Former Google Engineer Provides Bitcoin Economic Models | Vijay Boyapati

understand UM. He has recently written a new book called The Bullish Case for Bitcoin, and he is going to talk about some of the biggest objections that people have to Bitcoin in a very simple, easy to understand way that I think is going to make a lot of sense. Some of the biggest objections you might have heard are actually very simple when you can understand them at a different level. UM, So much to get into here. It's a great conversation, one that I really enjoyed, so it's

going to just jump right into it. Hey, everyone, welcome to another episode of The Market Disruptor Show. And today I am joined by VJ. Boya Patti and he is a former Google software engineer UM and more lately known for talking about bitcoin and the book called The Bullish Case for Bitcoin. It's actually been out for quite a while, something that I've read. I know a lot of people have, UM, and I'm super excited to talk to you today. Thanks

for joining. Thanks Mark, it's great to chat with you today. Yeah. So, UM, I think the first time we met in person was at Safety's dinner, and I think we got to sit across from each other at Big Block Boom a couple of years ago, and that was that was pretty fun. I remember you asked me specifically what my journey was, um into bitcoin, and so, um, why don't you tell us what your journey was in from being a Google software engineer, how you got in and then what led

to kind of writing this book, The Bullish Case for Bitcoin. Yeah, I'll try and keep it a little bit compressed, but I'll stop from the beginning. I'm gonna stray. And I was born and raised in Australia. I came to the US to do a PhD in computer science, but I ended up taking a job and ended up at a small startup which you know people probably know now called Google,

but it was much smaller when I joined. I worked at Google until the end of two thousand and seven, and I left because I wanted to campaign in the presidential election, the two eight presidential election for Ron Paul, and that was a great experience. I raised a lot of money, I brought hundreds of people to New Hampshire

to UH to campaign and canvas for Ron. But I actually became really disillusioned with the political process when I went through this, and I started to learn that there are much more powerful forces at work, and a grassroots

campaigning really does not compare to those forces. So, for instance, Fox News decided they wouldn't let Ron in the debate, and that really had a huge impact on his ability to to do well in New Hampshire, and so I was I was pretty cynical about the political process after that for a few years, and a little bit depressed about whether you know, the values that I hold, which I think are American values human freedom, the ability to

pursue your happiness without other people interfering. I was a little bit depressed that it would be hard to to advance those ideas through the political process. UH. But then I came across bitcoin in two thousand and eleven, and it was really exciting because it's this new technology which I think really promotes human freedom and promotes people's ability to to keep the fruits of their labor without debasement or confiscation. And I sort of recognize that we can

change the world through technology, we can change the political landscape. Uh. And I've just been so fascinated with bitcoin for the last decade. And I had a background in Austrian economics and I recognized when I came to bitcoin, this is a monetary phenomena. And I've just been obsessed with this question of how does this new monetary good which was created, created out of thin air, How does it have any economic value? Why does it have a price? Why why

do people value this thing? And so I've been obsessing over this question for a decade, and you know, I've come across so many misconceptions about bitcoin. In two thousand and seventeen, I decided I want to write an article to explain why I think bitcoin has an economic value

and provide an economic framework to think about bitcoin. And you know, when I wrote the article, I was hoping that it would be read by a few friends and maybe a couple of people on Wall Street, but it ended up getting read by about a million people around the world. It was translated into twenty different languages. I

didn't pay for that. People just volunteered, which was so humbling that people are were as excited about the article and that you know that they wanted to talk about bitcoin and use this as a resource to share with their friends. Uh. So I wrote the article. It was received much uh more than I expected it would be. Um and then people start asking me turning into a book, and I thought it was, you know, the right length. It was, you know, a long form article, but it

wasn't as long as a book. Hey guys, let me just interrupt this interview real quick, just to plug the show sponsor, and that is block Fi. Now. Block five is doing amazing things in the bitcoin finance space. As a matter of fact, they've cracked some really big news by bringing on the x cftc UM chair Chris gian Carlo Um and they are one of the most transparent, most heavily regulated UM companies inside the United States, which

gives me a lot of trust into what their services are. Now, I've recently did a video talking about how to retire off bitcoin, and you can do that by leveraging debt and interest against bitcoin and block five is the number one company in the United States or maybe in the world to go to and use UM. They are leading the charge their paying interest on your bitcoin if you

park it with him, or you can borrow against it. Now, as I broke down in that video, you can borrow against your bitcoin, and when you take debt against it, it's not taxable. It's not a taxable event. You can use that debt for anything that you want, including to live off of, to leverage up and buy more, or roll it into another asset. UM you can do something like I've done recently, like sell some real estate put

that money into bitcoin. Now as that bitcoin price has risen, I'm able to borrow against it and go back and buy the same real estate or something similar. And I still own the bitcoin, and I also own the new asset as well. Lots of ways you can do this. UM and block five is the company that I recommend. Down in the description, I have a link that you can click on. If you choose to use that link, you can earn up the two d fifty dollars in

bitcoin just for using that link. So check out block by now uh and so I sort of didn't do anything about that until when you know, the pandemic happened and the government responses around the world was so crazy.

