The Mark Moss Show Dec 27, 2021

to understand what bitcoin is. You have to understand what the decentralized revolution is and how it's going to change the world. I try to bring you not just the most up to date news. Um, you can go read the news yourself. Now I can bring you and I will bring you the most important pieces of the news. But more importantly than just bringing you news, I want

to explain to you what's going on. We'll talk with some of the biggest names, some of the special some very special guests in the bitcoin space I'll bring to each and every time, and then I want to teach you something because there's a big learning opportunity here, and to understand what's happening with bitcoin, it takes a lot of different disciplines, It takes a lot of different skills, and I'm kind of uniquely situated to help you with this journey. You know, my my career has sort of

been this jack of all trades, master of none. I have a very wide depth across multiple different disciplines, including ones that are necessary for bitcoin, including monetary history. You notice I use a lot of history because I love it. Economics, I love it, finance of course. Technology. Um, I've been in I've been in technology since their late nineties, investing

into these things known as internet stocks. It was kind of funny back then, seeing at the time I remember being an investor already in My roommate quit his job and he became a day trader, day trading these things

called internet stocks, and nobody knew what they were back then. Um, and we would, you know, get together talk about these things, talk to other people and know what about this one and this one and these internet stocks, and it's it's just funny because today here we are in the cryptocurrency space and it's like the same thing happening all over again. Um. But I was around at that time, and uh, it was it was a bit different back then, of course,

because we didn't have the Internet yet. I mean, obviously the Internet was working, don't get me wrong. UM, but we didn't have like e trade, we didn't have robin Hood. We couldn't trade stocks from our phone. Um. And so it was a much different world back than having to call your broker and so forth. Um. And today, of course, obviously we have robin hood, we have the smartphones. We could trade cryptocurrency from our phone, So it makes it

much different. But I've been around in technology. I started e commerce business in two thousand and one at the bottom of the dot com crash. So the dot com boom famously rose from really from is when it took off, when the Netscape I p O happened. As a matter of fact, let me just give you a little background on that, just to bring in from some perspective. Of course, UM, if you understand how technology cycles work, it'll better help

you understand what's happening with bitcoin and cryptocurrencies overall. So, um, they all work the same, So the way that technologies rollout is always about the same, and so understanding this is very key to understand how to play this. So if we look at um, let's actually go back a little bit further. Let's go back to the early let's go back a hundred of years, more than a hundred years, and so um, one of the biggest technologies at the

time was the automobile. We had the rise of oil and automobiles, and there was new technology not only the automobile, but also the assembly line. And so we saw automobile and we saw a mass production. And of course, once the first few automobiles rolled off the line, a couple of things happened. One UM, a lot of people thought they were ridiculous, and they thought they were stupid, and they thought they were a joke, and they thought they

were pointless. And look at these noisy automobiles. They're noisy and they're stinky, and they're dangerous, and they're going too fast and they're gonna hurt people, and they're unnecessary because, of course, horses and buggies have worked just fine for hundreds of years. As a matter of fact, walking and horses has been the primary mode of transportation for five

thousand years. Why do we need an automobile? Right, they're noisy, they're stinky, they're slow, they break down, they're expensive, they're dangerous. It's time familiar. Anytime there's a brand new technology, it's something that's called creative destruction. And so when there's something new that's created, it destroys the old way. And it's important now what happens is the entrenched people that are there,

they don't like that. The buggy makers at the time, they didn't like that, right, Hey, we want to sell horses, we want to sell buggies. You don't need those stupid cars. So anyway, there's always this fight and and and that's setting the stage for what I'm about to jump into in a minute. But that was happens. But but then when the car rolled out, you know, some people saw the visionaries and they want to jump into it. And so all of a sudden people start buying these cars.

