Episode Transcript
[00:00:01] Everyone wants to make you an addict. Some people sell illicit drugs on the black market and want you to become addicted to them so they can profit from you. The dealers naturally focus on drugs that are physically addictive because they are often the hardest to kick. When they do manage to addict you to them, that becomes harder and harder over time. For drug lords and dealers, this is heaven. This virtually guarantees that all customers will be regulars, at least for as long as they survive. For the addict, it depletes the quality of their life. They start to live from one fix to the next. As bad as such addictions might sound, and as widespread as they are, the current global addiction is yet worse. The addiction to digits Pandemic the best in Bitcoin made Audible I am Guy Swan and this is Bitcoin Audible.
[00:01:14] What is up guys? Welcome back to Bitcoin Audible I am Guy Swan, your professor for the day, the guy who has read more about Bitcoin than anybody else you know. And this show is brought to you by the blockstream Jade Hardware Wallet. Don't forget to check out my unboxing video. There is very important information that you need to be aware of in that video, like what else comes in the box, what does a Jade plus smell like? And other very important details. And also the BitKit mobile wallet, which has been one of my favorites. It was actually one of the ones that, you know, when you set up a wallet and you're just intending to play around with it, so you do a bad thing and you forgot to write down your seed, or you put your seed in a vulnerable place. Like I actually posted my seed in Discord with the engineering team, with the guys who were developing it, specifically because we were trying to test something out with contacts. And then I forgot that that seed was vulnerable because at the time the wallet was brand new, it was in beta, and I was just trying it out, but I really liked it and I found myself continuing to go back to it. And then I realized sometime later on, it was like four months later or five months later that I had kind of started using it. Like I had a few hundred dollars worth of bitcoin in that wallet and the seed was literally just text published in a Discord server somewhere. And one of the developers had even booted it up on their device because, like I said, because we were testing something. And then it hit me. It hit me one day. I was like, oh my God, this is a totally compromised seed. But it was just a great example of both, you know, opsec, but also a testament to the fact that the bitkit wallet was pretty awesome because I had kept using it. But anyway, I didn't intend to tell that story, but it just popped into my head. We've got a great episode today. We've got a great read from Ivan McAdonsky who we have read. He does. He did the entire series, which we've only read the first one, I think on construction, but the series on how instant payments and Lightning Network can fundamentally change industries and then really kind of thinking about the model, how you could change the economic and market model using instantaneous payments. It's a really. It's a pretty fun series and I intend to probably get back to actually doing the whole thing on the show. The only thing is, it's just. It's a ton that there's a. It's a long series and they're all pretty long. They're decent sized pieces and I've already just got a list that the list grows longer than I get the audio out. But I really wanted to hit this one in particular because it's one of his most recent or it is his most recent piece because it's about the digit addiction. The addiction that we have to fake points and what it means and what the difference between real digits, real points and fake ones even is. I just thought this was a really interesting framing and I don't want to lead too much. I want to let Ivan kind of take it away and then we will follow it up with a guy's take. So with that, let's go ahead and jump into today's article and it's titled the Digit Addiction pandemic by Ivan McAdonsky. A look at the compulsive and addictive behaviors encouraged by the structure of the fiat world.
[00:04:44] The dystopian present Fiat has made us all digit addicts.
[00:04:51] Everyone wants to make you an addict. Some people sell illicit drugs on the black market and want you to become addicted to them so they can profit from you. The dealers naturally focus on drugs that are physically addictive because they are often the hardest to kick. When they do manage to addict you to them, that becomes harder and harder over time. For drug lords and dealers, this is heaven. This virtually guarantees that all customers will be regulars, at least for as long as they survive. For the addict, it depletes the quality of their life. They start to live from one fix to the next. The problem for the dealers is the illegality of the product. Staying in business as a dealer requires a lot of care, caution and expense. Additionally, much of the total addressable market is turned off by drugs. Bad reputation. So what do you do?
[00:05:46] If the problem is legality, make legal drugs. The drugs sold in pharmacies are legal and in many cases, no less addictive. There's a drug for every complaint and three dozen for the common cold virus. Some, like a simple nasal spray, are addictive and can lead to a chronic condition which locks you in for life. Life. It's the same basic business model as the street dealer, but with less friction, lower risk, and much better optics. The barrier to entry is that the clients have to be sick.
[00:06:23] Now, consider supermarkets, where the market is perhaps saturated, but the total addressable market is almost 100% of the population everyone eats. Junk food can be quite addictive and can make its users sick. Sick junk food junkies might turn to pharmaceuticals without changing their habits, compounding the problem.
