[0:06] CK: I think we’re waiting for a few more people. But for the most part, I’m pretty ready to go.
[0:10] Level39: Yes, I think while we’re waiting for everyone to get ready, I’ll just mention how the article came about. It actually came about, I was reading something that Jason had posted on his Twitter about his thesis. The words he was using just reminded me of something I had read. Specifically, it was Tesla’s essay on the problem of increasing human energy. He’s saying the same stuff as Tesla. And so I looked it up, reread the essay, and I was completely blown away because I came across this passage that was literally exactly what Jason was talking about. I showed it to Jason and we were just like, totally floored, it was just incredible.
He basically had rediscovered what Tesla was saying, in a sort of first principle’s way that no one had ever really thought about until we had re-evaluated with Bitcoin, I guess, is how I described it. So, once we saw that, I just said, “Oh, I’ve got to write about this and just put it into an essay.” And it was really interesting, I think I created a thread first, and as I started writing the thread, I got some people came out of the woodwork and was like, “Oh, you should include some information about some of the free energy stuff that Tesla was working on,” and a lot of it is quite sci-fi.
I started talking with Mike Hobart. We were just going through this stuff and just thinking about what can we include in this article before it gets really far out there? And that was a lot of fun. It was really great, a really interesting time putting things together. I just have to thank Jason, really, for introducing us to this sort of new way of looking at Bitcoin. CK, shall we get into it now?
[1:55] CK: Yes, we should get into it. And I guess, the only person who’s not on stage that should be is Robert Breedlove. If you are on a desktop, you should get to your mobile phone and accept the request to jump on stage. Actually, Zach Herbert, I just shot you a request as well. But we are all set to go. Level39’s awesome article that he dropped, actually all the way back in October, is pinned to the top here as well as a lot of other stuff regarding what Bitcoin Magazine is doing.
I want to make a quick shout-out to the Bitcoin 2022 Conference. You need to be there, you need to buy your ticket. I have heard a word from the organizers that our holiday discounting and all that kind of good stuff is over as of New Year’s, so, get your ticket now before the discounting stops. I believe we’re going to be doing one last kind of push for the New Year’s and Christmas and is the ultimate Bitcoin gathering. This is going to be 30,000 Bitcoiners descending onto the City of Miami. A 4-day event, 3-day conference, 1-day festival at the end to celebrate Bitcoin culture. I can’t imagine not being there and calling myself a Bitcoiner. It is worth every single cent or set or whatever you want to denominate your ticket in.
I saw a thing on Reddit where people were like, “Should I HODL Bitcoin or should I go to the conference?” Well, the answer is that you should figure out how to do both. If you go to the event, I guarantee it’ll be worth every single penny. And, if you do it right, you’re going to get a Bitcoin job. You’re going to make valuable, valuable Bitcoin connections. I started in the industry by getting my job at a conference. I know Cory, CEO of Swan, I believe it kicked off Swan Bitcoin at Bitcoin 2019. So, magic happens at these conferences, you got to go. I’ll stop shilling now.
Level, I’m gonna hand it off to you. I’m ready to get really freakin’ cosmic with this amazing panel just because these are some big-brain ideas. People haven’t even really considered them for a long time until Bitcoin, kind of, made them viable once again.
[4:03] Level39: A hundred percent, I think that’s exactly how to put it. Thanks again, CK, for hosting this and to Bitcoin Magazine, and every one, this amazing panel, it really came together because of Jason. I think a lot of people showed up because they want to hear what Jason has to say and ask him some questions, so I’ll get to it as quickly as I can here. We’ll just go over quickly, just for those who aren’t super familiar with Tesla, probably one of the most amazing inventors ever, I would say.
There’s a great book called Tesla: Man Out of Time. If you want to read it to learn more about Tesla. He was born in 1856 in Croatia. He created alternating currents and transmission technology. Certainly, Bitcoin relies on a lot of his technology. He invented electric oscillators, electric meters, the Tesla coil in 1891. He demonstrated radio communications two years before Marconi did. He emigrated to the US in 1884. He worked for Edison. I think he was helping him to revamp something with DC. Edison actually took advantage of Tesla financially. He actually promised Tesla, I think $50,000, and then when he finished the work, Edison was like, “Sorry, I guess you didn’t understand American humor, you’re not getting any money.” This was really the story of Tesla’s life, I would say, for the most part, doing all this amazing work.
Edison actually ended up FUD-ding Tesla’s AC inventions. He electrocuted animals with AC, this was Edison. He said it was dangerous, so Tesla was used to the FUD, coming from all sorts of individuals like Edison. Let’s see, Tesla invented the radio before Marconi. Marconi actually used 17 of Tesla’s patents when it came to radio. Tesla conceived the RADAR in 1917, 18 years before Robert Watson-Watt. Edison was actually head of R&D for the US Navy at the time and said there’s no practical application for Tesla’s idea for RADAR.
Wilhelm Röntgen was credited with the discovery of X-rays. Tesla had taken actually the first X-ray photographs and sent them to Röntgen, and who really developed it. He partnered with General Electric, built the first modern power stations installing hydro-powered AC generators in Niagara Falls. He experimented with cryogenic engineering. The first person to record radio waves from outer space. He discovered the resonant frequency of Earth 50 years before it could be confirmed. He’s believed to be the only person who reproduced poll lightning in a laboratory. He invented remote control in the 19th century, what Tesla called “Telautomatics.” He often was credited with inventing the neon light. But in fact, his lights were wireless and more advanced than neon lights. Imagine using the Earth’s ionosphere to distribute free electricity to the entire world. He couldn’t get the funding.
He spoke eight languages, he could memorize entire books, he could recite them at will, he could visualize devices entirely in his head, and build them without notes. He was eccentric, he died at 86 in a New York City hotel room. He was living on milk and Nabisco crackers at the time. He fed pigeons, he had little money to his name. He was often taken advantage of by investors and unable to protect or monetize his revolutionary ideas. He likely had something called “Closed-Eye Visualizations” and a very high level of them, it was very rare. It began after the loss of his brother in 1863. You can actually visualize his inventions and his ideas, they would come to him in his visions, and he could see them right before his eyes, and take them apart and do all sorts of things to them in ways nobody else could imagine. And really, he was largely overlooked by history, and more credit was given to those who profited from him.
Tesla really grew up in a gold standard world, and he struggled to profit from the transition to fiat money, is the way I saw it. And the growth of the fiat system really necessitated what I like to think of as proof of profit. Whereas Tesla really would’ve benefited from a proof of work world. But he was flawed, I’ll just point out that he wasn’t perfect. He actually believed in eugenics and forced sterilization of criminals and the mentally ill, which is a bit ironic. Some believe that he was suffering from madness, actually, to some degree. But he was celibate his entire life, so that might have been his own way of dealing with that.
Real quickly, I just want to read a passage now before we hand it off to the other people on the panel. This was the passage that led me to really write the article and compare it to what Jason was working on. And I’ll read this passage here, this is from “The Problem of Increasing Human Energy”. But before I get into this, I’ll just summarize. One of the main themes in this essay that Tesla wrote was this idea of human mass. And human mass is, you can think of it as human progress moving forward with inertia. And, it’s imperative that this mass is kept moving, if we let it slow down or stop, it becomes increasingly harder to get it moving again. So you can think of it as in like a blackout. If all the energy and power goes off, it takes a long time to get those generators working again. But Bitcoin mining actually keeps the wheel of human mass spinning and that energy can be readily diverted at moment’s notice to other high-priority applications.
Gretchen Bach actually explains this in a modern concept of this, at least, in what’s known as a virtual power plant. And, these virtual power plants, these VPPs, they foster demand response energy grids, so you can have power really running at this high level, and instantly divert it to anything at a split second. Those mining rigs can shut off and it allows for this sort of instant-on-demand response when more power is needed. You can sort of think of it like a locomotive that’s always kept idling because it’d be more difficult to get it going again from a cold start. So, Bitcoin mining keeps that flywheel spinning so that it can be engaged at a moment’s notice.
Here’s where Tesla starts talking about the idea of fostering peace and keeping that energy moving, that human mass moving. He says, “So long as men meet in battle, there will be bloodshed. Bloodshed will ever keep up barbarous passion. To break this fierce spirit, a radical departure must be made. An entirely new principle must be introduced, something that never existed before in warfare. A principle which will forcibly, unavoidably turn the battle into a mere spectacle, a play, a contest without loss of blood. To bring on this result, men must be dispensed with, machine must fight machine. But how accomplish that which seems impossible? The answer is simple enough, produce a machine capable of acting as though it were part of a human being. No mere mechanical contrivance, comprising levers, screws, wheels, clutches, and nothing more. But a machine embodying a higher principle, which will enable it to perform its duties as though it had intelligence, experience, judgment, a mind. This conclusion is a result of my thoughts and observations.”
Now, I’ll skip ahead here a bit, he says, “But the force of this new principle does not wholly reside in its destructiveness. Its advent introduces into warfare, an element which never existed before, a fighting machine, without men as a means of attack and defense. The continuous development in this direction must ultimately make a war a mere contest of machines without men and without loss of life. A condition which would have been impossible without this new departure, and which, in my opinion, must be reached as preliminary to permanent peace. The establishment of permanent peaceful relations between nations would most effectively reduce the force retarding the human mass and would be the best solution to this great human problem. But will the dream of universal peace ever be realized? Let us hope that it will. When all darkness shall be dissipated by the light of science, when all nations shall be merged into one, and patriotism shall be identical with religion, when there shall be one language, one country, one end, and the dream will become reality.” CK, I’ll hand it over to you now.
[11:47] Jason Lowery: That was beautiful.
[11:48] CK: Yeah, I don’t know why you’re handing it off to me. I think that was great. I would love it if some folks on the panel who are inspired by that could comment.
[11:56] Jason: Yeah, I’ll jump in here real fast. Level39, thank you so much for being inspired to do this research and to share it with me. I remember exactly where I was and the goosebumps that I felt when you showed me these passages. I had felt like I was maybe toeing the line with craziness by trying to make this argument. And you gave me kind of the, I guess, confidence to go forward. If it was good enough for Tesla, then damn it, it’s good enough for my research, too.
So, some thoughts about this essay, it’s worth noting that Tesla, also, I think, in the same essay, believed in those death rays, remember? He kind of saw that, especially with how well he understood electricity, he kind of foresaw that eventually, you could build electricity weapons to some scale that would make the people who wield them essentially unimpeachable. And, he wasn’t the only person at the time to be thinking this. In fact, just a few years later, there’s this guy named Sir Maxim, who was a British-American engineer who had moved to the US to start making a bunch of different patents for gas and recoil and blowback devices for rifles and ended up inventing the first-ever fully automatic gun, which he called “the machine gun.” And, he had similar ideas. He said, after he built the first machine gun in 1895, a magazine came out asked him, “Don’t you think this gun will make war more terrible?” His reply was fascinating. He said, “No, it’ll make war impossible.”
And, I say this story, because around the turn of the century, when this essay by Tesla was written, there was a huge boom in all sorts of disruptive innovations, not just with machines, not just with electricity, but with the machinery of every kind. And it wasn’t uncommon for people to believe that the combination of these new technologies would transform the nature of the military conflict and they were very similar to us right now. They saw new technologies on the horizon and had great hope for the peace and prosperity of the future. But unfortunately, of course, Sir Maxim was really wrong, very wrong. Machine guns, did in fact, make war much more terrible and the combination of these new machines made war just awful. And so, it’s worth pointing this out because the line of reasoning that both Tesla and Maxim had with respect to weapons technology turned out to be right.
It just took a different form, that neither of them expected. It wasn’t a death ray, it wasn’t machine guns, but it was nuclear weapons that would make warfare become “too powerful”. And it’s worth noting that nuclear weapons surprised just about everybody, including and especially experts like Einstein. So, in 1932, a decade after winning the Nobel Prize, Einstein famously said, “There’s not the slightest indication that nuclear energy will ever be obtainable.” Then when he alerted the president in 1939 about the possibility of creating nuclear chain reactions, he was effectively admitting he was wrong.
