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 and 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.

The general definition of that I would give is the authority to act as you see fit.

It's a word that's etymologically associated with words like monarchy, money, rain.

Historically, it's referred to whatever the locus of supreme power is in the sphere of

human action.

Whether if you go back into ancient Egypt, the pharaoh had absolute sovereignty and everyone

else was pretty much operating according to his interest.

You fast forward to today, modern Western democracy.

We have more decentralized sovereignty in that we all get to go vote and elect officials

that make decisions on our behalf.

The theme of sovereignty across history is that it's been gradually decentralizing across

our different models of socioeconomics.

You could say it's rooted heavily in the money, I would argue, which is something we'll get

a lot into here.

If you have money, you have the authority to act as you see fit in the world.

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.

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.

As I argue in a lot of my writing, I actually think that sovereignty inheres within the

individual and that we each have our own interiorized space of choice, which is something like

Victor Franco 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 Man's Search for Meaning.

You can break that apart a little bit.

You've spoken about sovereignty as a closely linked 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 at the societal level.

Use 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.

Yes.

I agree.

As we get a little bit deeper into this, I think we'll come to see money as an extension

of your mind.

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.

It's a tool.

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.

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, 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.

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 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, maybe

ourselves or others, and then we're comparing how we may act in each situation and what

we think the result would be.

Actually, it's comparison, basically, it's comparison and contrasting of possible courses

of action.

That's the same thing with words themselves.

Most words, the vast majority of words, only have meaning in relationship to other words.

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

People have argued with me about this because there is a first word where you pick up rock

and say rock, but most other words in higher abstraction tend to be relative.

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 no longer needed our hands for locomotion.

We started to evolve more dexterity, and notably, we have opposable thumbs.

This gives us an ability to manipulate and particularize the environment in a way that

most other animals cannot.

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 at

a far off distance, and we could organize ourselves.

At the same time, we co evolved this fine musculature in the face and tongue.

It's as if speech developed, co evolved really with our dexterity.

As a natural extension of that came us making tools.

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.

I argue that action and speech are quintessential modes of self sovereign expression, and the

money is just 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.

It's really fascinating to think about our modern human society as deeply rooted in these

evolutionary roots from the very origins of life on earth.

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?

What ideas propagated to have roots in the evolution?

Yeah, I think one of the deepest impulsions in life is the territorial imperative.

All life is seeking to expand its dominion over space and time.

We think about, again, physically with space, it's advantageous to an animal or an organism

to have more territory under its control to raise offspring.

It's all about reproductive fitness at the end of the day.

We could also think of reproduction itself as the genetic impulse to replicate oneself

across time, so it's territoriality across time in a way.

This is very common in most animals.

Not all animals are territorial, but many are.

You see very interesting behaviors resulting from territoriality.

This is animal combat, the reason birds sing is territoriality, a number of other things.

It's my hypothesis, and others have shared this hypothesis as well, that mankind is clearly,

I think, what are your territorial species, and that he expresses this territoriality

in property rights.

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.

Then it comes down to how do we organize ourselves such that the contributions people are making

are commensurate with the consideration they're receiving.

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.

This is rooted in natural law, where we have rights to life, liberty, and property.

There's the fundamental layer of morality and capitalism, frankly.

You could think of, to get really primordial with it, the first capitalist in the world,

just to 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, a snowstorm, and he dug a little enclave and he protected

himself.

I thought you were going to go, because he said primordial, I thought you were going

to go back to earlier biological systems.

I guess primordial for humans.

Then the first communists or socialists would be someone that decided the fruits of his

labor belong to him, so he would have violently encroached on that individual and taken his

plot for himself for his own use.

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.

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.

There's this interesting moment when that first caveman, that first capitalist drew

a line, circle in this cave and said, 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, 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.

If we just look at the universe, 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.

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 going to be even fought over.

Is there something special about this moment because in discussing 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.

Is there something you could say as to what it means to own an asset or a property?

Yeah.

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.

If you've got knives and daggers and satchels and maybe some pelts you've hunted, whatever

you can hold and defend is yours.

