Brandon Quittem, Swan communications Director, and Robert Breedlove, CEO of Parallax Digital, discuss ways to conceptualize Bitcoin and its role in the 4th Turning.
4:49 Summary of 4th Turning and Bitcoin
13:32 Summary of Breedlove’s “Most Brilliant Idea”
31:47 Tinkering vs Thinking
34:50 Order vs Entropy
45:49 Bitcoin as Decentralized Mycelium
58:36 Law of Decimation
1:02:47 Natural distributions of Inequality
1:14:33 Bitcoin and War
1:25:00 Peaceful capitalism aligns with nature
1:32:27 Bitcoin and property rights
1:42:00 Closing Thoughts
1:46:36 Wrap up
Hello all, and welcome back to Swan Signal Live. Swan Signal Live is a production of Swan Bitcoin at swanbitcoin.com, the safest and easiest way to accumulate bitcoin with automatic recurring buys. We are on a show that happens weekly, and we talk about Bitcoin and economics with two great guests. I am your host, Brady Swenson. I’m head of education at Swan. We have a great show today for you with Robert Breedlove and Brandon Quittem. But before we dive in, I’m really, really, really excited to announce to you that we have launched Bitcoin TV. This is a 24⁄7 stream of the best Bitcoin content curated just for you, available at bitcointv.network and on our YouTube channel at youtube.com/ swansignal, where you can also chat 24⁄7 with other viewers as you watch. We launched a soft launch last week, and it’s been a lot of fun hanging out in that chat, popping in whenever you want, watching some Bitcoin content and chatting with Bitcoiners.
We plan to add value to the existing library of Bitcoin education through production, curating, editing, organization, presentation. In Q1 next year, we plan to launch Bitcoin TV on over the top television services like Pluto TV, Roku, and Samsung. We believe that right now is the right time to launch Bitcoin TV and build on Bitcoin’s incredible momentum over the past few years, as it has come a real player on the global stage in a time of monetary chaos. Bitcoin is inspiring millions to imagine a brighter future that we can build together, and we hope that Bitcoin TV will play its part to help the world in pursuit of this cause. So check out Bitcoin TV at bitcointv.network and youtube.com/swan signal. Okay, with that exciting announcement wrapped up, let’s dive into the show here.
We have with us Brandon Quittem, who is the communications lead here at Swan, and that means I have the great privilege to work with him very closely every day. He burst onto the Bitcoin scene a couple of years ago when he dropped part one of his great series comparing the Bitcoin network to mycelial networks. Fascinating stuff, and he’s very recently dropped a 10,000 word masterpiece titled Bitcoin and the Rhythms of History. We’re absolutely going to get into that today. Brandon, welcome to Swan Signal Live, man.
Appreciate it, Brady. Thanks for the intro. How’s it going, Rob? Some of my favorite people on here. I’m looking forward to this one.
Yes. This will be a lot of fun. I’ve been looking forward to it since we scheduled it. We have Robert Breedlove. He’s CEO and CIO of Parallax Digital. It’s a professional services firms specializing in Bitcoin-focused investment strategies and consulting, and he’s also what I like to call a Bitcoin philosopher. He’s authored quite a few epic essays himself, exploring Bitcoin very deeply from first principles. Inspiring stuff. Robert is also an advisor to Swan and we are proud to now be supporting his work in part, so you all can look forward to more great writing from Rob posted on our own blog, Swan Signal Blog, about once a month or so. Robert, welcome back to the show, man. This is your third appearance.
Thanks, Brady. Glad to be back and excited to be here with Brandon for our first actual appearance. We’ve done a lot of these conversations privately, but now we get to do them publicly.
Is this the first time you guys have been paired up together on a show? That’s awesome.
I think so.
I love it. Okay. All right, Brandon, let’s start with you, man. Let’s kick it off. The piece, Bitcoin and the Rhythms of History, applies a framework called the Fourth Turning framework, which was created by Neil Howe and William Strauss in their book by that name, and your piece compares or applies, I guess, that framework to our present moment and to Bitcoin. I would love if you could just start off with a summarization of that framework and put us into perspective, looking forward and backwards from our time here in 2020.
Yeah, definitely. So here’s the book, if anyone’s wondering. The Fourth Turning, William Strauss and Neil Howe. Interestingly, Neil Howe works at Hedgeye with our favorite Keith McCullough. Same place. Pretty funny. Go say hi to Keith for me. Neil, as well. But the book was written in the late ’90s around the same time as The Sovereign Individual, similar looking forward and shockingly correct of some of their ideas, and the main thesis is that society actually advances in predictable cycles. It does not advance in this linear path. Each of these 90-year cycles has four seasons, which he calls turn-ins, and the final period in that 90-year cycle is the crisis period. That’s when the institutions decay and we realize that, “Wow, our social, political, economic systems are not working and we actually need these institutions to hold society together.”
Typically, the catalyst that causes the unraveling or this crisis period is through war. Previous Fourth Turnings were kicked off by World War II, the Civil War, American Revolution. To present time, we’re about halfway through the current Fourth Turning, which started in around 2008 and the global financial crisis. You can expect about a decade to come up increasing volatility and massive changes to the exterior world. The analog here is the period between 1929 and 1945, so the Great Depression, the ’30s, FDR, the New Deal, World War II. And then we created all these things like social security, unemployment insurance, deficit spending, and then on the tail end of World War II we had Bretton Woods, the World Bank, IMF, NATO, the UN. And so, I expect a similar rearranging of the exterior world in this coming decade. If you’re wondering, “What is this based on? How do you come to these conclusions?” The short answer is that it’s about demographics and generational cycles. There’s a symbiotic relationship between history and generations. Neil’s quote is that, “History creates generations, then generations create history.” What that actually means is, let’s say we’re all millennials and we’re all born around the same time, so that the mood in the country is all pretty similar when we’re born. So we’re all raised in the same time period, and then we grow up and we become adults and we’re all similar. Now we’re adults and we start pushing back on history as this well-defined generation. That just continues throughout history. And then you can judge the moods or the periods in the cycle or the turn-ins, you can judge them by the constellation of the generations. And so which archetypal generation is that, which age, that’ll dictate how we respond to catalysts and you can steer the trends there.
Common ways to view these trends would be things like culture, how do we nurture children, the supply and demand of order, things like that. It predicts all this economic inequality we see now. It predicts the failing institutions and the lack of trust. Predicts cultural decay, rise of populism. From my perspective, the thesis is working very well at measuring the time we’re in now. The essay I wrote, also, there’s a summary on Twitter in a thread and an audio version by Guy Swann, it essentially places us in deep history, like what Brady was mentioned. I also include my commentary on the current zeitgeist through this lens of the Fourth Turning, but then also through the Bitcoin lens, which seeps into everything in my world.
Practically speaking, this is just another tool for your toolbox, a new way to view the world. Yeah, I think an important point for this discussion is that it underlines how important Bitcoin is now relative to the timing. Bitcoin was born in the dawn of the Fourth Turning, and it’s a money that is, it’s not the state money. It’s a new type of money, and this upstart currency could really only bootstrap itself during the period of chaos. Otherwise, why not? Let’s just use some easy money. It’s my belief that Bitcoin’s timing’s really great and now is the time to bring it into the limelight.
It’s fantastic, man. Rob, your latest piece, Our Most Brilliant Idea, also comes at, I think, an important time, talking about the idea of Bitcoin and it dives into the process and the importance of ideation, how it drives civilization, how it’s really the fundamental creator of society. You dive back deep into history, as you usually do, and dig up some of the beginnings of certain ideas that really changed civilization. I’d love to hear you talk about applying this study that you’ve done of ideation to the cycle of ideas that Brandon’s talking about here.
Yeah. So I’d like to say, first, I actually haven’t read The Fourth Turning, so I thought Brandon’s work was super interesting. It just opened up a whole new domain for me, intellectually. I’ve been thinking a lot about, I alluded to some of this in the piece, that humanity operates as one organism, in a lot of ways, and that’s what the economy largely is. It’s like an extension of the individual mind. So I thought it was interesting that we move in these cycles of institutional advance, but then when the institution becomes irrelevant or old or corrupt, that it decays and we have these revolutions and institutions break down and there’s this period of chaos that we go into. And then we figure out what worked, what didn’t work and we reassemble new institutions to repeat the cycle.
So it’s very interesting to me that, and I think the title of Brandon’s piece is super apt, Bitcoin and the Rhythms of History, that we are very intimately connected to the seasons of nature or the world in a broader sense than even, just say, the annual four season cycle. There’s something that we’re very deeply related to the movements of nature, which I thought was super interesting. This is, to me, is an expression of this exploratory impulse that all life has. As I argue late in the piece, that growth, essentially, is the central impulse of life. So it’s as if this collective socio-economic super-organism we call humanity is constantly trying to advance itself in terms of both population and productivity and it’s creating these institutions to do so, but so far throughout human history that these institutions inevitably become worn out, right? Or corrupt, as I said, and it’s two steps forward, one step back. So it’s this pulsation of the organism as it grows.
I love, too, that he incorporated this concept of reflexivity, right? Where we have this feedback loop between the individual and the institution of which he is a part or the individual and the culture. We see this throughout reality which, as I’ve come to see this, is that reality itself has this dual nature, right? The Daoists would call this duality. So, there’s a reflexivity even between man and tool, right? When we invent a new tool, it, over time, shapes us. What we create, in turn, shapes us. And then through those conscious decisions we can make using a new tool, we can create even more tools that shape us even more. So, we co-evolve with our own conscious decisions. I think this framework that Brandon’s explained institutions through is one of the highest expressions of that, because these are, even though they’re not tangible, these are among the most important technologies that humans use to organize themselves, are these grand overarching stories, right? Like the nation state, money, human rights, all these things. So, I thought it was super cool. Really encourage anyone out there that hasn’t read it to go read it.