Then six years later after that, which was about a year after Tesla died, Admiral Leahy, the top military adviser to the president, told President Truman that the Manhattan Project was “The biggest fool thing that we’ve ever done, the bomb will never go off, and I speak as an expert in explosives.” He said this a few days before the Trinity explosion, which was the first successful nuclear detonation. And Japan, of course, surrendered less than four weeks after that test, we all know why. So, with the creation of nuclear weapons, civilization lost its ability to wage war at a strategic level against nuclear-armed peers without risking the annihilation of the species. It was a very similar mindset to what Tesla predicted in this essay with how people or organizations or countries will in “death rays”, would effectively have unimpeachable power. But this creates a very big strategic– I guess not even a strategic, this creates totally new disruption that animals themselves had never experienced before.
Up until this point, the state and chain of custody of all available limited resources had effectively a permissionless control structure over it, meaning it doesn’t matter who you are, or what kind of animal you are, pretty much everybody has the option to project kinetic power to take the resources they need, right? It’s a permissionless control structure. Without this ability to take resources, you implicitly rely on or trust in someone else to give them to you or to afford them to you. And without a permissionless control structure, you actually create an insecure, unstable situation because if someone emerges that becomes oppressive, or if a government emerges that becomes oppressive with their control authority over limited resources, there is no way to countervail their control authority.
So, for example, when the monarchy became oppressive with the resources that we had over their colonies, Americans exercise their permissionless control structure and countervailed the military power of the monarchy using kinetic power projection. But fast forward to 1945, a year after Tesla dies, he didn’t get to see it but he was right, we would scale warfare up to the point where it becomes too expensive, and up to a point where we can no longer countervail the control of authority of anyone who wields these weapons. So, we’re kind of stuck in a pickle, civilization has lost its permissionless control structure over stuff, and we need a way to restore that.
And so, Tesla envisioned this, this is what I think he was describing with these machines right? Competing in electricity competition, I think he pretty much predicted proof of work – electric proof of work, in particular. I think somehow he understood the difference between kinetic proof of work and electric proof of work, where kinetic proof of work is putting force against mass, projecting power, the old-fashioned way, the 4-billion-year-old way. But the electric proof of work is this new idea where you take the exact same function but change the form. And I think that’s what he saw. And so, if you were able to find a way to transpose kinetic proof of work to electric proof of work, you effectively find a functional surrogate to warfare itself. You are able to restore civilization’s ability to countervail the control authority of oppressors if they emerge. You’re able to restore civilization’s ability to achieve a consensus on the illegitimate state and chain of custody of whatever the underlying property is.
And so, in my opinion, the end state of warfare where we are able to preserve permissionless control over a property is the same end state that Tesla predicted is machines competing against each other in a power projection competition where that power is derived electronically. I think that might be what we have discovered with Bitcoin. It could very well be Tesla’s vision of transposing warfare from the kinetic domain to the electric domain. You take humans out of the loop, you eliminate the need for bloodshed, at least insofar as we choose, and volunteer to monetize the underlying property with this new permissionless control structure over it.
I guess my last comment would be if you kind of try to look towards the future, and predict what the way of warfare would be in the future, we know the end state of the kinetic power projection game. The end state of the kinetic power projection game is rubble, is destruction, is wars without winners, is nuclear weapons, and we know that’s pretty much already off the table because it ends in the extinction of our species. But there’s an alternative, even proxy wars that we see today, they scale, only as far as they get to the point where we risk nukes, and then we have to back off. But just like animals have evolved ways to settle property disputes and establish consensus through mechanisms like antlers or horns, or other types of things that animals do.
I think what we’re gonna see is that a future end state of maybe non-nuclear warfare, non-kinetic warfare, is effectively, and we’re already marching towards it, is effectively drones. We nominate drones to fight on our behalf. They can’t scale because they’ll scale to nukes, right? So the only other direction they can go is into– I know this sounds cheesy, into the metaverse, meaning our drones will fight each other through cyberspace. Eventually, there’ll be no point in having a bunch of like suicide bomb drone clusters fighting each other because we know how that game ends already. That game ends in the nuclear holocaust.
But in the other direction, that game ends with Bitcoin miners. Bitcoin miners are quite literally an army of drones, projecting electric power, they are fighting to control to write the ledger, right? They’re fighting to control the state and chain of custody. And if anyone wielding an army of drones decides to become oppressive with their control authority, then everyone who subscribes to Bitcoin will maintain the ability to countervail the control authority of those oppressors. Why? Because in Bitcoin denominated terms, the cost of mining is permanently getting cheaper and cheaper, so it’s always easier to countervail the control authority of oppressors if they should emerge.
And so, maybe it might be true. I have a lot of hope. I don’t want to be another Sir Maxim that predicts that machine guns will end warfare, I don’t think we’ll ever see an end to warfare. But I think that we can choose to end warfare as a means to settle the state and chain of custody of monetized property. And I think that’s exactly what Bitcoin represents, it represents people choosing to opt-out of that control structure into one that doesn’t require bloodshed. And so, I’ll leave it there for comments.
[23:47] Level39: Thank you, Jason. I appreciate those comments tremendously. I want to give you actually a proper introduction before we get going. I’ll just gonna say this real quick. Jason is a Commissioned Officer in the US Space Force for those who aren’t familiar with him. He’s actually a national defense fellow pursuing a master’s degree in Engineering and Management at MIT. Previously, Jason was Director of Operations of the Space Force Launch Squadron, supporting national security, civil, and commercial launch and landing mission campaigns at Space Launch Delta 30 at Vandenberg Space Force Base. He’s over a decade of military experience between the US Air Force and the US Space Force.
His full-time job is actually to study engineering and research Bitcoin. He’s actually writing his thesis on the national strategic security implications of Bitcoin, which includes ideas about how miners are functionally identical to the role of militaries and can be adopted as a surrogate to war with respect to achieving global consensus and the legitimate state and chain of custody over monetary property. His views are strictly his. They do not represent the views of the USDOD. We just want to put that disclaimer out there. But anyway, I’ll let someone else jump in now.
[24:55] Robert Breedlove: Hey, guys.
[24:57] CK: What’s up, Robert?
[24:58] Robert: What’s up, CK? This is my first space, so thanks for inviting me, thanks for having me. Thank you, Jason, that was just brilliant. I know that a lot of your thinking, like my own, was shaped by the Saylor Series by Saylor’s, I guess just analogizing money to energy, which really seems to be the through-line across all these different dimensions, right? Like, human beings clearly were physical.
But as you know, there’s a great quote by Tesla. He said actually, “If you want to find the secrets of the universe, then you should think in terms of energy, frequency, and vibration.” And this is something Peterson goes into a lot too, that what we really see at the furthest reaches of science today, like especially in quantum and whatnot, is we see this infinite flux of interacting patterns, right? There’s no stuff in the universe, it’s all energy, all of it. Even matter. Matter itself is frozen energy.
So, I think what’s happening with Bitcoin is that it’s kind of like a gateway into this deeper ontological reflection. We’re really trying to get to the bottom of things in a very new and interesting way. But it’s in that contemplation and in the implementation, it’s somehow becoming like a self-fulfilling prophecy in a lot of ways, which is super interesting.
So, I’ll try to just speak to a few things that I’ve been looking at on the physics path, which this is, again, I credit, largely to Saylor and, Jason, your work as well, that just really starting to look at the world in terms of energy. And if we think about civilization itself, it’s indistinguishable from increasing the flow of useful energy. This is electricity, this is running water, this is food availability, this is economization of any human action effectively. That is civilization. That’s what we’re doing. That’s what trade and innovation are, right? They are force multipliers for human beings. So, therefore, anything that contributes to additional energy throughput, or additional flow is inherently good in civilizing. We are creating more with less, we’re accomplishing greater results with less effort.
So, by reason then, and anything that’s interrupting that flow is actually taking the sustenance of others, and it’s something that’s intrinsically destabilizing. I can think what we’re so caught up in this fabric of nationalism today, where we think we need these imaginary lines drawn all over the planet, and that’s just how human beings will get along because that’s how we’ve always gotten along. I view this as some kind of like, perhaps it’s a limiting framework, it’s a limiting geopolitical framework. Maybe it was necessary to bootstrap ourselves to this point of the digital age, or something like that.
I think Nietzsche has this quote about “In order to be free, you have to be a slave, at some point”, like you have to progress through slavery to achieve freedom. So perhaps nationalism itself was some form of servitude we’ve been evolving past for a long time. Like, clearly it’s better today than it was in the days of Ancient Egypt, per se. But it doesn’t mean that it’s something that has to persist forever. There is this possibility that I think Bitcoin is really throwing light on that we could evolve past everything we’ve observed historically.
So, just in the physics sense, is like maximizing and increasing the flow of useful energy, that is civilization. That is how we lower time preference. That’s how we create wealth. Interrupting, dividing, or segregating these flows where someone tries to take sustenance from others, that’s the opposite. That’s taking, that’s de-civilizing, this is raising time preference. And again, to tie it back to Austrian economics, civilization is the microcosmic reflection of our time preference. The more civilized we are, the lower our time preference, and vice versa.
So, basically, I mean, it seems pretty fundamental to me, everyone who prefers poverty over wealth, which is everyone, no one prefers to live in poverty. Knowingly or unknowingly, embedded in that want is the want to channel more energy, consume more fuel, or in a nutshell, live more freely to be able to satisfy your basic needs, food, shelter. You can work your way down Maslow’s hierarchy with less effort and this then frees you up to be more human, to be more civilized, to pursue higher aims, artistic, spiritual, or otherwise. This is just interesting to me, this concept of freedom being embedded in the physics of reality. This is something that’s not just human, it’s in nature. Nature is evolving towards greater freedom.
I want to read this quote, from this excerpt from a book titled, The Physics of Life, “Life is a movement that evolves freely in both animate and inanimate spheres. Alive are all the freely changing flow configurations and rhythms that facilitate flow and offer greater access to the movement. When movement stops, life ends. When movement does not have the freedom to change and find greater access, life ends.” So, this is the life phenomenon, it’s everywhere. It’s united in the inanimate realm, like rivers, lightning, snowflakes, and the animate realm – animals, vegetation, society, technology. And so this phenomenon we call life, we try to draw this bright line between organic and inorganic matter, it’s all around us, everything’s alive, everything’s flowing towards greater freedom. So the life phenomenon, it’s older than the biosphere.
It’s almost like Bitcoin has reintroduced us to this fundamental natural law of just honoring the freedom of the individual who creates the best outcome for the collective, something like that. I’ll pull this down to the economic sphere a little bit. Capital, right? Capital is something that we could say is defined by its ability to accelerate us towards the attainment of a name. Maybe another way to think about is that it also increases the options set of things we can do. So if you’re a caveman, and you wanted to go from New York to LA, you’re not going to do it, right? It’s just not there, the technological realities are not there, you probably spend your whole life trying to make the trek. But in the modern-day, we have this sophisticated roundabout capital production process that gives us things like airplanes, we can do the flight in four hours.
So, capital and we said earlier that increasing the flow of useful energy is indistinguishable from civilization, is indistinguishable from what is good. Capital is that which provides a freer flow of useful energy. So, capital is good. Capital accumulation is good. Capital is the fruit of free behavior, right? Free interaction. Good meaning, that the design is evolving towards greater energy flow and greater freedom, then the physical measure of a good idea would be the increase in human movement that it enables. So good ideas, basically become reflections of additional options for action, again, with the caveman, right? He has the option now to fly in four hours versus spending his whole life trying to go to New York to LA.
