Twitter Spaces: Bitcoin & Property Rights with Stephan Kinsella
Lawyer and libertarian theorist Stephan Kinsella joins Logan Chipkin and Kent Halliburton to discuss Bitcoin from a property rights perspective. If Bitcoin is not physical, how can anyone own it, if at all?
Link to Audio: https://twitter.com/i/spaces/1lPJqBAkOnWxb?s=20
Kent Halliburton (00:06:31):
Sure. Uh, thank you Logan, for theopportunity. You're gonna have to do a little intro for yourself as well. Youdo an excellent job hosting these spaces, but I operate as the president andCOO here at SAS Mining, which means I, uh, manage all the internal affairs. Uh,my first career was in solar, rooftop solar. And, uh, very excited for thisconversation to learn from you, Stefan. Um, definitely libertarianism has, uh,has gotten to be in my crosshairs, uh, the further I've gone down my, uh, myBitcoin journey here. But, um, yeah, been, I think you are the first, uh, firstAustria, Austria, libertarian, uh, that I've spoken to, and, uh, came to learna lot from you.
Stephan Kinsella (00:07:16):
Well, glad to, uh, meet you and, uh,prepare to have your mind blown
Logan Chipkin (00:07:21):
<laugh>. Uh, yes. So I'll, afew words about me. So I've been a, I'm a longtime writer, been writing aboutall sorts of stuff, journalism, physics, economics for years. And now I'm happyto be working with SaaS mining to really create a lot of our content aroundbitcoin, bitcoin mining and energy. Um, so that's a little bit about me. Uh,Stefan, before we start, do you wanna, uh, tell us a little bit about yourselfand your background?
Stephan Kinsella (00:07:46):
Well, I live in Houston, Texas. I amfrom Louisiana originally. I'm a, I'm an attorney, a retired attorney. I'm apatent attorney, uh, but also have long time been a libertarian speaker, writerand thinker. Uh, uh, mostly influenced by the Austrian economics and anarchist,uh, you know, camp of Rothbard and Mees and these guys. So that's my take. I'ma, I'm a, I'm a, I'm a huge Bitcoin, um, uh, hopeful advocate. I don't knowwhat you want to call it, <laugh>. So, yeah, that's, that's my take. PlusI was an electrical engineer in, in, in college, so, uh, yeah, I'm, I'minterested in technology and, uh, those related matters too.
Logan Chipkin (00:08:31):
Perfect. Yeah, I'm just to let theaudience know, fyi, I'm also essentially an a austral libertarian. I tend tonot use that word, uh, in other context cuz people probably don't often knowwhat that is. But since Steph's here, I figured out why not break open thechampagne bottles. Um, so it's nice to be amongst my people as it were. Notthat bitcoiners aren't, but anyway. So before we get into, so today we're gonnatalk about Bitcoin and kind, kind of how Bitcoin relates to property rights,uh, and we'll see why that's relevant soon. But Stefan, before we get intothat, what is Ostro libertarianism and what is the Ost austral libertarian viewof property rights?
Stephan Kinsella (00:09:07):
Yeah, that's interesting. So, and,and I'm, I'm assuming we have sort of a generic audience who probably doesn'tknow all this stuff. So, um, yeah, so basically, um, economics is just a studyof wealth, how wealth is created in society, right? And so there is a freemarket economics and socialist economics and things like that. And there's asub school called Austrian Economics, which is a special type of approach toeconomics, pioneered by Carl Manger and Lu Luon Meas and Friedrich Hayek and MurrayRothbard and these guys. And, um, from, probably, from most of your audience'spoint of view, the, the fundamental thing to think about, uh, what's uniqueabout Austrian economics is it's, it's focused on the individual look. So everyindividual is the actor and it's hyper free market. Like we need free marketproperty rights for people to, um, trade with each other and to establish moneyprices and have an efficient economy.
So it's, it's kind of pro capitalist.And then libertarianism is more the political side, which is basically anextreme or more principled or more ooc d version of the idea that, which most,most Americans, the idea that most Americans believe in, which is that, um, weshould have civil liberties, like personal liberties, like right to freespeech, right to freedom of religion, freedom of conscience, but we should alsohave economic liberties, which means the right to trade, the right to profit,the right to own your property. Um, and so that is what I would call softlibertarianism and hard libertarianism would be the way we view it, which islike no exceptions, like we just like want, we apply the principles so stronglythat we think the, the whole state is I illegitimate in democracy and thewhole, the whole deal. But basically in the meantime, we want there to be aminimal version of the state. So like, the state should only stop crime andprotect your property rights, but that's, that's all they should do. So taxesshould be very low, that kind of thing. And so if you combine, so AustriaLibertarianism is a label that we give to people that have combined sort ofthis Austrian view of free-market economics with this sort of radical, uh,skepticism of, of state or government power with libertarianism. So that's sortof our perspective on these issues.
Logan Chipkin (00:11:43):
Got it. Got it. And so when you sayright to free speech and civil liberties and right to pro profits, aren't thesenot precise from an Austrian perspective? Because strictly speaking, they'renot property rights,
Stephan Kinsella (00:11:56):
Correct? Yeah, no, that's actually,that's actually correct. So, so, uh, yeah, if you wanna dive into the detailsand the weeds, um, uh, these things are the consequences of a more baselinelevel of rights. So if you basically have a system and a society where peoplewant to get along with each other and they want to respect each other's rights,and they want to live in that live, I mean, there's, there's a whole movement,by the way, called live in that live, which I'm part of, mark Victor fromArizona, sort of this, um, the idea is that like most people believe, roughly speaking,and the live in that live idea, like you should live and let other people live,which means you, you have your own stuff and they have their own stuff and youtrade with each other and you cooperate and you negotiate.
