00:00 ladies and gentlemen bubbles have three
00:03 characteristics they tend to be a single
00:06 cycle boom than bust relatively short in
00:09 duration and crash back down to the
00:11 Baseline which is either zero or the
00:14 inflation adjusted place of where they
00:16 were before the Boom the Dutch tulip
00:19 Mania was like this so was the housing
00:21 bubble so was the dot bubble and so was
00:24 pretty much every other bubble ever so
00:28 what about Bitcoin well Bitcoin is
00:29 actually hard to the price Cycles
00:31 because it’s increased such radically in
00:33 value over time so we’re going to use a
00:35 logarithmic scale to look at what it
00:38 looks like on a price cycle where you go
00:40 from zero to a dollar then to $10 100
00:43 it’s called the logarithmic scale which
00:45 is often used for assets with this level
00:47 of upside so in the first price cycle
00:50 Bitcoin went from about 5 cents up to
00:53 $32 back to $2 now if we were having
00:56 this debate in 2011 you could be
00:58 forgiven for believing it two of the
01:01 three criteria of a bubble except that
01:03 it landed at a price that was 40 times
01:06 as high as the five cents that it
01:08 started at what happened next it didn’t
01:10 go to zero it went up to $1,200 came
01:12 back to 92 meeting now none of the
01:16 criteria of a bubble then what did it do
01:18 well it zoomed up to $199,000 down to
01:21 3,200 meeting once again none of the
01:24 criteria of a bubble 35 times the
01:27 previous low price then it zoomed up to
01:31 $69,000 down to $115,000 once again
01:34 meeting none of the criteria of any
01:37 historical bubble we have ever seen
01:40 bubbles look like the bottom left of
01:42 this chart they do not look like the
01:44 orange line so what does look like that
01:47 orange line well it turns out every high
01:49 value Asset that has ever become a
01:51 trillion dollar industry or asset looks
01:53 just like that on a logarithmic chart
01:55 Apple Amazon Netflix even gold when you
01:59 zoom out goes through the same pattern
02:02 and all of these assets do it for the
02:03 same reason the marketplace is trying to
02:05 figure out how big of a deal is this
02:08 asset how big of a deal is this industry
02:10 and what role will this commodity
02:12 technology or company impact in the
02:15 global world bitcoin’s doing the same
02:18 thing for the very same reason which is
02:20 the opposite of how any bubble in human
02:24 history has ever behaved so why is it
02:27 valuable well for the first time in
02:30 history we have a borderless predictable
02:33 and scarce monetary asset so what do I
02:36 mean borderless because Bitcoin is
02:39 decentralized it’s not controlled by any
02:41 country company or anybody and that
02:44 means Bitcoin is not like Fiat
02:47 currencies which is nothing but a bunch
02:49 of fifs all over the world and
02:51 borderless because you don’t have to
02:53 have the government’s permission to
02:54 cross a border with more than
02:56 $10,000 Bitcoin is a decentralized and
02:59 borderless currency that is valuable
03:02 because the world has never had a
03:04 universal worldwide currency that worked
03:06 like Bitcoin Bitcoin is also predictable
03:09 absolutely completely unlike the Federal
03:12 Reserve where even the experts get it
03:14 wrong every time and having a money that
03:16 is absolutely predictable is a very
03:19 valuable characteristic also Bitcoin is
03:22 scarce truly scarce there will never be
03:24 more than 21 million Bitcoin ever as
03:28 opposed to Fiat which is as in
03:30 as a politician’s promises so Bitcoin is
03:34 the first truly scarce currency the
03:37 world has ever had and that is
03:39 incredibly valuable so when you sum that
03:42 up we have a borderless predictable and
03:44 scarce monetary asset unlike anything
03:47 the world has ever seen before and it’s
03:49 doing exactly what you would expect it
03:51 to do on its way to more than a trillion
03:53 dollars which is where it is today north
03:56 of a trillion dollars solving the real
03:58 world problems of the need for a
04:00 borderless predictable and scarce
04:02 monetary asset so is Bitcoin a bubble
04:05 that is the question and Bitcoin meets
04:08 none of the criteria of any historical
04:11 bubble we’ve ever seen in history or is
