Bitcoin: The Future of Money? | Bitcoiner Book Club | The Jordan B. Peterson Podcast - S4: E:40

[Music] well hello everybody uh i'm trying something a little different today i'm speaking with a book club set up by john velas essentially centering on bitcoin which is a phenomenon that i'm very interested in but know very little about i ran across john's podcast partly because their book club also focused on my first book maps of meaning and so i looked up gigi durr who's speaking with me today john vellus richard james and robert breedlove who make up the four people in in this particular uh incarnation of of john's book club i was interested in their thinking about bitcoin and i noticed they were also interested in maps of meaning and so i thought we could try a free flowing discussion i haven't done a podcast youtube video with five people before so we're going to see how it goes and hopefully we'll have an interesting discussion about money about bitcoin about maps of meaning about maps of value about languages of value about information all of that so i'd like to introduce gigi durr john vallis richard james and robert reedlove and maybe i could start with gigi and you could just introduce yourself and and we'll move from gigi to john to richard to robert so gigi it's all yours yes i'll do my best first of all thanks for having us it's a great pleasure i think we're all great fans of yours i think that's obvious and yeah about me i think most people know me in the bitcoin world because i wrote a little book called 21 lessons um it's basically a short summary of what i've learned from falling down the bitcoin rabbit hall and other than that i've been involved in the bitcoin space for a couple of years and i've just i've learned a lot i've read a lot about it and so i tried to pay the forward and share it with the community and i think that's what brought me here thanks john yeah my name is john vallas and as you said jordan i host the bitcoin rapid fire podcast and uh first i'll i'll echo what gigi said it's a pleasure to be here um you know big fan of your work uh have listened to many hours of your stuff and of course read your books um i've been focusing in the podcast over the last year on exploring bitcoin and what it is and what it means and speaking with all the different people that are involved in it um but as we told you a bit earlier uh i've been placing the the phenomenon that's been most interesting to me has been the transformations that seem to be occurring in individuals as a result of understanding and engaging with bitcoin and it's a very peculiar phenomenon of course and so that's why i found it so interesting and of course i think there's um the book maps of meaning and part of the reason why we explored it in the book club is because i think that provides a framework for understanding that phenomenon better so hopefully we'll we'll get into some of that today yeah well part of the reason i wanted to talk to you guys was because when i started looking into what you were doing i was struck by two things that there seemed to be a psychological element to your endeavor but also perhaps to bitcoin and the bitcoin community such as it is and then also i was interested in your philosophical speculations about the domain of value and so we'll go delve into that what have you noticed about individual transformation and and do you think it's particular to bitcoin and like it's a strange thing to to notice and to and to bring up so maybe you could elaborate on that a little bit sure well one of the the answer is yes and one of the you know the interesting overlaps between your work and you and the changes that uh are represented in people that get involved in bitcoin is i think there's a lot it there's a lot of the instantiation of a lot of the things you talk about are represented in the changes we're seeing uh in people that engage with bitcoin and of course notwithstanding that your work generally as a permeate permeates out into the culture is providing people with ideas to chew on and that causes some degree of change but what i've noticed in people in bitcoin is that it rapidly accelerates this change toward uh taking more responsibility as it were changing that is well there's a couple reasons and i think the other aspect you know to to sum up and not take up too much time initially here is is that is it changes people's time preference as well it changes the relationship to time uh and so the first why i think uh that is is um it's a very it's a very peculiar thing but i think the the genesis of it is that bitcoin allows you to own something and to have to allow you to exclusively own something for the first time ever and that is the private keys to your bitcoin so it's an extreme form of ownership that is not represented in any other domain of life it's a inherent property right what do you think what difference do you think this idea of unique ownership makes and and then how do you relate that or if you do to a difference in time preference and what does that mean well for one i i would say that because it's the first time to experience something like that it changes your relationship to responsibility and i think one of the outcomes from that is it it causes you to contrast that extreme form of both ownership and responsibility in that domain to all the other domains of your life where let's say there's a dependence that exists and so this is kind of the idea of freedom that bitcoin seems to engender is that when you take you know complete sovereignty and control over the thing that most reflects you know who you are out into the social world at the very least and that is money that is the emblem of your time and sacrifice or what you gain rather for your time and sacrifice once you take control over that i think it it provides a you know a very powerful impetus to look at other areas of your life and see where you might establish greater sovereignty and take the responsibility to do that another part of it is is once you come into this space you start to realize uh basically the impact of the current system of money that we use um and i know this is a term that you use and you reference in the book but you begin to see how bitcoin represents the information let's say the truthful speech that rectifies pathological hierarchies that evolved as a result of false money you know as a result of fiat money let's say and i think you could broadly say that money is information regarding your own value hierarch hierarchies that you when you and everybody else right right and so when you use it you communicate those and to the extent that there's an intermediary or that there's anything that's distorting the fidelity of that communication pathological hierarchies incongruencies between what you're attempting to communicate and what you actually are communicating to that market i think emerge and i think that was what i found interesting about the claims that you guys are making and i i i wanted to have this discussion in part two to evaluate that claim to to see if there's well to see how solidly developed that idea is because it's a very interesting idea that in some manner bitcoin is incur an incorruptible provides an incorruptible language of value preferable to gold say so maybe you have to buy the argument first that gold is preferable to a currency that isn't dependent upon something like gold and that's also a separate argument but you're making the case then that bitcoin is superior even to gold and so we'll go into that what's your background john i started my career in finance i lived in in shanghai china for about a decade and then whilst i was there i got out of that because i i didn't enjoy the incentives that you know the behavior that came from the incentives in that industry and i went into natural medicine and uh did a degree in that and and worked in that capacity for a couple years and then all the while i had been interested in bitcoin and studying bitcoin and in 2019 it just kind of became overwhelming so at the time i was living in thailand and i decided to start the podcast and as everyone on this part this this current uh podcast will attest once you go down the bitcoin rabbit hole it's very very difficult to claw your way out you know you you're attempting to find the bottom rather than back to the surface so that kind of characterizes my pursuit since uh 2019. what's your background so i have a heavy tech background i studied computer science and i studied a little bit of physics and i've been a computer programmer for the last like 15 plus years um so yeah i think that sums it up i grew up with computers and i grew up online and so i know a thing or two about distributed systems and those kind of ideas that are very helpful to make sense of bitcoin um but still it took me a very very long time to make sense of bitcoin like many years and multiple touch points because i liked the economic knowledge that is required to understand this beast and so the last couple of years i um read up on my economics and discovered austrian economics and that was most helpful to make sense of bitcoin and what right so that's another touch point because i've become interested in austrian economics i'm going to be discussing austrian economics with some austrian economists uh well they're not actually austrian but they're from that school you also have a profound sense of sartorial splendor just so that you know it so richard over to you oh thanks very much dr peterson so yeah my name is richard james i i'm a filmmaker by by trade although um you know in more recent years sort of worked in other areas and and just been running a small business in a completely unrelated area but i mean i've had a uh almost a lifelong interest in economics and i studied that through school and into university but sort of fell out of love with it i suppose you know i kind of dropped out of economics at university but yeah maintained an interest in that and then i also came across um the austrian school of economics and i found that to be particularly eye-opening um and it led me down this path of of asking that question of what is money and as we've already mentioned gold plays such an important role in that and i think that gold understanding gold is the first step to understanding bitcoin and so you know what i in um in the last couple of years i've sort of turned back to filmmaking and and trying to link that interest to austrian economics and bitcoin um and last year i i sort of set myself uh a goal for a project to make a film related to bitcoin and it had two particular parameters one was that i wasn't allowed to spend a dollar and it had to cost zero dollars and the other thing was i wasn't allowed to leave my desk um so i sort of basically put this thing together using content that had already been created by people um