Kind: captions
Language: en
i could talk to somebody all day long
and they can tell me bitcoin's not
valuable it's a trillion dollar asset
tens of millions of people around the
world holding it transaction volume and
some of the card networks
[Music]
i believe it to be true that technology
is a one-way street that we will never
go backwards
[Music]
well bitcoin is the strongest asset the
human race has ever invented it's like
gold with none of the defects of gold
and then suddenly nfts come and suddenly
your mind is completely blown it's the
entire exchange transfer and storage of
value for the internet
[Music]
the internet
from 1990 to 2000 grew at 63 percent a
year
that was the fastest adoption of any
technology in all recorded history prior
to that
mobile phones
was the other one
but what happens is the internet
technology and the mobile phone
technology allows for these
networks to be built
and once that network's in place it's
faster to build the net next network so
in india for example they've just
basically given out free data to every
mobile phone in india so guess what
uh data usage is the highest in the
world
and so their internet scaling becomes
faster
so this so the internet was huge as we
all know and it remains huge so it's 63
a year it then flattened out over time
as more and more people got adopted
so at 1997 it was growing 63 a year and
it was 140 million users of the internet
in 2021 there are 140 million crypto
users
and it's growing at 113
a year which is double the speed now
this is where humans struggle
linear numbers and exponential numbers
because it's exponential
it means that growing at 113 a year
we're going to go from 140 million
people to a billion people by 2024.
i mean so
so
so when you go back
and what you how are you introduced all
of this so if you know
that something is being adopted at this
speed and it's a networking of money
at its core
and you can buy an infinitesimal
fraction of it so everybody can buy 10
of their net worth
then everybody who takes this
opportunity will probably have the
biggest opportunity
in history
yeah sure the meme stocks
cryptocurrencies it's easy to mock and
make fun of these young people but
these young people are interested in
understanding how does the market work
how does finances work how does
investing work and so you know if you go
back to that data right we talked about
45 of people have no investable assets
the two stats that just blew me away
when i started to look at this was uh 80
of millionaires in the united states
inherited zero dollars
so the narrative is interesting everyone
inherits wealth and is just passed down
well 80 of americans inherited nothing
20 inherited something eighty percent
nothing the second one is that thirty
three percent of uh millionaires in
america never made more than a hundred
thousand dollars in a single year
so you start to ask yourself well how
does it that somebody that doesn't make
six figures a year become a millionaire
well they have to be disciplined and
understand personal finance and so it is
possible to do it it's not everyone it's
hard right it's not the uh the easiest
thing to do but it can be done and so as
you start to understand like okay
the education is a huge piece of this
so you can go to vegas lose all of your
money and there's no regulation
but if you want to invest in a group of
startups or a single startup it's deemed
too risky by somebody
a lot of that is a power grab by wall
street because what does that mean it
means you can't do it you have to give
it to somebody else
and they can pull the money so then
you're not taking specific risks
and what that means is somebody on wall
street gets rich at your
on your behalf
because you're now paying them fees that
you didn't have to pay that's the beauty
of bitcoin you're basically a vc
investor in the future of money
not bitcoin ethereum even even better
you've got you're a vc investor in the
future platform of the internet of value
and you're paying nobody any fees i
believe it to be true that technology is
a one-way street that we will never go
backwards we will never unwind the
internet we will never be a less digital
creature we will only be more and things
like neurolink are going to become real
and i actually and i don't want to lose
people on this i think in a
very far distant future so this is not
in the next 20 or 30 years you know
maybe this is 100 years maybe it's 300
but there are people already that have
cochlear implants that give them back
hearing we're working on
implants into the eye they give people
back vision so it'll start with
correcting things but we will ultimately
as ourselves become really
um
tied physically to technology so
i believe that everything will
ultimately get digitized so what we're
living through right now is a really
fascinating moment where art is now
being digitized money is being digitized
and those two i live at the intersection
of art collectibles and money and and
watching those go digitized and watching
for anybody that wonders if this if the
human mind is just ever going to be into
these things
in the way that they are physical things
i will just say this that uh in august
of 2021
open openc did three billion dollars in
revenue on purely digital goods digital
art digital collectibles all of it and
that blew them past etsy at like day 16
of the month or something they went past
i mean just absolutely insane to see how
much money is pouring into the system i
think this was only 200 000 wallets so
200 000 people driving three billion
dollars worth of revenue all on digital
goods that have no physical tangible
thing in in out in the world now there's
utility it's beyond the scope of what
we're saying now so okay my thesis the
world's only going digital i have all
these kind of proof points around it now
one of the things that's going digital
is money
bitcoin in particular has a really
fascinating feature which makes it what
you call sound money and that feature is
programmatically
it can only ever produce 21 million of
these units unlike gold which for me and
i don't know if you'll agree with this
my mind got wrapped around it
immediately when it was like bitcoin is
digital gold because i understood what
gold was meant to be i was never going
to carry it around and shave some off to
