 Welcome back to the 21 convention 2017 of Orlando, Florida our 10-year anniversary live event Our next speaker is a returning alumni speaker or veteran at this point, especially this event where we've a lot of new speakers This speaker first spoke in 2011 right here in this room in Orlando, Florida And then again in 2012 he first spoke about health and the paleo diet things along that line the next year philosophy This time to me a little bit something different as you can see here. I Mentioned this though because over the years we've accumulated over a hundred alumni speakers Keeping contact with all them and ongoing relationships is doable But difficult over time and they keep growing, but I do keep an eye out in particular for speakers I really want to get back and people who really fit the event as it continues evolving and as they continue growing as men and the speakers and his authors This speaker is someone who I hadn't talked to and probably your two at that point when I invited them And I've been watching his Status updates on Facebook on Twitter and things like that and I knew I had to get him back at the 10 year So without further ado, please help me welcome Richard Nicolai from free the animal Thank You Anthony can everybody hear me So yeah, you know and this is this my third time speaking here and my first time in shoes I did my first two in barefoot if you can believe that now probably nobody is Nobody was here in 2011 and So you've seen this title screen. So let me go to I'm Richard Nicolai. I have a blog free the animal calm Let me tell you just a teeny bit about it. So I was a I was an internet geek way back in the day like, you know, we're talking 1990 as soon as you had Compus, I'm talking I had a shell account on copy surf and You know Prodigy AOL and so on and then I found that you found usenet if anybody knows who that is and I Did all I did use new news groups and did all the debates and whatnot and eventually I just I decided I'm taking too much of my time And I started business instead. I in the past life. I was a Navy officer. I know I look it I was a Navy officer for eight years who lived abroad for all eight years five five years in Japan and then two years in France as an exchange officer With the French Navy je parle fonce So And I lived all over the world and there's women all over the world so, you know, that's kind of one of I like this thing a lot of you guys are young and You know, I've been married for almost 20 years now But I did get it all out of my system in the in the 80s eight 80s were great. Don't you think the 80s were great? Best time in the world, right? so Anyway, so I came back but I got I when I when I lived in France I got into this kind of philosophical thing and and and you know The French are a lot about pleasure and and all of this stuff. So even though I had a job on Two friendships during those two years As navigator you have you have more vacation days a year than you can count and The food is good. And so I had a lot of free time on my hand. I thought, you know, I've never really Deeply read I had a business degree and all this technical stuff computers whatever but I I thought well, you know, I need to get in and and Really read so I became very philosophical. It was like a integrating philosophy with What I already had in terms of like technical know-how and the ability to fix cars and Do all this shit? So I I came back to the United States. I started a business I Blew my $50,000 of savings On to failed attempts, which I chalk up to tuition. So you have a degree in business, but you end up You know failing and failing and you just chalk it up to tuition So that at the third time the third time I Had about $250 to my name Right. This is 1992 and it worked. I Ended up making $250,000 my first year alone in a spare bedroom in 1992 92 93 Right. I and that grew into a company with 30 employees doing several million dollars a year, which I sold about four years ago shut down sold the So in the interim, I you know, I met a woman. She's a she's a She just retired in June 35 years as a school teacher, so she's kind of an ideal woman for me But so so I have a distance from a lot of you guys and and Anthony's format Really, but I really do get it because I've lived so much of it So I like coming back here for for the reason that That I I was in a lot of your space like how do I not be a doormat? And I've gone down that road, you know being a doormat with women and it never goes right, you know When my wife tells me I she loves me, which she does a lot. There's only one reply. I know and You know so anyway just to just kind of put it into context So I know I don't follow the red pill in the game stuff that much But I've I've been around enough to know and I've seen enough presentations where I understand That it is not what you know, the general public thinks so, you know, that's my concession to you guys is for My support actually for the people who's like you're gonna go to that misogynist thing, right? so Yeah, yeah, the fact is that this exists This the people out here exist this kind of thing exists because of the love of women and Let me make a distinction not just females, but women and and Hopefully ideal women just like I remember I gotta tell a little story the very very first time I met Anthony we did a little little Kind of inner video interview and I was because I was I was going to be speaking at the 2011 right right here and And he and so at the end I said so what you're talking about is you're doing a conference for real men And he stopped me he says no like they're they're Every you know they're males they're men He's like we're we're trying to teach people to be ideal men and I got the distinction right now days I what I use is I I I make a simpler distinction. I say males and men Just like there's females and women okay, so anyway, I have a blog free the animal comm I started that in 2003 There's four thousand and six hundred posts at this point Which if you do the math over 14 years works out to almost a post a day, right? So I'm pretty prolific, but I like to write and it covers the gamut In 2008 I found I you know kind of I was I I was a stock I was a options trader which is so you know so one of my many interests. So as an options trader and I I got to I started blogging about that as well because I've been blogging about politics philosophy social policy all the stuff And so that's how ultimately I got hooked up with Anthony. I became somewhat You know relatively well