And then for me, tying it all back to my piece, the aim of my piece was to hopefully help people see the world in a slightly different way and that we don’t have things, necessarily. Everything that we create is much more of an idea made manifest, right? So, all of the raw materials for every modern miracle that we enjoy today, like this laptop or this monitor, they’ve been here forever. The only thing that we ever lacked to create them was the capacity to collaborate across time and space super effectively, and to develop the idea structure to index the raw materials of nature to, or the knowledge structure, through which we can reassemble the raw materials of nature to create these things that help us, that improve our quality of life or increase our productivity.
So, it’s as if we actually shape the world. We sculpt and shape the world into the shape of our ideas, and we sculpt and shape our ideas through trade. So again, there’s this reflexivity occurring where, by interacting with each other and trading goods, services, and knowledge, we’re actually sharpening the idea structures on which all of these things are based. That’s why I argue, I call trade, essentially, the meta idea, which is the idea that generates all of our other useful ideas. When we optimize for that, right? Then we actually improve innovation, which you could think of as collective learning. Because the pre-supposition of the meta idea of trade is that anyone in the world, right? There’s 7.6 billion of us today. The pre-supposition there is any one of those 7.6 billion people may figure out something that the rest of us do not. So we accumulate all the distributed intelligence of the market of the entire world towards satisfying wants, and when we create socio-economic structures that optimize for that, we generate the most civilizational learning and advance at scale. That’s what capitalism is, right? Which we can dive into more shortly, but that’s the gist of it. It’s kind of simple. By getting out of our own way, optimizing for free trade, we actually create the best outcomes for ourselves across time.
Brandon, so this is a time, according to the Fourth Turning framework, that we’re really moving into an era of collectivism, of strengthening, or at least reliance on or belief in institutions to solve the problems that we are experiencing. We have. Obviously, central bank is one of the most central authority and power that we all think is at the base of a lot of the problems of society. The federal government has acquired more and more power over the history of this country, and that’s really being repeated all around the world. Now we have this idea of central bank digital currencies, which would just entrench the power of central banks even further to control the money, the base layer of civilization. So, what do you see happening in the next 10 years that would restore or swing that pendulum back toward free markets, capitalism and more decentralization?
Yeah, yeah, definitely. So first I got to say, Breedlove’s piece here, it’s really a poetic take on the defensive markets. I think people today think capitalism is this bad thing, and they blame all the problems that we see economically or in our country on this abstract idea of capitalism. It’s the boogeyman. Obviously, that’s misguided. We all know that. I think Breedlove’s piece covers that very elegantly and defends the fact that markets are really important. We almost have this moral imperative to increase trade. Trade creates new ideas and new ideas create new technologies, and those new technologies are essentially prerequisites for future geniuses to unlock their skill. Imagine Mozart being born before the piano. How big of a waste would that be? There’s endless examples like this. I believe that capitalism is in our moral imperative to pursue, and so I think I just have to get that point out of the way. Bringing it back to current times, looking through the Fourth Turning thesis, what we’re seeing here is a rise of collectivism.
That’s because the millennial generation is coming into power, and the millennial is the hero archetype who likes community and everyone’s the same, and there’s only eight menu items at your restaurant, universal healthcare, all these types of ideas. Through that, they also push back on individualism, and so individualism is under attack. Collectivism is on the rise. You can see this all around the world. The culture is dominated by this progressive millennial culture, which dictates the rules on what you can talk about and what you can say. This also spills into our monetary system. The state central banks are merging now and if it wasn’t bad already with central banking, they want to create central bank digital currencies, which are just going to be monetary socialism supercharged. What I see is a fork in the road here in this upcoming decade, and there’s essentially two ways to coordinate society at scale. We can either do that with free markets, or we can do that by force.
The central bank digital currency route is obviously by force. The man with the biggest stick wins. Bitcoin represents the free market, which is a peaceful way to coordinate at scale. Just like all Fourth Turnings, we flirt with this totalitarianism streak. Same thing happened in the ’30s. I think Bitcoin is going to save capitalism. Connecting it back into Breedlove’s recent piece, Bitcoin empowers the three principles that underpin capitalism: honest money, property rights, and rule of law. It is that distilled down version of capitalism and it’s implemented now, today. We can go vote for that by moving our capital into Bitcoin and pursuing that versus the existing system. It’s going to be a big fight. The millennials are pushing back on this one, but thankfully there is reflexivity here. So more people go into Bitcoin means less people pushing towards the force method.
I remain optimistic because I see a flood of intellectual capital coming into the Bitcoin space. I think 2020 is accelerating that. It served as this catalyst point where everyone said, “Shit, what’s going on? What matters? What’s my money doing? What’s my family doing? Where am I living? Should I live there?” We’re re-questioning all these things, and I think that’s perfect timing. Bitcoin’s about 11, 12 years old. It had a relative peace time to grow up and got all the zero to one moment’s done. Now it’s time for some big challenges, and I hope Bitcoin’s ready.
Rob, you wrote in your piece that Bitcoin bridges communistic utopianism with capitalistic pragmatism. It sounds like that could be a, well, first of all, a bridge between your two pieces, but also possibly a bridge between Turnings, in this framework that we’re talking about here, that might actually create something new, a blend or something of these two ideas, and maybe make these generational cycles get interrupted somehow because there’s agreement upon how we should approach the organization of our economy and our society. I don’t know. Thoughts on that?
Yeah. So one thing I’d like to point out, what Brandon just mentioned, that we dramatically improve our intellectual horizons by becoming more civilized and innovating. My favorite example of this, by the way, is Stephen Hawking, the astrophysicist. As many people may have known, he had a debilitating disease where he had to actually spend most of his life speaking through a machine and in an automated wheelchair. This is a guy that changed the worldview of everyone through his work in astrophysics. So I often think of him as one of these examples that, had we not had the innovations necessary to keep him alive, that everyone, all of humanity would have suffered forever. So again, how do we not optimize for the trade necessary to create the tools to keep someone like this alive longer than he otherwise would be able to live?
We all would have suffered in terms of knowledge and knowledge development. I think that’s my… There’s millions of examples out there, but that’s the guy that I like to point to for that. Jumping into this dichotomy between capitalism and socialism and how Bitcoin influences it, one of the aims in the piece here is, I go into the history of communism and, really, what happened. There was this ideological contention between American capitalism and Soviet communism in the 20th century. On one side of the fence, we had the Soviet state, which basically represented that it had unlocked the ultimate secret to human organization and that by adopting this model of communism, which was premised on the wonderfully sounding thesis that, from each according to their ability to each according to their need, right?
Sounds beautiful, poetic, heavenly, whatever. Under that moralistic camouflage, many of the greatest atrocities in human history were perpetrated, right? The state became… First of all, first thing that happened is productivity collapsed. So they essentially tried to replace the profit motive that causes a market and society to be self-organizing with this commitment to nationalistic faith and devotion. So they thought that if you were just selflessly dedicated toward the state, that that would be an adequate substitute for the profit motivation and price signal intrinsic to capitalism. And then on the other side of the world in America, we had a much more pragmatic approach to human organization that really attempted to dummy-proof, if you will, the socio-economic system, right? It was just premised on minimized laws. They decentralized the authority in a way that every state maintained checks and balances across every other state.
Capitalism was designed to have minimalistic government and optimize for trade, right? It was just, again, strong, clear, reliable rule of law. So this is the means by which we non-violently resolve any disputes that may arise. So if you have violence emerging to resolve trade disputes, you’re not going to optimize for trade, right? You’re going to optimize for war or battle. To have private property rights duly enforced. Private property rights are the relationship between man and any portion of nature he spends his time reproducing or reshaping. If those rights are honored and respected and mutually acknowledged, then this gives everyone an incentive to take care of nature, right? All of a sudden, it’s your baby. It’s your piece of land. It’s your business. Whatever it is, you have an incentive to care for it in the long run. And then if we enforce the interface of private property rights between one group of people and another, that’s actually how we protect the environment as well, right?
If there’s a factory pumping out tons of smog and it’s polluting my air or my river, I, through the rule of law, can now enforce torts against that market out there. Assuming the rule of law is stable and reliable, that actually increases the cost of that factory and incentivizes him to seek energy conservation and non-pollutant production strategies. And then the natural outcome of those first two pillars of capitalism, rule of law and private property rights, is whatever the most tradable private property right is, that is money, right? That’s the whole thing. So, this system of American capitalism was a group of what, I would argue, is much more pragmatic individuals that said, “We don’t know the answer. We don’t have the ultimate idea, but what we can do is put a system in place that optimizes for the generation of new ideas.” Right?
So, you don’t need to bet on any particular model of reality. You just bet on that leaving people free to figure it out for themselves and adapt to changes as they come is the best approach. Intrinsic to all of this is that it maximally honors the sovereignty of the individual and, again, assumes that anyone at any point in history may learn something that the rest of us need to know, right? It’s optimizing for that discovery process. And so that, in a sense, is like…
That in a sense is like collectivism, communism, socialism, whatever you want to put under that rubric is basically this murderous hallucination. It’s camouflage as it’s opposite, right? That it’s going to create this perfectly equal outcome. Everyone will be happy, Utopia Forever, but what actually happens is total dystopia. Because, in theory, as Taleb would say that, in theory, there’s no difference between theory and practice, but in practice there is, right? So when you try to put communism into practice, it actually leads to it being it’s opposite. So, and Bitcoin fits into the picture because it is, and here’s where it gets interesting Bitcoin of course, so many different ways to look at it. You could consider it an implementation of pure capitalism and that it has absolutely perfected rule of law. It is an unconfiscatable private property, right?
