The Building Blocks

Every passage, on the record.

1. 00:00Claim

   The destination doesn't change with the realization that Bitcoin is possible or that it has since been discovered, but it does feel like it is pulling forward the future at an ever increasing rate.

2. 00:30Claim

   If the arrow of time moves within the realm of the law of thermodynamics, the rate of change stays the same, but the sheer size of the entropic phase changes at every increment along the arrow increase, so the amount of local entropy that is being lowered increases over time as the extended order becomes more efficient at that transformation process.

3. 01:07Claim

   We are transforming lower productivity into higher productivity at a faster rate because of what Bitcoin allows for, because of the system that emerges because of Bitcoin's existence.

4. 01:42Claim

   Without Bitcoin, these entropic transformations from high to low at the local level wouldn't have taken place at the same rate, so we would elongate that timescale and it would get longer and longer into the future before we reached the point we're currently at.

5. 02:14Claim

   The more that adoption increases, the more people realize the efficiency gains because of Bitcoin, the faster that innovation is going to occur, which will then result in further energy reserves being accessible to the extended order.

6. 02:58Prediction

   It's certainly not rocket science to piece together this vision of the near future: Bitcoin adoption becomes widespread, where it goes from a niche store of value for select few monetary sleuths looking to remove themselves from the reach of fiat overlords who would force the dilution of their efforts.

7. 03:35Claim

   Bitcoin works as advertised doing that exact thing right now for those individuals who use Bitcoin as their unit of account; it is incredibly hard to argue that they haven't been the biggest winners of the past 14 years.

8. 03:35Quote

   It is incredibly hard to argue that they haven't been the biggest winners of the past 14 years.

9. 04:09Claim

   Ever since Bitcoin came into existence, holders have been better positioned than anyone else inside of the extended order in almost every regard, both in energy reserves and in exposure to unknown unknowns or counterparty risk.

10. 04:43Claim

    To keep on keeping on, the world has to get clownier in a debt-based system: as the debt rises, more extreme measures must be taken to match the speed of new debt creation needed to keep the system afloat.

11. 05:13Claim

    It's not just Bitcoin sucking energy from the fiat system, it's actually the fiat system squeezing the energy out of itself for shelter from the storm that is the clown world, happening from both sides, which is why it will appear in hindsight to have happened so quickly.

12. 05:13Quote

    It's not just Bitcoin sucking energy from the fiat system. It's actually the fiat system squeezing the energy out itself, right? For shelter from the storm that is the clown world.

13. 05:49Claim

    Bitcoin will work the exact same at the individual level as adoption grows, but it will absolutely result in a better, more robust economy as a whole; a Bitcoin economy will vastly outperform local economies or economies formed via decree.

14. 06:21Idea

    That's all the economy is: the economy allows for the transformation and storage of energy reserves in the most friction-free way possible, and it does that because if it didn't do that, it would have been out-competed by a system that does.

15. 06:54Claim · condensed

    The total mass of the world has not changed and the raw materials have not increased; in fact each person has a smaller claim of the raw materials on offer given a much higher population, so how have we ended up in a better position given these details?

16. 08:08Claim

    The extended order has morphed from a world where the majority of energy reserves were derived from control of natural resources of energy in its unmolested state to one that has transitioned to the transformation of resources using the energy of information that allows for the accumulation of knowledge.

17. 08:53Claim

    Innovation has pushed our ability to extract energy from the available resources, and all of these feeling-around-in-the-dark searches for different combinations of elements and processes are built on top of, or built with, pieces of the past.

18. 09:26Quote

    As somebody famous once said, the empires of the future are the empires of the mind.

19. 09:57Analogy

    If you are interested in extracting or transforming as much energy as possible, your most efficient strategy is to look where there is the most energy in the first place: if you're going to go hunting, you want to hunt in an area where there is a lot of whatever it is that you're after.

20. 09:57Claim

    Satoshi's breakthrough wasn't proof of work, it wasn't blockchain, it wasn't a single element inside of Bitcoin; it was combining all of the known concepts to uncover what is absolute scarcity.

21. 09:57Quote

    Satoshi's breakthrough wasn't proof of work. It wasn't blockchain. It wasn't a single element inside of Bitcoin. It was combining all of the known concepts to uncover what is absolute scarcity.

22. 09:57Claim

    The more idea building blocks there are in general, the more opportunities there are to solve problems, because there's a larger number of possible variables that can be included in certain problem sets, so we can have more variation with more building blocks.

23. 10:50Claim · condensed

    The more building blocks we have, the higher the possibility for combining new blocks with one another, so the more possible arrangements of the various blocks of innovation, the higher the number of solutions that become available to the whole; solving problems is valuable because it makes the extended order more efficient, and more ideas equals more growth.

24. 11:26Claim

    To have building blocks we need to transmit and store the ideas contained in them so we don't have to backtrack and recommit energy to understanding what we already know; losing all of the information in the various empires that have come and gone, not being able to track the libraries, is a huge energy hit to the extended order as a whole.

25. 12:00Claim · condensed

    Having information that makes you more efficient is fantastic at a local level, but it can't achieve its maximum efficiency gains while contained locally; it has to push out to the extended order to realize its full potential, so communication leads to more building blocks.

26. 12:33Claim

    The more we communicate and exchange ideas, the more total number of block arrangements become possible, and these new arrangements are new ideas and formulas that can manipulate the raw materials, which are the engine for wealth creation, as we would classically think about the concept.

27. 12:33Claim · condensed

    At scale we're abstracting away from the physical world, which up until 100 years ago was our primary vehicle for energy transformation, and moving toward the informational realm.

