I mean, it's turning down not just financial success,

02:52:09.980 | but also fame.

02:52:12.260 | I mean, fame is another drug, it's kind of power,

02:52:15.260 | but it's in itself is also a drug,

02:52:17.300 | especially in this modern society, in this attention.

02:52:20.500 | - And he would have both.

02:52:21.620 | - He would have both.

02:52:22.880 | It's fun to imagine who it could be.

02:52:25.740 | It's fascinating if it's somebody like you

02:52:27.860 | or somebody like Elon or somebody like that.

02:52:30.580 | That's fascinating to think about.

02:52:31.900 | - I think Elon would be hilarious.

02:52:34.100 | He came out and he was Satoshi and be like,

02:52:36.780 | "Hey guys, I know I'm already the richest guy in the world,

02:52:38.860 | but I gotta go ahead and double my lead here."

02:52:41.540 | - What do you make of Elon Musk investing with Tesla,

02:52:46.420 | investing in Bitcoin and maybe broaden it out

02:52:50.380 | in some of these other big companies?

02:52:55.620 | Billionaires, but also people tied to major companies

02:52:58.020 | investing in Bitcoin.

02:52:59.940 | - Yeah, I think Michael Saylor

02:53:02.460 | really led the charge on that.

02:53:04.020 | He's the CEO of MicroStrategy that I think they've acquired

02:53:08.900 | upwards of $2 billion in Bitcoin now.

02:53:11.020 | Started acquiring August, maybe of 2020.

02:53:14.820 | And he's personally bought a lot of it.

02:53:19.060 | He bought a lot as a treasury reserve asset

02:53:22.540 | for his company, MicroStrategy.

02:53:24.180 | Then they leveraged up on a convertible note and bought more.

02:53:28.300 | So he's really gone, really leading the charge

02:53:32.380 | in this Bitcoin institutional adoption.

02:53:35.980 | - Your conversation with him is a really interesting one.

02:53:38.140 | Your series of, I mean, series of episodes, I suppose,

02:53:41.820 | but it's only a couple of conversations, I guess.

02:53:44.260 | - Yeah, we recorded twice, five and a half hours each.

02:53:48.220 | So it's about 11 hours of content.

02:53:49.780 | And yeah, thank you.

02:53:51.580 | A lot of people have said that it's the best

02:53:55.220 | first principle thing they've ever seen on Bitcoin,

02:53:57.380 | which I take no credit for that at all.

02:53:59.380 | I mean, I just sat down with a guy and unleashed him.

02:54:02.620 | He's just a beast.

02:54:04.100 | - Yeah, but it's fascinating that

02:54:07.500 | his long-term vision with it.

02:54:11.380 | I mean, I'm not sure I'm all philosophically bought in,

02:54:15.580 | but if he's right, if this set of ideas are as powerful

02:54:20.980 | as he describes, as you described,

02:54:24.140 | that this would change the world,

02:54:26.700 | which as you say, it's funny that a company

02:54:28.700 | like MicroStrategy might be the company

02:54:33.700 | that has the biggest macro effect

02:54:38.060 | on our economy, on our world.

02:54:40.180 | - Yeah, the conversation reshaped my worldview a lot too,

02:54:44.420 | because he framed money as energy,

02:54:48.100 | which I had often thought of money as time.

02:54:50.940 | And it explored those connections a lot in my writing,

02:54:53.480 | but looking at it as energy,

02:54:55.080 | and then his supposition that the purpose of life

02:55:00.500 | is to basically channel energy across space and time.

02:55:03.120 | So we're just trying to figure out how to channel

02:55:05.100 | more energy across space and time

02:55:07.100 | toward the satisfaction of aims.

02:55:08.860 | And his definition, or his answer to that question,

02:55:12.660 | what is money, is that money is the highest form

02:55:14.900 | of energy a human being can channel.

02:55:17.140 | So it's a claim to all other forms of energy

02:55:19.420 | we can manifest in the world.

02:55:20.780 | And that just completely reshaped how I see it,

02:55:24.900 | brought in this whole other side

02:55:26.280 | to my intellectual explorations of money.

02:55:30.780 | - Can you elaborate on that a little bit?

02:55:32.180 | So I understand money is time,

02:55:34.260 | which is in itself a really powerful idea,

02:55:37.100 | but money is energy, channeling energy.

02:55:39.740 | Can you break that apart?

02:55:40.660 | - Yeah, so I guess,

02:55:43.100 | definitely have to check out the whole series

02:55:45.540 | to really get his perspective,

02:55:46.980 | but I'll do my best to condense it.

02:55:49.440 | Life itself, all forms of life,

02:55:54.980 | they're dependent on energy.

02:55:56.500 | Energy fuels everything,

02:55:58.100 | fuels life and action and motion and all of that.

02:56:01.320 | And we could say that maybe like a plant

02:56:04.940 | is harnessing solar energy

02:56:08.980 | and then reallocating that into growth.

02:56:11.820 | So its aim is to grow towards the sun.

02:56:15.220 | So it's allocating energy towards its goal

02:56:17.620 | of harnessing more solar energy kind of thing.

02:56:20.900 | And humans too have evolved

02:56:27.220 | to figure out how to harness energy in different ways

02:56:30.580 | to satisfy higher and more complicated aims.

02:56:35.180 | So the original energy network

02:56:37.540 | that he referenced was fire.

02:56:41.180 | We actually learned to wield fire

02:56:44.060 | as a tool in and of itself.

02:56:45.660 | So not only are we learning to channel energy,

02:56:48.100 | but we're actually learning how to isolate energy

02:56:51.340 | as a tool in and of itself.

02:56:53.780 | And so we went into that,

02:56:54.980 | how harnessing fire had changed human beings.

02:56:59.660 | And actually, this is one of the earliest examples

02:57:03.940 | to have a co-evolution between tool and our biology,

02:57:07.620 | because when we developed fire, we developed cooking.

02:57:11.500 | And cooking is, you can kind of think of it

02:57:13.100 | as pre-digestion in a way.

02:57:14.460 | We're liberating these macronutrients,

02:57:16.220 | we're making things that otherwise

02:57:18.340 | would not be digestible, edible.

02:57:20.940 | And it increases the efficiency

02:57:23.260 | by which we extract nutrients from food.

02:57:26.120 | That's what cooking does.

02:57:27.460 | So when we figured out cooking,

02:57:29.820 | we liberated all these digestive resources

02:57:33.580 | that were reallocated towards higher cognitive development.

02:57:36.580 | So there's this evolutionary path

02:57:39.620 | between figuring out fire and us becoming smarter,

02:57:42.820 | which was interesting.

02:57:44.020 | Some other early examples he gave,

02:57:47.700 | he went into were missiles and hydraulics.

02:57:50.320 | So missiles being, we learned to hunt at a distance.

02:57:56.620 | We can't bring down a woolly mammoth,

02:57:58.860 | maybe with spears and up close and personal force,

02:58:03.860 | but we could with spears and javelins

02:58:06.280 | and slings and whatnot.

02:58:07.820 | And then he went into how we've used water

02:58:11.820 | to channel hydraulic energy.

02:58:13.220 | So we can basically overcome gravity.

02:58:14.820 | We can move, you know.

02:58:16.940 | There's theories that the pyramids were constructed using,

02:58:21.620 | the blocks were moved using hydraulic energy

02:58:23.980 | or using water.

02:58:25.540 | Clearly we use like cargo ships and whatnot

02:58:27.980 | to move things much more efficiently across water

02:58:30.220 | than we could the land.

02:58:32.380 | So his whole view is how we keep figuring out better ways

02:58:37.380 | and more efficient ways to harness energy and channel it.

02:58:40.540 | And in that perspective,

02:58:44.080 | money has always represented a claim

02:58:47.440 | on all other forms of energy.

02:58:48.980 | So whatever energy couldn't be channeled

02:58:51.900 | towards something useful in the economy historically

02:58:54.820 | would go into gold mining.

02:58:56.180 | So gold became this residual, this economic,

02:58:59.560 | this token of the excess energy created

02:59:04.060 | by the market economy.

02:59:05.500 | And then you could take that token of energy

02:59:07.420 | and use it to redeem for any other form of energy

02:59:10.620 | or any other products of energy itself.

02:59:12.700 | I guess that's my best approximation of it.

02:59:18.060 | And it just really shattered my worldview again

02:59:22.300 | 'cause I'd always thought about it as time.

02:59:23.780 | Like we spend time sacrificing to obtain money

02:59:26.580 | that we then redeem for commensurate sacrifices

02:59:28.640 | from others.

02:59:29.980 | But I'd never considered it purely as energy.

02:59:32.420 | And then it also ties back into gold

02:59:35.260 | where there was an energy expenditure necessary

02:59:38.940 | to obtain gold.

02:59:40.260 | So there's a proof of work associated with obtaining gold

02:59:43.700 | that protected its market value.

02:59:45.340 | So you had to expend, again,

02:59:47.780 | if market value of gold's 2000 an ounce,

02:59:50.220 | you had to expend 1900 an ounce mining.

02:59:53.180 | So it kept producers honest in a way.

02:59:56.580 | - So do you think something like proof of stake

02:59:58.980 | that's more about reputation

03:00:01.980 | than actual exertion, like energy can work?

03:00:06.980 | - No.

03:00:11.180 | I think proof of stake is inherently centralizing.

03:00:13.740 | It's like the old Matthew principle,

03:00:18.380 | from those who have to those who have,

03:00:20.900 | more will be given from those who have not,

03:00:22.900 | everything will be taken.

03:00:24.100 | That's what proof of stake is.

03:00:26.460 | You need proof of work to embody skin in the game

03:00:29.900 | and the marketplace such that contributions

03:00:33.580 | are commensurate with consideration received.

03:00:36.460 | That's how systems work.

03:00:37.920 | - What's the idea why proof of work

03:00:42.220 | might incentivize decentralization?

03:00:46.980 | Do you worry that as Bitcoin becomes more powerful,

03:00:53.220 | it may become again more centralized?

03:00:56.820 | - Well, the decentralization of Bitcoin

03:00:59.580 | is largely driven by the nodes actually,

03:01:03.780 | which aren't actually mining.

03:01:05.300 | They're just choosing which rule set to implement.

03:01:07.800 | And then the mining network

03:01:12.060 | is actually enforcing that rule set.

03:01:14.580 | So I think the mining network

03:01:18.020 | is inherently decentralized in that

03:01:22.140 | really anyone with access to cheap energy

03:01:24.540 | can become a miner.

