Filtering the Filters

Every passage, on the record.

1. 00:00Claim · condensed

   For the first time ever there is a deluge of information so large that no one person could compute all of it, and the volume keeps building because it takes information to generate more information, an exponential curve that only grows as friction keeps getting removed from the generation process, so we need a filter to know the best place to transform our energy inside the extended order.

2. 00:00Idea

   I wanted to just go over a concept of Bitcoin as the great filter, the filter that is needed in the information age that we find ourselves in for the very first time ever.

3. 00:00Reference · condensed

   There's so many nooks and crannies, there's so many cracks and crevices in this thing, there's so many areas to explore and to discover inside of the extended order, and it becomes very complicated to try and find out where that might be.

4. 01:06Claim · condensed

   Money is the tool we use to store our energy inside the economy, which is just individuals who have pooled their energy together, and that pooling strategy out-competed every other strategy because larger numbers allow more specialization, and specialization lets people build information systems far more complex than they could alone.

5. 01:06Analogy

   Run the thought experiment: could you have access to more energy reserves on your own in the wilderness, or in a village of a thousand people? You're going to be able to do a hell of a lot more with a thousand people. It's not that complicated.

6. 02:09Claim · condensed

   As the extended order grows too large for everyone to communicate directly, the single most important thing it needs to filter for is where to spend its energy, because that is what lets it keep running the experiment of life, lowering entropy in the local world around us, and the more energy reserves it holds, the longer it can weather whatever uncertainty comes next.

7. 03:07Claim · condensed

   Filters like money are a tool, and the point of any filter is to remove whatever isn't moving the needle so you can see clearly where the best spot is to allocate energy, because that is the single most important question we face both as individuals and as an extended order.

8. 03:41Claim · condensed

   If a tool offered a better filter mechanism for allocating energy, it would be wise to embrace it as quickly as possible, because whoever adopts the superior filtration process before others will do significantly better than everyone still misjudging opportunity costs on information that is clouded, misinformed, or tampered with.

9. 03:41Quote

   We are losing efficiency because people aren't using the most competent filter of the time, but we also don't know what we don't know, we don't know how much we're leaving on the table, because we've never had a system that has been as accurate as Bitcoin.

10. 05:35Analogy · condensed

    The favorite analogy for a new technology is the cargo cult example: in World War Two, American planes started using an island in Vanuatu or Micronesia as a runway, and as a thank you for using the island, the Americans left supplies and technology behind for islanders who had never seen planes before and got used to the advantages, becoming better off with access to more energy.

11. 06:16Analogy · condensed

    When the war ended and the Americans packed up the planes and went home, the locals still wanted all the offerings they used to get, so they tried to work out what was different: there were planes here. Maybe it was the planes bringing the cargo, and the gods would be happy again if they built planes themselves.

12. 07:19Quote

    So they go about building these wooden ships, I'm sorry, these wooden planes, and they put these wooden planes back where the runways used to be, and they wait, and they think all we have to do is worship the plane god and eventually the offerings will come. Of course nothing comes, because there's no utility in a wooden plane. The utility of the plane is in the flying bit, is in the ability to carry the shit, is in the movement. That is the utility. The utility is not the shape of the plane.

13. 08:09Analogy

    That's exactly the difference between Bitcoin and ETH or any other shitcoin: they all look the same to the islanders, to people who don't have enough information. The wooden plane and the actual plane look identical and seem identical. It's only when you understand the lower layers of a system and its nuance that you're able to see those two things are very, very different, one serves zero purpose and the other is useful, and that utility is what attracts attention and energy, which means the thing is going to move. That is the difference between the Bitcoin ETF and the shitcoin ETF: one is a wooden plane, the other is a plane that actually works.

14. 08:48Claim · condensed

    A new technology that is new to a group of individuals can appear to be magic, the same way a 1940s Pacific islander would see a plane as a miracle, but not knowing how something works does not mean the difference between Bitcoin and ETH doesn't exist, it just means you don't understand it yet.

15. 09:53Claim · condensed

    It takes information to generate more information, so the more that already exists the easier and quicker new information becomes to add, because you don't need to regenerate all of it, just the new part, building on top of already existing information structures rather than starting from scratch.

