How To Fix a Broken World | Knut Svanholm

0:00I'm saying that this is a constant fight between freedom and totalitarianism. States are growing in size everywhere. People are arrested for social media posts. Unmass here. It's absolutely gross. Freedom and responsibility are two sides of the same coin. There is no way that once it's given away, it's ever going to be given back to you. What is needed is a constant resistance and a constant fight for freedom. From every generation, otherwise there will be overtaken by a criminal gang called the government. To not swanholm. What a pleasure it is to have you in the studio. It's a pleasure to be here. It's a very nice studio. I know you because you're basically the author of probably the most profound and succinct Bitcoin. Can we call it a meme? Which is, you know, everything in the world that ever is or ever was. Or ever will be divided by 21 million. And you've condensed that into a nice formula, which is infinity divided by 21 million. How did you arrive to that formula?

1:02I mean, the formula, I have to give credit to Joni Appelberg here, who made the animation for it. So the phrase comes from an article I wrote for a Citadel 21 magazine, which was Hodlunott's project a couple of years back, or quite a few years back now. And that article, the story about it is, I had written a couple of articles for him, and I was laying down on my couch one afternoon, writing another article. And then I thought to myself, okay, I should probably reread this and see if it's good or not. But I was too tired, so I just fell asleep and took a, an afternoon nap after I sent it to him. And I didn't think much about it. And then a couple of months later, I was walking back to my hotel from a meet-up in Copenhagen. And the article had just been released on Geiss once, Hodl, Bitcoin Audible,

2:02which was called something else back then. But anyway, and listening back to it, I had forgotten about it. It's like, oh shit, this is pretty good. It's probably my best work yet, actually. So I was very happy with it. And then I asked Joni to, if he wanted to collaborate and do an animation of it. Joni Appleberg did a lot of animations before that, also. And I really enjoyed them. So we started collaborating and made this short video called Bitcoin Everything divided by 21 million. And somewhere in the middle of the article, this, that phrase, imagine everything there is and everything there will be divided by 21 million. And then the graphic was added to that, which I think we sort of figured out what it should look like together, if I remember correctly. And after that, that video got sort of semi-viral and soon enough. And I also tweeted about it and got a lot of big-named

3:02retweets, including Sailor and Adam Beck, or retweeted it. And after that, it just took off. And people started adding it to the Twitter handles. And I saw it everywhere. And nowadays I have a subfolder in my everything divided by a subfolder with just tattoos. And there's about 30 different people around the globe who has it tattooed into their bodies. I saw one here at Sheet Code the other day. The guy who showed me tattooed the equation into his arm. I love it because especially if it's one of those, if you know, sort of things in the Bitcoin space, where you're not really projecting to the rest of the world because it's not quite mainstream. But everyone who is familiar with Bitcoin will understand. And recognize those symbols. Yeah, and I sort of had to write the book with the same title after that took off to just explain my thinking. So that was my third book about Bitcoin. I had written two short ones before that.

4:06And in the beginning, I thought, holy shit, I'm not going to be remembered for an equation that makes absolutely no sense because it's not mathematical and it's not really correct. Thinking deeper about that like every single equation that ever took off in human history was always misinterpreted to begin with. And this is more of a mimetic thing than a mathematical thing. Just hinting at that Bitcoin has the potential to swallow everything. And yeah, we could we could denominate everything in Bitcoin if we wanted to. It's either it either approaches that or it goes to zero. So it's still this binary bet where either we get into hyperbicornization or or Bitcoin goes to zero. And I don't think there's anything in between. One of those scenarios will play out. And I don't believe Bitcoin can coexist with fiat currencies given a long enough time frame.

5:09Make may take hundreds and hundreds of years but it won't stop unless it stops completely. For some reason we don't know. But yeah, of course I'm I think the other scenarios more likely where Bitcoin just takes over more and more. What are some of the most common misconceptions with respect to that statement and how it's encapsulated by that formula? I never said infinity but the infinity symbol is used. I said everything, meaning all the goods and services on earth. So we should really have been of some sign and not the infinity sign. But that wouldn't have been as memetically powerful, I guess. So it's sort of misinterpreted like that. And also one could also claim the money is half of all the valuable value in the world. And of course from a strict first principle's perspective value is still subjective.

6:13So you can't really measure value. That is not what money does. It's a price is signal value but it's not actually measuring anything. So and I think people take it too literally sometimes. But it is what it is. It's out there now and it's out of my control. And I like that. I mean, I enjoy seeing it propagate through the network and do its thing. We were talking on the on the journey to the studio this morning from Bedford. So we just come back from Pete McCormack's cheat code in Bedford. Very nice conference. It really was. It was my first time on stage for a Bitcoin conference. It was just the right size for me to feel comfortable as well and even my dog made a appearance on the stage which was quite a charming moment for everybody as well. And we were talking about ideologies

7:13and how you consider yourself an anarcho capitalist. And I guess when people are sort of ascribing to an ideology it does tend to inform their views on everything as we talk about Bitcoin. I'm sure some of those principles will keep popping up but perhaps we can just start with how you define anarcho capitalists, capitalism and in what way do you relate to that and identify you? I mean, first and foremost, I don't really view it as an ideology but it's more descriptive than prescriptive. In the sense that it's admitting to oneself that theft is wrong, regardless of who's doing the thieving and that popularity contests do not make theft more or less ethical, meaning that the, so if I do the very basics here it's like human beings have two means of resolving conflict

8:17and we only have conflict over scarce resources. That's why conflicts arise. And one means of conflict resolution is violence or aggression where you just hit the other guy over the head and take his stuff. And I would call that a barbaric interaction. And the other one is a communication or argumentation where you talk to the other guy and you decide who owns what through peaceful means. So no one addresses against the other person. And of course, all trade today is a mixture of the two. And I would call all human interactions trade or a transfer of value. For instance, right now we're in a, you and I are in a transaction, we're talking to one another and we're doing that because we both thought it would be beneficial for us to do so. I'm talking to you because I figured

9:20it was a good idea for me to go on this pod and you're talking to me because you figured it was a good idea to have me on this pod. We don't know beforehand whether that was the case or not but the value we put on it was strong enough to make us prioritize this over all other actions we could have taken today. When you think about this deeply and you use first principles and deductive reasoning, you can quite quickly see that a consensual interaction is more beneficial to more people always than non-consensual ones. I mean, I can say you want to buy this bubble gum here for a pound and if you think it's worth a pound or more or less, I mean, you will give me a pound for the bubble gum. If you think the pound is worth more, the transaction doesn't happen.

10:21Unless I have a gun and I put the gun to your head and say buy my bubble gum for one pound or I'll shoot you. In which case, you're in a different scenario where you will value the purchase of the bubble gum differently. It's easier to get what you want with a kind word and a gun than just a kind word. So because you value your life, so life plus bubble gum for one pound makes sense. But that is still a voluntary transaction but it's not a consensual one and this is very much akin to taxes and inflation. They are voluntary in a way because you voluntarily pay them but they're not consensual because one of the reasons that you do pay taxes and that you do use inflationary money is because there's a risk that men with guns will come and take your freedoms away if you don't. So I'd say that's the very basis of it.