[00:06:45] Now the cycle is complete. As bad as such addictions might sound, and as widespread as they are, the current global addiction is yet worse. The addiction to digits pandemic the first case of addiction to digits is in terms of fiat currencies. They have the benefit of transacting with everyone in a particular country. It is very convenient to use those digits as a medium of exchange. Those digit addicts usually say, I can't buy anything with Bitcoin, so I'm not going to buy any. They are saying, I am addicted to the benefit of a convenient medium of exchange, even though my purchasing power will deteriorate. Some people realize that money is usually static. It's active when people are transacting and passive when they're just keeping it for later. To be an effective store of value, money needs to preserve or grow its purchasing power over time. A person should not earn the same money twice. When I have savings, I should not be forced to actively manage it. So whole market segments focus on the passive use of money. It is strange how the system forces you to actively use your money to solve the passive use. It kind of defeats the purpose. Still, you can't let it degrade because of inflation. Here there are a few main bonds, real estate, equities, gold and art.
[00:08:19] The bond's benefit is its promise to return more digits after some period guaranteed by the state. And they truly do. They give you the benefit of increased digits. And at the end of the period, even with the more digits, your purchasing power is less than when you started. Still, it beats the ones that just saved the bond. Digit addicts will not buy Bitcoin because bitcoin in cold storage pays no interest.
[00:08:45] The real estate benefit is a Digit yield in the form of rent and the digit value of the property will be higher. The value of the real estate is a function of the returns it generates every month. The digit value of the building increases because the degrading of the fiat digits happens faster than the degradation of the physical structure. Real estate addicts will not buy Bitcoin because it is not physical and does not pay any digits for rent.
[00:09:15] Physical engineers invent products for people to bet on against each other. The whole premise of a stock market is that you sell something you have for another thing that may increase in digit value. Each trade has a winner and a loser. But like in a casino, the house always wins in the end. Just another addiction with another kind of dealer. The bitcoin system is unifying everything into one. In a bitcoin economy, there are no losers because one person's profit is not necessarily a loss for another. Those addicts will not buy bitcoin because there is no betting system in bitcoin and can't do call or put options or other illusionary engineering things. So the insiders benefit. If you just buy bitcoin and hodl for when you need it, then all the dealers of that addiction will be out of business.
[00:10:12] Gold addicts are addicted to the metal without realizing how it can be used against them. How can anyone tell us how much the market cap of gold is if no one can tell us the exact weight digits of gold that it is founded on? This is the true Schrodinger's cat these days. Now, owning gold is represented only by a number on a screen, reducing it to the same status as fiat. With fiat currencies, one piece of paper has the number one on top and the other has the number 100 on top. We do not care that they are on the same paper value, but we value the digits that are written on the paper. The gold digit addiction is the same, but it took longer to foster because everyone can measure its weight rather than rely on arbitrary numbers. Nobody can put a hundred on top of one kilo of gold and tell you that it is 100 kilos. But since digital displays of gold ownership have largely replaced physical possession, it follows the exact same mechanism as paper. Gold addicts say that Bitcoin does not have any physical or metal properties, so it has no value and they won't buy it.
[00:11:30] How about the art digit addicts? Their views on Bitcoin aren't very well known since they aren't very active in the discourse. The benefit of art is in the emotions it evokes. When Bitcoin starts to demonetize the art industry, we will see art digit addicts defending its value.
[00:11:50] Art should be art. It should not be a method for a store of value.
[00:11:56] The next digit addiction dominating today's societies is loyalty programs like air miles and loyalty points for discounts, promotions and exclusive offers. Even to this day, my grandma is looking through the brochure of every store in the area to find a discount of 10 cent cheaper bananas per kilo. Because the companies can't print currency digits, they print loyalty digits. They not only have much greater purchasing power inflation than currencies most of the time, but they also have much greater controls over when, where and how to actively use them. The addicts of the loyalty digits start orienting their lives around the loyalty program digits and the dealers love it. The next digit addiction is social media. People get addicted to subscribers, likes, views, etc. The benefit they provide is the platform, the ability to reach a far greater audience than through face to face interactions. This addiction is not directly connected to money, but all those digits are what promoters, sponsors and everyone is looking at. Sponsors and subscribers automatically convert metrics into value to assign worth in fiat.
[00:13:13] The next digit addiction is to video games. Gamers get addicted to the tokens needed to unlock the special item. They start chasing those token digits so hard in the virtual world that they forget to live in the real one. As young players age, their addictions often graduate from game tokens to other digit dealer systems.
[00:13:38] The current FOMO digit addiction is to blockchains. Their benefits include faster transactions, more anonymity and smart contracts to get you hooked. If the creator is not a direct scammer and truly wants to give those benefits to people, he is essentially saying that the benefit that he gives is more important than incorruptible money. The benefit of smart contracts is greater than incorruptibility.
[00:14:04] That is probably a misunderstanding that secure and decentralized money is the base that gives you certainty to build everything on top. If you want to launch rockets into space, you do not change gravity to make your use case easier to achieve. If you do, you will destroy all the sports where people need to jump. All the tall buildings and trees will be collapsing because it will be much easier for the winds to tilt them. You destroy the way of life on earth. But it is nice that we can go to space.
[00:14:39] If you believe that the benefit is worth it, then you do the work and build it on earth without destroying it. Build on Bitcoin.
