The Immaculate Conception: Bitcoin vs Fiat Standard | Dr. Saifedean Ammous | The JBP Podcast S4: E58

so bitcoin only has users it doesn't have any admins there's nobody with a master key and um we've you know this this is kind of the um simple way of thinking about it which is 10 years of this thing operating without anybody being in charge and with everybody who tried to change the consensus parameters the most important parameters of the network everybody who tried to change these ended up basically failing and bitcoin has maintained its consensus parameters to the point where you could run it according to the same code that was available in 2009 and you could still make it interoperable with the current chain and that's that's something that is unique about bitcoin which is that it is the coin that you know i like to call it the immaculate conception somebody uh made these coins anybody could have mined the coins from the first day you know they announced the currency and they said i'm going to start running it on this day and anybody could have joined and since then everybody who got bitcoin got bitcoin at the market price or because they mined it and expended resources which roughly cost them close to what the market price was so there are no insiders in bitcoin [Music] [Applause] [Music] hello everyone i'm pleased today to have with me dr sevadine amus he's an independent economist as well as a leading researcher communicator and educator in the field of bitcoin he obtained his phd at columbia university dr safidine is the author of the bitcoin standard which was published in 2018 and the newly released fiat standard he has advised corporations on bitcoin strategy helping many investors perform their due diligence on bitcoin dr amos teaches courses on the economics of bitcoin and economics in the austrian school tradition in his online learning platform safedean.com and also hosts the bitcoin standard podcast thanks very much for agreeing to talk to me today and i'm looking forward to learning a lot about things i know very little about today so um tell us maybe to begin with about your books let's start with the bitcoin standard and and then move to the fiat standard so the bitcoin standard yeah well first of all thank you very much for having me on it's a true pleasure to be talking to you um i published the bitcoin standard in 2018 and um it was a book that tried to explain the economics of bitcoin why bitcoin functions why it functions the way it does and what are the um implications that you would expect from the continued growth of bitcoin uh in the future and so um i analyzed it from the perspective of the austrian school relying on the work of economists like karl menger and ludwig von mises and marty rothbard and joe salerno and friedrich hayek and i think the key insight that i well there were several key insights but one of the most important ones in the book is that um bitcoin is the hardest money that has ever been invented because um we've essentially thrown away the the algorithm for making bitcoin work has been set at uh producing a certain number of bitcoin over time that's going to end at 21 million and there's no way of making more bitcoins and i think after 12 years of bitcoin operating we can pretty confidently say there's not going to be more than 21 million bitcoin and so that makes bitcoin truly unique as a monetary asset because it is the hardest monetary asset that we've ever found um there's no let me ask you a question about that so why is it important that that limit exists and what do you mean by hardest currency compared to other currencies yeah so the hardness here refers to the uh difficulty of making more currency units to add on to the existing supply and i think this is a big deal and essentially the first four chapters of my book focus on explaining why this is such a big deal because if you look historically at money you find that money has been a contest of survival of the hardest people are always looking for the hardest money available and the ones who manage to find the hardest money manage to store their wealth in it successfully whereas the ones who use an easy money will witness their wealth dissipate so people will learn but even if they don't learn you know the market will brutally teach them the lesson by discounting and reducing the wealth of the people who put in the easy money so the end result is that more and more wealth will be concentrated in the harder money and that's why historically when societies that had hard their money came into contact with societies that had easier money they the ones with the hard money were able to essentially buy up a lot of the resources of the easy money societies because they could continue to make more of their money and therefore devalue the money and increase the supply of it and there are many examples in my book about this seashells and glass beads and limestones all were used as money when industry made them scarce in certain times and places but then when modern technology came and allowed for an increase in their supply their value was declining and then in the 19th century we see this happen between gold and silver too the price of gold and silver i used to oscillate around 15 ounces of silver per 1 ounce of gold and in 150 years it's now or somewhere around 100 it's gotten to around 120 recently so the price of silver has been declining next to gold and i think that can be explained by the fact that gold is harder the supply of silver is being increased at a faster rate and there was utility in the use of silver when money was physical but then with the creation of essentially um financial instruments that were backed by gold you could use silver you could use gold payments for small amounts of payments as well as large amounts of payments so that kind of obsoleted the role of silver and so everybody went with the harder money and then the harder money appreciated and the easier money continued to lose its monetary status okay so let me let me see if i if i've got this straight so money is an abstract store of value and you always want it to represent value as such so something like the exchange of labor or the exchange of efficiency something like that and you can correct me if i'm wrong there you have to use something to represent that abstraction and the problem with that is that there will be people who have control over the representation rather than contributing to the value and those could be politicians who could print money or they could be people who well who find silver or who find gold or who mine it and so forth so anything that can be produced that's a representation is subject to devaluation if the production becomes more efficient and anything that's producible like a paper money can be uh toyed with by those who have control over its distribution and so your argument essentially and the bitcoin argument in general is well here's something that we will never get more of no matter what we do so i'd like to know why i should believe that and the next thing i'd like to know about that maybe is well why why bitcoin and not 200 alternative cryptocurrencies like so bitcoin can't be produced but crypto currencies can be and so why isn't that an indication of the softness of cryptocurrency bitcoin included yeah well these are great questions so i think um initially yeah you're absolutely spot on um it's it's exactly that that whatever gets chosen is money it holds value because it has value on the market but as soon as it starts getting chosen as money it gets into what i call the easy money trap which is the people who can make more of it will try and make more of it people will find a way and they will make more of it and so the things that have ended up being used as money were always the thing that resisted that the most things that are the hardest and so gold did an excellent job with that because gold's chemistry naturally gives it that property because gold is indestructible so because we've been accumulating gold production over thousands of years no matter how much gold we produce this year it's still going to be a tiny fraction of all of the stuff that we've accumulated over the last 5 000 years and so every year the gold supply increases by around one and a half percent and that's why i beat everything out so the hardest thing ends up winning you know whether people consciously realize that that is the case or just because of the realities of supply and demand every year we're making five percent or 20 or 30 percent more silver and maybe 100 more copper and larger quantities of all other commodities on the market but we're only making one and a half or two percent gold so over time gold holds on to its value and over time that ends up being the best store of value so um gold resisted that and then gold failed for issues we could talk about when we talk about the fiat standard but then bitcoin offers us this a possibility again which is that nobody can uh break this uh algorithm and i must say this is really the um the the reasonable skepticism about bitcoin is that yeah well you know it's just a line of code and then anybody can change it it's a line of code you know we can change the lines of code all the time somebody can get under the hood and change the code and it takes a lot of time to be able to understand why this is not exactly the case and i try and make that case in my book extensively in the latter chapters of the book um but if i were to summarize it i would say this with bitcoin what we had was that the um the the person who created the quote he put it out there he was anonymous he uh worked on it for about a year or two and then he disappeared and uh that was it there was nobody in charge since then it's now been more than 10 years that he's been disappeared and there's not been anybody in charge of the project and what we've only had are users so bitcoin only has users it doesn't have any admins there's nobody with a master key and um we've you know this this is kind of the um simple way of thinking about it which is 10 years of this thing operating without anybody being in charge and with everybody who tried to change the consensus parameters the most important parameters of the network everybody who tried to change these ended up basically failing and bitcoin has maintained its consensus parameters to the point where you could run it according to the same code that was available in 2009 and you could still make it interoperable with the current chain and that's that's something that is unique about bitcoin which is that it is the coin that you know i like to call it the immaculate conception somebody uh made these coins anybody could have mined the coins from the first day you know they announced the currency and they said i'm going to start running it on this uh day and anybody could have joined and since then everybody who got bitcoin got bitcoin at the market price or because they mined it and expended resources which roughly cost them close to what the market price was so there are no insiders in bitcoin and bitcoin has operated this way for 12 years now and um this is kind of the sociological explanations for it now to get more technical in terms of the explanations basically bitcoin is a distributed network and so anybody can run the code on their own computer and the network functions according to the consensus parameters that everybody agrees upon okay so i i don't know what those are the consensus parameters can you tell me what those are what does that mean basically the the main and most important rules according to which the network runs from the beginning and one of them perhaps the most important constitution yes it's like the constitution and perhaps the most important one is the number of coins that are generated so we have a very strict and clear schedule of how many coins are going to be produced every day essentially in perpetuity and um if you abide by these consensus rules then your computer can be in sync with the rest of the network and you're in consensus with the network and you can and you can buy and sell coins and you can transact coins on the network but if you try and break those consensus parameters you leave the coin so the miracle of bitcoin in a sense is that it has managed to maintain these important consensus parameters for 12 years now and it continues to get increasingly more ossified every day bitcoin is the most conservative thing in human history probably there's not going to be it just continues to get harder and harder to change the constitution of bitcoin and nobody's been able to do it in 12 years so that's kind of the um superficial or broad picture explanation of those things but you could also get into the software itself you know it's a distributed network so everybody needs to be in consensus with the network and then if you end up breaking the rules if you end up trying to change the rules which a lot of people have tried to do all that you will do is that you will end up with another bitcoin that is out there competing on the market with the original bitcoin but you've got a lot less liquidity and you've got a lot less ability to compete and we've seen many people try and do that and all that has happened is that their coins have you know continued to change their consensus parameters because once you break the you know once you break your duck once then it just becomes much easier to do it and they devolved into civil strife between participants on the network and of course they lost economic value and the value of the network has essentially dissipated close to zero so uh bitcoin continues to get stronger because it continues to demonstrate that it can do those few very simple technological tasks and it can do them reliably and it can do them according to the same rules that it has been doing them for 12 years that's kind of the value proposition it's immutable it's decentralized and the money supply is fixed so that's kind of a big deal if you put all of these all together right and so it's hard for anyone to make a bitcoin substitute that can catch up to it because it's established a kind of primacy given its track history of reliability and its widespread distribution that's part of the argument for its primacy yes but i think it's more than that it's not just you know coca-cola and pepsi catching up to one another or mcdonald's and burger king there is a fundamental issue here which is that what you would want the most in this kind of digital currency because after all this is all numbers and ones and zeros and programmers can change it and so if your programmers can change the consensus parameters of the network which basically all the other digital currencies can do at will you know the other digital currencies they have these hard forks which change the consensus parameters quite frequently and particularly the successful ones because the way that you know they managed to get successful was essentially through active management and so they're more like companies rather than uh private protocols and the the key thing is as you said there is a first mover advantage but there's also the problem of the immaculate conception you know if you make a new bitcoin that's going to start from scratch um you break consensus parameters or you start by imposing new consensus parameters you're already you know not starting with that immaculate conception you're already starting with the idea that there's somebody in charge and so there's now it's not 200 coins there's about 10 000 coins and if you've heard about any of them other than bitcoin it's because there's a small group of people that have been behind them and so uh that as far as i'm concerned makes it um highly unlikely that they would have a monetary role because at the end of the day you know what you appreciate about bitcoin what makes me pay attention to bitcoin is that it is neutral money that nobody can control so you can see two banks in two different countries um use bitcoin because that means they don't need to resort to their own legal system and their own central banks and their own regulators in order to carry out this transaction because bitcoin is just neutral they know you know you you it's it's like the an engine you know you click the right buttons and then the right smoke comes out and it does the right uh transaction that you want okay so i'm going to recapitulate that uh for a moment so because there's something in there too that's that's quite difficult to grasp quite difficult to believe apart from the fact that the the technical aspects are rather impenetrable for an outsider um this the way bitcoin came about seems it seems like a story that's virtually impossible to believe you you can't