The Peter McCormack Show: "Gradually then Suddenly Pt 1 - Killing the FUD with Parker Lewis (WBD358)"
Host: Peter McCormack
Guest: Parker Lewis
Release Date: June 9, 2021
Podcast: The Peter McCormack Show
Episode Title: Gradually then Suddenly Pt 1 - Killing the FUD with Parker Lewis (WBD358)
Introduction
In this engaging episode of The Peter McCormack Show, host Peter McCormack welcomes returning guest Parker Lewis to delve into the "Gradually then Suddenly" series. This series explores foundational concepts of Bitcoin, aiming to dispel Fear, Uncertainty, and Doubt (FUD) surrounding the cryptocurrency. The conversation begins with a recap of initial challenges faced during their first recording attempt and sets the stage for an in-depth discussion on the nature of money and Bitcoin's role in the modern economy.
The Foundations of Money
Timestamp: [00:55]
Peter introduces the episode by highlighting the importance of understanding the fundamental concept of money to grasp Bitcoin's significance. He states:
"In this first episode, we start with the fundamental question that everyone must understand before they can understand bitcoin. What is money?"
Parker emphasizes that Bitcoin compels individuals to consciously examine what money truly is, a question often overlooked in everyday life.
"One of the best things about bitcoin is that it forces people to consciously consider that question because it's a big question and it's not one that is particularly intuitive."
— Parker Lewis [00:24]
Bitcoin's Role in Solving Monetary Problems
Timestamp: [08:33]
The discussion pivots to how Bitcoin addresses the fundamental problem of trade and exchange. Parker explains that money exists to solve the issue of coordination in trade, allowing people to exchange value efficiently without the limitations of a barter system.
"Money solves a problem that everyone on earth has, which is a problem of trade and exchange."
— Parker Lewis [08:33]
He underscores that Bitcoin's fixed supply of 21 million coins introduces scarcity, ensuring that the value is preserved and not subject to arbitrary inflation.
Real-World Insights: Experiences from Developing Countries
Timestamp: [18:10]
Parker shares his firsthand experiences from traveling to countries like Venezuela, Cambodia, and El Salvador. He observes that in nations where local currencies have failed or are unstable, Bitcoin emerges as a preferred medium of exchange and store of value.
"In El Zonte, almost every store accepts bitcoin. People intrinsically understand why bitcoin is a better form of money."
— Peter McCormack [18:10]
These real-world applications illustrate Bitcoin's potential to provide financial stability and autonomy in regions plagued by economic instability.
Addressing Bitcoin Volatility
Timestamp: [29:36]
Volatility is a common criticism of Bitcoin, often cited by skeptics as a barrier to its adoption as a stable currency. Parker addresses this by linking volatility to Bitcoin's limited supply and increasing demand.
"Bitcoin is both volatile, because there will only ever be 21 million Bitcoin, but that is also the fundamental reason why people demand it."
— Parker Lewis [29:36]
He explains that as more people adopt Bitcoin, its fixed supply leads to price fluctuations, which is a natural phase in the adoption of any new economic system. Over time, as adoption reaches critical mass, volatility is expected to decrease.
Debunking the Energy Consumption FUD
Timestamp: [46:37]
One of the most persistent criticisms against Bitcoin is its energy consumption. Parker counters this by arguing that Bitcoin's energy usage is integral to its function as a decentralized monetary system.
"Bitcoin does not waste energy because money is the first order. The highest and best use of energy becomes securing the monetary network."
— Parker Lewis [46:37]
He asserts that the energy consumed by Bitcoin mining is justified as it underpins the security and functionality of the network, which in turn supports global trade and economic coordination.
Bitcoin and Regulation: The Myth of 'Bannable' Cryptocurrency
Timestamp: [67:54]
The episode tackles the notion that governments can ban Bitcoin. Parker dismantles this idea by explaining Bitcoin's decentralized nature and its resistance to censorship.
"Bitcoin is functional as money because it credibly enforces a fixed supply of 21 million. If a government wants to ban Bitcoin, it signals that Bitcoin is working."
— Parker Lewis [67:54]
He further elaborates that attempts to ban or regulate Bitcoin at a national level are futile due to its global and decentralized network. Historical precedents, such as the prohibition of gold in the 1930s, demonstrate Bitcoin's resilience against governmental suppression.
Bitcoin and Criminals: Separating Fact from Fiction
Timestamp: [107:55]
Parker addresses the frequent association of Bitcoin with criminal activities, clarifying that Bitcoin, like any form of money, can be used both legitimately and illicitly. He draws parallels with other tools such as the internet and firearms, which are used by both law-abiding citizens and criminals.
"Criminals are not in the money-losing business. They are in the profiteering business. Dollars are the preferred currency of criminals everywhere."
— Parker Lewis [107:55]
He emphasizes that the misuse of Bitcoin by a minority does not negate its value and utility as a globally recognized monetary system. The core functionality of Bitcoin as a secure and decentralized form of money remains unaffected by its potential misuse.
Conclusion
Timestamp: [125:31]
Peter wraps up the episode by reiterating the importance of Parker's insights in understanding Bitcoin's true value and addressing common misconceptions. He encourages listeners to explore Parker's "Gradually then Suddenly" series for a deeper comprehension of Bitcoin's foundations.
"Bitcoin is not too slow... Understanding why the foundational layer of Bitcoin works, how it provides security, how it provides decentralization, this was the most important lesson."
— Peter McCormack [84:48]
Parker adds that Bitcoin's design inherently solves fundamental economic problems, making it a robust and sustainable monetary system poised for widespread adoption.
Notable Quotes:
-
Parker Lewis [08:33]:
"Money solves a problem that everyone on earth has, which is a problem of trade and exchange." -
Parker Lewis [29:36]:
"Bitcoin is both volatile, because there will only ever be 21 million Bitcoin, but that is also the fundamental reason why people demand it." -
Parker Lewis [46:37]:
"Bitcoin does not waste energy because money is the first order. The highest and best use of energy becomes securing the monetary network." -
Parker Lewis [67:54]:
"Bitcoin is functional as money because it credibly enforces a fixed supply of 21 million. If a government wants to ban Bitcoin, it signals that Bitcoin is working." -
Parker Lewis [107:55]:
"Criminals are not in the money-losing business. They are in the profiteering business. Dollars are the preferred currency of criminals everywhere."
Key Takeaways
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Understanding Money: Grasping the foundational purpose of money is crucial to understanding Bitcoin's role in the economy.
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Bitcoin's Fixed Supply: The limited supply of 21 million Bitcoins ensures scarcity, driving demand and value.
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Real-World Application: Bitcoin serves as a reliable medium of exchange and store of value in economically unstable regions.
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Natural Volatility: Bitcoin's price fluctuations are a natural consequence of its adoption phase and fixed supply dynamics.
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Energy Consumption Justified: The energy used in Bitcoin mining is essential for securing the network and maintaining its decentralized nature.
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Resistance to Ban: Bitcoin's decentralized and global network makes it resilient against governmental attempts to ban or regulate it.
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Misconceptions About Criminal Use: While Bitcoin can be used illicitly, its primary function as a secure and efficient monetary system remains intact and valuable.
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Scalability Solutions: Technologies like the Lightning Network are being developed to enhance Bitcoin's transaction speed and capacity without compromising its fundamental principles.
For listeners seeking a comprehensive understanding of Bitcoin's foundations and its capacity to overcome prevailing misconceptions, this episode provides invaluable insights. Parker Lewis's expertise and clear articulation of complex concepts make this a must-listen for both newcomers and seasoned Bitcoin enthusiasts.