➡ The Canadian Prepper talks about how the current financial system, which is based on debt, is unsustainable and could lead to a major economic crisis. Bitcoin, a digital currency, is presented as a potential solution due to its decentralized nature and resilience to disruptions. However, in a disaster scenario where electricity and internet are unavailable, survival essentials like food and water become more important than any form of money. Despite these concerns, Bitcoin’s potential to function in a post-collapse world is being explored, with developments like offline transactions and global distribution of data nodes.

➡ Bitcoin, a digital currency, was created after the 2008 financial crisis as a response to the flawed financial system. Unlike other cryptocurrencies, Bitcoin operates on a ‘proof of work’ system, which means that the amount of Bitcoin you own doesn’t give you more control over the system. Despite criticisms and attempts to change the network, Bitcoin has proven to be resilient and decentralized, making it difficult for any single entity to control it. There are theories about the origin of Bitcoin, with some suggesting it could be a creation of intelligence agencies, but these remain unproven.

➡ Satoshi Nakamoto, the creator of Bitcoin, has a million bitcoins that haven’t been moved in about 12 years. He handed over the control of the Bitcoin network to Hal Finney, one of the early Bitcoin developers. Bitcoin was created as a trustless alternative to the traditional financial system, where transactions can be made without needing to trust a central entity.
However, while Bitcoin transactions can be tracked, the identity of the person making the transaction is not directly linked to their Bitcoin address, providing a level of anonymity.

➡ Bitcoin’s system is highly secure and decentralized, making it slow but hard to break. Speeding it up would mean sacrificing either its security or decentralization. Bitcoin uses a military-grade encryption algorithm, SHA256, which is incredibly secure and requires immense resources to break. Despite potential threats from quantum computers, Bitcoin’s network effect and its decentralized issuance make it resilient and difficult to control, even for large stakeholders.

➡ The article discusses the potential issues with Bitcoin’s wealth concentration, as a small number of people own a large portion of the cryptocurrency. It suggests that this could lead to a system where wealth is even more concentrated than in the current fiat system. However, the article also points out that Bitcoin’s decentralized and deflationary nature could be beneficial, as it prevents anyone from arbitrarily changing the rules. The article concludes by suggesting that Bitcoin is still in its early stages and could potentially become a widely used form of money in the future.

➡ The speaker discusses the volatility of Bitcoin and compares it to gold, stating that Bitcoin’s price fluctuations will decrease over time, similar to gold. They argue that Bitcoin is a valuable asset due to its unique properties and potential as a future form of money. However, they acknowledge that Bitcoin’s volatility and potential for profit discourage people from using it as a regular currency. The speaker also addresses concerns about the ethics of profiting from Bitcoin, arguing that the Bitcoin network, like cybersecurity, is a valuable intangible asset.

➡ Bitcoin is a system outside of traditional finance that allows transactions even if traditional money is frozen. However, if companies like Amazon only accept traditional money, Bitcoin might seem useless. But, even if the government tries to enforce only using traditional money, Bitcoin can still be used for peer-to-peer transactions. Despite potential obstacles, Bitcoin is seen as the best option for a sound money system compared to gold or silver, especially for small transactions.

➡ The text discusses the impact of inflation and deflation on an economy. It suggests that a deflationary economy, where the value of money increases over time, can lead to increased wealth and living standards for the middle class. However, in an inflationary economy, like the current fiat system, prices continually rise, discouraging saving and encouraging debt
and speculation. The text argues that Bitcoin, being deflationary, could be a more sustainable monetary system in the long run. It also discusses the challenges of adopting Bitcoin, including the need for technical knowledge and the trust issues with exchanges. The text concludes by suggesting that Bitcoin could be a useful tool for moving money between countries and evading centralized monetary systems.

➡ The text discusses the potential of Bitcoin as a new global reserve currency, highlighting its decentralized nature and resilience in a post-collapse scenario. It also mentions the possibility of transacting Bitcoin without the internet, using a radio mesh network. The text further delves into the current economic system, suggesting that it’s becoming increasingly reliant on covert monetary easing mechanisms, which could lead to more debt and money printing.

➡ The speaker was convinced by a podcast about Bitcoin, finding it more persuasive than previous discussions. He plans to revisit his views on Bitcoin and suggests a debate on his channel between the podcast host and Peter Schiff. He also encourages his audience to check out The Peruvian Bull YouTube channel and his own website for survival gear.

An exponentially increasing system is unsustainable by definition. The current fiat system as exists the debt is linked to the money. You cannot price out the entire middle class from a good life and expect the system to survive. It’s just not possible. There is no completely perfect system. But Bitcoin is the best shot we have at a sound money system. Let’s say there’s a grid down scenario. You don’t have electricity in your home anymore. In order for the bitcoin network to go down, it’s actually a lot harder than most people realize. There’s nodes in the Siberian tundra in Russia, there’s nodes in space, and there are also nodes stored in Faraday cages.

The only realistic way in which the bitcoin network could actually go down would be something like a worldwide emp. If there is a global solar flare or if there’s a nuclear war. My concerns are going to be bigger than my bitcoin holdings. The money supply is going to continue to increase exponentially. The debt supply is going to go up exponentially and that means inflation is going to get worse and worse and worse until people refuse to use it as money. If you don’t own a hedge, if you don’t own something to defend yourself against the inflation, you’re going to be destroyed.

In real terms, both gold and bitcoin I think will play roles in that post collapse scenario in rebuilding society. World War three is already happening. This is a house of cars and it is in the process of collapsing right now. You’re going to see an economic cray the likes of which we’ve never seen. Hi folks, Canadian prepper here today on the channel we’re joined by Roberto Rios, who goes by the moniker Peruvian bull here on YouTube and X. He’s a macro analyst and market commentator and outspoken bitcoin advocate. Now, as a bitcoin skeptic who’s somebody who’s dabbled in bitcoin probably since 2016, you know, I’ve done a swing trade here and there.

I’ve been meaning to get somebody on the channel who could try to convince me that it’s a good idea. As you know, we’ve had many hard asset enthusiasts on the channel, from Lynette Z to, you know, Peter Schiff and many others. Some of our guests like Gerald Celente have talked about, you know, the, the potential benefits of having something like bitcoin and gold. Now as a prepper, obviously we’re concerned about things that are tangible. So food, water, shelter, you know, means of generating electricity. Commodities, tools, tangible goods, things that have a dual purpose. So in the case of a monetary medium like silver or gold, there are actual intrinsic use cases for these things that are useful.

One of those things is gold is used in the computer chips that a lot of bitcoin is, as I jokingly say, printed on. What are your thoughts on crypto? And can you, you know how they say in the Wolf of Wall street, can you sell me this pen? Can you, can you sell my audience on bitcoin today, Roberto? Yeah, absolutely. So, you know, actually I’ve been following your channel for quite a while and I’m, I’m a little bit of an amateur prepper myself. I have a go bag, we have a bunch of water and food at our house.

We live near a well. So we’re, we’re trying to, you know, move in that direction. But I, I totally understand where you’re coming from. And that was actually my starting point as well. I started out as a gold bug, as someone who’s just into, you know, reading Austrian economics, reading Mises, reading Rothbard, and my whole thesis up until about 2020 was gold is physical, gold is tangible. I can actually touch it. It’s been proven as a monetary medium for thousands of years. It’s a store of wealth and it’s an inflation hedge, right? And so this is what’s going to succeed in the next monetary system.

And so I dismissed bitcoin just out of hand. And it wasn’t until 2020 and 2021 when I really started doing more research on how bitcoin works and the actual funct money that I started to understand the arguments for why bitcoin, even in something like a post transition world from the US as a world reserve currency or a post fiat world, right? So the first refrain that, you know, people have is, look, this thing is digital, right? So let’s say there’s a grid down scenario, let’s say there’s an energy blackout throughout the United States and you know, you don’t have electricity in your home anymore.

What is this thing, you know, worth? Well, the first refrain to that is, so in order for the bitcoin network to go down, it’s actually a lot harder than most people realize. The bitcoin network is not exactly like the Internet or any other network you’ve ever been familiarized with. Every other network usually uses centralized nodes, meaning, you know, all the cell towers, all the, you know, server farms. If you shut Those down, like 20 or 30 locations within, let’s say even a single state, the Entire network is down for the whole state. The Bitcoin network uses a decentralized system of nodes and miners, which is distributed globally.

