I distrust log-log plots. If you look at one of his clusters of dots that seem to merge into one, they range from less than 10 million to about 200 million. They clump together only because it's a log-log plot. When he talks about an R^2 value of 0.97, that would disappear to almost nothing if he did a linear plot. Perhaps there's some theoretical reason why it's a log-log relationship, in which case I'd be less critical. Anyway, I hope he's right. I'm long bitcoin.

This video is saying buy Bitcoin because the other is either buying it or will buy it in the future. Fiat money is backed by its Government, Gold is physical, Bitcoin is backed by dissipated energy. It's use is very limited due to limitations on simultaneous transactions. Governments will make it illegal, unless they control it and thereby have data on every trade that takes place. They tout Bitcoins scarcity, but Raul sold his Bitcoin after it had forked, if it forked once it can fork any number of times which increases supply with every fork. This video is garbage, with very superficial analysis , nothing of value here. Typical of not all, but the majority of content on Real Vision

Bitcoin (BTC) is the Internet of money, my friends. And it's 1990. You're having a chance no generation has in decades. You can join it or you can keep holding Kodak and Nokia in 2000, ignoring the inevitable and saying it's all just a "passing fad". No "Better coin" will come. No alternatives are coming. No governments are banning. It has endured 10 (almost 11) years of technical, social and financial attacks - none succeeded - it keeps rising. If you believe it's temporary go ahead and short BTC. There's good money to be made in that if you're right. But good luck shorting the Internet in 1990. Can't stop the new standard.

Model was right - Would love to see a catchup interview with Plan B

Ridiculous dribble. I hope he is right but it is unlikely.

Great content, and very informative, with the recent events occurring globally, and the current demand for metals, where do you see the stock to flow ratio for Silver now that supply has become limited, and investor consumption has spiked. Thanks again Real Vision for such great content.

While this is a compelling model and a great discussion, I am a bit disappointed that the interview did not address what I see as the most important question about bitcoin (and all cryptocurrencies), that is whether the scarcity is illusory due to the ease of creating alternatives (of which there are literally too many to mention). Gold (and diamonds) are valuable in part because the list of even *potential* alternatives is short (Silver, Platinum, etc.) whereas the list of alternatives to Bitcoin -- some of which might even be considered "better" in some respects -- is both long and growing. Imagine if there were hundreds of alternative metals to gold, all of which had similar characteristics, but slightly different names or cosmetic properties, it's hard to imagine it holding its value. The fact that other cryptocurrencies, and somewhat similar alternatives like tether and libra, can be envisioned, created, waxing and waning so quickly suggests that there are a lot of serious questions and fundamental risks to bitcoin's value that weren't really addressed here.

Took a long time, but I’ve been converted into a Bitcoin lover. So any chance we could delete my negative comment below? Raoul, you are the man! Love RV more and more each day!

Addendum 2: Please listen to the song,"I fight the authority, the authority always wins."

I get so bullish about BTC after reading comments here. There are so many people dismissing it as nonsense/ponzi/etc and complaining about RV having BTC content. Once you observe them you realize some might be investors with a lot of years of experience but still, they are absolutely clueless about the technical aspects, the social consensus and the overall game theory of BTC. Makes me realize how early we are at this even after almost 11 years. This is truly the Internet in 1990 - the opportunity for growth is insane. It's going to turn the finance industry upside down in the next decade. Raoul obviously has the vision to understand this and I'd be very surprise if the amount of BTC related articles here won't increase. Note that I mean "Bitcoin/BTC", not the "crypto/shitcoin" nonsense that is investing the field. Amazing times for those wanting to escape the sheep mentality.

For those wanting to dig deeper/learn more check out: https://digitalik.net/btc/ This is the Bitcoin stock to flow model live chart. When you scroll down the page below the graph you will find additional info. To the left of the graph are additional graphs, such as the Mayer Multiple.

