The World's Greatest Ponzi Scheme

No banks, no fees, no inflation. These

are the potential perks of this thing

called Bitcoin.

>> I think that something like Bitcoin is

really important. Bitcoin is worthless

artificial gold.

>> Bitcoin is digital property but without

the risks and uh liabilities of of

commercial real estate.

>> The reason why people are so scared

about them is the ability to take half

trace. The anonymity of it like P2P file

swapping in hit the music industry. This

is the P2P file swapping of money.

>> I would I would short it if there was an

easy way to do it.

>> You can never have too much Bitcoin.

We're uh we're big Bitcoin balls.

It can be pretty difficult to get a sane

answer from social media about anything

really.

>> There's an army of people competing for

your attention.

>> The more extreme their views, the more

attention they can grab.

>> America deserve 9/11, dude.

>> It ends up dividing opinion on important

topics into two angry extremes.

>> Hear us out. Hear us out. Hear us out.

>> Very little middle ground.

>> We need to kill Harabies. It is an

inferior culture in all ways

>> and Bitcoin is no exception.

>> Greatest Ponzi scheme in human history.

>> I close it down.

>> Yet it's been around for a long time.

Long enough to write its own story.

>> Don't leave

us out.

>> Free from any sensationalized takes or

personal agendas. Just facts that make

objectively clear its mostly negative or

mostly positive impact on the world. a

story it's been making since 2009 to

justify its own existence. The question

is

>> does it?

There are many places where this story

could start. In 1971 with the Nixon

shock, ending goldbacked currency in the

1990s with the various attempts at a

digital currency such as e-old or Boney

or even the digital market economies of

games like Ultima Online and Diablo or

October 31st, 2008. In the wake of the

greatest financial collapse seen for a h

100red years, it was in this financial

rubble that a synonymous person

appeared. A man, woman, or group, no one

can still say for sure, highly secretive

in nature, they simply went by the

moniker Satoshi Nakamoto. They would

propose to the world an alternative.

They called it Bitcoin,

a digital currency that could be sent

person to person without the need of a

central bank. It had been thought of

before, but Satoshi was the first to

figure out how to do it without the need

of a central server or control from a

singular authority.

Figuratively, standing on top of the

rubble caused by financial authorities

could not have been a better backdrop

for this proposal. What greater time

than this to offer to the world a

better, more transparent and

incorruptible financial system? Or a

terribly twisted irony that only more of

the same corruption, if not worse, was

yet to come. Almost immediately, people

would have an answer. Just five years

after the launch of Bitcoin in January

of 2009, the network has now gone from

two users to an estimated one to 5

million. In much the same way Jesus

experienced a mass following in the

beginning only if bread was involved,

this small community of mainly

passionate enthusiasts of the technology

became dwarfed by a new mass audience

interested in something else. Bitcoin

seemed to offer money.

This was no accident. Satoshi had rigged

the system to do this, predicting that

it could occur long before Bitcoin even

had a price. But I don't think anyone

could quite have imagined what would

happen next. To put just how crazy

things got into perspective. GameStop

Mania, an event which sent its stock

prices soaring from $17 to a peak of

over $480,

was an incredible 2700%

gain. Tesla launched at $159

and peaked at over 400 in 2021, a

monumentous gain of more than 25,000%.

If you had the incredible fortune to

invest into Apple at their launch in

1980 until their peak, that would be a

percentage gain of nearly 200,000%.

So, how do these compared to Bitcoin's

growth? Other than the electricity cost

of producing them and processing

transactions, a process known as mining,

Bitcoin was essentially free. That was

until October 2009 when a Finnish

computer science student sold 5,000

Bitcoin for $5, giving each Bitcoin a

monetary value of mere fractions of a

penny. From that to over $1,000 per coin

represents a mind-melting

111 million% gain. in case you're

wondering, to the highest price recorded

so far for Bitcoin, that $5 investment

would have been worth 345

million. So, the self- congratulatory

and euphoric feelings held by all those

who had believed in Bitcoin were

self-evident.

>> People are fascinated by anything that

makes new highs every day for weeks on

end, which Bitcoin has done.

>> Imagine how good it feels to be a

Bitcoin millionaire.

>> All of a sudden, I'm like the most

popular kid in school.

>> But they were about to have a rude

awakening.

Tokyo, Japan, home to a humble online

trading card business called Magic the

Gathering Online Exchange, has at this

point in time grown into a worldwide

financial behemoth to reflect this

newfound power and shed its very humble

origins. The name was hyphenated to

simply be Mount Gaus. If you wanted to

buy or sell Bitcoin using your bank

account or weren't techsavvy enough to

understand or trust in peer-to-peer

transactions, you had to use an exchange

website. And if you were around at this

time, you very likely chose this one. An

approximate seven out of every 10

Bitcoin transactions made worldwide at

this time were likely trades made by

users on this exchange. a lot of power

and therefore responsibility for one

small online company, perhaps never to

be replicated again, a topic for another

video. At the time, it was not uncommon

for users to keep every single Bitcoin

they might have owned on a website just

like this. It was simply the most

convenient storage space. Yet, the risks

of doing this are even more obvious than

you might think. In 2011, Bitcoin fell

99% in a single day because Mount Gaus

had been hacked for millions of dollars

worth of Bitcoin. In 2013, Mount Gaus

was hacked again, causing an 83% crash

in price. Perhaps it was through

ignorance, perhaps through arrogance in

the community, thinking that they were

just too big to fail at this point,

which made what was about to happen all

that more shocking and financially

devastating. February 7th, 2014,

Mount Gawk suddenly and without warning

halt services. While users could still

log into the platform and even make

trades, no one could withdraw any of

their own money. The reason technical

issues users would question how this

could happen to the largest Bitcoin

exchange in the world.

>> I want God to say they have all

sufficient funds that that the funds,

the bitcoins, the fi currency is safe.

>> There doesn't seem to be any commitment

or any kind of hope that they'll um sort

anything out anytime soon.