known in the paleo community and so on I still kind of him And then one thing led to another and so I've been doing these conferences But but in this venue I've always tried to do something a little bit different like Anthony already told you the first thing I Lost 60 pounds doing paleo. So that you know the health stuff and whole food and everything. It is valid But count your calories. Okay, so let's get into it Market-making so you already know this is kind of about Bitcoin and cryptocurrency, but I kind of want to introduce it like this You know Bitcoin and we'll get into the history later, but Bitcoin started in 2009. I Was reading it's funny because back in the day. I was in usenet I was kind of like into this. I was kind of interested in all this crypto anarchy stuff I'll show you my tattoo right there. So see I'm real So I'm into this crypto anarchy kind of stuff and I'm reading white papers on digital currency and So I'm thinking well, that's very interesting because if it's Crip if it's true Cryptography, it's it could be something because if it's hard crypto Nobody can break it and it gets out there. Well, that's what's happened But I'll I'm gonna explain that already, but you know, it's first started Satoshi Satoshi Is it not Kimura or what I will get I have it written down I can never remember even though I lived in Japan for five years So, you know, so it starts in 2009 and people are like it trades for like pennies That's Right but So now it gets price and dollars more people get into it Into it it gets interesting and this is not this is not unique to Bitcoin. It's actually human psychology. What you know? if I offer you something I say it's a great value, but I'm gonna charge you a penny for it. You're like, you know, not worth it It's not worth your time to it's not worth your mind space even though you can afford the money It's not worth your mind space. So you just dismiss it, right? Price and hundreds of dollars. Yeah, maybe It hit five thousand dollars one Bitcoin hit five thousand dollars like well just over a month ago now Right at the end of end of August By signal right sure like And that's how human psychology works And there it is there's a chart now the most important thing about that chart is Not so much the price line, right? It it that's important too What's important is the volume these vertical bars of the volume the highest volume day ever Was just after it hit a thousand bucks, you know what that was who knows what that was What no that was in 2014 early 2014 no no no Institutional no this is no well it could be incident I doubt it was many institutionals This I'll tell you what this bar is and I don't know for certain that I'm this is like a 99% educated guess because I've seen trade I've seen trade I used to watch trading action all I used to be a day trader in options, you know and so what that represents is People people with dumb luck who said Holy fuck. I bought this shit for pennies on for I bought Bitcoin I bought 10 Bitcoin 20 Bitcoin a hundred Bitcoin for a few cents each And I can get a stop and it hit what it hit it hurt It hit like I think at that point that was like a thousand dollars They were taking they were like and then it started going down of course because people are taking their profits So then everybody is like oh, it's going it's gonna crash So everybody's taking their profits highest trading day ever so anyway the point is the point is is that it's a Market now, right? So everybody said ha ha ha such a joke It'll never work. It'll never be anything people made real fucking money and Every time you read one of these stupid articles From an expert and I'm gonna show you later There's one answer People made real fucking money and some people who only invested grub steaks like 20 40 $50 became Bitcoin millionaires Because you can trade both ways I'm gonna I'm gonna tell you about that What's ideal money now, and this is this goes back to Anthony this whole real versus ideal I started to put real and I'm like Nope ideal. Okay, so I'll ask you a question Is this money? Who just by raise of hands who thinks this is money. It's a dollar bill. Is it money? Is it money? Well, obviously it's money. Everybody should be raising that Is it money? It's money. We use it all the time, right? Is it real money? Yes, it's real money The third question is is it ideal? Money, that's where everybody's hands should go down It's not ideal money. So What we're ultimately talking about is trade We have to trade right now, you know people figure that out early on it's like hey My chickens have eggs. I need some milk Right, so that that's a that's a classic barter eggs for milk You know you do chickens the other guy does Does cows and cows knee as milk, you know our bread whatever But that's barter. So every different transaction has to be Negotiated it's like, okay, how many eggs for your milk? Maybe it's different from another person and whatever So that's really not money that is that's why it's called barter. It's not it's not money. So it's not my bar, but Ideal money should be a store of value The classic one is precious metals and the classic of that classic is gold, right? because Then never use this word and I'll get to this I'll probably touch on this again never use the word intrinsic There's no fucking such thing as an intrinsic value in the universe Everything that is a value is a value because some individual with a conscience Values it animals don't have values actually incidentally. They have instincts They know what is a value. They know what's food Try to get your dog to drink the Seagram seven right Try to give them to drink a carbonated beverage Won't do it, right? So they don't they don't operate on him. I'll try that. Maybe I'll develop a taste for it, right? No So So there's no such thing as intrinsic value what people typically mean to say when they say that is Tangible you can hold it right so like if you have gold, you know You can do it stupidly by having gold stocks, which is dumb. I think Or You can look you can back in the pickup Hopefully right or or bring your little bag baggy and you get it physically and you treat it Like the value that it is the the the and it's a value because it is a desire banning There's nobody who doesn't value gold and I'm not a gold bug incidentally. I'll get into that In terms of fiat currency, so It's gold is a store of value Simply because It's rare, but it's also a unit of account Well actually good my ideal money. Let's get back to ideal money is