buy a loaf of bread like it's a thing
that i store somewhere else that we all
agree and yes it only has value in that
we agree it has value
it only can be created when stars
explode and that rains down on the
planet and gets embedded into you know
the bedrock of
you know the earth and so we have to go
and dig it out but we dig it out at a
rate roughly two percent a year as
economic incentives go up we dig out
more and so there is some big question
around well if there was enough
incentive could you devalue that
more by discovering that there are
actually harder to reach
deposits of gold okay so i get that it's
capped there's only 21 million units
therefore as long as we all agree that
that thing has value it becomes sound
money as you say because there can never
be any more of it
[Music]
look i think the big thing that happened
with regard to bitcoin this year is that
bitcoin is the first is the first point
in human history where engineering
impinged on economics
up until this point people didn't really
embrace the idea of energy theory and
engineering theory and math and sciences
is being integral to the way that a
monetary asset function
you know it used to be money was you
know seashells and tokens and then and
then we have this
general you know we have gold and we
have coins and then we have general
agreements and
and uh
and the like and
bitcoin was the first time when we
created um
a digital monetary asset a pure a pure
digital token on a pure digital network
that uh that actually uh
respects the laws of conservation of
energy
you know i say it's it's sound money
but that's the same as thermal dynamic
we sound money which is conservation of
energy which means mathematically proper
do you mind saying again
the cost of loaf of bread compared to
dollar versus big so if i denominate my
life in dollars and let's say i buy a
loaf of bread today and it's two dollars
five or ten years from now that loaf of
bread may cost me three four five
dollars depending on the rate of
inflation if i denominate my life in
bitcoin and today let's say that it cost
me one bitcoin for a loaf of bread in
the future it will cost me less than one
bitcoin so it'll actually become cheaper
for me to buy because every asset when
you think of price
it's denominated in a currency so a
stock right when i when i ask you what
is amazon's stock price you're telling
me one amazon share over how many us
dollars and that's how we get to the
actual value and so when you start to
think about that
look at the stock market the stock
market from 1971 to today is up and to
the right it's a perfect 45 degree angle
oh god i know you're about to say when
you denominate it in gold it's down
since 1971. if you denominated in
bitcoin since 2009 uh 2010 it has
crashed aggressively bitcoin has been
the best performing asset but that's
because it's denominated in dollars
and so ultimately what we're watching is
we're watching an entire generation of
people wake up to this fiat currency
kind of fiasco
and there's a famous uh i think it's
henry ford quote where he said you know
if people understood how money worked
there would be riots in the street
before morning
if you sign up for technology i think
you gotta have this model in your head
that you're a snake that's shutting its
skin
every three four years
or i mean a really good model in nature
for growth under pressure is a chambered
nautilus
and a chambered nautilus is this
creature that grows under under deep sea
pressure and it and it builds a shell
and of course the shape of the chambered
nautilus is this spiral because the
creature
is rebuilding the next shell to be twice
as big
as the last shell and turning in on
itself and is using its previous work as
the structure to support the next piece
of work
and so
if you look at the at the design of a
chambered nautilus what you see is
is nature's solution for growth under
pressure
[Music]
and then you start saying okay but
that's bitcoin and then what's this
ethereum business
and then you start realizing
decentralized finance you're like it's
kind of a finance thing but that's kind
of cool because i can get yields now you
know i can get instead of getting zero
on my bank account for my hard savings i
can now get six percent a year wow
that's a difference it's like going back
25 years in time
and then suddenly nfts come
and community tokens
and suddenly your mind is completely
blown that this is not just money it's
the entire exchange
transfer and storage of value
for the internet
whole business models are about to
change
massively because of what this
technology
unlocks and then once you get your head
around that you're like oh god i can't
even hold this in my mind any longer
it's so big
and that it's not just buy some bitcoin
i'm going to make some money over time
you know it's actually an entirely
parallel financial system
and business structure
for the world and it's being adopted
faster than anything we can ever imagine
what is it
that makes bitcoin
interesting enough that so many smart
people see this as ultrasound money and
what does ultrasound money mean as you
can probably see i am obsessed with the
future of crypto and nfts and i want to
make sure you are prepared to understand
and enjoy this new digital revolution
to help with that i've launched a new
impact theory discord where you can get
not only all my information on crypto
and nfts but also stay up to date on
everything impact theory you'll be
joining a community of amazing
impactivists and have direct access to
me early offers and so much more to join
click the link in the description and i
hope to see you in there the world has a
history of money
whether it's backed by gold or not
where
government gets themselves
excessively into debt
and they devalue the money
so the romans used to clip the edge off
the coins so there was less gold in each
coin
and eventually people would lose faith
in the coins because they blend them
with silver and then blend them with
copper and you know the coins were
worthless because that was supposed to
be worth the value of the of the daenery
in roman times
but governments can't help themselves
humans we're just humans right humans
are fundamentally flawed creatures and
we always will be
so then we have the gold standards you
know the us and the uk are on gold
standards world war one world war ii we
