#171 – Anthony Pompliano: Bitcoin

Anthony Pompliano is an entrepreneur, investor, writer, and podcaster on topics of decentralized finance. Please support this podcast by checking out our sponsors: – Theragun: https://theragun.com/lex to get 30 day trial – Sun Basket: https://sunbasket.com/lex and use code LEX to get $35 off – ExpressVPN: https://expressvpn.com/lexpod and use code LexPod to get 3 months free – Indeed: https://indeed.com/fridman to get $75 credit EPISODE LINKS: Anthony’s Twitter: https://twitter.com/APompliano Anthony’s YouTube: https://www.youtube.com/c/AnthonyPompliano Anthony’s Website: https://anthonypompliano.com/ Pomp Letter: https://pomp.substack.com/ Pomp Podcast: https://anthonypompliano.com/podcast/ PODCAST INFO: Podcast website: https://lexfridman.com/podcast Apple Podcasts: https://apple.co/2lwqZIr Spotify: https://spoti.fi/2nEwCF8 RSS: https://lexfridman.com/feed/podcast/ YouTube Full Episodes: https://youtube.com/lexfridman YouTube Clips: https://youtube.com/lexclips SUPPORT & CONNECT: – Check out the sponsors above, it’s the best way to support this podcast – Support on Patreon: https://www.patreon.com/lexfridman – Twitter: https://twitter.com/lexfridman – Instagram: https://www.instagram.com/lexfridman – LinkedIn: https://www.linkedin.com/in/lexfridman – Facebook: https://www.facebook.com/lexfridman – Medium: https://medium.com/@lexfridman OUTLINE: Here’s the timestamps for the episode. On some podcast players you should be able to click the timestamp to jump to that time. (00:00) – Introduction (08:54) – Army (16:35) – Iraq (24:14) – Will there always be war? (31:27) – Bitcoin maximalism (39:56) – Money is a belief system (42:27) – Bitcoin (46:03) – Censorship (50:35) – Bitcoin as main currency (59:27) – Scarcity creates value (1:01:08) – Money is time (1:09:34) – Eric Weinstein vs Bitcoin Community (1:23:23) – Ray Dalio (1:40:31) – Bitclout (1:43:43) – How to get Bitcoin (1:54:28) – Investing (2:05:05) – Volatility (2:18:08) – Philosophy of the meme (2:28:03) – Dogecoin (2:37:33) – NFTs (2:43:21) – Virtual reality (2:48:17) – AI (2:54:18) – Bitcoin resources (2:58:44) – Book recommendations (3:01:22) – Can money buy happiness? (3:03:16) – Meaning of life

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Lex Fridman?

  The following is a conversation with Anthony Pompliano, entrepreneur, technology investor, prolific writer, podcaster and Twitter user on topics of finance, cryptocurrency, technology and economics. I highly recommend his popular podcast and daily letter called The Pump Podcast and The Pump Letter. Quick thank you to our sponsors Theragun Muscle Recovery Device, Sun Basket Meal Delivery Service, Express VPN, and Indeed Hiring Website. Click their links to support this podcast. As a side note, let me say that I'll be having many conversations in the coming months about cryptocurrency with people of all kinds of backgrounds and worldviews.

• 0:44Lex Fridman?

  Those who are proponents of Bitcoin like Anthony, Nick Carter, Robert Breedlove, Alex Glassdine, and many others. And those who are proponents of other cryptocurrency technologies like Vitalik Buterin, Charles Hoskinson, Richard Hart, Sergey Azarov, Sivlian Mikali, and many others as well. I'm not framing this as a debate. I'm simply looking to explore exciting ideas in the space of technologies that could very well change human civilization and AGI civilization as well. I appreciate that some communities are a bit more intense in their style of communication than others. But I personally am only interested in open-minded,

• 1:29Lex Fridman?

  respectful collaboration in exploring ideas. I personally try to like to approach conversations by considering that I may be wrong about everything and I'm looking to learn. I won't engage in group think, social signaling, outrage mobs, mocking and derision. If you do, I understand. It's just not my thing. I send you my love either way and hope to meet you in person over some drinks, some good laughs, and a good conversation one day. No matter the difference in style or substance, we're all just human after all. This is an amazing ride. We're all on together. Buy the ticket, take the ride, as Hunter S. Thompson said.

• 2:13Lex Fridman?

  Whether you pay for that ticket with Bitcoin, Ethereum, the dollar, gold, seashells, a beer, or just a good old smile.

• 2:23Lex Fridman?

  As usual, we have come to the part of the podcast where I do the ad reads. I try to go off the top of my head, try to make them interesting. But I also give you timestamps so you can skip if you must. But please still click the links in the description. It is the best way to support this podcast. This show is sponsored by Theragun, a handheld percussive therapy device that I use for muscle recovery. It's surprisingly quiet, easy to use, comes with a great app that guides you through everything you need to know. There's been long stretches of my life where I would exercise quite a bit, especially when it was jiu jitsu or grappling or wrestling or judo involved.

• 3:06Lex Fridman?

  There's many days where I would do two a days or three a days, you know, training twice or three times a day for basically every single day of the week. There was an art there to recovery, but also an art to the training process itself to avoid overtraining, but still pushing yourself to the limit. I'm very much from the school of like Russian wrestling where drilling and exhausting the mind, not the body, is the goal of training. Anyway, try Theragun for 30 days. Theragun Gen 4 has an OLED screen, personalized Theragun app, and is both quiet and powerful. Starting at $199, go to theragun.com/lex.

• 3:51Lex Fridman?

  That's theragun.com/lex. This show is also sponsored by Sun Basket. They deliver fresh, healthy, delicious meals straight to your door. They have prepared meals, meal kits, and raw ingredients like just a nice New York strip steak, trout, sea bass, salmon, and much more. I should mention here that one of my favorite activities is going fishing. I love being one-on-one with nature for many hours at a time in that sort of peaceful zen state where it's just you in the water. I'm mostly talking about freshwater fishing. I've actually never been deep sea fishing, and I'm not exactly sure if I'm interested in that.

• 4:35Lex Fridman?

  It seems like a whole nother world, but I've sadly haven't done it regularly for a few years, but I'd like to get back into it. Returning to nature regularly is a good mechanism for reminding me what's important in life.

• 4:49Lex Fridman?

  Anyway, right now Sun Basket has a limited time offer. Get 90 bucks off and four free gifts across your first four deliveries, including free shipping on the first box when you go to sunbasket.com/lex and enter code Lex at checkout. That's sunbasket.com/lex, enter code Lex for amazing discounts and gifts. That offer expires on April 13th. All good things come to an end, friends, so hurry up. This show is also sponsored by ExpressVPN. It's a good tool to shift the asymmetry of power in the battle for free speech to the individual. In the digital age, your data, your private data is power

• 5:34Lex Fridman?

  and freedom is maintaining control over that data. There's a lot of tools that help with this. I think a VPN is just a very basic tool that all of us should be using for many of our interactions on the internet. Some technologies, of course, are just useful tools, useful hacks to get the job done, but they can also have profound philosophical ideas behind them. I think a VPN is very much that. The internet at its core is freedom. Of course, that can be chaotic, that can even be dangerous, but ultimately freedom wins and the internet always wins in the end. Anyway, go to expressvpn.com/lexpod to get an extra three months free. That's expressvpn.com/lexpod

• 6:19Lex Fridman?

  for the simple, beautiful design of a big red button. What else do you need in life, friends? This episode is also sponsored by Indeed, a hiring website. I've used them as part of many hiring efforts I've done for the teams I've led. The main task is to quickly go from a huge number of initial applicants to a short list of great candidates. I recently had a discussion actually about the hiring process for engineers and the three things I've mentioned that I was looking for. First is competence, extreme competence. So demonstrating they are able to dig into the details of a particular project that you worked on

• 7:01Lex Fridman?

  and demonstrate that there's both a skill and an obsession to getting every little detail right and innovating on every single detail and questioning how that could be done better. The second thing I look for is extreme passion. So just a love for, first of all, everything in this world, but really a love for projects that you've done in the past, a love for projects that you might do in the future. And the third thing is diversity broadly, which is, I love the weirdos. I love, I love people that don't quite fit in, the, the square pegs, if you will. People that think differently in ways that are unlike my own.

• 7:42Lex Fridman?

  I mean, this is where Indeed comes in, is you want to filter out the initial set of candidates to where you can really dedicate your energy, your attention to a few people at the very end to see who is actually a really, really good fit. I think that's a lot of work, but if it's done well, it's, it's one of the most rewarding things you can do, is to be on a team of people you love with whom you can create brilliant things. Anyway, right now, get a free $75 credit at Indeed.com/friedman. That's their best offer anywhere. Get it at Indeed.com/friedman. Offer valid through March 31st. Terms and conditions apply. Indeed.com/friedman.

• 8:27Lex Fridman?

  Speaking of which, this is the Lex Fridman Podcast, and here is my conversation with Anthony Pompliano.

• 8:54Lex Fridman?

  You served in the US Army for six years and spent 13 months in Iraq in 2008 and 09. Can you tell the story of why you joined the Army and what were some of the moving difficulty, maybe lasting experiences from the time you served?

• 9:09Speaker 01

  Sure. I joined when I was 17 years old, needed my parents to basically sign in order to, to join. And I'd graduated semester early from high school and thought I was going to go play football in college and kind of enroll in the spring semester. And when that didn't happen, basically was working at Chick-fil-A and Quiznos. Had in my mind, look, this is probably not the path in life that I want. And so I knew I was going to go to college. I knew I was going to go play football in the fall, but I had this window of time. And so I walked into a recruiting office and just basically was like, I'm assuming you guys need some help. And, uh, you know, they gave me the whole pitch and, uh, you know, give you a signing bonus. You can go jump out of planes and go do all this crazy stuff. I just said, okay, let's do it.

• 9:51Lex Fridman?

  This was, this was close to nine 11.

• 9:54Speaker 01

  This was in 2006, about five years after.

• 9:58Lex Fridman?

  So what impact, I mean, do you remember nine 11? What impact did that have on your thinking about this?

• 10:03Speaker 01

  So I was, uh, in eighth grade, um, if I remember correctly, and I remember, uh, being in school when it happened. And, uh, I walked into a classroom and the entire class, uh, somebody else's class, they were all talking to the teacher about something. The second that me and a couple of other kids walked in, everyone got real quiet and the teacher was like, hey, go back to your like homeroom. And so it was just kind of a weird, like, what's going on? Uh, and then next thing I know, they called all of the students into the cafeteria. And this is back before, you know, every classroom really had a television in it and, you know, cable and all that kind of stuff. And so when we were there, they basically just said, listen, there's been this, uh, event that's occurred. All of your parents are going to come pick you guys up

• 10:43Speaker 01

  and, uh, they'll explain it to you. And so to, you know, a kid in eighth grade, you're basically like, what happened? And so I got home and, uh, and I remember talking to my dad about it. And my dad basically gave me, you know, the, uh, the core American kind of talking points, right? Look, somebody from another country came here and tried to kill Americans and was successful in doing that. Um, and to some extent, he just said, and I'm willing to bet, you know, we're going to go back after them.

• 11:10Lex Fridman?

  Did that wake you up a little bit to the idea that there's evil out there that, you know, even just the idea of terrorism for many people, that was, um, when it hits you on your own land, it's a, it really shakes up your mind. In some sense, World War II, that's why World War II was fundamentally different for Americans than it is for the people like in Russia, in England, in France, and, uh, in Europe in general is, there's something about when there's, uh, families, women, children dying on your own land, that's different. And that was one of the first times in America where like on your,

• 11:50Lex Fridman?

  uh, of course it's Pearl Harbor, but like this is like in recent history, it's like they hit us here. That was like a profound idea.

• 12:00Speaker 01

  I think America was very, very good at exporting the violence elsewhere for a long time. And there was this element of complacency, but also this element of, you know, really just American superiority. That doesn't happen here. Right? And I think that that woke people up, not only to kind of the idea that other places around the world may not like the American ideals, may not like democracy and capitalism and that. But also, maybe we aren't as big, tough and secure as we thought we were. Right? And so obviously, I think you see the kind of the over-rotation with a lot of the kind of security theater that came after that of almost psychologically, let's make our citizens feel like they're safe, even if the things that we're doing don't necessarily, you know,

• 12:43Speaker 01

  kind of change that apparatus. But on top of that, I think that it really woke people up to extremism around the world. And I don't know if necessarily there was a change in the extremism as much as it just was an awareness thing. Right? How many people, you know, kind of drew a line from, was it 92 or 93 with the World Trade Center bombing? To, you know, deep levels of extremism and hatred of kind of the American industrial complex? Probably not that many. 2001, a lot of people. And so I think that was, you know, again, as a, as a young kid, you don't understand a lot of this stuff. You basically just, hey, somebody came here and tried to kill Americans. And so, you know, we should go fight back. Right? Was kind of the, the response, I think, that I had.

• 13:26Lex Fridman?

  What role did that have psychologically for you when you then in 2006 joined the army? I mean, this is a very different joining the army than in a time when like it's more peaceful. Here, you're essentially facing, I mean, I don't know if you see it that way, but you know, there is a war on terror. And I know that people kind of criticize that whole formulation, framework of thinking, but nevertheless, you are going to Iraq, you are going to Afghanistan, you're, you're going to these places and are fighting these complicated like.

• 14:01Lex Fridman?

  I mean, it's not even clear what you're fighting.

• 14:03Speaker 01

  Yeah, well, I think that there's a couple of key pieces, right? So one, like one of the actual most impactful data points, if you were or kind of stories for me was the Pat Tillman story. So I played football in high school and I was going to go play in college. And seeing, you know, this NFL player who basically just one day said, hey, I'm going to go and do this instead and walk away. I don't know necessarily if it was a, I want to pursue the same story, right? And obviously he ended up dying and so not exactly the, the end result that you want. But I think it was almost like he made it okay. If you were on a certain trajectory in life to go take this detour and, and to go do it. But the second thing is I was 17. You're pretty stupid when you're 17, you're pretty naive when you're 17, right?

• 14:46Speaker 01

  And so I almost kind of backed into the deployment because I signed up as a, a reserve member. And so basically the plan was to sign up for the reserves, was going to go to basic training, get all the, you know, kind of education and qualification. I was going to go to college and then after college, you know, maybe there's a chance that you will go and serve or do whatever. For me, I ended up getting deployed when I was a junior in college, literally got pulled out of school. And so at 20 years old, it's not exactly what you thought you were signing up for, right? Especially to kind of leave school to go do it. And then on top of that, I probably had an advantage over most people, both on the entry to combat and the exit to kind of a combat situation, which was football.

• 15:31Speaker 01

  So I always explain that in hindsight, you're in a male dominated, testosterone driven, kind of combative sport, where it's us first them and, and there's training and, and, you know, injuries and just kind of all of the things that go into playing a combat sport like football. To now they give you guns, but you still have a uniform on, still male dominated. It's just a little bit, you know, more serious in terms of the injuries and, and potential death and things like that. But also on the exit from that deployment, most guys I was there with, they're going back to being, you know, prison guards, police officers, working at the lumberyard, you know, just kind of everyday.

• 16:10Speaker 01

  Americans. And so I had the fortunate ability to go back into kind of that combative environment, go back to play football. And so it was almost this like de-escalation on the way out, where they take your guns away. We still got a uniform, still male dominated, still combative. And then eventually you're just a normal citizen. And so I think that in some weird way, I was, you know, very fortunate to kind of on the entry and exit, have that experience where other guys didn't.

• 16:34Lex Fridman?

  So what you were deployed to Iraq, were there any memories, experiences that changed you? Or in general, like, you're probably a different man on the other side of it. How did that time change you?

• 16:49Speaker 01

  I think there was two main takeaways that I took, right? So one was, not a specific moment, but on multiple occasions, I remember we were driving down the road and I would look and there would be a 10, 12, 14 year old kid. And if you've never seen somebody who literally has hate and disdain in their eyes.

• 17:06Lex Fridman?

  So would you?

• 17:07Speaker 01

  Just not necessarily to you personally, just to the uniform, to what you stand for, to all this stuff. When you see it, you see it, right? And I always think of, if you've ever watched the movie, 12 Strong, and in it, they've got this Afghan Afghanistan warlord, and he's talking to a bunch of soldiers. And he says, you know, you don't have killer eyes, you do, you do. And he's just like, he can just tell, right? He's seen so many soldiers. And so I think that that was a memory on a number of occasions where I just saw a young kid. And I just said, they hate us. Right? And it's not you personally, it's what you stand for. But the really big event was when you first get to these combat zones, a lot of times what will happen is you basically, your unit teams up with a unit that's leaving,

• 17:51Speaker 01

  and there's a handoff and it happens over a couple of weeks. And so you can imagine almost, you know, 1% of our team goes out with 99% of their team, then 5, 95, 10, 90, all the way till it's 50 50. And then eventually it rotates and then it's majority of our team and a small number of their team. And so what a lot of people will explain is the two most dangerous times in war are actually the first two or three weeks and the last two or three weeks. When you first get there, you don't know who the people are, you don't know the terrain, you don't know, you know, kind of the local cultures and who to look Look out for what signs, all that kind of stuff. And the last two or three weeks is you basically think you've survived the deployment. You're looking forward to going home. So you become complacent, things like that. And so we made it through that transition period with no issues.

• 18:32Speaker 01

  But the literally the very first mission that we went out as a team ourselves, a hundred percent. There was two separate incidents. One was we were driving in the middle of the night and what we think was a sniper shot at a truck that I was in. I was standing up outside of it along with a another guy. And that was kind of just a wake up call again of I've never been shot at before. Right. And so I'll never forget. You kind of heard this whiz go by and the guy next to me was from rural Pennsylvania. And he just said, you know, look, I've never been shot at before either, but I've done a lot of hunting. Get the fuck down.

• 19:07Speaker 01

  Okay. And so we kept driving that night. And later on in the night, an IED went off. A guy ran over an IED who was at the front of the convoy. And when that IED went off again, I had never been in a convoy that had been blown up before. But the training kicks in. And so immediately every single person starts screaming out IED, IED. And they started looking and trying to figure it out. And you realize the United States military did a fantastic job training us before we went. Because in that moment, nobody thought about anything. You just did what you had been programmed to do. And so ultimately, kind of through the end of that event, there was a US soldier that ended up dying. He was shot in the head.

• 19:47Speaker 01

  And when we got back to the base, kind of after that entire event, I think it just hit us. We are at war and if we make mistakes here, that is the cost of, you know, kind of those mistakes. And this was somebody who I didn't know. It was somebody who literally showed up kind of as secondary support for our unit. And basically was there to help us, right? And so it was one of those weird situations where you have this emotional connection because it's somebody who shared an event with you, but you didn't know them, right? And you learn their name later and you understand that they have a family and they have young kids and all this stuff. And so again, as a 20 year old kid, you're kind of processing all this and you just realize like

• 20:31Speaker 01

  the gun I have in my my hands, it's real for a reason, right? And we better take this seriously. This is not, you know, us joking around in kind of the barracks and, you know, all the things that you would expect. You know, guys are doing in the army. So I think that was like the moment where I said, hey, I'm gonna learn a lot here and I gotta make sure I get home.

• 20:49Lex Fridman?

  And you snap into the training, but nevertheless, I mean, you're somebody who thinks philosophically about this world now, right? You're very intelligent and thinks deeply about the world. So looking back, you mentioned hatred in the 14 year old kid's eyes. There's death. So the way you kind of described this whole story is like training kicks in. This, this shit is serious. Like this is, uh, you know, there's a reason there's a gun in, in your hand. So there's a strategic element. There's like, you have to get the job done. There's a task at hand. But at the same time, if you zoom out, there's a kid who has hate for you.

• 21:29Lex Fridman?

  Some of those kids would probably, if they could, would kill you for the thing you stand for in the uniform. And then there's bullets flying at you. And then there's people that some of them you might already care for deeply are dying. What the hell do you make of that? Do you think about that? Does any of that haunt you? How do you think about the world having witnessed that?

