The One Shot Principle - Independence Reimagined Chapter 11 | Bitcoin Infinity Academy #26

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Welcome to the Bitcoin Infinity Academy. This is our course on my second book,

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Bitcoin Independence Reimagined, brought to you by the Plan B Network and Bitbox.

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I'm Knut Swanum and I'm here as always with Luke DeWolf. Today's chapter is the one-shot principle

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in the always up point, which we already covered in Lugano, but we're going to go through it once

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again here. How are you today, Luke? I'm great, Knut. Good morning. Yes, one-shot principle in the

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always up point we we did this one in lugano uh but the the whole deal with that was we were we

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were live from the plan b forum there and we streamed it on rumble it was a lot of fun really

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cool but it's not exactly the the format of the the this particular podcast so we're we're just

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doing it the the proper way so if you've already listened to us talk about this in the past that's

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okay. But yeah, we're just going to cover it again here with the nice book visible and, you know,

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us sitting in our nice comfy chairs instead of in Lugano, Switzerland, on the tent stage where we

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later that, no, where we the previous night had played the Satoshi Rakamoto and it's a miracle

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that we were actually up to do the podcast at eight in the morning the next day.

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Yeah, that was exciting for sure. This is probably the most known chapter of this book. The one-shot principle is the most famous quote from the book by far. So yeah, let's dive into it and see what it is.

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Shall we?

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Let's do it. The one-shot principle and the always-up point.

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Who am I to conjure up theories about macroeconomics?

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I have no financial background, and even though I've probably studied mathematics more than your average Joe,

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that was a long time ago, and I'm hardly an expert at anything, really.

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Well, if there's one thing that Bitcoin has taught me, it's how scarce my time is,

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and that I won't be able to excel at anything if I don't have skin in the game.

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Everyone is new to Bitcoin, and everything in economics is speculative.

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John Cleese, one of my favorite human beings of all time, has said that it seemed like the main

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goal in life for everyone in his hometown of Weston-Super-Mare was to get safely into their

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coffins without ever having been seriously embarrassed. This phrase struck a chord with me.

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After having discovered Bitcoin, and in doing so also having discovered new ways to think about

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scarcity and time, I've decided to not hold my brain back any longer, but to put my thoughts

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out there, where they at least might ignite a spark in someone else's mind.

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Standing on the shoulders of true giants, here's my take on an economic theory and an

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explanation of the specific event that it implies.

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And just to be clear, this was Knut talking the whole time, not me, even though I agree

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with most of what you said, it doesn't all apply to me.

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Yeah, okay. So before we get into here's my take on an economic theory, the actual take on it, let's discuss this a bit. Yeah, it's funny because I had a guy come up to me in Lugano when we were signing books who asked exactly this, like, what gives you the authority to tell me about things? Like, why should I listen to you? Do you have a PhD in this and that?

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and the thing is uh bitcoin in my mind has sort of leveled that playing field this is one of the

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things i fell in love with with this community in the beginning all that mattered what what you had

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actually produced the credentials didn't matter at all like people listened to ideas not to

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authority and and that's uh i mean all i have to my name um in terms of expertise on this are my

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books and how much people like them. That's my proof of results. That's my PhD. And take that

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as you will. If you want to listen to me or listen to a Keynesian economist who has a paper from a

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school funded by the government, that's up to you. But all I did in this was think and write.

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I was never paid by anyone to have a certain opinion rather than another.

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Very good point.

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And I think also the John Cleese quote is interesting.

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It's kind of, yeah, there's some inspiration to that, right?

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Like you should lean in to the things and not worry about being seriously embarrassed, right?

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No, it has, as I say here, struck a chord with me because so many people go through life without ever taking risks, and therefore nothing happens to them.

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So life is not a rehearsal. You have one go at it.

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And just as I explained in the Praxeology book that hope is a rational choice because you're going to die anyway, so you might as well live as there's hope, even if life seems hopeless.

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this is sort of in the same vein as that.

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You might as well live life

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as if it was your last chance

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to do so, because it is your last chance

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to do so.

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So, go out

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there and

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be courageous, like,

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not in the woke sense of the word, but

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in the true sense of the word.

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What's the worst that can happen?

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I guess you can die a martyr

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or you're gonna die anyway,

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so why not just

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speak your mind?

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Very good point. And so I think with that, let's get into that which you spoke your mind about.

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The One-Shot Principle. Absolute mathematical scarcity achieved by consensus in a sufficiently

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decentralized distributed network was a discovery rather than an invention. It cannot be achieved

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again by a network made up of participants aware of this discovery, since the very thing discovered

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was resistance to replicability itself.

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I forget if we pause there in the Lugano thing,

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but I think it's time to just let you explain that in your own words.

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Yeah, that is the quote that has made its rounds

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around Bitcoin Twitter and so on.

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I recently talked to Max Keiser about this.

