technologies that are dominating today they're dominating because they're able to deliver force faster harder stronger smarter so if we ask the question what is money money is the highest form of energy that human beings can channel bitcoin is channeling human ingenuity into making it better and and every commodity is channeling human energy into making it worse the lowbrow or the the the historic colloquial term is total right hold on for dear life or just total or save whatever and the highbrow term would be adopt as a treasury reserve essay hey guys this is robert breedlove and welcome to episode two of the sailor series on the what is money show so in episode one uh we covered the rise of man through the stone and the iron ages so we went into ancient technologies we talked about fire we talked about missiles and we talked about hydraulics facilitated by water and now in this episode we're going to go a little further in the historic arc of man and we're going to get into the dark ages we're going to learn how missing one key step along the path of civilization can actually cause us to slide backwards and to regress and that civilization is it's not a guarantee right it is something that must be continually pushed forward and maintained across time and um we'll also get into how humanity re-emerge from the dark ages into the the ultimately into the industrial age and the steel age uh which enabled a lot of very important technologies like cities and aviation and railroads things of this sort so we're going to touch on again the the benefits that are offered by standardization uh and also the benefits of protocols similar to the ones we talked about in ancient roman times earlier and how the economic benefits of these standardizations to one language or one protocol actually accretes to civilization so these cost efficiencies accrete to us um in the form of being able to satisfy wants faster cheaper and better and that's actually the force that drives civilization increases both economic and network density for mankind we're also going to talk about how violence and monopolization have shaped the course of history how violence has been used to extract rents and taxes um how gatekeepers have influenced the course of history and how monopolies have have developed uh in both a natural and an unnatural way and then we'll also talk about packaged foods uh how much of an influence that had on civilization enabling us to store energy in a leak-proof container and also how mankind's ability to eradicate some infectious disease diseases was such a huge boon to humanity uh in terms of increasing life expectancy um and quality of life overall and again the the general aim of this is to construct a solid intellectual foundation on which to understand the profound impact that we believe bitcoin will have on the world um and you can think about bitcoin as sailor refers to it as an engineering breakthrough and that for the first time in history we have a technology that is able to store the energetic life force that money represents uh again we can think of money as a claim on all other sources of energy in the world right whether it's capital chemical energy kinetic energy food energy all these types of energy money acts as a kind of meta energy and we've never had a monetary technology that was totally leak proof and that it did not lose value over time so hopefully by drawing analogies to these very important innovations across history um you'll start to have a an emerging realization of the the the real importance and significance of bitcoin so with that let's jump into episode two and at the end of this i'll do a little outro to hopefully synthesize some of these ideas all right thanks we have the rise of man through the stone age and it took quite a long time but we got here that's impressive we have the roman the roman rise and we saw a sophisticated society mastering energy networks logistics networks advanced tools political processes in order to in order to dominate their sphere of influence and um by the age of the antonines around trajan hadrian marcus aurelius those are like 100 years it's a golden age of rome and that's like 90 80 to 180 a.d the average life expectancy of a roman is is 72. and so if you're you've got baths you've got writing you've got civilization you've got sanitation you've got aqueducts you've got roads they've got stuff pretty well organized some sophisticated machines and then of course we take a a hard left turn into the dark ages and stuff just starts to break down and um it's a reminder that if you that nothing is certain if you miss a key insight you could waste a thousand years and um stuff could have happened different way it didn't for example um let's take the printing press the chinese developed printing presses way back 2 000 years ago they never really thought to commercialize them and uh the chinese alphabet is a pictographic alphabet and so you wouldn't need 25 000 different uh type pieces in order to have like movable type and a printing press and so they had the wrong language to develop printing presses the romans had the roman alphabet which is an ideal language because you could actually print anything with just like 26 or 50 pieces of movable type and they had all the knowledge but for some reason they just stare anybody could have figured it out robert like all you got to do is walk in your boots through the mud and step on a nice floor and look down and there's the idea for a printing press tracks in the mud right they had paint they had dyes and you know they're they're just oh so close and then they don't hit it and we wait until whatever 1453 or something for gutenberg to work this out and we're gonna suffer for a thousand years um it's amazing to me how certain things can be just right in front of a civilization and they just won't grab them like if you go if you go to saint peter's square to the vatican and you look at that uh column that was i think that used to be tr it's now saint peter's column but it used to be trajan's column and trajan's calling was put up you know on the you know as a to celebrate the triumph of trajan and his wars and um it's a um it's a bass relief a marble relief of the dacian wars and it wrapped spirals up the column had a little staircase in the middle of it a work of art an architecture and at the top eventually the roman catholics put the statue of saint peter i guess uh and uh in the ancient roman times that had trajan statue on it and trajan is standing there in his imperial robes and he's holding his hand up in the air and do you know what he's holding in his hand uh i i don't know he's holding the world and it's round robert he's holding the globe in his hand and this is 100 a.d fast forward 1400 years and people think the world is flat it's like knew the world was not flat right and if they hadn't ripped his statue off the column a thousand years earlier or whenever they ripped it off and buried it somewhere they would have known the world was round and it's just it's so ironic that you could learn and then forget such a basic thing right right so there is the possibility of significant civilizational regression if we ignore those learnings that we've accumulated over time and yeah you can go backwards and you think well we've got it and if we do this we're going to leap forward into a new progressive error but if we kill it at a pivotal point maybe people forget it ever existed like letting that fire go out yeah i'll tell you another one that blows my mind if you go to the um museum of uh of the native american indian or native american in washington dc and you walk around you see there's an entire civilization i mean they're pretty much hunter-gatherers and if you want to understand how hunter-gatherers lived i mean the american and native americans the way they were when the europeans showed up in america is probably your best proxy for what uh what the what the paleolithic man was i guess but amongst all the artifacts they gather if you walk around you eventually find a pottery wheel and the pottery wheel it's a wheel and stone and it's got a beautiful piece of pottery and the sign says glowingly yeah native americans had very sophisticated pottery and they knew how to mold clay and they used this pottery wheel to do it and i looked at the wheel and i think for 5 000 years nobody in the entire continent thought to take the wheel and turn it this way and roll it right like they knew a wheel they knew wheel was useful i give you the wheel robert but they never invented the wheelbarrow they never invented the wagon there's no rolling stock anywhere in america incredible and you know and so you're like think about the consequences of that insight like how is it possible that not a single person the entire continent ever thought they might want to turn the wheel this way right but it's such a profound idea right and yet you can go a thousand years and not get that idea do you think there's any modern examples that jump to mind that something that's maybe glaring at us in the modern age that we're ignoring or something that maybe we've forgotten or we're not we're no longer respecting robert the blockchain and bitcoin is a wheel it's uh i can use this stuff if i turn it this way you know is i i take a couple of they're not complicated ideas you know public pretty good privacy public private key encryption hashing you know like no one of them on its own i mean they've all been sitting there and someone says well what if i just do that with it and i start this fire and it's i rub two rubbed two sticks together i just never think to rub two sticks together this calls to mind your example of the roman hierarchy as well that because everyone knew they were being watched right it maximized their accountability and therefore their their performance and competence the bitcoin network's sort of the same you have all the nodes and miners looking at one