And we, we tend to, uh, you know,oppose the, uh, the, uh, the use of force to take each other's stuff, right?So, but the, but the bottom line is the fundamental right is the right tointegrity, the physical integrity of your body, which is expressed by the nwhat we call the non-aggression principle. Which means that, you know, you shouldn'thit people and kill people, and you shouldn't use their body without theirpermission. You shouldn't rape them or kill them or murder them or rob them orwhatever, right? Because it's their body, not, it's not your body. So wheneveryou say something like, you oppose crime in, in a, in a, in a fundamentalsense, you're, you're, you're in effect recognizing property rights in theirbody. Cuz you're saying that, well, only one person can have control of thisbody. I mean, look, most people nowadays would not, uh, argue for slavery,shadow slavery like we had in the us, uh, um, in, in previous previous decades.
Okay? But if you're opposed to that,that means that's because you're saying that, well, you shouldn't be able toown someone else's body. So in other words, everyone owns their own body. Now,people get uncomfortable sometimes with that way of looking at it because thenthey're afraid we're, we're going on the other side too much, this capitalismcommodification commercialization side where, oh, everything's a, uh,everything is a commodity. It's like, yeah, well, I think that's complete BSbecause if you say you're against slavery, all you're saying is every personowns their own body and you can't attack them or use their body without theirpermission. And there's nothing more libertarian than that. And the people thatget concerned about this, oh, commodification of your body, it's like, I mean,let's, let's tackle one issue at a time, right? Like, let's first stop slaveryand then we can worry about people using their bodies to sell themselves, uh,in labor contracts that you don't like, that you think are exploitative, butlet's at least free them from the bo you know, from the bounds of actuallybeing attacked and assaulted by other people.
Logan Chipkin (00:15:01):
Okay? Now, is it possible for peopleto own ideas and abstractions from this perspective, if we're talking aboutowning physical bodies and basically universalizing that for all scarceresources? Okay, how can someone own an idea or an abstraction, if at all?
Stephan Kinsella (00:15:16):
That's, that's a good question. Andso the way, the best way to answer it, uh, given a general audience who is notfamiliar with all. So let me just, uh, let me just, uh, try to explain a fewbroad concepts. Okay? So, um, ownership is a property concept. It's a legalconcept. It means you have a property, right? Recognized by the legal system tocontrol a given scarce resource in the world. Okay? So that's what, that's whatownership means. Um, now then we, so, so, so the typical things everyonerecognizes cuz they're intuitive, they're common sense, they're traditional,you know, you can own animals, you can own a car, you can own land, you can ownsome iron or you found from the ground you can own some, some, some, somestone. You, you mine from the, from a mountain. These are physical things andyou can also own your body.
But all that, all that ownershipmeans is you have the exclusive right to determine who can use the thing,right? So if I own my body, if someone wants to kiss it, <laugh> or takemy cells for a, for a a medical trial, they have to give my permission. So thatmeans I can say no or I can say yes. So ownership ultimately means the right tosay no, the right to exclude people from using something. So how do you getthis right? Right? So the right in your body comes because in our view, thenatural, the natural idea that, you know, you're the natural, um, owner of yourbody because you are the body because you can directly control your body. Mostpeople wouldn't disagree with that. But then when we have other things in theworld, like things that are lying around in the unowned wilderness that we haveto take as resources and use to manipulate things in life to get what we want,we need to control these things and possess them.
And then if we possess these thingsand we want to use them, there's a chance someone else might want to take itfrom us by force B. Because the nature of these things is, we call them ascarce resource or rivals resource, is that only one person can use them. Andso if I'm using this, you know, this, this, this fishing net to catch fish, andmy neighbor's dog takes it from me, I can't use the fish in the net anymore tocatch fish. Okay? So there arises in society this need for property rules thatsays, okay, well who owns these other things that were previously Unowned Chrisresources? And the answer is the private law solution of the west, um, theRoman law and just classical antiquity, um, the common law, the Roman law, theidea that the first person to take something out of the un unknown state in thewilderness is the owner or whoever he transfers you to by contract.
So like you have two pretty three,three simple principles for your human body. Everyone is the self owner. Like,so we're against slavery. That's all that really means. And number two, forother things, the first person to start using it when no one else owned it, orthe person you transport to by contract is the owner. So you have cellownership, original appropriation, some people call it home setting orcontractual transfer. Like that's the, basically the, the way you decide whocan own things. Okay? So when, when the question is can you own information? Sothe the question, a legal system, so a legal system emerges because there's aneed in society for people to rely upon their fellow neighbors to help supportthemselves in res having their rights respected. Because you, no one can everdefend all their rights by themselves. Like, the only way you can have societyis to have society.
And society means there's otherpeople that respect you and have the same values and that kind of thing. So youhave to appeal to their commonly shared values, right? So, but the, but thepoint, the, the point is the purpose of these property rights is to havesupport in your neighbors. They're going to recognize your transfers ofproperty to and from yourself, right? And, and if there's an occasional mal,feas or bad guy, then they will be dealt with as they have to be dealt with.But by and large, you're, you're trying to appeal to the other people, right?And so the, so the the, so the point is when you have to appeal to otherpeople, you have to appeal to commonly shared values, which is that we allwould, most of us would prefer to get along with each other without conflictand without, um, um, without violence.
