Good morning. What a wonderful day to start day two of FII by bringing a bunch of people onto the stage to argue with each other. But that's what debate is, and that's what we do at Open to Debate because we believe there is such a thing as good argument. And what do I mean by that? First of all, I mean that it is civil. And when you look at the goals of FII, which is to figure out the best ways to have the best impact on our shared future, it's a fact that we can have shared goals but we're going to have different ideas about how to get there. We're going to have conflicting ideas, not everybody's going to have all of the answers, and debate is a way to test our ideas against one another, to hear each other out, to challenge one another, and potentially to learn from one another. And that's what we are about to do with our program called Clash of the Titans. We have six intellectual and business Titans who will be taking part in a series of three debates. Now, typically our debates take on one topic and they last for about an hour more or less. This is different. We are going to do three debates quickly, three in a row, and they're going to be around three themes. Those themes are money, truth, and power. We do have ground rules as has already been stated. One of them is civility in this debate. Also, the debaters are strictly timed: two-minute openings and one-minute rebuttal, and then we will move on to the next debate. So it's going to be quick, it's going to be more of a TikTok style debate. So let's get started with that.
Our first topic in Clash of the Titans is going to be money, and I would like to welcome our first two debaters to the stage. And I would appreciate applause when I introduce these debaters as they make their way to the stage. First, please welcome Saifedean Ammous. Dr. Ammous is an economist and best-selling author. His most recent publication is Principles of Economics. And Mr. Robert Rosenkranz. Robert Rosenkranz is Chairman of Delphi Capital Management as well as founder and chairman of Open to Debate. Once again, the topic is money, and here is the specific question we are going to ask you to take on: Is the future of currency crypto or fiat? Saifedean, you go first. You have two minutes to answer the question, which once again is: Is it fiat or is it crypto?
First of all, thank you so much John, and thank you everybody for inviting me to FII. It's an honor and a pleasure to be here. I'm going to make my comments as quick as I can. So Bitcoin's rise in the last 15 years for me has exploded two of the most important myths surrounding money. They're self-serving myths promoted by governments over the last century which I don't think hold up. The first myth is that money supply needs to expand to accommodate growing economic activity. But we look at Bitcoin in the past 10 years, Bitcoin supply has only expanded by about 50%, whereas the size of the Bitcoin economy has gone up by about 10,000%. So the money supply does not need to grow to keep up with the size of the economy. And I think this is an enormously important point, and the entire idea of having a monetary policy is built on this. And Bitcoin shows us that that's not necessary. The market is capable of choosing the money on its own, and the market chooses the asset that is the hardest. And that is the second myth surrounding money, which is that money is the choice of government. But history shows with gold, gold predates all of the world's governments as money. Governments did not legislate gold into becoming money. Governments had to make their own money out of gold in order for the market to accept it as money. They had to accept the market's choice for money. And this is what we're seeing now with Bitcoin, where Bitcoin is one of the 10 largest currencies in the world and it has no state sanction behind it. It's not the state anywhere that has made Bitcoin money. So what ends up happening on a free market is that the market chooses the hardest asset to produce as money because it holds on to its value. This happens in two ways: either people recognize this and choose the hardest money, in which case they benefit at the expense of the people who use the easier money, or people don't recognize it and just find that their wealth disappears and all the wealth ends up in the hands of the people who have the hardest money. This is exactly what's going on with Bitcoin right now. Bitcoin continues to rise because it is hard, whereas government monies are easy to produce and so they continue to lose value. So people today need to accept this and understand it. And I think Bitcoin is the most advanced form of money because of this, and it will continue to rise and it will replace government money. Thank you.
You have hit time. Robert Rosenkranz, we know where you stand with the way this is set up, but I want to launch you by asking the question: Is currency's future fiat or crypto?
Well, as a Titan of finance, I think that money has to meet three criteria. It's got to be a store of value, it's got to be transacted by trustworthy intermediaries, and it has to be ease of transaction. And I'd say that Bitcoin fails miserably on all three counts. As a store of value, there's no underlying asset whatsoever. Its value relies on popular delusions and the madness of crowds. Since 2011, there have been four occasions when Bitcoin has lost more than 80% of its value. And yes, fiat currencies erode in value over time, but that is usually offset by their interest income. Then the question of trust of the intermediaries: the largest Bitcoin exchange in 2014 was Mt. Gox, the largest in 2022 was FTX. They both had spectacular bankruptcies. The largest now is Binance, it was just fined $4 billion for its misfeasance. And then on ease of transactions: so Mastercard in two minutes processes 300,000 transactions. The Bitcoin ledger takes a full day to process 300,000 transactions, and to do it, it uses the entire power supply of the nation of Poland. This is insanely inefficient and wasteful. So on those grounds, I would say that Bitcoin has major, major failures as money. Thank you very much.