In my opinion, the amount of money that was created as just staggering trillions and trillions of dollars, and so they gave a new context in which I thought it was worth revisiting the article, and I thought there are actually some things in the article I didn't cover that are really important I wanted to put into a book, and so I spent some of the later part of the early part of one writing the book and I just launched it. And I'm really excited that people can

can can get that book now. Well, I launched it as a Kickstarter and and the kickstarter campaign has ended, but it should be in stores in about a month. So you took the article that got the million news and was translated all the languages, and then you've taken that and expanded on that and then turned it into a book, so you goil deeper into the different subjects

and stuff. Exactly right. I updated it because some of the things were tied to that time period in two thousand and seventeen when I wrote it, and I thought there was definitely enough changes in the market that it needed to be updated, and I significantly expanded it as well. So there were pup of things that I thought were incredibly important that I needed to to to discuss that I didn't in the article. So what was the historical context in which bitcoin came about? Uh, there would be.

There's been people working in the cipher punk community for at least a decade before bitcoin came about, trying to create digital money but actually having not succeeded, many of them were skeptical something like this was possible. But so I wanted to provide that historical context. I also really wanted to tackle the question of what is bitcoin. There was a huge debate in the bitcoin community in two thousand and seventeen about you know, it's bitcoin a payment system.

Is it kind of like PayPal, ex a bit decentralized or is it kind of like goal? Is it more like a digital you know gold where you keep your savings in that um And that that question was so important it resulted in a split of the bitcoin network really very hostile, and there's a lot of contention and people really upset with each other. And I have a view on what bitcoin is, and I really wanted to explain why I think bitcoin is the way it is, why it can only be the way it is, uh,

and how that development played out. So there's a number of things like that that weren't in the article that I thought were really important that I should cover up. Yeah, they sound like important things. Um, I wanted to dig into some of that, But I would like to hear just about the kickstarter piece itself, because that's kind of an interesting thing. Um. Maybe there's people listening that have thought about writing a book and I'm one of them.

I and honestly, I hadn't thought about doing a book to a kickstarter. Um, I've talked to a couple of different publishers. I've talked to some people that assist you with self publishing things like that. Tell me how that process went with the kickstarter and how it ended up. Yeah.

So I've never written a book before. And the first thing I did was I contacted a number of people in the bitcoin space who had written books and who I respect a lot of people like Sayer Dean and Yeah Pritzka and Nick Bartia who had written great books in my opinion, have them all on my shelf. And I said, should I what should I do here? Should I just go find a public a share or should I self published? And uniformly, every single one of them said self published. Do not use a publisher, And they

gave you know a few reasons. One is you don't control the rights, and that dramatically reduces your flexibility of creating derivative works, whether you can do translations. There are all sorts of issues around that where, uh, it makes it harder for you to control your work, and publishers tend to be very very slow in reacting to requests. So you know, I want to release an excerpt from my book, a chapter to promote, to promote the book, it can take months to get approval for that kind

of thing. So that was one reason. The other reason is you don't actually don't get paid very much if you if you use a publisher, they do, they do pay you upfront, but if you sell a book for twenty dollars, you're likely to get a dollar or a dollar fifty per book, which is not a very good renumeration because that the effort that goes into a book is pretty significant. You know, there's months of work where you're writing and you're sitting down a loan and having

writer's block and actually do this. Um so, so you know, then I thought, okay, I'm going to self publish. And I looked at doing that, and if you self published, you've got to do things yourself. You gotta do the type setting yourself, the editing, you've got to hire an editing. There are all these costs. Uh. But the benefit is if you sell through retailers when you're self published, instead of a dollar or a dollar fifty, you're probably gonna get maybe five or six dollars per per copy per book,

which is great. But then I thought about Kickstarter. I'm like, well, maybe I can launch my book on Kickstarter. And the great thing about Kickstarter is it's this website that helps people launch projects that may not be fully finished and helps them fund those projects to get them out there.

