Monero: Sound Money, Safe Mode

I'm Dr. Daniel Kim, Founder and CEO of Sweetwater Digital Asset Consulting. This talk is called "Sound Money, Safe Mode" and it is a broad, big picture introduction to cryptocurrency and Monero. A little bit about myself — so, academically, I'm trained as a particle physicist — I did my undergraduate and graduate work in experimental particle physics at Harvard. There, I had a habit ingrained in me to always look at data, so there's going to be a lot of data shown in this talk. Most of my career was spent in the non-profit sector. My first job out of grad school was with a symphony orchestra, where I ended up doing about 700 concerts professionally — first as a violinist, and then later as a keyboardist. Concurrently with that, I jumped through the hoops to become board certified in radiation oncology physics. Then as a medical school professor in medical physics, I helped about a couple thousand patients with their fights against cancer, by helping with the technical aspects of delivering high intensity radiation.

It was as a med-school professor that I did my perhaps most "DEF CON" thing, which was to invent a device that did packet sniffing on a medical network to reconstruct treatment data being delivered to cancer patients just before the time of treatment. I signed up for the Executive MBA program at Yale because I thought that I wanted to show an interest in the way that the world works in a different way than in physics. Of course in physics, you're getting at how the world works at the smallest levels but then to think broadly about "real world" human problems from a variety of perspectives, the MBA is good for that. While doing that, I made a switch to the for-profit sector — I joined a small hedge fund and I became Director of Research there.

I was a co-author of a paper that won the top research award of the CFA Institute. That paper was about the effect of liquidity on asset prices. In my spare time, I was getting more and more interested into cryptocurrency and then I made a decision that this was a genuine innovation, of which there are not that many that happen in one's lifetime, so I jumped to my own small business, which is what I do now as an independent consultant. Now I help bridge two very separate worlds as the founder and CEO of Sweetwater Digital Asset Consulting — there's the world that DEF CON represents, which is a non-commercial, open source, cypherpunk, grassroots, cryptocurrency culture — and on the right side is the very parallel universe of traditional asset protection, trust and family office portfolio management, estate and tax planning.

These two separate worlds know very little about each other, in practice — they often make assumptions about each other that are based in fear — and so as one who has significant experience on both sides of this divide, I talk with "OG" crypto guys who want guidance in putting together a plan to shield their crypto from future creditors, whether they be random people who might sue them or a potentially vindictive future ex-spouse — and then from the other direction, I talk with traditional portfolio managers in the trust and estate world who are well acquainted with traditional assets, have heard about this "cryptocurrency stuff," want to know if it's for real, and want to get in touch with a Sherpa who can help them sort through all the noise. In my non-profit efforts these days I am also a community volunteer for the Monero project. My talking here is on a voluntary basis. I'm doing this because I personally feel that this is an important project for humanity.

I think it's important for people to speak out and make their voices heard on matters like this. I do not receive any support from the Monero project, I've never asked for support from the Monero project — I want to maintain my independence, as my primary duty is to my consulting clients, to whom I owe the duty of doing the research and examination of the entire cryptocurrency space and making recommendations on what I think are the most compelling projects out there. Within cryptocurrency, I also specialize in tokens that do what I think is the "killer app" of Nakamoto consensus, which is money. This talk is called "Sound Money, Safe Mode." First, I'm going to talk about the pandemic and the economic fallout.

Second, the management of fiat scarcity leads to a strong suggestion that it might be a good time in history to be looking at independent sources of scarcity. Third, I'll talk about fungibility — what that means, and why it's important as the world moves increasingly towards a mass surveillance society. And then the fourth part is about getting involved. There's a shallow way to get involved and there's a deeper way to get involved. The shallow way would be because it's a cryptocurrency, it behaves like an asset, and so I put on my hedge fund hat and I look at Monero and Bitcoin, and also gold, as parts of one's portfolio.

But the deeper, more significant way is getting involved personally with your time and energy and expertise. I wanted to say thanks to a few people in the Monero community who I had consulted with while preparing this talk: Howard "hyc" Chu, Dr. Sarang Noether of the Monero Research Lab, and Dr. Francisco Cabanas of the Monero Core team. Here in this plot I'm showing U.S. government data all the way back to 1980, so we're looking at 40 years of history here. The blue line is "U6" unemployment — this is the fraction of people who are either looking for work, or working part-time when they want to be working full-time, or are so discouraged with their state of trying to find a job that they've given up. This is contrasting with "U3," which is only counting those people who are actively looking for work and can't find it.

So U6 is a broader measure and so it's widely considered to be more accurate. Unemployment in the year 2020 spiked up to the highest level ever in recorded history — at least of the U6 unemployment rate — it spiked up to about 23 percent. Fortunately that's gone down a bit since then, but it's still definitely not a pretty number. So demand for services like travel, entertainment — all fell through the floor — and so the federal government's reaction to that was to be concerned about deflation. To fight that, they expanded the money supply, because by printing money, that reduces the interest rate, then it becomes less attractive to save your money and get a tiny bit of interest, and it becomes more attractive to spend your money. Here in green is the MZM money supply — MZM stands for "money zero maturity" and what that consists of is the M1 supply — which is coins, currency, and checking accounts — and it combines that with savings accounts and money market accounts, which many people use as an alternate form of a savings account these days.

I've normalized that number to the gross domestic product — that is the value of all goods and services produced in the U.S. in one year. The money supply as a fraction of the productive output of the U.S. has been going up for the last forty years, and you can see here at 2020 the line spikes up from about 70 percent to over 100 percent. The word "unprecedented" gets thrown around a lot for this crisis, but truly, if you look at long-term plots like this and you see the size and the slope of this money printing that's been happening in the last several months — it's truly breathtaking. Of course the government can print as much or as little money as it wants, with nothing stopping them from doing whatever they want — this has been true since [President] Nixon abolished the linkage of the U.S.

Dollar to gold. Looking at the bottom line here, this is how much money is the U.S. government taking in minus how much money is the U.S. government spending, on a monthly basis. So, it's basically taxes minus spending. It spikes four times a year because that's when estimated taxes are due and so there's that seasonal structure to it. As you can see it really tanked, in especially quarter 2 of 2020. April 15, which is the normal deadline for taxes to be due, got pushed back to July 15, due to the pandemic. So there was no tax revenue coming in, yet the government was continuing to spend money as it was before. The spending didn't stop, just the income stopped. And so this might reverse itself, now that July 15 has come and gone, with a correspondingly high spike in taxes — that is assuming that this July 15 was a bonanza from the point of view of the IRS with a whole lot of tax money coming in — we'll see if that was actually the case.

