How the Very First People That Heard About Bitcoin Responded to It

00:01 Hey everyone, let’s talk about how the
00:03 very first people that heard about
00:05 Bitcoin responded and how you and I are
00:08 likely to have responded the same way.
00:11 So the background to this is I regularly
00:13 think, wow, if only I had been on the
00:16 crypto cryptography mailing list when
00:18 Satoshi Nakamoto sent the email and
00:21 indicated his idea and all of that. And
00:24 wouldn’t it have been amazing if I could
00:26 have mined hundreds or thousands of
00:27 Bitcoin back in the day just by keeping
00:30 my computer on. Uh but the truth is you
00:33 or I or anyone else is very likely to
00:35 have responded exactly the way the
00:37 people on the cryptography mailing list
00:39 actually did respond which most of them
00:42 were very skeptical and sort of thought
00:45 nothing of it. So you have to understand
00:46 the context. People had been talking
00:48 about inventing decentralized digital
00:51 cash, a form of internet native money
00:54 since the 1970s. The the internet was
00:57 originally invented in 1969. It they you
00:60 know scholars debate on whether it was
01:02 69 or 83 and people go back and forth
01:04 but anyway the earliest the internet
01:06 existed in any form I believe was
01:08 something like 1969. So since the 1970s,
01:11 people have been talking about wouldn’t
01:12 it be amazing if there was an internet
01:14 native cash and they tried a bunch of
01:21 opportunity was spending the same coins.
01:24 Essentially they all had a centralized
01:27 uh place that you could check to see if
01:29 any specific uh of the electronic
01:31 currency had been spent. And what kept
01:34 happening was governments would shut
01:36 down whatever that central uh place was
01:39 because they didn’t have a money
01:40 transmitter license or a you know some
01:43 sort of license. And so when So Satoshi
01:46 Nakamoto came along and on October 31st
01:49 uh 2008, which was when the uh Bitcoin
01:52 white paper was first uh published to
01:54 the cryptography mailing list. When he
01:56 came along, you’ve got to realize these
01:58 people had been seeing for decades ideas
02:01 for digital cash that didn’t work out.
02:03 So they were naturally skeptical. Every
02:06 other idea that anyone had had did not
02:09 work out. So then all of a sudden this
02:11 guy out of the blue, nobody’s ever heard
02:13 of him, using a pseudonym drops a white
02:16 paper on the cryptography mailing list
02:18 and people generally did not take it
02:20 seriously. They thought, you know, if
02:22 this was credible, it would not be
02:24 coming from Satoshi Nakamoto, whoever
02:26 that is. and the way that um Bitcoin is
02:31 proposed often. So, if you think about
02:34 how to design, you know, cryptography
02:36 and systems and all of that, it’s almost
02:38 like it’s backwards. And I had someone
02:40 tell me this. I think it was it was
02:42 either Jame Lop who’s a Bitcoin uh
02:44 developer, or it was Adam Beck, the
02:47 inventor of Hash. I was having a
02:49 conversation a couple years ago with I
02:51 can’t remember which one it was. It was
02:52 one or both of them back at Satoshi
02:54 round table in Dubai uh a year or two
02:57 ago. And I asked them, I said, “Well,
02:59 what did you think of, you know, when
03:01 you first saw it?” And I think it was
03:02 Jameson Lop said, “Well, what’s hard
03:04 about Bitcoin is if you spend if you’re
03:07 a software developer, it’s almost like
03:09 it’s designed in reverse.” like he’s
03:11 like the the way the concept of the
03:14 blockchain and all of that sort of stuff
03:16 when when it hits you for the first
03:18 time, if you’re used to solving computer
03:21 software design problems the way people
03:24 are used to solving them, then your gut
03:26 reaction is that’s all backwards.
03:28 That’ll never work. And it’s only after
03:31 you spend some really intense time
03:33 studying it that you realize, but wait,
03:35 that’s literally the only way it can
03:37 work. So in some ways uh Satoshi
03:41 Nakamoto, whoever that is, the inventor
03:42 of Bitcoin, in some ways the only way to
03:46 create Bitcoin was to think outside the
03:49 box. And the problem that everyone else
03:51 had that had attempted to invent digital
03:54 cash uh or n internet native money
03:57 before Satoshi Nakamoto, they were all
03:59 in some way thinking inside the box or
04:02 maybe they were thinking outside of the
04:04 the box, but not way outside of the box.