[00:14:52] The next addiction is to the digits of the custodians Bitcoin ETFs were hotly anticipated and have received plenty of acclaim. But their custodians are getting the punters hooked on convenience. Give me your bitcoin in my custody because you are inadequate to hold it yourself. Give me your bitcoin and I will give you digits. The common trait among all of these digit addictions is that they offer some benefit in return for dependence on certain digit lords. Once people experience the benefit, it becomes the thing that traps them. That is one of the struggles of the bitcoiners to accept that there are benefits to all of the addictions mentioned above. Bitcoin has its benefits and limitations, but the benefits of bitcoin do not negate the benefits of other things. This is the source of the greatest conflict between bitcoiners and crypto bros. Bitcoiners should not dismiss other crypto just because they are shitcoins. Instead, we should enter the arena and out compete them just like we have been for the past 15 years.
[00:16:02] Some of them do provide nice benefits to get people hooked on their blockchain digits. When we as bitcoiners do not compete with them and learn what we can, we are going to deprive bitcoin of those benefits. Bitcoin probably shouldn't adopt every feature that emerges somewhere in the crypto sphere, but competition fosters improvement. As a former professional athlete, I can say that my skills improved the most after losing to a weaker opponent. When a weaker opponent defeats a stronger one, it only means that he revealed a weak spot. Just because the weaker opponent won does not imply that the rules are unfair and need to be changed or the weakling should be disqualified.
[00:16:49] That is the tactic of the fiat digit lords. If we want to beat more powerful opponents, that is fiat currencies, we must also face the weaker ones. Bitcoin's obvious weak spot was, until recently, its throughput. Enter the Lightning Network Privacy welcome to Ecash. On top of bitcoin, the battle for control continues. In a new domain, the digit lords are capturing bitcoin digit addicts.
[00:17:22] The addiction is so ingrained in all of us that even when someone understands bitcoin and its implications, they transfer their digit addiction onto Bitcoin. For them, the addiction manifests in Hodling and the object of their obsession is how much do I have and is the number going up. I hodl and want the digital value to rise to give me the fix that I need. Still intoxicated by other digits, they are the easiest prey for the custodian digit platforms. By contrast, Real bitcoin maximalists value proof of work above all. Their primary goal is to build a better life for everyone through bitcoin. Unless you're building you're just a digit addict chasing your high. With bitcoin, different people get addicted to different digits. But even if someone benefits a lot from their addiction, that does not mean it is right for you. Michael Saylor was instrumental in helping me recover from my fiat addiction and going clean on bitcoin at the same time. He's hooked on the custodian's digits. After all, he has billions in the custodian's digit ecosystem. He preaches to people that it is better to have more custodians of bitcoin. Let's go ask all the gold bugs how that thing turned out for them. Do not get me wrong, all the benefits that he is saying are right and they are benefits. So what is the difference? The difference is in the control. In the addictions described above, the users get the high, but they also get hooked at the same time. A small group keeps control over the digits the addicts use and claims themselves as digit lords. In all those digit addictions, the mechanism is the same. Fiat digits are controlled by fiat digit lords. Air miles digits are controlled by the airline digit lords. Crypto bros are producing ever more blockchain digits with benefits that bitcoin does not have or yet to become. The blockchain digit lords, the custodians Digits are controlled by the screen digits lords. They all control the addicts through the digits.
[00:19:40] Another reason why the addiction analogy fits so well is that detoxing is so hard.
[00:19:47] Wonder why orange pilling is a struggle. Have you tried to take the cocaine away from an addict? Or the insulin of a diabetic? Or the chocolate from a fat kid? Resistance is natural. A real estate mogul who has spent decades mastering his trade and amassing a fortune is naturally going to resist any force that could demonetize his industry. The Hodler junkies, profiting from BlackRock's ETFs and similar custodians will naturally resist any threat to the number go up. Fix that is a marriage made in heaven for the Hodl digit addicts. You can see what infrastructure the custodians are setting up to capture you. Check the work of Whitney Webb and Mark Goodwin in their collaborative articles about that topic.
[00:20:32] Gold provides a clear example of how the digit custodians work. To analyze gold, you go to a goldsmith who can assess the gold's weight and purity, not an ETF dealer. The ETF Dealer is just the street pusher for the ETF digitlords. They can describe the imaginary trend lines on top of their imaginary digits that are disconnected from the metal. Unless that particular ETF dealer has a direct line to the gold Digit Lords, his opinion is absolutely worthless.
[00:21:04] He is just the digit addiction dealer pushing someone else's product to get his cut. Bitcoin ETFs are no different. Bitcoin can be used as a real store of value. In the fiat system it is mainly you store my value.
[00:21:23] The Digit Lords model has its weaknesses. Some try to exploit the model's mechanics for their own benefit and to avoid becoming addicts. For example, counterfeiting, fiat, insider trading in the store of value digits, hard and soft nepotism in the loyalty digit programs, hacks in games, all of the above in blockchains.
