The BTC Study: Bitcoin and Sound Money Education for Everyone
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Your Money, Your Education! Begin your Bitcoin journey by watching 60 minutes of recommended videos
We recognize that the world of Bitcoin and sound money is rife with technical jargons, conflicting opinions, and seemingly endless rabbit holes. We believe that this complexity should not be a deterrent for those who want to learn and benefit from these transformative ideas. Our goal is to curate the most reliable and educational resources available, presenting them in a user-friendly format that is accessible to all.
We envision a world where everyone, regardless of their background or prior knowledge, can grasp the fundamentals of Bitcoin, understand the importance of sound money, and confidently utilize the learnings to safeguard their financial future. We believe that this knowledge is essential for individuals to make informed financial decisions, protect their wealth, and actively participate in shaping a more equitable and prosperous future.
Embark on a new learning adventure! Take 60 minutes to explore the fascinating videos below. We've handpicked them to be accessible and engaging for everyone, so you don't need any background knowledge to dive right in and discover something new.
Let's kick things off with a cartoon that breaks down Bitcoin in a simple way
TL;DR: Bitcoin is a digital currency that is hard to make and can’t be inflated by governments.
In this video, the Tuttle Twins explore what Bitcoin is and how it works. They explain the problems with traditional government-controlled money and how Bitcoin was created as a solution. Bitcoin is a digital currency that can be sent directly from one person to another without a bank or government involved. It's also hard money, meaning it's difficult to create more of it. This makes Bitcoin resistant to inflation, unlike traditional currencies that can be printed endlessly. The video also covers how Bitcoin is secured by a public record called the blockchain, which makes it safe from criminals and counterfeiting.
Understanding inflation accurately is key to navigating the misleading narratives surrounding it
TL;DR: Inflation is an increase in the amount of money in circulation causing a decrease in the purchasing power of each unit of money.
This video features Ludwig von Mises, the renowned Austrian economist, explaining inflation.
The video starts with an explanation of inflation in the 16th century, when there was a surge in the amount of gold and silver reserves in Europe due to colonists exploiting America's reserves. This caused a rise in prices, similar to what happens today when the government increases the amount of money in circulation. The speaker argues that some people refer to inflation as a rise in prices, but it's actually the increase in the money supply that causes the rise in prices.
The video then discusses the semantic revolution of redefining inflation. The speaker argues that this revolution makes it difficult to fight inflation because there is no longer a clear term to designate it. This makes it difficult for statesmen and writers to address the issue.
Inflation may create conditions where populist leaders gain support by advocating for policies that tolerate or even encourage inflation. People are more likely to blame businessmen for raising prices due to greed than the government for increasing the money supply.
The video uses the example of the first attempts to issue bank notes in the 18th century to illustrate that there is no magic formula for creating wealth. If the government needs money, it has to raise it through taxes or borrowing. Printing more money does not solve the problem.
The speaker goes on to explain how inflation can distort the economy. When the government spends the new money it creates, some people receive it before others. Those who receive it first are able to buy more goods and services before the prices rise. This puts those who receive the money later at a disadvantage. This is called the Cantillon Effect.
The video uses the example of a government issuing money to pay for a war to illustrate this point. The ammunition industries and workers are the first to benefit from the new money, as the government spends it on ammunition. Businesses that sell to these workers are the next to benefit. However, by the time other people receive the new money, prices have already risen.
The speaker argues that governments prefer inflation to raising taxes because inflation is less unpopular. The video talks about the dangers of hyperinflation, using the example of the Nazi Germany after World War I. The German mark became worthless, and people started spending their money as soon as they received it because it lost value so quickly.
The video concludes by arguing that we should take care of our financial affairs during our lifetime and that one way to do that is to abandon inflationary policies.
The potential pitfalls of a singular focus on CPI inflation in economic analysis
TL;DR: Increase in money supply leads to a transfer of wealth from the working class to the asset class.
The video is about the true cost of inflation. Don't be intimidated by the jargons used in the first few moments of the video. Good explanations follow!
The speaker, Michael Saylor, argues that the conventional way of measuring inflation, the Consumer Price Index (CPI), underestimates the true impact of inflation on the economy. CPI focuses on a basket of goods that a regular consumer would buy, and doesn't take into account asset inflation.
