Episode Transcript
[00:00:00] One of the best signs that we're winning is just how bitter all the buttcoiners are getting. And we got a fun short one today. All about it. The best in bitcoin made Audible. I am Guy Swan and this is Bitcoin Audible.
[00:00:32] What is up guys? Welcome back to Bitcoin Audible. I am Guy Swan, the guy who has read more about bitcoin than anybody else. You know, we've got a great show for you today. This is going to be a read. It's going to be a very short read actually from the Financial Times and it's an apology to bitcoin hodlers, but not really. And there's just one or two things that said in this very short piece that just had me like I was just wow. Like it was just crazy that it seems crazy to me that people cannot see how dumb some of their anti bitcoin takes are or maybe just how unbelievably proven wrong they have been. And to take a step back, like you don't have to be a bitcoin supporter, but to just take a step back and ask that if the price of bitcoin, if the value of this network, if everything that you said wasn't going to happen, has happened and in fact happened in exactly the same way as the people you were disagreeing with said it was going to happen, maybe, maybe consider the premise could be a little bit off.
[00:01:51] Shout out to the Jade hardware wallet. By the way, my favorite setup right now with the Jade plus is Bluetooth connected to Blockstream Green especially for just like a basic wallet that I want to use like absent of multi sig and stuff which I am setting it up with multisig on my nunchuck but just booting up green wallet and the Jade together and then just using it and they just talk over Bluetooth. Man, that's really nice. If you want to grab yours. If you like that setup you can get 10% off with code Guy. That's my name. It's easy to remember. If you can't spell it, don't get a Jade plus, you're going to have problems. Link in details in the show notes and if you want a great mobile wallet with lightning built in with on chain and that is super intuitive and simple to use. The Bitkit wallet by the guys over at Synonym. It's been one of my favorites for a while. Definitely check this one out. Links and details in the show notes. All right, with that let's go ahead and get into today's episode. A short read from the Financial Times with a backhand apology to bitcoiners, and then, of course, we will follow it up with a guy's take. So let's kick it off with today's article, and it's titled Hodlers An Apology A Mea Culpa to Mark a Bitcoin Milestone by Bryce Elder Regular readers of FT Alphaville may have formed the impression that its current and former writers are united in skepticism about crypto in general and bitcoin in particular. That is correct. Ftav posts between June 2011 and today may have communicated the idea that bitcoin is a negative sum game being played on a protocol that's very clever and hypothetically useful as a unit of accountability, but is chronically inefficient as a conventional means of exchange and is compromised as a store of value. Our posts may also have promoted the idea that the price of a bitcoin is an arbitrary hype gauge that's disconnected from any utility the token may have because it's trivial to duplicate the utility provided by said token. So any intrinsic worth comes from the sunk costs of infrastructure alongside intangibles like regulatory acquiescence, interconnectedness with mainstream financial systems. It was once sold as being the antidote to, and the souvenir attraction of being the first.
[00:04:20] We stand by every single one of those posts. Nevertheless, with bitcoin's price recently crossing $100,000, a significant number of commenters seem to feel they deserve an apology in light of our longstanding cynicism. So here it is. We are sorry if at any moment in the past 14 years you chose, based on your coverage, not to buy a thing whose number has gone up. It's nice when your number goes up. And we're sorry if you misunderstood our crypto cynicism to be a declaration of support for tradfi. Because we hate that too.
[00:04:56] The end. That was it. So why why am I doing this episode?
[00:05:03] I did it because it is wild to me to think that someone can so consistently and for such a long time be wrong and yet not reconsider their premise.
[00:05:17] I'm doing this episode because of this sentence.
[00:05:22] The price of a bitcoin is an arbitrary hype gauge that's disconnected from any utility the token may have because it's trivial to duplicate the utility provided by said token.
[00:05:38] And here I would ask if you think it's trivial to duplicate the utility of bitcoin, then why, after 14 years, has nothing even slightly competed with it? And then the argument that the only reason here is that is to hand wave that away. The fact that we're actually watching the divergence between crypto and bitcoin now, and to try to whitewash that with nothing but the souvenir of being the first, the souvenir attraction of being the first, that this is all just because bitcoin is the first. You know what else was the first? MySpace, Mosaic, AOL Online, BlackBerry, Betamax. Is that really as deep as you go?