>> Confusion and panic would immediately

sweep over the entire community, causing

Bitcoin's price to plummet on other

exchanges. February 10th, Mount Gaus

issues a press release. In it, they

aimed to reassure investors in the

public, stating that pausing withdrawals

was simply a necessary but temporary

security measure to protect their

customers. In this communication, they

would go on to take no formal

accountability for any negligence on

their part, but rather laid the blame

entirely at the feet of the Bitcoin

network itself. an issue so systemically

critical, they claimed they would have

to work alongside Bitcoin developers to

fix Bitcoin itself before they could

reenable withdrawals for users of their

exchange. A rather odd claim to make

considering other exchanges were even at

this time fully operational and Bitcoin

had seemingly run without issue or any

significant technical changes since

launching in 2009. yet not a claim made

entirely without merit. Picture

contactlessly paying for something. Your

payment succeeds, but the printed

receipt looks weird. The cashier is now

confused if your payment actually went

through or not. And in the worst case

scenario, you're asked to pay again. In

essence, this is what could be done on

the Bitcoin blockchain, the software

that records every transaction ever

made. So, why is this such a threat from

OutGox and their customers? Say you're

at an ATM. You make a withdrawal of

whatever is in your bank account at the

time. The machine spits out your cash,

but suddenly it isn't sure if it

actually gave you your money. So, it

still shows credit on the screen despite

standing there with the very real money

in your hand. So, you withdraw again and

then again and again. The bank pays out

these requests from what little money it

keeps in storage and then starts to use

their other customers money they've

deposited to be able to fund these

withdrawal requests. Mount Gaus is

afraid of being that ATM and that's what

they are alluding to when they claimed

they had to fix a critical issue with

Bitcoin now known as transaction

malleability. Yet, this explanation

would immediately draw scathing

criticism from many in the Bitcoin

community, including Bitcoin developers

and other security experts. They claimed

that the transaction malleability bug

was a quirk of the system and that any

properly implemented accounting

practices and security measures could

easily navigate around this issue. From

all claims levied at the Mount Gaus

team, perhaps the most damagingly was

that this was not in fact a newly

discovered issue, but had existed and

was known about for years. So this was

either a profound display of

embarrassing incompetence from the

world's largest Bitcoin exchange or a

thinly veiled cover up for fraud.

Despite these damning allegations, user

funds would remain frozen and no further

updates would be given from the Mount

Gaus team, at least directly. February

24th,

22 days after first pausing withdrawals.

The fear, uncertainty, and doubt

swirling around for millions of affected

Bitcoin users was going to get worse

still. The Mount Gaus website suddenly

went blank and was unresponsive. Despite

the severity of the situation, it would

not take long before everything would go

from bad to catastrophic.

February 28th. Just a few short weeks

ago, Mount Gaus might have boasted a

valuation in the billions where they are

publicly traded company. Yet, they would

end this same month filing for

bankruptcy. Their total collapse now

made public and official. Taking a look

at the bankruptcy documents that they

submitted to the government, we see all

involved were seeking protections to

avoid suffering legal consequences for

losing their users funds. All of their

users funds, 450

million at the time to be more precise.

This new found financial hope for many

had ended almost as rapidly as it had

sprung up. Yet we know this is not the

end of the story. History might not

repeat itself, but it can rhyme. So why

was this financial devastation, one of

the largest thefts in history, not the

end of Bitcoin? Mark Carpel, CEO of the

now defunct Mount Got Exchange to this

day, maintains his innocence. His

defense was multifaceted, but quite

simple. ultimately pin the majority of

the blame on Bitcoin, not on any

negligence he or his team might have

displayed. It's been a mixed but mostly

effective strategy. He has avoided

serving any jail time thus far, but the

financial harm caused by his once

trading card website was far worse than

his prosecutors could have imagined at

the time. The largest theft to have ever

occurred in modern financial history is

commonly believed to have been that of

Bernie Maidoff's Wall Street endorsed

Ponzi scheme, which was initially

reported to have lost 65 billion of its

customers funds at the time of its

collapse in late 2008. However, when

accounting for falsified reports of

generated profit, as in reality, no

profit was actually ever generated, the

realworld consumer losses were in the

vicinity of $18 billion. At Bitcoin's

peak valuation thus far, the amount

stolen from Mount Gaus would have been

roughly 58 billion. Bernie Maidoff

needed 30 years to grow as large as it

did. Mount Gaus needed just four. In the

immediate aftermath of this collapse,

the critical takes of Bitcoin being

tantamount to a Ponzi scheme started to

gain widespread acknowledgement, if not

agreement.

>> It is totally absolutely crazy, stupid

gambling.

>> You have to really stretch your uh

imagination to infer what the intrinsic

value of Bitcoin is.

>> Just like I've got cash in my wallet

now. There's no way of ensuring your

bitcoins against loss. is one of the big

fears about

>> if you and I buy various

cryptocurrencies, they're not they're

not going to multiply. They're not going

to be a bunch of rabbits sitting there

in front of us that they're just going

to sit there and I got to hope next time

you get more excited after I bought it

from you and then maybe I'll get more

excited and buy it from you. And

actually, we could we could sit in the

house by ourselves and we could keep

running up the price between the two of

us. But at the end of the time, there's

one bitcoin sitting there and now we got

to find somebody else and and they come

to an end. Those that bought in at the

beginning and sold before the end may

have made ludicrous returns on their

investments, while many more lost

everything they had. Very similar to the

conditions you would expect to see at

the inevitable end of a Ponzi or pyramid

scheme. This new financial hope had been

exposed. The very worst aspects of the

finance industry wrapped up in digital

form. The devil itself. Customers of

Mount Gaus who, you know, were using

Mount Gaus as their Bitcoin bank have

lost their savings.

>> They haven't answered anybody's uh

support requests. They've seem to have

just taken people's money.

>> But who or what was truly responsible

for this disaster, the incompetent or

corrupt powerful few, or the system

itself facilitating such behavior? In

the subsequent years that followed,

popular public opinion on this matter

would become increasingly clear.

>> Your keys, your Bitcoin, not your keys,

not your Bitcoin.

>> The most important characteristic about

Bitcoin is the fact that it is hard

money.

>> You've talked about Bitcoin is going to

become the global reserve currency. I

don't think that governments go down

without a fight. Thanks to the invention

of Bitcoin, for the very first time in

the entire history of the world, any

human being can now send and receive any

amount of money with any other human

being anywhere on the planet.

>> Well, we don't need the banks anymore.

>> Bitcoin and crypto more generally are a

humanitarian force and can help

undermine tyranny.

>> It's a long-term property strategy. Uh

it's not a short-term trading strategy.

>> Why would you own Bitcoin if you could

own the dollar? I I ultimately believe

that people are going to opt for

something that is uh not manipulatable u

is not seizable is not sensorable. I'm

really excited about Bitcoin because

it's many people used to ask me, they

would say, well, if these fiat

currencies are going to collapse, what's

going to come in its place? And I always

used to say the free market private

enterprise will come up with a solution,

whether it be gold or silver or

something else. And Bitcoin is the first

free market private money created. It's

a completely electronic currency. Uh

it's there is no central Bitcoin

servers. So, you can't uh the US

government right now definitely sees it

as a threat. They're trying to shut it

down any way they can, but they can't.

It's a beautiful thing. It's been It's

uh not based in any one location. It's

like a torrent. And uh there's no way to

actually shut down Bitcoin.

The people had spoken. Within just one

decade, Bitcoin would go on to

accomplish one of the craziest feats

even the world's most recognizable

brands couldn't easily scoff at. For

instance, 1.8 billion servings of

Coca-Cola are estimated to be drunk per

day. Marl Borro sold 240 billion packs

of cigarettes last year. McDonald's

makes 6.5 million burgers every day. And

a supposedly collapsed Ponzi scheme with

no physical product to back it went on

to achieve a peak market cap of over $1

trillion. A milestone that took the

likes of Amazon and Google over 22 years

to achieve took Bitcoin just 12. How?

What belief fuels the growth of such a

deeply questionable asset? From a report

commissioned by Coinbase wanting to know

the very same. There is a consensus in

the US that the global financial system

is unfair and favors powerful interests.

a sentiment that cuts across all

demographic groups. Americans recognize

that changes to the system are needed

with the majority indicating major

changes are needed. And the major

financial change commonly referred to by

Bitcoin believers is one of the biggest

imaginable, replacing the United States

dollar as the world reserve currency.