So that’s, as some people have said, there’s no difference between knowing and owning with Bitcoin, you just own, you intellectually own the property and no one can take it from you. There’s no government necessary to acknowledge that property right or protect that property right. It maximizes individual sovereignty. And then finally, by being those first two things, it’s becoming the most honest money we’ve ever had in history. So you can say that Bitcoin is this implementation of pure capitalism, that’s bringing the world back towards capitalism but it’s also interesting that another way to look at Bitcoin is that it’s perpetually available public utility, right? It’s always accessible, is there for anyone that needs it anytime they need it but it’s facilitating trade flows of private property. So it’s almost like it’s taken this communistic utopian fantasy and giving it some roots in capitalistic pragmatism, and it’s again, another union of the opposites in a way that it’s maybe something even beyond capitalism.
Someone suggested the term sovereignism at one point. But I think here is where we’re all just struggling to get our heads around it. But we see that Bitcoin is rewriting history books or we’ll rewrite history books in this space. And then another point I think is interesting here is, historically these empires tend to start to Peter out around 250 years of age. They kind of peak and start to decline around that age. And America turns 250 in the year, 2026. And it’s interesting to me that that’s the same year Bitcoin turns 18. Bitcoin can sort of comes of age that year so, Bitcoin enters adulthood, right when America hits its peak.
So I think that’s just interesting to think about and then beneath all of this is that grand philosophical point that freedom is as creative as tyranny is destructive, right? As Brandon said, you can either organize a society with force or free markets. And I think that we’ve proven repeatedly that although you can implement force for a short period of time, it has no sustainability, right? People inevitably pursue their own ends. And if they’re not left to do so, that pursuit of individual ends will result in the collapse of a socio-economic structure imposed by force. That’s what Soviet Russia was. So hopefully, Bitcoin’s taking us into this more pure implementation of the American idea.
I love the idea…
Great points Rob.
I love the idea of Bitcoin as a very precocious 12 year old and looking forward to coming of age. Go ahead, Brandon.
Yeah. So just to piggyback off the socialism versus capitalism point, before we move on with that, I came across an idea by Kevin Kelly recently called thinkism and thinkism is essentially saying that you can solve all your problems if you just think about them enough. And this is the opposite of letting things play out and experimenting and adjusting as necessary. And imagine trying to understand the human body by just thinking about it. Obviously that’s not possible. We need to experiment, we need to take risks. It’s messy, when you do observe reality. And similarly markets are complex systems in the same way that humans cannot manage them. And every time we do there’s unintended consequences. And so Bitcoin, this is kind of mentioned in Rob’s point, but Bitcoin submits the fact that central planning or thinkism is not capable of managing the economy. And so instead we have to trust that the real world implementation of these ideas, battling each other, that’s the only way to move forward and that’s the trade, right? So they battle it out and the best one wins. And so I think Bitcoin is important in that sense, because it does produce prosperity through that feedback mechanism. And when, okay, what’s the problem with central planning? What if you can’t do a good job? I see this as a physics problem actually. And the physics problem is this, in the third turning, this is sort of the unraveling of the empire. This is the excess of the 90’s deregulation. The getting’s good. Nobody really cares government’s big, no one tries to fix anything. And what happens at this point is you actually suppress volatility and you prevent those fires from burning through politics and bailouts and QE, et cetera.
So you have this really high increase in potential energy. You can think of it like a Jenga game and we’re just undoing the pieces and the gravity wants to take it down, but it’s not quite ready or a pendulum swinging, it’s at that apex point, it’s starting to come the other way. That’s where all the potential energy is before it swings. And then during the fourth turning, because there’s all this potential energy, the volatility erupts and it combusts. And that’s when you get the violence of a crisis, this leads to massive changes, usually total war, winners and losers.
And so, I see Bitcoin plugging in here in a nice way because it actually consumes that short-term volatility and it converts it into order. And so in effect it prevents the potential energy from building up too high. And if you think about it on these cycles, these waves, I see Bitcoin as a way to reduce the magnitude of these cycles because it does thrive in these high entropy environments. And so, I’m optimistic that Bitcoin can maybe not prevent a war, but maybe prevent a war, but at a minimum, it will reduce the severity of these challenges.
Rob, I’m privy to some information that I know you’ve been thinking about entropy as well lately, came up in some DMs between the three of us, I think last night. So this is your jumping off point to give us your thoughts on entropy.
All right. I am deeply fascinated by this. This is actually an epiphany I had the other day. I don’t, wherever these things come from, I’m grateful for them. You’ll think about something for months and not get anywhere. And then all of a sudden, one day all the pieces sort of align. But to that point, it’s, and Taleb would say that tinkering or trial and error, this is the anti-fragile process through which we advance, right? There may be this common misconception that innovation is legislated or imposed somehow. But a lesson we’ve learned repeatedly is that you can’t force innovation, right? You can’t push water. You can only really create an environment that nurtures it. And again, we’re back to this, the capitalistic versus communistic approach to life, it’s like, do you want to try to force an outcome, or do you want to create an environment that’s conducive to good outcomes?
And this, to Brandon’s point communism, right? And we can put central banking in this bucket. They’re attempting to suppress the inherent volatility of life, right? We are beings that create order that go out and test the forms of order we have against the chaos of nature to try and learn more and improve that order. If all of a sudden we cut ourselves off from this flow of information, which this flow of information, again, Taleb would say, the stressors or the pain or the failings or the misfitness, when we take an action and it is divorced from our expected outcome, that distance is pain, right? That’s either that’s economic loss or that could be even physical pain or if you try to do something one way and you try to jump your bike off the ramp and you land over here instead in the bushes and that hurts and you learn a lesson. We only learn through pain.
That information is inseparable from the flow of contact with reality, basically. And in this domain, it’s like human intervention. We try to use human intervention as an analgesic from the pain. So central banking, right? We don’t want price volatility. So we’re going to increase and manage the money supply such that price stability exists in the marketplace, right? That’s suppressed volatility. We’re going to manage the economy such that there is low unpredictable unemployment, right? You’re suppressing the volatility of market cycles, but not, you’re not actually even suppressing the volatility, that you do in the short term, but you’re just putting more, you’re externalizing more entropy. And eventually, you can’t fool nature, right? Nature, again, when you do align with nature, you’re not trying to conquer or control nature, which is another 20th century fallacy. Eventually, the model does come in contact with reality.
So when that happens, the misfitness between the model and reality has grown so wide, that it becomes much more painful when the ultimate reckoning occurs. And so I’ve started to see this as, to get to entropy, entropy is, this is a topic that’s very widely misunderstood. You could just think of it as the measure of disorderliness, uncertainty or randomness in a system. It’s also expressed as heat versus cold, right? A more entropic system would have higher heat, but what I’ve started to see central banking as and is, which by the way, this gets very first principles. The only way we can define the flow of time in the universe is by measuring entropy. All physical processes are symmetric, right? You can run them forwards and backwards and you can’t tell which direction time flows, but there’s one constant.
And that’s, the universe constantly tends towards greater entropy, becomes more disorderly or chaotic over time. And the one force that runs countervailing to this, is life, right? We actually confront the chaos of nature with courage, convert it, slice it up into little pieces with the logos and our widths and our minds and convert it into good and useful order. That’s what innovation is. And so that’s how we’re learning, right? We’re feeding off the chaos of nature to feed, to channel its contents across our intellect and build useful order. So life is, and there’s two words to this, there’s anti-entropic, right? Which should be the opposite of entropy, is creating order or there’s actually a term called negentropy, which is the same thing. And so life is this information foraging. That’s what we do. We forage for information, which information is by the way, defined as a resolution to entropy.
So if there’s entropy, we don’t know what it is, but as soon as we figure it out, that the meaning we’ve extracted from that is information. So information runs countervailing to entropy. Money is anti-entropic, right? Money is an insurance policy on uncertainty. Uncertainty is entropy. So money like life is negentropy or anti-entropy. And then, I forget the third one now, but the point is that central banking, in trying to maximize its own certainty, right? Although they say, we’re trying to keep unemployment low and keep prices stable. What they’re actually doing is serving their private shareholder base. They’re trying to maximize the profits for their shareholders, which increases the certainty, the financial certainty of their business operation across time.
What this has the effect of in a physics sense, first principle physics sense is, they are doing that. They’re siphoning certainty if you will or information into their centralized body, but they’re externalizing all the… Because you can’t create or destroy energy, information, entropy. This has the effect of externalizing entropy onto the broader society. And that’s what inflation is. That’s what hyperinflation is. That’s what the social unrest we see. That’s what the, I would say, the strain on morality is, that’s, all these socioeconomic consequences that are coming to a head in 2020 and are articulated in this, The Rhythms of History piece, I think, are driven by this human relationship with entropy.
That’s fascinating. So if you, would you consider then money to be the storage of order, you capture negentropy your order, store it and then deploy it against entropy at a later time?
