The Quantitative Case for Bitcoin

Published on
October 18th, 2019
Duration
42 minutes

The Quantitative Case for Bitcoin

The Interview ·
Featuring "Plan B"

Published on: October 18th, 2019 • Duration: 42 minutes

The mysterious financier and Twitter personality known only as “Plan B” explains why he believes Bitcoin’s scarcity dynamics will continue to fuel exponential growth — basing his ultra-bullish view on his quantitative technical models. In an interview with Real Vision’s Raoul Pal, “Plan B” interprets Bitcoin’s rising stock-to-flow ratio as a sign that the cryptocurrency will soon eclipse gold as the king among hard money. Filmed on September 26, 2019 in New York.

Comments

Transcript

  • DD
    Damian D.
    29 October 2019 @ 08:13
    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
    • MM
      Meagan M.
      6 November 2019 @ 01:45
      there is so much factually wrong with this comment it's hard to know where to start
  • AK
    Aaron K.
    29 October 2019 @ 05:23
    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.
    • SS
      Steven S.
      3 November 2019 @ 02:23
      Thanks for the reference. Interesting work. Although I haven't gone through the entire work, I do have a minor criticism: the p-values on the R^2 value and slope are erroneous. Those appear to be calculated under the assumption of a null of independence between the data points, which is obviously violated. The correlational structure across the time series should be incorporated into the null. But, this is a minor point.
  • BD
    Brian D.
    25 October 2019 @ 12:39
    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...
  • DL
    Darryn L.
    25 October 2019 @ 00:47
    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.
  • TR
    Travis R.
    24 October 2019 @ 05:06
    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.
    • AK
      Ado K.
      24 October 2019 @ 12:37
      It is not silvers production that is the problem, but rather its stock. Plan B claims that silvers stock has been used up in industrial use cases. I did myself some research and was just shocked by how bad the numbers are. I could not find 2 sources claiming the same numbers. I would go as far as to say that SIlvers stock numbers are not reliable, for me this is a big problem as an investor.
  • JF
    Joseph F.
    23 October 2019 @ 16:05
    BTC/USD -500.55 -6.29% Oct 23/19. HODL, LOL.
    • mg
      micah g.
      25 October 2019 @ 18:46
      BTC/USD +1219 +16.42% Oct 25/19. Thanks for the advice, friend!
    • QJ
      Qasim J.
      26 October 2019 @ 06:45
      BTC/USD +2152 +28.86% Oct 25, 2019 stack and HODL, bears roasted
  • Jb
    Joe b.
    23 October 2019 @ 13:10
    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.
    • HD
      Herb D.
      23 October 2019 @ 14:05
      Flow = Bitcoin mined (yearly production). Does not have anything to do with transactions.
  • RL
    Robert L.
    23 October 2019 @ 05:52
    fantastic interview. loving the bitcoin series! keep them coming.
  • TS
    Tom S.
    23 October 2019 @ 03:37
    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.
  • CD
    Chris D.
    22 October 2019 @ 16:28
    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.
  • LN
    Leo N.
    22 October 2019 @ 15:30
    I'm not a crypto person but this was very intriguing. Got me thinking...
  • GC
    Gino C.
    22 October 2019 @ 14:09
    PLEASE STOP THE BITCOIN NONSENSE RAUL !!
    • RS
      R S.
      23 October 2019 @ 06:39
      Xi and Putin just get more powerful. This bitcoin madness is the election hijacking part deux. Simply amazing how they are convincing people of this bogus fairytale of decentralization.
    • LP
      Leon P.
      30 October 2019 @ 03:11
      you could just, not watch them
  • pn
    peter n.
    22 October 2019 @ 06:32
    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?
  • jy
    jose y.
    22 October 2019 @ 03:32
    gold trades mainly on paper gold
  • ea
    edwin a.
    21 October 2019 @ 19:05
    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.
    • QT
      Quang T.
      22 October 2019 @ 08:59
      I get where you are coming from but there is one important factor which separates Bitcoin from all other alcoins and makes it valuable, it's the network effect. Bitcoin has the most computers and miners supporting the network (hash power) in order to verify the transactions on the blockchain. Having the most computers supporting the network ensures that it is the most secure network and that's why the Bitcoin blockchain itself has never been hacked in it's 10 years of existence. This network effect has made Bitcoin 'rare' among the sea of other cryptocurrencies.
    • AB
      Alain B.
      22 October 2019 @ 17:54
      To touch on Quang's response, network effect and network security are very important factors to consider when determining why a cryptocurrency has an advantage over others. The decentralization of bitcoin is extremely important for it's security and compared to most other coins/tokens it's much much more decentralized, it is hard to find a single point of failure (there are over 10000 nodes running, all of which are insuring that the consensus rules are always followed, it would be very difficult to attack the network because of the amount of eyes watching). Any of the cryptos mentioned, Libra, tether, any other stable coin is controlled by a single entity (centralized) and therefore is easily manipulated. These stablecoins may play a part in the crypto ecosystem but to do not possess the qualities that make bitcoin a potentially remarkable SOV, medium of exchange etc... The trustless nature of bitcoin's network is also a very important factor. Bitcoin has proven that you do not require trust to utilize the network, you can be (practically) guaranteed that the system will do what it says it will do. This is why we've seen many massive transfers (1billion+ $) transmitted using bitcoin.
  • FS
    Fagundes S.
    21 October 2019 @ 17:03
    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.
    • SC
      Sean C.
      21 October 2019 @ 19:01
      In respect to your comment in "This is truly the Internet in 1990 - the opportunity for growth is insane", while that statement is (and was) obviously very true, it's also true that Amazon wasn't even founded until 1994, Google 1998 & Facebook in 2004. Isn't it just possible (maybe even probable?) that Bitcoin is just version 1 and will be superseded by Amazon/Google/Facebook/version X equivalent which hasn't been conceived of yet, and it's that which is what everybody will want to own and not Bitcoin?
    • TH
      Timo H.
      21 October 2019 @ 19:22
      Sean, you're absolutely correct. The truly valuable bitcoin-inspired innovations have not surfaced yet into the consciousness of the general public.
    • AB
      Alain B.
      22 October 2019 @ 18:06
      Sean, That is a possibility. However, i do not believe that we can compare these corporations/companies to the Bitcoin protocol. They are 2 completely different things and therefore may not follow the same path. Perhaps, Bitcoin V1 was the original protocol launched in 2009, There have been numerous forks leading to competitors, BCH, BSV, bitcoin diamond, bitcoin unlimited etc... in the end the winner is the protocol with the longest chain. Security, hashpower, decentralization is the name of the game here and because of the way bitcoin was originally created we are able to maintain those properties, I have a hard time seeing a brand new crypto, with a 'CEO' replace a protocol that is open-sourced, decentralized, extremely scarce, censorless, borderless and extremely secure. As we speak, because of how the protocol goes through continuous improvements and forks, we may actually be using bitcoin V18. (The network see continuous improvements, unhindered by government restrictions, shareholder concerns etc...)
    • JM
      Jennifer M.
      23 October 2019 @ 11:36
      The comments below about the internet 1990, I am not a bitcoin evangelist this is simply my own view. Bitcoin is not Amazon Google or Facebook. I think Bitcoin is HTTP.
  • MS
    Michael S.
    21 October 2019 @ 11:13
    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
    • WG
      Wade G.
      22 October 2019 @ 19:09
      "go all in"... "bubble 1000 times the size"... hyperbole much?
  • JL
    James L.
    21 October 2019 @ 10:45
    i don't care who you think you are, uncover your face loser
    • RP
      Raoul P. | Founder
      21 October 2019 @ 11:47
      Unnecessary ad hominem and not what we'd expect on Real Vision. Thanks.
