500 million years ago, Fungi colonized earth. Today, Bitcoin is colonizing our financial
system using similar innovations. Let me explain. Just as fungi and plants formed a symbiotic
relationship to successfully colonize dry land, humans can form a symbiotic relationship
with Bitcoin to improve individually and to advance our species. Hey guys, I'm Drew. I turn the most important articles on bitcoin
into documentaries so more people can learn from them.
This video was based on "Bitcoin is the Mycelium
of Money" by Brandon Quittem. Bootstrapping Life on Terra Incognita Five hundred million years ago, all biological
life lived in the oceans. Dry land as we know it was a sterile volcanic
wasteland devoid of life. That is, until plants and fungi formed a fateful
partnership that changed the course of history forever. This symbiotic partnership created a cascade
of evolutionary forces leading to the creation of all terrestrial life, including homo sapiens. Fast forward to modernity, humans now organize
around network based technologies, such as the internet and Bitcoin, which are reincarnations
of the ancient mycelial archetype out of which we emerged. Take a deep breath. Life is amazing. Ok, so how did we get here? Like human settlers, organisms colonizing
new territory are most vulnerable in the early days. In order for fungi to colonize dry land, they
needed to secure a reliable food source. Fungi effectively domesticated photosynthesis
machines (algae) to harness a self sustaining food source. We can think of these algae as little solar
panels bolted onto fungal networks which made colonizing virgin dry land possible. Soon after getting established, the fungi
began digesting the volcanic rock upon which they sat.
This ultimately liberated valuable nutrients
which were then traded with other nearby fungi, algae, bacteria, etc. Together, these early settlers bootstrapped
life on dry land. Let’s see how this compares to Bitcoin. How Satoshi Bootstrapped Embryonic Bitcoin
In order to colonize the internet (terra incognita) with a new form of money, Satoshi needed to
form a symbiotic partnership. Fortunately, he found the perfect partnership
and made a series of wise decisions that maximized Bitcoin’s chance of survival during the
bootstrapping phase. How satoshi “partnered with the algae”
to bootstrap Bitcoin’s life on the internet High early issuance rate disproportionately
rewarded early adopters (the early issuance rate might have been too aggressive)
Launched on the Cryptography mailing list (if anyone could incubate Bitcoin it was the
Cypherpunks on that email list) Timing the launch during the 08/09 financial
crisis (was this blind luck?) Satoshi’s message in the genesis block “Chancellor
on the second brink of bailout” (rallying cry to gain ideologically motivated supporters)
Mutualism or Parasitism: Examining the Cypherpunk-Satoshi-Symbiosis Were the algae complicit in the fungal partnership
(mutualism)? Or were the fungi taking advantage of the
algae’s ability to make food at the expense of the algae (parasitism)? It appears to be mutualism.
The algae may have been initially kidnapped,
however in exchange for photosynthesizing, they gained a mycelial security system, and
the opportunity to colonize a new niche. Were the cypherpunks complicit and did they
benefit in the partnership (mutualism)? Or did Satoshi take advantage of the cyberpunks
because he needed an initial distribution strategy (parasitism)? Most cypherpunks dismissed Bitcoin initially,
however a select few (most notably: Hal Finney) jumped onboard. Considering they were first to learn about
Bitcoin, they had a chance to acquire Bitcoin’s native monetary units in exchange for the
marginal electricity cost to mine (essentially nothing). With the advantage of hindsight, acquiring
Bitcoin during the first few years would lead to wealth beyond measure. (Economic) Evolution by Natural Selection With the initial conditions of life on land
set into motion, the fungal-plant alliance can start welcoming new market participants
(organisms) to enter the ecosystem.
Fungi interact with the world through chemistry. They secrete enzymes to externally digest
their environment. Volcanic rock was the only restaurant in town. These early fungi liberated molecular resources
by metabolizing the volcanic rock upon which they stood. This enabled a proto-economy made up of primitive
fungi, plants, and bacteria. They traded essential molecules required for
carbon based lifeforms (carbon, nitrogen, oxygen, etc).Fungi were essentially turning
rocks into fungible biology tokens.
These biology tokens were then traded on top
of mycelial rails connecting all nearby life. Fungi both created the market and facilitated
trade leading to an explosion of biodiversity on dry land. Bitcoin Enables a New Economic Paradigm
Just as novel organisms emerge (via speciation) to occupy newly created niches on dry land,
Bitcoin evolves its DNA (code) to produce new phenotypes (novel features) to take advantage
of new niches. In other words, Bitcoin enables novel financial
use cases that were not possible before. This increases the size of the economic pie,
thus generating wealth for society.
