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Lots of debate about the Saylor / Saifedean conversation

I thought it was really interesting

No one really knows what credit will look like in a Bitcoin Standard

They both make good points

I tend to think that (young, less capitalized, etc) people will of course still borrow to buy a car or or a home, to Michael's point

But I also agree with some of Saifdean's points about the inevitable decline in value of government debt

People seemed to hyperlock onto a short clip of it on X and spit takes instead of listening to the whole thing which is unfortunate

There's way too much 100% agreement in this space so a 2-hour animated conversation with two people who do share a lot in common but really disagree strongly on some stuff and aren't afraid to push back is very refreshing

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Discussion

TKay 1y ago

I think thats the problem with the discussion. not both made good points. Said did, Saylor didnt.

gladstein 1y ago

You think that people with no capital won't borrow to finance things if we use Bitcoin instead of dollars?

TKay 1y ago

Your asking questions with the same mindset Saylor came with into the interview with Saif.

I would summarize Saifs points. Borrowing doesnt necessarly mean yield.

People will borrow, but either for free. because there is no need to get interest, since the currency id deflationary.

Or people will borrow buy means like IPOs and selling project shares, where they take risk with the lender.

djmeistro✝️ 🍊💊⚡️ 1y ago

That wasn't Saif's point. Saif envisions a world where you're exchanging your bitcoin for equity.

IPOs are not borrowing. It's an initial public offering meaning you pay money for equity in the company.

TKay 1y ago

That is exactly what i say. Saif believes we will be exchanging bitcoin for equity through things like IPOs (equity). That is literally my last line.

And IPOs are a form of borrowing/lending. where the objective of the borrower is to get cash from someone with a promise of future returns.

As for borrowing through banks. Saif believes that will slowly stop, at least at the government level. and private lending might happen for free (he even argues for negative yield).

hkr 1y ago

Why would someone lend Bitcoin for free? I only see downsides (risk) to the lender.

Comte de Sats Germain 1y ago

Stock isn't borrowing. If you buy stock, you are buying ownership of the company. Future returns are never promised. Not even future dividends are promised - the board of directors, elected by the shareholders, which would be you if you bought stock, can change the dividend at any time. The one thing I do criticize is the preferred vs common stock distinction - preferred is much more expensive and basically impossible for normal people to buy and issuance of new shares doesn't dilute the preferred stock. That's obviously predatory and should be illegal.

Comte de Sats Germain 1y ago

Where do you find this discussion? I'm not on X... I think I understand Saif's arguments based on what people say here, but I think I should actually listen

kreyszig 1y ago

I think there will still be borrowing and this won't go away. However the interest rate with a money that inflates less than 0.1% annually in 21 years cannot be as high as it is for a fiat inflating 7%+ per year on average. Given that bank deposits are not able to sustainably yield 5% in fiat now, I don't see how can Saylor expect BTC deposits to sustainably return 5% in interest in 21 years. Maths simply don't work, that BTC denominated interest rate will have to come down.

Bitdoc 1y ago

https://primal.net/e/note1purwrjaj92ps4xjyc33kjq4au7weylx582336tew3fzcydll8hksss0sll

MikeMonty 1y ago

In a hyper bitcoinized world, what will debtors prisons be like?

MikeMonty 1y ago

It feels as if bitcoiners haven’t read the richest man in Babylon.

MikeMonty 1y ago

I’m getting to the last half hour of the podcast. It feels like it’s spiraling out of control 😮‍💨

MikeMonty 1y ago

Good on Saif finding a way to end on a high note.

Jake Woodhouse 1y ago

Yeah need to watch this one before commenting

Satosha 1y ago

I tried but after 35 minutes I feel asleep .. I mean how much time would you spend on a simple spreadsheet :-) ..

Here people are breaking heads on breaking cryptographic hash functions and these these two trying to figure out nursery formulas with absolutely vague assumptions ..

Sides 1y ago

Saylor seemed oddly rattled. He didn't like the push back from Saif. Wouldn't let him finish his point.

farooq 1y ago

There's no credit on a bitcoin standard and that's about it. A pure and simple supply & demand economics.

Luke 1y ago

I agree with you pretty fully but Austrian economics seems pretty clear about how one money eats the others. I can't see fiat surviving in the long run as long as Bitcoin trades freely.

Seems like the onus should be on Saylor to show why the Austrians are wrong about money's very nature.

Franz Mesmer 1y ago

Really enjoyed listening to them. A conversation on a very high level.

PoW@MaX 1y ago

#bitcoin is low time preference.

Debt is high time preference.

Tow opposite system can't coexist in the same time.

nostr:nevent1qqsx045yvcz47sexwegs56xrevsgnwwddxfjd8wd93gl2wvxhg66tvsppemhxue69uhkummn9ekx7mp0qgs9336p4f3sctdrtft2wlqaq5upjz9azpgylhfd3dplwf005mfrr9srqsqqqqqpc2dre6

Comte de Sats Germain 1y ago 💬 10

The rugpulling will continue until all credit is gone. Bitcoin banks are a cool idea in the transition period, but they won't make it, not even one.

gladstein 1y ago

In a Bitcoin standard what happens if I’m 22 and have no capital but what to buy a car. You don’t think leasing or auto loans will exist?