03:01:25.580 | You can freely enter or exit the market

03:01:27.860 | or the network at any time.

03:01:29.300 | But maintaining the block size at a manageable level

03:01:34.820 | is what's key to maintaining node decentralization.

03:01:38.020 | - This is an interesting question.

03:01:40.540 | Who do you think has more power, the miners or the nodes?

03:01:43.340 | 'Cause the nodes carry the idea of the protocol,

03:01:49.340 | like the specifics.

03:01:51.340 | So in some sense, they have more power.

03:01:55.340 | And Bitcoin is an idea.

03:01:56.940 | - They're kind of mutually indispensable though,

03:02:00.740 | 'cause you can't have,

03:02:01.940 | there's no security without the miners.

03:02:05.960 | So without the miners, Bitcoin is just an idea.

03:02:08.460 | And the idea of Bitcoin is maybe existed

03:02:12.180 | even before Bitcoin, right?

03:02:13.260 | Just sound money.

03:02:14.100 | We just say sound money as an idea.

03:02:15.860 | But there was no way to root that

03:02:18.980 | into thermodynamic reality without Satoshi figuring out,

03:02:23.200 | not just proof of work.

03:02:25.140 | It's the entire composite of the difficulty adjustment,

03:02:28.420 | proof of work, one-way hashing, et cetera.

03:02:32.780 | So I don't know, that's hard to say,

03:02:35.060 | hard to disentangle the two.

03:02:36.440 | - You've talked about money as morality too.

03:02:40.180 | How do you think about moral and immoral action

03:02:44.540 | in the context of money?

03:02:45.800 | - There's this great quote by Rothbard,

03:02:51.060 | who's a famous Austrian economist.

03:02:53.740 | And he says, "To be moral, an act must be free."

03:02:57.900 | Unquote.

03:02:59.780 | And I think morality, it changes over time

03:03:05.900 | and it has its roots in biology.

03:03:12.940 | Jordan Peterson makes the point that even animals

03:03:17.580 | have their own sort of pseudo morality.

03:03:21.180 | Where like with wolf packs, for instance,

03:03:24.500 | if there's a dispute between the alpha males,

03:03:26.980 | or I guess between an alpha male and a incumbent,

03:03:30.860 | the two males will have a fight basically.

03:03:35.540 | And then when one is decided that one has won,

03:03:39.500 | the loser will basically roll over

03:03:40.900 | and give up his neck to the alpha male.

03:03:45.000 | And they do this instead of fighting to the death

03:03:47.820 | because in a wolf pack, they need every wolf.

03:03:51.040 | So they can go out and bring down,

03:03:52.620 | you never know when you're gonna need the 20th wolf

03:03:54.920 | to bring down the big buffalo the next day or whatever.

03:03:56.980 | So they've developed this less than fight to the death

03:04:01.300 | social morality to optimize their effectiveness

03:04:04.540 | as a wolf pack.

03:04:05.640 | And similarly for humans, our morality sort of emerges

03:04:12.020 | through competition and play even.

03:04:16.140 | There are these implicit rules that come into place

03:04:19.860 | based on how we're organizing ourselves over time.

03:04:22.760 | And so with money, it's interesting

03:04:29.000 | because most tools we would consider to be amoral,

03:04:33.480 | as in a hammer can be used to build a house,

03:04:38.060 | which could be seen to be good,

03:04:39.320 | like a good constructive purpose,

03:04:40.800 | or could be used to bash someone's skull,

03:04:43.080 | which could be something evil.

03:04:44.580 | And that the tool itself is amoral,

03:04:49.400 | it doesn't have any independent morality of its own.

03:04:51.520 | All of the morality is associated

03:04:54.040 | with the wielder of the tool.

03:04:55.400 | So what's the quote, like any tool can be a weapon

03:04:58.640 | if you hold it right, sort of thing.

03:05:00.440 | But money's maybe a little bit different in that

03:05:05.640 | when you monopolize money,

03:05:11.880 | it's only useful as a tool for one thing.

03:05:15.320 | And that's for allocating wealth away from some

03:05:17.860 | and to others.

03:05:19.480 | So it is the only utility of monopolized money is theft.

03:05:23.660 | There's no other, you know,

03:05:26.880 | there's a lot of propaganda out there that will say,

03:05:28.880 | oh, we need to print money to get out of this disaster

03:05:31.040 | or to give to the poor, whatever this,

03:05:35.080 | whatever moralistically camouflaged political aim

03:05:40.080 | is being discussed,

03:05:41.960 | at the base layer of monopolized money

03:05:44.360 | is that it's only useful for taking from some

03:05:46.400 | and giving to others.

03:05:47.880 | So another way to think about this is that

03:05:50.180 | money is a paper claim on the savings of society.

03:05:55.200 | So it is just a ticket for redeeming savings,

03:05:58.200 | which could be time, could be capital,

03:06:00.920 | could be knowledge from any market actor in the world.

03:06:03.620 | So it's kind of a list of who owns what, if you will,

03:06:07.240 | it's a proxy list.

03:06:08.160 | If there's one group that can amend that list

03:06:11.240 | and others cannot,

03:06:12.880 | then they're basically able and incented to

03:06:16.000 | modify that list to their own benefit.

03:06:18.960 | And that's effectively what a central bank is doing.

03:06:23.120 | So a central bank is determining how much money to create.

03:06:27.180 | They're also determining who gets to receive

03:06:28.800 | that money first.

03:06:30.440 | And the first recipients of that money

03:06:33.180 | are gonna be the beneficiaries in an inflationary regime.

03:06:37.360 | So those that receive the money last

03:06:39.120 | are the ones being robbed.

03:06:40.680 | Those that receive the money first

03:06:41.840 | are the ones that are receiving the stolen proceeds,

03:06:46.640 | let's say.

03:06:47.480 | And this has a really corrosive effect on social morality

03:06:53.480 | because if we consider that people's time horizon,

03:07:00.280 | which the Austrians call the time preference,

03:07:03.960 | the more short-term thinking you are,

03:07:07.920 | the more likely you are to engage in selfish behavior.

03:07:12.640 | Right, if you know that it's all over tomorrow

03:07:16.400 | and you've been working your whole life to develop,

03:07:20.120 | you know, this business or create this reputation

03:07:22.240 | or whatever your thing is,

03:07:23.080 | but you just are given the foreknowledge

03:07:24.800 | that tomorrow it's all gonna end,

03:07:26.760 | you're much more likely to go out

03:07:28.400 | and just maybe get drunk and party that night

03:07:30.480 | because there's no more repercussions, right?

03:07:32.900 | Whereas if you know that you're gonna live

03:07:37.440 | for a very long time,

03:07:39.800 | you're much more likely to plan for the future.

03:07:42.200 | And money's very,

03:07:46.280 | so we just say that your time horizon

03:07:48.040 | is closely related to your morality, right?

03:07:50.560 | The longer term thinking you are,

03:07:52.160 | the more moral you would tend to behave,

03:07:54.000 | the more you would care about long-term relationship

03:07:55.840 | building versus going out and getting wasted.

03:07:59.040 | And money too impinges very closely on our time preference.

03:08:04.040 | And again, time preference is the Austrian term.

03:08:06.760 | So low time preference means you're long-term oriented.

03:08:10.520 | High time preference means you're short-term oriented,

03:08:12.760 | which can be a little trippy for some people

03:08:14.840 | 'cause it sounds backwards.

03:08:15.840 | But if your money constantly loses value,

03:08:20.840 | you are incentivized to become more short-term oriented.

03:08:26.960 | You are handicapped in your ability to plan for the future

03:08:31.320 | because your money, which is intended to be,

03:08:35.520 | here's another definition of money,

03:08:37.000 | as an insurance policy against uncertainty.

03:08:39.800 | So no matter what problems you encounter in the world,

03:08:42.080 | this money will best help you deal with those problems.

03:08:45.420 | When that insurance policy against uncertainty

03:08:48.640 | is injected with uncertainty,

03:08:51.000 | it's polluted with the uncertainty of inflation,

03:08:53.480 | your time horizon shrinks,

03:08:55.000 | your ability to plan long-term shrinks.

03:08:57.120 | And this impinges on social morality.

03:09:00.120 | So there's a great book on this

03:09:02.440 | called "Honest Money" by Gary North.

03:09:05.240 | And in that book, he gives the parable of the winemaker.

03:09:08.420 | The winemaker, if we just imagine

03:09:12.840 | the hypothetical winemaker operating a business

03:09:15.720 | in a centrally banked economy,

03:09:17.880 | and let's say his central bank just doubled the money supply

03:09:20.680 | to quote unquote save the economy,

03:09:22.580 | say an increase in money supply from one to $2 trillion.

03:09:27.100 | This winemaker that's accustomed to selling wine

03:09:29.260 | at $20 a bottle is now faced with basically three choices.

03:09:33.640 | And an important point here too,

03:09:36.640 | before we get into his three choices

03:09:38.040 | are what prices are themselves.

03:09:40.000 | Prices are the most visible aspect of any service.

03:09:44.680 | So when you increase prices,

03:09:46.560 | you are incentivizing your customers to look elsewhere.

03:09:50.400 | They're gonna look at your competition.

03:09:51.720 | When you decrease prices,

03:09:53.440 | you're incentivizing market actors

03:09:55.800 | to look closer at your product, right?

03:09:57.560 | You're delivering a solution at a lower price.

03:10:00.160 | So this winemaker that's accustomed to selling his wine

03:10:02.560 | at a $20 price point, all of a sudden,

03:10:05.240 | because of a central bank has tripled the money supply,

03:10:07.840 | he has three choices.

03:10:09.000 | He can either keep selling his bottle at $20

03:10:14.440 | and all of his inputs will increase

03:10:16.080 | due to inflation by 50%.

03:10:19.080 | So he will lose 50% of his profit margin as a result.

03:10:22.720 | So he can choose to eat that loss.

03:10:26.160 | He can choose to double the selling price

03:10:28.400 | of his bottle of wine from $20 to $40

03:10:31.720 | because all of the price of his inputs doubled.

03:10:34.120 | So then he would maintain his profit margin.

03:10:36.280 | Or the third one is that he could choose

03:10:40.680 | to water down his wine or use inferior ingredients.

03:10:45.400 | So he could use cheaper inputs

03:10:47.440 | and maintain the output at the same price.

03:10:50.000 | So he could basically start selling his customers

03:10:54.560 | an inferior product for the same price to preserve his profit.