a unit of account. So there's there's One doll it's denominated all sorts of ways one dollar a hundred dollars whatever Pennies you can break it down to pennies. That's our lowest unit of account in US dollars, right? So there is a there's an objective unit, right? And so and and it's a medium of exchange. So in other words in other words everybody agrees that a dollar is exchangeable like now you may want five dollars for something that Someone else will take four dollars for the same thing, but it's still a medium, right? So you can exchange instead of exchanging your eggs for milk you can go and say well It's three doll. I'll give you three dollars. Okay, and That person can take that the same three dollars and go buy milk with the three dollars, right? Now here's the here's what here's where we're going to get into the nitty gritty because Ideal money and this is why This I should leave it out here this is hell Should drop a couple quarters there too. That's why that is not ideal money Resistant to debasement But I have a whole section on that and it's not fiat and what is fiat currency can someone tell me what fiat currency is Well, that's true. It's not backed by anything, but that's not its essence What? That that's true, but it's it's not the essence That's that's the right. That's the right answer. It is fiat. It is in the word fiat It's money because we say it is This is what everybody will use. It's the law full faith and and and Nobody's on gold standard or any kind of precious metal or commodity standard anymore that limits the money supply So This is the this is the God and country bullshit, right and it's bullshit, right now You could be patriotic. I love America as an idea and an ideal, right? But I'm not a flag waiver Even though I'll stand I will stand for the national anthem just out of respect You know and plus if I protest I do it on my own fucking time Not my employers so Full faith and credit is basically like trust us. We're the government bullshit bullshit bullshit. All right so, yeah, right Okay, so Traditional and historical forms of money. We might as well cover that You know when you go back thousand really a thousand BC I think China was the first one who used like tools like an axe But you know so an axe of a certain form became money But that was kind of hard and trinkets. The problem is anybody can Produce an axe what but it takes work. So that's a good thing, right as long as it takes work, you know seashells Yeah, not so great because it is someone who just goes out and collect maybe they find a cache of them Right, and it doesn't take much work and boom. They're rich, right? So that's that's not gonna work, right? And then it was replicas of cool tools and that evolved into precious metals, right but When precious metals first began being used as as money and they were used because they're precious They're hard to find they have to be mine. It takes work, right? So nobody can just say well Look what I found. I'm rich, right? So it actually takes work And that's gonna this is going to remember that when we get to bitcoin It's called proof of work and we'll we'll I'll explain that so but back then it was traded by weight So a gram of gold or half gram or a hundredth of gram or whatever, right? So you traded it by weight, right? Government sees this and they're like I got it We are going to mint coins Because when we mint a coin from a precious metal It's not going to be traded by weight any longer It's going to be traded by face value It's a it's a quarter You know presumably it's made of a precious metal. It's a penny You know Then when that became cumbersome Well, there's a whole history of that which is I think the next section But when that became When that became kind of cumbersome for people to carry around coins and gold coins silver coins were the typical ones That's when the government came and the idea of paper currency was I believe invented by the chinese Way back when so And that would represent so it would be basically what's called a reserve note, you know And you've heard of gold standards it went out of vogue in the early 1900s and we got off of it by By the great great great president richard nixon in 72. I'm being facetious The um And the and and I'll I'll explain why we got off the gold standard in a bit too So and I'm not a gold bug either Um But so a paper currency basically was a reserve note. It was a certificate. It said okay, this represents X amount of gold or silver in some vault over somewhere, right? You could redeem it, right? It's like a receipt that's tradable as currency right But now where everybody is in the world so that they can steal your value More and more without you knowing because taxes aren't enough I mean taxes they get them to 30 40 50 percent. It's like we still need to steal more So you have you you have the the printing press, which is the modern fiat currency And I'll tell you how that works in a bit too So let's go let's roll back To the whole history of currency debasement right Coin clipping and coins sweating Were the first forms of currency debasement So this is a roman coin. I forget the name of it Something right so that's in its original kind of form and they had different figures on them But what you do What what the government did is after they issue them as they go through circulation They clip off a little bit more and remember they trade at face value But they're silver right So that and if you're going by weight that is worth a lot more than that that is literally Literally inflation of the currency right there, but it's a it's it's kind of hybrid Because it still is backed By something so is so is the gold standard is hybrid by the way So it's like you have this definition of fiat currency and someone said it's not backed by anything Yes, that's true That's true, but but still even on a gold standard or even if you're minting precious metal coins They're still it's still fiat in the sense that this this trades For the same as this because it trades by face value right not by weight There's now this is more this is actually more explicit So someone just takes a clipping tool and clips pieces of it away, right? This this is what the government used to do before they found out how to create the federal reserve bank And steal your value in a way more Clever way without you knowing about it, right Okay, so so oh coin sweating. I didn't come that's what you see this you see this in movies in old movies Actually, you know someone has a bag of