all have to leave it because we've got
too much in debt again
we've overly financialized yet again
because humans love leverage above all
things it's kind of sex and leverage are
the two things that drive humans for
some reason
then
we adopt a new system which has been
around before but it keeps getting
abandoned called fiat money fiat money's
money not backed by anything
it's backed by the promise of the
central bank paying it so that's the
dollar bill that we all are familiar
with and every country in the world now
adopted fiat currency
but
as with everything
if you're really thirsty and i gave you
a bottle of water or sold it to you
you'd probably pay me 10 times too much
for that bottle of water
if i give you a million bottles of water
they're worth precisely zero to you
so scarcity has value that's arts that's
cars that's
almost anything
um humans value scarcity for whatever
reason we do
and so
if you're printing too much money
you're creating less scarcity so yes
there's money everywhere
but the money has less value
so once you understand that
you said well what does it mean the
dollar hasn't collapsed it's kind of
where it was versus the euro in the last
five years or whatever it is
and then you say huh
but my 50 000 salary
now can buy me much less shares in apple
amazon google microsoft in fact
units of the s p 500 i i suddenly can't
buy as much since 2008 it's a fraction i
can buy like
a third of what i could
same with real estate
same with gold
and then you're like huh
assets have suddenly got expensive
they haven't
the value of your savings has gone down
or your money
so you can't afford to buy assets what
is an asset an asset is deferred
consumption from the future
i buy a house
i sell it in the future i get to retire
whatever the the things are right we
don't buy the s p because we want to
hang it up in our wall we buy it because
we want to sell it at a future date to
realize money
so that means our future sales are now
poorer that's essentially what this
means that's what currency debasement is
so bitcoin comes along in 2008 in the
middle of the crisis it's kind of like
it was perfectly prepared for this and
said
satoshi goes hey look at this
i can create an algorithm
that only creates so much of this thing
the bitcoin
and it can never vary
ever
so therefore this is scarcity that
humans can't [ __ ] around with
now humans have this propensity to [ __ ]
around with scarcity because they're
economically incentivized to do so
here they can't
so then they become economically
incentivized to own this asset
because it's scarce and it cannot be
changed because it has this consistent
supply curve and a limited number
so bitcoin becomes this great store of
value
and it would look like gold because
gold's a good story value it's worked
for thousands of years but bitcoin has
this other thing to it it's a network
which gold isn't
and it's technology which gold isn't so
we have use cases and the benefits of
building a network so suddenly it goes
up exponentially in price
roll onto 2015
and suddenly somebody's looking at the
blockchain
and they start saying
imagine if these bits on the blockchain
which is where you record the ownership
of something in bitcoin it's bitcoin
itself
what happens if we could put a contract
in there
because humans live off contracts you
know everything is basically a contract
in in our legal terms
and that was the rise of ethereum it
became a platform where you could
programmably change the blockchain not
the attributes of the blockchain you
couldn't remove anything off that ledger
but you could change the little holding
buckets and say well it can look like
this could look like that it can adopt
to this
and those things were verifiable as well
so they couldn't change
so this created a theorem which became
the platform so if you think of bitcoin
as the store of value this very pristine
beautiful thing
then you think of ethereum as also a
very beautiful thing but it's a much
broader application
because it's like programmable money
[Music]
okay so what's bitcoin well bitcoin is
the strongest asset the human race has
ever invented it's like gold with none
of the defects of gold so define what
the defects are why why is it the
greatest
monetary invention
so i buy a million dollars of gold
okay um
if the price goes up the gold miners
first of all the gold miners are going
to create more gold and dump it on the
market
if i could eliminate uh all gold mining
forever if i could wave a magic wand and
make it impossible to mine anymore gold
my million dollars a goal will hold its
value better because it'll be scarce
but gold miners are inflating the value
of the supply of gold by at least two
percent a year or so
and then if the price doubles again
investors will invest in more gold
miners and they'll create more capacity
to mine coal so you'll create capacity
to mine gold you'll mine the gold you'll
crank up the rate at which the gold
mines function
after that people with gold jewelry will
melt their jewelry down convert to gold
bullion and sell it right if the price
of gold went up by a factor of 20 you
would be like converting all your gold
stuff into gold bullion because it seems
like a good idea
they call it scrap gold right
and then after that um bankers will
issue gold warrants and gold and gold
paper and gold derivatives and they'll
sell them short without the gold because
they can speculate in it and they don't
have to have a one for one coverage of
gold to the gold derivatives
and so that's called hypothecation and
rehypothecation
okay if it keeps going up the
government's holding gold will start to
sell some of their gold to manipulate
the price down
right and all of these and if and
ultimately if it goes up enough someone
will club you over the head and take
your gold or a hostile regime will take
your gold or a politician will pass a
law taxing your gold
right there's there's a lot of ways you
lose gold because it's physical
how do you cure the problem
right i mean
here's how you cure the problem you make
it impossible to mine any more gold and
then you make it possible to take
custody of your gold personally off of
the exchange or off of the bank
so that way the bank can't hypothecate
it or re-hypothecate it miners can't
inflate it investors can't create any
