Risky Business
Staying in the legacy system is the losing bet, and the scoreboard already shows it. Going all in on Bitcoin only sounds risky because civilization compressed the physical world so far that people forgot money and information are physical.
The one-minute version
The retail belief that a low-cost S&P index fund defines safety and that going all in on Bitcoin is obviously risky.
That's the bet. Either you win or you lose.01:09
How poetic is the system?29:35
We live in the transition, which is messy and bloody and confusing.34:34
Every passage, on the record.
- 05:34Analogy · condensed
Imagine you're a typical space cadet who has been conditioned your whole life to think eight to twelve percent returns in a low cost S&P ETF is what peak performance and efficiency in savings and investing looks like. Linda in HR suggested you get behind the ETF during onboarding, and because she drives a Subaru you figure she's responsible, so you tick the box. You think that's low risk because everyone else does it: if everyone loses, at least you lose along with everyone else.
- 07:11Analogy · condensed
Imagine knowing nothing about baseball, and I tell you that you have to bet your entire life savings on one of two teams. If you pick the loser, your life gets harder every day. If you pick the winner, your life gets easier every day. You don't need to know the rules or the positions, you just need to look at the scoreboard, who has the most runs. Every day they play again, and every day you can switch your bet if you want to.
- 10:36Analogy · condensed
All you have to do is check the scoreboard each day and count. How many times would you need to see the New York Yankees beat the Bad News Bears before betting on the Yankees stopped feeling risky? If this one bet is going to make your entire life either better or worse, it's worth learning a little baseball, but even if you don't, watching the score for long enough should be enough to switch your bet from Linda's team to the team that's actually winning.
- 16:02Analogy · condensed
Imagine telling some worker in 1980, schlepping twelve hours a day in a coal mine, that they could increase their wealth by more than their entire life's work with a single decision: move a few logic gates on a server and trade fiat for the hardest to vary information in the known universe. That's the information economy, wealth increasing from understanding a change in the physical universe before other people, not from digging.
- 20:44Analogy · condensed
If you do the work now to understand Bitcoin, you become part of the frontier, reaching out into the void of uncertainty at the edges of the extended order. A lot of the time you come back with nothing. Sometimes you stumble on a tool like Bitcoin and come back with a huge amount of value, and those who find something useful out there are the ones rewarded with prosperity.
- 35:43Analogy · condensed
Technology is always improving, except look at the pyramids, we really messed that one up. What would have been better is if the knowledge of how to build them had been stored in a substrate that was physically harder to vary, because then it would still be around. Instead we parked that knowledge somewhere too easy to vary, and we lost it.
- 36:15Open question
Because I ended up rambling so long, I'm not even going to get into the knowledge flywheel today. I'm going to do a separate one on that, because I got completely carried away, as I tend to do.
- 13:35Prediction
This cannot last forever, this will end. People, even the mouth breathers, will eventually figure it out. But they haven't yet.
- 18:58Prediction · condensed
Understanding Bitcoin, how it actually works, will never get easier. It's always going to be hard to know why it's winning and how all the pieces fit together. What will get easier is reading the scoreboard and spotting the pattern, and that's why adoption keeps growing even though understanding doesn't.
- 20:11Prediction · condensed
Once the trust and memory problem is solved, it's solved forever, we don't have to solve it again. Fiat will go down forever. As soon as fiat is gone, Bitcoin will continue to go up forever, because technology is inherently deflationary.
- 32:47Prediction
It's way more difficult now to get a Bitcoin than it was five or ten years ago, and that trend is not going to cease, it's only going to get more difficult, because you only get one chance to allocate Bitcoin in a responsible manner.
- 02:52Idea · condensed
Once you get an element that prevents the rewriting of history, the victors can't just erase and rewrite the past in their favor anymore. The record Bitcoin keeps can be varied, but it requires a tremendous amount of energy, more costly than just going along with it, so everyone goes along with it. Nothing is harder to get rid of than the record that Bitcoin keeps.
- 04:28Idea · condensed
I said information when I should have said knowledge, and that's not just semantics: if you take information and apply it to your life, it has causal effects. In this case the cause would be your wealth vastly improving, your ability to perform physical transformations in the world around you increasing.
- 23:30Idea · condensed
It turns out to be a good approach to understand how someone solved the hardest problem and apply that map to other, easier problems. There's your map, the map for how to solve the problem of trust and memory. Just plug it in. Anything else that required trust and memory is now better off.
- 28:31Idea · condensed
If you keep peddling your fiat stack and gig without learning, you're going to end up losing lots, and you won't have control of the same amount of TASOE that you could have had otherwise if you had just learned. You'll be a much shittier steward of the Bitcoin itself, and it will leak to hands that are much stronger because they know what they have.
- 30:07Idea
Bitcoin is a tool like an excavator. What excavators can do is a very powerful idea if the goal of the economy is more holes in the ground at a faster pace. If excavators were new and you bought a share in one, you'd be much better off, because you're solving a problem at a faster rate with less energy bleed and waste. Own a small portion of the tool, or own the entire tool.
- 35:11Idea
This is not a one time arrangement you solve once and never worry about again. Every day that you hodl, you're confirming to every other participant on the network, which at this point covers the entire world, that you have contributed but you will not take what is rightfully yours. You are betting that the future is going to be more efficient than the present.
- 03:57Reference
Even now, after all these years of reading and studying the folks like David Deutsch and Karl Popper, I still manage to use the wrong term when I say information.
- 03:57Reference
Even now, after all these years of reading and studying the folks like David Deutsch and Karl Popper, I still manage to use the wrong term when I say information.