coins, right? And they're always shaking it You know and they're massaging it right and you thought it was like oh because it sounds good, right? No That's called coin sweating because when you rub them together it's like polishing rocks, right? So you rub them together and in their bag after they do that long enough in their bag, you know, they're they're wearing off some of the metal From the coins. So that's another method of debasement. That's one more individuals do and of course there's counterfeiting and that that applies to paper currency Mostly, uh, but I would add who's the biggest counterfeiter if you're talking about value What? All governments all governments are the biggest counterfeiters, right if you're talking, you know, they so anyway Monetary policy and this is the hugest area monetary policy that increases the money supply to inflationary levels Now how many people by show of hands think that? Rising prices is inflation Rising price prices of like your bread your gas and everything that's inflation Is that a cause? Or is that an effect? It's an effect what really causes inflation What? Well, yeah, but how do you how do you how do you? Increasing the supply of money That's the answer That's the answer, right? So in other words the supply of now money does need to to increase and supply. I mean Right, just like you keep mining gold, right? If you just had a fixed amount of gold It's hyper deflationary because if that was the only money then that all gold and all gold just becomes More and more valuable because there's such a limited supply of it So it is good to increase supply, but the supply should increase under market forces That are that go that are that are that are motivated by value decisions amongst traders, right? So Now the why do you think Why do you think the federal governments of? You know using the word federal that applies to america others call it different things, I suppose But why do you think central governments? want inflation Hmm It is it is it that is true. It's a hidden tax But it's not the funneled me fundamental reason. They want it They monetize the debt that is also true, but I don't think it's the fundamental reason what Yeah back there So so okay, let's let's move along and get to it the reason why They they want to increase the money supply is to keep The economy growing Okay, because if you're a politician in this day and age It is death If the economy isn't growing now what grows The economy people going out and buying stuff, right? Everybody has to go out and buy stuff. So To keep people buying stuff you have to keep devaluing their money So it's now in hype you see that in hyperflation Literally people with as soon as they got paid you got and buy because the price it it takes twice as much money In some of these countries. I think was it venezuela where recently they stopped even counting money They just weigh it right That literally we've gone back to to trading by weight, right because there's too many too many bills to count So you you go in there because the money the the country that that is that is a situation where they are trying to monetize Or that they just get just gets ridiculous and out of scale, but if in in a in a very controlled monetary system Like the us what they're really trying to do is make credit cheap easily accessible And we'll get into how they expand the money supply and expanding the money supply beyond The value decisions of individuals in trade Cause inflation there's too many dollars chasing too few people And so the cost of credit goes down. It's it's simple supply and demand So each each dollar's worth is is worth less Okay, so debasement now you can there's many Calculators on the internet. This is a very sophisticated one so you can drill down So that's why if you punch in a thousand dollars from 1900 It will give you a range of 24,000 to 897,000 And of course because that if you get if you drill that you start accounting for things and my friend jim sitting right there Is a is a accounting graduate hill understand So you're you're starting to account for things like depreciation based on on dollars You're you're accounting for For um, you know, you're talking about things nominated in dollars that are actually assets But they're depreciated and those the and the dollars are inflated So you can get to a high range if you're talking about dealing in us dollars instead of gold But that but basically in terms of average purchasing power is going to come out to about 30 k From 1000 right that you had then so How is it created? It's minted We already covered that coins It's printed those are notes They can be reserve notes or they can be a fiat credit policy interest rates so When the fed reduces interest rate when they get into trouble they start reducing interest rates You know, we've been at low interest rates forever And it's interestingly interesting that the interest that the low interest rates are what created The whole 2008 bust in the first place right japan When I lived in japan, it was like I can remember I was I I showed up there in 1984 Till I was I lived there from 84 to 89 And I read all these books about how japan is going to take over the world The yen is going to become the new the new reserve currency of the world and it didn't happen You know and they were at they were I don't know if they ever went negative interest rates But they were it's basically zero interest rates for for a long long time to try to induce people to borrow money to Go out and buy stuff that they didn't need on credit You know to keep the economy rolling. This is what politicians do all the time So the other the but the biggest way That so that you you always hear the talk about interest rates the biggest way That they create money new money enhance the money supply is through the fractional reserve Banking system and the money multiplier now This is not totally accurate. It's just it's kind of a a metaphor So the way so if you're if a bank a bank is legally able to Create new money. So, you know about a hundred dollars gets deposited Right so they can loan out 80, but they don't actually loan out 80 of that hundred dollars It's just a journal entry. So but in the end in the end you you can get basically about 500 bucks Almost 500 bucks out of that hundred dollar deposit. So you have a hundred dollars of presumably And this you know goes all through the economy, but you're so you're coming out with that's how money is created That's how the money money supply expands by