347. The Bitcoin Standard Course - Launch Lecture

Saifedean Ammous (0:00)

The Bitcoin Standard Podcast is sponsored by Bitgo. When it comes to Bitcoin, security isn't a feature, it's the whole business. And that's Bitgo. For more than a decade, they've been the infrastructure behind the scenes, protecting billions in Bitcoin for exchanges, funds, and institutions. Now they are opening up their services to individuals. I still believe self-custody is the best way to hold Bitcoin. But self-custody also comes with real operational risk, and can turn your entire setup into a single point of failure for your wealth.

Once your Bitcoin holdings become significant to you, it can make sense to diversify custody, rather than have everything depend on one setup, one disaster, or one mistake. Bitgo pioneered commercial multi-sig wallets long before the rest of the industry caught up. And now they want to offer that same cold storage infrastructure to individual Bitcoiners. Distributed keys, HSMs, offline key ceremonies, and geographically separated vaults. You can give your assets the same level of security the world's most demanding institutions rely on. Head over to bit.com and sign up for a free wallet backed by institutional-grade custody. There is no fee to open an account and no ongoing custody fee. Your Bitcoin, secured like an institution's. That's the power of Bitcoin. Hello and welcome to The Bitcoin Standard Podcast. In today's episode, we are going to begin an online course covering the book that started it all, The Bitcoin Standard. Over the coming months, I will be presenting lectures based on the contents of the Bitcoin Standard, the book which I wrote almost 10 years ago, and which has now been published in 39 languages, and has sold more than 1 million copies across formats and languages around the world.

The book has influenced many people all over the world. Many businesses make it mandatory reading for their employees. Michael Saylor has said this book was the work that has most influenced him as he has put his company's strategy on a Bitcoin Standard, and bought tens of billions of dollars' worth of Bitcoin.

Countless people from all over the world have told me the book has helped them understand Bitcoin, money, time preference, and how they make economic decisions, and it has helped them change their life for the better. Many government officials have likewise told me it has been enormously influential to them, as have many money managers around the world, and this is something that has likely worked out for them very well. When the book was published, the price of Bitcoin was $7,000 approximately. Today, it is up to around $85,000. So it is up around 10, 12-fold, depending on when you count. So I would say the main idea in the book has been validated. But in this course, we are going to examine and review and revise all of the issues that were brought up in this book.

Almost 10 years after I started writing it, we're going to discuss how it has aged, what has stood the test of time, and what hasn't, and how it helps us understand Bitcoin today.

In today's lecture, we're going to be covering the prologue of the book, which introduces the book, explains what the book is going to be talking about, and introduces and defines Bitcoin. So what is this Bitcoin thing and how did it get started? Bitcoin started on October 31st, 2008, when a programmer using the pseudonym Satoshi Nakamoto sent an email to a cryptography mailing list telling them that he has been working on a new electronic cash system that's fully peer to peer with no trusted third party.

Now, this was not the first time that somebody had tried to build an electronic cash system. There had been many, many attempts at doing this over many years. Maybe you could say about 30, 35 years before Bitcoin happened, people had been trying to build an electronic cash system. But there was one thing unique about Bitcoin, which is that it worked. It was different from all the other ones in that it actually worked. However, it working was almost inconsequential initially because it remained very obscure and it was confined to a small network of essentially cryptography enthusiasts on the internet who were using it, mining the coins, sending them to one another, trying out the software, emailing each other about whether it works or not. There wasn't much to suggest that it would take over the world at that stage.

However, in October 2009, arguably the most important milestone in Bitcoin's life happened, which is that an internet exchange bought 5050 Bitcoins for $5.02.

This gives Bitcoin a price of approximately 0.000994 US dollars per Bitcoin. That's around 9% of a cent of a US dollar. So 9% of 1% of a US dollar. That was the first recorded price of Bitcoin. More significant than the price itself was the fact that the price existed, because what this meant was that Bitcoin was now an economic good. Somebody exchanged money for Bitcoin. Somebody paid for it. So clearly now Bitcoin was an economic good. You could argue that it was an economic good before that, because people were mining it, and they were storing it on their computer. They kept their private keys. They maintained it. So they treated it like an economic good. But you could say that unquestionably it was an economic good in October 2009 And that was exactly 17 years ago, when it first was exchanged for US dollars. And so it demonstrated that it clearly had economic value, and that it had a network of people who gave it economic value and exchanged it with one another.