    • AG
      Andrew G.
      28 October 2019 @ 02:41
      Says the anonymous internet poster...
  • DB
    Doug B.
    21 October 2019 @ 09:34
    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.
    • AW
      Andrew W.
      21 October 2019 @ 09:35
      SFR is inverse of inflation. You've got this backward.
    • DB
      Doug B.
      21 October 2019 @ 22:34
      I am definitely not getting something. His pricing model is based on higher stock/flow => higher price, so when BTC flow is halved, its price should double. In regards to silver, he asserts stock "got used by industry" so SFR went from 20 to 3, which his pricing models says will reduce price, and offers this as an explanation of why the gold/silver ratio is so far from the mean. But, unless I am just too stupid to get this, I think this is saying you've reduced the stock of silver (made a scarce resource more scarce) so SFR is lower, so price will be lower. Increasing scarcity leads to lower prices. I don't get it.
    • MG
      Mandeep G.
      22 October 2019 @ 02:45
      I think the argument made was whether silver is behaving, and will be priced going forward, as a industrial consumable commodity, driven by the physical demand and supply instead of its usecase also as a store of value and therefore as a precious metal i.e similar to Platinum etc
    • DB
      Doug B.
      22 October 2019 @ 03:04
      Ah, so the argument is that if utility rises so that the stock falls it is no longer priceable via SFR. OK, I can understand that. But still, it is a bit weird if a scarce resource that is valued as a form of money becomes even more scarce because it is useful, it becomes less valuable. Maybe that is right, but it is hurting my head a bit. Thanks Mandeep.
    • AB
      Alain B.
      22 October 2019 @ 18:22
      Doug, From my understanding the way Stock to Flow functions is as follows. Using gold in this case, the higher the current stock (all current gold in circulation) and the lower the flow (current gold being mined every year) the higher the ratio will be (the higher the ratio the scarcer it is the higher the price will be). Currently gold's stock to flow is around 54:1. Even if industry were to double their production of new gold, the increase to the stock would still be so low that it wouldn't have much of an effect on its SFR, it's price and scarcity would remain relatively the same. However, when looking at something like silver, since it is easier to mine and produce then gold (less scarce) it is easier for industry to inflate it's stock if demand is present. If people start to use it as a SOV, miners will notice this because of an increase in price. They in turn will mine more and will eventually dramatically increase it's stock which will lower it's price down to what it was originally. This is not possible with Gold or Bitcoin, because of it already high STOCK and low flow and because of it's true scarcity it is very difficult to dramatically increase the flow like you can with other metals. As for bitcoin is it impossible to increase the flow past it's current issuance schedule. This gives Gold and Bitcoin very interesting qualities and making them excellent SOV.
    • DB
      Doug B.
      22 October 2019 @ 20:26
      Thanks Alain. I get that, but Plan B said silver's SFR went down not because flow (production) went up, but because stock went down (industrial consumption). So it became more scarce. His SFR pricing model predicts a lower price. If correct, I find that counter-intuitive. It implies humans will assign less SOV to an asset that gets more scarce if it is getting scarcer because it is useful and gets used up.
  • DB
    Doug B.
    21 October 2019 @ 09:13
    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.
    • DB
      Doug B.
      21 October 2019 @ 09:29
      Oops, commented before I got to the very end.
    • RG
      Ryder G.
      21 October 2019 @ 22:57
      It’s projected for at least two halving. By which time the price of Bitcoin will be so high that if you bought in now you won’t care if the model holds further.
  • TH
    Timo H.
    21 October 2019 @ 06:37
    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.
    • AW
      Andrew W.
      21 October 2019 @ 09:38
      There's no further innovation on Layer 1 necessary. As a monetary policy and money supply, BTC is 100% complete. All the innovation happens on top of it. Privacy, autonomous (not compliant to anyone or anything), well worth the energy for what it offers, with zero tenable alternative.
    • TH
      Timo H.
      21 October 2019 @ 10:09
      @Andrew, you really don't understand the true meaning of the word "innovation". Your narrative is 100% religion. "It's ok to innovate, as long as you don't question my fundamental beliefs." Why do I believe, that even the known future of digital assets is in something that is beyond Bitcoin, let alone the unknown future? I give you a hint. Split the bitcoin-style blockchain into two different ones (one with broad consensus to manage assets and identities and another one with narrow consensus to manage transactions), connect those two and optionally add e.g. a gossip protocol for purposes, where you don't want rely on a single transaction enforcer to prevent double-spending. (For legally compliant business transactions, you typically need a single known transaction enforcer as someone must be liable about possible malfunctions of the transactions.) Then you probably end up with something, that is very close to a solution for managing digital assets, that addresses all the serious shortcomings of Bitcoin-style blockchain. It is highly unfortunate for any true believer, that such network makes bitcoin itself somewhat obsolete. ;-)
    • CH
      Charles H.
      21 October 2019 @ 11:40
      Timo H, I think you have failed to understand the fundamentals of bitcoin. The same way the fundamentals of the internet were born on tcp/ip and to this day acts as the base layer for all information on the internet, the same will be for bitcoin. The innovations are build on strong foundations.
    • TH
      Timo H.
      21 October 2019 @ 13:14
      @Charles, For Bitcoin to be a true protocol-level basis for any business transaction network, it would need to guarantee privacy and transaction finality. Having unlimited scalability would also be nice. It does none of those. Furthermore, those issues cannot be solved at the "layer 2" without introducing trusted 3rd parties into the picture.
    • FS
      Fagundes S.
      21 October 2019 @ 17:07
      Ethereum is promises and nothing more. Even today Vitalik deleted an old post from January 2019 saying ETH 2.0 was almost finalized. It's nowhere near finalized, not even close, total vapor after one year. If you doubt me check out the Deleted Crypto Tweets bot. ETH is a huge flop. It's main use has been scam ICOs (and scams in general), totally failed use cases (of all sortes), a big bug that required a bailout/rollback and a cat game that put the network on its knees because it can't scale. Bitcoin is the standard. ETH will become some second layer R&D curiosity, not much more. Vitalik will tell you he needs another 100M to make it work tho.
    • TH
      Timo H.
      21 October 2019 @ 18:26
      N R, if bitcoin is a standard, it is the first time in the history of IT, that the first prototype of a big invention becomes a standard that doesn't need to be improved in any manner. There are problems in its architecture and there are also solutions to fix them. Bitcoin is not a perfect standard and Satoshi is not a god. Whoever considers any man-made invention something, that cannot be improved upon, is a certified moron.
    • AB
      Alain B.
      22 October 2019 @ 18:34
      Timo, Innovation never stops with Bitcoin. It is an open-source project after all with a great group of developers from around the world continuously improving it. Soft Forks and Hard forks are the way forward, those will be used to innovate on the existing protocol. As for claiming that this version of bitcoin is the first ever attempt at a decentralized digital asset, currency, sov, that is not true, dozens of attempts were made in the 80s and 90s. Bitcoin is the culmination of those attempts and failed projects. Time will tell, however, it is rather impressive that some people trust this protocol enough to transfer billions of dollars, often in a single transaction. As for it's energy use that argument has been debunked over and over, it uses approx 3-4% of its market cap in electricity to sustain itself. I would love to see how much electricity our current financial/banking system uses and the source of that electricity. China and Russia may be big players but rest assured that Canada and the US are also playing a big role and much of the electricity used comes from sources which would have gone to waste. Hydro, natural gas burn off etc...
  • WB
    William B.
    21 October 2019 @ 03:11
    Addendum 2: Please listen to the song,"I fight the authority, the authority always wins."
