This week in Bitcoin- 10-4-2019- Bitcoin TINA- BTC price is important, stupid trading games, gold

Hello everyone this year Adam Meister coin
it’s for my welcome for 2019 New Year’s Eve
a lot of people born on this stage yes the next no you can tell I’m pretty
excited your deep deep Tina here today no you wanted it back yeah all right there you are
let us talk about what we were talking about off air ah between therefore
pretty bad you’re muted
i muted oh there you are now you’re good okay so I was thinking about
Bitcoin which is probably pretty much all I ever think about and I was trying
to come up with a metaphor for what I think is happening today and has been
happening for the last ten years in Bitcoin we’re watching this amazing
asset and we’re watching an emerging and emerging money
and it’s very very hard for people to understand so I like to say and people
have heard this phrase before in the land of the blind the one-eyed man is
king and I think this is an interesting
metaphor it’s trying to volve this metaphor for for Bitcoin and
I’ve come up with some thoughts on this so here here’s my view of this so
imagine the world is all wandering about we have we have blinders on we have a we
have we have eyeshades over our eyes but we don’t even know we have our shades on
our eyes and maybe some of us also have earplugs in our ears we don’t really
hear what’s going on and we’re all wandering around we’re looking how do we
how do we make money how do we get rich how do we how do we succeed in life we wander about and we’re looking for
answers and it turns out as it relates to
Bitcoin there’s a man on a square and he’s there and he’s preaching he has
insights that others don’t have he’s standing there and he’s telling us about
this thing Bitcoin magical internet money names
tres mayor and he’s talking about Bitcoin and he’s freely giving out this
information he got to this very early he understood it very early he’s sharing
his knowledge with everybody else some people come to that Square
and they keep their liners on they keep the earplugs in they don’t they don’t
hear what he has to say they don’t understand what he has to say
people wander about saying you know how do I go how do I make a lot of money how
do I become successful trace is busy staying there and he’s he’s telling
people about this this wonderful thing Bitcoin
and one person at a time for some reason they start to hear what he has to say
they start to think about it and understand and there are lots of other
people wandering about and they’re asking each other where to go how to get
there so one blind man is asking another blind man where to go and these are many
of the traders that we see in the marketplace not understanding what
bitcoin is but asking somebody else what is technical analysis after all the
economical analysis is if if there are a lot of smart people operating in a
market technical analysis makes a lot of sense why do we like technical analysis
we think that insiders have some special knowledge that the rest of us don’t have
and we think we can divine that but what if it turns out that the people
you’re trying to divine knowledge from don’t know any more than you and they
actually haven’t helped you at all so one at a time people start listening
and there’s several people out there and they’re talking and they’re giving
advice they’re telling people what they think and not charging for it or not
charging very much for it or some of those people of course we have trace and
traces the guy who I always look to because I’ve learned more from him and
had to sometimes figure out what he was saying to understand what he was saying
to put it together myself as it wasn’t always clear and obvious I liked
sayfudine of MOS plan B and so all these people come to it at different times on a slightly different metaphor if we
imagine that a snowball is rolling down a hill that snowball starts off very
very very small and it grows as it rolls down the snowy
hill so a lot of people think that bitcoin is going to be this linear
movement that little by little people are going to buy it you’re gonna have
travel on a pretty much of a linear or flattening trajectory and I don’t think
that’s the right model for thinking about this at all because what’s going
to happen is that as you come to understand what these people have to say
and your blinders come off and you start to realize that in order to get what you
want you don’t have to do anything that’s special you just need to buy some
of this you just need to buy a little bit of Bitcoin as you come to understand
why it’s valuable you realize that you don’t have to trade it badly
just have to hold on to it and that over time this is gonna go up a lot in value
we we hear the noise of the markets things move up and down and it shakes
our confidence because we think that we think that markets know
and we hear things that we learn in finance classes in schools like
efficient market hypothesis mhm adiyae match was garbage because even
though information may travel rapidly through
the markets and may immediately impact the price for the moment that doesn’t
mean that knowledge or wisdom understanding rapidly transmits through
the markets knowledge and understanding are much harder to come by and many
people don’t want to take the time to really try to figure out what things
mean they want to react quickly to things so
you as people come to an understanding then
you become a carrier of knowledge and information so you you start off with a
small group of people and we’ve watched this grow in Bitcoin over time and so
you’ve got people like Adam bitcoinmeister you’ve got lots and lots
of other people who are teaching you about Bitcoin and you can listen to them
or not listen to them but those who come to really understand start to figure out
why this thing is valuable and why want to hold on to it
in an interview I listen to this morning with plan B on a different podcast
fabulous interview fabulous podcast Peter McCormick’s Plan B is talking about Bitcoin being
worth 100 trillion dollars which would be
approximately five million dollars a Bitcoin in the year 2028 to 2032 when Preston pish was on a podcast with
Stefan laverra Stefan actually credited me with a question that you know did
when Tina says you shouldn’t trade yes Reston what he thought about that I’m
just summarizing the question it was a pretty long question and Preston said
yeah you probably shouldn’t trade because you’re not gonna out trade these
movements I think I think Plan B is right I think we are going to see a
staggering valuation in 20:28 to 2032 and I think that number of
5,000,000 makes an awful lot of sense if you think you can out trade the return
going from eight thousand to five million dollars over the course of the
next nine to twelve years I can tell you there’s no way you’re gonna do that it’s
not possible because first of all if you’re in many jurisdictions are gonna
be hit by taxes which is gonna take a big chunk out of whatever you make so
there’s simply no way you’re gonna do this so what do you need to do you need
to find a position that you can buy you can hold on to and not get shaken out of
and acquire at reasonable prices anything under $20,000 is incredibly
reasonable there is effectively no real difference between buying at 3,000 and
at 20,000 that’s sacrilege to most traders oh my god I could make so much
money yes but heard a terrible story the other day I
was talking to online on Twitter I’d made a comment about trading and he
commented back and he said oh well some people is cut out for trading there it’s
he said he makes his income from trading and and that’s what he’s and that’s what
he’s doing and that some people are just naturally suited to it and I went to a
DM because I didn’t want to do this on my feed I said you know people don’t
really properly evaluate their potential returns on their trading they people are
very selective in the way they look at this stuff
it’s like gamblers who will go to Vegas and and they only talk about their winnings
and they don’t like to talk about how much money they lost so that I should
give you a net number so I went to Vegas I won $70,000 I don’t tell you the prior