Logan Chipkin (00:20:18):
So would you say, does Bitcoin countas information or would you say it's a physically scarce good, or is it aphysically or is it a digitally scarce Good. And that's how we, right, becauseyou're able to exclude people from it. So is that all we need to say
Stephan Kinsella (00:20:33):
Property? No. So, so yeah. So yousteered me back onto where I was <laugh>. Yeah. So here's the thing aboutBitcoin. So what happens is people, not everyone's a theorist, and so theydon't always use the technically precise language. And so they will intermixcategories of things. So for example, they'll call money property or they'llsay, oh, this is my property. But what they're, what they're talking about istheir wealth, right? Or their ability to control something. So there's asliding between realms of language between the, the normative realms. Normativemeans when we describe things like it's right or wrong, right? Or rights. Andthen, and then in the economic sense of like, like if you say, oh, I have thismany cattle, or I have, um, this goodwill in my business because it's was, ithas a value. Like there's a monetary value. So people tend to conflate themwith each other cause they relate to each other in real life.
Because if I have secure propertyrights in my home and in my factory and whatever, then I can sell it or use itto make deals or contracts. And that translates into monetary things. Sopeople, they tend to lose sight of the, of, of the connection between thesethings. Uh, uh, and so what this means is that, um, in a simpl, in a simplisticsense, and let's get back to the origin of money for just for a second to makethis explanation clear. So humans, every human is an animal, right? And livesis a life form on the earth. And the, and theoretically could live bythemselves on an island. This is the, the hypothetical of Robinson Cruso aloneon an island, right? And so you could analyze what he's doing e economically,but it would be very boring and simple. But basically everything he does is, islike an exchange or an action, or has opportunity costs.
Like he, he, uh, he, he, he takestime one day to build a net so he can catch more fish the next day. So youcould explain all that in primitive economic terms, but there's no other peoplearound. So the explanation is, is limited and boring and not that useful forthe modern world. When you have other people enter the situation, you have thepossibility of exchange and trade and the division and specialization of labor.So then you have what's called barter. So people start doing that. That's oneof the things they do to, and everyone is richer because of this, because theycan trade with each other. So they're not only alone on an island, right? Butthe problem is that, um, uh, the economic problem we call the doublecoincidence of once, which means that, you know, if I have a fish and I want ashoe, I've gotta find a guy that's selling a shoe that happens to want a fishto make the trade.
So barter is very impractical. Soinevitably a third medium of a third thing, uh, the medium of exchange arises,like money is something everyone trades into and out of is like, it's like aclearinghouse kind of thing, right? So it allows people to trade moreunimpeded. So this is why money emerges, right? Okay. So people start thinkingof money as wealth because you can use money to get wealth. Like if I havegoals or dollars or whatever money the money is, I can buy bread or a house,which is wealth, but the money itself is not wealth, right? Okay, so here's thequestion. Um, so, so people confuse these categories of property and ownershipand, and, and, and wealth because they all relate to each other. But if youwant to be clear about it, um, um, information is a second in, and this iswhere we have to get a little bit into what me is and who's a famous Austrianeconomist calls ology.
Ology is a word he came up with,which means, uh, the science of the logic of human action, right? Which meansyou the implications of human action. So you analyze what it is that humans do,and we try to figure out the consequences, which is what they, what theAustrians think is the, is the core basis of, of economics, right? Is isanalyzing the implications of human action, right? And, and so if youunderstand human action, and we all understand that on an intuitive basis, andwe all actually do it, what do we do as humans? Every one of us is anindividual subjective actor. We have our own goals, we have our own view of thefuture. We think things are coming, we could be wrong or right, but we have avision of what is coming in the future. And when we imagine, oh, this is what'scoming tomorrow and I don't like it, it gives me dissatisfaction, right?
It makes me uneasy as MEUs calls it.So I'm thinking, well, can I take an action to change the course of events?This is what all human action is about. It's like we always are alwaysimagining the next 10 minutes or five minutes or the next year or whatever, andwe're thinking if we don't do anything, X is gonna happen, but I would prefer yto happen. Can I make y happen instead? Maybe I can, maybe I can grab a means,a scarce means of action, some efficacious resource in the world that I can useto intervene the course of events to change the future, basically, right? Um,and so, um, and, and so every human action, I'm getting to my point, okay?Every human action is the employment of a scarce means or resource something,some physical material thing that we can use to, to change what happens.
But it's always guided by knowledge,always guided by knowledge, because you have to have a brain and a mi a mindand a consciousness that knows something about the future world and somethingabout the current world, something about the laws of cause and effect. And you,you, you attempt to employ these scarce resources to divert the course ofevents, okay? So the point here to recognize is this, the suc the ingredient.Every successful action, there's two ingredients. Number one is that the,there's a human actor who had the availability of a means and preferably in aproperty rights society. It's, it's, uh, these means are not just possessed,but they're protected by the law. And number two, you have to have knowledge,okay? So the knowledge is what guides your action. Now, I'm getting back toyour IP question, your intellectual property patent law. And by the way, I'm apatent lawyer.
I've been a patent lawyer since 1993or four. And so well familiar with how this, how this field works. But in myview, the law cannot give practical, uh, I'm sorry, the law cannot giveproperty rights in ideas. And the reason is not because I oppose it for thereasons I could. I gave it in my articles. Like, it's not a normative thing.It's not like, it's not like saying, um, um, um, the government can't outlawabortion. Like actually the government can outlaw abortion. I mean, you mightag disagree or agree with that, but it's, you can't say that it's impossiblefor the state to make abortion illegal, but when it is actually impossible forthe state to, uh, set up a system of ownership of ideas. And the reason isbecause ideas or the things that guide your action, they're not the tangiblematerial resources that you use to get your action done.
So whenever the state sets up apretend idea ownership system like patent law or copyright law, it's always adisguised and confusing thing that confuses everyone because they're notexperts. But it pretends to be ownership of ideas. But it's not really, becausewhat it's really ultimately is ownership of tangible resources because so, soif you have a patent or a copyright and you sue in a government court toenforce it, in the end what you get is an order from the court backed by physicalforce of the government courts against some, I call them a victim, right? And,and, and it tells them, you can't use your factory to make this product, or youhave to transfer a million dollars of your, of your bank account to disguisedamages. So it's, it's, the end result is always about, um, um, about ownabletangible material resources.
