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Dr. Saifedean Ammous

lines on the record: 39
first: 2019-09-07
most recent: 2019-09-07
sittings or episodes: 1
sources: podcast

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“Yes, my website, safetyan.com. I've started teaching economics classes on it and publishing my research teaching classes on economics and on economics of Bitcoin.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Entire structure and the way it works is optimized really for that thing. And so if you take that thing away, then you're just using something extremely inefficient, extremely slow in order to pretend to be decentralized while still in fact being centralized.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“None of them is a neutral protocol. They're just a small group of people that are managing something that looks like Bitcoin. And ultimately, if you take away that aspect of Bitcoin being neutral, being apolitical, being not controlled by anybody, there's nothing left there. A lot of the Bitcoin evangelists and Bitcoin fans would like to argue Bitcoin is basically Star Trek money. It's like the iPhone of money. It's going to make all of everything else look like in the 1950s phones compared to your iPhone. It isn't. Bitcoin is not pretty. Bitcoin is not optimized for your user experience. It's an ugly cludgy piece of software that does one thing, but it doesn't very well. And that thing is resist state control. And if it continues to grow and resist state control, you know, we can expect big things from this crazy, ugly monster. But, you know, your user experience and it's prettyness is not one of them. And so the...”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Foundation or company, whereas Bitcoin is a neutral protocol. And ultimately, if you've studied Gold's monetary history and just how many alchemists and people have tried to find ways of making gold, and if you studied fiat monetary history, you know that the temptation amongst human beings to find a reason to convince others of, hey, look, this cheap thing that I can make in my lab at very little cost, you should definitely be using that as a store of value. It's a pretty easy thing for you to convince yourself of. You know, you'll just, if you find a way of making something that could pass off as a store of value for a low price, you know, you're going to have a very strong incentive of trying to get people to want to use it. And that's why these things, the altcoins, they grew by aping Bitcoin, which is a neutral protocol, but none of them has anything like a neutral protocol. And anything...”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Building something that is like a neutral protocol for the transfer of value, your best shot would be to join Bitcoin. Anybody who built any other coin since then, Bitcoin was already there, it had the track record, it had been developed, it had many developers, it had started to build liquidity. And yet, if you started building your own, you're starting from zero and all of those things, you have no chance of competing against Bitcoin unless you actually have somebody in charge of your coin trying to direct its development and growth. And that's why none of the other coins other than Bitcoin have anything close to the Bitcoin idea of true decentralization, of just not being anybody's project. All these other coins ultimately have a small group of people that to a very large extent control a majority of the supply, a majority of the mining power behind them. They control the code and they review each other's code. So all of these other coins are more like a startup or like a group.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“My problem is that we are going to get one shot at making something a neutral protocol. And Bitcoin was that one thing. And Bitcoin has grown and developed as the neutral protocol that nobody controls. To a very large extent because the person who made it was interested in it becoming a neutral protocol. And that's why they made themselves anonymous and disappeared. And they may still be involved in Bitcoin, but it's very telling that they chose an identity that was around for a couple of years and disappeared because I think the project itself can work in any other way. It has to turn into something that doesn't have someone in charge of it. It has to become just code. The creator of Bitcoin did that because he wanted to turn it that way. And then since then, after the first year or two of it surviving, it already had established our best chance at building that. And so since then, it's pretty clear that if you were interested in...”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Any kind of large scale Bitcoin mining operations in any one particular location. That's why all of this anti-Bitcoin energy stuff has failed to pinpoint good pet noirs if you want, you know, just scapegoats. So just going to some power plant in the States or Russia and point at it. And the reason is you don't have giant petroleum or natural gas plants pumping out Bitcoin because I know people who work in that business.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“In demand from residential and industrial and commercial applications. So the energy sources that will end up being sustainably mining Bitcoin will be the ones that don't have to compete with civilians and commercial and industrial residential areas. And I think this is why the kind of environmental movement and the people who already hate Bitcoin, they are the ones who bring up the issue of Bitcoin, energy mining and power consumption. But in reality, you know, there are, you know, people say Bitcoin consumes as much energy as Switzerland or Ireland or Denmark or something like that. And that may well be true or if it might be true in a few months or years. But besides the point, let's put it this way, Ireland is far more visible in its energy consumption than Bitcoin. Where are all of the giant factories that are making the Bitcoins out there? And it's not easy to pinpoint.