more gold miners and then you make it
possible to move it from here to
switzerland or singapore in an hour for
for a nickel
and that way if you don't like your bank
or don't trust your bank
if the state of new york passes a law
taxing it you move it to state of
wyoming
you know if the government passes the
law taxing you know the the ownership of
uh land in california you can't move the
land out of california can you
if you have million dollars of gold in a
bank and in a vault in new york city
you know there's only a couple places
you can move it you can move it to
london if you have six months
okay so you're going to be subject to
the law of london or the law of of
new york can you actually move to your
favorite island or you know can you move
to the cayman islands and bury your gold
underneath your hut in the cayman
islands and be safe about it
not likely
can't even get it through the airport
right so so the problem with other
properties and
gold is the simplest example but the
problem the the challenge or the analogy
holds with any property
i give you a bunch of money and i tell
you you want to keep it and give it to
your grandchild
do you buy
a building in manhattan do you buy a
ranch in california do you buy a stack
of gold bars do you buy
shares in a company headquartered in san
francisco
do you buy bonds issued by a government
or company or do you buy bitcoin
and you can you can see the problem of
course is
the the debt is devaluing rapidly
the land in california can be taxed and
is not movable
you know
uh
the building in new york is not going
anywhere
it might be valuable to a rich person
that lives in new york what about a rich
person lives in beijing do they want
your building in new york
how are you going to hide your building
right buildings get properly taxed
there's a very famous story about you
know a bunch of luxury you know yachts
sitting in sardinian port and the locals
decided that that it wasn't fair
that all these uh people were rich
people were sitting on their yachts in
the port spending all this money but
they weren't paying enough taxes now
they're putting millions and millions of
euros into the economy
but
they came up with the idea that they
were going to put a tax on the yacht on
the value of the yacht
and so they you know they passed a yacht
tax that would have cost people
millions or tens of millions of euros if
they stayed in that port
and uh everything was happy and uh all
the restauranters and the hotels and and
and the entertainment people and the
port they were all happy making tons of
money off the yachts until the day
before the tax went into place and the
morning that the tax went into place the
port was empty and the economy died
every left
because yachts are floating capital it
just moves it's floating property right
so it's it's a very visible example
right why it's not that smart to put a
an unfair tax or an extreme tax on a
yacht if people can float the yacht to
the next port you know 100 miles to the
left
so
one would be discouraged
from taxing stuff that floats
on the other hand taxing a building
that's buried you know 100 feet down in
the bedrock that's easier you can't move
the building so
bitcoin represents the apex property
rights of the human race
like i'm not mind you i'm not disputing
the ability or or the you know
legitimacy of a government to pass a tax
at the end of the day they can tax your
gold they can tax your stocks your bonds
your building yourself your income
whatever they want
but the point really is
you're a lot more likely to tax the
stuff that you walk past
you know every day on the way to work
and your lot
and
legitimately
you can move yourself
and you can move your property if it's
crypto
to another jurisdiction but you can't
legitimately move a ranch in california
so
your property rights are stronger and
the value of the property is higher
right you have a valuable thing in
manhattan it's interesting to other
wealthy people in manhattan but when you
have bitcoin it's interesting to wealthy
people everywhere on earth
right it's you can liquidate a billion
dollars of bitcoin on the weekend in any
currency
you know any any time
try liquidating a billion dollar
building
right that's three year process right so
it's liquid it's fungible it's desirable
and so that what that's what makes the
asset valuable and it's very it's the
it's the most difficult thing to impair
[Music]
are there stats around
how much sort of nefarious stuff is
going on with bitcoin versus us dollar
the stats that i know off top my head is
over two trillion dollars of uh fiat
currency are just money laundering every
year used for illicit purposes
which is about the size of the entire
crypto industry not just bitcoin but the
entire crypto industry right uh so it's
a very big number um some of that is uh
simple things like uh terrorist
financing and then you're literally
bringing a bag of cash or whatever but a
lot of it also is uh major banks who end
up being caught up in money laundering
situations etc and i'm always careful i
think it's very easy to kind of point
your finger at banks and say you know
these are all bad people whatever
i tend to think of it more as
folks with good intentions they're
trying to do the best that they can
are there situations where they
definitely know they're doing it of
course
but if you had to monitor millions of
transactions a day going through your
bank
they'd do a better job than i would
right right so
there's again nuance there um so that's
the fiat system and then uh in the
bitcoin world so not all crypto but in
bitcoin specifically uh the latest stats
that i've seen is there's a report out
that says 0.4
so less than half a percent of all
transactions are used for illicit or
nefarious purposes
and then there was also a former cia
director who came out and basically
published a whole report i don't
remember what exact number he came up
but is pretty much in line you know
definitely less than one percent
and so uh if you talk to law enforcement
they say all the time they're like if
somebody commits a crime we want their
fingers on a keyboard
why there's a digital trail it's much
easier to track them it's much easier to
figure this stuff out and so i think
what we've seen is just criminals uh in
the early days of 2009 10 11 12 even
maybe 13 14.
