# Bitcoin 2022 keynote (Miami)

- Speaker: Peter Thiel
- Venue: Bitcoin 2022 Conference, Miami Beach Convention Center. Main stage keynote.
- Date: 7 April 2022
- URL: https://www.youtube.com/watch?v=ko6K82pXcPA (Bitcoin Magazine channel)
- Source method: YouTube auto-generated captions as returned by the web search tool's page capture (YouTube itself is blocked from this VM). Raw machine text: no punctuation, no speaker labels, some mis-hearings. Wrapped into blocks of 110 words for reading only; the blocks are not paragraphs in the speech. Check any quote against the video before use. Press-verified lines are listed first.
- Notes: The keynote opens with a 1999 PayPal video of Thiel (the first block below is that 1999 clip, not the 2022 speech).

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## Lines verified in press reports (Fox Business, Decrypt, CryptoSlate, The Independent, Bloomberg, all 7-8 Apr 2022)

- "Even being in a stock, you're effectively being in something that's like a government-linked entity. Companies — woke companies — are sort of quasi-controlled by the government in a way that Bitcoin never will be." (Fox Business)
- "The real competitor for Bitcoin is not Ethereum. That's a payment system. It's not even gold. It's something like the S&P 500. It's the stock market as a whole." (Fox Business)
- "The central banks are going bankrupt. We are at the end of the fiat money regime." (The Independent; Decrypt has "The central banks are bankrupt.")
- "It is the finance gerontocracy that runs the country versus a revolutionary youth movement. And we have to go out from this conference and take over the world." (The Independent)
- "Enemy number one", "the sociopathic grandpa from Omaha" (Buffett); Dimon has a "New York City banker bias"; Fink on the list too. (CryptoSlate, Finextra)
- "ESG is a hate factory. When you hear ESG, you should think CCP." (Finextra; Decrypt: "When you're thinking ESG, you should be thinking CCP.")
- "Bitcoin is always the most honest market in the world, it's the most efficient market, and it's the canary in the coal mine. It was telling us that the inflation was coming." (Chris on Crypto transcript)

## Raw auto-caption text

how do you move from these physical dollars to electronic dollars uh I think the basic technology is going to take place on the internet I think the specific platform in the emerging World um is going to be on a cell phone platform if you look at the numbers there are about 360 million um about 150 million online desktop based accounts today that number is projected to grow to about 300 350 million in the next 5 years however with respect to cell phones internet and able cell phone they're just getting rolled out right now they already have some significant penetration in Japan in Finland in Sweden

they're getting rolled out in Western Europe the us next year uh the numbers are projected to grow from about 10 million internet Naval cell phones today to about 1 billion in 5 years in 5 years from now everybody who is a member of the middle class in the emerging world and in the developed world will have an internet enabled cell phone and this sort of a cell in in the numbers project to be going go to something like 300 million cell phones most of which will be internet enabled these people will have access to um their bank accounts and it will be very easy for

them to move money into an account in a safe jurisdiction where um where the banks are not politically controlled um and they will basically be able to completely dollarize the economy there will be no need to have any rubles or animi and it will be non-traceable no matter how illegal the Chinese communist government says it is to hold US Dollars you will have a password on your cell phone and the only way to stop this process would be literally to shut down the Telecommunications Network and that's the kind of choice governments like China India some of these other countries are going to face they will

either have to shut down the Telecommunications Network and make it illegal for you to own a cell phone or they will have to basically uh give up the kind of monetary sovereignty they've had and the enormous power that uh they've been able to wield as a result of this kind of sovereignty over the last uh many many years hello thank thank you so much for having me here it's uh you know there's so much I was wrong about in 1999 but I thought I'd reflect on some of the things I was thinking at the time give some perspective on what it means for for the

world today of 2022 you when I was running PayPal when I was getting it started the standard way I'd start an investor pitch would I'd hold up several hundred bills and would always get people's attention it's kind of hypnotic you know even though you know it's really weird what is what is this I mean it's it's probably not very good as toilet paper it's not good as wallpaper it's um it's sort of this crappy Fiat money it's a very mysterious thing what is money is it a network effect you know um you know would would would the gentleman in the front row like to have