And so that means that as long as you have access to a rudimentary Internet connection, when I mean rudimentary, I mean really rudimentary, you just need like a couple megabits a second of connection. You can even get connection for the Bitcoin network in the Sahara. Then you have access to all the information that’s being broadcast by the nodes. So basically you can see what’s happening with the network and you can make transactions. And that means that the only realistic way in which the Bitcoin network could actually go down would be something like a worldwide emp. So your local disaster scenario, where, let’s say your grid is down in your state, or even say a region of the country like the Pacific Northwest, where I live, that wouldn’t bring down the bitcoin network, even in your area, as long as you’re able to get some sort of signal.

And you can, there’s all these different ways with, with the nodes that you can try to. It boosts your signal to get it, even without a traditional WI FI connection, so it would still be accessible. And there are, I should say as well, there are ways that they’re developing to allow transaction to happen off the chain. Meaning, like you don’t even need an Internet connection. Two phones will store the data. And then once you reconnect to the Internet or reconnect to the bitcoin network, it would all work. But so the first, just for clarification, then you only need one of these nodes that contains the entirety of the ledger for it to remain functional if things come back online.

Exactly. And we have nodes. There’s nodes in the Siberian tundra in Russia. There’s nodes in space. Blockstream is running about a dozen satellites with nodes. There’s nodes basically all over the world. So to stop the record of transactions that is the bitcoin network, you would have to simultaneously shut down every node. And there are also nodes stored in Faraday cages. So that means, let’s say there’s a world, you know, world ending, you know, EMP event where there’s a solar flare, all the grid is down, you know, all electronics are fried. Well, we would have a record of the bitcoin network, and so at least in theory, we could reboot it in the post grid world.

But of course that would require us rebuilding the grid and it would take years and years of, of, of reconstruction of our electrical and you know, industrial systems. But in theory we could, we could, you know, re. I guess, I don’t know what you’d call it. Reanimate, Revive. Right, the system. So really the only way the bitcoin network goes down in a, in a serious fashion is under an extreme scenario. In every other scenario it would still work. And you know, I guess the second refrain that most people would have is, well, you know, how can I use this for transactions? And my, I guess pushback on that would be.

Well, first of all, there’s. There’s lightning network which, which allows you to transact small amounts of bitcoin. But second of all, gold and sil. They are forms of money, obviously. But I would hypothesize that in a grid down scenario, gold and silver would be more worth, you know, they’re worth money once you restart society and once everything kind of goes back to normal in the, in the interim period of like let’s say 12 months where it’s just chaos, what actually matters is food and bullets, not gold or silver or even bitcoin. Really. Like what matters is you surviving and trying to just allow your family to make it to whatever, you know, emerges out of the, out of the chaos.

Yeah, I would actually agree with that because in order for any sort of medium of exchange to be transacted in a post collapse environment, there has to be some marketplace norms that are established. For myself personally, I have a problem with the fact that it emerged right around the financial crisis. It kind of emerged in an environment which is quite questionable and suspect. You have companies like BlackRock who own a significant portion of it. 90% of all the bitcoin in existence has been mined, which means there’s only 10% left to be had by the remainder of the population.

And I presume that 99 of people don’t own any bitcoin. So what would you say about the possibility then of this being used as a mechanism to further concentrate wealth and power in the hands of very few amounts of people. That’s a really good criticism. And you know, that was one of my, also my initial, you know, I guess sticking points with, with the entire, you know, thesis and ideology behind bitcoin. But what I would say is, you know, first of all, you’re right. Bitcoin emerged in the aftermath of the 2008 financial crisis. Right. The white paper was published like August or October 1, 2008.

And the first nodes and first broadcast of the network was in January of 2009. And the entire genesis of the bitcoin network was kind of a, you call it like a cypherpunk outlay of the Occupy Wall street movement. It was anger against the system. Our current fiat financial system is broken. I think everyone knows that. There’s infinite money printing by the Fed, there’s infinite debt borrowing by the Treasury. We’re seeing huge hu debt loads and interest expense right now being undertaken by the US Government. This, this most recent bill obviously just accelerates that. And so we’ve seen the infinite bailouts, we’ve seen the absolute destruction of, you know, of Main street wealth that has gone on.

And, you know, a lot of people said, well, this Bitcoin thing is just like an idealistic idea of what the next financial system should be, but it’s not practical. And I would say that’s actually incorrect. So first of all, Bitcoin functions on something called a proof of work system. So this system is completely different than any other type of financial system we’ve had before. If you look at Ethereum, if you look at Cardano, if you look at any of these other crypto coins, about 95% of them are what is called proof of stake. And in a proof of stake system, the, the way that you validate a transaction is basically there’s like a giant vote on which transactions are valid, right? And whichever node has the most Ethereum or the most Cardano or whatever the coin is, gets the most votes in the system.

But what that means is that the wealthiest people already get to influence the future of the system, meaning they get the votes to say who can transact and who cannot. And so that is a reflection of the system that we already have in fiat. We already have a system where the people in power have the most voting power to maintain and sustain the current system. Bitcoin is different because bitcoin works on something called proof of work, which means every computer has to essentially do a very hard guessing game in order to solve the problem that verifies the block.

And there’s no way around it. It does not matter how much Bitcoin anyone owns, it does not equate to control over the system because they separated the ability to, you know, let’s say, create or mine Bitcoin. So the issuance schedule and the actual ownership of it. So owning, if I own a million Bitcoin, I can’t influence the system any more than if I own 10 bitcoin. And this is the first time a financial system has properly done this in a decentralized, right, very, very robust way where it would be very hard for Someone to break the system.

And many government. We’ve seen government pushback on, even on bitcoin. And it’s proven to be something called antifragile, which is a term coined by Nicholas Taleb, which basically refers to systems that get stronger with testing. So your immune system, right, Things like that. The more you test it, the more you lift weights, the stronger your muscles get. When bitcoin was banned in 2021 in China, they destroyed the mining industry. They started arresting people and thousands of people left China and obvious, obviously hundreds of millions of dollars of mining equipment left with them. And we saw the hash power, which is the total computation exerted every single day on the network fall by like 45%.

And a lot of people said the bitcoin network is over. Look, here’s the government coming after it. The Chinese companies party, they’re very powerful. And they were right. The hash power reduced for a couple months and within a couple months by the end of that summer. So it was like, you know, August, September of 2021, three months later, the, the hash power was recovering. And within like four or five months it was already back to all time highs. And so what that told me is that the network is actually, it’s like a hydra. Every time you clamp down on one area of it that’s gotten a little bit centralized, it just scatters and decentralizes itself even more.

And so BlackRock owning, you know, they own like 4% or something with their ETFs. Michael Saylor owns about 4%. He owns, I think there are over 600,000 Bitcoin now. So they own a good sizable portion. You know, they can try to influence public miners, they can try to influence some nodes, but it’s really much more difficult to change the network than most people realize. And the, I guess you could say like the vulnerability in bitcoin was much, much greater back in the early days. So 2011, 2012, 2013, when Bitcoin was still nascent, when it was still small, when the number of nodes was a couple hundred and not 15,000 or 20,000 like it is today, it was much easier to change the network.

And that’s evidence in, in the block size wars. So in 2014, 2015, there were a bunch of proposals to change bitcoin, right? So people inside bitcoin said, look, bitcoin can only handle three transactions a second. If we want this to be global money, that is way too slow. Visa does 60,000 transactions a second. There’s no way this will work. And the small Those were the large blockers. The small blockers said, no, we need to keep it small because it needs. We need to keep it compact enough that each node, or like, you know, individual retail people can run nodes on their.

At their house, or they can run small mining rigs at their house. And if you make the transaction size for each block bigger, then that means that it’s going to take way more storage. And then only rich people will be able to run nodes. And then that will centralize the network. We don’t want to centralize it in the hands of. Of the wealthy. And so they had a. They had a fight, right? And they had a proposal to change the size of the bitcoin network. They had like 80% of the nodes agreeing to try to change it wasn’t enough.

You need something like 95 or 98%. You need it. I wouldn’t even call it like a super majority. You need like a hyper majority to change it. So the large blockers lost. They spent millions of dollars and three years trying to change the bitcoin network to large blocks, and they failed. And that showed the resilience of the bitcoin network and staying true to the ethos of we are going to keep. We’re going to be like gold. We’re not here to be the next Cardano, the next Ethereum, we’re here to be gold. And gold means unchanging. And so that means we’re not going to change the block size of the network.