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It's one of the reasons that I went to San Salvador last week

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because this is one of Max's favorite quotes

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in the Bitcoin, what's the word?

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The Bitcoin canon, maybe.

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So, and it hints at, maybe if I wrote it today,

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I would have used slightly different words.

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I would have replaced scarcity with finiteness,

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which is more accurate.

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But other than that, I still think this is the case.

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It's very simple.

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The very thing that intrigued me about Bitcoin in the first place was the promise of something on the internet that couldn't be copied.

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And I could never get my head around, like, how can information not be copyable?

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All information can be copied.

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That's in the very nature of information.

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But it's only like a decade later I realized the depth of that question and that the reason it can't be copied or that ownership of Bitcoin can't be copied is because the Bitcoins are not on the internet at all.

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They're in our heads and we are the thing.

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So this is sort of a pathway, a stepping stone on the path to that insight.

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Yeah, and I wouldn't mind if more people spread this thing.

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What's your take on it, Luke?

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What do you think when you read this?

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Yeah, well, the quote itself is really just distilling a few ideas about Bitcoin into this one, a couple of sentences, basically. And I really like how it does that. That's the way all memes work, right? The simpler they are, and the more information that gets packed into them, the better.

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And I mean, that's sort of everything divided by 21 million is this to a whole other level, basically, right? And I think the idea here is that this is also probably something that people are maybe a little unintuitive about here. It's the answer to all of the, well, why is Bitcoin actually scarce if there's all these other cryptos? That's basically the answer to that.

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Like it doesn't matter if you've got some other crypto that's got a fixed supply cap.

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They still have like a pre-mine and they have all of these other things that basically they knew the game they were playing.

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All of them.

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But Bitcoin is the only one that didn't.

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And so it's subtle, but it's important.

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It's more like, yeah, Bitcoin is the solution to the double spending problem.

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Either you can achieve digital resistance to replicability or you can't.

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So if the other cryptos were to count, then they would sort of debunk their own theory.

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They would be counterproductive to their own cause.

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So it's very simple.

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Finite amount of Bitcoin, infinite amount of crypto.

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And you have to bundle them into their own thing, like all of them, because they're all an attempt at doing the same thing, which is replicating resistance to replicability, which by its very nature cannot be replicated.

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So either it works once or it doesn't work at all.

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And I happen to be in the camp that thinks it worked once and that's all we need.

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Perfect.

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I think let's cover the remaining conversational paragraphs on this so that we can dig even further into your content.

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Sure. One more thing before we do that.

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And that is, like you mentioned, boiling down complex thoughts into a few sentences.

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And that's why this is interestingly enough, why I fell in love with Twitter in the first place.

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Because you were limited to 144 characters which forces you to distill your thoughts into the shortest amount of characters possible

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And that's absolutely helped my writing abilities.

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And I really enjoy Twitter for that reason.

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And I still do, by the way.

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you can put more characters in a tweet now,

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but you can still only see the first 144 ones

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or whatever it is.

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I don't know if it's exactly 144 anymore.

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But still, that's what Twitter mainly did for me

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is making me better at distilling ideas

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into fewer characters.

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Yeah, very good point.

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And yeah, uncapping that for paid subscribers

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to Twitter maybe has had some effects.

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I certainly don't make super short tweets

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all that often, but anyway. All right, on to the next paragraph.

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Absolute scarcity on the internet was long believed to be impossible because of the very

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nature of data. Ones and zeros that could be copied an infinite number of times weren't

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believed to be capable of representing something as uncompromisingly finite as Bitcoin's 21 million

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coin issuance cap. That is, until Satoshi Nakamoto showed us that the double spending problem could

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be solved by giving every participant in the network a reward for following the rules and

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making sure that every other participant also did so. In doing this, and then disappearing at an

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early stage of the network's development, he gave enough participants hope that the

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decentralization experiment could actually work and created a living thing that feeds on human

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incentives. The rise of Bitcoin was a true black swan event and it cannot happen again.

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A competing token would need to be sufficiently different from Bitcoin in order to achieve true decentralization, because it would be trivial for any big player to completely dominate this new coin.

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And there would be no way to introduce it to the market without a skewed initial distribution.

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A competitor would need to differentiate itself so much from Bitcoin that when push came to shove, it wouldn't be a competitor at all.

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I'll stop here. I think that was mostly just covering a lot of the points we've already discussed.

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yeah except one point and that is the monetary maximalism point here if this is so in order for

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anything else to it would need to be sufficiently different right in other words it couldn't be

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money it couldn't compete on the money front which is also why bitcoin needs to be money

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and nothing else if bitcoin is all all of a sudden all of these other things data storage

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bull crap, then it is competing with the other coins on those things.

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And we don't want that kind of competition.

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So it's actually an inadvertent argument for the monetary maximalism case.

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It's being money is what makes Bitcoin different from all the other shit.

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Yes.

