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The "What is Money?" Show
WiM008 - The Saylor Series | Episode 8 | Bitcoin and Immortal Sovereignty
Jan 5, 2021
02:12:26
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Quick takeaways
- Bitcoin's true value lies in its ability to preserve and transfer energy across time, making it a low-frequency medium of exchange.
- Bitcoin is seen as a universal language of economic truth and a well-engineered, self-sovereign unit of monetary energy.
- Crypto networks, like Bitcoin, offer immortal sovereignty and anti-fragility, allowing for the preservation and transfer of value across time.
- Bitcoin plays a role in enabling moral sovereignty and establishing decentralized institutions, dematerializing traditional approaches using digital endowments.
Deep dives
Bitcoin as the Ultimate Store of Value
Bitcoin is described as the highest form of energy that human beings can channel and is considered the most important asset to own. The strategy for building a Bitcoin position involves setting an initial portfolio allocation and a target allocation, followed by dollar-cost averaging and buying Bitcoin during price dips. It is also recommended to take custody of Bitcoin and move it into self-sovereign custody instead of leaving it on exchanges. Swan Bitcoin is recommended as a platform for automatic recurring buys, buying price dips, and setting up automatic recurring withdrawals into cold storage.
Understanding Bitcoin as a Low-Frequency Medium of Exchange
Bitcoin is viewed as a low-frequency medium of exchange rather than a high-frequency one. It is argued that Bitcoin's true value lies in its ability to preserve and transfer energy across time. The transaction speed and cost of Bitcoin are seen as inconsequential compared to its value as a store of value. The tax treatment of Bitcoin transactions, along with accounting and compliance complexities, are cited as factors that do not currently favor treating Bitcoin as a medium of exchange. Bitcoin is seen as more suited for low-frequency settlement transactions.
Bitcoin as a Universal Language of Economic Truth
Bitcoin is described as a universal language of economic truth and a well-engineered, immutable, self-sovereign unit of monetary energy. While local fiat currencies may still be used for day-to-day buying and selling, Bitcoin is seen as a standard unit of economic energy that can be used for relative cost of living comparisons and as a measure of economic truth. Bitcoin's value is expected to depend on its strength as a store of value rather than as a high-frequency medium of exchange.
Crypto Networks vs. Digital Networks
Crypto networks, such as Bitcoin, are contrasted with digital networks, such as centralized platforms like Apple, Google, and social media sites. Crypto networks offer immortal sovereignty and anti-fragility, allowing for the preservation and transfer of value across time. While digital networks excel in economy, performance, functionality, and compliance, crypto networks offer trust, security, and duration. While Bitcoin stands out as a successful crypto asset, other crypto assets are considered experimental, and the future of crypto networks depends on their ability to differentiate themselves and gain market acceptance.
The power of engineering and the divine quality of human ingenuity
The podcast episode begins by discussing the significance of engineering and how it is a divine quality that allows humans to shape and restructure the world around them. It explores how the mascot of an engineering-focused school, the beaver, symbolizes this ability to transform nature and create habitable structures. It emphasizes the importance of work as a means to convert chaos into order and the role of Bitcoin in elevating human productivity and timelessness.
Bitcoin as a low-frequency medium of exchange and high-frequency store of value
The podcast delves into the nature of Bitcoin as a medium of exchange and a store of value. It explains how Bitcoin's design favors its use as a store of value, presenting it as a high-frequency instrument for preserving wealth over time. It discusses the market's preference for Bitcoin as a store of value, the challenges of using it extensively as a medium of exchange, and the tax implications that hinder its use for frequent transactions.
The distinction between crypto and digital networks
The podcast explores the key differences between crypto networks and digital networks. It defines crypto networks as decentralized consensus models, highlighting their qualities of trust minimization, security, and survivability. On the other hand, digital networks are characterized by centralized consensus, providing efficiency, performance, and functionality. The discussion emphasizes the respective advantages and trade-offs of these network types.
Bitcoin's potential for moral sovereignty and decentralized institutions
The podcast considers Bitcoin's role in enabling moral sovereignty and establishing decentralized institutions. It contrasts historical approaches to achieving moral sovereignty, such as endowments and foundations, with Bitcoin's potential to dematerialize institutions using digital endowments. It presents examples of how Bitcoin can preserve intentions and provide dynamic governance for long periods, subsequently discussing the vision of creating lasting monuments in cyberspace.