• 21:57Speaker 01

  Yeah. A lot of times when we would talk about it, we were there. If I was that kid, I would want to kill that person too, right? I, I would have hatred as well, right? Imagine if in the United States tomorrow, you and I woke up and there was tanks rolling down the street from another country.

• 22:13Lex Fridman?

  Yeah.

• 22:13Speaker 01

  And they were basically imposing their rules on us. Whether they thought it was the right thing to do or not, the soldiers were there and they were doing this. We would probably feel not so great about it, right? At, at kind of a minimum and at a maximum, we'd be really, really pissed off. We would fight back. And so what you don't understand when you're in the heat of the moment is why does this person feel this way? And so what's very weird is, well, what happens if a year ago, US soldiers came through? They got shot at, they returned fire and they killed that kid's uncle. You'd be pissed off, right? And so you just start to understand, like, we look at war very black and white. We look at it very much from a clinical perspective. We're gonna go, we're gonna go kind of invade somewhere.

• 22:57Speaker 01

  We are the most dominant military in the world. We're very good at invading and we will crush wherever we invade. But when you're actually on the ground, what you understand is the humanity of it all. Right? And so what becomes very interesting is pretty much every veteran I know that comes back, they're some of the largest pacifists in the world. And I always revert back to Marcus Luttrell, who's a famous Navy SEAL. And there's a movie made about him and his story. He gave a speech one time that I saw. And he basically said, listen, if you're a politician, your job is to be the diplomat. Do everything you possibly can not to send me and my friends anywhere. Because when you send us, we're gonna bring hell with us. Right? And understand that is the business that we are in.

• 23:40Speaker 01

  But every single other person up until we get sent has a job to do to prevent having to send us. And I think that ultimately, that's where you see a lot of kind of this generation that has fought in Iraq and Afghanistan that says, listen, maybe we shouldn't be running around the world being the police. Maybe we shouldn't be going and invading all these different countries. Because when you actually get to see firsthand what happens, it's just something that we should avoid at all cost. But if we have to go, or we have to actually send soldiers somewhere, understand what happens when that occurs. And, you know, the United States is the best in the world at doing it.

• 24:14Lex Fridman?

  Do you think, thinking about that kid with the hatred, do you think there will always be hatred in the world? Do you think, from another perspective, do you think there'll be war always? Is that a fundamental aspect of human nature? Or is that something we can escape?

• 24:31Speaker 01

  Yeah, so war, I think, has like very negative connotations in terms of bullets and bombs and death and kind of just very morbid type. Understanding conflict, on the other hand, I think people look at and say, of course, there will always be conflict, right? You just can't have billions of people all on the same planet without some level of disagreement, whether that's a disagreement of ideas, disagreement over physical, you know, geography or something else. And so I think conflict will always exist. The question is, what form does war take moving forward? And so in my mind, you know, it's starting to look a lot more clinical, right? A lot more drones, a lot less soldiers on the ground, a lot more use of special forces and kind of these small,

• 25:13Speaker 01

  highly specialized teams rather than kind of big mechanical armies. And then you get into like the information warfare and kind of cyber warfare. And you start to understand that we're at war with a lot of people right now, right? Doesn't mean we're necessarily dropping bombs on their countries. Doesn't necessarily mean we're sending soldiers there. But on a daily basis, we are engaged in these kind of, you know, cyber battlefields. And so if that's where war starts to play out, it one changes the tools and tactics and techniques that we need to arm our country and other countries will arm themselves with. But it also changes the way that we think about war, right? It's it sounds a lot less worrisome. If I say, hey, we're going to go to war with a country. But by the way, there's going to

• 25:54Speaker 01

  be no death. Right? Okay. Like, that doesn't sound nearly as bad as hey, we're going to go send 10,000 soldiers and, you know, some percentage of them are going to die on the battlefield. And then we're gonna, you know, basically pipe back videos and articles saying that American soldiers are dying.

• 26:08Lex Fridman?

  Yeah, it does seem to be a fundamental difference between the the Genghis Khan style. Like if I would feel differently if somebody like hand to hand with a knife murdered my family versus cybersecurity wise stole all their data, stole all their money, stole everything they own, falsified their identity, all that kind of stuff. That those are both traumatic events. But they do seem to be fundamentally different. But maybe that's actually very narrow style thinking. Because ultimately, you have to think about what is life and what's happiness. And it's like the Samurai thinking. I'm not sure what's

• 26:53Lex Fridman?

  more painful. If I take it to myself, like, I'm not sure what I would rather live through being stabbed, like to death. Or

• 27:06Lex Fridman?

  Having my identity stolen, all my money stolen, or maybe

• 27:13Lex Fridman?

  reputation destroyed, like with lies or something like that. That that's very interesting to think about. If you think about quality of life and all those kinds of things.

• 27:22Speaker 01

  Well, one's finite, right? One, the pain ends, and the other is kind of a long, prolonged, almost torture.

• 27:29Lex Fridman?

  So it's physical pain versus psychological pain. It's really interesting to, it's really interesting to think about.

• 27:35Speaker 01

  And I think another key piece to this, which I don't have answers to, but but there is an element of emotion and rage in the physical violence versus, again, more of that clinical, you know, information warfare. And so it's really easy to show a battlefield where there's death on both sides and bombs being dropped and buildings destroyed. It fits very well into propaganda for everyone involved, right? Regardless of what side they're on. When you start talking about cyber warfare, how many times have we seen a big company get data hacked or information hacked? And we all, you know, read the headlines, maybe throw a tweet out and then move on with our day and don't remember it anymore.

• 28:15Speaker 01

  And so it's just very, very different, I think, in the emotion and response that it invokes in people when they hear about it as well.

• 28:23Lex Fridman?

  Given the conflict, do you think people are fundamentally good? Are we all sort of like blank slates that could be evil, given the environment, or good, given the environment? Or can we kind of, is there some base that we can rely on that people, if left to their own devices, will be good and trustworthy and honest?

• 28:47Speaker 01

  I think you have to separate out intention from action. So if you talk to some of the most heinous criminals in the world, they've rationalized their actions. And so you've got to ask yourself, what is the level at which they understood what they were doing? That they intended to be malicious, nefarious, and kind of do bad things versus the actual actions themselves? And so even as a society, you know, if, let's say, for example, you were to walk down the street and you were to murder somebody on the sidewalk completely unprovoked. We would look at you and say, you are a sociopath. You have everything wrong with you and that is somebody that we do not want in our society.

• 29:29Speaker 01

  And therefore, we will levy the extent of rule of law against you in order to protect society from you. Right? And you become that monster, that beast. If in the same situation, somebody walks in your house with a knife and you murder them or you kill them. Now, we put you up on a pedestal as a hero. And those are two very, very different responses. They may be just as morbid, they may be just as violent in terms of the actual actions. The intentions, the way it's perceived is very, very different. And so I think that as a world, we like a very black and white, clean cut, good, bad. I think the world's a lot more messy than that. And I think that a lot of times when you look at intention, it's hard for us to tell what somebody's intention is.

• 30:14Speaker 01

  But I've looked at a lot of people who are both considered very good and also a lot of people are considered very bad. And they sound very similar in terms of the motivations for their actions. And so I think that it's just a really hard problem that probably doesn't have a perfect solution or an answer.

• 30:31Lex Fridman?

  Do you give much value to the intention? Or do you think it's better to look at the results of the behavior as opposed to the underlying ideology, the underlying intention of the behavior?

• 30:45Speaker 01

  I think that intention gets at the question of like, are people inherently good or bad? Right? Is, I think that they're generally inherently good. And the intention is driving towards the thing that they believe is the best outcome or the best thing for them to pursue. The action, I think, is where we spend most of our time focused on. And frankly, we actually may be a better society or kind of kinder as a humanity to each other if we spent more time looking at intention rather than action. But again, if somebody walks down the street and murders somebody, it's really hard to have a conversation and it may be inappropriate for us to have a conversation about intention versus any level of action, right?

• 31:27Lex Fridman?

  So you're one of the prominent, I would say even the faces of the world of cryptocurrency, Bitcoin, that whole entire world. Let's dive straight in and ask, do you think, do you consider yourself a Bitcoin maximalist?

• 31:46Speaker 01

  I think that the way I really look at it is I work backwards off of what is the maximalism that I believe in. And the world that I believe in is kind of an automated world that is run on these open decentralized protocols. And what we ultimately do is we return sovereignty and individualism and kind of personal responsibility and liberty to people over institutions. And what we end up doing is we end up kind of taking what has historically been a very analog or physical world economy and geographic rule. And we then kind of put it in the cloud.

• 32:27Speaker 01

  And this digital economy becomes the prevalent way that we all conduct commerce, communicate, etc. And so it's less about any one single technology to me, right? I think that it's pretty stupid for people to almost in a way, put an inanimate object up for, you know, some sort of obsession. To me, it's much more about the ideals, the ethos, and the most rational and likely path to that kind of enigma or that world that I think, you know, is at this point, just a foregone conclusion.

• 33:00Lex Fridman?

  So the distinction there, and maybe people don't know the terminology, maximalism is basically saying, I really think this is a good idea. Like, you know, if you prefer a certain kind of diet, you could be a keto maximalist, saying like, this is probably, maybe it's not 100%, but probably the diet that's healthiest for humans, kind of thing. In the same sense, Bitcoin maximalism is saying, you know, of course, we don't know there's a lot of uncertainty, but this particular technology seems to be the best representations of some set of ideals that defines progress in the future. But you're drawing a distinction between sort of...

• 33:43Lex Fridman?

  Cult-like obsession about an object of any kind, whether it's keto or Bitcoin, and just sort of believing that a technology is the best representation of a particular set of ideals. And you believe that sort of this moving into the cloud, both the distributed nature of it, but also just the digital nature of it, is something that's going to be a positive step for humanity.

• 34:13Speaker 01

  Yeah, I would even take maximalism a step further. And it's not just the kind of singular viewpoint of this is the best. It's also an element of it's anti-everything else. Right? So, you know, take keto, for example, the keto diet is not only the best diet, all the other diets are bad.

• 34:31Lex Fridman?

  Yeah.

• 34:31Speaker 01

  Right? And so it's a very binary view of the world. I think that what's probably most misunderstood about, let's take Bitcoin as a specific example, is that most of the people who are labeled Bitcoin maximalist, they would be open-minded if they believed that something else came along that was a superior technology, or had a better kind of probability of achieving, again, that ultimate vision. I think where there's this controversy and kind of clashing of ideas, is that the Bitcoin community believes Bitcoin is the best way to do that, and has very specific arguments as to why the other things are not. Right? And so what ultimately ends up happening, which is very weird in the

• 35:13Speaker 01

  investing world, right? It's unlikely that you and I are going to sit down, you're going to like, Apple stock is the best stock, and there's no other stock that's worth anything.

• 35:20Lex Fridman?

  Yeah.

• 35:20Speaker 01

  Right? And then also, it's very weird if you said to me, you know, this stock is worth zero, and that's where everything that I own, I've put on a short on one single company. Right? There's diversification, there's much more kind of probabilistic thinking in finance in general. When it comes to this specific world of cryptocurrency and kind of digital assets, if you will, is there's two main groups of people who are trying to build two very, very different things at the onset. But when you unpack it and you start to spend more and more time on it, you realize they're actually trying to Accomplish the same thing in two different ways. So Bitcoin is seen, I think, as a digital currency, right? Kind of the idea that this is going to ascend to become the next global reserve currency. It's a programmatic, kind of transparent money.

• 36:06Speaker 01

  And it's essentially just 180 degrees difference than the inflationary, you know, non-transparent fiat currencies that exist in the world. You then look at kind of everything else, right? And you have a lot of smart contract platforms and various things that they're all going after. Ethereum with kind of the world computer approach. And you can kind of go down the line with all their other arguments as to what they're trying to build. I think the big difference just comes down to innovation versus security. And when you simplistically look at it via that lens, you actually understand where both people are coming from.

• 36:40Lex Fridman?

  When you say security, sorry to interrupt. Do you mean financial security? Or do you mean like literally the, the, the security of the, of the particular cryptocurrency?

• 36:49Speaker 01

  The, the technical security of a blockchain. So when you look at, let's say Bitcoin versus Ethereum, right? Bitcoin has decided and that community has decided, security is the number one thing that you have to optimize for. So decentralization over everything else in terms of transaction speeds, costs, anything that you could come up with that is something that would be important for a currency. The number one thing to optimize for is security. And as we have seen with a lot of technologies, right? Facebook's Libra or now what's known as D M is a great example. Not having decentralization is susceptible to the nation state. And so a lot of these other platforms and blockchains, they say security is important, but it's not the most important thing.

• 37:33Speaker 01

  We believe there's a trade off between, you know, a little less security and transaction speed or composability or whatever it is. And so take Ethereum as kind of the second largest community in blockchain by market cap.

• 37:48Speaker 01

  It was created because somebody wanted to, or a group of people wanted to do something on Bitcoin. They felt like they couldn't do it. And so they said, hey, we're going to go create something that has these smart contracts that we can then go do here. Again, this is technology, right? So the tribalism of like, you're right, you're wrong. To me is a little childish, just in the sense of like, the market is going to decide what is most valuable. And then when you go inside of that community, like, there's a lot of dumb ideas people are trying to build around Bitcoin. There's also a lot of really, really great ideas that people are trying to build around Bitcoin. Same thing in the Ethereum world. And so what you end up getting, I think, is the tribalism really comes out of the idea that there's a ticker price that is attached to all of this, right? If you go back in history of technology,

• 38:28Speaker 01

  venture capitalists didn't sit around the table and yell and scream at each other in this like religious zealot way, right? Because you bet on one type of cloud computing platform and I bet on another one, right? It's just the market's going to decide, we're both going to work on it and try to make ours successful. Here, I think that the sensitivity, and mainly it comes out of the Bitcoin community, is that a lot of this is being funded, not only by venture capitalists and kind of professional money managers and asset allocators. There's also this element of including the retail investor and the public. And so whether it's through ICOs or some other forms of capital raising, there's arguments for it, saying, hey, look, this now gives kind of the little guy some sort of access and ability to do it. But there's also arguments against it.

• 39:12Speaker 01

  Some people say, hey, it's easier to dupe them and it's easier to run scams and kind of all this stuff. And so ultimately, I think that crypto is this like arena of ideas. It is literally the war of attrition. And what will end up happening is 10 years from now, you and I will talk. And we're going to say, well, the market said X was valuable and Y wasn't. And so all of the tribalism from between, you know, here and there, it's fun, it's, you know, engaging, whatever, but ultimately it doesn't really matter.

• 39:39Lex Fridman?

  Yeah, because the public is involved. There's a lot of personalities. And so a lot of times we focus on the extreme personalities that do a lot of maybe, pardon the French shit talking. And so we kind of focus on that, but that's not necessarily representative of the communities involved.

• 39:56Speaker 01

  Let's talk about Bitcoin first, and then it'll help us use as a kind of a comparison to Ethereum or whatever else. So when you think about what is money, right? That's kind of the first question people really kind of go down the rabbit hole on. And ultimately today, it's a belief system, right? And you may believe that one currency has more value over another because it's backed by a certain military or a certain government has a monetary policy that you believe in or don't believe in. But ultimately, it's a belief system. There's nothing backing this other than a government asks you to pay your taxes in it, right? And they can have a monopoly on violence in terms of they can put you in jail if you don't pay your taxes. They can go to other countries and they can invade and do all this stuff.

• 40:36Speaker 01

  It wasn't always like that, right? It was historically a layer one technology was gold. And so gold was a fantastic store of value. You knew that if you held gold, it wasn't going to be inflated away. It was sound money. It was outside the system and no one could create more of it. And the reason why that's important is because that optimization for store of value served as the bedrock of the entire stack of money for 5,000 years. And so the problem with that, though, again, trade off between store of value is it was really hard to transact with, right? If I came in here and I and you said, hey, I want a couple of ounces of gold and I had a whole bar, I'd have to literally shave off the ounces of gold.

• 41:15Speaker 01

  It's heavy to carry around. If you said to me, hey, you're in one city, mail it to me, it's really expensive. You know, there's all these issues with it. And so ultimately what people said was, well, let's create a second layer on top of that gold in order to make it easier to transact. And so we created paper claims on the gold. So hey, don't carry around the gold in your pocket anymore. Put it in a vault or a bank. They're going to issue a paper claim. Now you and I can trade these paper claims around. And at any point, if you want the gold, you just show up and you say, hey, give me, you know, three ounces of gold or two bars or whatever. And so that actually made the store of value. It allowed that to be the anchor and kind of the most important. Important part, the security of your purchasing power. But now it became easier to transact. And then eventually we built layers even on top of that. So everything from electronic money, kind of electronic CUSIPs,

• 41:59Speaker 01

  all the way to credit and other systems on top of that gold. 1971 comes around and obviously we de-peg from that gold, right? It was a temporary measure at the time. We ended up not going back to it. And so what you moved or transitioned from was sound money, which was outside the system. No one could create more. To now the government had full control. They could create as much as they wanted to. They tried to be responsible and disciplined, but obviously hard to do. Sometimes we've been really good at it. Sometimes we've been less good at it. And then you go around the world and some countries have absolutely sucked at it and some have been good at it. And so when you look into the Bitcoin world, I think that when you look at this optimization for security, similar to gold, store value, people hold it. Purchasing power has gone up a lot year over year. It's like a 200% year over year compounded annual growth for over a decade, right?

• 42:42Speaker 01

  And so you measure this in kind of the US dollar exchange price, et cetera. But there's still a lot of people who will yell and scream about, it's slow, it's costly, right? All the things around those transactions that are obstacles or challenges. And so there's basically two schools of thought. And this is where we kind of get into the bifurcation. Some people just said, hey, this technology is antiquated. We can't use it. It doesn't make sense. And so what we're going to do is we're going to go build something new. And so you go get, you know, kind of all of the various versions there. The Bitcoin community says, no, just like gold had paper claims and other things built on top in layer two, three, four, five, we're going to do that here. And so they've already started to build kind of this layer two, where it's easier to transact, it's cheaper, it's faster, et cetera.

• 43:25Speaker 01

  And so I actually think that both of those worlds are going to coexist in the future. The big question is just which one has more importance, right? So again, get out of binary. It's just probabilistically. And so my personal belief is that the security, that the store of value component as the bedrock for a monetary system is essential, right? Like that is the most important thing. Cause you can always improve the other components, but you can't go back and fix that kind of core piece.

• 43:55Lex Fridman?

  So if money is an idea that we all, it's like an emergent idea that we believe in, you're saying that security is one of the most fundamental catalysts or fuels for that idea to sort of take hold and be stable and sort of take over the world. The other stuff is really nice to have, but if you don't have the security, you're not going to, like, it's not going to spread in a viral sense in our human brains.

• 44:24Speaker 01

  Well, and especially in light of the kind of the macroeconomy, right? So like, what's so fascinating about the last 12 months is in investing in general, the best returns, and I kind of put that in air quotes a little bit, is something that is different than everything else and right. So being different and wrong just means you're an idiot, right? Being different and right means that that's where kind of the outsized returns are. And so if you look around the world at currencies today, they're all the same. They're all inflationary, unlimited supply controlled by a government, done, and decisions made in a very non-transparent process. And what we've watched is the manipulation of all of those currencies over the last 12 months. In direct contrast to that is this thing Bitcoin, which is outside of the system,

• 45:09Speaker 01

  has a finite supply, transparent and programmatic monetary policy. And so when you see those two systems kind of in comparison to each other, in the United States, there's a lot of people who say the dollar works great for me. I can go to the ATM, I can get out physical cash, if I want to swipe a card, I could do that. My money in my bank doesn't lose 50% of its value in a day in terms of purchasing power. Like, the dollar's pretty good. When you go to other countries, that might not be the case. And so I do think that there's kind of a relative analysis that goes on here. If you compare Bitcoin to the dollar, there's all kinds of arguments to make that the dollar is better as a medium of exchange today. But if I go and I tell you, well, what about in, you know, these kind of extreme examples

• 45:51Speaker 01

  of Venezuela, Zimbabwe, Turkey, et cetera? And so I think that that's kind of one perspective to view this through is security versus all of the innovative components of a medium of exchange, et cetera. The second thing, though, that I think is really, really important is around censorship. And so when you look at, again, every currency in the world today, every single financial service, they're highly susceptible to censorship. And actually, I would argue, the United States is in the business of censorship in terms of, you know, how many countries around the world do we sanction and cut them off in either a minimal or a very material way from the global financial system?