trip they lost $75,000 and now they’re in the only in the hole for $5,000 I may
be exaggerating you know this is true traders are actually not much different
this this guy told me he was trading he came into it in 2017
he lost 12 Bitcoin on bit max he was liquidated and he’s busy trying to get
back to one Bitcoin now this is a terrible story I feel very badly for
this guy but what can you do he learned his lesson I think he’s still trading so
I’m not sure he’s completely understood the point here also is if you he didn’t
believe that bitcoin is going to be worth at least he didn’t have it in his
mind if you believe that bitcoins going to be worth a million dollars in 20
years and 15 years in whatever you can’t out trait why would you even attempt to
out trick people open guys you’ve got to open up your eyes to people like trace
mayer instead of all these fancy sets and graphics people talking this crypto
noise absolutely problem I’m on a technical problem but
give me one second out of my apologize all right everybody remember speaking
about technical issues play this show at 2x always play all your shows at 2x
we’re talking like everyone if you love team is the guy in the of his wisdom
definitely comes from learning the hard way over there uh are you back Bitcoin
Tina I think I I think I am alright very good
you talked about Plan B they’re forcing I’m gonna I want to share a tweet of
yours which which relates to him whereas gold has had to earn its high stock trio
of course money character in here drop a blast if you’d like to talk about that
now I just give you a little into that Adam
can you hear me yeah perfect IIIi was using a headset and it turns out the
headset has more problems than than the Apple Micah can you hear me yeah it’s
great the flow yeah I wanted to get to that I
wanna do you mind if we don’t get there yet just just okay jumped ahead I jumped
ahead in the game alright so as PS people talk to other people learn I
think this process is gonna happen a lot faster than most people think because as
the information spreads and as you see the price go up other people start to
get interested and start to take things more seriously people are very sensitive
to price and so watching the price go from twenty thousand to three thousand
created an awful lot of skeptics and confirmed the views of many people who
didn’t understand what this thing is but it’s an emerging money and it’s very
hard to understand so a model that I like to think about is looking at what
happened with technology and internet stocks in earlier years and I was having
discussion with a friend of mine last night we told my Microsoft and they’ve
commented that Microsoft looks like to him that it was an obvious thing to own
most computers were shipping with ms-dos and then almost all computer shipped
with Windows Mac was actually relatively small Apple was relatively small back
then and this idea of Wintel was a very powerful concept and and yet in the late
80s early 90s very few people understood and this
stock went up between one and two hundred times at least from the early
90s to two to 2000 and very few people who held it and held
on for that period except for Bill Gates and and some other insiders
similarly with Amazon the only people who really held on to that with Jeff
Bezos and his parents as somebody commented on a different webcast
so I think that when you start to come to understand what this thing is worth
little by little you’re going to one and that’s the stock to flow but I’m still
not ready to get there yet you’re going to see people start to front run these
having’s we’re at a time right now where i think bitcoin is insanely cheap and so
you hear people talk about what’s the quiddity of the marketplace and this
whole idea of liquidity I think is poorly understood
traders who are buying and selling Bitcoin are not actually adding
liquidity to the marketplace people think oh these traders are at infinity
if you’re buying it at 8,000 and selling it at 8300 you’re adding to minimus
liquidity the real liquidity providers in the market place
well there there sell-side liquidity providers the traders they’re not
actually by side liquidity providers the real by side liquidity providers are the
deep hollers the people who start to understand what this thing is because
they’re there to buy Bitcoin at reasonably good prices and they’re
the ones who are absorbing it in the marketplace look what it really means
can you unload large amounts of an asset or a stock any given price and so for
any asset it’s it’s about how will you understand what the value of this thing
is and there are all sorts of time preferences that goes on with the
various participants of the marketplace some some people have very very short
time preferences those are the traders were trading back and forth for
relatively small amounts and then there are other people who have longer time
preferences they start thinking in terms of months and years and even longer
possibly decades and when you start thinking in terms of that you start to
be getting lost in my own thoughts here I like that definition of liquidity I’ll
tell you that that wasn’t good I’m gonna go too well I want to I want to go to
how you have to think about valuing this thing understanding what bitcoin is the
best money in the world is probably the single most important idea in trying to
understand Bitcoin and what qualities it has as a money and why right now the
idea that it’s gold 2.0 it’s probably the single most important idea and can
take us to extraordinarily high valuations Dan held commented to me
recently that he thinks thinking about Bitcoin is gold 2.0 is probably the
single most important and clearest idea right now and I kind of agree with him I
thought about at night I was disagreeing and I’d you see Bitcoin is intense
exponential technology but that’s actually not it’s not the most important
thing right now and understanding why it’s so important on
this because when you start to understand
scarcity and you start to understand how scarce Bitcoin becomes and you start to
understand its qualities of money you realize that if I can acquire a
reasonable position in Bitcoin today and if it goes to the kind of values that
I’m going to tell you that I think it’s going to go to ten years out you realize
that we don’t even need scaling layers to work yet it’s not actually that
critical because the values are so extreme
and I think the skilling layers will work but I don’t think they’re that
important or even that necessary I could buy a Bitcoin today
and I could sell a piece of that Bitcoin ten years from now this is assuming that
I have income if I have you know money to live on along the way and then even
for living in a Fiat world which we probably will be ten years from now it
doesn’t really matter that I can’t spend my Bitcoin directly because if my
Bitcoin went from eight thousand dollars to five million dollars and I sold 20%
of it a million dollars I could easily spend that money in the existing legacy
system so I don’t even need that I don’t even need to be able to spend it on
coffee and other smaller items because I still have ways of spending my money but
the critical thing is that I’ve got that massive increase in value
now why did I get that massive increase in value I had tweeted about
how why do some of these very rich guys buy art money buy from our visas and buy
it because it’s a way to show off your wealth families have bought art over the years
for other reasons too they they buy it because it’s a way of of transporting
value into the future some people hid the art away and they know that if they
had to they could move the art out of a country therein send it to another place
and if we retain its value people are always looking for things that can
transport their wealth into the future and that’s what money does for you but
when you have as poor a money as we have today we know that our money doesn’t
transport our wealth into the future and that’s a really big and it’s a really
serious problem so what do we do we flee the money that we’re in and we look for
alternatives that can take the wealth that we’ve created and maintain its
buying power to some time for a future self sayfudine
talks about this as the trades we make with ourselves and talks about how the