11:22And I think you can, there's something called in prexiology and Austrian economics called natural law which is like you can divide prexiology, the science of human action into two branches, economics and ethics. And what it says about ethics is that natural law can be found in nature. It's simply admitting that if we want to live peacefully with one another, that's the sort of the axiom that you have to take for granted that most people want to live peacefully with one another. Then it is better for you if all interactions between us are consensual. So short term, I can benefit from taking something from you involuntarily or non-consensual. But long term, it's better for us to collaborate than bashes each other over the head with a spike club. And you see societies that adopt these principles

12:24are better off than societies that don't. The more barbaric your society, and the less your society respects property rights, the less it will thrive. I think that's obvious having been to a lot of countries in a lot of different time periods of my life. But I think that you can also reason yourself to these. I don't really view them as opinions, but more like seeing the world for what it is and being honest about human interactions and what they ought to be and what they ought not to be. So for me, it's more of a lens to view the world through than a political opinion. And when you see the world through that lens, it becomes easier to navigate stuff. I mean, you still try to be a law-abiding citizen, but not first and foremost because you think the law is sacred or something. Here, there's a distinction between lawful and legal

13:28where lawful is actually following natural law and absolute property rights and legal is man-made laws, which are bullshit. So you choose to follow those because you don't want the men with guns to come to your door. But you can also navigate through them and find ways of opting out of them, finding tools and technologies to opt out of them where Bitcoin is one, the most obvious one, I'd say. So you can live life on your own terms instead of just obeying and doing consenting and doing what you're told. And I think the world would be a much better place if more people had the courage to do that, and to opt out of as many non-concentral things as possible and just starting to take matters into their own hands and take control over their lives. With freedoms comes a lot of responsibility

14:30because you have to do things yourself instead. But acquiring a bunch of Bitcoin and waiting for a number go up and then paying for stuff is a good way of opting out, I think. I was going to lead me to, how does that inform you? I can certainly see the appeal of Bitcoin to what you've just described. I'd be interested here in your own words. How does that inform the appeal of Bitcoin for you? It's more about the reverse. Like Fiat is not appealing to me. Because we're stuck in this monetary system that's built on an absolute lie and the biggest lie ever told. And that is that inflation is a natural phenomenon and the free market needs inflation to function. That is all complete bullshit. The natural state of the free market is deflation. So all prices ought to go down over time. It's very simple.

15:31If you ask yourself if a human being practices doing something do they usually get better or worse at that thing they're practicing doing long and complicated sentence. But it's obvious that you get better over time. So human beings get better at producing goods and transporting them and doing services for other people. By simply, we have the knowledge of several hundred years of written word. And of course, we get better at doing things. And the introduction of the smartphone made coordination a lot simpler for everyone. AI makes stuff super simple. So the natural follow-up question to that then nobody asks themselves is. So why aren't prices falling forever? The truth is that prices are falling forever. You're just using the wrong denominator. If you were denominating the world in Bitcoin or in sets,

16:32you could see that all prices are dropping forever. It goes in cycles, of course, because Bitcoin is not yet widely adopted. It's still in its adoption phase. So it has a lot of volatility. But over time, all prices dropped in Bitcoin terms. And that's just extremely extraordinarily powerful. I also don't believe in the dichotomy between store-of-value and medium of change. To me, it's medium of exchange through space and time. So when you save or huddle, you're actually trading with your future self. So it's a medium of exchange with your future self, meaning a medium of exchange over time. And when you trade with other people, it's a medium of exchange over space. Gold was a pretty good medium of exchange over time because there's only a finite amount of gold on planet Earth. And human beings got increasingly better at everything else, at the same pace

17:32that they got better at finding new gold, roughly the same pace, over 5,000 years. Which is why a cow-priced in gold today is roughly the same as it was in the days of Mesopotamia. Bitcoin is different because Bitcoin is absolutely finite. So in Bitcoin, the prices will not stay the same. They will drop forever. The everything divided by 21 million thesis. Gold was a good medium of exchange over time. Fiat money is a good medium of exchange over space. When the first bill was introduced instead of gold coins, it became a lot easier to do trade at a distance because they were very portable and easy to carry around. But it came with a very big side effect. And that is that the person issuing the money could print more of it at everyone else's expense. So Fiat really started with banking.

18:33So someone had a vault and you could store your gold there and get a receipt for that gold. That I have this and that much gold in your vault and you're obligated to give it back if I give you the receipt. The banker quickly figured out that he could give out more receipts than he actually had gold in his vaults. Until there was a bank run because sooner or later they figured out and there was a bank run meaning that they were chasing down the poor banker with tar and feathers and pitchforks and torches. Until the invention of the central bank which is a very evil institution that bales out banks that should have gone bankrupt. So we've been living in that system for a very long time. I mean every monetary bill was redeemable for gold up until just before World War I where the British central bank was the first one

19:33to disconnect that convertibility. And then finally in 1971 you had the US dollar completely going off the gold standard and it's all been downhill from there. So there's the print money like mad just to keep up the illusion that prices ought to increase over a year by year by roughly two to three percent which is also a big lie because all you see is like slight price increases increases in small consumer goods while the majority of the inflation ends up in luxury apartments in London or New York or Tokyo or fine art and stuff like that. So the real inflation is a lot higher than what your average person sees. And Bitcoin is the remedy to that. It's the literal, it's the antidote to inflation because it's absolutely finite. And I think that I can think of a better course to fight for.

20:39I can think of anything better to do with my life than fight for that future. In essence, Fiat money is monetizing the trust people still have in their government institutions. It's fraud, through and through. So every time you use a Fiat monetary bill you're stealing from your children and from your grandchildren by using something that someone else can print. So get out of it as fast as you can as much as you can. You said fraud and stealing. So I mean, there are different words. It's ultimately theft because they're not upholding their, you enter a contract where one party does not respect the contract at all. And it's not even clear what the contract is anymore. It's in no monetary bills. It's a dollar used to have printed on it that it is redeemable for gold.

21:41A pound sterling, it's called a pound sterling because at one point in time it was worth one pound of sterling silver. But you don't get very much silver for a pound these days. So it's all a ginormous lie and a scam all of it. And I think we should end it. And that deep begging from precious metals like silver and gold. What does that allow government to do? Wage wars. And the first world war was called the Great War because there was no sequel at that point in time. But what it actually was was it's it's tempting to view it as a war that is still ongoing. And it's a war that governments are waging against their populations to make them more and more enslaved. Like what's the definition of slavery?

22:42Like if you're a hundred percent a slave you don't get to keep any of the fruits of your labor. It's all taken away from you. Then you're a hundred percent a slave. Somebody owns you. That person needs to feed you in order to get anything out of you because if you die you're not very much used to the slave owner. So in that sense a private slave owner is preferable to a state-run one because they can let you die more easily. But if you're paying 30% in taxes then you're 30% a slave. Add inflation to that and you're probably 50% a slave. Nowadays in Europe most people pay way more than 30% in taxes and you add inflation to that. And but there's more to the story even there because what you're not seeing is the exponential growth that could have happened if it hadn't been for this baked-in theft everywhere. So the example I often use

23:44is if you have an apple farmer with one apple tree he can and he makes so much profit in a year that he can afford a second tree the next year. And the same thing happens again and he's feeding more mouths, right? So the third year he can have four trees. The fifth, the fourth year eight trees and then 16 and then 32 and 64 and 128 and 256 and 512 and 1,024 and 2,048 and 4,096 and 8,192 and 16,384 and so on. All that exponential growth is never seen if there's just a 50% tax because you never get to the second tree or at least it's on a slower pace. So we're missing out on so much because of taxes and inflation which is really just theft all of it. A lot of people listening to this would be looking around them and saying, well, there are a lot of things

24:45that government funds that we couldn't do without doing so collectively through the government. Yes, and you should ask yourself how is it that you believe that this could not have been accomplished without a threat of violence? Because there's no reason at all that you would need to threaten people to build roads, to provide health care. Like all of that is a lie too. And I mean, the civilization thrives despite government, not because of it. Because the free market forces are so powerful at like just making life better for everyone on the planet. That despite government intervention we're still pretty well off. We're much more well off than we were 50 years ago. Like a hundred years ago no one had warm water. Here in the UK you still have the stupid valves with the hot water there and the cold water over there.