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And yeah, I think digging too deeply into sort of the debates about, you know, arbitrary

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data on Bitcoin. That's not really the point of this particular series. But yeah, Bitcoin is money

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and has to be money and has to be the thing that wins as money in order for us to do the things

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that Bitcoin is promising, right? Like Bitcoin is supposed to be the way out of the fiat system

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and the way out of the monetary spigot,

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having cantillionaires placed right up against it

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and gaining power just because they're closer to the money printer.

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Bitcoin fixes this.

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And Bitcoin can't fix this as effectively or as quickly

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if it is not money and if it is not the thing that wins at being money.

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I think that's all fair to say.

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Yeah, paraphrased, all it needs to do to win is be money.

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Very good.

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We should try to meme that.

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I'll continue here.

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More importantly, if a technically superior or more efficient token one day renders Bitcoin a thing of the past,

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the whole concept of absolute scarcity on the internet can be considered a failure,

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because there would be no guarantees whatsoever that this new token wouldn't suffer a similar fate at some point in the future.

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Users would no longer stand to gain anything from saving their Bitcoin, but contrary to this,

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they would be incentivized to spend and acquire new alternative tokens.

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This would destroy the only true value proposition of Bitcoin, its scarcity, and deprive any future

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attempt at creating decentralized currencies of any legitimacy. This is the main reason that

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blockchains other than Bitcoin's blockchain are counterproductive and confusing to a lot of

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newcomers, especially since a lot of Bitcoin proponents don't seem to understand this fully

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themselves. Hal Finney, the man who received the first ever Bitcoin transaction from Satoshi

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Nakamoto, definitely understood though. He said the following in May 2011.

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Any successful replacement of the Bitcoin blockchain will forever undermine the credibility

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of any successor. How can an investor know that it won't happen again? Rebooting now may benefit

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a few thousand early adopters. What happens when hundreds of millions use Bitcoin 2.0?

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They'll be just as jealous and envious of you as you are of others.

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Given the precedent you want to set, how will you argue against yet another reboot?

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Very prescient words. I have my own thoughts as relates to ossification and this and that,

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but yeah, what are your thoughts on these points?

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yeah Hal was ahead of his time

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Hal was so right about so many things

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and this is one of them

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I mean my one shot principle

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is just basically just paraphrasing

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whatever Hal said

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so yeah

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you can't reboot it

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without setting a precedent for it being rebooted again

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so the ossification thing though

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if I'm gonna make a comment on that

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is that first of all

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Bitcoin cannot ever ossify

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it's impossible since it's

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predicated on people doing things and people can just do things as we know so uh ossification is

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not a real thing and it never was uh if it can all that can happen is that bitcoin can develop

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more or less quickly and uh it's preferable if changes are slow and thought through uh rigorously

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there's a lot of developers that want to

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move fast and break things

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because they come from that kind of culture

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and in Bitcoin

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that's not necessarily preferable

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because people want

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as soon as you do anything to the code base

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as soon as you do anything to Bitcoin

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you at least potentially change people's behavior

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meaning that people value the thing differently

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meaning that the

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which

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without doubt has some effect on on the purchasing power of the thing on because it's all about how

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people evaluate it uh and the more you fiddle around with it the the less convinced people

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will be of its robustness so that's that's the the best argument i think for for not tampering

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with it unless it's absolutely crucial that we do so like fixing a bug that will kill the whole thing

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of course we should address those things but uh fiddling around with it just for the sake of

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fiddling around is never a good idea yeah totally agree with you there there's a bit of a ship of

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theseus thing going on here right like uh uh the the the whole idea of that bitcoin needs to sort

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of adapt and change to its conditions. And what happens if like, like a reboot would be totally

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getting rid of Bitcoin, but we don't need to do that. That's sort of the point here. And as long

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as the blockchain itself, like the Bitcoin blockchain or the time chain, if you want to

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call it that, as long as that's still the thing, and Bitcoin is still the same network overall,

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just changing slowly, deliberately, then we've still got Bitcoin. But as soon as you grab a new

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thing, the funny thing is anyone can go say, hey, we've got the Bitcoin blockchain, right? And now

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we're spawning off a totally new network based on that, right? And we're going to run our own rules,

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right? Bitcoin 2.0, etc. And that's the thing that doesn't work because it's not the same network.

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So it has to be the same blockchain and the same network. And you can make little changes and people can come and go from that network, but it has to be the same one. So yeah, that's how we avoid the Bitcoin reboot, basically. And that's just a couple of subtleties there.

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But on the ossification point, I think the thing that you mentioned that I specifically agree with why we can never truly ossify is just that there are things that could kill Bitcoin and there are people that want to attack it all the time.

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We live in the real world here.

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We live in a world where people who want to do bad things and steal people's money are going to be trying to do so.

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and their tools are changing, their methods are changing, and the way things happen always changes.

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So we do have to have the flexibility to be able to handle issues as they come up.

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We don't know the future. We don't know all of the things that could eventually be a threat to Bitcoin.

