SaylorCorpus

Tech Themes thru History—Harder, Smarter, Faster, Stronger | The Saylor Series | Episode 3 (WiM003)

WiM Media · 2020-12-07 · 1h 16m · View on YouTube →

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they're dominating because they're able

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deliver force

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faster harder stronger smarter

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so if we ask the question what is money

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money is the highest form of energy that

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human beings can channel

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bitcoin

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is channeling human ingenuity

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into making it better

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and and every commodity is channeling

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human energy into making it worse the

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lowbrow or the

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the historic

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colloquial term is total right hold on

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for dear life or just total or save

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whatever and the highbrow term would be

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adopt as a treasury reserve essay

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[Music]

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hey guys so as you learned uh by

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watching the what is money show

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bitcoin is the single most important

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asset you can own in the world today

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and so this begs the question which i'm

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often asked how does one build their

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bitcoin position

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and the strategy really is simple i

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suggest first you decide on an initial

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portfolio percentage allocation and

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target portfolio percentage allocation

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go ahead and establish the initial

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position with a one-time buy and then

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start dollar cost averaging towards your

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target portfolio percentage

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and you can also complement this by

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buying bitcoin price dips to further

0:01:44

increase that position and reduce your

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cost basis

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and finally i suggest to everyone to

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take custody of their bitcoin to move

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all their bitcoin into self-sovereign

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custody because again bitcoin left on

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exchange is not bitcoin it's a bitcoin

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and for those of you living in the us

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there's no better choice than swan

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bitcoin to do all of the above so swan

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lets you set up automatic recurring buys

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for bitcoin also lets you facilitate

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one-time buys for buying price dips

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and finally they let you do some

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automatic

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recurring withdrawals into cold storage

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which is a really big deal

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and all of this they provide at the

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lowest fees in the business uh

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approximately 0.99

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per year for weekly buys of 50 or more

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which is about 60 i'm sorry 70 to 80

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less than coinbase by comparison

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and the best part swan is a bitcoin

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focused

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education first company

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they publish great content on their swan

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signal live podcast

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they publish a lot of content in their

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newsletter and website and their their

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team is just the absolute dream team of

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bitcoin i would say check out their

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roster it's growing every day but but

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it's a super impressive group of

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individuals

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and so with that i would highly

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recommend you check out swannbitcoin.com

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backslash breedlove you get ten dollars

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in free bitcoin for signing up

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um and it lets you stack sets with

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myself and the rest of uh the swan team

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as we continue the fight to restore

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freedom truth and virtue in the world

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through bitcoin alright thanks

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hey guys welcome back to episode three

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of the what is money show

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here in the sailor series

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so we've covered with michael saylor so

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far uh the rise of man

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through the stone

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stone ages through the iron ages we went

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into the dark ages we saw how mankind

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can have a misstep that causes him to

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regress a thousand years

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and up into the steel and industrial age

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today uh we're gonna go even further

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into the future and the the the arc of

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all this is

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we're seeing

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how mankind uh does take these

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evolutionary steps forward in terms of

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both his morality and and the tools um

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that he conducts his life with

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and we we see as michael says that the

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natural selection

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through this process helps mankind

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become smarter faster stronger

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and we're coming to see that

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actually the defensive attributes of

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technology tend to be

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more important than offensive attributes

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over time

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and um

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this is just leading us deeper into

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and closer to bitcoin which you know as

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we'll talk about later is the ultimate

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monetary defense of technology

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and uh in that sense

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humans the reason we're able to progress

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in this way the reason we're different

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than any other animal is because we are

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actually capable of harnessing and

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channeling energy across

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uh these field lines of our intellect so

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we can we can form these abstract

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concepts and ideas and then actually

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energize them by harnessing harnessing

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energy in the natural world

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that's why

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in a geopolitical sense you know naval

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power has been the force that sort of

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governs

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the world you know he who dominates the

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sea dominates the world

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and uh in that context we're looking now

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as we progress into the digital age

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as digital space being this this new

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high seas if you will

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and um

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so in this episode we're going to get

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into a lot of that and then we'll also

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finish off by talking about

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an area that mr sailor is an expert in

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which is the history of scientific

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revolutions

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and we're going to talk about in

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particular the the technology diffusion

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s-curve

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which is when a new idea starts to

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permeate a society it starts out

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relatively slowly before it hits its

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inflection point and becomes rapidly

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adopted at an accelerating pace before

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finally uh hitting a point of full

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market penetration it starts to level

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and this will be uh important to

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comprehend in terms of not only all the

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innovations we've seen recently

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especially the internet but also the

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path that we would expect bitcoin to

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continue to follow

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and then finally we'll touch on

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[Music]

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war you know and how it is an accelerant

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innovation

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um and how it can it can accelerate us

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down that path of the technology s-curve

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and leaves us eventually with with

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technologies that would be

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perceived as miracles to primitive man

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right as michael will say later that

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sufficiently advanced technology is

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indistinguishable from magic so

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i hope you're pumped you know we're

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still building this big foundation

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getting into modernity um and this is

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going to be one of the final episodes

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that gets us there so with that let's

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get into episode three so i remember the

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name of the of the jewish bankers it's

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warburgs if you want a great

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vignette

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on on

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why it's important to have have capital

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that's mobile

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study uh just read any history of the

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warburg and what what their family went

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through and what all the jewish families

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went through

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in the 30s in germany

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and what the bankers had to do to move

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capital out of the country

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and um

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and you get

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you get a very poignant um

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punctuated uh

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appreciation for the need of having

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secure

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capital that you control

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there are some i think general themes of

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technology throughout history

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if you look across all of these

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the general theme is is

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human beings marching toward being

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harder smarter faster

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and stronger

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and um

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everyone that succeeded all every empire

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every individual every company

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they all found a way to be harder

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smarter faster and stronger

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george r.r martin

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he wrote a bunch of books he's known for

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game of thrones but he also wrote a

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bunch of books

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on superheroes or at least he called

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them wild cards

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and it's about a bunch of um

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superhero or super people that have

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genetic mutations and

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and um they get it from some virus

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and it's a it's a universe full of

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normal people

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and then uh and then jokers people that

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have been hideously disformed by this

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virus and then aces people that have um

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been given superpower and

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he takes a very

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modern view of it and he says he starts

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to analyze superpowers

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guy figures out he can shoot laser beams

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out of his hands or another

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woman can be invisible or some dude can

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be a thin man

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and he goes

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there are a lot of these superheroes but

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but after a while we quickly realized

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that the most powerful ones

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were the ones with defensive

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super powers

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defensive attributes overcome all the

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offensive attributes

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in a battle so for example

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the guy that's indestructible with no

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other superpower

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can pick up a machine gun and kill

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everybody

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and you can shoot him a million times

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but he's indestructible

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whereas the guy with laser beams jumping

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out of his hands he's just as mortal as

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you and me

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and uh and you hit him with one rock he

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goes down and he's dead

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so it's the it's the impossible to kill

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that end up winning all the battles

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between superheroes and the smackdown

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and the ones with the sexy things are

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sexy really cool

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superpowers they're useless

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because because the guy that's got none

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of those he just gets a bazooka and he

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just fire i was like i'm indestructible

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so i'm gonna set off an atomic bomb in

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the city and kill everybody but myself

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because i'm indestructible right it's

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pretty easy to win the war

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if you're indestructible

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and um

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it causes you to come to conclusion

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about

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you know history and who wins in history

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unbreakable is better

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anti-fragile

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is best

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so the superhero that's good is the one

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that you hit him and you can't hurt him

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but the superheroes that are most

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frightening are the ones where

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you shoot him with a laser beam and now

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they can shoot your laser beams back at

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and you mind read them and they absorb

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your mind reading and they can mind redo

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and you fly the speed of sound and now

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they can fight the speed of sound it's

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like that character and

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what is it an x

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i think it's rogue an x-men or yeah or

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siler and heroes or maybe rogue it's the

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one that absorbs your power and plays it

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back at you

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you know pretty soon it's like i'm

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indestructible and i have every other

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power and you just better get out of the

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way yeah and that's anti-fragile right

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yeah i'm looking for the fight like i'm

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looking for people because i'm just

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going to absorb their thing

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you see that theme through history

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uh the really successful um

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governments empires organizations they

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kind of

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they're continually fighting they're

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continually absorbing

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the romans absorbed the carthaginian's

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navy in 90 days

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but but it's it's easier said than done

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right

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that it wasn't like some roman

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politician that said these are

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carthaginian ships they're inferior to

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us we will invent our own ships

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it's like not too proud to copy

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not too proud to absorb it

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this kind of principle can explain the

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success of the united states and the

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wars of the last century or more it's

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like um

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why do we

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why did we win in world war one world

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war ii why you know why is america

0:12:28

america well

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there's two narratives or there's

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millionaires here's one one is because

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we're more patriotic and we're righteous

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and we're better

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the other one is

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the europeans

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were fighting in europe

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and we

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we were fighting

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they were soft when you're dropping

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bombs in the middle of suburban germany

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right you're attacking the soft

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underbelly of the citizens

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in germany

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or the soft underbelly of the citizens

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in france or you know the battle of

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britain right

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this is uh

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this is the the citizen population being

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ravaged by a war

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and that destroyed their economies right

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destroyed their cultures right same

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happened in russia

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same happened in italy happened

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and it's happened in china the chinese

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fought a war in china soil

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the japanese fought you know sort of a

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portion of a war right on their own soil

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with atomic warheads

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on the other hand the us hadn't fought a

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war on u.s soil since 1865.