look by low interest rates in policy Right so that people can go and get loans And go out and spend them at restaurants and buy cars and do all this stuff Which keeps everything going But the problem is is it inflates the currency. So you're always you're always You're always Gotta gotta get more gotta spend more gotta gotta keep things going, right Gold is money is the gold an ideal money? No It's tangible you can hold it It's relatively scarce. It's mined. It requires capital labor and technology to mine Right. It is a store of value. It's proven itself over and over again It's a medium exchange. There's nobody in this room. I could go up to and say, hey Can we decide on on uh, you know, I want to I want to get that Would you take a half gram or a gram of gold or something like that? You know, because you can there's gold shops. You can go you you can actually sell it real easy You know, you might not get face value, you know face value What is trading for in the market, but it's good. Nobody it's ancient and everybody recognizes it, right There's a big point. It's resistant to manipulation or debasement. Why do you think? Why do you think that we don't have gold and silver coins anymore? And we don't aren't in the gold standard Because the government is to some even even with reserve notes that are backed by gold They're kind of have their hands tied behind their back because it's the law So they can't just wild ass print money, right? So there's some some certain formula depending on which country and which currency If it's a if it's a backed currency that they have to follow and that's why they're that's why that's why uh, well You know one of the reasons that uh, the gold act of was it the gold act of 1932 or rosavel You know after he in turn. No, it was before it was before after he put the japanese in In prison camps. I forget but you know a dremacrat So he There was the gold act because the the federal government couldn't expand the money supply They needed more gold and people were holding gold because gold Is deflationary just like bitcoin gold is deflationary just like bitcoin remember that It's unlike a fiat currency which all all fiat currencies are inflationary Gold and bitcoin is highly deflationary, right? We'll talk about that in a minute. So um, it's So the government if it's if it's there it's it's they can't change its They can't change its essence people love it You know you go to thailand you ever heard of bot chains you ever been to thailand they have they a lot of people carry They're they're their their main asset. They wear it around their neck. They're very simple They're they're almost 24 karat gold and they're fashioned into these chains. They're wonderful. They're beautiful I used to have one I sold that I sold it in 1992 when I was down to my last 250 bucks Um before I got uh got a good business going So, yeah, I already covered they're in hate inherently deflationary So there you go There's the history of gold going back to 1900 so You look here Like okay, the the government was on a gold standard so gold Trading with the u.s. Dollar was pretty pretty flat right Get up to 1972 ish. I think it was 72 and nixon uh, just uh, uh, you know eliminated by fiat. I think Um, I don't think it was an act of converse. I don't know. I didn't research that but boom boom boom boom and then My god, look at that Crazy and that's not logarithmic. I I took out all this all the silly logarithmic shit So it's just a flat Look at what they've done to the currency the u.s. Dollar as opposed to gold and why? Because people know gold is valuable and the government can't fuck with it They can't it's not like they can put in a machine and make it not gold And they can't make something else into gold They can't print gold Not even with a not even with a 3d printer or whatever they're they are now. They can't make it right So and people are smarter than to be fooled like that Wait did I skip one here? Okay, let me see make sure okay all right Now digital money. So how do we segue? From gold into digital money Well, first of all, it takes cryptography and I was I was reading white papers on Theorized digital currency in like in like the mid 90s 95 96 Right. There was a company called called digicash And you know, I was kind of like and so you know, I don't really remember it and I didn't bother to go back and research Because it's not really how it came to be But I understood the principle that you could have You could have cryptographic units that Went through the system and had to be signed so they couldn't be forged or anything like that That's that was the important part discrete units. Yeah, yeah, you know, you have to have you essentially have to have a penny somewhere Which is in bitcoin is called a satoshi, right? I think Uh, I think one satoshi is worth about 202 bucks. I think something like that. I can't remember what's that Yeah, no, no, uh, well, yes the other way around like one penny is worth Uh, I think two cents the last time I checked so when you say I people say well, there's my two cents I think came out to 514 satoshis the last time I looked So that's the so each bitcoin For people who's like, I can't buy a bitcoin. It's like it's like what is it for what's it? What is it now jolly? 4,000 41 yeah, so so but You can trade bitcoins in each each single bitcoin is divisible by 100 million And they've been dubbed the satoshis right, okay, so It's decentralized and distributed Um I'll get to the database part in a second. It's peer-to-peer now. This is the beauty of it. This is the powerful powerful thing If I know someone's bitcoin address anywhere in the world I can open an app here I can enter that they're typically about 32 characters although it goes from 33 to 36 And to verify all you need to really do is look at the first four and the last four if those match you're good it would be so you enter the bitcoin address and how much tell how much bitcoin you want to send and They got it and typically about 10 minutes or so right once that once a new block block is formed in the block chain all right now Here's another important element of digital money Limited quantity bitcoin is capped at 21 million coins which will all have been mined by 21 14 or is it 21 41 21 14 or it's a long way off right But 75 percent of them and i'll get into that part in a minute too. So seven well basically what that means is that so the the the The mining is initially fairly easy and low cost and it gets it's built into the whole system It gets