How the Very First People That Heard About Bitcoin Responded to It

00:01 Hey everyone, let's talk about how the 00:03 very first people that heard about 00:05 Bitcoin responded and how you and I are 00:08 likely to have responded the same way. 00:11 So the background to this is I regularly 00:13 think, wow, if only I had been on the 00:16 crypto cryptography mailing list when 00:18 Satoshi Nakamoto sent the email and 00:21 indicated his idea and all of that. And 00:24 wouldn't it have been amazing if I could 00:26 have mined hundreds or thousands of 00:27 Bitcoin back in the day just by keeping 00:30 my computer on. Uh but the truth is you 00:33 or I or anyone else is very likely to 00:35 have responded exactly the way the 00:37 people on the cryptography mailing list 00:39 actually did respond which most of them 00:42 were very skeptical and sort of thought 00:45 nothing of it. So you have to understand 00:46 the context. People had been talking 00:48 about inventing decentralized digital 00:51 cash, a form of internet native money 00:54 since the 1970s. The the internet was 00:57 originally invented in 1969. It they you 00:60 know scholars debate on whether it was 01:02 69 or 83 and people go back and forth 01:04 but anyway the earliest the internet 01:06 existed in any form I believe was 01:08 something like 1969. So since the 1970s, 01:11 people have been talking about wouldn't 01:12 it be amazing if there was an internet 01:14 native cash and they tried a bunch of 01:21 opportunity was spending the same coins. 01:24 Essentially they all had a centralized 01:27 uh place that you could check to see if 01:29 any specific uh of the electronic 01:31 currency had been spent. And what kept 01:34 happening was governments would shut 01:36 down whatever that central uh place was 01:39 because they didn't have a money 01:40 transmitter license or a you know some 01:43 sort of license. And so when So Satoshi 01:46 Nakamoto came along and on October 31st 01:49 uh 2008, which was when the uh Bitcoin 01:52 white paper was first uh published to 01:54 the cryptography mailing list. When he 01:56 came along, you've got to realize these 01:58 people had been seeing for decades ideas 02:01 for digital cash that didn't work out. 02:03 So they were naturally skeptical. Every 02:06 other idea that anyone had had did not 02:09 work out. So then all of a sudden this 02:11 guy out of the blue, nobody's ever heard 02:13 of him, using a pseudonym drops a white 02:16 paper on the cryptography mailing list 02:18 and people generally did not take it 02:20 seriously. They thought, you know, if 02:22 this was credible, it would not be 02:24 coming from Satoshi Nakamoto, whoever 02:26 that is. and the way that um Bitcoin is 02:31 proposed often. So, if you think about 02:34 how to design, you know, cryptography 02:36 and systems and all of that, it's almost 02:38 like it's backwards. And I had someone 02:40 tell me this. I think it was it was 02:42 either Jame Lop who's a Bitcoin uh 02:44 developer, or it was Adam Beck, the 02:47 inventor of Hash. I was having a 02:49 conversation a couple years ago with I 02:51 can't remember which one it was. It was 02:52 one or both of them back at Satoshi 02:54 round table in Dubai uh a year or two 02:57 ago. And I asked them, I said, "Well, 02:59 what did you think of, you know, when 03:01 you first saw it?" And I think it was 03:02 Jameson Lop said, "Well, what's hard 03:04 about Bitcoin is if you spend if you're 03:07 a software developer, it's almost like 03:09 it's designed in reverse." like he's 03:11 like the the way the concept of the 03:14 blockchain and all of that sort of stuff 03:16 when when it hits you for the first 03:18 time, if you're used to solving computer 03:21 software design problems the way people 03:24 are used to solving them, then your gut 03:26 reaction is that's all backwards. 