[00:06:28] Is that as deep as the thinking goes? That the only reason bitcoin has succeeded, even though its utility is completely meaningless, because it's so unbelievably easy to duplicate it completely on an entirely different system, an entirely different chain, and one whose returns are being diminished, that has diminishing returns over time, and yet it still destroys all of its competition. You don't ever stop to wonder, maybe there's something more to it. You don't have an open mind for 10 seconds to just ask, what is it that Bitcoin does provide that nothing else can copy? If you actually started it from that premise, I don't see how it would take very long to find it.
[00:07:19] And this, so much of this stems from thinking that the purpose of money is how you end up using it. That the facade of changing the apparent the written ownership of numbers on a screen to be labeled by the name or the account of someone else, it is confusing the result of good money with its purpose, rather than understanding the purpose of money that allows the result to be meaningful.
[00:07:58] What does it mean to have that label change, to have the account number change on those particular digits? How difficult is it to change it back? So I'm going to try to distill down what I believe the ultimate purpose of, of money is. That allows all of those other moneyness things to come about. The payments, the transactions, the business contracts, the futures markets and options, social media tipping, the philanthropy and recovery funds sent to disaster areas, the actual shifting of real resources and real people in order to better obtain the thing that is money? What is it that makes all of that possible?
[00:08:50] What is it that makes people literally, literally sell their house, change their behavior, stop a project that they are in the middle of in order to prevent the loss of, or in order to obtain more of a singular good in the market? What could possibly enable or incentivize so many people to do so many things and make so many decisions around obtaining one good in the society?
[00:09:22] The purpose, the primary foundational purpose of money is to hold the entire value of society.
[00:09:35] Value equivalent to the reflection of the value of all of the items and houses and electronics and ideas and contracts, for all of it to be mirrored in one good, and that it would store this value reliably and not drop it. Let me say that again in a different way. Money's purpose or money's greatest challenge is to hold the value of everything available for trade in the economic network, all of it, cumulatively, without breaking it, is by definition, the most valuable good in the economic network. And in fact, the degree to which it can accomplish this, the scale to which it can hold value before it reaches its limits, before it breaks, before the desire to make more of it is overcome by technological or technological limitations, are overcome by the desire to make more of it, that limit is exactly how much network it is able to create, it's able to sustain. And that's what's dictated the limit of monetary networks. In the past, hides and animal skins were only ever part of a very disparate, small set of networks, because as soon as they become too valuable of a money and too large of a network, it's too easy to just aggressively increase the supply of them. Glass beads stopped working as soon as the European and African continents mixed. The new technology, the new environment, and the new scale to which those glass beads needed to sustain their scarcity, their limits, the rules as to what those, what that, what each individual glass bead was able to represent in the economic network, it collapsed, it got too big, and it ceased being able to function. And to talk about what that means, what that the idea of holding all of the value and not breaking that essentially means, can it remain scarce as the network of minds and technologies and products and goods and ideas in the economy compound, grow by an order of magnitude and in which any and all of them can be used and necessarily will attempt to be used because the money is the most desirable good in the society, all of these things will be used to try to make more of it. And specifically, as a network expands, as a network grows in its ability to trade in the specialization of all of the goods and services in that market and in the millions and then billions of minds, all acting toward a cooperative set of goals within that, that economic system, the economic system gets better at making more of everything. That's its whole job is to get orders of magnitude better over and over and over again at creating new things, at creating old things better and faster and cheaper, and then establishing the new things to create that solve the problems better, or that create new environments and solve new problems, and then get better at creating more of those Things, the entire economic engine is a system of human cooperation to make things better, faster, and a lot more of them. And the monetary good is the thing that can be most consistently uniform, most consistently scarce, and can actually stand up like a wall against all of that innovation at trying to make more of it. And it not changing all of the other features, all of the other desires, all of the other things that we would want out of our money, out of payment systems, out of transactions, out of contracts, whatever the hell it is. Everything else is downstream from that. You cannot transact value in something that cannot hold value. You cannot plan for the future in something that you do not know is going to actually be consistent and be defined as the same thing in three or four years. The degree to which it is able to maintain its uniformity and scarcity. Uniformity not only