harder and harder and harder as you go So there's limited quantity now. Let's talk about blockchain. What is this? Everybody says blockchain database. I hate that. It is not a database a database is something that's held at amazon It's held at ebay. It's held at facebook and everything and every user So it's a client server. It's a client server system and every client on the system Has a certain level of permissions where they can modify A certain section Originally of the database, you know, like their account so they can there's certain fields They can modify they might have to call up to modify Other ones that may may take higher levels of permission or whatever But you are you are modifying the original database and it doesn't matter whether that database whether whether you're modifying something that was established 10 minutes ago or whether it was established 10 years ago Doesn't matter. It's still the original copy. So you can actually With a database You can actually Recreate time it's kind of like in the soviet union where you take a picture and you can erase somebody right that never happened never happened impossible with the blockchain By its architecture because it's a protocol And and so when people ask you well How do you value bitcoin? I have one question. I I answer the question with the question. How do you value tcpip? Tell me give me a unit of tcpip and give me a value, which is what the whole, you know What the whole internet runs on blockchain is a protocol and what it does What it does? It's a distributed network of computers There's 9200 nodes something like that worldwide worldwide and they all run the software and You know everybody Remember the last election where the winner gets 51 the winner is the one who gets You know some some number greater than exactly 50 of the number of votes Well in blockchain in the blockchain protocol It's it's a unanimous or it doesn't happen I have no problem with voting as long as it's unanimous I don't vote right because Either I get my way Or nothing, right? So so I'm all for voting as long as the only things that happen Are if it's complete or if it's unanimous, right? And that's the way the blockchain is It's unanimous or it doesn't happen, right? So what these what the what they do what they do is they crunch these numbers and when you send Send bitcoins all cryptographic and it goes through all this bullshit Da da da and there's these server farms and they do it, but then they have a proof of work So they so everybody says yeah that transaction is okay every 10 minutes another block Gets written to the chain, but what's what's brilliant about it Is every block that gets written relies on every other block that's ever been written Since the beginning of time and every block that will be written you can never fuck with it because if you do It destroys the whole thing, right every single block. So it's it's uneditable once that block is written It is permanent record forever, right? There's no way it Just it would blow up the whole protocol. It would be like if tcpi tcpi p went down, right? so It's uh, it's forever done And then it's limited, right? I already covered that Now it's mined with proof of work. So the people who do this in 9 000 nodes They go through and they have a proof of work aspect which gets doubles in in difficulty every four years That's why they have to set up these massive servers now. They do it in iceland so they could save on air conditioning Right, they just blow air cold air through the building, right? So they so they they crunch algorithms, right? So that's that's how they're getting paid to do this work And slowly as it gets harder transaction fees will will become a part of it They already are in some limited time. There's ways to get around transaction costs. I'll tell you about that in a bit um proof of work It's it's impervious look So the only if if if if the government's you got to think of it like the internet You don't think of it as bitcoin you think of it as a protocol running Alongside or on top of tcpip You you you got to Think of it that way So the only way the government could shut it down is it was completely totalitarian like north korea says Well, I'm just not going to let you have a computer. We're just going to shut off the internet Well, you know, you might as well just drop a nuke on your own country Right, so you're not you're not really going to get reelected. So you'd have to change the whole system. Okay Satoshi Nakamoto he's a guy. He wrote a white paper Um, he coded it originally and he released it in 2009. You know the history Uh compared to gold it has all the same properties. It's limited It you it has to be mined. It can't be fucked with by government Um now there are other coins. So there's a thousand of them roughly a thousand thirty 31 or two something last time I checked Um, and most of them are crap Literally most of them are crap stupid people who has oh, we're going to do an icio, you know ipos, right? So they do an iciva initial coin offering and they go up and you know friends and family invest and it goes to zero They're crap or some of them are absolute either scams or their pyramid scheme shit So you got to be careful with that um I mean it's smart contracts because there's another one besides bitcoin called ethereum Which is which is more versatile in terms of what you can do with it other than just just a ledger So let me give you a quick example You can do smart contracts that kind of serve like an escrow, right? so say You had a betting platform right You could build it on a on ethereum on ethereum platform coin And you could make a bet with someone else like say like say Let's bet on who's going to win Who's going to be the president in 2018 right so you could say You know maybe you could devise it any way you want like you give like four and he gives four and whatever And you know if it's a push everybody gets them But you then you lodge it into this contract In the blockchain Both of you right and then with 2018 if either of your four either of his four hit Right then you automatically get that money into your account if it doesn't it's a push you both get your money back You know that sort of thing so you can do tons of shit with the ethereum platform, right? so Reasons to get in 2009 a 25 to $50,000 stake in bitcoin could have bought you 5 000 coins That would have been tradable for five million dollars when bitcoin hit One million for the first time in late 2013 Would have been worth 25 million if