If you integrate this over time, then you get the black line that's on top, which is the total federal debt normalized to GDP, again. In the aftermath of the 2008-2009 financial crisis, the government was spending quite a bit more money than it was collecting, and as a result, when you time integrate that, you get the black line up here in the federal debt to GDP. And now we're at this point here at the beginning of the year — the debt to GDP ratio is about 110 percent and that is before the pandemic.

In the G20, there are eight countries that have been reporting statistics on the amount of money that's in circulation in their particular currency. Here, I've normalized the amount of money in every country to be equal to 1 on January of 2020. There's this hockey stick shape to this curve of how much money is circulating. In the United States, the M1 expansion has been to the tune of about 1.33 trillion dollars — which amounts to a increase in the money supply of about 300 million dollars per hour.

Now, if you compare this to, for example, the market cap of Monero — that's something on the order of one and a half billion — so the money supply of the U.S. expanded by the size of Monero's market cap, roughly five times every day for the last six months. Let's broaden our focus to not just the eight countries in the G20 that have reported results recently, but let's look at all the G20 fiat currencies and let's also expand the time frame in which we're looking back to 2009, the year in which Bitcoin came out.

Every country's money is equal to 1 at the beginning of 2009. You can see that there's not one of the G20 currencies that has been flat or has actually decreased their money supply over time — it's all increased. As a former med-school professor who worked in oncology, the exponential math of uncontrolled growth in cancerous tumors is something that I think about when I see a plot like this. Pre-pandemic, we're looking at a doubling time of about 8 years.

If you think about how long does an average human survive, let's say 80 years– that is 10 doubling times, which means the amount of money expansion in an average human's lifetime is 2 to the 10th power, which is 1,024 — it's about a thousand times increase in the money supply. And that is before the pandemic — after the pandemic, we're looking at a doubling time that's closer to two years.

There's an interesting scholarly book called "Monetary Regimes and Inflation" which did a study of 29 historical cases of hyperinflation. At least for Americans, none of us have ever had to live through that, but all accounts of what it is like to survive through something like that is it's no fun at all — it wipes out people's savings, it promotes social unrest — it's just not pretty. This book came to the conclusion that in 25 out of 29 of these historical cases of hyperinflation, the trigger was that there was money creation that financed government deficits. These charts should be convincing evidence that the money creation — which is half of this equation — is indeed happening. The second half is the government deficits — so unless governments are able to make extremely difficult decisions and are able to balance their budgets, now we're going to have two out of two of these criteria met.

The conclusion of people that the money is no longer trustable and must be spent immediately otherwise it lose value — that decision, which needs to take place among an entire population in order for hyperinflation to take place — it's a social thing. It's the herd that decides that they don't have confidence in the money any more, it's hard to predict. So, it's not a foregone conclusion that money creation plus government deficits means hyperinflation or increased inflation — but it certainly doesn't help. The takeaway for anyone with assets to save is that it might be wise to consider the possibility that the future might hold higher inflation than what you are used to, and indeed what you might be comfortable with. In a hyperinflation scenario, there have been independent sources of scarcity that have been looked at to store wealth.

Physical commodities, for example, gold and silver — these are the classic ones. And since 2009, there's a new option for humanity, that is in the form of digital commodities, which became possible to consider after the development of the Satoshi Nakamoto Bitcoin white paper. Let's contrast digital fiat versus decentralized digital scarcity like Bitcoin and Monero. Fiat money is a source of digital scarcity, it's just that that scarcity is controlled by a centralized entity.

Access to the database of who owns what is protected — there's a moat of firewalls around that. Once you have access, you have quite a bit of ability to change things. At the lower level, like at a bank teller level, of course you can't just create money out of thin air. As you go up in the system, the amount of power that you have over that database becomes higher, so that now you get to the level of the Federal Reserve Bank — it becomes arbitrary write access to this ledger. And of course the software that controls this is closed source — why would they open source it — that would facilitate bad actors learning how the system works. There are downsides to this; mismanagement is probably the chief one — all these plots that I was showing of the money supply could be interpreted as signs of mismanagement. The Federal Reserve is supposed to be imposing discipline, independent of the political process — the Federal Reserve is supposed to be the entity that says "no, I'm sorry, please don't look to us to be manufacturing money out of thin air, because that's not sustainable." That's what the Federal Reserve is supposed to do.

It's not really doing that. There's also insider abuse that is a problem with these sorts of centralized security models. There are plenty of examples of large banks that do egregious things to abuse the trust of their customers and get away with it with just a slap on the wrist. Basically, you have middlemen between the people and the database — these middlemen who are in a position of power — and so there's little incentive to improve. So, the decentralized security model of Bitcoin, and also Monero, is totally different. In these decentralized networks, anyone can join the peer-to-peer network.

Anyone can download the Monero code, run it on their computer, and become part of this network which does the functions of what a bank does. So in contrast to the centralized security model where you have a master database sitting in the middle with all sorts of firewalls and protections around it to try and defend it from misuse, here each node has its own copy of the database that contains a record of who sent what to who. In the decentralized security model it's open source — it would have to be — if anyone is able to join the peer-to-peer network, you'd better make your code open source, because otherwise, how do you know what you're running? "The Cathedral and the Bazaar," the classic open source software development book that contrasts the building of a cathedral — which is a centralized process a la Microsoft — versus the bazaar — which is a farmers' market where everyone is free to show up and just build something — which would be the Linux model.

These two situations — fiat versus decentralized money — it's really like Microsoft versus Linux. Of course there are downsides to use of FOSS in money; it's new, fewer people have heard of it. It's relatively inefficient, because if there's no "boss" computer within this peer-to-peer network, then how are you going to decide what the true version is of the database that keeps track of who owns what? Currently, cryptocurrencies are able to be traded for fiat currencies, but this used to not be the case. Back in 2009, Bitcoin had zero dollar value. It was this interesting curiosity of a system that purported to make a new form of scarcity that acted like money. But back in 2009, nobody knew that that was actually the case; nobody knew if this thing would actually work like it said it would work. And so, I think it's a good idea, if you're new to cryptocurrency — before you get caught up in the latest price movement of this and that currency and the horse race — I would suggest pretending that all of cryptocurrency has zero value.