you can't you couldn't make it up right so this un known engineer satoshi anonymous created this came up with this idea that no one else had ever had implemented it online anonymized it and then vanished essentially without a trace i mean how much do people know about him are are we sure he's who invented it and what the hell was he up to and why did this happen and why should an outsider believe any of this because it does seem like the plot of a bad science fiction novel the i i will confess that i i did used to think about this in similar terms but i'll say this you know you use the wheel every day but you don't know who invented the wheel and uh we use a lot of things every day that uh you you don't use them because you trust the guy who made them you use them because they have a proven track record you know you've spent your life seeing wheels working and so you're willing to trust a wheel next time you get into a car so um i think you know that's ultimately what um in a sense it's kind of bad press for bitcoin but like a lot of things about bitcoin it actually ends up being illustrating its strength yes this thing has a story that you know a pr person would tell you just don't bother you know start doing something else with your life rather than try and sell this thing and it doesn't need anybody to sell it that's kind of the point it doesn't have a story it doesn't have a pr person and the fact that it has this kind of ugly story where this person just came in and then disappeared and who knows what happened nobody really knows you know maybe he died maybe he um has other things to keep him busy um maybe he's incapacitated in some way but ultimately it doesn't matter because even if he were to come back today he has no ability to control the network any more than you and i can control it you know he can control the code that he runs on his computer but at this point the project has worked 10 years without him so there's no reason why anybody in bitcoin is going to defer to his judgment um if he were to come back but besides this you know i think the the key point is that it works regardless of whether this person is part of it or not okay so i'm fair enough i i understand that so advantages of bitcoin you contrasted oh yeah a couple of questions advantages of bitcoin over fiat currency and both and that needs to be defined fiat currency and then i i'm also curious as an outsider you're an advocate i suppose of the austrian school of economics and there are a variety of economic schools and maybe you could briefly for everyone who's listening outline the competing schools and what the different propositions are and why there are competing schools and why you chose the austrian school okay um i'll uh i'll say this i think the main the main split is between the austrians and everybody else as far as i'm concerned when it comes to the main most important questions because the austrians come at the question from a different starting point which is that value is subjective economic value is subjective and that then leads to a whole different intellectual path with different methodologies and different conclusions from what you get from essentially everybody within the mainstream and when i say the mainstream you know that includes um neoclassical economists um chicago school economist to some extent keynesian economists and all other different players and even marxist economists because on the main and big questions i think the austrians stand on a completely different ground which is value is subjective so therefore um economic calculation is something that is done at an individual level and it is something that cannot be done objectively by a centralized authority um which is the kind of physics envy that has plagued mainstream economics throughout the 20th century so this leads to a difference in methodology leads to a difference in conclusions which is if once you understand that value is subjective you realize the best person who's able to achieve the important values that matter to them is the person themselves and so you you're more likely to be sympathetic to ideas of that give individuals more autonomy over their own life in economic terms whereas from the other schools it's a question of what is the optimum policy and what kind of policy should um government be using so you know the entire the questioning of the entire premise of the need for economic policy and for the need of economic management by the government is one important difference so if you're if you're working within the parameters of the austrian economic school does that tilt you so that tilts you more towards appreciation of non-centrally controlled distributed networks and and and the emphasis on the individual actor that's that's yes and to the mainstream economist this is you know uh irredeemably ideological and uh unscientific but you know to the australian what's the rationale for that though because it seems precisely the opposite i mean if you're if the because it seems to me but that that's more grounded in a kind of humility there's no way of of determining once and for all what the best thing is for the most people so what we should try to do is establish um institutions that distribute decision making in as what would in is an uncontrolled manner as possible i suppose so so that's like a rat in some sense that's is that a radically free market approach that is applied to all sorts of institutions and and the fundamental issue there is the decentralization of decision-making power absolutely and this is what you know from the mainstream perspective appears to be um ridiculous because in their mind you know the job of the economist is to figure out how the government can fix the economy you know get rid of unemployment and eliminate uh wage disparities and get rid of inequality and all these other uh buzzwords that appear to be you know profound economic scientific thinking when really it's just politics masquerading as um science um so and then so how would a mainstream economist re react to that kind of statement if you were playing devil's advocate to to help me understand how they would criticize what what they'd say is uh i think uh what they'd say is the austrian school made important contributions up until the first world war to marginal analysis but then the field advanced mathematically you know with the improvement in mathematical techniques that happened around the world and with the advancement of computers there became so much more room for the application of mathematical and quantitative methods into economics and the austrian school failed to keep up with that and so they're still stuck in the past writing essays shouting at the clouds not making much sense whereas you know the mainstream has moved on to this scientific management which is you know once you scratch under the surface you realize there's very few differences between uh modern macroeconomist scientific management and um socialist economists and soviet economists and their conception of central planning it's uh in fact you know one interesting anecdote paul samuelson literally wrote the textbook on economics in post-world war ii america and the world and his uh principles of economics textbook which first came out in the 40s or 50s i don't remember when was the first edition and it continued to come out until his death about 10 15 years ago up until the 1989 edition the book had continuously when discussing the soviet economy the book had continuously said the soviet economy will likely outperform the u.s economy and it will overtake the us economy within the next few years and there's a paper that's done that goes through all of these different editions and as samuelson continues to move the goalposts you know they were supposed to overtake the us in 68 but then by the you know 65 edition they're supposed to take the us in 75 now and then new edition comes along and i don't remember the exact dates but you know they kept on kicking the cam downward down the road while continuously you know not challenging the essential idea which is that central planning of the economy works and the soviet union is going to do a better job than the u.s but their defense against central planning of the economy is that it flies in the face of democratic control of society and we wouldn't want to infringe on people's freedoms so for mainstream economists the problem with soviet economic planning was that it necessitated you know breaking a few eggs and putting a few million people in gulags and that's why we don't want it but it would work and it would give us more gdp and so this continued to be published in paul samuelson's textbooks up until 1989 or 1990 or something like that you know students were studying this in class as the soviet union was collapsing and of course you know this is fiat academia fiat world um the next year they just take that section out and they continue to print the textbooks that continue to teach kids in universities around the world today that you know this is how economics works economics is about simply were you were you trained at colombia as a classical economist yeah i took the foundational course for economics at columbia yeah so my phd was in sustainable development it wasn't entirely economics but we took the foundational courses of economics basically so why did you become a deviant from that let's say what what what was your intellectual journey and i'm i'm very curious about that uh well um so my undergraduate background was in mechanical engineering of all things and in my phd it was in sustainable development and we were supposed to study the issues of you know energy and society and economics and um approaches from multi-disciplinary perspectives so my engineering background and then my new knowledge in economics gave me that kind of what kayak calls the fatal conceit of i'm just going to pick a topic in um in energy economics in en energy and engineering economics and you know study it with the big brains of a columbia phd and then figure out what needs to be done basically and then you know you can maintain these illusions until you actually start digging into the spreadsheets and then you start trying to actually mathematically model the complex world outside and put it on a spreadsheet on your computer and then you start realizing just how absurd these things are you know the yeah well you'd think if you could do that then you could put the stock market on a spreadsheet and run your economic wizardry and gather all the money in the world with your capability to model the economic system and predict and yet no one can do that so so and now let me what one more comment about that i mean i see that danger of that fatal conceit lurking underneath all the discussions of climate change does that seem like a reasonable proposition to you because it's a justification for central planning masquerading as a masquerading as well we we have to save the planet we know what's wrong with it and we know how to fix it and our solutions are going to work and they're not going to produce produce unintended consequences and it's so dire that you need to leave us alone while we do this and we know better than you do exactly and that's that's exactly how i essentially went off the reservation because you know the topic of the course the topic of the phd in the topic of the program was about how you can use this kind of scientific management to solve these big problems like climate change and as i was studying in particular my phd was on the topic of biofuels so you know ethanol and biodiesel which they make from plants which is just an absolutely insane abomination of the humanity it's it's a saying that people do this you know you you grow crops you use up land for a year to grow crops and then to process them and then to turn them into fuel when you can just get fuel straight out of the earth and much cheaper much more and much better quality that doesn't degrade the car and that doesn't destroy the other soil and um as i was studying that i was on the one hand i was struck by the impossible complexity of the question and then on the other hand i was noticing the inescapable uh conclusion that everything that they're trying to do here is just making things worse in fact you know the the idea was that we're going to save the earth from climate change by replacing fossil fuels with ethanol and biodiesel but the reality was that you were chopping down the amazon and indonesian palm forests and to turn them into um sterile farming land the midwest and the mississippi valley or over the u.s was essentially degraded from all of its soil and then the um the fertilizer that is just running off from the mississippi is causing all these enormous damage to the gulf of mexico it's it's it's it's insane how much damage is being done from this attempt to sort of centrally plan things from above and hayek has a saying where he says you know we used to suffer from problems we now suffer from solutions and this so let me ask you about that like look i've been struck by exactly this problem right this is the problem of unintended consequences and the irreducible complexity of things so like we can talk about climate change the problem of climate change but there isn't those words are unbelievably deceiving because there isn't a problem of climate change there's and fifty thousand problems of climate change and every single one of those is an unbelievably difficult problem and the solutions to those problems could well exist in terrible contradiction to one another and so but you get deluded you think well climate change well i can understand that the climate that's easy to say i must be able to conceptualize that of course you can't and then and then it hides the fact that it hides this under structure of complexity now you got a glimpse of that and that instilled in you this resistance to this fatal conceit it instilled in you some humility why doesn't that happen to other people and why did it happen to you um that's a good question um i don't know um i think uh i don't know different people they react in different ways i just um i have an insatiable curiosity to continue to try and understand this question whereas what i needed to do was to just sit down and run a bunch of equations on a spreadsheet and say that this is the model and you know as long as the thing was internally consistent then it gets the uh pass and then you get the degree maybe it was your training as an engineer yes i think actually that is a very good point yeah yeah because engineers they really like yeah engineers really like to build things that work exactly and you can't hide the fact like you have to trace the whole thing and how it works and you try and put you you have to conceptualize it in your brain it has to make sense you know think of the rube goldberg machine whatever it is you have to follow it through and then you need to figure out where it breaks and so thinking of trying to approach uh you know something as complex as the global energy market as an engineer approaches something like an engine you know a single engine exactly that's the faithful conceit because the engine is a product of human design it's a product of human constructive design somebody sat there with a pen and paper or computer program and designed this engine and then they iterated on it but things that are societal institutions are the products of human action and not human design you know we don't nobody sat down and designed the global energy market everybody out there is helping shape the global energy market every day with their consumption decisions and with their production decisions and everybody's kind of reacting to everybody else's actions in this kind of global dance that we all do together that ends up you know rewarding the better ideas and punishing the worst ideas and nobody knows how it's going to evolve that's ultimately you know mises critique of socialism is primarily about property rights it's the issue of calculation without property rights it's impossible for people who don't own resources and who don't have an opportunity cost uh to the use of resources to accurately and rationally estimate what is the best use of those resources it has to be real you know mises has a beautiful quote he says you know capital is not a play it's not play pretend or something along those lines it's not a game where you can just let's pretend that this is my capital i'm going to allocate no it it has to be worth what it actually is worth to you individually so that the decision has the weight yes the full weight of the reward and the full cost you have to feel it in order to be able to understand the decision if you don't own it then