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And only so much can be done on the node level as well.

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Like many security features are developed by simply patching in vulnerabilities to the Bitcoin core software or whatever implementation you choose to use.

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And those security features are good and useful.

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And it's not really the best thing to continue to use a really old version of Bitcoin core.

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because there are security

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vulnerabilities that can literally

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like you can lose your Bitcoin

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if you use that note

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as your Bitcoin wallet if you use two old one with security vulnerabilities so there a there a balance to be struck here between like let let be careful and deliberate and also that that we live

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the bitcoin is connected to the internet and therefore you you get all the same people trying

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to uh trying to hack it and this and that as as anything else connected to the internet and

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bitcoin having all of this money attached to it or being money is it makes it an even even better

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target, right? But the other point is that there are some things that have to be changed on a

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consensus level, such as the game-breaking bugs and things like this. And if we ever have quantum

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computing become a serious threat, I don't think it is now, but who knows, in a decade,

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two decades, whatever, we have to do something about it. It's not imminent, but we have to do

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something about it eventually. And so that means by definition that we can't truly ossify.

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And that will be how Bitcoin stands the test of time or not.

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I'm hopeful that it can.

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Yeah, a couple of points there I'd like to address because I think I have a slightly different view.

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First of all, the reboot thing, Bitcoin cannot reboot.

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A reboot would kill it because then the double spending problem isn't solved.

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You could double spend.

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A reboot from a certain viewpoint is a double spend.

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If this is not the thing, then the problem is not solved yet.

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The other thing is with the quantum threat, for instance,

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just to make a point about that is that maybe we'll end up in a scenario.

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I think this is what you mean when you talk about that.

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The scenario would be that we were faced with a fork

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where you would have to choose whether the hacked coins

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are somehow saved and taken off the network

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or whether the hacker gets to take the coins.

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And I would quite firmly be in the camp

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that lets the hacker take the coins

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because the rules you signed up for

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when you bought Bitcoin for the first time you bought them,

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they included this threat.

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This threat was always there

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and it was up to you to evaluate how big of a threat that was and what would happen if those

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coins ever moved. Same with if just Satoshi decides to come back one day and move all his coins.

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That can also happen. Would we stop him from doing that? Would we fork off? I certainly wouldn't.

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Also, who gets to decide what Bitcoin is? And the common thesis is that it's the longest proof

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of work chain, right? That that is Bitcoin. And that's what we define as Bitcoin. But ultimately,

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that's not entirely true either, because it's the market that decides. If the market decides that

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a fork that does not have the longest proof of work is the thing that we're going to call Bitcoin,

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then the other fork would die and die off slowly but surely. And whatever the market decides,

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Bitcoin is is Bitcoin and this is a crucial point because it's up to you the individual user to

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define what Bitcoin is to you no one gets to tell you what Bitcoin is except yourself and you you

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make this choice it's an individual choice at the end of the day it's not a collective choice

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Roger Veer may think he may think Bitcoin cash is Bitcoin as much as he likes

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I don't agree with him

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but it's not up to me

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to decide for him

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what he thinks is Bitcoin

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and I can't decide for Craig Wright

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what Craig Wright thinks is Bitcoin too

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and they can have fun staying poor

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on their chain if they want to

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and this is how I mean

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that the market decides

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because they had another definition

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of what mechanism decides

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what Bitcoin is and what it means

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than everyone else

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and therefore they are now insignificant

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because they chose the wrong chain.

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So the real moral dilemma, I think,

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happens when there's a chain split

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where the biggest token after the chain split

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is not the ethical one.

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That's when we get into the real dilemma.

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If there's a government coin that sort of takes over the chain,

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if one part of the chain split is like OFAC compliant and all this crap,

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then if that chain becomes bigger,

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that's the only case where I would cling to the other side,

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not for personal monetary gain, but to just keep my soul intact.

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I still think this is a fight worth fighting,

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and I still think Bitcoin is the only chance we have at.

315
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literally the only chance we have at taking this fight.

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So we need to defend it with everything we got, which is why I've been so adamant about

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spam being crap and that we don't hate the spammers enough and stuff like that.

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So regardless of if you're on the nuts or core side of that debate, that's not that interesting

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to me.

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The interesting thing is how willing are you to defend this thing in the long run?

321
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and will there be a fight where you will be forced to show you true colors?

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Who knows?

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Right now, I tolerate Bitcoin as it is.

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Core30 is released.

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I'm not happy with that release,

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but I am willing to tolerate that people are running those nodes

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and I'm not going to abandon ship because that happened.