Bitcoin, I mean, we can talk about this for thousands of hours and not run out of things to talk about, but I’ll try to say one line here – it’s perfecting the movement of individual self-interest, propagating individual self-interest across an inherently antagonistic network of market actors, by virtue of being perfectly mapped onto the thermodynamic realities of energy. It’s like the ultimate lubricant for the economic engine, something like that. I think this is why it’s so fucking mind-blowing because we’re harmonizing ourselves to deeper reality through contemplating and implementing Bitcoin, perhaps?
If you consider meaning in a mathematical sense, it’s an isomorphism to a deeper pattern of reality. So you detected a deeper pattern and you’ve started to harmonize to it. And so far as we can see, everywhere in nature, it’s evolving freely all the time. Fiat then, this idea of what an authority says being true, instead of what is discovered to be true is a distortion or divergence from this fundamental ontological reality. Because some guy with a big stick said so, does not make it fucking real. It means that we’re living in that guy’s lie now. This is not just money, this is the law, this is any declaration from authority that’s trying to supersede discovered reality.
So I think fiat is this like pathology we’re dealing with. It infects a lot of things, I’ll focus on property rights. Private property rights, and the other fruits of common law traditions like English common law, the ancient Roman law. These are all opposite to fiat. This is not what somebody said. This is observing the patterns of human actions across the broadest timescales and extracting what is useful, the principles that are useful, and encoding those into your socio-economic system. When we corrupt money, all it’s doing is violating private property rights, so it’s by fiat, we are diverging from reality. We’re corrupting the relationship between the agent and the arena, which is to tie this back into physics, we could say this is to corrupt the relationship between physicist and physics.
I’ve spent a long time talking to Weinstein about this, and I think many of us would agree, the divergence from hard money is at the bottom of much corruption in our socio-economic systems and institutions. So, corrupting money like this, corrupting property rights is disintegrating our ability to interact meaningfully. It is an actual pathology, it’s not an analogy, it’s an actual fucking pathology. If we want to get back to reality, it’s like we have to honor reality and acknowledge reality and the fucking reality is, every human being is individually self-owned. It’s an inalienable right if you want to use the term “right”. It’s an inalienable quality of human existence. You can’t even give it away. I can’t even give you my willpower or my consciousness, or my ability to think. I can’t do it. I do not have the ability to exchange it. It’s inalienable.
And so, Bitcoin is just acknowledging the reality of life, liberty, property, these principles we’ve discovered and thought about, and talked about for so long. And it’s just crystallized into this technological implementation that appears to be an incorruptible social institution. It’s like the wisdom of money or the savior of socio-economic reality for humanity. And it sounds wild and crazy and cosmic but I think it is. So, I’ll drop it there.
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[39:13] Level39: Jeff Booth, I’d love to hear what you have to think about what’s been said so far today.
[39:17] Jeff Booth: Yeah, I’m going to try to connect a couple of dots here and, Jason, great to hear you in this as well, and good to see you again, Robert. If you think about and if you look at some of the things that Jason is talking about, and combine that with essentially The Great Filter. Is The Great Filter behind this and we’re the only species in the world that got to this point? Or in the universe that got to this point, or is it in front of us? If you run what that looks like you would have to assume that if other races on other worlds tried to build a society, they would have to go through many of these things that we’ve gone through to get to this point. And in that competition for resources and control over other people, because money couldn’t be tied to energy in the beginning, you would end human nature, and human nature will always vote for more than we can actually get. So, I aggregate that up, we’ll actually always defer control to somebody else who says they can give us more and hide that in inflation. And you never had a currency that could stop that.
So, it was essentially a game theory that you would get to a Schelling point that became nuclear weapons or became something else. And so, when Jason talks about kind of what it looks like, humanity has never actually got to this point in a reset of currencies with the type of weapons that we have today. At least with many people controlling weapons like that, where a finger could end civilization. And so if you think about that kind of Great Filter in front of us, I suspect that that’s actually what Bitcoin changes because it moves the Schelling point to the other side around cooperation. And that’s what Jason talks about with the competition for resources being energy and that energy driving prices of energy down is actually competing and the byproduct of their work, whether they’re holding Bitcoin, whether they’re working on a system.
Let’s just use an example of an entrepreneur creating value on the Bitcoin network and you have to assume that with incorruptible money than what I wrote in my book about technology being deflationary, things will keep falling in price forever. So, an entrepreneur during that work is essentially on a path to make their work better for all of humanity. They’re building the bridge through which all of the humanity benefits, because as the price gets taken out of the market, eventually to free, humanity thrives. But you have to assume that if any other civilization or any other planet went through the same series of events to get to this point, this would be the next step and they wouldn’t be able to tie energy to money, and we’ve had Mr. Fuller, we’ve had Ford, we’ve talked about many people before talking about the perfect money would be tied to energy, but it couldn’t be done until this point, and this evolvement of humanity to get to this point where you could create this. I don’t think that it’ll be done again.
That’s what’s so unique about Bitcoin, it’s hard to understand because we’re living through a system change and we measure the system from the system. So, it’s really hard to see the other side about system change but it literally changes everything. And I know a lot of people on this call already understand that. Most of the world doesn’t, and so you can see through their rise measuring a system from the system. Foods going up, housing is going up, they wonder why. And what they will likely do is they’ll likely vote for other people to continue that system from that short-term payment. So, a Bitcoin is an escape from that system but it also builds a bridge to the other side of the new system that humanity walks across and I think it does so by that Schelling point of global cooperation instead of competition.
[44:02] Guest 1: I completely agree with you Jeff in terms of Bitcoin changing all the assumptions. And that’s why I just get really frustrated when a lot of people, whether they’re in a Crypto space or Legacy Finance, or maybe they just haven’t taken the orange pill all the way, but it’s difficult for me to try to reason with them because my base case is kind of based on a lot of Bitcoin native assumptions. So, I can definitely appeal that but at the same time, I do think that Bitcoin changes the incentives and that’s something that needs to happen because we’re seeing the incentives of fiat play out right now and I don’t think anyone on stage really likes what that’s looking.
[44:43] Robert: Yeah, imagine a world where with Bitcoin, it allows for the markets across education and whether you want to talk about public education or college, or we can talk about agriculture and farming, or food industries. Just imagine what good sound money that can be freely distributed as it should be allocated for as far as the returns on future potential. Just imagine the kinds of benefits we can yield from that. Just between food and education alone, I’m very excited for what this can actually do for humanity.
[45:24] Guest 2: So, I have a question for Jason. Thank you, Robert and Jeff, and Jason. Everybody is really, really great to listen to you guys. How do you see in your thesis, how does the fiat design was meant to occur? Does it come out of Bitcoin and those holding Bitcoin suddenly have more power and is there a bit of coercion to make it so that these wars are carried out in the virtual realm? I don’t really understand what this incentivizes on the fiat world from using force and mandate and then fiat methods to achieve their ends?
[46:07] Jason: Four billion years ago it was World War I, a bunch of unicellular organisms fighting against each other for limited resources. Two billion years later, a couple of cells started getting smart and they realize they could conquer more resources if they start working together. But what’s interesting is this was before they had brains. This was before they had eyeballs. It was before they could see or know what they were doing. They actually started cooperating as a competitive advantage. Meaning, cooperation was a predatory tactic and it was totally involuntary.
Their cellular membranes, because of the mutation, started becoming sticky and so these single-celled organisms started sticking together and so they involuntarily had to cooperate, or another way it happened, was a bunch of single-celled organisms realized that the best energy-efficient way to survive was to create really strong, basically cell membranes’ really strong defense. But if you have a bunch of all these cells conquering a limited space, what you have is basically the colonization of an area which is a form of attack because you are expanding. And all these other cells that are trying to compete over the same space will die because the colonizing cells are so powerful.
But the point is, these predators emerged, these multicellular badasses emerged involuntarily. They discovered how to cooperate, and so I think what you’ve called the fiat disarmament or what you perceive as people who would have no– by their own self-interest, why would they ever agree to this? I think the beautiful thing about Bitcoin is it creates that sticky membrane that forces people to cooperate with each other involuntarily. At the end of the day, everybody needs to preserve their wealth. At the end of the day, people keep on thinking this is a negotiation. Bitcoin is not a negotiation. Bitcoin is literally built out of nuke-proof technology that’s being adopted at a rate faster than anyone could possibly realize.
Like when Norbin the engineer paid a visit to Constantinople in 14– I think it was like thirty-something, whenever it was, he offered to build Emperor Constantine this “explosion engine device” which could shoot stone projectiles. And Emperor Constantine turned him down thinking this was a negotiation. But a year later, Emperor Constantine is dead, and the walls of Constantinople were shot down by this new weapon system. This new way to defend property and so, if you want to defend yourself and a new technology emerges that makes it pristine defense, you don’t have an option. There is no negotiation.
Once artillery emerged, the Schelling point is everyone owns artillery. Once airplanes emerged, even though the commander of World War I, the top-ranking person looked at airplanes and said, “That’s an interesting toy but it’s of no military value whatsoever.” It wasn’t a negotiation. Once airplanes emerged, the Schelling point is everyone has to have airplanes to defend themselves.
Once nukes emerged, the Schelling point is everyone needs nukes to defend themselves, that’s why so many people are going towards nukes. Bitcoin is a defensive weapon system in my opinion. It is built off of defensive weapon systems, TCP/IP was a defensive weapon system, SHA-256 designed by the NSA is a defensive weapon system. It makes defense, it perfects it, it allows people to achieve nuclear-hardened defense at the individual level, where we don’t have to rely on nation-states to provide it for us. So, it’s not a negotiation. It literally can’t be stopped and eventually I think people are going to realize that and going to realize that the best way they can defend themselves and their monetary value is the best way everyone can now, which is to buy Bitcoin as soon as possible. Does that answer your question?
[50:57] Guest 2: Yes. What an answer. Thank you.
[51:00] CK: Mike, what’s up? Actually, let’s go with Cory real quick because, Cory, I know you haven’t spoken yet.
[51:06] Cory Klippsten: Hey, everybody. Making sure you guys can hear me, looks like you can. This is great, super educational, and wonderful to share a stage with you guys. I actually wanted to tease out that analogy that Jason just made about the Ottomans conquering Constantinople. And one thing about that story is they were shown the plans for the cannon and sure they thought it was like charging a lot for it. But they also knew that they didn’t have the materials for it, so at that point, Constantinople was basically a shell of its former self, I think there were only 8,000 people living within the walls. They didn’t really have much money and much resources anymore, and so what would make it different or how is the analogy changed since maybe the existing system that has Bitcoin. Bitcoin has it directly and its crosshairs now, but the existing system does have significantly more resources than the remaining folks in Constantinople had at their disposal. Like how would that sort of change things in your calculus, Jason?
[52:15] Jason: It makes it so freaking frustrating because imagine if Constantinople was rich as hell and had a money printer, there would be no excuse. We’ll give Emperor Constantine the benefit of the doubt, yeah, he’s broke and the empire was going down, but it was an existential threat. Figure out a way to find the resources to pay for the gun before Mehmed uses it against you a year later. Yeah, it’s so freaking frustrating. It would be so easy to print money to buy Bitcoin. We’re already in control of a nice healthy hash rate here run by American Bitcoin miners or allied Bitcoin miners. You could print money, you could debase the debt away, you could buy Bitcoin, you can enrich everyone who owns Bitcoin, you could improve the sovereignty of everybody, you would immediately eliminate the capital fight risk that you’re scared of today, and then if you wanted to, you can still build your CBDC shitcoin on top of it if you want to. There’s nothing preventing you from still doing that. So, buy it for the love of God.
And it’s so sad because Emperor Constantine, in his last speech, he’s sitting there and he’s talking to his officers, I read the whole thing from different interpretations, and the entire time he’s ensuring them like, “Don’t worry, your swords and your shields are fully sufficient along with our walls to protect yourselves. Our enemies have no such weapons.” And he’s saying this as Orban the engineer is just raining shots down on them. He’s my hero, by the way, Orban. He shot so many times that he cracked his gun and killed himself accidentally. He’s a trigger-happy guy. I hope that America will figure it out, will understand that we don’t get the option. If we don’t take in Orban the engineer, then someone else will take in Orban the engineer, and also I hope that the people in this space continue to shoot down these walls but don’t accidentally kill themselves in the process.
