Loved the video. You helped me understand why Bitcoin’s claims never really made sense to me! Have you written anything or made a video about the credit structure of the existing monetary system? I’d like to understand that better… Thanks!
The point (from 25:12) about Nakamoto's original bitcoins being moveable but not exchangable/tradable (because nobody valued them) really clarified something for me.
It's only through the mystique they acquired that they became valued, and through that value that they acquired a price, and through the price that they became (temporarily?) exchangeable/countertradable.
So clear, and so appreciated. As was the reminder that gold too is not a currency, yet has great countertrade value through its millennia-deep cultural mystique.
"It's only through the mystique they acquired that they became valued, and through that value that they acquired a price, and through the price that they became (temporarily?) exchangeable/countertradable" - absolutely
This video is absurdly narrowly focused, vastly over-complicates Bitcoin, and also fundamentally fails to understand how Bitcoin will evolve over time. Here's the simple version: Bitcoin does for money what the Gutenberg printing press did for information.
The printing press took the control of information out of the hands of The Church and rulers and put it in the hands of all people - and that *included* rich and powerful people like rulers and bankers. Critiquing Bitcoin because it interacts with the current monetary system and because the wealthy and powerful use and exploit it, is like critiquing printed pamphlets and books because a lot of them are printed by the rich, banks and corporations to serve their selfish ends.
What mattered about the printing press is that for the first time *everyone* could exchange language and this gave each individual the power to do what the wealthy and powerful were doing. This shift dramatically democratized the world.
Bitcoin is the same. The powerful will use it. But more and more over time common individuals will also use Bitcoin.
The printing press did not democratize civilization over night. It took centuries. But as printing and mailing information became less and less complex and expensive, printing eventually almost completely eliminated the control of the powerful over ideas. Audio and video are following the same path. And we don't say that somehow the Internet has not democratized communications simply because large corporate interest and billionaires still leverage a lot of control over it. Just as with printing, that will change over time.
The newest form of democratizing information is Bitcoin. (Money is nothing but an information system used to communicate with others on how and when to move resources, energy, labor and work around to accomplish tasks.)
Over time, once Bitcoin stops skyrocketing in value because it eventually becomes broadly owned (including by Blackrock, JP Morgan, etc) Bitcoin will eventually transition from being treated like gold, to being treated as a common medium of exchange. Its replacing of the fiat banking system will be so gradual that it will be accepted as a natural process. For a while it needs to go through a gold-like phase in which people just use it to hedge against fiat risk, volatility and collapse. (And yes that process includes some of these holders getting rich by essentially shorting the Dollar's continuous loss of value by holding things like gold and Bitcoin, and manipulating to make that opportunity last as long as possible)
But Bitcoin is not like gold, it is a *lot* easier to move around and that is why it will eventually be owned and used by enough people to make it useful as a currency.
The bottom line is that once Bitcoin is as ubiquitous and easy to use as printing was in the 19th century, people will just naturally use it for basic exchange. Everyone will have some, its price will stabilize (no one will be able to get rich off of it via speculation any more) and *then* people will naturally shift to its secure peer to peer freedom, over the selfish Visas, Paypals and Citibanks of the world taking a cut of every exchange.
Attacking Bitcoin because rich people and libertarians like it and use it to get rich, is like attacking print because those same rich people and libertarians do the very same thing with print, or electricity, or telephones, or the internet. Think in four dimensions Brett.
I can see that you're passionate about Bitcoin, and I can also see you're not the bog-standard right-wing libertarian bitcoiner, and that you care about progressive causes, so I'll take some time to respond.
The first thing I'll say is that you haven't really engaged with the video, and I know this because I can see you misrepresenting my position. For example, I'm not 'critiquing' Bitcoin when I note that it interacts with the current monetary system - that's just a descriptive reality. Another example: I don't really focus on how 'the wealthy and powerful use and exploit it', so your Gutenberg example isn't really working. Also, your printing press example has limited use - books are books and monetary systems are monetary systems, and those aren't very similar examples: I mean, sure, many people can use blockchain tech to issue tokens but that doesn't mean those become money
At the risk of me sounding a bit condescending, you're making a lot of assertions that sound like articles of faith rather than carefully thought out positions (X will happen in the future etc). I also don't really appreciate you telling me to think in more dimensions, because have spent over 15 years in alternative currency design scenes so I make my comments on Bitcoin based on experience with many different design principles around currencies. If you want to understand the deeper structure of money systems etc, you can check out this section of my site https://www.asomo.co/s/5d-money.
