This Joe Rogan clip has been circulating crypto Twitter for the past few days and I was going to ignore it but... meh, let's address it. I don't know much about this Peter Zaihan guy, only that he's an analyst of geopolitics. Searching him on YouTube brings up multiple doomsday scenarios, one of which I watched despite the incredibly annoying clickbait title of "Everyone will be Terrified in next 27 days"... which turned out to be nothing but a talk about demographics going from a pyramid to an inverted pyramid. Oh no I'm so scared now. To be fair the information presented in the video wasn't bad. These are known economic models.
Speaking more on this tangent, I find it comical that everyone seems to understand the correlation between a healthy economy and a pyramid of demographics (lots of kids and only a few retired people), but no one makes the connection that it needs to be a pyramid because society itself is a pyramid scheme. The reason why economies completely fail during periods of contraction isn't because that's how economies work; it's because a debt-based society is a cancerous and exploitative Ponzi scheme that only works if more and more people engage in the scam over time. If economies were actually balanced they'd easily be able to withstand periods of contraction, just like ancient Egypt could handle a bad flood year (famine) if their granaries were full. But this is off topic.
lol, yep... pretty much!
How's that for 'liberal' viewpoint?
Right off the bat this guy's face becomes immediately punchable, not because of what he says, but the way in which he delivers the message. He's got the demeanor of a know-it-all college professor who's never actually applied his craft to the real world. His overbearing smug and dismissive attitude regarding crypto is nothing new: we see it all the time with guys like this (mostly economists). These people think they understand how the world works, so rather than actually learn what crypto is all about they just assume they already understand it.
Anyone in crypto could slay Zaihan in a debate.
Just absolutely annihilate him.
Just ask him any basic question.
How many words does a seed phrase have in it?
I don't know.
Okay... what's a seed phrase?
I don't know.
Why does Bitcoin have value?
It doesn't.
Then why is it trading for $17000 per coin?
The market is irrational.
How does Bitcoin maintain security without a central authority?
I don't know.
Can't teach an old dog new tricks.
People like this have ended the learning phase of their lives. Learning is hard. Why learn new things when you can just bullshit the answer using the knowledge that you already have? This is the classic move of the know-it-all, and we see it happen time and time again.
It would be truly comical to find out a critic of Bitcoin didn't know that a seed phrase has 12 words in it. What's the first thing anyone has to do when setting up a wallet? Write down 12 words. A crypto noob with five minutes of experience would be able to tell you the answer, but I get the feeling that the vast majority of crypto critics like Peter wouldn't have the slightest clue. They've already decided the answer without doing a single second of research, and people take them seriously. It's maddening! Just ask the Oracle of Omaha.
Analyzing the analyzer:
Yeah I mean I'm not going to say that it was all frauds,
some of it was a pyramid scheme.
Smuggy McGee has jokes!
There's nothing there... it's not a store of value it's not a medium of exchange.
Such amazingly weak arguments. It is not difficult to show how something is a medium of exchange. In fact if we look at the Investopedia definition we can see that companies used to invent their own private currencies called scrip during the Industrial Revolution into the Great Depression. So private currency issued by a company is a medium of exchange but Bitcoin isn't? Please. That is such an embarrassing and childish take. No contest whatsoever.
As for store of value... I mean Bitcoin doesn't store value, it generates value at astronomical exponential levels, going from $0 to current market value in less than two decades. This value generation creates volatility on the short term and extreme growth on the long term. He's basically just capitalizing on the bear market and FUD like Peter Schiff would do; making the fear-based argument. What is up with these guys named Peter I tell ya.
The one thing he didn't bring up was unit-of-account, which is the one point that he actually should have made. Bitcoin is not a unit of account, and it probably never will be. Goods are services are not going to be priced in a volatile and non-flexible asset. Another cryptocurrency will come along that does this much better so that Bitcoin won't have to. Which is fine. Bitcoin doesn't need to be a UoA. The niche is security.