04:07 So the vast majority of people who read
04:09 the Bitcoin white paper when it was
04:11 first uh first introduced did not take
04:14 it seriously. They did not think it was
04:16 going to work. It didn’t sound like
04:19 software the way they were used to
04:21 seeing software written. It did not work
04:24 like systems they were accustomed to
04:26 were accustomed to working. So the vast
04:28 majority of people dismissed it even if
04:30 they were there at the ground level. And
04:32 the few who did not dismiss it and
04:34 decided to download the software for
04:35 Bitcoin and started running it, most of
04:38 them decided it was not worth their
04:40 computer running hot. I’ll tell you that
04:42 in one
04:44 second. Okay. So the the vast majority
04:47 of people who did take Bitcoin even at
04:50 all seriously, they downloaded the
04:52 software which was released uh uh on
04:54 well it the the network started running
04:56 on January 3rd of 2009 and I think the
04:58 software was you know released right in
05:00 that time frame. So the number of people
05:02 who who actually did download the
05:04 Bitcoin software and started running it
05:07 because it used uh computational power
05:10 it made their computers run hot. So even
05:12 though they were getting maybe 50
05:14 Bitcoin a day, their their home computer
05:17 was mining one Bitcoin block per day,
05:19 which back then gave you 50 Bitcoin.
05:21 Right now it gives you 3.125 Bitcoin and
05:23 you can’t even run it on a home
05:25 computer. You have to have major mega
05:27 you know uh data centers to run the
05:29 Bitcoin uh you know to to effectively
05:32 mine Bitcoin requires massive data
05:33 centers. But back then you could mine
05:35 maybe 50 Bitcoin per day on your home
05:37 computer if you were running the
05:38 software. But the vast majority of
05:40 people who ran it ended up turning it
05:43 off because it made their computer run
05:45 hot. So, you know, as soon as you launch
05:47 the software and you turn on the Bitcoin
05:49 mining, you know, uh capability, it
05:52 would immediately all the fans on the
05:53 computer would kick up to full gear
05:55 because the the microprocessor, graphics
05:58 card, whatever was doing computational
06:00 uh processing would start getting hot
06:02 because it was working really hard. And
06:04 so, people didn’t like the fan noise. So
06:06 if you can imagine back in the day
06:09 people uh you know could get 50 Bitcoin
06:11 a day uh which right now would be worth
06:13 you know5ish million you know so around
06:17 4 to 5 million you know four and a half
06:19 to 5 million a day of today’s price
06:22 Bitcoin all because they didn’t want
06:24 their computer to run hot so before you
06:27 and I think we wish we had been you know
06:30 plugged in back then the truth is we
06:32 would have responded the same way uh and
06:34 I know that because when I first heard
06:35 about Bitcoin in 2014. I thought, “Ah,
06:38 it’s technology. Technology, you know,
06:40 it’s it they come, they go. I’ve seen a
06:42 million technologies come and go.
06:44 There’s no reason I need to engage on
06:45 this one because, you know, we probably
06:47 won’t even be here the next time. You
06:49 know, I’ll probably never hear about it
06:50 again.” Uh, and and if that was the case
06:52 in 2014 where it was already a
06:54 multi-billion dollar asset class, then
06:56 imagine back when it didn’t even exist,
06:59 when it was just, you know, an idea on a
07:01 white paper back in October 31st of
07:04 2008. Um, so in summary, if you or I had
07:08 pro had been reading the cryptography
07:10 mailing list back on October 31st of
07:12 2008, we probably would have dismissed
07:15 Bitcoin as, you know, not going to work
07:18 like the way most people did. And if we
07:21 had run the software on our home
07:23 computer when it was launched in early
07:25 2009, we also would have very likely
07:27 turned it off because we didn’t like the
07:29 fan noise and we thought it made our
07:31 computer run hot. And if we had been
07:34 introduced to Bitcoin back when it was,
07:37 you know, you could buy 10 of them for a
07:39 penny, we probably would have sold it
07:41 once they were worth a dollar each, just
07:44 like most people did. So in short, even
07:46 though all of us wishes we were at the
07:49 ground floor of Bitcoin, the truth is
07:52 all of the people who were at the ground
07:53 floor of Bitcoin behaved the exact same
07:56 way you or I likely would, which is one,
07:59 we wouldn’t have taken it seriously.