Truly an absurd proposition, but not one

made without any merit. The belief

common in the community is that as

Bitcoin continues to climb in value, the

poorest countries in the world are

incentivized to use and store it as part

of their financial reserves and so on

and so forth till the world's highest

governments are forced into using it, at

least in part. Wars have been fought

over far less, but with Bitcoin being

essentially invisible, could it be

stopped? It's a threat even the White

House specifically addressed.

>> Cryptocurrencies such as Bitcoin have

been exploited to support billions of

dollars of illicit activity like cyber

crime, tax evasion, extortion,

ransomware,

illicit drugs, human trafficking.

Many players have attempted to use

cryptocurrencies to fund their malign

behavior. This is indeed a national

security issue.

>> It's a hope that only the most devout of

believers ascribe to currently. But even

a commonly held belief is that crypto

will be globally used for good.

Continuing from that same report, a

majority of crypto investors believe

that the best days are still ahead, that

cryptocurrency is a worthy investment

for the future, and that it will be

broadly beneficial for society to

address inequality in the financial

system. If Bitcoin was truly to become

the world reserve currency as its

strongest proponents seem to suggest it

has all the potential to become, then

they could not repeat the mistakes of

the past. While not a strictly fair

comparison, if the existing world

reserve currency had approximately 11.5

trillion in circulation and Bitcoin

became similarly valued, then a

comparative theft such as the one Mount

Gawk suffered would have been like a

thief running off with over a trillion

dollars.

That a trillion with with a T.

So, is the entire Bitcoin user base at

just as much risk today as they were in

2014, or have they learned from the

lessons of the past? The answer is

they probably haven't. According to data

from Glass Node, Bitcoin stored on

exchanges reached a total peak in May of

2020 of more than 3.2 million coins.

More recently, there has been some

improvement, but still about 2.3 million

Bitcoin sitting on there. So, while

there is certainly a lot of Bitcoin on

exchanges, which is a cause for concern,

they are more widespread in their

distribution than they were in 2014,

with no exchange today having held as

much as Mount Gaus did at over 850,000

coins. Well, at least technically.

Bitcoin held by Binance, the world's

largest Bitcoin and crypto exchange

today, which boasts billions of dollars

in trade volume daily, held a record

692,000

coins from its users in April of 2023,

valued at the time at around 20 billion.

Crazier still, by the end of 2022,

Binance dominated Bitcoin trading,

accounting for 92% of all trades being

made. And according to a 2022 report

from Binance themselves, they hold 74

billion in total crypto assets. This

means that Binance has become

inordinately larger than Mount Gaus ever

was, more than 150 times larger. Like a

modern-day profit of this movement,

there's a lot of faith placed into this

one business. Despite this harrowing

imagery, Bitcoin enthusiasts may argue

that this is not a like for-like

comparison. Mount Gox held over 6% of

all available Bitcoin at the time and

today Binance holds perhaps closer to

3%. There is also a lot more legal

clarity to the space unlike in 2014.

Some exchanges are even publicly listed

companies on the New York Stock

Exchange. Things are just a lot safer

now, right? Perhaps the most significant

thing about things being different today

than it was back then is the example of

what happened with FTX, but not for the

reasons you might think.

>> My job is to make sure that we do the

right things at the end of the day one

way or another.

>> You said FTX has a responsibility to

seriously consider stepping into the

time to save companies. Why did you have

that sense of responsibility?

>> It's not fair to customers and uh it's

not going to be good for regulation.

like it's not going to be good for

anything from a longer term perspective.

It's just that was what was important.

>> How did you get the uptake at scale so

fast?

>> You know, it was really just a lot of

small things put together, a lot of

decisions that we've made around how to

build the product, trying to be as

responsive as we can to customers, to

regulators, to counterparties.

>> In the end, it's the mark that we

actually leave on the world, not the

mark we're perceived to leave on the

world that matters. FTX was one of the

largest cryptocurrency exchanges with

over a million users and was the third

largest cryptocurrency exchange by

volume. But in what heavily echoes of

Mount Gaus, user funds had been funneled

elsewhere, customer withdrawals were

suspended and soon after they would file

for bankruptcy. They lost an estimated 9

billion of their customers money.

Despite the flagrant fraud evident in

the case, the former CEO of FTX, Sam

Bankman Freed, maintained his total

innocence, laying the blame on

inadequate risk management and that the

reallocation of customer funds were well

within the bounds of the user agreement

customers must sign when first

registering. The obvious shortcomings of

this defense were not successful this

time with Sam Bankman Freed being handed

down a theoretical maximum prison

sentence of over 100 years. But the

bankruptcy rocked the crypto world. The

price of almost all crypto assets

immediately began to nose following the

bankruptcy announcement news. The

fallout of these events has rippling

effects throughout the industry to this

day. Yet another major change from today

to 2014 was soon evident. Following the

collapse of the Mount Gaus exchange, it

took Bitcoin 2 years to regain the faith

and trust of the people and achieve the

valuation it had before the crash once

more. And now an arguably much larger

exchange and even more obviously

fraudulent than Mount Gaus was took

Bitcoin 2 months to recover from.

Wherever you happen to fall on the issue

of Bitcoin being either the great

financial revolution of our times,

simply tantamount to a scam or somewhere

in between, the great demand for Bitcoin

is evident in its continued steep

valuations despite these major

tragedies.

In fact, in in an ironic twist of fate,

this demand could be galvanized in part

because of these major tragedies still

not being enough to stop Bitcoin. So

what could now? How do we marry the

concept of Bitcoin being used as a tool

to cause financial devastation on an

increasingly large scale with the

concept that it's a revolution for the

good of humanity? Even if the price

continues to climb, as history suggests

that it probably will. Wherever you sell

Bitcoin, your money just comes from

someone else perhaps just like you, that

bought it. Their loss becomes your gain.

A zero sum game. A reductive argument to

make, but not one without any merit. So,

how then could this ever be a positive

movement people continue to believe in?

Sometimes deeply and passionately.

>> I grew up in the US and uh I see all

these people like, "Yeah, nuke everybody

in the Middle East and kill them all."

And then they have the former Secretary

of State Maline Albbright on 60 Minutes,

one of the most popular news shows in

the US. And they asked her, they said,

like there's reports that more than half

a million Iraqi children have died as a

direct result of US sanctions. And she

looks back at her with a straight face

and she goes,

>> I think this is a very hard choice, but

the price, we think the price is worth

it.

>> Worth murdering half a million kids

because of what the government did. And

I apologize for crying, but it just

disgusts me from my core when I see

government people murdering people

around the world. It's not just

theoretical. These are real people with

real lives and it's real people. And

Bitcoin has the power to undermine

everything they're doing to people

around the world. And they do it through

central banking and through the control

of the money supply. And Bitcoin takes

that away from them.