Yeah. Another way to think about this is we’re all playing this game to try and resolve one another’s wants, better, faster, cheaper, right? That’s what economics is. And whoever succeeds in that game, they’re giving society something it wants and they’re rewarded. And the reward they get is a claim on the output of that society, which that’s what money is. It’s a claim on savings, right? It’s a claim on everything we’ve ever produced and theory, everything we could produce. Assuming it’s a natural free market money. And so it is life force, when Sailor gets on these interviews and says, “Money is life force.” It’s not an analogy. It’s fact, right? It’s a claim on human life force. It’s a claim on human effort, time, energy, how you want to put it. And so in that sense, and it just gets deeper from there, right?
That money is, it’s an extension of our vital energies. It’s an extension of our mind, right? By engaging with the market, through the price signal, we’re actually getting, we’re gaining visibility into the minds of all market participants, all compressed into a single number. So it’s the lifeblood of humanity. It’s the lifeblood of the socio-economic superorganism that are you in the piece? And we’ve perverted it, right? We’ve toxified it, we’ve corrupted it. And that’s why we are sick. That’s why the world is sick because we have poisoned the money and that’s what Bitcoin is, Bitcoin’s an elixir to this toxification that we’ve been suffering from under central banking.
Yeah. I love those ideas, man. We are, actual money, free market money, market chosen money, Bitcoin, true money is storing order. And you can’t do that with centrally planned money, right? You have this conceit that, we can improve upon the ability of money to store order, when really you’re just injecting more chaos into the economic system. Therefore the money is storing, less and less ordered information that you can then deploy at a later time. So yeah, that makes perfect sense. And I love that approach to thinking about it.
One last point that’s super fascinating. Looking at Bitcoin, technically, what does it do? It is a system that reaches deeper into entropy than any other system in the world, right? To solve the mining function, you’re literally finding one atom in the universe, right? It’s reaching, it’s solving a puzzle that’s so meshed in entropy. And the outcome of that solution, when it resolves that piece of entropy, is the most, the strongest form of order we’ve ever had, right? It’s global indisputable truth. So it’s, I didn’t mean to cut you off, but that’s, this is really profound, this relationship between Bitcoin, touching the deepest parts of chaos and producing the highest form of order we’ve ever seen.
Man, I love it.
It reminds me, the image I’m getting here is of my favorite analogy of mycelium. And the reason why it’s coming up is because it has these almost invisible threads, this network that essentially infiltrates the entire planet. It has the surface area that touches everywhere on our planet from the individual level to the institution. You can look at mining, you can look at the banking, infrastructure. And so, yeah, Bitcoin’s everywhere also nowhere, but let’s say it’s everywhere. And it is just consuming this disorder, this adversity, this uncertainty and it just Brock by Bach, keeps us in time. And that Bitcoin is an energy and information forager, is also hits home for me as a mushroom forager myself. But put us in context here, we’re going into a period of increasing entropy.
We’re hitting maximum chaos in the 90 year period. And at that point you can kind of look at it. Do we want a money that consumes volatility and produces order or do we want a money that was born during peacetime? It was sheltered its whole life by the banking class and it’s not well suited for volatility. And so it’s pretty clear to me that Bitcoin is the fourth tourney money. It was built for this. And if you look at the, if you put them next to each other, Fiat accepts the systemic risk. So it’s willing to blow up. But in order to do that, it provides you some short-term price stability, which for some reason, that’s the mandate. However, Bitcoin accepts the short-term price volatility but in exchange it provides systemic stability. And so that’s the type of monetary system we need during this chaotic dark night.
And to continue on this thread, you heard a quote where it was essentially, “Central banks play God,” or “When central banks play God, civilizations burn in hell,” which I thought was just number one, extremely put like in a wonderful imagery. And it also reminded me of Dante’s Inferno, which is a painting. And it has nine circles of hell. And what I was thinking is that our current implementation, which we have central banks, that’s not as bad as it could be when we get to this central bank, digital currency, Bretton woods, attempt to, whatever’s coming. We don’t know, but there is a new financial system and all the prospects that the central planners are talking about would make it a worse hell and would make our civilization even worse, right? Again, continuing on this sort of God-like thread, thankfully, Satoshi, stole fire from the gods in a Promethean sense, he essentially extracted the power to print money, the power of money production.
And he gave that to the people. And in a sense that obsolete central banks, there’s going to be a fight coming up here but another point in your piece, Robert, you mentioned how Bitcoin essentially forces States to bend the knee with regards to property rights.
They can’t say, bank, give us back the money. It’s either, do you have the private keys or do you not have the private keys? That’s who enforces property rights. And so as sort of this, it also reminds me of the quote from Lord of the Rings, King Theoden, where he’s sort of possessed at the point. And Gandalf comes in and Gandalf’s trying to work his magic on this corrupt King and the corrupt king says,” Your powers don’t work here.” And that’s the central banks trying to get your private keys. That’s not possible. And so with this pendulum swinging towards potentially crazy totalitarian states, Bitcoin is sort of that backstop to prevent that spread of thinkism or central-bankism. And again, from your piece, it disciplines, anyone misbehaving with the money printer. And so in a sense, Bitcoin is preventing civilization from burning in hell. And I know how crazy that sounds, but it is true.
Look, I think it’s a mythological reference, but I think we can root it in physics, right? We can define hell as a high entropy environment, right? War is hell, right? What is war, a bunch of shit’s happening? You have no idea what’s going on, the time horizon for history and humanity is shrunk to its smallest possible sphere. You don’t know what direction things are going to go. You don’t know what nation’s going to come out on top. You don’t know who’s going to die. Who’s going to live, what buildings are going to be left standing, it’s a pure entropy environment. And it’s, as we know, and we, many Bitcoiners argue, you’re like, war is largely funded by the central bank, right? So once again, they’re internalizing this certainty for themselves and externalizing the uncertainty unto the world, right? And it’s not just inflation, right?
It’s also warfare. It’s also all this, what I think, even though the moral aspect, the moral wickedness, they actually impose on the world. And I love that. You talked about the filaments of the mycelial network and how it infiltrates every nook and cranny, right? That’s kind of its strategy. And that’s why it’s so super dominant. And I, when you first wrote that piece on mycelium, it was huge. Just, I was already down the Bitcoin rabbit hole at the time, but it was like, you really just yanked me way further down, way faster. And I love that because you touched on the decentralized network archetype, right? Which is intrinsic to nature by the way, right? It’s found in the pattern of our brain and it’s found in the pattern of galactic superclusters. It’s everywhere. It’s throughout the universe.
And actually, when I wrote about some of your piece and one of my piece as I was comparing the decentralized network archetype to a sphere. And a sphere is basically the most energy efficient structure for conserving energy, right? It’s optimized for, its shape is optimized to have minimal surface area per unit of energy. So it has the least exchange with the external environment possible that shape. Whereas you could think of the decentralized network archetype as like an anti sphere, right? It maximizes its surface area within a space to increase its probability of exchange with the external environment, right? So again, there we are again, we’re back to trade, the decentralized network archetype optimizes for trade, right? That’s why it is an information forager. It’s getting into every nook and cranny, drinking entropy and disorder from every system that it can touch and find to accelerate its own learning and evolution across time.
And so that’s where Bitcoin is. Bitcoin is this informational, mycelial, decentralized network archetype that is sucking entropy out of the world and converting it into the highest and most useful order we’ve ever had. And that’s where people, you’re now getting into almost the biblical references, right? That is the ancient idea in Genesis that God is the force that courageously confronts chaos and converts it into good and useful order. So it’s something very deeply rooted mythologically, right? You can say these are just silly cartoons or old wisdom traditions. But I would point people on this topic to Jordan Peterson’s Biblical Series, which I know Brandon you’ve been watching a lot of, I mean, that guy, he just, he ties it all together for me, right? He ties science, mythology, religion.
Yeah. And in that way, Bitcoin has argued later in the piece. Maybe it really is the superstate, people have been theorizing about this for years, that war would never end until we had some force that emerged, that was super ordinant to the state, right? And the alchemists called it, the philosopher’s stone, the American pragmatists called it the moral equivalent of war. Some of the constructivists talked about when we actually were able to increase the, put the individual above the state. I forget what they called it. But all these things, they all point towards Bitcoin, something like it just can’t all be a fucking coincidence, right? People have been talking about this everywhere for hundreds, even thousands of years. And now here we are living through it. So that’s why it’s so exciting. Bitcoin.
Great points. And I have been listening to those Jordan Peterson lectures. They’re completely mind blowing and I love the sphere versus mycelial polarity there, that’s actually very beautiful and something that I had never considered until we spoke about it. But what this reminds me of is two things. One, we are this monkey with a big brain and we think very highly of ourselves and we make cool stuff. So we kind of consider ourselves to God. But when posed next to nature, we’re not, right? We are just a monkey with a big brain who thinks we’re greater than we are. We’re smart, but we’re not wise. However, you want to look at that. And so when you come across something that matches to this mycelial archetype or this decentralized network archetype, that’s billions of years old, that’s pretty much responsible for life on our planet or at least complex life on our planet.
That speaks to some deeper truth here. And looking to the future. That makes me very optimistic that we have stumbled on something fundamental because it mirrors successful evolutionary strategies found in history. And to bring this up to modern times, we’re at a point right now where the demand for order is rising, but the supply of order is extremely low. And what that actually means is, our institutions are crap, but we wish they were better. So the supply chain of orders low, but the demand is rising and…
So the supply of order is low, but the demand is rising. And so in order to get out of this Fourth Turning, we need to have some sort of a catalyst to unite the people to make wide sweeping change. And the main thing that we need is to increase our supply of order, meaning we need to create new institutions to glue society together. And historically what we do is we create industrial revolution base or agricultural base institutions, which are hierarchies. And you put the smart people at the top and they drive the ship. But what happens is, these decay over time, just due to fundamental human nature. And so if we want to do this game again, we can create another super better mega Epic government. That’s incrementally, hopefully better than the last one. But if we do that, it’s going to inevitably decay. And so what I see with Bitcoin right now is this potential new type of institution.