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
00:03:22 - Robert’s Intro
00:05:48 - Life converts entropy into order
“A dead thing can go with the stream, only a living thing can swim against it”
00:08:17 - The first engineered monetary system
00:09:15 - Networks further the human race
00:09:59 - The highest calling of humanity is to extract order from the chaos
Engineering – the honorable profession
00:11:07 - Bitcoin as a Medium of Exchange
00:11:28 - Peer to peer cash means settlement network
00:11:56 - High frequency transactions are unnecessary & irrelevant
00:13:12 - Centralized networks are best for MoE
00:14:06 - Privacy & Compliance
00:14:38 - Large transactions are more valuable
00:15:08 - High Frequency SoV, Low Frequency MoE
00:16:23 - Tax Challenges to MoE
00:17:38 - Accounting System Challenges to MoE
00:18:48 - Treasury Strategy for BTC
“Put it in the vault and throw away the key”
00:19:48 - Challenges of paying employees in Bitcoin
00:22:18 - Tax treatment is controls currency selection
00:23:28 - Bitcoin not practical as currency
00:24:00 - The option to settle is more important than the action itself
00:24:33 - “An armed society is a polite society” R.A. Heinlein
00:25:35 - The ability to cash settle is the deterrent
“Absolute power corrupts absolutely”
00:26:48 - The optionality keeps everyone honest in a free market
00:28:08 - “Just because you can do a thing doesn’t mean you should do a thing” -Stoics
“The loudest man in the room is the weakest man in the room” – American Gangster
00:28:48 - No need to flaunt power
Don’t get distracted by shiny objects.
00:29:38 - SoV is much more valuable than MoE
00:30:45 - Challenges of Privacy Coins
Meyer Lansky, Pablo Escabar examples
00:31:55 - Bitcoin as a Unit of Measure
00:31:58 - Bitcoin is a universal language of economic truth
00:32:49 - Bitcoin will always be a standard unit of economic energy
Bitcoin vs. Ounce of Gold
00:34:24 - Too much emphasis on MoE UoM, Not enough on SoV
00:34:48 - Non-constructive Crypto debates
00:35:17 - $300 billion Crypto Pond vs. $300 trillion Asset Ocean
00:36:48 - Crypto Market Segmentation
00:39:18 - Alt-coin experiments & DeFi
00:40:04 - Crypto Theory - Emergence of Magic in Cyberspace
00:40:23 - Crypto Networks vs. Digital Networks
00:41:14 - Crypto is for Immortal Sovereignty & Antifragility
Crossing Time & Domains
00:43:18 - Limitations of Crypto Architecture
00:44:36 - “If you want to go fast, go alone. If you want to go far, go together.”
00:45:48 - Plants vs. Animals – Genetic Tradeoffs
00:46:10 - Trust in Man, Company, Government, or Crypto?
00:46:28 - Solving problems with combination of tools
00:46:58 - Crypto Network is a life form in cyberspace
00:48:38 - One shot to create new form of crypto life
00:49:38 - Genetic similarities – no recalls allowed
00:50:23 - Ethereum Challenges
00:51:32 - Competition between Crypto Assets, Applications, & Currencies
00:52:28 - Defective Genetic Mutations
00:54:48 - Bitcoin Network Dominance among Crypto Assets
00:55:14 - Challenges of Proof of Stake
00:56:02 - Stablecoins as Crypto-Currencies
00:57:48 - Regulatory Arbitrage
01:00:07 - Crypto-Applications
01:00:50 - Digital Exchanges vs. Crypto Exchanges
01:00:50 - Risk Management & Crossing the Street
01:02:18 - Digital Network Advantages when integrated with Bitcoin
01:02:48 - Essence of the Crypto Value Proposition – Longevity
01:03:48 - Powering Digital Networks with a Crypto Network
01:05:48 - Rockefeller Estate Management
20th Century Approaches to Immortal Sovereignty
01:07:48 - Bitcoin is to Banking what YouTube is to Broadcasting
01:09:08 - Bitcoin Trust Structure
01:10:58 - Hybrid Solutions with People, Digital, & Crypto Networks
01:12:28 - Cyber Guild System
01:14:08 - Domains in Perpetuity – Monuments in Cyberspace
01:14:48 - Perpetuating Values – What do you love?
01:15:58 - Endowments via Bitcoin
01:17:04 - Tragedy of the Commons -Park in the Port of Naples
01:19:33 - Casting a Magic Spell with Crypto
01:20:48 - Bitcoin can be the source of “Magic Power”
01:22:24 - Fantasy Magicians, Spells, Curses, & Limits of Power
01:22:48 - Money is Power
01:23:48 - The power & reach of John D. Rockefeller
01:26:48 - Dominant Digital Networks & Bitcoin
01:28:12 - Market Forces & Ideology will Define the Future
01:28:48 - Role of the Maximalists & Citizen Soldiers
01:30:56 - Robert's Outro
02:12:13 - End
--
See My Work: https://linktr.ee/breedlove22
Contribute Bitcoin: 3D1gfxKZKMtfWaD1bkwiR6JsDzu6e9bZQ7
Stack sats: https://www.swanbitcoin.com/breedlove/
Twitter: https://twitter.com/Breedlove22
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