There's not like there's a government to appeal to, you're just a free agent operating

in the wild defending the assets you can protect on you, more or less.

What really changed the nature of property is when we get into the agricultural age.

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 going to settle here.

We figured out how to cultivate crops, 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.

For the first time in history, we have stockhouses of grain to defend or maybe meat or cattle

or whatever it is we're creating, we now have savings.

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.

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.

I think that drives a lot of our decision making and actually encourages us to be innovative

in a lot of ways.

You could say it's our laziness, it'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.

That's where we shift from kind of capitalistic society to something more communistic.

That's what government is.

It's a protection producing enterprise for the economic surplus generated by a trading

society.

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 for you and I both benefit.

We become collectively more than the sum of our parts through trade.

That's why human beings do trade because we become more energy efficient as a result.

We create more outputs per unit of input.

You could think of government in that respect, if we're looking at 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.

We're paying expenses to a vendor to protect peace, to preserve life, liberty and property

in that network so that we can have, when there's inevitably disputes over private property,

we can have nonviolent dispute resolution in the rule of law.

We can have a reasonable expectation of being able to conduct commerce without violence.

The problem has been that the protector tends to, 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 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.

That becomes a, 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?

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.

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, 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, we outcompeted 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 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, 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 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 going to

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 it 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 you become a drug that

you fall in love with in your 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, or you 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.

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 going to overshoot.

It's going to undershoot.

You have these little business cycles.

But when it's undershooting and you're experiencing business recession, in a capitalist environment,

the market needs to clear that malinvestment, that misallocation of capital.

I mean, 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 Tullibian concept where you can dampen short run volatility, but volatility

is truth.

Volatility is us matching our ideas to reality.

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 unstable 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.

It's like it's a sign of chaos.

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, this is the second law of thermodynamics.

Because 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.

We're living at the edges of the known.

And we're testing ourselves 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 and Genesis,

which I think is interesting, that actually enables us to construct civilization in these

layers of antientropy or order, you might say.

So today we live in a bubble of, of antientropy or order, you know, 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 there's 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 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 it's, we're fighting against it, right?

We're trying to innovate our way away from uncertainty to give us, 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, you know, 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 got to 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 want to 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 going to 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 they're,

them going up in flames is a way of enlightening the rest of us.

Or if they figure something out, you know, Steve Jobs creates the iPhone, changes the

world forever.

So enlightening the rest of us.

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 is this death of the individual components that contributes to the growth of the ensemble?

As a smaller side, 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 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 have a big fan of his writing.

He's always been a little different in person.

He signed one of my books, I met him in person.

He's got a very abrasive personality, he's kind of known for it.

I don't think I'm passing any judgment here, he sort of embraces it.

But he had written the foreword to a really important book in Bitcoin called the Bitcoin

Standard for safety in Amuse.

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 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 division this one little arguably silly thing

has led to.

I think a lot of people sort of project their, 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 viral 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 until I 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'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 on my Bitcoin and.

Oh, I see.

Yeah.

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 is coming after you, so you can 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 it.

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 noble?

How much of this is accessible to us humans?

How much uncertainty, like we're talking about, is there in the world?

Are you, do you fall into a place where we can reason deeply about this world and it's

noble 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 just, it strips away all of the non informational

components of something.

It just strips it down to its bare bones.

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

All right, so which is called an acid, the ideas?

The universal Darwinism.

Darwinism applied broadly, outside of the...

I mean, broadly.

And I would all condition all of this with 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.

The 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 the binaries, zeros and ones.

And we are ideas.

We are strategies competing with each other.

But nature is that which selects.

It's what selects the winning ideas, the ones that are most fit to environmental conditions,

frankly.

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.

We are biological meat vehicles, we're way overly attached to them.

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, make one million robbers, but you'll all have the

same idea, what is your real value, like I could just shoot you, and there will still

be 999 of you, but the idea is the important thing, the things you believe.

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.

So my particular concourse of experience is 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, like desperately trying to preserve

himself.

I think it reduces to some fundamental questions about what is consciousness and whether that

can be cloned, all those kinds.

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 Hoffman's 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 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 numbers 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 miniscule number,

and that makes up all of the light that we can interpret with our eyes.