Novelty provided by Bitcoin:
The first and only implementation of absolute scarcity (hard to overstate)
A global, near instant, apolitical, settlement system
Neutral money not easily captured by special interests. Uncensorable medium of exchange for black/grey
markets Democratization of basic financial services
Non-sovereign store of value with negligible barrier to entry
Bitcoin and Mycelium Improve Trade Mycelial networks act as a resource transport
layer and communications network connecting organisms in the biosphere. This enables organisms to voluntarily trade
resources and knowledge across species lines. Increasing trade leads to increased specialization
(division of labor), further increasing biodiversity (wealth and resilience) in the ecosystem.
Currently, our governments form economic monopolies
which p revent many citizens from accessing the global markets. Think about all the unproductive human capital
siloed in countries like Iran, Venezuela, and Argentina. Without access to a common economic language
(Bitcoin) many people are unable to participate in global trade. As Bitcoin becomes ubiquitous, it unleashes
human productivity leading to increased innovation, specialization, and trade. We’re already seeing some basic examples
such as freelancers in Venezuela using Bitcoin as a bridge currency to access USD which effectively
evades financial controls. Bitcoin Enables Economic Evolution by Natural
Selection Darwinian evolution by natural selection is
a biological engine designed to reward successful actors and eliminate unsuccessful actors.
When the antelope gets eaten by the lion,
it dies, no one bails out the antelope. Nature has skin in the game. This feedback loop is crucial. Individuals are fragile in order to ensure
the system is antifragile. Market based economics is an engine designed
to seek more efficient uses of capital by rewarding successful ventures and punishing
the unsuccessful. However, our current form of “capitalism”
is more like cronyism or as Travis Kling said: “socialism for the rich.” Instead of letting companies fail, we bail
them out.
This results in broken incentives which create
a moral hazard making the entire system more fragile. Not to mention, disproportionately hurting
the working class. Heads I win, tails you lose. A sound money system (like Bitcoin) improves
this economic engine by tightening the feedback mechanism that rewards value creation and
punishes failure. In a Bitcoin world, bailouts aren’t really
possible because monetary expansion is restrained by a fixed monetary base. Bitcoin ensures individual people/companies
are fragile in order to ensure the economic system remains antifragile. In other words, Bitcoin increases economic
“skin in the game” which improves the feedback loop leading to economic evolution
by natural selection. Economic Darwinism for the win. Standing on the Shoulders of Mycelium
Although mammals got off to a slow start, we’ve really come into our own over the
last million years. One particular great ape, the homo sapien,
achieved global dominance in a relatively short timespan. Current evidence suggests Humans have only
been around for about ~500k years, making us a relatively young species. For comparison, modern elephants have been
around for ~5m years. Like our fungal forefathers, humans have formed
symbiotic relationships with our environment throughout history. In fact, we owe our lives to the networked
based organisms we call fungi.
Humans Begin to Settle Down
One especially relevant fungal organism is Saccharomyces cerevisiae, otherwise known
as brewers yeast. Human agriculture appears to have begun around
11,500 years ago (although it might be much older). Interestingly, the first crops we cultivated
were also the best grains for brewing beer. This begs the question: did we settle down
for food/stability or to brew more beer? Turns out fermented drinks (beer, wine, etc)
provided a safe way to stay hydrated as water often contained pathogens that killed ancient
man. Although we didn’t know it at the time,
humans formed symbiotic relationships with fungi in order to produce healthy drinking
options that saved many lives. Unbeknownst to most moderns, we still heavily
rely on our fungal allies today. Without fungi, say goodbye to all beer, wine,
chocolate, bread, and many medicines such as penicillin. Like ancient man partnered with fungi to survive,
us moderns have a similar opportunity to partner with Bitcoin… Achieving Symbiosis with Bitcoin
We’ve established how both fungi and Bitcoin symbiotically partner with other organisms
to bootstrap life and build antifragile ecosystems. Now let’s finish up by exploring how humans
can partner with Bitcoin to improve individually and to advance our species.
“The real problem of humanity is the following:
we have Paleolithic emotions; medieval institutions; and god-like technology.” — E.O. Wilson Money is the most important coordination mechanism
for society and our existing fiat system is driving our species off a cliff. Fiat money has appeared periodically throughout
history, however, it’s the exception not the rule. Throughout most of history, humans coordinated
around a free market for money. Gold and silver, mainly. Time to wake up from our fiat money coma. It all Starts with Individuals
Bitcoin was the best performing asset of the last decade. This created unimaginable wealth for early
adopters. Besides financial gain, individuals also can
benefit from bitcoin in other ways. Interestingly, the values imbued into bitcoin
seem to rub off on its adherents. As a deflationary asset, Bitcoin teaches us
to delay consumption today in order to reap greater benefits tomorrow (low time preference). In a world fulfilled with uncertainty, Bitcoin
provides something to be optimistic about. Rather than change the system from the inside,
we can put our energy towards a parallel system.