trades that we make with ourselves are the most important trades we make Adam
talks about this all the time and so what do we look for we look for things
we buy stocks we buy real estate we buy art to find that thing
transport our wealth into the future and maintain its fine power or better yet
increase its buying power but none of those things are as good as a really
good money what do you think that is a what refreeze that there for a second I’m
worried why do you think what do you think that transporting my wealth
keeping my buying power or possibly increasing my buying power in the future
why are art stocks well scarcity scarcity of the art it’s
the scarcity of the art it’s scarcity but there’s more to it than just the
scarcity because the interesting difference between money
and everything else for transporting value into the future is that money is
the only thing out there for which there is a universal preference Styles
fashions for art change even for real estate we look at New York City the
places in New York that were once the hot places to be to live change over
time something period of time it’s the Upper
East Side other periods of time it’s down in Tribeca where the hot real estate is is not
necessarily in the same place similarly with stocks to companies
change but money is actually ought to be the riskless asset and effectively money
when it doesn’t actually change through time
or it ought not and so bitcoin is something which is both technological
but also there’s a social layer to it and it’s its characteristics which
enable money to carry that value that we create today into some period in the
future and the difference between money and any of those other things is that if
I hold money today and I sell some of my money for other stuff I sell it I sell
my money cuz that’s what you do when you buy something you’re selling your money
I sell my money for a house or I sell my money for an investment or I sell my
money for a car or I sell my money for clothing people are willing to take my money
because everyone has a preference for money I forget who said said this I
might have been mango Hut I don’t remember that money is the most saleable
good in the economy it’s the easiest to sell good
so now what do I want in a good money well we think of art as being valuable
because the piece is popular for whatever reason and once the artist is
dead we know the artist can’t produce any more of it although we source stuck
with the issue of validation and validating art can be very difficult
there are lots of fraudulent copies of art not actually necessarily easy to
validate whether or not the art is an original piece or copy and being able to
validate that art as being original is actually really important sometimes we
think of real estate as being a great with a store value we’ve heard people
say they’re not making any more of it actually not kind of exactly not true
how do we make more real estate build it up into the sky condom that’s it build
it up in the sky so you can buy a nice piece of land on the ocean and instead
of putting a house there you put a 50-story building there and now instead
of having one family live there you have 400 families live there and so this issue of scarcity becomes
very important and when you have something which is incredibly scarce and
yet really easy to sell it has a tremendous amount of value and it’s so
hard for people to come to terms with why why this money would have so much
value and yet I find it so hard that people have such a hard time with it
because it seems so incredibly obvious to me well it’s partially because they want it
it’s people don’t like things that are that simple they want fancy they want it
to be able to do something super fancy to be anonymous to be faster to they
have very different expectations of they forget the basics of money basically so in getting to the stock to flow we’re
talking about essentially its scarcity we talk about the hardness of money or
its scarcity Gold is approximately a sixty in stock to flow so what a stock
to flow mean it means that for every year a certain amount is produced
relative to the existing stock and for most things in the economy though stock to flow numbers are very
very very level because the thing is very easy to
produce relative to its existing quantities
and if you want to listen really good explanation of this you should listen to
plan be discussing but gold we see production continue every year in the
neighborhood of around three thousand tons of gold and so that sixty stock to
phone number remains pretty constant today gold has a ish
and if trillion dollar value but bitcoin is different in economics class they
teach about something called elasticity ask whether or not a
a thing is elastic or inelastic and elasticity is a really interesting
concept you know what elasticity means that’ll
refresh me for my economics courses I’m happy to so
it means for any given amount as the price change what’s the propensity of
people to produce more of it this is not a perfect definition so if you’re growing wheat let’s say and
the price of wheat is I didn’t have the price lead $10 a bushel and the price
goes up to $50 a bushel and many more farmers are going to start planting
wheat instead of planting other things because the profitability of the wheat
is incredibly profitable and usually those prices are pretty ephemeral but
they’ll respond in the marketplace to the price and produce more as that price
fluctuates if the price goes down they’ll tend to produce less and they’ll
produce alternatives Gold is today about $1,500 an ounce if
gold were $10,000 an ounce you can rest assured that many mines which might have
been put out of commission various exploration companies that don’t
find it profitable to produce gold that they might have found that $2,500 an
ounce would come online there would be more gold production which responds to
the price and that’s what elasticity is so you’ve
got producers responding to those prices and and how much are you able to respond
Gold is a relatively inelastic commodity it’s very inelastic compared to things
like agricultural products oil tends to be relatively more inelastic than other
types of commodities as well and so this creates a lag time in pricing sometimes
we see because of the ability of something to come online into production
so but oil oil is actually yeah I think it’s thought to flow is actually pretty
low but I don’t know what stock to flow as Bitcoin is the only commodity that I
know of that is almost perfectly inelastic if the price of Bitcoin were a
dollar today you would still produce 12 and a half Bitcoin on average every 10
minutes and if the price of Bitcoin were a million dollars today you would still
produce 12 and a half Bitcoin on average every 10 minutes and this is how it’s
going to be with Bitcoin pretty much for its duration until the issuance for the
block reward is used up what would happen if Bitcoin were to go from 80 166
dollars or it is right now to a million dollars in the next ten seconds hmm if
you knew that Bitcoin is that more than likely if it popped from eight thousand
dollars to a million dollars instantly that you see a lot more hashing power
come online people would throw hashing power online and so you would actually
have a slight impact on the amount of Bitcoin that was being produced but
because of the difficulty algorithm we know the difficulty algorithm will readjust
the production of Bitcoin back to one block on average every 10 minutes so
even if the price would have changed radically instantly you will only have a
period of time approximately 2100 blocks at the most
until that difficulty album algorithm changed where you might produce more
than you might expect otherwise you would still be subject to certain
limitations because there are only so many miners in existence there only so
many people who know how to mine so it wouldn’t necessarily hashing power right
now is in the 80 to 90 EXA hash rate conceivably it might go to a thousand
EXA hashes if the price were to change from 8,000 to to $1,000,000 it depends
on what’s available in the marketplace and how many people have miners every