[00:21:47] Even though they are not obeying expected addiction behavior, they are still addicts by chasing the same digits. The difference is that if they succeed, they are branded criminals or hackers by the Digit Lords. They are using the control system as designed and demonstrating that the whole system is exploitable. The exploiters can attain enormous power by those actions. But that is not the intention of the system. The Digit Lords need control to remain a privilege and guard it jealously so that no one else can own the digits but them. That is why they need us to be hooked. No single person's effort can overcome control over the digits. That is why any system that is disconnected from work will fail in the Bitcoin era.
[00:22:38] Bitcoin is the panacea able to cure all addictions. There is no free lunch in Bitcoin. Once connected to the open and permissionless Bitcoin network, all wallets, all investments, all loyalty promotions, all social media, all gaming tokens and all blockchains will benefit from Bitcoin and their first mover advantage.
[00:23:02] First look at the addiction the right way. Then take responsibility to break it and be free.
[00:23:11] Beyond the number go up, addicts analysts are also addicted to the models evaluating all the addiction digits. If Bitcoin is something genuinely new, then why are we using the same old modeling principles? The Power law model fits a number of real world phenomena, including Bitcoin. Through most of its history. From the growth of cities to metabolic rates and many other correlations relating to energy expenditure, the Power Law applies in a surprising number of cases. The Power Law is a functional relationship between two quantities where a relative change in one quantity results in a relative change in the other quantity proportional to to a power of the change independent of the initial Size of those quantities. In other words, one quantity varies as a power of another. Funny how the name of the model, coincidentally or not, suggests using it for things connected to power. Bitcoin is inseparable from energy or power, so the power law is probably the proper tool. That is why the power law of the hash rate will never break. Even if the fiat price power law might.
[00:24:24] Since engineers have built Bitcoin, their models explain the technology best. But when it comes to financial analysts, they are not modeling reality. They are trying to model the collective psychology about particular digits. Elon Musk is not going to land a rocket on Mars powered by likes or fanboys. The only way is to model reality and then build it. Reality is uncompromising and inspiration only takes you so far. Either the model is accurate and the execution works, or the rocket explodes over time, reality will defy even the best financial models. But they can accurately capture what the collective psychology values in the short term. That's why the financial engineers hypnotize the digital addicts and get them hooked. In the meantime, Bitcoin continues to do its thing, regardless of what any of us think about its future. It is an uncompromising force of nature.
[00:25:31] Perhaps there is a less fickle way to evaluate companies. Let's take Nvidia, the current FOMO stock. The digit value unit of a stock is connected to a digit unit of the share. Neither quantity is directly connected to energy and therefore can be created at will. But what if someone maps the produced GPUs by Nvidia? It is just a hunch, but it probably follows a power law. The production capacity of the chips is limited by physics. The production of the company can't break reality to scale. But when you cross reference it with the stock price, you may see when those digits are driven by the current psychology of the market or by fundamental value. Giovanni Santostasi is the person to do the math on that and say if he can innovate a new way of evaluating stocks with the power law model. I may be talking out of my ass for the stock's valuation application of the model. But he proved that this is the only model that maps the journey to hyperbiquinization.
[00:26:36] And what about digits that no one controls? Some digits are connected to reality, which is very useful. The digits for time, the digits for length, the digits for weight and the digits for temperature.
[00:26:51] Reality does not care about what we think about it. Reality just is. And we use digits to understand it. That is the language of the engineers, not economists. The numbers not connected to physical energy Are numbers backed by a group's opinion. They can be captured and controlled. Engineers digits are free. They resist control. Even those who haven't mastered them can benefit from those who have. They are the ones building the roads, the computers and everything else we need in modern life. The difference between open digits and controlled digits is that the addicts of the control digits depend on the digit lords for where, who, when and how they can benefit. You can't use the digits of one country outside its borders freely. You can't use one company's loyalty digit points with its competitors. You can't use the token digits from a game to buy a coffee. You can't buy microstrategy stock digits without a bank account. Michael Saylor always says that there is nothing worth buying in Africa. Even if you had a billion dollars to spend. That is grossly biased towards the passive use of money saving their purchasing power. If you are a billionaire, it sure is a problem. But if you want humanity to flourish, the most important thing is to build stuff. Africa is a very important part of humanity and we need to figure out what to build and how to facilitate spending so they can get to the point of caring about store of value billionaire digit addiction problems. And even beyond the addiction saving is just a partial view of that one store of value use case. My point is not that Saylor is wrong to protect his castle. Rather we need to build castles for everyone and then they can start protecting them. His blind spot is that the custodians now want to co opt Bitcoin as a store of value so that they can continue the 2% inflation game and remain digit lords. The difference is that with Bitcoin, the 2% inflation game runs on a decentralized global standard. Different countries and banks can connect to it in profit, but that attracts the degenerate custodians, companies, banks and states that will print digits on top of Bitcoin at some point. A bank run on the most degenerate custodian digit lord is inevitable. And then the domino effect of bankruptcies that they can stop in the fiat system is not something that they can do in the Bitcoin system. So buckle up. The biggest volatility may