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okay so who's harder right

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back to this missile idea right

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if you can throw a missile 3 000 miles

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and your enemy can throw a missile back

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300 miles at you

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it's pretty simple i have a rifle you

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have a pistol

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i stand back a thousand

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your pistol's good for 200 feet

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i take 100 shots

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eventually one hits

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you're a perfect shot

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it doesn't matter

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longer arms

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this this idea right are you

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are you unbreakable or or what is back

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to terrain what is the terrain the

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geography determines a lot of things

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if you take

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a modern

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ship if you if you take

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take a take a

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a modern yacht built in the year 2020

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with every piece of modern equipment on

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now try to sail it

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to afghanistan

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you probably won't get there

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something will probably break

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try to sail it

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try to sail it to rome without stopping

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in a port along the way

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you probably won't make it

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robert nobody does

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like they all stop and hide somewhere

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it's really

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hard to move stuff over the ocean

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thousands of miles

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it's really hard now

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why don't you try to sail an armada of a

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thousand ships three thousand miles

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in order to invade

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america

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right germans couldn't sail

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13 miles

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you know across the straits of dover

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right

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you know the japanese couldn't cross

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from japan to china during the kamikaze

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you know

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and that's not very far

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it's really hard

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it's only one guy that ever pulled it

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off william the conqueror in 1066 nobody

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else managed to cross 13 miles that's

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your hydraulic moat

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it's really hard it explains the culture

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of the uk

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it explains

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the culture of the united states it

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explains a lot of other cultures it

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explains the balance of power i think if

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you just say

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here's someone that you couldn't kill

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who could kill you

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i i had the option

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to fight on your turf

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but you did never have the option to

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fight on

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my turf now

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that in and of its way is the reason

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that uh security

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is so incredibly important to

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the bitcoin network

0:16:37

what is important is that it not break

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that it not that it doesn't

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if i'm indestructible i don't have to be

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the fastest

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the shiniest

0:16:48

the whatever anything

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i just have to be indestructible

0:16:53

if i'm indestructible

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the indestructible man goes and buys a

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machine gun and he's the most powerful

0:17:02

superhero in the room

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right right right the indestructible

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blockchain

0:17:08

goes and buys a digital app

0:17:11

or another crypto network as a you know

0:17:15

off-chain app

0:17:17

or a nexus a lightning

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or a binance

0:17:20

or a coinbase or square cache or

0:17:23

whatever

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and it's just fine it's the most

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powerful

0:17:28

network in the room

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because the thing

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that made it the winner was its

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indestructibility its immortality

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right not the fact that it could shoot

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laser beams from its fingers or it was

0:17:40

beautiful

0:17:41

or it could fly with pretty wings or it

0:17:44

was invisible right all of these other

0:17:46

things like privacy transaction all

0:17:50

these other things

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they're features and they're interesting

0:17:56

but they pale compared to the

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characteristic of immortality

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right

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being indestructible in the here and now

0:18:06

pretty useful superhero power

0:18:09

being indestructible and never aging

0:18:13

double useful superpower

0:18:15

and as for the rest

0:18:17

if you're an open software protocol

0:18:19

someone's going to code an extension to

0:18:21

your protocol to give you every other

0:18:23

cool power anybody wants

0:18:25

like i can find a way to construct every

0:18:28

other superpower by

0:18:31

hook or crook and that makes me

0:18:32

anti-fragile and now i'm like the

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frightening

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impossible to stop

0:18:44

that's superhero great analogy uh

0:18:44

cause of mine that old saying that if

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you wait long enough by the river

0:18:48

you can see the bodies of your enemies

0:18:50

float by you know it's like because

0:18:53

bitcoin is unchangeable and it's just a

0:18:56

rock-solid

0:18:58

absolute scarce quantity of 21 million

0:19:01

and that is the primary property and

0:19:04

money that matters right as you i love

0:19:06

the analogy you gave too of

0:19:09

when someone asks you about the eps of

0:19:11

your company they only care about the

0:19:13

fully diluted cap table right who gives

0:19:16

a if you've got 18 outstanding

0:19:17

whatever whatever just just tell me the

0:19:19

fully diluted number and that's what

0:19:21

bitcoin is right it's like you know it

0:19:23

doesn't matter if there's only three

0:19:24

million have been lost or 18 million in

0:19:27

a half mine so far and three and a half

0:19:29

to go it's all that really matters is

0:19:31

that fully diluted figure of 21 million

0:19:34

and that the scarcity cannot be

0:19:35

compromised and then it has enough

0:19:37

anti-fragility on top of that to absorb

0:19:40

other market-proven features that's all

0:19:41

you want in money right

0:19:43

yeah the mining rate

0:19:46

it's like like a secondary um

0:19:50

particular effect that happens in the

0:19:51

first few years of its evolution but

0:19:55

exponentially becomes irrelevant it's a

0:19:57

second order

0:19:59

driver the first order drivers

0:20:02

you know are the hardness infinitely

0:20:07

and then

0:20:08

adoption and utility

0:20:10

and inflation

0:20:12

in the um in the fiat reference frame

0:20:15

that it's operating in

0:20:18

a couple more points i you know

0:20:21

that are worth making on um

0:20:25

technology and

0:20:28

human history

0:20:30

humans

0:20:31

triumph

0:20:33

throughout history

0:20:34

by channeling energy

0:20:37

right that that all of these things come

0:20:40

down to how did i channel energy

0:20:43

navy power

0:20:45

right the british the british navy ruled

0:20:48

the sea

0:20:49

the phoenicians the venetians the greeks

0:20:52

the romans the americans today

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controlled the seas via their aircraft