25:48But I'm sure you'll manage to figure that one out pretty well soon enough too because of the free market. So you think free markets can also solve problems of national infrastructure? Absolutely. Why wouldn't they? How would they do that? But first, what do you mean by national? You got the power grid for example. Yeah, education system. I think all of this would have been better if run completely by the free market. But we've never tried that. There's always been interventionism for the last hundred years there's been excessive money printing. So absolutely I think doing things voluntarily and with consent produces better results than doing it with interventionism which is really baked in violence. Definitely. If you had competing power grid manufacturers you'd have a better power grid. If you had competing road manufacturers you'd have a better road grid.

26:48The thing is how do you have competition in roads? If I want to take a road somewhere. Yeah, I mean this one road. This is how roads worked before like anyone who has an interest in getting from place A to place B has an incentive to build a road there. And if enough people want that, that road will be built. The thing with roads today is that we don't see the cost of them because it's baked into the taxes and the inflation. We never see the cost. But the real cost is that over time we end up in a situation where everyone is just paying interest to a bank to a greedy banker somewhere and taxes and inflation are just sky high because we never saw the true cost of any of this. And we're building infrastructure where it's not needed and not wanted where no one asked for it. Like building like this is the thing collectivizing this stuff and centrally planning it

27:51inevitably leads to resource misallocation. So roads are being built where they're not necessary and they could have been built better where they were necessary and we could have kept more of the money. Like people tend to think that traffic that roads are great now and that traffic is great now. But we don't know what it would have been if it would have been paid voluntarily instead of with threats of violence. And I don't see any reason as to why threats of gun violence make roads better. I just don't see it. Okay, if I take that and I think, you know, we need to cross a river. There's a landowner on one side and another landowner on the other side. Right, so who needs to cross a river? You know, let's just say there's one town on one side there's another town on the other. They want to do trade with one another.

28:52Yeah, those people. There's an opportunity there for both landowners to coordinate maybe apply a toll. It's fairly simple, right? And so the landowners agree and we're going to split. It doesn't matter which side the traffic comes from. We're going to yonder bridge together and that's fine. It's fairly easy to agree. But even so, there could still be one guy that just says it's not something I'm interested in, right? And then you can buy that guy out, which reminds me of the sort of, you know, at a long enough timeframe. You know, we're all dead, right? Eventually, maybe it will be solved. So if you hold on to the ideology, the idea, the principle that eventually the market will solve all problems at all time. Yeah, but you call them problems, but that's entirely subjective, a problem to whom and why would it make theft more ethical? And in my world view, it doesn't because like it doesn't matter

29:52that if I buy a piece of land, then it's only truly mine if no one else can take it over by force. So if there's a democratic system or some type of government system in place, which all of a sudden enforces a law of saying that I have to give up that property to build a bridge here over this river, then it wasn't really mine to begin with. So they weren't respecting my property, right? So it might solve problems for other people, but that doesn't matter. It's still unethical at its very core. And I you might as well build a bridge somewhere else. This is like, I think this is the big difference between a socialist mindset and a free market mindset is that on the left, people actually believe that society owns all the resources and it's the job of the state to reallocate those resources fairly amongst them.

30:54And I come from a position where I think resources are like whoever homesteaded something owns that thing, meaning that the first, the guy who combined his labor with whatever he found in nature is the true owner of something. And then that good was passed down the generation through voluntary exchange also through violent takeovers, of course, and kings took stuff from one another and VAT was applied, which is a form of theft. But like the basis for human cooperation has to be property rights. Because otherwise, like let's say here's this pack of bubblegum. We just found, you and I just found it here. And we have to resolve, we both want it. So we have to resolve this conflict that has arisen through the scarcity of the bubblegum. So how do we do that? Do you own it? Do I own it?

31:57Or do we collectively own it? Or does a third party that has nothing to do with it own it? And you quite quickly see that everyone owning it does not make sense because who makes the decisions if everyone owns something. So there's no... You need a rightful owner for simply for decision making. You couldn't have an election about every single decision in society. And then you have the other thing that, okay, the other thing is whoever kills the other guy gets the thing. That's not preferable either because we want to resolve conflict without violence. We want civilized behavior, not barbaric behavior. So the only true solution to the problem is whoever found it first owns it. And then he can voluntarily give it up through trade by the other guy offering something of value

32:59to the owner of the bubblegum. And if that's the case, then everyone wins at every single transaction. Every single transaction between people, they both win. Or at least they perceive they will both win unless the transaction wouldn't have taken place at all. So that's the basis of it. That is human progress. That's what leads us to more and more technologies and better and better society. That and time preference. Time preference is another thing. That is just saying that if you set stuff aside to build a more advanced thing, you can produce more per time unit in the future. The very basic example is Robinson Crusoe catching fish with his hands, with his bare hands. Then he can catch maybe one fish every four hours. But if he sets some fish aside and to construct a fishing net, he can catch maybe four fish every hour. So he increased his rate of production a lot. So time preference, times how voluntary transactions are,

34:04that is civilization. That is how humanity moves forward. And everything a government does because the government doesn't produce anything. It can only take from people and then redistribute. And all that leads to is less efficiency. And less progress as a result. There is no escape from that. If I take your principle to an absolute. Yeah. There are, I can visit many instances where that could lead to the, it could impede progress. How? Well, and just in that road example, you could have, you could have a situation where one land owner says, I don't want to sell. And suddenly, suddenly, an entire highway has to take a divergence around mountains that makes it completely unviable. And you can't build that road from one city to another, for example. Progress to whom? That's the question. Well, yeah, well, I guess there is a concept of the greater good, for example.

35:05Yeah, but that's what they want you to believe. Like, it's still not an excuse for theft. I'm not, I'm not suggesting theft. Yes, you are. If you're saying that there's any excuse for a violent takeover of someone's property, then you are advocating for that. Okay, no. Let me define what I perceive as theft. Theft is me taking something from you without due compensation. Yeah. Against what? No, no, no. That's theft for me. Well, do compensation. Who decides what due compensation is? Well, that's a valid point. You believe in market forces, presumably. Absolutely. Do you believe that similar transactions set a precedent for the value of a product, or a commodity, or land, or anything like that? I believe value is entirely subjective. Whatever I'm willing to give up for whatever you're willing to give me is the correct price for it. Okay. So the example that I gave where one landowner could say, no, I don't want to sell,

36:05and impedes a project that could unlock value for the rest of society. You think that's legitimate? Absolutely. Because, if not the landowner, then who gets to value how much that is worth? Because I guess if all the other neighboring landowners decide to pull money together and buy the guy out, they would find a price where he was willing to sell his property. And then they could build a highway there. But if they do it by extorting him and taking the thing, expropriation, even if they compensated him, from his point of view, they didn't compensate him enough. Because then if they did, then he would have sold it with consent, like he would have sold it voluntarily. Can someone be unreasonable about their sense of what you can think that they are unreasonable or unreasonable?

37:07But that can never be an excuse for theft. Okay. I'm not suggesting theft. So I'm giving the example where governments, I'm saying that you are a choir under a particular scheme with they have various appeals mechanisms to courts. And you can do that in various countries. So in this country, you can, I know in Australia, you can, when there's an infrastructure project being built and they have a land acquisition scheme, let's say, an evaluation mechanism and there are mechanisms for also appealing that legal mechanisms for doing that as well. How does that equate to theft? I know it's compulsory acquisition, but with due compensation. Using non-market, well, quasi-market, but essentially saying these are the land prices in previous transactions in your area, like for like you have the right to appeal and perhaps make an appeal to increase what you might get for it. But the government is saying we're going to get it.

38:08Yeah, and I'm saying that absolutely theft. There's nothing ethical about it because prices ought not to be set by government. Like you're still saying that an institution that has said, like it's a good illustration of legal versus lawful. Because you said legal and it is legal, meaning that it's following man-made laws. But it's not lawful because it's not respecting property rights. Okay, but that's a definition that you've asserted about what is lawful in terms of natural rights. But some would say that natural rights might stem from the tribe, for example, rather than. Yeah, but this is not a debate. This is natural law can be found in nature. That's why it's called natural law. So it's based upon admitting that humans have two ways of conflict resolution. And if we want to live peacefully, one is by definition better than the other.