As typically used for gadgets and electronics and even board games where people are dreaming up something they want to create and they explain to people what their vision is and people get excited and they fund it, but people also use it for books, and so I thought, okay, why don't I do this? If I if I do

a Kickstarter and people taught me on this. Instead of you know, getting a dollar fifty or five dollars, if I self published, I'm selling directly, I'm going to get out of twenty dollars, I'm probably gonna get about eighteen dollars,

So it renumerates me a lot more. And the benefit is I really want to get these ideas to as many people as possible, So I would love to have the funding to get pay for translations myself, to own the copyright for those translations, to get this to spread around the world, because in my view, when people are presented with the reasons why bitcoin is valuable and why it's important to the world, and why it's a good idea to keep savings in bitcoin, they really get it.

They just need to have the ideas presented in a sort of logical clear way and have some of the risks explained to them in an open, honest way. Once you do that, I find I haven't had an experience where people like, well, I still don't believe in it. Most people I found get it. Uh So I'm excited to have the control over my work and to get it out and to be compensated enough that I can fund myself, translations and marketing and all of that stuff. So I think Kickstarter is a great way to do this.

I encourage anyone who's thinking about writting a book to to use Kickstarter. Safer Dean his new book, He's also launched on Kickstarter, And I think this is going to be a trend. Actually, I think a lot of people in this space are going to recognize this is a good way to launch your book. Uh and it's a good way to get compensated and keep control over over your own work. So it was a success. Then you were able to raise enough money up front on pre ordered the book to give you the money you need

to get it written, translated, etcetera. Yeah, so it's sold about a hundred fifty dollars worth of books, and that's enough for me to start working on other stuff. And that's that that that demand is coming from kind of the early demanding people who are most excited about it. And then eventually it's going to get into Amazon and Bonds and Noble and that sort of thing. But it's kind of tapping into that early excitement and demand for the book, uh and and and monetizing that a little

bit more than you would through Amazon. Yeah, that's awesome. Thanks for sharing that and maybe that I said, there's probably a lot of people are interested, and I definitely was. Um, so I want to dive into some of these subjects here. So um you talked about Um one of the big things was like this economic value and framework of bitcoin and so, um, you know, why is their value there in the first place. And of course that's one of the big complaints or or arguments that we might hear,

which I'm sure what's why you tackled that. Um, there's nothing back in it. It's just like fiat or whatever it may be, right, So we hear that all the time. Um, some people think that, you know, I think Peter Shift tweeted today that you know, only it has to be commodity money, only commodities or money. Um, So walk us through kind of this economic value framework that you said you kind of have if you will. Yeah, of course. So money is really it's a really difficult object to understand.

Most people don't understand why money has any value, uh, and they haven't really thought deeply about it. So that that that's fine. But the thing that's really hard about money is that with other sort of assets, financial assets, Uh, they're they're almost always valued on their cash flow. And that's that's fairly easy to understand. So stocks or bonds or real estate. Stocks have dividends, bonds have interest, and

real estate has rental cash flow. And you could look at a house and say, well, why is this house worth a million dollars? Well, it produces seventy thousand dollars of rent per year, so that justifies it a little bit. Whereas money doesn't. Money doesn't produce cashflow. Gold doesn't produce cash flow. Uh, bitcoin doesn't produce a cash flow. So

why why does something like gold have value? Well, the reason is money serves this other purpose in society and historically has always these purposes medium of exchange and store a value and unit of account. And through history humans have value use certain goods ah for their attributes that make them good at these functions of money. And we really need money in a society because money is this

incredibly important economic good that facilitates social coordination. If we don't if we don't have money, then we don't have a division of labor. And if we don't have a division of labor, we have a primitive society. We don't have civilization. We have a barter based society where people are trading you know, sheep for bread or whatever, and that really limits the scope in which trade can occur. So money is this fundamental innovation that society needs for civilization.

So what are the attributes that make for a good money? Uh? These these attributes have been known for a long time, all the way back to Aristotle who wrote about these things like divisibility. You want to be able to divide the money that you have into small pieces to use in trade. Uh. Verifiability it should be easy to recognize that this is money, and it's not easy to fake it. Um.