And so when you have a law that says,oh, I own this, then it's just a disguised and confused form of, uh, uh, ofstealing people's actual property. So in my view, what happens is in the, inthe bitcoin cases, you have people that are business minded and economicminded, and they're using the concept of control, which is what we would callin the law possession, which is this thing from ownership. Uh, because theydon't really care about legal ownership. They care about what you can do inreal life, right? So in Bitcoin, I have a key and that allows me, I, I'm theonly one who can access this, this, these satoshis, right? In, in, in, in, in,in the blockchain, I'm the only one who can enter a sequence of in informationthat can transfer control of this, of this space to someone else, right?
That's practically the thing. Andthat is similar to what the legal right of ownership gives you for physicalthings. So people call it ownership, but it's not really ownership, it justmeans possession or control. So we have to, so, so in my view, just like youcan't own ideas or information, um, no one can own Bitcoin. And there's anotherreason why you can't own Bitcoin. And that is because, um, the Bitcoin systemis designed to be pseudonymous in the sense of to transfer Bitcoins orSatoshi's within the system, you only have to meet certain criteria. Like youhave to give the right keys. That's it. You don't have to verify a legal thing,right? Um, so, um, so if I go onto Twitter or Facebook and I impersonatesomeone, I may be violating their, their, their, their terms, right? They're,they're user terms. I may be violating a contract. Um, but with Bitcoin, thereis no such thing. Like it's, there is no, there is no rule that says you can'tsteal someone's Bitcoin. So if you could somehow guess someone's key or youknow, uh, then it's, and then you transfer those coins, that is actually notlike a contract violation.
I'll pause here cuz I've been goingon for a while.
Kent Halliburton (00:32:16):
Uh, Steven, so I'm, I'm sort ofwrestling with your, your description here and, and trying to understand if,if, how do you classify Bitcoin then if it is not an idea, but also it's notproperty?
Stephan Kinsella (00:32:35):
How do you classify it? Um, I thinkthat, well, so first of all, I would classify Bitcoin as potentially money, ifit ever could become money. I don't think it's money yet because it's not, itdoesn't have a wide enough network effect money, but money has an economicdefinition. But we, we have lots of things, lots of phenomenon and reality thatwe understand and apprehend and comprehend and, and describe that are notalways just physical things, right? Um, so like for example, you could, youcould dis you could, you could distinguish your mind from your brain. I mean,they're different things. The concept of mind is different than the concept ofbrain, just like the concept of person is different than the concept of body,right? They're just different things. So I think, I think my personal view isBitcoin is simply, um, uh, a distributed ledger system, right? <laugh>,
Which is extremely inefficient and itneeds to be inefficient for, for the, for the blockchain to work. But it'sjust, it's a distributed, uh, uh, uh, ledger system and people can use it ifthey want to, um, to store value, right? So they, they can basically assignsubjectively value to it and they seem to have done so, but not completely, cuzit's not money yet. So I would say Bitcoin is just a ledger system. And to behonest, the word coin and the word Bitcoin, which is what Satoshi or whoevercame up with, is a little bit, uh, a little bit disingenuous cuz it's, it'strying to boost trap, it's trying to make it become a money by calling it acoin. But you could have just called it, uh, a ledger system. So it's, it'sjust a, it's just a database basically. And people can use databases forwhatever they want to use 'em for it. It's just like the Austrians point outthat, for example, um, if you have a, a good, um, there is no inherent publicor private goods distinction between them or consumer capital goodsdistinction. Um, like if I have a hammer, the hammer is not necessarily aconsumer good or a capital good. It depends upon the subjective perspective ofwhoever the owner is, right? So there are no intrinsic characterscharacteristics in these things. So I would say that bitcoin, uh, could be usedas money and I hope it will <laugh>. So that's my take. Sorry.
Kent Halliburton (00:35:10):
No, it's, it's, it's interesting. II'm not trying to, to challenge you at all. Just learn, uh, how you, how you'reseeing the world here. And you know, I guess clearly you're a big bitcoin proproponent, uh, as we are here. I'm building a business around it, but I am I'mcurious if you've come across any other Austria libertarians or libertarians ingeneral that, um, for whatever reason are, are not into Bitcoin, and yeah. How,how they would come to that conclusion based on, uh, libertarian values?
Stephan Kinsella (00:35:44):
No, that's a good question. Um, yeah,I I I I may seem, um, I may seem like a little bit of a naysayer to you guys,but I'm, I'm not really, I cause, but, but for my point of view, like, yeah,uh, the guys that I came up with and the guys that I admire and respect in thecommunity, um, they have been a lot more, I dunno if the word is skeptical,skeptical Bitcoin, i, I think it's maybe more that they're older and they justdon't get it. Um, there are some, there have been some, some Austriancomplaints saying that, um, there have been some arguments by Austrian sayingthat Bitcoin is impossible. Okay? And they, and I think it's ridiculous. I Idon't agree with them. And their, their argument is something based upon, um,um, um, what's called the, the regression theorem.
And this is Mees and Carl manger'skind of tr historical explanation of how money could have emerged. Becausethere's this problem of the, um, of the, uh, um, infinite, infinite sort ofregress. Like, well, if money's value today, rest recipro put on money's valueyesterday, then go back in time. How did it ever get a value? And, and me this answerwas, well, because at one point in time there was a barter society and therewas no money. And so you had everything had a real value based upon how theyactually traded. And then, then people started noticing, oh, we can start usingone of these things as a commodity for indirect exchange, right? And then moneyemerged. So his, in my view, my view always has been that Meez was trying tobreak this infinite regress by just pointing out the way that it probablyhappened or the way that it could be happened, the way it could have happened.
