Bitcoin vs. Blockchain for Investing: Which is Better?

00:01 Hey everyone, let's talk about why you 00:03 should invest in Bitcoin and not 00:05 blockchain. All right, so what is a 00:07 blockchain? A blockchain is a slow, 00:10 deliberate, ultra seccure, immutable, 00:14 um, decentralized database. Now, you'll 00:18 notice that the first word I used was 00:20 the word slow. Um, in the vast majority 00:23 of applications, you want a fast 00:25 database. Uh the problem is you can't 00:29 have a fast database that is also secure 00:32 and decentralized for money. That does 00:34 not exist. Um and so it's called the 00:38 blockchain trilmma. The blockchain 00:40 trilmma means you can have a secure 00:42 blockchain, a decentralized blockchain 00:45 and a and or a uh scalable or fast 00:49 blockchain, but you can only have two 00:51 out of three. You can't be fast uh scale 00:56 or sorry you can't be you know sort of 00:57 fast secure and decentralized. There is 00:59 no solution in the entire world that is 01:01 fast uh decentralized and secure. So 01:05 when Bitcoin was created it was uh the 01:07 concept of the blockchain which was 01:09 originally called the time chain but I 01:11 won't go into why. Um, the original 01:13 concept of a blockchain invented by 01:15 Satoshi Nakamoto way back in the day, 01:17 uh, was invented because nobody in the 01:19 world had ever invented a completely 01:23 decentralized database that could be 01:25 used for money. And in order for it to 01:27 be decentralized and secure, it could 01:30 not be fast. Well, and for a bunch of 01:32 reasons. Again, if you're curious, I'll 01:34 do a very technical video on why that 01:35 is. But the the truth is that's just the 01:37 way it is. It it's like sometimes you 01:39 see people say you can have a product 01:41 that's uh fast, cheap, uh you know, you 01:44 want it to be fast, cheap, and easy, but 01:46 you can only have two out of three. If 01:47 it's fast, and it's cheap, you know, 01:49 it's you know, it's not easy. If it's 01:52 you know, you know, easy and cheap, it's 01:54 not fast. You know, it's there's a lot 01:56 of things in life where there's sort of 01:58 three characteristics and you get two. 01:60 Well, in in the case of the blockchain 02:01 trilmma, it is uh you know fast uh which 02:05 people typically use the word scalable 02:07 because it refers to capacity uh 02:09 scalability, security and 02:10 decentralization. And Bitcoin went for 02:12 two out of three which was security and 02:14 decentralization which for money is by 02:16 far the most important. So after Bitcoin 02:19 came on the scene, a bunch of people 02:21 tried to use blockchain technology for a 02:24 bunch of different random things. uh 02:26 they said wait we can use blockchain 02:28 technology to track shipping containers 02:30 around the world. We can use it to track 02:33 uh stocking of goods at Walmart. And so 02:35 people introduced all these different 02:37 solutions for blockchain technology when 02:40 they were applying that technology to 02:42 something for which decentralization 02:45 doesn't matter. I have never say heard 02:48 anybody say hey I checked my Amazon 02:50 shipping log and they said they shipped 02:53 me a product but I just don't trust 02:54 their database. Right? Right? I mean, 02:55 that just never happens. Other than 02:57 money, you almost always want a fast 03:00 centralized database for even for 03:03 shipping containers. And if if people 03:04 want to know or be able to track it, you 03:06 do that through application programming 03:08 interfaces, which are called APIs, which 03:10 means you open up your very fast 03:11 database so other people can check on 03:13 it. But in almost in very very very very 03:17 few instances do you want a slow 03:21 deliberate database that is completely 03:23 decentralized, imu immutable, 03:25 uncensorable, unstoppable. There's 03:28 essentially one really good application 03:30 for that technology which is money. It 03:33 turns out for money that is the most 03:35 important application because how much 03:37 money everyone has is super super super 03:40 important. And in the case of Bitcoin, 03:42 even though you can send it to people 03:43 instantly, if you want to make sure 03:45 it's, you know, it's uh uh completely 03:47 irreversible and you're sending like a 03:49 billion dollars, it's not going to 03:50 happen as instantly as something like 03:52 PayPal or Vinmo. But something like 03:55 PayPal or Vinmo doesn't settle for days. 03:57 It looks like it does, but it doesn't 03:59 actually settle for days or weeks uh or 04:01 in some cases months. So, in the case of 04:03 Bitcoin, the vast majority of things 04:05 that people need databases for in the 04:07 world, they do not need a blockchain. A 04:10 blockchain is the wrong tool for the 04:12 vast majority of realworld use cases. 04:15 And as a result, the vast majority of 04:17 projects the companies have spawned that 04:19 uses blockchain technology have 04:21 ultimately been shut down because 04:22 they're like, I can use a SQL database. 04:25 Like I can use a plain old off-the-shelf 04:27 database and it actually works better 04:28 than a blockchain. So the one place in 04:31 the entire world that absolutely 04:33 positively you know you want a slow and 04:36 reliable database rather than a fast 04:38 database that is alterable is money 04:40 because in the case of money it is you 04:42 you do not want anyone to print more of 04:44 it and when you transact you want 04:47 absolute certainty that you have the 04:49 money you have other people have the 04:50 money they have when it transfers it 04:52 transfers and all of that. Um so uh what 04:56 is the real world application for this? 04:58 Well, sometimes people invest in things 04:60 other than Bitcoin because they say, 05:02 "Well, it's using blockchain technology 05:03 and I thought it was going to be great." 05:05 If it's using blockchain technology and 05:07 it's not Bitcoin, there's a good chance 05:08 there's no reason it's using blockchain 05:10 technology other than just to draft off 05:13 of Bitcoin's popularity. Uh, for 05:15 example, uh, once upon a time, uh, back 05:19 near the start of Bitcoin, a pizza 05:21 company changed their name to Blockchain 05:23 Pizza. And of course, their stock price 05:26 shot way up and cuz people were like, 05:27 "Blockchain pizza. Maybe they're using 05:29 the blockchain for something." There's 05:30 nothing you could possibly use 05:32 blockchain for at a pizza company that a 05:34 central regular old database works 05:37 doesn't work just as well for or better 05:39 for. Even tracking delivery drivers, 05:42 there's absolutely no reason an 05:43 immutable decentralized database is 05:45 necessary for that as compared to a 05:47 regular old database that Papa John's 05:49 uses. there's just no benefits to 05:51 blockchain technology for the vast 05:53 majority of things. But it just so 05:55 happens for a very small number of very 05:57 important things like Bitcoin and to, 05:60 you know, to some degree, although it's 06:01 still very early, decentralized finance 06:03 applications like Ethereum that 06:05 blockchains actually do matter a lot. 06:06 But that is not the case for the vast 06:08 majority of things. So, if somebody is 06:10 trying to get you to invest in a 06:12 blockchain fund or a blockchain 06:14 investment or a blockchain this or a 06:16 blockchain that, just be aware that it's 06:18 a buzzword and that the vast majority of 06:21 the value that the blockchain technology 06:23 has ever created for anywhere in the 06:25 world is just for Bitcoin. and the vast 06:28 majority of other things you could 06:30 possibly invest in that have anything to 06:32 do with Bitcoin technology or sorry, 06:33 anything to do with blockchain 06:35 technology, you are better off just 06:36 taking that exact same money and putting 06:38 it in Bitcoin. Um, so uh as always, hope 06:42 this helps. Ask me any questions. Always 06:43 here to help.