you don't understand the costs and you don't understand and you won't can't make that decision so that's one hand it's the property rights and calculation critique and then on the other hand there's the entrepreneurship critique which is even if we manage to let's say take over a capitalist functioning society and turn it into social society today it has no possibility for accommodating change it has no possibility for making change happen because it has no mechanism for consumers to impose their preferences for the quality and quantity of goods that they want on the producers right so there's no there's no way of gathering information about the state of the market absolutely yeah and about the future and this is the crucial role of the entrepreneur because the entrepreneurs plays a central role in austrian economics but not in mainstream economics because in austrian economics you know the entrepreneur is the one who foresees possibilities and most entrepreneurs are likely wrong perhaps maybe most or maybe close to most they're wrong about what they foresee in the world but some of them are the ones who build the truth right well and there's a there's a darwinian issue there too because look part of the rationale for evolution for the for the uh what would you say for understanding why the idea of evolution is necessarily true in some sense is exactly the problem of the complexity of the future it's unpredictable in principle you're not going to get smart enough to predict it that's never going to happen it maybe that would partly be because if you built a machine that was smart enough to predict it the existence of a machine that smart would change the way that the future would manifest itself in a way that that machine couldn't predict and so the way evolution solves that problem is that it produces it's like there's a million one mosquito gives rise to a million mosquitoes but every mosquito doesn't produce a successful million offspring we'd be like knee deep in mosquitoes in no time hardly any of those mosquitoes live and they've the ones that live vary a little bit from their parents in some unforeseen direction and if you get enough of that production of unforeseen variants then some of those unforeseen variants can match the unforeseeable future and that's how that's exactly how entrepreneurs work is most entrepreneurs fail and then when you look at successful entrepreneurs you see that most of their ideas failed and so what you do is overproduce and cull and that's not the same as logical prediction now there is some role that intelligence plays right because by all things considered you'd hope that more intelligent entrepreneurs you would predict that more intelligent entrepreneurs have a higher probability of success than less intelligent entrepreneurs but it isn't necessary because they're better able to foresee the future you know it might be that they're making better rational decisions of the sort of rational decision that intelligence can make but so it's very interesting to me that you say that the so the entrepreneurs in some sense their function is to keep the system modifying itself to keep up with the transforming present that we call the future that's the role of the entrepreneur and even psychologically that's the case they're high in openness and open people psychologically over produce ideas they're fascinated by ideas and they tend to be they have high verbal fluency they have high fluency in the ability to generate images so for example someone who's creative if you say to someone creative write down as many words as you can that begin with the letter s in three minutes the creative people will on average outperform the uncreative people that's and that's a consequence of trade openness and that's a consequence in part of its association with high levels of g fluid intelligence so it's just speed in some sense and there's also very the other thing that the creative people do is they'll produce more divergent answers how many different uses can you think of for a brick you score that by number of uses generated but then also by the rarity of the use that's specified extra points so to speak are given for that so so the so the way that nature solves the problem of the unpredictability of the future even within human psychological functioning is by over production and culling not by rational prediction yes and um you know one saying i think it's popper who said this but it may be appropriately attributed to him but it is to predict the wheel is to invent the wheel that's i think the issue of prediction like we're to predict the future is to basically try and predict what the future of knowledge is and we're at the limit of our knowledge right now so you know the invention of the wheel was a new thing you had to actually invent it in order to be able to predict it because you didn't even know that it was possible before you uh before it was invented and this is ultimately working something something new is by definition outside of your domain of knowledge it might even be outside the axiomatic structure of your domain of knowledge if it's new enough and so it's unpredictable by definition or it wouldn't be new and it doesn't matter you know the creativity is not uh you know it's not like you can pick the 100 most creative people in the country and then put them in a room and tell them come up with all the creative things uh the whole point is that it's it's a living ecosystem in which the creativity is what makes the new ideas and these like these ideas are tested in the real world you know they either sink or swim in the real world of the market and it's it's it's specifically they're you know sinking or swimming is what determines their success because that's all that matters so you need those people to be out there in every field of life in order to be able to innovate in those fields you can't just isolate and so a system that is built on central planning and this this is one of the critiques that mises has leveled at socialism exactly a century ago in 1922 he wrote his book socialism and until today i don't think there has been a single socialist that has actually illustrated their ability to comprehend this point and still disagree with it like they all just completely ignore it it's not something that anybody they they grapple with his ideas on property rights and they made some attempts to refute him and failed in my opinion but on the entrepreneurship point there's almost complete silence because there's no way that you can square the idea of letting you know every uh every workshop worker have the opportunity to create and innovate something new and try it out because they have their own money and then they start their own shop you know there's no way that you can square that with having a committee that decides all of these workshops that are doing this in this this line of business that all of their capital all their work all of their structure all of their um everything that they do has to be decided by central authority those two things are fundamentally incompatible so we're still walking through the bitcoin standard at least in some sense shall we talk more about the fiat standard the book that you've just released and so let's talk first of all tell everybody what constitutes a fiat currency and contrast that with bitcoin and and and have adder all right so let me just uh conclude with one more thing about bitcoin standard and the austrian school because i think it's a good recap of everything we've discussed so far which is that um you know practically speaking the men where the rubber hits the road in terms of the difference between the austrians and everybody else is in the uh free market conception of money versus the status conception of money this is where you know the two world views are the most divergent because from the mainstream perspective everybody in the mainstream you know the money is the creation of the state and the only question is what is the state's role in the management of money but from the austrian perspective money is a product of the market and the state um not the money is not the invention of the state and the state's meddling in money is actually not just uh not just you know irrational in the sense of it can't succeed for all the reasons that uh socialist central planning cannot succeed it's also at the root of the cause it's also the root cause of the majority of economic problems that all economists are concerned with so once you and i've and i heard your discussion with robert murphy who did a great job explaining the business cycle it's the it's the corruption of money that ultimately leads to the business cycle and up until bitcoin came about this was an interesting um philosophical discussion and economic and academic discussion uh but there was very few there were very few austrian economists and the majority of everybody just went along with what the mainstream thought but the absolutely fascinating thing about bitcoin one of the many fascinating things about bitcoin is that it is a live experiment in this question here we go we have a form of money that is not produced by the state not regulated by the state not controlled by the state and um it's functioning as a form of money and it tests you know it its continued survival refutes the state theory of money and uh perhaps even more deliciously it refutes the inflationist theories of money which all of these other schools are inflationists you know they all argue about how much the money supply should increase and how should the money supply increase and who should be in charge of the money supply increase but none of them has ever questioned the fundamental proposition which is the money supply should not increase does not have to increase and if we so why do they presume that it should increase um i mean intellectually you know the whole field is shaped from the perspective of how should the government manage the money successfully and so there's no way that you as somebody who's getting paid from the increase of the supply there's no you know the overturn window of acceptable answers for you through self-censorship uh more than or intellectual capture is you know how do we increase the money supply but you know if there's no money supply increase you most likely don't get a salary because your job is linked to that printer and essentially i think you know a less charitable interpretation by an austrian economist of a mainstream economist is that they're essentially court jesters for the inflationary central bank so the central banks need an intellectual apparatus that gets on tv and says you know we have to print all this money in order to prevent unemployment from happening and to prevent bad things from happening but really i think you know the bigger story here is the money printing of course is highly lucrative for governments and so of course governments are highly favorable of people who want that so bitcoin is powerful in this regard because a you know economically it's succeeding and intellectually it's succeeding as well i think this is it's a massive challenge to the um mainstream economics establishment their complete inability to explain it or to try and prevent present an um a coherent explanation for why it behaves the way it does or why it grows is absolutely astonishing you know it's been there for 12 years it's worth a trillion dollars right now and the vast majority of university professors will tell you oh it's just a tulip somehow they're convinced that the fact that you know um agricultural product prices went up for a few months in amsterdam in the 17th century somehow invalidates the fact that we have a form of money that travels internationally and is hard and is completely outside the state the state the control of the state it's it it its argument might sound bite almost they haven't even given it much thought because there's not much to say it's argument by dismissive analogy yes which is very common also in the uh climate change discussion as you always notice yeah you see i mean it's not that i i spend a lot of time looking at the climate change literature and and considering solutions for various reasons and i can never stop being more afraid of the solutions than the problem and it's not like i'm not afraid of the problem it's conceivable that human activity is producing global climate change and i think the evidence for that seems to be relatively robust although the economic how economically consequential that will be is subject to tremendous debate because it's prediction out 100 years or 50 years and like good luck with that boys and girls but the solutions terrify me so and uh and in fact i discussed this in the fiat standard okay i use this as an as an uh as an example of how fiat corrupts the planet basically so um in in the bitcoin standard a lot of bitcoin standard was about government money but uh you could always say more because it's just been so enormously important over the last 100 years so in the fiat standard i take the same kind of analytical lens that i used in the bitcoin standard to look at bitcoin which was you know when i started writing that book it was this obscure thing that only a bunch of weirdos on the internet had heard about and i tried to kind of come at the same uh with the same kind of lens at the fiat system and trying to ignore all the hoopla of a century of propaganda and academic work yeah well i you know sorry your discussion already has made me aware of all sorts of axioms of my thought that i didn't know i had so for example i basically just accepted in some sense on faith the idea that money is the government's fundamentally the money i know we all have our money and we own it but it's a state construct that's why each country has its own currency and so one of the functions of the government is to deal with money and the idea that you could abstract that away from the government any government any conceivable government conceivably forever or at least forever as far as we're concerned it's hard to wrap it's hard to wrap my head around how radical an idea that is i i don't know what that would mean if it was actually true and so and i the idea that i mean the arguments that you've presented that suggest that the notion that government control of that the government has valid control over money and maybe that that should be subject in some sense to the democratic process rather than the market process you know it's going to take me a long time to think that through because that really is a radical it's unbelievably radical proposition yes that's kind of why the austrians are kind of ostracized and considered outside the pale on this issue but think about it you know no government declared gold as money gold emerged as money all over the world independently because of its uh because of its properties and then governments had to use gold in their own currencies in order to give their currencies value you know if you wanted your picture on a coin and you wanted that coin to circulate and for people to hold it and appreciate it you had to make that coin out of gold you couldn't just make coins out of um anything and give it to people and when people tried to do that uh hilarity and calamity ensued in uh every case you know we have a long history of what happens when governments debase currency and you know it always happens in the same way they begin by making sound money they they specify the weight and they make it uniform but then they almost always i think although every example in history has ended up with them um basically succumbing to the temptation to increase the supply if it was paper money backed by gold or to what they used to do previously which is uh mix and base metals where yeah wasn't it the case that the the ridges on these edges of coins were there because the coins were shaved by slightly and was that a government was that a state function or were people doing that to coins i'm sorry i just this is just an example of how that solid uh uncorruptable currency can be you know if you get a gold coin you can you can scrape some of the gold off and if you have enough gold coins you can make a nice pile of gold dust and the gold coins still work but you have the gold and so there's various ways of doing that and i read that the ridges on the outside of coins why do they have them they now do you know is that the case or am i just chasing something that's not the case at all do you i i think i've heard stories like that yeah there's so many stories historically of governments finding creative ways of debasing their currencies you know the most common one is oh no some people are making fake currency so give us all of your currency so we can