But it's 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, or 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 a, it's an accessory to you and

I because it's holding this paper that's holding the information that's guiding our conversation.

But we could pay some $100 to jump over this table, and this table could simultaneously

be an accessory to you and I 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 exist 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 zero.

Whatever reduces your entropy by half is a bit and we measure information in bits.

So 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.

So if we're actually being deeply honest about it, it's quite painful.

I do appreciate that you defended your biological meatback 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.

You are the node of the idea sphere, the new sphere.

So what is it?

From a Bitcoin perspective, I'm like, I'm mining, I'm solving the cryptographic problem

in the general, in that sense, I'm a useful node.

Yeah, you're competing to solve the puzzle of entropy, right?

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 long

term vision.

I see us humans in 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 its 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 in all those kinds

of things.

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

It's the molding of ideas that our human brains can work with it.

And just from my perspective, I don't see any reason why they cannot be algorithmatized,

converted into computational systems.

I would agree, which is scary.

Very or potentially really promising, right?

It's kind of the case with 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, and 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.

Whatever you choose to do in any moment, you are expressing the values you hold in your

mind and your heart.

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 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 an error correction to what?

Error correction towards what we find is valuable.

So we're trying to satisfy human wants.

Why 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?

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 want to 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 at 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 dove told nicely with another book called Leela, the author is Robert Persig.

So he wrote Zen in the Art of Motorcycle Maintenance, which is a very popular book.

20 years later, he wrote Leela, 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 the 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 the 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, or 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.

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 we contend with that underlying nature, whatever it is, with the logos.

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 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, 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.

It needs to be something that's not dictated by any one group.

It's reached by consensus of the entire group.

That's how you think it's optimizing for error correction, again, where a free market would

be harnessing the intelligence of all market actors.

And a centrally 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 you can trust that physical matter won't change.

But there could be other ideas that were yet, maybe physics could be changed.

Eric Weinstein has anything to say about it.

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.

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 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 Wolfram's, I don't know if you're familiar with this

view of the world, that it's like hypographs 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 as they're even smaller than like strings

and string theory.

So those are the basic mathematical objects from which it emerges.

I think that's an interesting philosophical framework.

It's also, people should check out, a cool way to play with beautiful hypograph mathematical

structures.

I don't know if you know what 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, 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.

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 Ein Rand's

work and her whole philosophy of objectivism, where her whole contention is that we do have

access.

I don't want to misstate it, but at least she will claim that it's not useful, or I

think she'll probably say it's not correct to argue that we don't have access to reality.

We have the 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.

Right.

You have thoughts about her work?

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

So she is high on my list, and she's been recommended a number of times.

But 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.

Just 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 uses lies to point to the truth, something like that kind

of thing.

That's really good.

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 socially close to social consensus and is not shakeable

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 want to buy more of it, you want

to abstain from buying it, or maybe you want to try and find substitutes.

And you can think of that price signal, it's like an economic nerve signal that's coordinating

human action across time.

So if we're one socioeconomic superorganism or collective, 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 combine to create it.

And in that iterative process, we're constantly discovering new and better ways of solving

problems or satisfying wants.

So we could say, to go out and dig a hole, right, someone wants a hole dug, that a shovel

is going to 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 blow my mind a little bit here, I'm trying to generalize

the idea of tool, how to think about it, because I keep just, when you say tool, I keep imagining

different like specific concentrations 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.

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.

So wants are somehow, that's part of the supply and the demand.

And wants are back to value, right, because everything someone wants, they're expressing

their value.

Okay.

Yeah.

So the shovel is a pragmatic truth.

The shovel is truth.

It feels like a good book title.

Okay.

Sorry.

So what other pragm...

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?

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 long term volatility.

What about murder?

I'm being able to figure out why murder is bad because I just keep wanting to murder

people.

And I've murdered many.

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, for any reason other than them originally

breaking or infringing on life, liberty or property, then that's not going to 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 is helping evolve the virtues.

It's sharpened into virtues.

And these virtues can then go into motivational posters or 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.

It's another way to consider competition itself is that it is a discovery process.

