What exactly is that referring to the the y axis? Is it the number of people in the world using bitcoin? Is it the um? Is it uh that the is it uh the life cycle of the uh? Is it referring to the life cycle the product itself? What what does that y axis refer to exactly yeah? The y axis would be um survey. Data combined with uh exchange account data, so thats. Basically how many people do we hypothesize have bitcoin its hard to tell because theres, not an exact mapping, so we come up with an estimate so its that number divided by the global population. So if we think about bitcoins, you know bitcoins adoption curve its its very, very early um in terms of these other technologies, now whats really interesting about bitcoin is that it is bootstrapped on top of a very, very large network, called the internet. You know with that. That means that its, and what this chart also shows is that new, newer technologies, due to how capitalism has improved the distribution of goods and services by uh various functions of like digitally on the internet or physically moving packages around much quicker that these technologies get adopted. And thats, why you see these these lines? The uh, the blue lines, going to the orange and red lines, the newer lines in terms of adoption, curves are becoming much steeper and that steepness reflects how quickly they can get they become adopted.

And so yes, with bitcoin were at a very early stage for bitcoin. I think a lot of people when they look at bitcoins price. They think oh ive ive missed the boat. No, we were just getting started if bitcoin becomes widely adopted, its price wont be in the hundreds of thousands, it would be in the millions, and so we have a long ways to go and thats. I think what what this chart is very well. That is my next question is uh how how the adoption curve is correlated with the price growth. Can you comment on that yeah? So, as i mentioned before, bitcoins price and adoption is somewhat somewhat intertwined. A money, after all, is a collection of people, a network effect of those who believe in it, uh gold bitcoin, the dollar. They all work, the same its a belief system. We trust the parameters that this money has and we believe in this money and we believe in the value of this money due to its moneyness, how well it can do different money, things and thats where, for example, bitcoin has some advantages over gold with gold. You cant email it its not digitally native its physically native, whereas bitcoin is a digitally native asset also with gold. We dont know exactly how much gold is out there. We dont know how much gold will be produced, but with bitcoin we have extreme precision in knowing how much bitcoin will ever be produced 21 million – and we know uh how much bitcoin will be produced every single second.

So we know to a very, very precise degree of how much ownership i have of bitcoin, where, if you have one bitcoin, you know you have exactly one out of 21 million and so bitcoin, like these other monies needed to come into existence. Uh it wasnt going to be a linear movement. It was going to be one in fits and starts. I mean bitcoin is challenging the status quo of gold and dollars, and these are 100 year old or multi thousand year old beliefs or mindsets. So on this adoption curve, bitcoins price is what propels it forward, because without that price, without us hearing about that price, bitcoin would remain this niche thing that no one would hear about, and so satoshi hypothesized that the innate nature of humans to speculate to to be Attracted to uh, you know, the speculative investments would be the primary driver of bitcoins adoption, so bitcoins adoption in terms of price means that its more liquid means that theres more tools for people to use and as a money, speculation, isnt necessarily a bad thing, because money After all, is this belief, system and people wanting to store value in it? Moneys utility is, is the ability to store money in it and use it etc. So um, you know people sometimes go. Oh well. The adoption of bitcoin is separate from the price, and actually i fundamentally disagree its its the exact same thing, because, as it becomes larger in market capitalization, it becomes deeper in liquidity.

It becomes easier to use and also more people are in it and own bitcoin, which is all tied together. So a few follow up questions. First of all, why do you think that the curve for bitcoin is different from some of the later uh technological innovations like social media and tablets? Youll see that bitcoin has been flat throughout most of its history and its only in the last couple years started to ramp up in terms of adoption versus social media or lets say smartphones, which have basically started. You know exponentially growing right away. Why is that? Yeah? Its a good question, so i think on um part of thats also reflected in the early years. So 2010 2011 not much happened and same with 2012.. So it was a three year time period where things were a little bit slower and then things started to pick up. So if we were to, i think that made this chart about two years ago. So if we were to add a little bit more length to this that that line might be a little bit steeper, it hasnt been updated for the most recent cycle, so i would say: um you know, will it look just like these other these other curves? Probably not yes, it could be. You know we could see it go straight vertical or we could see it have little oscillating cycles and taking much longer because money is money is a a very deep, seated belief right.