the money to somebody come up and get it but uh I'll do it I don't how to throw it out at [Applause] people I thought I thought you guys were supposed to be Bitcoin maximalists you know and so uh and so this is like it's it's like kind of crazy that this stuff still works you know um but you know when we and and when we were starting PayPal we knew nothing about money about banking about payments about any of the stuff it was sort of uh all thought of from first principles we probably got a lot very wrong I I'll mention the two slides

uh that describe what we thought we were doing this is the PayPal February 1999 seed Round Pitch we were going to replace uh we said the US Treasury we actually meant the the central bank we didn't know the difference between the two um but it was going to be sort of a Clos loop system a new form of money new network effect um electronic 21st century version um of uh of money by uh 2002 at the time of the IPO the PayPal business model looked like a funnel where the money went in and out fast and I just want um and you know this was

it was just it was a payment system and I want to just start that those two pictures a closed Network versus a funnel are are two very different pictures you know in some ways this was a more practical IC business it was but it was a decline it was much less ambitious money goes in and out super fast and I think one of the ways to think about um all of these different things this is not a perspective I had at the time but if you think about these different forms that money can take you can have forms of money that are high velocity where

it moves super fast but then you don't actually need that much um in in the form that it has it's just like maybe an accounting device or something like that and if you have forms of money that are intrinsically low velocity then um the quantity you need is is much much greater and it's this inverse relationship that go goes across many different forms of money and so the uh the PayPal 1999 was a closed loop where You' you'd have this enormous uh store of value that gets built up the PayPal 2002 was sort of a high velocity Loop you know and this is of course

also analogous to something like gold ion is store of value low velocity money it moves once you know every few decades in a central bank vault Visa super high velocity moves trillions of dollars a year but Visa itself doesn't need to have very much money on on its own and I think one of the reasons people always get uh these two different modalities confused they're like radically different kinds of products is that when we think of money we are still always just thinking of the $100 bill that I presented you at the beginning and physical cash is it's it's sort of the one very weird

form of money that's actually sort of intermediate velocity and intermediate value it's not really great at either you know you can um you can store money in a piggy bank physical cash you can you store it in mattress that's that's getting pretty weird you can maybe use it to buy you know pay for a restaurant or Club a you know a uh maybe a used car probably gets hard to use physical cash to buy for a house so it's sort of both it's not that great at either payments or store value but it's in between and because we always think of physical cash when we

think of money we tend to think store value and uh and sort of high velocity things are the same even though in practice most things are at these two opposite end ends of the spectrum and then you know I I want to uh I want to obviously suggest that you know Bitcoin and ethereum are at these two extreme opposite ends of the spectrum Bitcoin store value gold replacement ethereum if it works is going to be sort of the super high velocity fast fast moving thing and um and the thing that's sort of I would say fundamentally honest about Bitcoin is that we are just at

this one you know sort of low velocity high value end of the spectrum and then if you look at something like ethereum you are um um you you you you you will say that it's High Velocity it's going to be sort of a frictionless payment system but then it's also going to have in incredible amounts of intrinsic value and there's probably something about all those things that doesn't quite add up um you know so if we if this is by the way this is a I I I took I took this slide from a from a vitalic from vitalic himself so uh so uh this

was uh uh um and there's sort of a question how do we compare and contrast them and um and so if we if we look at the current market caps 830 billion versus 386 billion of ethereum but if we if we map Bitcoin onto gold and ethereum onto Visa um well ethereum is worth roughly as much as Visa so it's fairly valued you know if if you have a a seamless frictionless payment system you know it's worth $400 billion as it works the gas fees have to go down it has to become completely frictionless to work um and then whereas gold is um is 12

trillion and if if Bitcoin is going to replace gold the question is really why is it so undervalued what is it going to take for it to go up uh the 10x I'm going to close on that close on that a little bit later um um we can um uh yeah so the sort of are all these um all these different ways Bitcoin is going to um has every potential to replace gold question is uh why it has why it has not done so yet um now I think there's if we take one step further back we can even ask a question why is you

know why is gold worth $12 trillion how much how much should all the gold in the world be worth and um and if we look at say the 1970s um gold did remarkably well um and uh you know stocks were were kind of a crappy investment and um and it's sort of very different from today so if you look at all the gold in the world today versus all the publicly traded equities in the world today it's about 12 trillion of gold 115 trillion of equities roughly a 10:1 ratio if you look at sort of the peak of um the of the of the bull