Time for rebuttal. Dr. Ammous, you have one minute.
On the issue of store of value, even with all of these 80% drawdowns, Bitcoin has outperformed every financial asset over the last 10, 15 years. In fact, I don't think there's any money manager who's outperformed Bitcoin over the last 5, 10 years. All those people charging fees to manage money cannot match just simply buying and holding Bitcoin because they're playing a game in a rigged currency where the currency is constantly devalued. So you need to run extra fast just to stay where you are because the currency is designed to lose value. Whereas with Bitcoin, because the currency is fixed in supply, simply the increased demand and as people recognize and understand that this is a fixed supply currency that nobody can inflate, that on its own is causing its value to appreciate more than pretty much any investment in the fiat world. On the issue of exchanges, Bitcoin does not require exchanges to operate. In fact, that's the whole point. The whole point is that you are the one who is in charge of your currency. You can decide what you do with it and nobody can take it away from you because it's cryptography, it's math, it's not money. And on the issue of energy, I think this is a failed comparison which I discussed in my book. Bitcoin is not a consumer payment system. You can't compare Mastercard transactions. It's the final settlement platform.
Thank you very much. Mr. Rosenkranz, you have the last word, one-minute rebuttal.
Okay, well my opponent has made a lot of the fact that the supply of Bitcoin is limited. Well, so is the supply of Picassos, and that does not make Picasso money. He's also talked about the fact that government doesn't have its hands on Bitcoin, but that's because the anonymity of Bitcoin enables a lot of nefarious activity, from ransomware payments to drug dealers to financing terror networks. Government establishes the value of money by making it legal currency, by making it the means of which you can pay debts, pay your taxes, etc., etc. And it has every reason to ban or heavily regulate Bitcoin. So in my view, Bitcoin ain't money, and in my view, it never will be.
That is a wrap on this round. Thank you very much, gentlemen, and you may leave the stage. Thank you. Now we move on to our second debate. The theme in this one is truth, and I'd like to welcome to the stage again with a round of applause, first, Sir Martin Sorrell, who is founder and executive chairman of the S4 Capital Group. Sir Martin, welcome. This side, sorry. And Zina Waked. Ms. Waked is the founder of Waked Advisory and is an executive coach and international advisor. Zina Waked, thank you, welcome to the stage. I said the theme of this round is truth and the degree to which truth may be disrupted by technology or is it being enhanced. And the advent of artificial intelligence has certainly raised this topic to new levels of relevance. So here is the question, and you will go first, Sir Martin: Will AI change the nature of truth? You have two minutes to respond.
Thanks, John. Good morning, everybody. So three very simple points. Firstly, AI, AGI depends on data. Garbage in, garbage out. So the data that is supplied to AI models is absolutely critical, and control of that data or influence on that data will be essential. That data is going to be increasingly supplied by very large companies, companies that effectively are countries if you equate market capitalization with GDP. A $3 trillion company would be the size of a France or a Germany, almost a Germany, an Italy, a Spain, or indeed a UK. And those companies will have enormous responsibilities in terms of the way that they collate the data, ingest the data, use the data. So critically important is how those companies are regulated. And the third point is there has to be self-regulation. Governments don't have the capacity or the resources or the capabilities that these large companies have. The regulatory agencies cannot move as fast and as quickly as those companies are moving or will move in the future, particularly given the needs, the capital needs of those companies around energy and compute power. So self-regulation, working together to work on the truth and what the truth is, is critically important. So self-regulation in partnership with government is the way forward in the absence of Armageddon in terms of regulation, an AT&T-type breakup of the scale that we've seen, for example, in the oil industry historically.
Thank you. Zina Waked, will AI change the nature of truth?
Thank you. Truth is an unchanging, objective constant. AI can't alter it. The Allies won World War II. 2 + 2 = 4. AI might distort, might manipulate perceptions, but the facts remain the same. AI doesn't change the nature of truth. AI might generate deepfakes, false information, but it cannot change the underlying reality. The moon landing happened in 1969. No matter how it might be portrayed, perceptions shift, truths do not. AI only affects how we access the truth, not its essence. Technology does change access, but it does not change truth. Across history, the printing press, internet, social media have changed how we access truth, but the truth nevertheless remains constant. Whether we learn through books or we learn through AI, Britain has a parliament. Technology does not redefine the facts. Truth has three fundamental characteristics: first of all, it is objective, it is fact-based; secondly, it reflects reality, it corresponds to what actually is; and thirdly, it is independent of how it is discovered. The method of finding truth, whether through AI or otherwise, doesn't affect the truth itself. AI might change perceptions or create alternative narratives, but truth's essence remains unchanged. AI is a facilitator, but it is not an arbiter. It helps us access and filter data, but it does not generate the truth. It is a tool, not a creator of truth. It may help us identify truths, but that is where it ends.