Cryptography is Fundamentally About Defense
Bitcoin is the largest implementation of public key cryptography the world has ever seen. A world with strong cryptography shifts the
balance of power towards defense. Defense from tyranny, censorship, overarching
governments, and surveillance capitalism. Cryptography allows us to assert our natural
rights. Bitcoin protects free speech, ensuring we
can “vote with our money.” Free speech is the foundation of open societies. Forming symbiosis with Bitcoin preserves freedoms
for our future generations. A cause worth fighting for. Bitcoin Metabolizes Fiat Infrastructure
We can use fungi to clean up oil spills, halt erosion, create natural pesticides, and even
decompose nuclear waste at Chernobyl.
In a similar manner, Bitcoin can be used to
clean up our dilapidated fiat infrastructure. We’re experiencing a period of unprecedented
monetary expansion. Bitcoin as a fixed supply monetary good serves
as a counter force to unfettered money printing. Short term, individuals using Bitcoin to avoid
capital controls and hedge against local currency risk. Long term, Bitcoin may force conservatism
onto central banks, starting with developing nations. In the richest country in the world (America),
average people work for 40 years and never get ahead. The legacy system was designed to siphon wealth
from the bottom to the top, most notably during each financial crisis. Since time is money, this forced wealth transfer
system should be considered systemic time theft. Make no mistake about it, we should be radicalized
by this. Every time you buy Bitcoin you’re selling
dollars. It’s time to join the peaceful revolution. Bitcoin Wears Risk on its Sleeve
Rather than persist in an opaque financial system designed to enrich the few at the expense
of the many, let’s embrace a more transparent financial system. A system where risks are laid bare for all
to see, rather than buried under bureaucracy and deception.
Fiat money is an inorganic system similar
to a monocrop industrial farm. Centrally planned, susceptible to disease,
unsustainable, and fragile. Fiat offers short term price stability, at
the expense of long term systemic risk. In other words, we don’t account for the
“fat tail risks” such as banks blowing up or global pandemics. Both examples lead to wealth transfer furthering
wealth gaps. Fierce competition, incremental growth, sustainable,
and antifragile. Bitcoin accepts short term price volatility
in exchange for long term systemic stability. Bitcoin enables an antifragile monetary system,
a huge win for humanity. Bitcoin Promotes Energy Independence
Bitcoin has an insatiable demand for low cost energy. Miners scour the earth for cheap energy assets,
acting as the energy buyer of last resort. This incentivizes innovation in low cost energy
production such as excess natural gas and stranded hydroelectric. Hash rate has been steadily rising, even when
price is not. Bitcoin miners are inherently long BTC. What do the miners know that you don’t? Rather than putting our heads in the sand,
it’s time to form a partnership with reality. Bitcoin’s hash rate continues to rise Let’s assume Bitcoin continues it’s monetization
path.
Eventually, Bitcoin mining becomes a matter
of national security. Those countries who produce their own energy
(and mine Bitcoin) will have further geo-political advantage over countries reliant on importing
energy. This creates another incentive for nations
to secure local energy sources — whether from fossil fuels, nuclear plants, renewables,
or otherwise. Long term, a world with more localized energy
production is a more robust world. Like fungi, Bitcoin is an invisible membrane
improving the health of the ecosystem it occupies. Humanity Will Coalesce on Neutral Money
The current geo-political game rewards those who exert influence over money production. This means large powerful states, politicized
money, and special interests groups competing for influence. “Give me control of a nation’s money and
I care not who makes the laws.” — Mayer Amschel Rothschild Instead, Bitcoin is a neutral money.
A system designed to prevent special interests
from exerting undue influence over the money. This creates a more fair game. Why would any government give up control of
their printing press? In a post-dollar regime, nation-states won’t
agree on a new reserve currency. Logically, each state prefers to settle debts
in their own currency. We’re already seeing cracks in the dollar
hegemony coming out of places like China, Russia, and Iran. Bitcoin is well suited for this problem.
Bitcoin is fully auditable, hard capped, and
offers final settlement quickly. The perfect neutral money for untrusting nation-states
to settle debts. Under this light, Bitcoin is money for enemies. It’s time to upgrade humanity by forming
symbiosis with Bitcoin. Let’s Wrap Up
The story of life on earth can be summed up as: success comes to those who form symbiotic
relationships with network based organisms (particularly fungi). As humble apes, it’s our duty to form a
symbiotic relationship with Bitcoin. We must strive to understand this phenomenon
so that we may shepherd her through adolescence. Just like fungi colonizing dry land was the
catalyst for biological evolution on terra, Bitcoin is a catalyst for human evolution. Let’s embrace Bitcoin or suffer the fate
of the dinosaurs..