another's activity to make sure everything's above board all the time right it's instantly auditing itself constantly in real time and you and you could say right the romans were healthy as long as they kept tension and um dynam dynamism and cap and this incredible competition in their ecosystem and when they lost it they lost their edge and then you know when you look at the classic guns germs and steel type narratives like the europeans they got hardened and tougher because they were always fighting with each other and living with your animals made you tougher and having people come through from asia made you tougher and you know and uh as soon as you try to insulate yourself from those stressors right then your stabilization forgets how to do things right never figures it out right celeb calls the stressors are the information right so you're actually cutting yourself off from the information flow that's driving your adaptation so one way or the other we meander through that but it strikes me that didn't have to last as long as it did you know life expectancy plunges down to 30 years from 72 years and in a world without technology if you don't have aqueducts and sanitation and and rules like don't bring your horse into the middle of the village because he's gonna crap all over everything and going to get sick right in the absence of all those those orderly rules then then you um you have just a degradation of the human condition and we started to crawl out with the renaissance and you know what's interesting there i think is um if you look at all the great cities in the world all the great cities grew as nexus as the central node of an empire so rome was the nexus of an empire carthage was the nexus of an empire when they lose their empire they collapse the only way you generate enough money to make a great city is you have to scrape a tax off of all the energy all the commercial value in a large place a fisherman cast a wide net to capture the fish that's your empire the roman the roman schtick was you know pay us 10 when it comes into rome and 10 when it goes into the next port and we'll take 20 percent of the value added or maybe 30 to whatever we're going to take right um if you go into venice and you look around the grand canal you see all these palazzos they're all just uh warehouses i bring a ship into venice i offload my cargo and then it goes out the back and it gets barged up and down the canal and it gets transshipped to a new ship in that world each ship ran this route venice alexandria was one trade route venice the rome is another trade route venice distant ball is another trade route you're you're at the nexus you're running these shipping networks and of course you got to bribe the guy in istanbul or maybe you know your son marries his daughter and that's how that's how you get to come in and out of istanbul without getting murdered or getting your stuff stolen you know and eventually all the families in venice intermarry like you know i know you you're my second cousin that's how we don't cheat each other and um there's no way you can't solve the traveling salesman problem there's no way i can take a ship from istanbul to alexandria to venice to rome you know to um uh ibiza wherever i would go right barcelona because i would basically get over taxed or extorted in each port unless i actually was you know friendly right right so the way that works is you have a hub and spoke system and there's always one central city and there's always one set of families or companies and they enter mary and they trust each other and they just agree i'm going to buy wheat for a nickel or for a dime in alexandria i'm going to bring it to venice and i'm going to sell it to you for 50 cents you're going to take it to barcelona and sell it for a dollar or and you're going to pay and you're going to pay a nickel and tax to the guy on the other and you know you're going to get your 45 cents i'm going to get my 45 cents those guys paying a dollar these guys got paid a nickel we can play with what's the markup right it might be i buy it for a quarter seller for 50 and you sell it for 75 to the dude that sells it for a dollar but invariably it's the people at the center of the network that are actually getting 10 20 30 50 of all the commerce right which is all the energy now and what's the definition of a smuggler or you know that or a pirate the definition of a smuggler is someone that doesn't want to give me half their stuff right so how do i stop that i have to have a navy that goes to kill them so so you have the carthaginian navy stopping smuggling so they can tax half the stuff and that's why romans can't carthago delinda s right is it like is it like uh 20 the elder or or cato i forget which one said in every speech he gave in the senate for 20 years carthago delinda s carthage must be destroyed why because two people can't shake down the same guy of half his stuff there's nothing left if i take half your stuff as a tax i can't you know it's like the tax wars yeah yeah indians are taxing the shippers and the romans want the money so therefore the romans must defeat the carthaginians now the romans tax you then they fall and the venetians rise now the venetian navy controls the men then you've got uh you know you ever go to venice there's this great um renaissance painting the battle of lepanto and the battle of ponto is when the king of spain allies with the pope from rome the head of the roman catholic church and with the doge of venice and those three navies fight the uh turks the the the invading muslims from istanbul and they beat them and and it's the triumph of christendom but it gets you thinking about why why were they all killing each other in the first place over the med and you realize it's because they're fighting over control of the mercantile network right and then the next interesting observation is you've heard the name the word roman catholic church right you ever heard the phrase venetian catholic i don't think so there was a time when the venetians terminated the catholic church in venice the catholic church in the entire venetian empire didn't terminate with with the pope in rome it terminated with the doge in venice and and so that means all tithes right all do goes to venice and stops you can't have an empire unless the person at the top of the empire is also in control of the religion because if you don't control the religion then someone else takes half your money you see it's all it's all about energy flow right and the energy is flowing by the way the pontifex maximus originally refers uh to the to the roman consul to the head of rome augustus caesar was the pontifex maximus so the romans had it eventually the um the high priest right so the high priest the roman consuls were the high priest of rome for 700 years if you're elected general you're also the priest you run all the religious ceremonies they didn't separate those two and so so the church and the mercantile empire and the power of tax migrates from rome to venice okay when did venice start to decline when they lost control of the of the church at the end of the day they start sinking because you can't afford to maintain those buildings you know you can't afford to maintain hundred story buildings in manhattan unless you're at the center of a financial empire right i have to basically buy your bonds for 68 cents on the dollar and sell them at uh 82 cents on cut the difference right you know there are a lot of securities in on wall street where there's only two market makers there's the one bank and the other bank and they trade with each other and if you're buying you're buying at the bottom or you're buying at the top of the spread and you're selling at the bottom of the spread and the spread is two percent robert and so if i turn over a billion dollars worth of bonds i'm paying 20 million dollars in commissions and there's a monopoly there and the 20 million dollars is just flowing into what it's flowing into the building you know and my buddy works for that bank and i work for this bank and we drink together and and we just kind of joke about the 200 basis point spread interesting so it's these groups sort of competing to be the head gatekeeper in a way right but to preserve that gatekeeping it's intimately connected to the church control of religion i guess you might say so does this somehow connect uh the the actual connections between money and religion like even today we have in god we trust on the us it takes us to the reformation by the way if you go to amsterdam amsterdam is the city of canals it's a big distribution if you've ever seen a distribution center it's the trucks come in one side it goes through a very complicated set of conveyors and it goes out the other side these trucks come from the manufacturers those trucks go to the stores or the locales and this this distribution center is uh a we a maze of conveyors amsterdam's that but it's that for barges before we had machines that's what venice is that's what every that's what every great mercantile that's what uh they did in every mercantile center and when you get to you know martin luther's time you realize one of the key drivers is there's there's no way that we can rise or or elevate our civilization if we have to send all of our money to rome right right you see this struggle with throughout medieval history william the conqueror had that struggle you see the struggle of the of the northern europe uh your northern european uh german nobles and then of course it punctuates itself with henry viii who eventually forms the anglican church so he can be the pontifex maximus and if uh the church terminates with the king of england they don't have to ship any money you know down to italy nor do they have to ask permission to to change their alliances and get married and do what they will it's useful to have god on your side it's always been useful and so that drives a lot of stuff