you know working in bitcoin and talking about bitcoin and the film's called hard money it's it's available free online so that's sort of been been my contribution i suppose but i'm yeah more interested in the philosophy of money the history of money um and particularly the phenomenon of inflation um and the way that links to things like time preferences as we've already talked about and also i suppose political philosophy or or and libertarianism and um these ideas that there's a certain and way of thinking um in austrian economics called praxeology which is is about human action and uh and the way that um you know really analyzing the way that people sort of pursue it's very general general in the way that they use means to pursue ends like that's the very first kind of axiom of the system and from that we can draw a whole lot of uh of deductions and um it's interesting the way that leads you down an ethical being able to create an ethical framework as well and that's where i guess your own work came into it where you know i found that found myself interested in this this libertarian system of ethics or morals and you know maps of meaning i think is essentially a book about morality as well in that it's a book about how to act so i found some very interesting parallels there and what was it about how would you define the austrian school of economics and why did it why was it of particular interest to you well the austrian school is i would say it's it's a a way of thinking that is about um logical deduction rather than empiricism i think the problem with economics in its current form uh you know modern economics keynesian economics because it's largely influenced by the work of john maynard keynes i think it uh it has a problem where it has this desire to imitate a physical science you know it wants to analyze data um you know get get complex in a mathematical sense but there's a fundamental problem there in that when you're trying to analyze something in economics you know we can't set up an experiment and you know run run a test on a parallel universe we're dealing with with real world um you know you can't isolate the independent variables basically so it makes that kind of analysis fraught with a lot of danger where where is that the behavioral economists are trying to deal with that to some degree right by by running actual economic experiments they're more like psychologists they are psychologists fundamentally and the um the austrian school takes a very different approach which is to say you know we'll take a certain set of of fundamental axioms you know and then we'll just we'll build our philosophy based on on logical deductions so it's sort of all all done from from the armchair basically uh rather than trying to validate anything via via real world data i guess the relationship between action and and economics and value i suppose is that people choose to act in relationship to those things that they value and that the manner in which they act is all actually an indication of what they value and so money becomes an index of people's value preferences and value preferences associated with their preferences for action i mean that shapes even such things as perception right because perception when we think about that as something that's automatic essentially because the world just appears to us in some sense but you move your eyes constantly in orient your head so that you can hear one thing rather than another and you pay prefer preferential attention to one thing rather than another and you do all of that as a consequence of comparative value and i was reading a book on on austrian economics last night and they were talking about trying to define economics and it struck me that the most suitable definition was something like the science of comparative value it looks like that's what economists concentrate on and then money becomes an index of comparative value and then that leads that leads well i'm going to talk to robert next i'll get him to introduce himself but i know robert has written a fair bit philosophically on the implications of money in general as a signal of value and of bitcoin in particular so robert hey jordan uh yeah my name is robert breedlove it's a great honor to speak with you today i'll just say that your work has had a profound impact on my life that i'd probably struggle to put into words so i'll just leave it at thank you um i'm a lifelong student of philosophy and economics um although more recently thanks to bitcoin actually was introduced to austrian economics i've been going down that rabbit hole for the past four years my background before that is i have a master's degree in accounting and finance i was a cpa for a number of years so i did tax strategies for high net worth individuals investment partnerships from there i moved on to be pretty much a career cfo focused in technology and then most recently i was operating a hedge fund before last year you know 2020 was transformative for a lot of us and this quote from h.g wells really struck me and resonated he said that civilization is a race between education and catastrophe and my realization is that the world is so poorly informed about the socio-economic significance and even philosophic significance of bitcoin that it was incumbent upon me to take what i think i see as the solution to many problems in the world and just pour all my energy into education and to that end i started the what is money show um i called it this because i do believe that question what is money this is the gateway to this rabbit hole that we've all fallen down it is the key to unlocking a lot of the untruths in the world and i think it's also the key to perceiving the corruption that's embedded in our current socio-economic system at the core of which is central banking which i'm sure we'll get into a lot today um and yeah i would just to echo a couple of the things that were mentioned earlier that question what is money has a lot of answers one of which is i think you've related in the past is that money is essentially a contract of the future and today fiat currency it's a violated social contract so we have a money by which an institution effectively robs our future they're compelling the demand for this money and they're violating its supply to enrich themselves and dispossessing everyone else mostly people economically vulnerable and to the point about morality it's like if we don't have a secure social contract in the most important market in the world which is money then we can't possibly have a foundation for a sound social morality so it it it causes people to be more short-term thinking when your money doesn't hold value over time you can't plan uh you can't create trusting long-term relationships and then the the last piece of that is you know with central banking violating the supply of money they are twisting our perceptions we perceive the world economically through prices and when that perceptive that perceptual mechanism is twisted it breaks down your valuations your goal orientations uh your trust really just trust yeah it really corrodes socioeconomic fabric social morality uh and even individually to john's point i think it really breaks us down and i've experienced that personally in my life i've i've kind of flown high and mighty on the fiat currency standard and i've experienced a certain set of character traits developing myself and i've experienced an antithetical set of traits uh developing myself as a result of studying and interacting deeply with bitcoin so can you can you elaborate on that a little bit you're making a moral contrast it's personal there's a story there i'm kind of curious about it so yeah i um i made a lot of money quickly at a young age and i would say that i s i walked a bit of a darker path where i just thought that i had made it i had arrived i would just kind of party and cut up and travel i didn't have a lot of i lost that deeper sense of meaning or sense of purpose that that you speak so eloquently to and you know you don't know it when you're up against it i still thought that i was um doing good things and was more or less a good person but i was just going further and further off course you know becoming more and more short-term oriented more and more uh pursuing immediate biological gratification whether it's you know drinking or or whatever um and bitcoin and this rabbit hole just gave me the the larger lens which we talked about time preference and when we say lowering your time preference what we mean is we're expanding your time horizons so you're you gain a greater sphere of concern let's say beyond yourself and that that spheric is made up of space and time and as you do that you start to see yourself as increasingly a more humble and infinitesimal piece of the total picture but somehow it also enriches you to want to really dig into whatever gifts you have and give back to the the whole picture and why do you think why do you think the fiat currency why do you think the fiat currency versus bitcoin issue is relevant to that conundrum do you know what we could say in the very severe original state of nature we're all just cavemen running around trying to eat um and and you know have shelter that is an uh an environment with a lot of scarcity right there's a lot of economic scarcity because we haven't begun to trade we haven't created the division of labor and specialization that creates wealth and i would argue that fiat currency because it generates arbitrary inflation so it's it's artificially magnifying prices in the world it's increasing prices when prices should be declining as we get smarter it's actually magnifying the perception of scarcity in the world and i think that contributes to social divisiveness up to and including things like cancel culture and other things we see in the world today uh i i really believe that artificial central bank induced inflation is a corrosive moral cancer on society and i think we understand so let's get some terms straight so that everybody knows what we're talking about so maybe we start with fiat currency and gigi i'm going to pick on you next because i want you to give us a technical description of bitcoin if you would and then we can start exploring its psychological and and philosophical implications so let's talk about fiat currency contrast that with a gold standard of bitcoin and then let's talk also about central banking and inflation and just flesh that out so everybody knows where we're at that's for you robert sorry that's for robert i'll get gg i'll turn to you for the technical description of bitcoin you'd like me to start with central banking sure yeah so to give the very high level description again the answer to what is money has many questions or many answers but one of them is we could say that it's a device for moving value or expressing