[54:49] Tomer: I lost my train of thought. There are so many smart things that’d been said this evening that my brain is melting from it. I think Jason as you were describing the evolution of combat from a single cell to multi-celled creatures and how all of these is not a negotiation, it really just brought up in my mind the memory of the next question – if you can’t beat them, join them. And I think this is what you’re saying is Bitcoin is not a negotiation. This is unbeatable technology, you might as well join them and that’s the lightbulb that we’re waiting to see go on to our America’s politicians and it hasn’t yet and that’s what you’re frustrated about. So, when are you running for president?
[55:32] Jason: Ha!
[55:32] Tomer: Well, it’s something that’s going to make– or Federal Reserve chairman or something, it’s like, it’s sitting there looking at us in the face and this isn’t about what Bitcoin short term price is. We’re talking about taking control for the United States of using the current power that it has with the dollars reserve asset and making Bitcoin the reserve asset but then having more of it than anywhere else in the world and that light hasn’t come on. And of course, if they do that, I know so many people are concerned about the price, we’re just talking about numbers that would be dwarfing what they are today because we’d be talking about all the money in the world essentially and the race to own the biggest share of it at the beginning. Am I correct in my attempt to restate some of what you’re saying there?
[56:31] Jason: My thoughts are – there is no price that people wouldn’t pay to protect their sovereignty and their monetary property. So, the price is pretty irrelevant. They’re going to pay it whatever it is in the future. Also, there’s this guy, Billy Mitchell, he saw these airplanes and he was a big advocate for them. He worked for the army. He was a general. And he was just constantly bashing Congress and constantly bashing his leaders about, “How could you not recognize the strategic security implications of this emerging technology called airplanes? And how could you possibly put so much money into things like battleships?”
He even got a captured German battleship from World War I and did a demonstration where he took a cheapo little plane with a cheapo little torpedo and then sunk the ship just to show the asymmetric advantage that airplanes offered. And there are transcripts of him basically calling his Congressional appointees like pigs, and like dumb as pigs. Anyways, he got demoted understandably. He lost his star, he died. So, he retired and died of old age but when Pearl Harbor happened and a bunch of battleships got sunk by airplanes, he got his star back. They posthumously put it back on him. He was totally right. And so I tell my bosses, “This is my Billy Mitchell moment, you got to let me do this.” I promise I won’t call my Congressional people dumb as pigs but I have to be an advocate for this because this is my Billy Mitchell moment.
[58:20] Level39: It’s a wonderful story Jason, and thank you then for realizing this and taking it so seriously and putting your career on the line for what you believe in and what you have done an incredible job of reaching above. I’ve learned so much listening to you in such a short period of time, and really, really, you’ve earned a lot of my respect.
[58:41] Jason: Thank you.
[58:42] CK: All right, we have– sorry, Jason. We have two people raising their hands. Mike, why don’t you jump in, and then we’ll go to Jeff?
[58:47] Mike Hobart: Yeah, I just wanted to kind of maybe bridge the gap a little bit between analogies that Jason so eloquently put forward. So, he mentioned how he was kind of discussing how owning the apex technology really kind of made for the individual, owning the big sticks, and having the higher ground. The question that Alex proposed was asking what prevents the physical disruption of the hardware that’s supporting the Bitcoin network, right?
Ultimately, it comes down to the aggressor weighing out the risk-return on doing something like that, and when it comes to Bitcoin because it’s the apex predator in the financial world, there comes a time where weighing out, attacking a fully decentralized network, that is just going to grow back like a weed anyway. The aggressor actually loses out on any sort of reward with the way Bitcoin operates and eventually like Tomer just so perfectly weighed out is that if you can’t beat them, join them. And that’s where attacking the hardware just doesn’t make sense. You’re going to spend more time and money trying to blow up hardware and maybe even risk the loss of life versus where if you just put that time and effort and energy into mining Bitcoin or producing Bitcoin, or defending Bitcoin, you just come out on top, right? So, like Tomer actually professed what I was going to say perfectly is that if you can’t beat them, join them and nobody can beat it. So, you might as well join it.
[1:00:23] Tomer: Can I throw in one thing? I have this idea for a short story. I’m dying to tell you. If in the near future, America’s nuclear subs aren’t patrolling the seas ready to launch nuclear weapons, they’re mining Bitcoin and it’s an indestructible Bitcoin mining operation that they’re running, so it’s no point attacking the American mining operations on land because you’re not going to get enough of them because they’re using the subs for them. What is the new ending of that?
[1:00:47] Jeff: I love that. One thing I just wanted to talk about with Jason and Tomer, it specifically saying, like if you actually play that forward on, where do US today stands and what would happen as if they went all into Bitcoin? What do you think it would do to the global currency right now as a US dollar? And so, financial systems would start to collapse everywhere and when you back up to that Schelling point, Jason, what really would happen in 1971 is then it happens with all of us is we protect our identity for the way we play game theory is- us first, then our family, then our friends, then our region, then our nation-state. And we’ve looked at the same. That notion that we have builds kind of a powerful alliance to our nation-state. And if you think about then to 1971, essentially US tied oil to energy to US dollar and made it ubiquitous because you have to price oil in US dollars, and if you didn’t, you were excluded from the financial system of the world. And if you tried to price it in something else you would be invaded.
And so, what’s mistaken or what’s missed there is that gave extreme privilege to the US and it allowed them to essentially get free energy because they could print energy, and everybody else had to pay energy. And so, the negative externalities much within many of the negative externalities around the globe are caused by that imbalance. And inside a country including in Canada because we’re beneficiary as well, we don’t see it because we can spend beyond our means for a long time and other nations can’t because their currency is collapsed.
So, tied into that, you just have to think, you need to be really strategic for how you do this because you can’t have the collapse at the same time. If you’re being strategic in that, I think you would want a regulatory framework that allowed it to move to your country. You would want to set up Bitcoin mining like Tomer’s just said, but you need to set up that Bitcoin mining at a state level. But be very careful because your system change from the system that has the biggest benefit from the system as it stands today. So you have to create a new system to move to the other side and I just don’t see very many companies.
If I have to think about a company example, short of Apple, hiding the iPhone in a lab developing it with a different group of people and running their entire business and not letting anyone else know about the iPhone until it was ready. I see it as a similar type of thing here in that transition. I suspect all over the place, different states in the US are actually moving this way, different counties are moving this way, but it’s just a natural progression from one system to another and I suspect it’s happening all over the globe.
[1:04:33] Jason: Sorry, I fell off there for a second. To answer the question that was asked before. So, we have seen effectively a nation-scale attack against the Bitcoin mining network. They didn’t use bombs but they effectively used the threat of bombs and it was over the summer and so do we think that we’ll ever see such a– I mean, to achieve the same effect, you would have to bomb all the miners in the country simultaneously. I guess if it can survive a 50% drop in hash rate in a couple of weeks and then recover 100% back within 6 months and hit new all-time highs, that is an incredible display of the resiliency of the network. But if push comes to shove, there’s always the old-fashioned way of protecting miners over.
[1:05:39] CK: Let’s jump to Robert.
[1:05:40] Robert: I kind of have a question I wanted to throw out. I think mostly for Jason, but really anyone. Jason, you’re describing the Schelling point of military dominance as I understand they coalescing to the more– I’m going to use this term “frictionless”. I don’t mean completely free of friction but less affected by friction, let’s say. So the move clearly, he who controls the waves controls the world, right? To be able to launch a successful navy was the most frictionless domain on which martial law was established at a global scale and that changed as you mentioned earlier when we got into air technology, fighter jets, and whatnot. So, now the dominant force in the world are these supercarriers and clearly, you’re involved with space force which would be the least or the most frictionless domain, let’s say.
So, it appears to me like there’s this again back to this idea of freedom, right? What is least inhibited tends to be where we can maximize the flow of energy is what humans work towards. But the other thing here is there’s an economic aspect where there’s a large initial investment, right? It takes a lot of energy to build a big ship and make it sea-worthy and set it out sea, takes an even larger investment in terms of technology and knowledge and propulsion to launch aircraft, takes, even more, to get into space. So, I guess my question, not be too complicated – is there an analogy or perhaps even a physical principle by which the more frictionless technology wins that we could use to make the case for Bitcoin as frictionless money or defensive tech or energy projection mechanism, something like that?
[1:07:50] Jason: Yeah, I’ve been trying to work that out in my brain. So, there’s this guy, super smart, he once said, “Technology is nonbiological evolution.” His name was Bobby Breedlove. The first weapons were when cells figured out how to subsume other cells with stronger membranes. The first weapons were when cells figured out how to grow little hairs so they could swim around and eat other cells when they could grow tails so they could swim around and break other cells. The first weapons were when cells figured out how to cooperate at mass scale and then you scale that up all the way to multicellular, you scale it up to almost humanoid species learning how to start fire, learning, growing prefrontal cortexes, learning how to cooperate at huge scales far beyond what other animals could do because they could use their prefrontal cortexes to cooperate through shared abstractions and apply meaning to things.
And so, somewhere along the way, that evolution changed from biological weapons to technological weapons, but it’s the same game. The game is the animals which project the most power in the most clever way earn the right to set the state and chain of custody of resources and the ability to project power is what enables you to have a permissionless control structure over resources. If you can’t project power to get your own resources, then you tacitly must rely on somebody else to do that for you, some other animal to do that for you. So, that’s the game. If you can figure out the most clever way to project that power, then you win the game and effectively what we see over the last 4,000 years is the people who project power in the most clever way to win this game, write the ledger. Sound familiar?
In my opinion, Bitcoin is just a subtle but slight change in the same power projection game that nature has played for four billion years. As the saying goes in Latin, “Natura non facit saltus”, nature doesn’t make leaps. Bitcoin isn’t really, from a functional perspective, a big leap. It’s the exact same game. Those who project power in the most clever way win the right to write the ledger. And if they ever become abusive with that power, users have the right to project power to counter bail the control authority of those entities. Weapons in the kinetic world help us do that, the creation of cannons, the creation of airplanes, of ships, of all these other weapons were functionally similar to when we discover more clever ways to create miners like ASICs. We’re learning how to project power in a more clever way that the only difference is its kinetic power versus electric power.
And so, I really do think that Bitcoin is war. I know that people get salty when I say that, but it is the functional surrogate to war. It is the exact same game, played the exact same way using the exact same physics. The only difference is instead of projecting force against mass to displace it, you project charge against resistor, but everything else is the exact same. And so, that’s awesome because now you’ve created a way to protect property but more importantly to re-establish a permissionless control structure over the property after civilization lost that ability because we scaled the kinetic power projection game too far. And so, Bitcoin creates a step function decreasing the amount of energy needed to preserve and restore the same game that nature itself has been playing for four billion years.
That’s kind of what I want other people to see. It’s like Bitcoin is not special because it creates a scarce form of digital property. I could go buy some shitcoin if that were special, right? In my opinion, the true scarce part of Bitcoin is the permissionless control structure over it which can only be achieved through the projection of power. Energy transfer per unit time, I think it’s fascinating.
[1:12:55] Guest 3: Jason and I know a lot of people are raising their hands. But one of the things that I didn’t appreciate, and maybe something that triggered me when you started making the analogy was I feel like a lot of Bitcoiners kind of see a world postwar as a goal. So, even justifying war as part of how society comes to a consensus, I’m sure it upsets people. And then especially, connecting Bitcoin to that, but it makes a lot of sense like war did have and physical violence in the monopoly of violence. All of those things were useful to society because to this point. You can’t just remove them without filling the void of some other form of consensus or way for people to kind of project that energy.