This institution that’s not run by humans. That’s not fallible by our meddling little fingers and it’s hard to change. And it creates a sturdy foundation upon which we can reorient life. And I don’t know what that looks like and my brain starts to go mushy when I even think about what that could mean for society, but it does feel like an asymptote for the future of our species. And again, I know how crazy that sounds, but I think it’s true and connecting it back to demographics. We have a period where we need to somehow unite people across generations. So the gen X‑ers and the millennials they’re individualistic, they don’t want to see communism, socialism rising, but you have this younger generations that are very collectivist. And so interestingly, going back to your previous point of connecting the utopianism with capitalism, what’s interesting is that the young people lean towards that communism side.
And we can pitch Bitcoin in a sense that it appeals to them. Bitcoin is not 12 guys with white hair running the money. It’s a network, it’s a community. And the millennials will get behind that. The gen X‑ers they’re pragmatists, they’ll say, “How do I make money? Don’t bother me”. And the boomers are ideological and they don’t want to be told what to do. And so this gives him sovereignty. And so it actually does cross generational lines. And this again, leads me to believe that Bitcoin could be this new institution that we ride out of the fourth turning and enter a new first journey, which is historically a period of low inequality, high progress, also a little bit less freedom, but Bitcoin might keep that totalitarian instinct in check and to circle back to Brady’s point, we might be 10 years away from the beginning of the Bitcoin Renaissance. And that’s exciting.
I couldn’t agree more. A couple of things jump out at me. One is, so there’s the law of decimation. It basically says, ” Any form of order we create…” Any tool any institution, 10% of everything we create tends to depreciate per year, tends to break down, right? So your maintenance costs on your boat’s is going to be on average 10% per year, or a building, even our social institutions. And ancient Roman armies by the way, they would implement this principle of nature. I think the rule was, anyone in their battle group retreated, they would randomly kill 10% of the soldiers. So it gave everyone a major disincentive to mal performance.
So, I think that principle is actually what drives, at least partially, is driving these turnings, right? Cause we have this emergence of institution and it maybe reaches a little bit beyond its original purpose and it starts to break down. And then finally it collapses because we need something new, right? We’ve outgrown the old model, so to speak. And I think Bitcoin maybe… I don’t know the real sample size for the Turning analysis here. I know you went back at least three turnings in your piece. So I guess that would be several hundred years, but in my mind there is a possibility Bitcoin breaks this whole cycle, right? Like with Ray Dalio, he has these long-term short-term debt cycles, right? That he thinks that is a law of nature. That’s this is the way things work all the way back to biblical times.
But I would argue that itself is rooted in the corruptibility of the money. So now that we have an incorruptible money, that we may actually break the short term longterm debt cycles. We may just become a less debt addicted society in general. I would… Again, not having read the Fourth Turning yet. I would argue that I think Bitcoin could actually change the shape of these Turnings over time, because it is a social institution that revivified itself. Bitcoin is not a static institution. It doesn’t just break down at 10% per year and then eventually will outgrow it. Maybe we will, who knows? But it does refresh itself. It does consume disorder and entropy to become better over time. And as far as like, how important that is, to have something that guides humanity that is beyond his reach. It’s like any axiomatic… Any system of logic, you have to anchor it into something outside itself.
When you’re going to first principles, there’s always something underneath it, and I think, even at the bottom of capitalism, we have the Judeo-Christian mythology essentially. So even capitalism itself, this system designed to optimize for trade, has these axiomatic roots in Christianity, which is a body of knowledge, mythology, religion, whatever you want to call it, that exists really beyond the control of man at this point. It’S like Bitcoin, it’s everywhere and nowhere, no one can change these stories. And so I think, any direction you look, anything you look at through the lens of Bitcoin, it just forces you to see it with new eyes.
Oh, absolutely. There’s no doubt about that. And we see it through hundreds, thousands, infinite analogies. Basically you can take just about anything that you know deeply or study or understand or read about, and apply the idea to Bitcoin in some way or another. And that’s why we have all of these wonderful analogies describing Bitcoin as entropy in a battle against entropy and mycelium networks and planting trees. And there are dozens that have been written about very extensively and hundreds more that we talk about all the time. It’s something that… I want to bring this back to the idea of the Fourth Turning and the prospects for the next 10, 20 years, the idea of the Bitcoin Renaissance and the idea that… Brandon wrote about this as a great phrase, that, “You’ll either a rule by free market or by force”. And Brandon you haven’t talked about this yet, but I know that you write about this in your piece that, typically history tends toward a physical war throughout history during times like this.
And now we have the sort of free market X factor. We don’t have a money that’s able to be co-opted by the state in order to fund the Wars, which is what has been done right through history. Many times through our history, the reason we’ve gone off of a sound money standard was for some central authority, a King or a nation state to fund a war. Happened in the civil war happened in world war II. World war one kind of set the stage for that. So, do we think, or do you guys think, I’d love to hear you talk about whether or not this free market money as an X factor during this Fourth Turning, could lead us toward a new First Turning or even just a new sort of overarching Super cycle, because we have the money that’s out of control of central authorities totalitarians.
Yes. So first point, you mentioned Dalio Super cycle the long-term credit cycle. Yeah. Interestingly we’re lining up pretty nicely with that. You can also zoom way out and look at the Sovereign Individual Thesis and say we entered the information age, those are a bit longer term cycles. But there’s at least three of these observable mega trends overlapping right now. And simultaneously we’re seeing Fourth Turning type characteristics showing up around the world. We’re seeing this in China. We’re seeing this in Duterte in the Philippines, India’s Modi, the yellow vest movement in France, there’s all these populous uprising. So, what it appears to have happened is we sunk the whole world together after world war II in the Bretton Woods Agreement. And so this is the first time in my understanding that we’re having a Fourth Turning globally. I assume that the entropy increases the uncertainty or volatility, which could get pretty scary. Next point is that nature or naturally in society, we trend towards inequality. And this is because we have differences in natural abilities.
Some people work harder, some people get lucky. And so if you look over time, the natural trend is towards inequality. And the only thing that fixes inequality are mega problems, essentially like war, famine, societal collapse. Economic collapse, doesn’t even fix inequality. Economic collapse actually makes inequality worse. Now there’s a two year down period. And then the wealthy people take advantage of the crisis and the normal people get screwed. And so my belief is that these Fourth Turnings, even under a Bitcoin standard, we’re still going to have natural inequality, hit a breaking point. The old people will have the money. The young people will push back and not be optimistic and they’ll need the game board shifted back in their favor.
And so I actually originally wrote this article saying that Bitcoin is going to break the cycle, which is the most foolish, blind Bitcoin thing I could do. But now I don’t actually think that. I think it’ll just smooth out the volatility and prevent some disasters. Now, the question is, do we need a total war every 90 years just to maintain equality as a civilization? That feels pretty crazy. It feels like we should figure out a way around that.
And I do think Bitcoin could prevent total war. We just have to figure out a way to prevent inequality from getting so bad. And I think that that’s probably a symptom of the money. So theoretically, the cycles could be longer as we trend towards inequality, or maybe it won’t get that bad. I’m not exactly sure, but I see Bitcoin as a pressure release valve here. And it’s just a way to prevent the potential energy from getting too bad. And this works on the individual level, a company level, the state level. Individuals can protect their own purchasing power. They don’t have to be tied to the sinking ship in their developing country. They can migrate out of their country with their own money. I think that’s really nice for the individual companies are going to protect purchasing power. We’re seeing this happen at an accelerated pace. We’re even seeing nation States, not the most favorable ones under the dollar hedge money like Iran and Venezuela, but they’re using this tool to protect themselves during a period of chaos.
And so I think those are all optimistic things for our species. I think it’s possible that we never have any of these total Wars. And we just have some sort of like competitive proxy, coldwar-esque], it would be the peak of the conflict, but we will have to figure out a way to prevent mass inequality, because if we don’t, people are going to be riding down the streets. And so I do predict the next 10 years we’re going to have massive deficit spending increases in central planning, a new, new, new deal, whatever we want to call this stuff, UBI, it’s all coming. But what will prevent it from getting over overdone and too violent is, my belief, Bitcoin. And so, I’m optimistic, but I don’t think we can escape these cycles because they’re an emergent human civilization thing.
Yeah. Jeff Booth talks about deflationary money, Bitcoin being inflationary money and pairing with deflationary technology. And kind of has a resulting optimism about the near term future in terms of equality, right? Access to quality of access to like basic needs, et cetera. So that’s something interesting. You can check out The price of tomorrow, and he lays out those ideas. Rob this quote from your piece, it’s actually a quote that you cite American pragmatist, William James. And this is going to, I think it’s kind of amazing because it really brings together both conversations here, this conversation of entropy and disorder of the Fourth Turning of Bitcoin being sort of an X factor in this fourth turning age, the quote says, “So far, war has been the only force that can discipline a whole community. And until an equivalent discipline is organized. I believe that war must have its way”. Discussed.