39:08Or better is also bad term for it. One leads to less conflict, one leads to more conflict. If less conflict is the goal, was it should be for every human being? Because that's good for every human being. Then no popularity contest in the world can be an excuse for theft. And back to the basic question here. This is what anarcho-capitalism is to me. It's just admitting that this is true and not opinionated. It's based on first principles thinking and it's based around something called argumentation ethics. So if I claim that I own my body because I control it, you can argue against that. But in the very act of argumentation, you prove my thesis to be right. Because you need to control i.e. own your body to even make the argument in the first place. And this can be extended to physical things that I acquire.

40:10Because a thing that I find in nature and manipulate into a tool, it's just an extension of my body. And how else would you assign rightful ownership to a thing than homesteading? And these are the basic principles of the praxeology and Austrian economics and the anarcho-capitalist worldview. Is that these things are true and are not debatable. These are axiomatic as a word that is not entirely applicable. But it's principle. It's all derived from first principles and deductive reasoning. There's no empiricism in it. There's no opinion in it. It's just seeing the world for what it is and admitting who the good guys and the bad guys are. So I wonder about some of the principles and whether or not there can be exceptions and carve outs to that.

41:14They cannot. On certain circumstances. They cannot. So for instance, one that often comes out and that many of the libertarian thinkers themselves had us like this is the one thing the state needs to do. It cannot be was of course national defense. How much do we spend on military and on weapons and defense? And the thing is, like, who is the better decider of that particular question than the free market itself? Like, if you let the institution that has a monopoly on violence over you in a geographical area, in other words the government, the mafia in control. If you let them decide what national defense should be, then they obviously are going to steal more of your stuff and spend it on national defense. And all of a sudden you have nation states with big armies and this is why we had the most atrocious wars in periods of excessive money printing and excessive totalitarianism.

42:23And this is the hardest pill to swallow here is that democracy is no different. In fact, it's worse in many senses than monarchies or dictatorships because a democratic government deals in bads and not goods. They don't produce anything. The only thing they can do is grow as a cancerous tumor until they take over everything. Or there's some type of uprising in a counter-revolution and then we overthrow the government and put something else in place. But if you look at democracies over time, the respect, the property rights less and less over centuries everywhere. Look at the tax rates now in comparison to 100 years ago. There's no way aware on earth that the taxes are lower now than they were 100 years ago. Meaning that property rights are less and less respected everywhere. And still we live in a better world, but that is 100% due to the free market process and human beings becoming better at everything.

43:33So you have a parasite class and a productive class. And the more you let the parasites take over, the slower the process of progress becomes. Do you believe in like national borders and states as entities? No, you don't. Unless everyone living there agrees that that's a good idea and sets their own laws. Isn't that implicit in the nation state? No, the social contract is not a paper that I agree to when I'm born. It's something I'm born into and I cannot do anything about. They say it's a social contract, but no one ever has to sign a contract. It's like taking for granted that you want this. So I believe in smaller city states, even. I believe Europe thrived the most when it was micro nations everywhere. Micro monarchies everywhere.

44:34And I think that's the outcome you get when you respect property rights more. And people will band together in cities and even countries and say that if you're within these borders, there's these laws apply here and you need to pay this fee in order to get onto the electrical grid and whatsoever. Doesn't that make you more vulnerable to attack? Because what I've seen at least in the 20th century might idea is that to a 20th century was a century of scale. Economies of scale. And we're seeing that somewhat reverse because we saw a homogenization there. There's a thing being left out of that. And that is that you're already under attack. You're already being waged war on. You're already giving up half of more than half of what you earn to a giant entity. And making the entity itself stronger to stop other entities from other countries. It's just a great dissolution. Isn't there a balance between the two countries?

45:37If you view, for instance, the Ukraine Russia war now. The small criminal gang of the Ukrainian government against the bigger gang of the Russian government, who has decided to invade the smaller gang, now being protected by the biggest criminal gang in the world, which is NATO, the NATO countries. And all that's happening at the end of the day is that a lot of resources get extorted from populations in the West, pulled into the interventionist machine of the Ukraine, where they steal kids from their mothers and force them into the army and use them as cannon fodder to defend themselves from this bigger gang with Russia. And the Austro-Liberitarian stance on war in general is that if it's happening somewhere else, it has nothing to do with me.

46:42And there should be no theft from my population to fuel one side or the other somewhere else on Earth. So I think we live in a world where states are enormously big and we have wars because they are. The more we opt out and the more we defund them by using tools to not let them steal our stuff, first and foremost Bitcoin, the better of the planet is because the fewer involuntary things happen, war being the worst example of it, when they do not only take your property, but take your actual life by sending you to kill people that you had no beef with. I mean, both the world wars in Europe, there's this great example from World War I where during Christmas they just stop shooting at one another and celebrate the Christmas together because in truth, none of these young men wanted to kill the ones from the village across the river.

47:46That's not what people want. Most people are peaceful. And instead we set up systems where psychopaths or literal psychopaths are incentivized like the incentive structure is set up in such a way that the already absolute corrupt. It says it said that absolute power corrupts absolutely and all that, but I think it's easier than that. It's like the incentives are set up in such a way that they already absolutely corrupt and end up on top. And they have no scruples whatsoever. They just keep taking and not giving anything back. And that's the thing we need to stop. Your stop war or world peace is not achieved until every single non-voluntary interaction between human beings is eradicated. We're not in peace times until we live in fucking and capitalist that. We've never been in peace times and we never will be because it's essentially in our nature from the very earliest days where that's just how we are.

48:52The organized dominate the disorganized the large dominate the small that's always been so what would have happened to Ukraine by now? Had they been a collection of city statelets facing the onslaught and not for me. We can't speculate to test and I'm not going to like pick sides in any of this. We're not doing that. We're not doing that. We're just testing. So what I'm doing is we're just using an example to explore. Yeah, I think you need to go deeper than that and look at it from an individualist perspective. Would a person be better off if they hadn't done this or that? And I know I know a Ukrainian guy, a big corner who left the country the day before the war started. I met him at many conferences and it's great. A very nice guy. But had he stayed in Ukraine one day more, he would have been cannon fodder. Just the concept of that is so vile and I don't think it's in human nature.

49:53I think it's in the nature of a few really, really evil psychopaths. And most people don't think anyone should die in any war. Most people, there are enough people who don't know that. So the problem makes it worthwhile to be prepared for it. But the problem in my eye is not how do we prepare for war? Is how do we stop these psychopaths from coming into positions of power? And the only way to do that is to defend them by refusing to use their money. Because they can't steal from you then. If you're outside of their systems, they can't steal from you. And that's what personal sovereignty is all about. That's what becoming sovereign is all about. You just stop using fiat money. I mean, it's very hard because everything is so regulated and stuff. And for me to go to England to talk about these things, I have to buy a flight ticket. And well, I do have a Bitcoin service that I use.

50:54But they have to pay the ticket in fiat and then charge me in Bitcoin. Anyway, we live in a world where fiat dominates. Everywhere. But the more we can get away from that, the more peaceful the world would be. And it's the only way out of perpetual war. I can certainly understand why Bitcoin has such a strong appeal for you. Because it fulfills all of those. I'm a pacifist in that sense. I'm a pacifist in the sense that I believe in the non-aggression principle. Which means, by the way, it doesn't mean that it's free for all everywhere. It means that if I'm violated against, I am entitled to give you a punishment for doing so. It's not the non-defensive principle. It's non-aggression. It's not a non-violence principle. It's non-aggression principle. It's the don't be starting shit, prince. No, don't trend on me, basically.

