Hello everyone this year Adam Meister coin it's for my welcome for 2019 New Year's Eve a lot of people born on this stage yes the next no you can tell I'm pretty excited your deep deep Tina here today no you wanted it back yeah all right there you are let us talk about what we were talking about off air ah between therefore pretty bad you're muted i muted oh there you are now you're good okay so I was thinking about Bitcoin which is probably pretty much all I ever think about and I was trying to come up with a metaphor for what I think is happening today and has been happening for the last ten years in Bitcoin we're watching this amazing asset and we're watching an emerging and emerging money and it's very very hard for people to understand so I like to say and people have heard this phrase before in the land of the blind the one-eyed man is king and I think this is an interesting metaphor it's trying to volve this metaphor for for Bitcoin and I've come up with some thoughts on this so here here's my view of this so imagine the world is all wandering about we have we have blinders on we have a we have we have eyeshades over our eyes but we don't even know we have our shades on our eyes and maybe some of us also have earplugs in our ears we don't really hear what's going on and we're all wandering around we're looking how do we how do we make money how do we get rich how do we how do we succeed in life we wander about and we're looking for answers and it turns out as it relates to Bitcoin there's a man on a square and he's there and he's preaching he has insights that others don't have he's standing there and he's telling us about this thing Bitcoin magical internet money names tres mayor and he's talking about Bitcoin and he's freely giving out this information he got to this very early he understood it very early he's sharing his knowledge with everybody else some people come to that Square and they keep their liners on they keep the earplugs in they don't they don't hear what he has to say they don't understand what he has to say people wander about saying you know how do I go how do I make a lot of money how do I become successful trace is busy staying there and he's he's telling people about this this wonderful thing Bitcoin and one person at a time for some reason they start to hear what he has to say they start to think about it and understand and there are lots of other people wandering about and they're asking each other where to go how to get there so one blind man is asking another blind man where to go and these are many of the traders that we see in the marketplace not understanding what bitcoin is but asking somebody else what is technical analysis after all the economical analysis is if if there are a lot of smart people operating in a market technical analysis makes a lot of sense why do we like technical analysis we think that insiders have some special knowledge that the rest of us don't have and we think we can divine that but what if it turns out that the people you're trying to divine knowledge from don't know any more than you and they actually haven't helped you at all so one at a time people start listening and there's several people out there and they're talking and they're giving advice they're telling people what they think and not charging for it or not charging very much for it or some of those people of course we have trace and traces the guy who I always look to because I've learned more from him and had to sometimes figure out what he was saying to understand what he was saying to put it together myself as it wasn't always clear and obvious I liked sayfudine of MOS plan B and so all these people come to it at different times on a slightly different metaphor if we imagine that a snowball is rolling down a hill that snowball starts off very very very small and it grows as it rolls down the snowy hill so a lot of people think that bitcoin is going to be this linear movement that little by little people are going to buy it you're gonna have travel on a pretty much of a linear or flattening trajectory and I don't think that's the right model for thinking about this at all because what's going to happen is that as you come to understand what these people have to say and your blinders come off and you start to realize that in order to get what you want you don't have to do anything that's special you just need to buy some of this you just need to buy a little bit of Bitcoin as you come to understand why it's valuable you realize that you don't have to trade it badly just have to hold on to it and that over time this is gonna go up a lot in value we we hear the noise of the markets things move up and down and it shakes our confidence because we think that we think that markets know and we hear things that we learn in finance classes in schools like efficient market hypothesis mhm adiyae match was garbage because even though information may travel rapidly through the markets and may immediately impact the price for the moment that doesn't mean that knowledge or wisdom understanding rapidly transmits through the markets knowledge and understanding are much harder to come by and many people don't want to take the time to really try to figure out what things mean they want to react quickly to things so you as people come to an understanding then you become a carrier of knowledge and information so you you start off with a small group of people and we've watched this grow in Bitcoin over time and so you've got people like Adam bitcoinmeister you've got lots and lots of other people who are teaching you about Bitcoin and you can listen to them or not listen to them but those who come to really understand start to figure out why this thing is valuable and why want to hold on to it in an interview I listen to this morning with plan B on a different podcast fabulous interview fabulous podcast Peter McCormick's Plan B is talking about Bitcoin being worth 100 trillion dollars which would be approximately five million dollars a Bitcoin in the year 2028 to 2032 when Preston pish was on a podcast with Stefan laverra Stefan actually credited me with a question that you know did when Tina says you shouldn't trade yes Reston what he thought about that I'm just summarizing the question it was a pretty long question and Preston said yeah you probably shouldn't trade because you're not gonna out trade these movements I think I think Plan B is right I think we are going to see a staggering valuation in 20:28 to 2032 and I think that number of 5,000,000 makes an awful lot of sense if you think you can out trade the return going from eight thousand to five million dollars over the course of the next nine to twelve years I can tell you there's no way you're gonna do that it's not possible because first of all if you're in many jurisdictions are gonna be hit by taxes which is gonna take a big chunk out of whatever you make so there's simply no way you're gonna do this so what do you need to do you need to find a position that you can buy you can hold on to and not get shaken out of and acquire at reasonable prices anything under $20,000 is incredibly reasonable there is effectively no real difference between buying at 3,000 and at 20,000 that's sacrilege to most traders oh my god I could make so much money yes but heard a terrible story the other day I was talking to online on Twitter I'd made a comment about trading and he commented back and he said oh well some people is cut out for trading there it's he said he makes his income from trading and and that's what he's and that's what he's doing and that some people are just naturally suited to it and I went to a DM because I didn't want to do this on my feed I said you know people don't really properly evaluate their potential returns on their trading they people are very selective in the way they look at this stuff it's like gamblers who will go to Vegas and and they only talk about their winnings and they don't like to talk about how much money they lost so that I should give you a net number so I went to Vegas I won $70,000 I don't tell you the prior trip they lost $75,000 and now they're in the only in