Rules of Bitcoin

Every passage, on the record.

1. 00:00Claim · condensed

   As Bitcoin progresses to become the global reserve asset, the opportunity diminishes, and all of this work will have been holding Bitcoin: a tremendous amount of energy sunk into understanding a new technology, a new opportunity to generate information at a scale we've never had before, right at the introduction of a tool that's more efficient at generating information, when generating information is the goal.

2. 01:20Claim

   You build conviction by taking all the pieces of this complex system apart, examining the individual components, then putting them back together and seeing what emerges, so you can tell the difference between the emergent properties of a complex system and the properties of its parts.

3. 01:20Reference

   There's a reason why e-gold didn't work the first time around. There's a reason why all of the other previous projects that were trying to be this tool that Satoshi discovered failed.

4. 02:15Reference

   The Lindy effect will not be with those components. The Lindy effect will be with the emergent behavior of the complex system.

5. 02:15Reference

   The behavior is where the value is, the value is in the social contract layer, that is where the value is for the extended order.

6. 02:15Claim · condensed

   The behavior is where the value is: the value is in the social contract layer, that's where the value is for the extended order, and if we know this thing can't be diluted, can't be tampered with, that's where the value for exchange comes from. Having absolute scarcity just makes it significantly more efficient to share that and facilitate exchange without a third-party middleman.

7. 02:53Claim · condensed

   If you're slightly educated and think yourself too smart for Bitcoin, you'll hear that the blockchain is the real breakthrough, that's just what Satoshi discovered, it's the blockchain. But we know that's wrong.

8. 03:25Open question

   I'm not gonna go into why, if you don't understand that you're on your own, look out there, there are definitely people much smarter than me who've done that, who've broken down why that's the case. It's not the point of today.

9. 03:58Claim

   There's going to be a new philosophy for creating wealth, this hasn't existed before: the reality of absolute scarcity and a protocol that lets information move at a rate nearing the speed of light just hasn't been a possibility before.

10. 03:58Prediction

    Buying Bitcoin will only be in this small window. You will not be able to buy Bitcoin. That's the opportunity that being early allows for.

11. 04:38Claim · condensed

    The ignorance you get to take advantage of right now is that this is an emerging technology, it's novel, no one has used it before, they don't understand it.

12. 05:15Prediction · condensed

    Once you can't buy any Bitcoin, everyone around you with the exact same skill set, the exact same hunger and drive for energy accumulation, is going to have an almost unimaginably harder time actually accumulating the amount of Bitcoin you have. That simply will not be possible.

13. 05:59Open question · condensed

    What's next? It's the pursuit of, if I'm going to have a large amount of energy reserves and get to allocate them where I see fit, what are the ways to do that in the most responsible manner, and how do I make sure that extends into the future.

14. 06:36Idea

    It's the pursuit of, if you're going to have a large amount of energy reserves and you are going to be allocated that where you see fit, what are the ways in which to do so in the most responsible manner that ends up with the most energy reserves for myself.

15. 07:12Claim

    When you look at examples from the past, the majority of super successful energy allocators and energy stewards, really their skill is the ability not to lose the energy in the first place, because it's very, very difficult to get it back. When you hear people talk about the early days of Bitcoin, the major regret is that they'll never have as much Bitcoin as they once had.

16. 07:12Claim

    If you end up with more Bitcoin than you started with, you've been a net positive to the members of the extended order, to life itself, to this game of pushing back disorder with more order. Are you doing that, yes or no? If you have more Bitcoin, the answer is yes.

17. 07:12Quote

    Now we have a legitimate scoreboard for how well you are contributing to the extended order throughout your life. If you end up with more Bitcoin than you started with, guess what, you have been a net positive.

18. 08:28Claim

    We're in such a small window of experimentation with the fiat system that all the accumulated knowledge of how to best operate in the fiat system is going to be worthless on the other side of this hill. None of that will work anymore.

19. 08:28Quote

    You're not going to be able to get rich with real estate in the big under Bitcoin standard. You're not going to be able to get closer to the spigot on a Bitcoin standard.

20. 09:42Analogy

    I no longer need to take apart the car to be able to put it back together and make sure it's going to work. I could just drive the car around. I need to learn how to drive the car, I don't need to learn what the carburetor does.

21. 11:01Analogy

    It's very difficult in the lead-up to crossing the Sierra Nevada. As soon as you get over the Sierra Nevada, you end up in this untouched world of splendor where everything grows, all the crops grow. That becomes California. But to get there, extremely hard, most difficult right at the very end, so it acts as a buffer.

