Automation in the Bitcoin Age

Every passage, on the record.

1. 01:30Quote

   Only the strong survive, and the strong survive by projecting power and by having enough energy reserves to do that.

2. 03:00Analogy · condensed

   Once an energy reserve becomes so dense a life form can no longer take full advantage of it, that life form passes the baton of energy efficiency to whatever can, which is how single cells give way to multicells, multicells to plants (autotrophs), and plants to animals (heterotrophs) that use the condensed energy plants generate.

3. 04:12Claim · condensed

   Fire let humans digest food outside the body, pre-digesting it so the energy that would have gone to digestion was freed up for other work, which is why brains could get bigger.

4. 04:57Analogy · condensed

   Economies are multi-cell organisms for human beings: individuals band together and agree to share their energy resources and keep track of that sharing with a tool called money.

5. 05:28Claim · condensed

   Money exists so a group can share and keep track of energy resources without needing the double coincidence of wants a barter system requires, and increasing exchange increases the transformation of energy from unusable to usable.

6. 06:24Claim · condensed

   Before Bitcoin, the size an economy could scale to, and the number of transactions it could support, was limited by geography and by the physical limits of a bearer asset like gold.

7. 08:03Analogy · condensed

   A Bitcoin transaction is like going to the market and saying: I have unlocked energy I don't wish to consume right now, so I'll trade my energy to whoever owns a fixed portion of the network and thinks they can go out and unlock more energy with it than I could.

8. 08:52Prediction · condensed

   Bitcoin represents the total accessible supply of energy inside the Bitcoin economy, and that economy will grow to become the largest economy we have ever known, and the currency on that network will grow to become the most liquid form of money that has ever existed, because it is decentralized, permissionless, not bound by any state, and runs 24/7 with nothing able to stop it.

9. 09:25Claim · condensed

   The only two ways Bitcoin comes into existence are mining it by inputting energy to solve the proof-of-work problem, or trading with someone who mined it.

10. 10:04Analogy · condensed

    An early Bitcoiner who accumulated a large stake spends it on a yacht; the person who built and sold that yacht would not have exchanged their energy for fiat dollars unless doing so was genuinely in their interest, so the trade only happens because real energy was unlocked somewhere upstream.

11. 11:28Quote

    You're, you're only one transaction away from the actual person that transformed the energy in a positive way for the benefit of all.

12. 11:28Claim · condensed

    In a Bitcoin economy with fiat removed from the equation, choosing not to consume your energy and instead sharing it through a global market means you always end up finding whoever is willing to pay the most to use that energy right now, a possibility that did not exist before Bitcoin.

13. 12:31Claim · condensed

    Bitcoin has no mass and exists only in the digital realm, making it an extreme example of lowering entropy in the world by transforming real energy into something maximally compact and then plugging it into the network.

14. 13:06Reference · condensed

    This is the idea that Jeff Booth talks about in the price of tomorrow: technology advancing, and individuals having enough resources to lower their time preference and plan for the future, is an unavoidable conclusion, and it isn't slowing down.

15. 13:38Open question

    What's going to happen to the markets? What's going to happen when automation kicks in, how does that change, and how would Bitcoin play a role in that?

16. 13:38Reference

    This sort of hitches onto last week's episode, or the last episode of the podcast, where we talk about Bitcoin as the blood of artificial intelligence, really the communication mechanism that the body of artificial intelligence will use to allocate resources.

17. 14:34Claim · condensed

    Narrow AI needs a way to anchor its productivity in the physical world, some way to know if the job it's doing is actually contributing more energy reserves to the total, and fiat can't provide that anchor because its supply isn't fixed or known and is based on whatever the Federal Reserve feels like that day.

18. 15:43Idea

    That's how you win at the game of money is you transform energy that wasn't usable to energy that is usable, and you decide to consume less than you transform.

19. 15:43Quote

    That's how you win at the game of money is you transform energy that wasn't usable to energy that is usable, and you decide to consume less than you transform.

20. 15:43Claim · condensed

    With a fixed constant like Bitcoin's 21 million supply to reference, simple devices can know in plain terms whether they should continue whatever activity they've been tasked with, based on whether more Bitcoin is flowing to them than is being taken up by that activity.

21. 17:36Claim · condensed

    Because software has no labor cost, even the slimmest margin is enough for it to dominate a market by flooding it with more and more of whatever it is.

22. 19:00Analogy · condensed

    A rider requests a fully autonomous Tesla through an Uber-like app; when the ride finishes, the rider's Bitcoin payment goes to Uber, which takes a small percentage and passes the rest on automatically to the vehicle's own Bitcoin wallet, with no person on either side of the transaction.