• 46:30Lex Fridman?

  So when you define, when you talk about censorship, do you mean just the censoring your ability to operate freely in the world?

• 46:37Speaker 01

  Well, look at it a little bit differently, which is that the United States has kind of the American superiority. Because we have the bombs, the bullets, the soldiers and that military might, we basically impose our will around the world. And so there's a very strong argument to be made that there are certain countries around the world that are being sanctioned, that the people of those countries did nothing wrong. Now, the governments are bad, right? In terms of the way that you and I would look at democratic rule, or communism, or whatever it is. But the people are being hurt as well. So there's a whole group of people who would have just argued, listen, we shouldn't hurt anyone at the expense of

• 47:18Speaker 01

  punishing one person or a group of people. There's other people who argue against that. But I do think that if you really kind of zoom out and you say, I'm gonna take myself out of the Western worldview, and I'm simply gonna look at this as we're all part of the human race, it's censorship. And there might be an argument for censorship, but there also might be an argument against the censorship. And so what Bitcoin does as that specific kind of payment network is it says, anyone in the world with an internet connection, I don't care where you are born, what language you speak, what religion you are, your wealth status, your education status, none of it matters. If you have an internet connection, you can plug into this monetary system, and you can move value around the world to anyone

• 48:00Speaker 01

  else without asking for permission. And in the United States, we basically have that ability in the US dollar, kind of traditional banking system. I could pretty much send money to almost anyone I want, unless they're a really bad person that's on some list or something. Most people in the world don't have that capability. And so what you're essentially doing is you're democratizing access to a true store of value and a medium of exchange, right? And so what you see in many of these countries is that when their currency starts to fail, the first thing that a government or a group of people in power and influence do is they lock the citizens into the currency with capital controls. Why?

• 48:42Speaker 01

  Because if you let them out, it exasperates the problem. And so now what we're seeing is we basically are giving a tool to billions of people around the world that is a peaceful protest, right? You and I had no say at all when not only the Federal Reserve and elected officials here in the United States, but central banks around the world over the last 12 months decided to create trillions of dollars and inject it into the monetary system, right? They have arguments, and some of them are very good arguments as to why they should do that. They're trying to mitigate short-term pain. Long-term, they'll figure out the other issues, right? They have very kind of elaborate and well-articulated kind of viewpoint as to why they're doing it, but you and I had no say.

• 49:24Speaker 01

  And so when you start to look at, we have a very small group of people in this world, both in our country and in countries around the world, that make these decisions that have very, very far-reaching kind of impact. And on top of that, in many cases, there's actually not that much kind of accountability because usually these are not elected officials who are making some of these decisions. These are appointed. And you can argue that, hey, we elected somebody who appointed them, but at the same time, that accountability isn't quite there. And so I think ultimately, when you just back out and you say, you know, what is Bitcoin? Why is it important to the world? It is giving access to anyone in the world with an internet connection, to a store of value and a monetary network that allows them to peacefully protest and to opt out

• 50:08Speaker 01

  of a system that pretty much is not working for majority of people in the world.

• 50:14Lex Fridman?

  So it's moving the power from these centralized places, sometimes unelected, to the individuals and to the people. So the dollar does seem to work for Americans and for many people in the world. But you kind of have a vision, you paint a picture of a future where potentially we move to cryptocurrency. So what kind of trajectory do you see where Bitcoin can become the main currency in the world? Or at least cryptocurrency become the main way of storing value in the world and basically overtake the dollar?

• 50:48Speaker 01

  Yeah, so I always go first to, we don't need to have competition like in terms of like a direct competition between the dollar and Bitcoin. Right? If you look at most technologies in the world, the really valuable ones are actually market expanding technologies, rather than simply just market share stealing technologies. Right? So if you look at Uber, for example, Uber didn't just say, hey, I'm going to go take out all the taxis. Right? It actually drastically expanded the market for people. Now there's literally millions of people in the United States who don't have cars because they use Uber. Right? And so I think that Bitcoin is very similar in that, yes, there is a component of medium of exchange in terms of the dollar. But also there is this component of just store value assets in general.

• 51:31Speaker 01

  And so when you start to look at Bitcoin specifically, I think that what you're seeing is you're seeing a generational gap, where young people say, I grew up with a phone in my hand. I'm digitally native. The whole idea of going to the bank and sending a wire or going to an ATM and getting physical cash is an antiquated idea in their mind. Right? I one time asked my brother, he's 24 years old, and I said, hey, how do you send money to your friends? And he gave me one answer, which I expected, which was Venmo. And the second answer I didn't expect, he said Uber. I said, how do you send money via Uber? He said, well, we get in a car together and at the end we split the ride. And so again, you and I have probably both done that, but I never thought of it as a way to send money to each other.

• 52:10Speaker 01

  And so it is a psychological difference between even me, who's only, you know, a decade older than him or so, and his peer group. And so I think as we're watching kind of Bitcoin continue this ascent, ultimately what we're seeing is an entire generation of kids are saying, listen, if I look at financial assets across the board, I have stocks, I have bonds, I have currencies and I have commodities. I know that bonds from a real rate return perspective. Is flat to negative, right? I'm gonna make no money on this because I have a belief that my dollar is being devalued. And actually, what we're starting to see is, again, the internet has broken down these walled gardens and kind of these centralized hubs of information.

• 52:53Speaker 01

  In that, if you were to look at, let's say, the stock market from 1971 to today, in dollar terms, it's a 45-degree angle right up into the right, right? You know, it's kind of 7, 8, 10% growth every year. And it's amazing. Just get invested in the stock market and you'll make money over a long period of time, regardless of the dips along the way. If you denominate that same stock market in gold, the stock market is down since 1971. And so is it so much that the stock market is accruing true value? Or is it that the underlying currency in which it is denominated in is being devalued? Right? And I was being devalued in a very disciplined way, right? In terms of, it's not like it went 50% devaluation in a short period of time, but it's still being devalued. And so I think that people are waking up to this idea

• 53:36Speaker 01

  that a traditional 60/40 type global portfolio doesn't work anymore, right? 40% of it in bonds is just not going to get it done. And so when you start to look at this, people first look at Bitcoin via two main ways, in my opinion. They look at it one as a store value. Should I actually go and put some of my wealth there? Use it as a savings technology, right? We ask people in the traditional world, if you're a teacher, a fireman, an accounting, you know, mid-level manager, we say, hey, go do your job. Be best in class as a fireman or as a teacher. And then, oh, by the way, you have to be a professional investor as well. Because if you just put your dollars in your bank account, you're literally going to have your wealth devalued away over time. So you can't just save, you have to invest.

• 54:19Speaker 01

  That is a really tall task for people. They have a hard enough time just doing their job right, taking care of their family, right? Now they gotta go be an investor. So I think savings technology from a Bitcoin standpoint is if you buy satoshis or Bitcoin, over time, it will increase from a purchasing power standpoint because there's a fixed supply and demand continues to rise. But then you start to look at, well, what other assets do people put in their portfolios? Whether it's art, it's real estate, it's precious metals, or something else. Most of those assets are not because people actually think that they're going to go up in value over time, they're using them to store value. Right? The reason why somebody buys gold is because it's a store of value, right? Historically, that's a narrative-driven type asset, though. We tell people it's scarce.

• 55:04Speaker 01

  We tell people that it is a store of value. When you look at it, though, we don't know how much gold exists in the world. We have a good estimate, right? But we don't actually, we can't prove how much there is. We don't know how much is coming out of the ground every day. Again, great, fantastic estimate, but we can't prove it. And we don't know what the total supply is. And that's what you mean by narrative-driven? We can't really prove it mathematically. You, I, and everyone else in the world has lived in a narrative-driven world for the last couple of decades, right? And what the internet and digital technologies have done is it opened up the possibility and the desire from people to have a world now where I can validate things. So when I see that headline, I want to see you say whatever happened in the news, if

• 55:47Speaker 01

  you're the subject of the news, rather than have somebody else tell me the story. If I see that you say something is scarce, prove to me that it is scarce. And so I think that's kind of a psychological shift the younger generation is starting to understand, because ultimately, you and I probably grew up in a world where our parents could tell us the story, and we just believed it. You know, dad or mom says it, it must be true. If my brother hears a story, what does he do? He goes to Google and he looks it up. Right? He comes back and usually tells my parents, oh, you got the story wrong, right? And so I think that that provability or that validation ends up becoming really, really important. And so, you know, look at something like gold. I think that people are drastically underestimating the shift that's underway right now. Gold is, one, down in value since April, or I'm sorry, August of 2020.

• 56:32Speaker 01

  And so in a timeframe where central banks have had historic quantitative easing, literally $6 trillion in the United States, the one asset that historically has been the best store of value and has, you know, in 2008, financial crisis hit an all-time high based on the government response, has actually suffered for a main part of this financial crisis. You then look at central banks around the world who have been very large holders of gold for a long time and net buyers on a monthly basis. For multiple months, over the last six months, they've been net sellers of gold. And then you start to look at jewelry demand, so the actual non-monetary value of gold.

• 57:13Speaker 01

  And that demand for gold jewelry peaked in 2013 and has continued to fall since. And so what you start to say to yourself is, take just the asset of gold, which is about $10 trillion market cap. And you say, okay, well, jewelry demand continues to fall, even if it's at a slight rate, but it continues to contract. You have central banks that now at sometimes are net sellers and sometimes net buyers, right? So, okay, again, contraction there. And then from the investment standpoint, the actual price, the daily price of this continues to fall, which is a signal that there's a contracting demand from an investment perspective. That's 93% of all use of gold. Only 7% of it's used for actual technology and metal conduction and things like that.

• 57:54Speaker 01

  And so you have a $10 trillion asset that it appears, and again, maybe data changes and I'll change my mind and other people change their mind, but it appears is on the decline. And so if that happens, you're going to get the contraction of a $10 trillion asset. Where's all that value go? And what you're seeing is, at the same time that that asset is contracting, you're also seeing a massive influx from not only retail investors, not only kind of the wealthy and the elite, but also from financial institutions, corporations, pension funds, et cetera, into this kind of digital sound money.

• 58:27Lex Fridman?

  So you're saying that there's a kind of shift from gold to Bitcoin? Because they have a lot of the same properties, except one is in the physical space, the other's in the digital space. So do you see like central banks quietly potentially switching out from sort of gold to Bitcoin? Like naturally just doing, seeing the pattern that you're referring to now, but more drastically into the future, where there's a complete shift?

• 58:55Speaker 01

  If you line up the gold community and the Bitcoin community next to each other, they'll agree on all the problems that they see in the world, right? They'll actually agree on the solution, that sound money is the solution. Where they differentiate is the gold communities believes that is the analog application of sound money, right? The physical gold, that is the solution. The Bitcoin community believes the digital application of sound money, Bitcoin.

• 59:19Lex Fridman?

  Can you define sound money, by the way?

• 59:21Speaker 01

  Sound money is just outside the system and no one can create more of it. So nobody controls it.

• 59:25Lex Fridman?

  This is scarcity is fundamental.

• 59:26Speaker 01

  Exactly.

• 59:27Lex Fridman?

  Why scarcity important in money?

• 59:30Speaker 01

  Well, I think scarcity just has this very high correlation to value across all assets, not just money, right? Money happens to be the, the unit of account that we use in terms of daily commerce. But whether it is, you know, as we're seeing now, sneakers, art, you know, whatever it is, scarcity ultimately is that signal of value, I think. And that's just been the way that humans derive value for literally, you know, thousands and thousands of years.

• 59:55Lex Fridman?

  Yeah, I gotta say, that's my view on life and love in general is scarcity is what makes it valuable. People talk about immortality. I, you know, I would like to be immortal, but it does, it does seem that when you let go of the finiteness of life, I feel like that meals and the experiences you have get devalued significantly. Like, the longer you live, the less value there are in, in, in infinity, if you live forever. I worry that all the meaning will, will dissipate. And the same thing with love, a quick criticism of sort of dating culture and all that kind of stuff. Like, I haven't had shocking revelation

• 1:00:40Lex Fridman?

  that I've never been on Tinder date or any of those things. I, I believe that scarcity in dating and, and interaction is like, intensifies the value of when the interactions do happen. So when they, like, when love does happen. And so in that sense, there's something magical about scarcity in the more subjective psychological, social world as well. And perhaps money is just another version of that, right? It's just, it's all about the stories and ideas we tell ourselves.

• 1:01:08Speaker 01

  I think they're actually more interconnected than you're giving it credit for, right? Which is, what is money? Money is time, ultimately, right? The, the pursuit of the acquisition of money, right? Of whether it's a currency or true money. Is because that should give you more time. And so one of my favorite movies ever is, and it's funny because Justin Timberlake is in it. Is this movie In Time. I lose most people at that part. In Time? In Time. And basically, the premise of the movie is that everyone has a clock that's embedded into their arm. And so if you go to work, you basically put your arm underneath when you leave. And there's time that's deposited into your clock.

• 1:01:52Speaker 01

  And if your clock ever hits all zeros, you're dead. You die on the spot. And so there's a number of scenes where people are basically running, you know, to get to you. And I give you a little bit more time so that you can get to work on Monday. And then you work to acquire time. And so basically, time becomes this currency. But what becomes very fascinating about it is there are sections in society where literally there's physical places. If you only have, let's say, 72 hours or less, you're allowed to go to section one. Section five, though, is because you have years and years and years on your clock. And in this movie, everyone at the age of 25 freezes from a biological aging standpoint. So everyone stays the same, but you may have lived for a thousand years.

• 1:02:36Speaker 01

  And so what becomes so fascinating about it is that rich people have time. Poor people do not have time. And so in it, Justin Timberlake, the main character, at one point, essentially acquires a bunch of time. And he's able to go to one of the higher levels. And now he's attending all of these galas and poker nights and all that stuff. And one of the first things that he learns is that in the lower end of society, everyone is running everywhere at all times in the movie. Because time is so finite and it is so scarce. And so therefore, why would I walk down the street? I must run down the street. In the highest level of society, no one runs anywhere.

• 1:03:18Speaker 01

  And in fact, if you run, you are seen as lower class. Yeah. Because wealth is time. And so that movie is, you know, it's got a ton of kind of things that you can pull out of it. But to me, is the perfect epitome of money is time. And so when you start to think about the acquisition of money, right? It goes to this whole idea of time billionaire. And I know that there's probably a lot of people have heard about this already. But if you think of a million seconds, it's about 11 days. A billion seconds is 31 years. And so if I said to somebody, you have to switch lives with Warren Buffett, would you do it? Some people would say, sure. That'd be their initial reaction.

• 1:04:02Speaker 01

  But you have to be 92 years old. Is the money worth the lack of time? Most people would say no. And there's this guy Graham Duncan, who really articulated this well. And ultimately, what ends up happening is you realize time is more valuable than the money. But you acquire the money to gain more time.

• 1:04:22Lex Fridman?

  And the reason it's valuable is because of the scarcity of time. We currently have the biology, the physics means that this is not just the narrative we tell ourselves. Maybe it is. I don't know, but it feels like, pretty sure we're mortal. And in that sense, the scarcity there gives value to time. It's fascinating to think about all the thought experiments here of if that could actually be on the economy, if you can actually convert time in a frictionless way to money.

• 1:04:55Speaker 01

  Well, and if you start to pull on this a little bit and say, okay, a young person today, let's say somebody in their twenties, has about 2 billion seconds left in their life, right? Kind of 60 years, give or take, based on life expectancy. They usually, until they start to understand this concept, think of wealth in dollar terms. But dollars are being devalued. And so, you know, a million dollars doesn't get you what it used to get, right? It's kind of an old adage. And so what you're doing is you're pursuing something that ends up losing value. And so it's the constant rat race. It's how do I constantly try to get more? How do I get more dollars? How do I get more dollars?

• 1:05:36Speaker 01

  Because even if I say to myself, you know, I'm going to retire when I get $100,000. When I get the $100,000, the $100,000 five years from now doesn't buy me what I thought it did. So now I need 500,000 or 200,000 or a million or whatever the number is. And so ultimately, what ends up occurring is that the Bitcoin community and many people and kind of this idea of sound money is you want to be able to acquire an asset that not only will hold the value, like the store of value over time, but it will actually appreciate over time. And so when you look at something like Bitcoin against the dollar, against other types of assets, all of these assets are down compared to Bitcoin, right? Now, some of that's just in the early days of kind of the pricing of an asset.

• 1:06:21Speaker 01

  You go from very small to something much larger. But now what you start to look at is, well, if you have a finite supply of something, what ends up happening is people begin to value it more. And so in a world where dollars are infinite and other fiat currencies are infinite, Bitcoin becomes very, very interesting, very special, and something that is very aspirational. And so I think that's where you're starting to see people say, wait a second, this is something where that finite, secure store of value is essential to wealth generation and preservation over a long period of time.

• 1:06:56Lex Fridman?

  And if Sam Harris is right, that free will is an illusion. This is really interesting to think about. Maybe time is a kind of blockchain because you can't change anything. And then the physical spacetime of the universe is a ledger. So maybe it won't be Bitcoin that replaces gold. Maybe it'll be time. Once we crack open that, in fact, the universe is fully deterministic. So maybe that's what like Eric Weinstein is afraid of. Once you figure out the theories of everything, of physics, we'll be able to then start trading, create a market out of like the very fabric of reality.

• 1:07:41Lex Fridman?

  And that way, break it.

• 1:07:42Speaker 01

  Well, if you look at infinite inflationary type currencies, you can't do that, right? Because it constantly is losing value.

• 1:07:51Lex Fridman?

  Right.

• 1:07:51Speaker 01

  When you look at a finite asset, again, that has the provability of the actual finite element to it, ultimately, the wealth is that marketplace.

• 1:08:02Lex Fridman?

  Yeah.

• 1:08:03Speaker 01

  And so, you know, I always kind of try to highlight for people, the top 55% of Americans understand something that the bottom 45% don't. They invest, right? The bottom 45% consume, the top 55% invest. And that's why we have a wealth and equality gap. And it continues to get wider and wider and wider is because the people who are holding the devaluing assets and saving are watching their wealth be devalued away. And there's arguments and controversy over how fast that's happening, but it's happening. The people who are holding the assets that have any level of scarcity, right? Real estate may not be finite, but it's scarce, right? Art may not be finite, but it's scarce. Gold may not be finite, but it's scarce.

• 1:08:48Speaker 01

  Those assets continue to appreciate against the devaluing currency. And so when you then say, no, I have complete finite supply with provability and this transparency around it where everyone knows how much is there and what, where it's going. Now, all of a sudden, you and I can transact back and forth that value. And it is a representation of time because what I can essentially do is if I gather or acquire more of that wealth, I then can apply leverage to my life. I can use machines, humans, or some other resources and basically now free up my time.

• 1:09:28Lex Fridman?

  Yeah, and it's not fun about the way you are trading time. Maybe it's a little bit indirect, but maybe not. So just because I brought up Eric and you're on Twitter, I'd love to hear your opinions. I talk to him a lot. He seems to have stepped into the beautiful dance of human communication and the social dynamics that is the Bitcoin cryptocurrency community. Do you have, do you have thoughts on gauge theoretic concepts? Conceptualization of the world or just Eric in general? He's got a lot of love in his heart and he's got grace in the way he communicates. But he's also loves to play with ideas and seems to have touched a sensitive point with the Bitcoin community.

• 1:10:12Lex Fridman?

  Is there anything you could say that's hopeful, inspiring about that whole dynamic that went down?

• 1:10:19Speaker 01

  So I don't know all of the details, but what I will say is I've listened to a number of his podcasts. And him, and there's a whole bunch of people like him. I basically put them in the bucket of they're an independent thinker who are courageous enough to speak their truth, whatever that may be. They are humble enough to revisit their ideas and say, I got this right. I got this wrong. Information changed. I'll change my mind. Obviously a sign of intelligence to be able to do that type of stuff. And I actually think that one of the most scarce things in our society are those independent thinkers who are able to do all this. Right?