03:10:57.520 | Now again, case number one, it's not very palatable.

03:11:01.000 | He doesn't want to eat the economic loss.

03:11:02.800 | Case number two, it's not very good either

03:11:05.080 | because he's then incentivizing all of his customers

03:11:07.440 | to go shop other winemakers if he doubles his price.

03:11:10.960 | So human nature being what it is,

03:11:13.400 | trying to get something for nothing,

03:11:15.520 | inflation actually seeps into other industries

03:11:18.280 | by encouraging producers into option three,

03:11:21.680 | which is to deceive your customer in the short run.

03:11:24.680 | And again, this would be done initially at the margins.

03:11:27.600 | Maybe it's just a few drops of water.

03:11:29.080 | Maybe it's just some cheaper grapes.

03:11:31.800 | But over time,

03:11:33.400 | this inflation is actually inducing producers

03:11:39.120 | to weigh their financial wellbeing

03:11:41.800 | against their moral integrity.

03:11:43.760 | So it's forcing them into this dilemma

03:11:46.160 | that would not exist in a free market economy.

03:11:48.920 | And it's not a good idea to do that.

03:11:53.680 | Because as they charge more money for wine

03:11:57.760 | that is inferior, the buyers of that wine,

03:12:00.920 | also living in a central bank economy,

03:12:02.640 | are also getting scammed by not only the inflation,

03:12:05.200 | but also the wine.

03:12:06.440 | So it becomes this kind of corrosive,

03:12:09.120 | contagious moral effect

03:12:10.960 | that propagates throughout an economy.

03:12:14.920 | And that's why I've argued in a lot of my writing

03:12:18.520 | that inflation is this infectious moral cancer on the world.

03:12:24.120 | I think it is tied back to a lot of the social strangeness

03:12:29.120 | we've seen in modern times,

03:12:32.480 | where there seems to be a lot of fake people

03:12:35.880 | and a lot of fake businesses and a lot of scams,

03:12:38.040 | all of these things.

03:12:38.880 | I think it really is rooted in the money.

03:12:40.960 | And Bitcoin has the first money in history

03:12:45.120 | that has a 0% terminal inflation rate,

03:12:47.360 | or said differently, zero unexpected inflation.

03:12:50.480 | There's no theft integrated into Bitcoin.

03:12:54.320 | You can only earn it through work

03:12:56.000 | or sacrificing resources to obtain it.

03:12:58.240 | It is the antidote to this moral cancer

03:13:03.720 | that inflation riddles our society with.

03:13:06.060 | - Again, you're blowing my mind a little bit

03:13:08.800 | to think about the ripple effects of inflation,

03:13:11.800 | the way it seeps through with our interactions.

03:13:15.080 | So at the very, the early ripples

03:13:18.560 | is the effect it has on the products,

03:13:20.360 | on the dilution of the wine,

03:13:23.040 | but also it might have a ripple effects on the character,

03:13:27.120 | on the behavior of people.

03:13:28.620 | That's interesting, artificial creation of scarcity,

03:13:33.280 | creating, having effects on society at the social,

03:13:38.280 | like the social fabric.

03:13:40.160 | - Yeah. - And I guess you're arguing

03:13:41.200 | the morality.

03:13:42.180 | - It's perverting free market dynamics,

03:13:45.920 | which again, we said free markets generate pragmatic truth.

03:13:48.960 | So inflation distorts price signals,

03:13:51.960 | which means it confuses capital allocation.

03:13:54.920 | So we're trying to solve problems,

03:13:56.240 | but all of a sudden we can't tell if this price increases

03:13:59.160 | a matter of true supply and demand change

03:14:01.600 | or a matter of policy change.

03:14:03.480 | So it clouds our economic perceptions.

03:14:07.160 | It suppresses innovation,

03:14:09.360 | because now you've exacerbated

03:14:11.080 | the boom and bust business cycle.

03:14:12.480 | People are gonna overborrow and go into projects

03:14:14.920 | that they can't profitably sustain,

03:14:16.800 | so then there'll be a huge collapse.

03:14:18.320 | So that actually breaks the market's function

03:14:22.240 | of generating innovation.

03:14:24.040 | And then, yeah, I would argue too,

03:14:25.180 | that it pollutes our pursuit of virtue, let's say.

03:14:29.600 | - Maybe it's pushing back, but I don't think so.

03:14:32.520 | It's not as clear to me,

03:14:34.840 | perhaps because I haven't thought about it deeply,

03:14:36.840 | that money is core to life and human interaction,

03:14:41.840 | because there might be other forces,

03:14:45.560 | other fraudulent forces, other things in human nature

03:14:48.860 | that are creating these effects as well.

03:14:51.180 | So it's clear, I think you're articulating really well,

03:14:53.280 | that there's these negative effects from inflation.

03:14:56.160 | I wonder if there's other undiscovered,

03:14:59.000 | not undiscovered, but ones we're not making explicit now,

03:15:02.280 | forces that are creating all the things we're seeing now,

03:15:07.280 | with, like you said, cancer culture and all those things,

03:15:11.480 | but also the negative effects on the quality of products,

03:15:16.480 | on the excellence of the creativity,

03:15:19.640 | and the innovation, all those kinds of things.

03:15:21.160 | I wonder if there's other factors.

03:15:23.120 | It's kind of, listen, it's compelling to think money's

03:15:26.720 | at the core of it all.

03:15:28.320 | Like if you fix, I forgot what the phrase was.

03:15:30.520 | - Fix the money, fix the world.

03:15:31.680 | - Yeah, fix the money, fix the world.

03:15:33.520 | Again, things that sound good, I'm skeptical of by nature.

03:15:40.480 | So I wonder if there's other things that are beyond money

03:15:44.440 | that are somehow deeply integrated into our human nature.

03:15:47.280 | - Another one related to money is social cohesion itself.

03:15:51.600 | So very simple anecdote for this was,

03:15:56.020 | the more you increase the inflation rate,

03:15:58.540 | social cohesion is inversely proportionate to that.

03:16:02.080 | So the extreme example would be hyperinflation, right?

03:16:04.580 | Where the money is produced in such excess

03:16:07.280 | that it loses all meaning and relevance.

03:16:09.780 | So today in Venezuela, there is cash clogging the gutters,

03:16:14.360 | clogging the streets, clogging the sewer system,

03:16:16.720 | because the cash has lost all relevance.

03:16:21.120 | And so anecdotally, we would suspect that, okay,

03:16:23.920 | if there's a inverse relationship between inflation

03:16:28.420 | and social cohesion, if we could then take inflation to zero,

03:16:32.640 | couldn't we theoretically increase social cohesion

03:16:35.920 | to its maximum?

03:16:38.600 | So another way to say that is inflation

03:16:40.540 | is a de-civilizing force,

03:16:43.980 | whereas natural price deflation,

03:16:45.700 | which would occur in a hard money economy,

03:16:48.540 | where there's either a fixed supply of Bitcoin

03:16:50.980 | or relatively scarce supply of gold, for instance,

03:16:55.980 | that lays claim to an increasing capital stock

03:17:00.220 | of goods and services.

03:17:01.900 | Prices would naturally decline every year

03:17:04.060 | as we became smarter.

03:17:06.100 | So the market price becomes a reflection

03:17:07.820 | of our collective knowledge.

03:17:09.780 | So by letting prices decline naturally over time,

03:17:12.660 | we can actually induce civilization.

03:17:16.080 | But by trying to force prices higher all the time,

03:17:18.580 | via the central bank, we're creating the opposite effect.

03:17:21.860 | - So we talked a little bit about the Soviet Union,

03:17:24.120 | and I happen to have lived through the collapse

03:17:26.340 | of the Soviet Union.

03:17:27.420 | And so what are the factors, the causes in your mind

03:17:33.740 | to why the Soviet Union collapsed?

03:17:37.880 | - So, definitely a multivariate situation.

03:17:42.880 | I think there's a lot of factors.

03:17:45.120 | One that jumped out to me recently,

03:17:48.880 | again, from that documentary that I didn't note before,

03:17:51.440 | was that at one point, Stalin eliminated,

03:17:54.080 | I think, 75% of his intelligence force.

03:17:56.920 | Which I think when you're competing

03:18:01.280 | with another nation state,

03:18:04.120 | and intelligence and covert operations

03:18:06.840 | are very integral to your survival.

03:18:08.800 | I think that was definitely a shot in the foot.

03:18:13.560 | But at a higher level, I would say that capitalism

03:18:18.560 | and communism were each resource strategies

03:18:23.640 | of the 20th century nation state.

03:18:25.580 | And they seem, we commonly consider them

03:18:30.080 | to be diametrically opposed,

03:18:31.440 | but there's actually a lot of commonality between the two.

03:18:34.800 | The difference would be that in Soviet Russia,

03:18:38.280 | as we alluded to earlier,

03:18:40.480 | they tried to completely replace price signals

03:18:43.560 | with this nationalistic faith and devotion.

03:18:46.840 | So they removed the economic nerve signal,

03:18:50.640 | which coordinated the allocation of capital over time.

03:18:53.720 | So this inhibited their ability to generate wealth.

03:18:57.000 | Whereas in the United States,

03:18:58.240 | we left most markets open to free enterprise.

03:19:02.320 | So we honored the integrity of price signals,

03:19:06.040 | and we allowed people to trade and accumulate wealth.

03:19:09.420 | So in every market, except the market for money,

03:19:14.560 | both markets maintained a central bank,

03:19:16.960 | as we've gotten to.

03:19:18.240 | So I think in a really big picture standpoint,

03:19:23.040 | that's why capitalism outcompetes communism,

03:19:27.520 | is because it is able to generate more wealth

03:19:31.200 | than communism was,

03:19:32.920 | and therefore was able to put financial pressure

03:19:35.560 | on the USSR until it reached the point of bankruptcy,

03:19:39.300 | essentially.

03:19:40.800 | This similar model, I would argue,

03:19:44.080 | is that for the same reasons we saw capitalism

03:19:49.080 | outcompete communism,

03:19:50.080 | which I think the data that I recall

03:19:53.840 | was that the USSR's economy was valued

03:19:56.560 | at close to one third of its inputs.

03:19:59.640 | So if you just didn't do anything inside the USSR

03:20:02.800 | and just sold all the raw materials that were going into it,

03:20:05.340 | it would have been worth three times as much

03:20:07.900 | as sending the materials in,

03:20:09.760 | running it through the efforts,

03:20:10.880 | and then shipping things back out.