But other people interpret thatinfant, uh, uh, I'm sorry, other people interpret me, is a regression theoremas, as a, as a proof that money can only emerge from a barter commodity with areal value. And, and, and they interpret that to mean that Bitcoin could is, is,is not possible because Bitcoin wasn't a commodity with a, with a useful valuealready. Right now I think they're wrong, but there are some Austrian. So, so Ithink that's part, so part of the reason is the, part of the reason for the,the sort of disheartening lack of endorsement of Bitcoin by Austrians, um,because we're the natural ones who should be endorsing it. I think part of itis because of this obsession within this misinterpretation of the me regressiontheorem. And part of it is because honestly, a lot of the older theorists arejust, they're just, they just don't get Bitcoin at all.
I mean, like the, the one I respectthe most is my mentor Hapa. And to his credit, he hasn't actually come outcriticizing Bitcoin, but he hasn't like enthusiastically adopted it either. Hejust told me. He, he told me firstly, he just doesn't get it. You know, he waslike, I don't know what, whatever. So, so, so I, I think that they're havingtrouble imagining the reality of this. And I think part of the reason isbecause they're economists and to fully understand this new phenomenon, youneed to have sort of a synthesis of at least three things, technology andeconomics and law, right? And now I'm an electrical engineer and I'm a lawyerand I'm an Australian economist. So I'm trying to like use what I know aboutthese three things to make it make sense. The thing is Bitcoin proponents thinkthat it's a criticism when people like me say, you can't own Bitcoin. It's nota criticism, it's just an accurate analysis of the way we need to look at thisnew phenomenon.
Logan Chipkin (00:39:47):
Yeah. I've heard, um, ver yeah, whenI first came across the apparent conflict between the regression theorem andBitcoin, I was pretty fascinated. I was like, oh, how do we square this circle?Um, Stefan, you're probably familiar, but some people argue that actuallyBitcoin did have value as a consumer good because people bought it as like acollectible. I don't know if you are familiar with that argument.
Stephan Kinsella (00:40:08):
No, I, I am. And I, I agree. That's,that's another, that's another, um, that's another problem with, with, withthat criticism of Bitcoin. Yeah. Yeah. I think, I think it did have a, it doesit, but it doesn't have a value like gold. I think it is distinct from, say, saygold did have a prem monetary border value of ornamentation or even scientificor whatever, um, Bitcoin, yeah, you could say it has a value as a collector'sthing or as a way to achieve liberty, but that's sort of like blending it intoits function. Um, but to me it doesn't matter. The the point, if it has, it hasenough value to get going, which it seems, it seems to have done right. It wentfrom, from from zero to, so 64,000 <laugh> right? Dollars. Um, it's, it'sat a certain point, it doesn't matter what the basis of, but I think, by theway, Bob Murphy has a good podcast on this about, um, about this regressiontheorem, uh, criticism of Bitcoin. I, I don't remember the episode number, butanyway, I'll pause.
Kent Halliburton (00:41:14):
You know, the, uh, the person thatI've heard talk about this, that gave a, uh, an answer or a solution to the,this regression, there was actually Dominic Frisbee, and he, uh, he identifiedthat that, uh, people, and I don't know if this is accurate, but I I like it,um, that gold was, people were attracted to it by its natural beauty, and thereis something naturally beautiful about Bitcoin, but it's a mathematical beauty.Um, and that's how he was, how, how he was square in this circle.
Stephan Kinsella (00:41:48):
Oh, that's, that's, that'sinteresting. Yeah, I can see that. Sure. I have no, no objection to that.
Logan Chipkin (00:41:56):
Yeah, that's in, I haven't heard thateither, Ken, but yeah, I could totally see that that's, uh, perfectlyplausible. Uh, especially those early cipher punks, you know, they were allabout that. Um, so Stefan, I wonder, I don't know how much you follow, um, kindof like governments around the world and how they're responding to Bitcoin, butfrom a libertarian perspective, how do you feel about places like El Salvadormaking Bitcoin legal tender? You know, it's almost like using fiat meanstowards libertarian ends.
Stephan Kinsella (00:42:25):
Uh, I'm waiting and watching, youknow, I don't really, I I'm not sure. I, I don't, I I'm not going to hurl bombsat it. Um, I mean, as a libertarian you could say that, um, all legal tenderlaw is wrong. You shouldn't force people to accept a means of pavement. Um, Idon't, and I don't think that's how Bitcoin will, will ever become, um, themain medium of, of exchange. Um, I think it will happen because people willabandon the fiat standards, um, whether these local little governments can helpit. I mean, I do think that the, the one thing I've seen, which I haven't seenmuch analysis on, is I, I think that, um, my understanding is that, uh, like inthe, in, in the western countries, like say the us we treat, um, um, certainforeign currencies as, as legal tender in their own countries, and thus notsubject to the same kind of crazy, um, sales tax and capital gains tax stuff ifthey're considered to be an actual legal tender currency of another country.
And so if some significant countrycould somehow get Bitcoin treated as their actual legal tender and recognizedby the us, then that would have a cas and, and, and if, if, if that resultedin, in meaning that you could hold Bitcoin in the US and trade it withouthaving, um, capital gain tax, um, then I think that could have a, a big effect.But I'm not aware of anyone who studied this, because everyone seems to betotally confused on all the stuff. Um, so because they just talk, they talkoutta their asses about it. They kind of, they hear something and they saysomething. I think there's something there. There's something potential,there's a reason the treasurer department or whoever it is that controls this,hasn't, hasn't like changed the regulations to recognize it. Maybe we need toget, you know, some, um, uh, what, what's, what's the thing that all, all the,um, not the gray scale one, but the, um, uh, the gray scale Bitcoin trust that'sis in trouble now.