mint it again into a new form so that we can make sure that it's uh right and then you get your currency back and then it has five percent less gold than it used to have that's that was kind of the quantitative easing that they did before and that they take some of that gold for themselves so that that has always that temptation has always been there and bitcoin is essentially the most powerful defensive technology against that it's it's it's an enormous quantum leap forward in the technology of money as as protection of value against predation and against inflation because you know the you you don't have to worry about whether the coin has base metal inside it you can verify everything with bitcoin and um it's it's it's fully auditable everybody can see every single transaction and uh everybody can verify the rules of the network so it's the most powerful technology that we have for money and i think it's it's a natural fit to anybody who's productive and wants to save their value into the future and it's not just a fit for them i think the beautiful thing about it is that it is uh it's a great reward for them it's a great reward for those people to go and um you know save into the future and this is why i think bitcoin is uh uh is is so um transformative to the individual because it um gives you a better way of saving for the future and i think this is something i discuss extensively in the bitcoin standard i think that's uh highly related to the time preference of individuals which is an enormously important topic so historically all throughout human history you know we're always moving to a harder money because we're looking for a better form of money and that culminated by the end of the 19th century with everybody in the world being on the classical gold standard basically the entire planet was on the same currency one money chosen on the market very hard to produce holding on to its value offering anybody in the world the ability to save for their future essentially for free you know you you get paid in the coin you keep the coin safe and then 20 years later that coin is not only held on to its value it's likely appreciated more because in those 20 years we've made more cars more houses more apples more oranges more everything but we haven't made a lot more gold so the gold coins remains valuable and so historically you see this has coincided with a decline in interest rates which from the austrian perspective is a measure of time preference a time preference is what determines interest rate and time preference is the degree of discounting for the future so effectively as long as we're using harder and harder money we are being able to provide for the future better and that's reducing our uncertainty of the future you know now you're you can be fairly confident that the money that you worked for today that you can save and it'll be there for you in five years time when you start thinking more about yourself in five years time and as our technology for money has improved and as our ability to save has improved our time horizon has expanded our time preferences dropped we start thinking more and more about the future that encourages to say encourages us to save more to invest more and then that leads to capital accumulation which leads to the increase in productivity and i think the whole world was basically lowering its time preference until the early 20th century and then in the early 20th century this is kind of the central argument of the fiat standard by switching to an easy money where now you know in the 20th century we moved to government money which has been increasing on average i calculate at something like roughly 14 a year globally so you move from a money supply that's being inflated at one or two percent as the average human being in the world you had that same gold coin now you're stuck with your government's local script that is inflating at on average 14 you know some people have witnessed 200 percent inflation so so that on average so you said worldwide if you just took western democracies into account say relatively stable societies with relatively admirable forms of government what sort of inflation rate are you looking at do you know that yeah i've done the numbers in the fiat standard the lowest averages you'll see are in the us switzerland denmark and sweden and they're about six to seven percent per year over the last 50 60 years so that's really as good as it gets for fiat as a kind of average so you're constantly you know so you need a return of six percent or seven percent just to keep up basically yeah and you know seven percent is is is not nothing seven percent means you basically lose half the value stored in ten years and that's seven percent that's in the good cases there are countries that have had an average of 200 because you know they had years in which the money supply went up tenfold within one year and that that has happened so you think about the examples of people living in hyperinflationary societies and i used to live in lebanon until recently and you see that when the currency collapses you know think about the stories about weimar germany or about any latin american country or lebanon or zimbabwe when you hear about their inflation you know the stories are of people that have been reduced to very very very uh short-term thinking your money you get paid in the beginning of the month your money is going to be worth half of its price by the end of its by the end of the month so you get paid and you run straight to the supermarket i remember i was a kid growing up in brazil and i remember that you know the first day of the month the supermarkets would be overrun and there would be people fighting and things would be crazy because everybody's trying to get things now before everybody else gets their paycheck and buys everything and then bids up the price so your whole time horizon is shortened when your money is losing its value okay so let me let me ask okay let me ask you a question about that then too so one of the problems that the people who are concerned about the environment and about global warming are are trying to solve is they're trying to increase our sense of caring for let's call it the planet the environment right global concern think globally act locally you're supposed to be taking all these other things into account and not consuming like a madman and despoiling the planet but implicit in your argument as far as i can tell is that if you stabilize the currency so it can't be inflated and you make people's time horizon much longer that they're going to be concerned about a far greater variety of things that are distal from them like the environment because they can they're now able to do that instead of having to fight for short-term emergency survival continually exactly exactly that's it that's so the more capital you accumulate the more you can provide for the future the more you can secure the present and start thinking about the future you know the more you care about the future then in some sense or can care about it and and and you know you think about it like the the fisherman who's able to move toward building a fishing boat and a fishing rod you know they're able to now rest assured that any day they just need a small amount of time to go out and catch the fish it's not like the days when they had nothing and they had to try and catch them with their hands every day and so some days you might not be able to even catch anything so now your survival is more secure and so you start thinking more about the future and money is an incredible technology for that for lowering our time preference that's kind of one of my central arguments in the fiat standard that money is the best mechanism we have for moving value to the future because you know you could save a fishing boat and you can save something else but you don't know what's going to happen in the future and you don't know if you want to move away from where you are money itself is enormously important because it's very useful you save some money and then doesn't matter what happens in your town you take the money and you can go away so it protects you against the uncertainty of the future and when that money is compromised your ability to think of the future is massively compromised as well and i think you know the hyperinflationary examples are an extreme example of that but i think the 20th century itself was one global slow train wreck of watching humanity's time preference rise as you know generation after generation of people all over the world witnessed their currency devalued everybody saw it there isn't a single people in the world that have escaped this you know it doesn't matter if you live in western europe or africa or latin america everybody has been screwed by inflation in the 20th century and everybody has a story in their family about somebody who saved up and worked hard and diligently and then one day they woke up and all their money was gone and all the wealth that they worked for was gone everybody has gone through this and it it leaves a mark it leaves a mark it tells you know don't be the sucker who saves for tomorrow because you know you missed out on all you see like in in in weimar germany you think about the people who are punished by that hyperinflation those were people who were productive and who and who had foresight because they put away something for the future it the ants were published punished not the grasshoppers you know and that's a terrible thing to do to a society to take the most creative people who also have the ability to delay gratification and then to just cut them off at the knees for daring to to do both of those things you couldn't do a worse thing to a society in some sense than that to punish people for for for creativity productivity and the capacity to save instead of the pursuit of impulsive pleasure so it is really a catastrophe so it absolutely is and and maybe that's not much improved when it's a slow train wreck rather than a quick one i mean who knows right so um all right yeah i mean the speed has varied but i think um this has been the story of the 20th century and on the flip side of it which is kind of the the two sides of the story that i tell in the fiat standard on the one hand you know you had individual productive people and businesses having their wealth robbed from them continuously throughout the 20th century because it's constantly devaluing and on the other hand you had government bureaucracies being given essentially unlimited financing to do whatever they want because they were connected to the printing press and all that you needed was to just have the right story in the ear of the right person to get the printing press to run for you and so you know not only are you punishing the most productive people in society and the people that are the best at saving for the future and thinking in the future you're also essentially rewarding heavily people who are good at playing politics and uh people who can you know get into government and people who can use government power because you are giving those people unlimited power so naturally you're going to our prime minister our prime minister managed to get a billion dollars into the hands of one of the charities he's associated with yes i've heard of that your prime minister has been an excellent lesson in what happens when seemingly idealist people with beautiful sounding cliches get into power and then have that power foisted upon them and then they they see in a great opportunity to capitalize on that to their own benefit and to their own aggrandizement um you know and all the while justifying it by reference to their their their the moral standards they hold that exceed those of everyone else absolutely absolutely and then you know you think about it first so there's the aspect of the corruption of the fact that you know playing politics pays but then there's the other aspect which to go back to the energy discussion and the food discussion which i discussed in the fiat standard these markets then become heavily regulated and influenced by a government that has an infinite printing press to the point where um that they've been made almost dysfunctional at this point so uh if you think in in terms of energy we've had and and both energy and food you know the the current hysteria that you hear around oh no we're going to boil the oceans uh because we're driving cars or you know we're going to boil the ocean because we're eating cows and cows are farting and you know four and a half billion years of earth was doing fine until the cows started to fart and now the whole earth is going to hell both of these hysterias incidentally have their roots in the inflation of the 1970s it was when the prices of food and energy rose in the 1970s there are all these cranky kooky ideas about you know earth punishing us and there's not enough resources for us to be able to live and we need to limit the global population and we're destroying the earth all that stuff started to come about in the 1970s and it was highly politically um conducive at that point it was likely to be popular because it was providing a very useful alibi to the government when it comes to inflation you know the reason we are witnessing massive increases in the price of oil and food has nothing to do with the fact that your currency is being printed and debased it's because we've reached the natural carrying limits of the earth and we're going to boil the oceans and we're going to destroy the planet and so you know you need to repent by moving away from consuming hydrocarbon energy you know oil and gas and coal and all of those things that made our modern world and the things that are the reason that we have our modern world and modern technology we can't live without them they're 80 percent of energy consumption around the globe and that's not declining in any meaningful sense any time soon unless we want to go back to pre-industrial societies and so you know by fiat we've uh tried to we fought these energy sources for 50 years and subsidize these feel-good essentially pre-industrial unworkable technologies which rely on biomass so biofuels as an example you know you're burning plants like your ancestors 500 years ago had to do in order to survive or wind which again you know your ancestors could use occasionally but it didn't build them it didn't build them apple computers and it didn't build the internet and solar energy which you know also we've always used but again it won't build you a car in order to have all these modern conveniences that we have we need those energies and people in the fiat world are completely dissociated from this reality they almost want it they almost want to overrule thermodynamics by fiat that we just want we want to have the same cars better cars but we don't want them to run on fuels we want them to run on wind and solar and all that and the result of that i think you know when i was doing my phd i saw this for the grift that it was um and i was not interested in it intellectually because you know who cares a bunch of people like al gore are going to become billionaires from this but you know a lot of hucksters get rich in a lot of ways no reason to get worked up but now i think i'm beginning to realize this is actually a serious serious threat to industrialization and civilization itself i mean our planet will witness massive catastrophes and calamities if reduction or if we have a serious reduction in the consumption of these energy sources which you know plants are being decommissioned all over the world based on the idea that we're going to be replacing it with wind and solar and the result is energy prices are rising massively and you know energy is becoming less and less reliable you're witnessing more and more grid failures yeah all right so on to the fiat standard yes so in the fiat standard looking at the uh looking at the way that the fiat money works as um you know from first principles trying to understand how it works i think the the fundamental idea is that in the fiat system the way that you mine a new currency into existence is through lending you when you when your bank makes a new loan they don't take somebody else's money and give it to you they make new money essentially out of thin air and they hand it to you and they put it in your bank account so this i think is a very key insight so we have that walk through that so everyone understands exactly what the banks are doing because that is not something that people know or understand yeah so it's it's not like there's a fixed sum of money that the bank has to deal with where and you know they need to get depositors money and then they need to lend it out