• 1:10:56Lex Fridman?

  Speaking of scarcity, yeah.

• 1:10:57Speaker 01

  And so to me, I put Eric and the whole host of other people, kind of, if you look at like the intellectual dark web is kind of a label that's been used. They're actually some of the most important people in our society. Because they're the people who are willing to stand up against the mass kind of thought process. They're willing to talk about things that others may think are taboo. Right? They're willing to change their mind, which all of a sudden has become a bad thing rather than a good thing. And so when I see the exploration of ideas in public, I actually think that those are the people who are most open to the kind of vehement blowback as well. Right? Because that's part of what they're doing is that they're eliciting, hey, I'm going to throw an idea into the arena.

• 1:11:41Speaker 01

  If it doesn't get attacked, they actually may be more nervous than if there is some level of, you know, kind of war of attrition, if you will. And so what I've seen with a number of the people who have done this, everyone from some of the best, you know, hedge fund managers and kind of money managers in the world, all the way to what I'll consider some of the most intellectual people in the world, is they play with these ideas and they play with the ideas and they play with them and they play with them. And they all arrive at the same conclusion. And sometimes it takes a month, sometimes it takes years. But they arrive at this Bitcoin thesis. And what's so interesting about it is it highlights something that many people view as a bug. But I think people in the Bitcoin community view as a feature, which is that community.

• 1:12:22Speaker 01

  And so what ends up happening is when you have something that is as ambitious as creating a global reserve currency, doesn't mean it needs to unseat any of the existing ones, but become the global reserve currency of the internet, right, this digital economy, you need shepherds of it. And so just like a technology company wants to find those loyal fans that are willing to go out and market and word of mouth and, and kind of not only promote it, but also protect it. This technology that is this decentralized thing, which uses a financial incentive in order to elicit the buy-in, not from a financial perspective, but from a mental energy standpoint, has built one of the most rabid, powerful, and

• 1:13:05Speaker 01

  engaged communities on the internet. And what ends up happening is those people have thought more about these ideas and actually challenged those ideas more than anyone else in the world. And so I've got a lot of folks who will just say, there's this guy Marty Bent, who will talk all the time about the Bitcoin critics haven't done their homework in a lot of cases. So they show up and sometimes it's super intellectual lazy arguments. Sometimes it's actually very well thought out arguments, you know, on the counter to the Bitcoin thesis. But ultimately what ends up happening is you're talking to somebody who's an expert, they've been thinking about it for five, seven, eight, 10 years, right? They've gone through every simulation you possibly can. And they show up with data examples and responses.

• 1:13:48Speaker 01

  Now, they're not always right, but they've just done the work. And so what I actually like about folks like Eric and others is as they're kind of going through this journey, they're incredibly smart, right? And they provide, or they apply a lot of intellectual rigor to some of these arguments. And so what it does is, what does it do? It's a marketplace. It keeps people honest.

• 1:14:08Lex Fridman?

  Yeah. So let me sort of make a few comments. It's kind of interesting. You're exactly right.

• 1:14:15Lex Fridman?

  Uh, maybe the blowback is part of the mechanism that actually develops these ideas and so on. I do want to kind of speak to a little bit of the toxicity that I've experienced in the Bitcoin community. I kind of see it, the Bitcoin community, I think you paint a really nice picture, which I kind of see it as an immune system that protects against sort of, uh, the viruses that are bad ideas. Uh, that said, the immune system can destroy a body, right? Uh, and, uh, the thing you mentioned about Eric and maybe about myself, uh, and in general, just people exploring ideas, is there is a Dunning Kruger effect, which is when you first start exploring ideas deeply,

• 1:14:57Lex Fridman?

  you have, um, a overblown level of confidence about like how much you understand. And that's actually the process about learning. Then you realize you don't understand much. What I've noticed with the Bitcoin community is, uh, they're not as patient with the, the basics of the Dunning Kruger effect. Like if I step in and make declarative statements about Bitcoin, like I, you know, I read a long time ago, uh, the white paper, like at the cursory level, I felt, uh, that I understand the technology, this is basic intuitions. You know, I didn't think about the social dynamics. I didn't think about any like financial implications and a lot of the deep,

• 1:15:39Lex Fridman?

  actually the ongoing innovations and all that kind of stuff. But I thought I understood that technology. And so I step in and make declarative statements. I think those are the, the first time you say, okay, what's the role of Bitcoin in the world? You start thinking about it deeply and then you make statements. The toxicity that you get in those first few statements is really outpouring to me. I'm somebody that tries to communicate love and live that with everything I do. And, uh, there is a level of disrespect that I've experienced, not directly, just observing others. People have been mostly kind to me and I appreciate that. But if you're going to criticize me about my exploration of ideas in Bitcoin,

• 1:16:21Lex Fridman?

  You have to also acknowledge that I'm a human being that got like a PhD and stuff. Like I did some hard shit that it could be in farming or it could be in whatever. Like I've lived life and I've really thought deeply and I really care. Like I know a lot of shit and it's possible that I actually have a lot of ideas that you can learn from. Now, if it's agriculture, fine, or if it's artificial intelligence, fine. Like I know what I'm talking about, about certain things and I could be wrong about a lot of things. And there's like an exchange of ideas that's that makes the that mechanism that you talked about more efficient. Sometimes when the blowback is too strong, too early on, the development of ideas is just inefficient.

• 1:17:05Lex Fridman?

  And I'm not sure if if there's a, you know, the way it was explained to me is that for so long, that community was like bombarded with just like bad ideas, like criticisms. They're just overly sensitive now to like to bullshit. Just they're like triggered by statements like they've heard it all before and they're like, oh, there they go again with the same old arguments. But that doesn't mean that, you know, you have to sort of, I guess, develop a patience and so on, especially when you feel like, in my case, that the person is coming from a good place, right? I don't know if there's something you could say.

• 1:17:45Speaker 01

  Yeah.

• 1:17:45Lex Fridman?

  That's positive about the future of this kind of overcoming this toxicity.

• 1:17:49Speaker 01

  I think there's a couple of trends that are all kind of coalescing here, right? In these types of experiences. So one is when you look at a community, there's always a spectrum, right? In terms of there's some people who overindex on kindness and stupidity, right? And there's some people who overindex on intelligence and basically just being an asshole.

• 1:18:07Lex Fridman?

  Yes.

• 1:18:07Speaker 01

  And then you get everyone in between. And so like naturally, as we know, the extremist ends of any community end up being the loudest usually.

• 1:18:16Lex Fridman?

  Yeah.

• 1:18:16Speaker 01

  Right? The second thing is. There is, from the outsider view, like at the beginning of the exploration of ideas, it's very much a learning process, right? It's, I don't know if I understand this or not, but here's ideas A, B, and C. From the internal perspective, there's a trillion dollars of value at stake and we must protect it with our lives. Yeah. Right? The truth is probably somewhere in between there, right? And again, the world's not black and white. There's, there's this kind of more gray area that I think actually is where most people exist. The other thing that's at play here is I think the Bitcoin community understands the internet and internet culture and narratives better than almost anyone. Yes.

• 1:19:00Speaker 01

  And so you see this with kind of the, the just complete destruction of narratives with memes and, and just the visceral reaction and the use of things like Reddit and Twitter and YouTube, podcasts, just areas where I think a lot about, if you are an upstart, right? And you are going to go challenge the most well-respected, elite kind of establishment institutions in the world. If you walk in in a suit and tie and you say, I'm here to debate you with ideas, you're going to get your clock cleaned. Yeah. Right? Cause they're going to trot out their lawyers, their regulators, their lobbyists, right? Like all this stuff.

• 1:19:43Speaker 01

  If you instead say, I'm going to meme you to death on the internet. Yeah. And I'm going to control the public narrative. You, you've shifted the, the power, the asymmetry of power is more symmetrical now. It's the ultimate insurgency. Yeah. Right? If you bring it back to the battlefield. Yes. And so when you think about this, you have to lean into the advantage that you have. Yeah. And so what ends up happening is you and I would absolutely lose it if we saw JP Morgan or Goldman Sachs or the Federal Reserve start tweeting memes. Yeah. Right?

• 1:20:14Speaker 01

  It, it would almost, the, the validation it would give to the medium and the even playing field that it would provide would pull these establishments down to the level of what is this upstart? But now what you're starting to see is that the Bitcoin community, even though there's some level of toxicity, toxicity at times, even though there's this visceral reaction, sometimes there's even what I would call bullying or, or, or kind of outward projection of things, right? Even though it may be a small percentage, it'll happen every once in a while. What they do understand, though, is that these establishments are made up of humans. And what you can actually do, one of the best ways to pick apart an institution,

• 1:20:58Speaker 01

  is to recruit from inside of them, one by one.

• 1:21:02Lex Fridman?

  Yes.

• 1:21:03Speaker 01

  And so what you're starting to see now is, I mean, I get the messages on Twitter and LinkedIn all the time. Hey, I'm a banker by trade, but I'm a Bitcoiner at heart. Right? And so what you're doing is you're essentially infiltrating the organizations, not in, in physical, you know, population.

• 1:21:21Lex Fridman?

  Yeah.

• 1:21:21Speaker 01

  But with the ideas and with the philosophies.

• 1:21:24Lex Fridman?

  Banker in the streets, Bitcoiner in the sheets.

• 1:21:29Lex Fridman?

  I like it. With that said, in terms of shitposting and memes, I gotta say, like, bring it on, because I believe, in terms of asymmetry of power, I believe in that love will save the world, not memes. Or at least, good, good vibe memes as opposed to shitposting. It's, it's an interesting battleground, though. It's an interesting battleground to think about.

• 1:21:57Speaker 01

  The, the other thing I would say, too, is, one of the elements that's always kind of funny to me is how much of the entertainment is love? Right? So when you start to think about how many of the memes that are posted, for example, are for outsiders versus insiders?

• 1:22:13Lex Fridman?

  Yes.

• 1:22:14Speaker 01

  Laser eyes, right? Which seems absolutely ridiculous, elementary and, and frankly, beneath anyone in any level of power or influence in the world. Somehow has congressmen and senators who have done it.

• 1:22:27Lex Fridman?

  Yeah.

• 1:22:28Speaker 01

  They're not trying to convince their colleagues in elected positions to become Bitcoiners.

• 1:22:34Lex Fridman?

  Yeah.

• 1:22:34Speaker 01

  They're speaking directly internally to the Bitcoin community.

• 1:22:37Lex Fridman?

  Yeah, there's some sense in which, yes, memes is love, even if you're hearing Bitcoin is love. They're trying to convert me.

• 1:22:46Speaker 01

  The one that you, you have to laugh at, right? Probably my favorite one out of all of it is I've seen on multiple occasions, you know, Mark Cuban a couple of years ago, Kevin O'Leary, whoever, you know, wealthy people, billionaires, et cetera. And you have people on anonymous accounts who, who knows who they are, telling them, have fun staying poor.

• 1:23:06Speaker 01

  And it's just, you know, it's just, again, part of a community and I think it's a, it's a feature, not a bug. There's bad aspects to it at times, but I do think it's a net positive.

• 1:23:15Lex Fridman?

  Yeah, just like the immune system. It does a lot of crappy stuff, but overall it's a, it's a major net positive. Maybe this is a bit of a personal question for me, just out of my own curiosity, but I've talked to Ray Dalio a few times. So Ray Dalio, I think was one of those people that took that journey, the Bitcoin journey. Do you have thoughts about him specifically about that whole world and about the journey? Maybe of others that are going through the same process because Ray is, at least from my perspective, I'm a bit of an outsider. He's one of the most insightful and deep thinkers about investment, about finance, about economics in general.

• 1:24:01Lex Fridman?

  Actually about life. So it's interesting to see him go on that journey. Do you have something to comment about Ray or just those kinds of people in general?

• 1:24:09Speaker 01

  So if we look at what I'll just consider the legends of Wall Street in general, right? There's no denying that they're incredibly intelligent. There's no denying that actually, especially in the hedge fund world, they're some of the most open minded people in terms of they're willing to change their mind when they get new information. There's no doubt that they are historians in the sense of having studied financial markets and cycles over time. And also, one of the things that I really respect about all those guys is almost all of them are willing to put ideas out via various writings that they do and accept the public criticism, right? Whether it's Howard Marks, Ray or others, they will put this stuff out in public. And sure, there's a lot of people who are supportive and kind of are part of a fan base, if you will.

• 1:24:54Speaker 01

  But there's a lot of people who also think that sometimes they say stupid things. And so putting that out takes kind of courage, right?

• 1:25:01Speaker 01

  I think Ray's actually the most fascinating though, out of all of these kind of legends of Wall Street in that he understands debt cycles, he understands currencies, he For a while now, has been all over and famously said, you know, cash is trash, investable assets, right? He just, he kind of like just knew all of it. And for a long time Bitcoiners have said, Ray, you understand the Bitcoin argument, you're just missing the last part, which is Bitcoin's the solution, right? And so he was gold and some other ideas, but I think that he's a perfect example of when you are part of the establishment, people view you in a very static way as the leader of a part of establishment. But whether it's Bill Gates, Ray Dalio, or somebody else, each one of these people

• 1:25:46Speaker 01

  were innovators and challengers to a system. They were upstarts at one point. And so it's kind of this idea that like, if you live long enough, you eventually become the man, right? And so, you know, Gates is a good example, right? Warren Buffett is a good example, Ray Dalio is a good example, et cetera. And so you have to give credit, I think, to Dalio in the sense of he kept an open mind about all of this and more so than many of his peers, has continued to do the work and come around to this idea. And now, I don't want to know if I wanted to say that he's a Bitcoin proponent as much as he believes it is one of, you know, a portion of assets that can be a solution. And so to me, when you start to convince those types of people, when it's, you know,

• 1:26:27Speaker 01

  Paul Tudor Jones, a Stanley Druckenmiller, Ray Dalio, Howard Marks now even writing about it saying, hey, you know, I was anti Bitcoin, I didn't put a ton of intellectual rigor into it, but thank God my son bought a bunch for our family, right? And, and kind of we've had exposure to it. I think what it does is more than anything, it's not going to convince somebody to go and, you know, take it seriously or go ahead and make an allocation. It reduces career risk. And so if all of a sudden, when Paul Tudor Jones and Stanley Druckenmiller come out and say, hey, I own Bitcoin and here's why, every other investor on Wall Street now can say to an investment committee, well, it's good enough for Paul Tudor Jones. It's good enough for Stanley Druckenmiller.

• 1:27:09Speaker 01

  And so I think that it's very interesting because Ray doesn't just represent Wall Street. I think Ray, in some weird way, represents this like macro economic investor. And so some of those are in hedge And some of those people would be like CIOs at organizations. Some of them would be at corporations and some of them are just kind of retail investors. And so you can see this kind of inflection point throughout the adoption of Bitcoin, right? There was infrastructure that got built. Okay, that kind of led to more adoption. There was certain individuals, right? Usually they were kind of technology oriented entrepreneurial billionaires. They would buy it and come out and say it. Okay, that led to inflection points. You started to have some of these kind of Wall Street legends come out.

• 1:27:55Speaker 01

  Sort of financial institutions started to now you're seeing corporations start to do it, right? Eventually there's gonna be a central bank that does it. And so you kind of walk through that line and what you understand is like it's the same thing every time. It's just somebody new, right? That that path, right? That Bitcoiners journey, if you will. And I think that that is almost the beauty of it is if you short circuit the journey. It's almost like somebody doesn't appreciate it, right? If you take, let's say, somebody who's a young kid and you just give them a bunch of money and they didn't have to work hard for it. They don't really appreciate it.

• 1:28:30Lex Fridman?

  Well, and Ray, Ray actually has a book, Principles, right? And he talks about the hero's journey. So he's like living in some sense in terms of, you know, thinking about digital currency in general, like digital finance. It's one of the big transitions, transformations of our world in some sense. It's not just about money. Or you could argue that money is everything. I mean, it's like money isn't just the narrow definition of money. Money is really everything. And so where you could argue that sort of cryptocurrency is like the base layer of this transformation to the digital space and everything else would just be built on top of it.

• 1:29:12Speaker 01

  I use a different word that I think is kind of closer to your world, which is it's ultimately automation. And what I mean by that is, you know, before 1970 or 1980, all the assets were analog. And so when you have analog assets, physical stock certificates, physical bonds, right? Physical deed to a home, you have to physically exchange them. Yeah. When we wanted to increase transactions and increase kind of global finance and access, we took those physical assets and we created electronic Q SIP assets. So now we have in centralized databases, kind of a file represents the asset that's sitting somewhere in custody and you and I can transact them a little bit easier. But it's still centralized, there's still some bureaucracy and, you know, maybe it

• 1:29:57Speaker 01

  takes two days to transact rather than actually mailing it across the other world. Now what we're seeing is a transition from those electronic Q SIPs to these digital assets. And so if you look at, again, just let's say money or currency, every currency in the world is going to be digital. You're going to have a digital dollar, a digital euro, yen, RMB, you're going to have decentralized kind of open source money like Bitcoin. You're also going to have private currencies like Facebook's attempt at DM and there will be others that will try to do this. And so when you get everything digital, right? And I think that's the kind of the first step that everyone focuses on. The competition at the technology layer essentially goes away. You get some level of feature parity and sure, there's bells and whistles on each

• 1:30:41Speaker 01

  kind of implementation of a digital currency, but at the end of the day, the technology is relatively the same. And ultimately what it will do is it will facilitate the adoption of digital wallets. So you have to have a digital wallet regardless of what digital currency you have. Same with me, same with everybody else in the world. But what it does do is when you kind of push away and reduce the friction of competition at the technology layer, it moves the competition to the monetary policy layer. And so when you get to that layer, now all of a sudden it becomes interesting because all of the currencies are the same, except for this one right now. And maybe there will be others in the future, but, but for sure Bitcoin today and people may try to replicate in a private manner or something, but Bitcoin is kind of the only finite scarce digital sum money. And so

• 1:31:24Speaker 01

  When you then have that pretty big difference in that competition at the monetary policy layer, it's actually not going to matter where you get paid, right? And what I mean by that is like you and I both live in a single currency environment. I get paid in dollars. I historically have saved in dollars. All of the assets in my life are denominated in dollars and I owe my debts in dollars, whether it's taxes or in the private market. And I don't have to worry about foreign currencies. I don't exchange anything. The only time I would ever think about another currency is if I'm going to another country in their single currency environment. And in order to change or exchange my currency, I go to the bank or I go get ripped off at the airport. Those are my two options.

• 1:32:08Speaker 01

  So it's high friction to change between currencies. When the competition of technology is kind of innovated away, now I can get paid in dollars, these digital dollars, and with a click of a button, switch into any other currency in the world. And so what ultimately happens is value and liquidity is going to coalesce around the best monetary policy. And so you get in this very weird world where even if the United States says, hey, you're going to get paid in dollars, you have to pay your taxes in dollars. You're going to start to see people operate in a multi-currency environment where they say, okay, I got paid in my digital dollar, click a button, I save in Bitcoin, it stays there, protects or grows my purchasing power. Oh, I need to pay my taxes. Let me switch back into dollars with click of a button and pay. When you go to a multi-currency world, it's not just about currency.

• 1:32:53Speaker 01

  It's now a multi-asset world because not only is the currency digitized, but that same technology is used to digitize stocks, bonds, and commodities as well. And so today, we live in a very fragmented financial world where basically I have a brokerage account, I have a bank account, I may have an alternative asset account, et cetera. When I can put all of those assets in a single digital wallet, And I can then go from asset to asset without having to go back to a single unit of account.

• 1:33:21Lex Fridman?

  Like frictionless going from asset to asset. Yeah.

• 1:33:24Speaker 01

  So now what you end up doing is you start to open up the possibility for machine to machine transactions. So today, if you and I write software code for two machines to transact with each other, they can't transact physical currency. And in many cases, they can't actually transact the electronic Q-tip currencies or assets either because there's too long of a settlement time. So you can't get true automation, right? So the whole idea of like, the car is going to drive over a strip in the road and it's going to pay the toll, right? Well, that can't happen right now because literally the transaction won't go through, right? And so I always joke that like, in an automated world, it's like a CD-ROM, but we're trying to take cassette tape player assets and put it in the CD-ROM. It's just incompatible technology.

