Lex Fridman Podcast - #176 - Robert Breedlove Philosophy of Bitcoin from First Principles

The following is a conversation with Robert Breedlove,

someone who caught my attention

and was recommended highly as a rigorous scholar

and thinker in the space of decentralized finance

and Bitcoin.

His podcast titled What is Money?

is a good representation of the way his mind works.

He’s willing to talk through ideas for many hours,

willing to listen, willing to think,

which makes him a great companion in conversation

to explore the history, philosophy, and future of money.

Quick mention of our sponsors,

Fundrise, Element, MonkPak, and BetterHelp.

Check them out in the description to support this podcast.

As a side note, let me say that I’ll have

a number of conversations in the coming months

on Bitcoin and other cryptocurrencies.

None of these conversations are financial advice.

That’s not a legal warning, that’s a genuine description

of my goals and approach with these chats.

At least for a while, I personally won’t actively invest

in Bitcoin or any other cryptocurrencies,

except to learn about the technology itself.

I don’t think this should be a journalistic standard

like the New York Times trying to establish,

which I very much disagree with.

In my humble opinion, I think journalists should be free

to invest in Bitcoin if they want to.

Luckily, I’m not a journalist.

I just know my own psychology and I feel that my thinking

will be muddled by excitement

if I invest before I understand.

I feel the same way about Tesla, for example.

I still don’t own any Tesla stock

and I am still indeed fascinated by Tesla Autopilot

as an artificial intelligence system.

I work hard to be cognizant of the biases

that arise in my mind and always try to choose the path

that maximizes or maintains a freedom of thought

as much as possible.

Also, let me say that I try to be very careful

in selecting guests based not only on the contents

of their ideas, but the richness, complexity, music,

style of their mind and character.

Yes, I will talk with people with whom you

and I may disagree, people who some may call bad

or even evil human beings.

I want to understand them because I believe that,

as Solzhenitsyn said, the battle line between good and evil

runs through the heart of every man.

I think if you always run from evil,

you become blind to the truth of human nature.

This is the Lex Friedman Podcast

and here is my conversation with Robert Breedlove.

Rousseau opens his 1762 book, The Social Contract,

with the following statement.

“‘Man is born free and everywhere he is in chains.’”

So you talk about freedom and sovereignty quite a bit.

What do these ideas mean to you, the idea of sovereignty?

Freedom and sovereignty, I think they’re very

closely related.

Let’s start just focusing on sovereignty,

which is a word I don’t think we talk about enough.

And the general definition of that I would give

is the authority to act as you see fit.

And it’s a word that’s etymologically associated

with words like monarchy, money, reign.

So historically, it’s referred to whatever the locus

of supreme power is in the sphere of human action.

So whether, if you go like back into ancient Egypt,

the Pharaoh had absolute sovereignty

and everyone else was pretty much operating

according to his interests.

You fast forward to today, modern Western democracy,

we have more decentralized sovereignty

and that we all get to go vote and elect officials

that make decisions on our behalf.

So the theme of sovereignty across history

is that it’s been gradually decentralizing

across our different models of socioeconomics.

And it’s largely, you could say it’s rooted heavily

in the money, I would argue,

which is something we’ll get a lot into here,

where if you have money, you have the authority

to act as you see fit in the world.

And even in our current political sphere,

if you have enough money, you can actually reshape the rules.

You can reshape laws, you can lobby Congress.

If you’re in a certain situation, like many billionaires,

you can negotiate your own tax treaty

such that you can get favorable tax treatment

with certain jurisdictions in the world.

So this concept of sovereignty, which today we call,

it’s common to call states or nation states

or government sovereign,

meaning that they have power over people.

But as I argue in a lot of my writing,

I actually think that sovereignty

and here’s within the individual

and that we each have our own interiorized space of choice,

which is something like Victor Frankl

called the final human freedom.

And that we, no matter what our circumstances are,

no matter what exogenous situation we face,

we always have this endogenous power

to choose how we respond to it.

That’s one of my favorite books is,

A Man’s Search for Meaning.

Maybe we can break that apart a little bit.

So you’ve kind of spoken about sovereignty

as a closely linked to power,

but is there something about your own mind

being able to achieve sovereignty

no matter what the monetary system is,

no matter what, who has the control over centralized power,

the money or whatever the mechanisms of sovereignty

and the societal level?

You as an individual, isn’t ultimately all boiled down

to what you can do with your mind, how you see the world?

How you interpret it.

Yeah, I agree.

And as we get a little bit deeper into this,

I think we’ll come to see money

as an extension of your mind.

So there’s a feedback between money and mind.

For instance, you think in dollars today,

almost guarantee it, most of us do here in the US.

And it’s a tool, right?

It’s a tool we’re using to decomplexify the world around us,

to deal with it, to understand the sacrifices and successes

across an entire history of economic transactions.

We can boil that all down to the price.

So it’s data compression.

And if you can change,

if there’s a central body or central governance mechanism

that can manipulate that money,

it can have an impact on your mind.

For instance, today, so I agree with you on the first hand,

say that I do believe in free will.

I do believe in individual autonomy,

but I also think that there are certain devices and powers

in the world around us

that can actually influence how we think.

And it’s fascinating to think about the fact

that money might be actually deeply integrated

into the way we think and into our mind.

You think about what are the core aspects of the human mind?

What influences cognition,

the way you reason about the world?

You have the Chomsky languages at the core of everything,

but you’re kind of placing money as pretty close

to the core of what it means

to be an intelligent reasoning human.

I think money is a direct derivation

of action and speech, actually.

It’s another expression of the logos.

If we even think of what it means to think

is that we are generating two different courses of action,

potential courses of action,

and we’re populating them with avatars, right?

Maybe ourselves or others.

And then we’re comparing how we may act in each situation

and what we think the result would be.

So actually it’s comparison.

Basically it’s comparison and contrasting

of possible courses of action.

And that’s the same thing with words themselves.

Most words, the vast majority of words

only have meaning in relationship to other words, right?

It’s all contextual definitions of a word or more words.

Now people have argued with me about this

because there is a first word, right?

Where you pick up rock and say rock.

But most other words in higher abstraction

tend to be relative.

And what’s funny about action and speech,

and this gets, I got into a bit of this in our paper here,

is that it’s linked to evolutionary biology

and that once human beings adopted upright stance,

we freed our hands.

We no longer needed our hands for locomotion.

So we started to evolve more dexterity

and notably we have opposable thumbs.

So this gives us an ability to manipulate

and particularize the environment

in a way that most other animals cannot.

And what’s interesting about this is that

as we gain this ability to manipulate natural resources

and count, point, pointing was a big deal

and that we could indicate prey

or items that are far off distance

and we could organize ourselves.

At the same time we co evolved this fine musculature

in the face and tongue.

So it’s as if speech developed,

co evolved really with our dexterity.

And as a natural extension of that came us making tools.

Right, we started to create things

to better satisfy our wants over time.

And the most tradable tool in any society

or the most tradable thing is money.

So I really, I argue that action and speech

are quintessential modes of self sovereign expression.

And the money is just sort of a tech layer

we’ve put right on top of that.

And that it’s a natural derivation of action and speech.

Okay, that’s fascinating to think about sovereignty

from the evolutionary perspective.

And then ultimately money is the technology layer

that enables sovereignty.

So, you know, it’s really fascinating to think about

our modern human society as deeply rooted

in these like evolutionary roots

from the very origins of life on earth.

So what, you know, some of the ideas you just mentioned,

what do you see are some interesting characteristics

of just life on earth that propagated to us humans?

Like what ideas propagated through,

have roots in the evolution?

Yeah, I think one of the deepest impulsions in life

is the territorial imperative.

So all life is seeking to expand its dominion

over space and time.

And we think about, you know, again, physically with space,

it’s advantageous to an animal or an organism

to have more territory under its control

to raise offspring.

So it’s all about reproductive fitness

at the end of the day.

And then we’d also think of reproduction itself

as the genetic impulse to have more,

to replicate oneself across time.

So it’s territoriality across time in a way.

And this is very common in most animals.

Not all animals are territorial, but many are.

And you see very interesting behaviors

resulting from territoriality.

This is like animal combat.

You know, the reason birds sing is territoriality,

a number of other things.

And it’s my hypothesis and others have shared

this hypothesis as well, that mankind is clearly,

I think, would argue a territorial species

and that he expresses this territoriality in property rights.

So property, when we hear that word,

we typically think of an asset.

We think of, oh, this house or this stock or whatever.

But property is actually the socially acknowledged

relationship between a human and an asset,

such that you have exclusive rights and responsibilities

to a particular asset.

It is not the asset itself.

So property, it’s information, it’s a relationship.

By the way, my mind was just blown.

Property is information, it’s not the actual asset.

That’s really important.

Very important.

That’s really interesting.

Yeah, and then it comes down to how do we organize ourselves

such that property, that the contributions people are making

are commensurate with the consideration they’re receiving.

So if you’re adding value to a piece of property,

you’re developing a piece of land for use,

in theory, to be fair, you should have the rights

to that fruit if you go out and plant a garden

or whatever it may be.

And this is rooted in natural law,

where we have rights to life, liberty, and property.

Those are kind of just the base,

the fundamental layer of morality and capitalism, frankly.

And you could think of, to get really primordial with it,

the first capitalist in the world,

just to kind of get some definitions out here,

I’ll say capitalism versus communism or socialism

as the spectrum I’ll speak on.

The first capitalist in the world would be the guy,

the caveman, that maybe dug a little hole for himself

to shield himself from the elements.

Maybe there was a rainstorm or a snowstorm

and he dug a little enclave and he protected himself.

I thought you were gonna go, because you said primordial,

I thought you were gonna go back to like

earlier biological systems.

I guess primordial for human, perhaps.

For humans, yeah.


And then the first communist or socialist

would be someone that decided the fruits of his labor

belonged to him.

So he would have violently encroached on that individual

and taken his plot for himself, for his own use.

And that’s the spectrum across which capitalism,

in the pure sense, and communism in the pure sense operate

in that capitalism, each individual has the exclusive rights

to the fruits of their labor.

So anything they spend their time, effort, energy

creating in the world, they own the rights to that

and they can trade those rights with others,

other self owned people that have done similar things.

Communism or socialism would imply that other people,

typically the state, have the rights,

at least some rights to the value you’ve created.

So there’s this interesting moment when that first caveman,

that first capitalist drew a line, a circle in this cave

and said, you know, this is mine.

You could say it was free to be claimed

at the time he claimed it.

But it’s an interesting moment when asset becomes an asset.

When space time, as you were referring to it,

becomes something that’s now can be possessed

by a human being.

Is there something special about this moment?

Because it feels like, first of all,

in terms of space and time, it feels like there’s a lot

of available space time yet to be claimed.

So if we just look at like the universe, right?

We’re talking about, there’s a funny thing

with Elon Musk and Mars, I think they sneaked in there

for SpaceX, that nobody on earth has any authority

on Mars or any, this is a very interesting question.

It seems almost like humorous at this time,

but perhaps not, perhaps there’ll be sections of space,

not just on planets that are gonna be even fought over.

So is there something special about this moment?

Because in discussing sort of violence

and respect for property, it feels like this is

a special moment because ultimately conflict arises

when you make claims on a particular territory.

It’s not always in conflict where people say,

when you look at Hitler or something, for example,

his claim would be in many of the lands that he attacked

and invaded that this is ultimately,

this has always belonged to Germany.

So is there something you could say as to like

what it means to own an asset or a property?

Yeah, so in the ancient days of hunters and gatherers,

we could say that property was mostly a loyal title,

which meant it’s just whatever you can defend, right?

So if you’ve got knives and daggers and satchels

and maybe some pelts you’ve hunted,

whatever you can hold and defend is yours.

And there’s not like, there’s a government to appeal to,

you’re just sort of a free agent operating in the wild,

defending the assets you can protect on you more or less.

And what really changed the nature of property

is when we get into the agricultural age.

So there’s a big flip where we went from just foraging

and hunting all the time, constantly moving,

trying to stay alive to deciding we’re gonna settle here.

We figured out how to cultivate crops.

We can create, we can increase the population

because we can harvest more energy from the sun

and we can establish a longer term civilization.

What happens in that transition

is that we begin creating economic surplus.

So for the first time in history,

we have stock houses of grain to defend

or maybe meat or cattle or whatever it is we’re creating,

we now have savings.

And it’s at that time when government emerges as well,

because once you have savings

or you have an economic surplus,

you have something that other people want to steal, right?

This one thing we’ll touch on a lot today

is people always want something for nothing.

People are always seeking the path

to get something for nothing.

And I think that drives a lot of our decision making.

And it actually encourages us to be innovative

in a lot of ways, right?

We’re trying to, you could say it’s our laziness

that’s helping us be inventive in a way.

We’re trying to accomplish greater results

with less efforts over time,

but we can cross that line in seeking something for nothing

where we start to violate the life, liberty,

and property of others.

And that’s where we shift from kind of capitalistic society

to something more communistic.

And so that’s what government is.

It’s a protection producing enterprise

for the economic surplus generated by a trading society.

So when people begin to trade,

they create what’s called the division of labor,

which is a very common economic term,

basically means you’re better at making hats,

I’m better at making boots.

If you specialize in hats, I specialize in boots,

and we trade, we’ve created a positive sum game

where you and I both benefit.

So we become collectively more than the sum of our parts

through trade.

And that’s why human beings do trade

because we become more energy efficient as a result.

We create more outputs per unit of input.

And you can think of government in that respect,

if we’re looking at it maybe in a tech sense

that the economy is the trade network that generates wealth,

generates innovation, generates all,

this whole lap of luxury we live in today

that we’ve inherited from our forebears is from the market.

It’s not from a government.

The government is the network security, if you will.

So we’re paying expenses to a vendor to protect peace,

to preserve life, liberty, and property in that network

so that we can have, you know,

when there’s inevitably disputes over private property,

we can have nonviolent dispute resolution

in the rule of law.

And we can have a reasonable expectation

of being able to conduct commerce without violence.

The problem has been that the protector tends to,

you know, they’re in a monopolistic position, we would say.

They tend to start abusing that position

to obtain property for themselves.

Again, trying to get that something for nothing.

When you control, you know, you are the security guard

for the economy.

The first thing they tend to monopolize is money

because if you can control the money,

you’re effectively controlling people, their energy,

their perceptions.

And that becomes a, you know,

particularly through inflation,

becomes an avenue to get something for nothing

and that you can just print more money

that everyone else is forced to sacrifice their time

and energy to obtain.

What are your thoughts about anarchism?

So I talk quite a bit, he’ll be here in a few days,

actually, Michael Malice, about ideas of anarchy.

And his idea or the idea of anarchists

is that any amount of government will eventually become

the very kind of thing that you’re referring to.

So there’s almost no way to have a government

that doesn’t then try to monopolize power,

money, and all those kinds of things.

Do you think it’s possible to have a government

sort of on that spectrum of like anarchy,

maybe libertarianism,

I’m not sure how exactly the spectrum goes,

but where you have a small government

that protects the liberty and property rights

and those kinds of things and doesn’t expand

to then also control the monetary system

and all those other things?

Is it possible?

Agreed completely, it was not possible until Satoshi Nakamoto.

So for the first time in history,

we have a money that cannot be monopolized,

cannot be corrupted, cannot be changed,

cannot be weaponized, frankly.

Our current monetary system is weaponized

by those who can print money against those who cannot.

And I think when you have,

at the heart of every modern economy,

which even we could say the US,

we pride ourselves as free market capitalists.

You know, we out competed communism in the 20th century.

We think that this is the superior model.

Most business people will tell you

that the free market is the best allocator of resources,

all of these things.

But what we have at the heart of every modern economy,

including the US, is an anti capitalistic institution,

which is the central bank.

The temptation to monopolize money

throughout all of history has been too strong

for anyone to resist.

So any, even benevolent, quote unquote,

dictators that have taken over,

many dictators have inherited, say,

an inflationary regime where society is coming apart

because someone was clipping the coins

or someone was printing too much money,

and they’ll commit to going back to a hard money standard.

So they’ll keep society on a gold standard, for instance,

such that they cannot violate the money

to benefit themselves.

But inevitably, over time, because it is

a political institution, there’s an incentive there, right?

For, again, to get something for nothing,

to spend more than you’re making through tax revenues.

And with that incentive, people typically,

ultimately end up pursuing that inflationary path.

So we can get deeper into that about,

inflation is a term that we’ve been conditioned

to think today is just something normal.

The prices just go up, and then it’s pertinent

to a healthy economy, but it’s actually,

if you look at it from real first principles,

it is just theft integrated into the money.

It’s a technology backdoor,

is another way to think about it.

You wouldn’t buy a cell phone knowing

that someone could siphon your data off your private calls

and sell it into the market.

Now, I know we do that with a lot of social media stuff

today, and that’s something else we can get into,

but you wouldn’t do it willingly, right?

You prefer that your cell phone and your data

was monetized by you, or if you’re gonna sell it,

you would be able to selectively sell it.

Inflation is that it’s similar, it’s a tech backdoor.

So it’s a money that only a few people

can siphon value off of surreptitiously, typically slowly,

but eventually, as we’ve seen throughout history,

that slowly builds up into a rapidly

and then causes the monetary system to collapse.

Do you think there’s a benefit to inflation, possibly?

So when you have perfect information,

perhaps you don’t need inflation,

perhaps it is purely theft, but I think of inflation

as like the snooze button on the alarm.

So if you have a hard standard,

you better wake up when the alarm rings,

but all of us kind of like probably shouldn’t,

but use the snooze button.

It’s like, okay, well, five more minutes

or 10 more minutes, and then you’re saying

there’s naturally a slippery slope

where it becomes a drug that you fall in love with

and you abuse, but nevertheless,

the usefulness of the snooze button

is that you don’t know how you’ll be actually feeling

when the alarm rings.

You might be able to ready to pop up.

It might be like you really need those few more minutes

to psychologically get yourself out of bed.

This metaphor is just not working at all,

but do you think there’s a use to inflation sometimes

from like an economics perspective?

I think the drug metaphor is a little more apt

in that inflation does provide

an immediately stimulative effect when used early on.

But what it’s doing is it’s, again,

we talk about the balance between incentives

and disincentives, right?

That being necessary for a system to function properly.

With inflation, you’re essentially giving the people

that can print money a way to dampen

the disincentives they face.

So it destroys feedback loops, I guess you might say.

And another way to look at this is when you,

so using inflation, using quantitative easing,

you can decrease short term volatility in the marketplace.

So the market is basically this idea,

this form of free exchange that’s trying to zero in

on the best ideas.

And the ideas are those that are most fit to reality,

to satisfying the most wants.

It’s gonna overshoot, it’s gonna undershoot,

you have these little business cycles.

But when it’s undershooting

and you’re experiencing a business recession,

in a capitalist environment,

the market needs to clear that malinvestment,

that misallocation of capital.

That means someone made a bet on a certain idea

that it would satisfy wants in a particular way,

and that bet did not pan out.

If you then paper over the losses

that business is creating,

you’re now delaying and exacerbating the volatility

that that idea created.

So this is kind of a Tel Aviv concept

where you can dampen short run volatility,

but volatility is truth.

Volatility is us matching our ideas to reality, right?

We’re constantly, again, overshooting and undershooting.

So you delay volatility,

you’re just amplifying it and exacerbating it

in the long run.

And that’s what central bank is doing.

The central bank mandate is low unemployment

and low and expected inflation, basically.

And so they’re trying to achieve economic growth

in a stable way, quote unquote, stable way.

This is their ostensible purpose.

And that’s just not possible.

Growth is an inherently instable process.

Can you elaborate a little bit

about the nature of volatility?

Why is it communicating truth?

That’s something that a lot of people are afraid of

is the volatility.

Almost like it’s a sign of chaos,

and so they want to escape chaos.

But you’re saying that that’s actually,

whether it’s chaos or not, I don’t know,

but it’s getting us closer to the fundamental reality

that we should not be trying to escape.

Yeah, so if we consider that the universe

is pervaded by entropy, right?

This is the second law of thermodynamics

is that every closed system

tends towards greater disorder over time.

And that life itself, again,

I would argue expressed through the logos,

we, life, is the antientropic principle.

It’s the only thing that’s converting entropy into order,

chaos into order.

And that’s what entrepreneurs are doing, right?

We’re living at the edges of the known,

and we’re testing ourself against the entropy of nature,

trying to figure out new and better ways

of saying, doing, or making things.

And then if we do crack a code or figure something out,

we then have a big incentive.

The incentive is to get rich, right?

Because then you have a new idea

that you could then sell back into the marketplace.

So it’s this sequence of courageously confronting

the entropy of nature and converting it

into good and useful order,

which by the way is like the ancient idea of God in Genesis,

which I think is interesting,

that actually enables us to construct civilization

in these layers of anti entropy or order, you might say.

So today we live in a bubble of anti entropy or order,

like the coastlines are guarded by the nation

and the city has a certain police force

that keeps it in order.

Even the way we talk,

like clearly the words matter,

but also the nonverbal cues,

all these things are like order that has been established

over many, many, many thousands of years of human evolution.

And I think that’s, when I say volatility is truth,

what I’m saying is that the experience of uncertainty

is something that’s ineradicable from life, right?

