Latest / Success Story with Scott Clary / Lessons - Understanding Bitcoin and "Shitcoins" | Samson Mow - CEO of Pixelmatic and JAN3

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Lessons - Understanding Bitcoin and "Shitcoins" | Samson Mow - CEO of Pixelmatic and JAN3 · Success Story with Scott Clary

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  In this lessons episode, discover the essence of Bitcoin and its role as decentralized money.
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  Learn about hyper Bitcoinization, the differences between Bitcoin and all coins like Ethereum
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  and the criticism surrounding their centralization. Unpack the challenges of smart contracts,
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  DeFi and governance tokens and understand their impact on the future of blockchain technology.
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  You mentioned that one of the outcomes of this particular battle could render Bitcoin
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  quote unquote meaningless. But I would like to understand because I don't know if there is a
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  across the board. I'm sure you have a very defined meaning for Bitcoin, but across the board,
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  it doesn't seem like there is a universal understanding of what it should or should not be.
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  So what is Bitcoin's meaning? Is it something supposed to be transactional?
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  Is something supposed to be a store of value, more symbolic of gold or something like that?
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  And then I'm also curious about if you are very bullish on Bitcoin,
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  and I only know enough to be dangerous. So if I'm speaking, you tell me. But I'm not as into it
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  as some people are. But if you are very bullish on Bitcoin, and I also want to understand
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  the place that Ethereum and blockchains from my understanding operate like an OS or an operating
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  system and you build things on them. So that's just sort of where I'm curious about because I want
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  to unpack that. But first, let's describe what Bitcoin is, how it has meaning versus what is a
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  meaningless version of Bitcoin in your in your interpretation. So I guess I'll go with the
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  easy answer first. And is that the question is, am I bullish on Bitcoin? I'm very bullish on Bitcoin.
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  I see Bitcoin as the ultimate end state. And that is what you're asking about earlier. What is hyper
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  Bitcoinization? Hyper Bitcoinization is the point at which we don't convert back to fee at money,
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  similar to how you don't convert dollars to seashells anymore. You might buy a seashell for a
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  decorative thing or a necklace, but you're not going to buy seashells and hoard them to store
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  value, right? But the other part is what is Bitcoin? And the answer is very simple. Bitcoin is
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  simply money. So it is all of those things that you mentioned. It is a store of value. It's a
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  medium exchange. And eventually, it will be a unit of account. And on some levels, it's ready
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  a unit of account. But what is a useless version of Bitcoin? I would say that is Ethereum.
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  Ethereum is centralized. It's basically a central bank digital currency at this point,
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  because it's just big institutions running the chain. So it's kind of defeated the purpose
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  already. You don't have- Is it not a money ripple? Excuse me, just to understand, is that similar
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  to ripple in terms of- It's centralization. It's similar to ripple. It's similar to FTT. It's
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  similar to everything. So you have Bitcoin on one side of the spectrum, which is decentralized,
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  permissionless, immutable. And then you have everything else on varying levels of uselessness,
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  right? So I think there are some cryptocurrencies that you could say are relatively decentralized.
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  But for the most part, 99% of them, they're all masquerading as decentralized. They stood up
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  with Swiss Foundation somewhere and they say we're decentralized. But it's really vitalic and his
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  buddy is deciding monetary policy. So you effectively have replaced the Federal Reserve with a bunch
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  of guys on a Zoom call that know nothing about money, deciding what money is. And right now,
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  I mean, they're on a kick to make Ethereum sound money. So they're trying to implement monetary
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  policy and make it more valuable, right? Like reducing the supply, burning fees, locking things up so
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  that people can't withdraw from stake pools or whatever. But that can change. Like if you can change
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  in one direction, you can change in the other direction, right? So when Ethereum prices high,
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  they can say, well, we need some inflation. We're going to print some more. And this is totally
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  within their power to do. And this is why a lot of Bitcoinists call Ethereum a shitcoin because
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  it's so malleable. They can change anything they want. It was hacked. There was a Dow hack. They
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  rolled it back on the chain. And I believe that was the inflection point for them to just fail. They
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  could have also, I think that was the first like SEC investigation into anything crypto from
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  not mistaken, wasn't it? Perhaps. But I mean, Ethereum is really an unregistered security. And a
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  lot of these things are unregistered securities, FTT included, but pretty much every crypto is an
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  unregistered security. And this is why Bitcoin is trying to distance ourselves from all those things
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  because they are trying to affinity scam and say, we're like Bitcoin. We're the same thing. And
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  they want Bitcoin to be a subset of crypto, but it's actually very different. Very interesting.