Saylor argues that asset inflation is a major problem, especially for young people trying to buy a house for the first time. He gives the example of a house that cost $100,000 in 1930 and now costs $30.5 million. This is a 30,500% increase in price over 92 years, which is an average inflation rate of 6.5% per year. This is much higher than the CPI would typically report.
Saylor says that this inflation is caused by the government increasing the money supply. When the money supply goes up, the value of each dollar goes down. This makes assets, like houses and stocks, more expensive.
The speaker concludes by saying that inflation is a transfer of wealth from the working class to the asset class. This is because the working class sees their wages stagnate, while the asset class sees their assets appreciate in value.
Understanding the Cantillon Effect helps workers grasp how new money creation can disproportionately impact them
TL;DR: Cantillon Effect is the idea that inflation hurts people who receive money later because the money they receive has already lost value.
This video explains the Cantillon Effect, a theory in economics which argues that when a government increases the money supply, the new money benefits the people who receive it first, and harms the people who receive it last.
The speaker, Javier Milei, argues that inflation is a form of poverty. He says that this is because the Cantillon Effect causes the value of money to decrease over time. People who receive money early (such as politicians) can spend it before prices rise. People who receive money later (such as workers) are stuck with money that has less buying power.
Milei uses the example of a worker who gets a raise. By the time the worker receives the raise, prices have already increased due to inflation. So, the raise does not actually make the worker better off. In fact, the worker is now worse off because they can buy less with their money.
The speaker concludes that inflation is a hidden tax that steals money from people.
The big question: Is monetary inflation needed?
TL;DR: Inflation is not necessary and can actually be harmful.
This video is about whether inflation is necessary for a healthy economy. The speaker, Lyn Alden, argues that inflation is not necessary and can actually be harmful.
She argues that a stable currency, like the gold-backed dollar used in the 1800s in the United States, can lead to a booming economy. In such a system, prices are stable and there is no incentive to take on debt.
However, if a country switches to a fiat system, where the currency is not backed by anything, inflation becomes a problem. This is because the government can simply print more money, which dilutes the value of the existing currency. This can lead to a situation where people are hesitant to save money, as they know it will be worth less in the future.
She concludes by saying that a hard money system, where the currency is stable, would be better for the economy in the long run. This would lead to more people saving money and making long-term investments. She mentions that there would be some losers in such a system, such as governments, banks, asset managers and different kinds of rent seekers (entities seeking to increase their own wealth without creating any benefits or wealth to the society).
The inevitable deflation caused by technology and its impact on the economy
TL;DR: Technological deflation is a bigger force than inflation and central banks around the world are powerless to stop it.
The video talks about deflation caused by technology and its impact on the economy.
The speaker, Jeff Booth, argues that deflation caused by technology is a bigger force than inflation and central banks around the world cannot stop it. Deflation caused by technology means the value of goods and services is going down because of innovation. This is different from deflation caused by lack of demand, which happened during the Great Depression.
The speaker uses the example of folding a piece of paper to illustrate the exponential growth of technological deflation. Moore's Law states that the number of transistors on a microchip doubles every two years, which means the computing power is also doubling every two years. The speaker argues that similar to how most people cannot imagine how thick the paper would be if folded 50 times, most people cannot imagine the impact of technological deflation in the future.
The speaker also points out that technological deflation is celebrated because it brings down the price of goods and services. However, this deflation also creates inequality because asset prices, like stock prices, rise due to government policies to fight deflation. This benefits those who already own assets but hurts those who do not.
The speaker concludes that the current economic model relies on debt creation to fight deflation, but this is not sustainable in the long run. Eventually, this Ponzi scheme of debt creation will break.
Ray Dalio on the big debt cycle
TL;DR: High debt to GDP can force money printing, leading to inflation.
The video is about sovereign debt and the big debt cycle.
The speaker, Ray Dalio, discusses debt as an absolute and relative construct. He argues that debt to GDP is a more important metric than absolute debt levels. When debt service payments rise relative to incomes, countries may have to print money to stimulate the economy.
Dalio also talks about the risk of bond buyers no longer wanting to hold onto government bonds. This could happen if they don't believe they are getting good returns on their investment. Investors may then move their money into tangible assets, such as gold or real estate.