And certainty, like it’s kind of a paradox

because we’re fighting against it, right?

We’re trying to innovate our way away from uncertainty

to create more capital,

which capital is very simply a way of mitigating uncertainty.

So this is why you might have like a stash of food

in case the power goes out or a generator,

like it helps you overcome uncertainty over time.

But uncertainty is also where all the sweetness of life is.

So there’s gotta be this balance

with one foot in, one foot out.

So human society is this kind of bubble of order

that we’ve constructed and slowly expanding,

but at the edges, you’re always going to have that chaos,

that volatility, and that the entrepreneurs

are kind of like jumping into that chaos

and some of them die and some of them succeed.

And so like, if you wanna grow this bubble of order,

you have to be embracing the volatility at the edges.


And reverence for entrepreneurship

because these are the people putting their neck out,

so to speak, risking themselves.

And they’re gonna contribute to society, by the way,

whether they go up in flames or not.

If they go up in flames,

society has witnessed their experience

as something not to do or something that doesn’t work

in a particular time and place.

So that you could say them going up in flames

is a way of enlightening the rest of us.

Or if they figure something out,

Steve Jobs creates the iPhone, changes the world forever.

So enlightening the rest of us, okay.

And Taleb would say.

The fire of their failure, okay.

Yeah, exactly.

Taleb would say individual fragility

is inseparable from ensemble anti fragility.

So this means that, again,

every time that entrepreneur goes up in flames

or say a restaurant goes out of business,

when a restaurant goes out of business,

that particular cuisine strategy they were implementing

in that particular time and place,

that’s a signal to all the other restaurants in the area

that that doesn’t work.

So restaurant food improves from bankruptcy to bankruptcy.

So it’s this death of the individual components

that contributes to the growth of the ensemble.

As a small aside, maybe you can guide me through it.

I don’t know if you’re paying attention,

but there was some chaos around Taleb

and the Bitcoin community.

I wasn’t quite paying attention,

but from my outsider’s perspective,

I thought it seemed Taleb was a supporter of Bitcoin.

And then a lot of people were very upset about something.

I’m sorry if I don’t know the details,

but can you pull out some profound philosophical ideas

from the disagreement of the chaos?

I admittedly don’t know too much about it either.

I’m a big fan of his writing.

He’s always been a little different in person.

Like I actually, he signed one of my books.

I met him in person.

He’s just, he’s got a very abrasive personality.

He’s kind of known for it.

It’s not, I don’t think I’m passing any judgment here.

He sort of embraces it.


But he had written the forward

to a really important book in Bitcoin

called the Bitcoin Standard for safety in a moose.

And then I think they had a little Twitter beef

because safety is very much against COVID mask

and state intervention,

whereas Taleb’s on the other side of the fence.

And so, and then after that beef,

Taleb came out against Bitcoiners saying,

oh, Bitcoiners are crazy and wrong.

I think the great mask debate of the 2020

will probably be the thing

that ultimately leads to World War III.

I’ve been very surprised how tense, how much like division

this one little arguably silly thing has led to.

I think a lot of people sort of project their,

like, it’s almost like not wearing a mask

is a statement of sovereignty, of freedom,

of like saying fuck you to the man,

the government, the centralized power,

or the dishonesty or the, in the scientific community,

all those kinds of things.

And then wearing a mask is a sort of kind of signaling

of various kind of social aspects.

I don’t know.

I’m not paying attention to it.

I actually tuned out.

I was part of a group of scientists

that were looking into like, do masks work?

This very interesting question.

To me, it was an interesting question.

I sort of roll in to ask that very interesting question

because I think it is an interesting scientific question.

But then I quickly realized that just as I was doing this,

like scientific exploration of this very interesting question

about Viron particles, like what kind of things,

like from a scientific perspective,

how do we prevent the spread of a pandemic?

Forget COVID, any pandemic, super deadly or not deadly.

Like there’s tools, there’s testing, there’s masks,

there’s all these tools, how well do they work?

And then I realized, you know, in April or so,

it became a tool of politics, a tool of philosophy.

And that’s when I sort of pulled out.

So it’s fascinating.

I think it’s a canvas on which people project

their emotions and I guess Tillam got caught up

in that kind of, so there’s nothing fundamental,

I suppose, to their disagreement.

Not that I’m aware of, but he is, you know,

he’s written some about in his books,

the problem with centralization.

I mean, a lot of his writing addresses that

and he actually points to, I think Switzerland

is the best government in the world

because it’s decentralized.

So there’s that, I don’t think he has any,

I’m not to speak for him, but I don’t think he’s voiced

any specific critiques on Bitcoin per se.

Could be wrong about that.

It’s just maybe his flavorful language

and the way he likes to communicate.

And the other theory is that maybe he’s playing 4D chess

and having a Twitter boating accident, you know.

So I don’t believe in Bitcoin, I’ve sold all my Bitcoin.

Oh, I see.


Sorry, the boating accident in Bitcoin is this,

I guess it’s proverbial by this point,

where it’s the way you lose your Bitcoin.

So if someone comes after you and says,

hey, you know, whether it’s a government

or an individual’s coming after you saying,

give me all your Bitcoin or pay these taxes in Bitcoin,

you go, oh, I had a boating accident and lost them all.

Lost them all.

So, yeah.

But back to the fundamental nature of space time.

Let me ask you, because we’re kind of left at,

I’d like to go back to this idea of,

that you said that everything we think, say,

or do occurs within the bounds of space time.

So first of all, maybe you can comment on

what do you mean in this context about space time,

but also about the nature of truth.

Like how much of all of this is knowable?

How much of this is accessible to us humans?

How much uncertainty, like what we’re talking about,

is there in the world?

Are you, do you fall in a place

where we can reason deeply about this world

and it’s knowable, or is it mostly chaos

and we’re just holding on for dear life?

Yeah, I think I said that all action occurs

within the bounds of space time.

The other thing, everything we say, do, or make,

the other thing is that everything we say, do, or make

starts out as an idea.

So there’s this concept of universal Darwinism,

which basically applies Darwinian principles,

but outside of the biological sphere.

So we could say that this kind of gets into

Richard Dawkins memetics, that even ideas are competing,

reproducing, recombining.

That idea is so powerful, by the way.

I don’t think it’s been understood fully.

I think in the digital, in the 21st century,

in the digital world, from my perspective

in artificial intelligence,

there’s yet to be some profound things

to be discovered about this whole construct.

Agreed completely.

It’s been called an acid, actually,

in that it strips away all of the noninformational

components of something, just strips it down

to its bare bones.

I have a quote in here somewhere about that, but.

I’m sorry, which is called an acid?

The ideas?

The universal Darwinism.

Darwinism applied broadly, outside of the.

Applied broadly, and I’ll condition all of this

by saying that a lot, most of my thinking

is shaped by a book I read recently

called The Case Against Reality,

which introduced me to this concept,

but it tied into Darwinism that I’ve used

more broadly in the past, looking at things

like money and economics.

So the book, The Case Against Reality,

by Donald Hoffman, he has a quote in the book

that describes universal Darwinism.

It says, quote, universal Darwinism can,

without risk of refuting itself,

address our key question.

Does natural selection favor true perceptions?

If the answer happens to be no,

then it hasn’t shot itself in the foot.

The uncanny power of universal Darwinism

has been likened by the philosopher Dan Dennett

to a universal acid.

And Dan Dennett says, quote, there is no denying

at this point that Darwin’s idea is a universal solvent,

capable of cutting right to the heart

of everything in sight.

The question is, what does it leave behind?

I have tried to show that once it passes through everything,

we are left with stronger, sounder versions

of our most important ideas.

Some of the traditional details perish,

and some of these are losses to be regretted,

but good riddance to the rest of them.

What remains is more than enough to build on, unquote.

So the way I would interpret that is that life itself,

I’ve come to view life as information propagating

through flesh, and that we are,

I guess DNA is a quadratic code.

I think it’s four letters, maybe,

versus a binary, zeros and ones.

And we are ideas, we are strategies competing

with each other, and nature is that which selects.

It’s what selects the winning ideas,

the ones that are most fit

to environmental conditions, frankly.

You know, talking about sovereignty and individualism,

there might need to be some rethinking here

about what is actually the basic individual entity

that is to be sovereign.

Like maybe our biological meat vehicles

were like way overly attached to them.

Like maybe, especially with genetics

and all those kinds of things,

or artificial intelligence, or living more and more

in virtual worlds will become detached

from that kind of idea.

So for example, if I can clone you,

you know, make one million robbers,

and, you know, but you’ll all have the same idea,

what is your real value as the,

like I could just shoot you,

and there’ll still be 999 of you,

but the idea is the important thing,

the things you believe, so.

I would argue that I don’t know,

even if you clone someone perfectly,

I don’t think you can reproduce the individual themselves,

because we’re all a product of nature and nurture, right?

So my particular concourse of experiences,

the path dependence that I represent cannot be replicated,

nor can anyone’s for that matter.

Well, that’s a hypothesis, so.


That’s of course a human meat bag would say.

Good point.

Like desperate trying to preserve himself.

You know, I think it reduces

to some fundamental questions about what is consciousness,

and whether that can be cloned.

All those kind of, you know,

it gets to the core of what it is to be human.

What are the things that make you particularly you?

Yeah, I think it would assume

kind of a materialist viewpoint on reality,

and that if you could reproduce every atom of an individual

that you would have their experience encapsulated in that.

And, you know, Hoffman’s, which his book is very radical,

he argues that space and time is not an objective reality,

it’s a biological interface.

So we are scanning our environment for fitness payoffs,

and this space and time is the rendering

specific to human beings

that allows us to navigate reality effectively.

So the further argument would be

that we all have pretty similar interfaces,

but they’re all slightly different too,

because we’re all, you know, adapting in different ways,

and that different animals have their own unique interfaces.

So we have a certain amount of photoreceptors in our eye,

whereas I think the number is three, might be five,

or something like the mantis shrimp has like seven or nine.

So they can see,

and we only see one 10 trillionth of the light spectrum.

So talk about a tiny fraction.

I mean, one 10 trillionth is a very minuscule number,

and that makes up all of the light

that we can interpret with our eyes.

But something like a mantis shrimp

could see, you know, much more of that.

So I think there’s this, we’re very conditioned

to have a fully materialist viewpoint on reality today,

where we think, you know,

the atomic clockwork kind of universe.

But I think there’s, I don’t think that’s true exactly.

And another school that goes into that

is actually Austrian economics,

where we could say that, you know,

we mentioned earlier that an asset is not property.

It’s actually based on the relationship

between the individual and the property.

There’s this whole realm of relevance associated with,

we’re all moving through life

in the course of a goal directed action.

So when we walk across a room, I go from A to B,

it’s because I valued B more than A.

So value is inseparable from human action.

We have a rank ordered value system in our mind,

each of us, and we’re constantly taking action

in accordance with those rank values.

Anything that accelerates us on the course

of our goal directed action towards our goal is useful.

Anything that impedes us, or we could say is valuable,

anything that impedes us is actually obstructing to value.

And anything that’s irrelevant is just valueless.

So this table that we’re using right now,

like this is an accessory to UNI

because it’s holding this paper

that’s holding the information

that’s guiding our conversation.

But we could pay someone $100 to jump over this table.

And this table could simultaneously be an accessory to UNI

and an obstacle to someone else.

So it’s this domain, this silent contention of willpower

and agendas occurring across the face of the earth

that is what Austrian economics really looks at.

It’s the realm of human action, as they call it.

It’s called praxeology.

So it’s a non materialist viewpoint on reality

and that things, we think in terms of matter being reality,

but it’s often more so in the sphere of human action,

what matters, that is reality.

It’s the relevance of a thing

to the course of one’s goal directed action.

And that’s ultimately exists in the space of ideas.


Not in the space of physical matter.

And just to jump back to this line here,

I think his fundamental line here is the question is,

talking about universal Darwinism as an asset,

what does it leave behind?

I’ve tried to show that once it passes through everything,

we’re left with stronger, sounder versions

of our most useful ideas.

That’s the key point to me.

And that ideas and information, so far as we can tell,

are the most fundamental substrate of reality.

And information itself, back to entropy,

information is the resolution of entropy.

That’s what the bit is, right?

It’s a one or a zero.

Whatever reduces your entropy by half is a bit.

And we measure information in bits.


And you’re right.

People don’t have ideas, ideas have people.

Honestly, it’s a really profound idea

or a statement about reality, a reframing of reality.

If we’re actually being deeply honest about it,

it’s quite painful.

I do appreciate that you defended

your biological meatbag earlier,

but it seems like ideas are the things that have power.

That me, Lex, for example, is worthless.

And relative to the ideas that used my brain

for a bit of a time.

But so far as we know, only human beings

can generate and share ideas.

So you can’t say Lex is worthless.

Like you are the node of the idea sphere.

I’m the newest fear.


What is it?

From a Bitcoin perspective, I’m like, I’m mining.

I’m solving the cryptographic problem and generate.

In that sense, I’m a useful node.

Yeah, you’re competing to solve the puzzle of entropy,


And when you do solve it, it benefits the entire network.

But I guess from my perspective,

just because just working in AI,

I’m looking at the longterm vision.

I see us humans and AI systems as really the same

and AI systems ultimately as something

that supersedes humans.

So what is intelligence?

So in the context of our current discussion,

I think intelligence is very closely linked

to this notion of ideas.

And it’s the ability to generate ideas,

to mold ideas, to compress seeming chaos

into some model, into some theory

that efficiently compresses the chaos

in a way where you can then integrate it with other ideas

and they can play and all those kinds of things.

So in that sense, it’s the turning chaos into order.

It’s the molding of ideas such that our human brains

can work with it.

And just from my perspective,

I don’t see any reason why that can not be algorithmatized,

converted into computational systems.

I would agree.

Which is scary.

Scary or potentially really promising, right?

It’s kind of the case of all novelty.

It’s terrifying as much as it is promising.

That’s why you’re pursuing it so heavily.

I would maybe take it a step further

and say that intelligence

in maybe its most simplistic form is error correction.

So we, humans have wants.

Again, we’re constantly expressing our value through action.

There’s no other way to express it by the way.

It’s whatever you choose to do in any moment,

you are expressing the values you hold

in your mind and your heart.

So as we move from less valued A to more valued B,

entropy happens, uncertainty happens, we fall off course.

And it is intelligence that enables us

to render information from that experience

and error correct, right?

So that we can move slightly,

shift our trajectory slightly more towards B

that we’re trying to move towards.

So I think that there’s something there

that I don’t know that we can make synthetically.

And that if we define intelligence as error correction,

it’s like error correction to what?

It’s error correction towards what we find is valuable.

So we’re trying to satisfy human wants.

Might not just be our own, could be others as well.

If I’m an entrepreneur,

I’m trying to solve the wants of others, not just myself.

And I’m trying to error correct myself towards that goal,

using intelligence and processing environmental feedback

through intelligence to error correct.

So I don’t know how,

if you eliminate the human element completely,

who’s doing the wanting, right?

Where does value come from?

I know the machine learning people who are listening

are saying that’s exactly what machine learning is,

which is error correction

because you have a loss function, objective function

that measures how wrong your thing is

and you wanna make it less wrong next time.

That’s the whole process of machine learning.

But you’re saying what humans are able to do

is in a world where there’s no maybe objective values,

absolute values, you’re generating that very loss function,

that objective function that measures the error

comes from the human mind.

Some aliens might disagree with you

because they might have a different objective function.

Obviously, the purpose comes from consciousness, I think.

And without purpose, there’s not error correction.

Yeah, I mean, this is again, a hypothesis.

Like where does purpose come from?

It seems to come from consciousness, you’re right.

That’s where suffering comes from

and you want to lessen suffering.

That’s where pleasure comes from.

It seems like it’s consciousness.

Maybe there’s something to this biological meat bag.

So to take it one layer deeper on this

and the reason I like this book so much,

again, The Case Against Reality.

So he’s making the case that space and time

are not fundamental.


Which I started my intellectual explorations in physics,

actually astrophysics.

So for the longest time, even the way I describe money

as I talk about space and time, so that blew my mind.

But this dovetailed nicely with another book called Lila.

The author is Robert Persig.

So he wrote Zen and the Art of Motorcycle Maintenance,

which is a very popular book.

20 years later, he wrote Lila, which no one’s heard of,

which is crazy.

And he basically says he was wrong about his first book.

And he lays out this entire other metaphysics of quality,

he calls it.

So it’s the metaphysics, I think it’s metaphysics of quality.

But his supposition is that it’s not physical reality

that’s fundamental.

It’s not informational information that’s fundamental,

it’s value.

So he actually, and it’s a beautiful book,

I highly recommend it.

He essentially is refuting causality itself.

We think A causes B.

This book makes the case that B values precondition A,

so that we are actually creating our future

through our value systems.

And this goes back to something,

I think Solzhenitsyn said this,

that the line between good and evil

runs down the heart of every man.

So it’s as if our moral decisions

are actually what’s creating the outcomes

in reality over time.

And then that gets into all the wisdom traditions

related to religion,

where it’s always talking about loving thy neighbor

and loving God and all of these other things

that are good morally to create the best outcomes.

So values are fundamental.

Value, yes.

Value is fundamental.

Oh boy, yeah, that’s interesting.

It does feel like physics is not capturing something.

You know, there’s some people, panpsychists argue

that consciousness might be one of the fundamental

properties of nature,

like from which emerges everything we see.

So that could be just other words

for this same notion of value.

And then the basic laws of physics

are not capturing that currently.

So maybe humans, in order to understand

from where humans came from,

we have to understand these other properties of nature,

which are yet to be discovered at the physics level.

And it’s, we contend with that underlying nature,

whatever it is, with the logos, right?

So we’re looking at uncategorized nature

and then we’re assigning a word to it.

So we’re slicing up chaos into little boxes of order.

And then we’re establishing this social consensus

as to those labels, which we’d call words.

And we’re using that to communicate.

And when we communicate,

we can start to build these other things.

This is like the Yuval Harari imagined orders.

So we can create these useful fictions, right?

Whether it’s the nation state or human rights or money.

And that allows us to cooperate flexibly in large numbers

so that we can better contend with reality.

We can produce more complicated things.

We can enlarge that bubble of civilization against entropy.

And that’s what capitalism is all about.

It’s about further specializing knowledge,

further enriching mankind’s treasury of knowledge

and doing it.

But to do that, the communication media that we’re using,

the words have to have stable meaning.

The money needs to have value that’s dependable, right?

It needs to be something that’s, it’s not dictated

by any one group.

It’s reached by consensus of the entire group.

That’s how, so you could think it’s like optimizing

for error correction again,

where a free market would be harnessing the intelligence

of all market actors and a central planning

or essentially planned market would be harnessing

just the intelligence of a small group of bureaucrats.

And it’s not obvious how to achieve this kind

of consensus mechanism.

I mean, there’s obviously, we’ll talk about sort of Bitcoin

as an idea.

Ultimately, the idea of Bitcoin is connecting it to physics.

So like, you can trust that physical matter won’t change.

But, you know, there could be other ideas that we get.

Maybe physics could be changed.

If Eric Weinstein has anything to say about it.

Like it’s, you know, we right now believe

that physics can’t be changed.

The physical matter of the world, but maybe it can

in a way that we’re totally not understanding.

You mentioned sort of reality

from Donald Hoffman’s perspective.

Like if we don’t have even close to direct access

to the fabric of reality, maybe we’re living in a world

that’s very like many dimensions,

that the notions of space and time is just like a silly,

useful construct that’s not at all connected.

You’re starting to look at like Stephen Wolframs.

I don’t know if you’re familiar with this view

of the world that it’s like hypergraphs underneath it all.

Like these mathematical structures

from which everything emerges.

Like they’re like many, many, many orders of magnitude,

smaller than what we think of.

They’re even smaller than like strings and string theory.

So like those are the basic mathematical objects

from which it emerges.

I don’t, you know,

I think that’s an interesting philosophical framework.

It’s also, people should check out a cool way to play

with beautiful hypergraph mathematical structures.

So he has, I don’t know if you know who Stephen Wolfram is,

but he created Wolfram Alpha and all these tools

that you can actually visualize and play with.

So you can play with physics in a visual way,

which, or at least discrete mathematics,

which I think is incredible.

He doesn’t get enough love.

One of the reasons he, I think doesn’t get enough love

is because of this little quirk of human nature,

which is the ego.

And he sometimes frustrates a few folks

because he’s very, let’s say proud of his work.

I guess.

But it’s interesting to think about a world

where we don’t have direct access to reality,

as Hoffman argues.

And maybe, I don’t know if you can comment.

I don’t know if you’re familiar with Ayn Rand’s work

and her whole philosophy of objectivism

or her whole contention is that, you know,

we do have access.

I don’t want to misstate it,

but at least she would claim

that it’s not useful,

or I think she would probably say it’s not correct

to argue that we don’t have access to reality.

We have, hence, objectivism.

We have direct access to reality.

That’s the only thing we can reason about.

And the only way to live life morally

is to reason through everything,

starting with the axioms of reality,

which we do have direct access to.

Do you have thoughts about her work?

I am slightly ashamed to say I have not read Ayn Rand yet.

So she is high on my list

and she’s been recommended a number of times.

So I don’t know a lot specifically

about her philosophy or objectivism,

but to me, it resonates closely

with what the American pragmatist commented on truth.