51:55Yeah, don't be starting shit, exactly. In my education, you all have free multi-education. Absolutely. I don't think schooling should be mandatory in any sense. Of course. But how do you supply that average level of intelligence through a nation or a space? I don't think intelligence is what schools give people. I think nowadays is mostly propaganda. And given the internet, there's no real use for putting your kid in a state-run institution for allowing them to be kidnapped for eight hours a day. Other than it allows you to do more work because someone else takes care of your kids for a while. But in terms of what they learn, like it's bullshit. And I think it comes down to first principles here, too. Education is a service that can be sold to people who want that service.

52:58If I want my kids to be educated, I ought to pay for it. And if I don't value that that much because I have a plan already that I have a pizzeria and I want my kid to take over the pizzeria at a certain point in time, then I wouldn't pay for that education. And I think that it's being marketed as this great thing that is super good for everyone because what society would we live in if we had such a low base level? But the kids don't really learn anything. Like they learn English from the internet. They learn math from the internet if they're interested. And the people who aren't interested in math don't learn it anyway. People come out after 15 years of public mandatory based on theft education and they are still retards. Like there's no getting around that. And I think it would have been better for everyone if that was completely voluntary

53:58and completely consensual, too. There's a great book by Murray Rothbard called Education Free and Mandatory. It talks about these things. And it's all about resource allocation and who ought to allocate the resources. People voluntarily doing things with one another or with consent or some central planner that thinks he knows more for some reason. And I don't believe that that person exists. I believe the free market is the best tool we have for coordinating human brain power and letting the best idea win. In all domains. In all domains. Really? Yeah. Every single domain. So you think we shouldn't have public safety regulations for electricity, food? No, nothing at all. Now just let the market decide. If I have a restaurant. Yeah, yeah. And I food poise some people in it. Then I go out of business.

54:58Eventually. Yes. Eventually, right? How many people need to get food poisoning until that happens? One. No, it doesn't happen. I mean, that's exactly how it happens. Regulations came after restaurants have been around for sense forever. And there was no regulation until the last like 50 years. So how has that made restaurants? How did that make things better? Exactly. I have a great example from how that just makes everything more expensive. So my brother is a chef working at a restaurant. And he had eight bureaucrats from a Swedish institution like a health ministry people. Coming, checking out the restaurants. And saying, no, we're not going to prove this. You have to fix this and this and that. There's some lighting. Lighting that didn't work or there was grease here or whatever. So they didn't approve the restaurant according to their standards.

56:02So they give them two weeks to fix the problem. Next day, they book a table. So it was good enough for them. Yeah. Like the hypocrisy there is just mind blowing. But why do you think the answer to overzealous bureaucracies is no standards? No, I'm not saying no standards. You're free to implement whatever standards you want on your property. And so the free market will solve for restaurants safety. Because all of a sudden you can start a nonprofit organization or even a profit organization that says, okay, we have this service where we go around to restaurants and give them our stamp of approval. And if I want that that business to be successful, I need to be honest about the restaurants. Because if a restaurant with my stamp on it, food poisoning people, then people are not going to use my restaurant approval service. So the free market solves for all of these problems.

57:03And we're led to believe that it doesn't because of the bureaucracy. And because of first and foremost inflation that these institutions are disproportionately big because we allow money printing to happen. So then we get weird things where you know the EU that dedicates what can be called a strawberry or not. We have this fucking bullshit here. And I'm swearing again. The bottle cap not being removable. That is not information. That is regulation. And it's it required every single factory who made this to make an investment in now a different method of constructing the bottle cap. So it wasted all of those resources for something that no one asked for. So I don't believe regulation is good as long as it's not consensual. Sometimes the market forces take time to uncover certain bad practices.

58:04On the contrary, they're much more efficient than superimposed ones. Let me give you an example. So for example, in building construction, you can have a whole bunch of buildings put up. Let's say you're in an earthquake zone. And there's no regulation or no standards to market just decides. People just decide how to build their buildings. You may not know for five, ten years until the next massive earthquake happens and brings down a whole bunch of buildings to great cost to society many lives. And then by that time, some of those companies who even put those buildings up may not even exist anymore. But even if they do, it's taken an enormous amount of time to uncover their shorty work. So who's responsible for buying the house in an earthquake prone area? And who's responsible for making sure that the house they bought lives up to the standards that they they deem safe enough for them to buy? My point with that example is that there should be standards for buildings that can withstand certain levels of earthquakes.

59:10And why couldn't they be voluntary? Well, they could. Well, they are then. No, no, they could, but not they're not necessarily so all the construction the construction. So for example, a developer is not necessarily eating their own cooking. They develop the building. They sell it off and they might pass it off as being able to withstand. Yeah, but why it's not tested? It's not tested. There's no standard. So why is not the consumer ultimately responsible for choosing to buy that or not? I mean, the purchase of the building is not the point. For instance, if say you have a completely voluntary system and you have this stamp of approval from earthquake inspection service limited. And I as a consumer choose voluntarily choose to take the risk of buying a non-approved house because I thought it was better for me. I don't think there will be an earthquake in the next 50 years. Or worse, you thought you were buying something that was built to a standard to withstand an earthquake.

1:00:13That's the point I'm making. Yeah, but ultimately the free market is a better decider of what works and what doesn't work here. Of course, the regulators don't want you to believe that or to understand that because they. Their livelihood is dependent on that not being true. Well, if we look at. If we look at areas with earthquakes. It's a really easy to test to do more buildings fall down post-regulation or pre-regulation. Why would they have brought in the regulations? Yeah, but it's the wrong metric. You're only measuring what buildings would still do earthquake or not. You're not important though. Yeah, but it's not the correct metric. Like did people. Who's to say that. Because it costs more to build a house to withstand the earthquake.

1:01:13But I can still as the consumer choose to buy a cheaper house if I'm not very worried about the risk of the earthquake. It's just like saying. What would be good other example? I can buy a cheap helmet. Or I can buy an expensive helmet. I have a motorcycle. Who's to say that like I know my motorcycle riding skills. So I believe that this cheaper helmet would do the job. Who should decide? But that sounds to me like you're saying if someone voluntarily purchases a building. Knowing it wasn't earthquake proof. And in an earthquake, the building collapses and they die under the rubble of the earth. That's a more ethical outcome. No, I'm saying that they are responsible. Okay, but it sounds like that's a more ethical outcome than if the building had been built to regulations that would withstand an earthquake. I think in a free market, you would have more. In a more pure free market, you would have more buildings with standing the earthquake than you will in an over-regulated one.

1:02:17For the simple reason that if you don't let the consumer be the responsible party for what they buy and what they don't buy, then what you get instead is trust in institutions. And that's why everything's shit. Where everything is run by the state. Havana Cuba. Around a thousand people per year die literally from the buildings falling on top of their heads. Because they have communism, meaning maximum regulation and state control. But no one cares to maintain the buildings because there's no money in it for doing so. So there you have without earthquakes a thousand people per year dying from imploding buildings. So I'd say the more regulation you put in place, the harder it becomes for the free market to solve the problem. I know, but I'm hardly an advocate for communism in saying that they should be like safety regulations. Well, you're more on that, you're more to that side than I am in saying that that's a good thing. No, I agree, but I think you'd been misrepresenting what I'm saying.

1:03:20Okay, sorry about that. By using an example like Cuba. No, no, it's a communist regime. It's an example to take into the extreme, right? Take into the extreme. So suggesting in the extreme. No, but you're suggesting something that is on the trajectory to becoming an extreme. I'm saying that this is a constant fight between freedom and totalitarianism. And if you give them an inch, if you give them a finger, they lead the whole elbow or whole arm. Well, you know what? Including the elbow. I don't agree with that. That what you can see it everywhere. States are growing in size everywhere, especially in quote-unquote Western democracies. Here, right now, you have absolutely more totalitarian government than you did 50 years ago. And that was during World War II. It's still more, I mean, people are arrested for social media posts on mass here. It's absolutely gross.