... if you want it decentralized and not under government control it is a haven for fraudsters, and now it's in the process of going to zero, except for Bitcoin which will probably go negative because if we're moving into a world with carbon taxes you have to take into account the energy it took to produce it in the first place.
Holy hell...
Does this guy love to talk out his ass or what?!
My god.
So where to begin with this... I guess the first question would be... where are these fraudsters you're talking about? There was no fraud in Bitcoin. Bitcoin operated exactly as it was meant to. FTX wasn't crypto fraud, it was bank fraud, and SBF was tipping out politicians and regulators with client funds the entire time. Literally all fraud that happened within this bear market (and any other time for that matter) was the direct result of centralization. To blame it on decentralization is once again a completely childish and comical take on the situation.
And then just when you think he can't say anything dumber he unironically says that the value of Bitcoin will literally go negative because of carbon taxes and people will be paying you to take their Bitcoin so they don't have to pay the carbon tax. What an unbelievable dipshit. That's just... this has to be a troll right? He's gotta be trolling. I feel better now. Jabaited.
There's no intrinsic value to this "asset".
Again he smugly uses finger quotes to describe Bitcoin as an "asset" as if to imply that Bitcoin isn't really an asset. Really? An asset is something that has value. Bitcoin has value. Again, purely just talking out his ass saying things that are provably untrue, but then expects people to take him seriously. Basically telling people not to buy the bottom. I wonder if he'll be telling people to buy at the next top. Would fit the bill.
Another point to be made here is that it is "intrinsic value" that actually deserves the air-quotes.
There's no such thing as intrinsic value. If you approach an aboriginal tribe with a lump of gold as payment for something and they reject the gold, what are you going to do? Explain to them how gold has "intrinsic value" so they must accept it as payment? lol. Different resources have different values to different people for different reasons. There's no such thing as something having universal value in every scenario no matter what. We tend to forget this because society is so connected it can seem like this fact is no longer relevant. If you're starving to death you'd take a lobster dinner over a million dollars (assuming the money couldn't be traded for food). Money is worthless on a deserted island. Facts are facts.
The people who really like crypto are convinced that it's the currency of the future, and a decentralized ledger is the way to go, and that anything that is controlled by government entity is by definition a negative, and if it's done by the private sector freely it will be better, and that's just not how currency works. Currency is a method of exchange and a store of value.
Quite the run-on sentence there bud.
Here we see the real meat and potatoes of the issue here. Basically everything he says here is accurate. This is the pillar of truth he uses to justify all the other bad takes.
It all comes down to:
that's just not how currency works
Oh, I see. So the private sector has never issued currency before. Except when I looked up the definition of medium of exchange the first example I got was corporations issuing scrip to their workers. Oops. So what he is really giving away here is that he knows too much about traditional economics, and traditional economists always without fail will completely dismiss Bitcoin and crypto because it doesn't fit within any of the current models of how currency should work, so they just assume that it doesn't work and avoid doing any actual work or research that would run contrary to their knowledge-base.
Another point to be made here is the simple one: a thousand years ago did governments print gold and silver to use as money? No of course not because you can't print gold and silver out of thin air. Again, this was done by the private sector, that mined the gold and silver. And what happened then? The scammers came and they counterfeited gold and silver to cheat the system. Guess which asset with "intrinsic value" can't be counterfeit? Bitcorn.
Crypto has more trust backing it than any other asset humanity has ever seen. It is always the centralized appendages attached to crypto that end up ruining it for everyone and creating the bear market. However, I believe that this is a necessary evil because growth would be at a snail's pace without any centralization involved.
The craziest thing about Bitcoin is that there will never be more than x number of units of Bitcoin.
Does he really not know it's 21M or just implying that any cap is dumb?
Unclear.
But add this question to the list of questions above for Bitcoin skeptics to fail and undermine their authority.
Well by default that means it can't be used for trade.
Because the whole idea of economic activity is that there's expansion.
