 Hey there, so this morning I want to answer the question. What is the central value proposition of Bitcoin? Why is Bitcoin valuable? If you're a smart person, you probably are not going to put a lot of your money down on something that seems like a big meme, even something like Bitcoin where lots of people have been, you know, getting rich or whatever over time. So I want to give you a argument that makes sense as to why Bitcoin is worth a lot of money. I'm actually doing this video because I was having this conversation with someone actually I think it was on Halloween and I didn't finish this conversation So I'm now finishing it for him and everyone else can listen. Okay, so The thing you need to realize about Bitcoin, you don't need to know everything about how it works But Bitcoin is just digital scarcity. Okay, it is the first digital object so to speak that you cannot simply just copy and Paste all over the place. Okay, and anyone who knows anything about economics knows if you have scarcity I mean that that is a whole I mean you can store value in it You can use it as a currency you can use it. I mean, there are so many things that come from it being scarce, right? It's not like it's not like a file on your computer that you can have DRM on it is truly scarce And that once there is a Bitcoin out there. It cannot be multiplied. Okay now Why is this important the thing you need to realize about Bitcoin? I mean, let's compare what people often do compare Bitcoin to gold. Okay, gold is also a store of value All right, it cannot be easily copied gold doesn't do anything. Note that gold doesn't like produce anything It doesn't I don't know It doesn't give you dividends a lot of the critiques that people have about Bitcoin You can say of gold and other stores value and in fact most of the things we have out there Or even things that like produce stuff They're still really often used as stores as stores of value. Okay, but gold is a good comparison compare Bitcoin to gold Well gold first off. It's very expensive to store. Okay, if you have a billion dollars in gold, right? You're gonna want to have some security system to make sure that no one steals it You are going to want if you if you want to move some of that gold somewhere else If you want to give some of that gold to someone That can be a very complicated procedure that needs security and stuff like that, right? And of course gold takes up a lot of space like there are a bunch of things about it. Bitcoin is not like that Okay, Bitcoin can be transferred across the world Extremely quickly compared to anything else. It's not like a physical thing. It's digital like it has all the benefits of a digital thing It's up for it remains digitally scarce at the same time Okay, Bitcoin in terms of storing Bitcoin well nowadays you can open open up an electrum wallet and you can memorize 12 words in a seed phrase that will give you access to all of your Bitcoin at any point You don't even need a store. I mean you should write it down and store that somewhere But you could theoretically just have it in your brain have that seed phrase in your brain And that's that's all you need. That's all your money You don't need guards and security and I mean you probably should if you have it written down But not anywhere as much that you don't need it build your own Fort Knox. Okay, that's what I'm trying to say So Bitcoin has all of these Superiorities over gold and Bitcoin is also programmable to some degree. You can write applications on top of Bitcoin Trustless applications. There are already things like atomic swaps Which are exchanging Bitcoin for another currency Which are a way for you to interact with people whom you've never met with total security All right, and the other thing about Bitcoin is I mean think about gold our entire financial system is actually built on the deficiencies of gold the reason we have banks is not because people really want them but because when people started storing value in gold They they're just like a gold is hard to carry. It's hard to move around I'm just gonna store it in this one business and they're gonna give me these paper notes These paper notes which are now worth nothing because they're not even tied to gold, right? They're just they're totally speculation. They're totally I trust the government is not gonna inflate my currency which That's always gonna be a bad trust. They're always gonna be inflating your currency Okay, so now the currency we have is not even really scarce Okay, so Bitcoin think about this. So this is why Bitcoin should be valuable It does at least what gold does it actually does a lot more, but it does at least what gold does much more efficient Efficiently so here's the thing the market cap Market capitalization the total amount of value stored in gold Depending on how you calculate it in the world right now is around what like 10 trillion dollars Okay, now the amount of money stored in Bitcoin around right now is maybe a tenth of that like 1 trillion But here's the thing if you take that 10 trillion, let's say that Bitcoin is going to displace gold As in fact, it's a superior form of store of value. So it might it's probably gonna go far beyond gold But let's say Bitcoin just comes to replace gold and it's you know around the same market capitalization quote-unquote Well, that would mean 10 trillion dollars in Bitcoin divide that by the maximum number of Bitcoin Which is 21 million and you have I should have done this before I started the video But it's somewhere between a quarter of a million to half a million dollars Okay, that is how much a Bitcoin is going to be worth if Bitcoin at least gets up to Displace gold. Okay, I think it's already has a greater market market cap than silver right now I might be wrong on that but But the thing is Bitcoin has much more potential over that that is like a conservative estimate Okay, that might happen actually within the next five