08:01 Two, we would have turned it turned it
08:04 off if we were running it because it
08:05 made our computer run hot. Three, if we
08:08 did get any Bitcoin, we would have sold
08:10 them as soon as it had any price because
08:12 we would have thought, well, heck, now
08:13 that it’s worth a penny, I got it for
08:15 nothing and now I can actually make some
08:17 money. I can make a few hundred bucks or
08:18 a few thousand bucks or even tens of
08:20 thousands of dollars. Not thinking, hey,
08:23 this is going to be worth millions one
08:25 day. Um, so that’s how everybody, not
08:28 everybody, but the vast majority of
08:30 people did respond and that’s likely how
08:32 you and I would have responded. So what
08:34 is the upside of that? What’s the silver
08:35 lining in all that? Well, the silver
08:37 lining is there’s way more Bitcoin for
08:39 all of the rest of us. If everybody who
08:41 learned about Bitcoin originally had
08:43 taken it seriously, they would own all
08:45 the Bitcoin or almost all the Bitcoin.
08:47 The truth is they don’t. Virtually
08:49 everyone who got in at the ground floor
08:50 of Bitcoin ultimately sold their Bitcoin
08:53 for a dollar or $10 or $100 because they
08:56 thought it had appreciated so much they
08:58 couldn’t imagine how much higher it
08:59 could go. So all of the Bitcoin that all
09:02 of the rest of us have, we only have it
09:04 at the prices we were able to buy it at
09:07 because the people in the very early
09:09 days did not take it seriously. uh
09:11 because people, you know, back then
09:13 didn’t want to run their computers hot,
09:15 which meant the Bitcoin got beautifully
09:18 distributed where, you know, each person
09:20 would turn their computer on, they’d
09:21 leave it running for a few days, they’d
09:22 get maybe 50 Bitcoin, 100 Bitcoin, 150
09:25 Bitcoin, then they turned their computer
09:27 off cuz it was running hot. So, what
09:28 that did is it resulted in a beautifully
09:31 wide distribution of Bitcoin throughout
09:34 the early adopters of Bitcoin. And then
09:36 those early adopters as Bitcoin’s price
09:39 increased they sold a portion of their
09:41 Bitcoin maybe half maybe 2/3 maybe
09:43 one/ird but that has happened every step
09:46 of the way and as a result the
09:48 distribution of Bitcoin is way more sort
09:52 of equitable or even not equitable
09:55 because that would be the wrong word but
09:56 more more even the the distribution of
09:59 of of Bitcoin is way more even than you
10:03 could have possibly imagined it would
10:05 have
10:06 So virtually everybody thinks if you
10:08 were early you stockpiled a huge amount
10:09 of Bitcoin and just sat on it. The
10:11 answer is no. People didn’t stockpile it
10:13 because most of the people never ran the
10:14 software. And the people who did run the
10:16 software didn’t most of them did not
10:18 stockpile it because it made their
10:20 computer run hot. So they turned it off
10:22 uh after getting you know 50 100 you
10:24 know 200 Bitcoin or whatever. And which
10:28 again is way different than thousands or
10:30 tens of thousands. Um you know if you
10:32 got 50 Bitcoin and then you’re like well
10:34 now I got enough to play with. I’ll turn
10:35 it off and, you know, see if it’s ever
10:37 worth anything. Um, so people who could
10:38 have had 5,000 Bitcoin got 50 and then
10:41 they, you know, stopped it running on
10:43 their computer cuz their computer ran
10:44 hot. And then the people who did end up
10:46 with thousands of Bitcoin mostly sold
10:48 them for a dollar or $10 or $100. So
10:51 what that lands us today is you can
10:54 still buy Bitcoin for less than
10:56 $100,000. If the Bitcoin had not been so
10:59 beautifully evenly distributed just by
11:01 human incentives, nobody nobody made
11:04 people not take it seriously. Nobody
11:06 made their people turn their computers
11:08 off cuz it was, you know, running hot.
