November 1, 2020

Happiness, Reducing Anxiety, Crypto Stable-coins, and Crypto Strategy

By phy6

Philosophy & Anxiety

  • So what is the role of anxiety? Well, firstly, I noted that pretty much everybody’s anxious all the time. It’s a rare human being who isn’t anxious and it makes sense. We’re alpha predators. We took over this earth and domesticated or killed all the other animals. And we did that by being the most paranoid, the most fearful, the most angry predators this world has ever seen. So anxiety is built into the core of who we are. In fact, you could argue that all the mind does all day long is fear-based scenario planning for survival, and then maybe a little bit of green for replication.
  • If you’re going to start somewhere, this book called “Think on These Things”. There’s also “The Book of Life”. He’s a very cerebral, very intellectual, and a little confusing, but he definitely speaks truth. And he walks the walk. Anthony de Mello, The Way to Love, Osho’s book The Great Challenge, and I know people think Osho is a fake guru and all that, but he had some real stuff too. He’s very articulate. He understood a lot.
  • The classics, the Bhagavad Gita, get a good translation. Stephen [Mitchell], I think, has a good translation. He also has a good translation of the Tao Te Ching. Those are both really interesting.
  • There’s ancient wisdom in Schopenhauer, read “Counsels and Maxims”. These are smart people self-reflecting but overall, the point is not to read. The point is to inspire so that you yourself can reflect. Kapil Gupta has an account on Twitter; he has a couple of great books. Direct Truth is a fantastic book written very recently and pulls no punches, but all of these are basically there to inspire you to self-reflect. And if you’re not interested in self- reflection, if you’re not at that stage in life, then don’t do it. It’s a waste of time.
  • Really, what you want to focus on is what’s timeless. Timeless is great. The old questions all have old answers and they’re best consumed from the old practitioners because they were very clear-minded about it. They weren’t busy trying to fit into the politics of this time, they were fitting to the politics of that time, but that’s lost to us now. So actually, another great source is, I have your Tao of Seneca series on Audible, and I listen to it on repeat when I’m working out a lot