22. 11:01Claim · condensed

    The majority of people are not going to be specializing in Bitcoin. If they have to specialize in Bitcoin, it's going to lose, because it's not going to be as efficient as a system that lets specialization spread out into other areas.

23. 12:12Claim

    You can just take anything that worked before and add Bitcoin to that, and if you replace a certain word with Bitcoin, that will get you ninety percent of the way there, and then the exploration can continue.

24. 12:12Quote

    You could just take anything that worked before and you can add Bitcoin to that, and if you replace a certain word with Bitcoin, that will get you ninety percent of the way there.

25. 12:12Reference

    I'm thinking like things like the richest man in Babylon, the book that accurately describes how to accumulate gold reserves when the world was operating on a gold standard.

26. 13:03Claim

    The world wasn't as connected, information was much slower to be exchanged, so if you lost a piece of gold you were never getting that gold back, it was gone from the system. If you made an investment mistake, if you didn't take care of that energy, you lost it for good. It was essentially absolutely scarce.

27. 13:33Analogy

    I'm not going to start a gold mine, I can't even, you know, I'm lucky to access food and water and shelter and some clothing. As soon as I lose that shiny little rock, it's gone forever.

28. 13:33Quote

    I can't scam the system by generating larger coins or smaller coins. Sorry, I can't shave things off. I can't do any of that stuff.

29. 16:53Claim · condensed

    It's not written for a crowd that's going to go on to be financial market makers or to be savvy in the ways of finance, it's for people who don't want to do that but still want energy reserves in excess of what they could do without this information. What's the eighty-twenty, what's the minimum you can give me that's going to be the maximum benefit.

30. 16:53Quote

    It's not written for a crowd that is going to go on to be financial market makers or to be savvy in the ways of finance. This is for people that don't want to do this but still want to accumulate energy reserves.

31. 17:24Claim

    You acquire Bitcoin by saving regularly, at least a tenth of your earnings, to build wealth for a secure future. That's exactly what you do: you're going to have to provide value to the extended order, and then consume value less than what you provided. If you do that on a regular basis, you're going to accumulate Bitcoin.

32. 18:10Prediction

    The threshold for which your contribution is going to make a meaningful difference in your Bitcoin reserves is going to go higher and higher and higher, and you're constantly in a race against everyone else around you to contribute efficiency to the extended order.

33. 18:10Claim

    Gold grows when you invest it along with the interest you receive on it wisely. Does Bitcoin grow when you invest it well? Bitcoin is growing at such a rate that you wouldn't want to invest it, because it's growing faster than anything around it.

34. 19:01Prediction

    Eventually the dust will settle, equilibrium will be reached, and the rise in GDP each year should be, you would think, with small fluctuations, the amount that Bitcoin continues to increase in value each year. Then there will be opportunities outside of that to exceed that number, and if you invest wisely you're going to generate more return.

35. 19:56Claim

    Your gold will stick around and grow if you follow competent advice from financial experts. Man, this is like the trust one, I think I would eliminate this one altogether. Your Bitcoin will stick around if you don't trust anyone except yourself.

36. 19:56Quote

    Your gold will stick around, your Bitcoin will stick around, if you don't trust anyone except yourself.

37. 20:26Open question

    How would those individuals who have access to that Bitcoin in the future, on a Bitcoin standard, how are they going to generate more Bitcoin because of the fact that they have Bitcoin, how is that going to give them an advantage other than just the consumption of energy?

38. 20:26Claim

    What has to come to the forefront, what you have to remind yourself of constantly, is the risk of total loss, because every time the Bitcoin is not yours and not in your control, you don't have it, it's gone, you're getting it back on trust in the third party where you put that Bitcoin.

39. 20:26Prediction

    I'm sure that there will be solutions, multi-signature solutions for borrowing and lending, all of those things will come to market. But at this stage those don't exist, or if they do, they're in very rudimentary forms and can cause more harm than good at this stage. Those ideas will certainly gain traction over time.

40. 22:23Claim

    You'll lose your Bitcoin if you give it to somebody else, if you give it to people you've lost it, if you need it for consuming energy you've lost it. So what's the way that you keep it? You don't follow bad advice, you don't take any advice.

41. 22:23Claim

    It's significantly better than gold, because there isn't some giant target on individuals that have Bitcoin, whereas if you are carrying around a giant sack of gold, chances are you'll have every Tom, Dick and Harry coming up asking if they can please have some gold.