Yeah. The American pragmatists are just an amazing school of thought and it actually emerged around during Civil War America. So when the last major war was being fought about slavery here, this school of thought emerged and it is very powerful. And I think to get to that, I would say… Brandon just alluded to these protests occurring all over the world. Where there are millions of people protesting their government to a degree never before seen worldwide. And a lot of this is driven and coordinated by digital technology. And to tie that back into the mega trends, I think that this whole COVID situation, which was predicted by the way, also in The Sovereign Individual, that States would use the specter of global pandemics to lock down borders and take away civil liberties and control people.
So I think this whole scamdemic frankly, was intended to drive divisiveness at a time when people were protesting in unity at a rate never before seen. So, the timing was too perfect by the way, there were several million man protests going on in China right when the scamdemic was announced. So, we were having the wool pulled over our eyes still like we have throughout history. And I hope that by people reading things like The Sovereign Individual and The Fourth Turning and this other work that we’re alluding to, that you’ll start to see the truth behind all of it. It is a group of people trying to organize society by force.
They’re trying to shift the balance of power away from free market, towards force, that’s what’s behind all of this. And to the point about inequality, inequality is ineradicable. By the way, very thing in nature adheres to this. It’s the Pareto principle, 20% of the stars in the universe have 80% of the stellar mass. This isn’t something that’s capitalistic. This is not like we screwed up the system. And that’s what created the Pareto principle. The Pareto principle is intrinsic to nature. So wealth inequality will persist so long as there is a variation of skill, know how, physical capability amongst people, which is forever. We can’t change our own nature. What we can do, and this is a very capitalistic argument, is, we can strive to maximize wealth creation.
Such that we’re all more wealthy, right? The wealth inequality will still be there, but you’ll shift the entire scale to the right, such that we’re all more wealthy. Whereas today, like in the US it’s common to need to work at least 40 hours a week to meet your basic needs. Just to survive and maybe save a little bit of money. That’s being inflated away, by the way, by optimizing for trade and moving into a more pure capitalistic environment, we can actually increase wealth creation, such that we can pull that number down, to say 20, maybe even 10 hours a week of work necessary to meet your basic needs. And then everything else on top of that would be gravy. So I think Bitcoin in that way it will never… You can’t fix wealth inequality. So anyone that thinks you can have equality of outcome, that’s a communistic fallacy and that individual they’re at best misguided and at worst, a murderous ideologue, you cannot trust that individual that wants a quality of outcome.
It’s unenforceable. What do you want? If you’re having brain surgery. Do you want just the… Everyone’s a brain surgeon? You want someone with skills. Skills imply inequality. There are going to be people that are better at things and people that are worse at things. What’s important is that we organize them into a place where their skills are put the highest and best use. So we can seek to strive for equality of opportunity, but not outcome. And that’s what Bitcoin essentially represents, is this perfect equality of opportunity. It’s a universally accessible money with symmetric rules that cannot be changed. So, it really optimizes for that. And to get to William James, is that, he basically saw the world, through a similar lens of these Turnings.
And he’s saying that there’s never been a force in the world that could unify people and discipline them and direct them towards a singular action, like warfare. There’s just nothing like it. And that we would essentially never see an end to war until we discovered something that was its moral equivalent. So, what he hypothesiz is that if we could somehow create a disciplinary force that was nonviolent, that could actually give people a disciplinary force through which to unify themselves and to array themselves behind. To give them a battle to fight, because people without a battle to fight or without a challenge, back to entropy and anti fragility, if we cut ourselves off from the pain signals, from the stressors, then we stopped learning. We stopped developing. It’s natural in us. We need challenge. We need strife. We need something to face.
And I think Bitcoin there, it really does hold, at least in my mind and heart, the potential to be the moral equivalence to war, because I see Bitcoin as this battle, right? We’re fighting this battle in ideological, philosophical space. Seeking to reclaim freedom and truth and virtue for ourselves and for the world. And when you tie into that it is also as defunding the kinetic war machines that are funded by central bankings. And it’s impoverishing these ideologies of inflationary monetary economics. And it also gives us this battle to fight for truth, freedom and virtue. To me it seems like it could actually be that force and time will tell.
Yeah. That quote, and thanks for bringing it all together and bringing it back to that quote in Bitcoin being a non-violent discipline that could be equivalent to war, just reminds me of that Hyatt quote. So the James quote is, “So far war has been the only force that can discipline a whole community and Intel and equivalent discipline is organized. I believe that war must have its way”. And then Hayek saying, “I don’t believe we shall ever have good money again, before we take it out of the hands of government”. So it’s basically the equivalent there saying that, we need something like Bitcoin in order to avoid Wars or to discipline society to the same degree that war could and we would have to take the money out of the hands of government to have a good money again. So I think that James quote just really instantly recalled the Hayek quote to me. And I think they are cut of the same cloth. Brandon, there’s a lot there. I want to give you a chance to take it and run.
Yeah. You threw up that Voskuhl quote saying that Bitcoin is a war by other means. Yeah. What came to my mind initially was how can you possibly go fight and send your soldiers to a far away land when you should be just trying to compete for some Satoshis. And maybe it is just the fact that our enemies are ourselves and competing against the market and making our lives better. Maybe it is sort of a moralizing force in society that doesn’t allow all this immoral madness, like the war machine or things like that. And I also was reminded during your last point there, Rob, which is that power is up for grabs right now, we’re going through a transition period. It’s very clear the financial system’s are going to be replaced. There is going to be a lot of political changes.
And during that time, everyone knows it’s bad. And so the politicians are actually weaponizing the fact that it’s bad and everyone realizes it. And so they’re going to push on that pain and make that pain even worse in order to rally the troops, which again increases populism both on the left and the right, they’re playing the same game. And this is not true in a third Turning, just to make this point clear from like the early eighties to 2008, politicians would say, everything’s fine, don’t worry about it. They would minimize the problems, but during the crisis, it’s in their best interest to maximize the problems. And you see this in political campaigns like, drain the swamp, various other ones, hope and change with Obama, Bernie’s campaign was the same deal. And these were massively popular campaigns because the pain’s bad and they’re sort of just digging into it.
And so under this context of massive change coming, power’s up for grabs. I think it’s important that individuals stay vigilant here. We’re not powerless. This next period could end in tragedy or triumph. Will we end up in another war or American civil war, or we’ll be figuring out a way out of this and cooperate and move forward and sort of put thiS inner conflict between countrymen, beside ourselves. And so I view this decade that we’re in right now, to set the context and tone for the next a hundred years.
And so it is a very important point. And if we’re not collecting Stats, maybe we’re trying to go to Mars or some other greater purpose that we can prevent ourselves from killing each other. I don’t know. But I do agree with the point that humans need an aim and preferably an aim that’s not necessarily intrinsic to ourselves, not an animal body type basic needs, something greater to drive us. And that sort of serves as a moral compass, whether it’s religion or we all agree we have to go find new lands or whatever it is. And so I do see this moral thread sort of wrapping things together in the name of Bitcoin.
I would just add to put a button on that, is, bitcoin too was born in war. The Genesis block wasn’t released in warfare, but cryptography, that’s a war born technology that was used to send secret messages between warring parties such that your opponent could not decrypt what you were saying. It was used to encrypt communications during war times. So Bitcoin is this military grade encryption technology used to de weaponize the monetary system, which I think is super interesting. And it gives us… Again by restoring this free market paradigm, it gives us this forum through which to channel our competitive impulse. Like instead of needing to go to battle or having this violent impulse towards other nations, we can actually channel those energies into a positive direction, into free market competition, into serving one another, into better satisfying wants across time and to creating more wealth. We can shift our predilection towards battle and warfare into a different domain. And Bitcoin enables that in a very interesting way. And there’s a… His name escapes me at the moment, but he wrote Fingerprint of the Gods. He’s a great podcaster. I was introduced…
Graham Hancock. He talks about the oldest lie. There was some poet that quoted the oldest lie that, “It is a glory to die for your country”. He said that is the oldest lie. And I think Bitcoin, through that lens actually give us this means of transcending nationalism. Because in 500 years, we could look back on this and think it was crazy that we used to think we were these individual tribes that wanted to go blow each other up. It’s like, why didn’t you just figure out that you could channel these energies positively for everyone forever. What’s the point in blowing each other up and fighting over stuff. Is just anti economic. War, it contradicts economics and human cooperation and freedom. It contradicts everything that we stand for in a sense of virtue and morality. So that’s another way I look at Bitcoin as possibly being this super state to which other States ultimately have to bend the knee.
Yeah. You bring up a really good point there, the social scalability point, which is that, we’re sort of trapped. We have a glass ceiling of an industrial age, who’s got the biggest army, who’s got the most tools and we’re just sort of squabbling over resources and war is profitable. However, probably now we could say war is not profitable, but up until very recently in human history it was. And so hopefully Bitcoin does sort of create this economic thread that connects and supersedes the desire to go to war. And if that is possible, what type-
It’s the desire to go to war and if that is possible, what type of cooperation could the human species come up with? If we didn’t allocate extremely overweight amount of our resources towards war. I don’t know the numbers off top of my head but they are very, very staggering and if we get out of this, humanity could have a totally new revolution coming, totally new renaissance of productivity and excitement and that’s something to work towards. That’s something that is very easy for me to dedicate most of my waking hours to.
I feel good about than, I feel good about that being surrounded by people like you guys and all the other people who are coming into this space with such incredible vigor and intellectual capital and willingness to work hard for this. And I think we do need that, Bitcoin is going to face its big challenges in the next decade here. And I think we have to figure out how it fits into regulations. Is the state going to fight it or are they going to give Bitcoin a free pass, kind of like how gold has and what is the future of the financial system? And so, yeah.