Comte de Sats Germain 1y ago

Cars will be cheaper relative to hours worked, like they used to be. Measure prices in terms of hours worked - that's what honest economists (I am by training) do. Also, sound money incentivizes competition in terms of quality, so I expect cars will last a lot longer. And 3d printing raises the possibility of printing custom cars on demand, cheaply. It wouldn't be cheap right now, but it will be. In America, its hard for people to imagine living without a car, but in almost any other developed country, its no problem at all to use buses, trains, and cheap taxies (have to say cheap because they aren't cheap here). America will need to learn this magic, but it will be no problem to any other country. You should be glad, Gladstein - credit is the primary means of oppression. We're nuking it.

Anchorite 1y ago

It's hard to imagine no credit. Perhaps credit would slowly become almost irrelevant because prosperity will enable abundant charity?

DRE 1y ago

What did people do before 1971? Work for a summer and then you can buy your car. Much better than having to repay a debt in something that increases in value over time. There will always be financially illiterate people that take on debt to buy consumer goods, but the incentive will be to buy consumer goods out right

frphank 1y ago

This is unlikely because simple labor is already of unsustainably low value now and it will get worse in the future.

Skills of today are engineering, entrepreneurship and the likes. The rule of 10,000 applies.

frphank 1y ago

Indentured servitude.

Spencer 1y ago

Frustrating to hear them talk past each other.

Saif: Bitcoin market dynamics will drive down lending.

Saylor: why do you want to force people to stop lending?

I would have enjoyed hearing more thoughts on how fiat dies. Eventually everyone wants to exploit the infinite money glitch, which means nobody can.

Resonance Cascade The II 1y ago

nostr:npub1gdu7w6l6w65qhrdeaf6eyywepwe7v7ezqtugsrxy7hl7ypjsvxksd76nak has been right before, I respect his views.

This was a beautiful moment

https://www.reddit.com/r/Bitcoin/comments/wyj11g/saifedean_telling_the_celsius_ceo_that_having_7/

kreyszig 1y ago

Yes I agree, Saylor kept arguing against stuff that Saif never said...

Rafael Maldonado 1y ago

Nobody seems to realize that they are both right!. just not in the same time frame. Saylor is right in the short term because regardless of how successful Bitcoin is we probably won’t see the collapse of credit in our lifetimes. Saylor is a pragmatic business person that has a lot of skin in the game and will not go against the financial system that he lives by. Saifdean understands economy and is right in the long term because there is no lender of last resort in a bitcoin standard period. Now, I think Saif showed more composure and really tried to explain his point based on economics. Saylor on the other hand was not listening and even accused Saifdean of wanting to make credit illegal. And,compared Saifdean to a communist I think Saif took it really well overall. Definitely not Saylors best interview.

Joe Bloggs 1y ago

This can be answered

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Judge Hardcase 1y ago

Amen. I do kind of get why many people miss Saylor's point because he kept saying "risk-free" - but this was in the context of fiat for the foreseeable near future. However, Saylor also acknowledged the inherent counterparty risk involved in loaning Bitcoin.

Ultimately, there will always be people (and organizations) willing to pay a fee (i.e. interest) in order to borrow capital; and, there will always be people (and organizations) with capital willing to make loans that earn at least enough yield (i.e. interest) to account for some risk of default.

dfa94a58... 1y ago

There will always be credit/debt. It will arise spontaneously, not least in the manufacturing cycle, when goods are ordered but only paid for on completion of being manufactured. In the meantime costs and salaries must be paid. Credit notes arise and circulate as money to facilitate this. These notes used to be called Real Bills. They are settled for bitcoin or gold upon payment for the goods manufactured. The problem comes when the debt issued becomes unmoored from the settlement amount. Like in fractional reserve banking. I don't know how you solve this problem. I don't think you can.

Judge Hardcase 1y ago

I think it's an issue of duration match. If a bank takes in deposits and issues loans resulting in a fraction of its liabilities left in reserve, this becomes a problem when depositors are free to withdrawal prior to a comparable repayment of the loans. As such, a responsible fractional reserve bank would put appropriate time requirements on the deposits they take in (such as with CDs). Does this prevent all banks from being irresponsible? No. But, it seems to me that problem solves itself when the irresponsible banks fail, and there is no money printer to bail them out.

dfa94a58... 1y ago

You are 100% correct. Duration matching is one problem, but excess loans without any matching is the problem and bank failure , or the implied threat of failure by a bank run , is the solution IMO. No regulation, because that becomes regulatory capture, just caveat emptor. Learn the hard way!

dfa94a58... 1y ago

Saylor worries me. The investing graveyard is full of "to the moon assumptions". Nothing wrong with that if you're conservative and debt free , but when you pyramid borrowing and debt to speculate on such an assumption, I think the chances are that you almost certainly eventually go bust, hit by a volatile glitch.