just in the units that like, oh, one bitcoin is one bitcoin is one Bitcoin, or one ounce of gold is one ounce of gold, et cetera, obviously that uniformity, but also the uniformity in the rules, in the operations and in the, the nature of what the good is across geographies, across jurisdictions. And then that scarcity, the fact that it cannot, nobody can create more of it, its ability to do that precedes any and all capacity of a network built with it as the economic tool for communication. It limits what any of those other features can actually provide. For example, let's say we have a, well, I'll just use a trust based money. We'll use a simple social hierarchy trust money, and we will use Dunbar's number, right? Is that after 100, 150 to 200 people, the general agreement on the interactions with everyone and the relationships between everyone, and the fact that, you know, is everyone even on the same team here, are we all a part of the same group? All of that starts to break down past Dunbar's number. And so we have a social system where people are just kind of agreeing to who owns what within it. And it works underneath the Dunbar's number with like 140 people. It works beautifully. It seems to be wildly efficient. You don't even need any other mechanism. You don't need proof of work. You don't need anything like that because you have a, you have strong social cohesion at that scale. Therefore you don't need anything else other than a bunch of people agreeing. Then it scales to 300, 400 people and the social cohesion starts to break down. And thus there's a split in the network and the rules in A disagreement about how things are unfolding, who should get what and should somebody print money and that that group over there didn't do the right thing. Those people are stupid or those people are just exploiting us. This is when it breaks up into separate groups and you get us and them. If the rules of the money cease to be consistent across 500 a group of 500 people, well then it can provide absolutely no other benefits that a money would normally provide. It can't be a medium of exchange, because now you have to use two monies. It can't be a unit of account and it can't balance economic specialization and trade networks because you're not using the same mechanism for what even everything is even worth. It can't hold value reliably into the future because the dominance of one group may actually change or shift wildly over time. And there may even a third group arise during all of this and there might be a complete, completely different monetary good. This is exactly what happens in fiat land. Is you necessarily because fiat is a tool of credit. It's a. It's a tool necessitating on trust. It ends up simply getting dominated by the most violent. And then its survival is literally to the degree to which it is abused in a certain period of time. This is why fiat money is changing all the time. The average lifespan of a fiat Money is like 21 years and it literally hyperinflates and dies. And that's the typical way in which a money, a fiat money, commits suicide. When regimes change, they completely swap the money. It becomes a completely new money. If you had savings in the old money, it's meaningless. And even peak dominance, the global reserve currency shifts about every 80 or so years. So let's go back to the claim that Bitcoin's utility can be easily copied. Now, if you think Bitcoin is an app that can change the label of guy owns this to Bob owns this on a computer screen, then not only is this whole system of Bitcoin not even necessary, but of course it could be easily copied. And in fact it could be done better. You could make a shitcoin tomorrow that has much faster transaction speeds if you don't care what it costs to undo those transactions. But what does transaction speed mean if it costs virtually nothing to undo it? Or if there is a group who run the system and own all of the nodes and all of the tokens and they can pretty much just unilaterally change whatever they want. What does a fast transaction mean in that context? A transaction of what Just the name on the account.
[00:19:06] I can do that faster than any shitcoin just sitting right here on my computer. So of course if that's what you think Bitcoin is, of course you think it can be easily duplicated. But if you understand that the thing that Bitcoin provides, the fundamental value that has already made it a multi trillion dollar asset, if you realize that that is because of its consistency, that is because of its integrity, that is because of the degree to finality in which you have confidence when you receive a transaction, when it is confirmed, and what that confirmation means, and just how much and who does or does not have the capacity to undo that confirmation, how reliably and predictably scarce it is going to be. Will someone find a technology or find a way to make more of it than the system allows? If you still have your keys, will your coins still be there? Is it still the same? Are the rules still the same and is the network still the same? No matter where you are in the world, can you still access it? When you realize that that is the list of things that Bitcoin provides, that is the real value that makes Bitcoin a multitrillion dollar asset, then you realize that not only can it not be copied, that the very act of copying it loses all of those properties instantly. It resets any potential value or integrity that it is and reputation that it has earned toward any of those goals at all. Understand, a Bitcoin network with one node and one miner and one piece of software that has just been forked from something else is anything. Is literally anything. It is no different than a spreadsheet on my computer. And we know this. We have literally seen this with forks of the Bitcoin system.