to borrowers if you have a lending license if you're a bank you're licensed by your local central bank the mere fact that you have that lending license means that you can issue loans and um essentially create new money and add new money to the money supply and put it in your clients bank account so now obviously they can't just do this limitlessly there are regulations and rules by the central bank that determine how much lending is done and so what are the rules approximately well the rules is you know the person who borrows has to have a good credit history and good credit standing and a good idea good reason for why they want to borrow it but obviously these things are getting less and less strict over time as monetary expansion picks up and political pressure for more and more monetary expansion increases these credits right you saw that with the housing with the housing crash yeah yeah housing is one example but i think you know perhaps the even bigger example is the financial industry which is constantly receiving enormous amounts of new credit from the central bank directly in the form of quantitative easing that's a huge one so you know in in bitcoin we have bitcoin mining which is an extremely uh sophisticated industry in order to produce new bitcoins you know we have about six and a quarter bitcoins produced every 10 minutes and um in order to produce these people expend a lot of resources in order to be able to make them roughly the cost of making a bitcoin fluctuates around the market price of bitcoin but both vary but it's roughly around it with gold the same is true as well you know it's it's costly and expensive to find new gold you have to dig and you have to process it and it's there okay so so so why bother mining it and why not just cap bitcoin where it is now why bother producing more why is that built into the system why 21 million and not just where we are now well 21 million is as good as any number it could have been 500 trillion it could have been five it could have been anything um any number is good enough as long as it's divisible and that's kind of the key insight from the austrians that made me specifically very interested in bitcoin the austrians were the only one who said yeah the quantity of money doesn't matter you could run any economy on any size of the money and then as the um as the economy grows the value of the money increases and that's a great thing that's that's the golden period that's the golden age of the west so it's sort of an it's a sort of an illusion in some sense the cap because well there's 21 million bitcoin let's say but they could be worth anywhere from like two dollars to a million dollars each and because it's it's fractionable right so so there is no in that sense there's no limit to how much money there is even though there's a limit to how many tokens there are exactly there's no limit to the value that the network can carry but there's a limit to the tokens that represent that value so you don't corrupt the tokens of the system in order to make more tokens in order to enrich the insiders you just keep packing more value into it into the tokens okay so why why why are they why was it allowed to be mined at all then so that the distribution of the coins would be a fair distribution so that anybody could enter into the network and secure coins because that you know if if you just made the first 21 million you know who owns them in the first day who's going to be owning the 21 million how are you going to distribute them this is not an easy question and i think you know most people um most people uh wouldn't have thought something like bitcoin to be possible had it not because of this issue you know how are you going to start off an upstart currency and give everybody in the world a new balance so it was to get it going exactly it's so you know it's kind of like just for the first 130 years of bitcoin's history we're going to need to have mining but then bitcoin operates without any more mining right so you have some you need some gold for gold to work and so you need to have a mechanism for mining the gold and so this is some mechanism for producing bitcoin so that there are some bitcoins so it can work and they're distributed across the people who have done the mining and so you already have a bit of an economy there because all those people are vested in it and it's completely open and perfectly competitive anybody in the world can mine anybody can bring their computer onto the network and mine and you know benefit from the mining and it's it rewards only the most uh successful miners introverts only the most economic miners because it has this thing called the difficulty adjustment which is um my favorite part of bitcoin it's it's really the magic glue that holds bitcoin together and i discuss it in the bitcoin standard and in the fiat standard um what happens is that uh you know if more miners try and mine copper or gold or silver you end up with a lot more copper or so gold or silver but with bitcoin the more miners that get into the network you still get the same number of bitcoin as was predetermined earlier but the difference is that you don't get uh but it just gets harder for the individual miners to uh uh get into the network so it's it's more like a sports competition where and there's one trophy and then the more competitors get in the trophy just gets harder to win it doesn't get you don't get more trophies handed out so how how in the world did satoshi figure this out how did he i don't understand how he could conceptualize this it just doesn't make sense to me it's an incredible work of genius when you think about just the the the amount of uh expertise that he had to have in different fields of knowledge to bring this monster together is absolutely astounding yeah well just just the conceptualization to begin with let alone the in the implementation the engineering implementation it's to be fair i mean this it wasn't like he invented this problem it's it's a problem that had been around for many decades people had been trying to build a digital form of money for decades you know since the 1970s and 80s and 90s have been attempts to do something like this and the um you know the different attempts to produce something like this always came up against uh a technical problem called the byzantine generals problem and then satoshi figured out a solution to it through the proof of work system which is absolutely astounding so tell me about that that sounds if we can do that without deviating too much so what is that problem and how did he solve it um well the problem is uh essentially about how to get all the different uh nodes on the network to agree on the same version of what's going to happen together you know how the how do they all agree without having a central command authority that's really the issue so um and why was that the byzantine general's problem you know ashamed to say it but i'm not up very much up on my history i'm not sure where the history of the term comes from okay okay well i won't torture you with that then but but he solved to solve the problem of consensus verification without a central authority exactly and the way to do it was to have this expensive uh ritual called proof-of-work being performed before any of the members of the network proposes a block of transactions to be added onto the record of transactions so bitcoin is um you know it's a record of transactions that exist over tens of thousands of computers and the issue is how are you how do you make sure that people don't put in fake transactions in this record well the way he did it was that anybody anywhere in the world could come in and propose new transactions but in order to have your transactions added you must first solve this problem this mathematical problem the proof-of-work mathematical problem and that's actually expensive to solve you know it takes your computer running for many many hours to be able to try and figure out solution to those things and um you know for it to get lucky once every 10 minutes so you have to spend serious money in order to be able to commit uh to make the claim of the new transactions and so once you know it's like uh if you just allow everybody to present their record of transactions then there's no mechanism of coordinating between everybody whose record do we pick from all those thousands of people but if you put currently you know the reward is about six uh six and a half seven bitcoin so that's about 350 thousand dollars the bitcoin network is giving out 350 000 every 10 minutes you can have them as long as you provide the proof of work solution which roughly costs you around 350 000 more or less so how do we make sure that we can all agree on this uh all the members of the network we don't evaluate any claim for the transactions we only evaluate the claim that has done the work and that has spent the money so why would why would someone make that claim then if it's so difficult what's the advantage to that you get three hundred fifty thousand dollars you get six or seven bitcoins and how is that how is that related that's the mining process that's the mining that is the mining process that is the mine okay good exactly oh i got it that's the mining process exactly so to mine new bitcoins you have to solve that problem so this is why it's portrayed as mining it's like those computers are digging in the ground trying to find the solution of the mathematical problem it costs money to be able to arrive at that solution on average around 350 000 currently at current prices so that's in order to be able to make a claim to get that you know your claim doesn't get looked at unless you've solved the problem and it's very cheap for everybody on the network to see that you have the right solution to the problem but it's very expensive to arrive at that solution so the solution is like this very difficult key to find but once you've found it it's trivial to verify that this is the right key because you just put it in the lock and it works so it's instantaneous and very cheap for members of the network to figure out that this thing is correct so you set up this massive hurdle essentially um if anybody wants to come and get this reward they first need to spend why wouldn't they just buy bitcoin it seems to be to be a lot simpler than mining it then if it costs 350 dollars to make three hundred and fifty thousand dollars why bother with the mining you know you said it it rewards more efficient people exactly the short answer is if you have a way of securing electricity at less than five cents per kilowatt hour then um you should get into a bitcoin mining business uh which is you know lower than most rates everywhere in the world so if you have a source of energy that is isolated then from the grid or if you have a cheap way of securing energy then bitcoin is a great uh weight mining bitcoin is great but for the most so does that mean that bitcoin is a very good way of moving resources from places that can produce electricity very cheaply to other places where electricity is more expensive does that actually make the electricity the cheap electricity it makes the cheap electricity much more valuable absolutely it's uh this is weird that's a weird thing it's it's very weird i think it's going to have a very profound impact on the global energy market because for the first time in history we have a way to sell energy that is location independent so a lot of places in the world have a lot of energy but it's very expensive to get that to the population center so the north of canada hasn't so you don't need wires exactly jesus that's weird that's a really strange thing yeah to get electricity from the north of ontario to toronto re needs a lot of wires or you need to you know if it was gas you need to put it on tankers or on trains or in pipelines all of that stuff is pretty expensive but with bitcoin you just need an internet connection you take the bitcoin miners to where that energy is and then you can monetize that energy and turn it into bitcoin it's magic so what's the what's the net effect of that on the price of electricity worldwide is that does that is that deflationary with regards to electricity cost i think so i think this is this is a point that i make in the fiat standard which is that you know we've had fiat subsidize all these dysfunctional forms of energy over the last 50 years that have led to the grid becoming unreliable and we have bitcoin like the vigilante savior that it is coming in and providing a global subsidy for anybody who can make electricity at a cheap rate to monetize that and i think well not only at a global subsidy but it's so but so interesting because not only you could go to where the energy is cheap with virtual certainty that you're going to make more and more money as the value of the bitcoin increases by by investing there assuming you assume that the value of bitcoin is going to continually increase which is a logical presupposition if it's if it's as stable as as is claimed and it's finite in the way that you're describing and increasingly widely accepted by vast numbers of people so it's also an investment that's likely to increase in value over time rather than decrease so it takes some of the uncertainty out of investing in cheap electricity generating processes that are geographically isolated that's i just can't believe that's true it's it's amazing that i i i think i must be misunderstanding because it seems like you can move the value of the electricity electricity magically without any of the problems of transportation yes exactly wow that's really something okay and and in terms of you know think about it in terms of independence i think the implications are pretty good because if you have an energy source you know it becomes far more sustainable to be able to exploit that energy source if you have a steady way of monetizing it so i think it can help people get off the grid that can help people become more independent um you know you have your own energy sources and you have your own um a monetary system that you use to trade with the rest of the world you don't need much of the control of the grid on you which is getting more and more suffocating every day yes and as as this idea that we're despoiling the planet and our technical activities our industrial activities our high standard of living all that's immoral because we're doing immeasurable long-term harm to this pristine biosphere like that you can just feel the moral pressure growing there just it intensely intensely intensely yeah and i think it's it's it's completely ridiculous because you know every action has a cost and this is the thing about it you learn from economics everything has a cost everything has an opportunity cost and people like to present this idea as if you know there's an evil cabal of oil producers that are out there forcing our governments to make our lives dependent on these oils and what we need to do is to just have the political will to transition to these more advanced forms of energy that are going to save the planet and it's just completely ridiculous well people people don't understand like people don't understand things as simple as the fact that there's a finite amount of solar energy that falls on a square yard of of territory that that at that basic level of physics it's just while the sun is an inexhaustible source of energy it's like well that's true but practically speaking that's not exactly the issue exactly because what you need is the power what you want is to convert that high quantity of energy into high power which is a lot of energy over a small short period of time and to do that this is this is really understanding that what humans look for is not energy because energy is everywhere you know there's sun and there's wind and all of that stuff but being able to channel that in order in in order to use it in high power applications that's what makes everything that we value possible that's what makes surviving the winter a breeze for the vast majority of us you know this is why we have our modern lights that's why we have transportation because we have high power and the way that we've managed to secure high power the way that we've built our world is modern hydrocarbons and so the thing that uh carbon people who are afraid of carbon dioxide need to present is they need to make the case that you know stopping hydrocarbons is going to have such a noticeable effect on the climate that it outweighs the benefits of taking yeah they're not going to do that because like you look you look at how how this works out is that you know we're trying to calculate the economic consequences of climate change and the economic consequences