value across space and time and historically it's a technology right the free market selects what the best tool for the job is that's true for essentially every market in the world today but we've never allowed that to be the case in the realm of money um and the best approximation of that historically was gold so if we understand that as a technology money needs to fulfill five critical properties needs to be divisible durable recognizable portable and scarce and i'll gloss over a lot of history but essentially monetary metals best satisfied the divisibility durability recognizability and portability properties of money and of the monetary metals gold was the most scarce and scarcity of money so what scarcity means is when demand outstrips supply but what's unique about money is that demand always exceeds supply there's never enough people always want more money right it's not like you're going to reach a certain amount of apples in your in your kitchen and you're satisfied with apples you always there's always more demand for money so we could say that money always has this scarcity property inherent to it um but the the market gravitates towards the good that best satisfies those first four properties and then fifthly has the most inflexible supply so another way to say this is the most inflation resistant monetary technology tends to be favored by market actors because as it turns out surprisingly enough or not surprisingly people don't like to get stolen from via inflation you want to hold the money that holds its rarity and scarcity across time such that no one can dilute you and so why do you regard inflation as theft so inflation it's just very simple supply and demand economics if price or purchasing power in the case of money is where supply meets demand if someone can arbitrarily increase the supply they can steal purchasing power from the others using that as a store value so that's why again gold was selected on the market because there was sacrifice necessary to obtain gold you had to expend time and energy to dig it out of the ground such that in this game theoretic selection of money everyone could trust that no one could arbitrarily violate the supply of gold because if they could they would just print gold if you could and still dilute it with silver or something like that that's right on occasion which they did yeah they've counterfeited gold and any number of things um the problem with gold though essentially is that it was great for holding value again back to our original definition money's a device for moving value across time and space so gold is excellent at holding value across time but it's a metals are pretty poor especially for a globalizing society at expressing value across space they're very heavy and difficult to move they're expensive to move expensive to secure etc etc so this is where paper currency was introduced by abstracting gold into a paper currency we could now increase its transactability across space and so long as it was redeemable one for one right one unit of currency for one ounce of gold for instance then it maintained its uh ability to to express value across time as well so we're basically augmenting this free market selected technology to make it more transactable across space and time the problem with that of course is that it introduced the need first of all it made money debt so now all of a sudden we don't have money we have a paper certificate that's redeemable for money which is gold so this this paper certificate becomes a debt instrument and the problem is you now needed to trust the custodian the bank whoever's holding that gold you have to trust they will not produce paper currency in excess of their gold reserves otherwise they are then uh the one artificially inflating the currency and able to steal from everyone else and as it turns out you know again money is like being the most important technology in the world the temptation to manipulate its supply has proven historically to be essentially irresistible and banks which tend to become central banks or nationalized banking operations over time have have always violated that trust function placed can you give us some recent examples of that well sure in 1971 uh the infamous nixon shock he took the world off a gold standard you know aft subsequent to world war ii we held the bretton woods conference where it was determined unilaterally by the united states that the dollar would be pegged to gold every other currency in the world would be pegged to the dollar so this gave the united states the infamous exorbitant privilege to just basically be able to print whatever amount of money they want send the world uh these paper certificates called dollars and then receive goods and services in exchange but other countries agreed to this one because the us was the dominant military power of the time and two because dollars were redeemable for gold but from between 1944 and 1971 it reached a point where enough countries had had lost faith in the dollar that they were asking to redeem their currencies for gold then nixon decided to spontaneously close the gold window so he just moved the world off of a gold standard onto a purely fiat currency standard and then there's since that point actually since 1971 through today it's been about a 50-year experiment we have had disastrous socio-economic consequences across a whole gamut of data there's a great website to this effect i would just encourage listeners to check out called wtf happened in 1971.com and it you know we've had obesity suicide uh addiction clearly global debt to gdp has exploded um it just points towards the the devastating force that is arbitrary inflation um so yeah i hope that answers it can i yes go ahead and just jump in for a sec before we move on we're talking a lot about value and i think jordan you mentioned something earlier that i just wanted to pull the string on a tiny little bit is and you talk about this in your work but you when we in order for value to emerge right we need to define limitations so things are defined by their limitations and as a result of that we're able to separate them right so things emerge out of the void their limitations allow us to separate them then the problem is how do we order them right and then so that is how these value hierarchies emerge and the the internal measuring stick we use to order things is our own limitations of time and energy so for a very basic example if i'm going to look at the lamp then i'm excluding everything else that i could look at i'm devoting my time and energy resources to look at that lamp at the exclusion of everything else the opportunity cost is infinite to anywhere you place your limited resources and so the the journey or the evolution of money of finding a money has been to try to find something that mimics our limitations that mimics the sacrifices that we make uh when we de when we bestow value on something so why would you why would you say mimics well because we want something to reflect the same limitation you know when we're bestowing value on something through our sacrifices that's basically what value is i'm sacrificing my time and energy and perception to focus on one particular thing if i want to express that out into the external world the ideal way of doing that is to find something that is similarly limited as my own so that's interesting so yeah so money i mean it's obvious in one sense that money is a reflection of human value but i hadn't exactly thought about it as a form of mimicry so what we want is an on an arbitrary external agent that's move mo mobile across people that signifies what people value of course so that's significant value structure why sacrifice well that's how we create wealth in the world we sacrifice our time and energy to create things so money that's just another definition i didn't mean to interrupt money as a measure of sacrifice okay gigi let's go to you now and let's fill in some of the gaps about bitcoin per se do you want to fill us in about what it is and and why you think it's significant what's revolutionary about it i'll try my best and i'll try to link it towards what's just discussed like we we always try to zero in on something that um yeah doesn't just melt away and that that we can use as money and historically as we just discussed gold and silver precious metals were very good at that because gold is virtually indestructible and it's also very scarce and visible and so on and so forth the problem is and that's what computer scientists tried to solve uh like for i guess 50 years plus is if you want to do that in the informational realm have something that represents value it's basically impossible because you can copy information indefinitely and that's what's what's described by the double spend problem like if you can read information you can also you can also copy it so you cannot have a token in the digital realm that can't be copied if you can read it you can also write it down again and that's a basic copying mechanism that's how computers work computers are just basic copying machines so digital scarcity is kind of an oxymoron and was never possible before bitcoin and also in bitcoin like the way that bitcoin works it doesn't produce anything that can't be copied everything in bitcoin is copied all the time and you can copy every aspect of it and there is also nothing that is really encrypted you know it uses it uses encryption technology like cryptographic technology but it doesn't really encrypt anything it only uses digital signature schemes to make sure that the ownership of things is clear but you can read any everything in bitcoin is completely plain text that's why we also say it's speech you know it's you can you can basically print out how bitcoin works and put it in the book and you can actually read it and you can feed it into another computer and just spin it up again and also the output that bitcoin produces this ledger which records who owns what is completely plain text like you can make sense of it by just looking at it kind of and so we we have this problem that historically we found physical artifacts to represent this value gold coins for example and the gold coins they speak for themselves like whoever has the gold coin is in possession of this value the stored value someone else put work into it to extract the gold first and foremost and after exchanges you know that whoever earned this gold coin or also stole it like it doesn't matter whoever has this bearer instrument whoever has this gold coin is in possession of some value and can redeem it um go to society and redeem it you can like whatever goods and services you want to have you can exchange your gold coin for that and in the digital realm doing that without any trusted third party before bitcoin was impossible because of this double spend problem