Bitcoin As an Asset (Why Bitcoin is Unique in Human History)

Malcolm and Simone have an in-depth discussion on why they believe Bitcoin is valuable as an investment asset, especially for the ultra wealthy. They cover topics like Bitcoin's divisibility, transportability, known supply, and increased ownership compared to other assets like gold. They also talk about how Bitcoin could be useful in various societal collapse scenarios compared to precious metals, and what risks there still may be to its long term value.

Malcolm Collins: [00:00:00] If I have a caravan and I'm trying to move assets between two locations in like medieval Europe or something like that.

And that caravan had a lot of gold in it, right? If that is raided by a group of bandits, those bandits, because the, the gold is easily divisible, it can easily divide it. They can easily use it even in small increments to buy a beer. You know, you could, you know, historically in the old West, that's where they'd grow out their nails.

They'd scrape a little bit of gold dust. And they'd use that to buy a beer. But, but If you are a group of bandits and you raid a carriage and it's full of art, expensive art, that is incredibly hard to fence. That is incredibly hard to make of use to you.

And the amount of money you're going to get from that is dramatically lower than the amount of money a wealthy person could get from that. And for those reasons, There is differentially less reason to raid those carts. Now, with crypto, it's a little different. If [00:01:00] I split my key. between multiple carriages for anyone to gain access to any of it.

They would need to successfully heist every single carriage was a portion of my key I hope it now makes sense to you why this is such a valuable asset to the ultra wealthy.

And then the question is, do we live in a world where Wales is being more and more concentrated among a smaller and smaller class of people? And to me, the answer there is f*****g obviously.

Simone Collins: You know, you're number one. You are the sun around which we revolve.

Malcolm Collins: That is not true. You are the best and I love you. You shouldn't. But we're going to talk about Bitcoin today. Bitcoin. Yeah. Yeah. So we got a comment under we, we had done a video on you know, investment and we mentioned Bitcoin briefly in that video and, and, you know, why I thought I liked it more than precious metals.

It's like a longterm investment and we're, we're pretty heavily invested in, [00:02:00] in that area of crypto at least. And one of the comments said. You like, I know I would never get Bitcoin because you don't own your own Bitcoin. You know, it's always on another exchange like FTX or something like that. But with gold, I can own my own gold.

And when I saw that I was like, holy s**t. Like even in our audience, which I consider a fairly educated audience. I was surprised by the lack of like knowledge about like the basics of Bitcoin as an investment or the way Bitcoin works or why it has value. If you are a Bitcoin person, you would hear something like that and just guffaw at the insanity of it.

Because it is so super incorrect. So what we wanted to take this podcast to do is explore Bitcoin. As an asset, i. e. not as a technology, like not why, and I think this [00:03:00] is the problem with Bitcoin videos, is they so often approach it being like, Ooh, here's like the technical part of like why it's cool, here's like the whatever, you know.

Great.

Simone Collins: Or like, here's how to invest and look at these weird charts and this is my

Malcolm Collins: method. Yeah, yeah. Or like that, like, oh, here's it going up into the right and here's it going down and this is how you do it and you

Simone Collins: know, because of the, this and that, like how it's going to change, blah, blah, blah. Right.

Malcolm Collins: Yeah. Whereas I want to try to do an episode on Bitcoin and this is why I didn't really prep for this episode. Otherwise I would have on an episode on Bitcoin. Interesting. So just at the highest conceptual investment level, like as an asset. discuss why it's a thing of value and why I think it will be a thing of long term value that I am very interested in, in participating, like long term when I think about my kids and stuff like that.

All right, let's do it. Well, so Simone, do you want to take a start in the basics of what you understand of how Bitcoin works? [00:04:00] Okay.

Simone Collins: Things I personally like about Bitcoin. One is it's not owned or run by a government. It you know, although there are obviously complications to this, like where the supply could be manipulated if enough people who Bitcoin.

Sort of decide they want to change this another thing that made it stand out to me is that you actually really can own this. And, and this is an asset that when s**t hits the fan, you can take with you and you literally don't have to have anything as long as like, you've, you've remembered recovery.

Phrases. And that's kind of scary. I mean, you could have it written somewhere. You could have it you know, like all these different friends, like hold different ones. Like there, there are many different ways you can do it, but like, literally, you don't even need to have any sort of device or thing and you can still have your value and it's not on an exchange.

It's not where people can get it.

Malcolm Collins: And hold on, I want to double click on what you said there because you're just like listing facts. And I think that that second point is something [00:05:00] that can be kind of confusing and that was clearly confusing to the individual who first heard about this. Okay. Okay.

Dive in. So crypto is an asset at the most basic level. And I said this in the, in the previous episode on this subject, it is the first time in human history in which we have had an asset with a known quantity that is divisible. Easily tradable. And a person could say, well, you don't have full ownership over it, which is just not true.

You actually have a fuller ownership over Bitcoin than you do gold or any asset. You literally have more ownership over your Bitcoin than you have over a block of gold you are holding in your hand. So why is that the case, that that is the case because unlike the block of gold that you are holding in your hand and someone could come along and yank it.

With Bitcoin, if you have [00:06:00] memorized your passphrase, you literally, there is no way to access it other than, than hacking the entire blockchain. You can be

Simone Collins: tortured. You can be tortured. You can be

Malcolm Collins: tortured, but do you understand that that is an additional level? You can be tortured for like, the location of your gold or something like that, right?

Yeah, yeah, yeah. But somebody could also externally find your gold. You could have

Simone Collins: somebody come. No one can find, no one can find your, your Bitcoin or other crypto. Voluntarily

Malcolm Collins: give up that information. And that is wildly different from any other now, now voluntary, obviously torture and stuff like that.

But that is a level of self ownership that goes beyond the self ownership of gold. And then somebody could say, well. He doesn't understand Bitcoin very well, so it's useful for me to explain this. Well, okay but where is it actually stored? Like, who actually has it if you just have a [00:07:00] code in your head?

And think of it like this. It's distributed among everybody who has Bitcoin. That's who has it. It's actually a little bit more nuanced than that. It's sort of like everybody who has a node that's operational for Bitcoin.,