03:20:12.280 | It was value destructive versus value creative.

03:20:16.220 | And I would argue this is because,

03:20:18.540 | again, the centralized computing model

03:20:21.400 | versus decentralized computing model,

03:20:23.320 | it just became more and more corrupt over time.

03:20:26.100 | It got to the point where I think most of the occupations

03:20:30.880 | in USSR towards the end were as informants.

03:20:34.000 | All right, they were working for the state.

03:20:36.160 | Jordan Peterson makes this point too,

03:20:38.460 | that at some point it was actually illegal

03:20:40.520 | to be sad in Soviet Russia,

03:20:43.080 | because if you were sad,

03:20:44.920 | you were contradicting the utopian view of the state.

03:20:48.840 | So if you were sad,

03:20:49.680 | you're implying the state's not doing something wrong.

03:20:51.920 | But by the way, this does remind me,

03:20:53.760 | do you know what Jordan Peterson thinks about Bitcoin

03:20:57.120 | and about the future impact of Bitcoin on the society?

03:21:02.120 | - No, I don't actually.

03:21:05.520 | We're hopefully gonna be talking to him soon about that.

03:21:10.640 | We did a book club on his book, "Maps of Meaning,"

03:21:14.140 | and he engaged with us about it.

03:21:16.080 | So we're hoping to deliver the orange bill to Mr. Peterson.

03:21:19.040 | - The orange bill.

03:21:20.680 | I think his audience is one of the most important audiences

03:21:24.040 | in the world to understand Bitcoin.

03:21:25.360 | These people that are conscientious and responsible,

03:21:29.380 | I think they'll quickly understand

03:21:34.200 | Bitcoin's value proposition

03:21:35.640 | and help elucidate it to the world.

03:21:38.480 | - I'm trying to remember what he said about it.

03:21:41.200 | Basically, I think his support of Bitcoin is grounded

03:21:45.760 | in the kind of people who are opposing Bitcoin.

03:21:49.880 | So without understanding Bitcoin,

03:21:52.720 | he starts to like Bitcoin

03:21:54.400 | because of the people who are opposing it.

03:21:56.500 | (Lex laughing)

03:21:59.320 | I mean, that's partially why I am interested in Bitcoin.

03:22:03.640 | It's like all the people in power

03:22:08.520 | and all the kind of shady, fraudulent, non-genuine people

03:22:13.520 | who are dismissing Bitcoin are making me think, hmm.

03:22:19.400 | - One of Jordan's definitions of God is,

03:22:23.520 | he says, "God is found in the truthful speech

03:22:26.680 | "that rectifies pathological hierarchies."

03:22:29.280 | And I think that is a beautiful definition

03:22:34.700 | of what Bitcoin is doing in the world,

03:22:36.720 | and that we have this pathological hierarchy

03:22:39.080 | called central banking,

03:22:40.840 | by which the rich get richer and the poor get poorer,

03:22:43.620 | that is used as a mechanism for perpetual theft

03:22:48.280 | and funding warfare at a global scale.

03:22:51.360 | Like Ron Paul said, it's no coincidence

03:22:54.780 | that the 20th century of total war

03:22:57.300 | was also the century of central banking.

03:22:59.300 | When you have an institution of currency counterfeiting,

03:23:05.800 | which the central bank is,

03:23:07.840 | you are no longer bounded by your own balance sheet

03:23:10.580 | when you go to war.

03:23:11.480 | You don't have to just go to war on your own resources.

03:23:13.560 | You can now pillage the Commonwealth

03:23:16.400 | and pilfer the savings of society as a whole

03:23:20.160 | before you go bankrupt.

03:23:21.400 | And indeed, this is what Hitler did, right?

03:23:23.920 | Hitler hyperinflated in the Weimar Republic

03:23:28.280 | to fund his war efforts.

03:23:30.440 | And frankly, every dictator, every world war,

03:23:35.620 | every internment camp in history was made possible

03:23:39.680 | by the weaponization of money in fiat currency.

03:23:43.460 | So I hope, I know Jordan Peterson

03:23:46.900 | is a huge proponent of free speech.

03:23:49.320 | And I think that's ultimately at its deepest essence

03:23:51.740 | as what Bitcoin really is, right?

03:23:53.180 | It is just the purest form of monetary speech we've ever had.

03:23:58.180 | And by purifying that primary operating system

03:24:02.940 | of human action, I think we can eliminate

03:24:06.180 | this pathological hierarchy that is unfortunately

03:24:09.220 | the dominant institution in the world today.

03:24:11.780 | - Yeah, I'm definitely, especially with these explorations

03:24:14.700 | of Bitcoin, this journey I've been on,

03:24:18.020 | I'll revisit some of the aspects of human history

03:24:21.360 | that I've been looking at, like Stalin and Hitler,

03:24:24.620 | with a, from a perspective of a monetary perspective.

03:24:28.820 | Like what are the effects of inflation?

03:24:33.100 | How was it used as a tool in gaining power,

03:24:37.980 | in maintaining power, in manipulating the populace,

03:24:42.980 | in doing, in inflicting suffering

03:24:47.880 | and I would say evil onto the world.

03:24:51.420 | It's interesting.

03:24:52.360 | It's interesting.

03:24:54.780 | I'm gonna have to sort of go back into the whole.

03:24:56.920 | So I tend to focus more on the human nature

03:25:01.780 | and less about the tools that human nature leverages

03:25:07.400 | to effect change, but you're right that in some sense,

03:25:11.140 | money is a tool which can be effectively used

03:25:16.140 | to perform moral and immoral actions,

03:25:21.780 | depending on how it's used.

03:25:23.540 | - And there's a feedback between the two, right?

03:25:25.700 | There's, specifically with money itself,

03:25:30.700 | it's the, I don't know,

03:25:37.680 | here's the way I've been posing it lately,

03:25:39.600 | is that I actually think,

03:25:41.360 | we typically think of people as good or bad,

03:25:43.580 | or again, trying to label people all the time,

03:25:45.840 | but I think people and their characters

03:25:48.120 | are emergent properties of the incentive structures

03:25:51.040 | they inhabit.

03:25:51.960 | - Yeah.

03:25:52.800 | - So, what does Charlie Munger say?

03:25:55.620 | Don't show me the incentives,

03:25:56.920 | I'll show you the outcome kind of thing.

03:25:59.480 | This is a flawed incentive structure

03:26:01.800 | we've been operating within.

03:26:03.580 | Now I'm not speaking to the intention,

03:26:05.740 | people wanna argue with me all the time,

03:26:07.120 | like Jerome Powell's not a bad guy,

03:26:09.640 | he's doing his best at the central bank,

03:26:11.200 | he's doing what he thinks is right, that's fine.

03:26:13.600 | Whether that's true or not, it actually doesn't matter.

03:26:16.360 | The intention is divergent from the outcome.

03:26:19.040 | The institution that they are running

03:26:20.640 | is premised on deception and theft,

03:26:23.000 | and it is handicapping the productive economy.

03:26:25.640 | So when we're, even the terms we use, printing money,

03:26:29.000 | you're not creating any new value,

03:26:30.600 | you're not infusing the economy with anything,

03:26:32.480 | any new productive factors whatsoever.

03:26:34.520 | You're just harvesting the economic surplus

03:26:36.740 | created by entrepreneurs in the marketplace.

03:26:39.620 | It's impossible to add any value to an economy

03:26:42.540 | by increasing the paper claims on its savings.

03:26:45.740 | So, there's a feedback loop between man and tool,

03:26:50.740 | between creator and created,

03:26:53.340 | and I think we have to honor the relationship

03:26:57.020 | above either one, right?

03:26:58.620 | Trying to put the right people in the system

03:27:00.540 | or just build the right system, we need both.

03:27:03.340 | - Do you think the interesting question

03:27:05.220 | of whether the people that are in control of central banks

03:27:10.220 | or in positions of power there,

03:27:14.680 | if they themselves are malevolent,

03:27:17.220 | they themselves are bad actors,

03:27:19.820 | or they're simply like leaves floating along the river,

03:27:24.820 | sort of just a cog in the machine,

03:27:29.820 | an ant in an ant colony that operates

03:27:31.980 | in a certain kind of way,

03:27:33.900 | like where do you put the blame?

03:27:36.700 | Do you put the blame on the way things are operating

03:27:40.700 | onto the individuals or onto the system itself,

03:27:44.420 | the idea behind the system?

03:27:46.940 | Where, and is it useful to place the blame somewhere?

03:27:50.820 | 'Cause for me, it might be useful to understand that

03:27:53.340 | in order to figure out what the solution is.

03:27:57.060 | I tend to not put the blame on the individual.

03:27:59.820 | Like I tend to believe most people are good

03:28:02.460 | and want to see themselves as good.

03:28:04.320 | And so in that case, it's very difficult

03:28:07.780 | to be truly malevolent as you would need to be to control,

03:28:11.140 | to gain centralized power at the large scale.

03:28:13.900 | But I know a lot of conspiracy theorists

03:28:18.180 | and just a lot of people think that there is evil,

03:28:22.700 | humans in the world that seek power, maintain that power,

03:28:26.700 | and they use that power for bad purposes.

03:28:29.640 | I think they're just people

03:28:32.320 | and they're just trying to get something for nothing

03:28:34.400 | like all of us do.

03:28:35.440 | - I like this framework of thought that you have.

03:28:38.800 | - Honestly, and that's what the central bank is,

03:28:42.120 | is the ultimate institution to get something for nothing.

03:28:44.960 | You get a perpetual income stream,

03:28:49.680 | the ability to acquire more and more territory in the world

03:28:53.240 | through monopolizing the supply of money,

03:28:57.400 | and you can literally print money.

03:29:00.040 | You can buy your way out of anything

03:29:02.040 | and buy your way into anything in the world.

03:29:04.500 | So it is, I think the most,

03:29:06.920 | I'd say the most,

03:29:09.600 | but a group of very intelligent people

03:29:11.540 | put this thing together and figured out

03:29:13.480 | how to get something for nothing in perpetuity

03:29:15.720 | by clouding people's conception of money.

03:29:21.260 | And if we look at the central bank,

03:29:24.800 | it's been around for a while,

03:29:25.680 | but the latest implementation here in the US is the Fed.

03:29:29.440 | It's about a hundred years old.

03:29:30.560 | It's an analog age institution that I think has lost

03:29:34.240 | a lot of its relevance in the modern age.

03:29:37.920 | And I don't think it will survive

03:29:40.160 | the ever galvanizing gaze of the digital age.