because of the nature of information that you can't have any token that can't be copied so what bitcoin actually does is it it is this play kind of it is this intricate dance of computers all around the world that spin up a system that checks and verifies copies of this ledger and it makes invalid copies useless so you can copy it and you can kind of transform the copies as well but everyone who participates voluntarily in this game agrees to certain rules and the rules say that we only accept valid copies according to the rules that we signed up to and this is what makes all this possible and what what comes what comes out of it is simply it's an unbreakable contract of trust yeah it's like unbreakable is a really big word and everything in bitcoin works kind of probabilistically including like cryptography itself it's it's it's basically it makes use of an asymmetry that some problems in our universe are very hard to solve unless you know the exact solution to it so that's basically all like the root of all cryptography like if i know the secret i can decipher the message instantly very easily but if you don't know the secret you will have to guess every possible secret and this is where this asymmetry of power comes from so cryptography is inherently defensive and this is what uh bitcoin makes use of as well like if you don't have my private key you cannot spend my bitcoin period like the heat death of the universe will come first before you you will be able to do that and this is the power of bitcoin so can you get extremely simple and describe what bitcoin is yeah that's the 21 million bitcoin question i'm afraid there is no simple answer like the the best i can give you is it's basically you can think of it as a as a shared excel sheet like shared a shared a shared ledger that simply attests to who owes what to whom like it has a list of these are the 21 million bitcoins that we have and john owns some and robert owns some and it's a list of transfers so it's a list of transactions and if you if you add all this up and and make sense of all the transactions it's the the what is recorded is from the genesis of bitcoin up to the present moment everything that happened in the bitcoin ecosystem and so that's true that's what makes it trade exactly ownership that's what that's what makes it so trustworthy it's like a it's a computerized accountant it's keeping track of who owes who owns what and who owes who what and it's distributed everywhere so no one can corrupt it and you can't get access to anyone's store because their key is encrypted in a way that makes it impossible to break it's it's because everyone holds their own keys in the best case like i i hold my own keys and you don't you don't even know like you can't associate um my bitcoin addresses with myself um that's also why i'm an invisible man so a lot of bitcoiners uh take care about their privacy and that's a big like a big topic in the bitcoin world as well and so there is simply no attack vector you cannot like you cannot invade all the homes of all the bitcoiners across the world and steal the private key so that's what you would have to do to break the whole system so the security is distributed in the sense that uh the security is at the edges and the system itself is insanely resilient and what enables this trust is exactly as you have said it's it's transparent and it's radically distributed everyone has a copy so i can check it for myself from from from the very first block like the genesis of bitcoin up to the present moment i can verify everything myself right so it's completely transparent it's completely distributed there's no centralized authority it can't be cracked it can't be stolen it doesn't inflate it can't be inflated um it isn't subject to at least so far to any form of overt administrative control so let me ask all of you guys a question maybe john and richard can chime in in this because they haven't spoken too much yet so one of the questions might arise especially in relationship to robert's comments is that we switched to a fiat currency back in 1971 and obviously you guys are no fans of fiat currencies but we do have money and it does work we we can still it still stores value we can still spend it and so i would say please tell me why i'm wrong or if i'm wrong or if you agree the american dollar has been the currency of record essentially since 1971 perhaps since before that despite the fact that we've switched to a fiat exchange system and my sense is the reason that people use the american dollar is because the judgment of the world is that by and large the social structure of the united states social and economic structure of the united states is such that it's more reliable than any alternative and so people trust them individual americans in some sense they trust the trusted interrelationship they have with each other they trust the emergent social institutions and and and as a consequence of that they're willing to put the same kind of faith into the dollar that you guys put into bitcoin and so that's working and so so what's the problem exactly and is there something wrong with my reasoning maybe richard you could comment on that and if not someone else jump in well i think we have we can make a fundamental distinction between a money that is chosen by the free market and a money that is forced upon someone um by the use of the threat of force which is essentially what the us dollar is and and any other fiat currency your point is is well taken which is that the us dollar works as money but i guess the question is in relation to to what uh or compared to what and and i think that um because we we sort of can't imagine this um this universe that doesn't exist where you know the free market was simply allowed to do to do what it what it would do um so there's there's two problems with with the um the us dollar one is that um yeah it's it's basically it's imposed by this legal tender law so so in the united states and and yes the united states has um economic and political dominance and that extends around the world but citizens in the united states aren't free to transact in money that they choose if i wanted to make a transaction in gold i'm legally not allowed to do that i'm not allowed to denominate a contract in gold and i'm also in a technical sense prevented from saving my money in gold and that's really because of capital gains taxes if if i want to want to use gold for example to to protect my savings from debasement because slowly but surely the value of the us dollar does decline over time if i then want to go and use that saved money um to actually make a transaction because i'm legally obliged to i have to pay a capital gains tax and and sort of give back to the to the state um the value i've tried to save so i think yeah there's a utilitarian domain so you wouldn't regard that you wouldn't regard necessarily any increase in value that pertain to investment in gold as an actual capital gain you'd be more inclined i may be putting words in your mouth i hope not but you'd be more inclined to think of that as a hedge against inflation and so not an increase in wealth but an actual maintenance of wealth because gold hypothetically is more reliable than the dollar you could make that case so exactly correct and this is the thing is that you know gold holding gold is is yes technically it's not an investment because there's no there's no return but the other interesting thing is that things that that we put our money money into these days that are investments such as real estate or shares and things like that most people are only doing that in an effort yeah not to earn a real return but only to sort of offset the loss of value that comes from the slowly depreciating currency so you know that's part of the problem of of having a currency where the supply constantly inflates is that people are aren't able to simply save money in a simple sense they're not able to hold money they have to take that money and invest it and take on the inherent risk in investing simply to maintain their purchasing power over time and then that that's basically that purchasing power is taken away from them again when they try and go rotate out of that investment back into money okay so let me ask you a question about that so maybe i could make a case that you know because we're all interdependent whenever i generate wealth i generate it as a consequence of my interdependence with other people i wouldn't be able to do it on my own i'm dependent on the infrastructure i'm dependent on the government or at least i i have the advantages that those things provide me and so could i not make a case that if i've managed to accrue a substantial uh sum of of excess capital savings that it's reasonable for the rest of society to expect me to allow some of that to inflate away as a tax on my hoarding as a consequence of the fact that part of my wealth is generated as part of a shared endeavor because you know you could posit a wealth tax right that might address inequality so that there's a two percent wealth tax or something like that on fortunes over 500 million dollars and so they decay with time to restore that hoarded wealth back to the general community do you what do you think of an argument like that well there's a the problem well a lot of this comes back to um you know we have to go right back to first principles about what we think about the nature of the government or the state like do we think that that institution helps or hinders do we think that that institution can actually redistribute resources in a way that's fair and equitable um and can it kind of do that efficiently that's almost an entirely different question you know i tend to be very skeptical of what uh what the state can do in that respect and i think that freely acting individuals would possibly be able to do a better job um so you have a baby you basically have a free market response to that objection that the free market is going to do better as a calculating device absolutely and the only other thing i'll quickly say before i think about handing over is that the problem with using inflation as a redistributive method is that it actually unfairly um works against the poor people in society because those that have wealth um you know you're talking about a wealth worth tax or or that sort of happens through inflation but the way that it generally plays out is those people who are wealthy they don't store their money as dollars they store it in assets and those assets appreciate in value as a result of the inflation whereas those people who are living on fixed wages salaries you know living week to week with a bank balance there and because they're spending a larger proportion of their money on on goods and services they're the ones who are actually most unfairly um targeted by