328
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we would have to be in a lot more trouble than that

329
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for me to abandon ship for sure

330
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however I do think that these things are

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the fact that we're debating them at all is very optimistic

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it's very hopeful

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more people are running nodes than ever

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and in my opinion

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as a result of that

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the network is more resilient than ever

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we'll just have to wait and see how this whole thing plays out

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yeah

339
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I wasn't expecting

340
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to go that deep into so many

341
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things but yeah

342
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fully agree for the

343
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most part there

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the only point I just wanted to be clear about

345
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with the quantum stuff I wasn't referring

346
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to that if there would be like an eventual fork

347
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that has to deal with hacked coin I think

348
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that would for sure be a discussion

349
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if it starts to happen

350
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all of the lost coins are basically

351
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the ones that are vulnerable here

352
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if someone has lost their key or something

353
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quantum could eventually

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go grab that. I don't want to go

355
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into the weeds of this but what I was getting

356
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at was that

357
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basically Bitcoin would have to add

358
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new address types that

359
00:27:54,241 --> 00:27:56,141
would not be able to be

360
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in any

361
00:27:58,841 --> 00:28:00,721
foreseeable future hacked by a quantum

362
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computer and that's possible to do

363
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and there's lots of

364
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things that prevent that. Basically

365
00:28:06,781 --> 00:28:08,961
if your public key isn't visible

366
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that's already a very good

367
00:28:10,701 --> 00:28:16,781
start for that but uh it's a future thing but it's a thing that i do firmly believe will need

368
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to happen eventually in order to to react to the changing world and the technological advancements

369
00:28:22,661 --> 00:28:30,021
that's the overall point yeah uh there's another bug like the millionth block the the internal clock

370
00:28:30,021 --> 00:28:35,661
will reset somehow and that's that's a bug we have to fix as theoretically 21 million more bitcoins

371
00:28:35,661 --> 00:28:45,521
at that point uh anyway the um oh where was i with this the the quantum thing like the the event i

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think is comparable is the ethereum split back in 2017 when ethereum classic was invented uh

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if i if i was if i ever fell for the uh ethereum scam i would definitely be on the ethereum classic

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side of that of that thing and i think that that the fact that most of the network moved to the the

375
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the chain split that that's changed uh history is a testament to how centralized the theorem is

376
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it's it's not resilient in the way bitcoin is and i think if bitcoin had a similar split

377
00:29:22,601 --> 00:29:28,761
everyone would lean towards the classic thing uh yeah anyway i would hope so i think that's

378
00:29:28,761 --> 00:29:34,021
That's enough about that. Let's end this section with a little bit of discussion about Hal Finney.

379
00:29:34,501 --> 00:29:39,581
For those of you who don't know, Hal was one of the people closest to Satoshi and a monumental

380
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part of Bitcoin's early history. He believed that the computer could be used as a tool to

381
00:29:44,861 --> 00:29:49,421
liberate and protect people rather than to control them. And some people even believe

382
00:29:49,421 --> 00:29:54,661
that he was the man behind the pseudonym. This would explain why Satoshi went silent in 2011

383
00:29:54,661 --> 00:29:57,601
since Hal fully lost control of his locomotive functions

384
00:29:57,601 --> 00:29:59,381
around the time of Satoshi's disappearance

385
00:29:59,381 --> 00:30:03,781
because of the amyotrophic lateral sclerosis disease he suffered from.

386
00:30:04,301 --> 00:30:08,681
The disease eventually bereft him of his life on August 28, 2014.

387
00:30:09,901 --> 00:30:12,541
Hal's body is cryopreserved and poised for resurrection

388
00:30:12,541 --> 00:30:14,161
as soon as this has been invented.

389
00:30:14,981 --> 00:30:15,721
Any day now.

390
00:30:16,921 --> 00:30:17,401
Hal Finney.

391
00:30:19,141 --> 00:30:20,841
Yes, rest in peace, Hal.

392
00:30:21,781 --> 00:30:23,441
There's a funny thought experiment

393
00:30:23,441 --> 00:30:26,641
what if Hal memorized a private key

394
00:30:26,641 --> 00:30:29,861
and when once he's resurrected 400 years from now

395
00:30:29,861 --> 00:30:32,121
he remembers that private key and moves the coins

396
00:30:32,121 --> 00:30:36,521
more of a funny thought experiment than anything else

397
00:30:36,521 --> 00:30:39,321
and sort of also

398
00:30:39,321 --> 00:30:42,561
points to the difference between saving and hodling

399
00:30:42,561 --> 00:30:46,321
which in my mind are two different forms of human action

400
00:30:46,321 --> 00:30:49,181
anyway

401
00:30:49,181 --> 00:30:50,881
yeah I don't

402
00:30:50,881 --> 00:30:54,461
I don't personally believe that Hal is Satoshi.

403
00:30:54,741 --> 00:30:57,861
I think there's sufficient evidence pointing to the contrary.

404
00:30:58,621 --> 00:31:05,021
Maybe if Satoshi was a group of people, Hal was one of the members of the group.

405
00:31:05,561 --> 00:31:10,961
But speculating about Satoshi and who Satoshi was is not very productive.

406
00:31:12,181 --> 00:31:13,221
No, agreed.