They're trying to convert to a, uh,um, not an ira, but you know, with where it is, like you said, like it was avehicle where people can use to get into Bitcoin. Now, of course, I'm in favorof having, uh, you, you have your own Bitcoin on your own wallet, but I dothink that having a second avenue for people to have access to it is, is, isone way people can start fleeing to it, to flee to it. You need to be able todo it. Right now, they're afraid of it because they hear about ftx.
Logan Chipkin (00:45:21):
Yeah, I agree. And actually somethingI've been thinking about recently is, and you know, of course not your keys,not your coins and all that, but I could easily see even after humanity is on aBitcoin standard, uh, financial derivative instruments, uh, still being tradedin the market, and you know, kind of like from an Austrian perspective, it'sjust price discovery. And if people think they can, uh, trade second layerassets in order to outpace the purchasing power of Bitcoin, I don't see whythat wouldn't exist in the future.
Stephan Kinsella (00:45:52):
Oh, yeah, I was thinking more aboutETFs. Yeah, I, I'm, I'm actually really skeptical of all these, uh, all thesederivatives. I, I think that it, I mean, my view about Bitcoin is that it, itcould solve a couple of problems. N well never want, it could solve wealthproblems because if it ever becomes money, it's gonna go up in value a lot. So thepeople that are lucky enough to invest in it now, they might make a lot ofmoney, but that's a one time sort of thing. Cause mm-hmm. <affirmative>,the way I envision it is it becomes hyperized in, I dunno, 10, 20, 30 years,whenever, and, and then it plateaus and then everything is fine. Uh, if unlesswe kill ourselves with a nuclear war that follows, right? But the secondproblem, you know, and then it just basically means that the government isstarved of this ability to do deficit financing of its wars and things likethat. The government now has to actually live on its taxes, <laugh>. Soto me, that's the big advantage how, how we get there. I've heard lots ofpeople speculate about this hyper big colonization process and this transferprocess, transition process, it seems to be happening slower than theypredicted, put it that way, right? All these optimist guys, 2, 3, 4 years ago,I don't think they would've predicted we're a bit 17,000 right now and juststagnating. So it, it may be a more complicated and difficult process than, um,the optimist hope.
Logan Chipkin (00:47:20):
Yeah, maybe, um, I personally, like,I don't even really pay attention to the price too much unless it's likegeopolitically interesting or, or whatever. But, um, yeah, I think it's a badidea to try to predict when exactly hyper colonization will occur. I think inkind of like what I mentioned with El Salvador, you know, you're just seeingmore and more people adopted, and that's exactly what we need. And I was talk,as a friend of mine said to me recently, you know, once there's some simple appthat basically serves as a money translator, kind of like, uh, if a Chineseperson and an Englishman were talking and they just had a translator, if youjust had some sort of app that converted fiat to Bitcoin and vice versaimmediately without people having to think at that point, it's presumably gameover. Especially if we have lightning network or something.
Stephan Kinsella (00:48:04):
Well, yeah. So I, I I, I, I agreethat it would be an advantage to have, um, um, uh, basically a, a frictionlesscostless translation service like you're talking about, and a lightning, youknow, something like that probably will do that. I mean, if we, if you're notin a rush, I mean, give it five years and who knows mm-hmm.<affirmative>. Um, but I don't know if that solves the problem. So, sothe way I look at it as this money solves a problem of barter, okay, itovercomes the, the double coincidence of once, and it, and it enables rationaleconomic calculation by giving you numbers. You can, you can use to compareheterogene heterogeneous units, um, and then the state fucks up money byco-opting it and, and centralizing it and inflating it and, and censoring itand all that kind of stuff. So money solves a problem and the state ruins theutility of money.
So then the question is, Bitcoin isthe promise of restoring money back to its original function. But the problemis, it has, it has to basically replace money. And, and so like, so I I, I bitcoinershate when I say this, but Fiat money works fine for purchasing. I can go downto Starbucks, I can go to the grocery store, I can buy a car. Fiat money worksfine because it still solves the original problem of barter. The main problemis the government controls it, they censor it and they can inflate it. So it'snot a good store of value anymore. Okay? So what's that mean? I just don'tstore as much of a money in my value, my wealth in money anymore. Okay? That'swhat people do in these societies where there's inflation. They just don't holdtheir money, their value. They don't hold a significant chunk of their wealthin money, but that's what they do.
So it still doesn't show why theywould switch from dollars to Bitcoin because it doesn't give them any advantageunless they start holding it as an asset for future appreciation, right? Andexpecting it to somehow take over, but seems like a chicken and egg thing tome. So this is my dilemma with Bitcoin right now, and I'm not blaming anyone inthe space. I mean, there's no one's fault, it's the fault of the state and it'sthe difficulty of getting out of the state system. But I don't think we shouldbe unrealistic and just like be Pollyanna about it and say, oh, Bitcoin isinevitable. I don't think it's inevitable at all. <laugh>. I wish it wasinevitable. <laugh>. Well,
Logan Chipkin (00:50:45):
Cer certainly the solution to anyproblem is not inevitable. I agree with you there. Um, let me just take amoment to reset and um, cuz we'll open it to questions or comments from theaudience as well. Just to, just to remind everyone, uh, this is the SaaS miningTwitter space. We host these every week. Uh, SaaS mining makes, uh, cleanbitcoin mining accessible to retail customers all around the world. Our nextfacility is actually being energized this month. So check out our website,www.sasin.com and buy your rigs before, uh, we run out of, uh, space. Uh, andwith that, if anyone has a question or comment, uh, feel free. If not, um, Ihave something. Um, so Stefan, do you think, uh, let's assume Bitcoin continuesto, if not completely take over be, let's just say become a significant, um,economic force. Do you think that has any impact on people's, um, politicalviews? For example, as you well know, there are millions of people in Americaalone who literally think a stateless money is impossible in principle. And soto have, uh, such a counter example, I wonder if it would shake them of theirideas.