I was thinking about this last night, actually, I guess it’s being down the Bitcoin Rabbit Hole so long, but it starts to look so simple to me it’s like what do people enjoy in life? Right. We enjoy freedom, we enjoy being able to travel, being able to eat good food, play with good toys, party, have fun, explore, be creative, like all these luxuries of life that are created by the free market. Right. They do not just exist in nature. So you couldn’t just have this… You couldn’t just appear in a blank state of nature and be a communist and have anything to communize, right? There’s no capital created. So, there’s so much more possibility we create for ourselves by just adopting an alignment with nature that it supports everyone achieving or at least moving towards their ends. Right.
I don’t think there’s anyone in the world that just wakes up in the morning and wants to go to war. Right? Like the ultimate aim of that is to go and take stuff that you don’t have. So it just seems to me like there’s this, the free market gives us everything we need. Right. And so if we can just realize that collectively, right, and move past this misguided false utopia of which we’ve already learned about in the 20th century with Soviet communism, we’re sort of currently learning about with monetary communism, which I’ve been calling a monetary socialism for some time but I’ve found that, that word is just too, it’s too favored.
People think socialism’s a good thing. I think because it has the word social in it. So I’m just going to call it communism because at least here in the U.S we know the communism doesn’t work and central banking is monetary communism essentially. If we can just get past these models of force, right, again how do we organize ourselves by force or free markets? Freedom, right. Freedom is creative. Tyranny is disruptive. This is fundamental to reality. So my hope is working with you guys and working in Bitcoin that we can hopefully help people see this truth, which helps everyone. So,
Yeah, completely agree. I, a couple of points that came to mind during this discussion about Bitcoin and preventing war one, Alex Gladstein points this out and it’s been pointed out with many other people, but he points it out in a lot of his talks that to democratic societies like Western democracies, have never gone to war against one another. And that’s, I think can be attributed to the fact that there’s a lot more cooperation between these countries and in the form, especially in the form of trade agreements, right? So there is a lot more trade and cooperation, economic cooperation happening between these countries, which means it’s like economically detrimental to go to war with one another kind of to Brandon’s point. And to that end, if you have money that is globally, encourages the global cooperation global trade, because we have one money around the world, that’s not tied to any particular country or nation state.
Then you can basically come to an agreement. Enemies can come to an agreement. Bitcoin is money for enemies and still trade with one another. And once you establish those kind of channels of trade, it becomes less and less profitable or less and less of a reason to go to war. Even if you have like moral disagreements, which might overcome those economic concerns, but it would make it a lot harder to overcome them. And then also the idea that Bitcoin democratizes final settlement, I think is really important, right? Because it takes it out of the hands of government right now, it’s really only the Providence of central banks to actually finally settle economic transactions. They accumulate and conglomerate them and batch them up into these giant transactions. And final settlement happens between central banks.
But with Bitcoin, like Brandon was saying, it’s sort of this for media and technology that gives every person who is on the network, the ability pretty cheaply and easily to have final settlement over their individual transactions. And that’s being able to demand that and have the accessibility of final settlement for individuals, really is a check on not just governments, but corporations and other entities that will tend to like centralized power. And I think that, that’s also results in a check on war as well. Governments can’t metastasize as much without control of the money. And that’s checked by democratize final settlement.
At one point to add you, is that speaking about war, first a funny point. So I forgot the line, but it’s essentially no country has ever been invaded if there’s a McDonald’s in that country, which is sort of illustrates the point that trade supersedes war and speaking back to Bitcoin and cryptography in general, this is an asymmetric to technology. It favors the defense over the offense and that sovereign individual pointed this out very nicely, that swings the power towards defense instead of invading at the same time in historic Wars, let’s say World War II, you go invade country and you go steal the gold immediately. That’s the first thing you do. You take the money. However, private keys are among the easiest type of way to prevent that, right? It’s the most defendable monetary source you can probably ever have. And so what are you going to do?
Go knock on the door and ask for private keys. They’ve got a multi continent multi-six set up, you can’t get the money. And so it just disincentives poor behavior in the term of war. And so, again, all these forces are aligning to minimize both their offensive capability with the money printer, and then the reward is even smaller. And if you can’t print money, you’re going to have to focus on trade more. If you want your country to be wealthy and you can’t just export inflation or any of these other little fancy accounting tricks rather than creating real value. And so I don’t see how that doesn’t help humanity massively.
Yeah there’s, I have a quote on the piece that is very much along the lines of our countries been invaded that hasn’t McDonald’s if goods don’t cross borders soldiers. Well, right. It’s, if we don’t have this interdependency of trade, this geopolitical cohesion among nations or groups, then there’s just, there’s no incentive to collaborate, right? You need to trade, you need to have these collaborative relationships. Otherwise, your relationship is more likely to drift towards something combatitive and Bitcoin, the other thing about, it takes private property rights, I think largely out of the hands of government, right? So we’ve needed government historically to hold this monopoly on violence and to protect the private property rights of individuals, right. To wield the monopoly on violence, to say such that no other group can come in and violently violate the relationship between you and your property.
Right? So, yeah. And call the cops or someone steals your car breaks your house or whatever. But I think that Bitcoin, by being this property right, that is totally agnostic of government becomes a real game changer, because the thing about that is that governments have that absolute authority essentially to honor or dishonor private property rights. But by having money that is independent of that authority, it really shrinks the demand for all other assets, right? Every property right in the world is a government IOU, right? You think you own your house, but they come in with eminent domain and say, “Hey, we’re going to build a pipeline through here. Here’s your check.” Right? You don’t own your house. They’ll take it from you whenever they want it. Or they can do something to a lesser degree and it can just increase your property taxes over time, or they can push you out of it, which is happening by the way, in many places in the country. States are largely insolvent, property taxes are increasing and likely to increase more into future.
So I just, I think that Bitcoin and changes our conception of property rights in a lot of way, because now we don’t need this monopoly on violence to honor the most important private property right, of all which is money. And I think it will be interesting to see how that shakes out. So by creating this huge demand for itself, by being its metro proprietor property right, if you will it’s going to suck value out of all other inferior property rights, which then will, which it’s also defunding large top-down federalized government. So I guess property rights and other assets revert back to a more localized government, which would the government originated as was kind of a localized protection racket. So I think that’s that also dovetails nicely into the sovereign individual thesis that had actually causes the large state to fragment into many smaller States.
And just one comment, I saw something in the chat people were saying, well, when if Bitcoin comes in pass and we defund government, then all these jobs will be lost. How will people survive? I would encourage them to go out and read the book economics in one lesson. It’s actually, there’s the seen and the unseen, right? And we actually drive unemployment by car, through inflation and through government intervention. Because every time you confiscate resources to reallocate it towards some politically determined end, you’re actually draining the free market of its ability to optimally deploy that capital, whether it’s human capital or personal property.
So there’s, I would argue that like homelessness, unemployment, despite central bank’s best efforts, by the way largely these, these are driven by manipulation of the money supply. So again, Bitcoin, by eliminating pulling government’s hands out of the money supply actually shifts us back to the free market paradigm, which is the most intelligent capital allocator in the world and the best wealth generator in the world. So it is, it holds the most promise of any socio-economic system we have ever created and eliminating or minimizing unemployment and minimizing homelessness. And if you’re thinking that, Oh, the jobs are going to go away, like you’re, you’re not thinking correctly. You’re thinking very first order. You need to think second order, third order to start to understand Bitcoin and its implications on the world.
Yeah. I’d love to step in here regarding property rights. And during the fourth term in what historically happens is that the government needs money and they get greedy. They have too much debt and they have to figure out what to do. So they scramble. And there’s also a populous way that supports this. So in the thirties, they said, soap the rich today, we’re trying to eat the rich and billionaires are bad, right? That’s the sentiment. And so they’re going to come for your money. They’re going to raise property tax. They’re going to increase marginal income tax. In the thirties. I got up to 65% or something crazy for the top bracket. And you’d be silly not to think that, that’s coming to America right now. If they introduced central bank digital currencies, if you have capital on the sideline, they’re going to tax you with negative interest rates specifically to your account.
And so what does this do? This forces people with wealth to say, where am I going to store my wealth? The traditional ways like real estate and bonds are gone, dollars are worthless gold, maybe. Sure kind of sort of, but really what happens is that these people are going to look around and they’re going to realize that Bitcoin reinvented property rights. This is the strongest opportunity here. The government can’t reach their fingers into my private keys. And so Bitcoin is going to be extremely favorable to big money over the coming years. And I had a tweet recently where it was essentially everyone is short Bitcoin, but only about 1% of us realize it. And I think that’s true. It’s just an IQ test for the globe. It’s people waking up to this new thing and the longer it takes you means you have a higher price.
And so that’s just the game we’re playing. And if we go that route, Bitcoin’s going to be massive and it’s going to change society because now, and property rights are foundational to society. It enables you to work for something and think long-term. And that thinking is when we build important things, it just came to my mind about Nick Carter, his beautiful piece on Bitcoin’s 12th birthday, we’re essentially building something, a cathedral that will not be completed by the time we finish our own lives. So we’re building something longer term than our own human life, right? And there has to be some very strong catalysts in order for that, to make sense that we’re not going to see the fruits of our labor, but we still dedicate time to this. So it’s clearly going to influence society.