market in the late 70s early ' 80s uh where gold peaked at about $850 an ounce in nominal dollars at the time all the gold in the world was worth about 2.5 trillion all the publicly traded equities were worth 2 and half trillion and the ratio was actually 1:1 and so one of the questions you have to ask is uh yeah why why is the ratio um 10:1 why can't it be 1:1 it should be 100 to1 it can be all over the map what what defines these kinds of ratios and I would say the I would say sort of one one simple version is

um is that uh in the 1970s you know cash was trash Bonds were trash but equities were pretty bad Investments as well because in an inflationary World um in a high regulation High inflation High tax World um the effective capital gain tax rate goes well north of 100% because you don't set the basis uh on on equities you don't adjust it to inflation and so uh equity's become an extraordinarily bad investment in the world of the 2010s you know gold did pretty well Bitcoin did extremely well but the real competitor uh for you know Bitcoin is not ethereum that's a payment system it's not you

know it's not even gold it's it's something like the S&P 500 it's the stock market as a whole and this is what you know this is the way Bitcoin trades every day you know if the stocks go up Bitcoin Goes Up N it's like a highly levered NASDAQ stock on a day-to-day basis and and that is sort of in a sense the real competitor and the question is um whether we're headed towards a kind of 1970s style world where it's higher inflation more regulation um and um and even being you don't want to be in a stock or Bond but even being sorry you don't

want in cash or Bond but even being in a stock you're effectively um in something that's like a government linked entity companies woke companies are sort of Quasi controlled by the government in a way that Bitcoin never will be and uh in that sort of a world um I I would submit that perhaps the way we should think of the Bitcoin to equity R you know the Benchmark for Bitcoin Is Not Gold but equities and the question is why can't there be parody between Bitcoin and equities why why shouldn't we be talking about something more like 100 to one which of course won't be won't

be as good as it sounds because um the Fiat money will be worth a lot less and it'll be taxed pretty heavily and and whatnot but I think um but I'm I'm still hopeful that if uh Bitcoin goes up by a factor of 100 you will uh you'll make um some money a modest amount of money in uh in real terms um now you know there there are sort of um at the very minimum what I think um you know it's always hard to know where Bitcoin goes from here it's $443,000 today where does it where does it go um what I what I like

to say is that Bitcoin is always the most honest Market in the world it's the most efficient market and it it was it was the canary and the coal mine it was telling us that the inflation was coming in the last uh two years as it went from 5 6,000 uh up by you know a factor of 10x it it is telling us that the central banks are bankrupt that we are we are at the end of the Fiat money regime and that's sort of uh that's sort of what it has what it has priced in I think the central Bankers Mr Powell people like

that should be extremely grateful to bitcoin because um it's it's the last warning they're going to get they are they they they've chosen to ignore it um and um and they will have to you know pay the consequences for that in in the years ahead but let me um let me ask let me U let me come back to this question um why why has bitco coin not yet gone to$ 100,000 to a million dollars of Bitcoin why has it not yet converged with gold or um or even with the equity markets more broadly and what what is what is going to you know what

is what is it going to take for this for this to happen and uh you know I know that sort of the ways we often talk about um businesses or Technologies is you know how how great the technology is how great the code is how great the math is uh you know how how how how it's sort of innovative but I I want to sort of suggest that we should maybe think of we should think of um we we should think of it at least in one dimension as sort of a political question and it's a it's a movement and it's a political question whether

this movement is going to um succeed or whether um whether the enemies of the movement are going to succeed in stopping us and uh and so I want to maybe end with um you know an enemies list a list of people who I think are stopping Bitcoin and you know they all have many of them have there's sort of a lot lot of them they tend to have the sort of nameless faceless bureaucrat perspective which is of course one of the ways they hide um but I'm going to we're going to try to try to expose them and uh and and realize that uh that

this is sort of what we have to fight for uh for Bitcoin to go 10x or 100x from here so um Enemy Number One I I think he sort [Applause] of um I I I think the sort of the the sociopathic Grandpa from Omaha is um is um you know uh is is perhaps the most honest and the most direct in it um and um and you have to sort of think of it's It's of course on some level these people areen always just talking their book it's sort of they have some sort of institutional bias uh it's long you know a list of woke