the hole for $5,000 I may be exaggerating you know this is true traders are actually not much different this this guy told me he was trading he came into it in 2017 he lost 12 Bitcoin on bit max he was liquidated and he's busy trying to get back to one Bitcoin now this is a terrible story I feel very badly for this guy but what can you do he learned his lesson I think he's still trading so I'm not sure he's completely understood the point here also is if you he didn't believe that bitcoin is going to be worth at least he didn't have it in his mind if you believe that bitcoins going to be worth a million dollars in 20 years and 15 years in whatever you can't out trait why would you even attempt to out trick people open guys you've got to open up your eyes to people like trace mayer instead of all these fancy sets and graphics people talking this crypto noise absolutely problem I'm on a technical problem but give me one second out of my apologize all right everybody remember speaking about technical issues play this show at 2x always play all your shows at 2x we're talking like everyone if you love team is the guy in the of his wisdom definitely comes from learning the hard way over there uh are you back Bitcoin Tina I think I I think I am alright very good you talked about Plan B they're forcing I'm gonna I want to share a tweet of yours which which relates to him whereas gold has had to earn its high stock trio of course money character in here drop a blast if you'd like to talk about that now I just give you a little into that Adam can you hear me yeah perfect IIIi was using a headset and it turns out the headset has more problems than than the Apple Micah can you hear me yeah it's great the flow yeah I wanted to get to that I wanna do you mind if we don't get there yet just just okay jumped ahead I jumped ahead in the game alright so as PS people talk to other people learn I think this process is gonna happen a lot faster than most people think because as the information spreads and as you see the price go up other people start to get interested and start to take things more seriously people are very sensitive to price and so watching the price go from twenty thousand to three thousand created an awful lot of skeptics and confirmed the views of many people who didn't understand what this thing is but it's an emerging money and it's very hard to understand so a model that I like to think about is looking at what happened with technology and internet stocks in earlier years and I was having discussion with a friend of mine last night we told my Microsoft and they've commented that Microsoft looks like to him that it was an obvious thing to own most computers were shipping with ms-dos and then almost all computer shipped with Windows Mac was actually relatively small Apple was relatively small back then and this idea of Wintel was a very powerful concept and and yet in the late 80s early 90s very few people understood and this stock went up between one and two hundred times at least from the early 90s to two to 2000 and very few people who held it and held on for that period except for Bill Gates and and some other insiders similarly with Amazon the only people who really held on to that with Jeff Bezos and his parents as somebody commented on a different webcast so I think that when you start to come to understand what this thing is worth little by little you're going to one and that's the stock to flow but I'm still not ready to get there yet you're going to see people start to front run these having's we're at a time right now where i think bitcoin is insanely cheap and so you hear people talk about what's the quiddity of the marketplace and this whole idea of liquidity I think is poorly understood traders who are buying and selling Bitcoin are not actually adding liquidity to the marketplace people think oh these traders are at infinity if you're buying it at 8,000 and selling it at 8300 you're adding to minimus liquidity the real liquidity providers in the market place well there there sell-side liquidity providers the traders they're not actually by side liquidity providers the real by side liquidity providers are the deep hollers the people who start to understand what this thing is because they're there to buy Bitcoin at reasonably good prices and they're the ones who are absorbing it in the marketplace look what it really means can you unload large amounts of an asset or a stock any given price and so for any asset it's it's about how will you understand what the value of this thing is and there are all sorts of time preferences that goes on with the various participants of the marketplace some some people have very very short time preferences those are the traders were trading back and forth for relatively small amounts and then there are other people who have longer time preferences they start thinking in terms of months and years and even longer possibly decades and when you start thinking in terms of that you start to be getting lost in my own thoughts here I like that definition of liquidity I'll tell you that that wasn't good I'm gonna go too well I want to I want to go to how you have to think about valuing this thing understanding what bitcoin is the best money in the world is probably the single most important idea in trying to understand Bitcoin and what qualities it has as a money and why right now the idea that it's gold 20 it's probably the single most important idea and can take us to extraordinarily high valuations Dan held commented to me recently that he thinks thinking about Bitcoin is gold 2

0 is probably the single most important and clearest idea right now and I kind of agree with him I thought about at night I was disagreeing and I'd you see Bitcoin is intense exponential technology but that's actually not it's not the most important thing right now and understanding why it's so important on this because when you start to understand scarcity and you start to understand how scarce Bitcoin becomes and you start to understand its qualities of money you realize that if I can acquire a reasonable position in Bitcoin today and if it goes to the kind of values that I'm going to tell you that I think it's going to go to ten years out you realize that we don't even need scaling layers to work yet it's not actually that critical because the values are so extreme and I think the skilling layers will work but I don't think they're that important or even that necessary I could buy a Bitcoin today and I could sell a piece of that Bitcoin ten years from now this is assuming that I have income if I have you know money to live on along the way and then even for living in a Fiat world which we probably will be ten years from now it doesn't really matter that I can't spend my Bitcoin directly because if my Bitcoin went from eight thousand dollars to five million dollars and I sold 20% of it a million dollars I could easily spend that money in the existing legacy system so I don't even need that I don't even need to be able to spend it on coffee and other smaller items because I still have ways of spending my money but the critical thing is that I've got that massive increase in value now why did I get that massive increase in value I had tweeted about how why do some of these very rich guys buy art money buy from our visas and buy it because it's a way to show off your wealth families have bought art over the years for other reasons too they they buy it because it's a way of of transporting value into the future some people hid the art away and they know that if they had to they could move the art out of a country therein send it to another place and if we retain its value people are always looking for things that can transport their wealth into the future and that's what money does for you but when you have as poor a money as we have today we know that our money doesn't transport our wealth into the future and that's a really big and it's a really serious problem so what do we do we flee the money that we're in and we look for alternatives that can take the wealth that we've created and maintain its buying power to some time for a future self