miner the people had they put the crappiest miners they’d mind with their
computers so I don’t know what the hashing power would go to but we know
that you might produce more blocks than you
should in that in that period but the
difficulty algorithm would kick in and it would readjust it so that price
change would only impact the production of blocks for a very short period of
time so I estimated what the stock to flow
numbers would look like going out to 2040 and approximately and I don’t know
if this is completely right because there are issues with lost Bitcoin and
I’m not completely sure how the lost Bitcoin effects effects lost if it makes
the stock to flow and it might have some pact I’m not completely sure about that
and that’s better question for Plan B but ballpark numbers you’re talking
about post-2020 having fifty six twenty four twenty twenty four hundred and
twenty twenty twenty eight two hundred and forty eight twenty thirty two five
hundred and twelve twenty thirty six 1016 2040 2040 approximately twenty
forty based on the numbers that the plan b was talking about estimating five million dollars Bitcoin
100 trillion dollars between 2028 and 2030 – that’s guesstimating a value
between somewhere between 248 and 512 stock to flow humans don’t know of
anything with that degree of scarcity it’s actually one person described with
scary scarcity it were selling Bitcoin you’re living in
an amazing time we think we think back oh my god those guys who bought Bitcoin
at tres Mayer at five cents or 25 cents Max Keiser at a dollar or three dollars
but I remember they’re using oh my god if I could have only bought that Bitcoin
at those prices look look what I could do
you’re living at a time that’s the equivalent of those prices you can up
600 times between now and 2020 8 to 20 32 from 8,000 to to five million I granted it’s not ten
thousand times yeah but you probably get there in twenty twenty-five years this is staggering returns and it’s so
hard to come to terms with what that kind of scarcity means that you have
people who are very short-term oriented and they’re thinking and they’re busy
trying to outsmart the marketplace the traders and there’s very few people are gonna be
able to do that the interesting thing is that every trader who trades thinks they
can and yet the numbers don’t actually prove that there’s a tiny percentage of
people who are actually able to do what they think they can do it’s funny
everybody thinks they can be Warren Buffett but actually there are very few
people who achieve anywhere near the returns a Warren Buffett and yet people keep trying to do it for
most people they have almost no advantage in trying to trade they look
at stock charts and they think they can divine some special knowledge based on
the past but it actually doesn’t tell you anything traders will tell you of
course it tells me something I can figure out what the demand is by looking
at those charts I know that if it traded here and it traded there and I got this
kind of I’ve got a cup and saucer or an ascending triangle or descending
triangle or a flying W or hidden shoulders pattern or upside down Head &
Shoulders pattern I know exactly what this thing’s gonna do no you don’t why
are all those charts completely meaningless because what you don’t know
is what the guy was talking to last night told me that last night told me
that his accountant has a client who’s a billionaire this billionaire client
acquired fifty million dollars with a Bitcoin approximately five percent of
his net worth with those charts don’t tell you is when
a guy like Ron Paul or dant a Piero or any of these other guys who come from
the legacy markets who are tied in to some of the biggest and some of the
smartest money in the world when Dan talks to somebody or Ralph talks to
somebody or they listen to what these men have to say and understand about
Bitcoin and the guy who’s worth a hundred million dollars or billion
dollars says to himself you know what the hell I’ll buy myself a five percent
position these guys are smart the argument they make make sense to me
go buy some those shorts don’t tell you when that rich guy comes to understand he wants to own some
Bitcoin because he might not even thinking about
it or doing anything when those charts were made when those
prices took place so you should be very thankful to the traders who were so
willing to give up their Bitcoin for such cheap prices to you I know I’m
thankful for it and oh no I want you missing tapi arrow what do you that
video of course that he was interviewed by Rao and what do you think about his
description of Bitcoin as the secured the is the security truth machine I think that I think there’s so much
that we don’t know about Bitcoin I think we’re gonna hear many many smart people
in the course of the next several years and decades come too
epiphanies understandings about what bitcoin is and what bitcoin does that
we’re gonna look back in the future and they’re gonna say to ourselves oh my god
that was so obvious how did I not see it so I don’t know what brilliant insights
people have that we will look back on at some point in the future and say how did
I not think of that how do I not understand that and so I I really you know I really
don’t know I think that there are I try to
try to listen to what people have to say try to understand it I don’t know if I
fully understand what Dan is trying to say but I know he’s a very smart guy and
I want to try to understand what he’s trying to say because there are so many
smart people out there that that I can learn things III don’t I don’t X I’m not
completely sure what it means and yet God please I’ve got another question
about it was he’s clearly not blind anymore he admitted he was blind the big
coin at one point and as you said everybody wakes up eventually well the
smart people do at least he but but speaking of waking people up he
specifically said that Bitcoin will when it gets to that trillion dollar
valuation and again now the the market cap is whatever it is 150 billion I
don’t even know what it is but it’s far from that trillion dollar market
valuation that it will wake up many traditional type of investors that
that’s a big round number that Allah not some people out of bed would you agree
with that with your experience in the traditional markets absolutely I mean I
think that price is actually very important as it relates to Bitcoin I
think price people respond and react to price I’m a huge believer in the concept
of price mechanism price mechanism makes our economy work price mechanism is
critical to a capitalist economy in terms of allocating resources and I
think that ban is absolutely right I don’t know what that price is
dan is been a professional investor for a few decades and if that’s the number
that he thinks he is more closely tied to that than I am so I don’t really know
but sure a trillion dollars is a very big number it’s very hard for a
professional investor to look at an asset like Bitcoin at a trillion dollars
and say I can just keep ignoring it it’s very hard for people who live in
the capital markets who look at prices move all day long and say I can ignore
this thing that is now the marketplace is valued at a trillion dollars and and
it’s come to that valuation through all natural processes it started it at
nothing in 2009 in 2010 and at a trillion dollars it becomes pretty hard
to ignore so sure I think that’s that’s a very reasonable thing do I know what
the right number is I don’t know what the right number is we all speculate and
what we think is the right number but trillion dollars is as good as number as
any other number now you mesh the word reasonable and I do think it is
reasonable to think we’ll get to a trillion one day that would be $50,000
Bitcoin now you have mentioned another number on this show and Plan B has
mentioned this number also and it’s the hundred trillion dollar number and I
could I mean I I love that you make these predictions about five million
dollar Bitcoin I could I could do a clickbait headline about it I won’t
because I don’t do that kind of thing tell that like button for no clickbait
titles but you do believe this a hundred trillion is a tremendous number though
it the the all assets on the planet only add up to over two hundred and fifty