inflation so it actually has the effect of increasing inequality and do why do you guys have any faith in in the idea that there is actually measurable inflation because i i is it reasonable i don't understand inflation there's a basket of goods and services that are calculated the price of them is calculated every year but what's in that basket of goods and services seems to me to be a relatively arbitrary choice i mean what makes you think that there has in fact been objectively reliable inflation say over the last 30 years given for example that many many manufactured goods and so forth have got dramatically cheaper now i know housing in many places has skyrocketed you know to to a tremendous degree but do you do you really feel that the the currency has become corrupted and that you can you can and what do you rely on to make that case what data do you rely on i could jump in here i think um i would say unquestionably debasement of the currency it is an arbitrary harvesting of the economic surplus a productive free market economy is creating so as an economy gets more efficient it generates more wealth that's passed back into mark two market actors in the form of declining prices so we're getting smarter at making chairs smarter providing services electronics all these things but by printing money you're basically stealing claims on that productive on that economic surplus and doling it out arbitrarily so we could say another way to think about this is that the free market itself as you've described jordan it's a distributed computing system so we all have our you know 120 bits per second conscious attention span you multiply that out by 8 billion market participants that is the cognitive power of the free market right i want to emphasize that because because it's such an important point and it could easily be skipped over because you know there are people who admire the ideas of central planning and you think well maybe there's 40 people doing your central planning and so maybe they're the smartest people in the world and they're doing your central planning but they have to calculate on the fly a virtually infinite amount of information if they don't have free market prices at their disposal they have to calculate what metal is worth what nails are worth what labor is worth what rubber is worth what cleanup is worth what nursing is worth etc etc and they have to do all those comparisons and they have to do those computations and there's actually no way even technically of doing that and the alternative is to distribute that calculation across a virtually infinite number of actors or actors in the billions at least and let every single person act as a computational device and some all that and that's what the free market does it's not it's not even in principle replaceable by a logical cognitive mechanism i can't see how it is that's exactly right it's not even possible that a centralized bureaucracy a centralized computing model can compete with a distributed computing model of the free market we could actually in fact say that the free market is a pure economic democracy people are voting by buying and selling and whatever price is generated on any given asset that's effectively the truth of what it trades at any intervention on that any intervention any regulation any pricing czar as they had in the ussr you move towards you move along that spectrum towards an economic tyranny where we have now the arbitrary wishes of a few overriding what the free market democracy is selecting and to tie this back to the problems with dollar the dollar is you know the dollar was gold by the way fiat currency never emerges on the free market that distributed computing model never selects a fiat currency by itself it's only when uh natural law is violated when they step across the line of life liberty and property and say i'm going to impose this technology on you or else that's the only time fiat currency has ever emerged and in fact the dollar itself was just kind of a bait and switch it was something redeemable for free market money gold that was then replaced with this this compelled money and again if money is speech we could say then that fiat currency is effectively compelled speech it's the same thing they're forcing a language a language of value they're forcing its use on you and though if you boil it down to brass tax the us dollar today and all fiat currencies they are mechanically their pyramid schemes so a pyramid scheme is a a system of network marketing basically that's using uh that's useful for enriching those in higher tiers at the expense of those and lower tiers and you're constantly recruiting more uh lower tiers to enrich the top okay so let me let me draw an objection to that just briefly so let's i'm going to accept the pyramid scheme hypothesis but i'm going to say that it's a pyramid scheme that sacrifices the future to the present but that doesn't matter because the future is going to be so much more productive than the present that we can afford that leverage it would be so to make this is the kernel of economics right is that i can delay consumption or gratification today invest for the future and then enjoy more in the future fiat currency and central planning more generally uh reverses that it actually it induces you to consume and take on debt today and disregard the future this is the raising of the time preference that we spoke to earlier so that and it's arbitrary nature again it it's as mises would describe all centrally planned action is it runs countervailing to what the free market would choose on its own so you're no matter what you do the government cannot make a good decision if they're if they're coercing people to do it because they're withdrawing productive factors from the economy to fund that decision if they want to go to war for instance the market may have not selected to go to war but a government has decided that no we're going to pull these productive factors from the economy and push us into warfare so it's it's contradictory to the the essence of democracy itself right so you guys really see that bitcoin as it just you really do see it as a distributed form of government as well in disruptive to centralized government yes yeah and and i think one of the elements of inflation and again this is the string back to what we were talking about earlier and i do think it is a fundamental point to make but it it if money is how we express our sacrifices and therefore our values into the matrix of value hierarchies that exist in the market then inflation is doing so without the commensurate sacrifices that everyone else needs to make into it to allow them to communicate that to the market and so this is where the idea of pathological hierarchies is applicable is because a naturally emerging market where the fidelity between one's actions one's choices one's valuations and the signal that they send out into the market is pristine and i would make the case that's what bitcoin um represents whenever that is diluted in whatever capacity you know to a small degree or to a larger degree that's what creates incongruencies between the matrix of value hierarchies that are out in the market if they are pristine if we are all able to communicate with perfection our value hierarchies to the market we will see in my opinion emergent order i don't see how it could be any other way where that gets thrown off is when that signal that we're sending carries all alternative information not information that we you know through our divine process of you know mediating chaos in order to bestow value on things and then express that through our actions not that process but through some other process of someone who controls the mechanism by which we communicate that and so inflation is just is changing the relationship between the matrix of value hierarchies without the commensurate sacrifices and that is what creates pathological hierarchies and that's what creates you mentioned you know the inequality of devices why do we why do we allow this with now we don't we're not going to degenerate into conspiratorial thinking and i'm always wary of any conversation that involves they you know an external actor like we we've allowed this as a as a global community and if if what we've done is flawed in the manner that your analysis indicates why have we allowed it to happen i could say who benefits and we could go there to begin with but again as i said i'm very leery of conspiratorial thinking i tend to think of large-scale social problems as everybody's problem you know but so so what do you think about that why why have we allowed this to happen and let's say who benefits and why well and who suffers i'm with you and i 99 of the time i attribute um you know the things that we see in the world that we might term evil or bad to incompetence and not uh right evil yeah not malevolent um i think you know there's there's many factors here but one is it happens kind of it happens in slow motion and so people end up not being able to see it for example like you would say today hey i got my iphone i got netflix we're talking on zoom things are good and right in the world and i you know i know oftentimes you discuss not to you know discredit not to go out and try to change the world not to be too critical of of of the state of the world because the order that we experience is almost miraculous but i would say that there's an element of that that may cause you not to see the how things have become disordered i mean it's it's difficult to see that and so when we talk about the uh disruptive effect of inflation that i just alluded to a lot of people have a difficult time seeing that we can objectively isolate problems that are going on in the world inequality and social problems and you know all the craziness that we see in the world and we could tribute that to fill in the blank cause whereas i think what we attribute most of that to is the disordering that results from this fractured congruence of value hierarchies that are being communicated in a market that's where i think most of that comes from but it it takes time to play so it's a form of faulty information right and we are we are leveraging right now or we are um still benefiting from this the the order the the the structure that was imposed as a result of let's say being on a gold standard and the political and social dynamic that that fosters in many cases we've been living off the stability that that fosters for the for the last several decades i think you could make a case that despite technological advancement that may might cause us to think hey things you know aren't so bad or may cause to distract us i think you can make the case that the equity that we've been living off of that stability is coming to an end and i think we're seeing that in many different cases but you know