A Bitcoin Prediction

Every passage, on the record.

1. 00:00Prediction

   I state what I think is the most likely outcome given the technology we have access to today and where it's heading, and then I can look back in 12, 24, 36 months from now and go man, I am either an incredibly intelligent human being or I'm an idiot.

2. 00:00Quote

   I am either an incredibly intelligent human being or I'm an idiot.

3. 01:31Analogy

   It's going to be like water finding its level. It's going to rush to the most vulnerable areas first, the lowest hanging fruit.

4. 01:31Claim

   History provides evidence of that being so, and it's going to go to where it's most vulnerable, where it's easiest, and it's going to fill those holes incredibly quickly because it has tools that are more suited to those issues than any technology we've had before, specifically around money.

5. 02:36Claim

   Bitcoin is a technology upgrade to a tool that is money, and it allows the extended order to do everything it did before, and some things it couldn't do before, more efficiently.

6. 02:36Reference

   It allows the extended order to do everything it did before and some things it couldn't do before, more efficiently.

7. 02:36Prediction

   Over time, those that adopt Bitcoin will not be able to hide their success and it will become apparent, the advantage they have over the legacy users, and this is what forces people to look for alternatives when they see their neighbor having significantly more success with significantly less input into the process.

8. 02:36Claim

   This is what forces people to look for alternatives when they see their neighbor having significantly more success with significantly less input into the process, and it just so happens to line up with the fiat world, the clown world, hitting its peak capacity of how crazy and how bad things can get.

9. 03:55Claim

   Even rough estimates for global adoption of any noteworthy size, meaning people that have enough savings, a thousand dollars, two thousand dollars, not just people using it on a sat basis of 25 cents or a dollar or 20 dollars, the size is still well below 1% of the population that has adopted this, in the most conservative estimates.

10. 03:55Reference

    If you look at that, I forget what the curve is called, but is it not the Laffer curve, is it the employment curve?

11. 05:11Prediction

    The curve of adoption where the first 2% are your early innovators, if we are 1% of conservative adoption we're still very very very early, and it can be hard to pick your head up and be able to recognize just how early you are based on some of the returns that we have seen people get.

12. 05:11Claim

    Early adopters, Bitcoin maxis, are more free to focus on other endeavors than their fiat counterparts, and that is starting to pay dividends, starting to make them more efficient than would have otherwise been the case, and this is what it looks like when Bitcoin is winning.

13. 06:05Quote

    It is perfect money, the most perfect money that we have known.

14. 06:05Claim

    Bitcoin now competes with the legacy system at the game of life, which is transforming and accessing readily available energy reserves: it coordinates the economy better, it is faster, it's cheaper, it's more energy efficient, it has increased privacy, it's open source, it's permissionless, it's censorship resistant, it has zero decay.

15. 06:36Claim · condensed

    The Lightning Network solves for security features necessary for a trustless system at the base layer. The way Bitcoin blocks process, the way transactions are validated by the network, limits its ability to act as a day to day currency for goods and services, because you need to wait for the standard practice of three block confirmations to be sure a competing chain won't overtake the one with your transaction on it.

16. 08:40Analogy

    The easiest way I often think about it is with lightning we are essentially opening up a peer-to-peer abacus, channels where we can shoot Bitcoin, or pieces of Bitcoin, sats, back and forth to one another. The abacus takes a significant amount of work, a significant amount of energy, to put the beads on in the first place, but once they are on there, there is very little energy required to slide them back and forth. So say you and I have a connection, but I'm trying to pay Bob, you have a connection with Bob, so I slide on our abacus, and then I jump to the next one, which is yours to Bob, and that's how things are paid.

17. 10:36Reference

    We touched on the idea of using proof of work and energy to create a digital power projection via the thesis put forward by Jason Lowery in an episode not too long ago, and essentially what we discovered in that look at his work is that Bitcoin can be used to impose real-world costs on our cyberspace counterparts.