Which means you need more currency to lubricate and manage that expansion.
This sounds very much like Keynesian economics to me.
Which is only one way of looking at it.
Again, how does he explain how currency worked when it existed as gold and silver? Can't just print more gold and silver on demand. The logic breaks down when we look at the actual history of economics over time.
To make this argument he was forced to compartmentalize Bitcoin and make the assessment by ignoring every other crypto asset out there. The painfully obvious counterpoint to this argument is to show the synergy between Bitcoin and the rest of the cryptosphere. Bitcoin doesn't need to be elastic, that's not what Bitcoin is about. Another network (or multiple) can handle the elasticity. In fact we see this elasticity hard at work during the bull market when people are degen gambling on the shiny new thing like DEFI 2020. A new currency was launching every single day. Sure, they were scams, but that doesn't mean they're always going to be scams. Some are still around today and may even make it to the next bull run.
If currency is locked into this specific number you get monetary INFLATION, and that is one of the fastest ways to destroy an economic model.
I'm fairly certain he must have meant deflation and not inflation, but his emphasis on the word 'inflation' was so strong that it's hard to tell. In any case he's right, deflation (currency value going way up) is bad for the economy, much worse than inflation. Every economist knows this, and we are probably going to be talking about it quite a bit over the next two years when the FED admits how bad they fucked everything up with their rate increases.
But Bitcoin isn't an "economic model" now is it?
So how can the economic model fail if it doesn't exist?
There is no economy backed by Bitcoin.
El Salvador is testing it in the field, but that's about it.
And they also have USD to fall back on so... no harm no foul.
And then Joe Rogan retorts:
So because of the lack of Bitcoin, because there's a certain controlled number, the only thing that can happen is that Bitcoin becomes more expensive.
Right.
LOL WHAT?!
But it's going to zero though.
But it's definitely gonna be more expensive.
But it's also totally going to zero.
Seriously, pick a fucking lane.
Joe Rogan cripples the argument with one dumbfounded shot in the dark.
lol.
And that means that the people who hold it are the ones that make the money but everyone else suffers? I'm sorry that's not viable.
There's a lot of truth to this as well. Maximalists are always talking about "generational wealth" and "getting in early". Deep down they want to exploit the people who enter later and dump on them and enslave them just like fiat does. That's not a different system. Why would you need "generational wealth" if you've built an egalitarian system where everyone is treated fairly? The logic does not add up unless that's not actually the goal.
The alternative is you have some private dude out there that generates the coins on a whim. How is that different than the monetary authorities we have at the Federal Reserve... except for the point that there's accountability. No... No.
This response lacks any and all vision as to what crypto can do. It can literally do anything; it's programmable. Why is it impossible for crypto to create a decentralized asset with elasticity? This is a topic I have been talking about for years. Again, it just shows his completely lack of understanding and his need to segregate and attack Bitcoin without considering anything else or what developments will occur into the future.
Conclusion
Even though the clip is less than 3 minutes long, it's 100% cringe. I had a hard time watching it even one time, let alone spooling through again and writing this post. How can so many ignorant things be said within such a short timespan? Must be his hidden talent.
At the end of the day no one should take someone like this seriously when they make provably false statements like "Bitcoin isn't a medium of exchange" and "Bitcoin will be worth negative dollars." Absurdist statements like this should completely damage his credibility, but there is no one around to challenge the nonsense that spews out of the "experts" mouths on the Joe Rogan Experience. Take the good with the bad I suppose. Freedom of speech and all that.
The most enraging thing about all of this is how embarrassingly overconfident and smug skeptics of Bitcoin are when it is quite obvious that they know extremely little about it, and instead opt to project their current skill-set onto a completely incompatible paradigm and act as though this is the reason why Bitcoin could never hope to work, even though it has been working better than any other asset in the history of ever. All we can do is ignore the noise and amplify the signal. Eventually, the people who claimed that the automobile and the Internet were simply a passing fad will be called out for the frauds they are.