trillion dollars or three hundred trillion dollars or something like that
so I I don’t wanna get people too excited I mean this is a huge number
five million I I would be happy to five hundred thousand Bitcoin $500,000
Bitcoin you are a huge believer in this though to come up with that number and
to agree with with Plan B but I mean have you ever put that in perspective
100 trillion compared to two hundred fifty trillion compared to three hundred
trillion you know did the value of all assets owner well I think your number of
250 300 trillion is wrong okay it’s won by a lot it’s it’s one that’s burdened
by wrong wrong by a lot so stocks are about 80 trillion dollars Fiat is about an 80 trilling to be
lightish Fiat or money is is approximately 90 trillion dollars all
debt markets are approximately 250 trillion dollars real estate and there
may be some double counting in the real estate because there’s a lot of real
estate that is that is financed so I don’t know where the
double counting is in that real estate is like 250 trillion dollars so I’m
guessing that those numbers are much bigger and these the end of the day some
of these things are just estimates these numbers are I I think the number is
probably somewhere between 300 plus trillion and six seven hundred plus
trillion I think the numbers are substantially larger then what we hear
or not and I’m not sure if we have great numbers not but here let’s think about
it slightly differently and the reason I use the number 100 trillion five million
dollars a Bitcoin is what you have to think about is think about Bitcoin as
repricing the world in Bitcoin and that’s kind of what really matters so if
you bought a nice pair of shoes you might spend Oh a pair of Gucci or
ferragamo shoes those are very nice shoes you might spend five hundred
dollars for those shoes the question would be then how much would those shoes
be in SATs so that’s what I think is going going to
be happening here but but more than just that I think that bitcoin is about an
emerging economic paradigm I think we’re going to see the world change in very
substantial ways in the 2020s in the early 2030s I heard Rob Paul talk about this in one
of his interviews and I’ve been saying this for for quite a while I think that
we are going to be moving into an economic paradigm where we have money
and equity based money which is going to be Bitcoin in my opinion and equity like
investments I think will actually pretty much have no credit or very de minimis
amounts of credit credit ie bonds ie fixed income in this future world and so
we’ll use we’ll use an equity like investment as opposed to a credit like
or bond like investment it’s very interesting as I commented about this on
Twitter just the other day and it calls me I got a response from somebody who
said what credit is created every time if I grant you credit I have created
credit so that’s that’s right so if I’m a store and I let you buy something and
I don’t make you pay me right now I’ve given you some credit and so there may
be some kinds of credit that exists we did use to have a world that operated
that way but the interesting thing is that and this just occurred to me
because bitcoins programmable money so if I ask you to build a house for me you
might say okay pay me X number of dollars up front so you can build me the
house but the interesting thing about Bitcoin is because it’s programmable
because we will see some form of smart contracts on it at some point we can now
we can already do this now with time locks multi-sig a lot of things we can
do i could actually create a method by which pay-as-you-go i might pay you X
percent a week and you go out and you buy the
materials and hire the labor for that period and I keep going a fairly tight
leash I’m building my my house building my product building whatever and so I
think we don’t really fully understand what this economy is going to look like
and I have said that I think some of the ways we think about the way an economy
must work or money must work is because of the nature of the technology which
was available at the time did solve certain problems so when we went from a
real gold based system to a banking system well why did we do that because I
can’t easily carry gold to another part of the world and trade with it there are
a lot of there a lot of problems with this so if I carry if I deposit my gold
with a local bank and I get a note from that bank and that bank has a
relationship with another bank in another city I take that note like I can
validate that this is a good note I I give that note to that bank in that
other city and now I’ve solved a technological problem for me of
transporting that gold safely from one part of the world to another part of the
world and so I think the way we do things is actually very much related to
the technology which was available to us at the time which created a methodology
by which the world worked so people think the world has to work in a
particular way and what I think is that the world doesn’t have to work in a
particular way the world works in a way to which there are technological
responses to problems that have to be solved
on new technologies offer different answers and I think that bitcoin is a
technology which is going to offer a set of answers which were not previously
available so I think we’re gonna watch the world change in ways that are very
very very hard to imagine and I think we’ll move to a world which is one
that’s very much based on credit to one which is very much based on equity based
money and other type of investments right so then let’s have is Libre fit
into all of this well I don’t know how fits into it I’m not really concerned
about Libre I think that anything which helps to legitimize
Bitcoin in the eyes of people becomes an on-ramp for Bitcoin so what would Libra
be I know if people talk about Libra as being panopticon you know the look of
the coin that everyone used is fine you and there be a lot of problems with
Libra but I don’t want to talk about zebra per se but Libra as I’ve heard it
described would be a multi currency stable coin and as such people can easily use it for their
payments but the difference between CII have argued that price is more than 99
percent of adoption for Bitcoin people like to make money people love to make
money and so most people buy Bitcoin because they want to make money if
Bitcoin were $1 today as it was $1 back in 2010 or 2011 I’m sure we would not be
talking about it I’m sure that’d be almost no interest in
Bitcoin people are interested in Bitcoin because they they can make money in it
and you’ll never really be able to make money in Libre because it’s a stable
point you can’t make money in a stable point so if Libra starts to cause me as
someone who doesn’t really know or understand Bitcoin to start to think
differently about my money odds are reasonable that Bitcoin will
become something which I might also pay attention to and if I see that Bitcoin
was ten thousand dollars in 2019 and now it’s 2022 and Bitcoin is $300,000 I said
oh nice to own some of that Bitcoin and if I start to understand that it’s gonna
go from three hundred thousand to five million I say well I hadn’t known it at
eight thousand like the guys that don’t own it did four hundred like but you
wanted that but I can still make pretty good money from three hundred thousand
to five million not as much as I could have made had I bought it four hundred
not as much as I could have made if I bought it at ten not as much as I could
have made it I bought it in a thousand well they can still make money and
that’s not bad so Libra becomes just another on rate
for Bitcoin and so as the process of legitimization so this is another thing
that I think about in terms of mindshare that’s the term I like to use bitcoin has a staggering amount of
mindshare relative to the size asset that it is I think many people in the
Bitcoin space what guys like Ron Paul or tanta Piero to understand this very well
but a lot of guys who are treating it now they think of Bitcoin as being
bigger than it is and I actually think it’s the most important invention for
mankind and generations if not centuries I think it’s incredibly important but as