What if I told you Bitcoin's creation

was more of an inevitability than random

chance? That its success was entirely

predictable. that despite any number of

its flaws, there still remains a greater

need in the world for a system just like

it, and that this need only grows with

time. Well, if you believe that, it's

likely because you believe in one

peculiar but very well doumented social

phenomenon. I like to call it

time to corruption is a freehand way of

explaining a repeating pattern. a

pattern where almost any governing

system will begin to misuse their

authority if simply given enough time.

Much like an unstoppable entropic force,

time to corruption suggests that

eventually power corrupts just corrupts

at different rates. We see it when the

interests of the powerful few begin to

take precedence over the well-being of

the powerless many. Examples of this are

almost everywhere throughout history. In

the ancient Chinese dynasties of Han,

Tang, and the Ming, where land holdings

were being held increasingly in the

hands of wealthy nobles and officials,

heavy taxation, mismanagement, all

caused significant strife in their

empire, leading to widespread revolt and

decline. or in medieval European

kingdoms, the feudal relationships

between the lords and their vassels

initially provided mutual benefits of

work and protection. But due in part to

the aristocracy exploiting the surfs and

commoners through their desire for

excess, this relationship eventually

collapsed. or the extravagance of the

French royals disregarding their

people's strife that eventually was the

fuse for the French Revolution and on

and on in almost all cultures and

societies on earth. Consolidation of

wealth and power eventually becomes the

primary concern of those few in

authority instead of having the

interests of their constituents

principally in mind. Even if ironically

that was the primary purpose of their

given authority in the first place.

>> We beat pharma this year.

>> Over 11 trillion that's trillion with a

T. 11 trillion in revenues. Nearly $2

trillion of actual net income or net

profit from this stuff.

>> It's a fairly nihilistic belief that

society is creeping even if slowly

towards degradation. Yet, that's exactly

what millions of Bitcoin users have

somewhat expressed. It is for many a

type of financial rebellion against it.

Even if they're not confident that

Bitcoin will replace any normal currency

in the future, they'll support it

because it seems right. It seems good.

But is Bitcoin actually effective for a

rebellion? Does it accomplish any actual

good in this regard? From the outside,

it can seem like people only want to use

it to stay even more entrenched in

existing systems. A common mantra of

Bitcoin being when Lambo. Perhaps this

question of rebellion is never so

poignantly demonstrated than by the

tragic history of one particular South

American country, Venezuela, 1970. A

beautiful and wealthy country home to

the largest proven oil reserves on

Earth. even beating that of Saudi

Arabia's where filling up your car

famously is cheaper than milk or even a

bottle of water. But with a country so

deeply reliant on its oil industry, the

discovery of new reserves, other

advancements in extraction, and a global

trend toward more fuel efficiency all

put the economy of Venezuela in

tremendous peril. For two decades

straight, the cost of anything,

including essential goods and services,

could as much as double year on year.

With widespread allegations of

corruption and economic mismanagement,

Venezuelans were disillusioned with

their political leaders. A total

financial reformation was needed which

set the path to power for the newly

elected president Hugo Chavez. A

charismatic speaker who addressed the

country's poor and working-class

citizens promising radical reforms. A

Bolivarian revolution. He painted

himself as the outsider to bring real

change to the traditional political

mold. Exactly what the people wanted to

hear and desperately needed. Much like

at the very start of Bitcoin, what

greater time was there than this to

introduce to the people a better, more

transparent and responsible financial

system? Or, in a terrible twist of

irony, that only more of that same

corruption, if not worse, was yet to

come.

In the immediate years following

President Chavez election, things

appeared to be improving until 2003,

where that and each year that followed

were just as bad as they had been in the

80s and '90s in an attempt to rectify or

simply exploit the situation. The

president along with the central bank of

Venezuela began to remove personal

freedoms from their citizens all under a

thinly veiled explanation. It was for

the good of the people. Starting in

2004, it became a crime for private

individuals and companies to buy foreign

currencies, something many people

previously did to escape the worst

devastations of inflation. The

president, in an attempt to prevent

immediate mass protests, calling for his

removal from office, promised his people

that they could still apply for

permission to regain the right to trade

foreign currencies. It was only later

that people realized how shallow a

promise this was. If you or your

business were part of the wealthy elite,

you likely got the extremely rare

approval to buy and hold foreign

currencies through the Venezuelan

central bank. If you were not rich and

powerful, you would have to turn to the

black market. In so doing, you would

risk fines, imprisonment, and or total

asset seizure by the government if

caught. But it was simply the only

option for many Venezuelans to avoid

financial ruin. Official figures on the

black market exchange rate are of course

not available. But in a study conducted

by two professors of finance, they

estimate that during the mid200s, the

cost of buying US dollars for the

average Venezuelan was two to three

times higher than normal international

rates. And by 2014, it is estimated to

have risen to 50 times higher. Did this

and other sweeping extension of powers

by President Chavez and his government

end up being worth every sacrifice for

the ultimate good of the Venezuelan

people? Nepotism, embezzlement, human

rights abuses, bribery, suppression of

the press, and a lack of transparency

were commonplace. The very governing

bodies that had been democratically

given power to help the economy had used

that power to destroy it instead.

Sympathy generated for the economic

hardships of their people should have

been enough to at least slow the

seemingly entropic forces of the time to

corruption principle. Yet, ironically,

if not tragically, its effects were only

hastened. It's difficult to contemplate

the financial devastation that occurred

throughout the 2010s, but to visualize

some of it, I have in my hand 1 million

Venezuelan bolivars in a single bank

note. In 1970, this amount of money was

worth just under a4 million.

But I have a 200 million note and even a

500 million.

And today, these can't even get you a

loaf of bread.

The inflation we suffer in the western

world while still being devastating to

the poorest among us is like an

idealistic dream in comparison to the

living nightmare of the average

Venezuelan even to this day. By 2017

inflation had skyrocketed to over a,000%

for the year. 2018 over a million% and

2019

10 million%.

Building up any cash savings in these

conditions is impossible. But as most

businesses could not keep up with

inflation, what many people even earned

immediately in the first place was

almost nothing. Unsurprisingly, by 2020,

more than half of all transactions

occurring in Venezuela were being made

in US dollars. Many of those dollars

came from people who had escaped the

country and were supporting their

relatives who were still stuck there.

But there was one financial lifeline

many would later rely on. Being

developed over in England, a small team

of two brothers and their childhood

friends would go on to create an

innovative borderless financial payment

system. If entirely by accident, where

estimates are that millions of people

would come to benefit from it. This

financial lifeline would come from one

of the most unimaginable places.

>> What type of people play and enjoy

Runescape?

>> Oh, I mean there's a huge huge range of

demographics.

>> The most popular free MMO RPG in the

world.

>> It's not not a game where where you

stand still.

>> In what sounds like a poorly written

dystopian movie, but is entirely real.

Over a million people would come to

rebel against their oppressive financial

system by earning and selling on sites

like eBay, one of the earliest versions

of a digital currency ever made. Not

Bitcoin, but Runescape Gold. As one

Venezuelan told Polygon, "Over time, my

salary became less than $4 a month, and

I just couldn't do anything with it. So,

I decided to try a game my neighbor was

telling me to play for money. For me,

without Runescape, my family would have

starved. The rise of the internet has

eroded the borders between countries and

peoples to varying degrees. The new

freedom to share information to almost

anyone in the world had great potential

for new, better systems to be developed,

even if they were emergent, unintended.