04:15 it an ideal monetary asset that just so
04:17 happens to check every single box for
04:20 everything you would want for a new
04:22 monetary system for the world the answer
04:25 to that question is Bitcoin a bubble is
04:28 obvious
04:30 many new technologies throughout the
04:32 ages have been grossly misunderstood at
04:34 first humans are not very good at
04:36 managing change and we tend to mock
04:38 things that we do not understand let’s
04:40 look at two historical examples
04:43 electricity and the internet 1879 Thomas
04:47 Edison invents the modern electric light
04:49 bulb and the decades thereafter
04:51 electricity was ridiculed in the public
04:54 here we have a cartoon from the late
04:55 1800s newspaper op EDS of the day called
04:58 electricity the devil in the wall today
05:01 nobody would question the utility of
05:03 electricity for lighting Refrigeration
05:05 air conditioning to power robots
05:07 computers machines and more the internet
05:11 was gifted to us publicly in
05:13 1983 15 years later in
05:16 1998 Paul Krugman famously said the
05:20 internet’s impact on the economy will be
05:22 no greater than that of the fax machine
05:24 this Yahoo won a Nobel prize in
05:26 economics you know what also happens to
05:28 be 15 years old right now Bitcoin all
05:32 seminal Technologies throughout human
05:34 history are only understood properly by
05:37 the general population in
05:39 hindsight Bitcoin is one of the most
05:41 important Technologies ever invented for
05:44 Humanity on par with fire and the wheel
05:47 and the printing press and yes
05:49 electricity and the internet in terms of
05:51 its import to humanity question 20 years
05:54 from now this will be obvious to
05:55 everybody but today let me give you a
05:57 fundamental framework to help you
05:59 understand why I know this this with
06:00 certainty Bitcoin is both an asset and a
06:04 network simultaneously if you go to your
06:06 computer you can duplicate many things a
06:08 favorite photo a file a document you
06:12 cannot duplicate Bitcoin the asset it is
06:14 a digital Bearer instrument much the
06:16 same that dollar bills are physical
06:18 Bearer instruments so with both Bitcoin
06:20 and dollars if I give them to you or you
06:23 take them from me or I misplaced them
06:25 they are gone that is Bitcoin the asset
06:27 but at the same time Bitcoin is also a
06:30 Network this is what is difficult for
06:31 people to get their heads around we have
06:33 billions of dollars of Bitcoin miners in
06:35 other words worldclass data centers
06:39 powering the most powerful bit or
06:41 computer network ever seen by history
06:43 and they are voluntarily running at
06:45 Great expense the Bitcoin protocol
06:49 software before we get to that why are
06:51 they doing this let’s talk about Henry
06:53 Ford one of the Great American
06:54 businessmen of all time 1921 New York
06:57 Tribune top of the fold 103 years ago
06:59 Henry Ford says if you want to stop all
07:01 wars you would have a currency based
07:04 upon kilowatt hours well you know what
07:06 folks that’s exactly what we have today
07:08 with Bitcoin Bitcoin miners running the
07:10 Bitcoin protocol convert electricity
07:13 into monetary value what is this Bitcoin
07:15 protocol that I speak of it is free and
07:17 open source software so it’s very
07:19 different than software that you would
07:20 get from say Microsoft or apple that you
07:22 both have to pay for and is a black box
07:24 you have no idea how the code works the
07:26 Bitcoin protocol software by contrast is
07:28 free for any human being to view audit
07:31 and use and part of what’s written into
07:34 the code is a hard cap on Supply no more
07:37 than 21 million Bitcoin can never be
07:38 issued absolute scarcity what does this
07:41 all mean Bitcoin is the most beautiful
07:43 form of sound money ever invented it is
07:45 unseizable if you want to be you can
07:46 truly be your own bank it is
07:48 uncensorable nobody can stop a Bitcoin
07:50 transaction unlike Visa or venmo or your
07:52 bank who can censor any transaction they
07:54 want and it cannot be inflated away like
07:57 politicians do with fiat currency
07:59 because they can never resist the Allure
08:01 of the Central Bank printing
08:03 press why is this important 250 years
08:07 ago our country was founded in part on