PLEASE STOP THE BITCOIN NONSENSE RAUL !!

i don't care who you think you are, uncover your face loser

BTC/USD -500.55 -6.29% Oct 23/19. HODL, LOL.

All this guy is saying is that gold supply is increasing by 2% pa and the stock of above ground gold remains stable. Not sure what the big deal is here. Bitcoin's 'magic' is that its supply is increasing a little each year until 21M bitcoins are in the system. Then the flow goes to zero and the stock is 21M bitcoins and the market cap is somehow worth.... trillions? Translate this 'theory' to Ravencoin... 21BN fixed supply, flow increasing at a decreasing rate... hey presto, you have another trillion dollar market of HODLR's hoping to sell to a greater fool...

So it seems the argument is own bitcoin due to scarcity and as more people own it then more and more people will have to own it and the price will go up. Therefore buy it now before all the laggards realise this.

Plan B gives the argument that silvers stock-to-flow ratio is falling while gold's is holding steady. It didnt sit well with me so I did some research and what I found contradicts his thesis. Silver mine supply has been in decline since 2015 and demand has been increasing. How does this translate into a declining SFR? Maybe he is in error here.

so when he calculates flow, does he use actual bitcoin transactions where a hash is created, or does he also include the trading that occurs on exchanges that really are just a journal entry on the exchanges books.

fantastic interview. loving the bitcoin series! keep them coming.

Now that was an interesting interview and thesis, with some actual math to back it up. Kudos to PlanB and Raoul - got to respect someone who has done the yards. It will be interesting to see if he is right or not.

If I've got this right, he said if you take silver, a scarce resource with a STF of 20, and greatly reduce the stock so STF is now 3, the price will fall? So you've made a scarce resource much scarcer and it gets cheaper? Doesn't make sense.

Amazing how smart guys like Raol avoided the S&P because it’s clearly a bubble but they go all in in a bubble 1000 times the size of equities, ie. BTC

There are hundreds of other cryptocurrencies with the exact same features; and new, better ones are created every day. Infinite supply.

would love to see an intelligent discussion on the risk of the stock and scarcity part of your model. its fair to say relatively low risks exist for disruption in gold stock, no enormous gold deposits that are easily mined are about to be discovered. But bitcoin lives in a space where the rate of technological change is enormous. for example a breakthru in processing power could be used to circumvent the security measures entirely. What about the risk of outlawing cryptocurrency? Wouldn't take much from the government to do and how many who own it are willing to end up on the wrong side of the law?

Another fun observation: Compare the price charts of Ethereum and Bitcoin over e.g. the last 12 months. They are quite identical, with Ethereum having a bit more volatility. What's the fun part? Anybody who understands anything about data management technology, knows, that Ethereum is a doomed project, that is not, and will not be, suitable for any real use. Still people speculate with it and its price behaves as if the technology actually had a future. Those who are invested in it, want to believe in it, regardless of the realities. Why would Bitcoin be any different? It is marketed as the freedom-guarantor with a bright future as the future money. In reality, it is a privacy-destroying digital collectible whose trust comes from miners residing in China and Russia. Anybody who uses it in any active manner without intermediaries, is exposed to the entire world. Most importantly, when push comes to shove, it won't be the next world currency. Some of the ideas introduced by Bitcoin probably will be used to construct such thing, but that's an entirely different story. Today, decentralized technology for managing and exchanging digital assets in a privacy-preserving and transactionally efficient manner exists already. It is in its infancy, just like Bitcoin had one. In such network, digital assets are managed solely by their owners, in full privacy, if desired, and transactions on those assets are managed jointly by the parties of the transaction, in a manner that is compliant with current legislation. Why should I bet on a future of zero privacy, poor performance and outrageous energy consumption, if a credible alternative development path already exists? How long do you think, that Bitcoin will be a store of value, if innovation steams forward destroying the narrative of Bitcoin piece by piece by addressing its obvious shortcomings? It won't be 100 years, or even 10. Maybe 1-5 years. My bet is about 3 years. Maybe it is a way to convey wealth from current monetary system into the next one during these 3 years, should the current one fail. Maybe it isn't. Claiming, that bitcoin is the future of money for generations, is a bet against innovation. That's outright stupid.