03:29:43.040 | There's just too much sunlight, too much transparency.

03:29:46.680 | Today, ideas move too quickly for something like this

03:29:49.400 | to remain relevant.

03:29:51.320 | But there are just people,

03:29:53.960 | they are just seeking something for nothing.

03:29:55.760 | But I think when you concentrate that much power

03:29:58.240 | and that much control,

03:29:59.440 | that much wealth into the hands of few,

03:30:02.360 | it does change.

03:30:05.000 | Hayek argued that the nature of power,

03:30:07.780 | again, it's something that we all sort of desire.

03:30:11.560 | To be completely powerless, you're really unhappy.

03:30:14.080 | If you're totally powerless, you're a slave.

03:30:16.340 | Someone else tells you what to do.

03:30:17.680 | You have no autonomy.

03:30:19.000 | It's miserable.

03:30:21.880 | It makes the consolidation of power alluring

03:30:24.600 | and that we want to protect ourselves

03:30:25.920 | from that slave state, let's say.

03:30:28.400 | But like many things, it can be taken too far.

03:30:30.760 | And when you concentrate power into too few hands,

03:30:35.520 | Hayek argues that it actually transforms.

03:30:38.520 | It becomes something much more intoxicating

03:30:41.080 | than it would be if it was held in a more distributed way.

03:30:44.360 | And I think that gets into a lot of these,

03:30:47.440 | I don't know if they call themselves elites

03:30:50.240 | or people call them elites or whatever,

03:30:51.760 | like let's say shareholders of central banks,

03:30:54.960 | people participating in the World Economic Forum,

03:30:56.800 | things like this.

03:30:57.780 | They come, I guess the incentives, right?

03:31:01.740 | The incentive schema they're in is rewarding them

03:31:04.800 | constantly, telling them everything they're doing,

03:31:06.720 | saying and thinking is correct

03:31:08.040 | 'cause they just keep getting richer all the time.

03:31:10.920 | And it leads you closer to this definition of evil,

03:31:15.160 | which in the book "Paradise Lost,"

03:31:19.240 | Friedman said, "Evil is the force

03:31:20.920 | which believes its knowledge is complete."

03:31:23.720 | So these people become more and more convinced

03:31:27.360 | that they have the plan or they have the course of action

03:31:32.160 | that will save the world,

03:31:33.240 | that if everyone would just listen to them,

03:31:35.600 | that they would lead us to the promised land, right?

03:31:37.960 | Whether this is Bill Gates saving us from a climate crisis

03:31:41.120 | or any of these other economic policies

03:31:44.520 | that are targeted at a certain outcome,

03:31:46.380 | but almost always diverge almost perfectly

03:31:49.280 | from that outcome, creating its opposite effect.

03:31:51.680 | I think that's the problem,

03:31:55.600 | that we have this mechanism that can concentrate wealth

03:31:58.720 | and power into the hands of so few

03:32:01.440 | that it leads to the proliferation of evil,

03:32:04.420 | meaning that it convinces people

03:32:06.960 | that their knowledge is complete.

03:32:08.280 | Whereas something like a Bitcoin

03:32:12.760 | almost forces the opposite outcome.

03:32:17.480 | In a Bitcoin-denominated world, a pure free market,

03:32:22.240 | the consumer is sovereign.

03:32:24.480 | So you cannot earn value in the world

03:32:28.000 | unless you are serving your fellow man,

03:32:30.520 | unless they have expressed

03:32:33.280 | through their buy and sell decisions in the marketplace,

03:32:35.600 | right, you've created a satisfaction of a particular want

03:32:39.560 | that they value so much,

03:32:41.520 | they've acquired so much of your good or service

03:32:43.160 | that you've become rich.

03:32:45.180 | You can only maintain that position of wealth

03:32:47.180 | so long as you continue to serve your fellow man.

03:32:49.960 | So it changes the incentives such that dominance

03:32:54.240 | in the world can no longer be paired with coercion,

03:32:59.080 | it has to be paired with competence.

03:33:01.640 | And that's how this, when we say Bitcoin fixes this,

03:33:05.460 | that's what we mean.

03:33:06.300 | Like it restores that skin in the game,

03:33:09.320 | that balance of incentives and disincentives

03:33:11.360 | that help us properly navigate reality.

03:33:13.920 | And it prevents the buildup of systemic rot

03:33:17.300 | like we see with the central bank.

03:33:19.100 | - What books, people love this question,

03:33:23.140 | and you're exceptionally well-read,

03:33:25.820 | you've explored all kinds of ideas.

03:33:28.220 | Is there some books, technical, fiction, philosophical,

03:33:31.960 | coloring books, children's books,

03:33:34.380 | had an impact on your life

03:33:35.680 | and you would maybe recommend to others

03:33:38.740 | that they should read?

03:33:39.840 | - I think we mentioned a couple of them here today,

03:33:43.160 | but I think a really useful triplet of books

03:33:47.780 | that I've been recommending recently

03:33:50.980 | to help diffuse this materialist worldview of reality,

03:33:56.100 | where we still think in kind of the Newtonian model

03:33:58.900 | that it's atoms and cause and effect.

03:34:01.220 | I'd first recommend Jordan Peterson's book,

03:34:05.100 | "Maps of Meaning."

03:34:06.280 | It's a deep dive into mythology

03:34:11.240 | and how it's developed over the course of history

03:34:14.300 | and how it's reflected both in our social structures

03:34:17.260 | and our intra-psychic nature really,

03:34:21.340 | and how they come to reflect one another in a way,

03:34:23.300 | like the way we think again, shapes the world,

03:34:25.780 | and then the way the world is shaped,

03:34:26.940 | shapes the way we think.

03:34:28.140 | That's an excellent book.

03:34:30.780 | It's very dense and difficult read.

03:34:33.500 | Actually, this trilogy is pretty brutal,

03:34:35.340 | probably take you a year to read, hours a day.

03:34:39.380 | The second one I mentioned earlier was "Human Action"

03:34:41.400 | by Mises.

03:34:42.380 | The ultimate tome on Austrian economics

03:34:46.520 | will help explicate this realm of relevance,

03:34:50.200 | I think, that economics truly is,

03:34:52.120 | where, again, there are things,

03:34:56.960 | and then these things become means or ends

03:35:00.040 | once we channel our purpose through them.

03:35:03.160 | So this realm of non-materialist relevance

03:35:07.480 | that I think's really important to grasping economics

03:35:10.440 | at a first principles level,

03:35:11.680 | I think that book lays it out tremendously.

03:35:14.000 | And then the last one would be,

03:35:16.440 | I think I mentioned this at the beginning,

03:35:17.520 | was that book "Lila" by Robert Persig,

03:35:19.900 | where he's making the case that value is fundamental.

03:35:23.760 | And all of these books,

03:35:25.600 | they kind of all point to that, actually.

03:35:27.520 | They're pointing back to value being the fundamental thing,

03:35:31.080 | values expressed through moral action

03:35:35.300 | as being the fundamental substrate of reality.

03:35:37.940 | So it'll, if you're like me,

03:35:40.140 | I grew up quite scientific-minded,

03:35:42.060 | it'll help diffuse some of that

03:35:43.340 | and maybe retrain you to the other side of reality.

03:35:45.900 | - So you said these books are difficult.

03:35:49.220 | Maybe you can comment on which aspect is difficult.

03:35:52.780 | Is it just the technical nature?

03:35:54.380 | Is it the length?

03:35:55.340 | Is it the depth of the ideas

03:35:56.860 | or how long it takes to integrate them?

03:35:58.900 | And more, sort of importantly,

03:36:01.740 | is there recommendation, advice you can give

03:36:04.200 | on how to integrate these ideas,

03:36:09.200 | how to read, how to learn in the spaces

03:36:13.820 | from your own life?

03:36:15.180 | Like, how do you enjoy taking in ideas?

03:36:17.020 | And this could be for these books,

03:36:18.180 | but also in the Bitcoin world

03:36:21.140 | and reading a bunch of different ideas written by others,

03:36:24.540 | just integrating stuff,

03:36:26.000 | even watching podcasts and all those kinds of things.

03:36:29.660 | - Yeah, I'm a reader.

03:36:31.440 | I love to read.

03:36:33.740 | One of the most useful things I've ever done

03:36:35.980 | was take a speed reading course.

03:36:37.700 | I actually think there's a version of this

03:36:40.120 | available on Tim Ferriss' website.

03:36:41.660 | It's like a 30-minute speed reading course.

03:36:44.280 | It's all about eye movement.

03:36:45.740 | Instead of moving your eye continuously,

03:36:47.920 | line over line, it's more about jumping in your brain.

03:36:50.580 | You can train your brain to just absorb words

03:36:53.560 | in their totality versus kind of reading word by word.

03:36:56.940 | - And also not,

03:36:57.940 | I haven't fully taken that journey actually,

03:37:00.800 | but I remember taking a few steps on that journey,

03:37:05.420 | realizing that I'm speaking inside my head.

03:37:09.140 | I'm saying the words inside my head

03:37:10.860 | and that's actually getting in the way.

03:37:12.220 | - That's right.

03:37:13.040 | - So there's a lot of little hacks like that.

03:37:15.100 | I may be lazily, I'll have to,

03:37:17.100 | now that you mentioned, I'll have to revisit this.

03:37:19.340 | But I have convinced myself

03:37:21.900 | that I don't need to read faster

03:37:23.700 | because that's not ultimately the bottleneck.

03:37:25.440 | The bottleneck is in the me thinking about stuff.

03:37:28.340 | In fact, I like reading really slowly

03:37:30.460 | or so I convinced myself.

03:37:31.900 | Because ultimately it's not about gaining more information.

03:37:35.520 | It's about time spent thinking deeply.

03:37:39.240 | - Yes.

03:37:40.320 | - But maybe that's just me being very lazy

03:37:43.280 | 'cause yes, it's true.

03:37:44.200 | It's important to think deeply,

03:37:45.460 | but maybe I could speed up the consumption of information.

03:37:49.340 | - It's fine.

03:37:50.180 | I like to be dynamic actually.

03:37:51.860 | So usually speed reading initially

03:37:55.320 | and that diffused that internal dialogue for me.

03:37:58.400 | 'Cause when I was reading one word at a time,

03:37:59.720 | I was having that too.

03:38:00.560 | You almost get a feedback in your own head.

03:38:02.240 | You're reading the word out loud

03:38:03.280 | and it's clouding your thoughts.