you'd held it to late august when it hit 5000 so Eh someone tells you it's bullshit. Well, you know That's the bubble right there, you know We already covered it, but you know that's a real market. There's real trading volume trades billions of dollars What's the distribution? Now keep in mind that you can just like you can have multiple bank accounts You can have multiple bitcoin addresses. I have a few most people do but the number of addresses That that that have accounts worth more than a thousand u.s. Dollars over 1.2 million 10,340 k 100,000 92,000 a million 72 546 Accounts have 550 accounts have more than 10 million dollars You know if you're speaking purely in fiat terms, that's real money folks, right? So it's like it's like When people scoff at it and laugh at it, you know, that was that was okay to do in 2011 even up to 2013 But I got into it in early 2014. Well, I bought my first bitcoin for 618 dollars after it hit a thousand. So that's when I got in I should have got in earlier Now here's the best reason to get involved It's 171 and counting There's a there's a website called 99bitcoins.com and they have a section called Called the obituary files. You can search it, right? So ever since 2010 and we're talking about Forbes money magazine all these all these experts, right that have predicted Since the beginning. Oh, it's gonna it's gonna crash anytime now, right? The experts That people listen to To me, that's the biggest reason to get into it And they're scared now. Do you know the the guy that that fucker Who runs j.p. Morgan chase? Yeah diamond Yeah, yeah So that fucker sits there and says it's a fraud and everything While chase is buying bitcoin as it's go as it's crashing because of his words now In my view You know, if I was if I was a a law abiding citizen, I'd say you should be prosecuted and And put in prison since I'm an anarchist I think some people ought to go deal with him, but I'll leave that to your imagination right He you know, well, hopefully everybody just laughed at it and hold when you see shit like that From the experts just hold, right? So and and that's a good thing to get into my trading philosophy. My personal trading philosophy Um, you you should talk to jolly over there. He's running a A cryptocurrency hedge fund now that he just started up, right and he you got into it 2011 fucker, didn't you? All right, so so you should talk to him. He probably knows a lot more than about it than me, but but For you guys you I abs unless you're made of money and if you're made of money, then fine do what you want, right? Uh, uh, you're a big boy. If you're not, how do you get into it? Fault small stakes and you know, read uh, uh, naseem to lab. Nicholas naseem to lab, you know Fool by random this black swan if you're not familiar with those with those works But just follow his simple thing. Hey 80 and save stuff and since we're still in a fiat world The safest absolute thing you can be in is is treasury notes really, you know Absolutely safe 80 in that 20 in in speculation, right? The for the for the big The the big rewards for little risk So you can afford maybe you can afford to lose 20 percent of your net worth, but maybe you hit it big, right? Small stakes diversification. So Okay, just let me give you an example. I have I have I have one account that I created another one for something I'm going to tell you about a little bit, but I have like I have most of my at least A third to a half of every time I buy goes to bitcoin because that's the reserve coin currency, right? I don't care about the price. I don't look at the price. You know people say it could go to a hundred thousand It could go to a million. I don't know But I just I I know that we're we're kind of moving that way So I want it to accumulate more and more of it. So I but I diversify so I want I have some I have some that look good I'm So it's speculation It's rational as a metric risk taking so As a metric risk taking is buying a lottery ticket Rational As a metric risk taking is saying is there something to this and I can hold it It's not like oh the the drawing is next week. That's just stupid and the odds are ridiculous but see Cryptocurrency making a lot of people a lot of fucking money is no longer unprecedented It was unprecedented before the end of 2013. Well You couldn't admit you and and a lot of people made a ton of money there The people who held made a fuck ton of money at the end of august Five times as much exactly, right? So it's rational as a metric risk taking So I want some coins that trade for a few bucks I want some coins that trade for maybe a hundred 200 bucks that are good like ethereum light coin You know monero has been good. I'm making I'm making my best gains from What is it token coin right now? Just to drop some names of of these things And I have a thousand pot coin and the reason that's my that's my one silly Deal is because that you can get them for like six cents or nine cents I'm getting them for like six and nine cents. I have like a thousand of them But you know all this all this legalization thing if that goes off and a lot of these people are unbanked because Banks and credit card companies won't deal with them. Who knows, right? So so if it goes to a thousand bucks, I'm a I'm a pot coin millionaire Okay, so So a lot of people they they're into these icos. I I I'll look at them I'm like, but I just put them on a watch list because I see like look at It's uh I was talking to uh to jolly about uh zcash I mean it they did their ico And it went to some insane level Then crashed now it's stable, but so there was a huge volume Right, but it's right at the early stages. I want to see I was looking today this morning And there was like ridiculous that you've got all these things all these guys that are that are that are like You know down or up, but there's like so little volume You want to make sure there's trading you want to make sure there's a market for it, right? It's a and it's inflation heads look at the bitcoin chart that trades against dollars. Okay, so How do you learn more? This is my little pitch at the end I have I started a new deal. It's on patreon. If you know that website. So page patreon.com Digi cash going back to my the first white paper di g i So what I do there is I create content for people I I've got a guide on there how to go to fiat to bitcoin or altcoin and back So you can go from dollars or whatever canadian or wherever you're from from euros into Into cryptos bitcoin or altcoin and back Back