And then of course the venture capitalist the investors, they came out and they saw this massive money making opportunity, of course, and so they jumped in, and they jumped in. They started building all these different automobile manufacturers, and in a very short amount of time there was over two hundred and fifty automobile manufacturers that were out in the market. But there's a problem. There was actually two problems. The first problem was that there was no market for all

those automobiles, meaning there was two automobile manufacturers. Lots of people wanted to sell cars, but there weren't that many people wanting to buy cars because it was at the very beginning of this this new technology. But the second problem was that there was no infrastructure. So that means that there was no roads, there's no gas stations, there's no service centers. So even if you bought the car,

what do you do with it? And so what happened is then the automobile manufacturers all went bust, and they all went bankrupt. Three remained for Chrysler GM, and then the market started to grow again. Now that didn't mean cars were done, didn't mean they were dead, but the market had to catch up. The money, the venture capitalists and the money got ahead of where the technology was, ahead of where the market was, and then eventually they all went out of business. And then eventually the market

caught up. And now there's probably automobile manufacturers today. I don't know the exact number, but there's a lot. It's important to understand the technology always rolls out the same way. Now, if we're looking at bitcoin and cryptocurrencies, we can see that it rolls out very similar in the same way. Before we jump to that, let's just take a pit stop and we'll look at the Internet boom very similar.

By the way, you're listening to the Mark Moa show, we're talking about bitcoin and cryptocurrencies and the decentralized revolution. Trying to give you some perspective on how technology cycles always roll out the same way. That way you can better be better position for where we're at right now in this cycle. So we talked about autobiles. Now back to the Internet. So I started talking about the Internet and want to I got caught in this little tangent,

little rabbit hole, so stick with me here. So in the Internet had started, you know in the seventies and eighties with the with the government, Darbonet, etcetera. But really it was in is when the first website went live, the first WWW, and the first purchase happened online and that was for pizza Um, same as the first purchase

for a bitcoin. And then is when things changed, and that's when we had the first I p O Internet Um initial public offering and it was for Netscape and it brought all the investors in all the venture capitals in similar to the automobile boom, and venture capitalists do what venture capitalists do, They start throwing a bunch of money at things, trying to create this to blow up,

and I did by by the year two thousand. From two thousand, the internet boom happened and anything with dot com in its name would instantly just get hundreds of millions of dollars or millions of dollars thrown at it. And it was crazy and by the end famously you know, in we had the pets dot com, the web band dot com, and everything dot com you can imagine. But the same two problems existed that happened in the automobile boom.

That was the same two things. One, there was no market for that, meaning you could buy web band dot com they could deliver your groceries, or pets dot com you could buy your pet stuff online, but there was no market. There was nobody buying anything online. As a matter of fact, by the year two thousand, less than ten percent of people had ever bought any thing online, so there was no one to buy all that stuff. The second problem was that there was no infrastructure, meaning

the Internet was too slow. You couldn't you couldn't use it for all those things that they wanted to. As a matter of fact, Netlix had come out, but Netflix didn't stream movies over the net. They mailed you a DVD to watch, and so it was too slow. The infrastructure wasn't there. So all those internet businesses went out of business. Didn't mean they were wrong, just meant there early, and early is the same as wrong. So they all

went out of business. A couple remained, obviously, And now today, of course we have you know, millions of websites that are out there today, and so you can see this pattern of how this works. And so we had this big boom. Now, I thought in two thousand one, that would be a grand idea to start an e commerce business at the very bottom of that market, at the crash, when nobody wanted to throw money around. Um, it was tough.

It was a long road. And when I went I started selling e commerce products and I went to these companies to sell their products on my website and they laughed at me and they said, come on, Mark, no one's ever gonna buy anything online. That's where ridiculous. And I said, well I think they will, um, And of course I was right. They were wrong, But it was a long road ahead. And I heard the same thing

with cryptocurrencies. Come on, Mark, that's ridiculous. No one's are gonna use it, just like no one's ever gonna take a car because we have the buggy, and no one's ever gonna use electricity because we have digital can we have candles? Right, So, same story, over and over and over again. Now I want to explain to you the West the rest of the way this rolls out, and I'm gonna apply it back to bitcoin and cryptocurrency so you can understand where're at in the cycle. Um, you're

listening to the Mark Ma Show. We're talking about bitcoin and cryptocurrencies and the decentralized revolution. I'm trying to give you the perspective you need to to survive. So stick with me, all right, Welcome back. You are listening to the Mark Ma Show, and we're talking about bitcoin and cryptocurrencies and this decentralized revolution that we are witnessing right now. And I'm just zoomed out a little bit on history.