08:08 this notion that we could separate
08:10 Church from the state with Bitcoin for
08:12 the first time in human history we had
08:14 the possibility of separating money from
08:16 the state and this has profound
08:18 implications Bitcoin is 15 years old was
08:20 intentionally launched at the height of
08:22 the great financial crisis and during
08:24 the past 15 years with Bitcoin we have
08:26 been seeing the birth of an entirely new
08:29 Financial system system with the Bitcoin
08:30 protocol as the Bas layer last time I
08:32 checked birth in nature is both volatile
08:35 and violent it is not a smooth process
08:37 and so with Bitcoin we see the birthing
08:39 of this new system expressed in the
08:41 metric of the old system dollar price
08:44 it’s gone down 70% or more four times
08:46 over it’s going up and to the right
08:47 Forever on our algorithmic scale because
08:49 it is one of the most important
08:51 Technologies ever invented for human
08:53 Freedom Bitcoin is not a bubble with
08:56 Bitcoin we are seeing the birth of a new
08:58 system that is critical for human
09:00 Freedom all right so how do you value
09:03 Bitcoin we know it’s an ideal monetary
09:05 system we know it’s not a bubble
09:06 according to the data but how do we
09:08 value it well Ark invest and the
09:11 chartered financial analyst Institute
09:13 are the two best resources to get
09:15 exactly what is the right price how do
09:17 you model it and all of that they put
09:18 forward four models we have time to look
09:21 at two Network effects and Market size
09:23 so meta’s law is how you value something
09:25 that has Network effects whether it’s a
09:27 Telegraph telephone the internet
09:28 anything that becom more valuable when
09:31 people connect to it and it says the
09:32 value of a network is proportional to
09:34 the square of the number of users so as
09:37 the users go up linearly the value of
09:39 being on that network with everyone else
09:41 that’s on there goes exponentially so if
09:44 Bitcoin has less than 100,000 users in
09:47 2011 which it did and the price was $1 a
09:50 coin and the number of users increases
09:53 to more than 27 million today which it
09:56 is far in excess of that you would
09:58 expect when there’s a
10:00 270x increase in the users for there to
10:03 be a 74,000 X increase in the value of
10:06 being part of that Network which is
10:08 roughly where we are with regard to
10:10 bitcoin so you again you can square that
10:13 270x you get 73,000 Xtra you can look at
10:16 27 million users squared as compared to
10:18 100,000 users squared so if you don’t
10:21 like that approach you can also go to
10:23 Ark invest their 2023 Big Ideas report
10:26 page 65 and they will lay down in very
10:30 specific detail exactly how you value
10:32 Bitcoin exactly where they get those
10:34 numbers exactly how they come to a price
10:36 of somewhere between 258,000 and 1.48
10:39 million in the year 2030 they will
10:41 answer all of that for you in exactly
10:43 the detail you want to see it’s all
10:45 there there are plenty of models online
10:47 and as far as what makes Bitcoin
10:48 valuable for the last years everything I
10:51 buy is with Bitcoin with the coinbase
10:53 debit card everything and well everybody
10:55 who’s using US Dollars their money is
10:57 losing value in the longterm overtime
10:60 I am using money that is increasing in
11:02 value over time that is valuable it is
11:05 an asset it is a network and it is a
11:08 protocol all at the same time Bitcoin is
11:10 a public database every transaction is
11:12 out in the open here’s an analogy for
11:14 you if I go back to my hotel room and I
11:16 create an email address Yad yada Gmail
11:19 and I send you a nasty email from that
11:21 Gmail address you’re not going to have
11:22 any idea who came who it came from the
11:24 FBI can figure out in 28 seconds who
11:27 sent that email if they want to that I
11:29 was the generator same thing with
11:31 Bitcoin it’s a public Ledger it’s the
11:32 last thing that people will use for
11:35 nefarious activities that’s what they
11:36 use dollars for you hear that bitcoin’s
11:38 not scalable again this is a complete
11:40 misunderstanding of the technology look
11:42 at our our banking system we have this
11:44 thing called the Federal Reserve and