throughout the renaissance and it drives the you know you can say you can say that northern europe broke off from the roman catholic church for religious reasons or you could say the northern european powers to be created the religion for political reasons to an economic reason to break off from the roman catholic church but either way you know it's it's kind of a triumph of history that everybody's forgotten that there used to be lots of why they call it roman catholic if there weren't other catholics how many different branches of the catholic church you think there were like a thousand there could have been a lot they just kind of coalesced over time but here's the general principle everywhere on earth where you see a big city it was the center of an empire paris london hong kong new york venice rome everywhere you and by the way everywhere where you see a city that's fallen upon hard times it's been destroyed it's empire lapsed carthage troy right you could name them on and on and on right venice had an empire lost an empire and that's because you can't physically create this kind of economic density you go to paris and you look at the cathedral of notre dame and you look at how much human effort went into creating notre dame there are people that are selling postcards and bottled water in the shadow of notre dame cathedral making money off of tourists where the guys inherited the concession from his fathers fathers fathers fathers fathers fathers fathers fathers fathers father's father and if you go back 10 generations the concession was 700 years old okay they're living off of off of um the vestiges of an empire long past now the question is what are the empires of the future where they form and that takes us really to the steel age you know the 19th century the the robber barons and the like and you can see with shipping networks you know those canals gave way to free ports and eventually gave way to container ships and container ships totally remade everything and they and they shifted power to singapore and hong kong and companies like maersk and uh ultimately it's a low energy it's a componentized way to move things around the most efficient way to move anything on earth is modern containers by the way the biggest range in technology and servers today is containerized software via kubernetes and docker which is the same principle as put all your stuff in a container ship and the container goes on to a ship they've got standard loading facilities into a port they've got standard standard train cars and standard trucks everything standardized and the cost of the cost and the transparency of that was cut maybe by an order of magnitude with that innovation right standardization once again all right so what i do have a question about the the in these empires that we've discussed historically ostensibly the purpose of an empire like this is to basically preserve the walls of the city protect the peace honor private property rights within that dominion right enforce contract law uh ensure that there's a non-violent means for dispute resolution such such that commerce can be conducted uh fluidly and i i and you you mentioned the empires of the future it this is something i think about a lot is that we've always needed this monopolist on violence to sort of honor private property rights within their jurisdiction but another really interesting aspect of bitcoin is that it's kind of it's the first private property right that is agnostic of government completely right you don't need government to enforce the your right to your private keys it's like holding physical gold or any other beer instrument so i wonder how much that plays into the the relevance of an an empire in the historical sense kind of going into the future well i guess yeah traditional empires are producing security the number one export of the united states is security like literally i can i can live in miami beach and i don't worry about someone shooting me across you know the intercostal waterway and if i was in certain other parts of the world i'd have to be surrounded by a hundred bodyguards right so security they they have that saying about genghis khan they said when the mongols controlled all of asia a virgin could have ridden from one end of the empire to the other with a pot of gold on her head and not be molested the mongols weren't screwing around either you intercept their mail if anybody get anything gets stolen anybody gets hurt they show up with an impa with an army and they murder everybody for 100 miles in every direction kind of to make the point don't f with the system right now most of these empires they generally provide this kind of security for their citizens you know not always for the non-citizens or the aliens or the slaves or the whatever whoever's the underclass but but they do manage to establish them um bitcoin is a security and bitcoin's number one its number one uh value proposition is security it's it's security of of uh energy right if energy is translated to money and money is translated to bitcoin and it's stored in the bitcoin network you're securitizing your assets you know in a cloud of behind a wall of encrypted energy and in that regard it provides an important right and empowerment to the individual it hasn't quite addressed the physical security element right when we actually come up with something that will surround your person with a field of of um i guess uh i guess repulsive energy you're you know you're almost filled yeah right then you will accomplish the same thing in the physical domain that bitcoin does in the virtual domain but it's but but having um if i secure your life force right energy money is energy is life force is money is power if i secure your power that can be converted into into physical security either by allowing you to travel away from the we have the example uh nazi germany in the 30s all the jews had their money locked up in germany and so the way the system worked is is they operated as bankers and they allowed people to launder their money out of germany and they would take a haircut 10 20 30 initially then 50 then 70 percent than 90 until pretty soon they were it was like a 90 haircut to get your value out and so consequently um people didn't want to leave right and so if you if you if you don't have your monetary power or your assets secured virtually then your physical security is always at risk because you can't leave nor can you protect yourself right you can't you can't pay for anything to protect yourself and you can't get out or you can't pay to get out you know you would think they're probably one of the most useful or common or not one of the compelling use cases of bitcoin would be if i'm a refugee trying to flee a war zone because it's either that or gold and the problem with gold is there's a lot of people with guns they're going to take it from you at least with uh bitcoin you could pay the guy with the gun half the money when you started and the other half when you got there and the worst you can do is blow your head off but he's not getting your money whereas if you got gold he just blows your head off takes the gold yep so so yeah i think it's second order beneficial to physical security in a lot of different ways and it makes the world better but it's first order beneficial to economic security um if we uh if we think about the steel age these rail networks are are are another network to deliver deliver energy faster stronger smarter harder uh of course at the at the nexus of every transportation hub there's an economic center so rail heads uh if the great city isn't a port it's at the center of a railroad juncture and when you bring in a lot of times sometimes they at the center of the rail juncture you can tax all the trains so if uh goods come from spain and to paris and they're going to germany the french get to take tax right there in paris the rail heads became a nexus the other fascinating thing about the railroads is they became really instrumental to logistics movement of armies and and they drove economic and political power and one interesting example is winston churchill when he was like 25 he wrote a book called the river war before he was famous for anything in fact he was quite the adventure he went off uh to fight in the war in the sudan under kitchener and uh the entire book is about the british um working to to win a war in the sudan and they had to had to take khartoum and it's like going a thousand miles up the nile maybe 1500 miles up the hill across desert and you know and why would they want to do it very interesting question but here's the bottom line the entire outcome of the war comes down to the question can the british build a railroad to cartoon and if the british succeed in building a railroad they win and if they can't build the railroad they can't provision the army and they can't move their heavy equipment and they lose the war the entire war it's called the river war but it'll be called the railroad war it's just about building a railroad across a desert and at the end of the day the as soon as the railroad arrived a bunch of guys with explosives and gatling guns showed up they you know devastated everybody and it was not a fair fight at all like gatling guns versus guys with spears and musket loaders and it's kind of very unpleasant you know and if you read it through the modern view you know it doesn't necessarily leave you a good taste of your mouth but it's a reminder that a lot of times the difference between winning and losing and living and dying is d of railroads i got i think there's a similar story in the american civil war if you look at the way railroads functioned and even the conquest of the continent right the union pacific railroad and once the railroad crossed the continent you know manifest destiny states was going to dominate without that railroad was it a thousand times more expensive to move stuff over land right right