Bitcoin is the hardest and most anti-fragile form of money.
Bitcoin surpasses gold in terms of hardness and adaptability.
Bitcoin's digital nature enables unprecedented speed and portability, enhancing its overall resilience.
Deep dives
Bitcoin's Anti-Fragility and Hardness
Bitcoin is the hardest and most anti-fragile form of money. It has the highest stock-to-flow ratio, meaning it has the lowest inflation rate. Unlike traditional monetary systems, Bitcoin has no gatekeepers or single points of failure, making it highly resilient. Its decentralized nature allows for rapid adaptation and response to threats. Bitcoin's diverse custody options and low switching costs force custodians to provide high-quality services at a competitive price. The specter of quantum computing, often used to discredit Bitcoin, fails to consider that if it were to occur, it would render all cryptography useless, not just Bitcoin's.
Bitcoin's Superiority Over Gold
Bitcoin is often referred to as digital gold, but it surpasses gold in terms of hardness. It has a fixed supply of 21 million coins and an exponentially increasing stock-to-flow ratio, making it harder than gold. Additionally, Bitcoin's anti-fragility sets it apart from gold. Bitcoin is a constantly evolving and adaptive organism fueled by the collective efforts of network participants. Unlike gold, which is passive and inert, Bitcoin can respond to changing circumstances and threats in real-time.
Bitcoin's Speed, Portability, and Custodial Diversity
Bitcoin's digital nature allows for unprecedented speed and portability. It can be transferred at the speed of light, enabling high-frequency and micro-transactions that are not possible with traditional assets like gold. Furthermore, Bitcoin's information-based format allows for various custody schemes. Bitcoin holders have the option to choose their custodians or self-custody their assets, creating a competitive and honest custodial market. Bitcoin's flexibility and diversity in custody options enhance its overall hardness and resilience as a monetary asset.
Bitcoin's Constant Adaptation and Static Nature of Gold
Bitcoin continuously updates its hardware and software, making it faster and more adaptable compared to gold, which has remained unchanged for thousands of years. Humans have proven their ability to overcome static obstacles, like mountains, by using their dynamism and ingenuity. Betting on Bitcoin's constant evolution and adaptability is a safer choice than relying on the unchanging nature of gold.
Bitcoin's Smarter, Stronger, and Faster Qualities
Bitcoin's programmable nature allows for the creation of smart software, such as lending and borrowing platforms. It enables users to generate yield by lending Bitcoin, and borrowers can find lenders with different interest rates and loan terms. Bitcoin's strength lies in its ability to channel monetary energy with force and acceleration. It facilitates fast and secure transactions, allowing holders to move and manage their assets efficiently. Compared to gold and traditional assets, Bitcoin offers superior mobility, security, and speed.
Michael Saylor joins me to discuss anthropology, energy, and technology from first principles as we build the intellectual foundation necessary to truly grasp the historic significance of Bitcoin.
00:00:00 - Episode Trailer 00:01:06 - Swan Bitcoin 00:06:23 - Bitcoin as Digital Gold – Harder, Smarter, Stronger, & Faster
00:07:13 - Bitcoin is Harder & Antifragile 00:08:05 - The Fragility of the Great Wall of China 00:10:05 - Military Wisdom - The best defense is a good offense 00:11:05 - Gold is a dumb rock – Bitcoin is a living, dynamically evolving ecosystem 00:13:43 - Importance of Pain to Antifragility of Bitcoin 00:14:17 - Quantum Threats to Bitcoin 00:16:34 - Crashing the World with Photon Bullets 00:17:25 - Managing Political Threats 00:17:48 - Survival of the Hydra – Fight or Flight 00:18:44 - Geopolitical Balance of Power “Show me the incentive & I’ll show you the outcome” – Munger 00:19:59 - Bitcoin Ethos & Hatred of Gatekeepers 00:20:43 - Roman Military Doctrine & Views on Defense “Gatekeepers are your weakness” 00:21:20 - Proof of Work vs. Proof of Stake 00:22:18 - “There is no such thing as a free lunch” 00:24:09 - Immune response of the network to an attacker 00:25:20 - Merits of embracing pain rather than running from it. 00:26:25 - Developing the immunity critical to life 00:27:18 - The Mongolian Horde & Genghis Khan 00:28:50 - The hardness of a hornet’s nest 00:30:45 - Merits Private Nodes & Private Keys 00:32:05 - Game Theory & Benefits of Key Optionality & Competition of Custodians 00:33:37 - Drive to improve client/server hardware on Bitcoin network Wallets, Miners, Exchanges in Aggressive Competition 00:35:05 - Upgrade cycles of Bitcoin vs. Gold “Humans move mountains”
00:37:47 - Bitcoin is Smarter 00:38:35 - Software applications to improve utility of Bitcoin 00:39:38 - Creating the smartest bank in the world via software 00:40:55 - Creating smart money for a mobile device 00:41:48 - Magical money via software 00:42:38 - Insurance applications 00:42:50 - Problems with Gold & Tokenized Gold 00:43:49 - Betting on dynamics rather than statics 00:44:50 - Developing a Yield Curve on Bitcoin 00:45:50 - Free market interest rates
00:47:14 - Bitcoin is Stronger 00:48:05 - Channeling money with force & acceleration 00:49:50 - Strength Limits of Gold, Stock, Bonds 00:50:43 - Challenges of getting interest on Stocks 00:51:57 - Merits of Competition to create Stronger Money 00:52:34 - Strength from Self-Custody across jurisdictions
00:53:03 - Bitcoin is Faster 00:53:15 - E=MC2 and Benefits of Virtualizing Gold 00:53:36 - Cost of move $100 million around the Earth 00:54:08 - High Frequency Transactions at the Speed of Light 00:54:48 - Ebay of Social Finance 00:55:08 - Systems & Compliance Impedance to Monetary Velocity 00:56:20 - Algorithms to make money while you are sleeping