lie ahead. The people that we call poor do not have access to custodian institutions. But now they can run their own bitcoin nodes. For the first time ever, unprivileged societies have the tools to take back all the purchasing power that was stolen from them by the digit lords without spilling blood. Take control of the math you use and Take control over the money you use so that you can take control of the life you lead. Otherwise there will come a time when you will beg someone in control to come and save you. This message is addressed to those without control. But this message is also relevant to those who already realize what Bitcoin is and need to prepare for the day when the addicts come and beg us to save them. We need to start working on becoming people of virtue. Alexfetsky we must not become digitlords, but actually detoxify people effectively and cooperate. Do not sit on your hands just hodling. Build the future. Anyone who's been in Bitcoin for more than four years, one cycle should be running a node and taking more control into their hands. Anyone who has profited from Bitcoin's appreciation should be thinking about what they want and how to integrate Bitcoin into those goals. No coding or technical expertise is required. All the analog infrastructures need to be integrated with the Bitcoin infrastructure. Barbers need to start accepting Bitcoin and telling the community. The barber infrastructure has to be connected to the Bitcoin infrastructure along with all the others. The Digit Lord companies should consider replacing air miles with sats. Replace in game tokens with millisats. The Digit Lords could do this immediately. This is Bitcoin's ultimate imminent network effect. Inflation in all the addiction digits will accelerate. The Digit Lords will do everything they can to keep addicts in their digit drug ecosystem. At the same time, companies that have already adopted Bitcoin will actually save them from bankruptcy. The Digit Lords will then serve all of us and whoever gives the most benefits will be the one that we choose and they will fight for our vote and support.
[00:31:54] Until you drop the digit addiction, you will never be free. Reality is uncompromising for those companies or countries who do not navigate its rules or laws properly. This is exactly the problem that the Digit Lords face. As long as the digits are connected to reality, someone can always verify the accuracy of the digits. I can lie about today's date, but you can verify. I can lie about the weight of something, but you can verify. May not be applicable for gold. I can lie about your height, but you can verify. I can lie about the temperature, but you can verify. Now for the first time ever, money digits are connected to reality through Bitcoin and everyone can verify. Lies won't last long. Just ask ftx, Celsius and Terra Luna Digitlords. They may control their closed digit systems, but no one controls reality. That is exactly why we will win. MartyBent the Digit Lords are addicted to that control, but people are building solutions to transfer control from the Digit Lords to individuals. Whether the Digit Lords realize it or not, they are losing ever more digit addicts to a system that is detoxing them. Losing addicts is fine if you can get them hooked on another substance. Referring back to the chemical drugs mentioned above that we looked at at the beginning of the article, this is why digitlords will do anything to keep their addicts hooked on the next digits. Now that people have Bitcoin money inseparable from reality, we have clear detoxified heads. We will never go back to the addiction. The current dynamic is that the Digit Lords will chase our attention, but we will never give them back the control. I will happily take a discount on a vacation flight, but I will not serve the Digit Lord's agenda. I will not obey the Digit Lord's vacation plans. For me, Whatever loyalty digits they offer, they will serve my plans and orient their services around my needs.
[00:34:07] One of my favorite phrases from Jeff Booth There is no they, there is only we. It is incumbent on all of us to take control and become we. The Digit Lords are the they people usually refer to in the current system. There are digit lords, digit dealers and digit addicts in the bitcoin system. Addicts, detox dealers, build detoxing tools and no one is a Digit lord. And brings us back to Jeff's there is only we in the Bitcoin system.
[00:34:43] Congratulations on reaching the end of this article. Few people take any time to digest anything more demanding than a meme, but not you. If these ideas are worth spreading, please share the link. If you think they are worth discussing on a podcast, tell the podcasters to hit me up and I would be happy to chat with them. May we all live without addiction and build what we want for ourselves and for the kids. GregFoss P.S. love to all the Orange brothers and sisters out there. Godspeed.
[00:35:14] If you are using the Bitkit Wallet and you are in the United States and you are having trouble using Lightning because the LSP doesn't serve us customers, then I urge you not to use a VPN because that would be a way to get around this and not have any of this frustration or friction. Do not do this because it would get you a very easy to use self custodial Bitcoin and Lightning Wallet that is simple and just works. You know don't use. There's a bunch of different VPNs and a lot of them accept bitcoin which you could pay for from your Bitkit wallet, like you know, NordVPN or Surfshark or Proton VPN or Mulvad or IVPN or private Internet access or a bunch of other ones that would enable you to do this with ease and that you should probably do anyway because VPNs are good, but you should not do this because this would make BitKit a fantastic all in one wallet that you could just use and didn't have to think about. So if you want to check out BitKit without a VPN, which is a great bitcoin on chain wallet, you can use my link in the show notes, but definitely do not get a VPN and use lightning very easily and simply if you are in the United States. This message was not approved by the makers of BitKit. When I first read this article, I was waiting for the counter argument, for Ivan to discuss the counterargument, because I love the idea of this kind of addiction to this fiat number go up this ever chasing empty points. But I knew I could already hear anybody who doesn't understand Bitcoin going how is Bitcoin not just an extension of this? How is Bitcoin not just the same empty points? And of course, how do you designate or how do you make the claim that crypto is that and somehow bitcoin is not? And I really think this section is the one that hit it the best.
