Energy Bleed and Communications

Every passage, on the record.

1. 00:00Claim

   You can't at a certain stage ignore or shield yourself from the effects of the network and the improvements that it imposes upon its users, both inside the network, and the punishment that it creates for those who are outside of the network, because they become severely disadvantaged, and there is only so long that individuals will remain at such a large disadvantage before they capitulate and give in, and that is the game theory behind Bitcoin.

2. 00:00Prediction

   There is only so long that individuals will remain at such a large disadvantage before they capitulate and give in.

3. 00:00Idea

   So really it's energy bleed is what it comes down to, and just where that energy bleed happens, the impedance that is inherent in the system in the legacy system, and how Bitcoin allows that information to flow.

4. 00:00Claim

   Price is simply information, markets are the best way to distribute information in large societies, and Bitcoin takes that up a notch by removing any impurities from the signal.

5. 00:00Quote

   So really it's energy bleed is what it comes down to.

6. 01:30Claim

   Inherent value is a faulty concept. Humans value something based on its usefulness, the utility of an item, so value is simply a reflection of people's demand for something's usefulness, for the utility of an item.

7. 01:30Claim

   At the very base level it's a communications technology, it's sharing of information, we share information so that we can become more informed, more information equals a higher chance of survival.

8. 01:30Idea

   Information velocity is much like monetary velocity, that's something you'll hear economists talk about all the time is the velocity of money. The more information we have the more utility we have access to, the utility is in the information, because by having more information we don't have to go out on our own individually and find out whatever that information was, it can just be told to us, so it speeds up knowledge dispersion.

9. 03:00Claim

   When more exchange is happening, that means more reserves are being unlocked, they were previously required for something else, but as exchange takes place through the division of labor, through the specialization of skills, those transactions take place only because each side of the transaction is willing to do so, it's not coerced or forced, in a voluntary transaction both sides are getting something, and what they're getting is the energy reserves that were previously inaccessible.

10. 03:00Claim

    We know that with every single transaction energy is unlocked, if that wasn't the case, if energy was being lost in those transactions, people would just not do them, it doesn't make any sense to continue to do transactions if we end up with less energy reserves.

11. 04:31Analogy

    It's like the idea behind the internet, now we can look things up quicker than ever before, we have access to more information than before, so we don't individually have to double back and do work that someone else has already done, we can leverage the work of the past to then gain access to even more information as a species, as a society going forward.

12. 04:31Claim

    Individuals have to understand that money is a representation of accessible energy, and everything is energy, and as soon as you are able to recognize that, it unlocks this new level and this different way of thinking.

13. 04:31Idea

    Really the hardest part for people when they are starting out, and when you're trying to orange-pill someone, just how deep and how hard you go on this idea of energy, it really is so foreign to people to think about money as energy.

14. 04:31Claim

    Markets are just information, price is the information that markets are conveying to participants, and it is the distributed information, because in an open market where everyone can see, in an open ledger like Bitcoin, everyone can see the transactions going in, going out, there's nowhere to hide, it is nothing but truth.

15. 06:01Reference

    There's nowhere to hide, it is nothing but truth, right, back to Gigi's infamous the map is the territory.

16. 06:01Claim

    Once we have that perfect information we can analyze it, become more knowledgeable about where energy needs to go, where is it most needed, where is it most effective at unlocking even more reserves, which gives us access to more energy in the future because we can unlock more reserves, that is what we're going for, because that increases survival.

17. 07:31Analogy

    We have letters, you can write a letter, you can give it to a courier, they can go there by foot, originally they can go there by horse, they can use carrier pigeons, all these are systems that developed to make transferring the information as efficient as possible. By horse it's going to use less energy in terms of feeding the horse, it's going to be more economical than feeding us as we are walking, it's just better using horses.

18. 07:31Claim

    The longer that it takes information to spread, transactions happen less quickly, and like the velocity of money, when things slow down, things go bad, so when the velocity of information goes down, things go bad.

19. 09:01Analogy

    Well actually Western Union comes before telegraph, right, because they figured rather than just have one courier with a horse, why don't we just link up a bunch of different horses and different couriers, that way we can get there even quicker than a single horse. If it took ten days on a horse and it took four days if you use multiple horses in a network, that could lead to severe advantages for the individuals, they were able to access that information quicker, think about investments, think about the movement of money.

20. 09:01Analogy

    The telegraph, we're gonna put all this work up front, we're gonna have this wire, we're gonna be able to shoot information across this wire, we don't even need the horses anymore, the problem the telegraph solves is how do we move information significantly faster than horse.

21. 09:01Claim

    Many horses equals faster message, faster message equals better information, using that better information unlocks more energy reserves, which means it's better for everyone.

22. 10:31Claim · condensed

    There is a middleman, actually two of them, there's the translator who types your message into Morse code and sends it across the line, and the translator on the other end who takes that information and puts it back into whatever language you are receiving it in and gives it to the end user. That's the problem, this middleman, or two of them, and the expense, it's a unique skill that needs to be specialized to learn, to sit there all day long waiting for the information to come across the wire, that is costly, and the other thing is bandwidth, only so many messages can go across the wire at any one time, it's a one way relay, so sending information you really have to have something important to say, it has to be worth the cost of taking up the entire bandwidth of that line.

23. 10:31Quote

    So that's the problem, right, you have this middleman or two of them, you have the expense, right, because these people, this is a unique skill that needs to be specialized to learn. The other thing is bandwidth, only so many messages can go across the wire at any one time, it's a one way relay. So middleman, expense, bandwidth, those are the problems.