Loved this. Whether he is right or not is secondary. I am just fascinated to see how the experts look at assets and markets. The insights are priceless for an amateur like me. So much to learn.

I'm not a crypto person but this was very intriguing. Got me thinking...

Gerald Cotten? The deceased founder of the now-defunct QuadrigaCX cryptocurrency exchange transferred users' money to accounts he controlled on competing exchanges under aliases, according to a report by the monitor overseeing QuadrigaCX's bankruptcy proceedings. What was once one of Canada's largest cryptocurrency exchanges was shut down in January 2019 amid a torrent of online speculation after 30-year-old Gerald Cotten suddenly died from complications of Crohn's disease during a trip to India in December. Cotten was the only person who knew the encrypted passwords to gain access to QuadrigaCX's offline cryptocurrency reserves, stored in what are called cold wallets. A total of 76,319 unsecured creditors — virtually all of them QuadrigaCX clients — have come forward to claim they are owed $214.6 million. Luckily I got my Coin out just before his "Death". Bitcoin........No Thanks.

It was illegal to own or trade Gold in the US from 1934 to 1975. The US and other governments could easily make Bitcoin illegal, especially since Bitcoin robs the governments of their control of their monetary systems. The electric utilities know where Bitcoins are being mined, and could stop mining.

has someone mentioned the problem of Overfitting in plan Bs model? comparing the history of gold (1000+years) and that of bitcoin (10years) is like saying that a 1 month old baby girl will run the the whole financial world, when she is 60 (unit of account in the next 5 years for) why not ETH or XRP or any other shitcoin?

gold trades mainly on paper gold

Doesn't this stock-to-flow model have to break down sometime? Eventually flow will be zero, no? Then the price will need to be infinite to still be on that line? It breaks down sometime, the trick is to know when.

Am I stupid or something? I really want to believe the BTC story, but can't get my arms around their scarcity argument. Gold is truly scarce. You can't simply use technology to create something identical to gold. I understand the inherent limits on the number of BTC. But BTC is a human contrivance, and it seems to me a very similar contrivance could easily be made. Why can't some other cryptocurrency make it obsolete - or at least less valuable?

Seems like the stock/flow model assumes fairly constant underlying demand. What if demand declines because another crypto that's better than BTC comes along or for some other reason? For example, some countries have already outlawed BTC. It would be naive to rule out that possibility for the "land of the free" (where the government currently forbids investing in several countries).

Bank of Canada is now exploring cryptocurrency and expresses its thoughts about use of Bitcoin /private currencies - very interesting! https://www.bankofcanada.ca/2019/04/the-road-to-digital-money/

There is no network effect. It is just the ordinary lower portion of an S curve.

With respect to the total market value of a scarce "money" asset, does it make sense that there is a finite capitalization based on total world wealth, and that some equilibrium is naturally achieved (by free money markets) across all of these money assets according to their relative stock-to-flow?

Does it make sense that Plan B's Bitcoin model may asymptotically approach the log-log regression line of the other scarce metals, rather than cross it? It seems odd to me to expect Bitcoin to have it's own regression line.

If its computer based, it can/will be hacked and attacked. The common retort is that it's a distuted ledger, its safe. Ok, so that is basically a form of "stateless". At some point you have to move your bitcoin from cold storage to hot storage. Think of it this way: Bank vaults aren't robbed (cold storage), the money is stolen in transit (hot storage) from the vault to the armoured car. At 55 yrs old I'm not throwing up a yolo bomb with my lifes savings until there is a proven chain of custody in bitcoin. Someone I can sue or at least call.

Addendum: As Ray Dalio points out, if a government (US) has debt in its own currency ($), it can simply print. If it has debt in another currency (Bitcoin), it has a big problem. The US seems to want to eliminate all of government and private debt. It will need to print dollars and stifle Bitcoin.