The system that Runescape had

facilitated in essence was that players

who had the time and patience to sink

into it could earn and sell a digital

representation of that time to someone

else in the world who would value it.

It's as if a grand arbitrage between

time and money could now take place

through the internet where major

imbalances between the two could now be

more equitably distributed even by

regular people. If one person in the

west earns $30 an hour at work and his 2

hours spare to play Runescape of an

evening, they might think buying gold

for $5, which otherwise might have taken

him the whole evening to earn himself,

has pretty good value for his time. What

starts for one as a small price to pay

to avoid monotony, becomes a lifesaver

and time well spent to avoid poverty for

the other. All facilitated through the

borderless nature of the internet. This

is why a seemingly privileged westerner

point of view claiming crypto as a whole

to be tantamount to a scam is only half

the story. You could say that no one

should play Runescape. Spider-Man 2 is

objectively a better investment of your

time. That might be true for you. That

might even be true for most people, but

clearly not everyone. To fairly judge

Bitcoin's impact on the world, we need

to look at its impact globally. using

your credit card to buy stuff that is so

20th century.

>> Former PayPal CEO Bill Harris called the

cryptocurrency quote the greatest scam

in history.

>> Cryptocurrency is is designed to empower

the individual with the idea that they

are the

>> money can be sent from here to Hong Kong

and back instantly for free.

>> Just a self-fulfilling referential

bubble with no link to anything in the

real world. Runescape might demonstrably

have been a force for accidental good,

but Bitcoin is not a like for-like

comparison. You can't work all day to

earn something to sell. Or can you? They

are oddly more similar in nature than

you might think. The same emergent

system of Runescape time being traded

for dollars through the medium of

digital gold is in essence the same

system that the Bitcoin network is built

on. If a Runescape gold coin is proof of

someone's time and knowledge spent

generating it, then the process of

creating Bitcoin through mining is proof

of someone spending time, electricity,

and technical knowledge to generate it.

You could do the work yourself or you

could buy the product of someone else's

work. So on a very fundamental level,

you could say that the same principles

giving Runescape Gold a value are the

same principles that give a value to

Bitcoin, a concept known as proof of

work. But is proof of work really enough

to give it its own value? Bitcoin is a

resource and time consuming to create.

So it has a value and it has a value

because it's time consuming to create.

That's a circular argument that proves

little. I can prove I can write a lot of

time-consuming words, but that doesn't

necessarily give them a USD value.

Unless you think they're valuable to you

and your situation. Venezuela has some

of the cheapest electricity in the

world. So its people might have

benefited tremendously through mining a

digital currency free from the

devastations of hyperinflation that the

central bank couldn't block their access

to. Unfortunately, many people in

poverty simply cannot afford a computer

to do this. It would not be an option.

But for those Venezuelans that could,

they in essence could take back their

broken trust and reliance in corrupt

politicians to maintain value for their

currency and put their trust and

reliance into the mostly unchanging code

that governs Bitcoin and its ability to

maintain its value. Except for the fact

that their government in 2020 moved to

outlaw private mining. Instead, you

would need approval first. And if you

meet the long list of criteria, then you

must join their particular mining

network known as a mining pool, which

the government controls as set up where

they can dictate how much you earn and

even withhold payments entirely,

potentially without you even knowing

about it. All done with a thinly veiled

excuse that it's for the safety of the

people. With such wild potential for

corruption and huge historical precedent

for it, it would almost be funny that

they're doing this if it weren't so sad.

While Bitcoin was innovative, being the

most free transactionary system from

authoritarian control ever made at its

launch in 2009, that does not mean it

has been immune to the principle of time

to corruption. As we've seen, Bitcoin is

far from free by at least indirect

authoritarian control, where your trust

in valuable services that utilize it can

be broken, and where even using your

computer to mine it can be considered a

criminal offense punishable by fines,

asset seizure, and even imprisonment.

Yet, some still take these risks,

believing the benefits to be worth it.

Even the most critical people on Bitcoin

would find it hard to claim that there

hasn't been at least some level of

utility in it. For certain people under

certain conditions globally speaking,

not if they're trying to be objective

anyway. One could still make the claim

though that for many, if not for most

people in the world, that Bitcoin is

practically useless and shouldn't be

valued nearly as high as it is. Not a

claim made without any merit. For most

in the west, very likely you who are

watching this right now, there's little

demonstrable benefit to having yet

another payment system. There's Visa,

Mastercard, PayPal, Apple Pay, Google

Pay, and free banking services on top,

which for the vast majority of the time

at least don't steal your money or block

your transactions and are more often

than not faster, cheaper, and more

convenient an option than Bitcoin is.

So, a borderless payment system, mostly

free from authoritarian control, that

depends on no third parties or the

continued popularity of a 20-year-old

video game, might not make any tangible

difference in the lives of many people

in the West, maybe for money launderers.

But is there actually a legitimate need

in the Western world for something like

Bitcoin? Perhaps again this question is

no more poignantly addressed than by the

life and example of one particular

activist who attempted to hold powerful

entities accountable. That man's name is

Julian Assange.

>> Julian Assange is not your average

journalist or publisher. And some have

argued that he's not really a journalist

at all.

>> Well, he's not exactly a bastion of of

truth and integrity. I was a famous

teenage computer hacker in Australia and

I've been reading general's emails since

I was 17.

>> The high court in London has, at least

for now, blocked the extradition of the

Wikileaks founder Julian Assange to the

United States.

>> We spent a long time hearing the United

States putting lipstick on a pig, but

the judges did not buy it. I was

involved in 2007 and 2008 at looking at

what was happening to Iran.

>> He says he's the victim of a conspiracy

to punish him for exposing US crimes.

>> He has to answer for what he has done.

>> We are subverting illegitimate

authority.

>> Wikileaks. I love Wikileaks.

>> Senior politicians are calling Julian

Assange a high-tech terrorist and an

enemy combatant.

>> Mr. Assange has already paid a

significant price.

>> You still love Wikileaks.

>> Uh, I know nothing about Wikileaks. It's

not my thing.

>> We've got breaking news for you. And I

have to tell you, the pictures are

shocking from London today where Julian

Assange's long standoff with

international authorities is finally

over.

>> This precedent means that any journalist

can be extradited for prosecution in the

United States for having published

truthful information about the United

States.

>> People ask, "What gives me hope?

Well, the answer is right here.

>> There are many quotes given by Julian

that in essence reference his belief and

deep concern of the time to corruption

principle. He believed access to

truthful information is essential for

democratic societies to function and

that secretive or opaque systems lead to

corruption. It was motivated by these

beliefs that he founded Wikileaks in

2006, a place where whistleblowers could

anonymously leak classified documents,

all funded by public donations. But it

was in 2010 that the site would first

gain significant attention. Thousands

upon thousands of classified documents

from the US military were leaked, and

the revelations contained within would

raise significant questions about the

government's foreign policy.