• 1:34:04Lex Fridman?

  References nobody understands at this point. By the way, you need to update your references.

• 1:34:09Speaker 01

  I probably do. It's like taking a CD-ROM, trying to put an MP3 player into streaming. But, but I think that the reason why that becomes really interesting is when you start to create these digital assets, now you open up the world of possibilities. So when new technology is created, you can do two things. You can either create new things the world's never seen before, or you can use it to improve the old world. Most people, because it's the easiest thing to think about, want to improve the old world. So an equivalent of this would be when the internet came along, a media company that had newspapers would say, hey, we should take a PDF of the newspaper and we should put it on a website. And now anyone in the world can go to this website and they can read the newspaper today. That was valuable. But it missed out on the ability to change headlines, to test, to put multimedia,

• 1:34:53Speaker 01

  to distribute it differently, to, you know, do all kinds of things that today we understand the internet really empowered. And so what I think we're about to watch happen is we're going to digitize the assets. We're going to put them all into these digital wallets. You're going to get automated technologies where machines can now transact with each other. And we're going to do simple things like, why do we pay people once every two weeks? Why don't we just pay them at the end of every day? Or why don't I literally stream payments to you on an hour by hour basis, based on the work you do? It would solve incredible economic issues in our country and in countries around the world. But historically, businesses can't do this because of the technology problem. They can't keep track of it all. How do they pay everyone every day? How do they pay everyone every hour? Like, you just can't do it.

• 1:35:37Lex Fridman?

  Yeah, it's funny, the vision of the future you're painting. It's kind of an exciting one. And it almost makes me sad looking into the future when we'll look back at this time. It's like, how incredibly inefficient of financial transactions were like, the transaction of value of any kind. Like how, like what to pay each other, like there has like processes, there's like payroll and all this kind of, just the entirety of the transactions is just like painful. Almost all transactions are painful. And even, and the companies that innovate to make the transactions a little bit more frictionless, like Amazon with the one click purchase button, like went out huge.

• 1:36:22Lex Fridman?

  But even that's really painful. There's actually really interesting, especially then you start to move that into the space of data. There's a lot of people thinking about privacy and data and like, can we put, can we like convert data into like money? It's just so that you can pay for how much you reveal to the companies about your own private data that can then be used to assign value to you. So you can use a service for free if you hand over the data, but there's like explicit transaction going on. So you can empower all those kinds of things that will just like fundamentally change our world. That's, that's really, really, really exciting.

• 1:37:00Speaker 01

  One of, one of the most interesting things to me is I invested in a company called Bridget. And what they told me was they said eight billion dollars was paid to the top four banks last year on overdraft fees.

• 1:37:14Speaker 01

  So literally, they took $8 billion from people who didn't have money in their bank account. Right? And so when you dig into why is that, a lot of times it's not that the people don't have the money. It's actually a mismatch of the payments. So what ends up happening is you get paid on the first and the 15th, but on the 12th, your Netflix bill hits. On the 13th, you went grocery shopping and on the 14th, your car payments hit. You overdraft and then on the 15th, you actually get the check and then you're able to pay not only the overdraft, but for the expenses that you have. And so something as simple as just getting paid at the end of every day immediately would eliminate, you know, some big percentage of those $8 billion of value that flows to large institutions on overdraft fees.

• 1:37:53Lex Fridman?

  Yeah. And also, I mean, this whole process with overdraft fees and just many of the financial transactions we have to live through today forces many of us to be like accountants, like to understand the different mechanism of financial, like the movement of money. As opposed to you, which is what we want to do as human beings, operating in a higher layers of like providing services for others, of like following your passions and like working for others, like doing cool shit. Or, or, you know, basically providing value, exchanging value in the world and not thinking about the money. The money takes care of itself and then you see the results of it.

• 1:38:35Lex Fridman?

  So you're, you're able to think in terms of money, but not have to know how the like the accounting works.

• 1:38:45Speaker 01

  Automation simply frees humans up to do more creative work.

• 1:38:49Lex Fridman?

  Yeah.

• 1:38:50Speaker 01

  Right? Like, like that's it.

• 1:38:52Lex Fridman?

  Yeah.

• 1:38:52Speaker 01

  And what

• 1:38:53Lex Fridman?

  Which is why they use the term, which is why you use the term automation, which I think is kind of brilliant reframing of all of this.

• 1:38:59Speaker 01

  Yeah. Cause ultimately, digital technologies are merely the conduit to usher us into that world.

• 1:39:05Lex Fridman?

  Yeah.

• 1:39:05Speaker 01

  And I think the most fascinating part of this entire industry is people who are trying to figure out, now that we're going to have these digital technologies, how do we usher in that automated world faster? And so there's people who are building all kinds of incredible things, right? There's literally some technologies where you can stream for paying for consumption of content.

• 1:39:32Lex Fridman?

  Yeah.

• 1:39:32Speaker 01

  Right. There's I saw somebody recently who they basically said, hey, I have created something, but it's not going to be released until everyone on almost like a GoFundMe type situation pays for in combination, then it gets unlocked. And so when you start to think about this, it's not only innovation on the technology front, it's innovation around the way that we form capital. It's the way that we organize resources. It's the way that we build companies. It's the business models, right? It's the application of those technologies. All that stuff starts to change. And go back to 2007, that's when the iPhone came out. Uber wasn't possible, right? I mean, you just go down the line, like all these companies that weren't possible before, when

• 1:40:16Speaker 01

  the digital technologies are kind of adopted on a global scale, I think that we all, myself included, drastically underestimate how fast and how big innovation can be, because it's just hard, right? Like, like, we like to think linearly, and that's not how the world works.

• 1:40:31Lex Fridman?

  Yeah, I do find it kind of interesting. It is NFT based, but I don't think it has to be.

• 1:40:40Lex Fridman?

  This idea of, I think, BitClout, it's called, or whatever, the idea of sort of investing in individuals, it makes me immediately think about investing in ideas. So even just the words you speak having value, and sort of if you have a frictionless, like automated financial system, then you could do a bunch of interesting things about what it means to add value to the world. I mean, I don't know if BitClout is currently an efficient representation of that, but I am truly happy that however that thing works, I'm just one notch above

• 1:41:23Lex Fridman?

  Vladimir Putin, which is one of the, that's like one of the bucket list items for me, to have a list where I'm one notch above Putin.

• 1:41:31Speaker 01

  Well, what I think you're talking about here is important because there's historical examples. You could invest in a patent in some situations. You could invest in an Organization that has an idea, right? So these are super inefficient, given kind of the the vision that you're painting in terms of like investing directly in an idea in a super efficient automated fashion.

• 1:41:51Lex Fridman?

  Yeah.

• 1:41:51Speaker 01

  But that's how the technology evolution works, right? Is it's really hard to do it first and then slowly kind of becomes easier and easier as technology is more prevalent. The other thing that I think is interesting is this whole idea of investing in people. If you really think about the origination of that is I would hire somebody, right? I pay you money and then you're going to create production, but I take the lion's share and you don't. Now there's things like these ISAs, these income sharing agreements where basically I will educate you on something, train you on something. I'll put up capital, right? And then over time you'll pay me back plus profits is some version.

• 1:42:30Speaker 01

  Eventually, I don't know what it looks like, but being able to get upside in somebody's success for having risk capital early on doesn't seem that far off. You see it in professional sports, you see it in, you know, a lot of these things. And so I just think that a lot of the focus right now is on the technology. But ultimately, these are ideas that are very old and have had lots of success and traction. And we're just merely standing in the way of the evolution of these ideas with new technology. And so it's easy to get caught up in the technology. But when you really zoom out and look at it from the ideological standpoint and kind of the the progress of humanity, it's a foregone conclusion this stuff's going to happen. It's just how.

• 1:43:14Lex Fridman?

  I think the world is waiting and some of us are trying to create that future world, which is like, what are the applications of this technology that will transform the world? And then, you know, I hate the term, but killer apps, like cool ideas that are implemented effectively at scale that transform the world. And there's been, there's been a lot of different ideas popping up. Like the, there's a lot of ideas about social networks that are built on top of the technology and all that kind of stuff. So, but let me actually drag this back down to something basic. If a person wanted to buy Bitcoin, store Bitcoin.

• 1:43:54Lex Fridman?

  How do they actually do it?

• 1:43:56Speaker 01

  Yeah, so there's a couple of different ways to kind of acquire Bitcoin. And in every way, you've got to exchange some form of value for Bitcoin, right? Which is part of why it has values, because you're giving up value. So in one way is to exchange energy and computational power for Bitcoin. So you can mine it, you can literally take computer power that you have, you can rent it to the network and run that software and then it will pay you a portion of the kind of daily revenue of that system. And you can acquire Bitcoin in exchange for your power and your computational kind of contribution.

• 1:44:36Lex Fridman?

  And that's the fundamental principle behind Bitcoin is the proof of work. So I got a hundred bucks, like I use Cash App. You know, they, there's Coinbase, there's all these exchanges. Like, how do I convert my hundred dollars to Bitcoin? Is there something, disclaimer, this is not financial advice. And this is just us talking and it's just your opinions. Do not use this to invest or take as financial expertise. That said, like, is there something you recommend that's an easy entry point for somebody that's like, hmm, I wonder if I can convert this hundred dollars into whatever amount of Bitcoin?

• 1:45:20Lex Fridman?

  What do you recommend? What are the options?

• 1:45:22Speaker 01

  So there's a lot of options. I'm heavily biased, I went out and I scoured the market, looked at all of them. I've invested a lot of money in a company called BlockFi that basically, basically has financial products for crypto investors. So you can go, you can take dollars or other currency you have, you can convert it through an exchange. You can leave it on these interest-bearing accounts, you can earn interest just like you would earn in a traditional account, but it's higher levels of interest because it's this new thing. Or you can withdraw it and you can put it into cold storage on a hardware device. You can leave it in a software wallet, there's kind of all these storage options. So BlockFi is, you know, kind of the one that I'm biased towards because I-

• 1:45:58Lex Fridman?

  So BlockFi, sorry to interrupt, so BlockFi is Bitcoin only or is it an exchange with other crypto?

• 1:46:05Speaker 01

  It's got a bunch of different ones, yeah. They basically are agnostic to what it is, but they provide kind of financial, you know, products to crypto investors.

• 1:46:14Lex Fridman?

  Okay, so you mentioned a few interesting ideas that'd be nice for people who are not be familiar with it. Cold storage, hot storage, what does that mean? So like, I go to a website and I convert dollars to Bitcoin. That's a kind of storage. That's like online banking, right? What else is there?

• 1:46:35Speaker 01

  So there's a couple of different things that you can do, right? And let's use a legacy system as kind of an example. So if I want to get currency and I put it in my bank account, it sits there. I have to trust that the bank doesn't go under, nobody steals it, all this kind of stuff. There's insurance for it, right? There's all these kind of benefits in the legacy system to make sure that as long as I don't have, you know, millions and millions of dollars there, I'm going to be protected pretty much if anything happens through FDIC insurance. If I want to do that, I'm taking that counterparty risk, though. So it's mitigated, but there's still counterparty risk. I'm counting on that bank. But it is easier to move it around, right? If all of a sudden you call me up and say, hey, send me some money, I can press a couple of

• 1:47:16Speaker 01

  buttons on my computer and it'll send it to you. If I want deeper level of security, I can go and I can get the physical dollars and I can go and I can, you know, put it under my mattress, right? And I can say, you know what? It's not going to be as easy to send it to you immediately. But if I really want to, I can go underneath my mattress pretty quickly. I can grab it. I can get it back to the bank and then I can send you the money. The third thing I could do is I could basically take those physical dollars out of the bank and I could go and I could go put it literally, you know, in a vault somewhere that I don't have control over that's behind 10 passwords and biometric scanning and like it's really difficult to even get to it, right? So if you can almost look at it as like there's three stages of security that you could have in the traditional world. The same thing is true in Bitcoin. So you could buy Bitcoin on any

• 1:48:01Speaker 01

  exchange. You could do it on BlockFi, but you also can do it on places like Coinbase, Gemini, Kraken, etc.

• 1:48:05Lex Fridman?

  Also Cash App.

• 1:48:07Speaker 01

  Cash App. You can do it on Cash App.

• 1:48:09Lex Fridman?

  I think, I think they're still sponsoring this podcast. I'm not biased at all.

• 1:48:14Speaker 01

  So once you get Bitcoin on any of these venues, you can leave it there on that venue. Now, the trade-off is you're taking counterparty risk. So somebody else is responsible for the security and the protection of it. In many cases, big, well-known companies who have billions and billions of dollars of assets, they have higher levels of security. That's why they're well-known. That's why people trust them, whatever. But you are taking counterparty risk.

• 1:48:40Speaker 01

  It is easier to quickly send to somebody so that so the trade off of like ease of use. But counterparty risk is big. And in the Bitcoin community specifically, this is a huge thing of they really, really have a keep for not leaving the Bitcoin there, right? For the obvious counterparty. The second thing you can do is you can basically get it off of an exchange and you can put it in some level of kind of what I'll call a second layer of storage. That second layer of storage could be a hardware device that you can quickly just grab off your desk and plug into your computer and immediately use. That's what they call like a hardware wallet. Hardware wallet, yep. Or you can have some sort of software wallet, right? Where it's not on an exchange, but there is some level of in between between the hardware wallet and the exchange and the software wallet. But the software wallet is connected to the internet.

• 1:49:23Speaker 01

  Yeah. And so if you kind of think of it as like the exchange, software wallet, hardware wallet, and then there's something called deep storage, right, or cold storage. And this is, you know, literally, there was a company called Zappos that would put things in deep cold storage and it was literally buried in a mountain. Right? So like the odds that somebody's physically going to go there, there's armed guards, there's, you know, kind of all this type of stuff. But again, you're taking some level of counterparty risk because they have your Bitcoin. And so the saying or the phrase is not your keys, not your coins. Whereas my buddy Isaiah Jackson came up with, he said, not your keys, not your cheese, right? In terms of sovereignty is important, right?

• 1:50:08Speaker 01

  And ultimately, this goes back to kind of the beginning of our conversation around Bitcoins ethos. Sovereignty, right? Giving the power back to people. You don't have to rely on this infrastructure in order to be able to participate in this monetary kind of economy, which you are now able to do is you're able to use digital sound money. You're able to keep control of it. You and you alone are responsible for it. So the idea of personal responsibility. And then also you and you alone make the decisions as to whether you hold on to it or you use it without censorship, right? No one can tell you what you can do with it or can't do with it. And so the purchase and the storage, what I find is depending on who you are,

• 1:50:49Speaker 01

  there's varying degrees of kind of concern or decisions that get made there. And a lot of it comes down to personal preference. The Bitcoin community, though, absolutely will over-optimize for sovereignty and kind of hardware or cold storage.

• 1:51:05Lex Fridman?

  I wonder if you can sort of comment on that because you have both sort of Cash App and BlockFi and Coinbase, like you can store it, you can purchase and trade it there and store it there and so on, but ultimately they're saying you want to, you know, keep some of it there, but you want to move it to the hardware wallet. And the cold storage of the hardware wallet is like you can disconnect it from the computer because ultimately stuff that's connected to the internet can be compromised, can be controlled by governments and other parties and so on. What are your thoughts about, sort of practically speaking, for maybe like a regular citizen?

• 1:51:48Lex Fridman?

  What should be the role of the hardware wallet in their lives?

• 1:51:52Speaker 01

  Yeah, so at the highest level, I just think that like learning about it is important, right? So even if you only have $5 equivalent of Bitcoin, going and understanding, here's how it works, here's why it's important, here's how I would actually withdraw from an exchange under the hardware wallet, like that alone, just as an intellectual exercise, is a worthwhile pursuit. I think people should go do that.

• 1:52:11Lex Fridman?

  Actually go through the process of the steps so you feel like you can, you can do it, yeah.

• 1:52:15Speaker 01

  Yeah, it's kind of like if I said to you, you know, hey, we're going to go buy an asset and you never went and you looked at it, you never went and, you know, made a decision like, sure, maybe I did it or I didn't do it, but like you didn't actually experience it, right? And so I think that that's an important part. The second thing is each person is different from a, how they view this asset. So there are some people who are speculating, right? There's three use cases for Bitcoin. There's store value, medium of exchange, and speculation. And the people who are speculating, they can't put it in deep cold storage because they need to be able to trade it. So what ends up happening is they fall in the bucket of like high risk, high reward. They're trying to trade, they're trying to do all these things, and sure, maybe there are profits that they can generate if they're good at it, but also they're introducing a lot of risk. And so that person is very different than the person who says, hey, you know, I bought

• 1:53:00Speaker 01

  one Bitcoin and I'm going to save it for my child, right? And I'm going to give it to them on their 18th birthday.

• 1:53:04Lex Fridman?

  Yeah.

• 1:53:05Speaker 01

  And so when you start to look at this, what you end up saying is, What are you actually purchasing this for? Kind of like, why are you doing it? And then what's your time horizon? And what ends up happening is more and more people in the Bitcoin community have longer time horizons. It's one of the advantages to this community, right? If you look at the on-chain metrics, 60% of Bitcoin haven't moved from the digital wallet in which they sit in the last 12 months. So even though it's appreciated hundreds of percent on the upside, there's been lots of volatility, a 50% drop in a single day in terms of the US dollar price, still doesn't move. And so these are kind of the long-term holders, right? These are the iron fists, or as recently has become popular, the diamond hands, right?

• 1:53:47Lex Fridman?

  The diamond hands.

• 1:53:48Speaker 01

  They're not going anywhere. And so I think that those people are much more likely to not have their Bitcoin on exchanges or in software walls. They've got it in some sort of like highly secure environment and one in which they have deep sovereignty or kind of prevalent sovereignty. And the reason for that is because they have that long time horizon. They don't want to be kind of convicted around Bitcoin, sound money, macro environment, all stuff. And then they make a mistake because they trusted, you know, ABCD company. And that counterparty risk ends up actually being fatal or detrimental.

• 1:54:27Lex Fridman?

  So again, this is not financial advice disclaimer, but let me ask. So in terms of investment advice on Bitcoin, so you see Bitcoin as potentially not just the thing that you speculate over like buy and sell, buy and sell, buy and sell, but it's something that you can just buy only. And I believe I've heard that you own quite a large percentage of your wealth in Bitcoin and you're basically buying only and storing long-term. So that's something that's a legitimate way to approach Bitcoin in your recommendation.

• 1:55:03Speaker 01

  Go to other cultures. So if we remove ourselves from the Western world culture of investing in gamification of financial markets and the financialization of everything, let's say we go to the culture of India. For hundreds, if not thousands of years, families basically saved their wealth in gold and in jewelry and in these hard assets with the expectation to pass it on to the next generation. And so it would be blasphemous to sell the family's gold in that culture, right? You know, your, your great grandfather gave it to your grandfather, your grandfather gave it to your father, your father gave it to you, right? And so in that culture, the long-term kind of holding is the default.

• 1:55:47Speaker 01

  I think that what Bitcoin has presented again is a digital application of the exact same thing, which is that while everything else in the world is being devalued, that is denominated in a currency that is being inflated away, whether it's quickly or not, this finite supply, this scarce asset ends up accruing more and more value over time, right? And so I think that for me personally, I've got, you know, over 95% of my net worth that's in this.

• 1:56:18Lex Fridman?

  Ninety, over 95% of your net worth.

• 1:56:22Speaker 01

  There's two important caveats to this. One is I didn't, you know, buy some Bitcoin in 2011 or 12, right? And then all of a sudden it appreciated a bunch and it grew into that, but from a cost basis perspective, you know, I put a hundred dollars and now it's a ton of money. Instead, what I did was I basically in 2018, saw Bitcoin from a US dollar price standpoint was falling and falling and falling. And in December of 2018, I decided to take about 50% of my net worth and convert it from dollar-denominated assets into Bitcoin. So it was a very kind of intentional decision with a very specific view on the world as to like why I was doing it. I then essentially just let it sit there, grow, whatever, until the spring of 2020.