It'll end up being good for you in the long run because you'll have a more solid understanding of what's actually going on with this stuff that you're buying and selling. Now there are three aspects that you need to get working to create a private form of money. First, you have to have some sense of what is the analogy of a bank account. Second, is you need to have some analogy to what it is to write a check — and third, you need to have some sort of process for that check, once it's shown to be legitimate, to be processed through the system. So, I'd like to turn the clock back and summarize how Bitcoin works. Bitcoin is based on the secp256k1 elliptic curve, and that's written out here — it's public knowledge what this elliptic curve is, there's nothing secret about it, it's a public standard: y squared is congruent to x cubed plus 7, mod this very large prime number.

X and y, usually, you think of as being real numbers — think of high school algebra, and you want to plot this curve, you'll make a curvy shape out of this — but in this case, we're restricting x and y to be integers. And furthermore, these integers are modulus this prime number, which is basically clock arithmetic — this is saying that 1 o'clock, 13 o'clock, 25 o'clock are all the same, because every 12, your counting goes back. So that's the case here, except instead of a clock with 12 numbers, you have a clock with a 70-some digit prime number of numbers on its dial. You have this universe-sized sheet of grid paper with (x,y) coordinates that are each integers — and some of the points on this gigantic sheet of grid paper are solutions to this particular elliptic curve.

If one was to try to guess random combinations of x and y to come up with a solution to this, it's basically impossible. So fortunately, part of the elliptic curve definition is to provide you with a solution called the base point. The base point is a solution — x sub b, y sub b — which is known to solve this equation. And furthermore, because of the mathematics of elliptic curves, if somebody gives you an integer n, it's possible to compute another solution, P sub n, which would be n times the base point. It's not just that you take the base point and you multiply both the x and y coordinates by the number n, it's more sophisticated than that. But the idea is, if somebody tells you n, you can compute the n-th point that is a solution to the elliptic curve. It's a one-way function — so if someone tells you n, you can get P sub n, but if someone tells you P sub n, you can't get n, you have to brute force that.

To brute force this, is a 10 to the 70th chance of getting it right, which means, might as well just not try. The location of that point, translated to a string of letters and numbers, is the Bitcoin address. At the heart of it, a Bitcoin address is representing an (x,y) coordinate on the secp256k1 elliptic curve. The number n is the private key, that's the secret — and knowing that number n is the authorized signature to spend the money that is associated with the public key, P sub n.

They're linked to each other, so that's why it's not like a password where you can just change the numbers that you're assigned — it doesn't work like that, there's a math equation behind it — so if somebody forgets their secret, there's no recourse. Getting a new Bitcoin account really means you're picking a number — you're picking a number in this vast numeric field. You're calling that number yours. Just like Coca-Cola keeps the formula to its soft drink secret, it's this piece of information that you can write on an index card. You, and you alone, are the person who knows the existence of this one certain point on the elliptic curve which is yours. So if you are in possession of a public-private key pair and you have a message that you want to send to the world, and you want to make sure that everyone in the world knows that that message came from you, and only you — you would take your message, combine it with your private key, to produce a signature — which is a block of bytes that is unique to the combination of the message and the private key.

Then you would send your message and you would include with your plaintext message the signature, which is this byte block that you generated. As a recipient now, you get this message and you got the signature from the purported sender, and you combine this with the public key which you know to be from the sender. When you combine all three of those, you get a binary verification result that says, "yes" this was a legitimate message from the sender, or "no" it was not.

This kind of message signing happens in a variety of computing contexts — for example, HTTPS uses this — here we're just using it in a self-contained financial accounting system. "Sending Bitcoin" means that you're sending this signed message, analogous to a check. So interestingly, knowledge of the private key, which is a form of speech, is now tantamount to money. It's kind of an attractive thing for the era that we're living in, the idea that knowledge of something can, in itself, be cash. Once you have a person who has a Bitcoin account and they sign a message saying "I want to spend this bitcoin," who's going to do the processing, who's going to make sure it's legit? That is done by a network of miners in Bitcoin. So "miners" are just a word for peer-to-peer Bitcoin accountants — there is no "boss" computer, they are all equal.

So how do they settle disputes? Basically, they gossip a lot, and they do majority rules. And so each of these accountants, when they receive a spend message, they will check it, and if it's legit, then they will pass that message on to their compatriots. A block is simply a list of valid signed spend messages. In each block there is a small data field called the nonce that each miner is free to fill with whatever random bits they want. A block is not accepted by the network until the hash of the block is lower than a certain number, called the difficulty. The difficulty number is dynamically adjusted so that the number of valid blocks that happened in a 10-minute interval is 1, on average. This is something that's hard to get your head around if this is the first time you're hearing it, because usually when you think about hash functions, you don't care about the value of what the hash is — you just care that the hash matches something else.

For example, if you're checking the download of a file, you want to take a hash of what it is you downloaded and check that against the hash of what you think you downloaded and make sure that they match. Here in this case, we actually care if the hash starts with a zero or a one — in fact, we care about the first several digits of the hash, and we will require them to all be zeros. So each of these miners is going to try repeatedly — and most often fail — to find a nonce that causes a block of spend messages to be considered valid. You have this worldwide network of computers. Each of them is churning away, brute force guessing different values of the nonce. One of them will eventually succeed and come up with a block that satisfies the difficulty.

The computer in the network that does that gets what's called the block reward, that is a bitcoin payout to the nonce solver. Once all of the computers in the world get news of this new block — again, because the accountants here are very gossipy — then they clear out the pending transactions in their own queues with the transactions that have been ratified in this new block, and then they continue working on the next block. And it's important to know that all of the money came into existence as a payout to a computer in the network that was helping to secure the accounting and the bookkeeping for that network.

None of the block reward in Bitcoin was shunted off and a cut went to a group of people, or to a foundation, or used to do marketing. And this is relevant from a regulatory point of view because FinCEN, which is one of the financial regulators in the U.S., defines a decentralized cryptocurrency as a currency in which the block rewards all go directly to the decentralized network that's doing the accounting. That's important because if you have a chunk of money that's going to a group of people, then that group of people could be considered as being the masterminds of the operation, so subject to increased regulation in terms of AML/KYC rules. So again, there's no one "boss" computer that is in charge of having the correct version of the ledger.

If you have a conflict in the network, who wins? Well, the answer is that the chain with more hash power is going to be the one that is deemed to be the authoritative version of the blockchain. So this functions as a self-healing mechanism if there's a discrepancy in the state of the network. So to summarize the Bitcoin white paper: Nakamoto consensus synthesizes digital scarcity. There's a few different kinds of scarcity. One is account level scarcity, that is, the establishment of property rights in this system of accounting — so that is enforced in Bitcoin by the users — the individual's selection and subsequent protection of an elliptic curve private key. How do we know that we're not going to have a situation like we have in fiat banking, where we have a money supply whose quantity is unpredictable over time, and is subject to the decisions of a central group with arbitrary control of that money supply? That is enforced by an open network of peer-to-peer accountants who are rewarded for behaving consistently with the consensus ruleset.