  • WB
    William B.
    21 October 2019 @ 02:41
    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.
  • WB
    William B.
    21 October 2019 @ 01:12
    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.
    • mj
      miztaken j.
      21 October 2019 @ 02:09
      I have been asking similar question to bitcoin enthusiasts/experts but no real answers yet. Bitcoin being digital asset, it would be very easy to throttle exchanges or ban it all together. In addition, what if Central Banks of multiple countries get in bed (like they always do) and come up with a new digital currency (g8tcoin) they start pushing to their citizen. What will then happen to bitcoin? The last thing any government would like to lose control over would be currency and weapons.
    • CS
      Christopher S.
      21 October 2019 @ 05:34
      True, central governments can "ban" bitcoin trading and choke off the on-ramps. China tried to ban bitcoin and mostly failed as mining, trading and ownership of bitcoin is still taking place there. So, it would be incredibly difficult if not impossible to ban owning bitcoin. Also, for a world wide ban it would require all countries to work together to ban the asset....good luck getting that done! Furthermore, bitcoin mining is trending towards renewable off-grid energy removing need for electric utility involvement. Lastly, bitcoin is not gold. It shares certain properties of gold but continuing to compare bitcoin to gold is completely missing the value of the technology and the value of the network. Bitcoin is simply a protocol which solves the Byzantine generals problem. Think of it as the HTTP of truth. Imagine if you could own a piece of http! @miztaken j. I don't think you've been talking to the right "experts" if they were unable to answer these simple questions or they were unable to convey the message properly.
    • RS
      R S.
      21 October 2019 @ 07:09
      China never tried to ban bitcoin, check your news. Xi is very happy to accept donations from bitcoin speculators all around the world, with many thanks. Five Chinese companies - AntPool, BtcCom, ViaBTC, F2pool, and BTCtop - are owned by the same Friends of Xi controlling 58% of BTC hashpower. If you add Russian state companies, bitcoin's hashpower oligopoly rises to 80%. Decentralization is a marketing myth.
    • CS
      Christopher S.
      21 October 2019 @ 09:25
      @ R S. Hrmm...I think you should check your facts. China has been trying and failing to ban bitcoin. In 2013, the PBOC prohibited financial institutions from handling bitcoin. In 2017, China banned exchanges from trading in crypto. In 2018, China banned crypto mining. It's all here (https://www.loc.gov/law/help/cryptocurrency/china.php). You could argue that maybe China isn't really trying to ban btc (since they are repeatedly failing at it), but they are signalling hostility towards it. Also, the location mining pools really doesn't represent the location of all the miners in the pool. Yes, miners should join the nearest pool (lower latency) but different pools offer different rewards and incentives so that is also a factor. I'm not saying btc isn't influenced by these large mining pools, but I don't think this is a long term hurdle to overcome. As more people around the world join the btc mining network, it will become more decentralized. Now, the largest ASIC mining manufacturers are all in China, so it makes sense that they would have a lot of miners. As you point out Russia is also applying a lot of capital and resources to btc mining. I don't see how any of these are negatives. If anything, I think it's a positive. Clearly these govts see the value in btc. If the western world did the same as China and Russia we may finally get a fully decentralized monetary system.
    • RS
      R S.
      22 October 2019 @ 07:59
      Xi is simply limiting capital flight. All of the rules about crypto had nothing to do with banning crypto and everything to do with preventing wealth from exiting China. It's very simple. Xi controls the majority of bitcoin hashpower (anyone inside China can be commanded to do anything Xi wants), so he's very happy for bitcoin to continue to grow. He only wants control on capital flight, hence his various bans. Chinese limitations on bitcoin are the same on gold, Hong Kong Dollar, USD, etc. Only a tiny quantity of currency conversion per day, must be government auditable, etc.
    • RS
      R S.
      22 October 2019 @ 08:07
      Bitcoin is not decentralized. Xi can command majority hashpower consensus to any chain he wants at any moment. He wields power to reject and approve transactions, alter what ledger is forevermore known as bitcoin into the future, determine what history is remembered, and control the order of transactions in blocks. I doubt he has cared much to exercise this power, but the point is, he does have this power, individually, as emperor of citizens controlling 58% of bitcoin hashpower. Not decentralized.
  • JG
    John G.
    21 October 2019 @ 00:42
    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?
    • AB
      Alain B.
      22 October 2019 @ 18:39
      What do you mean " for example a breakthru in processing power could be used to circumvent the security measures entirely." every 2016 blocks Bitcoin's difficulty adjusts as hashpower moves up or down. If there was a massive spike in hashpower then the POW difficulty would increase to insure that block time remains at around 10 mins, the security of the network would remain the same.
  • MS
    Michael S.
    20 October 2019 @ 20:49
    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.
    • AV
      Alex V.
      20 October 2019 @ 21:19
      Michael, there a few Swiss banks that will hold it for you, fully insured guaranteed etc
    • MS
      Michael S.
      20 October 2019 @ 22:33
      Thanks Alex. I love the concept just have a tech background so I have so many concerned Thanks 😊
    • FS
      Fagundes S.
      21 October 2019 @ 00:22
      Self custody options have improved a lot the past two years. Many multisig options, virtually bullet proof in every way, including if one dies and needs to leave a legacy. This isn't banks and fiat. Nothing is safer than math if done correctly. Get a Trezor and Shamir split seeds or Coldcard. Your funds will be 100% safe. Look into it. Don't let laziness make you miss an opportunity that very few generations have. Bitcoin is bigger than oil and the industrial revolution. It it bigger than the internet because money has always been a core concern of mankind. More important than information.
    • JG
      John G.
      21 October 2019 @ 00:48
      see that's part of the problem only a minority of people can actually understand what you just said. Name dropping some random features does not build public confidence and price is all based on narrative and confidence. And really the FOMO fear mongering really doesn't convince anyone other than millennials who want a winning lottery ticket from their $5000 speculation. The audience you have to win over are those with life savings who can't stomach the volatility and technological babble. They're not looking to turn 10k into 100 million in that once in a lifetime opportunity.
    • RS
      R S.
      21 October 2019 @ 05:45
      Bitcoin is more important than information. Rofl there you have it, folks. Buy, buy, buy.
  • FS
    Fagundes S.
    20 October 2019 @ 20:42
    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.
    • CS
      Christopher S.
      21 October 2019 @ 06:01
      Exactly! I was super skeptical back in 2011-12 when I first came across the tech. Thought the same as most others, "it's a scam," "ponzi scheme," "fake internet money," etc. Then, I took another look in 2016 when ethereum caught my attention. What did I find? BTC still going strong and much higher than it was when I first saw it. So I took another look and dove deep this time. It truly changed my life and how I view the world, money, finance and politics. I totally get why people are put off by it just as I was. Luckily, bitcoin continues to survive and gives the naysayers (like me) another chance.
  • SU
    Shakeel U.
    20 October 2019 @ 20:17
    Does anyone know what happened to the David Rosenberg interview? It was supposed to be released on Sat 19 October but it's disappeared.
  • DL
    Dan L.
    20 October 2019 @ 19:37
    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?
    • RS
      R S.
      21 October 2019 @ 07:13
      The problem with cryptocurrencies is that you can just invent more cryptocurrencies, with better technologies and mathematics.
  • DL
    Dan L.
    20 October 2019 @ 19:36
    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.
    • CW
      Chris W.
      21 October 2019 @ 06:22
      Bingo. This model is almost useless. You cant plot only BTC data points when all those data points are driven by the fact that BTC is exceptional (which we already know). Do the same plot with the other top 500 tokens on the same chart and the relationship will practically disappear. IMO btc will go to 100k+ but it has nothing to do with the rate halving.