an asset it’s a very very very small asset and the amount of attention and
time that it takes up in the minds of all kinds of people is absurd for the
tiny little asset that it is it’s a tiny little asset it gets coverage on CNBC it
gets presidents to tweet about it it gets other people to talk about it then
the scheme of things it is not a pimple on the backside of an elephant so that’s
pretty amazing so as more and more people come to accept its legitimacy
that opens up the desire to learn about it and buy it people like to make money
speaking about its gaining some legitimacy here I think I know your what
your answer will be to this we’re gonna end up with a Fed coin eventually that
the dollar will I think so at least that will definitely add some legitimacy to
cryptocurrency as a whole if the if the dollar goes crypto do you see this and
something that you mentioned you see the next decade we’ll still be living in a
dot it will still be a dollar world but you do envision eventually it will not
be a dollar so when when do you think that will happen especially since if
they make the dollar into fed coin it’ll be quite easy to stay with the dollar
every quite convenient for people no it won’t it won’t actually change it it
actually increases the likelihood of adoption well because they’ll be able to
easily turn their fake coin into Bitcoin you’ll be able to easily turn your foot
point I think hyper Bitcoin ization takes place the hyper bit colonization
goes what I collect it goes through the bond market and the credit markets what
I think will happen at a date much later in the future
probably that 100 trillion dollar mark somewhere
in the five million dollar-plus range it could
be a little you know could be lesson it could be a sixty trill you know that
sixty trillion dollars at three million dollars a bitcoin but I think there is
at some point in time when hope tres Mayer has described Bitcoin as them as a
black hole absorbing the value from the rest of the world and what I think you
will see at a point later in the future again at some price is people sell their
existing assets to buy Bitcoin so if you have money in the bank and you buy some
Bitcoin well you’ve now converted some of your
Fiat into Bitcoin if you sell a Treasury bill to buy Bitcoin you’ve converted
some Treasuries to buy Bitcoin and I think that
people later to Bitcoin who might have been doubters of it and uninterested you
know if if at a trillion dollars institutional money becomes interested
in buying Bitcoin what is institutional money and other people think at a
million dollars a Bitcoin at twenty trillion dollars that takes people who
are skeptics IIIi a in sort of a joking kind of way I described three types of
people four types of people with regard to Bitcoin skeptics cynics and haters
and then there are people who just don’t know about it at all so leaving those
people aside that people don’t know about at all
I argued that skeptic cynics and haters that each of those people will pay
subsequently higher prices so if you start off as a skeptic you might have
considered it at eight thousand dollars but you don’t buy it till it’s fifty
thousand dollars and if you’re a cynic you might have been cynical about it at
eight thousand dollars that plenty people who are cynical about it at much
lower prices you might not buy it till it’s a quarter of a million or a half a
million dollars Bitcoin and if you’re a hater you might not be buying until it’s
more than a million dollars a bit the price of Bitcoin will push people into
Bitcoin and this dynamic that plates takes place that gets you to these very
very large very extreme numbers is that think about the dynamic that’s taking
place with miners so every day miners acquire more and more
Bitcoin through their mining processes but through the having’s
those numbers become smaller and as more and more people begin to understand what
this money does for them and why it’s valuable they want to own some of it money is about transporting your value
into the future so here’s a question for you question people want to might want
to ask themselves let’s assume the big coin went up by the amount of 10% a year
forget about these super large numbers but that it’s always you know it’s not
subject to earnings and let’s see it’s a consistent 10% of here you can pretty
much rely on it not like a Bernie Madoff 10% a year but you know you can pretty
much rely on 10% a year for an increase in value what you own other assets instead of
owning Bitcoin I wouldn’t you what I wouldn’t I would
not who know I know you wouldn’t a lot of I asked our last night I said
so if Bitcoin went up by 10% a year from now until forever would you own stocks would you own real
estate and I think that once people start to understand why money is a
better asset to store value in so you’ll always have to have investments
investment to make an economy grow investments are critical to an economy
I’ve argued that what we’ve done with the Fed money that we have is we’ve
created artificially low cost of capital we have a cost of capital which appears
to be lower than it really is and the reason I say it appears to be lower than
it really is take it kind of quickly through that
thought process is that if I invest in a project and I assume my
equity my weighted average cost of capital weighted average cost of capital
is a blend of my debt cost of capital plus my equity cost of capital and let’s
assume I weighted average cost of capital is 8% and that would take a
basket of projects so me plus thousands of other people each engaged in our own
investment or in projects and we all have but simplified an 8% weighted
average cost of capital I say an effective cost of capital because of all
of those projects 10,000 projects let’s say some percentage of those projects
gonna fail because the 8% weighted average cost of capital was actually too
low in number maybe the real number should have been 12 percent for weighted
add the cost of capital so instead of having 10,000 projects at an effect at a
weighted average cost of capital and 8% maybe we should have had 6,000 projects
or 5,000 projects at a 12% weighted average cost of capital so then some
numbers of those projects fail which might have some residual value or not
and effectively what’s happened is our effective cost of capital isn’t really
8% but our effective cost of capital is really that that 12% because we have
destroyed a certain amount of capital none that accurately gone through the
numbers here but I think you can follow a logic of my reasoning and so
having to lower cost of capital in an economy is actually detrimental because
it encourages taking on projects which probably shouldn’t be taken on because
the real cost of capital is actually much higher than what the cost of
capital appears to be do you follow that laughs does that make sense to you do
you understand what I’m trying to say yeah there definitely did that last part
yeah it’s not the individual project that I’m
talking about I’m talking about a larger a systemic or an economy-wide effect
I don’t know if I don’t know if I explained it well there’s a lot of projects out there
shouldn’t be going on you know know that that’s what I’m saying
but what I’m saying is think about it not just as one project but a large
group of projects that’s occurring in an economy do you agree maybe this will
help do you do you agree that if my cost of capital is 8% that looking for an adequate return from
those that I would have more projects at 8% than I would have at 12% do you agree
with that statement yeah okay so what I’m saying is because of because of
yield curves which are artificially manipulated by central banks it makes my
cost of capital look lower than what my real cost of capital is and we don’t
find out what the real cost of capital is until the fullness of a cycle so it
looks like my cost of capital today is 8% because I’m taking the information
from various yield curves plus my equity cost you follow the logic of that you
understand how that works I hope people do okay
so I estimate my equity cost of capital the cost of my own personal equity or my
business’s equity and then I take a rate which is available to me in the market