23. 20:32Analogy · condensed

    Once a car's Bitcoin wallet crosses a set threshold, say one Bitcoin, it automatically funds a new car at the factory; the first car and the second now chase that same threshold together, then three cars, then four, faster and faster, with power and maintenance the only real ongoing costs.

24. 21:39Quote

    The only real necessary cost at this point is power.

25. 22:54Claim · condensed

    As these cars accumulate Bitcoin they don't have to sleep or stop driving, so the fleet is significantly more efficient than the taxi system, and because everything is also getting cheaper, the real threshold to fund another car ends up being less than one Bitcoin over time.

26. 23:31Idea

    You are now, you are now creating a perpetual money machine, if you can get on top of it, because you will have more Bitcoin than your competitors and you will just slowly soak up every single area that has any efficiency in your circle.

27. 23:31Quote

    You are now, you are now creating a perpetual money machine, if you can get on top of it.

28. 25:52Claim · condensed

    Miners defend the network with hash power and are rewarded in Bitcoin through block subsidies and transaction fees, and they can then pay the conversion and transformation layers in that same Bitcoin, so energy is being priced and paid for in Bitcoin all the way down the chain.

29. 26:58Prediction · condensed

    This oil-to-Bitcoin chain isn't fully automated yet, but it certainly will be, because the biological inefficiencies of human labor mean the process wastes more than an automated one would.

30. 27:57Claim · condensed

    A transformation step just needs to solve a simple equation, how much Bitcoin is coming in relative to how much is being spent, and that's the kind of comparison modern-day computing can already do.

31. 28:31Claim · condensed

    You cannot run this kind of automated resource allocation on fiat, because fiat's supply is not fixed or known and is not attached to anything in the physical world of any consequence, since humans can manipulate those numbers.

32. 30:25Claim · condensed

    Because Bitcoin is a public ledger updated roughly every ten minutes, the more the Bitcoin economy grows and the more adopters and businesses opt in, the more it becomes the most efficient market in the history of markets, since everyone can watch where energy is flowing in real time.

33. 31:11Prediction · condensed

    If a company has known Bitcoin addresses, you won't need to wait for quarterly earnings to see how it's performing; you'll be able to watch how much Bitcoin is flowing to it in real time and immediately tell where the inefficiencies in the market are.

34. 31:11Prediction · condensed

    A new kind of general intelligence will emerge from narrow AIs being able to communicate with one another inside this energy-allocation game.

35. 33:30Quote

    It's settled in finality and it's not going back. You can, you can push dividends to shareholders in real time.

36. 34:09Prediction · condensed

    You will end up streaming sats to your power company in real time instead of paying at the end of the month, closing the thirty-day gap where the power company has already delivered the service but can't yet redeploy the payment into more efficiency.

37. 34:41Claim · condensed

    The individuals and companies that make good real-time capital allocation decisions will end up with access to more energy reserves than those that don't, so the snowball toward better energy allocation and transformation just keeps compounding.

38. 35:26Quote

    It's really the first industry to automate wins.

39. 35:26Claim · condensed

    All roads lead to power: as an automated firm becomes more efficient it drives toward becoming essentially a power company itself, because that's where the remaining innovation energy gets directed.

40. 36:55Event · condensed

    Crypto Vault, a Bitcoin miner in Norway running 100 percent hydroelectric and wind power, is recycling the heat its machines produce to dry out wood for local commercial use and provides the service to the community for free; Bitcoin was in the $38,000 range on the day of the report.

41. 36:55Reference

    This Bitcoin miner in Norway, which is Crypto Vault, running 100% hydroelectric and wind power, is recycling the heat their machines produce to dry out wood essential for local commercial use.

42. 38:39Claim · condensed

    This is a flywheel effect with no end in sight: more energy reserves and better efficiency at unlocking them just keeps making the effect faster and more apparent and more beneficial to everyone around.

43. 39:44Prediction

    I don't know if it's gonna pan out, but it certainly seems unstoppable. So could not be more bullish on Bitcoin.

44. 39:44Claim · condensed

    The reward for backing Bitcoin early is exactly that you don't get much now, and have to sit through volatility, choppy times, and FUD, in exchange for having helped the network get large enough for this kind of energy distribution across the global economy to actually happen.

45. 40:16Claim · condensed

    You give energy to whoever has the best chance of coming back with more, because that's better for you and better for the person you gave it to, and in the end everyone wins through the buildup of these reserves.