And they distinguished what you could say

is absolute truth, which is at the bottom of reality,

whether it’s Mr. Wolfram’s mathematical formulas or value,

whatever it may be, it’s something ineffable,

something beyond the reach of epistemology, perhaps even.

And maybe that’s why religion just sort of points to it.

It’s trying to use, I think Joseph Campbell said something

like religion is using stories

to point towards the same transcendental mystery

we all experience but cannot articulate.

So something like the artist,

the artist uses lies to point to the truth,

something like that, that kind of thing.

That’s really good.

But the American pragmatist said that,

because at the end of the day, this is all about,

when we say truth, we need something

that is close to social consensus

and is not shakable by political action.

So that’s what physics and mathematics are.

It’s an unshakable point of reference,

I guess you might say.

So the American pragmatist defined truth

as the end of inquiry.

And in markets, we could say that the market itself

is a forum that generates truth.

We call this pragmatic truth

to separate pure objective truth

that we can’t even talk about without polluting it

versus pragmatic truth,

which is something that’s useful.

So the example here would be,

if I give you a map and you’re trying to go

from your house to the local brisket restaurant,

and the map gets you from your house

to the brisket restaurant,

is that because the map is true

or is that because the map is useful?

They’re very hard to disentangle

when you’re just looking at it pragmatically.

And in markets, markets, I argue,

generate three forms of pragmatic truth.

One is the price.

So this is the collective subjective demand

and purchasing power of humanity

running up against the objective supply of capital

and resources in the marketplace.

So there’s demand overlaid on supply.

The result of that is the price.

So that is the most truthful exchange ratio,

which is the closest approximation to the value

of any good in the marketplace.

So it gives us a data point on which we can operate.

It’s compressing all known market realities

down into a single actionable number.

You know, based on the price of bread or copper,

whether you wanna buy more of it,

you wanna abstain from buying it,

or maybe you wanna try and find substitutes.

And you can think of that price signal,

it’s like an economic nerve signal.

It’s coordinating human action across time.

So if we’re one socioeconomic superorganism or collective,

that the price signal is the nerve.

And that’s the first form of pragmatic truth

that markets generate.

The second form would be tools and innovations themselves.

So entrepreneurs are experimenting across time.

They’re trying to satisfy the wants of consumers.

Consumers are sovereign in the marketplace.

Whatever the consumer wants, the consumer gets, right?

I’m trying to satisfy that.

I’m trying to do it at a profit.

So I’m trying to take viewing the existing price signals

of goods in the marketplace.

I’m trying to assemble those in a way

at a cost lower than the final solution

I’m delivering to my customer.

I’m selling it at a price higher

than the productive factors I combined to create it.

And in that iterative process,

we’re constantly discovering new and better ways

of solving problems or satisfying the wants.

So we could say, to go out and dig a hole, right?

Someone wants a hole dug,

that a shovel is gonna let you do it much faster per hour

than you would with your bare hands.

So what is the pragmatic truth of digging holes?

It’s a shovel, right?

It’s the best way we know how to solve

any particular problem based on

the existing treasury of knowledge.

So every tool, again, we’re back to ideas being fundamental.

The shovel itself is just a knowledge structure.

We’ve figured out a way to create this particular implement

and then we’ve indexed the raw materials

we found in nature to this knowledge structure

to create a shovel,

which allows us to better satisfy human wants

faster, cheaper, better, effectively.

I’m trying to generalize,

you’re blowing my mind a little bit here.

I’m trying to generalize the idea of tool

to how to think about it.

Cause I keep just, when you say tool,

I keep imagining different tools,

like specific instantiations of a tool.

I’m trying to see, so the price is a pragmatic truth

that’s communicating value in this network.

Subjective demands against objective supply.


So it’s an economic democracy.

Got it.

So that’s the demand supply.

And then the tools are the ways of extracting

or solving problems is the more general kind of thing.

Or satisfying wants.

Satisfying wants.

So wants are somehow, that’s part of the supply

and the demand.

And wants are back to value, right?

Cause everything someone wants,

they’re expressing their value.



So the shovel is a pragmatic truth.

The shovel is truth.

It feels like a good book title.

Okay, sorry.

So what other pragma, what is it?

And then the third one I would argue is virtue actually.

Oh wow.

And another way to maybe think about this

is competitive competency,

but it’s also cooperative competency.

So we’re learning over time what characteristics,

what patterns of action, what mindsets,

what mental tools, what heuristics are most useful

to satisfying customer wants.

So I think that becomes over time,

becomes sharpened into virtue, right?

Like we know it’s best to be honest

because if you lie, it’s very energy inefficient, right?

You’re creating this little fork of reality.

And then if someone else asks you about that lie again,

you have to put another layer of lies on top of it.

Where if you just tell the truth,

you’re just recollecting what happened.

And so that sort of keeps,

again, when we’re talking about delaying volatility, right?

If you lie, you’re delaying short term volatility,

but you’re increasing longterm volatility.

What about murder?

I haven’t been able to figure out why murder is bad

because I just keep wanting to murder people.

And I’ve murdered many.

She’s the one for that.

Well, that’s why I’m trying to get an interview

with Vladimir Putin.

So that’s fascinating, virtue in this market

with the supplies and demands, and there’s the tools,

which is also a pragmatic truth, and there’s virtue.

It’s a pragmatic truth.

Yeah, and if we interfere with that free market process,

again, if we overstep, which this maybe ties into murder,

if you start to be coercive against life,

liberty or property,

so if you’re forcibly taking someone’s life,

you’re breaking down the trust in that market

that generates these pragmatic truths.

If you forcibly infringe on someone’s liberty, right?

For any reason other than them originally breaking

or infringing upon life, liberty or property,

then that’s not gonna work either.

And then if you violate private property rights,

if you steal property from others,

you’re breaking down the trust

that the intersubjective fabric of money and markets

and the rule of law, all of these useful fictions

are meant to preserve,

you’re corrupting it and breaking it down.

What’s kind of interesting to think about the market

as helping evolve the virtues.

It’s sharpened into virtues.

And then these virtues can then go

into motivational posters,

or like in books that we all agree on,

and then eventually take for granted

as if they were somehow fundamental to human nature,

but they’re not perhaps fundamental,

they’re just pragmatic truths.

Yeah, another way to consider competition itself

is that it is a discovery process.

So, you know, entrepreneurs are competing with one another

and they’re trying to best satisfy consumer wants

at the lowest possible price.

So they’re placing bets of time, energy and capital

on themselves, on their idea, their business plan.

And then the market decides, right?

The consensus of market actors decide which one was better.

One lives, one dies.

So competition itself is helping us get closer to truth,

to pragmatic truth.

So we’re discovering what is the right price for this asset.

And that price, by the way, it’s derived,

again, in the sense of data compression.

Everyone in the world can see that price.

Everyone in the world can then put their skin in the game

by choosing to buy or sell or short or go long

or do any number of financial actions on that price.

And that information is then propagated back out

to everyone else.

So it’s this feedback loop between market actor and price

that makes it so useful.

And that’s what carries us,

so it’s these collisions of interest that carry us,

it removes the unuseful aspects of ourselves

or of our tools or of a price

and reveals pragmatic truth to us.

Can you play my therapist for a second?

And if we talk about creative destruction,

I think, not Bukowski,

Hunter S. Thompson has a quote,

something like, for all instances of beauty,

many souls must be trampled.


But there does seem to be an aspect of competition

that destroys, you were talking about entrepreneurs

sort of on the outside of the circle of order,

striving to make sense, to compress volatility

of the chaos of the universe.

Is there some way to protect a little bit

against the pain of that destruction

or that creative destruction,

that entrepreneur screaming on fire

as he enlightens the rest of us,

is there some role for us humans together

in the togetherness of it?

Also government, but any kind of collectives

in helping that entrepreneur who’s on fire

maybe after a few minutes to spray him with some water

and put him out of his misery?

I would say that pain is the inarguable basis of being.

Pain is, no matter how you try to explain it away

or describe it,

or it’s not something you can rationalize away.

No one, I think ever,

someone may want to cut themselves to have an endorphin high

but no one wants to suffer, we’d say, right?

So pain in that sense,

it is what we’re constantly trying to deal with

and to move away from or create buffers between us

and potential pain or potential uncertainty.

And that pain is information.

When we experience something

that is misfit to the outcome we desired,

that pain is what puts us,

it encourages us to change our trajectory

to get back on course towards our valued aim.

So as far as, you need entrepreneurs that are exploring,

and you’re trying to do something new,

if you’re a pioneer of any kind,

you are courageously facing pain.

You’re willfully confronting it.

So I don’t think it’s avoidable in that sense.

It’s not like we can have pain free economic growth

like the central bank would maybe have us lend to believe

that we can just run these experiments

and when they fail,

we’ll just paper over all the losses and continue.

Or you’re just delaying and exacerbating

the inevitable volatility back to reality.

But what I would say is that capitalism,

because we’re building,

we’re increasing the capital stock of the world,

which again, capital is the mitigation of risk.

So we’re reducing the overall risk of existence

by accumulating more capital in the world.

And that’s what protects that entrepreneur

that’s deciding, hey, I saved up a million bucks.

I’m gonna go try this business idea.

I’m gonna put all my money on the line.

And if he goes up in flames,

then his cost of living when he comes back to reality

and he’s starting over from zero,

his cost of living is substantially lower

starting over from zero than it was in the past.

So then he would be out in the wilderness on his own.

So it’s the accumulation of capital stock

is the buffer against uncertainty for everyone.

And it gives you actually more potential

to go out and experiment,

to go out and confront the chaos of nature

because you are better healed effectively.

So I think we’re speaking

in sort of idealistic terms about the power of capitals

and when it works well.

Is there any aspects that you think

that don’t work well in a free market

in all the basic pragmatic truths

that we were talking about?

Is there ways it can go wrong?

So I would first argue that we have never seen

an actual purely free market.

Closest example would be kind of geopolitically

we have a free market

and that governments are not necessarily governed

but they are premised on governing large groups

of individuals.

So that’s not, doesn’t exactly.

You mean between governments?


See, but isn’t there still,

so a free market, maybe you can correct me,

is the free market still grounded in the ideas

of property rights and all those kinds of things, right?

So governments tend to also sometimes

be violent towards each other.

That’s right.

So they don’t respect all the basic aspects of capitalism.

That’s right.

So maybe another way to look at this is that

gold is the original governor of government actually.

And this is the reason governments have abused

and gone off of the gold standard.

So historically, if you are a bank or a nation state

and you produce more currency

than your gold reserves can justify,

then gold will flow out of your bank

or out of your country.

So there’s this natural check via the money

that via capitalistic money, which is gold, right?

Gold was selected by the free market.

It’s not decreed by government.

It provided this natural check on government action.

So my, I guess to get back to the original question is

we’ve never seen a pure free market

because money has always been monopolized

and coerced, frankly.

So to try and answer what goes wrong with a free market

is really difficult because we’ve never actually seen it.

And I would define free market is one

in which government only protects life, liberty and property.

And so that has a very minimal role in society.

Again, just as network security

for the economic trade network.

And anything that, any government function that goes beyond

those three core functions, which by the way,

are pretty much the core tenants of morality as well.

So government’s just really intended to preserve,

you know, natural law, if you will.

Anything that goes beyond that is,

moves us closer to an unfree market.

So every regulation, every act of coercion

is actually a gradation closer to a purely unfree market,

which would be a monopoly.

So in terms of what I guess theoretically we could say

goes wrong in the free market is that it’s volatile.

It’s trading off, it’s accepting short term volatility

in exchange for less long run volatility.

And this tends to be the way of nature, by the way.

So if we look at something like there’s a region

in North America called Baja, California,

and it runs into the United States

and it runs down into Mexico as well.

So the same topology, but two different jurisdictions.

In the US, we very heavily manage forest fires.

We’re trying to manage nature effectively.

Whereas in Mexico is much more unregulated.

It just, when wildfires spring up, they let them burn off.

North America, when wildfires spring up,

we’re actually extinguishing them.

So we’re constantly trying to dampen

the short run volatility of these small brush fires.

Whereas in Mexico, we just let them burn.

We let nature do its thing.

The consequence of this is that the wildfires

still occur eventually, but they’re much larger

and much more devastating in North America

where human intervention has occurred

because it’s dampening nature’s natural corrective mechanism

of clearing this underbrush with these more frequent

and smaller fires at the cost of much larger fires.

So again, we’re delaying short term volatility

and exacerbating long run volatility.

And in Mexico, it’s the opposite, right?

Just these wildfires burn much smaller

and more continuously over time.

The further effect of that in North America

is that the fires can get so big and so hot

that it burns away the top soil.

So it actually destroys the fertility of the soil itself.

So the point of this is that human intervention, right?

Even the intention behind North American authorities

managing that forest fire is to create less destruction.

That is the intention,

but the intention is divergent from the outcome.

So in Taliban speak, he would say that human intervention

moves us from mediocre stan into extremist stan.

So mediocre stan would be something much more like nature

where for instance, you can’t double your body weight

in a day, probably can’t even do it in a year, right?

But in extremist stan,

which is something much more information based,

you can double or send your net worth to zero

in a single trade in a single moment, right?

So when we try and intervene

with natural biological systems

that have these feedback loops,

we actually start to push the system more

to behave more like an extremist stan system

that has less short run volatility,

but more extreme long run volatility.

So, but the question is,

where you look at capitalism or communism, for example,

and by the way, yes,

I will talk to somebody who’s a Marxist or a communist,

like Richard Wolff is a pretty eloquent defender

of these ideas because it’s always good

to really understand ideas

as opposed to just reject them offhand.

When you look at the system of capitalism

or the system of communism,

there’s ideals and a lot of people argue

in this perfect form would actually be good for the world.

The question is how resilient are they

to the corruption of human nature?

And I mean, you’re saying that there’s not a,

there’s never been a free market.

It’s a very true statement.

The question is how resilient is capitalism

or whatever implementations of capitalism

we had up to this point to human nature

where one person will become successful

through legitimate means

and starts to try to manipulate the system

that takes it away from a free market

or takes it away from the things

that gave them the riches in the first place.

And then try to, through corruption, get more,

get this, the thing you said, the lazy human ways.

Now try to figure out how to get something for nothing.

That’s right.

So how resilient do you think is capitalism to that?

Well, the best implementation we’ve had of it

really has been the United States, I think,

up until this point.

But it’s still the central banking itself.

This was in the 1848 Manifesto to the Communist Party.

Measure number five reads an exclusive state monopoly

and centralized control over cash and credit.

So the central bank is a Marxist or communist institution.

It is antithetical to the free market principles

on which the United States was founded.

And indeed, the United States resisted

the implementation of a central bank.

I think it was Andrew Jackson.

I know there was the first national bank,

the second national bank were both disbanded.

And then Andrew Jackson, which is my favorite Tennessean,

he has some famous quotes about routing out the bankers

like a den of vipers.

I think he punched one of the central bankers in the face.

Back when our leaders were a bit more badass,

I guess you might say.

And finally in 1913, the Federal Reserve was implemented.

And it’s been kind of all downhill from there.

So what is, can you, oh, sorry, go ahead.

I was just gonna say that communism and capitalism,

it’s also a matter of scale.

The ideal behind communism is from each

according to their ability to each according to their need.

Sounds beautiful, right?

Sounds like a great, peaceful, harmonious way

to organize ourselves.

The problem is, and by the way, I am a communist

in my family, in my home, right?

At that very smallest of scales.

Yes, in your very small circles of trust,

you’re much more likely to behave selflessly

towards one another.

By the way, I look forward to the Bitcoin community

clipping out that part, saying that Robert Breedlove

was a communist and the ideals of communism are beautiful.

Yeah, context matters, people.

Sorry, go ahead.

But to your point, it does not scale, right?

As we move into this larger system

of socioeconomic cooperation, which is necessary

to deepen the division of labor, to generate more wealth.

We need to interact with one another on much larger scales

than this communistic utopian ideal.

We get into the realm of capitalism

where we need really sound rules, hard rules,

consensus, verifiability, and frankly, prices.

Because the other thing in Soviet Russia

is they tried to replace the profit motive

or the price signal with this devotion to,

this nationalistic faith and devotion.

Where it’s like, you don’t need self interest anymore.

You don’t need prices or profits.

You can just protect Mother Russia, right?

And serve Mother Russia and that would create wealth.

And what happened, right?

They destroyed price signals.

There were shortages, there were famines,

there’s all levels of corruption.

Because to your point, it’s once you,

people have to run the system no matter what.

So when people are always pursuing something for nothing

and you put someone in a seat

of much closer to absolute power

where they’re making all the pricing decisions,

they own all of the productive factors in the economy,

they’re not beholden to any market force.

There’s no market check on their action

that that institution tends to become more corrupt.

And further, it’s an inferior resource strategy.

I alluded to this earlier where the other way

to think about free market versus central planning is

it’s decentralized or distributed computing

versus centralized computing.

So each one of us, I think that the number

is 120 bits per second of active awareness.

And so we can take in, clearly we process a lot more

than that, but our active awareness,

I think is 120 bits per second.

In a centralized planning body like in Soviet Russia,

they had the pricing czar.

Maybe they had 10, 20,000 people deciding the prices

for the entire country.

You’re only getting that much data throughput, right?

20,000 people times 120 bits per second.

Whereas in a free market, if everyone is free to interact

with deep capital markets based on an accurate price,

you’re getting the data throughput of 120 bits per second

times the entire economy, right?

So you’re getting, it’s a more efficient means

for disseminating knowledge effectively.

And then again, knowledge is just,

the more knowledge a socioeconomic structure can contain,

the more wealthy it is, right?

Prices, tools, all these things are just knowledge.

So in that respect, that’s why something like capitalism,

even in its marginalized form, state capitalism,

out competes communism.

It’s distributed computing versus centralized computing.

You know, we kind of brought up religion

and Joseph Campbell and myth and the propagation of ideas.

And kind of before I forget,

I wanted to ask your thoughts about this.

You know, Jordan Peterson, I haven’t really understood

exactly like be able to pin him down exactly

what he sees as the role of religion in human society.

But it feels like he’s describing it as having value for us.

The ideas of myth are valuable.

They’re valuable mechanisms toward,

I think you mentioned kind of directing us

in this world as a human society.

Do you think about myth?

Do you think about religion?

What’s the use of it in this construct of markets

in this framework of where ideas are ultimately

the fundamental thing that makes societies work?

Yeah, I think Jordan Peterson, who I’m a huge fan of,

he’s been very influential in my thinking

and influential on my own religious views as well.

I think his position would be, and he’s said this before,

that he acts as if God exists.

And I’ve had some arguments about this before,

but to me that points towards the preeminence of action

and how important action is

versus your cognitive beliefs necessarily.

And I think there is a lot of utility in that,

that if you follow the moral code of something,

like the Bible, you do reap benefits from that.

Society reaps benefits from that.

And sometimes I bring up this point and people are like,

oh my God, are you kidding me?

Have you read the Old Testament?

They’re clobbering people with rocks

when they do the wrong thing.

The Bible doesn’t claim to be this,

like do everything that was done in the Bible.

It’s more like charting this moral progression

where we came from this very barbaric society

into something more like the New Testament

where we’re honoring individual sovereignty

above the state and things like that.

So I think that mythology itself

is another form of data compression.

If you look at these stories,

Cain and Abel is a good example,

or Peterson makes the point that it’s a tiny story.

It’s a paragraph ish long,

but it contains so many layers of meaning

in regards to violence, to evil, betrayal, work,

the divergence between intention and result,

because I think Cain is actually making,

he’s making the effort to sacrifice for God,

but the sacrifices he’s making are not,

God doesn’t find them useful.

And so he sort of rejects them.

Again, if we’re organizing these stories

we’re organized by these useful fictions, right?

These, these Herarian imagined orders.

I think mythology is kind of the original version of that,

where we were learning to organize ourselves around stories

to best coordinate our action across space and time.

And so I think it’s very foundational.

And back to what we were saying in the beginning

that if value truly is fundamental,

I think it’s interesting that all these stories

point towards often common moral values.

They’re not perfectly aligned,

but it does speak to just the evolutionary importance

of morality and the subjectivity of morality,

where morality sort of evolves over time based on,

frankly, the capital stock we’ve accumulated.

The more capital stock we’ve accumulated,

the easier life is, the less barbaric we have to be.

Whereas if we’re living in conditions of true scarcity,

then we tend to be a bit more barbaric towards one another.

And that too, to dovetail this

into something largely unrelated,

but I think is really important is inflation.

Inflation by artificially increasing the prices

of goods and services in the world, right?

We’re injecting more dollars,

chasing the same level of goods and services.

We are artificially increasing scarcity,

perceived scarcity, right?

And when you increase perceived scarcity,

you are amplifying divisiveness.

The natural state of man is when everything is scarce

and you really have to fight hard

just to eat or drink water that day.

So it’s decivilizing in a way

by artificially amplifying

the perceived scarcity in the world.

Can you elaborate how does inflation increase

the perceived scarcity in the world?

So we could think the price itself is an indication,

it’s a data packet, if you will.

The price is a data packet on supply and demand, right?

It’s telling you how much supply there is

of something in the world relative to the demand.