The video concludes by mentioning that some countries will prosper through the debt cycle, while others will not. The United States, for example, made a lot of money before entering World War I and World War II. Countries that have strong real estate markets and other hard assets are likely to do well during difficult economic times.
Now back to Bitcoin: The hardest money ever invented
TL;DR: Bitcoin is a decentralized digital currency with a limited supply of 21 million, making it resistant to inflation. It combines the stability of gold with the ease of transfer of traditional currencies.
In this video, Lex Fridman interviews Saifedean Ammous, author of The Bitcoin Standard, about what Bitcoin is and why it's such a big deal. Ammous argues that Bitcoin is the most advanced form of money ever invented because it has two key properties:
- Hardest money ever invented: Bitcoin has a fixed supply of 21 million, making it resistant to inflation. Unlike traditional fiat currencies, which can be printed at will by governments, Bitcoin's supply is mathematically guaranteed to never be increased.
- Trustless system: Bitcoin operates on a peer-to-peer network without a central authority. This means that no one can control or manipulate the network, and users don't need to trust any third party to conduct transactions.
Ammous also explains the concepts of salability across space and time, which are essential properties of money. He argues that Bitcoin combines the best of both worlds: gold's salability across time (holds its value across time) and fiat's salability across space (can be transferred quickly across the world without much loss).
Setting the record straight on Bitcoin and energy
TL;DR: Bitcoin mining can actually be beneficial for the environment.
This video is about Bitcoin energy consumption and climate change. The creator, Andreas Antonopoulos, argues that Bitcoin mining can actually be beneficial for the environment.
People often criticize Bitcoin for its high energy consumption, but Antonopoulos argues that this criticism is based on a misunderstanding. He says that people confuse energy production with energy consumption. Electric cars, for example, use more energy than gasoline cars, but they are better for the environment because they don't produce emissions at the point of use. Bitcoin mining can be done using renewable energy sources, such as wasted hydro or off-flaring gas. In this way, Bitcoin can actually subsidize renewable energy.
Antonopoulos concludes that regulating energy production is a more effective way to address pollution than focusing on Bitcoin's energy consumption.
I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something they can’t stop!
Friedrich Hayek, Austrian economist
What insights did we gain from watching these videos?
Inflation, the silent erosion of purchasing power, is caused by an increase in the money supply. It is a persistent threat to economic stability. Inflation devalues savings and disproportionately harms the working class. The Cantillon Effect illustrates this. It demonstrates how an increased money supply benefits those who receive it first, usually the asset-rich. Meanwhile, the working class receives it later and suffers from diminished purchasing power due to inflated prices.
High government debt-to-GDP ratios often worsen this inflationary cycle. They incentivize money printing as a solution, which fails to address the underlying economic issues. Instead, it causes significant harm. Despite technological deflation, the natural decrease in prices due to innovation, central banks often resort to inflationary policies to stimulate economic growth or address financial crises. However, these policies can backfire and lead to unintended consequences due to the multitude of interconnected factors influencing inflation, such as global events, market sentiment, and the unpredictable nature of human behavior.
In contrast, Bitcoin stands as a strong defense against inflation. It is a digital currency with a finite supply of 21 million. Its decentralized nature and capped supply make it resistant to manipulation and arbitrary inflation, similar to gold. However, unlike gold, Bitcoin offers the ease of transfer akin to traditional currencies. It combines stability with convenience. Additionally, Bitcoin mining can leverage renewable energy sources, contrary to popular belief. This contributes to a greener future.
In conclusion, Bitcoin represents a symbol of hope in an era of rampant inflation and economic uncertainty. Its unique characteristics offer a path toward a more equitable and stable financial system. In this system, individuals can protect their wealth from the erosive effects of inflation and the arbitrary decisions of central banks. As we navigate the complexities of the modern financial landscape, Bitcoin emerges as a potential solution. It promises financial sovereignty and a hedge against inflation.
Congratulations!
You've taken the first steps into the exciting world of sound money and Bitcoin—congratulations! If you have found yourself spending additional time delving into the principles of sound money, we commend your initiative and eagerness to learn. Now, it's time to embark on a more comprehensive exploration and uncover the answers to the many questions you undoubtedly have. This deeper dive will provide a clearer understanding of how Bitcoin is not just a technological innovation, but a potential paradigm shift in our economic reality.
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