If you truly do believe that you can see monetary systems in more dimensions than me, and that I'm truly deficient in understanding, you're going to have to do more than merely talk about the printing press. You're going to have actually give a coherent account of how this process of transition to Bitcoin would actually work, beyond 'more people will get it and start using it'. You need an actual account of how monetary systems work, and the biggest thing I'll say to you here is that the mere fact that Bitcoin has numbered objects that can be moved around doesn't make it a monetary system
Incidentally, here's something else for you to think about. For there to be an equitable global distribution of Bitcoin tokens around the world, each person would need to hold 0.0025 BTC (this is the total supply divided by the global population), but in the early days of the system the tokens were handed out in 50 token chunks, which is 20,000 times the fair average distribution, and it was handed out to a very specific class of people - mostly young men with access to good computers and enough education to know how to work the system. These people were claiming vast multiples of the equitable distribution like this, and nowadays many of those people are billionaires (or at least millionaires), all while the vast vast majority of the world holds far far less than the equitable distribution. So, even if Bitcoin could somehow work as a monetary system - which is highly questionable - you're going to have to address an incredibly hardcore inequality problem
I am not "passionate" about Bitcoin. I am an anarchist with a long term goal of eliminating money entirely. But I also see how Bitcoin enables profound changes in local and global economics, and that it is crucial that we utilize this potential.
I did watch the entire video before replying. And in it you do very clearly dismiss Bitcoin as unworkable, suggesting that oligarchic forces will always fundamentally control and bastardize it. That conclusion is what I am calling out as incorrect.
My "think in four dimensions" comment simply meant you are not extending your analysis though the conventional fourth dimension of time. I wasn't making some meta comment about your intellectual capacity. You are only addressing Bitcoin statically in our current moment.
To your overall response, the Gutenberg press, telegraph, telephone, radio, television, the internet, and now Bitcoin are not 'systems' they are advancements in technological tools that enable exchange of information to be further democratized. Systems can be built *using* them but the technologies themselves are not systems.
Following all of these technological advances (from the Gutenberg press through to Bitcoin) oligarchs have thought that they could squelch expanded free exchange of information by controlling the systems in which the information is exchanged, and in each case they were wrong. They've done a lot of damage (especially Edward Bernays and the global Public Relations juggernaut that he spawned). But in a long range analysis over decades, each such technology proves to be unstoppable and eventually becomes a fixed public good no different than public roads and highways. Always.
Eventually the individual and the commons receive a major net gain in information access and freedom of communications. You don't have to understand financial/monetary systems at all to grasp that reality.
Regardless I have studied money for decades and *do* understand it. And the reason you are not getting what I'm saying is that you still objectify money as a tool of *agency* rather than a tool of *communication*.
David Graeber got closest, showing that money's earliest, and arguably most essential aspect is simply as a ledger record of successions of ongoing exchange. That's communication. Agency only accrues when two or more parties look at any given ledger and agree that it communicates to them a reliable claim to buy or deliver a good, service or commodity. And I am including cash and coins as crude 'ledgers'.
Once you are simplifying money as merely a communication method, the printing press comparison becomes undeniable, and doesn't require an understanding of money/finance as a 'system' (again money is not a system, but systems *use* it).
So to get what I am saying you have to hunker down and think out money until you see it as a communication method. One can't point money at someone's head and demand they follow one's orders. One cannot lift a pallet of potatoes with money.
Money is just a communication that says to others what to do if they agree. For example money is the communication you send to a worker who drives a fork lift to ask that they lift the pallet of potatoes, this because they know they can in turn pass on that communication to a pizza shop to buy a pizza, afterwhich the shop owner can pass on some of that communication to ask a distributor to give them a bag of flour, and then the distributor communicates with money to a wheat farmer to reply with a bushel of wheat, and so on. It isn't money that *causes* the actions that parties take. Their decision to agree to honor the signal that the money is sending them and take action is what causes the action to happen.
Once you internalize money as communication, it becomes clear how a globally distributed, uncrackable, un-ownable ledger, will democratize money communication and cut out middleman *systems* (like banks) which currently control most of money communication by privately controlling the ledgers.
Is it speculation to say with confidence that this will take place? Yes. But only in the same sense that it was 'speculation' to predict that nearly everyone would read print, or use telephones.
First, let's be friends. Second, let me ask you a first question: How present money is backed by a "liability" like a voucher if the issuer (banks) creates it out of nothing? It is the inverse of vouchers, since the redeemable object doesn't belong to the issuer (but to the entire society and that's why money creation causes inflation, theft).
Loved the video. You helped me understand why Bitcoin’s claims never really made sense to me! Have you written anything or made a video about the credit structure of the existing monetary system? I’d like to understand that better… Thanks!