16. 11:14Claim · condensed

    We no longer have a problem of not having enough information on a situation: the information exists, you can learn any skill on YouTube, the actual constraint is that we don't have enough energy or time to access all of it, or the ability to locate it.

17. 11:14Claim · condensed

    A voluntary exchange only happens between two entities who are both looking to finish better off than when they started, so it frees up previously inaccessible energy and generates information, information being the physical embodiment of order, and the outcome of any exchange done properly is that both sides end up with more energy on the other side of it.

18. 12:33Claim · condensed

    Once an exchange leaves you with more energy than you have an immediate need for, you either have to store it for later or share it by exchanging further with others, and the more you exchange with others the more everyone involved can specialize, because someone else is taking care of your other needs, which is how more information generation becomes possible.

19. 14:03Analogy

    The printing press freed information from its infancy in the spoken word and handwritten scrolls into the teenage years of information generation, simply by removing the energy requirement: more people reading books means more people consuming order and realizing they can build on top of the knowledge already presented to them.

20. 15:19Claim · condensed

    With the introduction of the printing press, what is now the German people had a one to three generation head start in specialized information generation and consumption over their neighbors, because they had access to books and shared, built-on information for multiple generations before the printing press spread across the rest of Europe, and a head start like that can almost never be eclipsed, because of the foundation it lays.

21. 16:08Claim

    The written word, easily shareable, meant less double work, fewer people redoing tests that had already been done, because the previous generation's results could be passed on in a high fidelity medium: repeatable results across scientific papers, no miscommunication, no noise in the channel, only information, only signal being passed down the line.

22. 16:49Claim · condensed

    It isn't only the technology of delivering and storing information that matters, it's also the different types of information we now generate, art, music, language: more forms of order mean more opportunities for people to contribute meaningfully to the extended order even if they aren't inclined to write a book or tell a story.

23. 17:56Analogy · condensed

    You can fit a hundred books on a Kindle that is itself the size of a small paperback novel: that's massive when you scale it over the entire extended order, and the physical space saving alone is probably the easiest way to visualize how profound the shift in information has been over the last thirty years.

24. 18:47Claim · condensed

    Any increase in quality of life, which really means access to energy, over the last hundred or thousand years can be attributed to our ability to generate more information, but we are now well past the point of simply needing more information, well past what any one human can access of everything the extended order has already produced.

25. 19:18Reference

    The personbyte limitation, the idea coming from Cesar Hidalgo's book Why Information Grows: a single person can only know so much, they can only compute so much information, and once you exceed that you have to spread that knowledge throughout an economy, throughout a group of individuals, throughout a corporation, whatever it is, and that knowledge then has to find a way to come back together.

26. 19:18Idea

    What becomes more important now with all of this information is developing a filter to sift through the noise of information and find the signal, the filter is the main tool pushing order into a system that is growing larger and larger every day, information growing larger and larger every day. Like I said at the beginning, a filter is just a tool, right, just like money.

27. 20:19Analogy

    Our brains are constantly filtering, all the time, filtering out of all the inputs it's receiving from the outside world what is necessary in order to survive, what we should be focusing on now, and that approach survived better, it was more fit for the environment than other approaches that weren't constantly filtering, so filtering out-competed everything else.

28. 21:18Quote

    I know I can think of just a few off the top of my head that will sound an awful lot like what makes a good money.

29. 21:18Claim · condensed

    The best possible filter for the extended order would need to be reliable, giving the same good results all the time rather than great results half the time and shit results the other half, resistant to bad actors manipulating it, and transparent enough that we know exactly what it's doing at all times so it can be updated if needed, and more often than not, doesn't need to be, because it's working as designed.

30. 22:16Claim · condensed

    The best possible filter would also be as low cost as possible to use, fast with low latency when querying new information, and really simple, so it applies to the greatest number of uses and offers the greatest value to the extended order.

31. 22:47Claim · condensed

    The chain runs: the ultimate goal of life is just to keep going, which needs energy, which we get by becoming more efficient and generating order, which requires specialization, and specialization is only possible because we can share information and develop a system for taking care of individual energy needs without dedicating all of our own energy just to satisfying those needs.

32. 23:38Claim · condensed

    The single most important thing we need to be filtering for at the level of the extended order is where it gets the most energy return on investment, or set another way, the most useful thing a filter can do for the extended order is tell it where to direct its future energy allocations. That's the main goal.