years Bitcoin might displace gold The thing is as I said before Bitcoin You can build applications on top of it a lot of our financial system You know, we have like trillions of dollars in derivatives and all of these kind of things and a lot of them can simply be written On top of Bitcoin. Okay, so a lot of the financial system now, which is based on fake You know fraudulent Federal Reserve notes, right a lot of that can be rewritten on Bitcoin Which is a hard currency that no one can inflate. Okay, so instead of the measly 10 trillion that gold represents you might have hundreds of trillions or I mean you look that there's like an obscene amount of money in the financial system and Like gold Bitcoin is like this much right now and gold is like this much right now and the whole financial system I don't know you can look it up. It's big. So if you are going to have a you know, which seems to be the direction We're going to a digital You know a world financial system based on a scarce digital asset Bitcoin being you know The primary one then the price of Bitcoin has a potential like it would I don't even want to say you can do the math I don't even want to say how much it could be worth because it would sound so stupid if I said it now I mean just just to be clear like 10 years ago when Satoshi Nakamoto, you know when he invented Bitcoin He didn't even think of Bitcoin is doing that like this is kind of an inevitable thing that happened with Bitcoin now When we look back retrospectively, but originally it was just founded to be digital cash, right? It was just supposed to be we can transact with each other and that's about it But when you think of it as being a way of storing value Okay, in the same way that gold is you realize that it can have this massive market cap And that's one of the reasons it's gone from less than a dollar to you know, $60,000, you know in in less than 10 years Okay, Bitcoin is like increasing a market cap faster than any other You know company out there or anything like that it drastically exceeds that and the other nice thing about Bitcoin Okay, this is another one of its superiority and this is something that means a lot should mean a lot to people Maybe it doesn't but it should Bitcoin is trustless If you have like the thing about our traditional financial system, you might think that you control your bank account But you really don't okay your bank account, of course is run by your bank Okay, you need basically their approval to deposit or withdraw any amount of money or transact And that is of course, you know controlled by government regulations The thing with Bitcoin is all you have to do is sign a transaction With your private keys put it up there, you know, and it'll go through, you know There is no you cannot your Bitcoin assets unless someone comes to your house and steals your seed phrase, which you've clumsily You know stored It you cannot steal Bitcoin. You get the government cannot seize from your bank account You know all of this, you know a lot of the worries we have in the traditional financial system Think of something. I mean when you think about it, it's pretty crazy that you can Charge an account just by having the account number, you know, that's nutty They don't even have the distinction that Bitcoin has between a private and public key I mean that that's totally crazy when you think about how insecure and rife with fraud The traditional financial system is and Bitcoin totally deals with all of that and it is something that's in your control You know one big problem nowadays is that, you know If you want to transact value online, if you're not using cryptocurrency You are using you basically have to go through 50,000 intermediaries if someone wants to send you $5 That's going to be tied to their bank account It's going to be tied to some payment processor stripe PayPal then that's going to be tied to your bank account Everything can be shut down. Bitcoin doesn't work like that. Now, of course, I have many Critics that I've made in the past of Bitcoin. This video is just to get you to understand Why it should be value valuable And I expect Bitcoin to continue to go up line will continue to go up it will It'll go down. Okay. We saw in the past couple months. It basically halved its value. Okay, that's pretty crazy But that's to be expected right when you're putting money in the Bitcoin network, okay You have you have to be doing that under the expectation that I'm gonna I might maybe I'll withdraw this in 10 years Maybe I'll just keep it in there because it might be the the Bitcoin network is its own You know, no one's gonna be thinking about transferring out of it But you know, that's the situation you have to think of the actual thing you have to think of I don't necessarily recommend people to buy into these like random coins scam coins usually that are just trying to do what Bitcoin does with like goofy memes or whatever I Think you know, usually people's tendency when they get into cryptocurrency is to buy, you know a lot of this stuff But I will just say Bitcoin is the most important thing for you to have in my personal opinion This is not legally binding financial advice. I don't know why is that like a legal thing that people say I just know that everyone in videos say this was not financial advice, whatever So I'll say that just to be careful. I will say the only other assets I really care about I've talked about before one of them being Monero I mean probably really the only one that matters being Monero Monero is better than Bitcoin in many respects and it you know It I think it I'm not gonna say it's likely to overtake it, but I sort of feel like it should I think Bitcoin has a lot of network effects behind it But the thing with Monero it of course has extra features that basically make it private Bitcoin Of course is based on a blockchain transactions can be monitored and Theoretically, you know, someone can follow them and