Fung Ability is another one. You want something which is essentially equivalent to any other piece or quantity of that thing. So gold is better as money than diamonds because diamonds are irregular in shape and quality, so they're not as good for trading. Uh. And probably the most important one of all the attributes to make for good money is scarcity. You want to have you want to keep your savings

in something that is very difficult to produce. If it's easy to produce, then your savings are going to be sort of diminished, very quickly over time. So gold is much better as money than sand because if sand were money, you could take a bucket to the beach and you'd be rich. Right, So other people are not going to want to keep their savings in it. But gold is

very difficult to produce. Uh So, if you look at those attributes that make for good monetary good, gold does really well over those attributes, and if you rank them, Bitcoin does even better. Uh And one of the attributes I failed to mention was portability. Bitcoin is so much more portable than gold. I can transmit bitcoin that I have to someone on the other end of the world almost instantly at very low cost. But if you're going to do that with gold, that would be very expensive.

It would be risky. Um. So, if we rank monetary goods along these attributes that we know people demand for money, Bitcoin comes out really really well. It's superior to gold along almost every attribute except for established history. Gold has this very long established history, and I think Bitcoin is actually superior to feat moneys along every single one of

these attributes. And in my article, I have a table where I list all of the attributes and I ranked them as if they're you know, taking a test in college, A, B, C, D, E F and I rank all of them. Uh, and you can go check out my article and see this ranking.

Coin I think is superior to feat over all of the attributes and it's um that's the reason that bitcoin outcompetes these other monetary goods over time, because people slowly recognize that bitcoin has attributes that they want in money and that they need in money, and so they choose to keep their savings in bitcoin rather than these forms of money. And I think the thing is understanding. Knowledge can be sorry, information can be transmitted very quickly around

the world, but understanding takes time. And so I've view this as like a process of the understanding of bitcoin superior superiority spreading around the world, um but inevitably growing, which is why Bitcoin's adoption is also growing, because people are coming to this understanding and realizing, Hey, it makes sense for me to keep some of my savings in bitcoin. Yeah.

When you talk about the scarcity aspect um and how gold has been really good at app you know, one thing that I've always thought is I was a gold bug. After two thousand and eight, after that market crashed, I then found I became actually a sound money advocate, but um, you know, with gold, it was always kind of like, uh, money has to have a true cost of capital, so like you can't just create it from thin air. It

must represent some form of energy um. And so with gold, for example, I have to buy the land and by the equipment and expend all the energy to get that gold. So there's like a true cost of that capital um and so um it's backed by energy, right and so um you can like look at bitcoin kind of the same way in a sense where it's also backed by capital because of the equipment and the energy that's used. So sometimes I thought, well, it's back the same as

gold is backed right there, both backed by energy. Is that a good way to look at it? I think absolutely correcting. That's that's the way bitcoins it produces in this process of mining where the mine is a running software which has to expand real energy um to produce a new bitcoin. So and you can actually look that

the real cost, it's it's perfectly measurable. Unlike gold is not always clear how much energy went into the production of goal, is very clear how much energy is expended to to go into a bitcoin, So there is a cost of capital. And so that means that when people have a bitcoin, they know that a real amount of energy was put into its production and then it was

it's an incredibly large amount of energy. And that energy is what actually secures the bitcoin network, which makes it hard for people to fake transactions and to to create fake bitcoins, because to create a new bitcoin or to to do a transaction, a huge amount of energy has to to go into that. Uh, and that's what protects the integrity of bitcoins network. Yeah, yeah, that's good. It's and and then I guess the last piece would just

be back to the commodity money. Right, So then of course back to shift not not not to bring him up, but you know what gold has intrinsic value. I can use it as cuff links, right. Um, I like to say that there's no such thing as intrinsic value, and all value is is, you know, based off of what we decide it's worth. Um, what would you say in regards to that? Right? So gold is something physical that

there's actually a physical value there. Yes, So people get sort of caught up in the physicality of gold and the circled tone of intrinsic value to justify golts price. I think that's actually quite a big mistake, because if you look at any form of money, it's price level is determined by two factors. One is its utility, it's kind of industrial use or whatever, or it's used for jewelry. And the other part is the monetary premium. That is,

people aren't using it for its industrial use. They're using it for its monetary role. They're using it as a store of value or a medium exchange. And a lot of the gold in the world, actually the majority of gold in the world, doesn't do anything. All that does is sit in vaults in banks and central banks around the world, and and that demand is the monetary premium. And in my in my article, i explained that different monetary goods have different monetary premiums. If you look at silver, uh,