right right like you know google is um they're very good at saying we don't do anything else that's going to be 10x or 100x better i mean so that's a silicon valley trope you know don't bother to do it unless you're gonna have a breakthrough that's 100x and well all these things were 100x better but a railroad we take for granted it could be i give you five tons of stuff carry it from new york to california count the amount of energy it's going to take you now put it on a railroad car try again right you think that's not faster and stronger thousand times faster thousand times stronger something like that orders of magnitude and that takes us to john d rockefeller right and before standard oil comes along people are actually hunting whales they're getting in wooden ships chasing around the ocean to kill a whale boil down his blubber make kerosene and burn a lamp no not a very efficient way to gather energy you know so then along comes oil and oil is a thousand times more efficient way to get energy and what standard oil was was it was first an energy producer but it was also an energy storage device is a battery right because the best way to store energy is put it in a tank it was also an energy network standard oil they bought up all the they didn't actually buy the fields they bought the refineries they refined the oil they stored the oil they bought up all the tanker cars they bought up all the tanker ships they locked down all of the networks and they basically had an energy network they actually had guys driving around with carriages to deliver you know their energy to every single retail store they had retail distribution they would even give away the furnaces to sell the energy they did a jeff bezos you know amazon prime people think jeffy is invented he didn't invent it if you read the you know the biography of john d rockefeller rockefeller invented it all like he he did it all he gave away you know the razors to sell the razor blades he's the first guy to realize that by the way that you have to form a cartel or you have to form some kind of understanding of scarcity if there's no scarcity there's so much volatility that um the market is chaotically destructive so you had the world's first serious energy network there and such a powerful network that a hundred years after rockefeller's dead those companies still are worth a trillion dollars right they're still instrumental yeah what is it what does that mean that you said that rockefeller realized he had to institute a cartel in order to i guess impose scarcity on the market such to offset volatility can you can you elaborate on that booms and busts like people would well you talk about scarcity the problem of using a commodity is money is when the price goes up people produce too much of it supply goes up yeah well so so he it was a very inefficient industry with massive volatility and so he consolidated it to drop the volatility so that they could standardize every component along the way interesting so so that he could drive to a lower energy level right i mean a more efficient a more efficient energy system and um and i mean ultimately right that if you want to look at the human condition you know you ever get on one of those rowing machines and you row as hard as you can for an hour you know and you know a kilowatt hour hard to come by and then you start to you start to think like if i rode all day long and i was olympic level rower i think the sum total of my effort is like 29 cents right if you calculate you know the value of all of your human effort and and uh modern energy cost a quarter nic some people couldn't do a nickel worth of work right and you think about where we got to and we got through to that uh by channeling this energy and uh it must be again it's a thousand x 10 000 x more energy in fact just a general theme you see everywhere where there's an explosion of innovation and an explosion of vitality somebody tapped into a thousand x more energy or figured out how to deliver the energy some oil you know oil was originally it was all about uh kerosene and lighting and then heating and then of course the automobile shot it up by a factor of 10 and that was the killer app um but if you go on and to some other industrial era robber baron type networks here's an interesting one kraft hershey's and post cereal they're technology companies people don't think them as that before they came along um there wasn't no breakfast that people to eat breakfast craft and posts figured out how to box corn flakes and put it and what they did is they stabilized food energy and put it in a container that didn't bleed the energy that didn't leak energy if i give you um a bottle full of tomato sauce and i just make it in my kitchen and you put it in your refrigerator it will spoil over some period of time how much well there's bacteria in it the the origin of branding the craft brand the hershey's brand or whatever brand the origin of branding is i make some i make it in a clean room hermetically sealed everybody has to clean up scrub down sterilize get the bacteria off i have machines to uh to load the can to seal the can to seal the bottle i stamp it with my brand the number one value proposition robert wasn't it's good catch up the number one or it's good tomatoes or good soup or good whatever the number one value proposition is it's not going to kill you don't you just yeah right you ever actually make some leftovers and leave it in your refrigerator for two months and eat it by the way here's a better one why don't you make something in your kitchen and then leave it in your closet for two months without a refrigerator because they didn't have refrigerators frozen food came along later and marjorie meriwether post became like one of the richest women of the century a because her her father gave her post cereal and they were able to stabilize starch in a box at room temperature and then b because she brought bought a frozen the first frozen food company and she realized the ability to actually freeze food was going to be a game changer and before that no one ever frozen food before you think they're not technologists right it's a food energy company energy storage technologies right i mean i mean you need energy and food form a nutritional form to not die yeah right if i could store it now it's like it's very interesting here right like can i take electricity from detroit and deliver it to you in san francisco today no can i deliver electricity from detroit to grand rapids michigan yes when it gets to you how long can you store it in your battery it bleeds two percent a month you'll probably lose it all in the year can i ship food from detroit to grand rapids yeah when it gets there how long can you store it in your cellar a day a week well if the answer is two weeks there's no national business there there's no national brand the answer needs to be three months or six months now there's a national brand now it matters so so these guys that were launching these businesses they were really launching clean room manufacturing plants that uh captured energy or something of value they cut they were store of value robert store of value that would not uh decay or bleed due to bacterial infestation or spoilage and because of that the brand became important just like the standard brand was important the kerosene is not going to explode it's clean right is the gasoline queen is the ketchup queen you go to hershey's pennsylvania they got a factory it's a work of art if you you know it's more complicated than most computer programs they wrote a computer program in steel it's like don't f that up right there's no version two coming write your program in an analog computer welded in steel that takes up a football field that's what they did and in one end goes like milk and eggs and you know and yeah oh and out the other end comes like boxes of chocolate bars 50 000 an hour and it's not just they come out perfectly uniform it's they come out without bacteria in them and you can put them on yourself and they won't make your kids sick right and and therein is the rise of all those cpg companies it's interesting i love the the perspective you have on all investment being an investment in technology because that is what we are doing right we are making tools protocols technologies that basically improve our productivity and that's how we that's how we advance is sort of layers of these innovations on top of one another such that basically every business is a technology business i think that's a very unique insight i'd never heard before and i think the the other thing is the interesting connection between this hyper sanitation right to really make sure there's no bacteria or any um anything that could cause harm to the user of energy which would be the the eater of the food how the the hyper sanitation is connected to the preservation of the food or the energy store and that seems to somehow kind of mirror bitcoin in a way that it's it's got a hypersanitary ledger right there's never any errors in the blockchain whatsoever such that it preserves its sanctity maximally across time like it's the most uh the best preservation technology of value because there's no uh detritus in it i guess you should say the best branded asset in the history of the world right exactly maybe it's the first time someone came up with a way to cryptographically brand a security yeah which is an interesting idea yeah now with regard to businesses i would say that all of the great businesses the growth companies were all technology companies in their time and eventually and almost by definition they stop growing when they when they are no longer cutting edge technology companies right there are other businesses that are more like rent seeking businesses or their concessions the guy that sells bottled water in the shadow of the notre dame cathedral that's a business it relies upon political largesse you know maybe