A lot of people so think that the dollar is backed by gold, which is pretty bizarre because it hasnt been for a long time now, and you know people dont want to wake up and challenge the nature of their reality and question questioning the nature of the Reality and going what is money, and can i trust my government um, you know these. These sort of realization moments only happen during covet with money, printer gober and people going. Oh wait a second. What is my government doing with my money? Oh, this bitcoin thing is a good alternative, so yeah i mean it certainly may not look like those nice vertical lines for these newer technologies. It could be more of a fits and starts, or we could just see it go straight vertical or there are moments of extreme distrust with governments and everyone floods into bitcoin. At the same time, uh well see what happens and what plays out. What is your prognosis? Where do you see this curve headed? Is it going to go above 50 percent? Most of these most of these things have reached 100 percent of adoption in the u.s, except the newer things they havent. They havent gone there yet, but so anyway, what do you think? What do you think bitcoin is going to end up on this chart? Well, you know bitcoin, i think um it depends on the cycles, so were in the middle of a bull run right now, and these bull runs bitcoin adoption, typically 10 xs or 100 xs.

So you know on this chart. We could see at the end of this bull run, bitcoin potentially being representing um, maybe 30 or 40 percent of uh ownership percentage penetration in the u.s um. In fact, yeah this chart is a little bit out of date. I think the current percentages are close to like five to ten percent of the adult us population owns bitcoin, which is pretty incredible. I mean bitcoin has no marketing team um, it merely just exists and survives long enough, and then people start believing in it. So five to ten percent is is actually pretty wild, and so i think thats, where its at today, but if the bull run continues, you know we, i could. I see that very easily hitting between like 20 and 30 at the end of this bull run, maybe even 40 percent um, which then that line starts to look straight vertical. Well, i guess the question was theres a couple of questions well, first of all, um how much of the actual adult population of investors own bitcoin, so its a percentage of investors owning bitcoins another is another, i think ratio we need to look at and second, how Many people are actually using bitcoin as a form of payment and whether or not you think that role can expand, because if you look at all these other things, you can actually use the telephone electricity. All these are appliances or utilities that you can use in your everyday life, most of them at least bitcoin.

I dont think, has gotten there yet for most people um and until we see bitcoin being used to you, know uh as an integral part of everyday transactions. I i i hesitate to say that its going to be adopted as widely lets say an iphone. What do you think whats your take? Well, i spent eight years in san francisco the quintessential gold rush city of the world, and that would all say we would all say that gold is unanimously called money. It is the quintessential form of money. Nowhere in the former gold rush city of the world can i spend gold, but gold is still valuable because gold is used as a store of value. So money has three functions: a store of value, medium of exchange and thats. Your common, like transacted everyday currency and unit of account unit of account, is they go to the grocery store and the labels are in dollars. Sure a new money has to go through stages. If people dont want to transact with it or price things in it, if they dont first own it, so we have to go through the store value era and thats, where bitcoin is in that era, right now becoming globally recognized as a gold, 2.0 and weve seen Jerome powell, chairman of the federal reserve, mentioned this – that bitcoin is a speculative store value asset and so bitcoin first has to be adopted to such a degree that a high percentage of the population owns it and then over time, as it becomes much more liquid.

Even bigger in the tens of trillions market cap, it becomes more liquid and more stable in terms of price because it has matured to a very large store value asset. In those moments when market penetration is high and volatility is low, then a transaction, then it transitions to the medium of account and unit of exchange era where people are like cool, i own bitcoin, ive owned it for five years. You know and the price hasnt you know, price is stable, now its at a million dollars in bitcoin and has been for 10 years or something or five years and youre like okay. Well now, i think of it, as my my mindset now is in the the bitcoin era of oh thats priced in x, amount of sats, which is one one hundredth of a millionth of a bitcoin, so that takes a lot of time, so were good, at least Five to 15 years away from that era, so dan lets assume then that the adoption rate of bitcoin is currently at ten percent of the us adult population and lets also make the assumption that itll one day go to 100. Can we then say that the bitcoin price is currently only at 10 percent of its maturity? In other words, were at what just to shy forty thousand dollars lets use. Forty thousand dollars, for example, is that ten percent of the uh of the full value of bitcoin can i make that assumption.

I think thats a little too linear, because the the penetration, the market penetration in the us is much higher than rest of world. So we would need the us is a very small percentage of the world population, so that would be number one number two is what percentage of their net worth do? They have in bitcoin its probably very, very low, like one to five percent um and then also we have the institutions, so the institutions they manage trillions of tens of trillions of dollars worth of assets across the world. They are also a bitter, and then you also have central banks. Central banks at one point could decide to back their currency with bitcoin uh. They current many of these uh. Many of these government reserves have gold, so this would not be out of the out of the realm of possibility of them, taking tens or hundreds of billions of dollars and using that to buy bitcoin. So bitcoin market participants include those retail traders, institutions and governments.

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