The Nature of Technology

Every passage, on the record.

1. 00:00Claim · condensed

   It's crazy how hard we are going to win: the extended order's understanding of Bitcoin is so underdeveloped, and because of absolute scarcity it is not possible for anyone to catch up at the speed it is happening.

2. 00:00Quote

   Man, I think it's crazy how hard we are going to win.

3. 02:55Claim · condensed

   It's a game of order and information generation, and the one with the most abundant energy reserves is going to win: allocate your energy to Bitcoin and you have the entire network of individuals working for you around the clock to make your energy more abundant.

4. 04:04Claim · condensed

   Imagine being so productive you do 40 percent year on year: almost zero businesses in the world can do that, maybe ten in total, and I'm not one of the people who could own 100 percent of those ten, so the most efficient thing I can do with my energy is plug into the machine that already does it.

5. 04:04Analogy · condensed

   It's like if I was a farmer doing all the farming by hand, digging every trench myself, and someone showed me there was a tractor, only it's an AI tractor: I never have to look at it, wash it, or service it, I just turn it on.

6. 05:19Claim

   Now I know it's an energy game and it's a matter of speed: I need to get on it as fast as I can and make sure I'm not being debased at all, because anything else is time spent inefficiently. I've discovered the secret, which is efficiency, which is energy reserves, maximizing those things.

7. 06:23Reference

   These are the people whose milkshake we will be drinking, or whose milkshake we are drinking. These very people, the people who think that they are right on the other side, that's on either side of the gap.

8. 06:58Reference

   This latest example was a book called Money by David McWilliams, and this is a guy on the exact opposite side of Bitcoin, everything he is doing and everything he believes to be true is the opposite of me.

9. 07:30Claim · condensed

   Bitcoin has kicked the living shit out of this guy for 15 years, and this brand new 2024 book still dedicates an entire chapter to why Bitcoin isn't money and won't keep winning, even after it has won harder than anything else in the past 15 years since its inception.

10. 08:02Quote

    It isn't what I think is right, so it's wrong.

11. 08:02Claim

    This is the entire bedrock of life, the struggle of order versus disorder. It comes down to this one thing: energy efficiency, energy reserves.

12. 09:36Claim

    This guy worked at the central bank and he is sure that Bitcoin isn't going to work: I don't get outsized energy returns as fast without people like that.

13. 10:07Idea

    I like that Bitcoin makes the extended order more efficient and that in the end everyone ends up better, but it's no small bonus that the people who are going to get burned the hardest in this transition, they are the milkshake boys, the very people who have had their boot on your face since the dawn of modern banking.

14. 10:38Quote

    I'm fine getting my ass kicked on 50% of my energy reserves. What? You made it this far and you're fine getting your ass kicked on 50%. Well, get sure. What the fuck are you doing? Get sure.

15. 10:38Claim · condensed

    If you know all this stuff and you're still only 50 percent allocated, get sure: look at anybody who has done the work and ask if 1000x'ing your energy reserves by going from 50 percent to 100 percent is worth stopping what you're doing.

16. 10:38Reference

    Just look at anybody who has done the work. I don't know, look at Michael Saylor. Has it been worth it?

17. 11:17Claim

    They will hold out the longest, they're going to miss their allocation, and they'll get Bitcoin at the price that they deserve.

18. 11:17Prediction

    Bitcoin is not going to stop at 100K or 250K. It's not about this cycle. It's going up forever. It's replacing the entire system.

19. 11:49Open question

    When will the victory lap actually take place? When can you say, I was right the entire time and you were all wrong, and this is it, it's over? If you started at $6 and it went to 60,000, is that a guaranteed win? I don't think so, it's still a little too nascent to do that.

20. 12:20Claim · condensed

    Bitcoin will win so hard that it'll definitely be in your best interest to never tell anybody that you've got Bitcoin, or mention that you got it under a million dollars: it's going to be so dangerous to have access to that much power that it won't be good opsec to even do a victory lap, all the stacking sats and staying humble.

21. 12:50Analogy

    I want to be the great Bambino. This is the great Bambino moment, calling your shot: if this is wrong I didn't know what I was talking about, but if I say it and it's right, and I bet the whole goddamn farm on it, and I was right, that's going to be fun.

22. 12:50Reference

    I want to be the great Bambino. This is the great Bambino moment. Calling your shot.

23. 12:50Claim

    One million doesn't mean dick, made up by a few dumb ass randos in a room somewhere, far away from you and me: it's not bounded by energy in the physical universe, it's absolute nonsense, and they can devalue the whole system overnight for a nickel.