24. 12:02Analogy

    The solution that the telephone provided over the telegraph was it was again faster, because you could get more information out, because we're speaking directly to the person rather than having to write out the message, take up the bandwidth of that line and only be able to communicate small amounts, because the expense was based on how much information you were sending, how long you occupied that line.

25. 12:02Quote

    It's faster to get the information and you can also send more information at any one time because it's easier, because there is less impedance, there's less energy bleed going into things that are not the signal.

26. 13:32Analogy

    As the network grows out slowly but surely, able to connect more and more places, but early on it's location dependent, you have to get to a phone if you're going to talk to me, the other person has to get to a phone, both sides have to be near this device at any one time, it's location specific, they have to get there in order to do it. If that person wasn't in that space at that exact time, you were not able to communicate to them.

27. 13:32Claim

    The numbers in the telephone system, those don't equal the actual person that you are trying to communicate with, not everyone had a unique number, and that creates layers between you and the person that you were trying to communicate with, and that creates informational friction, and that is incredibly inefficient.

28. 15:03Analogy

    Now enter the cell phone era, where everyone has a unique number that you can call them, they have this device with them wherever they are, and you can instantly access that person, you don't have to go through another middleman in order to communicate whatever message you're trying to send through, it's just instant access to that person if you are able to find the number that is in that person's pocket.

29. 15:03Analogy

    That's another fallback of even the cell phone system, like how do you get a message to that person, which is what text messages improve upon, I don't know if the person is going to pick up, I still want to get this message through, they need to see it as fast as humanly possible, and the fastest way they're going to see it, if they are actually busy and not just ignoring your call, is I can send them a text message, they can see it as soon as they are free to onboard that information.

30. 15:03Claim

    This is where now we start to see how the banking system, now that we have it, most closely resembles this early telephone system, and our ability to share value or to share energy is much like it was sharing information in the early days of the telephone network.

31. 16:33Claim

    For banks it's a closed system, it's not open source, there was only one way that you could communicate with people in the past through the telephone system, and that was closed source, they had the wires, they set up the whole network, they set up the distribution areas for the operators to work in, that was their system, you were just participating in it, which meant they controlled everything, which meant if you had a specific need for something that no one else had a need for, the chances that actually being implemented in the system was almost zero.

32. 16:33Prediction

    Like any centralized planning or any centralized system, it's going to be out competed by open source systems.

33. 16:33Claim

    You can send money at the moment when there are people there to facilitate the spending of money, you can't just send it whenever you want, try a bank holiday, try a weekend, try to send a wire when you want at your convenience, you just can't do it, much like the early days of the telephone system where if you wanted to connect with someone and there were no operators there, guess what, you can't do it, there's no other alternative, you relied on those people and the system that they had built up being operational.

34. 18:03Claim

    Even if we are next to each other physically, outside of cash, I can't exchange value or energy with you without the use of a middleman, it's just not possible, so that middleman is going to extract fees, which are energy, there's going to be bleed in the energy that I passed to you.

35. 18:03Quote · condensed

    I want to give you a hundred dollars, the middleman is going to take a percent of that, so now I can only give you ninety nine, or realistically I'm going to have to send a hundred and one so that you get a hundred.

36. 18:03Claim

    You can't directly exchange energy between two parties, there is no way to do it unless it's physical cash, or you're in gold coins or something, there is no way to send that value directly to one another without relying on a counterparty, and that implies counterparty risk, you have to trust that those people, they have to be working.

37. 18:03Claim

    The legacy banking system is slow, any of these things that you want to do, even if they are open, even if they are giving you access to their closed system, even if there are people there and you're happy to pay the fees, it's still incredibly slow.

38. 19:33Quote

    Every single stop along the way there is energy bleed in trying to get to our final destination, that's the old network, that's the old telephone system, the banking system works the exact same way.

39. 21:03Claim

    Bitcoin eliminates all the issues that we just talked about, it's an open system, it's not closed, it works 24 7, it never stops, there's no one responsible for sending a transaction through, checking or making sure of it, it's the network that is doing that, there's no middleman.

40. 21:03Analogy

    It's like the cell phone system minus the carriers, minus the providers, just imagine that the providers were completely open source and all you had to do was tap, all you had to do is have a phone to tap into the entire cell phone network.

41. 21:03Claim

    We remove the middleman, we can directly exchange information between two parties, whether they be in the same place, in the same space, meat space, or whether they be on opposite sides of the world, and it's incredibly fast, final settlement in under 10 minutes.

42. 21:03Quote

    Final settlement in under 10 minutes, and if that is the only analogy that you share with someone, it's very hard to argue the other side of that.

43. 22:33Claim

    The more that we can exchange, the more energy reserves we're going to have, the more energy reserves we have, the better life is for everyone, it improves across the board, there is no arguing that point when it becomes very clear that Bitcoin is the system that will eventually win.

44. 22:33Prediction

    Bitcoin is the system that will eventually win, because more efficient, because people operating on the Bitcoin standard are able to do all of these things better than people operating in the legacy system.

45. 24:04Claim

    Analogies are always going to be, are never going to be perfect, but they do serve a purpose when you're trying to get people excited about the opportunities that are in front of the Bitcoin network, of the sheer scope of the problem that Bitcoin solves, and just how much energy is going to be unlocked by people harnessing this new technology.

46. 24:04Claim

    There's nothing that the legacy system does better than the Bitcoin system even now, all it has is adoption.

47. 24:04Quote

    There's nothing that the legacy system does better than the Bitcoin system even now, right, all it has is adoption.

48. 24:04Prediction

    It's simply a matter of blocks before the individuals that are operating on a standard will be so far outpacing the legacy system that there will be no ignoring the path to Bitcoin.

49. 24:04Quote

    There will be no ignoring the path to Bitcoin.