03:28 That'll never work. And it's only after 03:31 you spend some really intense time 03:33 studying it that you realize, but wait, 03:35 that's literally the only way it can 03:37 work. So in some ways uh Satoshi 03:41 Nakamoto, whoever that is, the inventor 03:42 of Bitcoin, in some ways the only way to 03:46 create Bitcoin was to think outside the 03:49 box. And the problem that everyone else 03:51 had that had attempted to invent digital 03:54 cash uh or n internet native money 03:57 before Satoshi Nakamoto, they were all 03:59 in some way thinking inside the box or 04:02 maybe they were thinking outside of the 04:04 the box, but not way outside of the box. 04:07 So the vast majority of people who read 04:09 the Bitcoin white paper when it was 04:11 first uh first introduced did not take 04:14 it seriously. They did not think it was 04:16 going to work. It didn't sound like 04:19 software the way they were used to 04:21 seeing software written. It did not work 04:24 like systems they were accustomed to 04:26 were accustomed to working. So the vast 04:28 majority of people dismissed it even if 04:30 they were there at the ground level. And 04:32 the few who did not dismiss it and 04:34 decided to download the software for 04:35 Bitcoin and started running it, most of 04:38 them decided it was not worth their 04:40 computer running hot. I'll tell you that 04:42 in one 04:44 second. Okay. So the the vast majority 04:47 of people who did take Bitcoin even at 04:50 all seriously, they downloaded the 04:52 software which was released uh uh on 04:54 well it the the network started running 04:56 on January 3rd of 2009 and I think the 04:58 software was you know released right in 05:00 that time frame. So the number of people 05:02 who who actually did download the 05:04 Bitcoin software and started running it 05:07 because it used uh computational power 05:10 it made their computers run hot. So even 05:12 though they were getting maybe 50 05:14 Bitcoin a day, their their home computer 05:17 was mining one Bitcoin block per day, 05:19 which back then gave you 50 Bitcoin. 05:21 Right now it gives you 3.125 Bitcoin and 05:23 you can't even run it on a home 05:25 computer. You have to have major mega 05:27 you know uh data centers to run the 05:29 Bitcoin uh you know to to effectively 05:32 mine Bitcoin requires massive data 05:33 centers. But back then you could mine 05:35 maybe 50 Bitcoin per day on your home 05:37 computer if you were running the 05:38 software. But the vast majority of 05:40 people who ran it ended up turning it 05:43 off because it made their computer run 05:45 hot. So, you know, as soon as you launch 05:47 the software and you turn on the Bitcoin 05:49 mining, you know, uh capability, it 05:52 would immediately all the fans on the 05:53 computer would kick up to full gear 05:55 because the the microprocessor, graphics 05:58 card, whatever was doing computational 06:00 uh processing would start getting hot 06:02 because it was working really hard. And 06:04 so, people didn't like the fan noise. So 06:06 if you can imagine back in the day 06:09 people uh you know could get 50 Bitcoin 06:11 a day uh which right now would be worth 06:13 you know5ish million you know so around 06:17 4 to 5 million you know four and a half 06:19 to 5 million a day of today's price 06:22 Bitcoin all because they didn't want 06:24 their computer to run hot so before you 06:27 and I think we wish we had been you know 06:30 plugged in back then the truth is we 06:32 would have responded the same way uh and 06:34 I know that because when I first heard 06:35 about Bitcoin in 2014. I thought, "Ah, 06:38 it's technology. Technology, you know, 06:40 it's it they come, they go. I've seen a 06:42 million technologies come and go. 06:44 There's no reason I need to engage on 06:45 this one because, you know, we probably 06:47 won't even be here the next time. You 06:49 know, I'll probably never hear about it 06:50 again." Uh, and and if that was the case 06:52 in 2014 where it was already a 06:54 multi-billion dollar asset class, then 06:56 imagine back when it didn't even exist, 06:59 when it was just, you know, an idea on a 07:01 white paper back in October 31st of 07:04 2008. Um, so in summary, if you or I had 07:08 pro had been reading the cryptography 07:10 mailing list back on October 31st of 07:12 2008, we probably would have dismissed 07:15 Bitcoin as, you know, not going to work 07:18 like the way most people did. And if we 07:21 had run the software on our home 07:23 computer when it was launched in early 07:25 2009, we also would have very likely 07:27 turned it off because we didn't like the 07:29 fan noise and we thought it made our 07:31 computer run hot. And if we had been 07:34 introduced to Bitcoin back when it was, 07:37 you know, you could buy 10 of them for a 07:39 penny, we probably would have sold it 07:41 once they were worth a dollar each, just 07:44 like most people did. So in short, even 07:46 though all of us wishes we were at the 07:49 ground floor of Bitcoin, the truth is 07:52 all of the people who were at the ground 07:53 floor of Bitcoin behaved the exact same 07:56 way you or I likely would, which is one, 07:59 we wouldn't have taken it seriously. 