it has a fairly small monetary premium. Most of the price level of silver comes from its industrial use. Um. Some people hold silver in volts, but not many. Gold is mostly monetary premium. Uh. There are some industrial uses, but they're actually quite small compared to the amount of demand that comes from just having your gold sit there and do absolutely nothing. Bitcoin is pure monetary premium. It's

a pure form of money. Now, the mistake is that people say that that tiny amount of industrial demand for gold is the reason it has any value. No, it's completely wrong. The majority of gold's demand comes from its monetary uses. And actually, if gold were to stop having any industrial uses and people decided, well, this isn't really nice for jewelry anymore. There's something better that we can

create more cheaply. Uh, old would still have a high price uh or another way of saying it, if you took away gold monetary demand, its price level wouldn't be an ounce It would probably be a hundred dollars announced. So most of that value comes from the monetary side, and Peter Shift kind of misses that, and he focused on this tiny fraction of demand for gold, and he

thinks that's the explanation for the price level of gold. No, money is valued for its monetary uses, and bitcoin, being a pure form of money, has all of its value determined by that. And the last point I want to make about this is it's actually a big disadvantage for

a monetary good to have industrial demand. The more industrial demand it has as a fraction of its price level, the worst it is as money, because you don't want the price level of your money to fluctuate all over the place if the industrial demand moves around, like one year there might be less demand, one year there might be more demand. You don't want moneys to behave that way. You want most of the value to be in that

monetary premium. Yeah. I think also on top of that, um, we don't necessarily want those um, those materials to go up in price either because they need to be used. And so if I'm putting all my money into real estate because dollars is no good, well then it's pushing the price of real estate up. But now nobody can afford a home where I'm putting it all into goal but now pushing the price of gold up, and now we can't use it for conducting, which is what it

should be used for for example. So there's actually maybe a case for why non commodity money is actually superior or better for better for society anyway. Yeah, absolutely right, that's a good point, the point that I hadn't mentioned it. It works in both directions. Yeah, hey, sorry to interrupt this video just one more time. I'm not running Google ads, so it's actually way less interruption than I normally would have on a video UM and that's because it's sponsored

by block five UM. They are opening up the world of bitcoin and financial products offering to pay you interest on your bitcoin um better than own in a rental property that you have to manage and control and have the risks. You can or certain interest on it, or you can leverage against it. Now, I plan to hold my bitcoin forever and literally never sell my bitcoin. So how do you do that? Well, if I need money,

I don't want to sell that bitcoin. I'm gonna pay tax on it, all right, I'm gonna end up with less and I don't have the bitcoin anymore. So a better way to do it is to borrow against the bitcoin. So I've put all my money into bitcoin. If I want to buy a car, or I want to buy a house, I can borrow against it at very very low competitive rates. Get my house, get my car, whatever that may be, and get to keep the bitcoin. I've done a whole video on this. You can find it.

I'll link it down in the description below. How to retire off a bitcoin without paying taxes and you can do that with block fight services. I'll link to the video down below. I'm also going to put a link to block Fight. If you choose to click on that link to check them out, you can earn up to two fifty dollars in free bitcoin just for using that link. And that's it. Let's go ahead and get back to

the interview. Yeah, um, if we if we jump to a different topic of something else that you had said that I think it is also pretty important, is that, um, bitcoin is old technology. I hear that one all the time, right, it's the old technology. It's slow, it's dumb. Um, it's the MySpace, the Google, you know, the Facebook's coming, blah blah blah. But to your kind of point you made earlier, Um, it had been tried for decades without succeeding. So this

was not the first iteration. It has many generations. Maybe to walk us through kind of that, being a being a Google software engineer, maybe you can explain to us how technology kind of evolves and why maybe being a slow, dumb bas layer is actually the best option. Yeah. So

bitcoin is this fundamental innovation in computer science. It's solved problem in computer science that a lot of people didn't think was solvable, which is it's called the Byzantine general's problem, and so Toshi Nakamoto, when he published his paper in

two thousand eight, presented the first solution. And so he made something possible that had never been possible in the history of the world, which is to be able to transmit value from one end of the globe to the other end of the globe near instantly without having to have someone in between, a trusted intermediary like a government or a bank. And that's a that's a profound innovation when when you the other part of your question as well,

other people can create these new cryptocurrencies. The thing is, these new cryptocurrencies aren't that they add technological bells and whistles, but they're not a fundamental innovation on top of Bitcoin. Uh So, so the thing is here, Bitcoin is a monetary good and it's valued as a monetary good. For these new ones to to outcompete Bitcoin, they have to improve on the monetary attributes that Bitcoin has, and none of them, as far as I can see, have any

superior monetary attributes to Bitcoin. For instance, scarcity, and whenever you have something, any product or service or good that has a network effect, it's really really hard to unseat that unless you are orders of magnitude better. UM. So, uh, you know, the example of Facebook and MySpace is an interesting one. I think the only case in which, you know, something with the network effect can be outcompeted is in the very very early stages. Uh. You know, when my

