Innovation: Bitcoin at the Center of the New Financial System
In this episode of Wealth Building Made Simple, Phillip discusses the evolution of global economic systems and the potential for Bitcoin to become the foundation for a new financial system. He highlights successful components of past systems, such as the Venetian network's extensive trade network and innovative banking idea of double entry bookkeeping, the Dutch's use of joint stock companies and a stock market, the UK's successful management of currency and long period of low inflation due to their strict adherence to the gold standard, and the US's innovation in its democratic system, which fosters a culture of innovation and reinvention.
The new world being built is a globally connected internet economy, and the financial system of this economy is crypto, particularly Bitcoin. Bitcoin has the potential to become the gold of this system due to its transparency and decentralized nature. It incorporates the successful components of past systems, such as transparent bookkeeping and a lack of central authority, while also being limited in supply like gold. It’s Phillip’s belief that Bitcoin will be the anchor asset and the most creditworthy coin, serving as the pristine collateral of the digital financial system being built.
Bitcoin will operate as the gold to where, if different people trade in different currencies like ethereum, US dollars, Yuan, or whatever, and things out of whack, Bitcoin will be the asset that people are most willing to lend and settle against. Banks will lend in different currencies, but Bitcoin will be the most trusted currency. Understanding how the system works and the mechanisms behind it will reveal why so much building is going into Bitcoin. While Bitcoin won't be the only currency, it will play a role similar to gold as the pristine collateral of the digital financial system being built.
| **Timestamp** | **Summary** |
| ------------- | ----------- |
| 0:00:01 | Introduction to the podcast and sponsor |
| 0:00:44 | Introduction to the topic of a world with bitcoin at the center |
| 0:01:18 | Explanation of emotional intelligence and promotion of Wealthbuildingmadesimple.us newsletter |
| 0:02:38 | Overview of global financial systems throughout history, starting with the Venetian network and double entry bookkeeping |
| 0:04:21 | Discussion of the Dutch and their extensive trade network and empire |
| 0:05:15 | Discussion of business competition and the evolution of innovation in financial systems |
| 0:05:59 | Explanation of the UK's management of currency and use of the gold standard |
| 0:07:02 | Discussion of the US's culture of innovation and democracy |
| 0:07:30 | Explanation of the hyperconnected internet economy and the innovation of crypto |
| 0:09:10 | Introduction to bitcoin as the epitome of transparency in the digital world |
| 0:10:26 | Discussion of Bitcoin as a credit-worthy coin and its role as an anchor asset |
| 0:13:10 | Bitcoin's role as the pristine collateral of the digital financial system being built |
"Bitcoin, it's a super transparent system."
"It builds upon the lessons from all the previous generations into a currency, but it doesn't mean it's not going to be other currencies."
"And what's the most consistent currency to date? Gold, because it's lived through every economy, because it can't be changed. So then you go to internet currency and you go, all right…Which one has the biggest network and can be changed the least? It's Bitcoin."
"Because what ends up happening is if somebody wants to lend me money in whatever currency and they want collateral and I got Bitcoin, they'll lend me whatever currency I want against the Bitcoin because it will be the most trusted currency."
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Phillip Washington, Jr. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
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