So when you print money

and artificially increase that price,

it’s diverging away from supply and demand.

It’s becoming just more of a product of policy

than it is of free market fundamentals.

The more expensive something is,

that is a signal to the marketplace and to market actors

that it is scarce, right?

That’s why a Leonardo painting

might sell for $16 million, there’s only one,

there’s a lot of demand for it.

Maybe my numbers are off, but you get the point.

It’s the reason mask spiked in price

after the COVID announcement, right?

There was not enough supply,

toilet paper, et cetera, et cetera.

So inflation, and by inflation,

I specifically mean arbitrary fiat currency

supply inflation by legal monopoly,

not inflation is a commonly misunderstood word.

That is amplifying the perception of scarcity

among market actors in the world.

And I would argue that it actually amplifies divisiveness.

I think this is the key maybe to looking at

the connection between the monopolization of money

and things like cancel culture,

because it’s increasing our natural predilection

to be combative with one another,

because we think there’s more scarcity in the world

than there actually is,

versus in a world where you’re not increasing

the money supply, prices are declining every year.

As prices decline, this is a signal to market actors

and the market that scarcity is declining.

There’s less need to fight over things.

And all of this ties back into the old Bastiat saying

that if goods don’t cross borders, soldiers will.

So if we’re not trading with one another,

if we’re not acting interdependently,

and we’re not becoming more intelligent as a market,

and that increased intelligence or increased knowledge

is reflected in decreased prices,

because prices are just the exchange ratios of things.

So the smarter we can solve problems,

the better we can solve problems, the less prices would be.

So it induces more cooperation.

I love how you tie inflation and cancel culture together

as essentially artificial creation of increase of conflict.

Artificially increasing scarcity

and thereby artificially increasing conflict.

That’s really fascinating.

You’re short circuiting my brain

many times throughout this conversation.

Okay, this robot is struggling to keep up.

Okay, maybe to step back at the useful fictions

or pragmatic truths.

Let me ask the question that you’ve answered

in many ways already, but let’s explicitly look at.

What is money?

Oh, as you know, that’s my favorite question.


Is the name of the show I just launched,

the What is Money show?

Clearly, we could say that the Bitcoin rabbit hole

is what’s led me to explore a lot of these ideas in depth.

And I think as we’ve demonstrated today,

it goes well beyond just the economic sphere

when you start to think about things like exchange

and morality and time preference and civilization.

So I love the question, what is money?

I think it is the key to incepting a deeper understanding

of the world into people that if you actually

just start to ask the seemingly simple question,

it surfaces more and more layers of truth.

And I recently, I just wrote a piece,

I think I have 30 something answers to this question.

So there’s.

So sometimes it’s actually a more systematic way

of asking the question of what is the meaning of life?

There’s some questions that are almost unanswerable,

but in their asking allow you to deeply get closer to truth,

deeply understand the nature of our human existence.

And the meaning of life is almost like

this initial philosophers striving towards that.

If money is indeed as fundamental as you’ve described,

especially in the context of value being fundamental,

then that is a really, that’s a more,

let’s take a 21st century way of asking the same question

about what is the meaning of life.

You mentioned that it’s a meta property

out of the list of many ways to answer that question.

How would you help people to think about that?

Yeah, the first most serious answer

comes from the school of Austrian economics

and it defines money as a universal medium of exchange.

So this would be any good that is used,

held and used purely for purposes of facilitating exchange.

So in the configuration of demand for any particular asset,

it’s bifurcated between its utility,

which is something a service

that it can render to you in real time,

whether it’s, if it’s water, you’re thirsty,

that’s the utility of water is that it can quench your thirst

whereas the marketability would be the expectation

of future exchange that other people would want this asset

in the future to trade it for whatever they may have.

Money is just going to be the good in any trading economy

that has the highest proportion of marketability

relative to utility.

So today that would be gold.

Gold has utility, it’s used in electronics,

it’s used in dental dentistry and whatnot,

but it’s largely used as a store of value across time

and that’s what it’s been used for for 5,000 years.

So if we say gold has a $10 trillion market cap,

maybe 2 trillion of that is its utility value

or it’s actually demand for use in computers and dentistry

and an 8 trillion of that is demand

for its use as a store of value.

Money, the marketability aspects of money

boils down to five services that money can render.

Money needs to be divisible, it needs to be durable,

it needs to be recognizable, it needs to be portable

and it needs to be scarce.

So I’ll gloss over a lot of history with this

and just say that historically,

money’s always been a technology,

still is a technology or a tool.

I use these terms interchangeably

and you think of a technology

as just a more sophisticated tool effectively.

To best satisfy those properties,

monetary metals were determined

to be the most satisfactory tool,

the most divisible, most durable, most recognizable,

most portable tool in the marketplace.

Of the monetary metals, gold was the most scarce

as quantified by either its stock to flow ratio

or its inflation resistance.

So simple way to say this is that people always prefer

the money most resistant to inflation.

That’s a nice definition of scarcity in the context.

The money is, if you were to measure it,

the resistance to inflation.

So how hard is it to artificially increase

the supply of the thing?

That is the hardness of money.

And that’s why gold is hard money.

Because the alchemy is hard.

That’s right.

Because no one cracked the alchemy.

So gold became money.

So that’s such a nice clean explanation of what is money

with the five elements and gold ultimately won out

because of the last piece of scarcity.

That’s right.

And to get to maybe dig a little deeper there.

So scarcity, we commonly think of scarcity

as strictly a supply property,

where if there’s not much of something, then it’s scarce.

But it’s not actually true.

Scarcity occurs when demand exceeds supply.

So when there’s more demand than the supply can justify,

the thing becomes an economic good

and it establishes itself a market price.

So there’s more demand for the thing

than the supply can satisfy.

The unique thing about money as a concept at least

is that demand always exceeds supply.

There’s never enough money to satisfy everyone, right?

Because another definition for money,

it’s the most marketable good.

So it can be traded for any other good service,

piece of knowledge in the marketplace.

So humans being what we are, we’re never satisfied, right?

We always want more of something, whatever it may be.

So money as the ultimate token of obtaining that something

is always scarce as a concept.

But the problem with money is that if you can,

as you alluded to, easily increase its supply,

then all of a sudden you can compromise

the scarcity of it over time

and you can rob people through inflation.

So that’s why the market settled on gold as money.

And robbing is reallocating the value that I,

so essentially the one property, like why scarcity

is important is it adds a lot more friction

to the reallocation, like through essentially violence

or implied violence.

Well, it prevents it through cost of extraction too.

So if you want to go out and dilute gold holders today,

you have to go out into the world and mine gold.

It’s a very expensive process.

That process tends to find equilibrium

where production cost equals the market value of gold.

So if market value is $2,000 an ounce today of gold,

its production cost is going to be around there.

That’s the natural market equilibrium.

So that way gold miners cannot just dilute people over time.

Whereas if you look at something like fiat currency,

which we’re jumping ahead a little bit,

but its production cost is zero.

So there’s a reason the market value of fiat currency

historically has always converged to zero

because its production cost is near zero.

So the extension to that question might be

how did we get from gold to paper currency?

And again, this is rooted in the properties of money.

As good as monetary metals were

and as good as gold is as money at holding value across time,

it’s rather limited in terms of portability.

It is not as useful for moving value across space.

This is another definition of money, by the way,

a social device for moving value across space and time.

So to rectify this technological shortcoming of gold,

we introduced, first of all,

the custody of gold was gradually centralized

into fewer and fewer warehousing operations.

This is because there are economies of scale

associated with using gold as money.

And that if you centralize the custody,

the warehouse owner can then issue a paper receipt

called a warehouse receipt for that gold.

And then market participants can trade that paper

as if it’s good as gold.

And everyone has an option at any time

to go and redeem real gold from the warehouse.

So that system works until the problem with it

is that it introduces the need to trust the custodian.

So it’s introducing counterparty risk

in the form of the custodian.

And now should that warehouse choose

to increase the supply of paper notes to gold

beyond its supply.

So if it’s got three tons of gold

and it issues six tons worth of paper receipts,

all of a sudden it’s participating in a fraud.

It’s basically lying.

It’s representing that it has more gold

than it actually does.

And that is the pathway that we got into banking

and central banking,

is we needed a convenience mechanism

to rectify the portability shortcomings of gold.

We needed to be able to move value across space, right?

Gold was doing a great job at moving value over time,

but not space.

Paper currency gave us the ability

to move value across space,

but it introduced this attack vector

for warehouse operators, which became banks,

which became central banks,

to modify the supply to suit their own political agendas.

Added the snooze button.

That allows you to do a little fraud.

To get something for nothing.

Something, just a little bit at first.

Just this one morning, just a little bit.

I mean, I don’t know if you can speak

to the birth of fiat currency.

Is there some interesting characteristics

to those early steps that created it?

Like, could it have been averted?

Or is this the natural progression of governments?

You know, what’s funny is that central banking

was initially designed to be the custodian of gold, right?

And so they were going to custody the gold,

issue paper on top of it,

and then they would maintain,

you could trust the public stamp effectively.

You could trust that the central bank

had as much gold on reserve as they said they had,

and they were supposed to be the trustworthy institution.

So we went from placing our trust

in a free market game theoretic process,

or trusting gold,

and we began trusting this institution instead.

This, that institution would not have arisen

if the portability of gold was really high.

If we could have somehow sent gold

across a telecommunications channel,

there would have been no need for a central bank.

Everyone could have custodyed their gold

in any information bearing medium, frankly,

and they could beam it around the world at any time.

So this whole institution itself

is rooted in a technological shortcoming of gold.

So I think it’s, another way to think about that

is maybe had there been all the gold in the world today

fills two Olympic sized swimming pools,

all the gold mined throughout all of human history.

So there’s not a lot, right?

What if there had been just like way more?

There’d just been, I don’t know,

20,000 Olympic swimming pools worth.

Portability wouldn’t have been as much of an issue, right?

We could have, and this is to say,

assuming gold was still the most scarce metal

and all these things,

portability would have been less of an issue.

We would have had less dependence

or need for a central bank.

So I think it’s kind of idiosyncratic

in that we just happened to end up here on this planet

with a certain amount of gold.

It best satisfied the properties of money.

And a certain amount of humans,

a geographic dispersed such that portability

had certain properties that you want to achieve

for humans in the geographical space

to be able to be a exchange value.

It became more of an issue as we globalized, right?

As we became more of a global society,

we needed money that could move across space really fast.

So we could trade in international capital markets.

So that drove the central bank

to become the dominant institution of the world.

And if you follow the flows of gold throughout history,

you know, I’ve been watching this documentary

on World War I and World War II on Netflix.

I think it’s called World War II in Color.

Oh yeah, that’s really good.

So good.

When I say gold has been the governor of governments

or gold is geopolitical money,

like it is the base layer operating system,

has been the base layer operating system for analog society.

So it’s always been about who controls the gold,

is who makes the rules.

And that’s, in that context,

is why Bitcoin is so interesting

because it is the disruptor to

this base level operating system

that’s functioned for all of human history.

I think this is a good place to ask,

we asked the what is money question.

What is Bitcoin?

That’s a question as complicated as what is money?

I think if you get a general understanding of money

from a number of angles,

that we could say Bitcoin is the most superior

monetary technology that has ever existed.

So one of the most superior implementation

of the ideas of money that you talked about,

you talked about money as speech,

you talked about money as an idea,

we talked about money as sovereignty.


So we’re attaching the concept of money, to your point,

to whatever tool best satisfies those properties of money

or best renders those services we need for money.

And as you said, you’re using the word tool

and technology interchangeably here.

Yes, yes.

And another thing to think about here is that

we think often in terms of goods or services,

but actually everything is a service.

So it’s not the physical properties of this pen

that I find valuable,

it’s the services that it renders to me,

that I want to write a letter,

this serves me by allowing me to lay ink on paper

and communicate information.

So value, humans attach value as we alluded to earlier,

two services, not goods.

So the properties or the services that money renders

that human beings value are those five properties,

divisibility, durability,

recognizability, portability, scarcity.

Metals best satisfied those services historically,

but Bitcoin as the most superior monetary technology

in human history, essentially perfects them.

It’s as close to perfection as we’ve ever been.

So in terms of divisibility,

each Bitcoin can be broken down into 100 million subunits

called a satoshi.

If that divisibility were ever a problem,

which actually there was a question that came up recently,

if you divide the world population

by the total supply of Bitcoin,

you end up at like 0.3 Bitcoin per person,

call it 300,000 satoshis per person.

What if that was not enough to facilitate economic activity?

And the answer to that is Bitcoin can soft fork

into further divisibility.

So if Bitcoin ate all the money in the world

and the average Bitcoin or wealth

will say 300,000 satoshis each,

but that wasn’t divisible enough maybe to buy coffee

and do all these day to day transactions,

what would happen?

Well, we would increase its divisibility.

So Bitcoin’s perfected divisibility,

the divisibility of money,

lets us transact across scales, right?

We can buy coffee or we can buy a house.

Durability is an interesting one.

So clearly something like gold is very durable.

It’s resistant to degradation over time.

Bitcoin is just pure information,

but it’s stored in a distributed format.

So information stored in a distributed fashion

tends to be virtually infinitely durable.

The example I’d like to give here

is something like the Bible.

The Bible is just distributed information.

It’s stored everywhere and nowhere, so to speak.

And for that reason, it has outlasted empires.

And Bitcoin’s similar, right?

You can’t make changes to it unilaterally.

But to make explicit the ways in which it is not durable

is the fact that it relies on computing infrastructure.

Like it needs computers.

So if you were to destroy all the computers in the world,

it needs mechanisms that store and transfer information.

And so you could attack it.

I mean, you could attack gold in the same kind of way,

I suppose, through the physics,

but it’s probably easier to destroy

all the computers in the world

than it is to destroy all the gold in the world.

Maybe not, I don’t know.


Yeah, you’re right.

Maybe, I’m not sure which one would be harder to destroy.

The other thing is there’s a dynamic incentive.

So every time you destroy Bitcoin miners,

you’re creating incentives for anyone else

with access to electricity to mine

because you’re making the algorithm easier.

Yeah, so the destruction is difficult

because of the decentralized nature of the whole thing.

And the difficulty adjustment.

Yeah, so you’re gonna have to use nuclear weapons

and cover the whole globe, but anyway.

Yeah, and by then,

we’ve got much bigger problems than money, right?

That’s right, so okay, so that’s durability.

So portability, Bitcoin’s pure information,

it can move at the speed of light,

can’t get much faster than that.

Recognizability refers to the ability

to verify the veracity of the money or its authenticity.

So you can actually, when we used to transact gold,

there were time honored techniques for verifying

that it was gold and not gold plated lead, for instance.

This is where we get the term sound money.

A gold coin made a very particular sound

when dropped from a certain height.

You’ve seen people biting coins.

These are all techniques for testing the authenticity of gold.

And with Bitcoin, we have something unique

in that if you’re running a full node,

you can verify that the Bitcoin is Bitcoin, right?

It cannot be tampered with, it cannot be faked.

And in addition to that, as a node operator,

you can audit the total supply of Bitcoin at any time,

which is unlike any money in history.

So you know with full certainty,

if you’re holding 1000 Bitcoin,

you have 1000 out of a possible 21 million forever.

You have a guaranteed fraction of the total supply.

Yeah, so a full node contains information

about every transaction that’s ever been had

so you can figure out, yeah, I mean,

all the truth of this money is all right there.

Yeah, it’s like a fractal constituent

of the whole network, right?

The whole Bitcoin blockchain is comprised in a node too.

Not the proof of work piece,

but the entire transaction history.

And so that’s unique as well.

And that’s what makes Bitcoin the ultimate store of value

is that you know with certainty what the total supply is

and will ever be.

And you know that your share of that supply is fixed.

It cannot change.

It can only improve actually.

If someone loses, you know,

if the Satoshi stash is truly gone forever,

the million Bitcoin never moves,

then we’re talking about 1000 Bitcoin

out of 20 million instead and so on and so forth.

As more people lose access to their Bitcoin,

they’re basically making a contribution to everyone else.

It’s anti dilutive.

And there’s certain properties of Bitcoin

that are sort of a little bit more into the details

that ensure that the full nodes,

like the size of all the transactions that ever happened,

at least currently can be stored

in a single computer, for example.

So it doesn’t blow up too quickly.

That’s right.

But you know, there’s arguments that that’s not necessarily,

you can make arguments for that to be a very nice property,

but you can also say that there’s like drawbacks to it.

That’s hence the block size debates

and all those kinds of things.

Yeah, that was the Bitcoin Cash Civil War, right?

Was that particular piece.


And, you know, ostensibly they were saying,

oh, we need more transaction throughput

to buy more coffee and do more transactions.

But what they were actually doing

was increasing the size computing power necessary

to run a full node,

which would have theoretically compromised decentralization.

So yeah, but it would in theory,

and this is, you know, in theory,

it would allow you to have much more transactions.

That’s right.

But the drawback, it would,

because of no longer can be stored in a single computer,

personal computer, then it naturally leads

to the centralization.


Which you see with gold.

Which would have compromised its survivability.


So, I said, what else is there?

The last one, which leads straight into this one,

actually is the most important one of money,

which is scarcity.

And that you need to know the supply is fixed

and safeguarded from counterfeiting and inflation,

which counterfeiting and inflation are the same thing,

by the way.

Counterfeiting is criminalized inflation.

Inflation is legalized counterfeiting.

So central banks today,

when they say they’re printing money, they’re not.

They’re counterfeiting currency.

That’s a very important part.

And Bitcoin, as I’ve argued in some of my writing,

is more than just an invention.

It’s actually the discovery of absolute scarcity.

And that we have unveiled a property of money

that we will only discover once, and it’s got really

major ramifications for the world at large.

So with gold, for instance, as we’ve covered,

it became money because it was the most relatively scarce

monetary metal, right?

Its supply was hardest to increase over time.

However, if we could somehow flip a switch today

and make everyone in the world go out and start mining gold,

we could increase the supply much more quickly.

We could, you know, it’s historic inflation rates

about 2%, we could double that pretty quickly.

Bitcoin, with Bitcoin, it is not possible.

So no matter how much effort and energy and capital

and operational expenditure we pour into the mining network,

we cannot deviate from its fixed

and diminishing supply curve from between now

and the last Bitcoin being mined in 2140

because of the difficulty adjustment.

It’s constantly, it’s adapting to human action actually.

So the harder we pursue it, the more that it recedes,

and then the less we pursue it,

the more available it makes itself.

And this is, it’s a real major breakthrough

because it’s the closest thing to perfect information

we’ve ever had in an economy.

And perfect information is this, it’s a theoretical,

but unattainable state of the market where all market actors

have all the relevant information about everything

so that they can compete as efficiently as possible.

And in a state of pure information, we have,

I’m sorry, perfect information, we have perfect competition.

And in perfect competition, we maximize wealth generation.

So we’re competing as freely as possible

from coercive and violent impediments.

And so I think Bitcoin in that sense

is going to pull the world closer to a state

of perfect competition than we’ve ever been before,

which would increase wealth generation

to an extent we’ve never seen before.

Many of the things you said about Bitcoin

also hold for other cryptocurrency technologies

that followed after.

Can you say something to why you think Bitcoin

is the superior technology

from a pragmatic truth perspective than say Ethereum,

but also other crypto, like Bitcoin Cash,

like other hard forks of Bitcoin,

and maybe things that might yet to be invented,

tools yet to be invented?

Yeah, so this is a good point of argument

because a lot of people have countered me and said,

Bitcoin cannot be absolute scarcity

because you can fork it and create something

with the same properties as Bitcoin

or potentially even better properties, right?

You create something with a deflationary monetary policy.

That’s what Bitcoin Cash was actually.

It forked Bitcoin with all of the same properties

except for the block size that we alluded to earlier.

The problem is that money is valued.

Again, it’s the good with a configuration of demand

that is predominantly marketability.

So it is valued based on its liquidity.

That is how many other trading partners are there

in that monetary network.

So it is a network valued because of its liquidity

and network effects.

So any new entrant into the market for money

is incentivized to always choose the money

with the deepest liquidity and the most network effects.

This is why money has tended to be a winner take all market

because it’s essentially a single purpose tool, right?

It is a tool for,

if we consider that tools are time saving devices, right?

The shovel that you dig more holes per man hour

than you can with your bare hands.

Money is a tool, there’s yet another definition of money

that lets us calculate, negotiate

and execute trades more quickly.

So that function tends to coalesce

towards one solution.

And so the short answer would be that

for the same reasons, quantifiable reasons, right?

Like inflation resistance and liquidity and network effects

that we have one analog gold,

we’re only likely to have one digital gold.

And I think the Bitcoin Cash Fork

proves that out empirically.

It’s a good case study because.

Well, it’s one case study, right?

But okay, so that’s really well put.

So like gold was sticky.

Once it was accepted, the network effects,

the winner take all took over.

And here’s a fundamentally different kind of like

analog versus digital is a leap in technologies.

That’s right.

And you’re suggesting that there may not be,

there’s unlikely to be other leaps of that kind

into a whole nother kind of space of technologies.

I would argue that Bitcoin,

it’s kind of like the ideological synthesis of gold,

taking the monetary properties of gold

and combining them with the internet itself.

And in doing so,

it has essentially perfected the properties of money, right?