The majority of nodes in Bitcoin have coded in advance that the total number of bitcoins that are going to be rewarded to miners is going to be a total sum of 21 million bitcoin. You need majority decisions on this network to be considered correct, that's how you get around the fact that there's no "boss" computer — basically the majority rules becomes the boss — and so a rogue computer that's introduced to the network is going to have zero effect on it — unless it can manage to get 51 percent of the hash power, which is expensive and difficult to do.

Finally you have database modification scarcity, which is record permanence. Every single block in the Bitcoin blockchain has a low hash number, and so that makes each piece of data that gets added to the blockchain a rare piece of data. It took a lot of trial and error, in other words, it took a lot of proof-of-work to get that data added to the blockchain, and so it's extraordinarily difficult to make modifications to that database — especially as time goes on and more proof of work gets piled on top of the older transactions. Okay, so let's contrast that with the scarcity features of Monero. Monero is not a code fork of Bitcoin — most important when assessing, is Monero something worth considering given that Bitcoin was there first — most cryptocurrencies simply did a copy-paste of Bitcoin's code and then made a few, often times trivial, changes and then publish that and call it your own cryptocurrency.

One criterion that one can use to whittle down the subset of cryptocurrencies that are worth considering, is this: is it simply a Bitcoin fork? How much original intellectual effort went into the creation of this other cryptocurrency? In Monero it has its own separate codebase. In fact, it uses a completely different elliptic curve than Bitcoin: Monero uses ed25519. That is, the (x,y) points on this gigantic sheet of grid paper — which is fundamental to how the cryptocurrency works — that very equation is different in Monero than it is in Bitcoin. To the extent that the elliptic curve used in Bitcoin may or may not have weaknesses associated with it — this is a form of technical hedging in which Monero has chosen, deliberately, a different elliptic curve. In Monero, there are two private keys: there's a spend key and a view key. The spend key works like the Bitcoin private key — if you know the spend key, you are in complete control of your account.

There's a second key, the view key, which is a cryptographic subset of the spend key — if you know the view key then you can look at details of transactions that you were involved in. One of the misconceptions about Monero is it's just this completely secret box so you can tell nothing about about what's going on in it. You can actually share details of what's going on in your particular Monero account if you share your view key. It offers opt-in transparency. In Monero the address space is larger: 10 to the 76th different addresses to choose from, versus 10 to the 60th in Bitcoin. This means that there is more security in terms of the birthday problem. When one is choosing a cryptocurrency account, one is simply picking a point on this grid paper.

What is the risk that somebody else in the world picks the point that I picked? If they pick the point that I pick, then they will know the private and public keys for that elliptic curve point. Therefore I'm going to be sharing my my money with this stranger somewhere else in the world. That is a possibility — so in that sense there is security by obscurity in cryptocurrencies — but that is mitigated by the vast number of addresses that are possible. And there's an even more vast number of addresses in Monero than there are in Bitcoin — by 10 to the 16th. The drawback of this is that you have a less user-friendly experience, because the address lengths in Monero are very long strings of numbers and letters. The emission schedule is different in Monero relative to Bitcoin. In Bitcoin, every 210,000 blocks, the miner reward that goes out to each miner who successfully adds a block to the network gets cut in half.

If you're a Bitcoin miner, there is a date coming up sometime in the next four years in which your income from helping contribute to the Bitcoin ecosystem gets cut in half. If you're doing mining for business this is a rather disruptive thing. This is something in which Monero has looked at the granddaddy cryptocurrency, thought about what they're doing, and trying something a little different that might help matters a bit. And so in Monero the emission is continually decreasing so we are spared from this drama in Bitcoin of having an every-four-year disruption thrown in to the mining ecosystem. There's a form of unwanted scarcity, and that is future miner rewards. In Bitcoin, the miner reward is cut in half every four years, as I just explained. What that means is that in, say, 40 years from now, the bitcoin reward is going to be one-half to the 10th power, that's about 1/1000th of what it is now.

This brings up a concern: are miners in the Bitcoin network — in that length of time from now — are they going to find that to be enough incentive to keep working for the network? There's some academic research that shows that the solution that Bitcoin has come up with — which is to institute a fee market in which the people who transact end up engaging in a auction-like process process to bid up the fee that they offer — that that idea may not be enough to incentivize miners in the future. In Monero what we have what we call the tail emission, that is, that the block reward is never going to be less than 0.3 Monero per minute.

Over time, the number of Monero in existence is going to linearly increase forever. This gets portrayed as being "infinite emission" by people who are not thinking about it very, I would say, fairly. The reason is that the absolute value of emission is not relevant in any macroeconomic theory. Any macroeconomic theory that takes into account what the money supply is and the effects of changes in that money supply in the macroeconomy will look at the percentage increase of that money supply. So it's not the absolute value of U.S. dollars increasing that's relevant, it's the percentage increase in U.S. dollars that's relevant. And if you have a money supply, like Monero, that is increasing linearly over time — every year, the money supply is going to expand by a fixed constant amount — which is what linear expansion just means — but that's going to be added to a pre-existing base of monero that is going to be growing. Therefore the inflation rate in percentage terms is going to be decreasing and asymptotically going to zero.

Which means that that is the relevant input to any macroeconomic theory that uses the expansion of the money supply — an asymptotically zero inflation rate — and so to claim that identically zero inflation rate is a totally different situation than an asymptotically zero inflation rate is silly. It's just not factual. It is easy to understand that 21 million Bitcoin is the only amount that's ever going to be created, but it leads to a bit of a laziness of thinking in which one comes to this false conclusion that one must have a identically zero inflation rate in order to be macroeconomically negligible.

What do we gain in Monero for having this tail emission? We know in Monero that miner incentives are going to be there in perpetuity. In Monero, we do not have a civil war over who is going to be paying for miner rewards in the future. Now this sounds like it might be trivial and academic, but this whole position in Bitcoin that we are going to get the transactors of Bitcoin to engage in this fee market — the viability of that was debated within Bitcoin and was one of the factors leading to the divorce of Bitcoin versus Bitcoin Cash. We avoid all that in Monero by having this tail emission. Here are some charts that show what I'm talking about. I'm looking at a time scale of 2009, going out 15 years into the future to the year 2035. There have been about 18 million bitcoin created and they're going to be three million more created for the rest of time.