Crypto Currencies

  • I think cryptocurrencies are probably one of the greatest inventions in human history and the reason why they’re interesting is because if you look to the technology industry, technology plays in unregulated spaces.
  • At, at one point, you and I did a very thorough cryptocurrency one-on-one conversation with a domain super expert named Nick Szabo, S-Z-A-B-O, which people can also find for more on the history and basics of some of the crypto.
  • The best-known cryptocurrency is Bitcoin, and Bitcoin is trying to be the new gold or the new Swiss bank count, all rolled into one. And it has some advantages, as a store of value, it can be stored digitally, so it’s hard to seize, it’s very easy to verify, technologically speaking on my goal, it’s easy to send across national boundaries and electronically over the internet. It’s easily divisible and verifiable, its authenticity is very, very verifiable, where gold is hard to do, it can be divided down to millions and trillions of a Bitcoin, very, very easily, it is somewhat programmable, so you can put it inside smart contracts and you can do some intelligent things with it. So it has a lot going for this store of value.
  • What’s difficult about it is it’s not really private, although there are parts of it that are private, it’s not completely private and it’s untrusted, it’s brand new, as far as stores of value go, it’s only from 2009. And so people don’t know if it’ll be around forever and how dependent it is on the internet and people aren’t really certain about, so like the proof of work mining algorithm that makes it possible and can it be hijacked? Can it be centralized? Can it have a bug? Can it break? And every year, the Bitcoin survives and goes through one of the various challenges facing it. It gets more valuable as people entrust it a little bit more and more but it is extremely volatile. You buy a Bitcoin, you’re buying a very speculative asset at the moment, and you’re speculating that it will become digital gold or possibly even, all store of value, and so be incredibly valuable. But along the way, there’s lots of hiccups and at any point, it could break, it could go to zero.
  • There’s no free lunch. So what does that cost? And all I was saying is that the three main categories of stable-coins today, they each impose one or more of these costs. And so one cause is fraud risk, where people suspect this of Tether, where actually, Distinct says it’s backed by dollars but it’s not actually backed by dollars. I don’t know if this company has dollars underneath, so you have to kind of take their word for it.
  • The second kind is where you’re dealing with someone like Coinbase or some company that is well known and trusted and is regulated but then it’s no different than holding normal dollars. There’s censorship risk, where if the government says, “Hey, we don’t like this character,” sees their bank account, Coinbase can turn off your USDC account and your stable-coin has basically been seized; you’re no longer decentralized and sovereign like you are with Bitcoin.
  • The last kind of risk is a blowup risk, or something like a maker, it’s collateralized but it’s collateralized with Bitcoin and Ethereum and so what they’re hoping is that the price of Bitcoin, Ethereum won’t move so drastically, that the peg breaks and you lose money on your so-called stable-coin.”
  • You’re either taking on fraud risk or censorship risk or blowup risk or some combination of them.
  • There are custodians, like Anchorage, is an amazing one, there’s Bitco, there’s Coinbase.
  • The point of crypto is to be your own bank. So if the government is coming to seize money or if they’re printing lots of it, you can always withdraw your crypto assets from these organizations and you can carry it yourself.
  • But you have to understand, you’re replacing the banking system, you are literally replacing the government, all the guns and the police, that backup the banking system, you’re replacing all that and all the control that comes with it, so of course, it’s going to require some level of sophistication, you’re literally building your own Swiss bank. So it is quite complicated.
  • Listen to the interview we did with Nick Szabo, go online and start reading up on Bitcoin, read up on Ethereum, read up on the privacy coins like Zcash and Monero, learn about the different high-level stuff in the crypto space.
  • The scariest thing that happened in 2020, from a financial perspective, is both the Republican and the Democratic party figured out that, “Oh, actually we can just print lots and lots of money.” And the US has this reserve dollar that’s reserve currency status with a dollar where most of our dollars, I think something like 70 percent, are held by foreigners because the trusted reserve currency of the world, they use it for trading oil, they use it for settling international transfers, they use it just to hide money, they use it to protect money from their local inflationary authorities. So because of that, when we print a dollar, 70 percent of that inflationary attack effect cost is borne by the rest of the world, not born by us. And so the US government’s figured this out and we printed $6 trillion to fight the coronavirus. And so now both parties can agree that they can just print money to get out of any problem that they’re in.
  • They’re going to keep doing that until at some point, the rest of the world throws in the towel and says, “this dollar thing is not working for us.”
  • There’s also hard assets like gold and crypto and real estate. And even the run-up in tech stocks, at some levels because equities are tax-efficient, inflation, hedge, or a relatively tax-efficient inflation hedge. Because someone like Google can just raise prices and they don’t have to hire more people because they’re a monopoly, they can lay off half their engineers and the company will work just fine.
  • The pound sterling used to be the reserve currency of the world and it lost its status at one point. Money used to be gold-backed and that went away.