We looked at the automobile technology, we looked at the Internet technology, and now we're about to use that perspective now to dig into the cryptocurrency technology, and so we saw the same thing happened. UM. Bitcoin stormed on the scene about twelve years ago, two thousand nine. UM, and bigcoin kind of grew slowly, nobody really knew what it was,

kind of like the Internet in the other days. UM. Then we had the first I c O sort of like the inflection point where the Internet was the I p O night, as I said, and it brought all that venture capital money, and in UM I think it was two thousand fourteen, we had the first I c O initial coin offering, I think it was master master Coin, and then Ethereum launched after that, and then the same thing.

The venture capitalists, the investors all rushed in, brought in a bunch of money, started throwing that money round everywhere they could, just like the automobile boom, just like the Internet boom. And they started trying to solve everything, just like the Internet boom. Did you know webban dot com? That's dot com? And so now we have blockchains for everything. We're gonna manage to let us on the supply chain. We're gonna sell movie tickets on the blockchain, and we're

going to do supply chain management. We're gonna do everything on the blockchain. Right when you look at under the lens of what happened on the the Internet, it kind of starts to make more sense. Now they're not wrong, But the same two problems existed in the automobile boom internet boom, and today two things. One no more market there's no one around to use all that stuff right now, and too there's no infrastructure. The network is too slow, it

doesn't work properly. And so what happens is they're not wrong. Eventually a lot of that stuff will be built on the network. Unfortunately, most of it's going to go bust, and then I'll have to get built later. So that's kind of how that works, um, And so I'm bringing you that perspective somebody who's lived through this. Like I said,

people laughed at me, literally laughed at me. I had to spend about twenty dollars to build out this website back in two thousand one because there was no Shopify, there's no word press, and I had to hire someone to build a custom and so I spend all this money and then I went to these stores and they they laughed at me. So I know how this goes. I think it was Gandhi who said, the first day laugh at you, the first day ignore you, then they laugh at you, then they fight you, and then they

join you. And so UM, using that perspective, I want to talk about something um that that's come out this week, and actually it's been happening over and over. UM bitcoin is that thing that was ignored and then they laughed at bitcoin. Now they're fighting bitcoin, and event they're gonna adopt poin and a lot of people already have started adopting bickoin. But we're continuing to see this attack on bitcoin continued to rise. And one of the guys who

talks about um bitcoin very unfavorably, Steve Hankey. UM surprising that it comes from him, because Steve Hankey is an economist. He's a former advisor to the regular administration. He's also part of the Cato Institute, which is supposed to be for freedom. And I get it. Like you think something stupid, that's okay. That's your prerogative, right, Like you don't like it, do you think it's dumb, you think it's a waste of time, waste of money, whatever you think it is,

that's okay, that's your prerogative. But shouldn't take away my right to do that. You you know, you don't have the right. Nobody has the right to tell me what's a waste of my time? Only I do. And so Steve Hankey, it's just funny coming from him, being that he's part of the Cato Institute talking about freedom, but yet he wants to constantly attack bitcoin and say that people shouldn't be a to use it. So I don't understand that part, but um, you know, he he continues

to ramp up this rhetoric. And I want to talk about something he just talked about this week, because you need to understand this key piece. This is a key piece to economics. He's talking about bitcoin specifically, but he's talking about economics. And remember, as I said, you have to understand a bunch of differ disciplines. You have to understand history and monetary history and technology and economics. Game through economics is one of those. Let's talk about this.