how to get back out if you want to sell them We talk about transaction fees because if you are buying the ones that are a few pennies Transaction fees become important because what if it goes to a thousand bucks and you could have had $100,000 more if you avoided that transaction fee that was like a dollar or two dollars Right so So it becomes important transaction fees we talk about security in terms of like do you leave it with exchanges? A lot of people may remember the mount gox Uh thing I think that's I think a lot of the the exchanges are you know people got their lesson with that bullshit Right Wallets software wallets hardware wallets right and you have to be careful of those get ones that people are used Where it's open source Right open source codes that someone has looked at the code you don't want to go on google and say oh I'm going to get this wallet But it has a back door built in as soon as enough people have enough in there all the money's gone It is like cash right if you if you send your cash to put an envelope send it to a wrong address You may not get it back right that's how it is. That's how it works Right I do I I talk about all the trades I do I uh Have a real-time portfolio that I created just for this and I created it when I started this like three weeks ago With seed money like seven like 750 bucks seed money Just so people that are small time that want to just get into do grub steaks like 20 bucks here 40 bucks here 50 bucks here You know spread it out Can see what a portfolio looks like that does that rather than like oh, yeah I've been in since 2011 like jolly and like look at me, right? So so no you're gonna see what it was what it would be like if you started about now Like say you get into it just about now, you know, I and it's fun I've got like bitcoin and eight other coins right now. I'm about to buy two more Get into two more, but I see I see 30% swings over a few hours in a portfolio not just on one coin It's really kind of fun to watch and if you don't have Money that you're afraid to lose at stake. It can be a real fun deal So the real fine time and I have people comment I got community they can post post here and I and and I evaluate new altcoins now So now here's comes time for my big pitch Five bucks per month no ads no pop-ups no upsells no premium content one price quit anytime access to all content I hate bullshit You know, I like to do an honest deal I it started three weeks ago. I have like 133 Patrons right now if you want to check it out It's all there and so now questions No, no, well, that's the thing it's patron because isn't that ironic isn't it? Yeah So any any questions so should we get the mic around for that? go ahead So one of the things I didn't see on your ideal money was stability And so I I I was curious about that You know, like you said bitcoin eventually right now it's hyper inflationary Eventually, it'll be hyper deflationary Which makes it sort of very good Better than gold and being gold But not, you know, not very stable, which I would think would be a Good function of ideal currency. So I'm curious about your thoughts on that. You're absolutely right. It's an excellent question Um, it is not stable. It's highly volatile. I mean look at the chart, right? But it's like one of those things. I have this saying that I say well, you can't get there from here Right, so ultimately we want ultimately the the idea would be that we're just trading in bitcoin Right, it's it's so it's so well adopted Right, we probably won't even call it. Well, we'll we'll be calling it satoshis or some shit, right? Because You know because the the the it's deflationary um The the and I didn't get I was getting short for time So I didn't really go into deflation right the govern I talked about how why the governments want inflation Deep but see in a deflationary environment the government in fiat currency or in a hybrid Where it's like gold backed even because you know, we were we were gold standard during the great depression when we had Had deflation the governments are scared shitless of that because what happens if your money if the money supply tightens Right, it becomes deflationary because your money becomes more valuable by holding it So you don't go out and spend it and grow the economy Invigorate the economy. That's why you know right after nine and one one remember that George bush gets up and says don't worry go out and spend money Right, they didn't want people to hunker down because then they don't you don't want to compound the problem From a from a logical governmental standpoint. You don't want to compound even beyond the politics Right, the system is what it is, right? So you don't want to compound the problem by people saying hunkering down So the government is deathly afraid of inflation Because they in a political context they always have to show well the economy grew by this much You know in other words people got a lot more useless shit This year than they got last year, right? And so they they don't really want and i'm not talking about i'm not really talking about going back to some agrarian content But there is truth to the fact that we're just so fucking wasteful for a lot of bullshit reasons And a lot of keeping up with the joneses and everything like that And You know the thing i'm not the thing is we should have gotten over the fear of deflation a long time ago This is fucking deflationary technology is deflate inherently deflationary, right And yet we still got to go buy the new fucking thousand dollar phone that just came out, right? Instead of saying well, no, it's going to be twice as good in five years. I'm just going to wait We don't we don't behave like like that, right? So that so technology in itself is very deflationary Thank god because if it wasn't we'd really be up shit creek, you know because you can really get You if you you really get more and more for less and less money Even as badly as the government has fucked it up But into your question and volatility it is just what it is because we're in this transition phase, right? People don't really right now bitcoin is is a there's a lot there are a lot of people who try to Live on bitcoin. I think it's kind of silly personally, so i'm take i'm treating it as something to make fiat money Right now, right? But I embrace the day where you can just easily trade in bitcoin and when you start doing that I believe the volatility volatility will settle out, right? So any anybody else got it got to cut it All right