Stephan Kinsella (00:51:55):
No, I actually think it, yeah, ofcourse it could. Uh, I mean, you even have people like Peter Schiff and youknow, you have, you have our people who are skeptical, and I think if they sawit actually worked, they would go, oh, maybe something's different. Um, so,and, and the example I always give is, um, look, I used to be a libertarian whothought that the reason, the reason we have stateism and, you know, riceviolations and lack of prosperity is because too many people are too stupid andthey, they just haven't learned their basic e economics. And so the solution isyou just go out and propagandize and educate everyone. So, okay, so I have ajob and I'm, I'm gonna give 2% of my salary too Cato, and they're gonna passout pamphlets and whatever, but that's just such a pipe dream.
But, but the, but the, but thementality is that the way to solve problems society is to change people'smentality by propagandizing them. And of course that's ridiculous, right? Butyou can change people's views, um, by reality. So for example, the fall of theSoviet Union in 1991, um, was a big teaching, teaching moment in history. Now,it didn't teach everyone everything, and they all still wanna clinging totheir, well, we can do socialism a better way, but it did, it was a bigstinging rebuke to everyone, and they did learn something. And now the whole worldsort of knows you just can't totally centrally plan the economy if you wantprosperity. I think everyone sort of knows that, and they wouldn't have knownthat in 1982 or 1973. So, and that's because the Soviet Union hadn't collapsedyet. And so, so my hope is that something like that is true for Bitcoin andthat, that if Bitcoin actually starts getting success, even though all thepeople doubted it, look, it's just like Uber or whatever, like people neverwould've imagined Uber, Netflix, these kind of business models.
But when they start working, you go,okay, well it works. So yes, I do think that if Bitcoin, uh, goes to the nextlevel, let's say let's, let's say it hits 200, 300, $400,000 in the next coupleyears, and more and more people flee to it and lightning gets more advanced andpeople start using it, um, I could see that as like an eye-opening moment for,for people in society in general, and the people that were, were, were, wereopposing it for, for decades will look like. So I guess that's, that's, that'skind of my perspective on it. Jf you have a question?
Speaker 4 (00:54:55):
Well, no, just a couple of comments.First of all, I think s Stephan undersells the, the invention Bitcoin, uh,Bitcoin, because it's not just a database, I think it's an open letter and, uh,shared book. This is an such a huge innovation in the realm of, uh, accountingand, and money. Because for the first time in history, human history, the bookand the money where you, where you, you know, the, the money that is accountedfor in the books, uh, are one and the same. That that bars are basically andknows a series of, of, of, you know, about corporate and, and, uh, governmentand even banking practices that are behind lots of, of, uh, you know, socialills in the 20th century. And, and, and before now even, and the second thingis I want to speak into the, the, the legal, the legal situation in, in ElSalvador, the, the, how do you call it in, in English, the, um, legal tender,um, legal tender. Of course it's, it's forceful, but they also have legaltender or they are forced to use the US dollar. So as long as it, you already havelegal tender, you might as well have more options, right? So I just wanted toadd those two bits and of course I agree on all the rest with Stefan whose workI have always admired
Stephan Kinsella (00:56:20):
And I love yours. Two one.
Logan Chipkin (00:56:27):
Uh, does anyone else have anyquestions or comments? We only have about 10 minutes left with Stephan. Okay.Um, I have another question. So you were saying how Haa is not that into it.I'm actually kind of surprised. Um, is Bitcoin never spoken about at let's say,um, Misa Institute or Haas's uh, society?
Stephan Kinsella (00:56:53):
Well, that's, that's actually aninteresting question. Uh, so I think the reason Hans Hopa is not thatinterested in it is, uh, he's basically retired. So he, he's, he's done whathe's done and, and he, I, I, like I said, I don't think he quite gets it,although I will say that he, uh, I'm not gonna give any details away, but, um,he consented. I, I'm involved with his property and Freedom society and, and,and we had some bi we had some Bitcoin donations years ago. He consented to me,uh, hobbling them. Let's put it that way, <laugh>. So number two, um, um,uh, I think at, at the pfs maybe 5, 6, 7 years ago, PFS means Property andFreedom Society in Turkey at this Haas group. Um, there was a guy named Romanssku. I dunno if you know of him, I dunno if he's disappeared or not.
He's a Ukrainian now, but, uh, Romanwas a big Bitcoin guy and Roman was there. Roman's been there many times. He'sa former US um, military guy, but he's become a libertarian. Anyway, Roman, uh,wanted to give a talk on Bitcoin. Now, I will say that Hans did, Hoppa did notwant PFS to become a Bitcoin hotbed. Like he, he didn't want it to become aboutthat, which I totally appreciate, but so he allowed there to be, um, um, sortof an informal, uh, presentation about it. And a couple years later I actuallygave a talk about Bitcoin and property, the kind of stuff we're talking abouttoday. So I actually gave a presentation there. So he is not hostile to it,it's just he's not, he doesn't promote it and see it as the, as the world'sleading, uh, the salvation of the world.