We’re not going to change how the nodes operate. We’re not going to change any of this. And anything we do would require 95% consensus. And obviously, since so few things in the real world reach 95% percent consensus, that means basically nothing ever changes in the bitcoin network. And so it’s defended a couple of these attacks already. And, you know, it’s. It exhibits these features, like I said, of. Of decentralized system where any individual, any single person has an incredibly strong time at cracking it. And, you know, one of my other arguments to. To get rebutt and finalize.

What I’m saying here is if the NSA could have broken this or if the CIA could have broken this, they should have done it in 2011, they should have done 2012. And if they can do it today, then why haven’t they done it yet? So what are your thoughts on the origin, though, of. Of this thing? Do you think that this Satoshi Nakamoto character was a real guy, or was it. A lot of people suspect that perhaps this was some creation by. By the agencies that you mentioned in order to perhaps deflect attention away from, you know, the things that central banks are buying.

Yeah. So that’s. That’s another actually, I think, valid conspiracy theory because. Right. Satoshi Nakamoto in Japanese means central intelligence. And so it really either be. I didn’t know that. Yeah. Yeah. Okay. So. So it. Yeah, it could be. It could be a. Not decentral intelligence, but central intelligence. Yeah. Yeah. Not decentralized intelligence. No. You think they would. Would have, you know, gone a little step further to. No, absolutely. Yeah, absolutely. Yeah. Look, it’s Whoever. So Satoshi Nakamoto, right. He was posting in cypherpunk forums for years before this. This happened. Which again, if it makes sense, either if he’s a cypherpunk and a libertarian or if he’s a, you know, working for an intelligence agency, either could be plausible.

And he does have 1 million Bitcoin. Correct. Or he does. He does have a million bitcoin. Yeah, he has a huge amount, but it hasn’t moved in about like 12 years. Hasn’t moved since like 2013 or something like that. And even people even theorize that he’s dead. Right. Because. So his last few transmissions on. On this forum was basically like he was handing over the keys, basically letting Hal Finney run the. The network because he was stepping back and saying that he was going to go work on other projects. Who’s Hal Finney? What is that? Hal Finney is one of the, I would say, core bitcoin developers in the early days.

And he was running some of the first nodes and miners in the. In like 2010, 2011 timeframe. Yeah. And so he also like, does Blackrock or do some of these companies, do they do their own mining? There are. So I don’t know if blackrock does mining. I do know that blackrock has invested in. In publicly traded miners. Again, remember, like when you own a miner, what you’re really owning is like a future income stream of bitcoin. It doesn’t relate to control or power over the network because even if the miners have a proposal, it’s the nodes who verify transactions.

So just like how the US Government has a system of checks and balances, the network itself has a system of checks and balances. So the miners might want to up the fees, but they can’t because the nodes will disagree with them, because the nodes don’t want to make the network more expensive because then no one will use it. So BlackRock, I don’t. I Don’t know if they directly own miners, but I do know that they invest in them. There’s a lot of public companies that invest in miners. But this whole, you’re right, this whole origin, it, it came out of the depth of the 2008 financial crisis and this like, I guess, populist blowback against the establishment.

Right. One of the founding paragraphs in the, in the Bitcoin white paper was basically describing that the fiat financial system is broken and that the money was based on trust and that the central bankers had betrayed our trust. And so that’s why we need what, what Satoshi called the trustless alternative. Right. Something where you don’t have a centralized counterparty, where if I’m going to send Canadian prepper some money, I don’t need to trust JP Morgan, I don’t need to trust hsbc. I can just trust the network. I can not even trust the network. I just send it out to the network and people bid on it.

People try to compete for my transaction. The miners work and expend energy because they want the reward. And because of this decentralized system, there’s no single entity that I have to trust to get my net by my message across. And that made the whole, I guess, ethos and culture of the, of the bitcoin community very libertarian in the early days and still retained its, its libertarian bent. And as to its, you know, actual, I guess, like you said, control of, from the CIA, the, the way it’s designed, like I said, is no single entity could even control it if they wanted to.

So if the CIA did invent this, then they don’t have, they don’t necessarily have direct control over it today, especially at the size that it is today. Like I said, there’s nodes in space, there’s nodes in the Arctic, there’s nodes all over South America, Africa. That is all great stuff. But they do obviously have a, now have a record, this ledger of every transaction that has been made, which for somebody who wanted to kind of control a society, that would be something that would be very useful for them. One would suspect that the ability to track every single transaction going back to the beginning of the creation, the inception of the currency.

Yeah, absolutely. So you’re right. Bitcoin is not, we call it, it’s not anonymous, it’s pseudonymous. So each, each address, you can track all the transactions as the nature of a decentralized ledger. All the transactions of everyone is broadcast to everybody else. But what, what the identifier that links me to that address is you know, the address is just a string of numbers and characters. So it’s o, X, a B4 24 and then yours would be a 2735 4. And so there’s no direct way to know which person is correlated with which, with which address. Now that they’ve been trying to change that with the KYC laws, they’ve been doing, you know, initiatives with the exchanges to make them register a kyc.

So if you buy bitcoin on an exchange, they absolutely do know you own that address and they absolutely can track your Bitcoin. Which is why tools like coin joined or mixers are so important. Because you can go and take your bitcoin and you can put it in this basically like a Tumblr. It, it washes all your coins with everyone else’s coins and then it pops it out at a new address and then they can’t track who owns which and then they don’t know, you know, which address is yours. And so that breaks the chain of, of following it.

But you are right, it is a trackable system, especially if you use the exchanges or the banks or any other traditional financial medium to on ramp yourself into Bitcoin. And that’s a danger. Right. I’ve long advocated for people to not use KYC solutions and if people want to know about it, there’s a couple of resources online that you can find to non KYC or Bitcoin because it is a big concern of the community. Yeah, I, I was, you know, I was first exposed to Bitcoin in 2008 and it kind of, I, I always get suspicious when something becomes popular for some reason.

Like the Bitcoin algorithm could theoretically be replicated and you could call it something else. Right. Where unlike gold, there’s a real, there’s a finite amount of this stuff. You can’t just, you know, claim that copper is gold one day, although a lot of people would like that, unfortunately can’t do that. Whereas you could theoretically just replicate the, the Bitcoin algorithm and, and popularize a new, you know, version of bitcoin, maybe something that is even more efficient. You know, I still have a, an issue with the fact that it, when it emerged, it kind of, it was immediately, you know, it was, it was viewed by the mainstream media as obviously they were talking about it, you know, and you only, you only get that if they want to kind of call attention to something, if there is a intention of popularizing and making it seem, you know, you want people to do something, you know, tell them they shouldn’t do it.

And it was kind of like they were promoting it in that sort of way. Couldn’t bitcoin just be replicated as something else? And, and why should people believe that it’s going to endure and it’s always going to be sought after when it could be replaced by something better in the future? That’s a good question. And I’d say that. So there’s already been several attempts to do that. Right? So we already talked about the block size wars. In the wake of the block size wars, there were several other. Because what happened with the block size wars is that the large blockers, the people who wanted more transactions on the network but that would mean more centralization, they lost.

But in order to claim a victory, they forked the chain. So they essentially did what you said. They created a copy of the Bitcoin algorithm. Then they changed a couple of the parameters. So they said, okay, we’re going to allow, the nodes are going to do double the transaction throughput as before. So the nodes, there’ll be fewer nodes, but because they’ll be way more expensive and way bigger, but we’ll be able to support more transactions. And so they forked into their own coin. And then there were a couple other forks. So we have Bitcoin Satoshi’s vision, we have bitcoin cash and there’s also something called bitcoin gold actually.

And so there’s three clones now of bitcoin and all three have basically collapsed to zero in, in relation to bitcoin. So bitcoin cash is I think at like $400 a coin right now and bitcoin’s at a hundred thousand dollars. And so that just shows you like the market for bitcoin classic, like the original Bitcoin is much, much greater. And the reason why again is because in, in a decentralized system there are trade offs that you cannot get around. And so this is called the blockchain trilemma. So you have, you know, imagine a triangle and imagine three corners, you have decentralization, you have security and then you have transaction speed.