407
00:31:13,221 --> 00:31:19,341
But regardless, Hal is a great early figure in Bitcoin and incredibly important to its spread.

408
00:31:19,441 --> 00:31:21,001
So yeah, as you said, rest in peace, Hal.

409
00:31:22,361 --> 00:31:32,641
Okay moving on to the always up point The always up point is a highly theoretical albeit logical conclusion of what one deflationary currency competing with nothing

410
00:31:32,641 --> 00:31:38,741
but inflationary currencies might ultimately lead to. The Bitcoin block subsidy, which is the newly

411
00:31:38,741 --> 00:31:44,801
minted coins part of the block reward, is halved every four years, resulting in an ever-increasing

412
00:31:44,801 --> 00:31:50,421
stock-to-flow ratio of the asset. This concept is explained in the laws and effects chapter at the

413
00:31:50,421 --> 00:31:57,161
end of the book. At some yet unknown point in the future, Bitcoin's unmatched stock-to-flow ratio

414
00:31:57,161 --> 00:32:02,061
combined with enough people who aren't willing to ever sell their Bitcoin, also known as hodlers

415
00:32:02,061 --> 00:32:08,441
of last resort, will make Bitcoin so hard to come by that it can't lose value. In other words,

416
00:32:08,541 --> 00:32:14,161
a point in time from where the price of a Bitcoin can only go up. This might sound outlandish,

417
00:32:14,421 --> 00:32:19,661
but keep in mind how far off in the future such a point may be, and that all other currencies on

418
00:32:19,661 --> 00:32:25,281
earth are inflationary, including gold. The comparison to other currencies is sort of

419
00:32:25,281 --> 00:32:29,981
misleading in this case, since Bitcoin's monetary properties are so vastly different from what

420
00:32:29,981 --> 00:32:36,721
we've seen in the past. All right, the always up point. Yeah. There's one sentence here,

421
00:32:36,721 --> 00:32:44,741
which might be slightly unclear. It's like, will make Bitcoin so hard to come by that it can't lose

422
00:32:44,741 --> 00:32:52,481
value uh instead of the word value there that is like that it can't uh lose value in fiat terms

423
00:32:52,481 --> 00:33:00,441
is what i would uh add to that because of course valuations are subjective and dynamic and

424
00:33:00,441 --> 00:33:05,921
how many sets you're willing to to buy a hot dog for can still go up and down

425
00:33:05,921 --> 00:33:12,741
the thing is though that all fiat currencies are not only inflationary but ever increasingly so

426
00:33:12,741 --> 00:33:21,181
There is never enough money around or fiat around to pay off the ever increase in debts.

427
00:33:21,361 --> 00:33:29,781
So the only way to pay them off is to issue more debt, which leads to a compounding effect.

428
00:33:30,401 --> 00:33:39,321
So that more debt is needed to pay off the previous debt, which means that all fiat currencies are on this hockey stick trajectory.

429
00:33:39,321 --> 00:33:49,301
especially as we get human beings get so much better at doing things um the the the the price

430
00:33:49,301 --> 00:33:55,661
drops that should have happened in in terms of all goods and services on earth just since the

431
00:33:55,661 --> 00:34:00,741
mobile phone was invented are just staggering when you think about it that how much the prices

432
00:34:00,741 --> 00:34:06,741
should have fallen it should have fallen if if you if you denominate in bitcoin you can sort of

433
00:34:06,741 --> 00:34:12,261
see this reality that oil prices are dropping extremely fast and faster and faster each year

434
00:34:12,261 --> 00:34:19,161
uh with fiat it's the opposite way uh it's the other way around they have to print faster and

435
00:34:19,161 --> 00:34:25,401
faster to keep up with the technological advancements and add to that just simply the

436
00:34:25,401 --> 00:34:32,201
fact that uh that there's never enough money around to pay off the debts so the debts needs to

437
00:34:32,201 --> 00:34:33,601
to grow exponentially.

438
00:34:35,801 --> 00:34:38,821
That is the conclusion of this always up point.

439
00:34:39,341 --> 00:34:45,881
The always up point is just being honest about how destructive fiat currencies are

440
00:34:45,881 --> 00:34:49,361
and how vastly different Bitcoin is.

441
00:34:50,041 --> 00:34:52,801
So there is such a point at somewhere in the future.

442
00:34:53,621 --> 00:34:53,961
Definitely.

443
00:34:54,341 --> 00:34:57,181
And well, let's see how far away we are from that.

444
00:34:57,421 --> 00:34:59,301
It might be in our lifetimes.

445
00:34:59,421 --> 00:35:00,201
It might not be.

446
00:35:00,201 --> 00:35:05,081
But regardless, it's good to look at what these natural conclusions are.

447
00:35:05,541 --> 00:35:09,621
I think we should finish off the chapter so that we can round off the discussion.

448
00:35:10,321 --> 00:35:10,561
Yep.