Folks, Plan B, the math is not correct: r2 in log-log space is not a goodness of fit statistic/test for power laws. ( "Power-law distributions in empirical data", arxiv:0706.1062 ). Since the log-log plot hints at a relation, I kindly ask the author of the study to do a proper hypothesis test for the power-law fit and provide the pvalue and MLE fitted parameters. The inaccurate statement I would like to see corrected is: "a statistically significant relationship between SF and market value (95% R2, significance of F 2.3E-17, p-Value of slope 2.3E-17)" Thank you, Daniel

Crazy that there is so little talk about the idea with Bitcoin as free market cash with intrinsic value of data in blockchain. BTC has centrally planned limit on block size, BCH has centrally planned blockchain reorg threshold now which one is left representing the original idea and long term viable alternative (BSV).

Am I the only person who does not know what halving means? Listened to interview two times very interesting but what the hell is halving?

Bitcoin and other cryptos are for flight capital, illegal transactions and speculation. Period. It does not own anything (e.g. blockchain) it has no intrinsic value but costs lot in terms of energy at all time and forever. The rest is just blah blah blah.

I own both gold and bitcoin. I will wait and see how bitcoin reacts to the next monetary crisis. If behaves well I will add. Gold has a 5000 year history. I know how it will behave. BTC has a 15 year history, I am less sure, but loaded and ready to bounce. PATIENCE and an open mind is key I believe going forward. Time will tell.

Does anyone know what happened to the David Rosenberg interview? It was supposed to be released on Sat 19 October but it's disappeared.

BS "exchanges" with 100x leverage, mysterious anon leaders, Brock Pierce, McAfee, Whales wash trading. Good luck with that lol ! Goldbugs, Bitcoiners same seed.

I have this funny feeling, that you can replace the word "bitcoin" in this video with any PoW-based cryptocurrency name and the logic still holds. What does that tell about the scarcity of crypto assets?

For all those wondering about BTC’s value (Raoul kept asking about BTC’s “fair value”) ...study the Network Effect on value. https://www.nfx.com/post/70-percent-value-network-effects For those less inclined (nice word for lazy) to read the above real-world study/article ...70% of the value of the top Tech companies in the world is due the Network Effect. 70%! This is where BTC derives it’s value. All those doubters constructing arguments around “what if a new crypto comes along that is better and replaces BTC?”... should ask themselves the same thing about the FAANG stocks (for example) and whether they own any of them. What gives Facebook its value? Simple ...the Network Effect. Adoption of BTC is increasing over time ..deal with it. Heck, now even the state of Ohio is accepting BTC for taxes.

Thanks RV & PlanB!! Excellent Interview!

Director of the Dallas Federal Reserve, Rob Kaplan: “We have not at the Fed decided to pursue or drive to develop a digital currency, but it’s something we’re actively looking at and debating.”

Very interesting discussion and incredible correlation thus far with the proposed Stock-Flow model. Thanks RV - you guys always make me think!! I will be looking at this asset more seriously now, especially in view of this discussion and the halving scheduled for May next year.

one of the best points made for Bitcoin! Fascinating!

It's a generational thing. In an age of pervasive computing, driverless cars, and space tourism, I just can't imagine people storing their wealth in gold bars.

This guy puts a very case across , but please don't really need the Mr X look , a wee bit infantile to me.

To anyone who may provide an answer on this: To me "real money" is human productive output in the form of goods and services, the value of such are simply represented by whichever instrument we, as a society, decide to use (today that'd essentially be USDs). All instruments (currencies), till now, have had a level of elasticity in their supply dynamics which have allowed them to adjust relative to levels of human productive output by market mechanisms which increase or decrease the value of such instruments relative to that human productive output (even gold's price fluctuates relative to this output when it was used as a currency). What happens to goods and services prices based on a means of exchange which has, by definition, no adjustable elastic functions built into it?