0:20:58

carriers and by naval power

0:21:00

and naval power is just bringing

0:21:03

overwhelming force to bear

0:21:06

faster

0:21:08

stronger force that's faster that's

0:21:11

harder than any other force anywhere on

0:21:14

earth i park in an

0:21:16

aircraft carrier somewhere

0:21:19

you know and death reigns from above

0:21:21

and um

0:21:23

so we've seen all empires are driven by

0:21:26

a naval power

0:21:28

in time

0:21:29

we invented airplanes

0:21:32

you know

0:21:33

and then air power became the thing

0:21:36

right

0:21:37

and uh air power is all again about

0:21:39

death from above right the most powerful

0:21:41

navy idea is airplanes flying off an

0:21:43

aircraft carrier first it was the

0:21:45

battleship i show up in your harbor and

0:21:47

i blast everything then it became

0:21:50

air power

0:21:52

and uh if i could get above you

0:21:55

and we saw this conclusion

0:21:57

it is impossible for a modern nation

0:22:00

state to function if it does not control

0:22:02

its own airspace

0:22:05

you saw that in the first gulf war the

0:22:07

second gulf war

0:22:10

the united states or

0:22:12

especially the united states air force

0:22:15

could pretty much bomb any country back

0:22:18

to the stone age in a matter of a week

0:22:21

once they lost their

0:22:23

air supremacy once you lose control your

0:22:25

airspace there's no hope for you

0:22:29

you can take out every port

0:22:31

every power reactor every generator

0:22:33

every serious building they're all gone

0:22:35

death from above there's nothing you can

0:22:38

you're at the bottom of the gravity well

0:22:41

right and with technology today someone

0:22:43

can sit out six miles up

0:22:46

you can't shoot down a plane moving high

0:22:48

speed six miles up you have to fight the

0:22:51

gravity while to get there they're just

0:22:54

working opposite it's an energy thing

0:22:56

right so i'm moving from a lower energy

0:22:59

state i'm on the ground moving armies

0:23:01

around to a high energy state i have a

0:23:03

boat i'm moving heavy medicines around

0:23:05

to a higher energy state i'm above you

0:23:07

dropping munitions on you

0:23:13

then after that

0:23:13

became nuclear power right you harnessed

0:23:15

nuclear power and that ended world war

0:23:17

ii pretty definitively in a hurry

0:23:20

then we go to

0:23:23

space satellite power

0:23:25

and you go up in the gravity wall some

0:23:28

and that manifests itself primarily with

0:23:30

gpes right

0:23:32

if you look at the impact of having your

0:23:34

global positioning satellites that's

0:23:36

what allows me to drop a laser guided

0:23:38

bomb or a drone anywhere on earth and

0:23:41

guide it day or night to anything right

0:23:44

and that's a massive source of american

0:23:46

supremacy controlling those gps

0:23:48

satellites

0:23:49

right and uh you lose them big problem

0:23:53

right

0:23:55

one of my favorite books and i noted is

0:23:57

the moon is a harsh mistress

0:24:00

and in it robert heinlein

0:24:02

he writes about a bunch of um loonies

0:24:06

basically

0:24:07

libertarians that live on the moon that

0:24:09

believe in making their own way and

0:24:12

and their motto is there ain't no such

0:24:14

thing as a free lunch

0:24:15

abbreviated to tons of and he introduced

0:24:19

that idea

0:24:20

and they take it to the extreme which is

0:24:21

like your air is not even free on the

0:24:23

moon you pay for everything you pay for

0:24:25

water you pay for food you pay for air

0:24:27

everybody pulls their own weight

0:24:29

no one waits for a bailout there's no

0:24:30

bailout coming from anybody

0:24:33

you know and uh they're not big fans of

0:24:36

authority and i don't like being told

0:24:38

what to do

0:24:40

and and uh the plot of the book kind of

0:24:42

winds on that they're they're being

0:24:45

oppressed by um

0:24:47

earthlings

0:24:48

who are making them work as slaves and

0:24:51

they're taking 90 of their economic

0:24:54

um economic productivity and shipping

0:24:58

basically their future to earth and

0:24:59

they're and they're gradually

0:25:00

suffocating and starving them to death

0:25:03

and uh and it's just onerous taxation

0:25:06

without representation

0:25:08

but uh onerous

0:25:10

so the learnings decide to fight back

0:25:13

you know with the help of an ai computer

0:25:16

the first ai computer i have to remember

0:25:18

the name of the computer is mike

0:25:20

by the way

0:25:21

right

0:25:23

and their technique is they realize they

0:25:25

got a catapult and they start tossing

0:25:28

rocks

0:25:29

down the gravity well

0:25:31

and they just take a big rock

0:25:34

put it in their catapult and it doesn't

0:25:36

take that much force to you know toss it

0:25:39

off the moon because they're low g

0:25:41

right they're tossing a rock out of a 1

0:25:44

8 g or whatever and it hits the it hits

0:25:46

the earth goes into a trajectory and of

0:25:49

course it starts picking up speed

0:25:51

and by the time it lands

0:25:54

like an atomic warhead

0:25:56

wow they just start tossing them at

0:25:58

random places

0:26:00

until the until the uh the federation

0:26:03

empire that's oppressing them

0:26:05

decides that maybe it's had enough

0:26:09

and of course the lesson is right it's

0:26:12

humans

0:26:13

channeling energy but they're channeling

0:26:16

gravitational energy and a lot of it and

0:26:18

there's a lot more energy

0:26:20

than the stuff that we have

0:26:22

all through human history since a

0:26:24

million years ago to today

0:26:26

it's really the story

0:26:28

of intelligent people looking around for

0:26:30

where is the energy coming from

0:26:33

and how do i channel it in a network in

0:26:36

order to achieve something

0:26:39

harder smarter

0:26:40

faster

0:26:42

stronger that's such an interesting

0:26:44

point

0:26:45

it's back to the terrain of the battle

0:26:47

right they're holding the ultimate high

0:26:49

ground being on the moon

0:26:51

and another thing this this calls to

0:26:53

mind is um i don't know if you've read

0:26:55

the book the sovereign individual

0:26:58

i don't know if i read it all i've read

0:26:59

i've heard of it but so the the

0:27:03

yeah i've written written in the late

0:27:05

90s and it's been

0:27:07

relatively prescient in a number of

0:27:09

domains they predicted

0:27:11

the rise of what they called narrow

0:27:13

casting as opposed to broadcasting which

0:27:15

we call social media today they

0:27:17

predicted the rise of anonymous digital

0:27:19

cash being disruptive to the nation

0:27:22

state which we would think bitcoin is

0:27:24

and they also predicted the

0:27:26

digitization of securities so other

0:27:28

property rights going away from a

0:27:30

government

0:27:31

function to be to be

0:27:33

provided via software

0:27:35

and one of the things that was

0:27:36

interesting there is they

0:27:39

they compared digital space to the high

0:27:41

seas basically saying the high c the

0:27:43

reason whoever controls the high seas

0:27:45

controls the world is because that's the

0:27:47

most frictionless environment right you

0:27:49

can move things

0:27:50

uh with the least energy on the seas

0:27:53

once you can conquer them so whoever

0:27:55

controls that domain sort of runs the

0:27:57

world but also because it's frictionless

0:28:00

it's very difficult to project

0:28:02

dominion over the high seas right so we

0:28:04

have we don't have law really we have

0:28:06

international waters kind of everywhere

0:28:09

in the world and they compared that and

0:28:11

analogized it to digital space

0:28:13

where it's this frictional and

0:28:14

frictionless space that whoever is

0:28:16

dominant there will be dominant in the

0:28:18

21st century but it will also be very

0:28:20

difficult to project the minion so you

0:28:23

won't have it'll be unregulated largely

0:28:26

so they're using that to kind of make

0:28:27

the case for

0:28:28

for digital cash and the fact that

0:28:31

people would be able to escape

0:28:33

uh oppressive regimes right once you get

0:28:35

your capital in the digital space you're

0:28:37

sort of no longer under the thumb of the

0:28:40

government or the local oppressive

0:28:41

monopoly so i just think it's

0:28:43

interesting how it always just comes

0:28:44

down to the terrain right

0:28:47

[Music]