In Monero, we also have a predefined schedule for what the coin emission is going to be over time. And so to the left of August 2020, you see what actually happened in terms of emission in the Monero blockchain up to now, and then in the future you can see the tail emission in Monero shows up as a straight line that's slightly tilted up to the right — that's the tail emission in which there's going to be a fixed number of Monero dedicated to be given out to miners every year, in perpetuity.

This differs from Bitcoin, in which they have a problem to deal with, which is, how do they guarantee that the miners in the far future are going to be incentivized to keep using their electricity to keep supporting their network? This is year-over-year supply inflation: how much U.S. dollars have there been versus how much U.S. dollars have there been a year ago, at the same date. We have a scary situation with the money supply of the U.S. dollar. As a result of the pandemic, this has spiked up to about 30 percent. Hopefully it works out for the best, because if it doesn't, there's going to be a lot of suffering by humanity — but the situation is what it is.

For those people looking for a source of scarcity that is gold or gold-like — this is what you're looking at: you have gold and you have new digital alternatives in the form of Bitcoin and Monero. The World Gold Council keeps track of its estimate of how much above-ground gold there is in the world every year, and that has been increasing at a pretty constant rate about 1.8 percent per year. If you use that as your litmus test, a working definition of sound money would be a source of scarcity that inflates by 1.8 percent per year, or less. Bitcoin and Monero both are coming up on a new era of scarcity. The inflation rates of both Bitcoin and Monero are going to be lower than gold, so both will satisfy that definition of sound money — a digital form of sound money. There's another form of unwanted scarcity that I want to talk about: that is, mining hardware. In the Bitcoin white paper there's this phrase, "one CPU, one vote" — and what that means is that you want to have every miner's probability of hitting a block reward be proportional to the investment that they put in to securing the network.

Now unfortunately, silicon economies of scale destroy this linearity. If you have an algorithm that is simple enough that you can design a piece of silicon to do nothing but that algorithm super efficiently, then you'll have an advantage over general purpose computing devices like CPUs. In Bitcoin, you have exactly this situation. So the proof of work algorithm in Bitcoin is simple enough that ASICs got custom designed to do nothing but the Bitcoin proof-of-work algorithm over and over. And unfortunately, all of the requisite hardware happens to be all made in China, so Bitcoin mining currently is a Chinese-dominated oligopoly. This is not necessarily a problem that it's China; the problem is that it's just one part of the world that effectively has a monopoly on the production of the necessary equipment to maintain the accounting system.

At this point, if you are just a regular guy with a gaming computer at home, and you want to join that to the Bitcoin network and try to see if you can maybe hit a block — you have a higher chance of winning the lotto than getting a Bitcoin block reward. It's not worth your time, it's not worth the extra electricity that your computer is going to eat while it's trying to come up with blocks to satisfy the Bitcoin network. So in Monero, we have taken steps to try to keep the proof of work algorithm viable for small independent miners who don't necessarily have, for example, 50 million dollars to spend on their own silicon fabrication facility, or have social inroads with the CEOs of the companies who do have these silicon fabs. If you look at the proof of work of Monero since 2018, it has changed four times.

It started out as Cryptonight, then Cryptonight v2 came, Cryptonight v3, then Cryptonight-R, and now RandomX. To support that narrative, this is a chart of the Monero network difficulty, 2014 to the present. So through version 0.11 of Monero, the proof of work was Cryptonight. You can see that the difficulty was proceeding along for several years, and then there's a spike upwards, interpreted as ASICs coming onto the system. There were chip manufacturers who looked at the Monero proof of work, figured out how to program the Monero proof of work into a custom piece of silicon, make that piece of silicon, plug it into the network, and then start getting a disproportionate share of block rewards. Once that happened, there was some alarm in the Monero community, so work commenced on a variant of the Cryptonight proof of work. So Cryptonight v2 was developed, and tested, and then deployed on the network. When that happened you can see the difficulty took a nosedive, because all these ASICs that were previously viable and collecting a lot of the block reward were now shut out, because the proof of work changed on them.

Several months later, there was another upward spike in the difficulty — there's a several month lead time from the time that you design an ASIC to the time that you actually fabricate it in enough quantity to make a big dent on the network — so that was ASICs coming back online. So Cryptonight was patched again. So again there was another hard fork in late 2018 to change to Cryptonight v3. That worked for another few months. Then the difficulty spiked up again. And then there was Cryptonight-R — mercifully, there was this silence from the ASIC manufacturer.

And then finally, there was a revolutionary change in the proof-of-work algorithm to RandomX which uses a randomly generated algorithm that must be executed in order to do the proof of work. It uses not only integer operations but even floating point operations, and so it's a very interesting example of a proof-of-work algorithm — for which the customized piece of silicon that will do RandomX the best happens to be an AMD Ryzen Threadripper, which is something that you can buy on Amazon. Commodity hardware is the most efficient at doing the Monero proof of work. These ASIC manufacturers do not have the most honest reputation, shall we say, of immediately shipping their product out once a customer buys an ASIC. There tends to be a several month lag due to, you know, "testing" — and why would a ASIC manufacturer want to delay shipment of product that's been paid for? Well, they want to collect Bitcoin block rewards with their customers' hardware before they send it out.

So that's the shenanigans that one has to deal with when one does not have a commodity piece of hardware to do proof of work. Since RandomX has gone into effect, what is meant by a hash now is different in RandomX versus Cryptonight, so there's a one-time jump in the difficulty which is meaningless — but since RandomX went in, all signs have been that CPUs have, once again, been dominating the network. There's been an enormous level of effort that's gone into this. This is remarkable for any cryptocurrency. It's a testament to the persistence, and really, the unanimity of the Monero community in having this goal of something that's actually decentralized in practice, with small independent miners having a shot at getting a block reward in Monero. Another form of unwanted scarcity is access to layer one. Bitcoin's one megabyte block limit caused a project fork. There is a controversy as to whether this line of code which Satoshi had put into the Bitcoin client, saying that blocks have to be no larger than one megabyte in size, which is something that Satoshi did as a kludgy way of preventing the network from getting spammed.