oh there's a pseudo-anonymous currency
that no one knows about like i'm gonna
go do all this crazy stuff with it
well now that we're in 2021 people
realize oh wait a minute i just used
this public you know ledger that
probably wasn't the smartest idea
um but i think that it's important
actually that the criminals and bad
actors adopted it first because that is
the adoption cycle that every great
technology takes whether it's mobile
phones beepers the internet etc there's
a constant cat and mouse game between
law enforcement and bad actors and so
what are bad actors constantly doing
they're looking for new innovative ways
to use technology to
get away from or obscure law enforcement
from catching them and so criminals are
actually usually the first adopters of
new technology which again doesn't make
people feel good but if you go back and
you look it's a historical pattern
and so the fact that they were first and
then we got kind of the first adopters
from a technology standpoint and then we
started to get more of the mainstream
and now it's estimated that more than
100 million people globally use this
stuff
it's kind of like goes back to you is
that high already oh yeah i mean
coinbase alone uh i think they report
now that they've got if uh remember the
number correctly it's like 58 million
you registered users just one company
and they're not even the biggest
exchange right
in the month of july uh 1.2 million new
users
came onto the bitcoin blockchain so not
coinbase not any exchange or wallet the
actual blockchain itself you can see on
chain new entities uh and 1.2 million
new entities came online which is the
fastest it's ever grown in a single
month
and so what you have is you have a fixed
supply asset
then now you've got the most number of
entities ever joining in a month
of course the price goes up right the
fixed supply asset demand goes up unless
you think that supply demand economics
are invalidated you know
the price has to move to accommodate
everyone
and so it's just um
just a fascinating asset that i think
ultimately um
those that embrace it early will end up
benefiting from and and a lot of times
as i kind of go down this path talking
about the criminal behavior and you talk
about the public ledger you talk about
the adoption
people get uneasy they don't like change
right humans hate change
but just like the internet right imagine
if we had sat here in the united states
and we had said
this internet thing is kind of crazy
it's a decentralized open thing anyone
that has an internet connection can kind
of join and participate and get
information
yeah do all this stuff
you know what
i don't think the u.s should participate
you know why
china china is going to benefit and
north korea is going to use the internet
too and iran those bad people they're
going to use the internet as well so the
us we're gonna set this one out
well people did do that north korea did
that and north korea would suck to live
in
right it's just they cut their people
off from a very important technology and
so when you think about that from an
open payment system right
the idea of an open payment system is so
foreign to us because the system that we
live in
but anyone in the world can plug into
this open system and send value to
anyone else without asking permission
if we sit here and we say you know what
we shouldn't participate because there's
some other country or some other
organization that's going to also
benefit from it we're actually likely to
be the ones that get hurt the most by
those decisions instead we should do
what we do with the internet
internet's going to be a thing the
united states is going to be the leader
in the internet
[Music]
yes there's volatility to bitcoin in the
short term i've heard you say if you're
looking at a number in anything less
than a four year increment it's just
noise and that once you extend out to
four years and beyond suddenly it
actually becomes a story of you know
growing i think it's like 200
year-over-year um which is you know
pretty thrilling
um how far does when you think about
this being sort of the apex
property
how much goes into just the the fact
that it's taking sunlight and turning it
into something that's cryptographically
protected and how much of that stance is
that this evens the playing field
you know i think a bitcoin is like
that shining city and cyber space
where billions of people will eventually
want to live
right instead of moving from europe to
america or moving from the old world to
the new world or whatever we're moving
from
the planet to cyberspace we can't move
to outer space yet i can't get a billion
people off the planet and settle on a
better earth
but i can move a billion people to
cyberspace
bitcoin is property in cyberspace
it's 21 million city blocks in cyber
manhattan
um
the people that move there first
right get to buy the land cheapest
and then event you know how many people
will eventually want to live there
well unlike manhattan where there's a
limit there's really no limit why
wouldn't everybody want to live there
right i mean
i don't know that there won't be other
cities in cyberspace that that might
meet other needs i mean i suppose if the
chinese
you know made it illegal to own bitcoin
but there was a chinese bitcoin there
might be a chinese version of bitcoin in
cyberspace kind of like
alibaba you know and ant and and wechat
kind of branched off from facebook and
google and amazon
so there might be some other digital
dominant monetary networks or dominant
monetary networks but but bitcoin is the
greatest
the greatest
monetary network that the human race has
ever developed and it's certainly the
dominant one right now and it looks like
it's going to be continued to be the
dominant one
for as long as we live
so
what makes it uh
dominant
well i mean clearly the the architecture
is uh proof of work or in other words
throwing up a wall of encrypted energy
right it's all of uh the crypto hash
power that's channeling energy through
the hashing function which creates
uh creates the stability and the