I do appreciate your criticism, and I have to admit you also make me laugh with your faces and your $9000 pizza.
I'm glad to hear that ;)
I find this „free riffing“ very effective. If this format saves you time, by all means, keep it coming.
For sure - I like making more structured videos at certain points, but the improv stuff is kinda more fun
Fantastic video Brett.
The point (from 25:12) about Nakamoto's original bitcoins being moveable but not exchangable/tradable (because nobody valued them) really clarified something for me.
It's only through the mystique they acquired that they became valued, and through that value that they acquired a price, and through the price that they became (temporarily?) exchangeable/countertradable.
So clear, and so appreciated. As was the reminder that gold too is not a currency, yet has great countertrade value through its millennia-deep cultural mystique.
Super helpful, thanks.
Thanks my friend
"It's only through the mystique they acquired that they became valued, and through that value that they acquired a price, and through the price that they became (temporarily?) exchangeable/countertradable" - absolutely
This video is absurdly narrowly focused, vastly over-complicates Bitcoin, and also fundamentally fails to understand how Bitcoin will evolve over time. Here's the simple version: Bitcoin does for money what the Gutenberg printing press did for information.
The printing press took the control of information out of the hands of The Church and rulers and put it in the hands of all people - and that *included* rich and powerful people like rulers and bankers. Critiquing Bitcoin because it interacts with the current monetary system and because the wealthy and powerful use and exploit it, is like critiquing printed pamphlets and books because a lot of them are printed by the rich, banks and corporations to serve their selfish ends.
What mattered about the printing press is that for the first time *everyone* could exchange language and this gave each individual the power to do what the wealthy and powerful were doing. This shift dramatically democratized the world.
Bitcoin is the same. The powerful will use it. But more and more over time common individuals will also use Bitcoin.
The printing press did not democratize civilization over night. It took centuries. But as printing and mailing information became less and less complex and expensive, printing eventually almost completely eliminated the control of the powerful over ideas. Audio and video are following the same path. And we don't say that somehow the Internet has not democratized communications simply because large corporate interest and billionaires still leverage a lot of control over it. Just as with printing, that will change over time.
The newest form of democratizing information is Bitcoin. (Money is nothing but an information system used to communicate with others on how and when to move resources, energy, labor and work around to accomplish tasks.)
Over time, once Bitcoin stops skyrocketing in value because it eventually becomes broadly owned (including by Blackrock, JP Morgan, etc) Bitcoin will eventually transition from being treated like gold, to being treated as a common medium of exchange. Its replacing of the fiat banking system will be so gradual that it will be accepted as a natural process. For a while it needs to go through a gold-like phase in which people just use it to hedge against fiat risk, volatility and collapse. (And yes that process includes some of these holders getting rich by essentially shorting the Dollar's continuous loss of value by holding things like gold and Bitcoin, and manipulating to make that opportunity last as long as possible)
But Bitcoin is not like gold, it is a *lot* easier to move around and that is why it will eventually be owned and used by enough people to make it useful as a currency.
The bottom line is that once Bitcoin is as ubiquitous and easy to use as printing was in the 19th century, people will just naturally use it for basic exchange. Everyone will have some, its price will stabilize (no one will be able to get rich off of it via speculation any more) and *then* people will naturally shift to its secure peer to peer freedom, over the selfish Visas, Paypals and Citibanks of the world taking a cut of every exchange.
Attacking Bitcoin because rich people and libertarians like it and use it to get rich, is like attacking print because those same rich people and libertarians do the very same thing with print, or electricity, or telephones, or the internet. Think in four dimensions Brett.
Hi Eric, thanks for your comment
I can see that you're passionate about Bitcoin, and I can also see you're not the bog-standard right-wing libertarian bitcoiner, and that you care about progressive causes, so I'll take some time to respond.
The first thing I'll say is that you haven't really engaged with the video, and I know this because I can see you misrepresenting my position. For example, I'm not 'critiquing' Bitcoin when I note that it interacts with the current monetary system - that's just a descriptive reality. Another example: I don't really focus on how 'the wealthy and powerful use and exploit it', so your Gutenberg example isn't really working. Also, your printing press example has limited use - books are books and monetary systems are monetary systems, and those aren't very similar examples: I mean, sure, many people can use blockchain tech to issue tokens but that doesn't mean those become money
At the risk of me sounding a bit condescending, you're making a lot of assertions that sound like articles of faith rather than carefully thought out positions (X will happen in the future etc). I also don't really appreciate you telling me to think in more dimensions, because have spent over 15 years in alternative currency design scenes so I make my comments on Bitcoin based on experience with many different design principles around currencies. If you want to understand the deeper structure of money systems etc, you can check out this section of my site https://www.asomo.co/s/5d-money.