11:10 And nobody made anybody sell Bitcoin at
11:12 a dollar or $10 or $100. But all of
11:15 those people did that completely
11:17 voluntarily following the incentives of
11:20 the system. And because they followed
11:22 the incentives of the system, the
11:24 Bitcoin ended up beautifully, not
11:26 completely evenly distributed.
11:27 Obviously, a some people have more than
11:29 others, and some early adopters did end
11:31 up with a lot of Bitcoin, but it is much
11:33 more evenly distributed than literally
11:36 anybody could have predicted it would
11:38 have ever been. Um, and it becomes more
11:40 evenly distributed by the day. As people
11:43 adopt Bitcoin, people who bought it at
11:45 $10,000, you know, they need a new car
11:47 or something, so they sell it for
11:49 $90,000. Somebody somebody new today
11:52 thousands or tens of thousands of people
11:54 in the world will buy Bitcoin for the
11:56 very first time at
11:58 93,500 and they are selling they’re
12:01 buying that Bitcoin at 93,500 because
12:03 somebody who bought it at
12:06 63,500 you know is up 50%. And feels
12:09 like now is a good time to sell some
12:11 Bitcoin. So the Bitcoin, all the Bitcoin
12:14 in the world keeps getting more and more
12:16 evenly distributed. Even as you have
12:18 Michael Sailor buying up a lot, you
12:20 know, as certain entities are buying up
12:22 a lot, that’s still a very small
12:24 percentage of the total Bitcoin. The
12:27 vast majority of the Bitcoin is every
12:29 single with every single passing day,
12:31 the vast majority of the Bitcoin is
12:33 getting more and more distributed among
12:35 more and more people following the
12:37 beautiful incentives of the network. And
12:40 as a result, people like me bought my my
12:42 first Bitcoin in 2017 and I’ve been
12:45 accumulating Bitcoin ever since. But at
12:47 some point, you know, Bitcoin will be so
12:49 expensive that I’ll just be living
12:51 entirely on Bitcoin without an income
12:54 stream. And if I’m living entirely on
12:56 Bitcoin without an income stream, that
12:58 means I’m slowly spending Bitcoin. And
13:00 if I’m slowly spending Bitcoin, that
13:02 means I’m distributing it very slowly to
13:05 the rest of the world. and everybody who
13:07 has retired on Bitcoin is doing the same
13:09 thing unless they’re borrowing against
13:11 their Bitcoin. They are slowly
13:13 distributing their Bitcoin to the rest
13:15 of the world. Um it’s just a beautiful
13:16 system. It’s a it’s a beautiful
13:18 completely voluntary system that relied
13:21 on the ent and has and will always rely
13:24 on the completely voluntary behavior of
13:27 humans following very natural and very
13:30 healthy incentives. And that is just a
13:32 beautiful system that results in Bitcoin
13:35 becoming the new monetary system of the
13:37 world and getting there in a completely
13:40 straightforward and completely voluntary
13:42 way, which is just a beautiful thing to
13:44 behold. So, um, anyway, just be glad you
13:47 know about Bitcoin. Now, in 2024, there
13:50 will be people who adopt Bitcoin for the
13:51 very first time in 2025, 2026, 2027, all
13:55 the way into the 2030s. we’re going to
13:57 be well into the 2030s, if not the
13:60 2040s, before everybody that possibly
14:02 could benefit from Bitcoin has um very
14:06 similar to Facebook. I don’t know,
14:08 Facebook has like three or four billion,
14:10 you know, users. It’s like half the
14:12 world’s population or something like
14:13 that, but it took them quite a while to
14:14 get there. It took them a while and the
14:16 early adopters and then it started to
14:17 snowball. So, we’re still, you know,
14:19 something like 5% of Americans own any
14:22 Bitcoin and even most of those own a
14:24 very small amount. Um, so you’re still
14:27 early to Bitcoin. Bitcoin is
14:31 on, excuse me, Bitcoin Bitcoin is on
14:34 sale and cheap right now in my opinion.
14:36 And uh it’s a beautiful