of our interventions over this this has to do with the time preference over say 50 to 100 years but the errors in your measurements and your predictions grow and grow and grow as you move out decades into the future it's that those justifications will never be forthcoming they're they're technically impossible and so it does it does go down to basic principles it's like do you believe this is a problem that can be solved by intelligent well-meaning people who are doing central planning and i've toyed with those ideas worked on u.n committees that are devoted to uh what are the u.n millennium goals and i looked at how that central planning was done and that's an interesting story in and of itself because it isn't even cabell's of experts like so this committee i was on was composed of uh you know ex-presidents and prime ministers and people like that from all over the world and so you think well they have some political and economic expertise they're putting together these the new vision of the u.n for the new millennium let's say but those aren't the people who are actually making the decisions because they're completely occupied they already have lives that are absolutely full so then the decision-making power falls down the bureaucracy until it lands on the shoulders of someone who has spare time for one reason or another and they make the decisions in the name of that person and then all those decisions are aggregated and there isn't anybody who's in some sense taking central responsibility for that so so that the document that i worked on to begin with looked like it was written by people who were stuck in the 1980s it was all cold war uh ideology essentially the northern hemisphere against the southern hemisphere so we just stripped all that out we just took it out and the reason we were able to get away with that was that we rewrote it and no one else wanted to re-rewrite our rewrite and so it just stuck and then there was these 200 millennial goals essentially and i i looked at that and i thought well why those goals and the answer was well there was constituencies of interest for each of those goals and then i thought well we need to rank order these because there's no bloody way we're going to do all 200. and there was no rank ordering and the reason for that was it would upset all the constituencies and i thought well you get this weird aggregation of things we need to do and then the impossibility of of recording that means you don't have a priority like what's the most important and how do you decide that well that problem just wasn't addressed at all and so this well it was an object lesson and how these sorts of things work it was central planning but it was it was so dysfunctional in some way it it's not like it's partly because there wasn't anyone in the world who had enough intelligence enough knowledge to make those sorts of decisions no one no one exists like that so well so well i'm going to stop with that but yeah i think the the ultimate issue i think in in these things i i'd go back to mises point which is that none of these people is making calculations with opportunity cost that's the great thing about the fiat world is that everybody has essentially a fake fiat job wherein they get paid regardless of actual results you know and the fiat world results are optional because your money doesn't come from the customer for many of those people their money comes from the money printer from up above so it's not about how you serve uh the customer it's about whether you do the things that the people providing the funding right so it's dissociated it's dissociated from the actual environment because the consumer is the actual environment the consumer is an actual living being and if you're serving the consumer then you have you have nature there as your witness and your judge and then there can be all sorts of intermediaries between that which is what you're discussing and then that moves the producer away from feedback from the consumer and it and it and it what it corrupts the signal it corrupts the information signal okay precisely and that's that's kind of the other central point in the fiat standards so in the one hand you're dropping people of the purchasing power on the other hand you're putting the decisions in about people's lives in the hands of people who essentially face no opportunity cost and they have these jobs regardless of whether they perform them because they're linked to this magic printer that continues to finance them so they don't lose their job and they always can continue to do whatever it is that they're doing and facing no accountability and you know the impact across life i think is is enormous because it leads to all kinds of central planning it leads to a and the fundamental problem with this which you see in the climate change debate and you see it in the coronavirus restrictions and response is that all of these people don't understand the concept of opportunity cost you know the zoom warrior class the people whose lives can be conducted from their internet connection they're just completely blind to the idea that other people need to leave the house and eat it's it's astonishing to watch it because in their mind you know you can call for something like let's lock everybody at home for you know a year and a half so that nobody gets sick except for being locked from being locked at home yeah well of course if you don't think about you know if you don't think about the downsides of thing then it's a brilliant idea everything is great if you just ignore the downsides and that's essentially what governments can afford to do because they don't have the markets discipline to essentially correct them and that's that's what bitcoin brings you know well the discipline the discipline is exactly the lack of discipline is exactly you know so so we could we could de-personalize this to some degree and think about it as a technical problem right is that as you stack up intermediaries between the producer and the consumer because the signal is degraded the responses aren't going to be accurate reflections of what's necessary in the environment and that's sort of ideologically agnostic what what you derive from that is you want to set up systems where those intermediaries don't exist because then the signal isn't corrupt and we can act properly in concert with the with the dictates of the genuine environment yes exactly and i in fact i begin the second section of my fiat standard books called fiat life it begins with this idea that all living things face this natural order of the world in which they need to produce more than they consume in order to survive there's just every cell every animal every plant needs to do this you know they're constantly working or they die or they die exactly and the only exception to this is essentially the fiat human because they don't need to produce because they can just uh live off the money printer that comes from them from above and so i think we've had an enormous section of the population that is not used to the concept of productive work it's it's um it's destroyed the concept of you know the the moral imperative of work as service to others when you take away the fact that work is also the only way to eat you know when work becomes optional it becomes much easier to it becomes much easier to philosophize it away and philosophize duty and responsibility away and that's i think what fiat does and you combine that with the fact that it raises time preference because it discourages provision for the future and it discourages people to think a lot of the future and you can see that a lot of the problems a lot of the pathology pathologies of the 20th century i think have their root in uh highly inflationary fiat currency a couple of objections to bitcoin let's say um it's not easily usable like i can't i can't just go to the store and buy something with bitcoin it's not easy and and i don't see that improving very radically radically now maybe it's a store of value and there will be systems built on top of it that make those sorts of transactions possible so but maybe you could address that you you just brushed over the the issue of the multiplicity of of of cryptocurrencies and but you made a very telling statement there which is you said all of them people have tried to make bitcoin variants and they all failed all the other cryptocurrencies are more like companies and so they have someone centrally involved and um so why are people like elon musk for example interested in coins like it's the deutsche dogecoin is that do only good every day coin is that it and it was sort of a parody coin to begin with as far as i my limited understanding enables me to so bitcoin isn't that usable that's a problem why why shouldn't we just be skeptical of cryptocurrency as such given the multiplicity of cryptocurrencies so yeah so in terms of the usability i think um the limit the reason that you don't use bitcoin currently to buy things from your shop is not the technological use issue it's simply the liquidity issue it's the fact that for the vast majority of people right now uh well overall the money balances over the world uh bitcoin constitutes somewhere in the range of one percent of the world's money balances so the odds that you are going to be trading with somebody who has enough bitcoin that they are willing to take the other end of the trade you know let's say you want to buy a assembly and they're willing to lose some to accept some extra bitcoin to add it onto their balance sheet is very low because most people have zero bitcoin and most people haven't heard of bitcoin so it's still very early so um the the that problem is um is in my mind it's just an issue of liquidity it's not an issue of interface or user you know you don't know how your refrigerator works your car a lot of machines we have no idea how they work but you know you know how to operate them and so bitcoin is like that and we saw in el salvador you know now um mcdonald's and starbucks are accepting bitcoin it's just there is a very easy way in in el salvador in el salvador yeah why why so it was announced as a national currency as a legal tender um in salvador in fact you know we're recording just one day after that law went into effect so now el salvador has two official currencies the us dollar and bitcoin they used to run on why did they do that um it's an interesting move from the president of el salvador i think yeah it's a radical move it's amazing i can't believe it yeah one one motivation is that a lot of el salvadorians send remittances back to their country and there's a lot of money in that so they could save with it on bitcoin right so that's a place where bitcoin could really would could really get wide usage is a replacement for things like western union that's a big deal given how much money passes from first world countries to third world countries it's a huge issue yes and i think you know still over time i still think you know it's it's it's um it's it's going to be a while until the whole world can move on to a bitcoin based economy because it's just you know you don't there's a hundred trillion dollars of money out there in the world we're not going to bitcoin can't eat all of that in a weekend no but it's stunning that it's even one percent of that i mean that's unbelievable that's a huge percentage of it it's it's a huge percentage because you know the the vast majority of that the vast majority of currencies are under one percent bitcoin is bigger than the vast majority of currencies there's only like maybe five or six currencies that are bigger than bitcoin the big ones you know and then all the other ones are just tiny little fractions next to it so it's astonishing that we've gotten so far but i think uh you know in terms of the interface issue it's uh let me just put it this way all of the solutions that you currently use for paying with your fiat can be adapted for bitcoin you know visa could add you know visa already provides the us dollar and the canadian dollar in the euro and 160 currencies from all over the world they can add 161 and then you'll be able to pay with bitcoin okay so you think that's a threshold issue enough users that'll just start to happen the market will drive that okay and we have the bitcoin native solutions as well okay now the issue of the other cryptocurrencies the other cryptocurrencies i think in my mind they are dilutive of each other but they are not dilutive of bitcoin because um bitcoin continues to grow very rapidly and i think um you know the other cryptocurrencies their value proposition rests on some kind of special feature that they provide none of them is really trying to compete with bitcoin on being this neutral money neutral protocol none of them can claim in any kind of serious sense to be uh doing that so okay so so let me ask you about that so so does that mean that bitcoin is addressing the issue of the store of value the long-term permanent store of value decentralized in the most philosophically uh profound possible manner in some sense these other cryptocurrencies they have other features but that's not the problem they're essentially trying to address yes so they're in a different category yeah all the currencies that try to market themselves as a competitor to bitcoin in this field have sunk without a trace and the ones that have uh stuck around have introduced a whole bunch of buzzwords about other things that they supposed to be doing and like what like what what what what's what's been popular um so there's all kinds of things like you know smart contracts and uh decentralized finance honestly if you ask me like uh none of that stuff has shown any uh sign of being anything more than a uh basically uh a pump and dump scheme wherein you know people come in and they buy the token there's a story like there's a story about how this thing is going to be used for you know there was talk about uh betting markets and uh smart contracts and uh real estate on the blockchain and um and now they're putting pictures on the blockchain and they're selling art on the blockchain and all these fads come and go but um ultimately none of them needs its own monetary system in order for it to function and i think the the accurate interpretation here is that these things are just monetary systems that have a side story that they're selling you about what their application is but nobody's really buying them in order to buy these applications because they don't really perform um anything that bitcoin cannot do or that you know any kind of real world use case it's just people are buying these currencies um and they're speculating on the price and the value of all of these currencies is going up because you know we're starting from a very small level however i think you know the distinction is that in the long run these currencies need to continue to invent new stories and continue to invent new narratives to continue to drive more attention to them um but whatever story you invent in your currency you know there will be other currencies that will come and um invest in you know promoting this in a better way so i think they are dilutive for each other because whatever value proposition you have you know let's say our blockchain network does the best smart contracts well what's stopping somebody else from copying that there's nothing that you can't copy about it they can just move the same thing and start another network that does it um right which is essentially the equivalent of printing money it's the electronic equivalent of printing money in that currency exactly and so i think you know maybe this speculative game won't run long but ultimately altcoins are easy money because they individually you can increase their supply there's a group of people that can sit down and change the money supply for all of these coins and that's the case with you know the second biggest uh currency after bitcoin they they've changed their monetary policy six times maybe since creation and uh and that's which platform ethereum ethereum right right and yeah yeah so they've changed the monetary supply so they could change it in any case and you know uh if anything tells us that there's always reasons why you want to print money so there will come times in which you're going to need to print money and there will be pressure and they did go through a case where you know somebody hacked um their somebody hacked one of their contracts took a lot of money out of it from the people that were pretty influential in it and they did roll it back they effectively um essentially ran an admin move where they froze everybody's account well not exactly froze but they reversed the transactions in order