Particularly concerning was the true

extent of the civilian casualties

throughout the Iraq and Afghanistan

conflicts, a fact often going unreported

in the news media. Julian would later

claim that every war in the past 50

years is a result of media lies. And if

wars can be started by lies, they can be

stopped by truth. While he is commonly

viewed as a champion of truth for his

actions, he is not without his

detractors. There are some who believe

Julian had recklessly endangered

national security by exposing these

classified documents and had put other

lives at risk. Not least among these

detractors was the US State Department,

which quickly sought to shut down

Wikileaks through cutting off their

access to these public donations.

Financial services like Visa,

Mastercard, and PayPal all began to

block any donations made by the public.

In a move that would scare away the

creator of Bitcoin themselves, never to

reappear again after this, Wikileaks

began accepting Bitcoin donations in

2011.

In so doing, Julian had circumvented the

financial blockade and received

significant financial support from doing

so. So, is there an objective benefit to

Bitcoin even in the Western world? It's

another payment processor. But don't the

existing ones work for most people? Time

to corruption is historically real, but

would Bitcoin do anything meaningful

about it? Did Bitcoin empower Julian

Assange to actually curtail any more

death and destruction or as the US State

Department asserted had only caused more

harm? Do you know in this last week of

any direct link between these leaks in

an attack on an Afghan or on a US

soldier?

>> What I don't think people that aren't in

the military and in conflict understand

is the danger of these kinds of leaks,

the ability to net together what is

seemingly uh information that may not be

related and then to take advantage of

it. Uh, and I think it's, you know,

irresponsible and could very well

potentially end up in loss of life.

>> Is Bitcoin good or bad, righteous or

evil, a scam or an anti-scam? I can

point to significant events surrounding

Bitcoin and allow you to come to your

own conclusions about it. But I could

also sit here and point to several

instances of leaded gasoline having

great benefits to the global economy, a

demonstrable force for good. I might

even get some of you to agree with me.

But all the while, the truth is it's

literally killing people. A bad thing

fundamentally sometimes used for good

doesn't not make it still a bad thing.

And this is the heart of the issue. With

so many claiming Bitcoin is nothing more

than a scam, that means the small good

it might be used for is ultimately not

worth the cost. The two most common

comparisons Bitcoiners receive is

pyramid scheme or Ponzi scheme.

>> Bigger because everybody that you bring

in, they're going to bring in.

>> So, I start here.

>> Yes.

>> And then it gets bigger and bigger and

bigger and bigger. What did I just make,

Andy?

>> But how deserving is Bitcoin of this

Ponzi scheme label. Comparing it to the

classic Ponzi introduced to the world in

the 1920s is about as definitive an

answer as you can likely get. That

original scam purported the following.

Investment leads to practically

guaranteed returns. Returns on

investment far outstrip what's common. A

story for legitimacy is used, but all an

illusion. A heavy focus on recruiting

new investors. The source of your gains

comes directly from other investors.

It's working perfectly for now.

Well, case is closed. I guess my work

here is done. Nothing looks so similar

to a Ponzi in the financial world than

Bitcoin does, except for the collapse

part, but

there's still time.

>> Why is the music coming back?

>> Investment leads to practically

guaranteed returns.

>> So, we think they just need that new

product to get people excited about

Tesla once again. all in. You know,

we're still uh you know, looking at this

company as disrupting the the auto

industry and having an opportunity to to

have outsized uh incremental margins and

earnings power here.

>> I've never been more bullish about

Tesla.

>> Returns on investment far outstrip

what's common.

>> I believe we will at one point in the

next 3 to four years be talking about

Tesla not just at 1 trillion, at 2

trillion.

>> A story for legitimacy is used, but all

an illusion.

>> It felt like they were dialing it in.

They had promised these things and were

going to deliver them, but it just

didn't feel like it had the hype that we

had a couple of years ago.

>> A heavy focus on recruiting new

investors.

>> At this point, I think I know more about

manufacturing than anyone currently

alive on Earth.

>> The source of your gains comes directly

from other investors.

It's working perfectly for now.

Overwhelmingly, our concern is how do we

keep the factories operating so we can

pay people and not go bankrupt.

>> Okay, the case is reopened. Legitimate

investments can share similarities with

Ponzi schemes. It's they're meant to

look like legitimate investments after

all. It's part of what makes them so

successful. One of the best ways to sort

out legitimate from scam is to saying if

it looks too good to be true, then it

usually is. Bitcoin objectively does not

sound too good to be true. Maybe at one

point, but not anymore. This video thus

far should illustrate that fact. Even if

it does go on to become worth a lot more

in the future, lives would have been

ruined in the process. Bitcoin is also

commonly known as extremely volatile.

This is important because Ponzi

typically overwhelmingly

only have good stories about it before

the end. only people ever making money

with it. There is no evidence of harm.

There is no volatility, no losses. These

are antithetical to a Ponzi's

camouflage. Bitcoin in stark contrast is

a very mixed bag, which ironically in

this light makes it more credible, at

least in resisting the label of Ponzi.

>> I WANT TO TELL YOU SOMETHING. FAITH and

belief is the one thing that we all need

to be able to change the world. And

right now I believe that in this room we

have the seed that's going to germinate

and it's going to explode

into an amazing

opportunity for us to change this entire

world.

>> Another fundamental difference is that

Bitcoin is objectively not at all good

at disguising itself as a legitimate

investment. The sheer fact that it is

open about not being backed by anything

is a preposterous idea and quite the

opposite of legitimate looking. It's

completely transparent in how it

operates. Now, you might argue that it

does pose itself as legitimate, but

you'd be wrong. The White House calling

your investment a threat to national

security is about as wildly far away

from legitimate investment as you could

possibly imagine in the mainstream.

Bitcoin is not a Ponzi scheme. There are

too many fundamental aspects of it which

run in stark contrast to the generally

agreed definitions of this financial

scam. But what about it being a pyramid

scheme? One by one, here are the

definitions. Is it a financial fraud?

Daily scam revenue is in the tens of

thousands, but it's an open ledger

anyone can verify for themselves.

Recruitment focused. It costs

approximately $und00 million to move

Bitcoin up or down 1%. That's like

trying to recruit people to buy Apple

stock so your investment in them can

rise. Promise of high returns. These are

marketers trying to promote the use of

third party services which pay them

bonuses. Payouts require more recruits.

There is an exchange rate on currencies.

Trading them is not considered a payout.

Why should it be different for digital

currencies? No genuine product. There's

an estimated 10,000 computers running

the Bitcoin software worldwide, and the

service has been running without

interruption since 2009.

Unsustainable.

It's been over a decade now and

seemingly still going strong.

