Bitcoin: A Novel Economic Institution with Yassine Elmandjra

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“Bitcoin is not going away… whether or not you like it, whether or not you have qualms with it, whether or not your government has banned it or you know of a government that has banned it. It lives and breaths on the internet and is effectively unstoppable.”
— Yassine Elmandjra

SHOW DESCRIPTION

Location: Squadcast
Date: Wednesday 23rd September
Company: Ark Investment Management
Role: Thematic Analyst

Before the advent Bitcoin, financial systems operated based on trust. Central banks, government-issued fiat money and payment processors all rely on trusted third parties. Relying on trust-based systems leaves the user vulnerable to decisions that do not necessarily benefit them, from inflation of the money to supply to the censoring of transactions.

Bitcoin changes this.

With Bitcoin, there is a fixed supply and rigid monetary policy, and the rules of the system can't be changed at the whim of a small group of people. Add to this the ability to truly custody your wealth; it is clear to see why Bitcoin is so revolutionary.

Not everyone has been quick to pick up on Bitcoin. Many institutional investors are still sceptical for many reasons, from the old defunct arguments that Bitcoin is for criminals and terrorists to concerns around price volatility. However, there are signs that institutions are beginning to shift their thinking, highlighted by MicroStrategy's recent decision to move $425 million of their treasury into Bitcoin.

In this interview, I talk to Yassine Elmandjra, a Thematic Analyst at Ark Investment, who recently published two whitepapers on Bitcoin. We discuss trust-based v trust minimised systems, property rights and institutional investment in Bitcoin.

TIMESTAMPS

00:04:42: Introductions
00:07:09: Kraken Financial and the trust-based model
00:10:45: The information revolution
00:16:34: MicroStrategy
00:19:34: The evolution from the physical to the digital world
00:24:42: Inherent weaknesses of the trust-based model
00:30:07: The four economic assurances…
00:30:53: 1 - "Value should be exchanged globally and freely"
00:37:13: 2 - "Wealth should be owned wholly and protected"
00:42:33: 3 - "Rules should be enforced reliably and predictably"
00:48:36: 4 - "The integrity of the system should be verifiable"
00:51:42: Zero reserves v 100% reserves
00:55:09: Second part of ARK's whitepaper
00:57:41: The Bitcoin opportunity in numbers
01:06:00: Final comments

 

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SHOW NOTES

PodcastPeter McCormack