11:46 dollars get settled at fedwire nobody in
11:48 this room has access to fedwire most of
11:50 you probably don’t even know what
11:51 fedwire is but postor War II we built
11:54 our banking system in layers we have
11:57 commercial Banks and then we have things
11:58 like a and Swift and wire transfers and
12:02 ATM networks and credit cards and
12:05 peer-to-peer systems like venmo and
12:06 PayPal right the internet was built in
12:08 layers in 1983 if you had the top
12:10 internet technologist in the world and
12:12 put them in a room and said show them
12:14 what the internet today most of them
12:15 would say not feasible but we
12:17 bastardized tcpip I say that in a
12:20 positive fashion in a way where we built
12:21 LS on it to do things that people never
12:23 could imagine Bitcoin the Bas layer is
12:25 fast not slow you need to compare
12:27 Bitcoin to fedwire right fed wire
12:30 transactions clear in days I can send a
12:32 billion dollars around the world in 10
12:34 minutes right Bitcoin is insanely fast
12:37 compared to dollars not slow and we’re
12:39 going to build layers on top of Bitcoin
12:41 just like we built layers in the
12:43 commercial banking system for this Brave
12:45 New World and you want Bitcoin because
12:47 it’s decentralized and not controlled by
12:48 the government as we enter a relatively
12:50 dystopian future thank you would Bitcoin
12:53 be easier to use for buying and selling
12:54 if there was no capital gains tax on
12:56 bitcoin on transactions yes absolutely a
12:58 lot of people are worried about that
12:59 coinbase with the coinbase debit card
13:01 makes it super easy for you because it
13:02 does it all for you in the background it
13:04 calculates all of that but yes a lot of
13:05 people are concerned about that like if
13:07 I buy something with Bitcoin that’s
13:09 appreciated do I have to pay taxes on
13:11 that the answer is yes but somewhere
13:12 like coinbase does all the work for you
13:14 and makes it simple but yes and in El
13:15 Salvador where it is legal tender you
13:17 don’t have to worry about that or in
13:18 Prosper where it’s legal tender you
13:19 don’t have to worry about that darpin at
13:21 the precursor to the internet was
13:22 created in the late 1960s the public
13:24 internet was given us in 1983 1998 15
13:28 years into the internet everybody
13:29 thought it was a toy Paul Krugman Nobel
13:32 prize winning Economist says it’s going
13:33 to have no utility more so than the fax
13:35 machine right they were all wrong give
13:38 it some time it’s going to evolve and
13:40 that gets back to the final chart that I
13:41 showed you Bitcoin is emergent it is
13:44 going to emerge this is what people
13:46 can’t get their head around into a store
13:47 of value over time it will further
13:49 emerge over the decades ahead into a
13:51 global money the Breakthrough of Bitcoin
13:53 is digital scarcity we’ve never before
13:56 had something that was digital that you
13:58 couldn’t copy paste and make an unlim
13:59 amount of the fact that we need a
14:01 monetary system that is digital because
14:04 things like gold don’t move across space
14:06 and time and borders fast enough and
14:08 efficiently enough to be a monetary
14:10 system for the world and we found that
14:11 from the past which is why gold got
14:13 taken away for example so the
14:15 Breakthrough of blockchain technology
14:17 which is specific to bitcoin is digital
14:19 scarcity the ability to have a digital
14:22 money that you can send anywhere in the
14:24 world at any time with no ability for
14:26 anybody to block it or censor it that is
14:28 a mass massive breakthrough that people
14:30 have been working on for decades and
14:32 nobody figured it out until the
14:34 invention of Bitcoin as far as spending
14:36 Bitcoin directly again use a coinbase
14:38 debit card the value is using a currency
14:41 that the government doesn’t print more
14:42 of and therefore is not in a constant
14:45 state of losing value like how insane is
14:48 it that we have a currency that is
14:50 supposed to lose 2% of its value every
14:52 year and generally loses 3 four 5 6 7 8
14:55 9% they print six to s% more money every
14:58 single year like it’s insane that we’re
15:00 expected to use that as money that’s
15:02 insane Bitcoin fixes that