33. 24:10Quote

    What would we call this filter if we did manage to create it? How about price? Price is the great filter. Price is the distillation of all the millions of hands that information must pass through to eventually tell us, individually, whether something is worth the energy or not.

34. 24:10Claim · condensed

    The number in a price only tells us a very small part of the equation; there are still steps that have to happen at the individual level to use the filter well, and every step that isn't required is wasted energy that could instead be redirected toward generating future returns, so we want the most efficient filter, not just the most accurate one.

35. 25:40Analogy

    Price is a number we just made up, a symbol, so being able to tell if something is priced high or low requires more information than the number itself, you need the denominator, the out of what. A dollar for a bottle of water might be expensive or cheap depending on the number of dollars in the system, and you can't know that just by looking at the price.

36. 26:17Analogy

    People are using distorted prices almost like an energy sonar system to help them navigate life's energy demands: where should I be spending energy, where should I be allocating energy towards, because the price will distill all of the information necessary to make that decision.

37. 27:18Claim · condensed

    Bad actors, or even actors who think they're doing good, can alter prices to the point of massive wastage, both in the action itself and in the trickle down effect through the extended order, and it doesn't matter whether the misallocation is intentional. If the answer to any question is that we end up with less information or energy than before we started, that should be the first sign something is wrong.

38. 27:18Quote

    That doesn't make me sense, something there must be some fuckery in the system somewhere, that energy is leaking. This should not be the case.

39. 28:37Claim · condensed

    Ideally personal filters work almost like a brain, filtering information as many times as possible before it reaches the very last filter, which is the individual, and if that filtration process could be outsourced from our biological constraints entirely, the input requirements would go way down.

40. 28:37Claim · condensed

    The Bitcoin protocol is the best filter for energy, which is the ultimate filter for life: the tool with the most utility is the one that generates the most energy for the extended order, and the improvement Bitcoin makes to the pricing filter makes everyone better off without requiring extra work or extra input from most people.

41. 29:29Claim · condensed

    Bitcoin's absolute scarcity, the hard cap of 21 million, means everyone who opts into using it knows the denominator now and will know exactly what it will be in a year, five years, ten years, a thousand years, eliminating a huge chunk of the energy demand and noise from each energy allocation decision.

42. 29:29Claim · condensed

    It only takes a small minority of people to embrace the better filter for that minority to out-compete the majority still using the inferior one, because prices can no longer be manipulated to the extent they can in the fiat system.

43. 29:29Prediction · condensed

    How much better can we get with Bitcoin as the filter, we don't know, but the answer is better than we've been doing up until Bitcoin, and it's going to get better and faster because that's the only way it can go.

44. 31:00Quote

    If you know that having a filter is going to make you more efficient, and if you know that increasing the ability for that filter to separate the signal from the noise is going to lead to an increase in exchange, and an increase in exchange allows for more specialization, and more specialization allows for more information generation, and more information generation allows for more energy, I'd guess highly likely, and I would be very confident that we are going to have access to more energy in the future than we do now, and that is the investment thesis for Bitcoin.

45. 31:00Prediction

    We are going to have access to more energy in the future than we do now, and that is the investment thesis for Bitcoin.

46. 31:00Claim · condensed

    Whether you believe the extended order will have access to more or less information and energy reserves in the future, and how confident you are in that answer, should show you whether you are underexposed or overexposed to Bitcoin.

47. 31:00Claim · condensed

    The individuals who adopt the better filtration system before others are going to see a significant advantage over everyone around them, and that is why Bitcoiners are winning now, and why they'll continue to win, because it's a better filter that lets you do more with less.

48. 32:23Claim · condensed

    The energy you free up by no longer running the inefficient legacy filter needs somewhere to go: you buy Bitcoin, and the more you hold of that property that can't be debased, the better off your life gets, which opens up more opportunities for information generation, and the longer you put off pulling your energy reserves back out of the system and instead let the filter allocate that energy to where it's most useful, the more you win, and you win forever.

49. 32:23Quote

    You're gonna buy Bitcoin, and what happens then? You're gonna get more of the foundational level of energy that goes into creating the extended order 2.0.