• 1:57:06Speaker 01

  And when I saw the government step in and start to say, hey, we're going to really be aggressive in terms of interest rate manipulation and quantitative easing, I then decided to go ahead and take basically the remainder and start to convert it as well. So we became very aggressive in doing that. And so the way that I look at it is that's actually my savings, right? And so in some weird way, if I said to you, you know, what's the dollar worth? You'd say, well, a $1 bill is worth $1, right? Bitcoin, to me, I denominate my wealth in Bitcoin. So I think of one Bitcoin is worth one Bitcoin, not one Bitcoin is worth 60,000 or 55,000 or 70,000, right? I denominate everything in Bitcoin. When I make a purchase in my head, I'm calculating how much Bitcoin am I spending right now, right? Well, guess what happens?

• 1:57:49Speaker 01

  When you have a devaluing currency as the denominator, doesn't matter, right? Like you're financially incentivized to spend or invest, right? To consume. When you have an appreciating currency, all of a sudden you become much less consumptive in your behavior.

• 1:58:06Lex Fridman?

  Yeah.

• 1:58:06Speaker 01

  Because you're actually trading off future purchasing power for the consumption today.

• 1:58:13Lex Fridman?

  It's fascinating to think that if, if, uh, when you move about this world, you think in Bitcoin, you behave differently is if you think in dollars. That's really fascinating.

• 1:58:27Speaker 01

  People, but, but here's the thing is the last 50 years or so is actually the outlier in history. Most people used to think this way.

• 1:58:35Lex Fridman?

  Yeah.

• 1:58:36Speaker 01

  It's only when a fiat currency got introduced that one argument, the positive argument or perspective is there was an explosion in growth. But really it's because there was a financial incentive to consume.

• 1:58:49Lex Fridman?

  Yeah.

• 1:58:49Speaker 01

  Right? And there's nobody better in the world than the United States at consuming. And we consume anything and everything. And if you want to see a great example, look at how big the Coca Colas are at McDonald's, right? You know, you go to other places, they don't serve them that big. And so the other example, though, or the negative argument is we have to consume because if not, you end up being the bottom 45% of Americans that have no investable assets and actually are just having their wealth devalued away. So holding the dollars end up being a very bad economic decision. And so when you then switch to this sound money, you say, wait a second, why would I,

• 1:59:31Speaker 01

  if today I can trade one Bitcoin, you know, back in October of last year, one Bitcoin for 10,000 US dollars, why would I spend that if at some point in the future, whether it's a month from now or 10 years from now, I could trade it for something much, much more than that? You just become much more of a anti-consumer and much more of a long-term thinker.

• 1:59:54Lex Fridman?

  Yeah, from the individual perspective, that's pretty powerful. I wonder, I mean, I think that's an interesting debate, what's better for the long-term economy? No, better for the growth of the civilization? Because capitalism is fascinating. It seems to, it seems to work pretty well. There's this kind of, like Eric Weinstein says that one of the problems is for the past several decades, this whole economy, society is built on the idea that we have to keep growing. Like it depends on that idea. And it's a good question whether that's going to result in huge problems, or if like a

• 2:00:36Lex Fridman?

  college student on a deadline, the dependence on growth will mean that we'll have to grow. Like the fear of death will force us to grow.

• 2:00:48Speaker 01

  But I think there's a false equivalency between we're dependent on growth and then if the world was denominated in sound money, we don't grow. What I think ends up happening is we remove a lot of society's bullshit.

• 2:01:01Lex Fridman?

  Yeah.

• 2:01:02Speaker 01

  Because right now, when the money is free, or the currency is free, you can come up with all kinds of crazy stuff and people will give it to you, right? When all of a sudden, it's really, really valued by the population.

• 2:01:15Lex Fridman?

  The decisions are better.

• 2:01:17Speaker 01

  Yeah, you have to provide real value in the goods and services you provide in order to get them to give it to you.

• 2:01:22Lex Fridman?

  There's less room for corruption, less room for manipulation, that's in like, that's not actually productive. Yeah, definitely.

• 2:01:31Lex Fridman?

  So you said you moved a lot of your investment into Bitcoin. Is there, when you look, so you're a special human being in many ways. So you're like a strategic thinker, but you're also like a deep thinker about this whole thing. But when you look at a regular pleb like me, in terms of just investing and moving into thinking about cryptocurrency, is there a strategy that you recommend? What are the different options about investing into Bitcoin?

• 2:02:01Speaker 01

  Yeah, so I think that there's just kind of timeless advice when it comes to investing or acquiring an asset in general. Dollar cost averaging is usually the best way to think about it. And what I mean by that is, most people don't just have a pile of currency sitting there, right? It's not like they have a million dollars sitting in their bank. It's like, what do I do with it? That situation aside, what happens is they trade their hours and their effort for currency. And so as they get paid every two weeks, let's say, the best way to acquire Bitcoin without having to worry about timing markets and being a professional trader is to simply take whatever the percentage is that you want and to buy Bitcoin when you get your paycheck.

• 2:02:43Speaker 01

  So if you get paid on the first and 15th of every month, on that day, you should go take, you know, let's say it's 3% of your paycheck. Take 3%, go buy Bitcoin. Don't worry about what the price is. Just do that over time. And the reason why that's important is if in December of 2017, when Bitcoin is at $20,000, it was the height of kind of this last big upwards movement, you had taken all of your money and you had put it into Bitcoin. You would have had to wait almost three years just to get back to, quote unquote, "break even" in US dollar terms. If at the same time, you had simply bought then and over the next three years bought every two weeks, you would have been up hundreds of percent three years later. Because what ended up happening was you bought a bunch of Bitcoin when it was at 15, 12, 10, 9, 8,

• 2:03:28Speaker 01

  3, 4, 5, 5, 5, you know, all the way back up on the other side. And so dollar cost averaging is one of these weird things that, it almost sounds too easy. But what we find is in America, we have a lack of financial education. And so rather than try to be smarter than markets, what most people are better off doing is just saying, "Hey, set your what's called an asset allocation plan. I want 30% in stocks, I want 10% in real estate, I want this, this, whatever." And every time you get your paycheck, just think of it as a savings account, right? Just put it in based on those percentages and don't think about it. And over a long enough period of time, what we find is almost anyone in the United States, right? There's exceptions, but almost anyone in the United States can become a millionaire in their lifetime

• 2:04:14Speaker 01

  if they follow these plans and have that long-term view and they allow compounding to work for them.

• 2:04:18Lex Fridman?

  And so don't look at the price of Bitcoin and all that kind of stuff. Just pick a specific time, specific day that you just buy and you just keep buying. That's probably good investment advice across any kind of assets.

• 2:04:32Speaker 01

  Like if you don't believe in Bitcoin and you just wanted, let's say you just want to do the S and P 500.

• 2:04:36Lex Fridman?

  Yeah.

• 2:04:36Speaker 01

  You shouldn't try to time the market of the S and P 500 either, right? You should just, every two weeks, you should just buy some and over a 20-year period, you're gonna end up buying it at all kinds of different prices, but you're gonna get kind of a blended average. And the more important thing is the compounding and the time in the market. Then did you buy it at, you know, 2% higher or lower than where you bought it? It doesn't really matter.

• 2:04:56Lex Fridman?

  And buying often makes you, I guess, resistant, robust to the volatility of the market or the volatility of the Bitcoin price and so on. That said, Bitcoin price is volatile. And, you know, again, the argument I've heard is like, everything that's going to be a lot more valuable in the future. Like if you look at the history, like companies like Apple, like Tesla is now, I mean, but let's look at companies that have now stabilized, right?

• 2:05:34Lex Fridman?

  Apple is a good example. It's like volatile in the beginning. And so the argument for Bitcoin is like, yeah, this is the early stages because it's going to be a lot more valuable. Right now it's volatile and this is why you have to have these kinds of strategies to ride out the volatility. Of course, everything that goes to zero is also volatile. Like the early days are volatile. Do you see like this volatility as like a feature or a bug? Or is this just like a way of life?

• 2:06:01Speaker 01

  So Amazon is the one that I know the numbers on in terms of the early volatility. Every year since it has gone public, it's had a double-digit drawdown in that year. The average is over 30%, and one time it drew down over 95%.

• 2:06:18Speaker 01

  Sounds a lot like Bitcoin, right? Oh, wow, this is crazy.

• 2:06:22Speaker 01

  But it's one of the best performing stocks in the last 20 years, if not the best performing stock. And so volatility is not positive or negative. It's positive or negative compared to the position you're in. So if you're long and it's volatile to the upside, it's positive. If you're long holding something and it's volatile to the downside, you see it as a negative. It's all about perspective. With that said, another way that I look at this is every asset priced in Bitcoin is down significantly. So over the last one, three, five years, the dollar priced in Bitcoin has crashed 99%.

• 2:07:02Speaker 01

  If you denominate stocks, it's down like 80%, 85%. If you denominate gold, if you denominate bonds, if you just go down the line, real estate, etc. It's all down massively against Bitcoin. Now, you could argue that that's because Bitcoin is appreciating in US dollar terms. Or you could actually argue that the world is repricing this asset, is doing price discovery on this asset. And it's essentially comparing, it's saying, hey, Bitcoin versus this stock, or Bitcoin versus this ounce of gold, or Bitcoin versus this dollar, which is more valuable. And it continues to move up in the rankings in terms of the value that the world ascribes to this. Some of that's based on Lindy effect, just the longer it persists, the more likely it is to survive.

• 2:07:42Speaker 01

  Some of that's based on like the underlying fundamentals of how much computing power, the usage, transaction volume, things like that. But some of it also is that as more and more people wake up to the fact that it's a finite supply asset that has a place in the world and demand increases, people just naturally compete and ascribe more value to it. And so the volatility, I think, all comes back to like, what do you price your life in? For a majority of people, that's dollars. And so you look at the US dollar price, you get all this volatility. The beauty of this is that 60% that doesn't move regardless of price upward or downward in movement, those people aren't looking at the day-to-day price. What they've basically said is I've acquired X amount of Bitcoin and I'm just gonna hold it for years.

• 2:08:26Speaker 01

  And every time somebody's done that, right? If you bought Bitcoin at any point in the last 12 years and you held it till today, you are up in US dollar terms. Now, if we had this conversation 18 months ago, couldn't say that. So it's all about not only the acquisition price, if you will, it's also when are you looking at it, right? Because there was a point in 2017, you could've said the same thing, but in 18, you couldn't. And so I tend to think a lot about, humans are really, really bad at short-term decision-making because we're so emotional, especially when something has a price tied to it.

• 2:09:01Lex Fridman?

  And so it's in terms of our strategies and decision-making, we should be long-term and have like a regular, almost think like an algorithm in that kind of way. So I think you've tweeted that you believe that Bitcoin has a chance of reaching 1 million. I don't know what it is currently, I think it's 50s. 60s, which is incredible. I think I remember when it was at least in the double digits. I think I remember it was in the signal digits of a dollar. So the fact that it's crossed 50s, crazy. But you're even crazier, apparently, thinking that it can reach a million. So do you think it's possible for it to reach a million? Is there some kind of transformative effects we'll have to see first? When might it reach a million?

• 2:09:45Lex Fridman?

  Like, what are the signs that we would look for, what's required for it to reach a million?

• 2:09:50Speaker 01

  So let's just look at it from a macro perspective. Gold is a $10 trillion asset, and when you compare the technology of gold to the technology of Bitcoin, Bitcoin is superior in every single way, right? It's more portable, it's more divisible, it's more verifiable, it's more scarce on everything.

• 2:10:09Speaker 01

  And so some people would argue it's a 10x improvement. Some people argue it's 100x improvement from a technology standpoint. And so we don't need Bitcoin to actually kind of capture the full 10x or 100x improvement from a market cap standpoint. If Bitcoin simply captures 2x the value, it'd be a $20 trillion market cap, which would put Bitcoin at about $1 million, right? So kind of just from a macro perspective, if you have a 10x or 100x improvement from a technology standpoint, and you directionally get some value capture in that direction, you're hitting around a million or more dollar price point.

• 2:10:45Lex Fridman?

  Can I ask a quick question, which is what's the current market cap for Bitcoin?

• 2:10:50Speaker 01

  The current market cap's right around a trillion, just over a trillion dollars.

• 2:10:53Lex Fridman?

  And you're saying gold is 10 trillion. And sorry, where did you get the 20 trillion?

• 2:10:59Speaker 01

  20 trillion would just be 2x gold's market cap.

• 2:11:01Lex Fridman?

  Got it.

• 2:11:02Speaker 01

  Right, so if it's a 10x technology improvement, let's just say it only captures 2x the market cap.

• 2:11:07Lex Fridman?

  Got it.

• 2:11:07Speaker 01

  Right, and so again, if it was to capture just gold's market cap, kind of the equivalent, puts you around $500,000, right? So you can kind of see there's-

• 2:11:14Lex Fridman?

  Single Bitcoin, so if you capture the entirety of the gold market, then it would be value of a single Bitcoin, the price of a single Bitcoin would be $500,000. Okay, to reach a million, it would be double that. That's where the 20 trillion comes from.

• 2:11:31Speaker 01

  Correct.

• 2:11:32Lex Fridman?

  Got it.

• 2:11:32Speaker 01

  So if you then say to yourself, okay, how does the pricing kind of cycles work, right, or the boom and bust cycles? Gold is a very kind of linear type supply schedule, meaning that there is a certain amount of gold that comes out of the ground each year. The inter-year variation in that incoming supply is not much, right? Maybe there's an extra mining company that gets set up, or a couple of them, maybe one goes out of business, but for the most part, the kind of inflationary increase to the supply of gold is pretty stagnant year over year. Bitcoin has a very unique feature which every four years, there is a programmatic

• 2:12:17Speaker 01

  supply shock, meaning that in the beginning, 50 Bitcoin every 10 minutes was introduced into the supply. After four years of that happening every 10 minutes, it was cut in half. So in a single moment, it went from 50 to now it was 25. Four years, every 10 minutes, 25, got cut in half again to 12 and a half. And then recently in May 2020, got cut to 6.25. When you have an asset that is determined the price based on supply and demand, you normally have two inputs to the equation. What is the supply and what is the demand? In an asset like gold, or a stock, or anything else, we have to do our best guess at the supply, both the existing supply and the incoming supply, and do our

• 2:13:00Speaker 01

  best guess at the demand. And we're actually pretty good at this a lot of times in terms of directionally saying it's going to go up or down, and here's kind of some price point milestones. Bitcoin's unique in that there's 100% verifiable proof of the existing supply, the total supply, and the incoming daily supply. So we know 100%, I can show you on the actual blockchain, or in the code, that there's 21 million Bitcoin. And that's all there will ever be. I can show you that there's 18.6 million, give or take, Bitcoin that actually are in circulation today, right? And I can go all the way back, show you every single transaction that's ever occurred since January through 2009. And then I can show you on a daily basis that 900 Bitcoin a day are coming into the circulating

• 2:13:40Speaker 01

  supply. And so when you have 100% confidence, because you can prove the supply side of this equation, you can hold it constant. I know with 100% accuracy, the supply side. So now I've reduced the mathematical equation that I need to do to determine price movements to a 50% reduction. I only have to worry about demand, I don't have to worry about supply. And so when I look at demand, I can do all kinds of things. I can take the demand over the last 10 years and the growth and just extrapolate it out. I can increase it, I can decrease it, whatever. But what you find is that the supply shocks lead to significant price appreciation as the asset gets repriced because there's a supply shock to it.

• 2:14:22Speaker 01

  And so probably the best thing that I've done over the last couple of years was in 2019, I started to talk about the idea that we were going to have both a supply shock and the demand shock in 2021. Or I'm sorry, in 2020. I didn't know when this bull market that we were in was going to end. Nobody knows, right? It's impossible to time these things. But you could tell that we were kind of at late stages of a cycle. There was inverted yield curves, there was gyrations in the repo markets, a lot of CEOs leaving their jobs, you know, all this kind of stuff. And all I said was, at some point, when the market turns over, the government's going to have to step in. We were addicted to stimulus. They're going to have to manipulate interest rates down and they're going to have to print money. I had no clue that there was going to be a global pandemic, that they were going to

• 2:15:07Speaker 01

  have to step in in such an aggressive way and move rates not down, but down to zero, and that they not only were going to print hundreds of billions, but they could print trillions of dollars. But the framework that I used to think about this was, when they do that, everyone is going to run to store value assets. They're going to run to gold, they're going to run to Bitcoin, et cetera. And right as they do that, it appears at the same time, there's going to be this supply shock. So you're going to get a supply shock and a demand shock that are both positive for the price. And I called it rocket fuel for Bitcoin. Well, it happened, and here we are. I now look for, and I say, okay, we are likely going to see 100,000 Bitcoin, $100,000 Bitcoin this year, or at some point. I don't know when it happens, but we're moving in that direction.

• 2:15:50Lex Fridman?

  So you think in 2021, we'll see 100,000?

• 2:15:53Speaker 01

  That would be my most conservative view. I've said $100,000 since 2019, and people thought that was insane and crazy and all this stuff. Now I'm the conservative guy in the room because I stick with $100,000 and people are saying, you know, multiples of that number. So we'll see what happens. But I think that there's still a lot of room kind of to run from a US dollar price standpoint. What is on the horizon is in 2024, we will have another supply shock. And so that's what I think will carry us to the million dollar Bitcoin price.

• 2:16:24Lex Fridman?

  From the 625 to whatever.

• 2:16:26Speaker 01

  50% reduction.

• 2:16:27Lex Fridman?

  Yeah.

• 2:16:27Speaker 01

  Yeah. And so that's what I think will basically, when we get that's that next supply shock, that'll carry us up over 100 or over a $1 million Bitcoin price, which if historical examples persist, and again, sometimes it's hard to use historical examples to look at future events, but if that happens, we would see a million dollars of Bitcoin by the end of 2026.

• 2:16:50Lex Fridman?

  After that wave.

• 2:16:51Speaker 01

  So 2024 basically is the supply shock and within, you know, 18 to 24 months, you would see the, uh, the, the kind of top of the next market.

• 2:17:00Lex Fridman?

  Hopefully without a coupling to the, to another pandemic.

• 2:17:03Speaker 01

  Yes, we, we would like to do all of this without a public health crisis.

• 2:17:08Lex Fridman?

  So that would take it to 20 trillion. You don't have to compare it to the dollar, essentially in some sense, that the dollar could also lose value. I mean, there's a lot of kind of dynamics at play here now, but like fundamentally, there's going to be a huge move in your prediction of value into, into Bitcoin. I mean, that's a fascinating world to think about.

• 2:17:33Lex Fridman?

  I mean, but I do have to kind of ask you about the whole space of technology there because we're talking about the value of security. We're talking about the, the future, which Bitcoin will be at the center of. But from my perspective of thinking how like I and others can build technologies on top of this kind of decentralized world, I'm thinking about different tech, different technologies out there, different cryptocurrencies out there, Ethereum being one, but there's a lot of others. So I'd love to get your sort of ideas about some of these. But so first, let me ask you about what the hell is shitcoin?

• 2:18:13Lex Fridman?

  Is this connected to our previous discussion of the meme? Does shitcoin cover basically all coins that are not Bitcoin? Is it mean? Is it beautiful? Is it some mixture of both?

• 2:18:29Speaker 01

  As with most things in life, depends who you ask. The most kind of enthusiastic and parts of the Bitcoin community, shitcoin is anything else, right? Kind of if you ascribe to kind of a maximalistic view of the world, shitcoin would be anything. If you look at people who I would say are Bitcoin proponents, yet see value in other things, shitcoin may be the bottom half of the other things, right? So I think, again, it's really important kind of who you ask is how you'll get that answer.

• 2:19:04Lex Fridman?

  So there's tiers and the way you divide those tiers might be different depending who you ask.

• 2:19:09Speaker 01

  Ultimately, what it is, is it's a meme.

• 2:19:11Lex Fridman?

  Yeah.

• 2:19:11Speaker 01

  And it's used to articulate the idea that whatever you want to put in that bucket has no value. So shitcoin, right, are coins that have no value.