to secure their own they reset the day exactly exactly so that's that's you know that's that's the best competitor when it comes to bitcoin so none of them can really establish the scarcity so for me in the long run i would not recommend i i don't feel comfortable recommending any of this of course you could make uh money in the short run there's a lot of fluctuation but in the long run you know these things continue to make more and the supply contains increase and you need and you need a base of people to continue to hold them for the long run in order for the value to stay in them and i don't see any compelling narrative for people to want to store serious value in these currencies in the long run and i don't see that they could trust it because of the fact that it can be increased and i think it you know it individually can be increased but collectively all of them you know you're constantly making new currencies that trading on this novelty so the market for novelty you know the demand for novelty even if it's larger than the demand for the store of value of bitcoin is getting dissipated at the all the extra inflation of all these novelty coins that are being added every year um and you know i i don't pay much attention to this world because in my mind i've paid enough attention and seen the patterns which is that it's you know these stories are generally there to uh sell the story of the uh currency that exists there but i think bitcoin is really all you need bitcoin is the one that i that i can trust will be there in 10 years in 15 and 20 and 50. so let me ask you about one more thing i want to i want you to talk about your online learning platform and why you built that why you're doing that what you think the implications are what you offer people what that means for the future of education let's say why you aren't in the traditional university system i know that's a lot but i do really want to hear what you have to say about it um i was at the traditional university system but um you know the internet changes everything and um towards the time when i uh started learning about bitcoin it really changed the way that i think about the world and in gave me an understanding of the power of technology and the power of uh innovation and the power of the internet and i started realizing just the limitation of the physical university model which is you're stuck in a small classroom with students many of them are there just because they want the credentials not for the actual learning and the economics of it are uh not very good because you know the students pay a lot of money and this professors don't get paid a lot of money and then a lot of money gets lost in the middle in the gigantic bureaucracy which expands way faster than the faculty and and continually undermines the power of the faculty with the faculty's own uh what would you call they're concentrating on the research and they're politically naive and they get they get their power gets inflated away to a tremendous degree every year i warned my colleagues about this sort of thing continually when i was a faculty member and they never paid attention i said you you're you just have no idea what you're giving away and well okay so so and i you know i've had the same experience as you i think i mean i was i've had a lot of health problems recently but i was thinking about going back to the university i've resigned from the university of toronto my my original position i'm a professor emeritus now but i thought if i'm well enough to go back to the university and teach i'm well enough to teach on the net if i teach on the net i can talk to people like you every day i never have to teach the same course twice i can learn while i'm teaching and i can teach to like five hundred thousand to a million people continually so why in the world with no administrative overhead whatsoever direct to consumer exactly so that was that was really it and um for me i think the most frustrating part of academia is uh the the uh peer-reviewed journal nonsense it's just an enormously frustrating ritual where you that's no no the grant the grant writing system is worse yeah well i'm in my defense i never went that far i could never get myself to wrap well you know the typical the typical researcher in the united states in particular you get big grants in the us but they're impossible to get whereas in canada you get small grants and if you do a grant proposal properly you probably get a grant small but in the states the typical scientist spends 40 percent of his or her time writing grant proposals and that that is not what they're good at like that's not the same as being an entrepreneurial and researcher it isn't the same skill set at all yeah it's it's a so it's a and then you don't get the grants yeah and in particular teaching is massively massively undervalued in the modern university you know your university hires you mostly for how many publications you can get no no no no no now it hires you mostly for you the quality of your diversity statement now i'm not kidding i'm not kidding this is really happening in california cardinal but not also not research now it's literally the case that in the uc systems the diversity statement which is just something that that crept in say five six years ago you have to provide a diversity statement along with your research statement that has more weight with regards to the hiring procedure then the research history and teaching well it's like who cares about the damn undergraduates right so yeah yeah fiat education is another chapter in the fiat standard where you know i take my experience from the university world where essentially again it's the same story the financing doesn't come from the customers for the students whether it's at the university or school level it comes from above and so the bureaucracy is optimized for sucking more money from above and it essentially uses the students as the props to do that in fact you know universities get a lot of money uh a lot more money from governments directly or indirectly you know government subsidize the loans for the students so even student money is effectively government money and so um they're that they're optimizing focusing on kissing the hand that feeds them and that's why the university is becoming so politicized it's also part of fiat disease it's it's not the case when uh it's not how universities functioned under the gold standard they were at far more integrity because the money had integrity and so the only way that you could get your university to have money was you know to teach people useful things so that they would be happy and they would tell their friends to go to that university and they would donate money but this kind of cycle is breaking now that's why we see so many um god even the economist even the economist miracle of miracles has published articles in the last month pointing out that the politicization of the university campus which is something that i've been observing for like 20 years and have been warning people about is having these massive downstream consequences throughout society it's like and that's definitely the case and so why is that politicization occurring so exactly and so for me you know it was i wanted to just um i it was like you know bitcoin like uber it's like sidestep the entire monster and figure out what it is what is the essence of what it is that i'm good at i like to teach i enjoy teaching so i'm going to build a website and i'm going to you know i i the the writing the bitcoin standard was uh what allowed me the courage to take this move and i i i regret not doing it earlier um but once i had a little bit of a global audience that i could follow you know it was i could teach many more students that i could teach in a physical classroom where much more interested and you know this is this is what i learned from austrian economics you want to follow the place where you're able to create more value that's what you need to follow so people seem to like what i was doing online and so i thought i'm going to try and figure it out so uh how long has this been yeah how long has it been in operation is that safetying.com safeidean.com yes two years now i've had it running for uh to actually yeah just turned two years uh ah a couple of weeks ago i didn't make a big deal well congratulations so so so tell me tell me like um what size audience are you serving how is it growing what have you learned how are you generating revenue the first couple of years i've focused on building rather than um getting a bigger audience i've made it a little bit more it's it's mainly focused on you know my audience on twitter they're the ones who sign up i haven't promoted it widely i haven't done any advertisement i haven't raised funds i've been focused for the first couple of years on just learning um how to do the courses online and to putting the courses online and focusing on the topic itself you know how to make an actual online course rather than marketing this and growing it and on also writing my two books so it's like the platform for me to um intellectually stimulate myself and discuss things with students as i write the book it was enormously valuable for me to writing the book and it's you know i remember in the university the teaching process is something that gives you the ideas for writing and i wanted to make sure that i had that as i left the university i didn't want to just write i wanted to have seminars where i discuss things so i could i have two live seminars every week with uh members of safeindeen.com uh twice a week we get together and we discuss um my books my work my courses uh bitcoin in general austrian economics and all kinds of other issues and so now now it's a little bit it's being done on a smaller scale as i was focusing on the courses in the books the plan is you know starting next year i'm going to start hopefully expanding the operation as i have my books completed and my next two books i'm also writing an economics textbook as well so you know the the next problem to solve for the decentralization of education i've been thinking about this for a long time as as it's possible to learn more and more online is accreditation is where all the value is all of it and i've talked to many wise academics like seriously wise academics who know perfectly well that there's almost zero financial utility in the knowledge that universities are dispensing to students it's not zero but it's low but there's tremendous residual value in the accreditation so the next big revolution is going to be the decentralization hopefully the decentralization of accreditation so that there's a there's a there's a way of providing verifiable accreditation so i've been thinking about that so you to some degree so you can imagine something like a set of exams where only 10 percent of the people who take them pass or maybe it's 20 percent that's bronze 10 percent that's silver 5 that's gold you can retake the exams multiple times but you keep it scarce and so the accreditation there's tremendous economic value in the decentralization of educational accreditation because the content is going to be provided right by people like you perhaps by people like me that's going to just keep happening and that's going to find its own market so well so i don't know how that problem might be solved but yeah the way that i solved it in my first two years was that i just told people you know um i'm gonna only give knowledge i'm not gonna do anything right right right yeah that that's that's how you that's a reasonable approach too you know and and and it sort of relies on your trust in the students themselves in some sense right you don't have to sit through this you're not going to get anything out of it except the knowledge that's a reasonable approach and maybe it's the right one it's just for those who wish to educate to do so and to let the chips fall where they're going to fall and also i think you know there is there are some downsides to testing that you have to kind of formulate the education in a way that is uh aminable for testing and that can corrupt the system exactly it's like predicting the future right it's the same problem it's like which part of the knowledge that you've learned is relevant and can we form and so there's the hypothesis that we can formalize that now you know you might be able to do it in some ways by because maybe you can test something like uh literate literacy right because that's a that's a broad scale skill that's you useful across multiple domains and so maybe there's a role there for for testing to specify level of skill but it gets much more difficult in other areas so that's that's partly why the the accreditation problem is real tough one to solve to do it properly i don't know i i go back and forth on whether accreditation really is such a big deal or whether it's going whether the whole issue of accreditation is going to be devalued over time because yes yeah in a sense i can see how it was valuable in the pre-internet world where you know going to a university and spending four years taking courses with the experts on a topic next to a physical library that actually contained the books on the topic was basically the only way that you could establish confidence in the topic and getting a degree that you've ticked all the boxes was a very reliable signal that you did do that but now you know the knowledge is all out there and [Music] the people looking to hire you are becoming increasingly practical increasingly specialized about what they're looking for you know it's not that big of a deal whether you have a degree in all those um fascinating topics that you learned about um you know can you build a mousetrap that catches much right exactly have you so that might mean that the accreditation problem is actually downloaded to the people who consume the students so to speak right and that that's the people who are doing the hiring i mean the hiring people have a tough job and they were using accreditation as a shortcut to doing their job properly relying on the institutional validity of the universities to select the proper students and they were universities were basically doing that on the basis of it of uh making it difficult to get into the universities and and by proxy selecting people who had high levels of of g fluid intelligence so basically yeah and it's it's becoming less and less valuable as a signal as knowledge becomes everywhere it becomes available everywhere you don't need to go to a physical library and you don't need to be next to the professor you can download the lectures online and you can discuss things with students online you can recreate the entire university experience online basically now is it as fun as going onto a campus well no but you know when you think about the difference in costs you could learn an entire undergraduate degree for a couple hundred bucks online you know think about all the extra money that you save and all the extra time that you save i don't think about how much fun you could have with that and that's when it becomes a fair comparison i think [Music] well look that was great i learned a tremendous amount you really made me think uh he cleared up a lot of the questions i had about cryptocurrency and about uh about bitcoin i understand how it functions better some of it was absolutely fascinating like that idea that you can monetize energy production in in in areas that wouldn't be able to ship the electricity to market that's that's absolutely mind-boggling it'll take me like five years to think that through it's so s and it seems to completely contradict the idea that bitcoin is a waste of of of the world's resources right it's it's it's it's a complete opposite if that if this monetization idea is actually true so that's really really really interesting so yeah that was great i'd like to talk to you again at some point so um we'll see how people respond to this and what sort of questions they have and what sort of things they might like us to discuss but uh i really enjoyed the conversation so thanks a lot for for all that and good luck with your book your new book so that new book so everyone remembers the two books are um the bitcoin standard and the fiat standard and my you're going to learn a lot by reading those books an awful lot i learned a lot about the austrian school of economics too and about its fundamental philosophical differences and that was really useful to me as well so lots of lots of pieces fell into place the sign of a good conversation when that happens so thank you thank you very much it was an absolute pleasure as well i enjoyed talking to you very much and i hope you do it again [Music] you