So he says that as on Yahoo Finance, he says, we know the price of bitcoin, but not its value. It's probably zero. M hm. We know the price but not its value, but it's probably zero. That's what Steve Hanky says, Now, remember he's an economist and former advisor to the regular administration. Right, he's he's he's an expert. I say that with air quotes. He's an expert. So, um, let's dig into this and let's see how little this expert is expert really knows and how you could understand

this with just an elementary understanding of things. So let's dig into this a little b So, um, you know what happens is if you just read headlines, you don't really understand what's going on. Then people start repeating these headlines without ever really grasping the information. So let's break it down. So um, he says that bitcoin has a price, which, by the way, the price is rallying a little bit today. Um. I don't talk about the price a whole lot. I

think price is a distraction. But we are rallying. We had got as high as sixty nine thousand, and then it had dropped all the way down, um, you know, into the fort range, and we're up above fifty thousand right now. So it's rallying just in time for Christmas. I guess go back to Steve Hanky and what he said. He said, we don't know its value, which is probably zero. He says that there's a difficulty deriving value for the

for the for the bitcoin. Um. He says, quote, from a high theory perspective, you end up with a bitcoin that does have a price that is objective and we know what it is, which at the time it's over US dollars. But he says, we don't know it's fundamental value. And my guess is it's probably zero end quote. So

what are you saying? The professor fact and I was questioned how the value of bitcoin can be derived when deciding it's a rate of exchange with national currencies such as the dollar and the pound, and he says, quote, there is no exchange rate model that would actually rationalize the bitcoin US dollar exchange rate. So he's saying that we know the price obviously, right, So fifty U s D. There's um lots of people that be willing to give

you that exchange rate. As he's quoting exchange rate the amount of dollars that you've trade for the amount of bitcoin. And as a matter of fact, there's UM twenty six billion with a B six billion dollars of bitcoin traded every day. Every twenty four billion so there's billion dollars worth of volume of people that would go gladly give you fifty U S dollars for a bitcoin or a

fraction thereof. Now, but but but let's dig in a little bit more so what he's saying here, Uh, And I'm gonna go back to this quote from a high theory perspective. Okay, Well, we don't live in a high theory world. We live in a real world. We live in a practical world. We live in a world of real things where I really need real goods and services, and people have to be willing to trade me those goods and services in exchange for other things. The medium

of exchange. Now, um, you might be willing to trade me a thing for my labor if I come and paint defense for you. You might be willing to exchange my dollars or my pacos or my bitcoin or whatever. We live in a real world, not in a place of as he says, high theory perspective. The piece that he's also talking about is we don't know its value. Well, here is where these economists get this completely wrong. Peter Schiff is one of them. Peter Shiff is someone that

i've I've respected for a really long time. He's a very smart economist, Austrian school that economy economics um very instrumental in my development a dozen years ago. But the problem is he's dug in on this thing of what's called intrinsic value. And so a lot of you listening right now might be saying, way, how bitcoin doesn't have any intrinsic value, right, And I think that's what he's saying here. There's no value. There's no intrinsic value. That's

what Peter Shift says, there's no intrinsic value. But what if I told you there's no such thing as intrinsic value? What come on, Mark, you gotta be kidding me. You weren't an advisor to President Ronald Reagan. You don't know what you're talking about. Of course, there's intrinsic value. Really, what if I told you there's no such thing? And what if I could explain it to you in a way that an elementary kid could understand it? And that's

exactly what I want to do. I wanna, I wanna explain it to you, And I'm gonna tell you the rest of what Hanky said, because you need to learn to look through what he's saying. And when I finished telling you the second half of what he said, it's going to make the first part of what he said look completely ridiculous. That's how crazy these people are. By the way, you're listening to the Mark Mashow, we're talking about bitcoin. If you didn't know, we're talking about bitcoin, cryptocurrencies,

and the de centralized revolution. We're talking specifically about the value of bitcoin. We know the price, as Stinky Pinky says, what's the value. I'm gonna come back with that and tell you don't go away, all right, welcome back. You are listening to the Mark ma Show, and we're talking about bitcoin. We're talking about cryptocurrencies. We're talking about the

de centralized revolution that's happening right now. I don't talk a lot about the price on a regular basis, as far as what the price is this minute and what I expect the price to be tomorrow. But we are talking about the price, and we're talking about the price specifically in regards to something that Steve Hankey came out and said this week, and he said, quote, we know the price of bitcoin, but not its value, and it's probably zero. Now. I would choose to ignore what this

guy says. Here's someone you know, kind of well known, I guess, I mean he's the economy. He was an economist and former advisor to the Reagan administration. Well, that also means he's really old. So maybe that has something to do with his misunderstanding the bitcoin, But it's it's it's bigger than his misunderstanding bitcoin. He has a misunderstanding of what economics is, which is rich for me to say because he was advised of Reagan and I wasn't.