place if I were to float a bond or go to the bank and borrow money and I create a
blended weighted average cost of capital with those two things so let’s say my
equity cost of capital is 8% and to go borrow money cost me 5%
and let’s say I put up half equity half debt so that would be
combined five plus ten 15 percent divided by two is seven and a half
percent give me a weighted average cost of
capital seven and a half percent do you follow that
that make sense to you okay so I’m saying that the market
implies an 8% cost of capital I’m just making numbers up here this
front have you follow my thinking and my logic the market implies an 8% cost of
capital so with that 8% cost of capital I is a
businessman run some numbers and I think I can get a certain amount of sales with
a certain amount of earnings and support the project to make profits necessary to
make with the cost of capital of 8% and then I go about and I decide to do this
project or not do this project if it meets that 8% cost of capital but that’s not the real cost of capital
exists in the economy and I find out in the fullness of the cycle that a certain
number of those projects failed it weren’t successful even at the 8% because there wasn’t enough demand out
there those projects so effectively because
those projects failed that money that capital is effectively destroyed I
basically took that money I threw in the garbage can so when I netted out effectively meant my cost of capital was
and I’m making the numbers of again twelve percent not eight percent if I
had built to a twelve percent cost of capital then a certain number of those
projects just would never have gotten built because people have run the
numbers against the twelve percent number and said I can’t make these
numbers work it doesn’t you know my returns are not sufficient for my twelve
percent cost of capital and so I can’t make a return which is necessary to do
that project so I don’t do the project so we create systemic mispricing in the
marketplace because we have central banks which come in and miss price risk
and what I’m saying is that in an economy which uses money rather than
credit and all those fixed income instruments are credit plus other to to
make equity like investments that it that might be that that will net result
in fewer but better projects and so I think
the net result will wind up would be much higher growth because there’d be
less capital destruction and I think we’re in the very very very very early
stages of watching a new economic paradigm emerge and I think it’ll be a
much more efficient paradigm I think we’re gonna see a lot of changes that
take place in the course of of the next 10 to 20 years and I think the rate of
change that we’re going to see is going to be very shocking to a lot of people I
think bitcoin is a major factor of that I think they’re there other factors as
well that people talk about which are well beyond my knowledge base or scope
things like self-driving cars AI various bio technologies they’re there a lot of
things are gonna happen and I think we’re going to see very dramatic change
but I think Bitcoin is going to have an incredibly big impact but again it gets
back to the idea what makes it so valuable is that a very scarce money
that can transport my value into the future
and that money continues to get more and more scarce so as you start off with
let’s imagine you start with a hundred people understanding about Bitcoin they
see the price go up and they tell their friends and now you’ve got a thousand
people who all want to buy some of this and that thousand then grows to a
hundred thousand people whatever the numbers are and these numbers just get
bigger and bigger because more and more people start to understand
and and that’s what we’ve seen from bitcoins earliest days and what I think
a lot of people don’t really understand and that’s what I think we’re going to
see numbers that are likely in excess of what the model projects because we know
that we know what the issuance rate is going to be on Bitcoin I think it is
actually very smart to front run the having’s because on average on average
the price is always going to be lower today than it is at some point in the
future if we think about price differently if we think about price as
noise around a point so let’s say the current valuation is seven or eight
thousand and we’ve had a lot of noise around this point in the last three or
four years it’s ranged from $1,000 to $20,000 and point value based on the
model might be about eight thousand dollars I’ll think is what plan B is
using so yes we have a lot of noise around that point the noises from I
forget what the price was at the habit was probably at the hammer that wavers
eyes the worth price in 2016 six fifty or something like that six
fifty to twenty thousand so that’s a lot of noise around the point do you
understand what I’m saying statistically you think about it noise
around the point so if we think of it in yearly chunks and
Plan B has said that if you look at it in yearly numbers as opposed to daily or
monthly numbers it actually gives a stronger r-squared number which is a
tighter fit on on his regression so in in the date range of 2016 to 2020
which price is about it’s not that’s not right the model price is about eight
thousand dollars in the model price in 20 22 24 might be $100,000 let’s say
I’m not sure with the model prices of the top my head so you see a lot of
noise around the point you could have crisis as high as 3 for $500,000 prices
as low as 20 or $30,000 but we know progressing through time
that bitcoin is inelastic because we know its issuance is pretty much set
because of the way Bitcoin works we know according to the difficulty algorithm
that the most that can happen is you can produce a certain amount of Bitcoin in a
certain period of time but the difficulty algorithm is just going to
kick in again and force production back to
whatever the reward is then per block on average every 10 minutes so bitcoin is
this thing that we’ve never seen an economy before and I’ve argued that you
know I mentally think of Bitcoin as being like a gecko except it’s a gecko
that’s turning into Godzilla so it’s gonna go from this little gecko that’s
running around you know a couple of inches to something which is a mile high
and when it walks on the ground the earth is gonna shake for hundreds of
miles around and that’s what this thing is and so people who don’t understand
about how scarce this money is going to be they’re playing stupid games right
now they’re playing stupid trading games and they can because right now bitcoin
still acts like a legacy asset but post the 2024 having it ain’t no legacy asset
anymore count that like flattened people 2020
for having well if you’re if you’re at if you’re at approximately 56 start to
flow in 2020 working your way to 120 in 2024 and Gold is approximately 60s or so stock to
flow that means you’ll go from a gold like stock the flow number which we know
which we understand to something much bigger almost double
what gold is and then it doubles again doubles again doubles again and that’s the point is is gold is
something that we understand we understand that stock to flow we have
not lived through something with a greater stock the flow is what you’re
saying so so so it morphs from a legacy style asset to something that we don’t
really get we don’t understand what that scarcity really means and more and more
people are coming to understand why that is money that you want to hold on to
transport your value into the future because you because of all the qualities
that Bitcoin has that it’s hard to seize that it’s that it’s easily that you can
easily transact with it at a distance electronically you know all the
qualities that Bitcoin has which are which are which are many that it’s
infinitely divisible all of these various that is that it’s infinitely
portable because it has no weight it’s easily transact will easily securable
not dependent on a third party all the qualities of Bitcoin has so as you start
to understand why this money is so good and is essentially fungible because you
don’t really care what you see echoes were attached to the
month through the money you’re buying you only care about it maybe if your