24. 13:56Claim · condensed

    The only win that counts is Bitcoin being the highest performing asset over the span of my entire lifetime: my thesis isn't that Bitcoin goes up 100x, it's that this thing eats the world because it's more efficient, so it will be the best asset in the world, cut and dry.

25. 13:56Prediction

    I think it has to be the highest performing asset over the span of my entire lifetime, that's the only win that counts. If it goes up 100x and something beats it, I'll still feel slightly wrong, like I would have missed something.

26. 16:36Claim · condensed

    That is where the value is, because that is what is useful about it: this field that wasn't there, wasn't knowable, or wasn't accessible before this thing. Once you see it, you can't unsee it, and it's undeniable, they can't show you where you're wrong.

27. 16:36Idea

    As soon as you explain that, it's undeniable, show me where I'm wrong, they can't. And then they got it, and off they go in their hodling journey.

28. 17:44Analogy · condensed

    Once you get used to the cookie cutter responses it's like Neo on the Nebuchadnezzar when he first comes out and realizes he doesn't even have to move his limbs, he can just think it, because I know exactly what you're going to say. It becomes useless.

29. 17:44Reference

    Like Neo on the, in the real world when he's on the Nebuchadnezzar, when he first comes out.

30. 18:18Prediction · condensed

    The Bitcoiners are going to be winning so hard that you're not going to have a chance to avoid it. It's not going to be a 50-50 battle where it seems like everybody's winning, no, no, no, no, no, that's not how it's gonna go.

31. 18:48Quote

    It's just going to be an absolute bloodbath, ass-kicking. And the conversation will be, yeah, you're getting your ass kicked. I'm not, you are. Figure out what you need to do differently.

32. 19:18Claim · condensed

    It's easy to forget how far down this I am: I'll start talking about SHA-256 and how the words are derived from bits, and people look at me like I'm speaking Klingon.

33. 19:54Prediction · condensed

    No one is going to have to know any of this stuff, nobody. The 99 percent will just adopt it because there's no choice, it's either life or death. The adoption will certainly not be voluntary, that's the Disney version of the movie to think it'll be optional.

34. 20:27Claim · condensed

    The next crash isn't actually going to happen in the normal world of the extended order. The economy in the normal world isn't going to crash, a crash resets the table even for the lowest on the socioeconomic hierarchy, but what's coming is far worse.

35. 20:27Prediction · condensed

    If I was in charge I would not run the crash playbook, I would run the melt-up playbook: everything getting more expensive for longer, forever, full flood of the system so there's no chance of getting to the table if you aren't already at it.

36. 21:04Prediction

    What's going to happen over the next two years is that life for Bitcoiners is going to get better and better and better at a faster and faster rate, not a slower rate.

37. 21:37Claim · condensed

    There will certainly be a redistribution of coins to larger entities as time preferences play out: your life gets better, you want to cash out and do something else because you're not going to live forever.

38. 22:14Reference

    It's like Michael Saylor says, is it better to know for all of that to happen in the next year, or better for it to happen over the next 20 years? It's actually better the longer that it takes, because you can take more advantage of it.

39. 23:17Claim

    That's how you ratchet up the energy gains: you have to get to that point of understanding to do it.

40. 23:17Reference · condensed

    The latest book that I came across was The Nature of Technology by W. Brian Arthur, either late 90s or early 2000s. It's basically a more elegant version of the same ideas and concepts we've discussed on this podcast.

41. 23:51Claim

    Technologies are constructed from existing technologies and components, and new tech emerges by combining existing ones: you can't combine things that aren't already existing, or you wouldn't have been able to build the thing that couldn't exist.

42. 24:25Claim

    Technology is information and products are information, and they are physical, the physical embodiment of order. A jet engine is highly unlikely to occur in the universe on its own, and it takes a tremendous amount of information to generate one.

43. 24:25Analogy

    A jet engine is highly unlikely to occur in the universe just on its own, that's why you never just stumble upon one on the surface of Saturn.

44. 25:00Claim

    What Bitcoin harnesses is the phenomenon that we can create a bridge between the physical and the digital and achieve absolute scarcity, something we cannot do in the physical world but can do in digital space. That's a new phenomenon other technologies can build a support network around.

45. 25:31Claim

    Technology is recursive, self-referential growth, because it can't be any other way: over various state changes it evolves through variation and selection for energy efficiency, just like in nature, and all along the way there has to be adoption.