You can’t get more divisible, durable, recognizable,

portable, or scarce than Bitcoin.

So Satoshi has kind of,

he left no design space for a superior technology

to intercede and out compete Bitcoin at this point.

Now that it’s established liquidity

in the network effects. Far superior technology, right?

Yeah, but it’s a combination of the tech itself

and the social layer that is coalesced to it.

You can’t separate those two out.

Like they’re all connected and then the political as well.

I mean, but the portability, for example,

that’s another way to phrase that is the,

what is it, the scaling.

So the number of transactions,

that’s a limitation for Bitcoin

that many argue is a feature, many argue is a bug.

You have a bunch of cryptocurrency technologies

that are able to achieve much higher,

much faster frequency of transactions,

much more transactions, you know, all that kind of stuff.

What are your thoughts on that?

You know, the low level of transactions

that’s possible with Bitcoin.

Do you think that’s a feature?

Do you think that’s a bug?

Necessary for security actually.

And even these other crypto assets that settle more quickly,

they settle with less assurance of finality.

So Nick Carter has a great piece on this actually called,

the settlement assurance is stupid.

It’s really good where the gist of it is

that there is more work being done in each block of Bitcoin

that it can’t, it is less vulnerable to reversion.

So it’s giving you higher degrees of assurance

that your settlement or your trade has occurred

with finality, whereas other blockchains

are much more vulnerable.

And again, with Bitcoin, the evolutionary path of money

with gold is that it was first used as a collectible.

It then became used as a store value.

After it had stored enough value,

it began to be used as a medium of exchange.

And then finally, when it was used widely enough

as a medium of exchange, it becomes a unit of account.

We actually start to think in the money.

Bitcoin’s following a similar path.

So started out as kind of a collectible.

Today, I would argue it’s a store value,

one of the most effective store value we’ve ever seen.

So that evolutionary path that Bitcoin’s following

is similar to gold.

First a collectible, today a store value.

To be an effective store value,

it has to optimize for supply cap.

That has to be the first,

and this is all Bitcoin really needs to do

to be successful by the way.

Exactly what it’s been doing for 12 years,

virtually flawlessly,

which is keep creating a block every 10 minutes

and keep enforcing a supply cap of 21 million.

As long as those two things hold,

it is sound money, the ultimate sound money,

the most inflation resistant money there’s ever been.

It’s actually completely immune.

It’s taken unexpected inflation to 0%.

We know with perfect certainty

what Bitcoin supply will ever be.

For it to be used more broadly as a medium of exchange,

it can’t make trade offs at the base layer

to increase its portability for instance.

Even though portability is maybe kind of a misnomer

because Bitcoin has extremely high portability,

just doesn’t have extremely high transaction throughput.

So we could say you can move it pretty quickly

anywhere in the world

as long as you’re willing to bid up for the block space,

but you can’t satisfy all the world’s economic volume.

You can’t do 300 million transactions per second

like you can on a centralized database like Visa.

But Bitcoin needs to be this,

it has to be a store value first

before it can be a medium of exchange.

So it has to protect the supply cap first

before making any trade offs for that.

And I would argue that that’s why Bitcoin is so rigid,

is that it’s optimized for survivability

and optimized for that supply cap.

And it’s pushing experimentation and other features

that would increase its transaction throughput

to higher layers.

So I think Lightning Network

is something that’s very interesting.

It’s still early,

but there’s a lot of throughput already being used

on the Lightning Network.

And it makes some slight trade offs

in terms of the trust minimization of Bitcoin.

You end up trusting these smart contracts

instead of move the Bitcoin,

but you pick up nearly unlimited transaction throughput.

So that’s how, and that’s how biology evolves.

That’s how the internet evolved.

It evolves in layers.

So I think Bitcoin,

you can sort of conceive of it

as the latest layer to the internet.

And it’s one that preserves this store value property

better than any asset we’ve ever had.

Let me ask sort of a critical question of,

if you’re wrong about your statements about Bitcoin,

and you find out years from now that you were wrong,

what would that look like?

What would be the things

that make you realize you were wrong?

Likely ideas or crazy out there ideas?

Do you think about this kind of stuff?

All the time.

Because you speak very confidently about Bitcoin.

And one of the things, let me put it this way.

I think certainty,

I feel like that’s like a stoic statement.

Certainty leads to ruin, something like that.

Like certainty, I think is an antithesis to progress often.

And especially in your writing,

but this is true for the Bitcoin community.

There’s a certainty about the Bitcoin.

And that makes me very skeptical,

no matter how good the ideas are.

Whenever things are good, this might be the Russian in me.

I think like, what are the ways this is gonna go wrong?

So what do you think are the ways this might go wrong

or you’re wrong in your conception of what Bitcoin is?

Yeah, so science evolves via negativa,

meaning that we’re not proving hypotheses

and that’s what becomes the body of science.

Science is whatever is left over as we disprove hypotheses.

Whatever we can empirically, through experimentation,

disprove, gets discarded.

And whatever remains, whatever theory remains,

it hasn’t been disproven, is science, effectively.

This process is similar to market actors zeroing in

on a store value, right?

They’re experimenting with different forms

of storing wealth across time.

Some do better than others

and eventually everyone ends up on the one that is best.

That’s what gold was.

In terms of understanding Bitcoin,

I look at it as a similar approach.

And that is the main question I’m asking myself

is how do you stop this thing?

How do you turn it off?

How do you end it?

If you’re a nation state, particularly,

who has the most to lose in this transition,

what is the attack vector by which they neutralize Bitcoin?

I mean, that is the $250 trillion question.

And I’ve spent five years thinking about this thing

very deeply.

I’ve read everything on monetary history.

I can get my hands on.

The general thought of how it is stopped,

and this is the snag point that a lot of people get to

in their explorations down the rabbit hole,

is they just say the government will never allow it.

And that becomes kind of their bottom.

It’s like, all right, Bitcoin’s interesting,

it’s superior money, blah, blah, blah,

but the government will never allow it.

And they say.

Was Ray Dalio, did he say that?

Dalio was currently stuck there, yeah.

So Ray Dalio said that Bitcoin seems to be too promising.

If it is in fact as promising as it looks,

governments are going to,

I don’t forget what the exact quote is,

but not allowed.

Ban it.

Governments will ban it.

So how do you get Ray Dalio unstuck from your perspective?


And how do you get unstuck from that idea

that governments, will governments,

how do you prevent governments from stopping a thing

that threatens centralized power?

Well, Bitcoin is an idea.

So governments that are really good

at fighting centralized threats to their power, right?

Whether that’s a currency counterfeiter

or competing nation state or business they don’t like,

or an individual they don’t like,

you know, they can kill them, they can throw them in jail.

They can use any number of course

of a violent tactics to suppress it.

But how do you point a gun at an idea?

How do you coerce an idea?

And that’s, you know, there’s some anecdotal history here

where there’s the PGP case, which in the United States,

the court was trying to classify it as munitions.

When we were shipping this

pretty good privacy software overseas,

government wanted to classify it as munitions

and restrict that exportation.

But, and this was a circuit court case precedent.

When the PGP attorneys actually printed out the source code

on paper and presented it as evidence in the court,

all of a sudden it became protected under freedom of speech

and that it’s just code is speech, code is language.

And therefore, at least in the United States,

it’s protected under the first amendment.

I think a government ban would be largely unenforceable,

frankly, on Bitcoin.

Being that it’s pure information,

if you suppress market actors

from using it in one jurisdiction,

you’re just creating incentives for them to go elsewhere.

And you’re actually increasing the incentive

for other jurisdictions to be favorable towards it

because then they can create,

they get to benefit from the tax revenue

and the businesses and the innovation

that’s occurring in and around Bitcoin as a result.

So you don’t think if a particular central bank,

like in Europe or United States,

bans it, not maybe using those terms,

but in some kind of way,

you think that provides a really strong incentive

for the other big players to enable it.

That’s right.

And that they’re more likely, by the way,

and governments know this, by the way, too.

The other thing that causes a government

to shoot itself in the foot is that if they ban something,

they draw a lot of attention to it.

People are smart.

I mean, people ask why, why would a government ban it?

Why can’t I use this?

So that’s kind of typically be the last arrow

in their quiver.

They may try to ban it if Bitcoin

really starts to monetize very quickly.

And the power structures that they impose today

start to dissolve faster than others might think they will,

then they might try and ban it.

But I think that ban will be largely unenforceable.

They’re more likely to tax it,

which they already do tax it.

They’re likely to increase taxation of it.

They’re likely to try and make it more white market

by actually tracing Bitcoin, seeing who has it,

attaching identities to Bitcoin ownership,

and making sure that they’re getting their pound of flesh

on all the transactions it results in.

But I don’t think, the other thing about this is,

so we saw the internet outcompete intranets,

in that we’d say that open source networks

tend to outcompete closed source networks.

And there’s a really good reason for this.

And it’s because in a closed source network,

there are costs associated with defending the network itself.

So you have to, the network owners,

the owners of the closed source network

have to expend resources protecting it from competitors.

And they have to expend resources imposing its rules

because they’re not voluntarily adopted rules.

So you actually have to impose these rule sets.

Whereas an open source network,

which is something much more akin to capitalism

in its pure sense, these are voluntarily adopted rules.

So all market participants have agreed

and consented to this rule set.

So there’s no enforcement costs

and there’s no turf protection

because anyone can freely enter or exit the open network.

For that energetic reason,

I think open networks outcompete close networks typically.

And in the digital age, that’s why I think open,

that’s why internet outcompetes intranet

and that’s why open source networks

are gonna eat closed source networks.

So what Bitcoin would be in that lens

is the ultimate open source monetary network

devouring closed source central bank monetary networks.

And I just don’t see how there’s no possibility

of unilaterally stopping Bitcoin or destroying it.

So then they’re more likely to regulate or tax it.

And again, the other fallacy here

is that a lot of people tend to think of governments

as these singular indivisible entities,

like they just move under one plan.

But in reality, it’s a lot of people, right?

A lot of people with loosely coupled interests

and agendas and whatnot, regulators and others

whether wearing their citizen hat,

they’re gonna see this thing monetizing,

they’re gonna be on the front lines

of trying to regulate it, trying to control it.

And I think what’s likely to happen

is they’re gonna start to adopt it,

to buy some of it even as an individual

or possibly even ultimately at a central bank

or sovereign wealth fund level,

as an insurance policy against its success.

And once you start to acquire something

and then you have a vested economic interest

in its monetization,

I think it kind of dissolves any of the power structures

that are arrayed against it from the inside.

So I’ve written a lot about this

in a new series called Sovereignism,

which is based loosely on a book

called The Sovereign Individual.

And that’s the general thesis

is that microprocessing technology would devour

our organizational models,

the most important of which is the nation state.

So I think we’re going into this world

where coercion and violence is just much less rewarding.

The economics of violence are declining

because of the low cost of protecting property, right?

You can now protect your monetary property in Bitcoin

at orders of magnitude less cost

than is necessary to run a banking network.

So it changes the way we organize ourselves.

And again, zooming back to gold

as kind of the original governor to governments,

where if they manipulated the money,

gold would leave their country.

That’s why governments have taken relatively concerted action

to go off of the gold standard.

There’s a great book on this called The Gold Wars

that outlines how governments have been waging

a cold war against gold for the past 50 years.

Bitcoin sort of renews hope

for that free market governor of governments.

And that is this digital gold

that governments cannot stop or coopt.

So I think it’s something,

that’s why I think it’s such a big deal

is that it is changing,

it’s a new useful fiction, you might say.

A useful fiction that’s superordinate

to the mythology of the nation state and government

as the dominant institution in the world.

Well, I hope you’re right

that all forms of centralized power

start breaking apart naturally.

So governments, the more and more power

is given to the individual, whatever the technology is.

And Bitcoin seems to be a promising technology

that empowers that, enables that.

That seems to be the trend.

And that’s a promising trend

at least from a perspective of somebody

who values this particular biological meat bag

that’s full of consciousness.

I think Bitcoin is exposing the greatest scam

in human history, which is political authority.

Like who gives anyone the right to be politically,

have political authority over anyone else?

People should be free to adopt the rules

and systems and tools that best suit their needs.

And that arc of history we covered earlier

where as socioeconomic systems have become more favorable

towards individual sovereignty,

the more wealthy we have become,

the more we have given the individual,

we’ve maximized individual choice,

the more wealth that society has created

and the more it has out competed

the systems that have come before it.

The latest would be capitalism triumphing over socialism.

Before maybe we eat, you are in Texas,

you brought over some brisket.

Before we may be indulge in that,

let me bring up one quick topic

and then we’ll take a break.

And the topic of what some may term

the toxicity of the Bitcoin community.

You’ve written that Bitcoin toxicity is tough love.

Do you wanna break that apart a little bit

sort of the idea, the philosophy of the toxicity

that seems to be present in part in the Bitcoin community?

Yeah, we were talking about this a little bit

before we recorded and I’ve been through the gauntlet

with Bitcoin toxicity as well.

I came into this space professionally in 2017.

I was originally running a multi strategy

crypto asset hedge fund.

And my initial investment thesis on the world

was that Bitcoin was a big deal,

but there were all these other exciting coins

and projects and ways the technology was going to be used.

And that view of reality met this immune,

I guess you could say as an ideological immune system,

this Bitcoin toxicity and that it’s kind of a filter

that’s trying to catch bad or useless

or even scamming ideas that this space is very well known for.

As we’ve touched on today, Bitcoin, in my opinion,

is this world shattering innovation,

but it’s in a sea of the most scammy stuff ever, right?

People, anybody can go and create a coin.

So you can go and launch one immediately online

and you can throw up a website, an advisor page,

post a white paper talking about

how great your technology is gonna be

and how it’s gonna change the world.

And then you can raise $30 million in Bitcoin

or Ethereum in 30 seconds kind of thing.

So it’s drawn in a lot of this scam artistry, you might say.

And I think people living through that,

because there is this natural predilection for people

when they first come into Bitcoin, you’re excited about it,

then you get lost in the shit coin universe.

And then just looking at the market success

of Bitcoin versus, and when I use the word shit coin,

I’m just.

You say with all the love in the world.

All the love in the world.

I guess you could call me a toxic maximalist in some ways,

although I consider myself a freedom maximalist,

not a Bitcoin maximalist.

Yeah, I saw that line, that’s a good line.

Bitcoin, tracking the market success of Bitcoin

versus alternative crypto assets,

the signal is very clear

that Bitcoin has out competed all of them.

So I think that Bitcoin cultural toxicity has evolved

as an immune response to those bad ideas,

which is actually, if you think about it,

kind of is a tough love, right?

You don’t want new entrance to the space

to get lost in shit coin jungle and learn the hard way,

the way many Bitcoin maximalists have

that the real innovation is Bitcoin.

But like an immune system, I think it can also go too far.

And so I think it’s useful when it is defending the space

from false narratives, we might say,

but it becomes detrimental when it’s attacking people

that are inquiring about Bitcoin

or people that are approaching Bitcoin

with a good spirit and good intention

and a desire to learn.

Because then at that point,

it’s actually impeding the free flow of ideas,

which the example in your clip

that was totally taken out of context.

And then you’re literally just saying,

I’m here to learn and contribute.

I think I’ve got some stuff to do.

And then people attack that.

Like that doesn’t make any fucking sense.

It’s like you’re attacking someone who’s approaching it

in a good spirit and asking questions.

Yeah, and I think sometimes talking about it,

the toxicity in the Bitcoin community as an immune response

has a negative effect of giving it a pass

because like it almost says,

look, it equates it with the human immune system,

which seems to do a really good job.

And so you could say that the toxicity has a lot of features

in the sea of fraudulent projects

that steal money from people.

It’s really useful to make sure

that you give people the harsh truth

about who is and isn’t a scammer.

You have to take it apart,

take it away from that metaphor of the immune system

and look at basic human nature.

And human nature can go to some dark places,

which is it’s sad to say that some people,

maybe many of us can enjoy for its own sake, the toxicity,

the mockery, the derision,

and you stop being part of the immune system

that makes a successful idea propagate

and start being a sort of a destructive virus yourself.

And that’s something I think about

because I am new to this particular immune system,

but I’ve explored other immune systems.

And I think you understand this world much better than me,

but I tend to prefer sort of love

as a mechanism for spreading ideas,

to err on the side of love and kindness

and almost like an open mindedness

in a way where you’re constantly lowering yourself

in the face of other ideas, constantly questioning yourself.

But I think I understand that that might be more applicable

in certain contexts,

like maybe in the space of science or something like that.

But in the space of Bitcoin, as it currently stands,

there’s so many people that are trying to scam others

out of their money

that the kind of harshness required is different.

Nevertheless, I do want to put it on people like yourself

and others who I know you wouldn’t consider yourself this,

but you’re one of the faces or leaders in this space

to call people out a little bit,

to inspire them to be more loving, I suppose.

But it’s difficult,

because you want to walk that line carefully.

You don’t want to be too loving and open minded,

otherwise your brain falls out.

I get it, it’s a difficult balance to walk.

It is subtle and it’s nuanced and it is difficult to walk.

And I think that, that’s why I try to say tough love,

because when we’re young, we may have certain ideas

about the way we want our life to go,

but then maybe our parents

are not letting us do certain things.

And we think they’re, I know when I was a kid,

I wanted to get my, when I was in fifth grade,

I wanted to get my ear pierced.

My mom wouldn’t let me do it.

And I was, oh, come on, mom, I thought it was so cool.

And then two years later, I’m like, thank you, mom,

for letting me get my ear pierced.

I think it comes from a place of good intention

that they are actually,

they have asked themselves that question, right?

That they’ve been inquiring

in why not this crypto asset or this crypto asset?

And they’ve done the exploration,

they keep coming back to Bitcoin

and they’ve seen people being taken advantage of.

But to your point, it’s like it can,

this tough love can become detrimental,

just like the immune system can become detrimental, right?

It can overreact and it can actually harm the human body.

So I would say that it’s such a tricky and nuanced topic

that even biology hasn’t figured it out, right?

A lot of people have autoimmune diseases.

And then there’s the other thing

that we have this natural, I agree with you about love.

I think love is like the deepest value.

That’s a whole nother philosophical thing,

but we’re biologically programmed to pay more attention

to things that are adversarial or harmful, right?

That’s part of us protecting the meat suit, so to speak.

So there is some maybe better delivery method

by being a little bit toxic to really get the point across,

like, hey, don’t get lost over here.

These things can hurt you.

Really try to focus on Bitcoin.

But the toxicity of that message,

I guess it increases its ability

to penetrate the individual, but it can also go too far.

So it is very…

It’s interesting, but I almost to push back a little bit,

toxicity is a funny word.

I think maybe another way to say it is,

I brought up like Christopher Hitchens

and somebody who like, okay,

you might say he’s toxic or something like that,

because he’s basically a intellectual powerhouse

who’s also a troll.

So he’s constantly, it’s like guerrilla warfare

in the space of ideas.

He’s very harsh in his disagreements and criticisms,

but he’s done with incredible grace and skill and poetry.


We could use more of that.

So toxicity just like…

These are just words.

They can mean a lot of different things,

but disagreement doesn’t have to be done with love,

but it should be done with skill if it’s to be effective.

So there’s a lot of ways to be effective in guerrilla warfare,

but you wanna learn how to shoot

or whatever the weapon you’re using and to do it well.

Some people do it better than others.

And it’s worthwhile to learn to do it well.

Again, I prefer love, but even love,

just because you think you’re communicating a good idea,

which you very well may be,

doesn’t mean it also doesn’t require skill

to do the communication well,

whether it’s disagreement and harsh

or more agreement and loving and so on.

Yeah, I think very fundamentally that all of our decisions,

we alluded to earlier that every decision

is an expression of value, every action we take,

they ultimately come from fear or love.

Fear would be something much more in the biological domain

where it’s like, we’re trying to protect ego,

we’re trying to behave selfishly.

This is the domain of sin.

I don’t know all the sins, gluttony, greed, sloth, wrath,

lust, pride, envy, these are all selfish behaviors.

Whereas something like love,

it’s morally superior in that it’s more selfless.

I don’t know that we can properly

define love with words at all,

but I would say maybe like selfless action

could be kind of a generalization of it.

And that way, it is really hard to your point.

It’s hard to love in a world that has a lot of conflict

that might make you fearful

if you’re really focused on your meat suit.

But if you’re focused on the bigger picture

and you’re focused on others and legacy and life,

that there is a way to do it.

And that’s why I actually think Christ,

that is the highest moral aim, right?

He met all of the vitriol in life,

betrayal, hate, violence,

he met it all with love and he met it with compassion.

And that’s why, regardless of if you believe

that he actually lived or any of this,

he is symbolic of the highest moral consciousness possible.

And Carl Jung would say that that was a suitable

alternative to psychoanalysis,

was actually setting your moral aim higher

and striving towards it diligently.

So, I mean, I agree completely.

We need more of that in the Bitcoin space.

We need more of that in the world, frankly.

In the world, yeah.

And these things, they’re all intertwined.

We touched on the beginning, all of us get to decide,

but the world does influence what we do.

It does influence kind of if we adopt fear or love,

but it takes, I don’t know, it takes good systems

and it takes, I guess, good leaders to set an example.