42. 23:42Claim

    You could play it so that everyone else takes risks except you and you're still able to benefit from the risks. Everyone that is allowing their Bitcoin to be exchanged or used for some other activity that is not just hodling means they are undertaking risk, yet they're going to see some amount of reward, and you also get a small sliver of that reward, the more Bitcoin you have the larger the sliver.

43. 23:42Quote

    You can constantly be getting fucked by saving in a fiat standard. In a Bitcoin world you cannot be fucked saving, you can only benefit saving.

44. 24:20Claim

    If we're gonna do the five laws of Bitcoin, which would be before all of these other laws, it's: if you want to be ultra conservative, do nothing. Find a way to live off of the amount of Bitcoin that you can accumulate to take care of your daily expenses. That's it.

45. 24:20Idea

    That's how you protect yourself at, you know, the Fort Knox level, that's the maximum, that's level ten of protecting yourself, and every time you slide down the ladder of protection of risk that you're willing to take on, you do it willingly.

46. 24:20Analogy

    This is a little bit like the Warren Buffett thing. You don't have to swing at every single pitch. You can take your little punch card of investments over your entire life, have it number ten, and you can punch out one of those ten great ideas that you're gonna have and back.

47. 24:20Reference

    This is a little bit like the Warren Buffett thing. You don't have to swing at every single pitch.

48. 25:13Claim

    You'll have to set a bar for future Bitcoin holders that you're gonna pass this enormous responsibility on to, they're gonna have to have wisdom, worldly wisdom, an understanding that they know nothing, the more they learn the less they know, to be able to humble themselves enough to realize the power they're in possession of. And law number five: you'll lose your gold, your Bitcoin, if you succumb to the allure of get-rich-quick schemes or risky investment strategies that promise huge payoffs, that has to be completely scrapped.

49. 26:43Claim

    All of the malinvestment that has come, the misallocation of energy, the work required to transform energy into a dense usable form and then to just have it squandered by governments or mismanagement, even on an individual level, let alone a corporation level or a state level, that complete gross mismanagement of energy has led to an ungodly amount of suffering. Remove that ability to misallocate energy, and who knows the information you're able to generate because of that.

50. 27:20Claim

    The total pool of investment possibilities shrinks dramatically when seen through a Bitcoin lens, so everything gets simpler. On a Bitcoin standard, where everything should become simpler, you should be able to specialize further and further into whatever edge of the web of knowledge you're exploring, because there's less getting in your way, less you have to keep up with.

51. 28:12Analogy

    You're looking to take something that's incredibly energy intensive and you're looking for a shortcut, right, the algorithm is the shortcut. The danger being, and this is a Richard Feynman thing, many generations could pass to where you wouldn't know exactly why you were using that shortcut in the first place.

52. 28:12Reference

    The danger being, and this is a Richard Feynman thing, the danger being that many many generations could pass to where you wouldn't know exactly why you were using that shortcut in the first place.

53. 28:55Quote

    The sign of a life well spent will be, did you add Bitcoin to your personal stack, to the family stack, did you add or did you subtract, and that's the easiest, most corporate, you can keep track of.

54. 30:03Claim

    We've taken this broad range of calculations necessary to see whether or not you were a valuable member of the extended order, and we've boiled it down to one number, one thing we can track, one in and out, one flow, one ledger entry. Do you have more Bitcoin than not.

55. 30:43Open question

    What are the best ways to go about earning Bitcoin, what are the best management styles for making sure you don't lose the Bitcoin you do have, and how does that affect how you should behave in the exchange processes of the extended order, how you specialize.

56. 31:52Claim

    There will be individuals that can beat the extended order, they're going to be outliers. Finding those individuals, understanding why they are able to beat it, will be the next step, and that's where the exploration just hasn't happened yet because there hasn't been enough people, enough smart people, that have realized Bitcoin is going to win, and Bitcoin has won, it's already won.

57. 31:52Quote

    It's like it's it's gone. It's done. The bomb's been dropped. Just not everybody knows that fiat's dead.

58. 31:52Prediction

    The quicker that you learn it the larger the reward, and it just so happens that the large reward that is possible now is going to shrink forever, and incredibly fast, the more people realize this.

59. 33:05Claim

    It'll be something as simple as the five rules, the five laws of gold in the richest man in Babylon. These are the things that you can and can't do with these five measures, you never have to read another finance or money book ever again.