stuff like that Monero is better Because it avoids that it avoids some other proud problems transaction fee problems There are a lot of problems like with Bitcoin in terms of like the specifics But if you want to understand why it's valuable, I think that's about it That is Bitcoin is graduate like the financial system is going to be gradually replaced by something digital Bitcoin being the most obvious successor and you expect the market cap of that to be equal to you know Whatever it displaces which is going to be massive like a huge amount that that is why Bitcoin is worth so much now So I think also it's worth asking will Bitcoin continue to go up forever That that's sort of a funny question But think about this. Okay, right now. We're living in a very opportune time where The whatever is gonna whatever this digital asset is that's going to displace the financial system It is going to be going up and up and up and up But it isn't going to reach an equilibrium where it has taken up all of the share of the traditional finance System that it can okay Now here's how I would look at that I think it I think of it in terms of once Bitcoin gets to that point Where it is not taking up more of the proportion of the financial system you might expect it Okay, well now the price is going to equilibrate. It's going to be at one point, you know for all times But that's not I think actually it will continue to increase probably at a lower rate And that's because it's going to be basically indexed to the total stored value within that network Okay, meaning as you know the as the economy grows or whatever Bitcoin will still continue to increase because the financial system will increase and Therefore your returns to Bitcoin will keep going up even if you know again. It's not really doing anything And this might sound like totally I mean it really does sound like free money. Okay, it sounds like free money because oh my goodness, you know here Here I'm buying this thing that that's like basically doing it seems to be doing nothing Okay, really you are like propping up the the global financial system and stuff like that and but Or a decentralized equivalent of the global financial system If it were about supporting the financial system, I would not endorse that But um, you know a new decentralized, you know trustless Global financial system where you control your money not banks. Okay um Anyway, I I do expect that as you know, even if you just had yearly growth In the economy in real value in the the economy You would still see the price of bitcoin increase and the price of big bitcoin would be increasing At some rate equivalent to the general growth in the economy and again that sounds absurd Like why should this keep going up? But that's that's actually just how hard money works like if you save money It is more valuable later and that is something, you know with all of the currencies We've had in the history of mankind Basically all of them have been taken under the wing of governments. They've been used to inflate So we are just not used to the idea that if you save money now It will be worth way more in a hundred years. Okay, but that is actually the default situation of hard money Okay, and it it changes totally I mean this is one of the reasons I think that this kind of Digital hard money is going to be really revolutionary You can talk to bitcoiners longtime bitcoiners about how it affects them Knowing that they can use the bitcoin network to basically make gains. They become extreme savers Okay, they will you know, they'll they'll get their paycheck You know, maybe they'll keep $50 aside to live for the next two weeks and they'll put the rest of it in bitcoin, right? Um, and that that is sort of people in a very extreme degree But you know, that's really the benefits of saving You're actually getting the returns of saving rather than the government just inflating the currency And you know stealing the the the goods of that You know the the returns of that so, um, I think bitcoin will radically It's one of the reasons bitcoin will probably if it catches on like this Really destroy the kind of consumerist economy. Okay, which is based on oh, does the um, do the numbers look good right now? Does the gdp? Do we have enough effective demand? Oh, Keynesian economics, dude This is very important man. We got to make our indicators look good Where you're basically You're in a disaster scenario for everyone else because it's not even You know, you have to stay in a job because you can't have savings You can't ever have financial stability because you don't have a hard currency Um bitcoin solves all of these problems, right? This is this is something that is it's like hard money taking all the the world by force Okay, so hopefully that gives you a kind of idea of you know, why bitcoin can be valuable Um, you know, why all this other stuff that the kind of effects that it can have Um, I think it a lot of people understate how radical it's going to be It's already been kind of radical, but bitcoin right now, you know, most people just use it as a speculative asset But that's going to change a lot of the people who have been in bitcoin for a long time They're starting to realize. Oh, this is this is very useful. I mean, I I've realized I used this example Uh before it's very nice being able to transact, you know, semi large value Uh, you know, I bought a car the other month. I didn't use bitcoin, but I or monero or anything But I was wishing I could have because it's just so hard to like send money to someone Uh with a check that will take a couple days to clear or anything else It it just be easier if we had this digital currency stuff. Anyway, so All right, so that's been a little rambly. Uh, that should be about it. Hopefully I don't know If you feel like Putting some money in the bitcoin network or the monero network, I think that that might be worth it Not legally binding financial advice though