Yeah, I do believe that there’s like individual people

can have a ripple effect.

So that’s what I try to do, sort of embody the,

I’m just one ant.

But one of the things I have faith in is,

I’m trying to do that more.

I know this is a podcast,

but I’m trying to do less talking and more doing.

I’ve been disappointed in myself, if I’m being honest,

how much talking I’ve been doing,

as opposed to, like in my own private life,

I live the thing I talk about,

but I also haven’t created much.

And I believe in the power of individuals that create stuff,

like create an idea through those individuals

that try to create something new, the world progresses.

And hopefully there’s more and more,

more and more of those people.

So you mentioned kind of people who,

what the Bitcoin community might call scammers.

I have a lot of passions in my life

that I focus a lot of my attention to.

Bitcoin doesn’t happen to be yet one of them.

Bitcoin and cryptocurrency, you know.

I’m always looking for things to really fall in love with.

So how is a person like me supposed to figure out,

I also happen to have a platform a little bit,

and how am I supposed to figure out who is interesting,

what is an interesting set of ideas and what are not?

Because people are financially tied into

a lot of the cryptocurrencies that we’re talking about,

certainly with Bitcoin, you know, their livelihood,

their wellbeing is tied up to it.

So it becomes much more emotional, much more personal.

It’s no longer purely an exploration of ideas.

It’s really almost like a threat on your property.

Like it’s a personal threat

and it makes it very difficult to explore those ideas.

So I understand that, but it makes it very difficult

for somebody like me to just walk in and be curious.

So how do I proceed in this difficult world

in exploring this landscape

and not give a platform to ideas that may harm others?

I guess first I’d like to commend your forthrightness

about this, because I don’t think many people

try to walk that line necessarily.

People, again, kind of the territorial imperative,

they’ll put whoever on, they’ll help expand their reach.

Oh yeah, that’s true.

Or say whatever needs to be said to expand their reach.

So I think you’re coming from a good place.

I’ll say that.

There’s a great piece written

on the topic of scammers and scamming.

I think it was by Goldstein.

He wrote a piece called, Everyone’s a Scammer.

And it’s sort of back to this general human proclivity

to try and get something for nothing always,

which again, it can be positive,

it can be innovative, or it can be a negative.

You can be trying to steal from people.

That might be, I think that’s a useful piece

just to kind of see the crypto world through that lens.

And that’s how Bitcoiners are thinking all the time.

They are by nature adversarial thinkers.

So they’re trying to minimize the need for trust

in any situation and maximize verification.

As far as sifting through the ideas,

I guess this is back where the cultural immune system

has some utility.

Because there were times when I thought

this particular crypto asset,

Augur was one I was really into,

that it could facilitate prediction markets

and prediction markets could make markets more efficient,

et cetera, et cetera.

But when that investment does get to the point

when that investment thesis basically met

the cultural filter or immune system,

it forced me to reevaluate my position,

forced me to really look into it more deeply.

And through that exploration,

I realized that it would need to be built on Bitcoin

to work basically.

So it really comes down to like you doing your homework,

but we can’t all deeply evaluate every idea out there.

One of the things I struggle with was Alex Jones,

for example, had dinner with him.

I could tell that will be a very fun conversation,

but like then I also understand that there’s

like consequences to that conversation

that should be explored with care.

And so you need to take on the responsibility

of being a chef with the puffer fish

and all those kinds of things.

That said, just like you said,

it’s very difficult to know this ahead of time

and I will probably make mistakes.

And that’s a shitty thing to have to live with

that I’m going to make mistakes

and some of them very large.

Like, yeah, I mean, I can imagine a bunch of different ways,

but all we can do in this world

is once we make the mistakes,

we acknowledge those mistakes and learn.

And also, I have to put this on the rest of us

that you don’t take one thing that a person did

and then burn them at the stake for it.

That you realize that we all make mistakes,

that a particular mistake does not make the person.

And this applies to taking stuff out of context

over hundreds of hours of talking,

but it applies to actual, in context, big mistake.

So what if I murdered somebody at some point?

Just give me a break.

No, there are some things that are too far, of course,

but in general, we need to give each other a chance.

Yeah, but I’m still,

I walk with a heavy heart

knowing that I’ll probably make a mistake,

especially one that I didn’t mean to.

That’s the one that worries me most.

This is human nature, like hamartia, to miss the mark.

That’s the root word of sin.

We are sinful by nature.

We can’t help it.

There’s no way, again, pain is information, right?

There’s no way to learn other than trying, failing,

learning, and then you put yourself in better formation,

right, in formation to better deal with it next time.

So I hope, I don’t get the sense

that you’re actually afraid of making a misstep.

I think you’re just maybe disappointed’s a better word.

You know you’re gonna make the mistakes.

Yeah, that’s exactly, that’s a much, much better word.

But we have to embrace that.

That’s the only way anything,

that’s the only way we can advance,

is that we’re dealing with an incomprehensible reality.

All we can do is throw spaghetti at the wall

and see what sticks.

And in that process, we’re all inherently gonna hurt

ourselves and hurt others,

and that’s where love and forgiveness come into play, right?

And yeah, I think the other thing is that this culture

of reducing people down to a label, right,

whether it’s racism or whether you’re calling them a scammer

or any number of terms,

you’re discounting their sovereignty to zero, right?

You’re taking a super complex human that is vast,

contains multitudes, is changing over time,

and you’re trying to put them in a bucket of a word.

And that is just, I think, a cognitive fallacy.

Like, it’s not only gonna hurt the person

that you’re winnowing down to a word,

it’s also gonna hurt you.

And it’s gonna, in your attempt to decomplexify reality

by assigning this person to a term,

you’re actually gonna create bad outcomes for yourself.

Because you’re not gonna understand that person.

I do also think there’s a failure

of our social media technology that incentivizes

that kind of reduction to a label.

It’s just the viral nature of that reduction.

So not only do we humans naturally do that,

our social media platforms make that easier, more fun,

more effective to do that at scale, the mass hysteria.

So I think there’s actually technological ways

of adding friction to that.

Yeah, I wonder, I mean, I agree with you that it’s,

social media is an amplifier to our natural,

this natural way of dealing with one another.

But I wonder, and my thinking has evolved a lot on this,

that there’s something below

the way we’re treating each other too, right?

We could say civilization sort of advances

in the tools we make and the way we treat each other.

We tend to have better tools, better quality of life,

and better morality, better quality of living,

and ways of dealing with one another.

And I think that when you corrupt the money,

that it really does push us the negative direction,

pushes us away from, again, encouraging,

or magnifying scarcity artificially

causes us to be more divisive.

When things are more divisive,

we tend to be less civilized, less nuanced,

more black or white, or this or that,

or you’re this, or you’re label A or label B.

So I really think, and this is a harder one to unravel,

but I think if we can fix the money, right,

which again is the base layer operating system

for human moral action in the world,

that it has downstream effects.

So we’d actually maybe start to treat each other

a little better on social media,

despite the fact that it enables this faster communication.

That’s interesting, so perhaps fixing social media

as I’ve been thinking about is treating the symptom,

not the cause.

Yeah, that is the Bitcoin rabbit hole in a nutshell,

is that they say fix the money, fix the world.

You keep tracing these different social malaises

or technological difficulties, lack of innovation.

Weinstein’s entire Portal podcast,

something went wrong in the early 70s.

We went off the gold standard in 1971,

and there’s a great website, wtfhappat1971.com,

goes through this whole gamut of socioeconomic data

that’s completely gone askew since the early 70s.

Yeah, you had this whole video,

what do you think about Eric Weinstein and Bitcoin

and the gold standard?

Does he, I actually haven’t heard him talk about his thesis

about the 70s in connection to the,

going off of the gold standard.

Yeah, what are your thoughts there?

What are your thoughts about his general relationship

with the Bitcoin idea and the community?

Yeah, the first exposure I had to Eric was his,

I think it was his first episode with Peter Thiel,

and they’re going through that thesis

that there’s been this general institutional rot

and suppression of innovation since the early 70s,

and he’s trying to identify what it is.

I don’t think they ever pended on the money

on going off the gold standard,

but in recent interactions with Eric,

I’ve interacted with him on Clubhouse.

We recently released an episode of the show

I did with Chris Espley,

and it was titled Dear Eric Weinstein.

So we’re going through his worldview

that he’s expressed in the portal

and tying it back to the money in different ways.

And he’s been, he’s engaged.

Eric retweeted the show.

We’ve exchanged some messages.

He’s been very open minded.

He’s asked some really good questions.

So I get the sense that he’s approaching

this very wholeheartedly.

He does bring with him his existing worldview

and his existing theory.

The one that really blew up was gauge theory.

They got really popular.

I don’t know a lot about gauge theory.

I actually messaged Eric and said,

I want to learn more genuinely,

because he seems to be serious

that that needs to be considered in the sphere of money.

And so I want to learn more about it.

But I think overall it’s great.

It’s great to see an intellectual heavyweight

of his caliber gravitating towards Bitcoin.

Yeah, he has some gauge theoretic conceptions

about the world broadly, but also about economics,

which ultimately boils down to just a set of mathematics,

which allows you to more effectively reason about the world.

And he has a certain set of views there.

So it’s fascinating to see him grapple with it.

I think he’s also kind of actually kind of like all of us,

grappling with the idea of what is Bitcoin in this world.

It’s a very young technology,

and it’s unclear exactly how the ideas of the past

fit with it and integrate, how the two integrate together.

And so it’s interesting to explore,

not just Bitcoin in the particular.

So for me, like what I’ve always saw Bitcoin as

from the beginning, from a narrow worldview

is computer science, which is where I come from.

And so I wasn’t almost aware

in the social, political, financial aspects of Bitcoin.

But now I see that there’s not just power,

but there’s fascinating ideas to explore on that side

of things, not just the computer science,

not just the technical details,

but the political, the socioeconomic, the philosophical.

That’s where I find all the fascination in the world,


One other thing about Weinstein and intellectuals

more generally that are skeptical of Bitcoin,

I would challenge them to read the book,

Human Action, written by Mises.

I think in 1949, he published the English version.

It’s essentially the Bible of Austrian economics.

And I think Austrian economics is a noticeable gap

in most modern intellectuals worldviews,

that it’s not taught in school.

I mean, I have a master’s degree in accounting and finance,

studied a lot of economics in school.

There’s not one peep of Austrian econ.

The least we’d love talking about all the degrees he has.

I was a CPA.

But that curriculum that we get in college

is noticeably deficient in Austrian economics.

And I think there’s a reason why, right?

It’s heavily government influenced.

Again, master’s degree in accounting,

they never taught me about what money is

or where money comes from.

All you learn is that the central bank issues money

and the central bank takes money away.

So it’s conceived of in the textbooks

quite literally as God, right?

An entity that suffers no opportunity costs,

that basically is the foundation

of the entire Keynesian worldview

that you’re taught in economics.

And Austrian economics is the opposite

end of the spectrum of that, right?

It’s actually the culmination,

which economics is the youngest science in the world,

by the way.

So it is kind of the front,

it’s the frontiers of science in many ways,

like to actually, when I say praxeology,

many people have never even heard of that.

But it’s something, it’s an a priori study

equivalent to something like mathematics,

that you’re building things from first principles

to reason about economic reality.

And I think that book, it’s a very difficult book

written by Mises, 1200 pages, translated from German.

The way he wields English is fascinating

and terrifying all at the same time.

It’d probably take you six months to read it

if you read it daily, seriously.

Like it’s a beast of a book.

But that will plug the gap, I think in most,

any intellectual that’s skeptical about Bitcoin,

I think that will plug the gap that’s necessary

for you to see it in a new light.

Well, I’ll take that as a challenge.

Now that we took a little bit of a break,

ate some good Texas brisket, thank you for that,

by the way, for passing over.

Quite welcome.

Let me ask the ridiculous question.

At the core of the idea of Bitcoin,

is this guy or this entity named Satoshi Nakamoto?

So the ridiculous question is, who is Satoshi Nakamoto?

And first of all, is it you?

It’s not me.

I wish.

And is this an interesting question?

Or is it just something about our human nature

that wants to, that always tends towards mystery?

Well, as we’ve touched on a bit today,

you know, mythology, in my opinion,

is something that is intrinsic to how we see the world

in a lot of ways.

Like it’s how, it’s kind of the structure

by which we build these useful fictions.

And so in that way, you could just say that

Satoshi is the godhead of Bitcoin, effectively.

And I think a compelling argument could be made

that his disappearance is what really solidifies

Bitcoin’s decentralization.

Because if there were one individual to personally vilify

or denigrate or attack, you know, to disparage

or question the motives of, you know,

if he’s out on the Hollywood Hills partying,

everyone knows he’s got a million Bitcoin, you know,

it would just kind of tarnish the entire project

in a lot of ways.

But the fact that on that theme, something for nothing,

this guy actually gave humanity something for nothing.

And it appears that he didn’t profit in any way.

He, she, or they.

I actually heard recently that he identified as a he

in some of his communications.

So it sounds like it is a he.

So like his communication is being like studied,

like almost like exactly as if he is a religious.

That’s right.

Like a prophet.

It’s fascinating to imagine that he’s still alive

and living in this world.

And it’s even more fascinating to imagine

that he’s perhaps participating in the Bitcoin community

because I mean, that takes a special human being

to out of principle do that, to do, to remain anonymous.

That’s very much the George Washington.

Yeah, I always wonder like how many people are like that?

There’s a cliche that like absolute power corrupts,

absolutely, like power corrupts.

But it seems like the progress of humanity depends

on the people whom power doesn’t corrupt.

And it’s enough to have just a small selection of those.

And even if most of us are too weak, we give into power.

If given the chance, all it takes is a few.

That’s, I’ve never thought of it like that,

but Marcus Aurelius immediately came to mind.

You know, the guy that he had the keys to the kingdom

and he apparently adhered to the stoic virtues

until the end, but yeah, I agree with Satoshi.

The other thing that’s interesting is he would be by far

the most wealthy person in the world on a liquid asset basis

because he has a million Bitcoin,

which is 60 billion liquid net worth at current prices.

So if he is still alive and just operating in the world,

he is daily and moment to moment resisting massive

incentives to go and just be the richest guy in the world.

He’s the ultimate hodler.


I mean, so it’s, I mean, it’s turning down

not just financial success, but also fame.

I mean, fame is another drug.

It’s kind of power, but it’s in itself is also a drug,

especially in this modern society, in this attention.

And he would have both.

He would have both.

It’s fun to imagine who it could be.

It’s fascinating if it’s somebody like you

or somebody like Elon or somebody like that.

That’s fascinating to think about.

I think Elon would be hilarious if he came out

and he was Satoshi and be like,

hey guys, I know I’m already the richest guy in the world,

but I gotta go ahead and double my lead here.

What do you make of Elon Musk investing with Tesla,

investing in Bitcoin and maybe broaden it out

in some of these other, you know,

big billionaires, but also people tied to major companies

investing in Bitcoin?

Yeah, I think Michael Saylor really led the charge on that.

He’s the CEO of MicroStrategy

that I think they’ve acquired upwards

of $2 billion in Bitcoin now.

Started acquiring August, maybe of 2020.

And he’s, you know, personally bought a lot of it.

He bought a lot as a treasury reserve asset

for his company, MicroStrategy.

Then they leveraged up on a convertible note

and bought more.

So he’s really gone, really leading the charge

in this Bitcoin institutional adoption.

Your conversation with him is a really interesting one.

Your series of, I mean, series of episodes I suppose,

but it’s only a couple of conversations, I guess.

Yeah, we recorded twice, five and a half hours each.

So it’s about 11 hours of content.

Yeah, thank you.

A lot of people have said that it’s the best

first principle thing they’ve ever seen on Bitcoin,

which I take no credit for that at all.

I mean, I just sat down with a guy and unleashed him.

He’s just a beast.

Yeah, but it’s fascinating that his longterm vision with it.

I mean, I’m not sure I’m all philosophically bought in,

but if he’s right, if this set of ideas are as powerful

as he describes, as you described,

that this would change the world,

which as you say, it’s funny that a company

like MicroStrategy might be the company

that has the biggest macro effect

on our economy and our world.

Yeah, the conversation reshaped my worldview a lot too,

because he framed money as energy,

which I had often thought of money as time.

And it explored those connections a lot in my writing,

but looking at it as energy, and then his supposition

that the purpose of life is to basically channel energy

across space and time.

So we’re just trying to figure out how to channel

more energy across space and time

toward the satisfaction of aims.

And his definition, or his answer to that question,

what is money, is that money is the highest form of energy

a human being can channel.

So it’s a claim to all other forms of energy

we can manifest in the world.

And that just completely reshaped how I see it,

brought in this whole other side

to my intellectual explorations of money.

Can you elaborate on that a little bit?

So I understand money is time,

which in itself is a really powerful idea.

But money is energy, and channeling energy,

can you break that apart?

Yeah, so I guess I definitely have to check out

the whole series to really get his perspective,

but I’ll do my best to condense it.

Life itself, all forms of life are,

they’re dependent on energy, right?

Energy fuels everything, fuels life in action and motion

and all of that.

And we could say that maybe like a plant

is harnessing solar energy

and then reallocating that into growth.

So its aim is to grow towards the sun, right?

So it’s allocating energy towards its goal

of harnessing more solar energy kind of thing.

So, and humans too have evolved

to figure out how to harness energy in different ways

to satisfy higher and more complicated aims.

So the original energy network

that he referenced was fire, right?

We actually learned to wield fire as a tool in and of itself.

So not only are we learning to channel energy,

but we’re actually learning how to isolate energy

as a tool in and of itself.

And so we went into that,

how harnessing fire had changed human beings.

And actually, this is one of the earliest examples too

of a coevolution between tool and our biology,

because when we developed fire, we developed cooking.

And cooking is, you can kind of think of it

as pre digestion in a way.

We’re liberating these macronutrients

or making things that otherwise

would not be digestible, edible.

And it increases the efficiency

by which we extract nutrients from food.

That’s what cooking does.

So when we figured out cooking,

we liberated all these digestive resources

that were reallocated towards higher cognitive development.

So there’s this evolutionary path

between figuring out fire and us becoming smarter,

which is interesting.

Some other early examples he gave,

he went into were missiles and hydraulics.

So missiles being, we learned to hunt at a distance.

We can’t bring down a wooly mammoth,

maybe with spears and up close and personal force,

but we could with spears and javelins and slings and whatnot.

And then he went into how we’ve used water

to channel hydraulic energy.

So we can basically overcome gravity.

We can move, there’s theories that the pyramids

were constructed using, the blocks were moved

using hydraulic energy or using water.

Clearly we use like cargo ships and whatnot

to move things much more efficiently across water

than we could the land.

So his whole view is how we keep figuring out better ways

and more efficient ways to harness energy and channel it.

And in that perspective, money has always represented

a claim on all other forms of energy.

So whatever energy couldn’t be channeled

towards something useful in the economy historically

would go into gold mining.

So gold became this residual, this economic,

this token of the excess energy created

by the market economy.

And then you could take that token of energy

and use it to redeem for any other form of energy

or any of the products of energy itself.

So it’s, I guess it’s my best approximation of it.

And it just really shattered my worldview again,

because I’d always thought about it as time.

Like we spend time sacrificing to obtain money

that we then redeem for commencement sacrifices

from others, but I’d never considered it purely as energy.

And then it also ties back into gold,

where there was an energy expenditure necessary

to obtain gold.

So there’s a proof of work associated with obtaining gold

that protected its market value, right?

So you had to expend, again,

if market value of gold’s 2000 an ounce,

you had to expend 1900 an ounce mining.

So it kept producers honest in a way.

So do you think something like proof of stake

that’s more about reputation

than actual exertion, like energy can work?

No, I think proof of stake is inherently centralizing.

It’s like the old Matthew principle,

from those who have to those who have,

more will be given from those who have not,

everything will be taken.

That’s what proof of stake is.

You need proof of work to embody skin in the game

in the marketplace, such that contributions

are commensurate with consideration received.

That’s how systems work.

What’s the idea why proof of work might

incentivize decentralization?

Do you worry that as Bitcoin becomes more powerful,

it may become, again, more centralized?

Well, the decentralization of Bitcoin

is largely driven by the nodes, actually,

which aren’t actually mining.

They’re just choosing which rule set to implement.

And then the mining network’s

actually enforcing that rule set.

So I think the mining network

is inherently decentralized in that,

really anyone with access to cheap energy

can become a miner.

You can freely enter or exit the market

or the network at any time.

But maintaining the block size at a manageable level

is what’s key to maintaining node decentralization.

This is an interesting question.

Who do you think has more power, the miners or the nodes?

Because the nodes carry the idea of the protocol,

like the specifics.

So in some sense, they have more power,

if Bitcoin is an idea.

They’re kind of mutually indispensable though,

because you can’t have,

there’s no security without the miners.

So without the miners, Bitcoin is just an idea.

And the idea of Bitcoin has maybe existed

even before Bitcoin, right?

Just sound money.

We just say sound money as an idea.

But there was no way to root that into thermodynamic reality

without Satoshi figuring out, not just proof of work,

it’s the entire composite of the difficulty adjustment,

proof of work, one way hashing, et cetera.

So I don’t know, that’s hard to say,

hard to disentangle the two.

You’ve talked about money as morality too.