    • CW
      Chris W.
      21 October 2019 @ 06:42
      Okay I feel bad saying its useless. The concepts are really interesting and I learned a lot, but it's wrong to say market value has a near perfect correlation with supply growth. That .95 R squared is totally spurious.
  • DV
    Daniel V.
    20 October 2019 @ 18:13
    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
    • DL
      Dan L.
      20 October 2019 @ 19:26
      Can you do this calculation and share it with the community? I, and I'm sure others, would love to see it.
    • mj
      miztaken j.
      21 October 2019 @ 02:01
      can you share your findings plz?
  • BN
    Barrett N.
    20 October 2019 @ 15:26
    Thanks RV & PlanB!! Excellent Interview!
  • cp
    claude-vincent p.
    20 October 2019 @ 13:19
    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.
    • AW
      Adam W.
      20 October 2019 @ 16:06
      Haha, define intrinsic value.
    • FS
      Fagundes S.
      20 October 2019 @ 20:44
      I see Claude just joined the Bitcoin chat and didn't notice he's repeating red herrings that have been refuted to death. The sheep always arrive late and end up pocketing a lot less money. Don't be a sheep Claude, you deserve better.
    • SS
      Steven S.
      21 October 2019 @ 00:10
      Anyone who uses the phrase "intrinsic value" has a lot of unlearning to do.
  • FB
    Fredrik B.
    20 October 2019 @ 00:37
    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).
    • FS
      Fagundes S.
      21 October 2019 @ 00:26
      BSV shills even here LOL. This scam is dying but it sure should die faster. BSV is a ponzi. Ignore that everyone.
  • MB
    Michael B.
    19 October 2019 @ 23:22
    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?
    • MH
      Mark H.
      19 October 2019 @ 23:58
      The way I understand it, it is when the reward for mining bitcoin gets cut in half. This means it will not be cost effective to mine unless the price goes up. So long as sentiment does not change, the demand would stay the same but the supply would dwindle. The halving happens about every 4 years.
    • FB
      Fredrik B.
      20 October 2019 @ 00:39
      Except it happens roughly every second year... last time was late 2017 early 2018, right?
    • HG
      HUGO G.
      20 October 2019 @ 00:43
      The amount of Bitcoin each block contains halves every 210,000 blocks, and it will reduce from 12.5 to 6.25 in the next halving.
    • DV
      Dhruvil V.
      20 October 2019 @ 03:23
      Halving is the rate at which new bitcoins are created, and this rate reduces in half every 4 years. Till 2012, 50 new bitcoins were created every 10 mins. This reduced to 25 new bitcoins after 2012. In 2016, this supply again reduced to 12.5 new bitcoins every 10 mins. Again, in May 2020, the supply is going to Halve to 6.25 new bitcoins every 10 mins. Hence, the term "Halving".
    • FB
      Fredrik B.
      20 October 2019 @ 15:43
      Sorry my bad, four years it is!
    • PG
      Philippe G.
      20 October 2019 @ 20:32
      https://www.binance.vision/halving A block halving is a process of reducing the rate at which new cryptocurrency units are generated.
    • SS
      Steven S.
      21 October 2019 @ 00:22
      So others have explained what the halving is but you might observe that more or less on average right now Bitcoin needs about $14 million net inflows per day to maintain current price. After the halving, it would need only $7 million net inflow. Any more than that will drive the price higher. And it is easy for it to go substantially higher. The higher price brings more interest, which increases net inflows. Right now interest is at a low ebb after some premature excitement this summer. Sentiment is negative. The bulk of the $14 million every day is long term HODLers stacking more cheap satoshis, buying regularly (saving) and of course those who have a temporary need to hold Bitcoin for some reason, such as moving money around across borders--one of its many powerful use cases. Big price moves are generally larger players, including miners, getting in or out. If you want to move millions into or out of Bitcoin, you probably will affect the price at least temporarily.
  • JH
    Jesse H.
    19 October 2019 @ 19:59
    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.
  • JM
    John M.
    19 October 2019 @ 18:41
    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/
    • RV
      Ryan V.
      19 October 2019 @ 22:20
      In summary they think bitcoin/private chains aren’t the answer and a central bank currency will be. The federal reserve has spoken about offering all American citizens a chequing account. When the banks start to fail they will launch it and the banks won’t be necessary anymore. Take not. They’re going to take bitcoins lunch. At the same time they will ban private crypto’s and contrary to what people say, they can and will enforce it.
    • RS
      R S.
      20 October 2019 @ 05:00
      Bingo! Confirmed plans underway from central bankers in Canada, USA, China, Japan, and many smaller countries. Bitcoin will remain a novelty and minor collectible. Central bank digital currencies will be Stable, Portable, Trustworthy, Ubiquitous, Legal, Medium of Exchange, Unit of Account, Fungible, everything. No need for bitcoin once these come online.
    • AW
      Andrew W.
      21 October 2019 @ 09:48
      You people have literally zero clue of BTC's purpose.
  • YB
    Yair B.
    19 October 2019 @ 17:18
    one of the best points made for Bitcoin! Fascinating!
  • BG
    Bruno G.
    19 October 2019 @ 12:30
    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.
    • FS
      Fagundes S.
      20 October 2019 @ 20:46
      Horses and oil lamps had thousands of years of history until cars and electricity were invented. You're at the tipping point. Take advantage of it or miss the opportunity that rarely becomes available in many generations.
  • RS
    R S.
    19 October 2019 @ 10:49
    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.”
    • FS
      Fagundes S.
      19 October 2019 @ 11:44
      Government coins have nothing in common with Bitcoin. They are irrelevant in its context and provide no alternative.
    • FS
      Fagundes S.
      19 October 2019 @ 12:05
      Reading some of the clueless anti BTC comments here makes me realize how far ahead in the game those who have spent time learning and researching BTC are. Stacking it slowly while these naysayers keep distracted with the same flawed arguments like "other coin will come", "government will ban", "tulips" etc. Those who make the effort to learn take the red pill to freedom. The rest remain in sheepland. I've been studying Bitcoin and gold daily for four years. Comments like those make me feel more bullish about how early in the cycle we are. I'm buying more BTC today.
    • DW
      Daniel W.
      19 October 2019 @ 12:48
      ...and the will turn out to be supportive or restrictive to the price of Bitcoin?? My guess is restrictive.
    • NS
      Nathan S.
      20 October 2019 @ 03:04
      If restrictive, lose 1x. If the opposite, 100x++. It’s a risky bet not to have at least 1-5% of investible assets in BTC. More, obviously, if you’re not a skeptic.
  • CA
    Chad A.
    19 October 2019 @ 10:27
    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.
    • RS
      R S.
      19 October 2019 @ 10:46
      Ohio doesn't anymore. Network effects can be purchased with any marketing budget.
    • DC
      Daniel C.
      19 October 2019 @ 23:20
      All you need to do is to market more and put more money behind your marketing department to overcome the alpha?? Hot damn! I need to hire you to become my CMO
    • DL
      Dan L.
      20 October 2019 @ 19:12
      Consider Plan B's S2F model, where scarcity drives price; In order for Bitcoin to significantly increase in value (as it has done), then it must come to dominate the other so-called "alt" coins; otherwise, those digital currencies would effectively dilute the bitcoin market. Where network affects and first mover advantage comes into play is exactly with respect to Bitcoin's market domination among digital moneys that are based on a public blockchain (keeping things apples to apples). VHS beat out Betamax for this reason, as is well-known. In addition, on top of normal network effects, as the price of bitcoin increases, it attracts miners (more hashing power) to the network, which in turn makes it more secure, and therefore more desirable than its competitors. It is thus extremely difficult for other altcoins, even ones that may have the same or higher S2F, to compete with Bitcoin.