But let's think through this in just you know, something called common sense, all right, So he says in theory in his quote, he said from a high theory perspective. But again, we don't live in a high theory perspective, right, we live in a real world. So let me let me explain to you that a elementary kid can understand there is no such thing as intrinsic value. There is only subjective value. So what do I mean by that? So Peter Scheft says that no gold has intrinsic value.

Those gold cuff links that I have, they could be melted down and turned into jewelry. Okay, that's that's true. But that doesn't mean there's any value there. Value is only derived because people put value into something because collectively we value it. So like being babies or something, all of a sudden gets this crazy high value because everybody wants it, and then it's gone. Nobody wants it, so all value subjected. Let me give it. Let me give

you a thought exercise. If we were stranded on a deserted island and we had two briefcases, one briefcase with a billion dollars of dollars, a billion dollars of cash, and we did another billion dollars of let's say gold bars. Remember person per shift that gold bars have intrinsic value. But we're deserted on on on island. I mean I got no boat, I got no cell phone, I got no food, no water, I got no nothing. How much is that billion dollars of cash or billion dollars of

gold worth? It's worth of zero? Does me no good? I can't buy anything? I need goods and services. Goods and services are wealth money cash currency is not wealth. Goods and services are wealth. Cash or money or currency measures wealth. It measures how much wealth I can acquire. Wealth is goods and services back on that proverbial desert island.

If there was a guy with a hut who had a couple of fish and some coconuts, he would be way richer than I would be with a billion dollars of cash, because I can't do anything with my cash or the gold. There's no intrinsic value. There's nobody that believes that has any value. Does mean no good. Now, last night I went to dinner, I had leftovers. I didn't want to take him home with me. They threw him away. Those leftovers were worth zero dollars to me.

But if I was on that deserted island and I had a billion dollars of cash and I was starving to death, I would give all billion dollars for that leftover food if I was dying. You see what I'm saying. All value is subjective. So when he talks about his high theory of value, well, I'm sorry, man, I know that in a classroom you can come with some crazy economic formula that made make sense on a piece of paper, But it's not the it's not the real world, right.

The real world is value of subjective. We value things at certain times, and that is why bitcoin has value. No different than anything else as value. Why do other things have vue? Why does a certain watch or a certain uh, you know, purse, or a certain piece of clothing? Why does it have more value than another? Because we

perceive that it has more value And he's saying. What he's saying is that um, Because the professor of economics questioned how the value of bitcoin can be derived when deciding it's rate of exchange for national currencies such as the dollar. We'll already know what the dollars. There's twenty six billion dollars a day every twenty four hours traded, so we already know that's a pretty well function in market. So we already know. And so we already know what

the US dollar equivalent of bitcoin is. And then he says it is. He went on to say it is difficult to know the purchasing parody of bitcoin. Well, not really, because twenty six billion dollars a day has been traded in US dollars and that puts a value. So I know I can trade the bitcoin for dollars in the dollar for a Gucci watcher purse, So we know that. So, you know, don't listen to these guys. They're they're really smart in a classroom, but it makes no sense to

us in the real world. That's the thing. He also says cryptocurrencies hang on. He says, you've got the purchasing power parody that can't be used for bitcoin, and you have got interest rate parody that also can't be used for bitcoin. Well, okay, so you've got purchasing power that can't be used for bitcoin. Really because, as I said, there's twenty six billion dollars a day being traded and unsed dollars, so I could so I know exactly what