03:38:04.680 | If you're speed reading, you can't do that.

03:38:06.600 | You're just, you're taking in groups of words at a time

03:38:08.700 | so you can't internally verbalize it, I guess.

03:38:13.120 | And then I also am really big on annotating,

03:38:15.600 | underlining, writing in the margins.

03:38:17.780 | I prefer a physical book,

03:38:20.040 | but I also read the Kindle a lot

03:38:21.480 | 'cause it's just so convenient.

03:38:23.140 | Anywhere you're waiting in line

03:38:24.300 | or every night before bed, I'm reading my Kindle.

03:38:27.100 | And I also advocate rereading a lot.

03:38:30.140 | So if you found something that struck you at a deep level,

03:38:34.620 | you found particularly fascinating,

03:38:36.100 | like you have to listen to that.

03:38:37.540 | That's your, I don't know, your mind or your spirit signal

03:38:41.380 | that that is something meaningful to you.

03:38:43.540 | And you should, to your point, reread it,

03:38:46.380 | sit with it for a long time, write about it.

03:38:49.240 | And that becomes the ultimate triumvirate

03:38:55.820 | of synthesizing an idea, actually.

03:38:57.540 | If you can read about it and then write about it

03:39:00.980 | and then go and talk about it,

03:39:03.540 | you get this crystallization of understanding

03:39:05.680 | that's just not possible doing any one of the three

03:39:08.140 | or any two of the three.

03:39:09.340 | So I definitely highly recommend people to do that.

03:39:15.060 | And in terms of how are those books difficult?

03:39:18.840 | I mean, in every way, they're all long books.

03:39:22.720 | In terms of density, I would say "Lila" is the least dense.

03:39:27.720 | Maybe "Maps of Meaning."

03:39:30.840 | I don't know, but "Maps of Meaning"

03:39:33.480 | and "Human Action" are both extremely dense.

03:39:35.960 | But they're just, I had to read those books very slow.

03:39:40.360 | You just have to take your time with them.

03:39:42.640 | To give you an idea with Jordan Peterson,

03:39:44.240 | he's said this a lot with "Maps of Meaning."

03:39:47.160 | He spent three hours a day writing for 15 years

03:39:50.480 | to write that book.

03:39:51.400 | It's probably, I think it's a 600 page book.

03:39:53.880 | He said he estimates he rewrote every sentence in the book

03:39:56.600 | 50 times, five zero, to try and get it just perfected.

03:40:01.600 | And when you read these sentences,

03:40:04.280 | you can tell that he rewrote it 50 times.

03:40:07.740 | - I've used actually Anki for space repetition.

03:40:12.700 | It's like a piece of, it's an app.

03:40:15.760 | I'm not sure if you're familiar with it,

03:40:17.240 | but it allows you to load in facts or terms

03:40:22.240 | or entire paragraphs.

03:40:24.440 | And then it brings them, you review them every day.

03:40:29.440 | And then it brings them up less and less often over time

03:40:33.760 | as you show yourself being able to remember

03:40:36.360 | the thing that you wanted to memorize.

03:40:39.640 | And oftentimes when I'm reading,

03:40:41.520 | what I want to memorize is the key idea.

03:40:44.280 | But also I use it for, I'm terrible with names,

03:40:47.160 | so I started to use it for names too,

03:40:49.080 | of names of people, names of people that I want to remember.

03:40:53.560 | And also throughout history and also my own personal life,

03:40:56.560 | but also events.

03:40:57.960 | You know, dates to me are usually not important,

03:41:00.200 | but sometimes dates are really important.

03:41:03.040 | And so it's really useful.

03:41:04.440 | I recommend it highly.

03:41:05.280 | Naval, I think, mentioned a piece of software

03:41:08.680 | called Readwise or something like that,

03:41:11.560 | that I hope I'm saying that correctly.

03:41:14.680 | It's something like that.

03:41:16.320 | And what it does is it goes to your highlights

03:41:18.960 | from your Kindle or the various places

03:41:23.040 | where you highlight stuff that integrates with Goodreads.

03:41:27.800 | And it does the same kind of space repetition,

03:41:30.000 | but for things you've highlighted.

03:41:31.680 | - That's super cool.

03:41:32.520 | - It sends an email every day.

03:41:34.800 | It's been really, I recommend it highly

03:41:38.400 | 'cause it sends like to me an email form,

03:41:43.400 | a selection of the things I've highlighted

03:41:45.400 | and previous things I've read.

03:41:47.120 | And it's like this weird, like shock to your memory

03:41:52.120 | that sprinkles, like I'll have a,

03:41:54.280 | probably way too much Orwell in there.

03:41:57.560 | And it just kind of like, it brings you back.

03:42:00.280 | And these ideas that are,

03:42:01.880 | because what you realize depending on how you highlight,

03:42:05.680 | but at least for me,

03:42:07.360 | and I think it's probably true for a lot of people,

03:42:08.960 | the things you've highlighted had at that moment

03:42:11.440 | and like an emotional impact on you.

03:42:13.920 | And so like these things are just like

03:42:15.480 | hitting you hard again.

03:42:17.120 | It's like, whoa, it might not be meaningful

03:42:19.560 | to anyone else except you.

03:42:20.760 | And it's something I recommend.

03:42:23.280 | You never know with these like hacks or tools and so on,

03:42:25.800 | like what's actually BS and what is amazing.

03:42:29.480 | And that one is kind of amazing.

03:42:31.400 | So at least for me, it works for me and Naval.

03:42:34.640 | I think he's the one.

03:42:35.760 | - Read wise you said.

03:42:36.920 | - Read wise or something close to that.

03:42:39.920 | It could be read something else,

03:42:41.480 | like read wealth or something.

03:42:43.680 | The one other thing I really like,

03:42:46.880 | and this is more of a new one is,

03:42:48.880 | I used to always listen to music at the gym,

03:42:50.960 | but now I've just,

03:42:51.800 | 'cause I'm so backlogged on podcasts, right?

03:42:54.640 | There's just, there's so many.

03:42:56.800 | I exclusively listen to podcasts when I'm walking

03:42:59.840 | or when I'm at the gym,

03:43:00.680 | anytime I'm doing something that I can't read basically.

03:43:03.860 | And I think there's something really special

03:43:07.040 | about exercise and ideation.

03:43:09.400 | I mean, I don't know if this happens to everyone,

03:43:12.400 | but my creative juices just go ballistic

03:43:14.520 | when I'm at the gym.

03:43:15.400 | Like I hit a certain point of,

03:43:17.560 | I guess heart rate and you're sweating enough,

03:43:19.520 | then the ideas just start to flow.

03:43:21.800 | So I'm basically at the gym now listening to podcasts,

03:43:25.480 | exercising as fast as I can to try to get to that state of,

03:43:29.040 | where you're just straining,

03:43:32.000 | you're strenuous exercise, I guess you would say.

03:43:34.360 | And then I'm end up typing notes into my phone

03:43:36.360 | as fast as I can with all these ideas that are flowing.

03:43:39.200 | So I've created a lot of good writing out of that.

03:43:42.520 | - Yeah, it's kind of work.

03:43:43.560 | So I do running quite a bit.

03:43:46.440 | So running outside and I'll listen to,

03:43:50.320 | I've been, okay, I told myself this has been going on

03:43:53.160 | for about a year is I only listen like the stuff

03:43:58.160 | that's either World War II or World War I related.

03:44:01.840 | So Hitler, Stalin, like difficult historical stuff.

03:44:07.600 | And also listen to brown noise.

03:44:12.600 | So those are the two modes.

03:44:14.480 | So brown noise helps me,

03:44:17.320 | this is like white noise, but like deeper, I guess.

03:44:20.080 | It helps me remove the world.

03:44:22.560 | And at the gym, there's a lot of distractions.

03:44:24.840 | When you're running, there's a lot of distractions.

03:44:26.600 | It helps me remove the world.

03:44:27.680 | So one, I'll be listening to difficult historical ideas.

03:44:32.400 | And then when my mind is all of a sudden

03:44:34.280 | starting to generate ideas,

03:44:36.480 | I'll listen to brown noise and force myself to think.

03:44:40.080 | It's kind of, it's meditative in a sense.

03:44:44.400 | And your mind wants to be lazy.

03:44:46.440 | You want to, it's hard, man, like running and thinking

03:44:51.440 | in the sense that some of the ideas

03:44:53.720 | that come into your head are pretty heavy.

03:44:56.240 | It's about your own life.

03:44:57.400 | It's your own demons come in there,

03:44:59.580 | but also just difficult ideas

03:45:01.600 | that require you thinking through

03:45:02.940 | and persevering through that,

03:45:05.440 | like not letting yourself get lazy

03:45:07.160 | and like thinking through it has been really,

03:45:09.560 | for me, rewarding in the same way

03:45:11.080 | that you're saying it is for you.

03:45:13.960 | It's true that like podcasts and music,

03:45:16.840 | like shallow, like funny podcasts or music

03:45:20.960 | have been a kind of filler distraction.

03:45:23.400 | But informational podcasts,

03:45:26.440 | like podcasts that have some depths of ideas

03:45:29.400 | or audio books have been truly rewarding.

03:45:32.680 | I try to listen now less and less to podcasts

03:45:35.000 | that are just fun.

03:45:35.920 | 'Cause I feel like I enjoy it too much

03:45:39.680 | and I don't allow my mind to get bored

03:45:41.920 | and to think through stuff, to explore ideas.

03:45:45.040 | It's so easy to fill the space

03:45:48.240 | that usually would be filled with thought

03:45:52.760 | and instead fill it with fun podcasts.

03:45:55.720 | Like there's a bunch of comedy podcasts I really enjoy.

03:45:58.320 | So there's value to that, of course,

03:46:00.320 | but you have to realize it's entertainment.

03:46:02.080 | It's not, you don't get much value except entertainment.

03:46:07.080 | - Right, right.

03:46:08.200 | And there's utility to the boredom too, I think.

03:46:10.920 | To give your mind the space,

03:46:15.440 | I guess your subconscious maybe the space

03:46:17.320 | to chew on some of these problems, right?

03:46:19.160 | Where you've imbibed so much knowledge,

03:46:21.800 | you've highlighted and thought about something,

03:46:23.480 | but then you need to stop thinking about it for a while

03:46:25.760 | and let it marinate in the subconscious.

03:46:27.960 | And then these flashes of insight

03:46:30.920 | that people have described,

03:46:32.120 | sometimes I get them in the middle of the night,

03:46:33.480 | like I just wake up from a dream and have them

03:46:35.040 | and I got to write it down.