  • DR
    David R.
    19 October 2019 @ 07:36
    This guy puts a very case across , but please don't really need the Mr X look , a wee bit infantile to me.
    • NC
      Nic C.
      19 October 2019 @ 12:24
      David - let people be how they want for God's sake, trust me, you're not perfect - keep your opinions to yourself
    • DR
      David R.
      19 October 2019 @ 13:18
      Hi Nic , couldn't agree more I'm not perfect yet just voicing an opinion . It's an open platform and that's the beauty of it .
  • TH
    Timo H.
    19 October 2019 @ 07:16
    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?
    • RS
      R S.
      19 October 2019 @ 09:30
      Bingo!
    • FS
      Fagundes S.
      19 October 2019 @ 11:48
      You do not understand the concepts of hash rate, network effect and social consensus. Every single "coin" that was created to surpass Bitcoin has failed to do so. In fact, Bitcoin dominance keeps increasing and is now well above 70%. Even much higher if you consider more useful metrics than market cap. After almost 11 years people still talk about "other coins". But BTC is stronger than ever. Waste of time.
    • TH
      Timo H.
      19 October 2019 @ 14:14
      N R, rest assured, I know this stuff. You, like every other bitcoiner, confuse network effect with brand value.
    • PG
      Petter G.
      19 October 2019 @ 15:14
      @Timo: Last time we discussed Bitcoin in the RV comments section you posted links to a project that supposedly was much better than Bitcoin (you claimed that BTC had failed because it lacked instant settlements at the base layer). The problem though was that your project was a *permissioned* system (comparing apples to oranges). So at least you didn't "know this stuff" back then. But to your point on branding: If marketing budget was everything then Bitcoin Cash would have won this race long ago. (I only mentioned our old convo because you wrote "N R, rest assured, I know this stuff")
    • TH
      Timo H.
      19 October 2019 @ 16:01
      @petter, the permissionless blockhain community has failed to demonstrate ANY decentralized service, that would meet the basic requirements of proper identity management, reliable privacy and efficient transaction handling. Until those qualities are introduced to permissionless blockchains, the technology is useless in any real services. This applies also to bitcoin. It lacks real privacy to be a truly useful store of value. I fail to see, how a privacy-destroying solution can be freedom-preserving.
    • TH
      Timo H.
      19 October 2019 @ 16:19
      A thought experiment: if someone invented a privacy-preserving bitcoin, what would happen to the value of the original one? Spoiler alert: it would go to zero. (If such invention won't show up, Bitcoin's narrative as a freedom-guarantor remains very questionable.) Bitcoiners essentially bet on the cessation of innovation in blockchain technology. I would never do that.
    • JH
      James H.
      20 October 2019 @ 07:54
      PlanB has done a study of altcoins, there is no correlation or cointegration with stock to flow, look it up on his twitter feed. I have a feeling this won't dissuade you though, good luck ;)
    • TH
      Timo H.
      20 October 2019 @ 14:33
      I may get interested, if the reasons of altcoins not following the bitcoin pattern are technical, i.e. not dependent on market psychology, including herd behavior.
    • DL
      Dan L.
      20 October 2019 @ 19:21
      @Timo, the conversation concerning use-cases for public blockchain other than as a store-of-value, is a separate subject which tends to confuse people. If you are interested in the state-of-the-art of public blockchain technology in general, then I suggest taking a close look at Cardano, which is probably still a few years out from serious application in the ways that you are mentioning.
  • BC
    Benjamin C.
    19 October 2019 @ 06:46
    Fascinating
  • UJ
    Ulf J.
    19 October 2019 @ 06:11
    Fantastic conversation Raoul we are entering unknown waters and trying to navigate and this was interesting, If something has been around for 6000 years it is truly time for a change and when we are going into space we must have something else then gold to use. I think why the halving is not priced in is because there are so many people like me that don't understand the old markets and the understanding of buy the rumors sell the news but that is not only one thing that plays in Bitcoin halving price. It is wise to own gold and Bitcoin. I discovering a lot with you guys at Real Vision I wish the Internet was there when I was young.
  • MH
    Matt H.
    19 October 2019 @ 03:17
    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.
    • CB
      C B.
      19 October 2019 @ 05:11
      For the same reason people believe that pervasive computing, driverless cars and space tourism are actual solutions to societies problems, gold exists as reminder of our human ability to allow the story to get ahead of the reality.
    • DR
      David R.
      19 October 2019 @ 17:11
      I get your point Matt , but no one embracing technology more than the Chinese ( go out to Beijing , Shanghai and try to pay for something with cash ) yet they are aggressively buying gold and suspect there ''official '' reserves are nonsense . Gold will be an anchor of value in the next 50 years as well as something like Bitcoin I suspect.
  • DH
    Daniel H.
    19 October 2019 @ 02:03
    There is no network effect. It is just the ordinary lower portion of an S curve.
    • RS
      R S.
      19 October 2019 @ 02:40
      Correct. Nor is bitcoin decentralized. The repetition of these marketing buzzwords -- decentralized, network effects, digital gold -- do not describe bitcoin. Bitcoin is none of those things. Bitcoin was founded by less than 10 people. Today, it's hashpower is 80% controlled by China and Russia. 10% of bitcoin core is written by one developer. Another single businessman owns 40% of lightning network alone. Even the creator of bitcoin named a single male successor, Gavin Andresen. Network effects can be purchased with marketing dollars. Digital scarcity is no different from domain names. There are unlimited new cryptocurrencies coming with better technology, so there is zero scarcity.
    • TH
      Timo H.
      19 October 2019 @ 14:28
      The transactions are decentralized, but the data is not. Everyone sees everyone's assets. There's essentially no privacy and thus no real freedom. It is astonishing, that this is completely ignored by the bitcoiners.
    • AW
      Adam W.
      20 October 2019 @ 16:14
      'Controlled by China and Russia'?. The networks may be inside China and Russia, that is very different from your threatening sounding 'controlled by'. Bitcoin was created by less than x number of people sure, but these people are anonymous, left their early Bitcoins in the system, and do not interfere. Other cryptocurrencies are generally pump and dump exit scams designed by boards of active directors trying to acquire money; they are not decentralised and lack the ideals of Bitcoin.
    • RS
      R S.
      21 October 2019 @ 07:22
      Bitcoin isn't decentralized. 58% is owned by state-backed Chinese companies AntPool, BtcCom, ViaBTC, F2pool, and BTCtop. The handful of guys who control these five companies have the worldwide exclusive power to determine which chain is the real bitcoin, allowing them to unilaterally decide on which transactions to approve and which version of history will survive, that is hashpower. If you add Russian state companies, bitcoin's hashpower oligopoly rises to 80%. Decentralization is a marketing myth. Bitcoin was created by less than 10 people, is still controlled by less than 10 people. The creator himself, Satoshi, named one single person as his successor, Gavin Andresen. Not decentralized. Storytelling.
  • CH
    Chris H.
    19 October 2019 @ 01:17
    "Lets talk about Bitcoin." zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz
  • as
    andrew s.
    18 October 2019 @ 23:59
    BS "exchanges" with 100x leverage, mysterious anon leaders, Brock Pierce, McAfee, Whales wash trading. Good luck with that lol ! Goldbugs, Bitcoiners same seed.
    • as
      andrew s.
      19 October 2019 @ 11:57
      Fake $ in the form of USDT (tether) created out of thin air. Pffft !
    • as
      andrew s.
      19 October 2019 @ 12:07
      Speculating , no one accepts BTC but Dark Web purchases. Store of money or new cash system ......?