sayfudine talks about this as the trades we make with ourselves and talks about how the trades that we make with ourselves are the most important trades we make Adam talks about this all the time and so what do we look for we look for things we buy stocks we buy real estate we buy art to find that thing transport our wealth into the future and maintain its fine power or better yet increase its buying power but none of those things are as good as a really good money what do you think that is a what refreeze that there for a second I'm worried why do you think what do you think that transporting my wealth keeping my buying power or possibly increasing my buying power in the future why are art stocks well scarcity scarcity of the art it's the scarcity of the art it's scarcity but there's more to it than just the scarcity because the interesting difference between money and everything else for transporting value into the future is that money is the only thing out there for which there is a universal preference Styles fashions for art change even for real estate we look at New York City the places in New York that were once the hot places to be to live change over time something period of time it's the Upper East Side other periods of time it's down in Tribeca where the hot real estate is is not necessarily in the same place similarly with stocks to companies change but money is actually ought to be the riskless asset and effectively money when it doesn't actually change through time or it ought not and so bitcoin is something which is both technological but also there's a social layer to it and it's its characteristics which enable money to carry that value that we create today into some period in the future and the difference between money and any of those other things is that if I hold money today and I sell some of my money for other stuff I sell it I sell my money cuz that's what you do when you buy something you're selling your money I sell my money for a house or I sell my money for an investment or I sell my money for a car or I sell my money for clothing people are willing to take my money because everyone has a preference for money I forget who said said this I might have been mango Hut I don't remember that money is the most saleable good in the economy it's the easiest to sell good so now what do I want in a good money well we think of art as being valuable because the piece is popular for whatever reason and once the artist is dead we know the artist can't produce any more of it although we source stuck with the issue of validation and validating art can be very difficult there are lots of fraudulent copies of art not actually necessarily easy to validate whether or not the art is an original piece or copy and being able to validate that art as being original is actually really important sometimes we think of real estate as being a great with a store value we've heard people say they're not making any more of it actually not kind of exactly not true how do we make more real estate build it up into the sky condom that's it build it up in the sky so you can buy a nice piece of land on the ocean and instead of putting a house there you put a 50-story building there and now instead of having one family live there you have 400 families live there and so this issue of scarcity becomes very important and when you have something which is incredibly scarce and yet really easy to sell it has a tremendous amount of value and it's so hard for people to come to terms with why why this money would have so much value and yet I find it so hard that people have such a hard time with it because it seems so incredibly obvious to me well it's partially because they want it it's people don't like things that are that simple they want fancy they want it to be able to do something super fancy to be anonymous to be faster to they have very different expectations of they forget the basics of money basically so in getting to the stock to flow we're talking about essentially its scarcity we talk about the hardness of money or its scarcity Gold is approximately a sixty in stock to flow so what a stock to flow mean it means that for every year a certain amount is produced relative to the existing stock and for most things in the economy though stock to flow numbers are very very very level because the thing is very easy to produce relative to its existing quantities and if you want to listen really good explanation of this you should listen to plan be discussing but gold we see production continue every year in the neighborhood of around three thousand tons of gold and so that sixty stock to phone number remains pretty constant today gold has a ish and if trillion dollar value but bitcoin is different in economics class they teach about something called elasticity ask whether or not a a thing is elastic or inelastic and elasticity is a really interesting concept you know what elasticity means that'll refresh me for my economics courses I'm happy to so it means for any given amount as the price change what's the propensity of people to produce more of it this is not a perfect definition so if you're growing wheat let's say and the price of wheat is I didn't have the price lead $10 a bushel and the price goes up to $50 a bushel and many more farmers are going to start planting wheat instead of planting other things because the profitability of the wheat is incredibly profitable and usually those prices are pretty ephemeral but they'll respond in the marketplace to the price and produce more as that price fluctuates if the price goes down they'll tend to produce less and they'll produce alternatives Gold is today about $1,500 an ounce if gold were $10,000 an ounce you can rest assured that many mines which might have been put out of commission various exploration companies that don't find it profitable to produce gold that they might have found that $2,500 an ounce would come online there would be more gold production which responds to the price and that's what elasticity is so you've got producers responding to those prices and and how much are you able to respond Gold is a relatively inelastic commodity it's very inelastic compared to things like agricultural products oil tends to be relatively more inelastic than other types of commodities as well and so this creates a lag time in pricing sometimes we see because of the ability of something to come online into production so but oil oil is actually yeah I think it's thought to flow is actually pretty low but I don't know what stock to flow as Bitcoin is the only commodity that I know of that is almost perfectly inelastic if the price of Bitcoin were a dollar today you would still produce 12 and a half Bitcoin on average every 10 minutes and if the price of Bitcoin were a million dollars today you would still produce 12 and a half Bitcoin on average every 10 minutes and this is how it's going to be with Bitcoin pretty much for its duration until the issuance for the block reward is used up what would happen if Bitcoin were to go from 80 166 dollars or it is right now to a million dollars in the next ten seconds hmm if you knew that Bitcoin is that more than likely if it popped from eight thousand dollars to a million dollars instantly that you see a lot more hashing power come online people would throw hashing power online and so you would actually have a slight impact on the amount of Bitcoin that was being produced but because of the difficulty algorithm we know the difficulty algorithm will readjust the production of Bitcoin back to one block on average every 10 minutes so even if the price would have changed radically instantly you will only have a period of time approximately 2100 blocks at the most until that difficulty album algorithm changed where you might produce more than you might expect otherwise you would still be subject to certain limitations because there are only so many miners in existence there only so many people who know how to mine so it wouldn't necessarily hashing power right now is in the 80 to 90 EXA hash rate conceivably it might go to a thousand EXA hashes if the price were to change from 8,000 to