449
00:35:11,981 --> 00:35:22,281
Absolute scarcity means that one day there will only be 0.00000001 Bitcoin, or one Satoshi, left in circulation.

450
00:35:23,241 --> 00:35:27,621
This Satoshi will probably be worth more than an original painting by Leonardo da Vinci,

451
00:35:28,141 --> 00:35:31,521
of which there are about 13 left today at this point in time.

452
00:35:32,201 --> 00:35:35,461
It will simply be immeasurably valuable as a collectible.

453
00:35:36,201 --> 00:35:37,601
Not for sale at any price.

454
00:35:38,641 --> 00:35:41,801
The always up point would theoretically happen a long time before this.

455
00:35:42,681 --> 00:35:45,341
Sometime between now and when all of the Bitcoin is lost,

456
00:35:45,681 --> 00:35:50,701
there's a tipping point where it becomes pointless to talk about Bitcoin's price in dollars, euros, or yuan.

457
00:35:50,701 --> 00:35:57,061
but the always up point would precede that event too. These two points may be closer to each other

458
00:35:57,061 --> 00:36:02,241
than they are to the present, or the point where there is no Bitcoin left, but no one can know for

459
00:36:02,241 --> 00:36:07,921
sure how far off or close these two points really are. The always up point may sound like total

460
00:36:07,921 --> 00:36:11,661
science fiction, but try to think about these things without coming to these conclusions

461
00:36:11,661 --> 00:36:17,621
eventually. I bet you can't. There is, of course, always the possibility that Bitcoin may fail for

462
00:36:17,621 --> 00:36:22,601
one reason or another but if it doesn't fail these events are bound to happen and are not fictional

463
00:36:22,601 --> 00:36:29,121
at all yeah so again some interesting thought experiments and uh definitely the the point where

464
00:36:29,121 --> 00:36:34,981
there's only one satoshi left is very science fictiony but yeah yeah uh well at some point

465
00:36:34,981 --> 00:36:41,321
there will only be one satoshi left to move like it it will it will have to play out that way

466
00:36:41,321 --> 00:36:47,421
since once a private key is lost, you cannot get it back.

467
00:36:47,421 --> 00:36:49,681
And all of them will be lost at some point.

468
00:36:50,821 --> 00:36:54,721
Then again, you could say that maybe that point doesn't precede, you know,

469
00:36:54,781 --> 00:37:00,601
the earth melting because the sun expands and we need to colonize the stars

470
00:37:00,601 --> 00:37:03,881
and we couldn't take Bitcoin with us because of the hash horizon and stuff like that.

471
00:37:03,961 --> 00:37:08,661
But still, it's a funny thought experiment regardless.

472
00:37:08,661 --> 00:37:28,221
I think this also ties into the sailor thesis that the most altruistic thing you can do is die with your Bitcoins so that no one else gets access to them and thereby you increase the scarcity, rising every other boat with the scarcity tide, so to speak.

473
00:37:28,221 --> 00:37:31,081
and I've been thinking about that

474
00:37:31,081 --> 00:37:32,181
here in San Salvador

475
00:37:32,181 --> 00:37:35,401
we had a great deep discussion about it

476
00:37:35,401 --> 00:37:36,361
after too many beers

477
00:37:36,361 --> 00:37:38,681
with a couple of other Bitcoiners

478
00:37:38,681 --> 00:37:39,321
and that is

479
00:37:39,321 --> 00:37:41,421
what's

480
00:37:41,421 --> 00:37:44,921
because the thing that's left out of that argument

481
00:37:44,921 --> 00:37:47,041
is that the entire economy

482
00:37:47,041 --> 00:37:49,341
would have one less player in it

483
00:37:49,341 --> 00:37:51,401
and having more players in it

484
00:37:51,401 --> 00:37:52,161
is valuable

485
00:37:52,161 --> 00:37:53,861
because of Matt Calls Law

486
00:37:53,861 --> 00:37:55,941
if money is nothing but communication

487
00:37:55,941 --> 00:38:00,561
that means money is a communications network, which means that the value of the communications

488
00:38:00,561 --> 00:38:07,961
network is equal to its number of users squared. So this user at the margin and his value would

489
00:38:07,961 --> 00:38:14,461
have to be greater than the value of the coins lost in relation to the total supply,

490
00:38:15,021 --> 00:38:20,441
which is also highly theoretical and of course unquantifiable because you don't know how much

491
00:38:20,441 --> 00:38:26,021
value another player brings because you don't know how useful that player is in terms of

492
00:38:26,021 --> 00:38:33,141
actually adding more economic value to the entire pie but you can know that if all bitcoiners died

493
00:38:33,141 --> 00:38:38,801
with their bitcoins in their heads there would be no people left to to give the last remaining

494
00:38:38,801 --> 00:38:44,201
if there's only one bitcoiner left uh the satoshis are worthless because there's no one to trade

495
00:38:44,201 --> 00:38:48,421
there's nothing to do with them you can't eat them you can't build a house with them

496
00:38:48,421 --> 00:39:01,121
All you can do is use them for trading. So you need other participants. So there's a curve there somewhere. I'm not entirely sure what it looks like. It's probably something like the Laffer curve or something.