    • DL
      Dan L.
      20 October 2019 @ 19:24
      @Andrew, just because there's hype and shilling going on does not mean that there aren't some people who are making sense. Let's take the conversation up a notch, shall we?
  • JF
    Joseph F.
    18 October 2019 @ 21:46
    Idiots down vote the truth.
    • JB
      James B.
      18 October 2019 @ 22:14
      If it's worthless you're more than welcome to sell 2030 calls to guys like Trace Mayer. After all, you wouldn't have to cover because it wont be worth anything by then, right?
  • NI
    Nate I.
    18 October 2019 @ 21:44
    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).
    • DP
      Daniel P.
      19 October 2019 @ 01:11
      Yeah it’s true lots of things could drop demand and break the model but what’s amazing is that if this model is correct (currently), demand doesn’t actually have to rise in order to see further incredible gains - just a product of the upcoming reductions in flow
    • AW
      Andrew W.
      19 October 2019 @ 02:31
      There's actually two questions here. "Another crypto that's better than BTC comes along" -> I don't think you understand what BTC is. BTC is a monetary policy, a network, and a social contract. At that, it's 100% complete. There is literally no feature missing from its as a money system. All these fancy features you seek, like privacy, payment processing, and banking are meant to be built on top of this money supply.
    • AW
      Andrew W.
      19 October 2019 @ 02:33
      Your second question is about outlawing BTC. Similar has happened for gold on numerous occasions. You keep your BTC is a separate political jurisdiction from where you live automatically. You procure it in a different jurisdiction. Any time you have hard money (BTC will be ultra-hard) there will almost certainly be laws going against it. I anticipate BTC being banned in many countries the more valuable it gets.
    • FB
      Fredrik B.
      20 October 2019 @ 00:48
      Except BTC doesn’t work as money with 3-4tx/sec. The contract, the white paper, describes a free market peer to peer cash system not centrally planned limited block sizes (BTC) or centrally planned blockchain reorg thresholds (BCH). BSV will be the only viable Bitcoin long term. Don’t like it? Create a more fair system that also actually works long term.
    • AW
      Andrew W.
      21 October 2019 @ 09:52
      @Frederik I can't believe we have BSV fraudsters on here. Unbelievable. For others reading this, the design of Layer 1 protocol at 4 tx/sec is sufficient since past a certain transaction cost most retail owners will be operating at higher layers. For example, the Lightning Network on top of BTC operates at 1 million tx/sec.
  • JF
    Joseph F.
    18 October 2019 @ 21:44
    Caveat emptor.
  • JF
    Joseph F.
    18 October 2019 @ 21:42
    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.
    • FS
      Fagundes S.
      18 October 2019 @ 21:45
      That's like not using the USD because banks get robbed and companies like Enron used it to defraud investors. Total nonsense.
    • JB
      James B.
      18 October 2019 @ 22:08
      That's why you hold your own keys and run your own full node. It's really not that hard.
    • AW
      Andrew W.
      19 October 2019 @ 02:36
      That's why you use an insured custodian like Bakkt or Gemini. If you're an institution, you could use those or Fidelity. There's many others, but the point is the people who used your exchange deserve to lose every penny they lost because they didn't do their research (maybe this is harsh but I stand by it).
    • UJ
      Ulf J.
      19 October 2019 @ 06:19
      it has nothing to do with luck, if you did not store your money at an exchange it is your own smart way of understanding that you must have your money in your own possession ask people in Cyprus if they trust ordinary Banks it is a risk to. You can't leave your money to people you don't know.
    • AM
      Andrew M.
      19 October 2019 @ 14:34
      Not your keys, not your coins.
    • GS
      GRANT S.
      22 October 2019 @ 12:59
      Not your keys....Not your bitcoin
  • SS
    Steve S.
    18 October 2019 @ 21:01
    Bitcoin. The greatest Asymmetric trade in the history of mankind. No-one is going to regret investing in at least 1 bitcoin. Your downside is minimal compared to the asymmetric upside which you will kick yourself if you miss it. Don't be a hero. Buy some bitcoin.
  • MC
    Mike C.
    18 October 2019 @ 20:36
    GREAT INTERVIEW
  • LW
    Lukasz W.
    18 October 2019 @ 19:46
    Can I pay for RV subscribtion in BTC ? If no, then this tells you something.
    • JB
      James B.
      18 October 2019 @ 20:06
      Bitcoin is a push only payment system, like physical cash or gold. There's nothing stopping you from creating a custodian that allows for Bitcoin credit cards.
    • SA
      Sanne A.
      18 October 2019 @ 20:54
      My bank doesn't provide creditcards. I can get one through a 3rd party but then I need to show that I can afford one by sending them financial data. I paid using a bitcoin topped creditcard. A bitcoin topped creditcard is less intrusive on privacy and it saves me the hassle of sending unnecessary copies of bank statements.
    • DP
      Daniel P.
      18 October 2019 @ 21:14
      A completely neutral platform providing information?
    • KW
      K W.
      18 October 2019 @ 21:42
      Can you pay in gold ?
  • JB
    Jim B.
    18 October 2019 @ 19:21
    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?
    • dd
      diego d.
      18 October 2019 @ 19:46
      you can copy bitcoin but that bitcoin doesnt have the mining power and security behind it. but of course its possible that a better version will come out and take some marketcap off bitcoin.
    • RV
      Ryan V.
      18 October 2019 @ 19:55
      What if the new bitcoin was legal tender for all debts public and private? Wouldn’t the miners be motivated to switch over to the new bitcoin for the legal tender block reward? If the mining hardware is compatible with new coin, what loyalty do miners really have when a new reward block comes along every few minutes?
    • MP
      Max P.
      18 October 2019 @ 20:00
      Bitcoin isn't just the code. Sure you can copy the code and create another crypto, but what you can't copy is the network, the miners, the hash power, the people that use it and ultimately the social contract. The best example of that were the forks happening in 2017 (Bitcoin Gold, BCash etc.). They tried to copy bitcoin but almost noone is using it and therefore have not a lot of value. Plus none of the other cryptos have unforgeable costliness like bitcoin does.
    • DD
      Daniel D.
      18 October 2019 @ 20:21
      You are the opposite of stupid. I know the others will say it's different this time. True scarcity, I mean absolute real scarcity isn't something man made, can be and has been manipulated and will be again. Created by people in the shadows with hoods on, incognito. All sounds really cool, like a movie or something. This hype I've seen many times in my lifetime-I'm quite certain I'm older than many of you. It doesn't end well and I think RV spending so much time on it is silly! People will/have made money on it but, they did in the South Sea bubble, Tulip Mania, Bre-X, Confederate bonds, etc. at least for a while-then poof, it's gone and on to the next thing.
    • JB
      James B.
      18 October 2019 @ 21:09
      Easy money for you then, Daniel. Short sell Bitcoin.
    • SA
      Sanne A.
      18 October 2019 @ 21:16
      Bitcoin is truly scarce too. You cannot inflate it's supply. Copying the code is not enough. This has already been tried and it has had only a temporary effect. There are other protocols out there that are better at accomplishing Satoshi's original vision of a digital peer-to-peer cash (e.g. Avalanche) but they don't hold the same value proposition as Bitcoin due to it's network effects, monetary policy and energy/labor/costs to maintain the network.
    • RS
      R S.
      18 October 2019 @ 22:35
      Bitcoin is like a good domain name. There are many other domain names that will be better.
    • RW
      Ryan W.