[00:21:11] I don't know how many times I have to explain the history and what happened with Bitcoin Dark and how it proves basically every major point of the whole block size war era. If you fork that means you're going to have the opportunity to make a whole bunch of new coins. Your lendy effect is gone. Any and all of the supposed rules that you think are part of the network are moot. They mean nothing. The history is arbitrary and can be changed. And all the new fancy features, the privacy pool that they added and the smart contracts that they added all mean nothing. Because you do not know if the value of the good itself is even consistent. Is the thing itself that you now believe you have privacy and you have some new feature, new capacity or new toy and wing digit on it that you think is great? Is the good itself is the thing you are actually transacting. And the rules that determine what it is, are they even the same thing? Do they have any of the same properties or assurances as they did before? And if you have even a cursory knowledge of how any of this works, you know that the answer is no. It has none of it. And it is crazy to me that these people have been watching it and writing about this. If you notice at the beginning of that article they say June 2011. And they wrote an article about it in June 2011. It was like $19.
[00:22:47] And to still say something so unbelievably stupid to believe, to still think, to still think after all this time, that all of the characteristics and value of Bitcoin can just be trivially duplicated.
[00:23:06] How after 14 years could you have learned nothing about it? Like nothing more? And we're not talking about like a small price rise here. We're not talking about one cycle and you know it. Oh, it went up 200%. Ah, forgive us, we were wrong. You can always. Something that can always have a hype cycle. And if you don't know anything about it, sure, something stupid can have a cycle. Everything has a bubble, especially in fiat land. Everything has bubbles. Tons of stuff that doesn't even make a profit has its day.
[00:23:44] But that's not what we're talking about. We're talking about four full Bitcoin cycles and a 500,000% increase in, in its price.
[00:23:58] And from before shitcoins were any even a thing in which we have watched them try to duplicate trivially Bitcoin's utility and value and fail like 20 million times.
[00:24:16] And to still know nothing about it. That's just wild.
[00:24:23] It's just crazy. It's really amusing.
[00:24:28] Like I, I wonder how long it takes. You know, maybe this is such a. It's hilarious. You know, they say any intrinsic worth, the quote, any intrinsic worth comes from the sunk cost of infrastructure alongside intangibles like regulatory acquiescence, interconnectedness with mainstream financial systems. It was once sold as being the antidote to and the souvenir attraction of quote being the first which this whole.
[00:24:53] The regulatory acquiescence infrastructure, expanding infrastructure and interconnected with interconnectedness with mainstream financial systems. Literally there is nothing else you could, you could use as a metric of showing that something is succeeding and being adopted. Then those, the things that are just listed and you just kind of like hand waves them away. It's like, oh well, it's only more valuable because of these things. It's like, oh, because it's growing as a monetary network. Do you know what a monetary network is? That just. That sentence is pretty funny. But it's also kind of interesting that I get the sense that's kind of what's happening here with the value of this opinion, that it is literally hanging on by the sunk cost of the fact that it's been repeated for 15 years and everyone who has dug their heels in and just decided that this is how it is, that they can just kind of pass off the fact that the infrastructure has exploded, that the regulatory system has completely acquiesced and admitted that this isn't going anywhere and there's nothing that they can do about it, and that it has increasingly become interconnected with all of the mainstream financial system and tools that we are expecting it to be when it's adopted. That you can hand wave all that away as if that's the only reason it's valuable rather than those things occurred because it's valuable. When all I hear is like this desperate kind of pathetic clinging to we've been right for 15 years, you're just wrong. And it really kind of feels like that's the place we've gotten to is that buttcoiners are entirely hanging on just because of inertia. They don't have any arguments left. They're saying the same shit they've been saying since June 2011 and it still has not even slightly come to fruition. They have been so wrong that they have to publish a fake sarcastic apology in which they still defend the fact that they are right with no new evidence, no new explanation and still doesn't even know that if you copied bitcoin onto somebody's computer and changed the rules that it has none of the value of bitcoin. They still don't even get the most fundamental and basic operation and reason that this thing has any value at all. And from the context of like the mental position, like the positioning of confidence and like understanding and and or defensiveness like, like look at the individual position, like what's the mental framing? This post is bitter. This post is bitter and defensive.