companies it's it's it's it's somehow long this um this Fiat money system and um and of course um if if it was if it if the you know there's always a sense if you're a if you're a money manager you want to pretend that it's complicated to invest and uh if if if all you have to do is buy Bitcoin you know that's that's like that's like ridiculous all these people out of business you know it's uh I mean there there was a version of this also with gold they never like gold either because if all you had to do was own gold um that's

something everybody can do um but uh there is something there's sort of an Institutional bias a a um sort of a um Central left political bias um you know there's of course um there's of course the um um there's of course the New York City uh Banker bias um Jamie Diamond JP Morgan you can get quotes like this from from any number of these people uh and then then I would say um you know another another one even more obscure Larry thinkink the CEO of B Black Rock where um you know uh if if you have these sort of large institutional investors um they need

to be allocating some of their money to bitcoin when they manage State Pension funds in the US or or or or they they get trillions of dollars in assets when they choose not to allocate to bitcoin that is AEP political choice and we need to be pushing back on them we need to say you know um you have to you have to get on board on this and um the um the the the Larry fin quote is sort of rep representative I think of a whole genre of anti Bitcoin things where uh you know um and you have to always put in some context but

pro blockchain pro blockchain is an anti-b Bitcoin term very typically so it's like I love the blockchain but you know not so sure about this Bitcoin need Bitcoin we can move onto the blockchain move along this is not you know not the currency you're looking for Move Along move along and um and uh but you know if we sort of combine um all of these things you know I I would sort of put put the label on um on the sort of uh you know on on the sort of um the the label they've come up with and perhaps the real enemy is uh ESG

um and um and which you know I I I I you know it's always sort of unclear what it means you know um you might think of it is not charitable for me to sort of name some enemies here but I I think that ESG is just a hate Factory it's a factory for naming enemies and uh we should not be allowing them to do that or um or that you know of course you can you can sort of always ask the question you know what's the difference between ESG and CCP the Chinese Communist party you know they are they are into social and governance

um you know environmental is sort of fake uh it's probably also fake in a lot of these cases but uh but I always think when you think ESG you should be thinking CCP um and um and there's some there's some degree um you know and and it's it's been a surpris you know ESG has been surprisingly inclusive you know basically as far as I can tell the only the only things that are sort of not liked are you know some of the some of the carbon Industries and then um and then Bitcoin and uh it's because most of the other companies you know they are

they are subject to political control especially when they when when your companies go public you know I always I I always advise CEOs when they take their companies public you know there's some good things you get liquidity you you can you know the early investors can cash out um um you can get some credibility but um it's basically taking a company public it's a it's a de facto government takeover where where some people who are effectively government bureaucrats became more empowered it's the the CFO The General Counsel the accountants the lawyers the uh you know the HR people all these sort of extensions of the

state um are given more power uh and uh and we have to think of ESG as sort of this this vast um umbrella thing and uh and and we're you know sort of one of the one of the um great features of Bitcoin and it's always a question whether it's a bug or a feature but I would submit that in the sort of more heavy-handed uh statist world it is far more of a feature than a bug is that Bitcoin is not a company it does not have a board um we do not know who Satoshi is um and uh and in some ways all

these things seemed extreme in the world of the 2010s where you know the inflation was low the regulations were were not the worst um and it seems um seems extremely preent for the world of the 2020s and uh if we had a summarize this in in uh one frame it is um it is it is the J the the finance gerent talky that runs the country through um whatever um you know whatever uh silly virtue signaling slate Factory term like ESG they have um versus what I would call you know what what we have to think of as a as a revolutionary youth movement and

uh and we have to just go out from this this conference and uh and take over the world thank you very much welcome back we're here at the marathon news desk at Bitcoin 2022 presented by Bitcoin magazine I'm Pete Rizzo editor of Bitcoin magazine we're back with our panel Mr Mark Moss Kevin o and Nolan bowly first like and smash that subscribe button you just watched a Keynotes by entrepreneur investor and philanthropist Peter teal co-founder of PayPal this was high uction he led with a video of himself as a youth saying things about money that we say about Bitcoin today uh throwing money into the