it's worth. I mean. He also says there's no interest rate parody rarely, because there's also billions of dollars being um borrowed and loaned on a daily basis. As a matter of fact, I just borrowed against some of my bitcoins, So there's there's active Um, there's active exchange is happening for that. But let's talk about the second part of what he said here, which I think blows apart what

he's saying here. So um, he says Milton Friedman one of the intellectual leaders of the Chicago School of Economics. So Milton freedom was was an economist somebody that I recad some of that I respect, has written a lot of good stuff. And I agree with Milton Friedman read his stuff, not Steve Hanky. Milton Freedman was a colleague of steam Kay Steve Steve Hankey um, and he said, uh. Milton Freedman told us in there would be a new medium of exchange that would that was a prescient description

of the rise of bitcoin. Ten years later, he forecasted there would arise a digital currency indigenous to the Internet that would disintermediate the middleman in global finance through peer to peer transactions. And so that's what bitcoin does. Bitcoin has disintermediated the middleman. It's it's eliminated the third party, eliminated the middleman. So for example, if I want to pay with Venmo, well, my Venomo account is hooked to my credit card, my credit card is hook to my

bank account. My bank account sends it to your bank account with sends to your credit card, sends to your Venmo. There's like six people in the way, and any one of those people can stop that transaction. And each person also extracts a little bit of value along the way. So if they say, hey, I don't like this, person, this person is a bad actor, this person is a terrorist, this person is a whatever. You don't have the right

to send them money. So they're censoring my transactions. And like I said, they each rent seek, they each take a little piece along the way. So as he forecasted, there would be a way that it would cut out the middleman in global finance and go peer to peer. And that's what bitcoin does. That's the that's the one of the big revolutions of bitcoin. It goes peer to peer. If I want to send bitcoin to you, it goes for me to you with nobody in the middle, which

means two things. One nobody can stop it, blocking to prevent it, and two nobody takes a piece. There's no rent seekers in the middle. So he predicted that. Freeman stated, quote the one thing that is missing but will soon be developed, is a reliable e cash, a method whereby on the internet you can transfer funds from A to B without knowing them, without without them knowing each other. End quote um. And so that's what Freeman said a

decade before bitcoin came out. Well, Hanky goes on to say that, yeah, he was right, but that's what C B D C S are for central bank digital currencies.

Hanky believes that it's inevitable that we will see some version of the US dollar being produces a digital currency by the Federal Reserve, but he says this will not create the revolution in banking that has been touted in media headlines, because he says, quote, most of the US dollars that are produced are produced by electronic means right now, and the federals producers only ten of the money held in the hands of the public. The rest comes from

a commercial banks. So he's right, He's right. The dollar pretty much is already digital. All transactions are already done digitally. He is right, But here's what he's saying. He sees it's inevitable that will see some version of the US dollar being produced as digital currency, remember the central bank digital currency, and of course the government's already told us that they'll do that. Um, he says, uh. Quote, we talk about digital currency as though it is some new thing,

but most of the currency in the world is produced digitally. Again, he's right. But here's the part that when I read it, I just can't help but laugh because it just contradicts what he's saying. He he rails against bitcoins so much. And then this next part what he says tells you everything you need to know about bitcoin. It's like, how can he not see this? He's literally giving you the value prop So he starts, what's I was saying, there's no value? And then he lays out the value proposition

for us, like he can't connect the two dots. This is what happens when you're too smart. This is what happens when you study theory of economics your whole career and you don't live in the real world like you and I do. You know where we actually have to earn money and pay our bills kind of thing. When you don't live in that real world, you just can't understand. You sit there and talk about theory all day. So

