On the Nature of Money

Every passage, on the record.

1. 00:00Event

   There's been some price dips. There's been some movements. But overall, it's now October, middle of October. What is it? The price is somewhere, I think it just broke 58,000 US dollars.

2. 01:03Claim

   Since I originally started down the Bitcoin rabbit hole, there has been a shift in how people view the network, the participants in the network, the overall protocol, how valuable Bitcoin is to the world. There has been a shift and it's grown much more positive.

3. 01:03Claim

   In that shift has come a large number of participants that have no idea, from an economic standpoint, what money is and why Bitcoin is better than the traditional forms of money.

4. 01:34Claim

   You're not searching for the smartest person in the room who knows the most about finance, about economics, about how money works. I want to be speaking to the individuals who have the least understanding. If you can make your argument from that point of view, you can affect so many more people and the Bitcoin network gets stronger.

5. 02:12Analogy

   why Bitcoin is so powerful, why it is a black hole for value, and why it will be the future reserve asset

6. 02:12Prediction

   why it will be the future reserve asset

7. 02:57Claim

   And it's a good thing that it will be. It's a positive thing for everyone involved. It'll be the reserve asset of the world in the near future.

8. 03:28Claim

   You have to overcome the idea that you can't just explain Bitcoin and why Bitcoin is great. You have to explain what it is replacing. And if you don't do that, you are doing a disservice to that person's understanding of why Bitcoin will win.

9. 04:01Idea

   Really money is energy. And what I mean by that is it is the highest form of energy available to humans in society.

10. 04:32Analogy

    We can take the $10 in your pocket and you have the freedom to choose whatever you want. You can change that $10 into whatever you need, whatever form of energy you need in that present moment. So, for example, you can change it into food... you can change it into electrical energy... you can get gasoline for your car.

11. 05:09Claim

    Human beings want energy because the world is a scary and unpredictable place at times. We don't know what we don't know... the more energy we have access to, the higher our ability to deal with the unknowns of the future... We have a higher chance of survival if we can have access to more energy.

12. 06:13Quote

    To be more specific, it's a call option on future energy, on stored accessible energy.

13. 06:48Claim

    A technology solves a problem. It does so when you discover or when you invent a tool, you are inventing a piece of equipment or a thing or an idea that will allow you to solve a problem more efficiently.

14. 07:21Reference

    Through Darwinian evolution, the people that stored up more energy, they survived.

15. 07:21Claim

    If everybody wants energy, and our whole goal here is to gather up as much energy as we can so that we can ensure survival, right? Through Darwinian evolution, the people that stored up more energy, they survived.

16. 07:51Reference

    You have to make a joke about high school physics class and falling asleep, but missing a very important thing about energy, and that is the law of the conservation of energy, which is essentially that energy can't be created or destroyed.

17. 08:29Claim

    It has to be transformed, right? It has to go from one state to another. That is all that energy can do.

18. 09:06Claim

    Somebody smart figured out that rather than working on your own to transform energy from one state, from a useless state to humans, to a useful state, we can actually do more through exchange by cooperation, working together through a division of labor and specializing in certain skills.

19. 09:42Claim

    As a society specializes more and more and more, and division of labor happens more and more and more, we are able to transform more energy into useful energy. But the problem is, on an individual level, now we are ignoring daily energy transformation that each of us need to stay alive.

20. 10:16Claim

    We need a way to keep track of who is transforming the most amount of energy, who is transforming more energy than others, who is bringing a positive value, a positive add to the society. And that is what money does.

21. 11:28Analogy

    I'm Bob and I want to send money to Alice, right? We know that money is energy. I want to send her energy. And to do that in the system as it stands right now, I can't just hand Alice energy. I have to go to a third party and I have to ask that third party to send the energy to Alice... they're going to want some sort of energy in return for doing that, for providing that service.

22. 12:14Claim

    The ability to send value to someone without a trusted third party intermediary, that was one of the major breakthroughs that Bitcoin offered.