government says something about it but to most of the world they don’t care
they’re indifferent if you’re in Venezuela you don’t care that those UTX
OHS had whatever attached to it I don’t give a damn it doesn’t mean anything to
me so this is a very very special money and
it’s gonna be very very scarce it’s better than that work of art that
Picasso that you bought that you paid a hundred million dollars for well first
of all you have to make sure that they’ve verified that it was really a
Picasso that was really the work of art that you bought well that’s expensive
you have to hire art experts to appraise that piece and to make sure that that
piece is really the piece that it’s represented as well you don’t have the
problem with Bitcoin because your node verifies it for you
boom boom boom it’s done you know that you have real Bitcoin and that’s very
easy to do a piece of real estate think about
holding a piece of real estate into the future you buy a piece of real estate
and you want to rent it out to earn some money to keep your value up a real
estates a great big pain in the neck because you have to get a tenant or
tenants will pay their rent we’re not late on their rent then what’s gonna
happen to real estate well in time you’re going to replace the
roof and you’re gonna have to paint the real estate and you’re going to have to
fix the toilets in the real estate and you’re gonna have to replace the water
heater in the real estate and you’re gonna have to replace the furnace in the
real estate and you’re gonna have to do all things to keep this thing up to
snuff that’s a pain in the neck what do you do with your Bitcoin get by a
Bitcoin you store it you put it into a multi-sig that’s it and you just you
care for those private keys caring for those private keys it’s a lot easier
than caring for that work of art and caring for that building and caring for
your stocks your stocks what you have to worry about you have to worry that who’s
running the company what are they doing are they running into the ground what
are the earnings look like how about the new products how about the new services
have a competitor’s you don’t have any of those concerns with the money the
money essentially doesn’t change you just have to know that counterfeit money
can’t be produced well we know the can terrific money can’t be produced because
we know what bitcoin is and we know that it can’t be counterfeited so we have
something that we know is scarce we have something which we know is incredibly
easy to maintain relative to other things
it’s not easy bitcoin is still hard to deal with there a lot of hard aspects to
it but as it gets easier which it will do with development it gets much easier
to maintain and so that happens the price is going to go up
because people were afraid to deal with it look if you started with your Bitcoin
pre tracer then it was relatively hard to store people lost their Bitcoin lots
of different ways you had technological development take
place in this face I was reading on trace mayor’s website run to gold you
know he was advising oh I can’t remember what this thing was called but
our method what’s up armory was an armory no before before that there were
you know there were ways that were not as good and much harder the price of
Bitcoin was much lower you could have bought Bitcoin you know maybe $10 a
Bitcoin at that time you’ve stored it in a combination of Dropbox with I can’t
remember right I looked at the see other data camera what it’s called to consider
the run to Gold website now because $8,000 but there are better methods of
storing it and there will be better methods yet you’ve got cold card which
is probably a better method and you’re going to have multi-sig and we’re gonna
have snore masked what’s the other thing I’m thinking
remember norm asked I’m God it doesn’t matter well what you’ve got you’ve got
these technologies that are changing that are going to make that are gonna
make certain things much easier all right well we are we’re coming up on the
end here it is always a pleasure to have Bitcoin Tina on the show he’s linked to
below check him out of course well is there any uh any other information you
want to share with us current events anything you wanted to comment on no I
only want to stress on stress suspected I’m not concerned about Bitcoin scaling
I know that its current price and where it can go in the next decade
it doesn’t need scaling at all we can use the legacy system as our scaling
method we can store it in storage keys sell some and have that money available
to buy whatever we want in the legacy system and that in the course of the
next decade there’ll be more than other people as the price of this thing goes
up we will see billions and billions and billions of dollars of resources going
into development coming from all sorts of areas which are going to figure out
ways to scale this and I think ultimately it’ll be the one and only
money because I think that bitcoin is like a forest fire that generates its
own wind and by virtue of the fact that the value of this thing goes up what’s
going to end up happening is that many problems which look like problems today
start to go away as the value goes up because many people on Bitcoin will
start to become quite rich one Bitcoin will be worth in my opinion five million
dollars 10 years out approximately and so could be 12 years out nine years out
but think about that for $8,000 that comes worth approximately five million
maybe it’s three million maybe it’s six million but think about what that means
if you want to support a political candidate if you gave
a bunch of political candidates $20,000 that makes you an important contributor
bitcoin is going to have its voice heard and when Bitcoin talks Bitcoin is going
to scream because you’re going to have people who are worth an enormous amount
of money they will get their way because they will support candidates
who do things which benefit Bitcoin so people worry about all kinds of things
but I’m not concerned about this at all because I understand what this is and I
understand how much power and influence it’s going to have when Godzilla walks
governments will tremble and bitcoin is Godzilla that’s what the honey badger is
becoming honey badger is growing to be four miles tall and people will yield to
Bitcoin just remember we don’t change Bitcoin Bitcoin changes
us and Bitcoin will change the world oh yeah on that note that is that’s a
good way to end it yes the bitcoiners will shape the future not just the world
but the solar system to Venus cloud cities being built by bitcoiners it’s
going to be great and yes this is a golden age that we are entering these
2020s whether it be in money nanotechnology so
self-driving cars it’s gonna be great and I am pumped for it and I would love
that in the year 2030 I would love for Bitcoin to be worth five million dollars
that would be great one need everyone so yeah it’s eight thousand dollars today
on October 4th 2019 for all you people with big smiles on your faces in the
future watching this thank you Bitcoin Tina you’re always a great awesome guest
he’s linked to below follow him on Twitter definitely he’s great on Twitter
everyone should be following him on Twitter Mele Twitter TC HP alt that’s me
on Twitter remember a new show here every day we do this weekend Bitcoin
every Friday get all sorts of guests the best guest in the space i am adam
meister the bitcoinmeister the disrupt meister remember subscribe the channel
like this video share this video check out the links below found that like
button bang that Bell button I forgot to say hello my elite friends so goodbye my
lead friends shabbat shalom happy new year
we’ll see a Saturday night bye bye thank you

2 thoughts on “This week in Bitcoin- 10-4-2019- Bitcoin TINA- BTC price is important, stupid trading games, gold”

  1. I am not agree with people who do not buy GRAM tokens from Telegram) don’t you really recognize that they can grow in price at 10-30 times? I bought 1000 tokens in their ICO

  2. I should like to demonstrate my cryptocurrency portfolio for the current year: XRP, ADA, ETH and I still want to buy Telegram tokens using this link gramnews. pro

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