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Is going to be dedicated into mining is only going to go into operations that have to pay less than cents per kilowatt hour or so. And that effectively excludes all kinds of hydrocarbon burning power generating grids. So the thing about energy generation around the world is the real value of hydrocarbons is the fact that they're inert or relatively inert, easy to transport and extremely cheap ways of transporting energy. The reason they're so valuable is that their cheapest way of moving energy around, as opposed to building wires and moving electricity, which carries a lot of loss or pipelines, which also are expensive to build. So oil is, you know, you don't need to build massive pipelines and you can move it anywhere in the world, anywhere in a car or an airplane or a helicopter can go. Oil can go and you can build a civilization around it. It's extremely valuable because of that. That's why it's always”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“You get so many mining projects that go out of business, and it gets brutal. And this was, I think, the bottom in this last cycle was in December of last year. It also coincided around the time of the Bitcoin price bottom. At that point, you know, many mining businesses, and effectively any mining operation that was mining, I would say above 5 cents for sure, probably even above three cents stopped being profitable at around that time. You had to have three cents per kilowatt hour or less in order to be profitable at that time. That's an extremely cheap rate. You know, nobody has that commercially anywhere. So what ends up happening is that, you know, now as mining Bitcoin continues to grow in the amount of electricity that goes into it, the only kind of serious facilities and the serious operations that can go into mining in any kind of meaningful sense, all the real capital.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Bitcoin is always going to be very harsh on Bitcoin miners. It's sort of like with gold. Gold mining, you know, one guy makes a fortune, but 100 people ruin their lives digging for gold. It's always been a story like that and continues until today. Generally, the reason that gold, as I was mentioning earlier, works is money is because mining is largely insignificant. In the case of Bitcoin, difficulty adjustment does something similar in that as soon as the rewards of mining are profitable, more people entered into the mining and then the difficulty of mining goes up. So the difficulty adjustment increases and therefore it becomes more expensive to mine and therefore the profitability margin starts requiring a cheaper price of electricity. What Bitcoin mining does, what Bitcoin's difficulty adjustment leads to is that every few years you get a culling on”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Cards at a time, the value of the dollar doesn't have to collapse, the dollar economy, it's just going to be an upgrade, you know”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“paying with their homes out of their Bitcoin savings instead of taking out dollar loans they start paying for their houses and then businesses start running on Bitcoin capital rather than running on borrowed fiat so what we witness is the decline in the creation of debt and credit and dollars which is essentially the same thing because the fiat monetary system is creating dollars every time it creates debt and vice versa so we're effectively deflating that debt bubble slowly or you could say you know the house of cards is being undone bitcoin is a technology that takes out the cards two at a time you know the supply and the demand of new dollars it takes out demanders of dollars and suppliers of dollars from the creation of loans and therefore can allow for an orderly unwinding of this dollar catastrophe house of cards”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“And the mind of the Bitcoin is generally we think of if you start holding Bitcoin, you're going to want fewer dollars and so demand for the dollar collapses and then dollar hyperinflates. The demand isn't going to collapse that fast because people still need to pay taxes and bills and whatever. But also more importantly is that as those people start holding Bitcoin and they can use it as a store of value, they no longer need to live off of debt. You no longer live in a situation where you don't have money and you spend all of your money and you get into debt and you're constantly paying off debt until you die. Instead you save up capital and you spend from, you know, you pay your major expenses from the saved up capital, you accumulate wealth and capital over time and accumulate savings and therefore you don't get into debt. So now what happens if Bitcoin actually grows and people stop getting into more debt? People appreciate people get Bitcoin and then they can start.