03:46:35.920 | Or sometimes it's in nature, taking a walk.

03:46:38.800 | But I think that's very important too.

03:46:40.480 | We can't just brute force our way into understanding.

03:46:43.920 | You know, there's this interplay

03:46:45.560 | between kind of the brute force reading intake

03:46:47.720 | and then just relaxing, meditating, sleeping, being bored,

03:46:51.260 | letting your subconscious do the heavy lifting.

03:46:56.160 | - And there's, you should be aware of the fact

03:46:59.240 | that there's a war for your attention going on.

03:47:01.160 | So there's a lot of, there's been better and better

03:47:04.320 | and better mechanisms that are designed

03:47:06.540 | to steal your attention.

03:47:08.520 | So I kind of see it as a war zone

03:47:10.860 | between my right for boredom

03:47:14.120 | and the internet wanting your attention.

03:47:17.280 | In fact, Clubhouse as an app has been,

03:47:22.000 | I'm probably not gonna use Clubhouse much anymore.

03:47:24.600 | There's some aspect of my own inner loneliness

03:47:27.780 | and whatever it is that pulled me into Clubhouse

03:47:31.120 | a little bit too much to where it robbed me

03:47:33.480 | from that lonely time alone,

03:47:36.400 | where I sit and listen to Bruce Springsteen

03:47:38.080 | and think about life.

03:47:39.640 | So I wanna-

03:47:40.660 | - That's way more important.

03:47:41.840 | - It's way more, well, yeah, at least, you know,

03:47:43.600 | it's all in balance.

03:47:44.520 | 'Cause there is a Clubhouse,

03:47:46.860 | like a lot of these social networks when you use, right,

03:47:48.760 | can be a way to discover new ideas, new people.

03:47:52.160 | But the boredom is just being alone

03:47:55.160 | with your thoughts is priceless.

03:47:57.280 | - Absolutely.

03:47:58.120 | And you gotta know yourself, right?

03:47:59.480 | Like it took me a long time to realize I need solitude.

03:48:02.720 | - Yeah.

03:48:03.560 | - Like just how I'm wired, how I'm built.

03:48:05.280 | I need like an hour a day solitude.

03:48:07.360 | So you gotta listen to that part of yourself.

03:48:08.820 | You might be compromising something like that

03:48:11.700 | where you feel like you always need to be

03:48:12.920 | with your girlfriend or whatever it may be.

03:48:14.520 | But I would suggest listening to that voice.

03:48:18.120 | - Yeah, I try to remember things

03:48:20.840 | that made me feel good over time,

03:48:23.020 | like long-term had positive impact

03:48:25.380 | and long-term had negative impact

03:48:27.700 | and do more of the former and less of the latter.

03:48:31.120 | We don't often think like that.

03:48:33.160 | You know, we talked offline about like carnivore diets,

03:48:35.560 | for example.

03:48:36.400 | I try to remember that carbs don't make me feel good.

03:48:40.700 | - Yeah.

03:48:41.980 | - In the moment, it's hard to remember that.

03:48:45.020 | But you have to remember that that's the case.

03:48:47.940 | And in the same way, exercise,

03:48:51.900 | it's hard to remember that exercise makes me feel good.

03:48:54.920 | Like-

03:48:57.040 | - Especially when it's time to go to the gym.

03:48:58.020 | - Especially when it's time to go to the gym.

03:48:59.380 | But you should remember that

03:49:00.580 | because the kind of person you are without exercise,

03:49:03.860 | for me, just like he's beautifully said,

03:49:06.380 | that you have to know yourself.

03:49:07.440 | The kind of person I am without exercise

03:49:10.580 | is a less good person, a person I'm less proud of.

03:49:15.580 | - The food thing is so hard.

03:49:16.900 | By the way, I still, you know,

03:49:19.840 | I can't tell you how many times I've learned the lesson.

03:49:21.860 | Like, don't eat that.

03:49:23.540 | But then, you know, you go a few weeks

03:49:25.180 | of not eating whatever that is,

03:49:26.980 | and you're feeling good.

03:49:28.300 | And then you're, I don't know,

03:49:29.860 | something creeps up inside you.

03:49:30.900 | Like, ah, you could just have one,

03:49:32.220 | or you could just do this.

03:49:33.100 | But for me, it's sugar.

03:49:34.160 | Like, sugar just makes me feel terrible.

03:49:36.880 | But I always, not always, but if it's been a long time,

03:49:40.060 | I start to make that exception in my mind.

03:49:41.540 | Like, oh, you can have a little bit.

03:49:42.980 | And then I eat it and I feel terrible.

03:49:44.140 | So I don't know how many times I've done that dance,

03:49:45.900 | but it's not cool.

03:49:47.420 | - Well, it depends on how painful it is,

03:49:48.780 | and then you learn the lesson.

03:49:49.940 | I actually embrace the fact

03:49:51.820 | that I'll never learn the lesson with vodka.

03:49:54.560 | Every time I drink, especially with Russians,

03:49:57.740 | is like, I quit drinking every time.

03:50:00.260 | And then I forget.

03:50:01.380 | There's like a slow drop off.

03:50:02.900 | It'll be like two weeks, and then.

03:50:04.980 | - Na zdorovie.

03:50:05.820 | - Na zdorovie.

03:50:06.660 | (laughing)

03:50:07.500 | Very good.

03:50:08.540 | So it never makes me feel good.

03:50:12.020 | It never results in anything good,

03:50:13.880 | except the beautiful social chaos.

03:50:19.660 | - Yeah.

03:50:20.500 | - Which is ultimately somehow, there's value to chaos too.

03:50:23.980 | - Yes.

03:50:24.820 | - There's value to that.

03:50:25.740 | Whatever the hell stupid stuff you do when you get trashed,

03:50:29.100 | the over the top emotion of love usually,

03:50:32.820 | or whatever, camaraderie, there's value to that too.

03:50:36.140 | Like, as I get older, I realize,

03:50:39.580 | 'cause the world, sometimes, especially when you get older

03:50:44.380 | and the world wants you to be an adult,

03:50:46.340 | in order to maintain the youthful spirit,

03:50:49.420 | you have to use all the tools you can.

03:50:51.420 | - Yeah.

03:50:52.260 | - And alcohol is one of them.

03:50:53.080 | - Right.

03:50:53.920 | - To do all the stupid shit you can,

03:50:55.500 | even if you're like getting older.

03:50:57.900 | - To lower the inhibitions.

03:50:59.340 | - Lower the inhibitions.

03:51:00.180 | - Against that taste of uncertainty

03:51:01.900 | that is the sweetness of life, right?

03:51:03.420 | To be able to go out and be a flaneur at a party

03:51:06.500 | and not really know what you're gonna do.

03:51:08.140 | And we have this draw to the wild side of life.

03:51:12.780 | As much as we try and build up order around ourselves,

03:51:15.380 | I think there's always gonna be an appetite for that.

03:51:18.520 | I've always, most of my life,

03:51:21.060 | I've always been a social drinker,

03:51:22.980 | but I actually gave up alcohol a year ago.

03:51:25.220 | And I would add that to the idea,

03:51:29.360 | the repertoire for dealing with bigger ideas.

03:51:33.140 | Because alcohol's fun, it's a good times,

03:51:37.700 | it can be analgesic, it can give you all these benefits

03:51:42.260 | if you use the right amounts.

03:51:43.820 | But I got to the point, personally,

03:51:46.500 | where I was trying to wrestle with these ideas

03:51:48.380 | that are just so much bigger than me.

03:51:50.240 | And I have this backlog of books

03:51:52.360 | that was growing faster than I could read them,

03:51:55.120 | that I just reached a point where I decided

03:51:57.240 | I wanted to start making sacrifices toward attaining that.

03:52:01.480 | And alcohol was just an easy one.

03:52:03.360 | Even if you just drink socially on the weekends,

03:52:08.120 | you're probably spending five to 10 hours drinking,

03:52:12.240 | and then maybe another, what,

03:52:13.520 | five to 10 hours recovering, perhaps, on the day after.

03:52:17.580 | So it was a difficult transition initially,

03:52:22.580 | but once you get through a couple of months,

03:52:25.840 | I feel amazing without it.

03:52:27.160 | I sleep better than ever.

03:52:28.720 | My workouts are better than ever.

03:52:30.760 | I'm sharper than ever, I'm more lucid.

03:52:33.080 | So I'm not trying to be a proponent for not drinking,

03:52:35.880 | but I just want to say--

03:52:36.720 | - But you're a proponent for sacrifice in some dimensions.

03:52:38.240 | - I am a big proponent for sacrifice, yes.

03:52:40.880 | - Is there advice you would give to a young person today,

03:52:43.700 | curious about Bitcoin,

03:52:45.280 | curious about how they succeed in the world,

03:52:49.500 | or both career-wise and just in life in general?

03:52:55.460 | - I mean, the strongest piece of advice I have for,

03:52:58.380 | this is beyond just Bitcoin,

03:53:01.120 | this is you managing your own personal and financial affairs

03:53:05.920 | is that you need to invest in knowledge first.

03:53:11.640 | It's not good enough to just follow the crowd

03:53:15.700 | and buy a 60/40 portfolio and put it in a Roth IRA

03:53:20.040 | and plan on social security.

03:53:22.120 | I mean, the world's changing much faster

03:53:25.620 | than any existing institution

03:53:28.040 | is going to be able to keep up with.

03:53:31.140 | So that's why I named the show, "The Question, What Is Money?"

03:53:35.600 | Like, I think that, to me,

03:53:38.080 | is the rabbit that took me down the rabbit hole.

03:53:40.160 | It's like just asking that question

03:53:42.440 | naturally progressed to these other questions,

03:53:45.040 | like what is value, what is government,

03:53:47.280 | what is the purpose of society, speech,

03:53:50.820 | all of these things.

03:53:52.360 | So I would encourage people to arm yourself

03:53:57.360 | with knowledge and study.

03:53:58.720 | A lot of financial people always give you a line of advice

03:54:04.200 | and then say, "This is not financial advice."

03:54:06.000 | I'm like, "This is financial advice."

03:54:07.600 | Like, study, study, learn.

03:54:10.520 | - Knowledge is power.

03:54:13.200 | - Yeah.

03:54:14.040 | - This is official financial advice.

03:54:16.040 | - And you're exercising your divine trait,

03:54:19.120 | which is the logos, right?