08:01 Two, we would have turned it turned it 08:04 off if we were running it because it 08:05 made our computer run hot. Three, if we 08:08 did get any Bitcoin, we would have sold 08:10 them as soon as it had any price because 08:12 we would have thought, well, heck, now 08:13 that it's worth a penny, I got it for 08:15 nothing and now I can actually make some 08:17 money. I can make a few hundred bucks or 08:18 a few thousand bucks or even tens of 08:20 thousands of dollars. Not thinking, hey, 08:23 this is going to be worth millions one 08:25 day. Um, so that's how everybody, not 08:28 everybody, but the vast majority of 08:30 people did respond and that's likely how 08:32 you and I would have responded. So what 08:34 is the upside of that? What's the silver 08:35 lining in all that? Well, the silver 08:37 lining is there's way more Bitcoin for 08:39 all of the rest of us. If everybody who 08:41 learned about Bitcoin originally had 08:43 taken it seriously, they would own all 08:45 the Bitcoin or almost all the Bitcoin. 08:47 The truth is they don't. Virtually 08:49 everyone who got in at the ground floor 08:50 of Bitcoin ultimately sold their Bitcoin 08:53 for a dollar or $10 or $100 because they 08:56 thought it had appreciated so much they 08:58 couldn't imagine how much higher it 08:59 could go. So all of the Bitcoin that all 09:02 of the rest of us have, we only have it 09:04 at the prices we were able to buy it at 09:07 because the people in the very early 09:09 days did not take it seriously. uh 09:11 because people, you know, back then 09:13 didn't want to run their computers hot, 09:15 which meant the Bitcoin got beautifully 09:18 distributed where, you know, each person 09:20 would turn their computer on, they'd 09:21 leave it running for a few days, they'd 09:22 get maybe 50 Bitcoin, 100 Bitcoin, 150 09:25 Bitcoin, then they turned their computer 09:27 off cuz it was running hot. So, what 09:28 that did is it resulted in a beautifully 09:31 wide distribution of Bitcoin throughout 09:34 the early adopters of Bitcoin. And then 09:36 those early adopters as Bitcoin's price 09:39 increased they sold a portion of their 09:41 Bitcoin maybe half maybe 2/3 maybe 09:43 one/ird but that has happened every step 09:46 of the way and as a result the 09:48 distribution of Bitcoin is way more sort 09:52 of equitable or even not equitable 09:55 because that would be the wrong word but 09:56 more more even the the distribution of 09:59 of of Bitcoin is way more even than you 10:03 could have possibly imagined it would 10:05 have 10:06 So virtually everybody thinks if you 10:08 were early you stockpiled a huge amount 10:09 of Bitcoin and just sat on it. The 10:11 answer is no. People didn't stockpile it 10:13 because most of the people never ran the 10:14 software. And the people who did run the 10:16 software didn't most of them did not 10:18 stockpile it because it made their 10:20 computer run hot. So they turned it off 10:22 uh after getting you know 50 100 you 10:24 know 200 Bitcoin or whatever. And which 10:28 again is way different than thousands or 10:30 tens of thousands. Um you know if you 10:32 got 50 Bitcoin and then you're like well 10:34 now I got enough to play with. I'll turn 10:35 it off and, you know, see if it's ever 10:37 worth anything. Um, so people who could 10:38 have had 5,000 Bitcoin got 50 and then 10:41 they, you know, stopped it running on 10:43 their computer cuz their computer ran 10:44 hot. And then the people who did end up 10:46 with thousands of Bitcoin mostly sold 10:48 them for a dollar or $10 or $100. So 10:51 what that lands us today is you can 10:54 still buy Bitcoin for less than 10:56 $100,000. If the Bitcoin had not been so 10:59 beautifully evenly distributed just by 11:01 human incentives, nobody nobody made 11:04 people not take it seriously. Nobody 11:06 made their people turn their computers 11:08 off cuz it was, you know, running hot. 11:10 And nobody made anybody sell Bitcoin at 11:12 a dollar or $10 or $100. But all of 11:15 those people did that completely 11:17 voluntarily following the incentives of 11:20 the system. And because they followed 11:22 the incentives of the system, the 11:24 Bitcoin ended up beautifully, not 11:26 completely evenly distributed. 