If you truly do believe that you can see monetary systems in more dimensions than me, and that I'm truly deficient in understanding, you're going to have to do more than merely talk about the printing press. You're going to have actually give a coherent account of how this process of transition to Bitcoin would actually work, beyond 'more people will get it and start using it'. You need an actual account of how monetary systems work, and the biggest thing I'll say to you here is that the mere fact that Bitcoin has numbered objects that can be moved around doesn't make it a monetary system
Incidentally, here's something else for you to think about. For there to be an equitable global distribution of Bitcoin tokens around the world, each person would need to hold 0.0025 BTC (this is the total supply divided by the global population), but in the early days of the system the tokens were handed out in 50 token chunks, which is 20,000 times the fair average distribution, and it was handed out to a very specific class of people - mostly young men with access to good computers and enough education to know how to work the system. These people were claiming vast multiples of the equitable distribution like this, and nowadays many of those people are billionaires (or at least millionaires), all while the vast vast majority of the world holds far far less than the equitable distribution. So, even if Bitcoin could somehow work as a monetary system - which is highly questionable - you're going to have to address an incredibly hardcore inequality problem
Hi Brett,
I am not "passionate" about Bitcoin. I am an anarchist with a long term goal of eliminating money entirely. But I also see how Bitcoin enables profound changes in local and global economics, and that it is crucial that we utilize this potential.
I did watch the entire video before replying. And in it you do very clearly dismiss Bitcoin as unworkable, suggesting that oligarchic forces will always fundamentally control and bastardize it. That conclusion is what I am calling out as incorrect.
My "think in four dimensions" comment simply meant you are not extending your analysis though the conventional fourth dimension of time. I wasn't making some meta comment about your intellectual capacity. You are only addressing Bitcoin statically in our current moment.
To your overall response, the Gutenberg press, telegraph, telephone, radio, television, the internet, and now Bitcoin are not 'systems' they are advancements in technological tools that enable exchange of information to be further democratized. Systems can be built *using* them but the technologies themselves are not systems.
Following all of these technological advances (from the Gutenberg press through to Bitcoin) oligarchs have thought that they could squelch expanded free exchange of information by controlling the systems in which the information is exchanged, and in each case they were wrong. They've done a lot of damage (especially Edward Bernays and the global Public Relations juggernaut that he spawned). But in a long range analysis over decades, each such technology proves to be unstoppable and eventually becomes a fixed public good no different than public roads and highways. Always.
Eventually the individual and the commons receive a major net gain in information access and freedom of communications. You don't have to understand financial/monetary systems at all to grasp that reality.
Regardless I have studied money for decades and *do* understand it. And the reason you are not getting what I'm saying is that you still objectify money as a tool of *agency* rather than a tool of *communication*.
David Graeber got closest, showing that money's earliest, and arguably most essential aspect is simply as a ledger record of successions of ongoing exchange. That's communication. Agency only accrues when two or more parties look at any given ledger and agree that it communicates to them a reliable claim to buy or deliver a good, service or commodity. And I am including cash and coins as crude 'ledgers'.
Once you are simplifying money as merely a communication method, the printing press comparison becomes undeniable, and doesn't require an understanding of money/finance as a 'system' (again money is not a system, but systems *use* it).
So to get what I am saying you have to hunker down and think out money until you see it as a communication method. One can't point money at someone's head and demand they follow one's orders. One cannot lift a pallet of potatoes with money.
Money is just a communication that says to others what to do if they agree. For example money is the communication you send to a worker who drives a fork lift to ask that they lift the pallet of potatoes, this because they know they can in turn pass on that communication to a pizza shop to buy a pizza, afterwhich the shop owner can pass on some of that communication to ask a distributor to give them a bag of flour, and then the distributor communicates with money to a wheat farmer to reply with a bushel of wheat, and so on. It isn't money that *causes* the actions that parties take. Their decision to agree to honor the signal that the money is sending them and take action is what causes the action to happen.
Once you internalize money as communication, it becomes clear how a globally distributed, uncrackable, un-ownable ledger, will democratize money communication and cut out middleman *systems* (like banks) which currently control most of money communication by privately controlling the ledgers.
Is it speculation to say with confidence that this will take place? Yes. But only in the same sense that it was 'speculation' to predict that nearly everyone would read print, or use telephones.
First, let's be friends. Second, let me ask you a first question: How present money is backed by a "liability" like a voucher if the issuer (banks) creates it out of nothing? It is the inverse of vouchers, since the redeemable object doesn't belong to the issuer (but to the entire society and that's why money creation causes inflation, theft).