03:54:22.320 | That we are these animals that can tell and believe stories.

03:54:26.480 | So it feels like almost a sacred duty

03:54:28.920 | to really sharpen that part of ourselves

03:54:31.680 | and use it to create the best world possible.

03:54:36.960 | - And then the second one was the, I think,

03:54:39.440 | health and fitness stuff.

03:54:40.720 | Maybe everyone does this in their 20s.

03:54:45.960 | They just live a little fast and beat themselves up.

03:54:49.400 | Not that I wasn't, like I was living well

03:54:54.140 | and successful by a lot of measures,

03:54:58.320 | but I wish I had maybe gotten my act together

03:55:00.400 | a little bit sooner.

03:55:01.400 | I just think--

03:55:05.280 | - Fitness, morality-wise.

03:55:07.480 | - Yeah, drinking, I think morality and eating.

03:55:10.960 | You know, I just was kind of doing whatever I wanted

03:55:13.480 | in some ways, let's say.

03:55:15.680 | - Is there a value to a trajectory

03:55:18.040 | that includes a lot of mistakes?

03:55:19.920 | So maybe you're supposed to make the mistakes in your 20s.

03:55:22.600 | - That's a great point.

03:55:23.440 | - Maybe the 20s are all about the mistakes.

03:55:25.520 | Accumulate the most mistakes possible.

03:55:27.080 | - Yeah, I don't--

03:55:28.040 | - As quickly as possible.

03:55:29.320 | (laughing)

03:55:30.680 | - I don't regret any of it,

03:55:32.280 | but now that I'm kind of in this place where I feel good

03:55:35.640 | and I know the value of a good night's sleep,

03:55:37.960 | I've more deeply explored my own potential

03:55:42.320 | that I feel maybe a little regretful

03:55:44.200 | that I didn't do this earlier, is all I'm saying.

03:55:46.240 | So maybe just exploring different sides of yourself, right?

03:55:50.640 | See what it's like to go and make a bunch of mistakes

03:55:52.720 | and be wild and crazy,

03:55:54.000 | and then maybe try to walk the straight and narrow

03:55:55.440 | for a few months and just see what it's like.

03:55:57.680 | - There's probably a guy doing vodka shots right now

03:56:02.200 | listening to this podcast with his buddies,

03:56:04.040 | and if you are, please take a shot for us

03:56:07.600 | for all the mistakes you should make in your 20s.

03:56:11.280 | And what about love?

03:56:15.620 | We talked about money is ultimately a mechanism

03:56:21.880 | by which you can pave a moral path through life.

03:56:29.640 | To me, one of the purest expressions

03:56:31.680 | that is love broadly defined for a family, for others,

03:56:36.040 | for knowledge, for the world,

03:56:38.080 | is basically an optimistic open view to the world

03:56:40.840 | that embraces all that is beautiful about this world.

03:56:44.800 | So do you think about love often in a personal sense,

03:56:49.800 | romantic, family, friendship, and in the broad sense

03:56:54.920 | about its value in a successful life?

03:56:59.400 | - Yeah, of course.

03:57:01.360 | I'm blessed to have a two and a half year old daughter,

03:57:04.520 | and love is a word we throw around.

03:57:09.080 | I love these potato chips.

03:57:10.240 | I love you, man.

03:57:11.360 | I love you, my daughter.

03:57:12.720 | It's got so many different intensities,

03:57:15.520 | I guess you might say.

03:57:16.560 | I don't know, my intuition is that

03:57:21.880 | it is something very fundamental to the universe.

03:57:27.160 | Again, I know words don't do it justice,

03:57:29.080 | but if we just proxy love with selfless action,

03:57:33.240 | the whole damn universe is selflessly acting, right?

03:57:38.360 | It's just unfolding.

03:57:39.720 | And it may sound a bit hippie-dippie,

03:57:43.680 | but my intuition is just that love is the core of it somehow.

03:57:47.480 | I don't have anything to back that up, really.

03:57:50.400 | It's just...

03:57:51.880 | - In the way you're framing it,

03:57:52.960 | it's making me think that love,

03:57:56.600 | we talked about sort of meditation,

03:57:59.640 | as opposed to thinking from an egocentric perspective

03:58:05.640 | of you, the individual operating in this world,

03:58:08.240 | is allowing you to be empathetic towards the world

03:58:10.960 | and thereby think of the universe,

03:58:13.440 | think of the world acting through you,

03:58:15.840 | almost like accepting this notion that ideas have you,

03:58:20.680 | you don't have ideas.

03:58:22.840 | That you're not existing in the universe,

03:58:25.280 | the universe is existing through you.

03:58:27.320 | It's sort of like, that's what selfless

03:58:29.960 | in that context means, is embracing that thought.

03:58:34.640 | That's a weird thought.

03:58:36.600 | That's a weird thought that we're just here

03:58:38.160 | for a little bit of time.

03:58:40.200 | These meat vehicles, receptacles,

03:58:45.160 | and this much bigger thing is just using us,

03:58:51.580 | not in a malevolent way, but just like a river flows,

03:58:55.980 | is using us to create more and more beautiful things.

03:58:59.180 | - Yes, yes, more and more beautiful things.

03:59:01.940 | We are the universe experiencing itself, frankly.

03:59:05.480 | - That's a trippy thought, man.

03:59:08.120 | That in some sense, the universe created us

03:59:12.220 | to experience itself.

03:59:13.820 | - And we are one of the highest forms of beauty

03:59:17.820 | that nature has created.

03:59:19.300 | If we just think one of the most complex

03:59:23.340 | and adaptive thing, we're a reflection of nature.

03:59:26.660 | And another thing that comes to mind here is that,

03:59:30.540 | Dalio has this quote where he says,

03:59:33.460 | "Truth, or more accurately, an accurate depiction

03:59:38.220 | "of reality is necessary for any good outcome."

03:59:41.320 | So when we think that love or value is primary,

03:59:47.420 | I think that too reinforces this thesis

03:59:49.940 | that acting out of love or acting out of proper moral action,

03:59:54.900 | you're best reflecting the fundamental nature of reality.

03:59:58.360 | Therefore, you're best creating the best possible outcomes

04:00:01.060 | or the things of the most beauty,

04:00:02.260 | whether that's your artistic expression,

04:00:03.960 | your children, your business, whatever it is.

04:00:06.500 | And Jordan Peterson goes deep into that

04:00:09.660 | where you have to listen to that sense of meaning

04:00:12.660 | in your life, or you might have some decision on paper

04:00:15.300 | that's so great this way,

04:00:17.320 | but your heart says no, your heart says otherwise.

04:00:19.860 | I've tried to listen to my heart throughout

04:00:24.220 | and I think that creates the best outcomes.

04:00:26.480 | - But nevertheless, does it make you sad

04:00:30.260 | that you in particular, Robert,

04:00:34.380 | are gonna be dead pretty soon?

04:00:36.060 | We talk about scarcity, one of the certain things

04:00:42.260 | that ensure the scarcity of the human experience

04:00:45.900 | is the fact that you and your consciousness

04:00:48.460 | are gonna be done, they have a deadline.

04:00:51.460 | - Only time and Bitcoin are absolutely scarce.

04:00:54.300 | I'm fortunate that when I,

04:01:01.820 | I guess I got started on this philosophical journey

04:01:04.660 | a bit when I was younger,

04:01:05.500 | but I got into Musashi and Sun Tzu quite a bit

04:01:09.700 | who wrote, Musashi wrote the "Book of Five Rings."

04:01:14.900 | Sun Tzu wrote "The Art of War."

04:01:17.380 | And one of the things that, I mean,

04:01:19.900 | these guys were just absolute beasts.

04:01:22.860 | They lived and died by the sword

04:01:24.380 | and they were just very great equanimity

04:01:28.820 | about all things in life.

04:01:30.220 | And I also found this kind of in the Stoic philosophy

04:01:32.840 | where they just are very cool with everything.

04:01:37.420 | And one of the lines there is that,

04:01:39.380 | "The way of the warrior

04:01:40.500 | "is the resolute acceptance of death."

04:01:43.540 | And so I've always tried to think about that.

04:01:45.100 | Like, of course I experienced fear.

04:01:46.900 | I experienced everything that you do in a meat suit, right?

04:01:51.780 | Like anxiety and all the things,

04:01:53.300 | but I always try to have that higher order view of myself

04:01:58.300 | and that it's just a certain experience occurring

04:02:02.660 | at a certain level,

04:02:03.680 | but it shouldn't override your kind of highest order self.

04:02:06.980 | That's just resolutely accepted death

04:02:09.700 | and that this is your one play in life.

04:02:13.500 | So hopefully that propels me towards proper action.

04:02:18.500 | - I think scarcity cannot help but lead to something good.

04:02:23.960 | Just like with this conversation,

04:02:26.740 | sadly must come to an end.

04:02:29.280 | The scarcity of it is what makes it beautiful.

04:02:31.380 | So Robert, this was one of my favorite conversations,

04:02:35.900 | philosophically and in every other level,

04:02:40.060 | just the ideas and the way you express them around Bitcoin,

04:02:44.380 | around morality, around money,

04:02:47.140 | has been really inspiring and really educational.

04:02:51.300 | And I'm glad you're out there fighting the good fight.

04:02:54.160 | And I'm glad you're wasting all of this time with me.

04:02:57.060 | It was really fun.

04:02:58.380 | And thank you for coming down to Texas

04:03:01.720 | and having some good old brisket together.

04:03:05.060 | This was really fun, man.

04:03:06.620 | - This was awesome, Lex.

04:03:07.940 | Thanks for having me, man.

04:03:10.020 | - Thanks for listening to this conversation

04:03:11.700 | with Robert Breedlove.

04:03:13.060 | And thank you to Fundrise, Element, Munkpack,

04:03:17.380 | and BetterHelp.

04:03:18.540 | Check them out in the description to support this podcast.

04:03:21.980 | And now let me leave you with some words

04:03:24.060 | from Nassim Nicholas Taleb.

04:03:26.500 | Anti-fragility is beyond resilience and robustness.

04:03:30.020 | The resilient resists shocks and stay the same.

04:03:33.700 | The anti-fragile gets better.

04:03:36.300 | Thank you for listening and hope to see you next time.

04:03:40.020 | (upbeat music)

04:03:42.600 | (upbeat music)

04:03:45.180 | [BLANK_AUDIO]

Robert Breedlove: Philosophy of Bitcoin from First Principles | Lex Fridman Podcast #176

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