[00:37:15] And what about digits that no one controls?
[00:37:19] Some digits are connected to reality, which is very useful. The digits for time, the digits for length, the digits for weight, and the digits for temperature. Reality does not care about what we think about it. Reality just is. And we use digits to understand it. This is the language of engineers, not economists.
[00:37:45] Now I wish he had expanded on this more directly from the idea of someone who was going to make this argument, but I love the framing that he kind of leaned on here is understanding that the difference is literally the fiat digit addiction is that this is the difference between digits that are fully trusted and controlled by someone else and digits that are actually meaningful in some sense to something in the real world. Because the real world thing is the thing that matters. The digits themselves are either a reflection of what happens in the real world or they are meaningless. That is the key difference. And the digits, the digits themselves are arbitrary. The unit itself, it doesn't matter if it's an inch or a foot or a millimeter or a decimeter. The unit itself is arbitrary. It's about a standard so that you can weigh it against, you can measure it against everything else. And everyone else's measurements and world and reality, so that we have some sort of relative weight, some sort of relative measure for your sense of passing time, the size of your house or your cost, or the weight of something distant or the height of something that we can't see or that we are standing at and we have no perspective of. It is all about being able to intercommunicate and relate the meaning of things in the real world to each other. When the digits become separate from the real world and they begin to reflect the simple control or the simple ambiguous reward from some person who's running or the master of some sort of a system or some spreadsheet, then it becomes disconnected from reality and it becomes completely meaningless that we even chase those points. And this was always something. This is one of the things that bothered me about video games. Video games is why I had to, like, step away from video games. And I actually think video games are super valuable in a bunch of different ways. I'm not even, like, crapping on the idea of video games themselves. But I've told this story before of essentially when I finally broke down and started this show, I had been in a place where I was devoting tons of my afternoons. And when I got off work to the game League of Legends, which I, by the way, I still love, I think it's a super fun game. I haven't played it in ages, and I don't intend to get back into it, but I'm still super nostalgic for it. And I also just particularly love the League of Legends series on Netflix. But for anybody who knows, you know, you get experience points and all this stuff, and you can spend it to get skins and, you know, get some stuff to arbitrarily, you know, make your character cooler and whatever. But one thing I would do and had become a habit of mine, and I had been wanting to start a show or to start explaining, doing, I mean, anything. I had been in Bitcoin for a long time at that point, and I felt like I had something valuable to add and I wanted to be a part of it. I wanted to build something, I wanted to say something, I wanted to explain something and teach it to people. And I could not figure out what. What that looked like a podcast at the time seemed like the lowest barrier to entry, which it was. And I 100% love the fact that I did this and how many other things it's opened me up to. Like, I'm now finally building things and doing way more than just talking about Bitcoin. But you have to start somewhere. And I was just trying to find something that I thought would be helpful. But my time was being eaten by this game. I was chasing these arbitrary points inside this game that I had no, that had no connection to anything real. And I would come, you know, come home from work and try to get my. There was this thing called first win of the day. And you get a little bit more experience points than just from a typical game. And so I would play a couple of games until I got a win, and then I'd shut it down for the night and I'd go do something productive. And I came home from work thinking, I'm gonna do something productive. I'm gonna build something. I was pretty. I was pretty jazzed about it. And I took the energy and I literally put it in League of Legends. I'm going to sit down, I'm going to get my first win of the day, and then I'm going to switch over to this. I was, I was ready to go. And I literally thought the game was going to amp me up, but I really needed that kick. Like, I was genuinely addicted to this game. I loved playing it. I loved the, the surge I got. And to the point that when I wasn't winning, I would get like, very, very angry. And that night, every once in a while this would happen and I would just be like, what in the hell? And I would just go in like a 8, 9 game streak of just lose, lose, lose, lose, lose. And there were multiple times, I remember there were like two or three games that night where we were literally kicking butt. And then somebody does something stupid and it all just. The momentum just immediately is killed and the entire thing ran against us and we lost like, like so close to tasting it. And remember my motivation and my energy was I was trying to. I was thinking that I was going to build this up and dedicate this to finally starting a show or trying not to half start something and leave it on the table, which I had done many times before. And I just kept losing and kept losing. And then I turned it back on. I said, I'm going to do one more. This is so ridiculous. I'm going to get my first win of the day.
[00:43:19] And then when I lost, like literally the eighth or ninth game of the night, I real. I looked at my situation and I looked at myself and I realized how much I was exhausted. I was exhausted.
[00:43:34] I was literally furious. I think it was literally close to midnight. I hadn't even spent any time with my wife. I was still in my work clothes. I had not eaten. And that was it. I needed to go to sleep.
[00:43:51] That was. That was the end of the night. And I just could not believe that I had just done this.