to $1,000,000 it depends on what's available in the marketplace and how many people have miners every miner the people had they put the crappiest miners they'd mind with their computers so I don't know what the hashing power would go to but we know that you might produce more blocks than you should in that in that period but the difficulty algorithm would kick in and it would readjust it so that price change would only impact the production of blocks for a very short period of time so I estimated what the stock to flow numbers would look like going out to 2040 and approximately and I don't know if this is completely right because there are issues with lost Bitcoin and I'm not completely sure how the lost Bitcoin effects effects lost if it makes the stock to flow and it might have some pact I'm not completely sure about that and that's better question for Plan B but ballpark numbers you're talking about post-2020 having fifty six twenty four twenty twenty four hundred and twenty twenty twenty eight two hundred and forty eight twenty thirty two five hundred and twelve twenty thirty six 1016 2040 2040 approximately twenty forty based on the numbers that the plan b was talking about estimating five million dollars Bitcoin 100 trillion dollars between 2028 and 2030 – that's guesstimating a value between somewhere between 248 and 512 stock to flow humans don't know of anything with that degree of scarcity it's actually one person described with scary scarcity it were selling Bitcoin you're living in an amazing time we think we think back oh my god those guys who bought Bitcoin at tres Mayer at five cents or 25 cents Max Keiser at a dollar or three dollars but I remember they're using oh my god if I could have only bought that Bitcoin at those prices look look what I could do you're living at a time that's the equivalent of those prices you can up 600 times between now and 2020 8 to 20 32 from 8,000 to to five million I granted it's not ten thousand times yeah but you probably get there in twenty twenty-five years this is staggering returns and it's so hard to come to terms with what that kind of scarcity means that you have people who are very short-term oriented and they're thinking and they're busy trying to outsmart the marketplace the traders and there's very few people are gonna be able to do that the interesting thing is that every trader who trades thinks they can and yet the numbers don't actually prove that there's a tiny percentage of people who are actually able to do what they think they can do it's funny everybody thinks they can be Warren Buffett but actually there are very few people who achieve anywhere near the returns a Warren Buffett and yet people keep trying to do it for most people they have almost no advantage in trying to trade they look at stock charts and they think they can divine some special knowledge based on the past but it actually doesn't tell you anything traders will tell you of course it tells me something I can figure out what the demand is by looking at those charts I know that if it traded here and it traded there and I got this kind of I've got a cup and saucer or an ascending triangle or descending triangle or a flying W or hidden shoulders pattern or upside down Head & Shoulders pattern I know exactly what this thing's gonna do no you don't why are all those charts completely meaningless because what you don't know is what the guy was talking to last night told me that last night told me that his accountant has a client who's a billionaire this billionaire client acquired fifty million dollars with a Bitcoin approximately five percent of his net worth with those charts don't tell you is when a guy like Ron Paul or dant a Piero or any of these other guys who come from the legacy markets who are tied in to some of the biggest and some of the smartest money in the world when Dan talks to somebody or Ralph talks to somebody or they listen to what these men have to say and understand about Bitcoin and the guy who's worth a hundred million dollars or billion dollars says to himself you know what the hell I'll buy myself a five percent position these guys are smart the argument they make make sense to me go buy some those shorts don't tell you when that rich guy comes to understand he wants to own some Bitcoin because he might not even thinking about it or doing anything when those charts were made when those prices took place so you should be very thankful to the traders who were so willing to give up their Bitcoin for such cheap prices to you I know I'm thankful for it and oh no I want you missing tapi arrow what do you that video of course that he was interviewed by Rao and what do you think about his description of Bitcoin as the secured the is the security truth machine I think that I think there's so much that we don't know about Bitcoin I think we're gonna hear many many smart people in the course of the next several years and decades come too epiphanies understandings about what bitcoin is and what bitcoin does that we're gonna look back in the future and they're gonna say to ourselves oh my god that was so obvious how did I not see it so I don't know what brilliant insights people have that we will look back on at some point in the future and say how did I not think of that how do I not understand that and so I I really you know I really don't know I think that there are I try to try to listen to what people have to say try to understand it I don't know if I fully understand what Dan is trying to say but I know he's a very smart guy and I want to try to understand what he's trying to say because there are so many smart people out there that that I can learn things III don't I don't X I'm not completely sure what it means and yet God please I've got another question about it was he's clearly not blind anymore he admitted he was blind the big coin at one point and as you said everybody wakes up eventually well the smart people do at least he but but speaking of waking people up he specifically said that Bitcoin will when it gets to that trillion dollar valuation and again now the the market cap is whatever it is 150 billion I don't even know what it is but it's far from that trillion dollar market valuation that it will wake up many traditional type of investors that that's a big round number that Allah not some people out of bed would you agree with that with your experience in the traditional markets absolutely I mean I think that price is actually very important as it relates to Bitcoin I think price people respond and react to price I'm a huge believer in the concept of price mechanism price mechanism makes our economy work price mechanism is critical to a capitalist economy in terms of allocating resources and I think that ban is absolutely right I don't know what that price is dan is been a professional investor for a few decades and if that's the number that he thinks he is more closely tied to that than I am so I don't really know but sure a trillion dollars is a very big number it's very hard for a professional investor to look at an asset like Bitcoin at a trillion dollars and say I can just keep ignoring it it's very hard for people who live in the capital markets who look at prices move all day long and say I can ignore this thing that is now the marketplace is valued at a trillion dollars and and it's come to that valuation through all natural processes it started it at nothing in 2009 in 2010 and at a trillion dollars it becomes pretty hard to ignore so sure I think that's that's a very reasonable thing do I know what the right number is I don't know what the right number is we all speculate and what we think is the right number but trillion dollars is as good as number as any other number now you mesh the word reasonable and I do think it is reasonable to think we'll get to a trillion one day that would be $50,000 Bitcoin now you have mentioned another number on this show and Plan B has mentioned this number also and it's the hundred trillion dollar number and I could I mean I I love that you make these predictions about five million dollar Bitcoin I could I could do a clickbait headline about it I won't