The Physics of Bitcoin with Giovanni | SLP732

**Giovanni Santostasi** (0:00)
We talk about falsify because I want people to accept this idea that Bitcoin has a very structured growth over the long period of time. And I want to remind, when we are talking about long term, we are talking about years, right? So we're not talking about changes in the price on the scale of months or days. That is not what the power law is about. It's about this very long term trajectory. And it's important because, you know, we don't know, right? If I tell you Bitcoin is going to be $1 million in 8 years, it's very different from somebody telling you Bitcoin is going to be $1 million in 2 years.

**Stephan Livera** (0:38)
Hi, everyone, and welcome back to Stephan Livera Podcast. Rejoining me on the show today is Giovanni Santostasi. As many of you already know, we spoke earlier on the podcast, but he is the, let's say, the founder or the creator of Bitcoin Power Law Analysis. And he's back to present and talk to us a little bit about his new book that's going to be coming out. It's called The Physics of Bitcoin. He's also the founder of the Scientific Bitcoin Institute. And I, you know, for me, I find this stuff quite interesting. I wouldn't call myself a power law analyst, but I am, you know, I'm a fan. I've been sharing and trying to talk about it also, because I think it's an interesting framework for understanding different aspects of Bitcoin, whether it's the adoption, the price, the hash rate, and these different explanatory factors of Bitcoin. So yeah, so welcome back to the show, Giovanni.

**Giovanni Santostasi** (1:27)
So much. It's my pleasure.

**Stephan Livera** (1:29)
So yeah, let's talk a little bit about, you know, why you want to write this book.

**Giovanni Santostasi** (1:35)
It's funny because I am doing a lot of AI. I'm using a lot of, you know, it's an incredible tool. And I was making a plan of how, you know, to let people know about the book and explaining the idea. And one of the things he suggests is say, you should go to Stephan Livera Podcast.

**Stephan Livera** (1:56)
So I'm in the AI somehow. The AI is telling people to find me.

**Giovanni Santostasi** (1:59)
Yeah, like one of the top podcasts where I should go.

**Stephan Livera** (2:02)
So I found it. I think it's probably because I do often interview Bitcoin authors. And so it probably that's why it comes up in the AIs and whatever. So yeah, but yeah, tell us about why you wanted to write this book instead of just doing online podcasts and articles.

**Giovanni Santostasi** (2:20)
Yeah, so the book is actually kind of, it's going to be almost like a reference book because it's self-contained. It's supposed to even to be a book that maybe introduces Bitcoin to people that never heard about it. So there is an introductory section where we cover the basics. You know, it doesn't go too much in the technical details, so how to use Bitcoin, how to get a wallet because there are plenty of books like that, right? And but I do mention them in the references. There are several appendices, we have to say, okay, read this, read that, you know, to get this other information. But it's trying to make the big case, that is what the power law is all about from the beginning.
But Bitcoin looks more like a force of nature, right? It's similar more to this other process. Basically, there are several important assumptions. And I have mentioned these assumptions and these point of views in my post online, in my article on Medium. But I think the time came to put it all together and make a coherent story that somebody that never heard about Bitcoin and he thinks it is random, that it goes up and down, and it has no value, reads these things and gets transformed, and say, whoa, you know, hopefully, maybe this becomes one of the most powerful orange peeling mechanism, because if you understand Bitcoin is not random, it's following a very precise pattern. This pattern is a pattern that nature prefers in growing different structures, tooth and nails. And at a certain point, I mentioned this article that I mentioned before in my tweets about finding it in a book that says, look, you know, nature likes the power law for all these structures. So it's not just biological structures, but the universe like galaxies, planets, and things like the language, you know, the type of activity that humans do. Cities, you know, cities are one of the most important inventions of humankind. You know, the entire civilization, the world civilization itself comes from civitas, I mean, city in Latin, you know. So cities and civilizations are one to one. So all the things that are most fundamental in human life are coming from cities. And they follow power laws. They grow as power laws. So once you put Bitcoin in this context, there is this clear picture of what Bitcoin is, right? And then we can discuss this in more details, but one of the biggest criticism of Bitcoin is how it has no value, right? And there is an entire section, an entire chapter of the book that takes all this information and tries to build almost a mathematical definition of value. You know, why Bitcoin is valuable? In fact, probably it will become the most valuable invention of humankind or system, whatever you want to call it, and it is connected to this power law theory, you know? All the consequences from the power law theory. So this is why I wanted to write a book. I want to reach a lot of people. I want people to use it, maybe to orange peel other people. I want to address the skeptics, you know, because there are a lot of skeptics. Maybe if they read it in a book format, they see the pictures, they understand the concept that are linked to it, because I also build all this concept. The foundations that are necessary, we talk about self-organized systems, we talk about network theory, we talk about power laws in general. So yeah, there are many reasons why I wanted to write.