February 11, 2020
Bitcoin as the Internet of Money – Andreas Antonopoulos on The Joe Rogan Experience #844
Key Takeaways
- Bitcoin is a protocol not owned by anyone, like the web or email—think of it as ‘The Internet of Money’
- Applications built on Bitcoin work globally and seamlessly without permission (same with the Internet): “This [Bitcoin] is the internet of money, which means it’s open, borderless, global, and requires no permission.” – Andreas Antonopoulos
- Cash is slowly being eradicated
- “If the product/service is free, then you are no longer a customer; you are the product—the customer is the advertising agency” – Andreas Antonopoulos
- (The cost you pay for free content is no longer being able to engage with the web without it being filtered based on your data)
- Hardware wallets are purpose-built devices for storing your Bitcoin/Crypto keys securely, even if your computer is hacked
- Since inception, Bitcoin protocol hasn’t been hacked (one reason for such: there’s no single target to attack)
- Continuously pumping money into an economy prevents washing out frauds and failures. Worse, it encourages systemic fraud.
Intro
- As the Halving arrives later this year, we dug back into our archives to cover this masterclass in crypto
- Host – Joe Rogan (@joerogan)
- Andreas M. Antonopoulos (@aantonop) is a public speaker and author of: The Internet of Money, Volume 1, Volume 2, and Volume 3; as well as Mastering Bitcoin and Mastering Ethereum
What is Bitcoin?
- A monetary system that lives on the Internet and allows global, peer-to-peer transactions
- Bitcoin is a protocol not owned by anyone, like the web or email—think of it as ‘The Internet of Money’
- Bitcoin changes how we think about money—an ancient technology that’s “changed” only 4-5 times through history; we went from:
- Bartering —> trading collectibles —> trading precious metals —> trading certificates of deposit (i.e., paper money) for precious metals —> using plastic money (AKA credit cards)
The Future is Digital Currency
- Cash is being eradicated. The transition to a digital money society can take two possible two forms:
- State and corporate money under complete surveillance/control
- Peer-to-peer money under the control of its owner with no other parties involved (i.e., digital cash)
- Non-cash payments are peer-to-corporations-to-peer—each corporation takes a cut
Infrastructure Inversion
- Infrastructure is built whenever there’s a need—this happened with automobiles, the Internet, electricity, etc.
- “They wouldn’t let the internet be on the phone network, so now, the entire phone network is on the internet” – Andreas Antonopoulos
- Currently, international wire transfers can take weeks, compared to just a few minutes with Bitcoin (even if transferred globally)
- Banks are starting to realize they can use Bitcoin technology to streamline banking
- You can build banking services on top of the internet of money, but not the other way around
- Think: Banking becomes a phone app accessible to billions of un-banked people (before they ever see a bank)
- “It isn’t about banking the un-banked, it’s about de-banking all of us” – Andreas Antonopoulos
Innovation is Not Permissioned (Bitcoin is the Internet of Money)
- Applications built on Bitcoin work globally and seamlessly without permission (same with the Internet)
- “This [Bitcoin] is the internet of money, which means it’s open, borderless, global, and requires no permission. People will try to create the intranet of money—it’ll have all the limitations of the traditional banking system” – Andreas Antonopoulos
- Sending Bitcoin is like sending emails in 1990—it once required hard work and coding skills, but now, all you have to do is swipe your finger
- Check out this video clip from 1994 where ‘The Today Show’ discusses what the internet is
- Innovative solutions are being developed for making Bitcoin easier to use; a few examples:
- User interface and design
- Security (making backups easier)
- Infrastructure services: Exchanges, ATMs, Debit cards, etc.
The Lightning Network Enables New Business Models
- The Lightning Network enables a high volume of rapid/small transactions, opening up new possibilities for Bitcoin; a few examples:
- Paying artists and authors directly for their work, enabling creators to sell content directly to their consumers
- Paying to read ebooks or internet articles per page
- Paying by the second for video streaming
- Pay a self-driving car by the mile
- “If the product/service is free, then you are no longer a customer; you are the product—the customer is the advertising agency” – Andreas Antonopoulos
- Think: Users already pay in “micro-violations of their privacy”
- (The cost you pay for free content is no longer being able to engage with the web without it being filtered based on your data)
Bitcoin Security
- Bitcoin is continually tested with an ever-increasing bounty ($170 billion market cap)
- Since inception, Bitcoin protocol hasn’t been hacked (one reason for such: there’s no single target to attack)
- (That said, cryptocurrency exchanges are honeypots for hackers)
- Since inception, Bitcoin protocol hasn’t been hacked (one reason for such: there’s no single target to attack)
- Bitcoin allows you to hold your money, not leave it in someone else’s custody
Hardware Wallets
- Hardware wallets are purpose-built devices for storing your Bitcoin/Crypto keys securely, even if your computer is hacked
- Why store your bitcoin on a hardware wallet?
- For the average person, it makes security much easier
On Recessions as Cleansing Events
- Continuously pumping money into an economy prevents washing out frauds and failures. Worse, it encourages systemic fraud.
- Many businesses are only profitable under 0% interest rates—they lend free money in bigger bubbles (i.e., subprime auto, payday loans, subprime loans, student loans, mortgages, etc.)
- An entire generation is now suffering because of the fragility of the banking system
- “It’s about a generation of kids leaving college with only McJobs waiting for them. Their parents could get by with 1 income; now 3 jobs in a household of 2 and you can’t afford a car, let alone a house!” – Andreas Antonopoulos
- 0% interest rates are an unprecedented monetary experiment with 2 billion hostages
Quotes from Andreas to Ponder
- “Children born now will never know a world without the Internet. They will also never know a world without Bitcoin. And none of them will get a driver’s license because there will be no human-driving cars.”
- “What seems inconceivable to us then becomes the norm, then becomes inconceivable to live without”
- On banking: “A system that’s very opaque—most people don’t understand it’s a very corruptible system because you can make the most money without anyone noticing”
- “Think about the power of being able to transport an unlimited amount of money simply by memorizing 12 words that can’t be confiscated from you as a refugee”
- On future money: “What consensus algorithm did the federal reserve use? Oh, it used the 12-white-dudes-decide-for-you algorithm.”
Additional notes
- Bitcoin Obituaries keeps track of every time the media declared the death of Bitcoin (379 times)
- Andreas is excited about OpenBazaar, a decentralized peer-to-peer online store
- Bitcoin’s volatility drops as its economy grows
- Bitcoin is a safe haven asset in countries with capital and currency controls