[1:13:43] Jason: Yeah, I mean, I don’t like war either. I probably don’t like war the most out of this group. The problem is, it’s not avoidable. You don’t have the option to unsubscribe from having your heart bleed if it gets shot, right? There’s a book it’s called Everyone Poops. And it’s a lesson to not shame people who poop, right? Like, we hire plumbers, we create systems to minimize the amount of poop that we have to see in our lives. But every now and then it gets a little messy, and you have to clean it out, or maybe something breaks. But what you don’t do is you don’t shame the plumber for smelling like poop. You don’t shame the plumber for having poop on his hands.
It’s the same for blood, everybody bleeds. You hire people to minimize the amount of blood that you need to see in your life. But, it’s not perfect, people make mistakes, things get ugly. What you don’t do is you don’t shame the people with the blood on their hands because you are all benefiting from their work. If you identify as a citizen of a country, then you tacitly comply with warfare as a consensus protocol. If you own any property, if you recognize legal ownership of anything, then you tacitly comply with the contract law that only exists because a war was fought to legitimize that law.
The Constitution was written ten years after the Revolutionary War started, and so if you recognize anything, like everything we inherit is at least in terms of legacy property, the state and chain of custody of all of it were written in blood. I’m sorry, but that’s how it is. It’s like these people that love steak, right? I love a good juicy steak. When’s the last time you’ve killed an animal, right? You probably haven’t recently. You probably have hired someone to do that ugly business for you because you don’t have the fortitude to do it. I’ll stop there.
[1:16:21] Level39: Wow.
[1:16:22] CK: Good points. Let’s jump to Tomer.
[1:16:24] Tomer: My god, Jason, you’re blowing my mind every time you speak. It’s amazing. I keep losing my train of thought. Let me see if I can gather my thoughts together again. I’m sorry.
[1:16:39] Jason: We can go to breathe in too.
[1:16:40] Tomer: Yeah. I’m literally got blown away. I’ll find my thoughts.
[1:16:43] Rob Hamilton: Jason. Yeah, brilliant. This is the channeling of energy to the right flow. We describe reality through complexity theory. We talk about stocks and flows, but ultimately this is like unbroken wholeness of interaction. Energy transmitting, it’s just essential to everything, every physical process. So I won’t belabor the point, but I’m thinking deeply about this. I pulled this up, the coefficient of friction. Maybe it’s just something to think about in terms of packaging the importance of Bitcoin, for people that don’t understand it and connecting it to prior military innovations.
I’m going to read this piece here. “Friction is a resistive force that prevents two objects from sliding freely against each other. The coefficient of friction is a number that is the ratio of the resistive force of friction divided by the normal or perpendicular force pushing the objects together.” And there’s an equation given here, I just wonder if there is perhaps some way, I don’t expect you to answer it here. Just to think about how we might capture the energy efficiency gains in the sphere of military technology by moving to more frictionless environments, right? Land, sea, air, space, like algae to Bitcoin, right? You know where I’m going with this, so I’ll leave it there.
[1:18:31] Jason: Yeah, remember when we were talking on Twitter and I was like, if you want to do an apples-to-apples comparison of the energy used by Bitcoin, you should measure it in TNT, right? Because that’s how we measure the energy of bombs. We have a TNT equivalent, but it’s still joules per second, it’s still watts. It’s just how you do the conversion. And so like, you can literally measure the potential energy stored in all of our atomic weapons and combine them and compare it to Bitcoin, you could measure the watts expended by all engines on all military things. You can measure the watts expended by the heartbeats of all service members of all militaries over all of history, mind you. To protect and defend monetary resources or to determine the “fair pecking order” or “legitimate pecking order” or over “legacy property”.
But I said this on Pomps’ podcast, I would love to do that calculation, and that’s like an engineering thing. But that would be so freaking hard to do. I don’t know how to begin. And then the other problem is it runs into this trap that I think that’s happening with the ESG argument right now, where I think, and I got this term from you, Robert. ESG is essentially moral camouflage. It’s like masquerading as an engineering topic, right? It’s something that you can speak towards. It’s like baiting people into having this efficiency conversation when in reality, it’s effectively an ethical argument. And the ethical argument is, effectively, that Bitcoiners are wasting energy, right? That energy could go to some starving child in Africa somewhere.
But the problem with that argument, as I hope I’m starting to make clear to people is that the apples-to-apples comparison between the energy that Bitcoin uses to defend property, and the energy that’s used to defend legacy property is the cost of the electric bill versus the cost of people who have to fight and die to preserve the state and chain of custody of property as it exists. Or to countervail the control authority of oppressors if they emerge. And so, I think I still want to pull that thread with you, Robert. But my go-to is it’s better to pay an electric bill than a blood bill. And by the way, we’re paying a blood bill and it’s still not working.
[1:21:15] CK: All right. Hey, I know Tomer was thinking about this question. So let’s go back to Tomer and then Rob, I know I’ve been neglecting you. So you get it next, no question asked.
[1:21:25] Tomer: Thanks, I’ll kind of be quick to that. I just want to do more inquiry in some of what you’re saying. And you said, Jason, Bitcoin is a war. And part of the question I want to ask is – who is it a war between? Who’s at war and who’s fighting the war on whose behalf because it sounds to me like if I take to heart, the role of the soldier, the role of the butcher, and the role of the miner is the same. They’re doing the work that the rest of us benefit from. And we passively and implicitly benefit from it.
So I’ve got the question of – who is the war with? But I also want to ask, as a devil’s advocate, if we have this competition over hash rate, which is the projecting of the force, but it all exists in cyberspace, and we’ve all got our Bitcoins. What is your view on why military force doesn’t just roll in and say, “I don’t care that you guys have Bitcoins, you’re using my fiat money at the point of a gun, and that’s the end of the story, put away your Bitcoins,” how does Bitcoin still, in the digital realm with electricity, repel the force of a gun?
[1:22:39] Jason: So I think this is a good common confusion that I need to get better at explaining. I think Bitcoin is a surrogate to warfare, not is a war against any particular entity. So when you buy Bitcoin, you effectively are volunteering to engage in a new form of warfare between other people who own Bitcoin, where the warfare is fought between miners, just like Tesla kind of envisioned. We are choosing to let miners set the state and chain of custody of these limited resources. We are volunteering to monetize this. Like, when you buy Bitcoin, you’re seeding to the development of this Bitcoin military-industrial complex, right? And we let miners countervail the control authority–
[1:23:34] Tomer: Can I interject with just something because you’re explaining it right now? Let’s say in the traditional world, I either align myself with the American army or with their enemy, and depending on which one of them wins, I stand to gain or I stand to lose. So I should ally with the winning side. But in this mining war, I’ve not aligned myself with the war between them, no matter which one of them wins the war, which is also, kind of this never-ending war, I win. Because one or the other is going to mine my block. I don’t have to take sides with any of them. Well, I just think that’s such a distinct difference from having to take sides in a war. On Bitcoin, there is only one side to take, and everybody’s on the winning side.
[1:24:21] Jason: Yeah, I mean, you sit back and you let the machines duke it out and you sip your apple martini and get richer. Like, it’s a pretty great alternative form of war. Yeah.
[1:24:32] Tomer: That’s a pretty great alternative to war. Sign me up for that.
[1:24:37] Mike: Yeah. Every ten minutes, the battle is fought. Somebody wins. There’s no bloodshed, and it starts all over again. It’s beautiful.
[1:24:43] Jason: Yeah, exactly. The battle is like the history of the legacy property is partitioned by the time that the last army surrenders, right? These wars, like it’s a war partitioned blockchain. It’s a war partition ledger. That’s what legacy property is. But to Mike’s point, you have a constant tempo of warfare, you have a bunch of miners going up against each other, to project power, to win the probabilistic game, just like actual warfare is. Someone’s gonna win it, boom, bam, we move on. And so you just like constantly, it’s like a continuous, “warfare”, but in an electric sense, not physically.
[1:25:33] Tomer: Okay, but why can’t a guy with a gun come in and kill us all?
[1:25:39] Mike: So Tomer, that’s where my explanation kind of touched on. I’m not trying to steal it from Jason, but I just don’t want to cut his time. The incentive, the monetary and financial incentive, and the time and energy cost incentive of doing that versus just dedicating that time and energy into the money that that individual spent on hiring the mercenaries or the goons to point the trigger to purchase the weapons and all that stuff, they could have just put it into Bitcoin and they probably would have been better off, instantly and into the future.
[1:26:19] Jason: And if you take it at scale, the real reason militaries kind of emerged is effectively to preserve trade routes. If you don’t have a navy, you have a pirate problem. Right? Like, if you don’t have a Roman legion, you have an issue. And so you create a military to preserve trade routes. Once the trade routes are preserved, you create a rule of law to enforce all the different monetary and trade contracts that are in place. And then once you have those two things, then you have the money to facilitate the trade, make it faster. And so like, at a big scale, people don’t fight the same way at scale for the same reasons as they do the crazy guy on the subway who might shoot you and try to take your coat or something like that. It’s a totally different incentive. The return on investment is a game, it’s a math equation, right?
There’s the stick side of the equation and there’s the carrot side of the equation. We could all sing Kumbaya and maximize our private property rights as much as we want to. But if we don’t have a standing military and if we’re successful creating abundance, the return on investment, like the Calculus says, for a third party to come in and just take your stuff. Right? Bitcoin changes that calculus. For starters, you can’t take their stuff. The monetary property is hidden behind a wall of encryption, it’s much more harder to get to it, if not impossible. Imagine if there is no monetary value of the property itself, how little return on investment you would even get by, waging a big-scale war. So I think maybe it’s just the incentives that would kind of dissuade people from large-scale violence and that kind of thing. That’s all I have.
[1:28:39] Mike: The beautiful part of the Navy analogy, Jason, and the reason why I so rudely interrupted Robert earlier was as far as like maritime history goes if I have it accurate is that, at one point, Chinese merchants had developed the maps, right? I think Robert even talked about this, like developed maps to actually navigate the oceans so they can maximize returns, and kind of burnt the maps. And so would China ban Bitcoin out of their walls, they essentially just burned the maps. So what are we trying to side with here?
[1:29:15] Jason: That’s such a great example. This is what China does, it’s not even new. They’ve been doing this for 600 or more years. Their elite class was essentially threatened by the merchant, their merchant navy because the merchant navy was getting rich, the merchant navy was starting to make deals outside of China. They were starting to become extremely sovereign, they were starting to become extremely popular. And so China’s elite had to burn the merchant navy to prevent that from getting out of hand. If they hadn’t done that, we would be speaking Chinese in America probably. They would have probably colonized the Americas from the West Coast, and they didn’t. Talk about a strategic blunder. But I still don’t think that strategic blunder is as bad as what we’re about to see, what they did after 2021. But it’s effectively the same game like their merchant class was starting to get pretty sovereign and starting to get pretty rich and starting to threaten their power. So, to preserve their family dynasty, they kind of have to stop it.
[1:30:32] CK: I posted a photo a while back, but it was like effectively a pistol with the barrel facing in the other direction. And that’s exactly kind of China’s strategy for Bitcoin. Let’s go to Rob.
[1:30:46] Rob: So I was jotting a couple of notes during this conversation, really awesome discussion here. Really quickly, just because the mining discussion that we were just talking about like every ten minutes is a battle. I think it’s interesting because you don’t have to worry about the messy parts, like the end of a war or conflict with surrender, in terms of surrender. Because the contingency of being able to participate in future games is you agree to the previous state of the battle, right? And in a technical term, you anchor your block, the new block has to anchor in the hash of the previous block. So you almost have to immediately concede to move forward from a war game perspective. So it’s almost like a cooperative war game that everyone’s agreeing to play too, and that’s the easiest path to keep on playing.