because I don't do that kind of thing tell that like button for no clickbait titles but you do believe this a hundred trillion is a tremendous number though it the the all assets on the planet only add up to over two hundred and fifty trillion dollars or three hundred trillion dollars or something like that so I I don't wanna get people too excited I mean this is a huge number five million I I would be happy to five hundred thousand Bitcoin $500,000 Bitcoin you are a huge believer in this though to come up with that number and to agree with with Plan B but I mean have you ever put that in perspective 100 trillion compared to two hundred fifty trillion compared to three hundred trillion you know did the value of all assets owner well I think your number of 250 300 trillion is wrong okay it's won by a lot it's it's one that's burdened by wrong wrong by a lot so stocks are about 80 trillion dollars Fiat is about an 80 trilling to be lightish Fiat or money is is approximately 90 trillion dollars all debt markets are approximately 250 trillion dollars real estate and there may be some double counting in the real estate because there's a lot of real estate that is that is financed so I don't know where the double counting is in that real estate is like 250 trillion dollars so I'm guessing that those numbers are much bigger and these the end of the day some of these things are just estimates these numbers are I I think the number is probably somewhere between 300 plus trillion and six seven hundred plus trillion I think the numbers are substantially larger then what we hear or not and I'm not sure if we have great numbers not but here let's think about it slightly differently and the reason I use the number 100 trillion five million dollars a Bitcoin is what you have to think about is think about Bitcoin as repricing the world in Bitcoin and that's kind of what really matters so if you bought a nice pair of shoes you might spend Oh a pair of Gucci or ferragamo shoes those are very nice shoes you might spend five hundred dollars for those shoes the question would be then how much would those shoes be in SATs so that's what I think is going going to be happening here but but more than just that I think that bitcoin is about an emerging economic paradigm I think we're going to see the world change in very substantial ways in the 2020s in the early 2030s I heard Rob Paul talk about this in one of his interviews and I've been saying this for for quite a while I think that we are going to be moving into an economic paradigm where we have money and equity based money which is going to be Bitcoin in my opinion and equity like investments I think will actually pretty much have no credit or very de minimis amounts of credit credit ie bonds ie fixed income in this future world and so we'll use we'll use an equity like investment as opposed to a credit like or bond like investment it's very interesting as I commented about this on Twitter just the other day and it calls me I got a response from somebody who said what credit is created every time if I grant you credit I have created credit so that's that's right so if I'm a store and I let you buy something and I don't make you pay me right now I've given you some credit and so there may be some kinds of credit that exists we did use to have a world that operated that way but the interesting thing is that and this just occurred to me because bitcoins programmable money so if I ask you to build a house for me you might say okay pay me X number of dollars up front so you can build me the house but the interesting thing about Bitcoin is because it's programmable because we will see some form of smart contracts on it at some point we can now we can already do this now with time locks multi-sig a lot of things we can do i could actually create a method by which pay-as-you-go i might pay you X percent a week and you go out and you buy the materials and hire the labor for that period and I keep going a fairly tight leash I'm building my my house building my product building whatever and so I think we don't really fully understand what this economy is going to look like and I have said that I think some of the ways we think about the way an economy must work or money must work is because of the nature of the technology which was available at the time did solve certain problems so when we went from a real gold based system to a banking system well why did we do that because I can't easily carry gold to another part of the world and trade with it there are a lot of there a lot of problems with this so if I carry if I deposit my gold with a local bank and I get a note from that bank and that bank has a relationship with another bank in another city I take that note like I can validate that this is a good note I I give that note to that bank in that other city and now I've solved a technological problem for me of transporting that gold safely from one part of the world to another part of the world and so I think the way we do things is actually very much related to the technology which was available to us at the time which created a methodology by which the world worked so people think the world has to work in a particular way and what I think is that the world doesn't have to work in a particular way the world works in a way to which there are technological responses to problems that have to be solved on new technologies offer different answers and I think that bitcoin is a technology which is going to offer a set of answers which were not previously available so I think we're gonna watch the world change in ways that are very very very hard to imagine and I think we'll move to a world which is one that's very much based on credit to one which is very much based on equity based money and other type of investments right so then let's have is Libre fit into all of this well I don't know how fits into it I'm not really concerned about Libre I think that anything which helps to legitimize Bitcoin in the eyes of people becomes an on-ramp for Bitcoin so what would Libra be I know if people talk about Libra as being panopticon you know the look of the coin that everyone used is fine you and there be a lot of problems with Libra but I don't want to talk about zebra per se but Libra as I've heard it described would be a multi currency stable coin and as such people can easily use it for their payments but the difference between CII have argued that price is more than 99 percent of adoption for Bitcoin people like to make money people love to make money and so most people buy Bitcoin because they want to make money if Bitcoin were $1 today as it was $1 back in 2010 or 2011 I'm sure we would not be talking about it I'm sure that'd be almost no interest in Bitcoin people are interested in Bitcoin because they they can make money in it and you'll never really be able to make money in Libre because it's a stable point you can't make money in a stable point so if Libra starts to cause me as someone who doesn't really know or understand Bitcoin to start to think differently about my money odds are reasonable that Bitcoin will become something which I might also pay attention to and if I see that Bitcoin was ten thousand dollars in 2019 and now it's 2022 and Bitcoin is $300,000 I said oh nice to own some of that Bitcoin and if I start to understand that it's gonna go from three hundred thousand to five million I say well I hadn't known it at eight thousand like the guys that don't own it did four hundred like but you wanted that but I can still make pretty good money from three hundred thousand to five million not as much as I could have made had I bought it four hundred not as much as I could have made if I bought it at ten not as much as I could have made it I bought it in a thousand well they can still make money and that's not bad so Libra becomes just another on rate for Bitcoin and so as the process of legitimization so this is another thing that I think about in terms of mindshare that's the term I like to use bitcoin has a staggering amount of mindshare relative to the size asset that it is I think many people in the Bitcoin space what guys