0:28:51

and i agree with you on that

0:28:54

and um

0:28:55

i i agree that the digital domain has

0:29:00

has weakened all the geographic terrain

0:29:03

constraints

0:29:05

it's pretty clear that

0:29:07

information is flowing across borders

0:29:10

and even when people try to stop it

0:29:13

um they're uh

0:29:15

they're defeated by vpns and

0:29:18

not browsing and

0:29:20

you know

0:29:22

other techniques

0:29:23

and we see we see places where

0:29:26

information is illegal it's leaking

0:29:28

where capital is uh what's illegal to

0:29:31

move capital is leaking or it's illegal

0:29:33

to move information is leaking where

0:29:36

one person's um

0:29:37

one person sedition is another person's

0:29:40

news or truth

0:29:42

depending on who controls the government

0:29:45

and uh

0:29:46

that's something

0:29:49

i wrote about in uh my book the mobile

0:29:52

wave you might be interested to note and

0:29:55

i think 1998

0:29:58

we created a product called narrowcaster

0:30:01

oh really

0:30:02

yeah we made a lot of money off it and

0:30:04

it did just that it actually sent out

0:30:06

personalized information so

0:30:08

i was i was always a big fan of that so

0:30:10

i think

0:30:12

it's it's interesting the way that's

0:30:13

evolving

0:30:15

probably

0:30:15

probably the key theme

0:30:18

there is

0:30:20

technology is empowering the individual

0:30:22

and giving them more sovereignty that's

0:30:24

right and it's it's harder

0:30:27

and harder

0:30:29

in those ways for the government to

0:30:31

control

0:30:32

what information you get and then how

0:30:35

you manage your assets

0:30:36

right

0:30:37

it's a very

0:30:40

twisty complicated subject because the

0:30:42

government's getting more power over you

0:30:43

in some areas as they get less power of

0:30:46

you and other areas right

0:30:48

and it's spinning fast

0:30:51

and you could argue that that trajectory

0:30:54

is taking us closer to a reflection of

0:30:57

natural law right because natural law

0:30:59

would would say that sovereignty in here

0:31:01

is within the individual

0:31:03

our our rights are not given to us from

0:31:05

government they actually

0:31:08

inherit naturally within us

0:31:10

so it seems to me that

0:31:12

and it's complicated because we've never

0:31:14

seen a world like that right again we've

0:31:16

always needed government to sort of keep

0:31:18

the peace and

0:31:19

enforce contract law and satisfy

0:31:21

property rights but now in digital the

0:31:24

digital age at least there's the

0:31:25

possibility of some of those functions

0:31:28

kind of falling to software

0:31:34

yeah as more and more

0:31:34

things dematerialize the software and

0:31:36

they and they move into cyberspace

0:31:42

it seems like it

0:31:42

it gets harder for any one government

0:31:45

to assert control over the things that

0:31:48

take place virtually

0:31:51

there's a lot of virtual

0:31:52

empowerment going on but

0:31:56

there's a lot of other things going on

0:31:57

too yeah

0:32:00

you know

0:32:01

i guess i i would end i'd end this

0:32:03

section with

0:32:06

just a couple of

0:32:08

dynamics that i think i i've seen over

0:32:10

and over again the technology

0:32:13

you know um when i was in mit i studied

0:32:16

the history of science and

0:32:17

i read about the structure of scientific

0:32:19

revolutions and i just i studied all

0:32:22

different types of

0:32:24

technology diffusions and

0:32:26

and um there are certain things that pop

0:32:30

you know a lot of times you'll see an s

0:32:31

curve

0:32:33

where

0:32:34

it'll start slow

0:32:36

and it'll accelerate until it reaches

0:32:38

diminishing returns and then all of a

0:32:40

sudden it's not an interesting

0:32:41

technology anymore you see that a lot

0:32:44

one of the lessons of history is

0:32:47

it's very difficult to figure out when

0:32:49

the curve starts

0:32:54

it's hard to stop it once it starts but

0:32:57

it's it's a lot easier to invest in it

0:33:00

and to forecast it once it starts

0:33:05

before it starts people will say well

0:33:07

next year this will commercialize or in

0:33:09

two years or in five years ten years

0:33:11

you could be off by two years you could

0:33:13

be off by a hundred years

0:33:16

like you remember uh

0:33:18

google glass

0:33:21

how big that was gonna be and

0:33:23

and how that was a lead balloon and how

0:33:25

many years is it after google glass and

0:33:27

it's still not going to happen

0:33:30

next year either

0:33:36

technology

0:33:36

fails

0:33:37

until it succeeds that's another trend

0:33:39

and another theme so you see over and

0:33:41

over again people pick a technology to

0:33:43

say it'll never work it'll never work

0:33:44

it'll never work

0:33:46

in the year

0:33:48

1902 before the wright brothers flew

0:33:52

that next year

0:33:54

if you'd asked the most learned people

0:33:56

on earth they would have given you a

0:33:57

hundred reasons why airplanes will never

0:34:00

and they would do a hundred examples of

0:34:03

how they didn't fly

0:34:04

and they would talk you to death

0:34:08

and uh the thing about these paradigm

0:34:10

shifts is

0:34:11

oftentimes

0:34:13

it's not the learned individuals that

0:34:16

make the breakthrough

0:34:19

aircraft

0:34:20

wasn't uh aircraft weren't designed by

0:34:22

professors of aeronautics and

0:34:24

astronautics and

0:34:25

engineering and fluid dynamics and

0:34:28

mathematicians they all failed miserably

0:34:32

right the wright brothers were bicycle

0:34:34

mechanics

0:34:36

they had a bicycle shop

0:34:39

tinkerers

0:34:41

they're the ones that ushered in the age

0:34:44

and uh they did it against all

0:34:46

conventional wisdom

0:34:49

and on the other hand leonardo da vinci

0:34:52

tried to develop his own flying

0:34:54

contraption every brilliant person for

0:34:56

hundreds of years tried it failed

0:34:59

all failed and then some dudes in dayton

0:35:02

ohio that have a bicycle shop succeed

0:35:05

um it happens like that

0:35:07

you know the story of um

0:35:10

john harrison

0:35:11

inventing uh discovering a method to

0:35:14

determine longitude on the ocean which

0:35:16

is it's articulating the book longitudes

0:35:18

amazing story

0:35:20

everybody knew how to find latitude it

0:35:22

was easy you just sight against the

0:35:24

north star but longitude is very hard

0:35:26

because all this they're spinning all

0:35:28

the time required massively complicated

0:35:31

calculations they gave it to the

0:35:34

newtonian professors

0:35:36

at cambridge and oxford the smartest

0:35:39

mathematicians in the world the smartest

0:35:40

astronomers in the world no one could

0:35:42

figure it out

0:35:43

finally they posted a 10 000 pound prize

0:35:47

and john harrison

0:35:49

who was not a mathematician his clock

0:35:51

maker

0:35:53

figured it out and the way he figured it

0:35:55

out is he made a clock that was accurate

0:35:58

and they put one clock

0:36:01

on the this ship and they set it

0:36:04

to the greenwich observatory the royal

0:36:07

observatory which is in greenwich

0:36:08

england

0:36:09

hence the term greenwich mean time

0:36:12

greenwich mean time comes because you

0:36:14

sail down the timbs past the royal

0:36:16

observatory in greenwich you set your

0:36:18

clock on that and then you have another

0:36:19

clock

0:36:20

and then every day at noon if you're in

0:36:22

the caribbean you look up and then you

0:36:24

set that clock and then you just

0:36:25

subtract the time on the one from the

0:36:27

top of the other multiply by 15 degrees

0:36:29

and you've got your lawn longitude

0:36:31

it was a tinkerer's solution to

0:36:34

a problem everybody else wanted to solve

0:36:36

it with star charts

0:36:38

and tables and complex math

0:36:41

but of course

0:36:43

ships captains in the middle of the

0:36:45

caribbean or in a storm they can't do

0:36:47

complex math they're just

0:36:49

stay alive

0:36:50

so you see lots of examples

0:36:53

in history where people try to do

0:36:55

something and they either accidentally

0:36:57

discover it like penicillin or um a

0:37:00

tinkerer discovers it and not the

0:37:03

educated and then all the professors

0:37:04

crap all over it

0:37:06

and they all swear it'll never work

0:37:08

and the tendency is

0:37:10

is either to reject it people don't like

0:37:13

change

0:37:14

or it doesn't get embraced until

0:37:16

everybody dies

0:37:18

or until there's a war

0:37:20

and war has a way of opening your mind

0:37:23

because

0:37:23

when someone drops a bomb on your head

0:37:26

and you're burning or screaming then the

0:37:28

pain causes you to take a more

0:37:30

open-minded attitude so a lot of stuff

0:37:32

happened after world war ii and happens

0:37:35

in various wars and you can trace

0:37:37

without human history that drives

0:37:39

innovation faster

0:37:42

you know generational change will drive

0:37:44

it faster

0:37:46

people keep trying it and then

0:37:49

just because it's failed a thousand

0:37:50

times what doesn't mean it won't succeed

0:37:52

but when it does succeed

0:37:54

then it's probably unstoppable for a

0:37:57

while

0:37:59

and hence

0:38:01

you know you just get to this phrase

0:38:03

which is cut which is kind of

0:38:05

punctuation for

0:38:07

modern technology

0:38:09

arthur c clark writes

0:38:12

any sufficiently

0:38:15

advanced technology

0:38:17

is indistinguishable

0:38:19

from magic

0:38:21

and it was a great quote

0:38:24

it's a quote that i put on the back of

0:38:25

my prospectus when my company came

0:38:27

public in 98

0:38:29

i believed it then

0:38:31

we have thousands and thousands of

0:38:33

examples of magic things in our lives

0:38:36

today

0:38:37

literally magic things

0:38:40

that are just technical things

0:38:42

it's always been that way and

0:38:44

and to a to a primitive man right a

0:38:47

rifle looks magical

0:38:50

or an airplane

0:38:52

and now

0:38:54

and we're starting to deal with uh with

0:38:57

some software technologies and digital

0:38:59

technologies that

0:39:01

don't just look magical to a primitive

0:39:05

they're gonna look magical to a modern

0:39:09

right

0:39:10

because they just really are getting

0:39:13

pretty magical

0:39:15

[Music]