And additionally, on top of this like Breedlove, to what you’re talking about before, like the lowest friction domain, that’s where you go from land to sea, to air, into space. I think the software is this leg of very low friction because it’s digital, right? It’s ephemeral, but what makes Bitcoin so unique is that it’s backed by energy. So since it’s backed by energy, you have this stickiness that gets kind of brought into it. I think from the digital realm and that’s what makes it so interesting and to ultimately pull this to like Tesla, he was so good at physics, the energy game of physics in the physical world, but he was so bad at the monetary game. And Bitcoin is the merger and the intersection of those two games and energy ultimately being immoral. It’s interesting that you have to opt into a certain set of principles with Bitcoin like in software code. And that’s where you get sovereignty from because you’re able to take this immoral thing energy, right? It can do good things, it can do bad things. It’s just the fuel in the tank, right?
But you transcribe it into this like a codified rule of laws and all of a sudden you get digital property rights and sovereignty from it. And just one last piece here just like from the nuclear energy perspective, because I think that’s the major step function in war, right? Like the nuclear bomb and World War II was this huge step functioned up from dropping smaller TNT bombs and having gunpowder. Nuclear was a huge step function upward. I think defensive technology with Bitcoin. I think the nuclear triad is a deterrent, right? Saying, “Hey, we have land, sea, air, like we have all of these different ways of executing mutually assured destruction.” But with Bitcoin, you don’t have to worry about the physical threat of Mutually Assured Destruction. It’s like Mutually Assured Cooperation, right? Like everyone has to be forcibly played together.
And if energy is one part of this whole wargaming Bitcoin story, the chip fabrication is the other side. And I think all of the supply chain issues we’ve seen is that it’s actually a national security issue that we don’t have chip fabrication on US shores, that we’re reliant on things like Taiwan Semiconductor company, and we’re reliant on Samsung and Seoul. I think this is an amazing opportunity for this Bitcoin story with the US as a country and military defense of bringing chip fabrication onshore, American companies that we have much higher confidence and safety in. I know those were a bunch of disparate thoughts and points, but I leave that open to the group for any of their thoughts.
[1:33:59] Level 39: Real quick, before we get to Cory, I just want to say, to me, there are losers in the Bitcoin war, it’s when miners capitulate. They have to turn off their rigs when they’re no longer profitable. And to me, the lesson from Tesla is that the next generation of producing abundant, nearly free energy if you’re not producing abundant energy, you’re losing the war. If you’re losing the war, you’re not advancing humanity forward, you’re not forwarding that human mass that he talks about. But the great thing about this war is there’s no broken window. That’s all I have on it.
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[1:36:31] Mike: If you guys don’t mind, just selfishly, I wanted to jump in and ask a question of Jason before I’ve got to hop. This is fantastic. I’m going to still listen, I just can’t talk anymore after this question. Jason, you’ve been kind of sharing your work as you go, as you kind of develop this thesis for your program up at MIT. And I’m curious about where you are today, mid-December, looking at the rest of the path that you have going forward. What are some of the areas that you need to explore more or where you have kind of unanswered questions if you found them? And kind of what’s also maybe a part two to that question, what has been surprising to you so far, in maybe unexpectedly catching your interest and making you go like super deep down a rabbit hole that you had not foreseen?
[1:37:21] Jason: I’ll answer the second question first. So I’m trying to frame Bitcoin, the national strategic security implications of Bitcoin. It turns out that MIT is a leader in system engineering-driven security design. They have an entire methodology here called System Theoretic Accident Modeling and Processes. It goes by a couple of other names and it is the dorkiest, nerdiest, most boring lectures you could possibly ever think of and I absolutely love them. They’re fascinating how it works because it goes into a systemic viewpoint of security. Whereas, traditionally, a lot of people think of a probabilistic viewpoint of security. So it’s super fascinating.
And then what I found even more impressive is it’s derived from the airforce, particularly from nuclear weapons and how to make them more secure. And so it’s just fascinating how it all kind of comes together. The way that you fully appreciate Bitcoin’s security implications is from a systemic viewpoint. It merges all these concepts that I keep reading from Jeff, and from Robert, and from Michael Saylor, and from everyone else, it just kind of beautifully niches with everything.
So where I’m at right now is I think I’ve decided exactly what my methodology will be, I will use the System Theoretic Accident Modeling to develop a framework for analyzing the security implications of Bitcoin. I’ll do, may probably, like a systemic security analysis of the fiat system. It will not be pretty. I’ve also already read the FCIC report, Financial Crisis Inquiry report. And here’s something crazy, it just fell into my lap – the FCIC report on the “root causes of the financial crisis,” in the report, they say, “This report is designed to mimic a traffic safety investigation.”
And so everything that I’m learning in class is literally what’s taught to flight safety investigators when they’re trying to understand the root cause. And so now I can apply all these principles of safety engineering, security engineering to the financial crisis. And I’m essentially in these classes being armed with a bulletproof argument for destroying everything that they’ve been saying in these reports. I’ll have to type that out in a way that people will understand that won’t make people angry or divided, they’ll be as logical as possible.
[1:40:24] CK: That’s impossible.
[1:40:25] Jason: Yeah, right. That’s true. But I’m there. And then the rest of the stuff that you hear me talk about like deep-diving into four billion years of kinetic power projection and how life evolved, that game up to the point where we have it today. That’s just going to be like the intro. That’s going to be like the lit review. I’ve got a stack of books from all the Bitcoiners recommending me stuff. So I had to get through that over the next couple of months. It’s due in December of 2022. So I’ll just keep cranking out my crappy takes, please keep giving me feedback and helping me sharpen the arguments. I can’t even express how amazing the support I’ve been getting is. Just this conversation alone, Level39 basically did an entire lit review for me by reading everything from Nikola Tesla. And like sending me screenshots of all the most important stuff. I get that all the time. It’s amazing.
[1:41:27 ] Mike: I want to read the thesis.
[1:41:28] Jason: It is like 30 pages, and it’s all crap. And I have to rewrite every page. Do you want to know the secret, Mike? The thesis doesn’t matter. My goal of starting this thesis, my first thesis I wrote, and it was so good that it can’t be shared. It was about, basically, modeling the glinting pattern of satellites so that you could design them not to glint. If you get my drift. So like, no one read it. A couple of other people read it. But the thesis is just the ostensible reason for me to communicate these terms to people who can do something about it like policymakers. The thesis itself is the least important part. The most important part is all the podcasts, all the support, all the helping other people see this kind of stuff.
[1:42:23] CK: Jason, I’m expecting some stuff for Bitcoin Magazine at some point. So don’t leave us empty-handed. But, Robert, let’s jump to my man.
[1:42:33] Robert: Thank you. I think you’re doing wonderful work, Jason. I just wanted to read the mission statement of MIT real quick. It says, “The mission of MIT is to advance knowledge and educate students in science, technology, and other areas of scholarship that will best serve the nation and the world in the 21st century.” I don’t know your classmates, Jason. But I just want to acknowledge you, and express my gratitude for taking that mission seriously. I know it comes at personal, professional, academic risk but I think this is extremely important.
I’m going to go a little philosophical here for just a minute. But I think it ties back to physics for me is, I think fiat itself, the very concept, like when we say that word, fiat, a lot of Bitcoiners tend to go straight to the money, but it’s not that, right? It is attempting to override physical reality with an assertion of some kind. It’s an attempt to play God. It’s an attempt to say, this is because I said so versus this is because we performed experiments over a countless number of iterations and we determined that we could not disprove it so it is. I call it a pathology earlier and I think that your guess is the best word I got for it. And it’s a lie, right? It’s a lie because, if we have to say truth is an accurate depiction of reality, well, fiat, is by definition an inaccurate depiction of reality. It’s someone attempting to override what is with their assertion that maybe that’s what all this is about, like Bitcoins getting us closer to truth, just by virtue of being that thing like the monetization of Bitcoin is equivalent to the devitalization of coercion, right? Of the state business model which attempts to override individual self-ownership through inflation and taxation, and all these things.
So it seems like the world and maybe this answers an earlier question like, Why will people go this direction? Why are we so confident that people will move towards Bitcoin? You could perhaps generalize it more and say that these digital rails we are creating, they’re immune to coercion. So people want to conduct themselves in a way that’s free of coercion and they will inevitably adapt to this digital age approach to human affairs. So, again, everyone that prefers wealth to poverty kind of gets forced into this. The new technologies that we innovate or evolve which innovation revolution as we’ve touched on today, the animate-inanimate, they’re very closely related. The ones that command more energy projection will win, right? This is the essence.
I don’t know if I can get this in words entirely but this is the essence of evolution and evolution is everything. Evolution is like the only constant in the universe. So what is evolution? Evolution is whatever works, whatever is projecting power efficiently and effectively is kept, right? Whatever work is kept and Bitcoin is the only money in history that never stops working or the only property that never stops working. I hope that rounds out some of the edges, right? I really appreciate where you’re at Jason, that you’re exploring this from an engineering lens. But clearly, Bitcoin bleeds over into the philosophical anchor points we have with reality. And I don’t know, it just feels like maybe we’re on the verge of discovering a new language or science or something to that effect to better articulate what this innovation really is.
[1:46:24] Level39: Thank you so much, Robert. I appreciate those words. Any question for Jeff Booth? And if we have, I’d like to go to Tomer afterward and see if we can get a little cosmic before we closeout. And I might have another quick question for Robert Breedlove. We have time but we’ll see. Jeff, I like to think of Bitcoin as this war towards abundance, in sort of the ideas that Tesla had. We don’t know if his ideas would have worked for free and abundant energy. But I’d love to hear your thoughts in the sense that really I felt Bitcoin would have perhaps been able to fund those ideas if they were feasible. And I’d love to hear your thoughts about the ideas of moving towards a world of abundance with perhaps the energy future that Tesla envisioned.
[1:47:12] Jeff: Sure, and just to speak to Robert and this is one of the key things I think we’ve got to be careful in ensuring. Put it this way, I totally agree that Bitcoin is going to keep going anyway. It doesn’t matter. But I prefer to have more people understand it, and join and walk across the bridge and build it and build this. So I think about the language that helps them and doesn’t empower the state because of their fear. And so when you’re talking about specifically and I tell you where this goes, but when you’re telling, and specifically, but why did the system emerge like that, and through competition, why did it emerge like that?
When you think about just it from a gold standard. Gold couldn’t be used every ten minutes. You had to centralize that. You had to build a system on top of it. And that system because of that centralization fee to be able to move money faster, did move the world faster, but it was ripe for manipulation. And so you always put the human into it. Essentially, the human says, “We’re gonna go through a deflationary depression because people took too much leverage in debt, and everything’s going to stop.” And, and my choice is, I must manipulate money further to do that, and that has a different consequence.
But if you look throughout the history of any money, it always ends like this in these resets. And those resets, I think they used to happen over 500 years. Now that happened over, call it 80 years and probably faster and faster, and it’s actually faster because of technology itself because of what you’re saying, that the technology is moving at a pace and it always has been moving at a pace that’s been faster and faster and faster, and all of that output is essentially us choosing the best experiments. The best experiments win by giving us more value, is deflationary. Why currencies didn’t fail for 500 years a long time ago, is because it was slower. Why currencies will fail faster and faster on a fiat standard today, is because it’s happening at a faster rate.
And so, if you carry that forward, all energy will be priced in Bitcoin. The energy was priced in US dollars and that means energy prices won’t keep going up, they’ll go down. Energy is the number one input of every other thing we do and all prices will go down. They’ll keep going down because the marginal cost of technology moves to zero. When there is no economic benefit in that, because of that, and where you move with artificial intelligence, most of that moves to zero. What will happen is as we used to buy a whole bunch of calculators, there are no manufacturers for calculators anymore. That’s moved to zero because it’s technology, as many of the other things have on your phone as well. That’s going to happen everywhere if you have a base layer of money tied to the energy that allows that to happen.