I want to tell you what he said. When I tell you what he said, I mean, you're gonna think it's incredible, just like I did. By the way, you're listening to the Mark Moa show, we're talking about bitcoin. If you didn't catch on already, we're talking about bitcoin, cryptocurrencies. We're talking about the decentralized revolution. We're talking about the economist who thinks there's no value but he proves it in this next statement. I'm gonna tell you what that

is when I come back. Don't go away, everyone, Welcome back. You are listening to the Mark ma Show. We're talking about bitcoin and cryptocurrencies and the decentralized revolution, and I'm trying to give you the perspective you need so you can understand what's going on so you can participate. This is the biggest opportunity that you'll ever see in your life. For they we'll see for multiple generations. It already has been, it's already been the best performing asset class, and it

is not done. I think there's a there's an easy ten x in front of us. It's pretty dangn amazing, especially when you consider the stock market averages about a six percent return. So if I can do a ten percent return or a thousand percent return, that's pretty dan good. But anyway we're talking about right now, some of this we call it fud, fear, uncertainty, in doubt. This fud that's been cast against bitcoin by Steve Hankey and uh, you know he's uh, he's a mouthpiece for you know,

traditional media. I think tanks um nobody I take seriously. But mainstream media sure takes them seriously. And so we're dismantling something that he said. And so if you're just tuning in, Um, I'm not going to repeat everything that I said. But it started off with the headline saying that he said, quote, we know the price of bitcoin, but not its value. It's probably zero. So I wanted to explain that all values subjective, and I give you a thought exercise to explain what that that was, and

so forth. But here's what, um, this is where this article really just uh, it's funny to me because he's saying that it has no value, So why would anybody value anything? Right? So, typically would have some sort of utility or some sort of a need. Right, So like, um, I use the example if if we were starving on as an island and there's a little bit of leftover food that that would have some utility, would save us from starvation, it would be worth a lot of money. Um.

So typically there's some sort of value plus scarcity. And so, um, what type of value or what type of utility would bitcoin provide that would create that value where people would want it or people would actually need it because it has utility? Right? So I was on the deserted island. We'd have plenty of sand, but I don't need that sand. There's no utility, there's no scarcity for that UM, but that that leftover food there would be. But back to back to what I'm talking about. We talked about UM.

We talked about how Milton Friedman predicted that there would be this rise of this digital currency that could go appeer to peer, and Steve Hanky says, yeah, that's that's central bank digital currencies. So he says, going back to what he's talking about, says, quote, we talk about digital currency as though it is some new thing, but most of the currency in the world is produced digitally. But then Hanky paints a very dark picture of central bank

digital currencies, or what we call CBDCs. He says that in the hands of authoritarian governments, it has the potential to create serious privacy infringements. Yeah, no kidding. So central bank digital currencies are um currencies. They're they're sort of like a cryptocurrency, but not really. It's the money that that the central bank makes. And because they're digital currencies, they're both programmable and behavioral. So what does that mean?

So they can program the money. So for example, they say, hey, here's your stimmy, here's your bucks. If you don't spend it by Friday, it comes back to us. That's one way. Or they could say, um, here's your stimmy. You can spend it here here, here, but you can't spend it here here here, right. They could do a behavioral so to cause a behavior, to cause you to act in

a certain way. So for example, hey Mark, you're saving too much money, so we're gonna hit you with a negative a negative interest rate meaning they're going to charge me to keep money, so they're gonna slowly will pull away from me. Or hey Mark, you're not saving enough. We're gonna give you a positive interest rate. So they can affect my behavior. They could give money to um immigrants or um you know, certain ethnic groups or whatever whatever you know, division they want to do today. They

could do that all these different things. Um And, but they could also do it to completely surveil to see every single transaction. Um. So he went on. He dismissed the idea that the US dollar could be challenged by China's digital one. Um and he's and and he says, um, he's completely unconcerned about Beijing about China's first mover advantage of China already rolled at the central bank digital currency.

As a matter of fact, that central bank digital currency is scheduled for a complete rollout by the Winter Olympics of next year. He says, quote the yuan isn't even a convertible currency, so the idea that it could compete with the dollar is ridiculous. And until it can become freely convertible into other currencies, forget it. It's not going to be a challenge. End quote. He warned that the real concern from the digital wand is the quote the

snoop problem or the privacy problem within China. I'm still quoting him. That's why the digital uand is not even being accepted by the Chinese on the mainland. They don't want to be snooped on. They're smart enough to know that the Communist Party is going to be looking at every transaction they make. End quote. M hmm. So what he's saying is let me, let me just let me just add this up here. Hang on, hang on. So he starts out by saying that bitcoin has no value.