[00:27:40] Bitter and defensive people know that they do not know what they are talking about. That is their way to avoid admitting it to themselves. And this goes this is true for bitcoiners, this is true for shitcoiners, this is true for Fiat Maxis and Tradfi people. Bitter and defensive people almost universally are that way because they do not have a foundation to stand on. And I just have to wonder how long it takes. How long does it take for some people to like, will they be better after they're using Bitcoin or that their bank is settling all of the transactions like behind the scenes for their payment system? And would it be like, you know the old lady in the 1990s who swears she's never. Your grandmother swear never going to use the Internet. I don't have any use for it. And she doesn't even know that her landline phone in 2005 is actually being connected over the Internet. That the backbone of the phone switching network has switched to a digital packet switching. Is that what it'll be? They'll just like, like Peter Schiff will just die angry at Bitcoin, like shaking his fist and Bitcoin's $2 million or I hope we don't lose Peter Schiff that soon. Maybe it'll be $20 million. Weighing the various success of Bitcoin versus the continued and completely expected and unavoidable decline of the dollar. They're stupid bitcoiners. It's going to zero. It's not going to be the world's largest monetary network for long. No utility. I can copy it right now.
[00:29:13] I can imagine if I just said English has no utility. There's no value in the English language and I could just copy it anytime I wanted to. And you're all stupid for investing in it. I can't. I can't believe you actually pay people to teach English. That's how dumb that is. That's how stupid that statement is. And it's wild that people don't see that. To me, like, I guess I'm just so. I'm so deep down the historical networks, language and protocol concept like that is. That is literally the thing I spend all of my time digging into. It fascinates me. And it's becoming harder to see how people don't see it. I'm losing touch with. I'm losing touch with the normie. But I'll keep trying to explain it. I'll keep trying to explain it. You know, if you had listened to, to Financial Times, I don't know how you would have done. You certainly would have missed out on some stuff. And what's even sadder is I guarantee you I haven't even looked into it and maybe we've even done like a piece on this show. But I guarantee you somebody's posted about like a shitcoin that actually has some sort of utility because of smart contracts. I guarantee it. If someone can prove that nobody at the Financial Times has published that. I'll send you $10. I'll send you a $10 app. I'll send you 10,000 sats. I just find it insanely unlikely that there's not some sort of blockchain, not bitcoin article in the Financial Times catalog. That was the first way that everyone who didn't understand bitcoin hedged their bets to be like, okay, well, it's sort of working because blockchain is cool.
[00:30:55] But anyway, I just read this and I kind of laughed and I'm sure this was really just done in jest and you know, it was really for fun. There is definitely a tinge of bitter to this. And the thing I've noticed more than anything in this recent quote unquote era or this cycle of bitcoin is the amount of ground seeding and mental capitulation of the buttcooners out there. They're having to change how they talk about it. And that's kind of, that's just kind of interesting to see.
[00:31:29] So if you want to hold your bitcoin that can't be easily copied because it provides value that almost nothing else can think about, think about how difficult it is. Find something, anything that you just can't make more of in the whole world. Anything. Name it. If you want to actually own the one thing that you can reliably say that about, grab yourself a Jade plus hardware wallet and you can get 10% off with my discount code guy G U Y Very easy to remember. It's my name. And if you were looking to explore lightning or you want a really great mobile wallet that just has a beautiful design and is super simple and intuitive to use, check out Bitkit B I t K I t the Bitkit Wallet by the guys at Synonymous. And I will catch you guys on the next episode of Bitcoin. Audible. Shout out to everybody who boosts on Fountain, who zaps me on Noster. Always loving the SATs that you know could be easily copied by anybody, but you know, they feel important, they feel special to me and I really appreciate how much you guys support the show in a totally non obligatory way. You know, just value for value. Let me know you like the show, let me know I was wrong about something and zap me 21 sats to ease the pain.
[00:32:52] Love you guys. Shout out to the audionauts and I will catch you all on the next episode of Bitcoin. Audible. And until then, everybody take it easy, guys.
[00:33:16] Facts are stubborn things and whatever may be our wishes, our inclinations or the dictates of our passion. They cannot alter the state of facts and evidence, John Adams.