maybe there's a real estate business right i own that real estate and then i sell you water or lemonade on that real estate right there are those kind of businesses but the growth companies right standard oil you know was a growth company u.s steel boeing ibm in that period when they're growing their technology company and uh that means that all growth stocks are technology companies by definition you can buy another stock that's not a growth you know that's not a growth company or a non-tech company but it's probably not a gross stock in order to grow a non-technology company you could then you could then make this uh the assertion that you're gonna need to do financial engineering like roll-ups like i'm gonna buy up every mcdonald's or or every restaurant across the country with debt maybe that's a way to grow it or you need a concession from a regulator you know it's now illegal for you and i'm the only person that can operate airports in the united states i can grow that way i need a concession a political concession and then i i suppose there's a place for innovative marketing but i'm not if there's not a compelling technology breakthrough i'm just not a big fan right of the of the marketing thing you know except for if the marketing breakthrough comes about due to technology like for example i created a company that got famous because i'm famous on twitter and youtube and that's not a bad idea i'm the best marketer on a new medium maybe that can work but then the day those aren't going to be trillion dollar you know in their day i mean like if the dollar is inflated or it's debased by a factor of 100 at least well i mean john d rockefeller was worth 300 400 million dollars in his money multiplied by a hundred yeah all right multiply by 200 right you know he got to being worth a billion i think so he probably was worth 200 billion to 250 billion in his money and and that was in a day where uh where you didn't have access to all the deflationary tech uh services that are effectively free so so relatively speaking right that they had extraordinary power but they were all technology capitalist it's important at this point for us to just look at the impact of steel and aluminum through this entire era um created an empire based on steel and uh andrew mellon's empire was substantially based on aluminum and aluminum alcoa and um steel is an elemental force for the civil engineering industry and aluminum became that elemental force for aviation uh without steel there really there is no modern city you know you build a building in ward it's two stories build a building and bricks are masonry it's five stories is max in order to create new york or london or any great city you need steel and you need of course an elevator straightforward things but of the two of them steel is the harder development the elevator you could probably figure out it's a counterweight on a pulley whereas steel is is iron laced with carbon and it's really hard how hard it's think think about how complicated it is in order to refine steel and shape steel when it's uh molten and it melts through just about anything you might put it in or on you know if you read uh any books on steel like american steel i think by richard preston about new core they talk about steel refinery blowouts if you actually have uh an accident in this fluid refinery and if the molten steel falls on the um concrete there's water vapor in the concrete so molten steel super heats the water vapor and what happens when water vapor gets hot or water gets hot expands explodes molten seal on steel on concrete turns the entire refinery into a bomb and it blows up and it kills everybody for 100 meters in every direction so technology or not technology harder technology everybody thinks they're in the technology business today nobody deals with technology that's as dangerous and tricky as you know what carnegie and those early steel uh steel refines are dealing with or they duponts handling nitroglycerin like what do you think happens when you mishandle nitroglycerin when you mishandle crypto you lose some money when you mishandle nitroglycerin everything gets blown up again for half a mile in every direction and uh aluminum again not so easy either so these these are really difficult technologies but really elemental because the difference between steel and no steel is do you build a 100 story skyscraper right i guess you could say you might do something with iron but iron's just got problems steel's the perfect material for civil engineering it's uh it's cheap it's got extraordinary tensile strength if you if you paint it or maintain protect it from corrosion it will last forever literally forever robert if i if you build a steel ship and you punch a hole in it you can weld the hole with another piece of steel and the weld will be stronger than the original cold rolled steel it's that strong so in the world of strong this is the strongest of strong materials it's strong it's cheap carnegie figured it out they built every bridge with it no steel no bridges no bridges no manhunt figure out what happens if you blow the bridges man you couldn't ever starve to death you can't even get the food in fast enough and of course you can't hold the skyscrapers so all modern civil engineering is based on steel so then along comes aviation and they try to build a plane with steel what happens you ever see a steel airplane no it's the perfect material it's cheap it's indestructible why not build an airplane with steel too damn heavy two just one little nuance just one little problem but that you know the fact that it's better than aluminum in every way shape aluminum is 20 times more expensive than steel you know and it flexes and there's also and it's difficult to work it doesn't matter steel doesn't fly iron doesn't fly wood flies you know canvas flies fabric flies but you try to find a metal which is stable that's a that's out that's going to be a a structurally sound metal for aviation and aluminum's the one no aluminum no aviation nothing right nothing like you're talking about balloons right or maybe you got the right flyer but it's an elemental force and uh and on that uh element you make that breakthrough then you have hundreds you have a trillion dollar industry right based on that breakthrough how do you work it how do you create it how do you use it it's so interesting that these raw material breakthroughs then have so many follow-on consequences like first and second-order consequences you know to the point where you're saying no steel no city no aluminum no aircraft and then we have to think about how much commerce is actually conducted through the city and through the aircraft i mean it is it's foundational to global civilization as we know it and they all kind of come down to networks that move energy around standard oils and energy not work the railroads are are energy networks right okay no railroad no tanker car with energy on it right the railroad is the energy network moving the oil around the airplanes another energy network moving high frequency cargo around and information around and uh and each one of them you know build another one and then the food networks and the result of all of them is there are large corporations and huge huge opportunities for wealth creation if you get to the node of the network you know one one last point on the steel age before we move on it's worth noting is is average life expectancy at 1900 is 50. in america it was 70 under the romans it was 30 in the dark ages it might have been 32 33 on in the revolutionary war in the us we crawl back up to 50. and um and then by 1950 it's 70. and so probably the most rapid expansion in the quality of life in thousands of years is in that 50 years from 1900 to 1950 because of the conquest of infectious diseases and that's all really a function of discovering you know discovering the science of of microbes and sterilization understanding that you need to be sterile and then the second is antibiotics and those two things together were extraordinary antibiotics alone in penicillin is responsible for the defeat of tuberculosis and tuberculosis killed a billion people the white plague have you caught tuberculosis it was a death sentence i think it killed chopin killed all sorts of people um a billion people more than any war and of course in this particular case if you look at uh history books on the 21st 20th century they give it like two paragraphs you know you could pre if you were awaiting the text based upon the significance of what happened you prob probably something like half of all the history of the 20th century ought to be just about you know penicillin antibiotics and sterilization half and everything else could be the other half but in fact it's not even 0.01 the only measurable mortality rate in the 20th century is is the flu epidemic around 1920 where you could see a blip you you can't see an impact on the average life expectancy of any other event including all the wars the wars don't world war one doesn't register world war ii doesn't register nothing re it's kind of like just the the impact of technology of modern medicine and antibiotics and and uh networks and and cheap energy and sterilization and sanitation and running the impact of that so dwarfs every political thing that took place in the century that what you've really got i think it's just a chart that's just a small blip in 1920 and now it's like you know different estimates 100 million people died uh 20 people say as much as 20 percent 10 to 20 of the population died in that one or two year time frame and they're still debating what that is but it's the only event you can see on the chart and uh all of the activities of all all the politicians and all the ideologies and everything we fought over turned out to be not as relevant you know as uh defeating tuberculosis penicillin and it was the it was from a derived from a mycelium is that correct that was