18. 11:16Analogy

    Why would I build a wall in the physical world to protect my property? I am transforming energy, caloric energy necessary to move my body, to collect other forms of energy to build a wall, collecting rocks, collecting bricks which have been made, and the energy it took to make the brick is stored in there. The higher the wall, the more energy I can be assured an attacker must spend to overcome my deterrent system. And let's also imagine there is no other way to get past the wall, you can't fly over, you can't dig under, you must scale the wall. Well now I can be very precise in exactly how high the wall must be to keep out my strongest attacker: all I need to do is find out how much energy they have access to and build larger than that.

19. 12:42Quote

    If I invest a tiny bit of energy, it doesn't take much for the attacker to be successful breaching my defense. If I invest quite a bit of energy, well, now this is where things are gonna start to get interesting, right?

20. 13:42Idea

    Bitcoin can be used the same exact way. I can put up a wall of encrypted digital energy that limits access to only those individuals that have enough energy to overcome that wall, and what I'm doing is imposing a cost in the real world through the digital world. It is a phenomenon that was not possible before, because there was no bridge via proof of work marrying the physical and the digital world. So Bitcoin fixed that.

21. 14:41Claim

    Because there's no middleman, no financial intermediary, digital transactions have almost all fees removed. The fees being removed and the ability to send microtransactions is the game changer of lightning: it's all automated, dictated by code rather than people, which means there are no minimums to the size of transactions like there are in the legacy system, where if you have to charge 2% as the payment processor, it makes sense to put a lower bound limit in place.

22. 15:26Claim

    A key concept in traditional economic studies is the idea of opportunity cost: the opportunity cost of a particular activity is the value or benefit given up by engaging in that activity relative to engaging in an alternative activity. Every choice has trade-offs, and opportunity cost is the potential benefits you'll miss out on by choosing one direction over another.

23. 16:57Claim

    Why is it beneficial to be more efficient at energy calculation? Because that is the whole game of life. The more accurate we can be with the opportunity cost, the more we can understand what we are giving up, and the more we can become more efficient at allocating our energy to whatever the highest purpose is at that moment.

24. 18:01Idea

    In a hyper-Bitcoinized world that now has an economic constant at its core, it changes our ability to calculate opportunity cost. With Bitcoin and the potential wall of energy I can now control the flow of energy in my direction: if I want more energy from outside sources I can dial that in, if I want less distraction I can dial that in by increasing the threshold of energy necessary to interrupt my flow.

25. 18:01Open question

    For a certain amount of energy I would do something else, right, there is an opportunity cost which I am happy to accept up until a certain point, but I haven't done the work to realize exactly what that point is.

26. 19:31Reference

    With email, right into the original proof of work concept by Adam Back, it was all about getting rid of spam.

27. 19:31Analogy

    If you want me to read your email and I don't have you as a trusted contact, I could simply set a sats wall that you have to overcome: I won't read any email that isn't accompanied by more than 10,000 sats. If a real person actually needs to get a hold of me and exchange services, then it is worth it to them to send those 10,000 sats, because they are going to get that in return.

28. 21:49Prediction

    With Bitcoin you can now sell every second of every day and get paid for it. The market is completely open to all participants on the buy and sell side, and there is no time limit or energy limit too low because of what lightning can do. What this means is we can now know for certain what our base opportunity cost is, no matter what we are doing, no matter where we are, or the skills that we might have.

29. 21:49Analogy

    Much like the podcast we did on the revolution in productivity when clock technology was upgraded during the Renaissance, the ability to sell your time in smaller and smaller quantities allowed for flexibility, allowed for an increase in productivity, because you could point energy at different sources and be rewarded for that energy.

30. 21:49Reference

    Much like the podcast we did on the revolution in productivity when clock technology was upgraded during the Renaissance.

31. 23:19Claim

    Highly sought-after individuals in their specific fields, people that are very specialized, access to their specialty must be limited or the extended order won't benefit from their energy transformations. But how can they know the best use of their energy? They haven't been able to know that before, they've only been guessing based on what their specialization is and what everyone else is doing in that field.