i think that's why it happens in slow motion and people are not educated enough or necessarily paying attention enough to notice the relationship between all the different things that are going on okay so let me ask you guys a question about what happened in 2008 and so and i may be completely wrong about this but my understanding was that the the 2008 crisis was fundamentally produced by a technological revolution and the technological revolution was something like the realization that you could take investments of a certain risk level mortgages let's say substandard mortgages and by bundling them together in huge tranches and huge groups you could quantify the risk and as a consequence of quantifying the risk you could discount you could make the the group of of of investments more valuable than they would be as the sum of the individual investments which i thought was a brilliant innovation and so now these companies banks traded these huge tranches of subprime mortgages because they could quantify the risk and that means that that could be accounted for financially and so the risk was ameliorated and the the flaw was well no one realized that doing so on mass would increase the probability that housing prices would become correlated across time across huge geographical regions for example across the entire united states and so the housing market could collapse all at once but so so i you could make the case that that was actually a flaw in the free market computing prowess because a technological innovation came along warped the entire system and then what had to happen was the political system had to rescue it and so i watched that and i thought well did i was the political system embedded in the economic system which is i think the argument you guys are fundamentally making or is the economic system embedded in the political system and is what's wrong with my analysis of what happened in 2008 what wasn't it the case that the the market was rescued by the by the political actors is that incorrect the arson is putting out the fire sorry go ahead yeah no i could start and you guys feel free to jump in so i would first encourage you um to look into what's called the euro dollar system which is essentially these this we control the pyramid scheme in the us the domestic dollar supply but there's this offshore derivative system where everyone's trying to peg the dollars that the central bank doesn't control that's actually um been considered to be at the root of the 2008 crisis and then this was kind of a cover story but if we just get back to error so we could say risk is error right so there was this embedded risk that we thought we had calculated and contained but what was actually happening is because we have centrally planned money it's pushing hidden risk into the economy right because the free market distributed intelligence intelligence being defined as error correction it's mitigated by the central planning of money so these hidden risks accumulate and that's why we've had increased volatility since 1971 we have these huge economic booms we print a bunch of money inflation runs hot but so do assets everyone thinks they're doing really well and then we have these catastrophic retracements back to economic reality and actually that's because incremental incremental reaction to risk is not is not being implemented that's where you're diverging perceptions from reality effectively so even the the correction in march 2020 that was the sharpest liquidity collapse in the history of markets it was faster than 1929. so we would expect as more fiat currency which is artificial liquidity is pumped into the system it's further distorting this economic perceptual faculty and creates even more volatile boom and busts this is the austrian business cycle theory in a nutshell um and the only way the only way to resolve this is to let the free market clear errors that's what it does that's what consciousness does too by the way so you think of the free market as our are interconnected consciousnesses mediated by the price signal when you disturb the price signal our consciousnesses become divided and we have increased errors and blow-ups well that's why i suggest to people that they don't engage in deception because they distort the value signals and they warp their own consciousness it's a very dangerous thing to do that's right because you only have to use deception that's exactly what money does that's exactly what fiat money does fiat currency is a living lie that's what that's that's it in a nutshell and maybe to to bring this home the question you asked could also be a rephrase to to pick a more like an example that people might be familiar with you could also ask like was the drug addict or was uh the person suffering from alcoholism saved by alcohol because he suffered withdrawal and that's like a very similar question and then you could argue yes we gave we gave him the substance and he survived so it was a good thing and he made it through but what would actually be necessary is kind of you know like that's not the cure you you you would need to quit cold turkey and that's what bitcoiners are arguing or just in general people advocating for sound money are arguing that we need to get off the fiat standard that can be arbitrarily manipulated and manipulates the price signals manipulates the whole economy okay so that's a fundamental tenet of austria austrian economics is essentially that central planning in relationship to the monetary supply that isn't informed by incremental free market decisions produces error that accumulates and produces cyclical booms and busts that's very interesting because there is a psychological analog to that that psychological analog to that is failure to react to error when they're committed incrementally to store the errors up which compound across time and to collapse and the oldest myths which i talk about maps of meaning talk about for example the re-emergence of tiamat in the mesopotamian myth which is the consequence of corruption accumulates and produces catastrophe it's the flood myth idea essentially so the business cycle theory in austrian economics is a recast of the flood myth and the tower of babel is that right because those are the two parallels the two mythological parallels the tower of babel is administrative overload essentially and and the corruption of systems and the flood is you know the catastrophe the the downside of the of the or the natural catastrophe i would say so i think you hit on one of the main points of of this discussion generally is that truth is represented across scales maybe that's part of the definition of truth is that you can see it across scales it's represented in different forms it's certainly that part of the definition of deep truth right and so it's definitely when we look at maps of meaning you know i think this is part of the reason why we're so interesting and talk interested in talking about it is because we take those truths that are seemingly entirely unrelated to markets and money you know it's all about it's all about mediating the forces of nature the structure of reality in conjunction with the social relationships that constitute life and trying to figure out what behavior is most the most optimal balance between the two and uh i think we could carry that over to money and markets and no it's funny because you know maps of meaning could have been called maps of value and obviously money is a map of value but i hadn't drawn the analogy between a map of value and money although in retrospect that seems like an obvious thing to do which is why i got interested in your idea about on incorruptable money yeah and so you think of incorruptable money as a computational as computationally advantageous essentially that's that's the basis of the idea yeah and and i think again to pursue this i think bitcoin is the regenerative hero in different form it takes the forces of nature it it it digs into chaos into pure entropy into pure energy and let's say mathematics and spits out the greatest form of order that we as human beings use in the social realm which is money and it does so in the archetypal way in the maximal possible way of doing so and it does so in an incorruptible manner and so if you take a lot you know if you take those things you could easily you know that could easily have been talking about the regenerative hero as described in maps of meaning and i think it's represented in bitcoin it's instantiated in bitcoin and that's why it's having such a revelatory effect provides a really weird bridge between the objective world in the world of value too doesn't it because all the computation occurs in objective like that's objectively real and that objectively real incorruptible computation produces an unerring signal of value or that's the theory at least okay so let's talk practically for a bit so then we'll return to the central discussion i mean uh elon musk is recently objected to bitcoin on the basis of and maybe this is is this a flaw bitcoin becomes more and more expensive to produce as we proceed through time and the consequence of that is that we do in fact use up more energy or at least that's in one form which is computational energy maybe we gain that back and you know efficiencies within the market itself you could argue that but what do you think about musk's recent decision with regard to bitcoin i would love to jump in on that because i have written about that extensively and i think um what you said is exactly right that bitcoin is a map of value so to speak and what's so interesting about bitcoin is that bitcoin is both the map and the territory and as i've said before in the informational realm we cannot we cannot link usually like we cannot link the map to the territory you cannot do it like if if you have something in the real world writing something down about it you will always have to trust the person that wrote it down and what's so ingenious in in the world of bitcoin is bitcoin uses the only thing you can do with information which is to transform it to anchor it to the real world so this is what proof of work does that's what the ex the energy expenditure is for for and the energy is used for various things so it's it's used to secure the system it's used to distribute new coins it's used to make sure that the history becomes incorruptible so it also secures the past so it does a couple of things it also makes sure like it even decentralizes time itself which sounds kind of weird but it's very hard to keep a decentralized system synchronous because of relativity and other effects so you would have if you wouldn't have something like physical proof of work you would need to trust a central authority in terms of time because the order of things like the order of transactions needs an absolute order of time and all