Nick Szabo

So now we have to understand and think about what makes a thing money.

What makes it good? And this is from Nick Szabo.

One, hard to lose or steal.

Obviously, if the money was trivial to take or easy to lose, that would be pretty bad because you can work and fix all the windshields or work and do your job and then you lose it or then someone else takes it from you.

Correct.

So to finish the thought with Nick Szabo, he's basically saying that Gold or money is the asset that is least sensitive to or vulnerable to those types of manipulations or the need to trust anyone.

Again, they can run paper markets, 200 bucks and try to attack gold.

It's the most powerful nation in the world.

Like money doesn't measure value per se, but it is measuring inputs and outputs in that way.

And so I think what we're doing with money, to bring this to the answer, like what is money, is Money is something like a tool that lets us metaphorize the complexities of human action in terms of mathematics, something that's very wet code, as Nick Szabo would say, hard to measure, hard to quantify, et cetera, into something that's very dry code.

It's very quantifiable, algorithmic.

You can perform operations on it.

There will only be 21 million coins or units of Bitcoin forever, not because someone promised, but because the protocol and the math don't allow more.

Nick Szabo, who designed the conceptual ancestor of Bitcoin in the late '90s, called this property unforgeable costliness.

His exact phrase was, "Precious metals and collectibles have unforgeable scarcity because they are costly to create." Bitcoin is that property translated into pure digital information.

It's energy you spent in 2025 that still pulls weight in 2055 because nobody can dilute it out from under you.

It's not having, you know, lots of liquidity in markets so that bid offer spreads are really tight.

To me, the most profound thing that anyone has said in the last several years about crypto and Bitcoin is Nick Szabo in 2021 at Bitcoin 2021.

He gave a talk where he basically said liquidity is nice to have.

Sure, it's great bringing all these suits into these markets, but that is not what we're here for, to answer your earlier question.

It was before blockchain, it was before smart contracts.

It was after Nick Szabo's conception of smart contracts, but before blockchain.

But what you, what you've been saying about verifiability and about where I, where I was-- and about the economy and where, where my brain was going when you talk about the economy is the law.

It's like-

And I guess if you look at it, I think Adam Back is British, so he's a bad example.

Also, Nick Sabo is not mentioned in the white paper, but we know that he had the closest idea to Bitcoin with Bitgold.

And he's also American.

And the entire group of cypherpunks and the idea of digital cash, which derives from the works of David Chaum, it's all very American.

He made a crop and said, this is mine.

And the second idiot is the one who believed that and said, I'm not going to touch it because it's yours.

But realistically speaking, if you read Nick Sabo's studies on the history of money and how societies have evolved, actually, it was money that helped us create communities and trust each other and has obliged us, more or less, has pushed us to... get outside our communities and interact with the others and look for the resources and earn trust.

Ultimately, money is a token of trust.

What it absolutely cannot do is fabricate energy that was actually physically spent.

There's an old cypherpunk phrase by Nick Szabo that I've used a lot, unforgeable costliness, and it has never mattered more than it does right now in this moment.

In a world about to be flooded with infinite costless AI generated claims about literally anything, the one thing that can't be generated is proof that real energy was actually burned to produce it, and that's what a Bitcoin block is.

That's what makes the ledger trustworthy in a world where trust is about to become the scarcest resource of all.

Thank you to everyone at the SEC for working so hard on this.

And maybe you've already read all 401 pages, maybe not.

Either way, you'll finish this podcast understanding everything you should know about reg crypto and what it means for projects and their lawyers.

Let's start at 10,000 feet.

There are six conditions to this startup exemption.

Projects can raise up to $5 million.

It is a one-time use, so you can't have already relied on it or reenter it.

There's that four-year window for sales, so distributions under this exemption to occur.