100% agree, what I see coming, actually, and you see this already. We had Druckenmiller announced yesterday that he now holds Bitcoin, which he’s, reputably one of the best investors in the world. What I think will happen is that in these turnings, right, there’s a large to Brandon’s point, a large governmental effort to redistribute the wealth, right? To sort of calm the social fury smart money, right? People with assets are going to figure out very quickly. There’s only one untouchable asset in the world. There’s only one place to put your wealth that exists entirely independent of any government decision decree, any war, like there’s nothing that can unilaterally change or confiscate your wealth stored in Bitcoin. So I think that the game theory of money, as we see these as governments try to clamp down on wealth redistribution efforts, you’ll see a lot of demand surge in the Bitcoin.
And again, because of its perfectly inelastic supply, you’ll see that in real time, the market will signal to you loud and clear when that’s occurring. And I love the point too about that Nick’s piece is great. That is the definition of civilization almost as how many of those projects we engage in, right? How, selfless are we becoming? How much of our efforts are going towards creating a better tomorrow for the collective versus pursuing our own individual narrow aims.
And that ties back into actually the quote I opened my piece with says, “A pile of rocks, ceases to be. So when somebody contemplates it with the idea of a cathedral in mind.” So it’s, we develop larger and better ideas for civilization through this process of free trade. And when we do what’s opposite and try to rule it by force, we shrink our time horizons. We shrink our ideas and we basically, it’s like an auto-immune disease on humanity. We’re attacking ourselves. So, the grand promise of Bitcoin I think, is to just help eliminate a lot of that self-defeating effort that we’ve succumbed to over time.
Love it, Brandon, anything to close with? I mean, we could go all night. I know we could. I mean, I know obviously with the three of us, and I know the two of you guys have had like, you double digit hours conversations, but do you, let’s wrap this thing up pretty soon. I would love to hear some closing thoughts for you, man.
Yeah. So closing thoughts, I kind of touched on this earlier, but we’re in a really, really potent period in history. And so I just implore everyone to pay attention, speak up, get off your Netflix, teach yourself something and prepare yourself for a fourth turning. If you go look at the tweet thread, pinned on my posts on my Twitter, you can see the last tweet I mentioned, ways to prepare. And that could be things like, have a second job or don’t be cancelable or have a second passport own some Bitcoin essentially just make yourself antifragile. And that’s the only way to weather the storm. And of course, during this chaotic period, there’s going to be tremendous opportunity. We all understand that Bitcoin is going to play a role in that. So obviously get yourself some of that. That’s kind of what I would say to the broader audience, to this group here. I had a wonderful chat. I have lots of little threads to tease out now in my own time. And yet speaking to Brady’s point about previous conversations between Robert and I at Bitcoin 2019, we stayed together and after the conference we’d come home all excited and stay up for like three, four hours in the middle of the night, having insanely cosmic conversations and too bad, we didn’t record those because those lost tapes would be impressive. And so thanks for having me guys really, really appreciate it.
Yeah, those are awesome because we had some whiskey like the beef steak party and all that. And man, I remember waking up the next day. It was, we were just on the edge of our understanding. And also it’s kind of like the edge of consciousness too. Because we’re like half drunk and falling asleep, but those conversations are just Epic. So we’ll have to do that again sometime I think that like Brandon, hits the nail on the head that we can only navigate the chaos that’s coming by increasing our own optionality. Right. And Bitcoin and clearly an instrument of pure optionality as money. And the asset that I think gives you the greatest optionality over time. Right? It’s just something that’s disruptive to gold. So it’s clearly a very precious in that sense. And then to citizenship optionality, right? You don’t know, again, we’re moving into this higher entropy time. You don’t know what state is going to clamp down the hardest. You don’t know what laws are going to be passed. You don’t know what political games are being played.
There’s this African proverb that comes to mind. It’s like when elephants battle, the grass is destroyed or something like that. So like you want to make sure that you’re not collateral damage for these larger games that are being played. And you ensure your chance of success by optimizing your own optionality. So that’s citizenship money. I would say anywhere that a government has a sway over you like real estate, you really have to think about your investments differently. I think at this point in history, and I would say for the general audience, I just, I found extreme value in just asking that question, right? Like what is money, if you just keep thinking about it, just make it, install it in your kind of general operating system. If you’re just constantly thinking about how money interacts with the world and what it is.
I think it just keeps throwing out new truths and all different domains. So that’s been very helpful for me and in my explorations of the Rabbit Hole and learning and preparing myself, I always point people towards the sovereign individual. I think that’s the best articulation of this change we’re moving into, but sounds like I need to read the fourth turning as well, and yeah, to this group you guys are awesome as always great to see you. I would love to do this again. Brandon’s work is incredible. If you haven’t read mycelium of money, it is just wherever you’re at in the rabbit hole. If you haven’t read it, I guarantee you’re going to be further down after reading that piece. And yeah, I love, this is my favorite part about Bitcoin is getting cosmic. So this is great guys.
Absolutely, man, I knew this group was going to be a cosmic one. I was privileged enough to spend about an hour at that beef steak. I remember when it was closing up there were a bunch of like shorter conversations as you’re trying to meet everyone, but as it was coming to a close, I remember spending the last hour of it with you and Brandon and just having my mind blown completely I was relatively new at least compared to now to Bitcoin and the ideas. And so I encourage everyone to go to a Bitcoin conference and the next one, Bitcoin 2021 is in LA the end of April. It’s like the 30th through May 1st. I think that’s going to be amazing. So check out Bitcoin 2021 conference head there, if you can, like just hanging out with Bitcoiners is an just amazing time and time you’ll remember and cherish forever.
And when we look back 10, 15, 20 years from now, and we’re just like really proud to have been there early and been able to spend time talking with all of these people who have really helped to lay the foundation to make it happen in the best way possible. I also want to make sure you all know about Swan Bitcoin swanbitcoin. com, best way to accumulate Bitcoin automatic recurring buys. You can go to swanbitcoin.com/breedlove or swanbitcoin.com/Quittem either way. You will get $10 of free Bitcoin and you’ll support the work of these guys. You know, it’s the referral links and you can join the Swan force, which is our referral program. And you will get a page similar to what you’ll see at swanbitcoin.com/ breedlove, an image or icon up at the top and a quote, we’ll greet the people you’re referring and you’ll earn 25% of Swan’s fees on all of their purchases for three years.
So that can really add up to some meaningful sats. I saw someone in this chat say that a 100,000 sats will be a big deal in 20 years. And you can earn a lot of sats. That will be a big deal if you hold them for a decade or two down the road. So you can earn money recruiting new Bitcoiners, that’s swanbitcoin.com/enlist in the Swan force. And as I mentioned at the top super excited about Bitcoin TV, this is just the beginning for Bitcoin TV. You’ll find it at BitcoinTV.network or on our YouTube channel at youtube.com/swansignal. That’s running 24 seven, and it’s a curated feed or stream of the best Bitcoin content out there on the web. We will be adding to it. We will be improving it and eventually we’ll be launching it on over the top network channels like Pluto TV, and Roku and Samsung.
So we have big plans for it. This is just the beginning. Go check it out, give us your feedback, let us know what you would like to see on Bitcoin TV. Our DMs are open at Swan Bitcoin on Twitter. We also have a telegram channel t.me/swansignal. So yeah, you can go to either of those places and let us know what you think about Bitcoin TV and what you’d like to see running on Bitcoin TV. All right, that’s it for today. Thank you to Robert and to Brandon for a fantastic time, a great discussion. This was truly a great time. It’s really fun. And I always look forward to sponsoring a live every week for conversations, just like this. Join us again next week. Next Tuesday, same place. And we will, we’ll do this all over again every week. Thanks guys.
Episode 8 –Andy Edstrom and Ansel Linder
Episode 9 –Rockstar Developer and Jeremy Rubin
Episode 10 – Bitcoin TINA and CK Snarks
Episode 11– Gigi and Knut Svanholm
Episode 12 –Adam Back and Preston Pysh
Episode 13 –Alex Gladstein and Matt Odell
Episode 14 –Robert Breedlove and Tuur Demeester
Episode 15 –Isaiah Jackson and Max Keiser
Episode 16 –Gigi and Udi Wertheimer
Episode 17 –Aleks Svetski and Jimmy Song
Episode 18 –Stephan Livera and Marty Bent
Episode 19 –Mark Moss and Ben Prentice
Episode 20 –Samson Mow and Parker Lewis
Episode 21–Lyn Alden and Jeff Booth
Episode 22– Robert Breedlove and Cory Klippsten
Episode 23 — Saifedean Ammous and George Gammon
Episode 24 –Jameson Lopp and Eric Martindale
Episode 25 –Preston Pysh and Andy Edstrom
Episode 26 –Lyn Alden and Nic Carter
Episode 27 — Erik Townsend and Yan Pritzker
Episode 28 — Max Keiser and Tone Vays
Episode 29 –Preston Pysh and Andy Edstrom
Episode 30–Raoul Pal and Vijay Boyapati
Episode 31–Dan Tapiero and Dan Matuszewski
Episode 32–Robert Breedlove and Parker Lewis
Episode 33– Danielle DiMartino Booth and Michael Saylor
Episode 34– Jeff Deist and Stephan Livera
Episode 35–Will Reeves and Yan Pritzker
Episode 36–Alex Gladstein and Marty Bent
The Number Zero and Bitcoin –Robert’s Writing
An Open Letter to Ray Dalio –Robert’s Writing
Masters and Slaves of Money –Robert’s Writing