security
and so
it's based upon the architecture
but um but ultimately the appeal of it
is that it's an open permissionless
protocol that everybody on earth can
engage in
anybody can mine it anybody can so
anybody can contribute security to the
network
and anybody can run their own node and
anybody can own it and then any company
uh can plug into it
and so there's nothing that open there
is no there is no monetary protocol or
asset or currency that is so open
as the bitcoin asset
and so that's what's driving its value
right now
it's
it's an opportunity for people that are
that have little
that have little to lose and much to
gain it's all it's an opportunity for
everybody though i mean the way i think
of it is it's a moral imperative a
technical imperative and an economic
imperative
morally it's an imperative because it's
it's the best hope for eight billion
people to secure their property rights
if i give you a 50 android phone you can
carry around in the android wallet your
property
and no bank
or no hostile regime can seize it
and we've never and that's the best
property right you're ever going to get
i think it's a technical imperative for
the same reason you've got 8 billion
mobile phones
that will all have property and so
what's more important storing your
photos and your videos on your mobile
phone or storing all your money
all your life force on your mobile phone
i mean you're worried about losing the
photos you took on your iphone you
worried about losing your life savings
clearly it's more valuable so
so it's a it's a technology imperative
for an apple and amazon and google and
facebook and companies like square and
paypal and binance and coinbase are
already extraordinarily successful by
embracing it you can see that right now
and finally it's an economic imperative
because there's 500 trillion dollars
worth of uh fiat derivatives cash and
bonds and stocks and real estate that's
valued based upon cash flows and all of
those things are being devalued at one
percent a month
something so we can go back and forth
over what's the rate of currency
expansion but
you know it's it's not that hard to see
that this is a 25 to 50 trillion dollar
a year problem
for anybody with assets on earth
it's very rare that you find it a
technology that's the solution to every
rich person's problem and every poor
person's problem simultaneously rather
than
rely on that hierarchical structure by
creating a network we created the
strongest computer network in the world
in 12 years and is it strong because you
can't break it there's no person there's
no point of failure i can't go hack
timmy
i can't can you know
seduce somebody and like you know get
their keys to something and is that what
makes it strong just that it is there
would be so many people to go after i i
think of strength of a network in two
ways specifically around let's say
bitcoin um one is just a pure
qualitative uh metric um or i'm sorry a
qualitative metric and then one is a
quantitative one the quantitative one is
really easy how much hash rate or how
much computing power is actually running
this network and that's can stop a brute
force attack or anything like that and
so um the bitcoin network has more
computing power running it than anything
else right it's way bigger than any of
the largest computers in the world etc
so that's a quantitative metric the
qualitative one i think more is
structurally right so um from a
structure standpoint if you think about
um other technology networks that have
been shut down right napster is always
like a really easy one
peer-to-peer file sharing
was a great idea people were doing it
obviously uh the music industry didn't
like it how do they shut it down well
you can basically go and find out who's
the ceo of the business where is the
business where are their servers all
this type stuff and you can go ahead and
you can shut it down
and so when you remove that hierarchical
structure and you now have a
decentralized structure the strength
comes from there is no single point of
failure
hey guys i hope you've joined the impact
theory discord which if you were
unfamiliar with discord it is basically
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more click the link below to join our
discord community and follow the steps
to read my article the beginner's guide
to crypto and nfts reading that and
joining the discord community will make
sure you are ready for october 13th
[Music]
so when i started in crypto i was like
okay one percent i'll i'll get to one
percent i just don't want to be a fool
it's sort of schmuck insurance then as i
got to one percent i was like well this
feels pretty good i'm gonna go to two
percent
and then that's where i was about when
it started to fall and so i was like
okay well here's my opportunity to buy
in thesis is still intact why don't we
go to five percent and so now i'm like
well five percent feels pretty good i'm
thinking about 10 percent so
what is your allocation of course i know
this punch line but it'll be interesting
for people that don't know
so i am
this is going to sound weird when i tell
you but i'm actually risk averse
so i own
a few properties
myself and i live in them so i don't
rent anything out
you know these are this is my bank is
lifestyle
so and i and i like to live in nice
places
so
that i don't consider consider money
that i'm investing or doing anything
with that's just buried in lifestyle
my shares in real vision as an
entrepreneur they could be worth nothing
they could be worth gazillion that's not
part of it so what really matters is
your
liquid net worth
the money that you've got available to
invest
and i'm 100 in crypto
and i feel like i'm underexposed
so maybe i didn't start with enough cash
um that i should you know i should have
had more in cash you know
um as opposed to in real estate or
whatever but
it's a hundred percent i feel massively
underexposed now why can i do 100
because i have income i have numerous
sources of income
so i've always got money coming in
if i lost
well you're never going to lose 100