like Ron Paul or tanta Piero to understand this very well but a lot of guys who are treating it now they think of Bitcoin as being bigger than it is and I actually think it's the most important invention for mankind and generations if not centuries I think it's incredibly important but as an asset it's a very very very small asset and the amount of attention and time that it takes up in the minds of all kinds of people is absurd for the tiny little asset that it is it's a tiny little asset it gets coverage on CNBC it gets presidents to tweet about it it gets other people to talk about it then the scheme of things it is not a pimple on the backside of an elephant so that's pretty amazing so as more and more people come to accept its legitimacy that opens up the desire to learn about it and buy it people like to make money speaking about its gaining some legitimacy here I think I know your what your answer will be to this we're gonna end up with a Fed coin eventually that the dollar will I think so at least that will definitely add some legitimacy to cryptocurrency as a whole if the if the dollar goes crypto do you see this and something that you mentioned you see the next decade we'll still be living in a dot it will still be a dollar world but you do envision eventually it will not be a dollar so when when do you think that will happen especially since if they make the dollar into fed coin it'll be quite easy to stay with the dollar every quite convenient for people no it won't it won't actually change it it actually increases the likelihood of adoption well because they'll be able to easily turn their fake coin into Bitcoin you'll be able to easily turn your foot point I think hyper Bitcoin ization takes place the hyper bit colonization goes what I collect it goes through the bond market and the credit markets what I think will happen at a date much later in the future probably that 100 trillion dollar mark somewhere in the five million dollar-plus range it could be a little you know could be lesson it could be a sixty trill you know that sixty trillion dollars at three million dollars a bitcoin but I think there is at some point in time when hope tres Mayer has described Bitcoin as them as a black hole absorbing the value from the rest of the world and what I think you will see at a point later in the future again at some price is people sell their existing assets to buy Bitcoin so if you have money in the bank and you buy some Bitcoin well you've now converted some of your Fiat into Bitcoin if you sell a Treasury bill to buy Bitcoin you've converted some Treasuries to buy Bitcoin and I think that people later to Bitcoin who might have been doubters of it and uninterested you know if if at a trillion dollars institutional money becomes interested in buying Bitcoin what is institutional money and other people think at a million dollars a Bitcoin at twenty trillion dollars that takes people who are skeptics IIIi a in sort of a joking kind of way I described three types of people four types of people with regard to Bitcoin skeptics cynics and haters and then there are people who just don't know about it at all so leaving those people aside that people don't know about at all I argued that skeptic cynics and haters that each of those people will pay subsequently higher prices so if you start off as a skeptic you might have considered it at eight thousand dollars but you don't buy it till it's fifty thousand dollars and if you're a cynic you might have been cynical about it at eight thousand dollars that plenty people who are cynical about it at much lower prices you might not buy it till it's a quarter of a million or a half a million dollars Bitcoin and if you're a hater you might not be buying until it's more than a million dollars a bit the price of Bitcoin will push people into Bitcoin and this dynamic that plates takes place that gets you to these very very large very extreme numbers is that think about the dynamic that's taking place with miners so every day miners acquire more and more Bitcoin through their mining processes but through the having's those numbers become smaller and as more and more people begin to understand what this money does for them and why it's valuable they want to own some of it money is about transporting your value into the future so here's a question for you question people want to might want to ask themselves let's assume the big coin went up by the amount of 10% a year forget about these super large numbers but that it's always you know it's not subject to earnings and let's see it's a consistent 10% of here you can pretty much rely on it not like a Bernie Madoff 10% a year but you know you can pretty much rely on 10% a year for an increase in value what you own other assets instead of owning Bitcoin I wouldn't you what I wouldn't I would not who know I know you wouldn't a lot of I asked our last night I said so if Bitcoin went up by 10% a year from now until forever would you own stocks would you own real estate and I think that once people start to understand why money is a better asset to store value in so you'll always have to have investments investment to make an economy grow investments are critical to an economy I've argued that what we've done with the Fed money that we have is we've created artificially low cost of capital we have a cost of capital which appears to be lower than it really is and the reason I say it appears to be lower than it really is take it kind of quickly through that thought process is that if I invest in a project and I assume my equity my weighted average cost of capital weighted average cost of capital is a blend of my debt cost of capital plus my equity cost of capital and let's assume I weighted average cost of capital is 8% and that would take a basket of projects so me plus thousands of other people each engaged in our own investment or in projects and we all have but simplified an 8% weighted average cost of capital I say an effective cost of capital because of all of those projects 10,000 projects let's say some percentage of those projects gonna fail because the 8% weighted average cost of capital was actually too low in number maybe the real number should have been 12 percent for weighted add the cost of capital so instead of having 10,000 projects at an effect at a weighted average cost of capital and 8% maybe we should have had 6,000 projects or 5,000 projects at a 12% weighted average cost of capital so then some numbers of those projects fail which might have some residual value or not and effectively what's happened is our effective cost of capital isn't really 8% but our effective cost of capital is really that that 12% because we have destroyed a certain amount of capital none that accurately gone through the numbers here but I think you can follow a logic of my reasoning and so having to lower cost of capital in an economy is actually detrimental because it encourages taking on projects which probably shouldn't be taken on because the real cost of capital is actually much higher than what the cost of capital appears to be do you follow that laughs does that make sense to you do you understand what I'm trying to say yeah there definitely did that last part yeah it's not the individual project that I'm talking about I'm talking about a larger a systemic or an economy-wide effect I don't know if I don't know if I explained it well there's a lot of projects out there shouldn't be going on you know know that that's what I'm saying but what I'm saying is think about it not just as one project but a large group of projects that's occurring in an economy do you agree maybe this will help do you do you agree that if my cost of capital is 8% that looking for an adequate return from those that I would have more projects at 8% than I would have at 12% do you agree with that statement yeah okay so what I'm saying is because of because of yield curves which are artificially manipulated by central banks it makes my cost of capital look lower than what my real cost of capital is and we don't find out what the real cost of capital is until the fullness of a cycle so it looks like my cost of