- 11:43Reference
There is a giant bounty on every problem that affects every person in the extended order in your economy.
- 02:13Claim · condensed
The solution was free and open source and able to be seen by everybody, you just had to invest the time and energy to get it. That was the problem: the information was already freely available to all.
- 05:03Claim · condensed
It makes perfect sense to hold back at the beginning of a Bitcoin journey because of the risk involved, since you have to develop your own conjectures and criticisms before you understand the problem Bitcoin solves and how valuable it is.
- 11:43Claim
This is the landscape of the information asymmetry we are currently experiencing in the monetary world, and it used to be incredibly difficult to increase your wealth because you had to solve a problem that hadn't been solved before and that would solve other people's problems too.
- 12:20Claim · condensed
The bigger the problem and the more people it affects, the larger the bounty, and the lowest hanging fruit gets picked first, so generating massive wealth is incredibly difficult under the old system.
- 12:56Claim
Now all you have to do is buy Bitcoin and sit there, doing nothing, because you're allocating to a system that is better at coordinating specialization in the extended order. Getting out of the way is the best you can do right now.
- 15:19Claim
Bitcoin is real, it's physical, and if we hadn't compressed the world to the degree we did, it would be obvious how big this thing is and how hard to vary. That is the cost of admission.
- 16:46Claim
This is the information economy: increasing your wealth with a single decision, with only information, just a story you managed to download and comprehend. Tell me the information doesn't cause physical change in the universe.
- 17:18Claim
It used to be that everyone else had to lose for me to win in the fiat legacy system, I needed to dilute and steal their energy to sit idle. With Bitcoin that doesn't happen anymore: you can hash for new knowledge that excites you and still stack sats, and your wealth grows even faster than sitting around doing nothing.
- 19:33Claim
By the time Bitcoin has sucked up all the value from the legacy system, if you only recognize then that the scoreboard was right the whole time, you'll have to get back to work solving problems, because the trust and memory problem will already be solved forever.
- 21:15Claim · condensed
Those who are lucky enough to be out there hashing for knowledge and stumble onto something useful are the ones rewarded with prosperity, and understanding Bitcoin is just the beginning of how much you end up winning.
- 21:46Claim · condensed
You throw a little at it and win, you throw more and win more, and you realize everything else you're doing is losing compared to this. Then, if you dig deeper and ask why you're winning, the tool becomes even more useful, because you realize it scales up to every other physical system.
- 24:02Claim · condensed
The further down you go with study and processing, the smaller the number of participants at that depth. Quite a few people have invested an hour understanding Bitcoin, far fewer have done a hundred, fewer still a thousand, and almost nobody has done ten thousand.
- 24:33Claim
You don't have to get to the point where you can just summarize the key points like some LLM would to make a more educated decision about owning Bitcoin. But to reap the full benefit of what Bitcoin offers the frontier knowledge generators of the extended order, it requires criticism and conjecture.
- 26:48Claim · condensed
You don't want to compete where everyone else already is, and the way you get away from the competition is by digging further down the rabbit hole, since the problems you solve open up more problems you can solve.
- 27:25Claim · condensed
As you solve more problems and get rewarded more, you end up with more excess reserves of energy that has to go somewhere, and it isn't going into some government bond losing two percent a year in real yield after returning sixty percent a year elsewhere.
- 27:58Claim
There are deficits in life so great you cannot overcome them no matter how hard you work, and money is one of those things that can hold you down, so you want to be very picky with the money you adopt and the unit of account you use day to day.
- 29:03Claim · condensed
Even someone who just keeps peddling their fiat stack and gig is still providing value, because the job wouldn't exist otherwise. Even working for the government is speculatively attacking the Leviathan from inside, just at a much lower rate than you'd get on the open market.
- 29:35Claim
You'd end up with less Bitcoin because you could have been more valuable in the private sector, and that means you and you alone are punished in ultimate wealth terms for that choice.
- 31:09Claim · condensed
A supercharged way to profit is to buy the excavator and then also learn to use it yourself, actually dig the holes, rather than just owning a share and capturing the spread. And the easiest time to succeed at digging is right at the introduction of the tool, before more people realize digging is easier and competition increases.
- 31:42Claim · condensed
More competition is good for the extended order and great for Bitcoin at a super organism scale, because it raises the entire knowledge base, but it's bad for the individual stacker trying to maximize their own TASOE ownership.
- 32:47Claim · condensed
If some degen with half a brain loaded ten thousand dollars in 2012 and hodled until today, they'll end up wealthier than almost anyone could match, even the best steward of Bitcoin knowledge, because they found it earlier.
- 33:26Claim · condensed
If an early hodler doesn't eventually action something that solves a problem and adds value, they will end up with less Bitcoin over time, unless they were so early that they have a large enough safety margin to absorb a costly mistake.
- 33:59Claim
Bitcoin goes to the responsible allocator because it can't go anywhere else: no one can force a Bitcoin exchange, it pools with the individuals and institutions who solve the biggest problems for the most people.
- 01:09Quote
That's the bet. Either you win or you lose.
- 17:55Quote
You can have nothing or you can have more of everything. Which sounds riskier?
- 18:27Quote
It sounds like magic because it is.
- 29:35Quote
How poetic is the system?
- 32:12Quote
Any dipshit in the system can now get super wealthy if they understand Bitcoin right now.
- 33:59Quote
No one can force a Bitcoin exchange.
- 34:34Quote
We live in the transition, which is messy and bloody and confusing.