because i've got no leverage so it could
go down
and it'd be back to roughly where i
bought it so i'm kind of
safe in this crypto space now i can't
really lose money
but i've got cash flow coming in so even
if i did lose it it's not going to
change my life
and in fact cash flow coming in gives me
an ability to buy at lower prices
so i'm structurally set up to take
take advantage of the biggest
opportunity i've ever seen
um and i'm comfortable with that now i
don't know what percentage of my total
net worth it is because i don't think of
total net worth as total net worth
because those are things that are never
going to change you know my my my beach
house and it'll came and do i sell it
and buy something else i'm gonna invest
in something else with it that is the
answers lifestyle is the answer to
everything right we don't do anything
else for any other reason i don't think
or you shouldn't
to be rich is not
is not a future state
to have the lifestyle that you want is
the future state and that can be
anything you can live on a shack and a
beach in nicaragua and be the happiest
man in the world go for that
so that's what i care about but liquid
net worth yeah everything and i feel
underinvested and desperate to you know
waiting for the next quarter when more
income comes in to put more in because i
feel underinvested at all times that's
how that's how much conviction i have
i've and i've never done that before
ever in my entire lifetime have i ever
taken a bet like this
going back to
investing i want to lay out for people
that might be new to this they're not
seasoned investors
the idea of dollar cost averaging was
extraordinarily comforting to me
and i'd love to go into what it is why
it's useful and whether you think that
applies to what's happening in crypto so
there's a mythology of investing the
mythology is investing is hedge fund
manager george soros
spots the opportunity gets in at the
right price makes a fortune
the reality is
most people have no idea where the price
is going over a short term so what
happens is you buy something you put all
your money in you've saved up your 5 000
bucks you put it all into bitcoin
bitcoin falls 50 you panic you sell it
you feel terrible bitcoin goes back up
again you feel even worse now you can
scrape together you know you've you've
lost you know half of your money now and
then you've you
you keep compounding these errors right
it's called market timing and market
timing is extraordinarily difficult you
know i i do some market timing
because that's been my job and 30 years
i've done more than my 10 000 hours a
lot more than my 10 000 and that doesn't
make me very good at it either i'm not
bad at it in long term investing i'm
terrible at short term so what is dollar
cost averaging all the cost averaging is
basically what everybody does with their
401k the problem is with 401ks or
retirement funds is nobody cares about
them
you don't know what's in it you have no
ownership you just put some of your
salary away and it goes in this mythical
thing that you probably assume won't be
worth as much money as you hope it is
that's what that's become
and you put it in every month
why do you do that well because you're
averaging all of the highs and lows over
time because markets tend to do this
so you're kind of indifferent in fact
you love it when it falls because you're
buying more units
at a lower price because your game is to
own as much as you can
at the lowest possible price
but if you don't know how to market time
and 99.9
of people don't and cards and shouldn't
then you just average in overtime and
magic will happen
you just average a beautiful price over
time and had you done that in the s p or
anything else you make money now what's
so lovely about bitcoin is
it's not a passive investment like your
your retirement fund because a
retirement fund you can't access until
later so you kind of write it off and
you you know everybody's heard that it's
never gonna be worth as much as it
should be anyway so it's become a bit of
a pain as opposed to something but this
you own
you live and breathe that volatility
and you live and breathe those gains
when they happen
and you will be like wide-eyed
i did it's my sister-in-law forced her
to do this i said listen i'm gonna make
it easy keep just gonna open a paypal
account start that way
and she had some savings
um she could take out of another thing
she had like 5 000 bucks 10 000 bucks
and she put it in and we got the timing
relatively right so it shot up a lot i
think she got in about 13 000 in bitcoin
yeah and it's shot up a lot so she's
like wow and then it falls a lot and
she's calling up saying what do i do
should i sell some i'm like no
you keep putting in part of your
paycheck
and
after all of these falls the several
falls she starts to really understand
and when they start falling a lot she
starts doubling the amount that she
would have normally invested
and now she's taught herself to invest
next thing i hear oh well i bought some
ethereum
and this is how i'm dealing with that
so she's now
looking at two different things and
she's now thinking about the ass
allocation what's going to outperform
ethereum
she knew nothing about this stuff this
is a year and a half and she now
understands because of that dollar cost
averaging and taking ownership that you
exactly as you said once you actually
own something that 401k you don't
actually really own it's like some other
guy does something with it and hopefully
he makes money this is you
you're taking responsibility for your
own finances that's so empowering what
does the log chart do i've heard the
phrase but i i honestly don't know what
that means the scale so normally a scale
would go like a bitcoin chart well
because it starts really low it might
start at ten dollars
and then it's got to go up to
65 000
so suddenly you're seeing a move a
thousand dollar move
um it looks small but before it was big
so what happens is it squashes the
charts
because most of the price action has
happened from let's say ten thousand