Channel: Jordan B Peterson

Views: 372,693

Rating: 4.9325409 out of 5

Keywords: Jordan Peterson, Jordan B Peterson, psychology, psychoanalysis, Jung, existentialism, maps of meaning, biblical series, free speech, freedom of speech, biblical lectures, personality lectures, personality and transformations

Id: FXvQcuIb5rU

Length: 118min 46sec (7126 seconds)

Published: Mon Nov 15 2021

Reddit Comments

[u/letsgocrazy]

This episode was recorded on September 8th 2021.

Saifedean Ammous is an expert on Bitcoin with a PhD from Columbia University. He joins Dr. Peterson to discuss decentralization, different schools of economics, the Fiat vs. Bitcoin standards, and much more.

Dr. Ammous is the author of The Bitcoin Standard, widely considered the essential book on the economics of Bitcoin. He also hosts a podcast of the same name. His new book, The Fiat Standard, should be out in November.

[u/Nwabudike_J_Morgan]

I am pretty sure that when the last Bitcoins are minted, that will be the end of Bitcoin. Once dead wallets start coming into play, confidence will plummet.

[u/garebear3]

Just me or does that guys eyes make h8m look like an anime character?

[u/letsgocrazy]

I can honestly say this to everyone here - I strongly recommend you take a little bit of money you can afford to lose - and invest it in some crypto currency - like bitcoin or ethereum - and then just learn a little bit about money.

[u/thoughtbait]

I’ve listened to a few discussions now on the topic. They are all highly theoretical and spend a lot of time explaining what Bitcoin is. However, the problem Bitcoin has is widespread adoption and that will not be solved by theoretical discussions. I, like most people, still don’t know the practicalities of actually purchasing Bitcoin. I’ve heard enough theory and am interested, but no one actually lays out the process of taking fiat money and turning it into Bitcoin. Like he said about refrigerators, people don’t need to know how it works. They need to know that it works and where to get it. People will spend a dollar on just about anything.