0:39:22

all right guys so that was episode three

0:39:22

of the sailor series

0:39:24

hope you enjoyed that we continue our

0:39:27

progress towards modernity

0:39:29

um and laying this really solid

0:39:31

intellectual foundation

0:39:33

uh through the lens of technology

0:39:35

anthropology

0:39:36

uh civilizational development military

0:39:39

all of these aspects that lead us to the

0:39:41

importance of bitcoin as mine

0:39:44

and uh as i said to the in the intro

0:39:47

i like to think of this whole arc as an

0:39:51

evolutionary process right i actually

0:39:53

consider that

0:39:55

evolution is the inorganic form of

0:39:59

innovation or you could say that

0:40:00

innovation is the organic form of

0:40:02

evolution so it's all

0:40:04

they're both about

0:40:07

colliding ideas together and with

0:40:09

reality to test which

0:40:12

ideas strategies

0:40:15

and approaches work best right which

0:40:17

offer the highest utility

0:40:19

to the the organism or

0:40:22

human being

0:40:23

that's that's set an intention in a name

0:40:26

and um it's through this this iterative

0:40:28

process as sailor says it makes us

0:40:30

harder faster and stronger

0:40:34

i think what's what's starting to shape

0:40:36

up here because i think you'll see is

0:40:39

the defensive attributes tend to be even

0:40:42

more important than offensive attributes

0:40:45

if you have an ability to defend

0:40:47

yourself say behind a wall of water like

0:40:49

here in the united states we're defended

0:40:51

on both sides by like by large walls

0:40:54

water in the atlantic and the pacific

0:40:55

ocean we have this natural

0:40:58

defensive advantage

0:40:59

so it's uh

0:41:02

really difficult to

0:41:04

invade us

0:41:06

um without having long-ranging weapons

0:41:09

uh when we dominate

0:41:11

the naval territory already right like

0:41:13

we are the dominant naval force because

0:41:15

of our access to the oceans and our our

0:41:17

protection from from hostile powers and

0:41:20

i liked the the analogy that

0:41:23

sailor gave when he talked about

0:41:25

um the superheroes the the george rr

0:41:28

martin superheroes that

0:41:29

i think they were called the aces where

0:41:32

it wasn't the superhero with the most

0:41:36

the best offensive capability right the

0:41:37

laser beams out of the eyes whatever

0:41:39

that became

0:41:40

uh dominant it was actually the one that

0:41:42

was indestructible because you could he

0:41:44

could essentially subject himself to any

0:41:46

situation

0:41:48

and survive so uh which reminded me of

0:41:51

that saying that

0:41:52

which i think is from sun tzu

0:41:54

might be laozi if you wait long enough

0:41:56

by the river you live to see the bodies

0:41:59

of your enemies flow by so it's this

0:42:01

point that if you

0:42:02

are optimized for survivability

0:42:05

that tends to make you the dominant

0:42:07

competitor over time right time is on

0:42:09

your side whereas time would be arrayed

0:42:11

against all of your competitors

0:42:13

and it's time being the ultimate judge

0:42:15

of all things

0:42:17

it really

0:42:18

is a it's probably the defining feature

0:42:22

or the defining competitive competency

0:42:24

you could have is just really high

0:42:26

resiliency or robustness or ideally even

0:42:29

even anti-fragility where you're

0:42:31

actually improving

0:42:33

um from the hostility you face in the

0:42:36

world

0:42:36

uh and advancing through adversity

0:42:39

so that was that was interesting and you

0:42:41

know clearly plays really well into the

0:42:43

bitcoin narrative

0:42:45

and um

0:42:50

you know we're looking at

0:42:50

again how the terrain had shaped battles

0:42:52

throughout history and why

0:42:54

america fighting in europe and say world

0:42:56

war ii was much different than war

0:42:58

taking place on american soil as in we

0:43:01

were fighting and attacking the soft

0:43:03

underbelly as sailor called it um

0:43:06

but we we weren't exposed to that same

0:43:10

level of attack ourselves you know with

0:43:12

a small exception of pearl harbor

0:43:17

that's why

0:43:19

the nation that controls the sea

0:43:21

controls the world because that is the

0:43:22

terrain

0:43:24

that it's the hardest to project power

0:43:26

and dominion across so whoever is

0:43:28

dominant there just runs things you can

0:43:31

you can move energy

0:43:33

uh around the world much more quickly

0:43:35

and bring force to bear much more

0:43:37

quickly anywhere in the world and so

0:43:41

when you look at

0:43:43

bitcoin through that lens

0:43:45

it's like

0:43:47

it's already the longest and most rigid

0:43:50

chain

0:43:51

so it is already

0:43:53

become dominant um it is

0:43:57

if you look at digital space and compare

0:43:59

it to the ocean bitcoin has dominated

0:44:00

digital space

0:44:02

for monetary networks right it's

0:44:04

impossible to compete with it as money

0:44:07

because it's already perfected all the

0:44:08

properties that make money money and

0:44:11

it's done so in this terrain uh this

0:44:14

digital terrain that that everyone

0:44:16

all other competitors would be competing

0:44:18

for which is it's very low friction

0:44:20

right very low friction

0:44:22

domain so you can move things the speed

0:44:24

of light in the digital space

0:44:26

and you can defend things with

0:44:28

cryptography at very low cost right you

0:44:30

can basically erect these impenetrable

0:44:32

walls of encrypted energy at relatively

0:44:35

low cost so bitcoin is just

0:44:38

has optimized for that it gives us

0:44:41

a way to store the vital life energy

0:44:45

that is

0:44:46

money behind a wall that basically

0:44:48

cannot be breached and that that

0:44:50

i like that military analogy pointing to

0:44:53

it as a very fundamental breakthrough

0:44:56

and the other thing there we didn't talk

0:44:58

about this in the episode but that i

0:44:59

think about is

0:45:02

it sort of balances this

0:45:04

super

0:45:05

this anti-fragility or robustness um

0:45:09

with also a degree of adaptivity so even

0:45:12

though bitcoin is the longest chain the

0:45:14

most rigid it has these unbendable rules

0:45:16

that favor its holders it also still

0:45:19

maintains its ability to adopt new

0:45:21

features that are beneficial to it and

0:45:24

one of my my favorite authors and good

0:45:26

friend brandon he's written about this

0:45:28

this is called

0:45:29

in the mycelial space it's called

0:45:31

horizontal gene transfer so when a

0:45:33

mycelium

0:45:35

which is the the underground

0:45:37

informational network of a fungus like a

0:45:40

mushroom

0:45:41

when it encounters a threat in the

0:45:43

environment

0:45:44

it can actually code new enzymes and

0:45:47

proteins and defensive backgrounds

0:45:48

against that threat

0:45:50

at one particular spot right these

0:45:51

mycelial mats can be you know tens of

0:45:54

hundreds of square miles in size but if

0:45:57

it encounters a threat

0:45:58

in creates a formula to neutralize it

0:46:02

and even any one spot

0:46:05

of that of that mycelial mat it can

0:46:07

incorporate those lessons into the

0:46:09

entire organism

0:46:11

so it's actually

0:46:13

learning from interaction with its

0:46:14

competitors at the edges but then

0:46:16

incorporating all of its lessons into

0:46:18

the entire organism which is something

0:46:20

that that bitcoin's capable of doing

0:46:24

so that's kind of a tangent but but

0:46:26

pretty interesting stuff undergrows the

0:46:27

bitcoin

0:46:29

and then

0:46:30

as we said earlier it's

0:46:33

what distinguishes us as human

0:46:35

is that we have this unique ability

0:46:38

they decide as say they described it

0:46:39

earlier we're the only animal that plays

0:46:42

with fire right

0:46:43

so we we have this special ability to

0:46:47

mold our behavior in a way that allows

0:46:50

us to

0:46:52

harness energy

0:46:54

and then we can channel it you know

0:46:55

where we can create these abstractions

0:46:57

of thought and speech

0:46:59

uh and i in the ideological space

0:47:03

and then we can use that energy to

0:47:05

energize these formulas that we've

0:47:08

created and that's what makes us human

0:47:10

right that's what we do when you look at

0:47:12

anything you look at a table or a house

0:47:14

or a computer

0:47:15

all of these things began as ideas

0:47:18

that we then

0:47:19

funneled energy into right we've

0:47:21

harnessed energy in the natural world

0:47:23

whether it's hydrocarbons or fire

0:47:26

uh which is kind of the stone age energy

0:47:28

network

0:47:29

um solar radiation whatever it may be

0:47:31

and we channel that energy into the the

0:47:34

manifestation of these ideas and that's

0:47:37

what helps us

0:47:39

uh become more productive and and enjoy

0:47:41

a higher quality of life over time so

0:47:44

it's such a radical new way to look at

0:47:47

humanity and really makes you appreciate

0:47:49

being human

0:47:51

and um

0:47:53

i think to

0:47:55

you know we again we're talking about

0:47:57

the naval power and how that's shaped us

0:48:00

throughout history

0:48:03

the naval power naval power was the

0:48:07

predominant aspect of what determined

0:48:10

which nation is in geopolitical control

0:48:14

but what i think and i got this from a

0:48:16

book i read called the next 100 years

0:48:19

that predicted in the 21st century it

0:48:21

would actually no longer be control of

0:48:23

the seas that mattered so much but it

0:48:25

would come to be control of space

0:48:28

and you see that somewhat in us military

0:48:31

dominance today in that

0:48:33

we control the seas actually with our

0:48:35

aircraft carriers which essentially

0:48:37

means we can control the airspace of

0:48:40

nations

0:48:41

so again back to fighting

0:48:44

the battle on

0:48:46

the terrain that favors you most

0:48:48

by going into

0:48:50

the sky right we're able to get again

0:48:52

this very frictionless space of air but

0:48:55

we're also able to take advantage of the

0:48:57

gravity well that is the planet so we

0:48:59

can drop bombs

0:49:01

um that you know at a very low cost for

0:49:04

a plane to release a bomb is essentially

0:49:06

no cost once it's up there but it brings

0:49:08

this gigantic force to bear on its

0:49:10

terrestrial targets

0:49:13

and that's why