      19 October 2019 @ 05:53
      LMAO Cash is digital in your bank account, credit is digital in your loan statement, gold is digital when you store your gold in a vault and get an account statement. Calling Bitcoin digital gold is pure marketing, making it feel more like snake oil and tulip bulbs than having legitimate value. The futures market comments say a lot about dislocation. That's great for speculation which is the world of Bitcoin buyers. Gold buyers look for stable assets. One more thought, borrowing from Raoul's example. What makes rare valuable? A single unique chair might have no value vs a single painting that might be "priceless." We might just as well issue shares in the Mona Lisa. At least, the MonaLisaCoin would have some meaningful tangible value to investors vs the fiat (self decreed) scarcity of 21 million bits.
    • TH
      Timo H.
      19 October 2019 @ 07:36
      Bitcoin is scarce to those, who believe in it. So is Bitcoin Gold, Bitcoin Cash and Bitcoin SV. For everyone else, they all are just digital collectibles. In general, all monetary systems are belief systems. Money is money only, if you believe, that it is money. What I see going on right now is a fight between crypto religions. Bitcoin seems to be leading, but as with all religions, it is possible, probable and, in the digital realm, even inevitable, that competing religions emerge. Gold is no different in this respect, with the exception that is is not in the digital realm. It is the product of the Church of Physical Scarcity. Because of the word "physical", it is a bit hard to found a competing religion that preaches the gospel of Physical Scarcity. Only time will tell, which religions or scarcity attract people the most, when the need for scarcity emerges in earnest. My bet is on gold, because in the SHTF scenario where the scarcity is really sought after, the true scarcity of gold will be 10-100x more severe than currently perceived, because of the inevitable sudden vaporization of the naked futures market. On the other hand, in the digital realm, nothing really prevents emergence of new Churches of Scarcity, if the demand for such goes through the roof.
    • TH
      Timo H.
      19 October 2019 @ 08:00
      To add one more thing here. I think we all agree here, that the State Church of Centrally Priced Debt has con men as its high priests. When that fact becomes evident to the general public, the search for a bit more honest Money Religion starts. The most honest one hopefully wins.
    • CA
      Chad A.
      19 October 2019 @ 10:09
      Study the network effect... https://www.nfx.com/post/70-percent-value-network-effects
    • YC
      Youp C.
      19 October 2019 @ 10:10
      "Gold is truly scarce." Until you can extract gold from seawater, or mine an asteroid for minerals, including gold.
    • FB
      Fredrik B.
      20 October 2019 @ 00:55
      You are not stupid, however there can only be one cash that is best which long term will be the free market peer to peer cash described by the white paper. Not BTC:s centrally planned blocksize limit fueled gold narrative or BCH:s centrally planned threshold limit only cash narrative... with one left, if you looking for a asymmetrical trade look at BSV.
    • DD
      Daniel D.
      21 October 2019 @ 19:02
      James B. Or another more intelligent alternative-do nothing!
  • RV
    Ryan V.
    18 October 2019 @ 17:49
    I think he has the stock to flow model completely backwards. Let’s look at silver. The stock to flow has fallen from 20 to 3. Let’s keep this trend going. Is silver worthless when it reaches 0.1 or a tenth of annual mine supply? That sounds like a scarcity to me.
    • RV
      Ryan V.
      18 October 2019 @ 18:23
      Wait never mind. I get it. Stock/flow is just the inflation rate described in the inverse.
  • BT
    Bernardo T.
    18 October 2019 @ 16:05
    Has anyone tried to run a rescaled range analysis (R/S) on the BTC/USD pair? It would be interesting to see if any stationary cycles will be exposed and whether there is a statistically significant global determinism on the price of BTC. It would be interesting to tie these results with the stock-to-flow study ran by Plan B.
  • RS
    R S.
    18 October 2019 @ 15:35
    Popularity for a couple years does not turn a fad into money. Storytelling. Pure marketing. Better cryptocurrencies with centibillionaire corporate/sovereign/transnational backings will come. Zero scarcity, unlimited new cryptocurrencies with better technology and wealthier backers.
    • SA
      Sanne A.
      18 October 2019 @ 16:59
      Bitcoin has less marketing than gold. I suppose you are in the camp of Bill Gates then - who famously said "I would short bitcoin if I could". Well you can (as could Bill when he said it). Seems a no-brainer. You are welcome.
    • RS
      R S.
      18 October 2019 @ 17:26
      Bitcoin is less than 1% of gold. You don't short fads, you don't short tamagotchis, beanie babies, or slap bracelets.
    • NB
      Nicholas B.
      18 October 2019 @ 17:47
      Supposedly it’s been a fad for 10 years now. I’ll add this to the list of negative terms everyone has been calling it for the last decade. Scam, fake, corrupt, evil, tulip, fad.
    • SS
      Simeon S.
      18 October 2019 @ 18:17
      Have you looked at stock to flow of beach sand??
    • JC
      Jean-Paul C.
      18 October 2019 @ 18:51
      All true, but there is a simple investment thesis. Country coins replicate our current model digitally with surveillance. Company coins are hamstrung by geopolitical reality (why not wepay in US?). The only chance for a universally global digital money is Bitcoin. Network effects are so strong that it will take something 10x better to kill BTC. Even then you are starting a fresh experiment with tech/developers/governance. Incredibly hard to build confidence without time. Meanwhile bitcoin keeps improving. If you want to bet on the most likely winner, Bitcoin is it by a huge margin. It is not guaranteed to succeed, but nothing suggests it's time is up.
    • FS
      Fagundes S.
      18 October 2019 @ 21:49
      Anyone who has studied Bitcoin can easily tell R S is a clueless noob. Don't waste your energy debating such simple red herrings - clearly someone who can't be bothered to invest learning time, especially now that there are at least 4 excellent books and many podcasts with great professionals.\ Time will teach RS again, if he didn't learn from the past 10 years of BTC success.
  • SL
    Seth L.
    18 October 2019 @ 15:08
    One of the greatest interviews I've seen in ages! Lovely, thanks!
  • JT
    Jose T.
    18 October 2019 @ 14:50
    How sifficult is it to understand? Bitcoin is the metric system for money. Finally a "barometer" that can't be meddled with. That is all folks.
    • RS
      R S.
      18 October 2019 @ 15:28
      It's a fad. Infinite supply of new, better cryptocurrencies. There is nothing valuable about bitcoin except that it's been popular for a few years. Pure marketing. Unlimited supply of better cryptocurrencies with new centibillionaire backings will come online in coming years.
    • AW
      Andrew W.
      19 October 2019 @ 02:44
      @R S People store their wealth in BTC to escape money debasement. Thus, participation in altcoins is irrationally antithetical to the entire purpose of BTC. As a money supply, BTC is 100% complete. There can be no better BTC as the monetary policy has no imaginable improvement at the base layer.
    • AW
      Andrew W.
      19 October 2019 @ 02:46
      Or, to look at it in another way, we already have the scenario you're talking about: marketing and supply of "better" cryptocurrencies with authoritarian backing ... thousands of them... and they all failed. Once you realize BTC is 100% complete as money, you'll realize why there is one and only one BTC.
    • RS
      R S.
      19 October 2019 @ 09:37
      There are new cryptocurrencies with all the features of bitcoin, plus more, and they will be backed with tens or hundreds of billions of dollars. You will see how quickly network effects and popularity and scarcity and everything that currently makes bitcoin valuable, can be bought, within months.
  • AW
    Andy W.
    18 October 2019 @ 14:01
    Among all the cryptos, why do you believe Bitcoin will eventually win? What will happen to the value of the coin if it becomes marginalized and nobody uses it anymore?
    • SC
      Stuart C.
      18 October 2019 @ 14:58
      Suggest you dive deep into Trace Mayer’s network effects.
    • RS
      R S.