left in a sink overnight accidentally something to that effect yeah and it's an accident the guy we get it from a from a a fungus uh and um it's accidental it's incredible and uh and and powerful but um i don't know i guess your takeaway from that is um let people do their stuff and don't don't right don't try to channel people in any particular direction too much because uh nature's a bit more complicated i think celeb makes a point that all of our innovation is or will say all say the vast majority of innovation occurs through trial and error right this tinkering impulse that people naturally have versus this uh image of the inventor alone in a room laboring for 20 years straight and all of a sudden he has a breakthrough it's more like people working and tinkering all over the world and communicating that lead to these breakthroughs yeah half of science is accidental and half the stuff gets discovered but the issue is no one decides to commercialize it or or they don't engineer it into the solution so there's that that phrase um i think william gibson's phrase the future's already with us it's just not evenly distributed right right yeah yeah exactly all right guys episode two so good uh we're making progress we've now seen man rise through uh stone age iron regress into the dark ages and then finally progress into the steel age and this leads us into the industrial revolution and um where we are today which is the information age i i really appreciated sailors perspectives on this i thought it was interesting that we take so much for granted today we really think that all of these modern miracles generated by markets are a given but if we look at the dark ages and realize that one key misstep can send us sliding back thousands of years i think it's a great lesson to deeply absorb and realize that none of this none of this is promised um and he you know he made the point clear with you know the boot print right the the idea of the printing press was evident to anyone who had ever seen a footprint or a boot prep yet for some reason it took us a really long time to commercialize it uh and realize its revolutionary potential and uh i also when he pointed to tregen right the guy from 100 a.d the statue of tradition holding the globe right the spherical world in his hand at 100 a.d yet fast forward to 1400 bc and there's people in europe uh pre-columbus that still think the world is flat so it's so interesting to me that these ideas powerful as they are um they can be missed right we can we we can hurt ourselves by not paying attention um and not just at an individual level but really at a civilizational level and um i think you know as sailor might call that the fire of truth right when we let the fire of truth be extinguished um it society can regress into falsehood the other uh interesting point was the native americans or the pottery wheel right they had this device for you know who knows how many hundreds of years but no one had figured out to turn it on its side right and realize all of the mechanical potential of the wheel right the wheelbarrow the wagon um even things like the train and whatnot they all uh use the wheel to overcome frictions for terrestrial motion um and i thought that was an interesting example of how some of our most important innovations can just be hidden in plain sight frankly um and this is this points towards bitcoin for me in that so many people know there's something wrong in the world they sense there's something really deeply wrong in the world today but very few people understand how broken the money is and how much that contributes to the socio-economic problems we're seeing the world over so in that way i kind of think we the so the problem and the solution are hidden in plain sight so to speak and that we need to fix the money to fix many problems in the world and we got into the discussion about smugglers right so the definition of a smuggler which sounds like a a criminal actor is really just someone trying to protect their self-interest right there's someone that that wants to conduct commerce to report and not give away half of their stuff as sailor said i thought that was very interesting and that's actually where we get the term freeport i don't know if we touched on that in the episode or not but the term freeport means that you can dock there without having uh you know half your stuff or a percentage of yourself confiscated and that leads us to the really important role that gatekeepers have played throughout history whatever local monopoly on violence existed they've always wielded that monopoly to extract value or rents or tax from those conducting business and creating economic surplus in their guarded territory right that's been kind of the name of the game throughout human history and that's why we have the two adages right death and taxes anywhere you go to kentucky business uh you're going to get taxed and you know we're all mortal we all die so governments have always used the weapon of the law as an instrument of plunder right it is how they generate revenue is maximally extracting wealth from those that do business in their territory but it's a it's a parasitic relationship and if we look in the domain of biology parasites actually don't tax their host to death that would be actually counter to their own self-interest they want to extract uh maximum value but in a way that maintains the host longevity right so it's kind of like establishing monopoly profits in an economic sense there's there's a very particular point on the price curve where the monopolist sets their price to optimize their own profits which isn't enough profit to say kill the consumer and force them not to be able to pay for it and it's not a low price like we'd see in free market competition but it's like right at this peak point um so i thought it was pretty interesting that we were able to see governments in that light and that's why history has this distinct pattern of might is right yeah you know like people have been competing to be the head gatekeeper right and this is this could be governmental this could be religious um because it gives them a very the path of least resistance if you will for extracting value and becoming wealthy and indeed those were the first wealthy people in the world or people that were able to specialize in violence or to specialize in religion to establish monopolies on on local commerce or local belief systems and if you when that that you know points to the intimate relationship of government and religion and um you know the defining feature of western civilization today is the separation of church and state that was uh how we have secular society was a decoupling of those two institutions and we look at say a modern city like new york i thought the point was great that those skyscrapers are constructed from the value that is extracted by financial intermediaries right we're saying give the example of two bond traders in adjacent buildings uh driving most of the volume in a market and they both get discrete you know they're vague they're one or two percent and it reminds me of the hotels and the hotels in vegas right the old joke was like the the buildings aren't built built by winning gamblers right it's the nature of being an intermediary is that you get to extract perpetual profits basically from anyone doing business uh within your network and that's what money is right it's just this it's a network of trust and that's why the state has always fought to control and monopolize it because it gives them essentially unlimited power and wealth to be able to confiscate that from the uh the entirety of their citizens and um that's what you know that's what tax is that's what a rent is not a rent like you pay monthly for your apartment but uh rent in the economic senses it is the intermediary or group preserving peace in that area they get to siphon value off of it for the privilege of protection and it's not necessarily a bad thing uh the the problem with it is is when it's a non when it's priced at a non-consensual rate right when you have to pay 40 taxes to the government and you don't have any bargaining power in that relationship that's the problem right that's when we move away from free market competition and towards monopolization uh and that's what creates so many problems in the world and then when we shifted the discussion and started looking at standardized containers i talked about that standardized container um that you might see on the back of a semi truck or that now goes and they also you know ship across the ocean uh and we started talking about the value again there of standardization which we touched on a lot of this in episode one when we look at ancient romans when we are able to compress i guess you could say that protocols and standardization compress confusion right because there's less optionality so everyone knows the language everyone knows exactly what to expect so you're able to execute actions very quickly and efficiently and this creates a lot of economic surplus right this frees up a lot of time and resources which are harnessed as wealth it can be reallocated to other things so it's that is how we collapse fixed cost right is by standardization um and i think and we'll talk about this more a bit the pattern i see emerging is that at the beginning of an industry uh it's almost as if i mean if there's not a natural monopoly there's typically uh attempted to be imposed a legal monopoly and this can have some short-run benefit because it establishes standards but it's at the long-run detriment of the market because again the monopolist is essentially extracting wealth from other market participants um but we'll talk about that more shortly so when we looked at empires i love how sailor painted them in that the number one export of an empire is security right that's what the us is today right we're the imperialist that runs the world uh we export