But, but he, he, but he, but to hiscredit, he doesn't argue against it. Now, uh, a better thing might be like,what about my friend Gito Holzman, who's clo closer to my age? He's younger,you know, he's, he doesn't have as many excuses, like, I don't know,technology. Gito has always also been skeptical about Bitcoin, but he has nevercome out full-throated saying it's impossible either. So I respect that restraint.Um, I do think that it's a new phenomenon in society. It's a new type of moneyif it, if it becomes money. And I think that, um, um, people that have thehumility to, to say, well, maybe we have to pause here and see how we canintegrate this understanding of this new phenomenon into economic theory. Andof course, this is why I'm a, I'm a big, a big fan of safe aina Moose and who'smy good buddy? And, um, and actually, oh, so Hans Letz. Yeah, safe Aina Moose.Spoke about Bitcoin also at, uh, pfs about two, about two years ago. So there'sbeen some stuff there now at mes. I don't know, I think they accept Bitcoindonations. Um, <laugh>.
Logan Chipkin (00:59:43):
Stephan Kinsella (00:59:43):
Must, yeah. I don't think they'reopenly hostile to it, but they're not like running to the rampers to, to, to,to, to, to champion it. Sure. Not just yet.
Logan Chipkin (00:59:55):
Um, yeah, that's very interesting.Now I saw se moose's talk, I think it was at Hans's event about timepreference, which obviously Hoppa would, uh, appreciate. Uh, correct. Yeah. AndI, I don't know if a lot of people know this, so surely most people who areinto Bitcoin probably have heard of safety NamUs. I don't know if a lot ofpeople know. He's very strongly influenced by Hans Herman Hoppa. In fact, thetwo of you, to be honest, Stefan, I think of as kind of the two hoppy andprinces, if you like, you from the IP angle and him from the money angle.
Stephan Kinsella (01:00:24):
Logan Chipkin (01:00:25):
Um, yeah, I don't, I don't know if,uh, other people have kind of made that connection. Uh, but anyway, uh, anotherquestion, uh, kind of related to the, the notion that Bitcoin could affectpeople's political views. So even right now there are a lot of, not a lot, butthere are a good amount of socialists who are actually into Bitcoin. Do youthink that they would eventually face cognitive dissonance, or do you thinkeven on a Bitcoin standard we'll have socialists or people who admire centralplanning or that sort of thing?
Stephan Kinsella (01:00:56):
Uh, I was actually not aware of that.I, I was not aware of their socialists who are into Bitcoin, but if they are,yeah, they either have to be soft socialists or they have to be dissidents, orthey have to be, have cognitive dissonance in the sense of yeah, they're,they're gonna, they're gonna face the choice at a certain point. Like if, if,because if Bitcoin actually works, then the only way to understand it is Ithink the Austrian, the Austrian and free market, um, way of viewing the roleof money. Like, so money is a, is a sui generous or, or, or, or, or, or anaturally, uh, uh, unique type of good, which, which means that it is usefulbecause it helps solve this problem. I mentioned before the, the barter problemand the calculation problem. But it's not, it's itself a type of wealth.
So it's unlike other goods, becauseif you have other goods, consumer goods and capital goods, consumer goods arethings we can consume directly for, for, for satisfaction. And capital goodsare things we can use intermediately to produce them. Um, by and large, thenature of these goods is that the more you have, the wealthier you are, becauseif you have more food or more houses, or more cars or more fuel or more land,you know, or more tractors or capital goods, then you're wealthier because you,you have more ability to command things in the world and to, to achieve yourdaily wants. So the nature of a good normally is that it's a good, is a, asupply of a, of a, of a fungible or ho homogeneous commodity, which means thatevery unit is re replaceable with the next, but the next one is worth more.
I mean, not worth more, but it's,it's worth something. So if you have like, you know, a hundred tons of fish,another ton of fish is worth is, is valuable, it's worth less than the last tonof fish cause of the marginal, um, view of, of, of utility. But it's stillworth more. So, so that's the nature of goods is that the more you have, thebetter you off you are until you have so much that it becomes a waste and thenit becomes a bad, and it's like pollution or, or trash or whatever. But money,unlike these things, once you have a fixed supply of money or a supply of moneythat works, adding another unit to the supply of money doesn't, um, doesn't addto the stock of wealth in society. So for example, if you double the number ofcars or vacuum cleaners or washing machines or houses in the US tomorrow, youwould increase the supply of wealth, be like some magical space alien made uswealthier.
But if you, if you doubled the, theamount of gold, if gold was money, you wouldn't quite do that because we stillwouldn't be able to, you know, everyone has twice as much gold as they did thenight before, but you still can't buy another hamburger for a cheaper pricebecause you have an increased wealth. So I, I, my personal view is that this,this, this economic distinction between, um, the sui generics nature of money,um, and wealth is important to keep in mind, which means that Bitcoin has thepromise of being the perfect money because, you know, ultimately in a hundredyears it won't be inflated at all anymore. It'll just be a fixed money supply.So we'll have a continually decreasing, um, well, a continually increasingsupply of the, the value of money will go up over every year. So we'll bericher every year just by holding money. I think it will change humancharacter, it will change, uh, human society, it will change everything. Sothis is why I'm a proponent, I'm just trying to be a realistic proponent.
Logan Chipkin (01:04:52):
Very well said. And I think that's agreat note to end on. Uh, so I just wanna say, uh, Stephan, thank you very muchfor joining, uh, Kent, thank you. Thanks to the audience for listening. Uh,hopefully you learn something about property rights, all street economics,things that, uh, I'm personally very passionate about. And join us next weekwe'll have Ashton from the Crypto Coin Show. So that'll be a fun one. And withthat, I hope everyone has a great Thursday, great Friday and a great rest ofyour weekend. Thanks everyone. Thanks Ste. Thanks guys. Thank you Stefan.
Stephan Kinsella (01:05:19):
Logan Chipkin (01:05:20):
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