The idea that there's going to be a hard block limit that doesn't change has survived in Bitcoin — at least, in the dominant post-divorce implementation of Bitcoin. I'm showing a exponential scale, so this is 10 transactions a day on the bottom to a million transactions a day on the top. In Bitcoin you can see that the transactions per day in Bitcoin have asymptotically hit a ceiling, and that is due to this one megabyte block limit. Again in Monero, we look at what's happening in the granddaddy cryptocurrency, and give it all due respect as the first to exist — but we're looking at what could be done as an alternative solution to some of these issues.

And so in Monero, we use what is called an adaptive block weight — it used to be called the adaptive block size but there were modifications to the algorithm so now it's called the adaptive block weight — the basic idea is that there is no hard-coded limit on the size of a Monero block. There is a miner disincentive that kicks in when blocks get too big — so that disincentivizes miners from including a whole bunch of transactions into a block. There are user fees that also increase if the blocks get too big. The size can dynamically expand if there is organic growth in the demand for Monero transactions. From this past history of transactions per day, you can make a pretty good argument that the trend line of this, transactions per day, is on the way up.

It's unlikely to be spam related — it's unlikely that spammers are just carefully spamming the network by just a little bit and then increasing the amount of spam that they send over time — this seems to be organic growth in the demand for Monero transactions. [From] 2016 to this time today, that's a 10x increase in the transactions per day. It doesn't look like much on this chart, but that is quite significant. In four years, at this pace, we're going to be looking at a hundred thousand transactions per day, and then in the year 2028, maybe in DEF CON we'll be showing a million transactions a day, who knows.

At this point of the talk I want to talk about fungibility and transparency — and this is where the two "mission statements" of these two cryptocurrency projects start to diverge quite strongly. Bitcoin is transparent. Etched forever for everyone to see, is for every transaction, you can see the sender the receiver and the amount; for every address, you can see a complete live balance history. This is contrary to what you might have heard from the popular press, if you're new to getting into the real details of cryptocurrency, because the news reports always make Bitcoin out to be this anonymous currency that nobody knows anything about. Nothing could be further from the truth — it's actually completely transparent. For high-net-worth clients that I work with in my consulting practice, this tends to be a show stopper, once they know about it — once they become aware of this fact, that if you put a million dollars into Bitcoin, as soon as they know your Bitcoin address, anyone in the world can go to their blockchain explorer, type in that address and see there's 100 bitcoin in there, that's worth a lot of money.

No one with wealth wants to broadcast that to the world — it's just indiscreet, and it's unsafe. So the fact that there's this transparency in Bitcoin puts innocent people at risk. Also, businesses — because businesses have, as part of their secret sauce as to how they are able to serve humanity and make a profit at the same time — is that they have a certain pattern of suppliers they get their inputs from. So often times, the prices of those products might not be public knowledge. There are lots of trade secrets that businesses have and there's no shame in that — for some reason, for some people, any sort of desire for privacy gets portrayed as being something nefarious.

Businesses routinely need privacy in order to survive as businesses, in order for their intellectual property, their trade secrets, to not be copied by competitors. Another problem in Bitcoin that goes beyond privacy is fungibility. Every coin in the Bitcoin network is traceable back to the miner. So it's as if you have a $10 bill and on the back of the $10 bill there's a neat chart that shows your bank account numbers, and the account numbers of everyone before you who had that $10 bill going all the way back to the U.S. Mint that fabricated the $10 bill. It's even worse than that, because if it were actually on a physical piece of paper then the holder of the piece of paper would be the only one who could see it.

In Bitcoin, everyone in the world can see that transaction list for every piece of currency that's in the entire system. That invites voyeurism. If you know a Bitcoin address it's natural to go to a Bitcoin explorer and type in the address and see how much money is there and see how many transactions they do. I think it's a pernicious social effect of this feature of the protocol — it's normalized being nosy. There's also guilt by association, and this is far more serious. There are many companies in existence whose job it is to try and associate names and faces with every address in Bitcoin.

They're trying to dox everyone on the Bitcoin network. And what do they do with that information? They basically come up with the equivalent of a social credit score. Because every bitcoin in existence can be traced, they can make a graph showing people transacting money with each other, and if any of these people happen to be a "bad" person, then those people who happen to have exchanged money with that bad person are now flagged as potentially being bad themselves. The problem with this is that it's based on imperfect information that is easy to misinterpret. In contrast, Monero is fungible. Every Monero is indistinguishable from every other Monero. There are three technologies that promote this indistinguishability. One is ring signatures, those keep transacting senders private; stealth addresses keep transacting receivers private; and RingCT keeps transaction amounts sent private. When a person joins the Monero network by downloading the software at getmonero.org, and running that on their computer, and downloading a copy of the blockchain from their peer miners, then they are getting a complete history of who sent what to who in Monero.

The difference is: in Monero it's all encrypted, because by default, it's none of your business. You will know that transactions happened; you will know when they happened, and you will know that they happened, but you won't see the details of what happened. Two of these three technologies were included in the original whitepaper that defined Monero — which is the Cryptonote whitepaper — but RingCT was not. RingCT was a innovation. And the history of how this got into the network is an example of the dedication of this group of people to put it in. RingCT required several ingredients to come to fruition: first it required original cryptographic research — we're talking postdoc, PhD mathematician level cryptographic research — that goes through audit and peer review. Second, you need development of code to implement this new math. The math is not trivial, and then to write code that faithfully implements that new math is also not trivial — just in case there were problems in the code that got written, it got subject to external audit, so basically the Monero community was solicited for donations to pay for external auditors to examine the code of RingCT and make sure that there were no subtle errors of memory overwrites or such, and that got approved.

Then finally, it doesn't matter if code gets written if nobody actually runs it. So the community of Monero node owners needed to get on board and download this and update their computers once the new code came out, because this was a hard fork. So all these ingredients had to happen for RingCT to go in. On the top I'm showing daily average bytes per transaction on both the Bitcoin network and the Monero network. Bitcoin is in black, and it's been pretty constant over time. That's part of their community ethos over at Bitcoin, is that they want a stable protocol, they don't want to rock the boat. In Monero, we are used to acknowledging that they're going to be new research, new innovations that make fungibility even better — and we go through the time and the trouble and the effort to actually make that happen.

In the birth days of Monero, you see that the transaction size in bytes was very small, because those were mostly coinbase transactions going out to empty blocks. But then people started using it, and then in the early days of Monero the system used denominated outputs. You can think of there being like a one-Monero gold chunk that is encased in plastic and it's engraved with the owner's key information on it. Once a person spends that one-Monero output, then it transmits, and it becomes the property of somebody else on the Monero network. And so, in the early days of Monero, you had every round number — so you had 1 through 9, 10 through 90, 100 through 900 — and then going the other way: 0.1 through 0.9, 0.01 through 0.09… and so as a result there were a large number of inputs and a large number of outputs on every transaction. This was not so good for privacy, because if you spend 341 Monero, just to make up a number, you can see the 300 and the 40 and the 1, you can see they're travelling around — that's what you could see in Monero pre-RingCT.