security if you look at a map of how many u.s military bases are worldwide we're basically everywhere except russia and china um and it's interesting to me how bitcoin fits into that picture because bitcoin's number one value proposition is security right it's security of your time and energy in a medium that cannot be compromised and uh as sailor described that he said it's like a technology bitcoin for securitizing your time and energy behind an impenetrable wall of encrypted energy right so it's this it's a very unique tool and that for the first time in history we have a place to put our life force right or our wealth that is independent of any political happenings in the world right it's an a political money which is which is very central to its value proposition and although bitcoin hasn't so it clearly has a huge relationship with security although it hasn't clearly hasn't solved physical security right bitcoin's not a force field or anything like that it does have some interesting potential implications in that because it's programmatic you could say program a payment to be issued to a gatekeeper like half before you pass the gate whatever the gate may be whether this is a border um or anything anything that a gatekeeper does and then programs such that they receive half a payment after so it can actually reduce the incentives to violence right and increase the incentives to cooperation so it'll be interesting to see how bitcoin fits into the empires of the future and then we went into the steel age which you know steel is just such a fascinating thing it's this raw material for building these networks um in a really permanent fashion right um and again if we look at what people are people are like as i say in some of my writing we're the networked species right we we dominate the planet with our wits right because of our ability to abstract to tell stories like money like nation states like human rights um and this is all that entire thesis is encapsulated really well in the book sapiens if you haven't read that and our ability to abstract these stories orient ourselves around them and then communicate about them very precisely and very quickly that's what lets us function as almost like a single harmonious organism which we would say that's what the world economy is right we're we're communicating with each other with words and prices uh and and shifting uh the allocation of resources to the highest and best use at least in a purely free market central banking clearly distorts a lot of that and in that context steel was critical to building out kinetic networks right the railroad the ability to move people and military assets 1000 x or 10 000x more cheaply across land right to say it was making the point that wars were won and lost based on the successful construction of railroads and this drove an interconnectivity of people and cities across land so it's one of these these primordial uh networks for civilization what was the railroad and behind that were the roads right built by the romans again and um that took us to john d rockefeller and standard oil um i thought i think the point was great about light again you know before we figured out how to harness oil right oil being this compressed energy source from ancient sunlight right it's sunlight that's fallen on the earth for tens of thousands of millions of years and has been compressed uh into its subterranean layers that we're then able to harness um to radically increase our productivity as we've seen in the industrial age before that before we figured out oil we're literally going to see hunting whales right harpooning whales to harness to harvest their blubber uh for candle light so the the the productivity and i've seen the math on this before i can't quote it exactly but the amount of energy necessary to produce a single lumen which would be a unit of of light radiance going from a from needing to hunt whales to produce candles to harnessing oil like again it was orders of magnitude more cheap uh to actually create light right um so i thought that was really energy really interesting and um oil basically was this like fire almost this primary energy network right that we were able to tap and just radically accelerate how quickly the economy was producing wealth and new things and new innovations so again if we consider that we're channeling energy across our intellect to create new and useful things it's as if our intellect hit this uh new really potent source of energy when we figured out oil and rockefeller you know he he captured the entire value stream right he built out the logistics network he had the train cars the container ships the trucks uh sailor made the point he was giving away the furnaces for free so he had the freemium model he's giving away the furnace to sell the oil so to speak um and he originated that this cartel model of owning the whole supply chain uh so he could standardize the industry which i thought was super interesting because again we're back to standardization where a monopolist can come in and lay out the singular unitary plan to kind of mute the volatility right to mute the competition which is long-term bad but short-term sort of a benefit and that that monopolist now gets to set standards right he can create standards that everyone else will be forced to operate on uh if done correctly forever right he almost gets to be the incipient of the path dependence of the network that he's creating and so this the thing that comes to mind is monopolies serving this function perhaps of muting volatility in the early stages of an industrial particular industries development and to establish standards which then commoditizes the space and assuming you can remove that monopoly after it's served its function of setting the standards then you let free market competition take hold on those standards and it's more beneficial right versus if you just set out in the beginning with pure free market competition then it's hard to get uh the industry to interoperate well because of the lack of standards so it's a bit of a mind twist for me but uh the the old saying comes to mind if you want to go fast go alone if you want to go far go together it's as if a monopolistic single unitary plan enables you to go fast right really build out an industry really quickly even in the information age today right i think we're very early and we're seeing the monopolist take a big lead right facebook amazon netflix google but over time i would suspect that the standards that they have been setting will start to be opened up to more free market competition and we'll see uh the demonopolization of the space and with that the decline in cost um which then you know again frees up all this economic abundance that man can reallocate towards the next major wave of innovation so it's a lot to think about there but uh it seems like there's something natural some natural interplay between uh monopolistic and free market competition and that led to you know rockefeller figuring out standardizing oil led to henry ford's production of the automobile and the automobile as sailor said was the killer app for oil right um and when we think about the automobile it's like what was invented right we think it's just this vehicle for getting us from a to b but it enabled all of a sudden the density of the city the economic network density of the city to be a reality because then people could commute into the city and commute out um it created a lot of the pollution we see in the world today it changed people's self-identity right like the car is an avatar of who we are people um often use automobiles today as kind of a status symbol so it's just a total game changer right the invention of the automobile which again is one of those innovations that sort of sprung up from uh the mastering of the oil energy network and uh i thought it was interesting too how rockefeller was basically the most wealthy guy in history i think sailor made the point was worth over 200 billion dollars in today's dollars but rockefeller died in say 1937. the refrigerator wasn't even commercialized until like uh early 1920s so this is a guy the richest guy in the world right didn't even have a refrigerator so if you today have a refrigerator you in some ways are more wealthy than john d rockefeller was um you know just a little a little less than 100 years ago and that i think is just a testament to the abundance created by free markets right it's like every living generation assuming we're optimizing for uh for productivity improvement is head and shoulders above the prior generation even the richest of the prior generation and then we got into the discussion about craft hershey's and post foods i i never thought about this before that the business they were in was actually selling stabilized energy right like food is inherently unstable it doesn't keep well especially before the invention of the refrigerator and these innovators figured out basically how to stabilize food energy at room temperature and the value proposition they were selling is that their food doesn't kill you which i thought was just great it's like this again they were they're technologists right we think of it as food and we think today it's no big deal i go to the grocery store and we buy boxes or cans or bottles of whatever we want but this is a major breakthrough for for supporting larger populations like we have in the world today and um it kind of reminds me of the certification function on coin engine bills too because you know sailor made the point i'd never thought of a brand like this that the brand was like you know this food won't kill you just like a gold coin uh stamped by a government or a private certification business was saying this is one ounce of gold or this is 10 ounces of silver or whatever it was so it's it's a trust thing right you learn to trust the brand to represent what it says it is um and then also in food