And so if you choose two of them, you get rid of one of them. So if you choose decentralized and security, so you want a super secure system, it takes a long time to verify transactions and the nodes are distributed everywhere. So it’s very, very hard to break. Then it’ll be a low, it’ll be a slow system because that’s the nature of how this system has to work. And if you want to be very fast, well Then you have to either give up decentralization or security. And most people will give up the decentralization. So I always tell people like the fastest systems in the world like Visa are very centralized, right? Visa has just like two or three server farms stored in locations in the U.S.

and if you knock down those server farms, all the entire VISA network will be gone. And so of course they’re you know, highly guarded, they’re secret, they have tons of security there. But if those things were knocked down or if there’s a grid down scenario, it would be done. You’d be fried. Right? And so anything, anyone that tries to shift the Bitcoin network will invariably end up losing one of those qualities, like I said. So if you go for speed, you’ll lose decentralization or security. If you go for, let’s say you try to go for more security, well then you have to give up more on speed or on decentralization, right? It’s just how it works.

And Bitcoin itself is already incredibly secure because it uses something called the SHA256 algorithm, which is actually military grade encryption. And so to break it, which SHA 256 so far has not been broken, knock on wood, it would require an insane amount of compute power and an insane amount of resources and money to try to destroy the system. And then even if it did, that fork that you talked about is like a negative, which you’re right, people could try to create copies of it and they have, but there’s always trade offs. You could fork it positively.

So let’s say Bitcoin was broken. Let’s say they break the SHA256 algorithm which everyone’s talking about with quantum, let’s say, well, with quantum computers this really, really strong encryption will finally be broken. Okay, they break it, they could fork the chain and create a new encryption algorithm that’s actually pro quantum, that’s made by quantum computer. And then they could just run on that encryption. And so now you’d have quantum computers defending the chain as well as attacking it. So it would equalize, right? The, the security. And so things like that, that are more I guess in depth, nuanced takes but they, they illustrate like this, this intense resiliency, you know.

And Bitcoin also has something called the network effect, which I’m sure you’re away aware of it. It, the stronger and stronger the network gets, the more and more reason people have to stay in it. That’s the reason why the dollar has had a staying power for so long. The Reason why Facebook is so big. You know, if I went out tomorrow, I could copy the Facebook code base and I could try to make a Facebook clone. But how many people would use it? Not many, because why not many people are already there. So systems, these, this complex have this inherent, I guess you call feedback loop, flywheel effect that you need to get started in order to get going, if that makes sense.

And that is true. And bitcoin has already gotten started, so these other, these other coins would be starting at ground zero. I mean, that said, you still do have companies emerge in an environment where you have things like a Facebook. Like you had Snapchat emerge and start to become popular. You had MySpace used to be, you know, one of the biggest social media platforms. In my mind, if you were to do this transition to a decentralized, fair currency, it would almost have to happen in mass, where everybody had kind of like an equal opportunity to convert their existing wealth into that digital currency.

You know, we’re seeing the, the increasing concentration of wealth and there is that Pareto principle where the more wealth you have, the more you make. Right. So we’re seeing that reach a breaking point in society. And that is now just being replicated in the bitcoin network. And I would say almost to an extent, which is even more extreme because you have BlackRock owning 4% of the entire network, which some people are saying is going to replace money. Well, if that’s true, then there’s only 10% left for the rest of the planet. Well, so I, I see your points.

One thing I’ll try to parse part your, you know, question. Long winded diatribe. Yeah, so first off, you mentioned, okay, we could do a more advanced, decentralized system where people just convert their current fiat holdings into the next money. And I would say, how is that not a continuation of our fiat system? Because in that scenario, all the wealthy people who are billionaires will own disproportionate amounts of the next network. And bitcoin was trying to initially solve this problem because the only way you could own bitcoin was by mining it or by getting it sent to you.

So the nature of the network is decentralized issuance. So I don’t have control over a centralized node where I can issue bitcoin and then send it to you because you’re my friend or because I like you, I can’t, you know, control a centralized money printer like the Federal Reserve can, and send money to the defense manufacturers and to, you know, the healthcare companies and to insurance Giants like I, I don’t have that ability anymore because it’s a decentrally issued system. And in that you’re any system, there will be wealth concentration. That’s the nature of economics. Even though people don’t like to admit it.

The printer distribution is actually much more widely, I guess you could say, even distributed or widely seen throughout the universe, really, even in the size of stars, the size of black holes, the height of trees in the Amazon rainforest. These feedback loops will work in the real world to, to propel certain things higher and drag other things lower. And you could even say that’s why gold was successful for so long. Gold had intrinsic properties that gave it an advantage. And once it had enough of an advantage over silver and copper, it just raced ahead. And nothing was ever, no other currency was truly ever used really as a reserve currency, except for gold.

Silver was intermittently, but gold was the standard for centuries. And so when you look at bitcoin again and you think about the future attacks, any future attack would have to compromise in some way. We already have a decentralized issue system. You’re right, we do have new wealthy people in this system. A few of them are old players like BlackRock or State street, but most of them are completely new people. There are people, individuals who own, like Michael Saylor, who owns a huge chunk of the network. There are tons and tons of, I guess you call them retail investors who bought Bitcoin in 2010.

Now they own 10,000 coins or 20,000 coins, which proportionally is much more than they would own in the current fiat system. And so yes, there will still be wealth, but the wealth will be differently distributed. And the benefit of bitcoin, and the true selling point is that your ownership of the network does not equate to control in the current system. They could. Theoretically, though, if I’m a person who owns all this bitcoin and I have billions of dollars, I could go, and I’m in a better position to go and start mining Bitcoin in the nether regions of the, the Arctic or the Siberian tundra than somebody who doesn’t, you know, somebody who’s just mining it on their, you know, computer at night while they sleep.

The more money you have, the easier it is for you to mine bitcoin at scale. That’s fair. That’s fair. And, you know, I even heard the refrain, which is probably similar to your argument is if you had a ton of Bitcoin, you could buy off a bunch of the nodes, right? You could try to buy off the miners pay to not verify these other people’s transactions or pay people to vote with you when there’s a bitcoin network proposal. And that’s fair. You like again, Bitcoin does not mean all corruption in the world is gone. It does not mean all wars will never happen again.

It doesn’t mean that. It just means it’s much, much more difficult to do those things. And I guess the argument I would use to push back on that is, so, you know, let’s say somebody got major, you know, significant control over the network. Let’s say they, let’s say BlackRock controls a bunch of the nodes. What are they going to realistically do to the network if they try to inflate the supply? That lowers the value of bitcoin, which they own. So they’re a huge stakeholder in that. If they try to lower the security that’s their asset, the security of their asset that they’re lowering, anything that harms the network will actually be detrimental to them as well.

And so the irony is, you know, getting some of these large players in the game actually makes bitcoin more secure, especially from someone like something like a nation state attack. Right? The US government is much less likely to attack Bitcoin when BlackRock owns 4% and when Michael Saylor owns 400,000, 500,000 coins. Because now they have wealthy people who have a vested interest in protecting it. And now this isn’t the ethos of bitcoin. Bitcoin was never meant or desiring to move in this direction. It’s just the way that, you know, the cards have been, have been dealt.

But you know, we have to roll with the punches and, and how we take them. And like I said, because of the intrinsic nature of bitcoin, the decentralized aspect, the basically like disinflationary or deflationary aspect of the money supply. I would much rather live in a system where a couple wealthy people do own 10% of the, you know, of the supply of bitcoin, but nobody can print it and nobody can just, just change the rules arbitrarily versus the current system where both of those are possible. Okay, but I think one of the problems is if 90% of the Bitcoin has been mined and a very small fraction, I don’t know how many people actually own bitcoin, but I presume it’s less than 1% of the human population.

I could be wrong about maybe it’s, you know, 2 or 3%, maybe it’s.001%. I don’t know. You play that tape through if you’re, if you believe like some of the bitcoin enthusiasts claim that there’s going to be a, you know, Bitcoin is going to be worth a million dollars. That concentrates wealth to such an extent in the hands of a few people, which, you know, we haven’t even yet seen in the Fiat system. So like, let’s just play that tape through to. Bitcoin is now worth $10 million a, or a million dollars even a coin. So that’s 10x.

What is Michael Saylor’s stake worth right now? I think it’s 50 billion, something like that. 50, 60 billion. Yeah. So we, it’s like 70% of the market cap of this company. So it’s like, yeah, 60 billion. Right. Which is kind of a weird sort of Ponzi thing in and of itself, that whole micro strategies thing. But okay, so we’re talking about half a trillion dollars potentially and you’re going to have all these people who are buying in at those levels which will not have benefited from being these early adopters. They’ll essentially be the bag holders. So if we were to all start off at the same place, you say that that would be some replication of the Fiat based system.