dollars to sixty five thousand so you
keep getting this looks like this all
the time
and so this is just by stretching out
the timeline no so what a log chart does
is change the scale where it doubles
every measure so it goes 10
100 or it goes 10x let's say 10 100
dollars a thousand dollars a million
dollars
what that little trick does
is smooth out all of this issue
um so
you'll get comfortable when you look at
it just to realize that and look at the
scale look how it's changed versus the
other scale and you'll see from that
it basically compresses all of this it's
the same as if you do use percentages
because you know a 5 000 point move now
in bitcoin is not the same as a five
thousand point move when it was at five
thousand it would have been a hundred
percent
and now it's not now it's like whatever
it is today ten percent
so it's it's it's changing that
and that that really really really helps
[Music]
one of the words that we need to define
is tokenization what does that mean so
remember we talked about smart contracts
smart contracts are this thing that you
can attach to the blockchain and that
contract can be any kind of contract
so
that brings up the word tokenization
because you can therefore attach
anything onto the blockchain because of
this contract
piece of art
fractionalized real estate whatever
whatever
so
bitcoin okay that's attached on the
blockchain but now it can be other
things because the contract will say
well legally it has the right to this
so it starts off with people
conceptualizing about real estate
artwork other things why real estate
this is a really powerful thing real
estate none of us can afford the 50
million apartment in manhattan
but that goes up 100 in two years unlike
something in queens that goes up
20 in five years
so the rich dude's getting richer while
the poor are getting less off the rich
poor divide
once you fractionalize it like you can
with bitcoin
that anybody can own 10 of their net
worth in a 50 million apartment we're
all making the same amount of returns
the rich don't get richer we all get the
same
if it goes down in price we all go down
in price
that is what it should be that is what
tokenizing real estate is going to do
and you can do it with tokenizing
artwork so you're allowing
fractionalized ownership of all sorts of
things that is recorded nobody can take
it away from you it's written
and recorded on the blockchain
and on that ledger it's confirmed by
lots of people to say
tom owns this piece of this real estate
and nobody else can take it okay that's
genius
but then what happened was this massive
explosion this year in digital art
or just happened last year digital art
was where you start
tokenizing
the recorded ownership of something
digital so people say digital art well
it's just a jpeg
well a jpeg has no scarcity
now it's the same with photographic art
so photographic art has no real scarcity
until it's signed
or you have the negative
then it's priceless
that creates scarcity and i i collect
sign rock and roll photographs
um a music artist signed by famous
photographers now
because it has scarcity and i like that
um so
that applies with digital art too
because if you say there's only gonna be
one of this and it's recorded on a
blockchain and it's called a
non-fungible token it's a token
then i can sell it to you and you now
have the rights to it
we have scarcity there's one
and this guy called beeple
crates
i don't know i can't remember how many
pieces of art it's like 14 000 pieces of
art
those more so he did 15 000 pieces of
art which was all into one
jpeg
um which was 13 years worth of daily art
and all incredible
and then he sells it at christie's or
sotheby's
for 69 million dollars
and everyone goes oh my god it's the
same when damian when um banksy started
selling graffiti art and everyone's like
this is ridiculous
and now suddenly everybody wants a
banksy and it's the same when
um
jackson pollock started spraying paint
and now everybody wants to jackson park
nobody believes in art until they do and
it's that same human system you talked
about once we perceive it's got value
it's got value that's how it's going to
be and we will trade it for whatever it
is
so we can put
digital art
we can tokenize it and own it
art market you know depending on how you
account or whatever trillion dollars or
less right
the digital art market you just said it
open seeded three billion dollars in
transaction volume
in a single month
and so why is bitcoin
better as a global store value than gold
why is the digital version better than
the analog well one
there is a digital component to it
meaning that anyone in the world with an
internet connection can sign in and
immediately start to transact in it so
there's an accessibility advantage
two is there's fractionalization i don't
have to buy a full bitcoin at forty five
fifty thousand dollars i can buy a piece
of a bitcoin
uh three is that i can carry it around
really simply on my phone right or on my
laptop rather than lugging around
physical goals there's a portability
advantage to it
and then you start to look at it from um
a storage cost etc right there's a whole
bunch of advantages digital version
versus the physical version
what happens with the digital art it's
the same thing
more accessible more divisible more
portable all this type of stuff and so
if we're gonna go and move our lives
into this like metaverse digital world
whatever you know is the the new way to
describe it
why would we leave
the assets we care about in the analog
world no we're gonna bring them into the
digital world too more
obviously it's with musicians and sports
stars
you know if you're rihanna
you have
you're the third largest social media
influence in the world after
barack obama and
i can't remember who the next one was
so it's her and bieber
she has
150 million followers
well
that's just on twitter
so her reach is something like 400
million people
on a daily basis
they all want to be part of the
community of rihanna we saw that with
lady gaga and her little monsters
if you give them a