Bitcoin Does Nothing

Every passage, on the record.

1. 00:00Claim

   TradFi people are starting to come around to the idea that Bitcoin is an investment, an alternative to being correlated to anything else they know about, and important to get a hedge, because it doesn't have any yield, it's just a thing that sits there.

2. 00:34Idea

   That is the Bitcoin doesn't do anything statement. Imagine how stupid you have to be to proclaim that.

3. 00:34Claim · condensed

   The 'Bitcoin doesn't do anything' statement is the dumbest thing that you can actually say about the system.

4. 00:34Quote

   Tell me you know nothing about Bitcoin without telling me you know nothing about Bitcoin.

5. 01:08Claim

   Saying Bitcoin doesn't do anything isn't slightly wrong, it's completely wrong: the exact opposite of the true nature of reality.

6. 01:08Quote

   You are living in bizarro world.

7. 01:42Claim

   Bitcoin isn't doing a little something. It is doing more than any other tool in the history of the extended order.

8. 01:42Open question

   I haven't seen anyone else call out this behavior, and I think it has to be called out by people that know. Why they haven't said this, I'm not sure, or if they have, I haven't come across it.

9. 02:14Claim

   If you have access to this information now and realize everyone else has no idea what they're talking about, while the ones talking actually think they're right, that's how you make a lot of money in investing. The people who are the most wrong also happen to think that they are the smartest.

10. 02:45Claim

    People who think Bitcoin does nothing don't know the problem Bitcoin is solving for, and if you don't know the problem, the solution can't seem useful or valuable, so you won't even recognize the solution right in front of your face.

11. 03:17Claim

    Very few people, in overall numbers, are even talking about Bitcoin.

12. 03:47Claim

    If you think you're late to Bitcoin, that is a telltale sign that you haven't been around long enough to realize just how early you are.

13. 03:47Claim

    Most people who come to Bitcoin don't see value or utility in the tool itself; they see value in one of its byproducts, namely number go up against the alternatives as a way to get more dollars.

14. 03:47Reference

    namely number go up against the alternatives as a way to get more dollars

15. 04:23Claim · condensed

    Even the minority who go all the way to being all in on Bitcoin as a unit of account mostly still fail to see what they're actually getting behind: you cannot understand the tool itself and still see being 100 percent allocated as anything other than being under-allocated to the system.

16. 04:23Quote

    Being 100 percent allocated is actually being under allocated to the system.

17. 05:01Claim

    You can understand that you'll be better off over-allocating to Bitcoin than anything else and still not understand the tool itself, because the emergent property of number go up all the time is in fact true and will continue to be true. But not knowing why puts you at an information disadvantage.

18. 05:01Open question · condensed

    Are you going to end up with more energy because you understand the tool, when you're already a super maxi all in on the system? I think you might be able to. It's going to be very hard, but I think there's opportunity there.

19. 05:32Prediction

    The thing is not going to zero, and if it's not going to zero, it's going up forever.

20. 06:02Claim

    How many people that you actually know understand money? In the physical world, the individuals you interact with in your little Dunbar circle, on average it's going to be zero, not one.

21. 06:02Reference

    the individuals that you interact with in your little Dunbar circle

22. 06:33Claim · condensed

    Understanding money is one filter; understanding how the current system of money actually works is a smaller one still, because it's incredibly complicated and there's no immediate benefit to going down that rabbit hole unless you need to.

23. 06:33Claim

    Beyond that, how many people understand the goal of the system overall, the goal of the extended order, the goal of life itself? And of those, how many have enough spare energy capacity to explore alternatives that might be beneficial to that system?

24. 07:07Claim

    Of the small subset of people who have the capacity to explore alternatives and who do come across Bitcoin, they then have to know enough about information theory, physics, economics, and computer science to see what the tool is actually creating and therefore what problem it's solving.

25. 08:50Claim · condensed

    The information I'm generating right now will actually become significantly less valuable over time if I'm right: if you found this podcast and knew nothing about any of this in 2022, the order I've generated has a much higher level of value, meaning it's much more useful to you, than to someone who finds this podcast in 2030, in real energy terms.

26. 09:40Prediction

    There will come a day, if I'm right, where the value will have been completely sucked out of this information: the usefulness of identifying the new world that Bitcoin makes possible will have been completely priced in, and you won't get outsized returns anymore.

27. 10:44Claim

    Bitcoin is a very real tool, and tools are useful because they make us more efficient. Efficiency is good because the extended order is playing an energy and information game. Information is the physical embodiment of order, and order is what life wants: more information equals more better, more information equals progress.

28. 11:14Claim · condensed

    More information means more energy, which means longer runways, and longer runways make the extended order more robust because it can deal with the uncertainty and unpredictability of the future.

29. 11:45Quote

    Information is physical. It is physical. You are information.

30. 11:45Claim · condensed

    Information is generated via physical systems and must obey the physical laws of the universe. When you do anything, you're generating information: you build an iPhone, you generate information; you sing a song, you generate information; you solve a previously unsolvable math problem, you generated information. You created order, and order is good because it makes everyone else more efficient, which means more energy to direct at other order.

