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Riot’s Block Time Podcast
My appearance on BlockTime, the new Bitcoin podcast on Riot Platforms.
Last month, I joined Pierre Rochard on his new podcast BlockTime, hosted by Riot Platforms. Riot is a friend of Texas A&M and my Bitcoin class. We visit their facility in Rockdale, Texas, every year and they support some of the research on mining here at Texas A&M.
We discussed my journey into Bitcoin from my intellectual roots at the University of Chicago, my efforts to limit the bank bailouts during the Great Recession when I served on the George W. Bush Council of Economic Advisers, and my Bitcoin class at Texas A&M.
Pierre himself is a longtime Bitcoiner with deep knowledge of Bitcoin well beyond mining. If you don’t have time to watch the full 80-minute discussion here, I’ll give you some highlights:
Keep your eye on the ball, and that ball is the Fed.
In the broader conversation of Bitcoin and crypto, it’s easy to get lost in all the noise with altcoins. But let’s remember Bitcoin’s roots. It emerged out of a desire to eliminate central trust.
This is nowhere more evident than the secret message that Satoshi embedded within the Coinbase transaction of the Genesis block. That headline from the Times of London from January 3, 2009 is a reminder for posterity that Bitcoin emerged from the ashes of the financial crisis. In my view, the chief target is, and always will be, central banks.
Store of value versus medium of exchange
Bitcoin technologically dominates gold as a private store of value. And I can see it approaching the market capitalization of private holdings of gold, which today is $3-5 trillion (more if you count jewelry). Displacing the $2 trillion+ of public holdings of gold, mostly by central banks around the world, is a bigger lift. It may take time before central banks elect to hold the very asset that puts them out of business.
I get asked often whether Bitcoin will become the reserve currency of the world, and my honest answer is that I have no idea. There is a lot of distance to travel from store of value to medium of exchange. And to speculate when and how this would happen is, in some sense, no different than central bankers trying to speculate on the course of the macroeconomy.
My position is not that Bitcoin will win, but that it should. It is the best technology for money that we have, and therefore, something that civil society should embrace. We need to see Bitcoin not as inevitable but rather as Satoshi did: an intentional design and a collective effort. This shared responsibility for Bitcoin’s future is, I believe, existential for its future success. Bitcoin will win if we want it to win: it is as simple as that.
What I tell my students: don’t just bet on the future. Build it.
Bitcoin education is still a contrarian bet
I spoke about the process of launching my class and the resistance I faced. Universities respond to incentives like everyone else, and they follow governmental and market priorities. Today, that priority is AI, where all resources flow.
It’s disappointing to me that universities feel the need to follow the herd, as the market will incentivize its own investments in AI. This emerges out of reliance on federal funding of research, funding which inevitably follows the latest trends. Educators, in my view, need to instead invest in more radical technologies that the market will not yet reward. Bitcoin is one, but not the only. I will write about this in a future post on the Bitcoin Labor Market, and the challenges and opportunities there.