      18 October 2019 @ 16:22
      China and Russia own 80% of bitcoin hashpower, and lightning network. Decentralization is a myth. Satoshi named one successor, his name is Gavin Andresen, and Gavin doesn't care about bitcoin anymore for a reason.
    • RV
      Ryan V.
      18 October 2019 @ 17:41
      Bitcoin is the first kick at the can. If bitcoin fails as a store of value, why should any crypto currency after it have a store of value when it is also replaceable? It is bitcoin or nothing.
  • GH
    Galen H.
    18 October 2019 @ 13:50
    I think most people assume that as the scarcity of an asset increases, the value of the asset goes up, but could there be any validity to the notion that if scarcity increases too much, it starts having a detrimental effect? I had this feeling about gold (obviously hasn't happened yet) before BTC came along and now it would apply more to BTC. From this video and others this week, it would seems this has never been tested. I also don't have a reason for this, except an odd feeling (Maybe decreased tradeability or decreased "allure" of finding more decreases its "special" status). I guess we'll have to wait and see. I'm not banking on this "odd feeling" being the winning trade though. I also liked the part where Plan B reckons that if/when the BTC market cap is, let's say $2trn, the market will be quite different (especially due to its divisibility).
    • SA
      Sanne A.
      18 October 2019 @ 17:02
      Trading/investing based upon feelings is quite detrimental ... don't do it! (:
    • IO
      Indi O.
      18 October 2019 @ 18:27
      Even when S2F of BTC is on par with gold after the next halving, BTC will still be divisible in far smaller units than gold practically is, not to mention far more easily stored and transported in amount great and small. So we certainly wouldn't anticipate the issue you state at that point given that gold isn't facing such a problem now. How far we would have to go in scarcity for there to be "too much" scarcity for practical liquidity is hard to say, but definitely should have to "eat up" the increased flexibility of enhanced divisibility and transportability relative to gold first.
    • MM
      Matt M.
      18 October 2019 @ 19:24
      One thing is certain, as governments came to realize this with gold: if an asset is scarce, governments will move away from using it as the backing of their money because they can't artificially inflate the supply. So again. I ask you: is that good for Bitcoin or bad for Bitcoin?
  • CL
    Charles L.
    18 October 2019 @ 13:35
    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?
    • GH
      Galen H.
      18 October 2019 @ 13:53
      I think the same question I have, but yours is far better articulated!
    • NP
      Ni P.
      18 October 2019 @ 14:01
      In a world where BTC is the global reserve currency, lending will still exists. Interest rates (the price of credit) would fluctuate in the free market to adjust for these fluctuations. The only difference is that it would be harder to re-hypothecate assets.
    • CL
      Charles L.
      18 October 2019 @ 14:50
      @ Ni P, thanks very much for your answer mate. It I may, a second question comes to mind from it. In today’s USD based system, my understanding (which may be wrong of course) is that precisely the supply elasticity attribute of fiat currencies provides the needed flexibility to print more money units to be able to cover the supply/demand imbalances created when money (in the form of credit) is lent/created. This imbalance is overcome by more money printing, devaluing the purchasing power of each money unit. Prior to fiat currency systems, these imbalances were not so long lived and simply put debt defaults occured on a more frequent basis. To me, in essence, all we have done with fiat is create more “room to move” in terms of money supply thought the effect is loss of purchasing power (in the same way gold or silver content in roman time coins decreased, causing the progressive loss of their purchasing power). The thing is, when debt is defaulted on, assets & liabilities are both destroyed in a credit based system using fiat currency. This way, supply expands or contracts accordingly, allowing overall price adjustment. How would this mechanism work when lending money units which are fixed in quantity at all times, independent of debt defaults? What would that do to prices?
    • SS
      Steven S.
      18 October 2019 @ 16:46
      Money is whatever people choose to use as money. Laws can encourage (making federal reserve notes legal tender) and discourage certain things (outlawing private gold ownership) but if the incentives are strong enough people will do whatever they need or want to do. > What happens to goods and services prices based on a means of exchange which has, by definition, no adjustable elastic functions built into it? Prices go down. As they should. This distributes the gains to productivity as widely as possible to all holders of money which is much fairer than the current system which is designed or has evolved to collect such gains primarily in the hands of the state and a tiny elite with shocking efficiency. The price of everything is crashing in terms of Bitcoin over a multiyear timeframe. Once you absorb this fact you will begin to act appropriately.
    • YC
      Youp C.
      19 October 2019 @ 10:05
      "... "Real money" is human productive output in the form of goods and services" I think that's incorrect. Goods and services are just that: goods and services. Money is the medium of exchange used to pay for them. The characteristics of a good medium of exchange must therefore be: durability, portability, divisibility, uniformity, limited supply, and acceptability. Normally all these characteristics are to be found in one medium of exchange. Unfortunately, our media of exchange are being debased. Therefore, our money has little use as a store of value. You are forced to either invest in the financial markets, hold gold and/or bitcoin in order to not get robbed by inflation. Of course, there is no reason why there can't be several media of exchange; each covering a part of the monetary function or competing with each other for one monetary function. If bitcoin only serves a purpose as a store of value, it'll do great. Quite possibly for purchasing your daily groceries, something else will pop-up. If not, then that's for government fiat. The business cycle - causing all the booms and busts - is a function of fractional reserve banking together with central bank monetary policy. If that no longer exists, the boom and busts will disappear and prices will drop steadily with a growing economy since the media of exchange become steadily more valuable.
  • MT
    Mike T.
    18 October 2019 @ 13:22
    the recent videos have most certainly been very interesting, but, and whilst this may change in the future, only at an educational/academic level. For the moment a sense of realism will temper my interest, e.g. yesterday Bitcoin November Futures traded just 34 contracts in the entire day, value in round number USD $7M and yet APPL on it's own traded 14 million shares ( below average) with a monetary value of USD 3.3Billion.
    • MS
      Michael S.
      18 October 2019 @ 14:22
      Bitcoin daily volume is over $10 Billion, 3 times that of Apple, and it could care less what Wall St. and the futures market are doing.
    • RV
      Ryan V.
      18 October 2019 @ 17:50
      Michael crypto currencies are notorious for was trading. The volume you see on the ticker is not the real volume.
    • SA
      Sanne A.
      18 October 2019 @ 20:42
      Although there certainly is wash trading when it comes to bitcoin - comparing just bitcoin futures with APPL shares is comparing apples with oranges.
  • Bv
    Berend v.
    18 October 2019 @ 13:15
    Sorry for my typos, I should be doing other work and wrote this in a rush.
  • MM
    M. M.
    18 October 2019 @ 13:10
    Heej i recognize this voice. :)
  • BS
    Benjamin S.
    18 October 2019 @ 12:47
    Thanks for your feedback. I guess it would be dependant on many variables. Eg The number of computers processing it, the cost of the electricity and hardware. It can only be cheaper/more efficient transactions than our current banking system.
  • BS
    Benjamin S.
    18 October 2019 @ 12:11
    Could anyone explain who will run the bitcoin network once all the 21 Million coins have been mined, if there is no reward for the mining computers?
    • DP
      Daniel P.
      18 October 2019 @ 12:21
      transaction fees will replace new BTC being mined to continue to incentivise miners
    • BS
      Benjamin S.
      18 October 2019 @ 12:29
      Thanks Daniel. Is there any way to value what those transaction fees would be then?
    • SB
      Salvatore B.
      18 October 2019 @ 12:33
      I believe it will be what the market decides at that time. If you want your transaction moved to the front of the line, you can pay a higher fee for the miners to verify your transaction.
    • AK
      Ado K.
      18 October 2019 @ 12:35