31. 12:17Analogy

    Imagine a factory floor from one of the cartoons in the 1950s, the conveyor belt with all the energy going in, all the hashes, all the proof of work, the difficulty adjustment, and out at the very end of the line the output: information, order, that is the most difficult to change the extended order has ever known.

32. 12:49Claim

    Bitcoin is a system that generates the hardest information in the world to change. That is the output, and it is doing it all the time.

33. 13:21Claim · condensed

    No one can generate information on a scale that is harder to change, harder to corrupt, harder to alter, no matter what system, tool, or physical form that information resides in.

34. 13:52Reference

    The best lens to view this from that I've come across, these concepts are from David Deutsch and Karl Popper, their work on epistemology.

35. 13:52Reference

    The best lens to view this from that I've come across, these concepts are from David Deutsch and Karl Popper, their work on epistemology.

36. 14:28Reference

    The core idea from Deutsch's The Beginning of Infinity is that good explanations are hard to vary.

37. 14:28Claim

    A good explanation is precise and deeply connected to the reality that it describes.

38. 15:00Claim

    Bitcoin generates information that isn't describing reality, it actually is reality: for the very first time ever, the map is the territory.

39. 15:00Analogy · condensed

    In Bitcoin, for the very first time ever, the map is the territory: the order of the ones and zeros is in fact the territory. This type of information, this type of order, had not been possible before.

40. 15:32Claim

    We can explain how to get more Bitcoin, but that doesn't actually get us more Bitcoin: we can program the universe to get more Bitcoin without getting more Bitcoin. The information must be generated, the order must be embodied, and because of the difficulty adjustment and proof of work, there are no shortcuts via compression.

41. 16:04Claim

    The system is comprised of 21 million subunits, or really 2.1 quadrillion subunits, and holding these units means you are holding the hardest information to alter. The entity holding these has the sole power to alter that information.

42. 16:38Claim

    It's a global, open, permissionless system where nothing in the world is harder to change or alter, entirely digitized, making it very low cost to maintain, to move, to create, to spin up a node and hold the entire record of every single transaction: the map that is the territory.

43. 17:10Claim

    The current system isn't immutable, not possible; it's risen to power because it's very easy to change, which has perverted incentives and led to unknowable amounts of misallocation and wastage.

44. 17:45Claim

    If information is hard to change, we can use it to keep records of the physical world: who has done what for whom, who has generated more information than others, who is a positive force in the extended order and who isn't. Anyone draining resources from the system would be highly motivated to hide that fact and would fight tooth and nail against exposure to this information.

45. 18:16Claim

    If information is the hardest in the known universe to alter, you can trust it. If you can trust it, that enables collaboration, and collaboration leads to innovation. If you aren't scared of being kicked off the network, you can venture further and further out on the specialization curve to solve more niche problems without fear of being cut off by more connected entities.

46. 18:51Claim

    If friction is removed from exchange, this can happen at a more rapid pace: energy becomes less static and can flow in real time to where it's needed most, where it returns the most. In the legacy system, opportunity cost cannot be known, and a system that provides less information is not as good.

47. 18:51Claim

    The more stable and solid the base layer, the more complex structures can be built on top of it. Make order more permanent, build a structure that will stand the test of time, use the system as a record-keeping service, and watch innovation and creativity explode.

48. 19:28Analogy

    Even in the future, the people who say Bitcoin does nothing will still be right directionally, they just won't know why. It'll look a lot like the cargo cults in the Pacific islands: they didn't know why the planes came and dropped off supplies during the war, but they came anyway, so they figured, I see the plane, I see we're getting good stuff from this, let's worship the plane. They see the number go up and think Bitcoin is good only because number go up; they don't understand the why behind it.

49. 20:00Claim · condensed

    The TradFi folks are going to get it right, the number will go up forever, and the earlier ones who see that will be better off in energy terms. They'll have been wrong as to why, but that's where the information arbitrage will be for longer.

50. 20:00Quote

    You're thinking too small about monetary gains in your own little shit coins. You're not understanding the enormous potential of the tool itself. This isn't about the money. It's about information and order.

51. 20:32Reference

    Recently, Michael Saylor said it best when he said, you think that you're going to come up with a better idea, order information in a better, more efficient way than what has already been exposed to you through Bitcoin? Are you going to generate novel physical order that has a larger impact on the extended order than the tool that will create the hardest information ever?

52. 21:03Prediction

    You can help contribute, and in the process of forgoing energy consumption now, you'll be able to ride to reserves on a scale unimaginable. It's not stopping at a hundred thousand, it's not stopping at a million, it's not stopping, because it cannot be stopped: that is the whole output of the system.

53. 21:34Claim

    We have to build order on top of order, and the more order that is built on top of the order, the better off we all are, because that order turns into explanatory knowledge. Explanatory knowledge makes us more efficient, making us more efficient allows for more energy, and the circle goes on and on.

54. 22:09Quote

    You think that it is only good for number go up when in fact it is good because information go up all the time, everywhere, forever. It can't be stopped. And we're going to the fucking moon.