So, by definition, Bitcoin is not a

pyramid scheme either, especially once

you separate the third party marketers

from the equation. But what if it is

still fundamentally a pyramid? According

to many reporters, about 95% of the

Bitcoin supply is held by about 2% of

its users. If in fact true, this would

completely dismantle the idea that

Bitcoin is decentralized. A quick look

at the ledger that is Bitcoin also seems

to support this idea. This is a system

that feels quite familiar. Yet, there

are multiple problems in trying to get a

true estimation of Bitcoin's

distribution. But according to a

detailed report by Gloss Node, a company

which sells crypto analysis services,

they estimate the typical retail

investor makes up around 25% of total

Bitcoin ownership with that figure

growing. Still very much a pyramid in

distribution, just not as large as some

might claim it to be. If we examine the

distribution of any capitalist system,

be it currency, stocks, property,

commodities, they all tend toward a

concentration of wealth at the top. It's

inevitable when money can be used to

make more of itself and returns just

compound over time. It's part of what

the game of monopoly was trying to

demonstrate. It's a strategy that

Michael Sailor, a man much adored in the

Bitcoin community, takes advantage of

directly. He's taken out loans in the

hundreds of millions of dollars to buy

Bitcoin while using his already existing

Bitcoin holdings as collateral.

>> Well, I think the challenge is if you

wait for a decade for everything to be

cleared up, uh the price of of Bitcoin

is going to be 10 or 100x more than it

is right now. So you have to choose

whether or not you want to enter knowing

that there are about a dozen things that

are going to mature the asset class and

make it more transparent or whether you

want to wait for all those things to

take place and then pay a much higher

price when it does.

>> So Bitcoin being called a pyramid is not

wrong just as calling the modern

financial world a giant pyramid is not

strictly wrong either. The reason the

world doesn't collapse overnight from

this realization is in part because many

don't understand it.

>> Nobody knows if the stock is going to go

up, down, sideways, or in circles. Least

of all stock brokers.

>> Institutional investors, they have

almost unconsciously subscribed to the

dogma that the stock market will always

outperform and even though if you have a

bad year, it will recover next year.

>> The forecast is doom and gloom on the

economic front. So, if you got a client

who bought stock at 8 and it now sits at

16 and he's all happy, he wants to cash

in, liquidate, and take his money and

run home. You don't let him do that.

>> Come on. We just made the deal of our

lifetimes. We should celebrate.

>> You just bet against the American

economy, which means if we're right,

people lose homes, people lose jobs,

people lose retirement savings, people

lose pensions.

>> Revolutions. You follow?

>> Revolutions. Keep the clients on the

Ferris wheel. And it goes, the park is

open 24/7, 365, every decade, every

century.

>> As Henry Ford put it, it is well enough

that people of the nation do not

understand our banking and monetary

system. For if they did, I believe that

there would be a revolution before

tomorrow morning. But he said that in

1937. And today, considering the large

percentage of the western population no

longer believing that their systems have

their best interests in mind, more

people are perhaps beginning to

understand. But it's more complex than

just ignorance. As Morpheus in the

Matrix movie explains,

>> "And many of them are so in so

hopelessly dependent on the system that

they will fight to protect it." poor. To

use a more professional reference, as

American writer John Steinbeck put it,

"The poor see themselves not as an

exploited proletariat, but as

temporarily embarrassed millionaires,

despite the unfairness of the system and

the statistical probability of it

remaining that way for most, many still

have faith that the system will work for

their benefit, too. Ironically, the

early implementation of financial

systems were designed specifically to

rely on faith as little as possible. The

dollar was essentially a redeemable

voucher for its equivalent in gold

somewhere in a vault. Today, things are

far more abstract. Today, a dollar has

value because we believe it has value,

but not blindly. The American economy

has done very well historically, and

should something truly threaten the

dollar's value, well, wars have been

fought over much less. For this and many

reasons besides, there seems little

reason now to not believe in the value

of a dollar. It would no doubt take very

exceptional circumstances before people

no longer trust that. But every economic

system in the modern world requires

trust, and arguably at an

everinccreasing rate. With events such

as trillions being printed in 2020 to

stimulate the economy and the ballooning

US debt expanding so rapidly, you can

begin to question the very meaning of

money. Still, Bitcoin is one of the most

belief reliant financial systems ever

created. Not just in the traditional

investment world, but even within its

own sector. The very code Bitcoin runs

on is completely open- source and many

copycats have sprung up over the years.

Today, there are tens of thousands of

different cryptocurrencies with an

estimated five new ones being made per

day. Most are considered a joke, but

genuine competitors have emerged. Some

of these newer cryptocurrencies

demonstrate the ideals laid out in the

Bitcoin white paper even better than

Bitcoin does. Ethereum, the world's

second largest cryptocurrency, is

believed to be capable of 30

transactions per second. And BNB, the

world's third largest crypto, boasts

thousands of transactions per second.

Bitcoin can do roughly seven.

Truthfully, many of these newer cryptos

might claim they are faster, cheaper,

capable, or more equitably distributed

than Bitcoin is. On its own, Bitcoin is

slightly dated cryptographic software

originally adapted from the torrent

client, an online file sharing method

that is stored on multiple computers and

not much else. Yet, the people's belief

is clear. Even within its own advancing

sector, Bitcoin is many multiple times

larger than its closest competitors in

terms of their respective market caps.

Contrary to how most technology

platforms perform, Bitcoin becomes more

valuable as it ages, not less. So, this

is not without some logic, though. The

biggest hacking bounty in the world,

where a successful exploit would reward

a hacker with what would feel like all

the money in the world is the Bitcoin

code itself. Like an elusive carrot,

this prize dangles in front of the

world's most advanced computer hackers.

So each year that Bitcoin continues to

operate without impedance displays its

resilience. It displays its potential to

be a safe store of value. It increases

belief. Even so, that argument might

explain why Bitcoin could retain

dominance over other less tested

cryptocurrencies, but does little to

explain why it should be dominant over

other realworld assets. They inherently

require less belief to maintain their

valuation. But much like how you might

avoid criticizing Bitcoin for

demonstrating the inevitable results of

capitalism, you might also avoid

criticizing Bitcoin for demonstrating

the fragility of human psychology. Allow

me to demonstrate. Let's take a piece of

pure gold. We believe it to be valuable

because of its rarity, because of the

difficulty of extracting it from the

earth. cultural significance. It looks

shiny and many more reasons I could list

so on and so forth. Yet, it serves no

critical need for me and something

vastly cheaper like a bottle of water is

so useful it could be the difference

between life and death.

Now, you could state that this is an

oversimplification that it comes down to

supply and demand ultimately to

determine value. And while it is true,

it's probably not as true as you might

think. Let's take platinum for example.

Another precious metal sharing. Many of

the same properties that gold does, but

platinum is stronger, has a higher

melting point, less reactive, more

useful in industry, shinier.

It's hypoallergenic, meaning that it's

it's better for people with sensitive

skin. It's much harder to extract and is

found much deeper in the earth in

practically every conceivable way. It's

superior. It's even rarer than gold.

Despite this, gold is far more valuable.

So belief is king even over laws that

supposedly govern us like logic, reason,

or supply. And this irrationality

doesn't just apply on a small scale. It

applies to the largest scales too.

>> The illusion has become real. And the

more real it becomes, the more desperate

they want it.

Capitalism at its finest.

>> Over the past few months, the price of

gold has been going haywire.

>> It's just money.

It's made up.

Pieces of paper with pictures on it so

we don't have to kill each other just to

get something to eat.