1:04:21I agree with that. Yeah. I'm saying that the thing that leads to that is people wanting other people to take care of their problems for them. If you outsource your responsibility, you outsource your freedoms too. Freedom and responsibility are two sides of the same coin. And there is no way that once it's given away, it's ever going to be given back to you. All political temporary measures become permanent over time. So what is needed is a constant resistance and a constant fight for freedom from every generation. Otherwise, there will be overtaken by a criminal gang called the government, which is just the biggest criminal gang in a certain area. So I agree with all of that. I think there is a constant need to be vigilant. But I don't know which one of us is more idealistic. Because I think that we should constantly be striving to find where the balance is for us as a society given the current time that we're living in.

1:05:27And I think right now I'm very much in agreement with you that governments are beyond overreaching. But I don't think I'd ever find myself in agreement philosophically with you, but I find the conversation certainly fascinating. How do you find a balance? Because that's also subjective. All of these things that were political ideas and that we've discussed, all of the words that we've used to describe outcomes, they're all subjective. And I know that you've made some assertions at the start about natural law and what is law and what we're normal like. It would be quite easy to push back on all of that. Now I don't want this conversation to become only about that, but I wanted to explore some of your ideas around that as we sort of move on to Bitcoin as well. Because on Bitcoin we both agree. But I think it sounds to me like Bitcoin is one part of a much broader and better defined world view for you.

1:06:27Well, Bitcoin is the most powerful tool for self-someranity ever known to man. Well, except for nooks, I guess, if you have a nook, you can be pretty sovereign. But if you don't have a nook and you don't want to own a nook because you don't necessarily want to kill millions of people, Bitcoin is the next best thing for sure. Because then you can do things under the radar and you can truly reclaim the driver's seat of your own life. It is definitely the only thing I can think of that you genuinely own and can own and control your ownership of without interference. And here's the funny thing, you can't even own it. So this is another one of my insights about Bitcoin that sort of evolved over time. So ownership is a legal relationship between me and a thing. So actually, if I give you my phone, I am still the owner of the phone, but you are now in possession of the phone.

1:07:33So you as the processor can choose to give the phone back if I ask for it or you can say, no, I'm not giving it back. It's mine now. And then you've stolen my phone. There is another mechanism here because you don't have my fingerprint or my pink code. So it's kind of useless to you, which gives me a bit of protection from you stealing my phone. But that's the crucial difference between ownership and possession, right? Someone can write fully on something, but someone else can possess it. So for instance, if you own a house, but the state says there's a property tax of 10% that you need to pay for a year, then you don't really own your house. They are in possession of it, and they are granting you the privilege to live there, given that you... It's exactly like a mafia, like a nice little hair salon you got here, pity if anything would happen to it. That's what that is basically. Bitcoin is totally different because I think it's one layer deeper than both ownership and possession.

1:08:40Because you cannot own a number and owning a Bitcoin is just knowing a number. You're knowing your private key and it doesn't matter if it's the actual private key or the seed phrase or the location of the private key or the location of the seed phrase or the location of the hardware wallet that contains the private key. And the pink code to the hardware wallet. None of that matters. It's at the end of the day, the thing that makes you able to act as if you own the Satoshi's on there is just keeping a secret from everyone else. And you also have to believe that... So two things, you have to believe two things. First of all, you have to believe that the incentive structure of Bitcoin is set up in such a way that it won't change to the extent where... where the 21 million coin cap is ever inflated away, where things will work. Blocks are predictable, difficulty adjustment will work as it's intended.

1:09:45You think that this is set up in such a way that your big coins are not at risk from Bitcoin changing. The other thing you need to believe is that the private key contains so much entropy. So it's neglectable the risk that other people also know this private key. So given those two, if you believe those two things to be true, then you're allowed to act as if you own the Bitcoin because you effectively control them because you can unlock them and send them somewhere else. So the Sats are scarce and finite, not because they're a number on the internet and someone figured out how to not be able to copy numbers because it's simply not true. All the data in the world can be copied. Information is inherently copyable. So you keep in the secret is what makes the Sats vulnerable to you.

1:10:51Meaning that you literally, not only metaphorically, but literally are your Sats, they are literally in your head. And this makes Bitcoin completely different from everything else because it's very hard to take something from another person's head. It's much harder than taking physical stuff. Because I can point a gun at your head and say, actually give me all your Bitcoins and you can give me a fraction of it and I have no way as the attacker of knowing if you actually gave me all you got or not. In theory, everyone on Earth could own all the Bitcoins because everyone could know all the private keys where I have no way of knowing that if they do or don't. I can make an educated guess that my grandmother does not own any Bitcoin and probably not yours either. But I can never prove that someone else does not know all of Bitcoin or does not control Bitcoin. So it makes it completely different from everything else and it makes us, it makes the attacker, the attacks less valuable to the attacker.

1:11:54Because if you have a house, but you have 99 times more value stored in a private key in stored in Bitcoin, which are in your head. Then the government can take your house and then they took 1% of what you owned. And that's all they got because they can't get to the other 99%. So what this does is just simply mind blown because it incentivizes everyone else that has that are Bitcoin and all other Bitcoiners to not only not attack you but to collaborate with you. Because the more people that have Bitcoin and the more people that use it, the higher the value of it. So we want other Bitcoins to thrive. We inherently want other Bitcoins to succeed in whatever endeavors they're engaged in. It's good for me. The success of Archie is super good for Knutzwano and vice versa.

1:12:59You and I are incentivized to just be awesome to one another. None of us are incentivized to steal the other person stuff. And this changes the dynamics of violence and particularly aggression for everyone. Over a long enough timeframe, that is the path to world peace in my opinion. Just making attacks, making aggression less profitable. And I think it's absolutely gloriously beautiful. And I think this aspect of it, this way of looking at it is underrated. Because right now this digital commodity and it's backed by energy and all of these flawed metaphors that are simply, it's much simpler than that. It's just that humans found a way to interact with one another that makes aggression more costly. At the end of the day, Bitcoin is just an agreement on a fixed set of rules that are so hard to change

1:14:01and so hard to break that it's more profitable for everyone, every participant to just follow the rules. And this is a first in mankind and it's absolutely mind blowing to me what that implies. Because it implies everyone over time just becoming awesome to one another. Do you believe, as a lot of people do in Bitcoin, Bitcoin will end US dollar or I guess broaden that question out. It will end Fiat money altogether. Yes, I do believe so. What's the path towards that? More money printing, which all Fiat currencies have to inflate. That is the mechanism through which they work. Like there is no central bank that has ever put a finite cap on money printing. On the contrary, the central bank is there to print more money. It's not as simple as just printing and we can get into the, what's the nitty-gritty of how central banking works.

1:15:07But at the end of the day, it produces more monetary units making the existing ones less valuable. Bitcoin does the opposite. It has a finite supply. So over time, Bitcoin will be more and more valuable and dollars will be, and other Fiat currencies will be less and less valuable. It's kind of simple to see that one of those goes to forever, the other one goes to zero. All Fiat currencies die, regardless of if Bitcoin is a round or not. They have a finite life cycle. They all hyper-inflate. The pace of hyper-inflation is different in different currencies. The Venezuelan, Bolivar, hyper-inflates faster than the dollar. But the dollar is on the exact same path. It's just a little slower. And if you have an obviously better alternative around, that wins. There's no way that it doesn't, except if it completely fails for some unseen reason that we don't know about, it goes to zero.