But if you have a situation whereby people are buying into this thing at these higher levels, benefiting the people who bought in earlier disproportionately, that seems to more so replicate the current system, which is, I could see the bitcoin network almost seems like a far more extreme form of, of Pareto wealth concentration than even Fiat was. That’s why some people would put it on top of the Fiat pyramid or the, the monetary pyramid, which of course has gold at the bottom. If it was the case that Maybe there was 90 of the Bitcoin left to mine, I might feel differently about that.

But because there’s so few coins left to mine and so much of it has been concentrated into the hands of, of a very small amount of people so far. Regardless of whether or not they can manipulate that specific network, they could use that money to, you know, control the world in other ways. Right? Yeah, yeah. And okay, so here’s so Michael Sailor, if he is, if he’s worth half a trillion dollars, imagine how many politicians you can buy with half a trillion dollars. That’s true. But none of those politicians can affect change in the bitcoin network in any meaningful way, but they can affect change in society in other ways.

That’s. That is true. That is true. Yeah. It like I said it doesn’t. You know, some bitcoin maximalists will tell you bitcoin solves everything. They say, you know, there won’t be any more corruption, there won’t be any more, you know, bad. Like I’ve seen, I’ve seen this in one of the books at Bitcoin Standard, they said that there won’t be any more bad bosses. And I thought that that was ridiculous. You know, I’m a libertarian. But they’ be absolutely bad bosses. They will be assholes. There will be wars, there will be bad things happening. Drug trade, you know, all these things happening in the world.

Even with a bitcoin standard, it just separates the benefit of the bitcoin standards. It separates money from state. And what I would say to you is that you’re right. So as it currently stands, about 90% has been mined. About two to two and a half million coins are, are lost forever. So those are in hard hardware wallets, in, you know, defunct wallets that no longer have access to. And so those cannot be accessed. And so a large part of the bitcoin is already owned, but the difference is not every one of the network. And this is where the bitcoiners get into internal arguments.

Actually, a lot of people in the network aren’t really in it for, you know, believing that the next monetary medium, they believe that it’s just a number go up technology, right? They just say, this is digital gold. When inflation comes, it’s going to spike super hard and I’m going to sell. And so right now, as you can see on the chart behind you, we’re hovering at about $108,000, $110,000 a coin. And people have been saying, well, why, why isn’t bitcoin higher when, you know, inflation is pretty bad? The Fed is going to start easing especially much harder later this year.

And you know, we’re in this global debt crisis where the federal government is borrowing, you know, trillions and trillions of dollars every year just to keep the lights on. The deficits are growing every single year. Well, the reason why is because there’s actually a lot of people selling right now at $100,000 a coin. So a lot of the OG Bitcoiners want to profit. They want us, they want to go consume. And once you have these people start to consume and they either sell their bitcoin and that drives down the price, which makes it more affordable for everybody, or they go spend their bitcoin in some real way, right? Like let’s say they go To Costa Rica, El Salvador.

They can buy a house for bitcoin in El Salvador. Then the bitcoin now starts to circulate. Because you’re right, as it currently stands, bitcoin is progressing through the three forms of, you know, money or the three, I guess you call it like three factor model of money. Money has to be a store of value, has to be medium of exchange, and then finally unit of account. Now those are just normally listed as three factors that money has to have. But it’s also a roadmap for the timing of how to change something from non money to money.

So gold was the same way. Gold was first a store of value and then became a medium of exchange once they’re able to purify it and standardize it. And then it became a unit of account. Because now you could say, okay, these are official gold coins minted by the treasury. And this is like it takes three gold coins to buy that ship, it takes two gold coins to buy that house. Okay, I understand now it’s a unit of account. I can account do accounting with it. Bitcoin’s still in store value. It’s still really early in this money game.

It it a lot of people will say that it’s money. I’d say actually it’s not. Right now bitcoin is really just inflation hedge asset. Now. It has the potential to become money in the future, but it’s not really used as a monetary medium. And once it starts to overcome things like Gresham’s law, once it starts to overcome things like the price stability that we need to see, basically the bitcoin price has to be frozen at let’s say a million dollars a coin for five years for people to actually start considering to use it as money. Once we see those things start to happen and the volatility dies down and the chaos dies down and just stable, then we can start to see it used as money.

And once it starts to be used as money, then people can earn it rather than buy it just by working. So people with, with bitcoin will go out and spend it. Okay, these are all great arguments and, and honestly this is an excellent conversation. I must say. So far you really know your stuff. But in terms of the volatility, if this is touted as a finite, you know, currency with a finite amount of fixed amount of bitcoins or satoshis and we don’t live in a finite world, we don’t live on a, well, we live on a finite planet.

I suppose we don’t Live in a finite universe, as far as we know, in terms of our exposure to it. The population is growing, people’s. Even if the population starts to decline, people’s desire for stuff is only going to ever increase. Thus you’re drawing from a pool of, a receding pool of satoshis because people are going to keep losing them. So the volatility is always going to seem to be there in a sense that it’s never going to be as reliable. I mean gold, yes, the price of it has increased. And a lot of these criticisms could be levied against gold too, that it’s increased like what, 500, 600% in the last, I don’t know, 20 years or so as a reflection of USD anyways, and, and maybe bitcoin’s volatility range, do you predict that it’s going to start to approximate gold in that respect as moving forward in the long run? Yes, in the long enough timescale.

Because if you look at the original bitcoin cycles, right, you see this volatile like two or three year up cycle and then a crash. And so the first few cycles it went down 95% and then 91% and then 83%. And so we’re seeing like the, the contraction in the overall price level is getting less and less and less over time. But if you extrapolate that out, right, we’re still at like an 80, 83% contraction in the most recent bear market. That means it’ll take, you know, 10 of these cycles another 40 years for Bitcoin to truly be as stable as something like the bond market or gold or something like this.

And the gold also has the advantage of being a much larger asset. Right? Gold has a 16, 17 trillion dollar market cap at current 3534, 3420 now or 20. Okay, so it’s 20 trillion dollar market cap. Bitcoin’s at 2, so it’s 10th of the size. And so that means when you have a smaller market cap, it’s much easier to move the price marginally just because there’s less liquidity, because it’s a smaller market. And so gold, gold still retained. And by the way, like I said, I own gold. I have physical gold, American eagles, I own some silver too.

I’m not saying that you have to be 100% into Bitcoin, a cipher punk, and destroy it, you know, go throw away all your gold. I’m not saying that. I just view this asset as a, another hedge and the fact that it has unique properties make it stand apart from gold and silver, but I still own those two assets. But bitcoin will take a long time to compress the volatility and to make it stable enough for people to want to view it as a monetary medium to spend it. Because the problem is this is paradoxical, right? When bitcoin is going up in price and when it’s being volatile and people making money from trading it, it actually prevents it, it from being used as money.

Because, you know, this is Gresham’s law. Gresham said, he’s a economist, British economist from the 1700s. He said, well, in a bimetallic system where there’s gold and silver, whenever silver is undervalued, you know, people don’t want to spend it, they hoard it because it’s going to go up in value. And whenever silver is overvalued relative to gold, people want to go out and spend it because it’s overvalued. Well, the same thing is true in our fiat system. Fiat is burning at 2% a year, 4% a year. Right. Whatever the real inflation rate is. Would you rather spend bitcoin, which just in last year went from 60,000 to 110, or would you rather spend something that’s deflating at 4% a year? Well, I’d rather spend the currency that’s burning away than spend something that’s going up.

Same with my gold. I don’t want to spend my gold. It’s going to go up. I’ll spend the fiat. And so that means that there’s a, I guess you could say, like systemic force that stops gold and bitcoin from being used as money because just naturally, the participants of the market, you and me, don’t want to spend it logically. And so that’s the hurdle we have to overcome. And I’ve always said, let’s say we want to have a systemic reset between gold and silver or gold and fiat, or bitcoin and fiat. Not only do you need gold going up, up nominally, you also need the.

And like the gold, like, let’s say the gold exchange system and the amount of banks that accept and the amount of merchants that accept it. Same with bitcoin, you need that going up nominally. You also need the current system melting down. So you need to see worse and worse inflation, more and more debt, more and more economic crises, so that not only do people have a carrot to chase for the gains of gold and bitcoin, but they also have a stick that hits them and says, hey, hey, you invested In a bunch of bonds. You’ve been stuck in bonds.