How do you think about moral and immoral action

in the context of money?

There’s this great quote by Rothbard,

who’s a famous Austrian economist.

And he says, quote, to be moral, an act must be free,


And I think morality, it changes over time

and it is, it has its roots

in biology.

Jordan Peterson makes the point that even animals

have their own sort of pseudo morality.

Where like with wolf packs, for instance,

if there’s a dispute between the alpha males,

or I guess between an alpha male and a incumbent,

the two males will have a fight basically.

And then when one, it’s decided that one has won,

the loser will basically roll over and give up his neck

to the alpha male.

And they do this instead of fighting to the death

because in a wolf pack, they need every wolf

so they can go out and bring down,

you never know when you’re gonna need the 20th wolf

to bring down the big buffalo the next day or whatever.

So they’ve developed this less than fight to the death

social morality to optimize their effectiveness

as a wolf pack.

And similarly for humans, like our morality

sort of emerges through competition and play even.

There are these implicit rules that come into place

based on how we’re organizing ourselves over time.

And with, so with money it’s interesting

because most tools we would consider to be amoral,

as in a hammer can be used to build a house

which could be seen to be good,

like a good constructive purpose,

or it could be used to bash them on skull,

which could be something evil.

And that the tool itself is amoral,

doesn’t have any independent morality of its own.

All of the morality is associated

with the wielder of the tool.

So what’s the quote like, any tool can be a weapon

if you hold it right sort of thing.

But money’s maybe a little bit different in that

when you monopolize money,

it’s only useful as a tool for one thing.

And that’s for allocating wealth away from some

and to others.

So it is the only utility of monopolized money is theft.

There’s no other, there’s a lot of propaganda out there

that will say, oh, we need to print money

to get out of this disaster or to give to the poor,

whatever moralistically camouflaged political aim

is being discussed, the base layer of monopolized money

is that it’s only useful for taking from some

and giving to others.

So another way to think about this is that money

is a paper claim on the savings of society.

So it is just a ticket for redeeming savings,

which could be time, could be capital,

it could be knowledge from any market actor in the world.

So it’s kind of a list of who owns what,

if you will, it’s a proxy list.

If there’s one group that can amend that list

and others cannot, then they’re basically able

and incented to modify that list to their own benefit.

And that’s effectively what a central bank is doing.

So a central bank is determining how much money to create.

They’re also determining who gets to receive

that money first and the first recipients of that money

are gonna be the beneficiaries in an inflationary regime.

So those that receive the money last

are the ones being robbed.

Those that receive the money first are the ones

that are receiving the stolen proceeds, let’s say.

And this has a really corrosive effect on social morality

because if we consider that people’s time horizon,

which the Austrians call the time preference,

the more short term thinking you are,

the more likely you are to engage in selfish behavior.

If you know that it’s all over tomorrow

and you’ve been working your whole life

to develop this business or create this reputation

or whatever your thing is,

but you just are given the foreknowledge that tomorrow

it’s all gonna end, you’re much more likely to go out

and just maybe get drunk and party that night

because there’s no more repercussions.

Whereas if you know that you’re gonna live

for a very long time, you’re much more likely

to plan for the future.

So we just say that your time horizon

is closely related to your morality.

The longer term thinking you are, the more moral

you would tend to behave, the more you would care

about long term relationship building

versus going out and getting wasted.

And money too impinges very closely on our time preference.

And again, time preference is the Austrian term.

So low time preference means you’re long term oriented,

high time preference means you’re short term oriented,

which can be a little trippy for some people

because it sounds backwards.

But if your money constantly loses value,

you are incentivized to become more short term oriented.

You are handicapped in your ability to plan for the future

because your money, which is intended to be,

here’s another definition of money,

as an insurance policy against uncertainty.

So no matter what problems you encounter in the world,

this money will best help you deal with those problems.

When that insurance policy against uncertainty

is injected with uncertainty, it’s polluted

with the uncertainty of inflation,

your time horizon shrinks,

your ability to plan long term shrinks.

And this impinges on social morality.

So there’s a great book on this called Honest Money

by Gary North.

And in that book, he gives the parable of the wine maker.

And the wine maker, if we just imagine

the hypothetical wine maker,

operating a business in a centrally banked economy.

And let’s say his central bank just doubled

the money supply to quote unquote save the economy.

Say an increase in money supply from one to $2 trillion.

This wine maker that’s accustomed to selling wine

at $20 a bottle is now faced with basically three choices.

And an important point here too,

before we get into his three choices,

are what prices are themselves.

Prices are the most visible aspect of any service.

So when you increase prices,

you’re incentivizing your customers to look elsewhere.

They’re gonna look at your competition.

When you decrease prices,

you’re incentivizing market actors

to look closer at your product, right?

You’re delivering a solution at a lower price.

So this wine maker that’s accustomed to selling his wine

at a $20 price point, all of a sudden,

because of a central bank has tripled the money supply,

he has three choices.

He can either keep selling his bottle at $20

and all of his inputs will increase due to inflation by 50%.

So he will lose 50% of his profit margin as a result.

So he can choose to eat that loss.

He can choose to double the selling price

of his bottle of wine from $20 to $40,

because all of the price of his inputs doubled.

So then he would maintain his profit margin.

Or the third one is that he could choose

to water down his wine or use inferior ingredients.

So he could use cheaper inputs

and maintain the output at the same price.

So he could basically start selling his customers

an inferior product for the same price

to preserve his profit margin.

Now, again, case number one, it’s not very palatable.

He doesn’t wanna eat the economic loss.

Case number two, he doesn’t wanna eat the profit margin.

Case number two, it’s not very good either,

because he’s then incentivizing all of his customers

to go shop other winemakers if he doubles his price.

So human nature being what it is,

trying to get something for nothing,

inflation actually seeps into other industries

by encouraging producers into option three,

which is to deceive your customer in the short run.

And again, this would be done initially at the margins.

Maybe it’s just a few drops of water.

Maybe it’s just some cheaper grapes.

But over time, this inflation is actually inducing producers

to weigh their financial wellbeing

against their moral integrity.

So it’s forcing them into this dilemma

that would not exist in a free market economy.

And as they charge more money for wine that is inferior,

the buyers of that wine,

also living in a central banked economy

are also getting scammed by not only the inflation,

but also the wine.

So it becomes this kind of corrosive contagious moral effect

that propagates throughout an economy.

And that’s why I’ve argued in a lot of my writing

that inflation is this infectious moral cancer on the world.

I think it is tied back to a lot of the social strangeness

we’ve seen in modern times,

where there seems to be a lot of fake people

and a lot of fake businesses and a lot of scams,

all of these things.

I think it really is rooted in the money.

And Bitcoin, as the first money in history

that has a 0% terminal inflation rate,

or said differently, zero unexpected inflation.

There’s no theft integrated into Bitcoin.

You can only earn it through work

or sacrificing resources to obtain it.

It is the antidote to this moral cancer

that inflation riddles our society with.

Again, you’re blowing my mind a little bit

to think about the ripple effects of inflation,

the way it seeps through our interactions.

So at the very, the early ripples

is the effect it has on the products,

on the dilution of the wine.

But also it might have ripple effects on the character,

on the behavior of people.

That’s interesting, artificial creation of scarcity,

creating, having effects on society at the social,

like the social fabric.

And I guess you’re arguing the morality.

It’s perverting free market dynamics,

which again, we said free markets generate pragmatic truth.

So inflation distorts price signals,

which means it confuses capital allocation.

So we’re trying to solve problems,

but all of a sudden we can’t tell

if this price increase is a matter

of true supply and demand change

or a matter of policy change.

So it clouds our economic perceptions.

It suppresses innovation

because now you’ve exacerbated

the boom and bust business cycle.

People are gonna overborrow and go into projects

that they can’t profitably sustain.

So then there’ll be a huge collapse.

So that actually breaks the market’s function

of generating innovation.

And then, yeah, I would argue too

that it pollutes our pursuit of virtue, let’s say.

Maybe it’s pushing back, but I don’t think so.

It’s not as clear to me,

perhaps because I haven’t thought about it deeply,

that money is core to life and human interaction

because there might be other forces,

other fraudulent forces, other things in human nature

that are creating these effects as well.

So it’s clear, I think you’re articulating really well

that there’s these negative effects from inflation.

I wonder if there’s other undiscovered,

not undiscovered, but ones we’re not making explicit now,

forces that are creating all the things we’re seeing now

with, like you said, cancer culture and all those things,

but also the negative effects on the quality of products,

on the excellence of the creativity and the innovation,

all those kinds of things.

I wonder if there’s other factors.

It’s kind of, listen, it’s compelling to think money’s

at the core of it all.

Like if you fix, I forgot what the phrase was.

Fix the money, fix the world.

Yeah, fix the money, fix the world.

Again, things that sound good, I’m skeptical of by nature.

So I wonder if there’s other things that are beyond money

that are somehow deeply integrated into our human nature.

Another one related to money is social cohesion itself.

So very simple anecdote for this was the more you increase

the inflation rate, social cohesion is inversely

proportionate to that.

So the extreme example would be hyperinflation, right?

Where the money is produced in such excess

that it loses all meaning and relevance.

So today in Venezuela, there is cash clogging the gutters,

clogging the streets, clogging the sewer system,

because the cash has lost all relevance.

And so anecdotally, we would suspect that,

okay, if there’s a inverse relationship

between inflation and social cohesion,

if we could then take inflation to zero,

couldn’t we theoretically increase

social cohesion to its maximum?

So another way to say that is inflation

is a decivilizing force, whereas natural price deflation,

which would occur in a hard money economy,

where there’s either a fixed supply of Bitcoin

or a relatively scarce supply of gold, for instance,

that lays claim to an increasing capital stock

of goods and services, prices would naturally decline

every year as we became smarter.

So the market price becomes a reflection

of our collective knowledge.

So by letting prices decline naturally over time,

we can actually induce civilization.

But by trying to force prices higher all the time

via the central bank, we’re creating the opposite effect.

So we talked a little bit about the Soviet Union,

and I happened to have lived through the collapse

of the Soviet Union.

And so what are the factors, the causes in your mind

to why the Soviet Union collapsed?

So, you know, definitely a multivariate situation.

I think there’s a lot of factors.

One that jumped out to me recently,

again, from that documentary that I didn’t note before

was that at one point, Stalin eliminated,

I think 75% of his intelligence force,

which I think when you’re competing

with another nation state, you know,

and intelligence and covert operations

are very integral to your survival,

I think that was definitely a shot in the foot.

But at a higher level, I would say that capitalism

and communism were each resource strategies

of the 20th century nation state.

And they seem, you know, we commonly consider them

to be diametrically opposed,

but there’s actually a lot of commonality between the two.

The difference would be that in Soviet Russia,

as we alluded to earlier,

they tried to completely replace price signals

with this nationalistic faith and devotion.

So they removed the economic nerve signal,

which coordinated the allocation of capital over time.

So this inhibited their ability to generate wealth.

Whereas in the United States,

we left most markets open to free enterprise.

So we honored the integrity of price signals

and we allowed people to trade and accumulate wealth.

So in every market, except the market for money,

both markets maintained a central bank as we’ve gotten to.

So I think in a really big picture standpoint,

that’s why capitalism outcompetes communism

is because it is able to generate more wealth

than communism was,

and therefore was able to put financial pressure

on the USSR until it reached the point of bankruptcy,


A similar model, I would argue,

is that for the same reasons we saw

capitalism outcompete communism,

which I think the data that I recall

was that the USSR’s economy was valued

at close to one third of its inputs.

So if you just didn’t do anything inside the USSR

and just sold all the raw materials that were going into it,

it would have been worth three times as much

as sending the materials in,

running it through the efforts

and then shipping things back out.

It was value destructive versus value creative.

And I would argue this is because,

again, the centralized computing model

versus decentralized computing model,

it just became more and more corrupt over time.

It got to the point where I think most of the occupations

in USSR towards the end were as informants, right?

They were working for the state.

Jordan Peterson makes this point too,

that at some point it was actually illegal

to be sad in Soviet Russia.

Because if you were sad,

you were contradicting the utopian view of the state.

So if you were sad,

you’re implying the state’s not doing something wrong.

But by the way, this does remind me,

do you know what Jordan Peterson thinks about Bitcoin

and about the future impact of Bitcoin on the society?

No, I don’t actually.

We’re hopefully gonna be talking to him soon about that.

We did a book club on his book, Maps of Meaning,

and he engaged with us about it.

So we’re hoping to deliver the orange bill to Mr. Peterson.

The orange bill.

I think his audience is one of the most important audiences

in the world to understand Bitcoin,

these people that are conscientious and responsible.

I think they’ll quickly understand Bitcoin’s

value proposition and help elucidate it to the world.

I’m trying to remember what he said about it.

Basically, I think his support of Bitcoin

is grounded in the kind of people

who are opposing Bitcoin.

So without understanding Bitcoin,

he starts to like Bitcoin

because of the people who are opposing it.

He’s, you know, you start to, I mean,

that’s partially why I am interested in Bitcoin.

It’s like all the people in power

and all the kind of shady, fraudulent,

non genuine people who are dismissing Bitcoin

are making me think, hmm.

One of Jordan’s definitions of God is,

he says, God is found in the truthful speech

that rectifies pathological hierarchies.

And I think that is a beautiful definition

of what Bitcoin is doing in the world.

And that we have this pathological hierarchy

called central banking,

by which the rich get richer and the poor get poorer,

that is used as a mechanism for perpetual theft

and funding warfare at a global scale.

Like Ron Paul said, it’s no coincidence

that the 20th century of total war

was also the century of central banking.

When you have an institution of currency counterfeiting,

which the central bank is,

you are no longer bounded by your own balance sheet

when you go to war.

You don’t have to just go to war on your own resources.

You can now pillage the commonwealth

and pull for the savings of society as a whole

before you go bankrupt.

And indeed, this is what Hitler did, right?

Hitler hyperinflated in the Weimar Republic

to fund his war efforts.

And frankly, every dictator, every world war,

every internment camp in history was made possible

by the weaponization of money in fiat currency.

So I hope, I know Jordan Peterson

is a huge proponent of free speech.

And I think that’s ultimately at its deepest essence,

that’s what Bitcoin really is, right?

It is just the purest form

of monetary speech we’ve ever had.

And by purifying that primary operating system

of human action, I think we can eliminate

this pathological hierarchy that is unfortunately

the dominant institution in the world today.

Yeah, I’m definitely,

especially with these explorations of Bitcoin,

this journey I’ve been on,

I’ll revisit some of the aspects of human history

that I’ve been looking at like Stalin and Hitler

with a, from a perspective of a monetary perspective,

like what are the effects of inflation?

How was it used as a tool in gaining power

and maintaining power and manipulating the populace

in doing, in inflicting suffering

and I would say evil onto the world.

It’s interesting.

I, it’s interesting.

I’m gonna have to sort of go back into the hole.

So I tend to focus more on the human nature

and less about the tools

that human nature leverages to affect change.

But you’re right that in some sense,

money is a tool which can be effectively used

to perform moral and immoral actions

depending on how it’s used.

There’s a feedback between the two, right?

There’s, specifically with money itself,

it’s the, here’s the way I’ve been posing it lately

is that I actually think we typically think of people

as good or bad, or again,

trying to label people all the time,

but I think people and their characters

are emergent properties of the incentive structures

they inhabit.


So, you know, what does Charlie Munger say?

Don’t show me the incentives,

I’ll show you the outcome kind of thing.

This is a flawed incentive structure

we’ve been operating within.

Now I’m not speaking to the intention.

People want to argue with me all the time.

Like Jerome Powell’s not a bad guy.

He’s doing his best at the central bank.

He’s doing what he thinks is right.

That’s fine.

Well, that’s true or not, it actually doesn’t matter.

The intention is divergent from the outcome.

The institution that they are running

is premised on deception and theft,

and it is handicapping the productive economy.

So when we’re, even the terms we use, printing money,

you’re not creating any new value.

You’re not infusing the economy with anything,

any new productive factors whatsoever.

You’re just creating new value.

You’re not infusing the economy with anything,

any new productive factors whatsoever.

You’re just harvesting the economic surplus

created by entrepreneurs in the marketplace.

It’s impossible to add any value to an economy

by increasing the paper claims on its savings.

So there’s a feedback loop between man and tool,

between creator and created.

And I think we have to honor the relationship

above either one, right?

Trying to put the right people in the system

in the right place.

Do you think the interesting question

of whether the people that are in control of central banks

or in positions of power there,

if they themselves are malevolent,

they themselves are bad actors,

or they’re simply like leaves floating along the river,

sort of just the cog in the machine,

an ant in an ant colony

that operates in a certain kind of way.

Like, where do you put the blame?

Do you put the blame on the way things are operating

onto the individuals or onto the system itself,

the idea behind the system?

Where, and is it useful to place the blame somewhere?

Because for me, it might be useful to understand that

in order to figure out what the solution is.

I tend to not put the blame on the individual.

Like I tend to believe most people are good

and want to see themselves as good.

And so in that case, it’s very difficult

to be truly malevolent as you would need to be to control,

to gain centralized power at the large scale.

But I know a lot of conspiracy theorists

and just a lot of people think that there is evil humans

in the world that seek power, maintain that power,

and then use that power for bad purposes.

I think they’re just people.

And they’re just trying to get something for nothing,

like all of us do.

I like this framework of thought.

Well, honestly, and that’s what the central bank is,

is the ultimate institution to get something for nothing.

You get a perpetual income stream,

the ability to acquire more and more territory in the world

through monopolizing the supply of money.

And you can literally print money.

You can buy your way out of anything

and buy your way into anything in the world.

So it is, I think the most, not say the most,

but a group of very intelligent people

put this thing together and figured out

how to get something for nothing in perpetuity

by clouding people’s conception of money.

And if we look at the central bank is,

it’s been around for a while,

but the latest implementation here in the US is the Fed.

It’s about a hundred years old.

It’s an analog age institution that I think has lost

a lot of its relevance in the modern age.

And I don’t think it will survive

the ever galvanizing gaze of the digital age.

There’s just too much sunlight, too much transparency today.

Ideas move too quickly for something like this

to remain relevant.

But they are just people.

They are just seeking something for nothing.

But I think when you concentrate that much power

and that much control, that much wealth

into the hands of few, it does change.

Hayek argued that the nature of power,

again, it’s something that we all sort of desire.

To be completely powerless, you’re really unhappy, right?

If you’re totally powerless, you’re a slave.

Someone else tells you what to do.

You have no autonomy.

It’s miserable, right?

So there’s this, it makes the consolidation

of power alluring and that we want to protect ourselves

from that slave state, let’s say.

But like many things, it can be taken too far.

And when you concentrate power into too few hands,

Hayek argues that it actually transforms.

It becomes something much more intoxicating

than it would be if it was held in a more distributed way.

And I think that gets into a lot of these,

I don’t know if they call themselves elites

or people call them elites or whatever,

like let’s say shareholders of central banks,

people participating in the World Economic Forum,

things like this.

They come, I guess the incentives, right?

The incentive schema they’re in is rewarding them constantly,

telling them everything they’re doing,

saying and thinking is correct

because they just keep getting richer all the time.

And it leads you closer to this definition of evil,

which in the book, Paradise Lost,

Friedman said, evil is the force

which believes its knowledge is complete.

So these people become more and more convinced

that they have the plan or they have the course of action

that will save the world,

that if everyone would just listen to them,

that they would lead us to the promised land, right?

Whether this is Bill Gates saving us from a climate crisis

or any of these other economic policies

that are targeted at a certain outcome,

but almost always diverge almost perfectly

from that outcome, creating its opposite effect.

I think that’s the problem,

that we have this mechanism that can concentrate wealth

and power into the hands of so few

that it leads to the proliferation of evil,

meaning that it convinces people

that their knowledge is complete.

Whereas something like a Bitcoin

almost forces the opposite outcome.

In a Bitcoin denominated world, a pure free market,

the consumer is sovereign.

So you cannot earn value in the world

unless you are serving your fellow man,

unless they have expressed through their buy and sell

decisions in the marketplace, right?

You’ve created a satisfaction of a particular want

that they value so much,

they’ve acquired so much of your good or service

that you’ve become rich.

You can only maintain that position of wealth

so long as you continue to serve your fellow man.

So it changes the incentives such that dominance

in the world can no longer be paired with coercion.

It has to be paired with competence.

And that’s how this, when we say Bitcoin fixes this,

that’s what we mean.

Like it restores that skin in the game,

that balance of incentives and disincentives

that help us properly navigate reality.

And it prevents the buildup of systemic rot

like we see with the central bank.

What books?

People love this question.

And you’re exceptionally well read.

You’ve explored all kinds of ideas.

Is there some books, technical, fiction, philosophical,

coloring books, children’s books had an impact on your life

and you would maybe recommend to others

that they should read?

I think we mentioned a couple of them here today,

but I think a really useful triplet of books

that I’ve been recommending recently

to help diffuse this materialist worldview of reality

where we still think in kind of the Newtonian model

that it’s atoms and cause and effect.

I’d first recommend Jordan Peterson’s book,

Maps of Meaning.

It’s a deep dive into mythology

and how it’s developed over the course of history

and how it’s reflected both in our social structures

and our intra psychic nature really,

and how they come to reflect one another in a way.