• 2:19:21Lex Fridman?

  Yeah.

• 2:19:22Speaker 01

  What is fascinating about it, and I think that again speaks to the power of the Bitcoin community, is there was congressional hearings a couple of years ago.

• 2:19:31Lex Fridman?

  Oh, no.

• 2:19:32Speaker 01

  And at one point, a congressman from Ohio, Warren Davidson, who was definitely open-minded and excited about Bitcoin, asked an individual on the Congress floor during testimony to talk about these other coins. And at one point, basically read into the record, the terminology of shitcoin.

• 2:19:54Lex Fridman?

  He said the word shitcoin.

• 2:19:55Speaker 01

  I can't remember if he said it first.

• 2:19:57Lex Fridman?

  Somebody else did.

• 2:19:58Speaker 01

  Or if the other person did and then he, you know, repeated it.

• 2:20:02Lex Fridman?

  That's awesome.

• 2:20:03Speaker 01

  But he definitely, he was trying to get that read into the record.

• 2:20:06Lex Fridman?

  Yes.

• 2:20:06Speaker 01

  For sure. And so, you know, you can imagine, one, again, the meme speaking insultly to the Bitcoin community was, you know, made him very, very well liked. But also, two, was it does go back to this idea almost of if you and I sat down with 10 CEOs and we interviewed each one of them. And then we went in a room and we deliberated and we said, we have to pick the person who's going to be the most successful. One of the inputs, not all of the inputs, but one of the inputs would be who's the person who we believe has the best ability to raise capital, recruit people and tell a story to the world that will get them to follow. And so somebody like Elon would probably

• 2:20:49Speaker 01

  be the best example of this. When you have decentralized products, you have no kind of leader, right? In the sense of somebody who is financially ascribed to be that leader and kind of the executive decision maker. So what you have to do is you have to look at these technologies and these communities and say, well, which volunteer teams or which technologies have been able to coalesce these groups around it and in some way build the same level of engagement and protection and things like that. And so you naturally get tribalism, but you also get things like shitcoin because what it does is it's not

• 2:21:26Speaker 01

  only a kind of verbal attack towards others, it's a rallying cry for internal. What's so funny is that it was started with the Bitcoin community talking about everybody, but now you've seen adoption in other communities who use it, you know, basically say, well, we're not a shitcoin. It's the, it's the next guy.

• 2:21:46Lex Fridman?

  Yeah. I mean, the meaning, to be honest, it's, it's one, it's off, it's sometimes misused. I think like with anything, it's like people adopt memes that used to be brilliant or still brilliant and they're just not good at using them. So they become mean. But when you do with, with grace, it can tear down an argument and at the same time have like love and respect underneath it. I mean, it's a beautiful dance they have to be good at. Like, you know, people just can suck at communication and even like even a powerful weapon like a meme in the wrong hands, just fires in a way that doesn't get

• 2:22:29Lex Fridman?

  anything done. But this is like a war of humor and memes. It's kind of fascinating, exactly like you formulated, that there's asymmetry of power. So you have to have guerrilla warfare in this internet game, especially when there's no leader, like you said, in a distributed culture.

• 2:22:47Speaker 01

  The other thing I would say here that is, is really important, I think, is from a society standpoint. We've become very soft and very kind of coddling and not in a way that's like, I think people take this argument like too far sometimes, but what I mean by that is it's almost like if you're the person who holds somebody accountable, you become the bad person, right? If you're the person who says, hey, you know, that's wrong, you're the bad person, right? And so in a world where I think in this kind of influencery, you know, all positive, if you have any negative, you know, feedback or constructive criticism, like you're the bad person, it's the ultimate echo chamber, right?

• 2:23:32Speaker 01

  And so I think that what the Bitcoin world does in some crazy, crazy way to look at it is Bitcoin is ultimately about truth, not about narrative, not about feelings or emotion. It's math. You look at a blockchain and you can prove something or you can't. And so naturally, people who are attracted to that have a very similar approach in life, right? They say, hey, you made X claim, prove it. And as you can imagine, you know, a great example is like the financial media meets Bitcoiners. And it's a bloodbath, right? In kind of the arena of ideas, because what do they do?

• 2:24:14Speaker 01

  The financial media is used to the soft, you know, opinion pieces, et cetera. And Bitcoiners show up and they're like, here's data point A, B, and C. Here's example one, two, and three, and you're wrong. And then all they yell and scream about is like, uh, I'm wrong, I'm wrong, I'm wrong. Like you can't say I'm wrong. And they're like, no, like disprove what I just said. And so you get in this like very, very weird world.

• 2:24:35Lex Fridman?

  It's fascinating. It's a fascinating battlefield, but I do want to say it's, I've been watching this. It's kind of interesting. I think that the pursuit of truth, like tearing down bad ideas can be done with grace. And to do it with grace requires a lot of skill. Like what people don't realize about disagreement, they think that disagreement is easy. Like they see the, the, the lies or the inaccuracies in the statement and they, and they just think they can say wrong.

• 2:25:12Lex Fridman?

  Yes, you can say that, but if you want to be effective, it requires great skill. Like you look at, I don't know, a beautiful verbal shit poster, which is Christopher Hitchens, right? It requires a lot of skill through your words to tear down an argument, to criticize and to take a step towards truth. What I am disheartened by internet culture, like the negative side, is people don't put a lot of effort in their teardowns. Like into your shitposting, into your memes, you should put effort and see it as a skill that you wanna,

• 2:25:56Lex Fridman?

  if you want to be a part of this culture, you want to get good at it, like any skill. It's the 10,000 hours. Like get improved, deliberate practice, self criticism, all of those things. Just because you're anonymous doesn't mean you won't get deep joy and actually have an impact on the world if you get good at shitposting.

• 2:26:21Speaker 01

  But I think this is really, really important, right? Because you're right in that it's all about intention versus action. If your intention is to tell somebody that they are wrong in an effort to get them to see the truth.

• 2:26:32Lex Fridman?

  Yes.

• 2:26:33Speaker 01

  That's very different than if your intention is to tell someone they're wrong and hurt their feelings.

• 2:26:36Lex Fridman?

  Yes.

• 2:26:37Speaker 01

  Right? And so when you can unpack intention and action, you really quickly can tell what somebody ultimately is trying to accomplish. I also think that one of the craziest things that I've seen play out is memes. When I use that term, I'm not just talking about like a static photo, right? When I'm talking about these elaborate, kind of edited videos and kind of all this stuff.

• 2:27:01Speaker 01

  When done right, it is the most articulate way to deliver a blunt message. And it's done in such a way that is humorous and entertaining, yet really hammers the point home. And so.

• 2:27:18Speaker 01

  It's a skill set that many people don't have. I don't make those. I'm assuming you don't make them either. Right? I see them. I share the ones that I like, right?

• 2:27:27Speaker 01

  But it does take practice and you can tell. Look, there's people who are fantastic meme lords. And there are people who absolutely suck at it. And it's like anything, it's just how good are you at communicating? And I've heard the idea a bunch of times, so I don't know who to kind of credit for it. But whether it's emojis, it's gifs, it's memes, whatever. This is the extension and evolution of just hieroglyphics. Yeah, like, like we have been doing this for literally centuries. It's just that now we're doing it on the internet and you can press a button and go to millions and millions of people immediately.

• 2:28:04Lex Fridman?

  But speaking of memes, what the heck do you think is up with Elon Musk talking about Dogecoin a lot? Sort of from the cryptocurrency community, I've been talking to a lot of sort of technologists, I guess, and reading papers on cryptocurrency. It's like, nobody really sees Dogecoin as a revolutionary crypto technology. A lot of people talk about its security issues. There's a bunch of issues it has. Nevertheless, you did say that money is the kind of social construct, right? And Elon Musk's combination of humor and brilliant engineering in the various companies he runs

• 2:28:48Lex Fridman?

  combines to create a kind of value and excitement behind Dogecoin. It's like, what is it? He says that the most amusing outcome is the most likely kind of idea, which sounds silly, but there could be like profound truth to it. It's like, what do you make of Dogecoin philosophically or technically? Is it possible that Dogecoin will overtake Bitcoin and run the entire?

• 2:29:18Lex Fridman?

  Run the entire world. I can't even because it could happen. It could happen. But what if there's any serious way to answer that question?

• 2:29:27Speaker 01

  Well, we have to start with techno king of Tesla.

• 2:29:32Lex Fridman?

  Yeah.

• 2:29:33Speaker 01

  And master of coin as they are so articulately called in the latest SEC filing.

• 2:29:38Lex Fridman?

  He officially changed his title techno king.

• 2:29:41Speaker 01

  Techno king of Tesla and the CFO's new title is a master of coin. And so when you have a sense of humor.

• 2:29:51Lex Fridman?

  Yeah.

• 2:29:52Speaker 01

  And frankly, a level of self-confidence and an element of an appreciation for irony in the world. Dogecoin is actually one of the least crazy things that you could talk about. When you're willing to go to techno king of Tesla, master of coin and all this stuff. And so I think that Elon doesn't get enough credit, frankly, for his understanding of internet culture, understanding of memes and understanding of frankly, human psychology and marketing. And so in some crazy way, every time he talks about Dogecoin, it's a rallying cry for an entire generation of kids. It's a rallying cry for an entire industry in terms of cryptocurrencies and digital technologies.

• 2:30:38Speaker 01

  But this is the flag.

• 2:30:41Lex Fridman?

  Yeah.

• 2:30:41Speaker 01

  And this is the thing that he can yell and scream about and tweet about without worry of punishment.

• 2:30:48Lex Fridman?

  So he could be talking about Bitcoin. He could be talking about cryptocurrency, but that's not going to be as beautifully humorous and whatever the hell internet culture is as Dogecoin. He's finding the right language. He's speaking the language of the people of the, in the digital age.

• 2:31:06Speaker 01

  If you want to reach weird people.

• 2:31:08Lex Fridman?

  Yeah.

• 2:31:08Speaker 01

  You can't be serious.

• 2:31:09Lex Fridman?

  And most people are weird. The masses are weird. So he's speaking to the masses.

• 2:31:15Speaker 01

  Yeah.

• 2:31:16Lex Fridman?

  The techno king.

• 2:31:16Speaker 01

  And even further than that, I think, is he essentially is, he's using Dogecoin as a way to say, I'm doing this because I can.

• 2:31:28Lex Fridman?

  Yeah.

• 2:31:29Speaker 01

  He couldn't do it with. Securities, he couldn't do it with certain types of other assets, right? Like, I almost look at it as like a Venn diagram. What's the thing that a bunch of people know about, care about, think are funny, whatever? And also overlay that with the things that like, he could actually talk about, they won't get in trouble for.

• 2:31:47Lex Fridman?

  That's a big F you to the SEC. I could see the people just freaking out. I mean, I love it, but I don't know if I would have the guts to do it myself. But I think he's an inspiration to a lot of us to be like, well, maybe you should grow the guts.

• 2:32:03Speaker 01

  When you're the techno king, you can do whatever you want, right?

• 2:32:08Lex Fridman?

  And I mean, that's something to aspire to is to be the techno king in your own little world.

• 2:32:13Speaker 01

  If you also think about it in the sense of, when you're somebody on a mission to create interplanetary life.

• 2:32:21Lex Fridman?

  Yeah.

• 2:32:22Speaker 01

  When you're trying to solve a, or put a dent in the climate crisis, or create electric vehicles and be the first American company in, you know, however long. Frankly, the SEC or other things in your life that just don't, you don't ascribe that much importance to compared to those things. They're almost nuisances. And that's scary, I think, for shareholders of a company when the person that you're trusting to lead you to the promised land and create shareholder value doesn't put value on certain things. But at the same time, I always look at it as a tug of war. How much of the actions of what he's doing and calling attention to actually change the way

• 2:33:07Speaker 01

  that regulators, lawmakers, politicians, countries, whatever, act? He may not be able to say, do X, I'm the techno king, and they go do it. But with every step he makes, he changes some of their behavior. And so I think that it's a really kind of game of like 3D chess that frankly, I'm not privy to, right? And I'm kind of watching from the sidelines and figuring out alongside everybody else. But I also don't think that it's just Elon bought a bunch of Dogecoin and tweets about it because he thinks he's going to a dollar and he's gonna, you know, make money, right? Like, I don't think, I don't think it's an economic argument as to why he's so interested

• 2:33:49Speaker 01

  in it. I think it's much more, uh, it's almost like meta message for a lot of other stuff.

• 2:33:56Lex Fridman?

  Yeah, he's kind of trying to break apart internet communication from first principles, like it does so many other problems. It's kind of fascinating to watch. I know he's been, uh, he's, he's taught me quite a bit about communication. And, uh, at least for me, it's been liberating to not give a fuck about the old school way of things. I've been always bothered by a place I deeply admire, which is MIT, but there's problems, bureaucracies and hierarchies that hold back innovation, brilliant minds. And, uh, in that sense, Doge is a kind of FU to the system that's kind of positive, but also, uh, kind of, uh,

• 2:34:40Lex Fridman?

  but it was also an FU. So in that sense, I think Elon has a perspective on the world that's similar to Bitcoin, folks, which I really like, which is like thinking long-term. It's how visionaries think. It's like, how will, if I take these ideas, what, and the ideas hold true, what will the world look like in 20, 30, 50 years? And think about everything in that way.

• 2:35:08Speaker 01

  Yeah. I like, uh, Bezos's view, which is, uh, is essentially how do you minimize regret? How do you accelerate your life mentally and go to 80, 90, 100, 150 years, whatever we end up, uh, being, you know, fortunate enough to live to, and then look backwards?

• 2:35:25Lex Fridman?

  Yes.

• 2:35:25Speaker 01

  And say, this decision that I'm going to make, I have two options. Which one is going to be the one that I least regret? And if you continue to make decisions that way, one, you have that long-term view kind of built in because you're working backwards. Two, you are ultimately going to optimize for minimal regret. But also, three is, even if you only look forward 10 years, that's much, much further than most people do. And so it gives you a significant advantage. And I think that Bitcoin has kind of this like, you know, proxy for time, as we talked about, interplanetary travel, where there's multiple steps from creating a reusable rocket to landing it to, you know, all this stuff.

• 2:36:08Speaker 01

  All the way to simple things, just like, if you're simply trying to figure out where the world's going to be 30 years from now. You know, Bill Gates says that we overestimate what we can do in one year, underestimate what we can do in 10. Well, to me, it's a kind of degree of mistake, if you will. 10 years, maybe you're off by 10%. Well, if that line of progress continues, 20 years, you may be off by 100%. And 30 years, you may be off by 1,000%, right? Like, almost the further you go out, the more inaccurate you become. And so I think that people who want to iterate their way to success, right, that's a common thing in like the startup world,

• 2:36:52Speaker 01

  end up actually following kind of the breadcrumbs to where the world is taking them. But people like an Elon Musk, a Jeff Bezos, a Jack Dorsey, all the way down the line, all these innovators, they actually say to themselves, there is a point in time in the future where there's a world I want to construct. And then they go and they construct it regardless of the short-term iterations and incentives. It is just they're driving towards that point. And I think that it's this whole idea of having this like, you know, kind of set vision and this refusal to kind of move or budge off of that. It's what makes them special.

• 2:37:33Lex Fridman?

  One of the things that garnered a lot of excitement in the crypto community is NFTs. I have no idea really the depths, the fundamental technological philosophical depths of this technology, whether this is just like a little bit of a fad, or there's some deep lessons to learn, whether it's Bitcoin or cryptocurrency in general about it. Do you have thoughts about like the long lasting fundamental aspects of NFTs?

• 2:38:01Speaker 01

  I think there's probably both things happening. Fad and things to learn, right? And if we just start with like, what is an NFT? It's a non-fungible token, meaning that there's no fungibility. And fungibility is a fancy word. I always describe it as if I took a hundred dollar bill and I put it on the table with a bunch of other hundred dollar bills and we mixed them up. And I just grabbed a hundred dollar bill and left. I'm no worse, as long as they're all, you know, official hundred dollar bills. Because as long as I have a hundred dollars, I have a hundred dollars. I don't need that exact same bill back. So that means that those hundred dollar bills are fungible. Non-fungible would be like art. If I took a Picasso and I put it down on the table and you brought three artists that no one's ever heard of before and we mixed them up. And I just took any random piece of art and it wasn't the Picasso.

• 2:38:46Speaker 01

  I lose because the Picasso is really important there, right? So the non-fungibility is important in art. What these non-fungible tokens essentially are doing is they are creating scarcity and originality in a digital environment. And what I mean by that is, take a music file. If I had a music file and you wanted it, you said, send it to me. I press send. It essentially creates a copy and you get one music file, I get another. We don't care. You can listen to music, I can listen to music, we're super happy. If I instead though, have a digital file that entire premise is based on scarcity and I hit send and you get a copy and I keep the original, or you get the original and I get a copy, there's a problem.

• 2:39:30Speaker 01

  And so ultimately, what I think is playing out with NFTs is it's a technology, regardless of where it plays out, from blockchains or what in communities or environments, that just brings true digital scarcity to the internet.

• 2:39:48Speaker 01

  And so naturally, what do people do? They look at the legacy world and they say, well, what's scarce there that has value? How do we bring that to the digital world? So art is a perfect example, right? And frankly, last year I started to look at this because it felt like this was going to be really, really big. And the conclusion I came to was just as Bitcoin is going to be bigger than gold, right? The digital application of something is going to be bigger than the analog application. The same thing is going to be true in art. The digital art world is going to be bigger than the traditional art world. People think that sounds crazy at first until you start to realize it's very, very similar. The art is more portable. It can be divisible, right? It's got a larger demand market in terms of the internet rather than an auction, right? All this kind of stuff.

• 2:40:32Speaker 01

  When you display it, it can have motion and music and all of these aspects to it that are better than the traditional art. What the traditional art market has that the digital art market has not had is the narrative. Narrative based world, scarcity, kind of in digital sense. And so what I think the entire world is going through right now is an exploration of how do we use this technology? To create new things. Frankly, we're not going to be good at it for a while. And so the only place I've really focused on is digital art itself. And I've always been interested in art, but I wasn't going to go buy a painting and hang it on the wall, right? In the sense of that's how I was going to store value.

• 2:41:18Speaker 01

  What I find fascinating though, is that I now can take that concept, which most of the wealthiest people in the world have a significant portion. Some, you know, some people have 20% in terms of, you know, number of billionaires. 20% of their wealth is in art. And you can bring it to this digital realm, which is much more kind of natural to a digital native. And so the best way I know how to describe the importance is imagine a serial number being placed on something. Take the Eiffel Tower. The only Eiffel Tower that has value is the first one. Every replica of it, regardless of size, location, you know, who made it, where they sent it, they have no value. Eiffel Tower 001 is the most important.

• 2:42:01Speaker 01

  And so I think that's ultimately what we're starting to see here. And what we're looking at is probably 1% of what it's going to grow into.

• 2:42:09Lex Fridman?

  So you're bullish on it. You're saying it could grow into something for 1%. It could grow into something significant, like all the kinds of different applications.

• 2:42:18Speaker 01

  Strip away all of the applications right now and just think about, is digital scarcity going to be important on the internet?

• 2:42:23Lex Fridman?

  Right. Moving all the things that are scarce in the physical world into digital space, us trying to figure out which things can be moved and not. And also, there is things in the digital space, just like you're saying, that don't exist in the physical world that might also benefit from gaining scarcity. Like, you know, people are, I guess, creating NFTs out of like tweets or whatever. So like you're, you have, you have a fun Twitter account. You know, you could say like, you could put value to a single tweet and then be able to invest in it and trade it and buy parts of it and all those kinds of things. You know, you can invest in people, you can invest in, you know, art can be defined broadly as any kind of creation, right? In some sense, this whole idea of scarcity can overtake

• 2:43:08Lex Fridman?

  the entirety of the digital world. It can like consume the, all of the markets we see as financial markets and just turn everything into a market.

• 2:43:21Speaker 01

  Well, so if I, if I take you on like a, I don't know, 10 year fast forward.

• 2:43:26Lex Fridman?