Space was still very young, when Facebook started competing with it. Uh. And Facebook was superior and managed to outcompete MySpace over the network effect. But it was early enough that that was possible. And I would say, actually, you know, Bitcoin could have been out competed if something much better had come along in two thousand twelve or thirteen when it was still early. The Bitcoin is so massive now has such a strong network effect. Um. And this encompasses many

things that encompasses that. The brand, It's the strongest brand by far. No old coin is ever mentioned except in the context of bitcoin. The financial infrastructure, all of the companies that provide on ramps and off ramps to Bitcoin and and leverage on bitcoin. There Most of these other old coins don't have anything like that that. The community of developers that the best cryptographers and computer scientists in

the world a committed to working on bitcoin. So there are a number of factors like that that add to bitcoins network effect, and it's at such a large scale now that I don't think it's possible for it to be out competed. Uh. And it's not about technology. It's not about adding like some cool new thing that sounds good on your altcoin. It's about did you provide a better monetary attribute? Uh that's better than the ones that bitcoin has, And I just looking at the attributes, I

don't see how that's possible. Uh, there is, I should say there is one weakness. I think bitcoin does have. One weakness that I think will improve over time. Is it's fungibility. That is uh kind of the privacy aspect of bitcoin, like, is one bitcoin equivalent to any other bitcoin? And at the network layer that is true. Uh, any bitcoin can be transmitted on the network like any other. But because bitcoins blockchain is open and transparent, it is

possible to trace bitcoins. And the disadvantage there is that a government could come along and say, well, this bitcoin is tainted. We don't want any business to actually accept this bitcoin. They'll go to exchanges and say here's the list of tainted bitcoins, and that kind of reduces Bitcoin's funge ability a little bit. Uh. Cash. You know, cash U S dollars doesn't have this problem because it's completely anonymous and you can't tell where it came from. So

this is one area which Bitcoin has a weakness. But I am actually very optimistic that this is going to improve over time through technological developments. Uh. And for instance, there's been a protocol upgrade to Bitcoin recently that's been approved by the network called tap Route, which is going to improve the privacy of bitcoin. So you know, if a new old coin comes along and it's competing with Bitcoin, we shouldn't look at the technology. We should look at

the monetary attributes. And Bitcoin only has, in my opinion, one weakness, and I think that is an area it's improving quickly over the time. Yeah, that's a that's a good point to bring up on that weakness. It's something that I've actually had to I've come under kind of quite a bit of fire on recently. As a matter of fact, I got invited and I accepted opportunity to go onto the Monaro talk show to discuss this exact topic with Monaro people. UM. I was more than happy

to do that. Um. You know, in regards to that privacy problem, I mean we do have layer two technologies like lightning, which allow you to transact the bitcoin much more private. We also have coin joint applications where we can kind of obfuscate if not you know, kind of a race that history as well. So I think in that regard you have that you know their argument as well.

You know, Monaro never had it in the first place. Um, but it seems like if a merchant, so as you said, like it's not done on the network level, the network doesn't know the difference. It would be a merchant that would be squeezed by the you know whatever regulators to not accept that bitcoin. And so if they, if they could accept the Monaro or whatever privacy coin you want to use that has no history, then why wouldn't they just set to accept the bitcoin? Then it doesn't have

a street. I mean that's kind of that's the question, and I kind of keep going back to you. Yeah, yeah, And I think that's a great point. I think it's also it's not is it not a question without trade offs? And and people who say narrow or ze cash have more privacy need to accept that there are trade offs. And this is actually a really difficult question. And the trade off is if you have perfect privacy, you lose

some ability to have auditability in the supply. And z cash actually they found a bug in the way they have these shielded transactions. They found a bug where they weren't properly accounting for supply, and there was more supply than they thought. One of the great things about bitcoins blockchain being completely open is that we can order to know how much supply has been created and and and