23. 13:20Quote

    The only question that you have to answer at the end of the day to see if something is worth doing is, do we have more energy available to us at the end of whatever task it is that we are performing, whatever good we are purchasing, whatever service we are providing, is there more energy available to mankind on the other side?

24. 14:04Claim

    Once you understand what money is and what it represents, you start to look for inefficiencies in the system. And lo and behold, the inefficiencies in the current system are solved greatly by Bitcoin... we end up with more energy on the other side.

25. 14:38Claim

    That's the hard part, transforming it from energy that we didn't have control over to energy that we do have control over. Once we have control over which direction to push that energy into to meet our demands, to meet our needs, then how do we store it? How do we make it useful?

26. 15:13Analogy

    Bitcoin is instead of investing in the stock market in a passive index where you're propping up all of the companies of the world, say Vanguard index of the VTI or something... you're basically betting on corporate innovation... Well, Bitcoin is that, but it's betting on human innovation to continue to find ways to transform more energy from an inaccessible state to a useful state. And it's betting on every single human across the world.

27. 15:13Reference

    say Vanguard index of the VTI or something, where you are putting your money in and it's spreading it across all the major corporations across the world

28. 15:44Prediction

    Will humans continue to innovate? Will there be more energy tomorrow than there is today? If the answer is yes, you put your energy into Bitcoin.

29. 16:18Claim

    Because of the hard cap of 21 million, Bitcoin treats the energy world in an entirely different way than the legacy system. It says all of the stored energy that there is right now in this present moment, we're going to put a cap on that of 21 million units, 2.1 quadrillion satoshis.

30. 17:23Claim

    The only way to get into the system is to provide value. And then someone will exchange their Bitcoin for that energy that you are pushing into the system.

31. 18:01Claim

    The only reason a logical actor inside of the Bitcoin world would extract that energy from the system is because they can use it to transform even more... they can use the capital to purchase a tool that will allow them to become more efficient in their role for transforming energy in the world.

32. 18:31Claim

    If they want a claim on future energy, they're going to have to bring back more energy than they left with. So if they don't do that, they are punished on a singular basis... they now aren't able to buy back into the system.

33. 19:44Claim

    The best thing that you can do for everyone around you is you can transform energy... and as you unlock that energy and you plug it into the Bitcoin system, the best thing that you can do is delay consumption of that energy that you personally were responsible for unlocking.

34. 20:21Claim

    If you delay it, you're allowing, you're sharing that energy with other individuals, other actors in the space who believe that they have a way to unlock more energy... they're pulling energy out of the system... using it to unlock more energy themselves.

35. 20:51Claim

    They plug that energy back into the Bitcoin system and the total supply of energy grows. Yet the calls on that energy remain the same proportionally.

36. 21:23Claim

    The ones that do not innovate, that do not find more efficient ways of transforming energy from a locked state to an unlocked state, they will be punished... by not being able to buy back into the system, by not being able to control as much of the energy as they had before.

37. 21:59Quote

    If you want to be successful in Bitcoin, it's very simple. Find a way in the outside world to unlock more energy that was previously inaccessible. Plug that energy into the Bitcoin system and wait. Don't do anything.

38. 22:30Claim

    Doesn't matter who innovates around the world, who finds a better way to unlock more energy in the world. If you are an owner of the network, if you own any one of those 2.1 quadrillion satoshis, you benefit. And the benefit is proportional.

39. 23:03Reference

    If someone, if Jeff Bezos out there finds a way to increase the accessible energy in the world by some saving or some technology or some information, you win.

40. 23:40Quote

    Exchange equals more energy. More energy equals better for everyone in the system. Better for everyone in the system means that we can create things that were previously impossible.

41. 24:17Quote

    What is better for you as an individual is better for everyone else as well. The incentives that Bitcoin creates are what make Bitcoin unstoppable.