1:16:07If I look at recent history, really, to me, it suggests that hyper-inflation and resetting of a currency, or at least the collapse of the currency and then subsequent resetting. I think it's unlikely that we're going to see hyper-inflation in the US dollar or dollar alone lead to Dan its disappearance. Probably not on our own. I mean, I look at Turkey, for example, my family is from Turkey. I think in my lifetime, Turkey said two currency resets as a result of hyper-inflation. It's not diminished the trust of the population. No. In its government to continue wishing its own currency. Despite well-established mismanagement. I think it has eroded trust, though. It's just that they're forced to have no other options. Because they're forced to pay their taxes in this currency. Don't you think there's also a sense of national pride that people have in having a national currency as well?

1:17:09Just having a nation that implies state-funded education, state-funded media. It means that you're being brainwashed from birth onward. Like, the nations do that to people. It took me 40 years to figure it out. It's all a scam. I mean, it's very hard for people to understand. I think this is the biggest hurdle to Bitcoin adoption. Because understanding that the money is rigged and that it's just a grand fucking pyramid theft. And theft scheme is too black of a pill to swallow for many people. But the orange pill is the remedy to the black pill. But you need to take the black pill first and see how bad things really are. But I don't agree with that. I think humanity has already swallowed the orange pill. It's the gold pill. We already understand the necessity and the utility of gold. We already understand that. It's for people to wake up and recognize there is essentially a digital security.

1:18:10Most people have no clue about gold. I think most people think that fiat currencies are backed by gold. I've seen polls for this. But that's a misunderstanding about fiat. You go to some village in India and I'm sure the grandmother there understands perfectly well about the store of properties of gold. But in the West, we don't really use it, do we? Well, I've been sent from the back to use it. The thing with gold is that it's not perfect at all. It's very far from perfect. And it's very used to be confiscatable. It's not very portable. It's not very divisible. It only has a few of the good properties that money need to have, mainly that it scares. But on all the other properties, it scores pretty weakly. On all other metrics. At the end of the day, it's just a dumb rock. The thing is, one thing I've noticed when talking to people about things like this,

1:19:12is that most people have a much shorter time frame when thinking about these things than I do. One time frame is my lifetime. Yeah, mine is way further ahead. I see. I think the dollar dies, but it might take five generations. But I tend to extrapolate the thought vector as far into the future as I can. And see, where is this heading if I zoom out as far as I can zoom out? But it's also a sad state of the world and a sad byproduct of the Fiat monetary paradigm. Is that no one thinks further than their own generation. The boomers are a great example. They've been overspending their entire lives. I would say that's a very boomer mentality of not thinking about subsequent generations. I would say that history is filled with leaving the world or something more for the subsequent generations.

1:20:13But boomers have broken that. So it's a cultural adventure. Fiat broke that. Fiat rewards you for overspending. Fiat rewards you for taking out a big mortgage to buy a house. Which means you're fueling the Fiat system because you have to pay it back in interest. And the interest that money that will pay the interest is not in circulation yet. So it needs to be even more loans for that money to come into existence. So every single monetary bill in your pocket is owed to someone else. It's just loans all of it. And that's what keeps you in the rat race and forces you to work eight hours a day. All of that is connected because Fiat rewards you for overspending. Whereas Bitcoin rewards you for not spending at all, but sticking to your guns and not overconsuming at all. Like in order to make profit from Bitcoin, you need to buy something that will be at least short term more valuable than Bitcoin.

1:21:20And what is that? It needs to be a very, very, very good business idea. Basically a house will not do it. Stocks will not do it. Shitcoins won't do it. Well, what time frame? Well, at least certain statistical models. We don't have to name them. But they project diminishing returns. And such at one point, maybe in 10 years or 15 years, the returns might be S&P plus a few percent. At which point, yeah, it does make sense to deploy much more capital towards entrepreneurship if you're so inclined. Right? Because potential returns there could be superior. But the business idea needs to be way better than it needs to be in Fiatland. Because in Fiatland, you just have to outpace the next worst guy. In Bitcoin, it needs to actually outperform the sadness themselves. So what are the implications of that then? For innovation.

1:22:20For the number go up theory and the diminishing returns. I don't necessarily believe that. We will inevitably be experiencing what the SAT squeeze really means. So far in Bitcoin's history, the inflation has actually been higher than in gold. In terms of how many Bitcoins are issued per time unit. But now more than 96 percent of the all Bitcoins that will ever exist have already been mined. Half of the remaining ones will be mined the next four years. Half of the remaining ones after that, the next four years after that. So there's almost no Bitcoins left. And Michael Saylor, for instance, buys up more than is issued per week per week. So they're running out. And nobody knows what happens when we're actually experiencing the true scarcity that is coming. Because people still see it as an investment and they buy Bitcoin to gain more Fiat.

1:23:20At some point that ends. And then you have a point where the value of Bitcoin can effectively only go up. I haven't checked the numbers yet. And I wonder if you have, is the flow of new money into Bitcoin? Has it surpassed what the value of the daily issuances yet? If price goes up, that is true. If price goes down, that is not true. I might not be completely accurate about that. But I think that could be a good way of looking at it. Usefulness is measured at the margin for people. So if here I have a pack of chewing gums, it's useful to me. Every subsequent pack of chewing gums I guess I get is less valuable to me. Because I already have one right now. And I can't eat them right now. But let's say it's stakes. If I have 10 stakes, I probably won't be able to eat the last one. Because it'll go bad before I have the chance to eat them.

1:24:20So money also has this utility at the margin thing. It's just that money is very useful because you can exchange it for almost everything else. So people will always want more money. So we're coming back around to evaluation. Because you're quite famous for an iconic valuation formula. Which doesn't actually give an input. It's just a philosophical framework for Bitcoin. We're back to everything divided. Yeah, everything divided by 21 million. Funny, there was a Bitcoin apologist conference in Hong Kong. Very influenced by shit coinery. Where they had a drone show where they put the everything divided equation. But they put it upside down. It's like 21 divided by infinity. And it's like, I laughed my ass off when I saw that.

1:25:22Because like, yeah, there are shit coiners. They don't get it. They definitely don't get it. Or maybe they do. And that's why they inverted it. Yeah, that's right. I don't think so. It's like too stupid. More of a Freudian slip. Yeah. So a lot we're all interested in valuations. I think nothing attracts more conversation, posts, podcasts, minutes, and valuations. But how do you approach future projections for Bitcoin's price? What's your framework for reference? I don't think about it that much. I know that I can do nothing about the price movements. It's much more interesting to me to talk to people about fundamentals. Talk to people about why shit coins are shit. Talk to people about economics. And this and that, then to make price predictions.

1:26:22Because to me, price predictions can't be boring. And we know that Bitcoin either goes up forever or goes to zero. It's a binary bet. And nothing is hinting at it going to zero anytime soon. On the contrary, it's very likely it goes up forever. We don't know on what time frame and we do not know about how volatile it will be. But as long as you can, as you provide enough goods and services to other people to feed yourself and your family, if you can set aside some money and put it into Bitcoin, then that's probably a very, very good idea. Michael, sailor famously said it's either going to zero or over a million. Why would it stop? Yeah, no, but it was just put a point over a million. And they're like, what percentage probability do you give it of actually failing from here?

1:27:22Well, that's asking me to evaluate a risk, which I don't know what the risk is yet. There's definitely consensus risk. Right. We can say, what if the consensus changes? What if the culture of Bitcoin changes? No, no, the consensus is a funny thing. Because since changing Bitcoin requires such an overwhelming consensus, a little less if it's tightening the rules than opening them up. That means that whatever consensus change we agreed on was a good idea. That's like the flip side of how you how you watched that. If everyone agreed it was a good idea, which is required for it to happen, then it was a good idea. So, okay, that's really interesting. Okay, we have a hard and fast rule making contact with your philosophy and your some of your principles as well, which is if we all agree voluntarily, then it's a good thing, right? Yes. But could it ever be a good thing to expand the issuance to 22 million? No. What if we do it in consensus and voluntary?