28. 13:12Analogy · condensed

    If it's energy reserves you're looking for, it makes sense to go where it's most pointy, where it's easiest to transform in the first place and where there is the highest number of opportunities for transformation, which is the world of ones and zeros, the informational realm.

29. 13:44Claim

    There are few systems that have more energy than the extended order itself; those energy reserves are being stored in the ideas, in the building blocks themselves, and this organism has accumulated huge reserves over time.

30. 14:15Analogy

    The idea of communication and this building-blocks scenario and innovation mirrors exactly what is happening with Bitcoin, and an example we've talked about before is the Bitcoin reward structure: how are hodlers rewarded inside of the Bitcoin system?

31. 14:49Claim

    You get rewarded for your ability to combine these different building blocks at a given period of time, forever, as long as you commit your energy surplus to the Bitcoin system; if you commit that surplus, you can think of it as a building block.

32. 15:28Analogy · condensed

    That is one layer of the pyramid that is the Bitcoin economy: every block added on top of the level you got in on, whatever block height that was, rewards you because that level wouldn't have been possible without the energy you committed to the system in the first place.

33. 16:01Claim · condensed

    This is the same system we're thinking about when we're looking at innovation and ideas that increase efficiencies: without certain ideas, we're not able to move to the next level of efficiencies, so fully utilizing the extended order's energy means leaning on communication, because communication leads to more building blocks becoming available for combination.

34. 16:35Analogy

    Trace the arc of strictly human communication methods: it started with cave paintings, then hieroglyphics, then the alphabet, then the printing press, then binary code; each step along the way these forms of communication become more shareable, easier to access, with less friction in the accessing and the sharing.

35. 17:09Claim · condensed

    Today binary code can represent any idea, and once you make ideas easily shareable and remove the friction from the process, the pace at which building blocks begin to combine increases; any tool that increases the removal of friction in exchange of information is going to be immensely powerful.

36. 17:39Idea

    There are two parts of energy gains or value adds in a system like the extended order: the first is coming up with the instructions to transform energy more efficiently, the development of the actual methods that need to be put in place; the second is the carrying out of those instructions, and if you have beautiful, 100x-efficient instructions but no one there to carry them out, that code is worthless.

37. 18:19Claim

    The story of the last hundred years, and what looks likely to become even more apparent in the next hundred, is the shift in power from who carries out instructions to who creates instructions; as friction in finding code executors falls, the industries of the west have been hollowed out by this inevitability through globalization.

38. 18:52Prediction

    If the extended order continues on this march of efficiency gains, it isn't difficult to imagine a world where code executors require a near-zero fee, at which point you will be limited by the information you have access to and the speed at which you're able to rearrange the blocks inside the system to innovate new solutions.

39. 19:30Reference

    When I think about this in practical terms, I think about Andrew Grove's book, Only the Paranoid Survive, where he talks about these 10x strategic inflection points and how important they are for any entrepreneur or manager to recognize; these are career-defining moments, and he comes up with six major forces that can act on your existing framework.

40. 19:30Reference

    When I think about this in practical terms, I think about Andrew Grove's book, Only the Paranoid Survive.

41. 20:06Quote

    Well, Bitcoin is into 10x, Bitcoin is 1000x, and it isn't 1000x in one of the six categories. It's a 1000x in all of the six categories, right? Because it operates on a level below all of the other six categories.

42. 20:06Claim

    We don't even have to go into what those six categories are for this podcast; the easiest to focus on is the monumental increase in communication allowed for by the emergence of Bitcoin.

43. 20:39Quote

    No noise only signal in a system that up until now has been dominated by noise.

44. 20:39Claim · condensed

    With crystal clear communication between all parties that can be trusted to accurately reflect the territory at all times, we don't know how much efficiency has been lost on the table up until now, because it's impossible to predict how much noise has cost the extended order when we've never been able to filter the signal from the noise.

45. 21:11Claim · condensed

    The gains have started to accumulate inside the extended order because the time it takes to share ideas and the limiting factors of physical space have all melted away.

46. 21:41Claim

    We've entered an informational realm where ideas can be shared at the speed of light, and we're also removing the ability for individuals to manipulate what the world looks like and to manipulate the truth; everyone who chooses can plug in to the source of truth, to the actual map of the territory, which means everyone is a better energy allocator and no one can tamper with the system.

47. 21:41Quote

    Everyone who chooses can plug in to the source of truth, to the actual map of the territory.

48. 22:24Claim

    We have no idea how much more efficient everything becomes, because now, with the realization that absolute scarcity is a possibility, we have to go back and innovate in every single area the extended order has previously innovated in: energy transformation and Bitcoin, education and Bitcoin, entertainment and Bitcoin.

49. 24:18Prediction

    The layer above Bitcoin, when the extended order makes the inevitable step towards hyperbitcoinization and adopting a Bitcoin standard, will only get better from there, almost a power law, only getting better by orders of magnitude, again and again, and it will just never ever stop.

50. 24:18Reference

    The layer above Bitcoin, when the extended order makes the inevitable step towards hyperbitcoinization and adopting a Bitcoin standard.

51. 24:49Claim

    While Bitcoin has the power to draw individuals in because of the incentive structure it offers, the truly mind-blowing realization is that the majority of the gains, not for Bitcoin but for the extended order, are still on the table to be had, still waiting for us to adopt this technology.

52. 25:19Open question

    Just how quickly those things are going to happen, the quicker this communication happens, the quicker these building blocks begin to rearrange themselves, or there are more opportunities for those building blocks to rearrange themselves in any number of ways.

53. 25:19Quote

    And it really is only getting started.