Like the way we think again shapes the world

and then the way the world is shaped,

shapes the way we think.

That’s an excellent book.

It’s very dense and difficult read.

Actually this trilogy is pretty brutal.

Probably take you a year to read, hours a day.

The second one I mentioned earlier

was Human Action by Mises.

The ultimate tome on Austrian economics

will help explicate this realm of relevance.

I think that economics truly is where again,

there are things and then these things become means or ends

once we channel our purpose through them.

So this realm of non materialist relevance

that I think is really important to grasping economics

at a first principles level,

I think that book lays it out tremendously.

And then the last one would be,

I think I mentioned this at the beginning,

was that book Lila by Robert Persig,

where he’s making the case that value is fundamental.

And all of these books,

they kind of all point to that actually.

They’re pointing back to value being the fundamental thing,

values expressed through moral action

as being the fundamental substrate of reality.

So if you’re like me, I grew up quite scientific minded.

It’ll help diffuse some of that

and maybe retrain you to the other side of reality.

So you said these books are difficult.

Maybe you can comment on which aspect is difficult.

Is it just the technical nature?

Is it the length?

Is it the depth of the ideas

or how long it takes to integrate them?

And more sort of importantly,

is there recommendation advice you can give

on how to integrate these ideas,

how to read, how to learn in the spaces there

from your own life?

Like how do you enjoy taking in ideas?

And this could be for these books,

but also in the Bitcoin world

and reading a bunch of different ideas written by others,

just integrating stuff, even watching podcasts

and all those kinds of things.

Yeah, I’m a reader.

I love to read.

One of the most useful things I’ve ever done

was take a speed reading course.

I actually think there’s a version of this

available on Tim Ferriss’s website.

It’s like a 30 minute speed reading course.

It’s all about eye movement.

Instead of moving your eye continuously line over line,

it’s more about jumping in your brain.

You can train your brain to just absorb words

in their totality versus kind of reading word by word.

And also not, I haven’t fully taken that journey actually,

but I remember taking a few steps on that journey,

realizing that I’m speaking inside my head.


I’m saying the words inside my head

and that’s actually getting in the way.

That’s right.

So there’s a lot of little hacks like that.

I maybe lazily, now that you mentioned,

I’ll have to revisit this.

But I have convinced myself that I don’t need to read faster

because that’s not ultimately the bottleneck.

The bottleneck is in me thinking about stuff.

In fact, I like reading really slowly

or so I convinced myself.

Because ultimately it’s not about gaining more information.

It’s about time spent thinking deeply.

Yes, yes.

But maybe that’s just me being very lazy

because yes, it’s true.

It’s important to think deeply,

but maybe I could speed up the consumption of information.

It’s fine.

I like to be dynamic actually.

So usually speed reading initially

and that diffused that internal dialogue for me

because when I was reading one word at a time,

I was having that too.

You almost get a feedback in your own head

when you’re reading the word out loud

and it’s clouding your thoughts.

If you’re speed reading, you can’t do that.

You’re taking in groups of words at a time

so you can’t internally verbalize it, I guess.

And then I also am really big on annotating,

underlining, writing in the margins.

I prefer a physical book,

but I also read the Kindle a lot

because it’s just so convenient.

Anywhere you’re waiting in line or every night before bed,

I’m reading my Kindle.

And I also advocate rereading a lot.

So if you found something that struck you at a deep level

or you found particularly fascinating,

like you have to listen to that.

That’s your, I don’t know, your mind or your spirit signal

that that is something meaningful to you

and you should, to your point, reread it,

sit with it for a long time, write about it.

And that becomes the ultimate triumvirate

of synthesizing an idea, actually.

If you can read about it and then write about it

and then go and talk about it,

you get this crystallization of understanding

that’s just not possible doing any one of the three

or any two of the three.

So I definitely highly recommend people to do that.

And in terms of how are those books difficult?

I mean, and if you’re reading a lot of books,

are difficult, I mean, in every way,

they’re all long books.

In terms of density, I would say Lila is the less,

the least dense, maybe Maps of Meaning.

I don’t know, but Maps of Meaning

and Human Action are both extremely dense.

But they’re just, I had to read those books very slow.

That you just have to take your time with them.

To give you an idea with Jordan Peterson,

he’s said this a lot with Maps of Meaning.

He spent three hours a day writing for 15 years

to write that book.

It’s probably, I think it’s a 600 page book.

He said he estimates he rewrote every sentence

in the book 50 times, five, zero,

to try and get it just perfected.

And when you read these sentences,

you can tell that he rewrote it 50 times.

I’ve used actually Anki for spaced repetition.

It’s like a piece of, it’s an app.

I’m not sure if you’re familiar with it,

but it allows you to load in facts or terms

or entire paragraphs.

And then it brings them, you review them every day

and then it brings them up less and less often over time

as you show yourself being able to remember

the thing that you wanted to memorize.

And oftentimes when I’m reading,

what I want to memorize is the key idea.

But also like I use it for, I’m terrible with names.

So I’m starting to use it for names too,

names of people, names of like people

that I want to remember.

And also throughout history and also in my own personal life

but also events, you know, dates to me

are usually not important,

but sometimes dates are really important.

And so it’s really useful.

I recommend it highly.

Naval, I think mentioned a piece of software

called Readwise or something like that,

that I hope I’m saying that correctly.

It’s something like that.

And what it does is it goes to your highlights

from your Kindle or the various places

where you highlight stuff that integrates with Goodreads.

And it does the same kind of spaced repetition

but for things you’ve highlighted.

So it sends an email every day.

It’s been really, I recommend it highly

because it sends like to me an email form,

a selection of the things I’ve highlighted

and previous things I’ve read.

And it’s like this weird like shock to your memory

that sprinkles like I have probably way too much Orwell

in there and it just kind of like, it brings you back.

And these ideas are, because what you realize,

depending on how you highlight, but at least for me,

and I think it’s probably true for a lot of people,

the things you’ve highlighted had at that moment

and like an emotional impact on you.

And so like these things are just like hitting you hard

again, it’s like, whoa, it might not be meaningful

to anyone else except you.

And it’s something I recommend.

You never know with these like hacks or tools and so on,

like what’s actually BS and what is amazing.

And that one is kind of amazing.

So at least for me, it works for me and Naval.

I think he’s the one.

Read wise you said. Read wise.

Or something close to that.

It could be read something else,

like read wealth or something.

The one other thing I really like,

and this is more of a new one,

is I used to always listen to music at the gym,

but now I’ve just, because I’m so backlogged on podcasts,

right, there’s so many, I exclusively listen to podcasts

when I’m walking or when I’m at the gym,

anytime I’m doing something that I can’t read basically.

And I think there’s something really special

about exercise and ideation.

I mean, I don’t know if this happens to everyone,

but my creative juices just go ballistic.

When I’m at the gym, like I hit a certain point of,

I guess, heart rate and you’re sweating enough,

then the ideas just start to flow.

So I’m basically at the gym now listening to podcasts,

exercising as fast as I can to try to get to that state of,

you know, where you’re just straining,

your strenuous exercise, I guess you would say,

and then I end up typing notes into my phone

as fast as I can with all these ideas that are flowing.

So I’ve created a lot of good writing out of that.

Yeah, it’s kind of work.

So I do running quite a bit, so running outside,

and I’ll listen to, I’ve been, okay,

I told myself this has been going on for about a year,

is I only listen, like the stuff that’s either World War II

or World War I related.

So Hitler, Stalin, like difficult historical stuff.

And also listen to brown noise.

So those are the two modes.

So brown noise helps me, this is like white noise,

but like deeper, I guess, it helps me remove the world.

And at the gym, there’s a lot of distractions.

When you’re running, there’s a lot of distractions.

It helps me remove the world.

So one, I’ll be listening to difficult historical ideas.

And then when my mind is all of a sudden

starting to generate ideas,

I’ll listen to brown noise and then force myself to think.

It’s kind of, it’s meditative in a sense,

and your mind wants to be lazy.

You want to, it’s hard, man, like running and thinking

in the sense that some of the ideas

that come into your head are pretty heavy.

It’s about your own life, your own demons come in there,

but also just difficult ideas

that require you thinking through

and persevering through that,

like not letting yourself get lazy

and thinking through it has been really for me rewarding

in the same way that you’re saying it is for you.

It’s true that like podcasts and music,

like shallow, like funny podcasts or music

have been a kind of filler distraction.

But informational podcasts, like podcasts

that have some depths of ideas or audio books

have been truly rewarding.

I try to listen now less and less to podcasts

that are just fun,

because I feel like I enjoy it too much

and I don’t allow my mind to get bored

and to think through stuff, to explore ideas.

It’s so easy to fill the space

that usually would be filled with thought

and instead fill it with fun podcasts.

Like there’s a bunch of comedy podcasts I really enjoy.

So there’s value to that, of course,

but you have to realize it’s entertainment.

It’s not, you don’t get much value except entertainment.

Right, right.

And there’s utility to the boredom too, I think,

where to give your mind the space,

I guess your subconscious,

maybe the space to chew on some of these problems, right?

Where you’ve imbibed so much knowledge,

you’ve highlighted and thought about something,

but then you need to stop thinking about it for a while

and let it marinate in the subconscious.

And then these flashes of insight

that people have described,

sometimes I get them in the middle of the night,

like I just wake up from a dream and have them

and I got to write it down

or sometimes just in nature taking a walk.

But I think that’s very important too.

We can’t just brute force our way into understanding.

There’s this interplay between

kind of the brute force reading intake

and then just relaxing, meditating, sleeping, being bored,

letting your subconscious do the heavy lifting.

And there’s, you should be aware of the fact

that there’s a war for your attention going on.

So there’s a lot of,

there’s been better and better and better mechanisms

that are designed to steal your attention.

So I kind of see it as a war zone

between my right for boredom

and the internet wanting your attention.

In fact, Clubhouse as an app has been,

I’m probably not gonna use Clubhouse much anymore.

There’s some aspect of my own inner loneliness

and whatever it is that pulled me into Clubhouse

a little bit too much to where it robbed me

from that lonely time alone

where I sit and listen to Bruce Springsteen

and think about life, right?

So I wanna.

That’s way more important.

That’s way, well yeah, at least it’s all in balance

because there is a Clubhouse like a lot

of these social networks when you use right

can be a way to discover new ideas, new people.

But the boredom is just being alone

with your thoughts is priceless.


And you gotta know yourself, right?

Like it took me a long time to realize I need solitude.

Like just how I’m wired, how I’m built.

I need like an hour a day solitude.

So you gotta listen to that part of yourself.

You might be compromising something like that

where you feel like you always need to be

with your girlfriend or whatever it may be.

But I would suggest listening to that voice.

Yeah, I try to, I tried to remember things

that made me feel good over time.

Like longterm had positive impact

and longterm had negative impact

and do more of the former and less of the latter.

We don’t often think like that.

You know, we talked offline about like carnivore diets

for example, I try to remember

that carbs don’t make me feel good.


In the moment it’s hard to remember that.

It’s hard, it’s hard.

But you have to remember that that’s the case.

And in the same way, exercise,

it’s hard to remember that exercise makes me feel good.

Like especially when it’s time to go to the gym, right?

Especially when it’s time to go to the gym.

But you should remember that

because the kind of person you are without exercise,

for me, just like you beautifully said

that you have to know yourself.

The kind of person I am without exercise

is a less good person, a person I’m less proud of.

The food thing is so hard.

By the way, I still, you know,

I can’t tell you how many times I’ve learned the lesson,

like don’t eat that.

But then, you know, you go a few weeks

of not eating whatever that is,

and you’re feeling good.

And then you’re, I don’t know,

something creeps up inside you.

Like, ah, you could just have one or you could just do this.

But for me, it’s sugar.

Like sugar just makes me feel terrible.

But I always, not always, but if it’s been a long time,

I start to make that exception in my mind.

Like, oh, you can have a little bit.

And then I eat it and I feel terrible.

So I don’t know how many times I’ve done that dance,

but it’s not cool.

Well, it depends on how painful it is

and then you learn the lesson.

I actually embraced the fact

that I’ll never learn the lesson with vodka.

Every time I drink, especially with Russians,

is like, I quit drinking every time.

And then I forget, there’s like a slow drop off.

It’ll be like two weeks and then.

Na zdorovie.

Na zdorovie, very good.

So it never makes you feel good.

It never results in anything good

except the beautiful social chaos,

which is ultimately somehow, there’s value to chaos too.

There’s value to that.

Whatever the hell stupid stuff you do when you get trashed.

The over the top emotion of love usually

or whatever camaraderie, there’s value to that too.

Like as I get older, I realize,

because the world,

sometimes especially when you get older

and the world wants you to be an adult,

in order to maintain the youthful spirit,

you have to use all the tools you can.

Alcohol is one of them.

To do all the stupid shit you can,

even if you’re like getting older.

To lower the inhibitions.

Again, it’s that taste of uncertainty

that is the sweetness of life, right?

To be able to go out and be a flaneur at a party

and not really know what you’re gonna do.

And we have this draw to the wild side of life.

As much as we try and build up order around ourselves,

I think there’s always gonna be an appetite for that.

I’ve always, most of my life,

I’ve always been a social drinker,

but I actually gave up alcohol a year ago.

And I would add that to the idea,

the repertoire for dealing with bigger ideas

because alcohol is fun, it’s amazing, good times.

It can be analgesic, it can give you all these benefits

if you use the right amounts.

But I got to the point personally

where I was trying to wrestle with these ideas

that are just so much bigger than me.

And I have this backlog of books

that was growing faster than I could read them

that I just reached a point where I decided

I wanted to start making sacrifices toward attaining that.

And alcohol was just an easy one.

It’s you spend,

even if you just drink socially on the weekends,

you’re probably spending five to 10 hours drinking

and then maybe another, what?

Five to 10 hours recovering perhaps on the day after.

So it was a difficult transition initially,

but once you get through a couple of months,

I feel amazing without it.

I sleep better than ever.

My workouts are better than ever.

I’m sharper than ever.

I’m more lucid.

So I’m not trying to be a proponent for not drinking,

but I just want to say.

But you’re a proponent for sacrifice.

I am a big proponent for sacrifice, yes.

Is there advice you would give to a young person today

curious about Bitcoin,

curious about how they succeed in the world

or both career wise and just in life in general?

I mean, the strongest piece of advice I have for,

this is beyond just Bitcoin.

This is you managing your own personal and financial affairs

is that you need to invest in knowledge first.

It’s not good enough to just follow the crowd

and buy a 60, 40 portfolio and put it in a Roth RA

and plan on social security.

I mean, the world’s changing much faster

than any existing institution

is going to be able to keep up with.

So that’s why I like,

I mean, that’s why I named the show,

the question, what is money?

Like, I think that to me is the rabbit

that took me down the rabbit holes.

Like just asking that question naturally progressed

to these other questions.

Like what is value?

What is government?

What is the purpose of society?

Speech, all of these things.

So I would encourage people to arm yourself

with knowledge and study.

And like that, a lot of financial people

always give you a line of advice

and then say, this is not financial advice.

I’m like, this is financial advice.

Like study, study, learn.

Knowledge is power.


This is official financial advice.

And you’re exercising your divine trait,

which is the logos, right?

That we are these animals

that can tell and believe stories.

So it feels like almost a sacred duty

to really sharpen that part of ourselves

and use it to create the best world possible.

And then the second one was the,

I think health and fitness stuff.

I was, maybe everyone does this in their 20s.

They just live a little fast and beat themselves up.

Not that I wasn’t, like I was living well

and successful by a lot of measures,

but I wish I had maybe got my act together

a little bit sooner.

I just think.

Health wise, morality wise.

Yeah, drinking, I think morality and eating.

I just was kind of doing whatever I wanted in some ways.

Let’s say.

Is there a value to a trajectory

that includes a lot of mistakes?

So maybe you’re supposed to make the mistakes in your 20s.

That’s a great point.

Maybe the 20s are all about the mistakes.

Accumulate the most mistakes possible.

Yeah, I don’t.

As quickly as possible.

I don’t regret any of it,

but now that I’m kind of in this place where I feel good

and I know the value of a good night’s sleep

and just, I’ve more deeply explored my own potential

that I feel maybe a little regretful

that I didn’t do this earlier is all I’m saying.

So maybe just exploring different sides of yourself.

See what it’s like to go and make a bunch of mistakes

and be wild and crazy

and then maybe try to walk the straight and narrow

for a few months and just see what it’s like.

There’s probably a guy doing vodka shots right now

listening to this podcast with his buddies

and if you are, please take a shot for us

for all the mistakes you should make in your 20s.

And what about love?

We talked about money is ultimately a mechanism

by which you can pave a moral path through life.

To me, one of the purest expressions

that is love broadly defined for a family, for others,

for knowledge, for the world,

is basically an optimistic open view to the world

that embraces all that is beautiful about this world.

So do you think about love often in a personal sense,

romantic, family, friendship, and in the broad sense

about its value in a successful life?

Yeah, of course.

I’m blessed to have a two and a half year old daughter

and love is a word we throw around.

I love these potato chips, I love you, man.

I love you, my daughter.

It’s got so many different intensities,

I guess you might say.

I don’t know, my intuition is that

it is something very fundamental to the universe.

Again, I know words don’t do it justice,

but if we just proxy love with selfless action,

the whole damn universe is selflessly acting, right?

It’s just unfolding and it may sound a bit hippy dippy,

but my intuition is just that love

is the core of it somehow.

I don’t have anything to back that up really, it’s just.

In the way you’re framing it, it’s making me think

that love, we talked about sort of meditation,

is as opposed to thinking from an egocentric perspective

of you, the individual operating in this world,

is allowing you to be empathetic towards the world

and thereby think of the universe,

think of the world acting through you.

Almost like accepting this notion that ideas have you,

you don’t have ideas,

that you’re not existing in the universe,

the universe is existing through you.

It’s sort of like, that’s what selfless in that context means

is like embracing that thought.

That’s a weird thought.

It’s a weird thought that we’re just here for a little bit

of time, these meat vehicles, receptacles,

and this much bigger thing is just using us,

not in a malevolent way, but just like a river flows,

is using us to create more and more beautiful things.

Yes, yes, more and more beautiful things.

We are the universe experiencing itself, frankly, right?


That’s a trippy thought, man.


That in some sense the universe created us

to experience itself.

And we are one of the highest forms of beauty

that nature has created, right?

If we just think one of the most complex

and adaptive thing, we’re a reflection of nature.

And another thing that comes to mind here is that

Dalio has this quote where he says, truth or more accurately,

an accurate depiction of reality is necessary

for any good outcome.

So when we think that love or value is primary,

I think that too reinforces this thesis

that acting out of love or acting out of proper moral action,

you’re best reflecting the fundamental nature of reality.

Therefore, you’re best creating the best possible outcomes

or the things of the most beauty,

whether that’s your artistic expression,

your children, your business, whatever it is.

And Jordan Peterson goes deep into that

where you have to listen to that sense of meaning

in your life.

Or you might have some decision on paper

that’s so great this way, but your heart says no,

your heart says otherwise.

I’ve tried to listen to my heart throughout

and I think that creates the best outcomes.

But nevertheless, does it make you sad

that you in particular, Robert,

are gonna be dead pretty soon?

As we talk about scarcity, one of the certain things

that ensure the scarcity of the human experience

is the fact that you and your consciousness

are gonna be done, they have a deadline.

Only time and Bitcoin are absolutely scarce.

I’m fortunate, I guess I got started

on this philosophical journey a bit when I was younger,

but I got into Musashi and Sun Tzu quite a bit,

who wrote, Musashi wrote the Book of Five Rings,

Sun Tzu wrote The Art of War.

And one of the things that, I mean,

these guys were just absolute beasts.

They lived and died by the sword

and they were just very great equanimity

about all things in life.

And I also found this kind of in the stoic philosophy

where they just are very cool with everything.

And one of the lines there is that the way of the warrior

is the resolute acceptance of death.

And so I’ve always tried to think about that.

Like, of course I experienced fear,

I experienced everything that you do on a meat suit, right?

Like anxiety and all the things,

but I always try to have that higher order view of myself

and that it’s just a certain experience occurring

at a certain level,

but it shouldn’t override your kind of highest order self.

That’s just resolutely accepted death

and that this is your one play in life.

So hopefully that propels me towards proper action.

I think scarcity cannot help, but lead to something good.

Just like with this conversation,

sadly must come to an end.

The scarcity of it is what makes it beautiful.

So Robert, this was one of my favorite conversations

philosophically and in every other level,

just the ideas and the way you express them around Bitcoin,

around morality, around money.

Has been really inspiring and really educational.

And I’m glad you’re out there fighting the good fight.

And I’m glad you’re wasting all of this time with me.

It was really fun.

And thank you for coming down to Texas

and having some good old brisket together.

This was really fun, man.

This was awesome.

Thanks for having me, man.

Thanks for listening to this conversation

with Robert Breedlove.

And thank you to Fundrise, Element, Mugpack, and BetterHelp.

Check them out in the description to support this podcast.

And now let me leave you with some words

from Nassim Nicholas Taleb.

“‘Antifragility is beyond resilience or robustness.

“‘The resilient resists shocks and stay the same.

“‘The antifragile gets better.’”

Thank you for listening and hope to see you next time.

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