It's probably zero. He said, we know the pribace, we don't know the value. It's probably zero, so it's it's worth nothing. But bitcoin allows me to have a peer to peer money that is censorship resistant, meaning no one can stop it. If I want to send to you, nobody can stop it, block and prevented, um, nobody can create more of it. So with the dollars, they print more dollars, which steals the purchasing power for me. So there's they're stealing my value through inflation. So they're stealing

from me. They're manipulating me with interest rates and monetary um supply and demand. They are censoring me. They're they're saying who I can and cannot send that money to, And they're saying and he and he's also saying here that central bank digital currencies are coming next he's saying that. And then he's also saying that central bank digital currencies um as in his own words, he says, will be

snoop snoop do one. They don't be snooped one. Oh, he says, quote the snoop problem or the privacy problem. So central digital currencies have that. So m so bitcoin gives me alternative, meaning I have the digital currency that can't be inflated. It can't be stolen, can't be censored, and nobody can snoop on me, nobody can surveil me. So he's warning us of this problem. He says that, um, he says, it's not even being accepted by the Chinese on the mainland. The Chinese won't even use it because

they don't want to be snooped on. He says. They are smart enough to know that the commonest party is going to be looking at every transaction they make. So if you don't want to use the central bank digital currency that your country is going to give you because you're afraid of as he says, you're gonna be snooped on. I don't want that. Even the Chinese don't want that, then we have bitcoin. Bitcoin is an alternative. That's the

value proposition. He's saying. In his own words, he's telling you the problem with the sentence he's so, he's saying, they're gonna the banks are already created central bank desercurrencies. They're going to roll it out. The US will be bigger than China's. People don't want to use them because they can be snooped on. Even the Chinese people don't want to use it because they know every transaction they

make will be spied on. That's the problem. So he's laying out the future and tell us how bad it's going to be. It's an portable, he says, And this is how bad it's going to be, and it's gonna suck and you don't want it. And we have this, we have this other alternative over here. But there's no value to that. I mean, what kind of what kind of thinking is this? And it just blows me away. I mean he's literally laying out the value proposition and

then saying there's no value. So if these Chinese people that he's saying don't want to be snooped on, if you don't want to be snooped on, if you don't want your wealth stolen away from you through inflation, if you don't want your money manipulate, if you don't want your money and your transaction censored through the money and through their central maank digital currencies that they're ruling out in his own words, then what is your option? You

only have another option, which is to not use it. Well, what are you going to use? You have bitcoin, and bitcoin beats that. Bitcoin is open, it's borderless, it's transparent, it's portable, it's censorship or resistant. Nobody can censor my transactions. It's immutable, nobody can steal it, nobody can change it, nobody can take it. It. It fixes the very problem that he's telling us about. So he you know, he's good at throwing shade. He's good at saying this is

a big problem. Um. He says that the best way to solve the current situation is to look at the causes. The causes, he says the problem quote is too much money in the system. He says, the way to solve rise in inflation is to print less slow the rate of growth. But how how are you going to slow the rate of growth? The only way you're going to slow the rate of growth, That's that's his solution, that's his proposition. The only way to solve it isn't bitcoin. It's is to slow the rate of growth of the

money supply. How do you do that well? According to one of my favorite economists, Hyak, Frederick Hyak says that there shall never be another sound money again until the thing is taken from the hands of the government. That's the only way it can be done. By force, he says, only by some sly round about way that you can introduce something that cannot be stopped, and that's bitcoin. That's

the value problem. Steve Hankey lays it out for us perfectly, but he just thinks that somehow, magically, the governments are going to start operating on on a on a budget. They're gonna stop printing trillions of dollars because they just don't like it anymore, and that's you're gonna solve the problem. The answer is no, The answer is bitcoin. That's the value proposition. Hopefully that makes sense for you're listening to

the Mark Moa show talking about bitcoin cryptocurrencies. Thanks so much for listening.