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“In fact, collapse. I don't think it's that likely because, first of all, inflation, I believe, is a money supply phenomena. It's not a collapse in demand. You know, the Venezuelan people didn't suddenly drop their demand for their national currency to a billionth of what it was 10 years ago, leading to currency, dropping a billionth of its value. It's always the supply, that's the issue. And so what's ignored about the rise of Bitcoin is the impact of Bitcoin on the dollars. And that's where I think it's really the technological solution to the problem of debt money and fiat money. Because as Bitcoin grows as a hard monetary asset rather than a debt-based monetary asset, it is an asset that can grow without needing to generate more debt. And it is an asset that can grow and appreciate the value without the people who hold it getting into more debt and therefore people who hold Bitcoin while”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“I mean, you know, people have spent the last 50 years predicting the death of the dollar and the old bastard continues to survive. I think ultimately the strength and the reason that it continues to survive is that the clearance mechanisms around banking are just so essential that their control is so important that whoever runs them can continue to have a lot of leeway with their inflationism because that stuff is just so valuable. The theory that I have about Bitcoin is that Bitcoin might just be the technological solution to the political catastrophe that is fiat debt monetary system could become money. And I think, you know, generally most Bitcoiners will tell you the idea of the world's going to be one big Venezuela and Bitcoin is going to be the only thing that is left standing and out of all of the rubble, you know, the Bitcoiners will build civilization while certainly plausible in a sense that national currencies could”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Sorry, a lowering in the interest rate and it leads to an increase in investment and therefore an increase in productivity for society. And, you know, there's more of a long-term horizon when money is harder and when money is expected to hold on to value. And that leads to more capital accumulation, more investment.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“The point I'll say is that with the money that holds value and appreciates in value over time, you're going to get a lower time preference. You're going to get more saving, and that's going to result in more available pools of funds for investors, and that results in a lower interest rate. You know, if you see the process under the gold standard, as the hardness of money increases, as gold became better money and harder money and we moved from silver and copper and other forms of money, and as the capital structure became more and more developed, savings continued to increase throughout the 19th century and capital stock continued to increase and investment continued to increase and interest rates decline. That can only really be understood as first people drop their time preference. That leads to more savings being available for lending, and that leads to a lowering in time preference, and then leads to...”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Just like people, if the money loses 3%, people are going to want to beat the 3%. And still, if the money gains 3%, people still are going to want to beat the 3% that it gains. People are always going to want to gain from investment. And the difference is that when the value of money is depreciating, effectively it is economical for you to make an investment, even if the investment is destructive of capital for society overall. You know, as long as your investment doesn't lose 3%, it's okay. Even if you're actually destroying capital in real terms by 1% or 2%, because of this, a lot more malinvestment gets undertaken, a lot of more projects that shouldn't be undertaken that aren't profitable get undertaken, and these are only profitable under manipulated interest rates, and once the interest rate manipulation subsides, these projects fail. And that, of course, is the cause of the recessions that we mentioned.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so I think the issue here is that people miss the point that investment is secondary chronologically and logically, even conceptually in the mind of the investor. It is necessarily secondary to saving. Specifically, the deferral of consumption, the delay of gratification has to proceed saving, which also has to proceed investment. I agree that, and I think for me, you know, one of the most interesting things about Bitcoin is the issue of time preference and something that I think has massive consequences. And I think, yes, if we move in a world in which we use Bitcoin, the fact that money appreciates over time means that any dollars”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Growth rate is about 4% or 25 to 1 stock to flow. But in a few years, it'll drop or grow beyond gold. And then eventually it reaches infinity. So I think this is ultimately what makes something a good money. In other words, the size of the liquidity on the market is large enough that whatever happens in the production of the new mines doesn't really affect the market much. That's what makes a good monetary medium. You know, gold was the best thing that we had, but with Bitcoin, it's going to be, I think, even better.