So 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, 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, is 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

Bukowski, Hunter Stompson is a quote, something like, for all instances of beauty, many souls

must be trampled.

Wow.

But it, 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 entrepreneurs 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

to 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, 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.

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 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 capitalism 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?

Yes.

See, but isn't there still, so a free market, maybe you can correct me, is a 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 people, 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 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's a very minimal role in society, again, just as a 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 governments just really intended to preserve natural law, if you will.

Anything that goes beyond that 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 could 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 U.S., we very heavily manage forest fires, we're trying to manage nature effectively,

whereas in Mexico, it's 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.

Yeah.

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 is, 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, 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, even the intention behind North American authorities

managing that forest fire is to create less destruction.

That is the intention.

And the intention is divergent from the outcome.

So in Telemion speak, he would say that human intervention moves us from mediocristan into

extremistan.

So mediocristan 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 extremistan, 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 to behave more like an extremist system that

has less short run volatility, but more extreme long run volatility.

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 Wolfe 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 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, then 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, I 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 of the Communist Party.

Measure number five reads, an exclusive state monopoly in 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, like 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, second.

I was just going to 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?

It 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 small scale.

Yes.

In your very small circles of trust, you're much more likely to behave selflessly towards

one another.

Okay, I look forward to the Bitcoin community clipping out that part, saying that Robert

Breedlove is 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, right?

We need to interact with one another on much larger scales than this communist 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 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 and serve Mother Russia, and that would create wealth.

And what happened?

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 its 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.

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, 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.

So you're getting, it's a more efficient means for disseminating knowledge effectively.

And then again, knowledge is just the more knowledge socioeconomic structure can contain,

the more wealthy it is, 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 outcompetes communism.

It's distributed computing versus centralized computer.

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.

This, 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 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 this is not, 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 enables 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, we're organized by these useful fictions, 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, we're

injecting more dollars, chasing the same level of goods and services.

We are artificially increasing scarcity, perceived scarcity.

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, 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.

That's why 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, there was not enough

supply, toilet paper, etc.

So inflation, and by inflation I specifically mean arbitrary fiat currency supply inflation

by legal monopoly, not inflation's 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 in the market that scarcity is declining.

There's less need to fight over things.

And all of this ties back into the old Bastiot 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.

I'm struggling.

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 the, we could say 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?

You know, there's some questions that are almost unanswerable, but in their asking allow

you to deeply understand, 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, you know, if it's water, you're thirsty.

That's the utility of water is that it can cointre 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 dentistry and whatnot, but it's

largely used as a store 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 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, 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 if 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 of 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 alchemy is hard.

That's right because no one cracked 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 there's not much of something than 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.

But the unique thing about money as a concept at least is that demand always exceeds supply.

There's never enough money to satisfy everyone 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.

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, 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 a 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

the 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.

Gold is 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 central banks to modify the supply

to suit their own political agendas added the snooze button allows you to do just do

a little fraud to get something for nothing, something just a little bit at first.

Yeah.

Just just 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 that those early steps that created it?

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?

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.

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.

One could have custodied 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.

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 and 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 geographically dispersed such that portability had certain

properties that you want to achieve for humans in a geographical space to be able to be an

exchange value.

It became more of an issue as we globalized.

As we became more of a global society, we needed money that could move across space

really fast.

Right, 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.

It's 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 function 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.

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, to 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 was 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, 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.

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.

The mechanisms that store and transfer information.

That's right.

And so you could attack it, you could attack gold in the same kind of way as opposed to

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.

Anyway.

Yeah.

You're right.

Maybe I'm not sure which one would be harder to destroy, but 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 going to 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.

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 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.

I mean, as more people lose access to their Bitcoin, they're basically making a contribution

to everyone else.

It's anti dilutive.

And there are 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.

You know, there's arguments that that's not necessary, 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?

It 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 of computing power necessary to run

a full node, which would have theoretically compromised decentralization.

So yeah, but it would, in theory, 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 it can be stored in a single computer,

in a single computer, then it naturally leads to decentralization, the same kind of thing

we see with gold, which would have compromised its survivability, right?

So what else is 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 their 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.