you know frozen food was a total game changer like the fact that we could you know suck all the entropy out of food and keep it for extremely long periods of time uh just allowed us to accumulate the savings of food right um you know we all take it for granted today but again a freezer and a refrigerator like we should just stop in awe of our freezer and refrigerator every day and just think about how amazing it is that we figured out a way to suck the entropy out of food and store food energy for over extremely long periods of time and in in that context in a monetary sense we could say that fiat currency is a high entropy storage device right it leaks a lot it it suffers from spoilage over time whereas bitcoin could be considered like the deep freeze you know the absolute zero of storing monetary energy it sucks all the entropy out of it and you know that you'll own a guaranteed fraction of the total money supply for all time um so that that analogy was interesting to me as well i liked how he talked about food factories being again they're technologists they were computer programs written in steel so one end of this program you would put eggs and flour and milk or whatever it is and at the other end of this you know steel computer program it outputs cookies that you can then um box you know wrap in plastic put on the shelf and they last for a year or whatever the number is um this is a totally new and unique way to look at food and consumer packaged goods in general and in that way they were they were stores of value right food this consumer packaged good industry was in the business of storing value right they're storing food energy as value and selling it and they were able to accomplish that through hyper sanitization right they were i'm sorry hyper sanitation so they're removing all of the detritus and any uncleanliness from the food packaging process and in doing so they're able to output a product that was guaranteed to last for a fixed amount of time and again the analogy there to bitcoin being this hyper sanitized ledger right there's all of the nodes are all checking and the miners are all checking one another's work to make sure it's being done consistent with the rules of the protocol which are 100 open and transparent to everyone and that's what makes it this ultimate preservation device of monetary energy um so that you know just mind-blowing comparisons between consumer consumer food products and bitcoin um and in that way you know sailor hit this on the head if i saw the brand the concept of a brand in a new way like i used to think a brand was just a company's logo and reputation but to his point the brand was the certification saying this product is what it says it is you can trust the reputation of this group and you know particularly this food won't kill you right something that's pretty important something you're going to eat and put in your body you can reliably trust this brand that it won't kill you right there they're trading the producers trading on their own reputation if you will and i thought he just hit the button right on the head when he said in that sense bitcoin is the best branded asset in history because bitcoin does do exactly what it says it will do nothing less nothing more and there's no element of human corruption that can change that right like you could install a new ceo at kraft foods and he could say to hell with a customer i'm gonna start putting rat poison in my cheese crackers or whatever right can do some outlandish stuff to ruin the reputation of the business but bitcoin is this leaderless institution right that just runs the rules of the protocol and it doesn't change it doesn't bend so that was just mind-blowing for me and something i'm going to be thinking about for a really long time and um then we got into steel you know uh with with andrew carnegie mastering this ultimate raw material for civil engineering right sailor made the point steel is cheap high tensile strength if you paint it uh it basically lasts forever so it's non-corrosive as long as you seal it off from air and water and then the if you damage it and decide to repair it with a uh wielding though the welding weldings i say that welding is actually stronger than the original steel itself so it's just again another one of these fundamental breakthroughs in raw materials that supported a higher civilizational advance and then we talked about aviation clearly steel is good for a lot of things but no good for aviation because it's too heavy so we had to figure out aluminum um and so much i don't know my epiphany here is that so much was riding on these raw material breakthroughs um you were discovering new foundational elements to society and there's a lot of upstream consequences that we can't even imagine right like when someone figured out steel or figured out steel who knew we're going to figure out the city and then figure out you know aluminum to figure out aviation and then figure out uh say fiber optics encircling the planet figuring out the internet figuring out um youtube right it's just these layers of innovation and the from the point of innovation it's very difficult impossible frankly to see where it's going to go so it just it unlocks all this potential human ingenuity to discover all these other things and kind of a cascading effect so you know as i said no steel no city no aluminum no aviation and just think about just those two we just stopped there if we had no city and we had no aviation how much of the world would we not have today i mean how many of you have flown right how many of you have lived in a city it's really hard to fathom how much just these two raw material breakthroughs have changed our lives and again in my mind it's all it all comes down to increasing the energetic or network density right so we're increasing the possibility of exchange right we increase say the positive the uh economic and population density of a city increases exchange within that city so it's pumping out more ideas and innovations there's there's great books on this uh i think it's called the serendipity of the city maybe where it talks about this relationship between population density and innovation right the more population density there is the more innovation tends to come out of it and then in aviation sense it's about overcoming the frictions to free exchange right all most people more than 200 years ago would really never leave say a 30 mile radius where they're born give or take um and maybe those numbers are wrong but you get the point the world has opened up to us with aviation i mean you can go anywhere in the world now within a day right anywhere in the world uh it used to take it took settlers in the u.s what three or four months to cross the continent if you didn't die you know from disease or whatever so again it just points towards the importance of free exchange and how these raw material breakthroughs support more network density which increases accelerates free exchange even more and leads to more and more uh breakthroughs in a cascading fashion and the analogy i like there is that bitcoin it kind of is like financial steel right it's just the best tool for the job and it doesn't it just works right it doesn't bend it doesn't break it just is an absolutely perfected monetary technology and it's also it's steel but it also has wings right because you can just send it anywhere you can store it in your mind or a computer anywhere so it has all this flexibility too and it can be programmed to do different things and you can build different uh features and modules on top of the protocol and you build higher layer protocols uh it's just one of those type of breakthroughs where it's like a raw material slash network breakthrough so it's a lot to think about there and then finally we talked a bit about the conquest of infectious diseases which clearly we haven't conquered all of them but we've done a lot um and sailor made the point that these breakthroughs are the best amplifiers of life expectancy ever right the um curing to tuberculosis which killed a billion people right that had an immediate impact uh on the the life expectancy curve which the world war one and world war ii were just a blip right so makes the point that technology is increasingly uh more of a variable on our progress as it's almost like technology is becoming exponentially more important to us as we innovate further which gets us into the information age and the the wars which are more like political actions these matter much less in the long scheme of human history but there's a distortion in the history books right if you go to read history you're going to read 99 pages about world war and world war one and two maybe 9 900 for every one page you'll read about tuberculosis so there's there's this asymmetry uh in terms of how important the breakthrough is versus how much is written about it which i thought was was fascinating and penicillin you know that that breakthrough that increased our life expectancy so much it was accidental right it again as to love would say tinkering is an anti-fragile process so it's the more entropy or uncertainty or randomness we can introduce to the process the more breakthroughs we have that can be accidental at times right penicillin was i think it was a mycelium or a fungus left in a sink overnight right and then something grew on it someone tested it someone figured out holy crap holy cow this thing cures disease uh and infection and it just radically changed the world right one of the most important discoveries in the history of man from an accident right so i think it just points to what we need to optimize society for which is free exchange and experimentation that's how we create the most wealth in the world that's how we solve problems that's how we increase life expectancy so that was killer episode i hope you guys enjoyed it as much as i did and we'll see you back soon for episode three