capital today is 8% because I'm taking the information from various yield curves plus my equity cost you follow the logic of that you understand how that works I hope people do okay so I estimate my equity cost of capital the cost of my own personal equity or my business's equity and then I take a rate which is available to me in the market place if I were to float a bond or go to the bank and borrow money and I create a blended weighted average cost of capital with those two things so let's say my equity cost of capital is 8% and to go borrow money cost me 5% and let's say I put up half equity half debt so that would be combined five plus ten 15 percent divided by two is seven and a half percent give me a weighted average cost of capital seven and a half percent do you follow that that make sense to you okay so I'm saying that the market implies an 8% cost of capital I'm just making numbers up here this front have you follow my thinking and my logic the market implies an 8% cost of capital so with that 8% cost of capital I is a businessman run some numbers and I think I can get a certain amount of sales with a certain amount of earnings and support the project to make profits necessary to make with the cost of capital of 8% and then I go about and I decide to do this project or not do this project if it meets that 8% cost of capital but that's not the real cost of capital exists in the economy and I find out in the fullness of the cycle that a certain number of those projects failed it weren't successful even at the 8% because there wasn't enough demand out there those projects so effectively because those projects failed that money that capital is effectively destroyed I basically took that money I threw in the garbage can so when I netted out effectively meant my cost of capital was and I'm making the numbers of again twelve percent not eight percent if I had built to a twelve percent cost of capital then a certain number of those projects just would never have gotten built because people have run the numbers against the twelve percent number and said I can't make these numbers work it doesn't you know my returns are not sufficient for my twelve percent cost of capital and so I can't make a return which is necessary to do that project so I don't do the project so we create systemic mispricing in the marketplace because we have central banks which come in and miss price risk and what I'm saying is that in an economy which uses money rather than credit and all those fixed income instruments are credit plus other to to make equity like investments that it that might be that that will net result in fewer but better projects and so I think the net result will wind up would be much higher growth because there'd be less capital destruction and I think we're in the very very very very early stages of watching a new economic paradigm emerge and I think it'll be a much more efficient paradigm I think we're gonna see a lot of changes that take place in the course of of the next 10 to 20 years and I think the rate of change that we're going to see is going to be very shocking to a lot of people I think bitcoin is a major factor of that I think they're there other factors as well that people talk about which are well beyond my knowledge base or scope things like self-driving cars AI various bio technologies they're there a lot of things are gonna happen and I think we're going to see very dramatic change but I think Bitcoin is going to have an incredibly big impact but again it gets back to the idea what makes it so valuable is that a very scarce money that can transport my value into the future and that money continues to get more and more scarce so as you start off with let's imagine you start with a hundred people understanding about Bitcoin they see the price go up and they tell their friends and now you've got a thousand people who all want to buy some of this and that thousand then grows to a hundred thousand people whatever the numbers are and these numbers just get bigger and bigger because more and more people start to understand and and that's what we've seen from bitcoins earliest days and what I think a lot of people don't really understand and that's what I think we're going to see numbers that are likely in excess of what the model projects because we know that we know what the issuance rate is going to be on Bitcoin I think it is actually very smart to front run the having's because on average on average the price is always going to be lower today than it is at some point in the future if we think about price differently if we think about price as noise around a point so let's say the current valuation is seven or eight thousand and we've had a lot of noise around this point in the last three or four years it's ranged from $1,000 to $20,000 and point value based on the model might be about eight thousand dollars I'll think is what plan B is using so yes we have a lot of noise around that point the noises from I forget what the price was at the habit was probably at the hammer that wavers eyes the worth price in 2016 six fifty or something like that six fifty to twenty thousand so that's a lot of noise around the point do you understand what I'm saying statistically you think about it noise around the point so if we think of it in yearly chunks and Plan B has said that if you look at it in yearly numbers as opposed to daily or monthly numbers it actually gives a stronger r-squared number which is a tighter fit on on his regression so in in the date range of 2016 to 2020 which price is about it's not that's not right the model price is about eight thousand dollars in the model price in 20 22 24 might be $100,000 let's say I'm not sure with the model prices of the top my head so you see a lot of noise around the point you could have crisis as high as 3 for $500,000 prices as low as 20 or $30,000 but we know progressing through time that bitcoin is inelastic because we know its issuance is pretty much set because of the way Bitcoin works we know according to the difficulty algorithm that the most that can happen is you can produce a certain amount of Bitcoin in a certain period of time but the difficulty algorithm is just going to kick in again and force production back to whatever the reward is then per block on average every 10 minutes so bitcoin is this thing that we've never seen an economy before and I've argued that you know I mentally think of Bitcoin as being like a gecko except it's a gecko that's turning into Godzilla so it's gonna go from this little gecko that's running around you know a couple of inches to something which is a mile high and when it walks on the ground the earth is gonna shake for hundreds of miles around and that's what this thing is and so people who don't understand about how scarce this money is going to be they're playing stupid games right now they're playing stupid trading games and they can because right now bitcoin still acts like a legacy asset but post the 2024 having it ain't no legacy asset anymore count that like flattened people 2020 for having well if you're if you're at if you're at approximately 56 start to flow in 2020 working your way to 120 in 2024 and Gold is approximately 60s or so stock to flow that means you'll go from a gold like stock the flow number which we know which we understand to something much bigger almost double what gold is and then it doubles again doubles again doubles again and that's the point is is gold is something that we understand we understand that stock to flow we have not lived through something with a greater stock the flow is what you're saying so so so it morphs from a legacy style asset to something that we don't really get we don't understand what that scarcity really means and more and more people are coming to understand why that is money that you want to hold on to transport your value into the future because you because of all the qualities that Bitcoin has that it's hard to seize that it's that it's easily that you can easily transact with it at a distance electronically you know all the qualities that Bitcoin has which are which are which are many that it's infinitely