Now they’ve lost 70% of their value and they’re going to lose another 70% in three years. You’re going to be ground down to zero if you don’t switch to gold or bitcoin or do something. And that will be the force that will finally push people into adopting these things as store value and eventually as assets. Does it seem reasonable though, that somebody get rich on a monetary medium? Like, does it seem reasonable that a person who maybe bought, I don’t know, 10 Bitcoin back in 2008 when it was a penny, is now a millionaire? And where did that money come from? Like, it came from other people who, I don’t know, I just have a problem, I suppose, with the fact that nothing is being really created here.

Now, I know bitcoiners will say, well, the network itself is the creation. The proof of work is the creation. But it seems like, let’s say I invest in Apple. Apple is producing phones. They’re producing something that is tangible and usable and improves people’s lives. Whereas bitcoin, okay, you could make the argument that it’s used as a means of transacting and evading, you know, having to. Right, right. And fiat currencies and, and, you know, if I want to jump ship and go to one country to the next and not want to have to move a bunch of money, I could just buy bitcoin and do it that way.

But is there an additional value that, that you would place on this? And, and how do you rationalize, you know, a person getting rich solely on the basis of other people? Because it’s a zero sum game in the sense that, unlike me, investing in an Apple, where wealth is actually generated on the basis of manufacturing goods and innovating new products, you’re just getting rich by other people buying into the, the scheme. Not you personally, but just in general. Sure, sure. So I’ll answer your first question right, which is, you know, you see, like, what is Bitcoin actually producing? Right? What is, what is this network? What does it mean for, you know, for all these miners to be expending hundreds of millions of dollars to build out rigs to pay for energy? And what they are creating is, you’re right.

It’s not a physical object. It’s an intangible, abstract, you know, decentralized computer system that allows for like a monetary medium to be exchanged in a secure, decentralized way. And what that means is that this network is essentially a potential, like I said a potential future money. And so the reason why it’s important is because the same reason why investing in Internet security is important. Like you, you wouldn’t claim to, you know, want to have a non encrypted website or a non encrypted email server because then you could be hacked, then all your information could be leaked.

That’s an abstract concept, IP personal information. That’s an abst concept. And yet we place great value on these things. We’ll pay cybersecurity firms, you know, millions of dollars a year, especially for large companies, to secure your, to secure individuals or secure corporations. Bitcoin, is that for money? Bitcoin is a secured form of, of I would say digital gold that allows somebody to invest, hold and store their wealth in a, in a way that it cannot be taken from them without like literal jackboots breaking down your door and gun to your head. Tell me your Bitcoin seed phrase.

That’s like the only way to, to stop it, right? Doesn’t that happen it. So there’s obviously there’s, there’s people who have been abducted. Yeah, there’s people who have been abducted and been forced to, you know, sell out, shell out their Bitcoin. But when we talk about like especially like a government crackdown, the difference between Bitcoin and like, let’s say Fiat is if, if, if they’re going after Fiat, right? It’s very easy actually for them to, to stop everyone from transacting. They stop the major card issuing companies, they go freeze all the major banks and boom, overnight only, you know, 12 to 15 entities they have to go after.

And then boom, everything is, is frozen. Right. That’s actually what happened in Cyprus. If you look at the 2013 banking crisis there they froze all the bank transactions and they made everyone own, own equity in the bank. And so everyone’s cash got converted to forced first, basically like illiquid equity in a bank. And that is a terrifying, I guess you could say, harbinger of what they could do in a domestic financial crisis. They could just turn all your bank deposits into equity and freeze it. And so Bitcoin is a way, it’s another system that exists outside of the traditional fiat system that allows you to survive even if they do that financial apocalyptic, freeze all the money.

Nobody gets to transact anything. Or a social credit system where, hey, Canadian prepper, you talked about some bad things about the government this week. We don’t like that you said that we’re going to freeze your bank accounts. We’re Going to freeze your YouTube earnings. So Bitcoin allows a, you know, censorship resistant, decentralized, peer to peer way to transact without using the traditional system. And then for your second question, but what if. Okay, just. Sorry to, to interrupt you, but what if everything comes down to someday being determined by Amazon and Amazon is the only company that I can buy stuff from and they say, well, you can’t use your Bitcoin here.

How does that work? You mean? So you’re saying if there’s a monopoly, like a corporate monopoly. Well, which there already kind of is, you know, like, I mean there already is a handful of, of corporations already kind of control stuff stuff. And if I want to buy stuff, I have to buy it either with debit or Visa or MasterCard. I can’t in a lot of cases use Bitcoin. Couldn’t the government just say, well, you can’t buy, you know, you can’t use your Bitcoin to buy stuff. Which is what they did in China, I guess in a way.

Yeah, you’re right, they did, they did ban Bitcoin especially whenever the miners. But they did, they banned most transactions and made it very difficult. So, so that is another good, a good point. I’ve also said that the shutting down the on ramps is another way they could try to attack Bitcoin. But again my refrain to that is if you. Okay, so let’s say they shut down the ability for you to buy goods with bitcoin. With, with bitcoin. Well, I could still buy it with Fiat and then I can sell it to you for Bitcoin. And so on net I would be basically trading my fiat for Bitcoin and you would be sending your Bitcoin to me directly and you would be receiving goods.

So don’t you still need fiat then in that model? Like don’t they make it so that fiat is, is necessary? Like if they’re saying that, you know, Amazon is only going to be permitted to accept fiat currency, then don’t you always need fiat anyways? And I know this is not the fault of bitcoin. This is the fault of like the monopolization of our, you know, the general nature of the Pareto effect of capitalism. But, but so it’s not really Bitcoin’s fault. But what I’m saying is if they can just always make it so that you have to use their currency and sure, you could have this Bitcoin existing at the same time concurrent with that, but then you know, you would always need to go to transfer it back into some kind of currency to use.

Well, so that’s a good point, right? Like they, that’s definitely a sticking part where they could try to enforce dollar hegemony USD hegemony on the people by making it very difficult to transact in Bitcoin. Like I said, peer to peer transactions would still be impossible for them to block. So I could have Bitcoin on a wallet, I could walk to you, I can physically show you, here’s my address, you put it in on your computer, you can send me bitcoin. But the benefit of bitcoin really, and I guess you could say maybe this is the eventual also endgame for the fiat system is that that the current fiat system as exists is unsustainable because the problem is the debt is linked to the money.

They loan new money into existence via debt creation, via either the treasury borrowing money or by commercial banks loaning money into existence. And so that means that in the long run, the money supply expands at a compounding interest rate and the debt supply expands at a compounding interest rate, which is, is by the way, exponential. So an exponentially increasing system is unsustainable by definition. And so the money supply is going to continue to increase exponentially. The debt supply is going to go up exponentially. And that means inflation is going to get worse and worse and worse until people refuse to use it as money.

And when you come into the question of like, can the government have infinite enforceability power? Well, the government has enforceability power as long as you have a stable society. So again, grid down scenario, can the government really enforce laws? Not really. If there’s a 400% annual inflation rate, do you think the government and the police will be able to actively enforce all the laws as well as they can at 2%? Absolutely not. And so even if Amazon and even if like these large centralized entities can be coerced in a mostly stable macro environment to do things, that’s true, they can be in a much more unstable macro environment.

They won’t be able to to. And so you’ll see companies either breaking away and saying, you know what, screw the government, we’re going to accept Bitcoin. They don’t have enough officers to even arrest us. Or B, like I said, you’ll find decentralized alternatives. So there are already bitcoin marketplaces. There are already like sites like ebay or you know, Craigslist where you can go and you can arrange with somebody, text them, hey, I’m going to come over to your house, I want to Buy your, you know, fender for the 2006 Honda Civic and, and I’ll pay you in bitcoin instead and I’ll show you how to set up a bitcoin wallet and in that way you can transact completely, completely off grid.

What I would turn is what I would, in fairness to what I’m saying applies to gold as well. I can’t go to Amazon and buy stuff with gold. So I just want to concede that, that, you know, this is a criticism that pertains to gold and silver as well. Absolutely. And again, what I would say is, okay, you know, you’re right. There is no completely perfect system. But bitcoin is the best shot we have have at a sound money system, you know, as compared to gold or even silver. Right. The issue with gold and silver is the fact that these, these, these monetary mediums are not really useful for you could say like microtransactions.