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Roughly around 60 to 1. And that's really why gold was money. And that's why platinum can't be money, because platinum, even though it's rare, the stockpiles of platinum that we have accumulated have only been accumulated over a couple of centuries. And a couple of centuries in which platinum has had very little use in industry compared to gold's demand as money and for industry. So therefore, the entire production of platinum that we have is pretty small. And if somebody were to go and declare platinum as currency and start using it as money and start putting value in it, if 10% of the mining and capital that goes into gold would switch towards prioritizing the mining of platinum, then you're going to get a massive increase in the supply of platinum and the price of platinum is going to come crashing down. Bitcoin finds another way of reaching a higher stock to flow than gold, and in a few years, Bitcoin will overtake gold in its stock to flow. Right now, the Bitcoin supply...”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“One commodity whose stockpiles, whose existing stockpiles are much larger than the new supply that is being made every year from gold, that's ultimately what it comes down to. And that's because gold has been mined for thousands of years by people all over the world because it does not rust or decompose or ruin in any way. It just continues to accumulate. And so we continue to add up more and more gold. And so even as we continue to get much better at digging for gold, every one particular year is just one year's production compared to thousands of years of production. This year is also the most advanced of all the years, so generally it's not, you know, one out of a thousand. It's about one to sixty. In other words, it's always around 1.5%. Every year gold's supply grows at 1.5% roughly. So the stock to flow is”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“I found it to be the best way of explaining why it is gold that is money. You know, some people think it is because it is scarce, but that's not entirely accurate because actually, you know, there are other metals like platinum and palladium that are also pretty scarce, but they don't have a monetary role. They haven't been used as money, and they've not acquired a monetary role and they don't look like they're likely to acquire a monetary role. And in fact, people try to monetize platinum in Russia in the 1820s, and it failed. even though it's rare and i think the reason why the best way of understanding it is because it's not about the rarity or the scarcity it's the stock to flow or effectively it's a ratio of the existing stockpile of all the production that is existing on the market right now that can be sold the ratio of that to the production that comes out of the mines every year gold is the prime money in history because it is the”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“The supply inevitably increases, with Bitcoin when more people try and make the money to print more of it, the mining becomes harder, which because of the way Bitcoin works, effectively makes Bitcoin more secure. It's an astonishing rig of the way that money technology works that basically supercharges the process of monetization Bitcoin, because as demand for Bitcoin increases, there can be no extra supply. Instead, you get extra security, which makes Bitcoin harder to attack, which makes Bitcoin more reliable, which makes Bitcoin start looking more attractive as a store of value, which generates more and more demand.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Production of those things. And so those things end up being not very good money in the long run. But of course, you know, we don't have any good monies now. And that's why everyone is struggling to find a way to just preserve value. You know, we're looking for the whole market is paying in governments because their bonds are less likely to lose value than other things. With Bitcoin, and of course with government money, we see that politics is just the game of printing more money and finding excuses and ways and justifications and alliances and reasons to print more money. And so government money is always being influenced.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“People to produce. If you see it with gold, you see it with people digging for gold treasures and looking for old sunken ships. You know, people are always trying to find a way to make more gold. You see it with mining any metal that gets used as money. You even see it, you know, if you think of today's financial markets, the reason we get bubbles in real estate and in stocks is largely because these assets are being used as money. People are using stocks as a store of value rather than in the sense of an investment because they don't have a store of value. You can't just put your money in dollars and have say two years expenditures stowed away in dollars safely, not for investing, not to take any risk and hoping that they just maintain their value over the next couple of years. You can't really do that. So you have to be investing. And so effectively, the monetary premium that goes into making stocks or real estate or art a monetary store of value leads to the appreciation of the prices of those things and then results in the over.