0:49:14

you know it's in that sense we can

0:49:16

consider air power today being this

0:49:18

extension of naval power

0:49:20

as it has the highest optionality right

0:49:23

it has the greatest most degrees of

0:49:25

freedom both offensively and defensively

0:49:28

it's really hard to shoot down one of

0:49:30

these aircrafts moving at supersonic

0:49:32

speed

0:49:34

which gives it a lot of defensive

0:49:35

capability but it also can bring a lot

0:49:37

of force to bear on you really quickly

0:49:40

by dropping bombs or shooting missiles

0:49:43

and all of this is facilitated by

0:49:45

control of that frictional space and the

0:49:47

sea which is the aircraft carrier which

0:49:49

itself is really hard to attack because

0:49:50

it's thousands of miles out to sea right

0:49:52

it's just flying these planes in so

0:49:54

that's why

0:49:56

the aircraft carrier today is the

0:49:58

dominant military technology

0:50:01

but i think as we get further into the

0:50:03

21st century that it's going there's if

0:50:05

you go even another layer higher say in

0:50:07

the low earth orbit

0:50:09

you can get into a territory that's even

0:50:11

more often has even more offensive and

0:50:14

defensive optionality and um

0:50:17

is even you know it's just way harder to

0:50:19

attack it's literally in orbit so

0:50:22

um and the book i referred to the next

0:50:24

100 years i think they were called ion

0:50:27

cannons so

0:50:29

the thought was whichever country

0:50:31

came to get these ion cannons into orbit

0:50:34

first

0:50:35

would have a power that's even super

0:50:37

ordinate to what we consider aircraft

0:50:39

errors to be today so the

0:50:41

the space if you want to call it space

0:50:44

it's kind of this earth orbit uh is the

0:50:48

frontier for military dominance i think

0:50:50

that'll be really interesting to see

0:50:52

shake out

0:50:54

as we look at the development of history

0:50:55

through this lens and going forward

0:50:58

and sailor you know that he brought up

0:51:00

that book the moon is a harsh mistress

0:51:03

that really brought this point home for

0:51:05

me because

0:51:07

there were these rebels on the moon

0:51:10

right and they were tired of being

0:51:11

tyrannized by earthlings

0:51:14

so they basically took advantage of

0:51:16

their ultimate high ground and just

0:51:19

started throwing rocks at earth right

0:51:21

and because it was at the bottom of that

0:51:22

gravity well

0:51:24

um the earth earthlings were forced to

0:51:26

capitulate eventually and given to their

0:51:28

demands so it just keeps going back to

0:51:30

this principle of holding high ground or

0:51:32

holding the best terrain in any

0:51:33

confrontation

0:51:37

like the moon you know digital space

0:51:40

it is the ultimate high ground um

0:51:43

it enables us even as an individual

0:51:45

today with bitcoin

0:51:48

you can safeguard billions of dollars of

0:51:51

capital right which is again a life

0:51:53

force

0:51:54

by either memorizing 12

0:51:57

a 12-word seed phrase

0:51:59

uh you can move it around the world

0:52:01

speed of light permissionlessly at

0:52:04

virtually zero cost um you know talking

0:52:07

about moving

0:52:08

a billion dollars in bitcoin you can

0:52:09

probably do from anywhere from five to

0:52:11

twenty dollars

0:52:12

uh you try to move that same billion

0:52:14

dollars across space in a fiat currency

0:52:17

system

0:52:18

you're going to

0:52:20

spend a lot of time navigating

0:52:22

regulatory

0:52:23

the regulations of both the departing

0:52:26

the regime you're sending from and the

0:52:27

regime you're sending to

0:52:29

you're going to pay a lot of bank fees

0:52:31

you're going to be answering a lot of

0:52:32

questions you're going to be

0:52:34

probably paying a lot of taxes as well

0:52:36

right again

0:52:37

the number one export of empires being

0:52:39

security they sort of they gate check

0:52:43

all these movements of value across

0:52:45

their domain

0:52:47

and so

0:52:49

these rights and abilities that were

0:52:51

reserved for the nation state and era's

0:52:53

past where they could move

0:52:56

say goods and capital

0:52:59

if if they're if they're dominant

0:53:01

militarily they can do so pretty much

0:53:03

without permission right they do what

0:53:04

they want that same capability

0:53:07

is now being delivered to the individual

0:53:10

via software

0:53:11

so it's this radical new world view

0:53:14

that's shaking out where

0:53:16

because we don't need

0:53:18

an empire to

0:53:20

honor

0:53:21

uh at least the private property rights

0:53:23

and money with bitcoin like this

0:53:25

as far as we can see today maybe other

0:53:27

property rights will fall as well in

0:53:29

but that is a big

0:53:32

slice out of the pie right we also we

0:53:34

don't need the nation state to honor

0:53:36

property rights and money we can just

0:53:37

that entire function of trust and

0:53:40

security has fallen to distributed

0:53:42

software

0:53:44

and it's hard to even

0:53:45

fathom how big of a game changer that

0:53:47

really is

0:53:50

and when i i think about that a little

0:53:52

more it's just that

0:53:55

that these digital high seas they're

0:53:58

weakening

0:54:00

the geographic

0:54:02

constraints to being right all of a

0:54:05

sudden you don't

0:54:06

you're not as beholden to the local

0:54:09

monopolies and systems because you can

0:54:12

participate in this this global network

0:54:15

that has you know

0:54:17

many more degrees of freedom and a

0:54:20

a much lower

0:54:22

need for permissions right you don't

0:54:23

need to to check as many boxes and

0:54:25

satisfy as many bureaucrats interact in

0:54:28

the digital domain

0:54:29

um it really is this

0:54:31

much more of a pure free market

0:54:33

environment where kind of the best ideas

0:54:35

when if you're able to serve your

0:54:37

customer

0:54:39

by whatever means necessary you can earn

0:54:41

a living my mind goes back to

0:54:44

a story of girls in the middle east that

0:54:46

are actually

0:54:48

prohibited from holding bank accounts

0:54:49

it's illegal for women to have bank

0:54:51

accounts in certain countries

0:54:53

so this

0:54:54

contributes to their disenfranchisement

0:54:57

because they can't even earn a living in

0:54:59

the home right so the women

0:55:01

not only are perceived as second-class

0:55:03

citizens but in many ways are class

0:55:05

citizens because they can't hold a bank

0:55:06

account they can't contribute

0:55:08

um to the livelihood of the home so

0:55:10

they're just forced to stay home and

0:55:13

work and do as they're told while the

0:55:15

men go out and make a living

0:55:17

but with bitcoin

0:55:19

some of these uh some of the women at

0:55:20

least were able to find jobs online

0:55:23

right whether it's copy editing or

0:55:25

um anything you can do informational any

0:55:27

job you can conduct online which is you

0:55:29

know more and more jobs as we become

0:55:31

more advanced and they were able to be

0:55:34

paid and remove rated at bitcoin

0:55:36

so all of a sudden they just

0:55:38

they leap frog this entire restrictive

0:55:41

system that would really prevent them

0:55:43

from even

0:55:45

increasing their own condition in life

0:55:48

they cannot improve their own conditions

0:55:49

because they're trapped in this cage but

0:55:51

all of a sudden bitcoin

0:55:52

uh gave them this exit option to just

0:55:56

go into the world

0:55:58

and earn a living

0:55:59

based on their own skills

0:56:03

so that's just one example of how the

0:56:04

geographic constraints are weakened

0:56:08

and i think we'll see many more of those

0:56:10

come out another thing that comes to

0:56:12

mind here is

0:56:14

i've analogized amazon in the past like

0:56:17

amazon

0:56:19

came to be a dominant monopoly in the

0:56:21

world because they

0:56:23

essentially out-competed

0:56:27

digital distribution networks which are

0:56:30

a you know naturally scarce

0:56:32

service for the world you only need

0:56:35

it has a huge network effect right so

0:56:37

there's a there's a big advantage to big

0:56:39

economies of scale and a big advantage

0:56:40

to being bigger in that space

0:56:43

and amazon was able to bootstrap itself

0:56:45

in a way

0:56:47

by leveraging two things by two

0:56:50

um benefits of being digital and not

0:56:52

being a brick and mortar per se

0:56:54

firstly they were able to offer low

0:56:56

prices to their customer

0:56:58

because they could they had lower cost

0:56:59

of fulfillment right they didn't have

0:57:01

brick and mortar stores for a while they

0:57:03

were skirting sales tax so they would

0:57:05

you know distribute from a state that

0:57:07

had load or no sales tax and they were

0:57:09

selling into other states

0:57:11

without being deemed for sales tax so

0:57:13

they're taking advantage of this digital

0:57:15

space

0:57:18

and then

0:57:18

uh two because

0:57:21

in a bookstore you can only fit so many

0:57:23

titles right maybe you can fit i don't

0:57:25

know a quarter million books and a store

0:57:27

but the advantage to being online an

0:57:29

online store is that you have literally

0:57:31

limitless selection right anything

0:57:33

that's available on earth you can sell

0:57:35

on your store so i think that's one of

0:57:37

the reasons

0:57:38

bezos zeroed in on books you know amazon

0:57:40

started out as an online bookstore is

0:57:42

because that is

0:57:44

a product where that advantage

0:57:46

is super favorable right there are

0:57:49

millions of books written right the

0:57:51

selection is just endless um they're not

0:57:54

they're a totally non-fungible thing

0:57:57

right every book is different

0:57:58

and i think bezos started there and used

0:58:01

that as his pressure point

0:58:03

because

0:58:04

he could leverage the you know not only

0:58:07

the sales tax and like brick and mortar

0:58:09

we mentioned earlier but he also

0:58:10

limitless he could leverage the

0:58:12

limitless selection capability of an

0:58:14

internet-based bookstore uh to just

0:58:16

really dethrone a lot of the competition

0:58:18

so he could offer it at lower prices and

0:58:20

he could offer it a wider selection so

0:58:22

super interesting there um

0:58:25

and then he was smart enough to leverage

0:58:27