11:27 Obviously, a some people have more than 11:29 others, and some early adopters did end 11:31 up with a lot of Bitcoin, but it is much 11:33 more evenly distributed than literally 11:36 anybody could have predicted it would 11:38 have ever been. Um, and it becomes more 11:40 evenly distributed by the day. As people 11:43 adopt Bitcoin, people who bought it at 11:45 $10,000, you know, they need a new car 11:47 or something, so they sell it for 11:49 $90,000. Somebody somebody new today 11:52 thousands or tens of thousands of people 11:54 in the world will buy Bitcoin for the 11:56 very first time at 11:58 93,500 and they are selling they're 12:01 buying that Bitcoin at 93,500 because 12:03 somebody who bought it at 12:06 63,500 you know is up 50%. And feels 12:09 like now is a good time to sell some 12:11 Bitcoin. So the Bitcoin, all the Bitcoin 12:14 in the world keeps getting more and more 12:16 evenly distributed. Even as you have 12:18 Michael Sailor buying up a lot, you 12:20 know, as certain entities are buying up 12:22 a lot, that's still a very small 12:24 percentage of the total Bitcoin. The 12:27 vast majority of the Bitcoin is every 12:29 single with every single passing day, 12:31 the vast majority of the Bitcoin is 12:33 getting more and more distributed among 12:35 more and more people following the 12:37 beautiful incentives of the network. And 12:40 as a result, people like me bought my my 12:42 first Bitcoin in 2017 and I've been 12:45 accumulating Bitcoin ever since. But at 12:47 some point, you know, Bitcoin will be so 12:49 expensive that I'll just be living 12:51 entirely on Bitcoin without an income 12:54 stream. And if I'm living entirely on 12:56 Bitcoin without an income stream, that 12:58 means I'm slowly spending Bitcoin. And 13:00 if I'm slowly spending Bitcoin, that 13:02 means I'm distributing it very slowly to 13:05 the rest of the world. and everybody who 13:07 has retired on Bitcoin is doing the same 13:09 thing unless they're borrowing against 13:11 their Bitcoin. They are slowly 13:13 distributing their Bitcoin to the rest 13:15 of the world. Um it's just a beautiful 13:16 system. It's a it's a beautiful 13:18 completely voluntary system that relied 13:21 on the ent and has and will always rely 13:24 on the completely voluntary behavior of 13:27 humans following very natural and very 13:30 healthy incentives. And that is just a 13:32 beautiful system that results in Bitcoin 13:35 becoming the new monetary system of the 13:37 world and getting there in a completely 13:40 straightforward and completely voluntary 13:42 way, which is just a beautiful thing to 13:44 behold. So, um, anyway, just be glad you 13:47 know about Bitcoin. Now, in 2024, there 13:50 will be people who adopt Bitcoin for the 13:51 very first time in 2025, 2026, 2027, all 13:55 the way into the 2030s. we're going to 13:57 be well into the 2030s, if not the 13:60 2040s, before everybody that possibly 14:02 could benefit from Bitcoin has um very 14:06 similar to Facebook. I don't know, 14:08 Facebook has like three or four billion, 14:10 you know, users. It's like half the 14:12 world's population or something like 14:13 that, but it took them quite a while to 14:14 get there. It took them a while and the 14:16 early adopters and then it started to 14:17 snowball. So, we're still, you know, 14:19 something like 5% of Americans own any 14:22 Bitcoin and even most of those own a 14:24 very small amount. Um, so you're still 14:27 early to Bitcoin. Bitcoin is 14:31 on, excuse me, Bitcoin Bitcoin is on 14:34 sale and cheap right now in my opinion. 14:36 And uh it's a beautiful