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“You only really understand something when you try and teach it or when you try and write it, then you have to really lay out how you think of it and then you get to understand it. And I've come to the conclusion that maybe the magic glue that holds Bitcoin together, the singular technical advancement that Bitcoin introduced, because if you think about all of the constituent pieces that make the machine work, most of them, or pretty much all of them, were around before Bitcoin came about. What Bitcoin added, the magic ingredient that was added to it was the difficulty adjustment. And that's what I find the most interesting thing about it, because it makes Bitcoin through the unique as a monetary asset. For any other kind of monetary assets, for anything that gets used as money, its supply is always increasing, and the producers are always doing their best to try and introduce a new supply, you know, because the thing is highly valuable and it is demanded massively, that just leads to more and more of an incentive for”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Currencies were just different units of gold, different measures of gold. And today we have an absolute mess, even as the world is growing more and more globalized, where you just have an enormous complication with them and totalitarianism. And I think the link between having a money that is controlled by government whose supply and value can be manipulated easily by government has heavily swung the pendulum in favor of the collective management of the individual's affairs. If you compare the era of liberalism in the 19th century to the 20th century in terms of the restrictions that governments placed on their citizens and the kind of economic controls that they had, I think there's an enormous difference and I don't think it's a coincidence. So yes, you're right. It's not the usual Bitcoin pitch. It's not what people usually think of when they think of Bitcoin.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“You think about 19th century culture when everybody used to save much more versus culture today where everybody's borrowing. And I think that's also inextricably linked to the fact that money is not a good store of value anymore and people don't have this technology that has been developed over thousands of years and has continued to improve. We continue to improve the choice of the thing that we use for this, the thing that will hold on to value the most into the future. And by the beginning of the 20th century, we'd had something that was pretty good at it, which was gold, but then we uninvented that. We had one global monetary standard that saved value well and was neutral and was used for coordination of economic activity. And we uninvented it. And we went back to a system of partial barter, of a system of hundreds of currencies around the world. But the inefficiency of it is quite astounding to think that in the 19th century everyone in the world used gold as money and the different”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“And that flows from the function of money as a store of value. Money being a store of value allows it to, you know, is an enormously important technology for us as human beings because once we have the ability to store value into the future, we can start thinking about the future. And once we start thinking about the future, our time preference drops and we initiate the process of civilization. Human beings start thinking about the consequences of their actions beyond just the next meal and you start thinking about your children and their children. You start acting from that perspective. And this is really the fundamental driver of civilization. And that, for me, is inextricably linked to money. And it's inextricably linked to the availability of money as a reliable store of value. And so we can think about it in terms of the impact on culture, on the impact on morality, the impact on family, as well as economic impact on things like saving versus borrowing.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Will be accurate prices. If you think of the manipulation of, if a government tried to manipulate the price of apples, you're going to get mixed signals in the market for apples and you'll have shortages and surpluses and maybe black markets and so on. And the situation is similar in the case of money. When you manipulate the market for money, when the government can arbitrarily decide what is money and what isn't, and then it can decide what is the supply of money and it can alter the supply and alter the interest rate, then you're effectively distorting the price signals. And that from the Austrian school is the root way of understanding business cycles. It's the root both the problems of unemployment and inflation. They come about as a consequence of the manipulation of the money supply and the manipulation of the credit markets. So that's number one. My favorite is the issue of time preference.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“So, the first function of money is as a medium of exchange. And that essentially allows it to act as the coordinating mechanism of a market system. The only way that you can have an extended market system, you need a technology for indirect exchange that would allow people to perform final exchange with one another when they don't have what the other person wants. You know, when you have the problem of coincidence of wants. So money is essential for a market economy. Money is the information mechanism of the market economy. The concept that I have been strongly influenced with from Austrian economics is the idea of sound money being money that emerges on the free market emerges and its value is determined on the market freely through people interacting with it, which then allows it to act as an accurate reflection of market conditions. So prices reflected in the money that is determined on the market freely.