In the stock market, there's a term

given when a particular social

phenomenon is demonstrated within a

company. They become known as a blue

chip. A freehand way of expressing that

fundamentals are becoming less important

to maintain their valuation as belief is

just that strong. To illustrate, we see

a premium on almost all of the stock

prices of the largest companies. An

overvaluation of prices over what

traditional financial analysis suggests

they should be. This trend is only

growing, hastening the rate at which

wealth is being concentrated at the top.

The reasons for this are varied. It's

possible that the analysis is incorrect.

However, more crucially, these companies

have proven their worth as a store of

value. They have been operational for

years and have shown strong performance.

There's now a widespread belief that

despite inevitable economic turmoil,

funds invested in them should not only

be preserved, but also grow over time.

This belief by virtue of its popularity

turns into a self-fulfilling prophecy.

The peace of mind this offers becomes

worth the premium and even more

significantly the avoidance of loss

justifies any premium. According to a

well-known psychological study, the pain

of losing is about twice as powerful as

the pleasure of gaining. Another study

again found that losses are felt more

deeply than gains even when they are of

identical size. While these findings

cannot be applied to everyone, they do

offer a potential answer for why we see

what we do in the investment world. In

essence, an investment vehicle that

purports the potential for gains is

attractive, but is rarely enough on its

own. What makes an investment almost

irresistible, even to the point of

paying a premium on what it should be

worth, is if it's a safe store of value

as well. Warren Buffett once said his

first rule of investing is never lose

money. And his second rule of investing

is never forget rule number one.

Considering the volatility of Bitcoin,

shouldn't human psychology be working

against it rather than for it? This is

the investment vehicle after all that

within the past decade alone has posted

eyewatering losses. Hardly a good

demonstration of being a safe store of

value. But maybe that's just

cherry-picking data. Assuming you were

to buy Bitcoin on any singular day of

its existence, you would have over a 90%

chance of being in profit today. But

maybe that's just cherrypicking data

again. Assuming then you were to buy

Bitcoin on any singular day of the past

5 years, you would have a 78% chance of

being in profit today. Is that actually

any good? To get an objective answer, we

can make the exact same 5-year

comparison with the fang stocks,

traditionally seen as blue chip safe

havens. At 78%, this would generally

place Bitcoin in a riskier asset class

when compared to the more traditionally

known safe haven investments. But this

is not the full story. When we compare

the gains made within that same

five-year period, we see another form of

risk, the risk of opportunity cost.

Bitcoin on average was 30 times more

profitable an investment to make than

the traditional safe haven assets were.

Again, a circular argument that proves

little. It's valuable because it's going

up in value. My point here is to

illustrate the power of belief systems,

even overpowering fundamentals to a

degree. Even if fundamental analysis

tells you Bitcoin is a house of cards,

it's going to topple any day now, it's

increasingly difficult to form the

conclusion that this analysis was right.

There's a popular myth that illustrates

this quite well.

There was once a scientist who took it

upon himself to study the flight of

bees. Using the sophisticated principles

that govern fixed wing aircraft, he

proved mathematically that bees couldn't

fly. But bees, being ignorant of this

fact, fly anyway. It's a little ironic

then that a system that relies so deeply

on belief rather than material backing

to ascertain its value now benefits so

much from this approach. But this is the

secret of its success. It's a model the

USD adopted itself in 1971, but hasn't

taken quite as far as Bitcoin has, but

it is getting increasingly similar

rapidly. Is it truly reasonable to

criticize Bitcoin and its high

valuation? If another system had come

along and demonstrated utility,

resilience, and dependence over a

decade, had amassed millions of users,

was relatively low risk historically

speaking, and was one of the best

performing assets of the last decade,

then you'd be Facebook, and no one would

think your valuation was unjustified.

So, Bitcoin, Bitcoin does not get the

same pass as Facebook might because it

does not generate cash flow, but neither

do dollars. It's how they're used that's

important. In an effort to illustrate,

allow me to introduce someone I've been

excited to introduce you to.

>> Hi,

>> this is my daughter. Can you say hello?

My wife suffers from a fairly common

condition that meant us having any

children was unlikely. There is med

medication prescribed in the US to treat

it, but it's not available here in the

UK. As it's not an approved drug, no

business can legally sell it even

online, but some accepted Bitcoin

because of its pseudonymity and legality

in their own country, and so we were

able to get it. This means Bitcoin can

be used to buy harmful substances, but

it also meant that my daughter could be

born. And I hope no one would make the

argument that Bitcoin is a scam or has

no value fundamentally. To me, that's

demonstrably untrue. Perhaps in a

similar vein to the right to bear arms

in the US being believed to be some sort

of expression of one's right to freedom

then perhaps Bitcoin can be one's right

to some financial freedom albeit a small

one for most of us in the west. I am

still very glad that it exists. It's up

to us to determine whether that freedom

is used for good or for ill. But I do

have hope that we will ultimately choose

what will be good

>> for Bitcoin.

>> Can you say bye-bye?

>> Bye.

>> Uh uh a lot of you are skeptical. A lot

of you don't believe in the Bitcoin

system, and that's fine. uh you can stay

on the sidelines, but uh if you really

really want to want to um become wealthy

in the future, I suggest you take one

freaking dollar.

So I was losing a lot of business and a

lot of clients. And then when I came

across Bitcoin, that was my penny drop

moment. I was like, "Okay, this is

exactly what I needed." Literally put in

a trade, wait a few hours, let the

exchange rate fluctuate, and I'm

actually able to profit from the world's

largest financial market in the world.

>> Vera has become the first national park

to run a Bitcoin mine, all with

renewable energy. In order to continue

funding efforts to protect its forests

and world-renowned wildlife,

>> as Bitcoin continues to grow and ever

more people begin to accumulate it,

those who have this knowledge will have

an edge over the rest of humanity.

>> A few days ahead of the GoFundMe

campaign shutdown, the Bitcoin

fundraiser by Canadian Bitcoiners

started to go viral. They've raised up

to 22 bitcoins so far on an open Bitcoin

only crowdfunding platform called

Tallycoin where donations go directly to

the recipient without any intermediary

in between making it impossible to seize

the funds.

>> Um, Bitcoin when I heard it the first

time someone was approaching me with

with some kind of MLM. But when I

actually deep uh digged into it deeply

here and I understood what Bitcoin

actually is also from a tech point of

view, I understood well this is actually

solving all the problems the monetary

system right now creates.

>> I just told people I wanted a pizza and

I want to pay with Bitcoin. I didn't

want a gift card. I didn't want some

weird exchange. I I wanted I wanted to

give you Bitcoin and you give me pizza.

In October, a feminist coalition in

Nigeria raised the equivalent of tens of

thousands of dollars in Bitcoin to buy

gas masks and protest equipment as

activist bank accounts were being turned

on and off.

>> Eric, it's a heaven. And uh I guess

congratulations for making a lot of

money from for for seeing something or

investing quite early in the cycle. And

then you have all of the problems with

with with the current monetary systems.

And uh

it's

the Bitcoin system is so perfect

that I think it's going to be the

future.