these all these things combined are solved by the the proof of work system that uh satoshi nakamoto introduced and so the end like the energy expenditure the basic question becomes once you realize that the basic question becomes is it worth it and society in general yeah society in general asks this question about all kinds of things like our cars worth it our smartphones worth it is the internet worth it all these things they they take up a lot of energy and bitcoin us argue that bitcoin is definitely worth it for this for the sound money aspect alone musk is determining by fiat that it isn't well instead of letting the market decide it's it's very hard to um decipher uh what what musk meant with his recent comments because uh tesla is still holding uh like a lot of bitcoin on their balance sheet i think it's about 2 billion us dollars worth in bitcoin and they don't intend to sell any and so um you know like it's it's a political game to to um like so let me ask you this if you guys are right just tell me if i'm leaping somewhere i shouldn't be here but what should happen is that whatever energy is expended in the production of bitcoin and the maintenance of the system should be more than recoup by the increased efficiency of every system that use bitcoin as a transactional device and so the net energy there'll be a net energy gain not a net energy loss if you calculated it across the entire system and so it's a mistake just to look at the cost of generating bitcoin in the absence of considering the efficiencies that bitcoin would produce and the same is true for for gold as well you know like it takes a lot of energy to extract gold from the ground and historically society in general uh answered this question in the affirmative yes it's way worth it like it's it's worth to dig this up and um right but there were limits right because once the or becomes insufficiently rich at some point you stop refining it so so there's a there's a limit but according to your logic at least the the limit on the energy expenditure that bitcoin produces should be produced by the market response to bitcoin not by some fiat judgment about whether or not it's like ecologically sustainable because that's just a guess and the best indicator that we have for ecological stability is going to be cumulative free market decisions even though those aren't necessarily very good they're better than anything else we could possibly generate rationally and just to clarify one point and then i'll let robert dig into this bitcoin like doesn't take energy because the production of bitcoin takes energy the production of bitcoin it's an emission schedule so it's constant we know when the last bitcoin will be mined it's it's going to be around in 2140 and it doesn't matter how much energy you expend it won't be it won't go quicker it won't go slower so if you if you dig harder for it it will be harder to find and if you stop digging for it it will get easier to find so that's the the genius invention of the difficulty adjustment so there is no one-to-one link of bitcoin production and energy expanded the and the the energy is used for different things for its security for example and uh robert i think you you want to say a few things yeah yeah i'll try to dovetail and tie some things together so the general tenet here is there is no value in money without sacrifice we there has to be an energy expenditure to secure the supply of money or the network of money that's what ensures against its corruption basically and if if we zoom out it wouldn't cost anything that's right and someone would just arbitrarily suck value out of it by printing it right that's what the central bank is designed to do so if we zoom out a little further we could say the entire purpose of the world economy is to increase collective energy efficiency that's wow that's why we are trading and specializing that's what profits are actually right that's an indication that we have free energy provided we satisfy to want more efficiently and that that rewarded profits of the entrepreneur that then invites more competition more production etc etc so back to john's point the entrepreneur this is the the individual element that courageously faces the chaos of nature right with his skin in the game his his own capital plans etc um trying to convert it into good and useful order the entrepreneur is the living hero myth and that's what the free market honors it it honors the sacrifices that entrepreneurs go out into the world and make for us whereas something like uh bureaucracy is antithetical to that so to get back to your your point about why central banking how did we allow it to happen i boil it down to this is that even the entrepreneur he's pursuing something for nothing he's trying to find a way to satisfy wants more cheaply more efficiently to enrich himself and to enrich others that axis you talk about between chaos and order good and evil right we're all pursuing something for nothing but there's a point where you can cross that axis into the domain of evil where it's intentionally harmful to others to to benefit ourselves i think that's what central banking has has done right it's the entrepreneur wants something for nothing by figuring out how to provide a good or service but so does the central bank but it's it's crossed that divide to where it's actually economically harming others to give its shareholders its private shareholders a perpetual economic free lunch it has no sacrifice in the money creation process it pays a dividend to undisclosed shareholders it it's a parasite on the productive economy effectively and i would say that no one is better than their incentives right it's not like how did we let this happen it's like there was just an attack vector on gold there's technological shortcomings of gold that allowed it to be corrupted that's how we got the central bank built on top of gold so i think by introducing bitcoin a money that's really hard to steal in terms of inflation or confiscation it it pushes us to be more hardworking as a society because that is the only profitable strategy we become entrepreneurial whereas if money is easy to steal like it is under the central bank model via inflation we slide towards kleptocracy right and that's what you see even elon he's very close to the fiat i like the wii technology a lot better you know because because it does you make a case there you make a case for a kind of technological inadequacy is that as a species we haven't been able to generate a sufficiently incorruptable language of value and that has produced all sorts of negative consequences some of which you're outlining it's a problem that we all have okay so practically speaking guys bitcoin it's not easy to spend it's not you can't go into a store and spend it like it doesn't have that portability that you described robert as a cardinal element of a necessary currency and it isn't obvious to me that it's been rapidly moving in that direction but that may be a mere consequence of my ignorance um or or my time scale maybe it'll do happen in 10 years and that's virtually instant from a historical perspective i mean how do you think do you think bitcoin can leap the gap between its what would you say somewhat story yeah yeah yes that's right exactly can i just hop in real quick on the last point before we answer this and then we'll get to it but jordan you mentioned um you know is this energy expenditure and the environmental issues around bitcoin is it worthwhile right and as you said the market is the best thing to determine whether something is worthwhile or not i tend to think of our impact on the planet not as a planet in isolation but but as in human flourishing i mean isn't that what we should be looking at when we talk about the environment not just is the natural world harmed in some way but is our way otherwise we're just talking about maximizing someone's ideological perception exactly this is what the environment should be right so i think our question should be what is basically the ratio between the consumption of resources and the human flourishing that it nets and i think that money because it's the thing that allows you to determine the relative worthwhile of ever worthwhileness of everything else it means that there is nothing more important than that object so whatever the free market selects as the as the money the resources used to instantiate that to perpetuate it are definitionally worthwhile because it permits the the relative valuation of everything else downstream of it i just wanted to get that piece out yeah yeah fair point a fair point if i might jump in in terms of like you can't go to the corner shop and spend your bitcoin i i would say you know that's a fair criticism but that was true 20 years ago for e-commerce and uh other technologies so it it happens gradually then suddenly like that was the same criticism was like what what am i gonna do with a smartphone what am i gonna do with the internet election it doesn't work yet you know yeah and electricity a lot of bitcoins uh or some bitcoins like to use this metaphor because bitcoin is also a network and electricity is also network so you have network effects and they they um take a while to to grow but bitcoin is very usable already and there are a lot of people already living on a bitcoin standard so they're earning bitcoin they're spending bitcoin they're using bitcoin day-to-day currently because we are still in this early adoption phase and bitcoin is an exponential technology built up on other exponential technologies so it it lives on the internet and it uses like smartphones and other devices that are exponential in nature to to propagate itself then it's it will just take a while until it is ubiquitous but i think also it is unstoppable just like the internet was you know the internet dematerialized all kinds of things and it just took a little bit to play out and netflix wasn't possible from day one and video zoom calls that we are having right now weren't possible from day one and very similarly bitcoin is evolving and uh building itself up in layers and currently its main use is as a censorship resistant money if you are not allowed to have a bank account for whatever reason bitcoin serves you very well and if you if you want to have a long-term store of value bitcoin is an excellent choice of storage value as well and just look at at the data like historically year over year bitcoin compared to the us dollar gained 200 so if you put some money in bitcoin if you have done that in the past you you are better off than having money on the bank account or under your mattress because of the inflationary nature of fiat currencies that we discussed and i think it will just it will just continue to evolve just like the internet did and people will find it useful for various different reasons