[00:43:57] That in chasing those few completely meaningless points, they weren't gonna get me anything. It was literally gonna change the color of my character that I had been playing with. Like, I was probably just gonna buy a new skin for Morgana or something where she just has more cleavage. If anybody's seen the characters and stuff in that game, they are not shy about boobs. You can learn everything, you know about the demographic that plays that game, but, like, this was it. That was what I was chasing those digits for. And something about that little microcosm of what happened that afternoon. I had, like, seen my ambitions. I had seen what I wanted to do and what I had hoped that work was going to achieve. And then I had paused to play a game and chase some arbitrary points which were gonna build me up, and I was gonna be excited, and I was gonna take that energy, and I was going to be more productive. And I ended hungry, tired, so frustrated. And I didn't even get my fix. I didn't even get the stupid digits. You know, I was, what, 30 years old now at this point, and I just extended that out. I just laid that map out for the next four years and looked at what I accomplished in the previous four years, and I just said, what the hell am I doing? What was this for?
[00:45:28] And I uninstalled the game that night. And it sucks, too, because I had a lot of good friends up there. I had a number of people that I played with, and it was the only way that I was actually. That I actually stayed in touch with them, and the only way that I would ever converse with them, to the point that I've barely spoken to or seen any of those friends since that day. Like, I couldn't.
[00:45:51] You know, like, sometimes you literally have to cut.
[00:45:55] Like, you have to change your whole network. There's no. Like, I couldn't use that as an excuse.
[00:46:02] So at the cost of my life, you know, at the cost of every other motivation and thing that I hope to achieve and my family and my time at home. And I'm pretty sure it was the next day or the day after. It was literally within a day or two that I started the show. And it's also important to note that, you know, the podcast isn't an end game to anything. The podcast was. I mean, just, you know, talk about. It's like, oh, Everybody's a podcaster or an influencer. Like, I never wanted to be either of those things, aside from the fact that I wanted. I wanted a podcast because I love doing this. Like, this excites me, this interests me. I love getting up on stage and talking to people and explaining and telling stories. Probably more than anything, I feel like I'm a storyteller, or at least that has always been something that I've. I've really loved. But this was always a way to do something that I thought would be valuable or that someone else might get some use out of so that I could potentially go on to do more valuable things, be more involved, actually have an income that I have control over, that I can direct to projects and things that I want to see in the world. And that is really what it all comes back to, including the whole idea of digits and why they matter or why they are frivolous. Does it ultimately connect back to something real in the world? And this is kind of the definition or the concept of why it is that fiat finance has become so parasitic and such a force of destruction is it has become completely disconnected from the actual value, the profitability, the longevity of any of the actual business practices of these companies and financial institutions. Because those things literally do not matter when trillions upon trillions upon trillions of these arbitrary digits are just flooding into the system and you don't have to do anything of consequence in the real world in order to chase and scoop them all up, in which the effect is your ability, ability to control and direct all of the resources in the real world by getting the fake digits. That is how fiat manages to suck the meaning out of all of our economic activity and leads to this end game of fiat finance, where literally everything is a token and nothing means anything. We all just chase bigger numbers and more numbers as if it's a video game. And we. We forget that the only reason any of those numbers matter is their relationship to what is happening in the real world. And that is the only extent to which it matters. Any and all degree in which those numbers are disconnected from reality make them worthless. It makes the incentives that it produces and the actions and behaviors of chasing it any and all in the realm of disconnection from reality. A literally destructive process.
[00:49:20] And this is literally what makes Bitcoin different and why it is so unbelievably valuable. Because we have digits. We have meaningful digits for weight, we have meaningful measurements for length, for time, for these things in the real world that matter and that we need to communicate and we need to trade with each other. But we have not had anything but a giant series, a giant set of networks of fiat, of arbitrary tokens that are subjected to trust, opinions and subjective control before and beyond any connection to the real world. And for the entire era of the virtual economy, this has been the only, only thing we have had to measure value. And when I say virtual economy, I mean paper representations. I mean the trade of an agreement, of contractual obligations, of promises, of resources. This was, this goes back to the 15 and 1600s. That is when gold began to lose its hold on actually establishing strong and the, the integrity of our trade networks. Now it still wasn't. That loss still wasn't very meaningful for a very long time. I think the tipping point was really towards 1900, when gold both saw its greatest network, that it was defending the reality and the soundness of money in the greatest economy it has ever accomplished that in. But then also the virtual economy grew to a size where it became so meaningful, it became such an important part of it, that gold essentially became paper. And then World War I and World War II were essentially the unraveling of losing that independent standard and the need to establish a dominance in order to actually have a global economy. Because when your currency is entirely backed by trust, well then at the end of the day, the most powerful group or institution, the one with the most ability to execute and control through violence and dominance, is necessarily also the most trustworthy, because they can always just kill the next most trustworthy. The honesty of the person that you are trusting doesn't matter if the person can't defend themselves from someone else's control. The end game of fiat was always military dominance. But Bitcoin is connected to the real world specifically because of proof of work. Because proof of work is what allows us to establish consensus on which history is the true history.