And so, it was decided in the community that this was not acceptable, and so when the research for RingCT was tested and vetted and also externally audited there was a decision in the community to do it. Now, this was despite the fact that when RingCT was enabled, you can see there's this big jump in 2017 of the transaction size, so it went to about 10 kilobytes per transaction. But that was a price that was decided in the Monero community was worth it to improve fungibility of the coin — which would protect the innocent. Then later, bulletproofs came — more clever mathematics to ensure that the balance of inputs and outputs, that is guaranteed using higher math in RingCT, can be done with far less byte space than it previously did. There's a research process, an audit process, a coding process, and a vetting process for all this for bulletproofs as well. But when that went live on the network — that was in late 2018 — you can see that the transaction size dropped by basically an order of magnitude. And then you can see here on the transaction fee side, the fees also dropped by an order of magnitude.

You could argue that the Monero transaction sizes are still quite a bit larger than Bitcoin's, but there's a new news item in the Monero research pipeline — CLSAGs are a way to compress the byte size requirement of transactions even further, on top of what bulletproofs have done — that just went through an audit process and it's being coded up for inclusion in the next hard fork. In Monero, "hard fork" is not a term of war; it's something we look forward to because it means that new good stuff is going to come on live. So CLSAGs are set to go live on the network this October, and once that happens, I'm showing in a dotted line here the magnitude of improvement that we're expecting to see post-CLSAG. There's a gap here between the transaction sizes between Monero and Bitcoin, but it's shrinking. The reason it's shrinking is that there is ongoing active research in Monero to improve the way the engine works under the hood. This is the kind of thing that is actually rare to see in other cryptocurrencies. Other cryptocurrencies tend to make big announcements, use lots of buzzwords, and not actually improve anything.

It's actually the opposite in Monero — people work quietly without fanfare, and from time to time, introduce something that improves the actual product. Monero benefits people with nothing to hide. It does that by eliminating the risk of receiving coins that are tainted, due to no fault of the receiver. So for example — let's say you're selling your used car, and the person who you sell your car to gives you bitcoin. And, like everyone else who sells their car to a stranger by posting an ad on Craigslist, you didn't do a thorough background check on this person who bought your car. They had bitcoin, you had a car, you did an exchange, you went on your way. Unbeknownst to you, the way that they got their bitcoin was that they were, for example, selling drugs on the dark web — and that's how they came up with that bitcoin, which now you own, because you sold your car to this person.

And now, because the companies that are doing blockchain analysis know that — now they are looking at you, thinking, "this person just got ten thousand dollars worth of bitcoin from a known drug dealer… maybe this person is supplying drug paraphernalia to that dealer." Now this person tries to put their tainted bitcoin into a crypto exchange to get USD out of it. Once they send their tainted bitcoin to their exchange, it gets frozen, and now the customer has to go through all sorts of extra hoops to prove their innocence.

And they're trying to prove their innocence to somebody who really doesn't care to know the truth — they just want to cover liability on their side, they just want to make sure that they don't get in trouble. The easiest thing to do is just to quarantine that money, not give it back to the customer, and wait for the authorities to give them permission to give it back. And none of this had anything to do with the innocent person involved. This is why the transparency of Bitcoin is a problem — even for innocent people who have nothing to hide. Because the system is transparent, false accusations can be made against them due to incomplete misunderstandings that other third parties are making based on that transaction data. It's even worse than that. So, for example, let's say you're an owner of Bitcoin, you're totally 100 percent squeaky clean, and you get hacked.

Somebody steals your bitcoin. Let's say that the person who stole your bitcoin now goes on the dark web and spends it. Now your address, your identity, is associated with that. You might be investigated for crimes that were committed with your bitcoin that got stolen. And so, now, not only are you suffering the loss of your money, you're having to now explain that "it's not the case that I paid this guy to buy drugs for me, I actually had my money stolen from me!" For people who actually are squeaky clean, any involvement in the Bitcoin blockchain means you have a probability of interacting with somebody else on the Bitcoin blockchain who is not as squeaky clean as you are. And if that happens, that's going to be flagged in these companies doing blockchain analysis as a link, when the fact is, it's a false positive. But you as the user have no power over that. You have no recourse; you have no way of communicating to these companies and saying "hey, yo, I'm actually squeaky clean." They don't know. They don't care.

One way to look at this is in the Akerloff framework. So this was a Nobel Prize winning paper in economics; it has to do with used cars. So first, I'll explain the paper, and then I'll apply it, because it has applications to both DEF CON "Safe Mode," our virtual meeting that we're doing — and also a surveillance state with transparent coins. So there are two used car types: there are lemons and there are peaches. Lemons are the cars that are going to break right away, and peaches are the well-maintained used cars. So sellers know which type of car they have — if you own a lemon, you know it, because you were there in the hurricane when your car was under five feet of water and now you're trying to sell your car because it's damaged, that's a lemon — a peach is a car with the type of owner who changes the oil and does all the maintenance that you have to do on a car to keep it in good condition.

So the sellers know what kind of car they have, but the buyers don't, because both lemon sellers and peach sellers make sure that the paint job on their car is extra shiny. On a superficial level, both lemons and peaches look identical to buyers. So the buyers can't tell lemons apart from peaches, but they know that they are ignorant in this situation — they know that they could end up with a lemon. The Akerloff paper brilliantly explains this race to the bottom that happens in this asymmetric information market in which buyers are armed with less information than the sellers are.

What is the offer price that a buyer is going to offer for a car? At the minimum, you're going to be offering the lemon price — and then you're going to offer more than the lemon price contingent on what you think the probability is that you're going to get a peach versus a lemon. So if you think there's a zero percent chance you're going to get a peach — well you're just going to offer the lemon price. If you think there's 100 percent chance that you're going to get a peach, then you're going to offer the lemon price plus the difference between the peach and the lemon price. In other words, you'll offer the peach price.

