Bitcoin vs. Blockchain for Investing: Which is Better?

00:01 Hey everyone, let’s talk about why you
00:03 should invest in Bitcoin and not
00:05 blockchain. All right, so what is a
00:07 blockchain? A blockchain is a slow,
00:10 deliberate, ultra seccure, immutable,
00:14 um, decentralized database. Now, you’ll
00:18 notice that the first word I used was
00:20 the word slow. Um, in the vast majority
00:23 of applications, you want a fast
00:25 database. Uh the problem is you can’t
00:29 have a fast database that is also secure
00:32 and decentralized for money. That does
00:34 not exist. Um and so it’s called the
00:38 blockchain trilmma. The blockchain
00:40 trilmma means you can have a secure
00:42 blockchain, a decentralized blockchain
00:45 and a and or a uh scalable or fast
00:49 blockchain, but you can only have two
00:51 out of three. You can’t be fast uh scale
00:56 or sorry you can’t be you know sort of
00:57 fast secure and decentralized. There is
00:59 no solution in the entire world that is
01:01 fast uh decentralized and secure. So
01:05 when Bitcoin was created it was uh the
01:07 concept of the blockchain which was
01:09 originally called the time chain but I
01:11 won’t go into why. Um, the original
01:13 concept of a blockchain invented by
01:15 Satoshi Nakamoto way back in the day,
01:17 uh, was invented because nobody in the
01:19 world had ever invented a completely
01:23 decentralized database that could be
01:25 used for money. And in order for it to
01:27 be decentralized and secure, it could
01:30 not be fast. Well, and for a bunch of
01:32 reasons. Again, if you’re curious, I’ll
01:34 do a very technical video on why that
01:35 is. But the the truth is that’s just the
01:37 way it is. It it’s like sometimes you
01:39 see people say you can have a product
01:41 that’s uh fast, cheap, uh you know, you
01:44 want it to be fast, cheap, and easy, but
01:46 you can only have two out of three. If
01:47 it’s fast, and it’s cheap, you know,
01:49 it’s you know, it’s not easy. If it’s
01:52 you know, you know, easy and cheap, it’s
01:54 not fast. You know, it’s there’s a lot
01:56 of things in life where there’s sort of
01:58 three characteristics and you get two.
01:60 Well, in in the case of the blockchain
02:01 trilmma, it is uh you know fast uh which
02:05 people typically use the word scalable
02:07 because it refers to capacity uh
02:09 scalability, security and
02:10 decentralization. And Bitcoin went for
02:12 two out of three which was security and
02:14 decentralization which for money is by
02:16 far the most important. So after Bitcoin
02:19 came on the scene, a bunch of people
02:21 tried to use blockchain technology for a
02:24 bunch of different random things. uh
02:26 they said wait we can use blockchain
02:28 technology to track shipping containers
02:30 around the world. We can use it to track
02:33 uh stocking of goods at Walmart. And so
02:35 people introduced all these different
02:37 solutions for blockchain technology when
02:40 they were applying that technology to
02:42 something for which decentralization
02:45 doesn’t matter. I have never say heard
02:48 anybody say hey I checked my Amazon
02:50 shipping log and they said they shipped
02:53 me a product but I just don’t trust
02:54 their database. Right? Right? I mean,
02:55 that just never happens. Other than
02:57 money, you almost always want a fast
03:00 centralized database for even for
03:03 shipping containers. And if if people
03:04 want to know or be able to track it, you
03:06 do that through application programming
03:08 interfaces, which are called APIs, which
03:10 means you open up your very fast
03:11 database so other people can check on
03:13 it. But in almost in very very very very
03:17 few instances do you want a slow
03:21 deliberate database that is completely
03:23 decentralized, imu immutable,
03:25 uncensorable, unstoppable. There’s
03:28 essentially one really good application
03:30 for that technology which is money. It
03:33 turns out for money that is the most
03:35 important application because how much
03:37 money everyone has is super super super
03:40 important. And in the case of Bitcoin,
03:42 even though you can send it to people
03:43 instantly, if you want to make sure
03:45 it’s, you know, it’s uh uh completely
03:47 irreversible and you’re sending like a
03:49 billion dollars, it’s not going to
03:50 happen as instantly as something like
03:52 PayPal or Vinmo. But something like
03:55 PayPal or Vinmo doesn’t settle for days.
03:57 It looks like it does, but it doesn’t
03:59 actually settle for days or weeks uh or
04:01 in some cases months. So, in the case of
04:03 Bitcoin, the vast majority of things
04:05 that people need databases for in the
04:07 world, they do not need a blockchain. A
04:10 blockchain is the wrong tool for the
04:12 vast majority of realworld use cases.
04:15 And as a result, the vast majority of
04:17 projects the companies have spawned that
04:19 uses blockchain technology have
04:21 ultimately been shut down because
04:22 they’re like, I can use a SQL database.
04:25 Like I can use a plain old off-the-shelf
04:27 database and it actually works better
04:28 than a blockchain. So the one place in
04:31 the entire world that absolutely
04:33 positively you know you want a slow and
04:36 reliable database rather than a fast
04:38 database that is alterable is money
04:40 because in the case of money it is you
04:42 you do not want anyone to print more of
04:44 it and when you transact you want
04:47 absolute certainty that you have the
04:49 money you have other people have the
04:50 money they have when it transfers it
04:52 transfers and all of that. Um so uh what
04:56 is the real world application for this?
04:58 Well, sometimes people invest in things
04:60 other than Bitcoin because they say,
05:02 “Well, it’s using blockchain technology
05:03 and I thought it was going to be great.”
05:05 If it’s using blockchain technology and
05:07 it’s not Bitcoin, there’s a good chance
05:08 there’s no reason it’s using blockchain
05:10 technology other than just to draft off
05:13 of Bitcoin’s popularity. Uh, for
05:15 example, uh, once upon a time, uh, back
05:19 near the start of Bitcoin, a pizza
05:21 company changed their name to Blockchain
05:23 Pizza. And of course, their stock price
05:26 shot way up and cuz people were like,
05:27 “Blockchain pizza. Maybe they’re using
05:29 the blockchain for something.” There’s
05:30 nothing you could possibly use
05:32 blockchain for at a pizza company that a
05:34 central regular old database works
05:37 doesn’t work just as well for or better
05:39 for. Even tracking delivery drivers,
05:42 there’s absolutely no reason an
05:43 immutable decentralized database is
05:45 necessary for that as compared to a
05:47 regular old database that Papa John’s
05:49 uses. there’s just no benefits to
05:51 blockchain technology for the vast
05:53 majority of things. But it just so
05:55 happens for a very small number of very
05:57 important things like Bitcoin and to,
05:60 you know, to some degree, although it’s
06:01 still very early, decentralized finance
06:03 applications like Ethereum that
06:05 blockchains actually do matter a lot.
06:06 But that is not the case for the vast
06:08 majority of things. So, if somebody is
06:10 trying to get you to invest in a
06:12 blockchain fund or a blockchain
06:14 investment or a blockchain this or a
06:16 blockchain that, just be aware that it’s
06:18 a buzzword and that the vast majority of
06:21 the value that the blockchain technology
06:23 has ever created for anywhere in the
06:25 world is just for Bitcoin. and the vast
06:28 majority of other things you could
06:30 possibly invest in that have anything to
06:32 do with Bitcoin technology or sorry,
06:33 anything to do with blockchain
06:35 technology, you are better off just
06:36 taking that exact same money and putting
06:38 it in Bitcoin. Um, so uh as always, hope
06:42 this helps. Ask me any questions. Always
06:43 here to help.