497
00:39:01,121 --> 00:39:07,861
where if no one, well, I guess if no one ever died with their Bitcoins,

498
00:39:07,961 --> 00:39:09,721
that doesn't matter because they're still capped.

499
00:39:09,841 --> 00:39:13,141
But there's something to you not dying with your Bitcoins.

500
00:39:13,821 --> 00:39:19,521
HODLers of last resort, the network growing as opposed to the network not growing.

501
00:39:20,101 --> 00:39:25,521
Utility at the margin squared since you're another user of a communications network.

502
00:39:25,881 --> 00:39:29,481
Yeah, there's a lot of brain farts to explore here if you want to.

503
00:39:29,481 --> 00:39:33,801
Well, if you die, you're no longer a part of the communications network anyway.

504
00:39:33,801 --> 00:39:34,521
No, that's the point.

505
00:39:34,521 --> 00:39:40,801
It's just a case of whether you've given your Bitcoins, if you have increased the adoption

506
00:39:40,801 --> 00:39:47,181
of Bitcoin over your lifetime, you dying hasn't decreased the efficiency of the network.

507
00:39:47,181 --> 00:39:48,941
That would be my counter to that.

508
00:39:48,941 --> 00:39:54,361
So, what's the difference between dying and hodling forever?

509
00:39:54,361 --> 00:39:56,421
Well, there we go.

510
00:39:56,421 --> 00:39:58,721
I think that's sort of, you've answered that.

511
00:39:58,721 --> 00:40:00,921
if you are interesting,

512
00:40:01,081 --> 00:40:01,821
get hodling forever.

513
00:40:02,021 --> 00:40:02,381
So therefore,

514
00:40:02,781 --> 00:40:04,981
this is too complicated

515
00:40:04,981 --> 00:40:06,281
and extremely out there

516
00:40:06,281 --> 00:40:08,161
and maybe not so useful.

517
00:40:08,541 --> 00:40:09,581
The only other point

518
00:40:09,581 --> 00:40:11,481
that I would want to make here

519
00:40:11,481 --> 00:40:12,881
is that I think the point

520
00:40:12,881 --> 00:40:13,681
of there only being

521
00:40:13,681 --> 00:40:15,181
one Satoshi left in circulation

522
00:40:15,181 --> 00:40:17,181
is probably when we're post money.

523
00:40:17,541 --> 00:40:18,661
As in when Bitcoin

524
00:40:18,661 --> 00:40:19,661
is no longer relevant,

525
00:40:19,781 --> 00:40:20,961
there's no such thing as scarcity.

526
00:40:21,381 --> 00:40:22,021
It's possible.

527
00:40:22,961 --> 00:40:24,321
Very, very science fiction.

528
00:40:24,581 --> 00:40:25,621
But I would suggest

529
00:40:25,621 --> 00:40:27,421
that that would be the scenario.

530
00:40:27,421 --> 00:40:42,721
If you happen to like thought fart experiments like this, I recommend all of my other books, especially the one I wrote together with Luke, Bitcoin Inverse of Clown World, because there is where we really do deep dives on all of these thought farty things.

531
00:40:42,721 --> 00:40:45,281
I happen to like

532
00:40:45,281 --> 00:40:48,501
the mental

533
00:40:48,501 --> 00:40:52,621
gymnastics for lack of a better word

534
00:40:52,621 --> 00:40:55,001
like using mental gymnastics to

535
00:40:55,001 --> 00:40:58,141
exercise the brain, that's what it is

536
00:40:58,141 --> 00:41:00,101
more than anything tangible

537
00:41:00,101 --> 00:41:03,641
the always up point is

538
00:41:03,641 --> 00:41:07,721
sort of the other point of this chapter

539
00:41:07,721 --> 00:41:11,181
but the main point is the one shot principle

540
00:41:11,181 --> 00:41:17,141
If there's anything that I wish you as the reader would remember from this chapter, it's definitely the one-shot principle.

541
00:41:17,521 --> 00:41:19,841
And don't worry too much about the always-up point.

542
00:41:20,781 --> 00:41:21,041
Very good.

543
00:41:21,161 --> 00:41:24,181
And I think with that, that's a good summary of this chapter.

544
00:41:24,301 --> 00:41:31,101
The one-shot principle is very good and a very good concept, I think, for Bitcoiners to grasp.

545
00:41:31,941 --> 00:41:36,261
And with that, I think we can now say that this has been the Bitcoin Infinity Academy.

546
00:41:36,781 --> 00:41:37,741
Thank you for listening.

547
00:41:38,921 --> 00:41:39,261
Bye-bye.

548
00:41:41,181 --> 00:42:11,161
Thank you.