If you think the probability is somewhere in between — then you're going to adjust your offer price to be somewhere in between. That's the offer price that a rational buyer is going to offer for a car in this market, in which they are ignorant, but they know that they're ignorant, and they can adjust their offer price to account for this uncertainty. So what do the lemon sellers do when they see this price? Well, they see a great offer — this sucker here is offering quite a bit higher price than the lemon price. So the lemon seller is delighted — they're going to say, "Okay, I thought about it and yeah, I guess I'll accept your offer." The peach seller — they've done the maintenance on their car, they know that the value of their car is worth what a peach is — but you can tell them all day that you've done a great job of maintaining your car, but the buyer, at the end of the day, they're going to be skeptical.

They don't know if you're really telling them the truth. They don't know if you're telling them the partial truth. So the price that the buyer is going to offer is less than that of the peach price. And so what's going to happen then? The peach sellers are going to become discouraged. They're going to be disappointed by the fact that their moral goodness in taking care of their car is not going to be reflected in a high market price. So they will leave the market — they will delete their Craigslist ad — they will just keep their car until it runs into the ground. Now, a greater fraction of the cars that are available for sale are now lemons. And eventually, buyers are going to get wise to that fact.

When they get wise to that fact, they're going to lower further their offer price — and thus, the negative feedback loop is born. Every time the offer price goes down, more peach sellers are going to get discouraged and leave the market. You have a situation at the end where only lemons exist in this car market. So this was the Akerloff paper that got the Nobel Prize. Let's think about this in terms of the pandemic. In health terms, peaches are people who are healthy. And they are now faced with the decision of: "do I engage in this super thing called DEF CON, in which a whole bunch of smart people get together, and talk about cool geeky stuff, and you make new geeky friends in Vegas and have fun" — basically, are you going to engage in this social marketplace in which you are dealing with other people? You could be dealing with all peaches when you get to the live, in-person DEF CON — that is, everyone could be healthy — but you are aware that that's not the case.

There are going to be some lemons. There are going to be some people who are sick, and don't know it, because of the nature of the virus. So you have to gauge your overall social utility of going to the conference by the probability that you're going to end up with a lemon — i.e., get sick. If the penalty function of getting a lemon is large enough, and the probability of it is large enough, then the rational thing to do is to withdraw from that marketplace and decide to do DEF CON in "safe mode," and that's exactly what we've done this year. Let's apply this to the marketplace for transparent coins, or surveillance coins, as I like to call them. The complete history of every coin is traceable going back.

That means, if you are a squeaky clean person with a good reputation, you are a peach seller. Your social status is healthy. The thing is, if you deal with bitcoin with other people, are you going to unknowingly, by mistake, do a transaction with somebody who is not healthy, in terms of a legal status? You don't know that. You could suffer a "lemon consequence," just by dealing with other people in this network, because this network has this undesirable feature that the coins are not fungible. So what is a squeaky clean person going to do? They're going to tend to want to go to a coin that does not put them in jeopardy due to the actions that they can't control of other people on the network. So you're going to see the squeaky clean people going to something like Monero. Which is counterintuitive, certainly, according to the biased and misleading portrayal that often gets put on Monero.

It's the squeaky clean people who need Monero the most. So Monero is what Bitcoin noobs think they bought — it's sound money, in safe mode. I started this talk talking about the out of control fiat money supply around the world that is currently happening as a result of the pandemic, and that led to the idea that one should maybe spend some time looking into alternate forms of scarcity that are not controlled by governments — that would be precious metals and also, now that there's Nakamoto consensus, Bitcoin and Monero.

How does one process the relative expensiveness or cheapness of these assets? Here is, I think, the only price chart that should be looked at by anyone who's looking to think of cryptocurrency as an investment. I'm doing a long-term time scale — so this is from 2009 to the present, and what I'm doing here is I'm showing the value of all the world's bitcoin and I'm dividing that by the value of all the world's above-ground gold. So there are several variables that go into this chart: first, there's the number of bitcoin in existence at any given time; there's the price of bitcoin; there's the amount of gold in existence at any given time; and there's the price of gold. You need all four of those ingredients to come up with this ratio chart, which I'm showing on log scale, again. And then I've done that again for the value of all the world's Monero divided by the value of all the world's gold.

Currently all the world's bitcoin is worth something like two percent that of all the world's gold. And all the Monero in the world is worth about 1/100th of one percent of all the world's gold. You might be aware that there's been a recent spike of interest in cryptocurrency prices — bitcoin is back over ten thousand dollars — but you don't see that here because there's also been a spike in the price of gold. The relative valuation of crypto to gold has been flat in the post-pandemic time period. Is this rational that crypto to gold cap ratios have been flat during the pandemic? I'll leave that to you to decide. Second, of these two cryptocurrencies, there is one that actually acts like gold, because it's fungible. Gold does not have on the back of every gold bar, a list of everyone who owned that gold before you did. So it's actually a more apt comparison to compare the value of Monero versus gold. So is it rational that the valuation of Monero is one ten-thousandth of that of gold, whereas the valuation of bitcoin is one fiftieth of that of gold? One thing I also wanted to show was a chart that counters this very stale narrative that there's infinite inflation in Monero.

Let's say you have an investor who decides that they want to buy one one-millionth of one of these alternative forms of scarcity. To protect themselves against inflation, they are not going to buy one one-millionth of today's supply; they are going to buy one one-millionth of the supply in 100 years' time. So they're going to look at: "what is the supply of this scarce asset going to be in the year 2120 — and I would like to buy one one-millionth of that, today." First, let's look at gold. So currently, there are about 200,000 metric tons of above-ground gold, and gold has been expanding at about 1.8 percent per year.

When you compound that over a hundred years, that ends up being pretty significant. So in 2120, at that rate, there's going to be over a million metric tons of gold — which means to buy one one-millionth of all the gold in the world, you're going to end up buying more than a metric ton of it — which, at the current price, is going to be $76 million worth of gold. That buys you one one-millionth of the projected gold supply in the year 2120. So let's do that with Bitcoin. So with Bitcoin, they're going to be very proud that a hundred years from today, there's going to be only 21 million bitcoin in existence. To buy one one-millionth, how much does it cost? 244 thousand dollars. How about in Monero? Now we have the tail emission, so that commonly gets thrown about as being "infinite inflation." Well, actually, we know what it's going to be.

And in a hundred years from now, the coin supply will be less than double what it is today. That's not too bad for a century. So to buy one one-millionth of all the Monero that will be in the world in the year 2120? Three thousand dollars. If you want to learn more about Monero — there's monerovillage.org for the rest of the festivities happening this week. Also, the official website is getmonero.org — that's important to know, it's "get monero dot org" — not other variants. If you want to get in touch with me over email, it's Daniel at Sweetwater Consulting. Thanks for your attention..

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