It is true abundance, it’s a total system change. And where will entrepreneurs go? They’ll attack the industries that have the highest cost. And there’ll be tons of opportunities for entrepreneurs to build more value for society. But all of it will reduce the cost further and further and further as the entrepreneurs win a share of that in Bitcoin. But the byproduct of their work benefits humanity in general. It is a path to abundance. And unfortunately, the existing system we live in can’t provide that. So the existing system we live in must fail in kind of a couple of different ways through ending the human race, if you kind of press a button, it must fail through that, or there is a potential other way that it can keep going. It can concentrate all power and control in a very small number of hands who have domain over everybody else and can change your minds. That’s not a world that I subscribe that I would want to live in, and so, it’s why I’m such a huge promoter of Bitcoin because it’s really an advocate, because it’s for the human race, it is for everybody. It actually makes sure that our work moves broadly to humanity.
[1:52:21] CK: Level, do you want to get Tomer involved?
[1:52:23] Level39: Yeah. Tomer, I think you’ve mentioned you have something cosmic you wanted to share with the group when you got started. But I don’t remember if you got a chance to talk about it.
[1:52:32] Tomer: No, I haven’t. In your article and you asked me to think a little bit about this. In your article, you had mentioned that based on how Bitcoin uses energy and how it tracks how much it’s used in total and when. That if the human race was gone and an alien archaeologist found a node, they’d be able to know how far we make it as a civilization in terms of our progress towards this Kardashev scale. And I think that’s a cool take. But I wanted to elaborate because this was the first contact and this particular case would be after we’ve somehow died off, some alien then stumbles on here, but I just kind of want to turn around to, well, what if Bitcoin is actually first contact with an alien civilization? They send it ahead because they want to arrive not on some planet with these crazy lunatics who are threatening to nuke each other. But where they live in peace and they’ve created tremendous abundance and energy and they’re interesting to talk to, it’s a much nicer place to visit.
Takes a lot to get there physically, but you can send ahead the information to teach and influence people how to build something like Bitcoin, which is effectively like nuking the planet with peace from outer space. That’s just another way to consider what Bitcoin is. It’s this worldwide, it’s this bomb that is one shot of it has blown up the entire world that just took one shot and the explosion is continuing to spread all over the world. But it’s an explosion of peace rather than war and it saves lives rather than ends them, and it creates wealth rather than destroys it. I think that’s what to me is so beautiful about this technology, whether it was sent by aliens or discovered by one guy all by himself or something else like that. That is what it is. And it’s out of our control.
As Jason said, it’s not a negotiation, peace is on its way. I think it’s just an extraordinary cosmic event that we’re experiencing. I think that’s maybe a little bit of what Robert Breedlove was talking about to discover something you will understand so much more about ourselves when it’s all said and done. But whoever gave us Bitcoin, thank you.
[1:54:58] CK: Alien Technology.
[1:54:58] Level39: That was a beautiful take. Thank you, Tomer, I appreciate that. And if anyone hasn’t read Tomer’s amazing article on what makes people think Bitcoin is alien technology, I butchered the title, but you speculated on this before. I think everyone sort of had that thought in the back of their minds and you put it really so eloquently.
I had a question for Robert Breedlove real quick, and then we can turn it over to CK. We can turn it over to anyone else who has any questions. My question for Robert is – it feels like ever since Tesla passed away, we’ve been stuck in this sort of and we’ve had Einsteinian physics. But your conversations with Eric Weinstein have got a lot of people thinking what the fuck has happened to physics since 1971? And I’m curious if you feel like fiat is responsible perhaps for the loss of magic in physics, and I think a lot of people who are listening who were fans of Tesla dream of a sort of a world where there is free and abundant energy coming from the cosmos. I’m curious if you feel like perhaps fiat has prevented that from happening to some degree.
[1:56:10] Robert: Yeah, that’s a great question. I actually invited Eric to join us today but he never responded. Some of you guys have maybe seen that movie Contact, where the alien crafts land all over Earth. I think there are 10 or 11 of them. They don’t really do a lot. There’s a female main character and she–
[1:56:32] CK: Oh, Robert, that’s the Arrival.
[1:56:33] Robert: Oh, Arrival, you’re right. The Arrival, sorry, wrong title. This alien species comes to Earth and effectively, they’re teaching us a new language, right? They’re teaching us this language of complexity or something to that effect. And she makes reference to linguistic relativity, which I think is also called the Whorf-Sapir hypothesis, where the very language that we used to think in, which is to see the psycho technological instrumentation we make use of actually determines or at least influences the shapes and contours of the thoughts we are capable of producing.
Money, we’ve called it a language of value. Literacy clearly is pure psycho technology. Money is somewhere like kind of a hybrid. And if you guys haven’t listened to my series of John Vervaeke about this, I know Tomer was a huge fan. I think John Vervaeke is one of the most brilliant. He’s a peer of Jordan Peterson, we talked about this at length. He coined the term psycho technology. And we were really hashing out the details of what the fuck is money? I get, sort of both. It has this literacy-like quality, where we think in terms of money, we perform economic calculation and planning, negotiation, etcetera, but it’s also a technology and that it has to be rooted into the real world that has some rooting into the thermodynamics of work and sacrifice and all of these aspects of the economic reality, of scarcity, frankly, ultimately.
And so, when we corrupt that instrumentation, we introduce noise to the channel, that’s maybe another way to think about it. What are we doing really? We’re interrupting our ability as conscious actors in the world to reconcile ourselves to what is happening, right? There’s loss of signal, there’s the introduction of noise, which inhibits our ability to respond, which is the essence of responsibility itself, right? This is something that, again, kind of gets back to private property rights because when you have a private property right, you have this high integrity relationship between an owner and an asset. Then there’s a lot of throughputs. There’s a lot of information density in that signal. But when you start to violate the private property right, the person’s both their rights in the asset to enjoy whatever it is, the services that the asset renders, and the responsibility to take care of it, they’re both ameliorated because you’ve broken down the informational relationship between owner and asset.
And so, Vervaeke expands that more generally, he calls it, agent and arena relationships. And he has this beautiful YouTube lecture series called Awakening from the Meaning Crisis. It’s like, I don’t know, 50 hours, it’s a lot. It’s just amazing, though. I highly encourage everyone to check it out. He’s going through the reasons, like, what causes this breakdown of agent-arena relationships. I think in our series together, one aspect that we really pulled apart was this idea of violating property rights or corrupting money, which is effectively the same thing. How would that actually contribute to this loosening of the grip, right? Economic actors lose their grip on socioeconomic reality. When you can’t trust the money, you can’t trust the signal of the money or the prices of the property.
To circle back to physics and academia or educational institutions, it’s like, okay, if you corrupt this most fundamental membrane or mediating force or it’s like the Ether, right? I know Ether is a dirty word in this space but not Ethereum the fucking shitcoin. The ethereal, the firmament, right? That’s like what money is mapping onto, it says medium for propagating information and energy. And when you corrupt that and it becomes divergent from what is, I think it’s just upstream from everything, right? So all the downstream effects are catastrophic. What do we say in Bitcoin? Fix the money, fix the world.
I’ll leave it at that. I mean, it’s a real fucking rabbit hole. I talked to Vervaeke for 12 hours about it. He got 50 hours about Awakening from the Meaning Crisis, I think it’s really useful. But this idea of a relationship, we know relationships are very important in our personal life. That’s where we get the most meaning from life. But when you violate that relationship or corrupt it with a lie, you disintegrate the relations between elements and a system. You create pathology. That’s what cancer is, right? Cancer is uncontrolled cellular growth, it’s not dying. It’s not there’s the autophagy stops, the cell just like a zombie company. I’ll stop because I could really go long on this. Because it also gets into modern zombie mythology, which exploded post-1971. There’s something really, deeply, painfully terrible about corrupting money and/or property that percolates throughout the entire sphere of humanity.
[2:02:19] CK: That was very powerful. And again, I fully agree, and I feel like monetary maximalists, which a lot of Bitcoiners kind of find themselves in that perspective, would agree too that there is something very insidious about kind of corrupting the very fabric of how we communicate value across time-space, amongst each other, peer-to-peer, etcetera. I couldn’t agree more. I want to open it up to some of the newer folks that we let on stage. Frankie, I know you’ve been raising your hand very patiently. I’ll allow you to jump in, take the mic with a comment or a question.
[2:02:57] Frankie: Awesome. Thanks. I appreciate that, CK. So, riffing a little bit off of Tomer. So if peace is on the way, I feel like we definitely have some challenges in between. But today, I decided to think really deeply about exponential growth. So my question is about the relationship between hyperbitcoinization and exponential technology. So, Jeff, in your book, The Price of Tomorrow, you say, “The only way to keep our economies growing and combat the effect of exponential technology under our existing system is to allow debt to rise exponentially as well.”
Well, I feel like that’s already happening, right? But you go on to say, “That unless global jobs and our economies expand at a rate that exceeds debt creation, that the age of inflation is already over,” which I’m fairly curious on that comment as well. But that’s not exactly the question. If the only way to keep our economies growing during a deflationary environment is by allowing debt to rise exponentially as well, what is the inflection point where we begin to see decay, right? It just seems to me that if technology continues its pattern of acceleration, in what scenario is the inflection point? And when does this begin to level out again?
[2:04:17] Jeff: So I love the question because that’s actually what are all the Bitcoiners on this call already see, the decay is already all around us. The signposts all around are what is predictable from a system that must go against the truth, and it must continue. So if you looked at the ecosystem of that and you said, just in China, so what China has to do is take away the free market and capture the money that is being put into the technology companies and take more power from the individuals and put it in the state. You thought it was bad before, it’s going to get worse and worse, so does the US, so does everywhere in the world.
A way of looking at this is, as a whole bunch of the population loses out and that population is living on the street and breaking into places in San Francisco because of the same thing, what will people vote for? They’ll vote for bigger police forces to protect them. They’ll give away their individual rights and freedoms to the state to be able to take that away.
And so, what you’re seeing all around the world is a predictable path from a system that’s trying to defend itself against a greater force of technology moving the other way. And first, you do it by creating more and more debt that can be paid back. And then when you can’t do that, you change the rules of law, property rights, everything else, to take more away and you turn society against each other. And it’s all on a path to more and more control in central powers, centralization, which population will vote for. Bitcoin is exactly the other side of that. And so my hope is that more and more people see this and I feel positive about that. But that’s actually why if you look at this call, I think we have 1,300 people on this call.
All of those people or many of those people are dedicating their free time and energy, their energy to making this happen. And as a byproduct of that energy, every single experiment, every single call, Bitcoin is this emergent technology, emergent force, which is actually us, our minds changing to be able to build a bridge to the other side. And that’s what gives me a whole bunch of hope in that. Because if you take it to what Robert said before, everything in our life, everything was an idea first. This is just a better idea. If enough people believe in this idea, we’ll move to a really great future.
[2:07:25] Frankie: So, do you think that hyperbitcoinization is the inflection point?
[2:07:31] Jeff: Yes, probably, but the rails of Bitcoin aren’t ready for that today in the US.
[2:07:41] Frankie: Right. Yeah, that tells me that there’s a lot of challenges in between because, in my mind, if hyperbitcoinization is the inflection point, this is the time when all humans work towards using the full force of the technology that is already at our reach. According to Elon Musk’s meme that he posted a few days ago about how in 1969, 4 kilobytes of RAM landed a man on the moon. Whereas, now we have 8 gigabytes of RAM and Chrome crashes. So, I wonder if hyperbitcoinization is that inflection point where we slow down and we utilize the technology that has been created.
[2:08:21] CK: Yes. Yes, it is.
[2:08:24] Jeff: Yes, it is.
[2:08:25] Frankie: Okay. Awesome.
[2:08:27] CK: I mean, look, S9s still work, your iPhone 10 does not. That is the difference. Publord, raise your hand. All right, you’re raising your hand, jump in.