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“China without having to go through the central bank. So functionally, strictly on a functional level, it is an alternative. Currently, Bitcoin does half a million transactions per day. It probably can scale beyond that, but not by much. But still, if it does say a million transactions a day, or even if it stays at half a million transactions a day, if you think about the potential for how many institutions you could build around the world with that number of transactions to be able to settle finally transactions around the world, we would have essentially a system of many thousands of institutions that function like central banks. And so instead of having a couple of hundred central banks that are effectively all centralized at one central bank, the whole world really functions around the US Federal Reserve, instead of having the Federal Reserve setting the monetary policy and dictating the policy”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Of the internet. It's replaced everything in your home from your local grocery store to your local bookshop to pretty much everything. But now it's knocking at the door of the central bank. We can just have a piece of open source software that would allow us to perform the final settlement layer of transactions, which is traditionally the role preserved for central banks. And that's why, you know, the subtitle of my book is Bitcoin is the decentralized alternative to central banking. Until the year 2008, if you wanted to send money from one country to the other, the only technology available for you, the only channel available for you, the only legal channel available for you was the use of central banks or the institutions that are regulated and that ones that settle their transactions through central banks. And now we have an alternative. We have an alternative that allows you to use a trustless technology that can perform this function. You can send $10 million from the US to”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Financial transactions. Bitcoin itself doesn't need to grow to handle all the world's financial transactions. It can handle the settlement and clearance transactions at the base layer. In other words, it's not going to replace visa or MasterCard or Western Union. It's going to rather replace the settlement systems amongst large financial institutions and central banks. And if you think of it this way, it's a neutral protocol that allows us to do with code, simply with code and technologies of cryptography and several other technologies that have emerged over the last couple of decades. It allows us using code only to perform the functions that have required over the past couple of centuries a very sophisticated, complicated and fragile set of political and financial institutions to run. But all of that can effectively be eaten by code. This might be really the final frontier.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“Across national borders with final settlement within, say, an hour or two. That's it. You know, the payment is finalized. You send half a million dollars from here to China and it's finalized within a day or within a couple of hours. And that's it. You know, there's no way to reverse it. At least let's say the level of finality that you get after a couple of hours is larger than level of finality you would get from financial institution transaction over several months because there will always be clearance and settlement transactions to be done. So things can get reversed, but Bitcoin allows you a pretty high degree of finality within a couple of hours. And then that finality continues to get more and more certain with every passing 10 minute block. The power of being able to send that money across national borders, because it's such a powerful tool, I think it might end up serving as essentially as a settlement layer for.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“You know, that payment is finished, it's settled. You take the coin and then you can spend it. And that's it. The fact that you have the coin itself is the value itself and it's not in its value dependent on anybody else. It's not like a checkbook. It's not like a credit card. It's not liability for anybody else. It's money that is a bearer instrument that carries value on its own. And Bitcoin essentially managed to do that in a digital sense. And of course, that's obviously counterintuitive because, you know, when you think of cash, you think of cash as being physical, but there's something deeply counterintuitive almost about Bitcoin making digital cash. However, once you think about the implication of that, maybe the real killer app and the comparative advantage for those for this technology is to serve as the final settlement layer for financial transactions. If you think of it, it's an extremely powerful technology in that I can send a digital page.”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT
“I think the key thing that I would say they're missing is that this is a free market. This is a product of a free market that has emerged over 10 years now and it has grown as a neutral internet protocol rather than as a private company or someone's private undertaking. And I think this is what is truly unique from it. It's about it. It's an international global protocol that allows for the transfer of value through telecommunication infrastructure essentially without having to rely on trusted third parties. Effectively it brings the form of it's a technology for introducing cash into the digital realm and so it allows us to do digitally what you and I could do only with a physical bill which is once I pay you the physical bill once I hand over a piece of cash or a gold coin to you”
2019-09-07 · We Study Billionaires · TIP259: What Bitcoin Solves - w/ Dr. Saifedean Ammous · IDENTIFIED FROM THE TRANSCRIPT