crowd but also doing some other things comparing Bitcoin to ethereum uh saying that Bitcoin is too slow uh saying that the competitor to bitcoin is the S&P uh making a lot of statements here also saying uh being pro blockchain is anti- Bitcoin where do you guys want to start with this speech let me take a stab at it go back to the beginning of the presentation uh the one that I found most interesting was comparing Bitcoin valuation or total market cap to that of the S&P 500 now the the reason that's a difficult comparison uh at this point is the S&P 500 is primarily owned

by Sovereign wealth and pension plans uh when you have $250 million a day to put to work the only place you can find liquidity of that size is the S&P 500 it's the largest market on Earth represents the largest companies on Earth and is a store of value even in inflationary times the challenge with his analogy in asking why Bitcoin is is not a challenger cuz he showed the analogy at a period in time gold market cap was equal to that of the S&P that was very interesting that chart right now there isn't a single pension plan or soling weal fund that is allowed to

buy Bitcoin so if you want to see it compared to the S&P 500 which is what they buy all day long 247 you have to set the playing field level which means we need policy to allow pension plans both Sovereign wealth plans and domestic to buy Bitcoin as an asset you can't do that yet and in order for that to happen you will have to get the government to agree and the SAT to agree and the regulator to agree and the infrastructure that provides compliance and the ESG committees and the the ethical committees to agree to allow them to buy it and we're a little

ways off but when that happens you will see Bitcoin break out of its current trading range because it will be allocated and then it'll start to appreciate Kevin you're taking a positive take Bitcoin equities good comparison Mark yeah I want to jump in I mean I would definitely agree with Mr O on this Mr Wonderful um it's we're going to need to couple changes to happen and when that when that change happens they'll be coming in but I think the big thing that I saw in that comparison equities 115 trillion Bitcoin 88800 billion I think what we're going to see is that because we've been

in this inflationary monetary system there's nowhere good to park your money as Mr Larry points out you have $250 billion what are you going to do with it you have to put it in the S&P that's the only place that can take that much money when we have a better when we have a superior asset that we can put money into it's going to pull monetary premium from other properties so silver has industrial use gold has a monetary premium and I think we're going to see monetary premiums being sucked out of real estate being sucked out of the equities markets as well because Bitcoin will

be that pristine asset running short in time here he did say the dirty word ethereum reactions to the floor uh what did you make of his comparison Bitcoin to ethereum I thought he got into trouble with those analogies that's you know analogies can be really unpersuasive because it's so easy to see the holes in them and you know Arthur Hayes who I think is one of the best writers entrepreneurs in this industry he set that stage already for most of this industry and for me in particular when he mentioned that okay ethereum has a potential to like take the walls Street piece Bitcoin really is

you know something for savings something for for people to put their store value again I think it was an attempt to pigeon hole Bitcoin in this world of crypto assets to the floor for remarks well what he got wrong in that comparison with Bitcoin ethereum is he pointed Bitcoin as a place to store value but um ethereum has more velocity so it's better of a medium of exchange and he's got that completely wrong because Bitcoin is a new technology that allows us to have the superior value storage properties of Bitcoin but also has the velocity of instantaneous and and free transfer so it's both wrapped

into one we don't need two assets like we used to before we wrap up I just want to note he did say a few other things that are positive Central Bankers should be grateful to bitcoin saying that Bitcoin has these enemies the sociopathic Grandpa from Omaha Jamie Diamond the floor there's nothing wrong with making that comparison however that's not what Jamie Diamond said he's saying my clients want this and we're going to start to accommodate them that's what we are we're a bank if they want to buy the asset remember Bitcoin is software ethereum is software you can decide on your own which software provides

more productivity more cost savings whatever you want but it's just software and if you if you're willing to invest in Microsoft or invest in Google you're just investing in software too so at the end of the day that's how you should look at it sure but software is political and that's where I thought he really found his Pace in this in the whole talk when he was really talking about it's a political Choice saying your pro blockchain is a political Choice it's not neutral it's not technology Bitcoin itself and you didn't agree with that I certainly agreed with that I I think this whole thing

is a world view and Bitcoin does offer a way to organize markets and see the whole world it's not just about the asset certainly a lot to unpack a lot to discuss but unfortunately we have to throw back to the main panel stage we've got Bitcoin is freedom coming up moderated by Alice gladstein author of checky financial privilege you can find that one on the Bitcoin magazine.com backstore uh keep it tuned here smash that like button uh we'll be here all day on YouTube bringing the best from Bitcoin 2022 Miami