And 95 of transactions by the way, happen below a thousand dollars, which just makes sense. You go out, you get coffee, pay for your gas, whatever it is. 90% of your transactions are just going and doing day to day things that are relatively cheap. If you’re using gold, you’re going to have to flake off little pieces of gold. You have to carry around tiny little specks of gold dust because gold is so valuable in order to pay for your goods. That doesn’t seem very sustainable to me and it also seems kind of antithetical to the digitized, you could say, modern Internet based society that we’re leading into.

Silver is better because silver is obviously a lot cheaper, but silver has a much higher inflation rate rate. Right. Gold’s inflation rate is like 2% a year and silver’s can be, can be as high as like 10% a year. Like they can find in. There’s been times in history where they found deposits of silver that inflate the, the total supply by 20 or 30% within single years. Like the Potosi mine in, in Peru. And so when we move to a monetary medium, especially in a post dollar world, and there’s the, the debate between using gold and silver as an actual day to day transactional money or bitcoin, I think the answer will clearly be bitcoin.

Just because gold and silver will just be better stores of value than it will be for actual microtransactions, paying for your gas or paying for your coffees. There is this cosmic question that I always have with bitcoin, okay? It’s a finite monetary medium with fixed amount of Satoshis. But as I said before, the universe is, as far as we know, it’s infinite. So what happens when we start, start mining other planets? You know, maybe we, we find a planet that has this massive gold supply and, and maybe that causes the price of gold to, to crash.

But I would suspect that if we’re constantly expanding our horizons, and if, if the, the nature of, of human growth is, is expansionist, then shouldn’t the currency kind of reflect that to a certain extent in that, that, okay, imagine the world a thousand years from now and the population is 100 billion people who are still transacting in these, in this fixed amount of satoshis as they go. And they, you know, they venture out into this, this, into the universe. Like, is it that future proof really, you know, or is this just maybe the first iteration? And, and would bitcoin enthusiasts be willing to concede that, that maybe there’s going to be a better form of bitcoin introduced in the future which is going to render this current network obsolete? So I’ll answer your first question and second question in order.

So the first question, right, I would say the fundamental characteristic of any economy that’s developing technologically is deflationary. So if you look at the 1800, 1800s, you see home prices go from $150,000 in today’s dollars to about $70,000 by the night by 1900. You see educational prices go down. You see the price of books go down. You see the price of basically all goods, all forms. Yeah, yeah, yeah, true. All forms of wealth basically increased just because the real purchasing power of wages was compounding, especially from about 1870 to 1895, 7% a year. Which means the middle class was finally able to develop in the US and across the world because productivity and wages were rising so rapidly and that real wealth was being transferred to everyday people who were just working in the factories or working on a farm and able to earn more and more for their money.

And that only happens under a sound money system, in a unsound money system, which is the fiat system we have now, the money supply inflates as much or even more than the population growth, which means prices go up forever. And when you have the prices go up forever, it changes all the incentive mechanisms in the economy. Now it’s no longer good to save. It’s actually no longer even really good to invest. Unless it’s high risk, high reward investments, it’s best to borrow as much as you can, get in debt as much as you can, and speculate as much as you can, because the inflation will wipe out the debt in a long enough time frame.

And that leads to an economy that’s completely unbalanced in terms of its productivity, in terms of its consumption, in terms of its people. Real wages since the 1970s have been falling because inflation has outpaced wage growth. And what that means is that the actual living standards of people have been going down. It’s been more expensive to afford a home, more expensive to afford college, and none of that is sustainable in the long run for any economy. You cannot price out the entire middle class from a good life and expect the system to survive. It’s just not possible.

A sound money system allows you to do that. And so Jeff Booth says this eloquently, and he’s a major bitcoiner. He says, when you have scarcity in money, you have abundance and everything else. When you have abundance and money, you have scarcity in everything else. And so when you move towards a system that’s deflationary, what it means is that. That, you know, if the supply is fixed, the price of everything goes down forever. And that’s true. Like, you know, most people will see in gold terms, gold prices, you know, the price of everything going down. But that only means there’s more incentive to save and actually invest in real capital and real, you know, real projects, real productivity projects, versus speculating and borrowing like our current system incentivizes.

And so when you’re asking me if we know which one is more sustainable for 300 years, I would say it’s the bitcoin standard, unequivocally. And you also think about it in this way. People say that the gold. Right, okay, let’s use the gold argument. You can’t use gold right now as a global monetary asset, global reserve asset, just because there’s not enough gold in the world to handle the transactions. And that’s true, but the better way to think about it is there’s not enough gold at these prices, at $3,500 an ounce. It’s. Gold is too cheap.

There’s. There’s, you know, too few dollars or by too much gold in order for global trade to be transacted at $20,000 an ounce. Now we’re talking in the level where gold, actually gold is expensive enough, where there’s enough of it for everyone to transact. And rather than just a few people hovering up the entire market. And so when we think about the monetary system and the future of. Of the economy, we want to be thinking about one where the Money itself, just like a, a measuring tape or a home, the money stays constant and it’s the technology and the economy and the markets that change, not the actual supply and the demand characteristics of, of the money itself.

Okay, yeah, I suppose if Bitcoin was not being lost, and again, I guess it would go back to that question of did everybody had a fair kick at the can in terms of adopting this technology, which I think we’re, we’re well past that point of everybody having equal access. Because there is, you know, one of the criticisms of Bitcoin is that there is a barrier to entry in terms of you got to kind of know how, you know, keys and, and wallets work and the fees and all the various protocols and things of that nature. So this is why a lot of people will just use something like Coinbase or these, these places that these exchanges where they, you’re not really buying the crypto.

You’re. Is that how it works when it, when, if you go on Coinbase and buy bitcoin, are you actually buying the Bitcoin or how does that work? You do actually buy the, you actually buy the Bitcoin and you, you quote, unquote, own it, but they, they hold it for you in what’s called a custodial wallet. So it’s kind of like a bank account. They say, we have your Bitcoin and you kind of have to trust them. And you know, many exchanges have been caught lying. Right, which is why I’ve also said, again, this is the Bitcoin ethos.

Do not trust. Like the entire point is take your money out of the centralized system, take it out of the centralized exchange, take it out of the centralized brokers and move it to your own address, your own court. Cold wallet storage where you can show, hey, I have the Bitcoin in this thumb drive. It’s. And I even have one here. You have it in a segregated thumb drive. Nobody can touch it. It’s air gapped. It’s going to take them. This is a blockstream jade wallet and can only be connected with a usb. And when it’s air gapped like it is now, no one in the world can take it from me.

Only someone physically here with a gun to my head would be able to take it from me. So that makes it, like I said, a much more secure and I guess I would say long term, you know, defensible system than, than anything else. And you know, your, your, your com, I guess concerned that it’s, it’s not egalitarian, is fair but my refrain would be, what other way could they have launched this? Because the problem, the quintessential problem of any new monetary medium is you have to convince people to use it. Same with gold. You’d have to convince people to use gold.

So if we go to a grid down scenario tomorrow and you own a ton of gold and I don’t own a ton of gold and gold is a new monetary medium, then you would be very rich and I would be very poor. And that is more of a relation of my beliefs towards gold and your beliefs towards gold, rather than any sort of intrinsic problem with the system. The issue is in the current fiat system. Too many people still believe in the structure and stability and the, I guess you call permanence of the system instability to sustain itself when it’s unsustainable.

And so we have to, we’re trying to convince people, hey, the current fiat financial system is unsustainable. The debt is going up exponentially, the money supply is going up exponentially forever. Because this is how the system is designed. And every 80 years there’s these debt super cycles where we see a huge washout. Right, right. The 1940s was World War II, we saw the Great Depression. Massive, massive monetary chaos. We’re going to see the same thing again eventually. And that means that, you know, if you don’t own a hedge, if you don’t own something to defend yourself against the, the inflation, you’re going to be destroyed in real terms.

And so that’s why you need to own gold and that’s why you need to own Bitcoin. You know, one of the most compelling arguments for bitcoin, all the rhetoric that I hear from Michael Saylor and all the arguments, I’ve never been sold on it, but one of the most compelling arguments for me was a very simple, you know, one line explanation that Bitcoin is for flight and gold is for war. And I think it was Clem Chambers who I was interviewing who had talked about that. And so I, I think you make some compelling cases for having some exposure to Bitcoin at this point in time.