divisible all of these various that is that it's infinitely portable because it has no weight it's easily transact will easily securable not dependent on a third party all the qualities of Bitcoin has so as you start to understand why this money is so good and is essentially fungible because you don't really care what you see echoes were attached to the month through the money you're buying you only care about it maybe if your government says something about it but to most of the world they don't care they're indifferent if you're in Venezuela you don't care that those UTX OHS had whatever attached to it I don't give a damn it doesn't mean anything to me so this is a very very special money and it's gonna be very very scarce it's better than that work of art that Picasso that you bought that you paid a hundred million dollars for well first of all you have to make sure that they've verified that it was really a Picasso that was really the work of art that you bought well that's expensive you have to hire art experts to appraise that piece and to make sure that that piece is really the piece that it's represented as well you don't have the problem with Bitcoin because your node verifies it for you boom boom boom it's done you know that you have real Bitcoin and that's very easy to do a piece of real estate think about holding a piece of real estate into the future you buy a piece of real estate and you want to rent it out to earn some money to keep your value up a real estates a great big pain in the neck because you have to get a tenant or tenants will pay their rent we're not late on their rent then what's gonna happen to real estate well in time you're going to replace the roof and you're gonna have to paint the real estate and you're going to have to fix the toilets in the real estate and you're gonna have to replace the water heater in the real estate and you're gonna have to replace the furnace in the real estate and you're gonna have to do all things to keep this thing up to snuff that's a pain in the neck what do you do with your Bitcoin get by a Bitcoin you store it you put it into a multi-sig that's it and you just you care for those private keys caring for those private keys it's a lot easier than caring for that work of art and caring for that building and caring for your stocks your stocks what you have to worry about you have to worry that who's running the company what are they doing are they running into the ground what are the earnings look like how about the new products how about the new services have a competitor's you don't have any of those concerns with the money the money essentially doesn't change you just have to know that counterfeit money can't be produced well we know the can terrific money can't be produced because we know what bitcoin is and we know that it can't be counterfeited so we have something that we know is scarce we have something which we know is incredibly easy to maintain relative to other things it's not easy bitcoin is still hard to deal with there a lot of hard aspects to it but as it gets easier which it will do with development it gets much easier to maintain and so that happens the price is going to go up because people were afraid to deal with it look if you started with your Bitcoin pre tracer then it was relatively hard to store people lost their Bitcoin lots of different ways you had technological development take place in this face I was reading on trace mayor's website run to gold you know he was advising oh I can't remember what this thing was called but our method what's up armory was an armory no before before that there were you know there were ways that were not as good and much harder the price of Bitcoin was much lower you could have bought Bitcoin you know maybe $10 a Bitcoin at that time you've stored it in a combination of Dropbox with I can't remember right I looked at the see other data camera what it's called to consider the run to Gold website now because $8,000 but there are better methods of storing it and there will be better methods yet you've got cold card which is probably a better method and you're going to have multi-sig and we're gonna have snore masked what's the other thing I'm thinking remember norm asked I'm God it doesn't matter well what you've got you've got these technologies that are changing that are going to make that are gonna make certain things much easier all right well we are we're coming up on the end here it is always a pleasure to have Bitcoin Tina on the show he's linked to below check him out of course well is there any uh any other information you want to share with us current events anything you wanted to comment on no I only want to stress on stress suspected I'm not concerned about Bitcoin scaling I know that its current price and where it can go in the next decade it doesn't need scaling at all we can use the legacy system as our scaling method we can store it in storage keys sell some and have that money available to buy whatever we want in the legacy system and that in the course of the next decade there'll be more than other people as the price of this thing goes up we will see billions and billions and billions of dollars of resources going into development coming from all sorts of areas which are going to figure out ways to scale this and I think ultimately it'll be the one and only money because I think that bitcoin is like a forest fire that generates its own wind and by virtue of the fact that the value of this thing goes up what's going to end up happening is that many problems which look like problems today start to go away as the value goes up because many people on Bitcoin will start to become quite rich one Bitcoin will be worth in my opinion five million dollars 10 years out approximately and so could be 12 years out nine years out but think about that for $8,000 that comes worth approximately five million maybe it's three million maybe it's six million but think about what that means if you want to support a political candidate if you gave a bunch of political candidates $20,000 that makes you an important contributor bitcoin is going to have its voice heard and when Bitcoin talks Bitcoin is going to scream because you're going to have people who are worth an enormous amount of money they will get their way because they will support candidates who do things which benefit Bitcoin so people worry about all kinds of things but I'm not concerned about this at all because I understand what this is and I understand how much power and influence it's going to have when Godzilla walks governments will tremble and bitcoin is Godzilla that's what the honey badger is becoming honey badger is growing to be four miles tall and people will yield to Bitcoin just remember we don't change Bitcoin Bitcoin changes us and Bitcoin will change the world oh yeah on that note that is that's a good way to end it yes the bitcoiners will shape the future not just the world but the solar system to Venus cloud cities being built by bitcoiners it's going to be great and yes this is a golden age that we are entering these 2020s whether it be in money nanotechnology so self-driving cars it's gonna be great and I am pumped for it and I would love that in the year 2030 I would love for Bitcoin to be worth five million dollars that would be great one need everyone so yeah it's eight thousand dollars today on October 4th 2019 for all you people with big smiles on your faces in the future watching this thank you Bitcoin Tina you're always a great awesome guest he's linked to below follow him on Twitter definitely he's great on Twitter everyone should be following him on Twitter Mele Twitter TC HP alt that's me on Twitter remember a new show here every day we do this weekend Bitcoin every Friday get all sorts of guests the best guest in the space i am adam meister the bitcoinmeister the disrupt meister remember subscribe the channel like this video share this video check out the links below found that like button bang that Bell button I forgot to say hello my elite friends so goodbye my lead friends shabbat shalom happy new year we'll see a Saturday night bye bye thank you