[00:52:13] And it is defended verifiably by a literal wall of energy produced by the entire planet at the same time to protect it. And because of that consensus, we can also then use those rules. We can have integrity. We can believe that the transactions and the ownership are real. And thus by verifying the rules of the system, we can know what restrictions every participant in the network in the economy based on Bitcoin had to adhere to in order to obtain the right to the value. And thus it can be trusted to connect it to real resources in the real world. I can sell my house for Bitcoin, knowing that both I genuinely have a house and both I genuinely have a unit of value in the digital World with a degree of ownership assurances that are literally comparable to my ability to own a house. In fact, better.
[00:53:16] Better. I own my bitcoin far more securely than I own my house. Or at least I guess that depends on your attacker. When it comes from the idea of a government. I clearly don't own my house or a financial institution. I have a mortgage, I pay property taxes. The government can just arbitrarily change the rules and I can't move my house. It's stuck where it is. Situation for bitcoin is exactly the same. However, it's also very hard for a robber to steal a house for the exact same reason actually that it's easy for a government to steal it. But if somebody put a gun to my head and I didn't get to shoot them first, which I'm working on being good at, I definitely have hot wallets and they would get some bitcoin. But anything at the value of my house, I actually get a profound and really kind of crazy set of things that I can secure it against and ways that I can ensure that it can't be taken from me, which is literally so cool. And you should probably think more about ways to actually do this for hot wallets. But it also adds a lot of friction when you're actually living on a bitcoin standard. So it would seem like the easier, more the far greater net value would be in learning how to draw my gun quicker and more accurately. But the integrity, little, little tangent, but the integrity of those bitcoin points, of those digits and all of the rules around ownership, around consensus and around what it means to have them and how they cannot be achieved by cheating the system, by altering the rules makes it the perfect way to. To begin to measure value in the real world and become consequential in genuine trade networks of genuine resources that result in economic prosperity and trade. But the second those digits do not have integrity of the rules and ownership system or the consensus by thousands, hundreds of thousands of participants in the network, well then its connection to reality is completely lost. And the trust that others can safely connect it to their reality, to their resources, to the stuff that they are selling for it to stand in place, to hold the value in place of the house they are trying to sell securely, that trust dies. Its ability to meaningfully maintain that connection disappears. Which is exactly why proof of work is indispensable from the system, because it is a real world cost to the protection of its consensus. I know I say this, I use this analogy a lot and I Hope people kind of understand the picture. But the proof of work of every block is literally a force field. It is a wall of energy that you cannot go around, you can only go through. And it takes exactly the same amount of energy to attempt to go backward through its history, making the assurances and weight of value that you can place in its transactions and the trust in its ownership the fastest and most secure in the world. If someone tells you some crypto shitcoin is faster, understand they mean faster. Like the spreadsheet updates faster on Google than Amazon. And that update is utterly meaningless because it doesn't mean anything. It's just a spreadsheet that updates. The only metric that matters is how difficult it is to change that update, how irreversible is the ownership of the person who just received that transaction. And Bitcoin is far and away the fastest and most secure with no real competitor at all. If you don't understand that yet, I would recommend I think it's Nick Carter's piece. It's the settlement assurances stupid. Of course I have it in audio on this show, but there's also a lot of other pieces that are that explain this idea. One of them is Stop into Crips or is it Beautyons? No, Stop into Crypt Stop into Crips piece invalid blocks need not apply. And I always love the analogy that he used. He called Bitcoin an impenetrable fortress of validation. Those are both great ones to understand that concept. If what I just said is confusing to you or you don't understand why Bitcoin has the fastest transactions, you should listen to both of those before you think you have a counter argument. But anyway, this has gone on quite a bit and I've got to wrap things up anyway. I gotta take care of the kiddo so thank you all for listening so much. Don't forget to check out the Bitkit wallet and of course get your Jade plus. I hope you guys liked my unboxing video on Twitter and nostr. But if you neither understand how sexy the J is normal know what it one smells like, you may or may not find out the answer to both of those questions. If you watch the video and get 10% off with code guy and get more assurance over your ownership of Bitcoin than you do of your house. That's how you do it. You get a Jade plus. And then if you want a self custodial hot wallet, it's like super good and has a fantastic design and ui. Bitcoin and Lightning. Then you should check out this bitkit. And if you were in the US you should not use it in conjunction with a vpn. Don't do it, because that would be a sly, roundabout way to get lightning. So stop it and I will catch you guys on the next episode of Bitcoin. Audible and until then, everybody take it easy, guys.
[00:59:32] People use drugs, legal and illegal, because their lives are intolerably painful or dull. They hate their work and find no rest in their leisure. They are estranged from their families and their neighbors. It should tell us something that in healthy societies, drug use is celebrative, convivial and occasional, whereas among us, it is lonely, shameful and addictive. We need drugs, apparently, because we have lost each other.
[01:00:02] Wendell Berry.