I would say that, you know, anything short of a full blown Mad Max nuclear apocalypse, there’s probably a use case there, especially if you’re wanting to move money from between countries or exchanging in the cyberpunk dystopia for various things in, in commodities, in, as a way to evade, you know, the, the, the centralized monetary systems. Is there any other arguments you would have to, if you were trying to convince somebody who is a prepper who is skeptical of the, maybe not even just bitcoin, but crypto in general. Any other arguments you would throw at them to say, hey, this is something that you should consider? Sure, I, I would say two.

So one is, you know, you, you earlier touched on the, you know, the, the tiny size of Bitcoin, 1.3% of the world population owning it, a large part of it already being mined and already being owned. And I would say you could see that as a negative thing, but you could also see that as opportunity. If only 1.3% of the world population owns bitcoin and only, you know, I think 10% of Americans, because America is a wealthier country, owns it, then that means that there’s a lot of people who don’t own it yet and there’s a lot of wealth that’s yet to transition into bitcoin.

And bitcoin is only a $2 trillion asset when the global debt market is a $400 trillion market. So if we’re 1 2/th of the total size of the debt market and that doesn’t even include derivatives or stocks or anything else or real estate, then that means that we have a long way to go. And so you could see this as very risky, but I would say it is very risky. But there’s also a huge amount of upside, right? And that upside will come in the coming years as the price starts to appreciate more and more and we see more and more adoption, more and more corporations and maybe even nation states starting to buy bitcoin.

It’s like a form of a new global reserve currency. The second thing I would use to argue for Bitcoin is its decentralized nature, its censorship, resistance, it’s you could say anti fragile like effects that we talked about earlier. Its ability to fight against a centralized system make it actually great for a post collapse scenario, right? When the dust settles and there’s a, an emp, a massive disaster, there’s a war, and you’re living in that post grid down scenario and you are trying to transact monetarily, or let’s say new local governments are to pop up, they’re not going to be able to really issue money in the same way that a federal government will be able to.

And so both gold and bitcoin I think will play roles in that post collapse scenario in rebuilding society. Because the entire point of prepping is not to prep, trap and live in, you know, you don’t want to live in that kind of like caveman esque hunting for your Food forever. You would hope that yes, there’s a transition period, maybe one year, maybe three years, but eventually society would start to re. Stabilize. We’d be able to rebuild and re, you know, revive the economy and the markets and the industry so that we could go back to, to where we were.

Right. We wouldn’t want to live in there forever. And if, if that scenario does start to play out, if we have a disaster and you, we have to rebuild, we wouldn’t. We’ll need an economic system. And for an economic system we need a money supply. And I think Bitcoin is the best solution. In that case. Just another two more questions for you. Sure. Do you need the Internet for Bitcoin? Is it like if there was a, you know, grid down disconnect, is it possible to transact in a way, maybe utilizing like mesh networking or some other way that the, the system could still function in the absence of the actual Internet? Yeah.

So actually bitcoin nodes can transact and transmit transactions via a radio mesh network. So you could transfigure radios so that, especially AM radio so they could transmit information with binary code and then everyone could tune to that frequency and they could actually still, still be able to, to control the ledger and to understand like, you know, when, when transactions are being held, when your transaction goes through and you could actually see it in real time as long as you, obviously you need to have electricity and you would need to have access to a, to a radio system.

And so the only scenario in which that wouldn’t happen would be something like a global EMP or a solar and very severe solar flare that wipes out everything. But my, my contention with people is if there is a global solar flare or if there’s a nuclear war, my concerns are going to be bigger than my Bitcoin holdings. I’m going to be worried about making, you know, surviving the next 48 hours or the next 72 hours rather than the, the money supply I have. And the gold that you have in the vault also will be pretty useless if everyone is dead and all electronics are fried.

And so in those worst scenarios, that’s why food and bullets and medical supplies are so important. You need those tangible goods to, to be prepared for any sort of catastrophe like that. So in those scenarios, I’d say yeah, it’s, it’s essentially impossible to kill. In the worst case scenario, it can die, but, you know, you’ll have bigger problems to worry about. That’s very cool. Very, very cool. Okay, so you’re called the Peruvian bull, but you got a lot of bearish sentiments as well towards the market in general. So what is your prognosis macroeconomically? Just for the current state of things? I’m looking at your channel and there’s a lot of bearish news, it would appear.

So where do you see this whole thing going? Are we going to see a financial crash? So the current, the way the current system has been constructed is that the, the monetary authorities have switched from using overt easing mechanisms to what I would call like covert monetary easing mechanisms. So, you know, you can call this like stealth QE. So in the wake of the 2008 financial crisis, they enacted, you know, basically like QE1, then QE2, then Operation Twist. They did the TARP program from the treasury to buy back a bunch of toxic bonds they’d made Maidenly 1 and 2 to buy off a bunch of toxic assets, MBS and CDS from the, from the banks and the brokers and the insurance companies that all held all this stuff.

But, but ever since 2020, they faced the same situation, but they didn’t want to come out and lose face by saying, hey, we’re going to have to do bailouts and we’re going to have to find ways of adding liquidity to the system to make sure everything keeps running right, to keep the gears greased on this economic engine. So what they started doing is they started creating covert methods of monetary easing. The first one actually happened on March 16, 2020, when they lowered the reserve requirement ratio for all banks to zero percent, meaning banks don’t have to hold any reserves against your deposits.

They can just, they have, they can print the money, give you the deposit, and not have to hold any capital against it in case you don’t, you know, you don’t pay back your loan and your deposit is lost. Then they did what’s called reverse repo and tga. So reverse repo is essentially a way for people to, for institutions to park cash at the Fed. And the Fed incentivized all these money market funds, brokers, banks, to park their cash at the Fed. And this window grew to $2.2 trillion at the height, which meant that basically a lot of cash was stored in the Fed’s balance sheet and that allowed them to hold on to that cash for any day.

And once they started the taper in 2023, the, the balance of reverse repo started to fall. So they were easing all into, you know, 2021, 2022, you know, they were printing $120 billion a month, $90 billion a month going to Treasuries, the rest going to MBS. And when that liquidity wave was over, the market started to contract and we started to see things like the Silicon Valley banking crisis start to erupt. And so what they did is they moved to, okay, where can we find more liquidity without actually printing money? Well, we store all this excess liquidity in this reverse repo window.

And same with the tga, which is the government’s essentially checking account. We’ll just draw those down and that will offset the losses from the banking sector and all the other problems emerging. And so there’s much more about this on my sub stack and I can send you the link to that if people want to read it. But they did all these kind of like monetary, you could call it like sleight of hand, where they use parts of the banking system to inject more money and inject liquidity without actually showing it on their balance sheet. And so I expect that, that to play out the ultimate end goal, or I guess you could say like, end state of the system is more and more liquidity, more and more money printing and more and more debt, just because that’s how compound interest works.

You can’t, you know, like, like the Bitcoiners say, you can’t taper your way out of a Ponzi. And the current fiat system is in many ways a Ponzi because it requires more and more debt and more and more money to be shoveled into it for it to sustain itself. Well, I gotta say, man, I’ve listened to a lot of arguments for Bitcoin and this by far has been the most informative talk or just podcast that I personally have heard. I’m not just saying that because it’s on the Canadian channel, but somebody who I hold in high esteem, Robert Breedlove, for instance, was not able to convince me in the ways that you’re convincing me today.

So I’m going to try to see if we can set up. Would you be willing to have a debate with Peter Schiff on my channel? Absolutely, sure. I would love that. I think that would be excellent because I think we can hopefully sort out once and for all, you know, whether or not this is something that we as, as preppers should be, you know, giving a second look. Honestly, you’ve, you’ve convinced me to give it a second look, so. Okay. Well done, well done. Thank you, thank you. Like I said, a few percent. Not saying you have to, you have to go become a full bull.

I’m not saying I’m gonna go and load up on it. I want to make that clear. I’m just saying I’m going to give a second look. That’s good. That’s good. Awesome. All right, guys. And I want you to give The Peruvian Bull YouTube channel. Channel A second look as well. Thanks a lot for coming on, Roberto. Appreciate it. Thanks so much for having me. The best way to support this channel is to support yourself by gearing up@canadianpreparedness.com where you’ll find high quality survival gear at the best prices. No junk and no gimmicks. Use discount code. Prepping gear for 10 off.

Don’t forget the strong survive, but the prepared thrive. Stay safe.
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