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  And I'm super curious because actually grabbing for this interview, I saw you actually did a podcast
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  with Vitalik and I didn't realize now I understand whoever the host was. I can't remember his name,
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  but now I understand why he got you both on that call. Yeah. So if I didn't listen to the whole
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  thing and now I probably will after this section, I should have. I didn't realize it was such like a
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  contentious podcast, but if you were going to say this to Vitalik, what would what's Vitalik's
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  argument? Because that's a pretty, it's a pretty bold claim. I've never heard this claim before that
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  Ethereum is a shit coin. I've heard a lot of shit coins are shit coins, but not Ethereum.
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  Well, things every shit coin likes to call other things shit coins and they think they're not,
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  but they are. So I remember that all. Dolecoin was like laughing at other things and saying,
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  oh, they're all shit coins and they're going to fail. We know how that ended up.
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  Yeah, you know how that ended up. But Ethereum, it's just malleable. If you look at some of their early
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  recordings of their meetups and things they're talking about their ICO, that in itself is an
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  indicator that it's a security. It's an effort by a group of people to make money and attract
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  investment into their project. It's just that they don't have a company. But if you look at everything
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  that Ethereum does, it's basically a company. A DAO is basically a board of directors. You're
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  just saying it's a tokenized thing and therefore it's not under the existing framework, but I think
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  regulators and the CFTC and the SEC, they're starting to understand that a lot of that's just
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  bullshit. It's really a security's offering that you're trying to pretend is decentralized.
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  And I think the time is running out for these guys.
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  Now, then that sort of, this is a great way to sort of dive into the thing that I alluded to
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  earlier, which is smart like smart contracts built on Ethereum. I've never in my life heard of a
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  smart contract, which is again, if Ethereum's EOS and you're saying it's a centralized OS and
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  the points you're making are very valid, then you have all these programs built on all these
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  smart contracts and all these other things that we've now, you know, it's blown up into
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  everything from DeFi and NFTs to whatever, I don't know if they're all built on Ethereum,
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  I don't think they are, but a lot of shit has been built on Ethereum. So I haven't seen much built
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  on Bitcoin. So why has there not been more of an explosion in smart contracts and the understanding
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  that Bitcoin can be an underlying OS for all these applications? Well, you don't really need an
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  underlying OS. The world doesn't need some sort of OS and if it did have an OS, it should be
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  decentralized, but you there are things built on Bitcoin, but they're not the same scale as Ethereum
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  simply because the Silicon Valley money machine is not investing in companies building on top of
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  sound money. Silicon Valley itself does not understand sound money. They don't even understand gold
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  barely. What they're interested in is a quick turnaround and a quick gain on their investment.
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  If you watch the all-in podcast where you have Chamath and David Saxon, those guys, they're all
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  talking about Salana and pumping their bags, right? But what the VCs want is super fast liquidity
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  and turnaround on their investment and they can achieve that through investing in these token
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  projects that have no real purpose or utility. It's just an easy way to dump on retail investors.
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  So they don't need to wait seven to ten years for a company to go public. They buy Salana in the
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  pre sale and discount and sell it to retail investors and then they're good, right? So this is why
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  there's such a big, big push for all of these projects in smart contracts, right? At the end of
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  the day, you're building smart contracts which are not necessarily immutable or unchangeable
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  because they build back doors into them. If you Google smart contract back door, you'll see a lot
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  of these smart contracts. They say, you know, code is law and they've written their rule set in
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  here, but then there's like an access point where they can shut it off. And just like a five-minute
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  Google will show you there's so many of these cases and all of them are very insecure. If you Google
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  DeFi hacks, you'll find pages and pages of hacks every week. There's a DeFi hack because they're
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  just building JavaScript constructs that are unsecure and have back doors and centralized. So
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  this is why none of this is really meaningful. Even a smart contract itself needs some sort of
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  input. It's not like a smart contract will just run on it, run on its own. If you go back to the
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  simple example of buying real estate, there has to be some proof that the transaction happens and
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  then the funds are transferred, right? So there's always some input into these things, but the bigger
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  problem is your building smart contracts and DeFi stuff that is just relying on trading governance
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  tokens or worthless tokens like fruit, dog tokens for other dog tokens and other governance tokens.
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  So it's really a house of cars where you're staking some governance token to get another governance
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  token to trade some other governance token. At the end of the day, none of the governance tokens
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  even are meaningful because decentralized and it's a small group of people that's going to
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  decide regardless of the governance tokens direction. Thanks for tuning in. If you found this
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  valuable, don't forget to hit that subscribe button so you never miss an episode. And if you want
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  to dive deeper into this conversation, check out the links in the description to watch the full
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  episode. See you in the next one.