The History of Money & The Potential of Crypto - Raoul Pal - YouTube

the world has a history of money  whether it's backed by gold or not  

where government gets themselves excessively into  debt and they devalue the money so the romans used  

to clip the edge off the coins so there was less  gold in each coin and eventually people would  

lose faith in the coins because they'd blend them  with silver and then blend them with copper and  

you know the coins were worthless because  that was supposed to be worth the value of the  

of the denarii in roman times but governments  can't help themselves humans we're just  

humans right humans are fundamentally  flawed creatures and we always will be  

so then we have the gold standards you  know the us and the uk run gold standards  

world war one world war ii we all have to leave  it because we've got too much in debt again  

we've overly financialized yet again because  humans love leverage above all things it's kind  

of sex and leverage are the two things that drive  humans for some reason then we adopt a new system  

which has been around before but it keeps getting  abandoned called fiat money fiat money's money not  

backed by anything it's backed by the promise of  the central bank paying it so that's the dollar  

bill that we all are familiar with and every  country in the world now adopted fiat currency  

but as with everything if you're really  thirsty and i gave you a bottle of water  

or sold it to you you'd probably pay me  10 times too much for that bottle of water  

if i give you a million bottles of water  they're worth precisely zero to you  

so scarcity has value that's arts  that's cars that's almost anything  

humans value scarcity for whatever reason we  do and so if you're printing too much money  

you're creating less scarcity so yes there's  money everywhere but the money has less value  

so once you understand that you say well what  does it mean the dollar hasn't collapsed it's  

kind of where it was versus the euro in  the last five years or whatever it is  

and then you say huh but my fifty thousand 000  salary now can buy me much less shares in apple  

amazon google microsoft in fact units of  the s p 500 i i suddenly can't buy as much  

since 2008 it's a fraction i can buy like a  third of what i could same with real estate  

same with gold and then you're like huh assets  have suddenly got expensive they haven't  

the value of your savings has gone down or your  money so you can't afford to buy assets what is  

an asset an asset is deferred consumption from  the future i buy a house i sell it in the future  

i get to retire whatever the the things are  right we don't buy the s p because we want  

to hang it up in our wall we buy it because we  want to sell it at a future date to realize money  

so that means our future selves are now poorer  that's essentially what this means that's what  

currency debasement is so bitcoin comes along  in 2008 in the middle of the crisis it's kind  

of like it was perfectly prepared for this  and said satoshi goes hey look at this  

i can create an algorithm that only creates so  much of this thing the bitcoin and it can never  

vary ever so therefore this is scarcity that  humans can't [ __ ] around with now humans have  

this propensity to [ __ ] around with scarcity  because they're economically incentivized to do so  

here they can't so then they become  economically incentivized to own this asset  

because it's scarce and it cannot be changed  because it has this consistent supply curve  

and a limited number so bitcoin  becomes this great store of value  

and it would look like gold because gold's a good  story value it's worked for thousands of years  

but bitcoin has this other thing to it it's a  network which gold isn't and it's technology  

which gold isn't so we have use cases and the  benefits of building a network so suddenly it  

goes up exponentially in price roll onto 2015  and suddenly somebody's looking at the blockchain  

and they start saying imagine if these bits  on the blockchain which is where you record  

the ownership of something in bitcoin it's bitcoin  itself what happens if we could put a contract in  

there because humans live off contracts you know  everything is basically a contract in in our legal  

terms and that was the rise of ethereum it became  a platform where you could programmably change the  

blockchain not the attributes of the blockchain  you couldn't remove anything off that ledger  

but you could change the little holding buckets  and say well it can look like this could look  

like that i can adopt to this and those things  were verifiable as well so they couldn't change  

so this created a theorem which  became the platform so if you think of  

bitcoin as the store of value this very pristine  beautiful thing then you think of ethereum as also  

a very beautiful thing but it's a much broader  application because it's like programmable  

money so that this is this movement there's two  things there's the democratization of information  

and then there's crypto so crypto as it starts  building out as an ecosystem you start to realize  

that okay this is now the fastest adoption of  any technology in all recorded human history  

the internet from 1990 to 2000 grew at 63  a year that was the fastest adoption of any  

technology in all recorded history prior  to that mobile phones was the other one  

but what happens is the internet technology and  the mobile phone technology allows for these  

networks to be built and once that network's in  place it's faster to build the net next network  

so in india for example they've just basically  given out free data to every mobile phone in india  

so guess what uh data usage is the highest in  the world and so their internet scaling becomes  

faster so this so the internet was huge as we  all know and it remains huge so at 63 a year  

it then flattened out over time as more and more  people got adopted so at 1997 it was growing at 63  

a year and it was 140 million users of the  internet in 2021 there are 140 million crypto  

users and it's growing at 113 a year which is  double the speed now this is where humans struggle  

linear numbers and exponential numbers  because it's exponential it means that  

growing 113 a year we're going to go from 140  million people to a billion people by 2024

so if you know that something is being adopted  at this speed and it's a networking of money at  

its core and you can buy an infinitesimal fraction  of it so everybody can buy 10 of their net worth  

then everybody who takes this opportunity will  probably have the biggest opportunity in history  

you start with understanding money which most of  us don't think about then you kind of understand  

how we're getting screwed by central bank printing  and the debt-laden economy and what it means  

and then you start saying okay but that's  bitcoin and then what's this ethereum business  

and then you start realizing  decentralized finance you're like  

it's kind of a finance thing but that's kind  of cool because i can get yields now you know  

i can get instead of getting zero on my bank  account for my hard savings i can now get  

six percent a year wow that's a difference  it's like going back 25 years in time  

and then suddenly nfts come and community tokens  and suddenly your mind is completely blown that  

this is not just money it's the entire exchange  transfer and storage of value for the internet  

whole business models are about to change  massively because of what this technology unlocks  

and then once you get your head around that you're  like oh god i can't even hold this in my mind any  

longer it's so big and that it's not just buy some  bitcoin i'm going to make some money over time  

you know it's actually an entirely parallel  financial system and business structure for the  

world and it's being adopted faster than anything  we can ever imagine it has grown as an asset  

it's gone up i think it's two million percent  since inception no other asset in all recorded  

history has ever done this and we haven't even  started i still think there's probably another  

100 x from here not even the baby boomers got  given that the s p didn't go up 100x since 1980.  

so this is the magnitude of what's there so i'm  screaming from the rooftop saying you might be  

cynical you might think you don't understand it  you might think you can't afford to play in this  

but you have to listen because this is  the opportunity you can't come back to me  

in 10 years time and say well we missed all  of that all the rich people got richer no you  

i everybody else is saying now is your time  don't be irresponsible you know dollar cost  

average do all the right things but here  is your opportunity this is the biggest  

opportunity i've ever seen and i'm going to take  advantage of it and so should everybody else  

this is not rich or poor this is an every person  opportunity and we've never had this before ever