[2:08:40] Publord: Always want to jump in but, yeah, spaces like this, man, I looked at the panel, I looked at the guests in the chat, man. It’s a beautiful room. A lot of fantastic thought leaders here. Tomer, I just got to know recently and, hey, I literally just put a meme together because of him. And it’s something that he reminds me of, something and Jeff Booth. Lovely Jeff, of course. Bitcoin is not only peace, but a peace that can outperform any type of anger in the world. Bitcoin is that little piece of grass, that little piece of nature that always grows through concrete. You guys ever walked around the city, go through a city and there’s a tree growing out of somewhere, any concrete opening, there’s something growing. That’s Bitcoin. No matter what the governments will do, the banks will do, Bitcoin will find a way. Bitcoin finds a way because it’s organic and it’s true, and it’s nature. I just came on stage to tell Tomer, I made you a meme, man. That’s for you, Tomer.
[2:10:00] Tomer: Thank you, man. I appreciate that. What you’re saying is nature finds a way, right? And no matter what, nature finds a way and Bitcoin is like a force of nature. I think when Jason talked before about China, gave it its worst, then there was a 50% wipeout, 60% wipeout. Then Bitcoin absorbed this thing, like, I visualize it. It’s kind of like, Bitcoin’s got a force field and this attack comes out, and then it kind of softly squishes it in, and then it bounces back out. It’s completely neutralized just a few months later. Every time we see this type of ability, it doesn’t even fight back, Bitcoin, right? It just stands there and it’s like if somebody flicked a grain of sand at you and you’re not going to go and bother to even fight back. Bitcoin doesn’t have the ability to fight back. It just has the ability to absorb every attack against it and in the worst case, slow down to 13-minute blocks for a couple of weeks time. I thought that was the worst of the attack and then just completely recover and bounce back to the condition it was in and then continue to grow and grow, and grow. It’s incredible.
[2:11:17] Jeff: Tomer, it’s the humans that get emotional over that, it’s not Bitcoin. It just keeps moving.
[2:11:24] Tomer: Exactly. It’s like, if I was walking and somebody threw a single atom at me, I wouldn’t notice even, right? That’s kind of like Bitcoin. Maybe it felt like a little breeze in its face. But it’s going in the direction that it’s going. This whole thing that China did was a couple of steps uphill rather than just the part of the street, coasting across the street sideways.
[2:11:49] CK: So we have about 15 more minutes here. We got Sovereign Stoic on stage, I guess I’ll give it to you if you want to jump in. I guess Mark Moss, you just jumped on. I’m seeing you now too. So the microphone is open to either of you.
[2:12:04] Mark Moss: Hey, guys. Yeah, Jason, I just love the idea that legacy war destroys resources. But hash rate wars can actually create energy abundance and lower the cost of energy per kilowatt-hour for civilization. It’s just wonderful to think about bringing on the hash rate wars, right? But I also wondered what you thought about as we are in the digital age and the sovereign individual thesis marches forward if Bitcoin mining is mutually assured preservation for nation-states, how does that transcend to the monocellular level of individuals who are running ASICs in their homes, in their crawlspaces, in their garages? Is that personal preservation for home Bitcoin miners? Or are we going to be obsolete in an age of nation-states competing for hash rate?
[2:12:58] Jason: Wow, that’s a really good question. I guess what I’d say is earlier when Robert was talking about we have inalienable rights and governments kind of have a tendency to– the challenge with protecting your rights is that you need an army to do it, right? You need massive-scale cooperation to do it. Because if you don’t, then you’re going to get Genghis Khan, right? If you don’t have your own military, you’re going to become part of the British Empire or the Roman Empire or the Mongolian Empire. And so you don’t really get an opportunity to defend your property. Your property is only as good as whoever its military allows you to have it, right? Whoever rule of law allows you to have it.
With Bitcoin, even if the mining scales to the point where maybe the individual miner can’t compete with like nation-states, the beauty is it doesn’t grant them any more ability to control your access to. It doesn’t impede your property rights or it doesn’t have the same risk of impeding your property rights as it happens with the traditional military.
Then the other difference is this – in kinetic power projection, well, it’s gotten so expensive that it can’t be used. The only way to overthrow a nuclear-armed state is to make our own nukes, it’s just unrealistic. But in a Bitcoin world, even if sovereign nation-states are the primary mining pools, it is always getting easier and easier and easier for people to mine. Like it’s getting cheaper in Bitcoin terms. The only way that a sovereign nation-state can maintain some competitive posture is if they constantly re-upgrade their systems if they’re constantly trying to bring legitimate value, constantly being efficient, constantly able to turn a profit. It’s like your civilians, their pitchforks are constantly getting more deadly at all times. That’s a great way to keep your nation-state in check if it needs to come to that. I don’t know how it’ll look, but just keep that in mind. I think it will be better.
[2:15:45] Jeff: Jason, I think it’s just important in the competition, that competition is bringing down energy costs more. And that competition is bringing down all costs more, which means everybody wins by that competition. I think that’s the key point in that that you’re saying.
[2:16:05] Jason: Yeah, you see it, right? In the kinetic power projection game, the result is massive exquisite military technology, right? If we pivot to an electric power projection game, the result will be badass microchips in everybody’s hands for free, with energy for free and abundance for free.
[2:16:34] Jeff: Bingo.
[136:36] Jason: What is crazy is it’s the same game, nothing’s changed. The only difference is – do you choose to monetize a digital property with this control structure over it or do you choose to monetize an analog property with the kinetic proof of work control structure over it?
[2:16:56] CK: Well, I think what’s interesting is what happens when we move over to the digital? And then what did that do to our ability to interact with the physical? I feel like there’s very much a back-to-nature component of Bitcoins incentives, as well as an unlocking of potential resources and the ability to harness it.
[2:17:15] Jason: Yeah, we get into a zero marginal cost society where the cost of energy is free. It’s nothing. The cost of scaling energy is basically nothing. That’s a cool world to think about.
[2:17:29] CK: Man, great panel. Great group of people, by the way. Jason, love hearing your take on this. You were just kind of talking about it right now the kind of the question I want to ask. But back to kind of the Bitcoin projecting power narrative, which I’ve heard you talk about already tonight. Obviously, with the amount of energy being used, I guess, I kind of get the projecting power narrative. Obviously, throughout history, every time that balance of power shifts, the mega politics of the world shifts as well.
But you kind of mentioned having nukes or when nations got nuked up, you kind of had this mutually assured destruction, which brought peace. So, projecting power with nukes then brings peace because of mutually assured destruction. I could see the projection of that power with weapons, the kinetic warfare, as you say, right? Hey, I don’t have to use the weapons but you know I have them so I’m projecting that power.
But Bitcoin doesn’t project any force, it obviously uses energy to protect itself. But almost maybe like in a science fiction movie where you have a force field around a city or around a ship. It uses energy as a force field, but that force field doesn’t project force, right? It’s only meant for defense. So, I guess I’m just kind of thinking about it in that terms. It seems like Bitcoin, being more of a defensive technology where it’s censorship-resistant, immutable, etcetera, but I don’t see how it projects force on anybody. I mean, it shifts the balance of power, shifts the incentive structure.
My conversations already brought up before that it would probably be too costly to even bother engaging in war, so you’d rather do something else. But I don’t know, it seems like more defensive stuff. How do you factor in that, I guess, that projection of force in that?
[2:19:18] Jason: When I was deployed to Al Udeid, we had a bomber land with a bullet hole from a 762 round, so shot from an AK, a bullet hole in the intake of the engine, which we patched with the putty that dentists use to measure your teeth, right? We patched it up, we sent that bomber out the next day. Those bombers, interestingly, the most common operation that they do is not dropping bombs, their most common operation is what we would call force projection or show of force.
The way it works is, say, you have a convoy in Afghanistan and the Americans in the convoy are taking sniper fire, some type of shots, they can identify the shots are coming from the mountain, but they can’t find where they’re coming from. What you do is you take your bomber, you put it on its terrain-following computer, and then you fly it super low, like 300 feet off the ground. I’ve been underneath these bombers as they do these flybys that close and that fast. It is freaking terrifying when it happens, right?
And so what we do is we illustrate, we project force or we project power. We never actually touched anybody. In this operation, no one gets hurt. But we remind the people on the mountain that it’s too expensive to continue doing what you’re doing. You’re risking a lot. That’s a show of force and we do this a lot in the military. It’s probably the most common operation, that’s why we sail ships around all the time. It’s a constant show of force, we’re constantly spending lots to tell people it’s too expensive to try to be uncooperative with the people who own this military.
[2:21:12] CK: But that’s because the show of force is threatening force. Hey, we could bomb you but we’re not going to. That goes back to the nuclear weapon. We don’t use a nuclear weapon but you know that we have it. We could show force, whereas like I said, Bitcoin is more like a force field. I mean, a force field is not going to go attack you but it’s obviously not worth your time to go attack it with a force field either.
[2:21:37] Jason: So if you punch a wall, what happens?
[2:21:42] CK: Put a hole in it or break your hand, I guess?
[2:21:44] Jason: Yeah, break your hands, right? If you punch a brick wall, it hurts like hell, right? A wall is a force projection apparatus. A defense-only thing like a wall will hurt, will harm the person who tries to punch it. And so, Bitcoin will hurt the people who try to attack the ledger, it will hurt their pocketbooks. Bitcoin works precisely because it threatens their attacker, right? It’s like a direct– [crosstalk]
[2:22:21] Guest 3: Can I jump in?
[2:22:24] Jason: To waste their energy, money, time effort, power, and mining an invalid block, they can do that but the force field that is Bitcoin’s algorithm for accepting another block into the blockchain is just going to turn all of that energy, turn it all into a complete waste and it costs them something. I mean, this is where Bitcoin is in fact, it’s such a strong force field that it shows you that it actually has a cost of attacking it. It’s not free to attack but you have to launch a weapon and everything so you’ve got at least the cost of the weapon, which you might as well do something better with if the weapon is going to be completely ineffective.
[123:02] CK: Yeah, if you guys have seen the last movie of the Harry Potter series, there’s a part where all the wizards are coming together and projecting a force field out, right? The way I’m thinking about this is that the miners are the wizards supporting the force field that’s going outwards. That’s kind of how I was conceptualizing the difference between Bitcoin network aggression expression and then the actual Bitcoin network defense mechanism.
[2:23:26] Publord: Listen then. Here’s the brilliant thing. To date, Bitcoin doesn’t care. We’re on stage here, all of us. We look beautiful. We got some great avatars. Yeah, Bitcoin doesn’t care about anything we say. It’s doing its thing, man. Like I just did for Tomer there, man, I’d put the plant that comes out of concrete. The government could put all the concrete they want over Bitcoin, Bitcoin will find a way, just like everything else, man.
[2:24:00] CK: All right. Well, I think that’s a good spot to wrap it up. It’s been a nice two-and-a-half-hour riff. This recording should be available immediately on your Twitter app. As long as you’re on mobile, you should be able to listen to the recording. It’ll also be available on Bitcoin spaces live, hopefully before the end of the week. So, keep an eye out for all of that good stuff. Yeah, looking forward to the next amazing conversation. Really appreciate everyone who stayed on the entire time, especially my man, Level39, who put together the article that inspired this, as well as organized the space. Thank you so much, Level39.
[2:24:39] Level39: Thanks so much, CK. Appreciate it.
[2:24:40] Publord: Yeah, just wanted to finish off real quick because everyone I see up here, man, because we’ve talked offline in certain ways. I put one up on this stage right here. Let me tell you something. They could be going out and charging thousands of dollars, man, for their input. Everyone you see on stage right here and even you and the audience could do the same thing. Let me tell you something. These are the people that make Bitcoin work. These are the people that are pushing it forward. I love you all, man. I love you all.
[2:25:17] Level39: Thanks, Pubby.
[2:25:18] Publord: Yeah, I love you guys.
[2:25:20] CK: All it takes to talk about Bitcoin and make it work. But yes, you can talk about Bitcoin with all your favorite Bitcoiners in person at Bitcoin 2022. So, go to that, promo code Satoshi, spend in Bitcoin, save an extra 100 bucks. See you all there. Peace.
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