verify that it's you know, according to schedule. We know that no more than twenty one million bitcoins will ever be produced. So this is a technically difficult problem, and there are trade offs, and we shouldn't sort of h be too blase about those tradeoffs. I think some people when they talk about this, they're like, oh, yeah, this is easy just to use a different privacy coin, but you have to recognize that there are weaknesses that come

from making that trade off as well. Yeah. So, UM as a software engineer, and I look at the way that bitcoin is done, and so we have that base layer, but it seems like we're seeing pretty rapidly now new

technology is being built on layer two. UM, and then now there's layer three that we have being started as well, and so it seems like we kind of have this this base layer that gives you that hard censorship resistant, decentralized open, but then all the new technologies can be built on top which didn't have those trade offs that allow for those trade offs. Um, and it almost seems like all the other all coins that are out there that have all these bells and whistles will all probably

eventually come back and beyond the main chain. As a software engineer, what do you think about that? Yeah, that's a great point, and you you mentioned something earlier than I forgot to mention. I think is really important that Lightning is a privacy improving technology. It's a set and layer on top of bitcoin where people can trade bitcoins back and forth very quickly and very cheaply. That the base layer of bitcoin is more costly and isn't really

meant for transactional use. I mean, people got confused in the early days because there were there wasn't much usage, and they thought, oh, bitcoins are payment system, a cheap payment system, But actually it's the settlement layer. It's really meant for a settlement, large settlement between large financial institutions or large holders of bitcoin who want to send, you know, a million dollars or something like that, that the smaller

transaction should happen on higher layers. And this was actually anticipated from the very beginning. How Finny who was one of the people who helped develop bitcoin in the very earliest days, he recognized that all financial systems are built in layers, and and that's exactly exactly how Bitcoin is being built. And I like what you said about how this is going to suck in these extra layers are going to suck in the features from these other old coins.

It's kind of like, you know, to give an analogy, it's kind of like how cell phones sucked in all of these other features from all of these sort of peripheral products. Like think about the camera. In the early two thousand's, people had separate digital cameras that they take pictures. No one has that anymore. People used to buy gpss. You remember the tom toms that you'd attached to people that don't have that. All of these other things were

sucked into the smartphone. And I think that's a really great way I hadn't thought about. A really great way of thinking about it is that these extra layers are going to pull in the feature set because it can be done much more cheaply and and economically at the high layers. And so that that parrative advantage that people claim all coins have is all going to be brought into Bitcoin. Yeah, and we even have now smart contracts

being done on bitcoin. So why would you want to do a smart contract on a chain that's unsecure right or centralized on Amazon servers for example, when you could run smart contracts on bitcoin. Um, So it seems like that's the way that that it's going. And if you can do smart contracts and faster and cheaper and more private than those eight thousand other coins don't seem to have a whole lot of advantages that are kind of left over. The other thing is understanding how like progress

is made. Um. I've been reading high x book The Constitution of Liberty, and he's talking about this concept of progress and the more people that you can get in and the more iterations and attempts you can have, the faster that can happen, the more progress that can happen. And so then like on a very slow, dumb basse layer if you want to call bitcoin that, it allows almost unlimited options on top of that, which means innovation

could happen really fast. When you take a smarter we'll call it that whatever, a more featured blockchain, um, it limits the ability of things that you can build on top of it. Yeah, I think there are um there. This is a game where there are tradeoffs where Ethereum tried to pack all of this functionality into the base layer, and the tradeoff is that it becomes so complex that it it really hinders the decentral realization. That's that's the

big trade off. Like if you want to run your own ethereum, notice pretty costly, and it's it's slow, and it's hard. It is actually pretty hard to people have tried this and have written their experience about how how difficult this is. And also like you really want that base layer, the settlement layer, to be simple and accountable and really really secure because that's where the majority of

value transfer is going to happen. And I think it's something that most other old coins haven't appreciated and and when they were put to the test, if they were put to the test, they failed. So Ethereum is an example where uh, you want to trust the base lay. You don't want people to be able to, you know, governments to be able to come along and say, no, we don't like this transaction, we're gonna roll it back.

And it actually happened on Atherorum in the early days, when the theory faced its most important test, it failed, which is this this Dow hack where people invested a bunch of money in this smart contract and it kind of failed. It was it wasn't programmed properly. Metallic Budaum came along and got the minus to roll it back.