  • If it were to happen, then you would basically have the true reckoning. Then our ability to print our way out of recessions would go away; you would probably have an inflationary collapse in the US and you would just see our global economic system start breaking down. In those scenarios, crypto does really well, assuming the internet stays up.
  • we also see in 2020, what do we have, five million new [gun] owners in the US?
  • if the world were to decide that Bitcoin is better money than US dollars, the world would switch to Bitcoin. It’s a story, it’s a consensus belief.
  • When Paul Tudor Jones or MicroStrategy buy Bitcoin, the story’s becoming stronger, the set of believers is increasing, the validation is increasing and now more people can come in and hang their hat on this and say, okay, if Paul Tudor Jones agrees and Michael Saylor agrees, then I agree to be in that set of people who believe that this is going to be the new way to store value and wealth.
  • it’s a Swiss bank account but it’s a Swiss bank account with finite space and if you want shelf space in that Swiss bank account with finite space, you have to buy out one of the existing holders in that space.
  • crypto failed the crisis test with COVID right? Naval Ravikant: I mean, it did and it didn’t, what it didn’t do was, it didn’t skyrocket. Bitcoin didn’t go to a $100K, as everybody fled the US Dollar but that shows you how resilient the dollar is and how far we are from losing global reserve currency status. But at the same time, it didn’t collapse either, you know, it didn’t go down, it went down briefly, as people needed cash to meet various margin calls and loans, but overall stayed very stable.
  • Eventually, some country out there is going to say, actually, we inflate our currency too much, our currency collapsed, nobody trusts us anymore. We have to adopt a new national currency instead of pegging to the dollar, let’s peg the Bitcoin, oh, let’s use Bitcoin or let’s use some other cryptocurrency, or let’s be clever and buy up a bunch of Bitcoin and then announce we’re going to use Bitcoin and then Bitcoin will skyrocket and we’re all rich.
  • it’s going to be stumbling steps forward and backward, it’s not going to be necessarily in one fell swoop, until it is. That’s the nature of black swans, you can’t predict them and when it happens, it happens suddenly.
  • if two computers are talking to each other, if two mini-AIs are talking to each other in high speed, exchanging resources to run a company, how are they going to exchange money? You think they’re going to send US dollars through PayPal or through Fedwire? Hell no, they’re going to use crypto. Crypto is the native currency of the internet. Of course the internet is going to have its own currency. Otherwise like saying the internet is going to use email through the USPS, US Postal Service. Heck no, it’s going to have its own native on-chain on-wire protocol for communicating data.
  • What the internet gave us before was digital abundance. I can make copies of everything. That was a very big idea. I can make one podcast and ship it to everybody. I can make one webpage and ship it to everybody. That was a very big idea and created huge fortunes and huge revolutions.
  • The same with digital scarcity is an equally interesting idea, which is I can only have one of this thing. If Naval has a Bitcoin then Tim Ferriss doesn’t have that Bitcoin or vice versa. That ability to create scarcity and transmit scarcity and value through the internet is just as important as the ability to create abundance and transmit that through the internet. The native language of the internet in communications and protocols around valuable things, around finance, is going to be in cryptocurrencies. It’s not going to be any other way.
  • long-term thinking gets you long-term results. I’ve said this a thousand different ways. In business, you want to play long-term games with long-term people. In your modern life and addictions, and kind of just dealing with the avalanche of all the abundance of things that are thrown at you that are really traps, like video games are traps. There’s a shadow career that substitutes for your real career. Smoking weed or drinking alcohol substitutes for like pleasure through more simple things like sunlight and on.
  • And walks and porn substitutes for sex. The list just goes on and on.
  • The modern devil is cheap dopamine. Some interesting people on Twitter pointed out to me, actually, the ancient devil is cheap dopamine as well. In modern times, we’ve just hyper-accelerated it. The modern mind is overstimulated.
  • if you’re doing something that you love, if you’re running a business that you enjoy, it is probably going to be more fun than playing a video game. If you come home at night from work and your first instinct is to play a video game, you’re suffering at work, you’re working just as hard in the video game, but the rewards are all fake because they’re going to change the rules on you. Some 13-year-old kid on the internet will destroy you because they’ve played that video game all day long.
  • I think the number one criteria I look for in a relationship is that person has to be kind. They just have to be a nice person. Just stay away from these high conflict people.
  • The reason to win the game is so that you can be free of it.
  • All of life is games, right? You start out with the family game, you do the school game, the grades game, the getting girlfriends and boyfriends game, the getting married game, the having kids game, the making money game, the having the career game, the getting famous game, the dressing well game. It’s so much social games. There are a few that are not games. Meditation you’re not doing, if you’re scoring points in meditation, you’re doing it wrong. Yoga, these are single-player games, right ? It’s really the multiplayer games are the ones that suck you into society and into anxiety.
  • I would aspire to be like Socrates and say, “There are so many things in this world that I do not want.” I like to think that I’m kind of there for the most parts. Either I don’t want it, or I have it. Now, of course, there’s a fear of losing it, which is always there, but I don’t want to pick up new desires unconsciously. I don’t want to keep upgrading my lifestyle and my expectations to match my circumstances. Otherwise, I’ll be on this treadmill forever.”