the advantages of a digital business

0:58:29

model um in a

0:58:31

really pressure point focused way

0:58:36

when i i look at

0:58:38

tech and bitcoin through that lens

0:58:40

i see

0:58:42

and sailor alluded to this as well is

0:58:43

that the overall trend is that

0:58:47

distributed software and encryption is

0:58:50

very empowering to the individual

0:58:53

so these things that we used to need

0:58:57

large

0:58:59

entities to satisfy because there are a

0:59:02

lot of fixed costs that you had to incur

0:59:04

to deliver these functions right whether

0:59:06

it was a bookstore or whether it was a

0:59:08

bank custody or gold

0:59:10

all of a sudden we can do these things

0:59:13

via software right at very low fixed

0:59:15

costs it can be replicated at near zero

0:59:18

variable cost so once it's up and

0:59:20

running you can basically do it anywhere

0:59:22

um you know net of the the actual

0:59:25

distribution fee the physical

0:59:26

distribution fees

0:59:27

uh assuming there are some right if it's

0:59:29

software there's basically no

0:59:30

distribution for either that's what like

0:59:32

the apple app store is

0:59:34

and so

0:59:36

it's interesting to see how that

0:59:39

i just want

0:59:40

i'm thinking about this a lot it's like

0:59:42

okay we needed empires and large

0:59:44

entities in the past to provide security

0:59:47

to create this uh intersubjective fabric

0:59:49

of trust in the world so we can

0:59:51

interoperate but now a lot of these

0:59:54

human-based

0:59:55

politicized or politicizable

0:59:58

institutions are now going into trust

1:00:01

minimize software where it's like here

1:00:03

are the rules

1:00:05

you can't bend them or break them um

1:00:07

and bitcoin's just the greatest

1:00:09

expression of that right it's

1:00:11

amazon and things like that still have a

1:00:13

political dimension because they're

1:00:14

they're

1:00:15

they're traditional organizations right

1:00:17

they're essentially owned and controlled

1:00:20

but something like bitcoin is just just

1:00:22

a pure instance of that it's just pure

1:00:26

unbendable unbreakable rules that help

1:00:29

you channel energy across time and space

1:00:32

uh and satisfy wants more efficiently so

1:00:36

i think too that and this gets a bit

1:00:38

into the sovereign individual thesis and

1:00:41

we didn't touch on it a lot in the

1:00:42

interview but

1:00:44

as people wake up to this truth right

1:00:46

that we have this

1:00:48

ultimate savings technology in

1:00:50

cyberspace or this

1:00:52

non-state central bank like whatever you

1:00:55

want to call it it's a

1:00:57

it's a medium for permissionlessly

1:01:00

storing your wealth in a way that no one

1:01:03

can compromise and you don't need any

1:01:05

government to even acknowledge it or

1:01:07

honor its uh the property rights you

1:01:09

have in bitcoin it's just we've

1:01:11

converted property rights to information

1:01:13

right owning

1:01:15

is now knowing

1:01:17

and when you couple that

1:01:19

with the increasing incentives to exit

1:01:22

inflationary currency and that the book

1:01:25

again the book the sovereign individual

1:01:26

goes really deep into this but

1:01:28

the numbers are roughly if you for every

1:01:31

ten thousand dollars you can reduce your

1:01:33

annual tax liability assuming you can

1:01:35

compound that capital at an average

1:01:38

return rate of ten percent

1:01:40

you're talking about tens of millions of

1:01:42

dollars over the average

1:01:45

earner's lifetime right this becomes a

1:01:48

10 becomes at least a multi-million

1:01:50

dollar in many cases tens of millions of

1:01:52

dollars decision

1:01:54

of holding your money in an inflationary

1:01:56

fiat versus holding your money in a

1:01:58

non-inflationary bitcoin

1:02:00

so i think as the market wakes up to

1:02:02

this and really starts to do the

1:02:04

calculus i think you're just going to

1:02:06

see this overwhelming demand

1:02:09

for security

1:02:11

distributed tech you know especially for

1:02:13

your money as in bitcoin

1:02:15

and it's just going to pull demand out

1:02:17

our these anachronistic security models

1:02:20

like the nation state and banks and all

1:02:22

these other um

1:02:24

politicized institutions

1:02:27

you know

1:02:29

wow that's just a lot to think about

1:02:31

it's hard to even

1:02:33

fathom where that goes

1:02:36

sovereign individual the next

1:02:39

you know they predicted

1:02:40

social media they predicted bitcoin

1:02:43

another thing they predicted was the

1:02:44

actual

1:02:46

digitization of securities so other

1:02:48

property rights being eaten by software

1:02:51

and my general thought there is that

1:02:54

the government's not going to let go of

1:02:55

any of this willingly right it's not

1:02:57

like a government would have ever

1:02:58

acknowledged and accepted bitcoin

1:03:00

bitcoin just grew up in the wild um

1:03:04

somewhat flying under the radar long

1:03:06

enough to establish itself as something

1:03:08

that's

1:03:08

really difficult to take down now you

1:03:11

know where

1:03:12

today i think we're at 350 billion

1:03:14

dollar market cap for bitcoin so it's a

1:03:16

really entrenched monetary network at

1:03:18

this point um and it's exhibited a lot

1:03:20

of anti-fragility

1:03:23

i think as my theory would be that as

1:03:26

bitcoin continues to ascend and

1:03:28

demonetize

1:03:30

inflationary government business models

1:03:32

that some of these functions

1:03:34

that governments have bureaucratized

1:03:36

will just start to fall

1:03:38

to free market competitors right it's

1:03:41

just going to come a point

1:03:43

where government's no longer solvent

1:03:45

enough to keep

1:03:47

uh the one example of light that i heard

1:03:49

from safety is

1:03:51

there's a

1:03:53

train international international a

1:03:55

national train

1:03:57

um agency in lebanon i think it was

1:03:59

right and he made the point that there

1:04:01

hasn't been a rail of of uh there hasn't

1:04:04

been a track of railroad in lebanon for

1:04:06

50 years i might have the country wrong

1:04:08

with the years home but

1:04:09

it's that old saying that there's

1:04:12

nothing more permanent than a temporary

1:04:14

government solution right so we have all

1:04:16

these layers of unnecessary bureaucratic

1:04:19

buildup across the world and all the

1:04:22

countries because

1:04:24

they're not accountable to their p l

1:04:25

right they there's no free market

1:04:28

competition keeping them honest so they

1:04:29

get away with these these asinine

1:04:32

uh models where you know they don't they

1:04:35

have a training committee but no trains

1:04:37

for instance so i think as those

1:04:41

useless or worthless or unaccountable

1:04:43

institutions start to shrivel up and die

1:04:45

because there's no funding for them that

1:04:47

you'll see whatever functions that they

1:04:50

provided or intended to provide

1:04:52

start to fall into the free market and i

1:04:54

think software's just gonna eat that up

1:04:59

there's a lot to think about and that's

1:05:01

something to keep your eye on but i also

1:05:03

liked how

1:05:05

sailor dove into this diffusion of

1:05:07

technology which is really just another

1:05:09

way of saying the diffusion of ideas

1:05:11

and it follows

1:05:13

the s curve right this is

1:05:15

uh the name of the book escapes me i

1:05:17

think it's the history of scientific

1:05:19

revolutions it's possibly the name

1:05:21

and it talks about the s-curve where

1:05:24

there's a beginning where there's kind

1:05:25

of innovators that adopt it first

1:05:27

and then it hits an inflection point

1:05:29

let's say around 13 and a half percent

1:05:31

market penetration

1:05:33

and the innovation becomes super sort of

1:05:35

being adopted adopted at a super

1:05:38

accelerated rate so the curve just goes

1:05:40

vertical for a while until it hits uh

1:05:43

you know

1:05:44

it's it's suffused and saturated the

1:05:46

market sufficiently where it starts to

1:05:48

level off and you have the laggard sort

1:05:49

of adopting it late

1:05:52

when we look at

1:05:54

bitcoin through that lens it's we're

1:05:56

very early on the flat part of the curve

1:05:57

we're very we're

1:05:59

far below thirteen and a half percent uh

1:06:01

total adoption we're probably more in

1:06:03

the range of one to three percent as we

1:06:05

sit here in late 2020

1:06:08

you know sailor just makes this great

1:06:09

point that

1:06:11

those curves

1:06:12

are impossible to predict you never know

1:06:14

when it's going to work the idea can

1:06:16

exist

1:06:17

for hundreds of years before it ever

1:06:18

gets commercialized right if we think

1:06:20

back to the native americans that had

1:06:21

the pottery wheel but never figured out

1:06:23

to turn on its side and use it as a

1:06:25

wagon wheel right the idea was there but

1:06:27

no one had harnessed it commercialized

1:06:30

and but his point is that once it does

1:06:33

become commercialized

1:06:35

and it hits a certain critical

1:06:37

uh mass

1:06:39

that it's

1:06:40

very clear to see that you can invest in

1:06:42

it now like almost right before it hits

1:06:45

that vertical point

1:06:46

um and reap just just huge gains as the

1:06:49

rest of the world wakes up to

1:06:52

the importance of the innovation the

1:06:53

utility of the innovation

1:06:55

and i thought that was

1:06:57

great and he the other thing

1:06:59

in his book the virtual wave which i

1:07:01

read preparing for this

1:07:02

you know he laid out in 2010 saying

1:07:05

facebook apple amazon netflix google buy

1:07:07

these hold they're going to eat

1:07:09

everything don't diversify

1:07:12

here's why going to network effects and

1:07:14

and all of this this history of

1:07:15

scientific revolutions and paradigm

1:07:17

shifts

1:07:18

he still he saw that right and

1:07:21

he's now

1:07:23

proclaiming bitcoin to be a similar

1:07:26

pattern proliferation like it is it has

1:07:28

reached this critical mass right we're

1:07:30

north of 100 billion in market cap

1:07:34

it's the race has been won almost for

1:07:35

digital money and now it's just a

1:07:37

question of how big

1:07:39

does digital money become relative to

1:07:42

everything else relative to analog money

1:07:45

you know if you're

1:07:47

[Music]