46. 26:01Claim

    Over time information becomes more and more complex and interconnected, the greater the order, the more efficient it's going to be, and the more complex it becomes, the more difficult it is for one person to fully grasp the underlying information in totality without the power of the hive mind.

47. 26:34Claim

    The extended order is the unavoidable endpoint from an information standpoint: there is no way to compute the amount of information that we now have access to.

48. 26:34Claim · condensed

    The building blocks of Bitcoin are cryptography, hash functions, peer to peer networks, proof of work and consensus mechanisms, all of which had to exist before Bitcoin.

49. 27:11Analogy

    Those all had to exist before Bitcoin got its guess, so those are the Legos that you're taking up to build this new thing.

50. 27:11Claim

    That novel integration, when Satoshi combines these existing technologies in an unprecedented way to solve the double spend problem, that's when we've got something, a new domain that can be created.

51. 27:11Reference

    That novel integration, when Satoshi combines these existing technologies in an unprecedented way to solve the double spend problem.

52. 27:11Claim

    What is the natural phenomena that Bitcoin is actually harnessing? It's thermodynamics and energy consumption. Bitcoin's proof of work mechanism ties computational effort to energy expenditure, which is grounding digital processes in physical reality.

53. 27:47Claim

    By grounding digital processes in physical reality you can put a constraint on a new world that had not had constraints before, and that's what creates the domain of digital scarcity: Bitcoin introduces scarcity to the digital realm, a phenomenon previously limited to physical goods.

54. 28:23Analogy

    How many different things can you throw a new type of metal for a shovel? There's only so many different designs for a shovel head. How many different things can you attach digital scarcity to?

55. 28:23Claim · condensed

    Money, the tool used for exchange, is half of every transaction, so attaching digital scarcity to money touches every single aspect of the extended order, which is why the number of connections explodes.

56. 28:54Claim · condensed

    You couldn't have lightning without Bitcoin. Lightning gets you the ability to stream sats, which gets you subscriptions, only possible because of lightning, only possible because of Bitcoin, only possible because of the building blocks laid out before it. It becomes the foundation.

57. 29:57Claim

    At every different interaction point with other areas of the extended order we are increasing the complexity and therefore increasing the order, and think about the ecosystems that spring up: exchanges, wallets, miners, developers, all sprung from this original season of knowledge, of innovation, of information.

58. 30:29Claim

    The connections get further and further from the source: the Bitcoin ETF wrapper is like the API into the fiat legacy system, just another pipeline into traditional finance that begins to influence global economics because it becomes a liquidity sponge everyone can now access.

59. 30:59Event

    Now, boom, if you've got a Schwab account, you can get it instantaneously. Is it as good as holding the keys yourself? No, but it's just another step inside of this order that is being generated.

60. 30:59Claim

    Life and technology push back against entropy by creating order, and Bitcoin is the embodiment of this principle: miners expend energy to solve cryptographic puzzles and transform energy into ordered information, secured blocks, and each mined block represents a local decrease in entropy contributing to the overall network.

61. 30:59Quote

    Life and technology push back against entropy by creating order. Bitcoin, it really is the embodiment of this principle.

62. 31:31Claim

    At every junction where these things come together we are removing friction, and as you remove friction you increase energy efficiency, allowing more energy to get to the endpoint, or less energy needed, which leaves more in reserve.

63. 32:01Claim · condensed

    Energy in reserve has to go somewhere, and it goes to the place where it's treated best, the system with the highest expected return on energy parked, the one that allocates energy the most efficiently. That happens to be Bitcoin, so it's gonna win, it's not even close.

64. 32:01Quote

    It's going to be in the system that allocates energy the most efficiently. And that just happens to be a Bitcoin. So it's gonna win. Like it's not even close.

65. 32:31Prediction

    My guess, my bet, is that you're gonna be handsomely rewarded if you figure this stuff out sooner.

66. 32:31Prediction · condensed

    Going forward 100 or 200 years in the future, the fact that you bought Bitcoin will have made the biggest difference in how you're remembered, more than anything else you've done.

67. 32:31Quote

    The legacy of your lifetime will be, even if you've done fantastic things up until this point, it's like if you get Bitcoin now, going forward 100, 200 years in the future, it'll be the fact that you bought Bitcoin will have made the biggest difference in how you're remembered.

68. 33:09Quote

    You're not gonna be as efficient. So you can think of that as a blessing or a curse. Up to you. Either way, I would probably get some.