32. 23:19Reference

    Let's look at Beyonce, somebody like Beyonce, okay, super famous, very sought-after, and her energy is incredibly valuable because she can transform quite a bit relative to her output.

33. 24:28Prediction

    She could put a wall of energy up that she made me hurdle to gain access to her energy, to her attention. Let's say it's a million sats to ensure that she will read and personally reply to my message. I just bought access to her energy with my own energy: she gets the sats, I get the energy.

34. 24:59Claim

    Now I can already hear from the Fudsters, I can already hear them coming in hot here: well, what if she sets a threshold and then she just takes the sats?

35. 25:36Quote

    This is your fiat brain thinking here. This is your short-termism. This is your high time preference coming out.

36. 25:36Claim

    She could do that very early on, it's more than likely that most people will, but her future earnings are dependent on her not doing that. In a low time preference environment in a Bitcoin world, you can't scam long term or else sats will stop flowing in your direction. It pays more in the long run to be a positive actor.

37. 27:15Prediction

    What if there was a marketplace to combine energy towards a common goal, the hive mind of where this energy is best used based on people's real wants and desires? Maybe her live appearance fee is a single Bitcoin, and perhaps you could open a collaborative transaction and anyone who wanted to contribute to that could send sats. Once the threshold is met the sats go through, and pretty soon you have a Beyonce concert wherever you stipulated.

38. 28:09Reference

    You can start to see the beginnings of this with things like Vita. It's on Twitter, an app that allows you to monetize messages and interactions: you can set a fee for people sending you direct messages, or set a fee for getting on a call with somebody, and that is just the tip of the spear.

39. 29:14Prediction

    If I could offer a one single prediction from this podcast it would be for what people will be doing in the future that they aren't doing right now: they will be calculating how much energy it would take for them not to be doing whatever it is they choose to be doing now. That will be a personal calculation that Bitcoin adoption will make very important for maximizing efficiency overall, and these figures are not static, they could be constantly fine-tuned. This leads to less inefficiencies by making downtime more effective.

40. 29:14Quote

    People in the future will be calculating how much energy it would take for them not to be doing whatever it is they choose to be doing now.

41. 29:48Prediction

    It changes employment forever. You will work for the highest bidder should you choose to; if you choose not to, you will know exactly what the opportunity cost was in real time.

42. 29:48Reference

    The problem is that Michael's energy output is very valuable, right, him talking to me might not be the best use of his energy unless I can provide more energy than what he is currently getting, plus some sats above and beyond that due to the distraction of breaking his normal schedule.

43. 30:52Claim

    A simple workaround is a deposit system: I send a certain amount of energy to make sure he reads the offer, a read minimum, and then if he accepts I get that deposit back, or it's used in part to pay for the actual service. If he rejects, he gets to keep the sats as payment for the energy required to read the offer.

44. 32:22Claim

    It isn't only beneficial for me as the consumer, it's beneficial for Michael as well, as he now has accurate information on how much his specialization is valued by the extended order. It can help dictate what you do in terms of energy allocation.

45. 32:22Prediction

    In the very near future we will be pricing how much it would take us to stop doing whatever we choose to do and do whatever the extended order settled on, what we were most useful for, most valuable for. These won't be traditional employment contracts, because we could be selling down to the seconds worth of energy; it'll end up being priced in sats.

46. 33:24Quote

    Efficiency skyrockets, right, energy transformation hits highs that have never been imagined before, because there is essentially no downtime that is wasted.

47. 33:24Quote

    The result is a swarm of energy allocators who have never been better informed.

48. 33:24Claim

    Bitcoin can act as a barrier between yourself and the extended order, and you will be able to dial in with extreme accuracy how much contact, or the number of interruptions, you are happy to receive based on your sats threshold. You are responsible for setting the height of your own wall. This is the path towards ultimate energy transformation and the shift up the Kardashev scale.

49. 33:24Reference

    This is the path towards ultimate energy transformation and the shift up the Kardashev scale.