1:07:49

if you're keen to believe

1:07:52

the advantages that digital tech has

1:07:55

over analog tech i mean clearly on

1:07:58

bitcoin bull i would say it eats all of

1:08:00

it right it's just

1:08:01

it offers so much more utility to the

1:08:03

users and it's so much more energy

1:08:05

efficient

1:08:06

it's as if you don't adopt it you just

1:08:08

get left behind so there's this

1:08:10

darwinian propulsion to adopt

1:08:13

the hardest money and you know you can't

1:08:16

get any harder than bitcoin right it's

1:08:18

21 million fixing forever

1:08:22

and then he brought up two that

1:08:25

these things seem crazy at first like

1:08:28

when the wright brothers finally flew

1:08:31

uh had their first maiden voyage and

1:08:33

figured out how to fly

1:08:36

he made the point that anyone you

1:08:37

interviewed up until that time you could

1:08:38

interview the smartest people in the

1:08:40

world they would tell you flat out it's

1:08:41

not possible mankind will never fly it

1:08:43

just can't be done until it's done right

1:08:45

until a tinkerer figures it out in their

1:08:47

garage

1:08:49

which points too that that

1:08:51

it's the tinkerers not the theoreticians

1:08:55

that bring about breakthrough right it's

1:08:57

not like i feel like some people think

1:09:01

there are geniuses sitting inside of

1:09:03

harvard

1:09:04

writing a bunch of complex formulas that

1:09:06

figure out you know this practical

1:09:09

mechanical innovation in the world and

1:09:10

that's just largely not the case

1:09:13

it's people it's entrepreneurs

1:09:15

putting their skin in the game

1:09:18

failing right failing forward learning

1:09:20

from their mistakes facing the unknown

1:09:22

adapting to the unknown trying new

1:09:24

things

1:09:25

and then also there's a breakthrough

1:09:27

right all of a sudden the the plane

1:09:29

flies the wright brothers are sky bound

1:09:31

so that's what drives humanity forward

1:09:34

is this this relentless impulse to

1:09:36

tinker and play with things not not um

1:09:39

the intellectuals sitting in their

1:09:42

their ivory towers theorizing

1:09:45

and he brought up too that you know john

1:09:47

harrison the clock maker no one could

1:09:49

figure out longitude right like it was

1:09:51

easy to calculate latitude but no one

1:09:53

could figure out longitude and how did

1:09:55

they solve it they put

1:09:58

a reward in the paper i think it was a

1:09:59

10 000 pound reward anyone that can

1:10:01

solve this

1:10:02

um how to calculate longitude will give

1:10:05

you a financial reward so what did they

1:10:07

do they went to the free market right

1:10:08

they incentivized the collective

1:10:10

intelligence of humanity as best they

1:10:12

could to the newspaper at the time

1:10:14

and this guy john harrison a clock maker

1:10:17

comes out of the woodwork and figures

1:10:20

hey i can solve

1:10:21

this spatial problem which is the

1:10:23

calculation of longitude at c

1:10:26

with a temporal answer he's a clock

1:10:29

maker right so he makes a super precise

1:10:31

clock

1:10:32

which is just kind of out of the blue

1:10:34

like who

1:10:35

if you had been a theoretician you would

1:10:36

have sat there and like tried to figure

1:10:38

out how to calculate space and

1:10:40

observational things but this guy just

1:10:42

took a 180 right he solved a spatial

1:10:44

problem with a temporal solution

1:10:46

and that's the kind of kind of problem

1:10:48

solving you get out of the free market

1:10:49

that you just won't get out of um out of

1:10:51

legislated

1:10:53

uh you know innovation or think tanks or

1:10:56

things like this

1:10:59

so the point there i think is

1:11:01

you can't

1:11:03

i like to say you can't push water right

1:11:05

like innovation is something that it

1:11:07

emerges naturally through us our

1:11:09

creative impulse you can't force it

1:11:11

right you can't

1:11:12

yell at your garden to grow faster right

1:11:14

it needs to go through its own natural

1:11:16

process of discovery to to get the best

1:11:19

ideas to the surface

1:11:22

and the only thing we can hope to do

1:11:24

within our socio-economic systems is to

1:11:26

incentivize that right like they gave

1:11:28

they put a reward in the paper for this

1:11:30

um that's what the free market is it's

1:11:32

like just go into the world

1:11:35

you have

1:11:36

liberty to do pretty much anything you

1:11:38

want as long as you don't hurt anyone

1:11:40

kill anyone or steal from anyone right

1:11:42

these are the actual

1:11:43

uh pillars of free market capitalism

1:11:46

and make bets right invest your time

1:11:49

energy and capital onto things you think

1:11:52

on to solving problems you think

1:11:55

the market wants solved and you think

1:11:57

you have a unique way to do it

1:11:59

and by betting against one another

1:12:02

we develop better faster and cheaper

1:12:05

ways of doing things right we

1:12:06

incentivize this this ideation process

1:12:09

that rewards humanity forever in the

1:12:11

form of innovation

1:12:14

i'd like to say there that it's it's the

1:12:18

tinkering entrepreneurs

1:12:20

there's nothing more problematic to

1:12:22

problems than tinkering entrepreneurs

1:12:24

right if we want to solve problems we

1:12:26

need to harness our collective ingenuity

1:12:28

and we do that through free market

1:12:29

capitalism and tinkering not through

1:12:32

legislation

1:12:34

and um

1:12:36

you know finally we got into

1:12:39

war um i talked about it as an

1:12:41

accelerant to innovation

1:12:43

my thought there is pretty simple it's

1:12:44

just that

1:12:45

war pushes you into a domain

1:12:48

of high uncertainty right where

1:12:50

everything

1:12:51

the relevance of everything becomes

1:12:53

uh accentuated because you don't know

1:12:56

what's going to happen next you don't

1:13:00

maybe how much food you need to save or

1:13:02

money or what kind of money or weapons

1:13:04

or where you need to be

1:13:05

everything becomes much more relevant

1:13:08

when you're in unexplored territory so

1:13:10

to speak and that

1:13:12

you know they say necessity is the

1:13:13

mother of invention it's like all of a

1:13:15

sudden

1:13:16

you're pushed by your survival instinct

1:13:20

necessarily figure out all your

1:13:23

now uh very relevant surroundings very

1:13:25

quickly so it accelerates

1:13:27

uh the the that s-curve adoption or

1:13:30

accelerates these ideas that may have

1:13:31

been idle for some time all of a sudden

1:13:33

uh there's a big impetus to figure it

1:13:37

and that's what that's what's going on

1:13:38

right now in 2020 right we have a war on

1:13:41

cash we have a war on covid

1:13:44

uh everyone's strapped into seclusion

1:13:49

a lot of people are out of work you know

1:13:51

inflation is right around the corner

1:13:53

so everyone's been pushed to figure

1:13:57

things out and i love that that sailor

1:13:59

paints that that picture of the war on

1:14:01

kova being an accelerant to

1:14:04

bitcoin and digital technologies more

1:14:05

generally

1:14:07

and then finally

1:14:09

i love this quote that he references

1:14:11

from arthur c clarke that

1:14:13

any sufficiently advanced technology is

1:14:15

indistinguishable from magic like that

1:14:19

all these modern miracles that we take

1:14:21

for granted

1:14:22

they're all generated by free markets

1:14:24

and if you

1:14:25

pull the primitive man

1:14:27

out of the stone age and brought him

1:14:28

here to 2020 he would just be

1:14:30

flabbergasted right like all this stuff

1:14:32

looks like magic this camera this laptop

1:14:35

um so i thought that was super

1:14:37

interesting

1:14:38

and it's that's why

1:14:40

bitcoin is so misunderstood and

1:14:42

considered you know even the joke right

1:14:44

magic internet money um it's disparaged

1:14:47

like that

1:14:48

but what i think it actually is that it

1:14:50

is this radically more innovative

1:14:53

and advanced technology that people are

1:14:55

just trying to get their head around

1:14:59

and ultimately in the long run you know

1:15:00

the great promise of it is to

1:15:03

help us make even more magic in the free

1:15:06

market right to create even more

1:15:07

advanced technologies by eliminating the

1:15:09

barriers to trade again

1:15:13

tinkerers operating

1:15:14

freely

1:15:16

in the open marketplace is where we

1:15:18

discover all the new and useful things

1:15:20

that make life easier and better

1:15:25

we've honored that paradigm to some

1:15:26

extent especially in western

1:15:28

civilization but we've erected these

1:15:30

artificial barriers to it

1:15:32

with fiat currency and central banking

1:15:35

overly complex tax codes

1:15:39

convoluted laws all these things are

1:15:41

frictions to free trade

1:15:43

so bitcoin by defunding these

1:15:45

inefficient institutions it's it's

1:15:48

eroding these barriers to free trade and

1:15:50

therefore bolstering the innovation uh

1:15:54

generated by free markets so

1:15:57

in that sense i think bitcoin not only

1:15:59

is it magic internet money but it's

1:16:00

going to make

1:16:01

the world much more magical in the long

1:16:03

run so

1:16:05

i hope you guys enjoyed that that was

1:16:06

episode three of michael saylor we've

1:16:08

probably got 10 episodes total so we'll

1:16:11

be back soon with the next one until

1:16:13

then take care

1:16:15

[Music]

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