and now you regard it as unstoppable and so on what basis do you make that claim why do you believe that bitcoin is pure information it is pure information and also the system that is running it like the the asset itself is pure information i can store 12 words in my head and i have bitcoin in my head literally so it is very useful in that regard that's what makes it that what makes it virtually um resistant to to um yeah nobody can take it away from you like if you secure it properly bitcoin has certain properties that allows you to um make sure that you and only you can spend the bitcoin and on the system side of things the bitcoin network itself it's just computer code and so it's just information and we as a society are very good at making sure that um important information information that various people regard as important survives so we we often like to compare bitcoin to other informational texts just like the bible for example that outlast empires because it is it is very hard to destroy pure information if it is distributed well enough and the whole reason for the bitcoin system to work in a that complicated manner that it does is because it maximizes decentralization it maximizes censorship resistance the whole idea of the bitcoin system is to build something that they can't stop and it doesn't matter who they are so it's it's to build a system that we as humanity can't stop exactly right right to build a system that we can't well so that's well you know that's kind of an interesting conundrum there too you you're going to ask yourself there's no shortage of of um dire science fiction predictions about the buildings of systems that we can't even stop downsides to bitcoin well how about the facilitation of criminal activity underground criminal activity for example um and like if you guys put your heads together and you had to critique bitcoin as a social danger what would you say oh there's the there's definitely the criminal element which seems immediately relevant i would say it's it's the same as with every powerful tool like a chef's knife is a very dangerous weapon but you can also prepare beautiful meals with it and we have to kind of make sure to wield these powerful tools directly but it's also kind of um you know like the genie is out of the bottle we kind of have to just like with the internet you know like the the internet and every other technology before it can it's just a tool it can be used for good and bad and there's plenty of crime facilitated online as well and you know like i don't even want to go into bank robberies and cars that were early adopted by bank robbers so that they can run away faster so i think that would be my answer to that question and george just very quickly on that one you know in your uh writing and such you detail how the religious traditions particularly christianity in our case have informed the legal system and one of the very special ways that it's done so is that it sanctifies the sovereignty of the individual even if that individual is is has obviously committed a crime they are given the right of due process they are presumed innocent until proven guilty and this is a technology that fundamentally sanctifies the sovereignty of every individual and what they choose to do with that sovereignty is their choice yes you're also making a case all of you that the very act of bitcoin sanctifying the sovereignty of the individual is actually tilting individuals towards doing something good rather than something bad that there is that it's not just neutral as gigi was was was laying it out that there's an intrinsic ethic to bitcoin that is more likely to tilt it in a positive direction which would be a more what would you say a more powerful rejoinder to the bitcoin equals criminality uh criticism so the question is is that see that's what i'm trying to wrestle with here is okay so let's accept your proposition that bitcoin is an incorruptible currency and that seems fair enough i mean i i can't come up with an obvious rejoinder to that and then so that means that we have an incorruptible language of value that enables us to make better decisions well we do use money to make decisions i mean sometimes look sometimes when i'm trying to decide whether i'll do one thing or another i'll do the thing that makes more money because i can't decide any other way right it's an obvious way of picking one thing over another when they're relatively commensurate other people seem to value it more because they'll pay more for it so it's actually helpful as a cognitive it's a helpful cognitive tool pricing obviously because it simplifies decision making to a tremendous degree so it's integrally involved with decision making you could make the case that in an economy or in a market that's properly constituted and structured structured i.e people's expression of their values is not corrupted that you following that signal of something being more financially rewarding is moving toward the good because the good news is so that's really what's at the bottom of this as far as i was concerned that's what got me so intrigued by what you were thinking because that's a re that's an unbelievably radical claim and it does right because not your baby is corrupted right you're basically saying that that you can you could rely on an incorruptible currency as an unerring signal of value so you're doing all your computation externally you know in this new book i wrote beyond order i made the case that a lot of our sanity is distributed like we tend to think of ourselves as organized within that's part of the psychoanalytic tradition the psychological tradition for that matter we sort of keep ourselves sane if our psyches are well structured but a lot of the way we stay sane is by interacting with other people and the signals they send us and that we respond to keep us sane and you can see we're all going off in all sorts of weird conspiratorial directions as a consequence of being locked down under covid for so long because everybody's brains are we haven't been subjected to enough social correction for a while because we're isolated and we all go kind of off the rails as a consequence so if the if the value language is incorruptable then you can externalize your your cognition and you can rely on the market almost completely to make decisions for you so you'd buy the cheapest car for example all things all other things being equal because the the calculation would have already been done for you i mean there's going to be a bit of individual idiosyncrasy but fundamentally the greatest reward would be climbing the value hierarchy of the market in aggregate and then the question becomes what is at the top of the value hierarchy of the market of the collectivity of all people and so then in my opinion yes that allows you to outsource some of your cognitive load and and determine where you should deploy your resources more easily but i think that also allows us to contend with what is and if we can do that then i think we can solve our problems more easily and of course the market is is a massive component of identifying those things and i think it empowers us to say which is a huge part of your message is when we see things out in the world that we don't like or agree with our action is what changes those things our contribution to that market to nudge or shift the matrix of value hierarchies in whatever way is how we affect the is the best way we can affect change well we do affect change because we buy things and then there's more of them i mean we do make we do have that impact every time we make a purchasing decision so that and part of this i would just add that so sovereignty itself it's the generative source of sovereignty it is the logos right so as you've described in your your work we we first had thought i guess you could say then we had action then we developed speech to describe our actions and that became embedded in something like the bible we describe our moral development across time and then money we'd say money is the tech layer on top of that it is the natural extension of speech and action that allows us to as a mode of self-sovereign expression so when we uh and that's rooted in the logos the logos defined as the word or ratio in greek prices are exchange ratios denominated in money for again outsourcing this cognitive load to the market it's the same value yeah prices in words like the uh you could say prices are speech right our money is speech expressed through prices and when we violate that when we have an institution which also we create institutions to do the same thing we want an institution so we don't have to think about the important civilizational operation we can just rely on the institutional practice so we don't need to think about it when we corrupt that institution tries to corrupt words or prices as communism did in the 20th century or central banking does to prices today it destroys the generative principle of order in the world which is individual sovereignty so that's what bitcoin is it's just a tool that maximizes the freedom and the sovereignty of the individual empowering them to be entrepreneurial and then usher in a more wealthy and abundant world as a result and maybe if i go ahead if i tag on to that i think you in your work you came to the conclusion that free speech is paramount but it's also dangerous but it is good and we would we would be saying that bitcoin is free speech money and along the same lines it is very powerful and it can be dangerous but it is also good so that the net benefit outweighs everything else all right that is a great place to end guys that's a nice natural play stand gigi john richard robert thank you very much that i can't believe that our time is over that flew by madly and that's exactly what i was hoping it would do so it was a pleasure talking to you guys um we'll do this again hey and uh i really appreciate you taking the time to speak with me and i hope everybody who's listening or watching found this engaging and useful and i'll keep reading what you're doing and watching what you're doing and um we'll see how all this transpires [Music] you

Channel: Jordan B Peterson

Views: 438,257

Rating: 4.9245348 out of 5

Keywords: bitcoin, Jordan Peterson, Jordan B Peterson, psychology, psychoanalysis, Jung, existentialism, bitcoin live, bitcoin news, bitcoin news today, bitcoin explained, bitcoin today, blockchain, crypto, cryptocurrency, The money today show, bitcoin vs gold, Bitcoin cash

Id: iVym9wtopqs

Length: 89min 27sec (5367 seconds)

Published: Mon Aug 09 2021

Reddit Comments

[u/Warbane]

He recorded an episode in May with Bob Murphy that should be out soon. His backlog is deep.

[u/EastonAudleye]

Smart man, expected nothing less from him.

[u/Austro-Punk]

Link to video in title

[u/bigdata111]

Awesome! Been waiting on this!