  Yeah.

• 2:43:26Speaker 01

  And I paint a picture of something today that seems absolutely insane, but there's early signs that people are building this and let's just give them the benefit of the doubt that some of the early iterations will work and some of, or most of them won't.

• 2:43:40Speaker 01

  There's a world where you and I are participating in a digital economy, in a virtual world, where, uh, whether it is a piece of art, it is a digital sculpture, it is a digital skin from a video game, it is a digital good that we purchased somewhere online and we bring it and we display it in a digital museum or a virtual museum. And so now all of a sudden, you can charge people for entry. You can consign digital goods. It's the replication of what happens in the analog world, now just in digital. And when you do that, what you do is you take the addressable markets of these assets or these mechanisms and they

• 2:44:23Speaker 01

  explode in the digital realm. And so now all of a sudden, how fast does the human race accelerate when it comes to human production, intelligence, learning?

• 2:44:36Lex Fridman?

  All in the digital space.

• 2:44:37Speaker 01

  Output. Well, it's just if I said to you 20 years ago, I'm going to give you a global education. It means I'm going to take you and I'm going to physically move you to geography after geography after geography. It's going to take time, it's going to take resources, and ultimately it's going to take lots of effort. If I now said to you, hey, I'm going to transport you in this virtual world to multiple geographies, but you're going to experience it in this virtual world, and you're going to have digital goods that you can take from economy to economy or from location to location. All of a sudden, you may get, maybe you get 90% of the value, you don't get 100% of the same value, we get 90% of the value.

• 2:45:21Speaker 01

  But you can do it at a much faster pace. And so in a six-month period, you've actually made three times the progress than you would have if you had to do in the physical world. So that's where I think we're heading.

• 2:45:34Lex Fridman?

  So there's digital art being displayed in the digital museum and people are being charged for access. And perhaps we plug in our senses, which means we start to operate more and more in a virtual reality, augmented reality, virtual reality way with this digital world, and increasingly go into this world. Basically, we lived most of our productive and social lives in this digital world.

• 2:46:00Lex Fridman?

  And increasingly, essentially create a simulation where the biological basis is just there to sustain the brain that's used to operate in the virtual world. Taking us back to the original, when we started talking about war. I wonder what conflict looks like in that world. That the people who are born today maybe will be fighting wars in the space, in that museum world, in that digital world.

• 2:46:29Speaker 01

  Remember what I said? We're moving from a world of conflict surrounded and determined by bombs, bullets, and soldiers to a battlefield that is determined by war of information and cyber capabilities. And so in that virtual world, is it about death and destruction of human life in the physical analog world? Or will it become more important to attack or defend virtual property and virtual life? And, you know, some level of virtual sovereignty?

• 2:47:05Speaker 01

  In my opinion, the latter is more likely. And so what you start to understand is, well, what do you truly value in your life? Is it the physical analog, materialistic, consumptive goods? Or is it virtual? And in many cases, something as simple as the ability to connect with somebody is really important. And so one of the most disruptive, combative, violent things that a country may do to another country in the future, simply take down the internet.

• 2:47:39Lex Fridman?

  Mm hmm.

• 2:47:41Speaker 01

  And put people in isolation.

• 2:47:42Lex Fridman?

  Yeah.

• 2:47:44Speaker 01

  I don't need to physically harm you if I can psychologically harm you. I don't need to.

• 2:47:48Lex Fridman?

  It's terrifying.

• 2:47:50Speaker 01

  Yeah, I don't need to actually convince you through a monopoly on violence, on physical violence. What if I can psychologically change the way you see the world through misinformation, through all sorts of nefarious activities? And I think that, you know, the United States has been struggling with this idea over the last couple of years in the political arena. But what happens when it starts to come to other aspects of our life?

• 2:48:15Lex Fridman?

  And I think it's very likely, it's almost obviously likely, that we're moving into the digital world. One of the features of the digital world is that artificial intelligence systems can operate with much more power and a frictionless way in that world currently as we understand it. It's hard to build robots that operate at scale and do like arbitrary large amount of impact, damage or positive in the physical world. It's much easier to do in the digital world. Do you ever think about AI systems just swimming about doing extraordinarily powerful,

• 2:49:00Lex Fridman?

  destructive things in the digital world? Is that something of a concern to you? Or is this something into a very distant future?

• 2:49:09Speaker 01

  I think a lot of artificial intelligence is in the name. It's simply the replication of human intelligence at scale, automated and programmatic. Meaning that in the analog world, you could go hire a thousand employees or in, you know, an Amazon case, hire millions of employees and set a mission or a goal and push them to go do that. That requires recruiting, retention, training, resources, all that stuff. In the virtual world or in this digital economy, what if you can just program the resources and gain the same leverage and do it at scale and do it in a very programmatic

• 2:49:54Speaker 01

  way and then have them actually make decisions in a way that doesn't require you to have thought of every single potential scenario or edge case. That's ultimately what we're talking about when we talk about artificial intelligence, right? And so when you look at that, when technology is created, everyone uses it for good or bad, but both get used, right? And so whether we're talking about cell phones, beepers, the internet, guns, whatever, it's always used for good and bad. The big question is, and I think that yourself and many other people have rightfully said this, is the question really becomes, is the negative and nefarious uses of this inadvertent potentially?

• 2:50:39Speaker 01

  Or does it actually come from a malicious person? It's the intention malicious. And to me, that's what I, I don't know enough. You know much more about this and there's plenty of other people who do as well, but I do think that there will be nefarious actors and malicious people, but we're going to treat them the same way we've always treated people who use technology poorly, right? We're going to understand it, we're going to identify it, we're going to control it and then we're going to end up reversing it or preventing them from doing that. It's the inadvertent things that I think are actually the most dangerous. Because when you have something that can think for itself and there is no way to leverage a monopoly on violence for control.

• 2:51:21Speaker 01

  It's a very scary thing.

• 2:51:23Lex Fridman?

  And it can, I mean, the thing that's scary to me is that it can scale arbitrarily. So it can outnumber humans very quickly, even if it's dumber than humans. And so I don't know if we're able to reason about a world. Like, let's look at the physical analog, where all of a sudden, uh, let's talk about something kind of like humans, but dumber than humans, like chimps, okay? Imagine that all of a sudden chimps could multiply arbitrarily quickly. And you could have like a trillion chimps the next day, when you, when you only had maybe a million the day before. Like, how does that world look different?

• 2:52:08Speaker 01

  Now, where the fuck do all these chimps come from?

• 2:52:10Lex Fridman?

  And they like, and then we can, we can pretend to be like, well, let's hope the chimps like don't get violent because they, they don't seem to get violent when the resources aren't constrained. But like, we don't know. And the problem is, it all starts by building that first chimp multiplier device. And everyone's like, okay, yeah, there's a lot of good applications you want, you know, uh, you, you can make all kinds of arguments for why you have more chimps. Uh, maybe they can help you out around the house or something like that in the physical space. But ultimately, it's the unintended consequences that you're referring to is you don't know what's gonna happen.

• 2:52:51Lex Fridman?

  I'm really worried about dumb AI agents, uh, like having impact when they're multiplied to a million, to a billion and are allowed to operate in the digital space, especially as we clearly are moving more and more of our lives into the digital space. So it's kind of terrifying because we, you know, a lot of people are terrified or like concerned about super intelligent systems. I think I'm definitely much more concerned about super dumb systems at scale. That that's terrifying.

• 2:53:30Speaker 01

  I always think about the inadvertent, but as you were talking, what it made me think of is also the irreversible.

• 2:53:37Lex Fridman?

  Irreversible, that's.

• 2:53:38Speaker 01

  Right. So it's one thing if there's inadvertent negative impact, but we have reversibility built into a system and we can fix our mistakes.

• 2:53:46Lex Fridman?

  Yeah.

• 2:53:47Speaker 01

  I think the really scary part is when you overlay inadvertent mistakes with the irreversible aspect of it, and therefore humans have no control.

• 2:53:56Lex Fridman?

  Yeah, if you if you have the trillion chimps, you can't, they're not going to like it when you try to start killing them off.

• 2:54:07Lex Fridman?

  All right, but back to Bitcoin.

• 2:54:11Speaker 01

  Those chimps in the Bitcoin community.

• 2:54:14Lex Fridman?

  Anytime you bring up chimps, some people say Joe Rogan entered the chat. Can I ask you about sort of learning about Bitcoin books and resources? You have an amazing podcast. That's not just about Bitcoin or cryptocurrency. It's about everything, including life, but you do have a lot of really amazing conversations about this whole digital world. But you obviously you also have a newsletter that's incredible on Substack. And and.

• 2:54:46Lex Fridman?

  But do you have recommendations? Maybe it would be great if you could talk about, first of all, your podcast and the newsletter, but also other resources that you recommend people should check out in order to learn about Bitcoin.

• 2:54:59Speaker 01

  Yeah, so the podcast and email are always the two most selfish things I do because the podcast is a way for me to learn from other people. So I get them to come on and tell me all the things they're thinking about and I get asked some questions.

• 2:55:12Lex Fridman?

  What's it called, by the way?

• 2:55:13Speaker 01

  Uh, just a pump podcast. And so in doing that, it really is informative for me. And I think that my whole goal is just like, if I'm learning, other people will be learning. And then the email, I read it every morning because it forces me to collect my thoughts and actually articulate them in somewhat of a coherent way. And so it's just something that is like a practice that I probably would do even if no one read it. And then by being. Being able to publish it, what does it do? It elicits, you know, both the good and bad responses. And so people will let me know if they think I'm an idiot and they'll usually not respond if they think that it's something smart. And so those two things are really educational for me and I think kind of forced me to be able to articulate a lot of ideas.

• 2:55:57Speaker 01

  But a lot of what I share or learn on those things come from these other resources.

• 2:56:01Lex Fridman?

  So I'm definitely subscribing, people should subscribe. But what are Bitcoin resources, books that you recommend?

• 2:56:08Speaker 01

  I think you got to start with Bitcoin Standard. That one to me feels like it really lays out the picture nicely. There is Bitcoin Money You Can't Fuck With. It's written by our friend Jason Williams. As you can imagine, it's basically what it talks about. There's another book Layered Money, it's written by Nick, who's done a great job kind of laying it out. There's a book called Bitcoin in Black America, written by a guy, Isaiah Jackson. And he basically lays out the argument for why the black community can benefit in a asymmetric way from something like Bitcoin. And there's a whole bunch more, I'm going to forget them all. There's the, I think it's called The Cost of Tomorrow, a guy, Jeff Booth, Jeff Booth wrote it.

• 2:56:53Speaker 01

  And just if you get on Twitter, basically, you're going to see all these books flying around. But I do have to say that from a psychological concept or philosophical concept, the number one book that I've ever read that aligns with Bitcoin ethos but doesn't say a word about Bitcoin is a book called The Tao of Capital by Mark Spitznagel. And so what he essentially does is he just reiterates over and over and over again, long-term thinking, outliers, disruption, all this stuff. And so he's a guy who, he runs a fund that essentially they just do tail risk hedging. And so in, you know, March or February of 2020, they're up like 4,000%, right?

• 2:57:36Speaker 01

  By the way, they pretty much lose money, you know, for eight, nine years, then that happens. And so, but they're still one of the best performing funds if you look at it over, you know, years and years. And so it's just this mindset of everyone is so short-term focused. And so I think it's just a great reminder to long-term thinking.

• 2:57:54Lex Fridman?

  And also, I mean, I've gotten quite a bit of value just reading the papers. And that's perhaps more like for technical folks. There's quite an active research community. And also going back to the original white paper and just original documents, old school. Old school is still what like what a few years ago is still really interesting to think about, to look at what people were thinking about. Because the the principles are carried through with other cryptocurrencies as well. Like, it's all, it's all there, even in the early documents. So that's kind of fascinating to see that whole history for if you're more like tech savvy. And like you said, Twitter is actually an interesting place.

• 2:58:37Lex Fridman?

  If you can look past all the shit coin talk, it's a fascinating place for news and resources. Is there books outside of all of this cryptocurrency sort of technical fiction philosophical that an impact on your life? Because you've you have interests that are all over the place. Is there something that you would recommend to others?

• 2:58:59Speaker 01

  So Dow of Capital is definitely probably my favorite book. Books that have been impactful, I read when I was 20, actually, sitting in the desert of Iraq. Rich Dad, Poor Dad, Think and Grow Rich, and The Richest Man in Babylon. And I don't think I took a single thing and like implemented it from like an execution standpoint. But it was a complete shift in mentality and understanding a relationship with money and just kind of what I wanted to do with my life and stuff like that. So I think those three books, and I read them in succession, were really impactful. And then I think one of the best books probably ever written is, I think it's called When Breath Becomes Air, or Air Becomes Breath, I can't remember. But it's basically a doctor or a medical professional who's dying.

• 2:59:44Speaker 01

  And he essentially writes about the experience and thoughts and kind of all the stuff. And I think that it's just one of these things where if you said to me, you know, what's the number one thing I took out of my experience in Iraq? That's a book like that also gives you is we're all gonna die, right? And you and I can want to be as immortal as we want, but at some point, we're gonna die. And so it really does kind of focus you on time being that scarce asset and use it for enjoyment and happiness more so than anything else. And I think that's part of your message, and it's a great one.

• 3:00:18Lex Fridman?

  Do you think, do you like literally meditate on your own mortality?

• 3:00:23Speaker 01

  I don't necessarily think I meditate on it as much as.

• 3:00:26Lex Fridman?

  Are you afraid of death? Were you afraid of death when you were in Iraq? I mean, if you're coming face to face with it, are you afraid of death today?

• 3:00:33Speaker 01

  No, I think that it was just one of these things where like, if you fixate on something and you worry about it, then, at least to me, like, you become uneasy about it. And so after an experience like going to war, I think that everything is just so not important compared to that. Right? Like, when I came back, I remember going back into the college environment and like, things people worried about, I was like, listen, let me explain to you, you know, what the real world's like, right? But I think even today, right? If you talk to people who know me really well, I don't get worked up about a lot of stuff. I don't get, you know, in either direction, good or bad, anything,

• 3:01:15Speaker 01

  because ultimately it just comes down to if that's the final result, let's enjoy it.

• 3:01:22Lex Fridman?

  It's fascinating to ask you because this reformulation of money essentially buying time. And, you know, there's the old question of does money buy happiness? Do you think money can buy happiness? In the context of money being able to buy time? Or is happiness something else that is beyond all of this?

• 3:01:52Speaker 01

  When people talk about this question, I think that they really focus on money as a means to getting materialistic things. So they want a big house, they want a boat, they want a fast car, they want, you know, whatever. They think that's the stuff that will make them happy. What I think about it is if you have resources, you can have time, and if you have time and you spend it the way that you want to spend it, then that's ultimately happiness. So I always say to people, if you think that money doesn't buy you happiness, what if I told you that if you had more money, you could spend more time with your family?

• 3:02:27Speaker 01

  It reframes it. And now it's all about, I want to do certain things in life, but there's a lot of people who spend their life not doing those things because they feel the need to pursue economic means as a way to provide a living or whatever. And so I explained to them, I said, listen, in my opinion, again, it's my opinion. It's what makes me happy. If I can leverage financial resources to create more time to do the things I like, I'm happier.

• 3:02:57Speaker 01

  Might not work for everybody, but like, that's what works for me. And so there's this element of like, I don't care what other people think if they like that or not, because they're not me, right? Like, there's almost this element of like, you gotta figure out what works for you. And if it works for me, then like.

• 3:03:10Lex Fridman?

  No, I think that resonates, that that will resonate with a lot of people. I think that's a brilliant reframing of it. That said, you kind of imply there's a, there's a reason behind this whole existence of ours, there's a meaning to it. So let me ask, what is the meaning of life, Anthony? Do you think about these ridiculous big questions that have no answer every once in a while? Or do you just enjoy the shit out of every day?

• 3:03:37Speaker 01

  I answer it in a way that isn't meant to be accurate. It's meant to

• 3:03:45Speaker 01

  be the right answer for me, which is ultimately, you know, and I talked to a lot of people who always ask like, what's the, what are you doing? Why are you doing this? I say, it's to be happy.

• 3:03:55Speaker 01

  And the reason why I think of it that way is I've got a friend, Jonathan Geller, who talks about, you know, enough being enough. And recently he talked about it in the context of Bitcoin. And so Bitcoiners are, have two things. Any Bitcoiner, if you talk to them, they believe the same two things. One, they don't want the US dollar price to go up because they actually want to acquire more Bitcoin, right? And then, then like, oh, once they feel like they've got enough. But two is no matter how much they own, they think that they don't own enough and they want to acquire more. And so at some point, you say to yourself, what is enough? And, and I think that the whole meaning of life is to understand kind of what your level of satisfaction is. And for some people, that's a monetary thing. Some people, that's a freedom of time thing.

• 3:04:38Speaker 01

  For some people, it's an impact thing, whatever. But just understanding that's important and then going and accomplishing it. And what I've found is that the people who I know who have done this and been intentional about it, they accomplish it on a much shorter timeline than people who don't. There's some people who start thinking about this when they're 60. Naturally, you're not going to accomplish it before you're 60 if you just start thinking about it at 60. People who start thinking about it earlier can do it. And so I think that's really it. For me, it's just like the meaning of life is to enjoy it.

• 3:05:06Lex Fridman?

  The way I think about it, that's because this is a really nice formulation. I almost like to sort of oscillate back and forth. So majority of the time is spent in the mode of enough is enough of gratitude, of basically being content with where you're at, like deeply appreciative of every moment and all the Bitcoin, whatever Bitcoin you have, being deeply appreciative of it and that being enough. And then some fraction of time, perhaps it shrinks as you get older. That's maybe there's an optimal trajectory there, but some fraction of time is spent to being like deeply self-critical and nothing is enough. Nothing you've ever done is worth anything. It's the Marvin Minsky said, like, the secret to success is hating everything you've ever done.

• 3:05:50Lex Fridman?

  So like that mode of just hating everything you've ever done and just like trying to improve, trying to make stuff better. It's nothing is enough. It's never enough, that kind of stuff. And then oscillating back and forth. You don't have to have the same algorithm operating throughout the day. You could just like oscillate back and forth. And maybe reserve that gratitude part, the chill part to when you're hanging out with family and friends and loved ones. And then when you're like alone or maybe at work, that's the madman comes out kind of thing.

• 3:06:21Speaker 01

  I also think it's kind of purpose driven in the sense of there's a lot of people who have the, I need to do more, but in a somewhat altruistic way. So they're, you know, take Elon as an example. The idea of colonizing Mars, sure, if he is successful, he will be very rich. I don't think you or I or many people believe he's doing it for the money, right? There's a lot of other things he could do that would be much easier that would make him tons of money. And so in some weird way, he has enough because he's able to free himself from the constraints of I need to acquire more resources. And he can focus on what is the thing that I want to work on regardless of money.

• 3:07:04Speaker 01

  And so in that pursuit that is non-economic, you can be as selfish as you want, because ultimately you're not tied back to this like measurement tool. And so it's this, again, like altruistic, non-monetary purpose. And I think that there's a lot of people who spend their whole life looking for that, and they don't know what it is. And so, again, some people may not think of it that way. But if you can find something to do that, you win.

• 3:07:33Lex Fridman?

  I don't think there's a better way to end it. Anthony, I'm a huge fan. It's a huge honor that you waste all this time with me today.

• 3:07:41Lex Fridman?

  You know, I thank you for just educating the world, for, for teaching me, inspiring me to learn more about this new set of technologies that look like they have a potential to change, transform all of human civilizations. So thank you for coming today and thank you for being who you are.

• 3:07:57Speaker 01

  Absolutely. Thank you so much for having me.

• 3:07:59Lex Fridman?

  Thanks for listening to this conversation with Anthony Pompliano. And thank you to our sponsors, Theragun Muscle Recovery Device, Sun Basket Meal Delivery Service, ExpressVPN, and Indeed Hiring Website. Click their links to support this podcast. And now let me leave you with some words from Mahatma Gandhi. Freedom is not worth having if it doesn't include the freedom to make mistakes. Thank you for listening and hope to see you next time.