1:28:22As I said before, that's one of the things you take into consideration when acquiring Bitcoin. Is that I believe that this is set up in such a way that no one will ever be incentivized to want to increase the market cap. Or at least just only Peter Todd will be incentivized to do so. And everyone else thinks Peter Todd can go fuck himself with himself when he says that. Does he still believe that? Or is that something he just said at some point? I mean, who knows what he believes? I think he's playing a different game when he says that. And it's more of an attention game or something else. There's something else. There's another incentive in it for him than just protecting his stack. Because if he had a big stack to protect, then he probably wouldn't say things such as that. And the bigger your stack, the more you are incentivized to protect Bitcoin from hostile attacks and to stick to your guns and stick to your principles. I don't think that Bitcoin can ever ossify based on the fact that it's not backed by energy.

1:29:29It's backed by human action. At the end of the day, it's just an agreement on a fixed set of rules, meaning that people are behind all the rules. Like who are you proving the work to? The users are in charge. And the day that the users aren't in charge, then it's not Bitcoin anymore. And there are risks. I mean, there are many risks. One of them is mining centralization, which is already... We already have too much of. And that is... On a technical level, you know that you need three confirmations to know that your big coins are settled. There's a final settlement. That's only true if that's from three different mining pools. If you have six blocks from F2 pool, you should probably wait nine blocks instead of that. A lot of people don't know these things at all. There are other attack vectors. We shouldn't go into this, but I'm big on the Bitcoin 10 core versus not debate.

1:30:31And I have more opinions about that. I think there are social attack vectors. I think most people are lazy. And when policies and stuff are changed, then most people don't react. However, Bitcoin is... If there is a minority that actually does something... Bitcoin is sort of protected by a very militant minority in the sense that it is hard to change for a reason. And that is people voluntarily running code to stop it from changing. And the consensus changes and actual changes to the rules should be there to protect Bitcoin as money. They shouldn't be there to make Bitcoin something else than it is, which is damn near perfect money. Any change to the... I think Bitcoin should ossify in terms of the idea of Bitcoin.

1:31:31I want ossification that everyone agrees that Bitcoin should be money and nothing else. That's the thing I want to ossify. And the code has to adapt to that. So the code should change if Bitcoin is at risk of becoming less... But becoming something else than money. Then there is enough motivation to change the code. But it's to protect and ossify the idea that Bitcoin is money. I never thought it never expressed it that way, but I think that's a very good... I'm going to tweet about that, I think. A good way of putting it. The thing that should ossify is that Bitcoin is money. To reinforce that utility of Bitcoin is money. Some people are suggesting we introduce certain things that might compromise some of its other properties. Yes, and I think that's never... Almost never motivated. I guess that the Lightning Network was motivated.

1:32:31And it's great. I think in hindsight we shouldn't have probably shouldn't have done taproot. It was adopted prematurely because it led to a bug exploit that led to all this spam. I think there is... I even think that if it is shown that the Lightning Network came with unintended side effects and consequences that are unwanted, then maybe we shouldn't have done that either. Like protecting Bitcoin as money is absolutely crucial. I think also a thing Giacomo pointed out to me a couple of weeks back is that the biggest... The biggest good thing for Bitcoin as money that came out of the Lightning Network is not fast payments. It's private payments. Lightning payments are more private than on-chain payments, and that's a very good thing for the monetary properties of the network.

1:33:32What happens to Bitcoin as money if Lightning fails? Well, it depends on the way it would fail. I would say 99% of the transactions that I've made have been on the Lightning Network in terms of buying stuff. And the only time I've used Bitcoin on-base... Which is to send money to someone for a payment like... Yeah, bigger one, or something or whatever. Yeah, but it's great. The Lightning is enabling fees to be low and they're not being very many transactions in bulk. And I don't buy the security budget narrative at all because I don't give a rat's ass as to how miners make their money. Like, if you look at the hash power right now, it's 940x, I mean, it's 940 plus 18 zeros, guesses per second on what the correct hash of a block is. Like, it's insanely secure. So even if difficulty should go down, we have the difficulty adjustment, right?

1:34:34So mining will always be a very low profit margin thing. A lot of people are scared that over time when the block reward is smaller and there aren't enough fees that miners will go out to business. I salute this. I think this is a good thing because that decentralizes mining even more because then other smaller miners have a... That don't have it making money as their primary incentive, but maybe securing their stack or heating their home and just mining. For instance, I have a 21 energy often to home miner that the primary use case for that is heating my home and not mining. It's a side effect of it. And I think the more we can get into those things and where miners can have other incentives than to make money from fees and rewards are better off we are. Because one of the biggest misconceptions people have about Bitcoin is that Bitcoins are created by miners or found by miners.

1:35:37Bitcoins are created by Bitcoins users and we pay miners in Bitcoin to find block space for us. The thing they're harvesting, the thing they're trying to find by hashing over and over again is block space for us to put our transactions in. And that also at the same time as a byproduct secures the network by this wall of energy that makes the rules harder to break than to just follow. But the miners don't make the rules. The miners are the employees of the users and they have to provide a service to the users and if they don't provide the service that the users want they will be punished by the users at some point. So but we are paying them in sets we allow them to create new sets for themselves as well as get some fees from Bitcoin transactions.

1:36:39So to me that's a very big misconception because it's always construed as that they are looking for the big points they're not looking for block space to sell to big corners. And I think that's crucial to remember when when talking about minor revenues and whether this or that is a good idea because you shouldn't care about minor revenues. That problem is already solved and it's way back like just look at how many miners there are today comparison to 10 years ago. It's like orders of magnitude bigger and that is because it works. And it's also taking into account that Bitcoin can and probably will double in price every four years. Then the whole narrative that we we needed tail emissions or whatever it is just moods because you still making more money in four years from now than you're making now even though there's a hovering in between. So so I don't feel minor revenues as a problem at all if anything I think they have too much power.

1:37:45But I think that's a very good moment to wrap this up. Can it spend homes? Thank you. It's been a great pleasure to have you. Thank you Archie. And shout out to Pete McCormack and the team for a fantastic conference. I enjoyed myself a lot and I'm very grateful that you took me here to the UK. I haven't been here for a while. So great. Absolutely. Likewise. And thanks to Danny for the invitation to to moderate a panel as well as my first panel. And I enjoyed being there last year. I was there anonymously and it was a very different experience. I knew I was about the docs through the launch of my podcast. So there's a much bigger conference because you know price was booming and yeah, and it was also very sunny sort of weekend in in bed fit as well. This this time around is a little bit quieter, more subdued, but very intimate got to know some people as well. So I really enjoyed it. If you haven't been to Bedford for Peter's cheat code, put it on your calendar for next year because it's it's really worthwhile.

1:38:45Especially if you're in the UK in Europe, make the effort to come down. Hopefully he holds it for next year as well. How can people find you and you know website your books or that? Yeah, I'm at Knot Swannohm on Twitter. So at my name, I or on X nowadays, which is where I have my biggest following and I produce most of the content. I have a pod called the Bitcoin infinity show where we interview an interesting person, mostly Bitcoiners every week once a week. I also have the Bitcoin infinity academy, which is me and Luke do all reading my books, but that's on on pause for now, but you can find my first two books for free. That way in video discussions about every single paragraph. I have a website called Bitcoin infinity.com where you can find all my books for sets and a couple of other books as well. Very large book is on there, for instance, and said bunny's book.

1:39:47Anyway, they're also available on Amazon. They're called Bitcoin sovereignty through mathematics, Bitcoin independence, reimagined, Bitcoin, everything divided by 21 million. Practiology, the invisible hand that feeds you and the latest one is Bitcoin, the inverse of clown word. Awesome. Knot Spannohm. Thanks, Kenber. Cheerio.