So if you're on the ethereum and you have value you want to transact a large amount, you can't necessarily trust that that's gonna uh, that transaction can't be rolled back, whereas Bitcoin you have a very high degree of trust that you can't roll back those transactions. And even if a nation state came along and said, look, we don't want bitcoin to have this transaction, we're gonna precious some developers and miners, it's very hard because of bitcoin's decentralization

to do anything like that. Yeah, and then more recently, one of the big things that bitcoin add back to your monetary principles is scarcity. And so Bitcoin, I'm sorry, ethereum has an unlimited supply cap and was it two months ago or so? Vitalic and and and boys got together and they decided to give it a fixed monetary supply. But the fact that a group of people can get together and change the monetary supply of the network is exactly the problem we're trying to get away from. Its

sounds like the money system, absolutely right. It's not the supply schedule that matters. It's the credibility of the supply schedule. Do you actually believe that um ethereum has a limited supply or could it? Could it be changed? So so gold has an inflation that goes forever. Two is added to the supply of gold. But the thing about gold supply schedule was we really trust it, We really believe that it isn't going to explode. Bitcoin has an even

better supply schedule. It's ultimate scarcity. No more than twenty one million bitcoins will ever be produced. And the good thing about bitcoin, as opposed to its competitors, uh, is that we trust that supply schedule. We know, because it's decentralized, no one can come along and change it. And that's incredibly important, And that's one of the biggest I think comparative advantages of bitcoin over all of its competitors that none of its competitors have. Yeah, yeah, I look, I

look at it. I worked on this new thesis I've been presenting on these just three revolutionaries, say, those that are converging and so, um, there's like a political social cultural converging with the technological and converging with the financial, and like um, problems or solutions come to problems. So if you look at like the problems we have and like political social cultural, like we have obviously unlimited money printing, Um, we have censorship. But one of the big problems we

have is like we're ruled. We should be ruled by law, but now we're ruled by men. So the Constitution was supposed to limit the power, and everybody knew what those rules were in advance and we could all plan our lives. But today we have men that just change the rules on us all the time. No, you can't eat inside anymore. Okay, now you can't eat outside. Okay. Now if people a plexiglass up at okay, now it's it's like that we we can't we can't do that. And so if you

understand what the problems are. Then the solutions would be censorship resistant, immutable law right, UM, no, not governance. UM. Since there's all these things, and then when you when you understand the problems and solutions, I mean it very quickly narrows it down to like only one option or that. So, UM, I love the way that you put all this together. UM. As you said, there's a lot of other good books. You mentioned Layered Money, and of course next book on

that is great. There's so much good information, um you said earlier. UM, you know you kind of put this together to relay information in a good, smooth way, and I think that's so important today. UM. And so I'm encouraged by it, and and hopefully other people are. UM. I think that the ideas, good ideas win because they're good ideas and if you can and if you can share that information in the right way, then it wins. UM.

Right now, we kind of have this problem. Uh. We don't need to dive into much, but you know, toxic uh, toxic stuff in the in the space where it's kind of like this cancel culture where it's like have fun stained poor kind of a thing, and it's like there could be a really good response that was given intelligently that could actually change that person's mind as opposed to kind of pushing them back and maybe digging their their hills and even more. Yeah, I mean I agree with

what you say about truth prevailing. There's actually a Latin phrase and trying to remember it's something like magnet es veritas it preval a bit, which means truth is the truth is great and it will prevail. And I agree with that because if you present people with the truth and you give them the reasons so that they can reason about its, reason about it themselves, it's almost inevitable. Because when you when you talk to someone or when you present a book to them, for instance, and they're

reading your book, you're rewiring their brain. They're they're processing the information that you present and if it makes sense and you provide the correct reasons, you are rewiring their brain to recognize something as truth. Which is why I think we have an advantage when we present true ideas, when we present them compelling lee and simply uh people, people want to accept them and they see their importance.

And that's in my experience uh talking about bitcoin with people, that when when these ideas are presented simply, people get really excited about them. Yeah awesome. Well we're gonna gohead and wrap it up with that. I know you gotta get going and I appreciate you sharing that. UM. We'll make sure UM to link to I guess I don't know what we're linking to. Your books not available yet? But where should people follow? Twitter? I guess is probably

the best. Yeah, you get you follow follow me at Twitter. That's the best place. So I'll keep updating people on Twitter about when the book will be in stores. I'm hoping it's within a month. My kickstarted campaign has ended, and I want to get the books out to the people who supported me, and then I want to get them out in stores so the wider population can get them. But yet Twitter, I'm real underscore of VJ at Twitter. Yeah awesome. All right, Well with that, we'll go ahead

and sign out. Thanks so much for joining. Thanks man, all right four assssssssssss