Michael Saylor Interview: Bitcoin Is THE ANSWER!

hey guys and welcome back today I'm

joined by Michael Saylor he was listed

number four most notable people on in

cryptocurrency by coin Telegraph last

year he's one of the most influential

people in the cryptocurrency space I

know you've heard of him and we've got

him on the channel today I want to talk

to him a lot about the problem that

Bitcoin is trying to solve of inflation

of the US dollar and why Bitcoin might

be the best solution that mankind has

ever discovered in that direction

Michael welcome to the channel how are

you doing sir I'm awesome thanks for

having me that is a beautiful

behind you can you tell me a little bit

about the story of that what's going on

with that

well I mean it's it's a model of the

ships of the Dutch East Indian company

dispatched to the East Indies back in

the 17th century and that's a handmade

model from the 19th century of a 17th

century sailing ship kind of a merchant

warship and so uh I don't know it was

given to me as a gift once upon a time

and I I keep it as a reminder of um

of the beautiful work that human beings

are capable of doing and the intricacy

of life that's amazing I think that's

something that we're going to be talking

about today is one of those beautiful

Works called Bitcoin that you in 2013

you you sent out the Tweet everybody who

interviews you asked about this I'm not

going to make you talk about it again

but you had a tweet in 2013 saying

bitcoin's gonna go the way of online

gambling you said an interview that you

don't even remember sending the Tweet

it's probably just something you sent

and obviously you've changed your tune

on that because between you and your

company microstrategy you own almost

well you and microstrategy combined on

about 140 000 Bitcoin is that right yeah

that's correct that's incredible I think

a Bitcoin is it's digital energy and

it's also digital money it's digital

property and and it reflects such a a

profound uh new idea that unless you

spend 10 or 100 hours or more and unless

you have a need to embrace a new idea

you wouldn't really appreciate it and

understand it so if someone just pokes

you and says what's your opinion of it

you spent half an hour an hour thinking

about about it normally you've got a

kind of ignorant reaction based upon

imperfect models and imperfect

understanding and it's only when you get

the point in your life when you need it

and you need to understand it or you're

you know you have a an inspirational

experience that forces you to dig a bit

deeper do you start to form a more

nuanced View

right I think that's actually a very

important part of the adoption of

Bitcoins because I want to kind of lay

the foundation here I've talked about on

the channel how Bitcoin is in my opinion

the best solution ever created to one of

the biggest problems that we've ever

faced and that is the fact that we don't

have control over our own finances we

don't have control over the rate at

which our currencies are inflated we

which gold is mined we don't have

control over the rate at which property

appreciates as the devaluation of our

currency takes place that is a huge

problem because as you've talked about

quite a bit you can't store wealth into

the future reliably whatsoever if you

tried to buy a house 100 years ago it

would have been a hundred thousand

dollars and now it's worth 50 million

bucks if you try and store wealth into

the future it's going to be eroded or

taken or stolen and I personally think

that Bitcoin is the solution to that

would you agree that that's one of the

biggest problems that we face right now

and if so is Bitcoin the solution to

that problem

yeah I mean I think the biggest problem

that we face as a civilization is

conservation of energy how do I conserve

energy

over time

and that's that's the inflation and the

degradation problem

um the a secondary issue is how do you

move energy through space the

transactional problem that's that's kind

of tactical but the Strategic issue is

what's the half-life of your energy

right if I if I give you

um food and a container and it and it's

good for like a day well you got to eat

it in a day how do you store food for a

decade

it's a challenge right and if I give you

energy and the half-life of the energy

is three years then then you can only

plan with a three or time Horizon

I think when you have um energy in the

form of money right money is monetary

energy it's economic energy so if I have

economic energy and I'm storing it in

the fiat currency that's hyperinflating

that means that the half-life of the

energy is one year if the currency is

inflating at the rate of seven percent a

year

the half-life of the energy is 10 years

if I put that money into gold and Gold's

inflating at two percent a year the

half-life of the energy is 35 years if I

put the money into a building and the

building has a useful life of a hundred

years that's long I mean no no building

will probably last 100 years without

serious maintenance but let's just plug

it in just for the for grins

well you know so the half-life of the

energy is 50 years and 100 years the

building's gone

so what if I wanted to Half-Life at the

energy to be a thousand years or ten

thousand years how do I make something

last forever that fundamentally the real

issue and with the human race is how do

I make something last forever how do I

achieve a mortal life

um if I want something to um uh to

Circle uh the globe forever I put it in

orbit

if I get it almost in orbit it crashes

to earth right it's almost in orbit is

not in orbit if I get it in orbit it'll

circulate a circle around the the world

forever but if I get it out of orbit

if I can reach escape velocity it'll

Circle the Sun forever when maybe if I

if I beat the sun's escape velocity

it'll Circle you know a Galaxy forever

so how do I conserve energy or or how I

propagate energy forever and and Bitcoin

is a solution to this problem

paper money isn't a solution to the

problem land

land and and buildings aren't really a

good solution gold isn't a good solution

and so I I do think it's the idea that

you can capture an a set of energy and

hold it

forever

right is is a profound idea and you can

it's not so different than saying what

if I wanted to build a city and I told

you that the um the rock you're building

the city on was only going to sink at

one foot a decade

I okay well

you know if Venice was sinking at one

foot a decade what does that leave us

that one foot a hundred years

it's still a bit of a problem I mean you

lose two or three feet over 300 years

and you're underwater in some places so

I I really need something that's not

going to deflect it's it's not going to

move not one inch in a hundred years

right and and if we look at things that

Advance the human race

steals an example of a low deflection

form of metallic energy the difference

between building a building with steel

and building a building with clay or

wood

right or you know fill in the blank

right some other material it's pretty

profound and

um and and building a city on granite or

schist versus sand or swamp land is

pretty profound

building an economic system

a company a country

uh an institution on bitcoin

as opposed to on um

Venezuelan boulevards

right how long is your company going to

last on a currency which is

hyperinflating right not five years

how long will your company last built on

a currency like the US dollar

you said the US dollar lost 99.5 percent

of its value over 80 years

that doesn't work as a foundation as a

balance sheet and so Bitcoin is Bitcoin

represents

um you know a liquid fungible synthetic

asset that you can use to build a

balance sheet if you're a family a

company a country

you can move it anywhere right it

doesn't degrade

right the maintenance cost is lower than

any other form of asset

and if you know that you're building on

a firm foundation you can look out 100

years 4 000 years and uh

you know that's profound idea

I think that's very important because

like I said I think that Bitcoin is the

first and you've talked about this many

times how you know try and store your

money in real estate two percent

property taxes 50 years is gone stored

in gold half of it's gone in 35 years

you store it in the US dollar CPI data's

been two percent that's ridiculous it's

been much higher than that recently

you've said that it's been you know

probably closer to 25 30 I completely

agree with you

um and you've also said that trying to

move around from the US dollar to

another Sovereign currency another fiat

currency to the stock market to bonds to

Precious Metals you're just moving deck

chairs around on a sinking ship what you

need to do is get off the ship and get

on a new ship like Bitcoin and I think

it's actually very helpful for me as

somebody with a history in astrophysics

and physics before I decided that I

wanted to start this YouTube channel and

build a media company I had wanted to go

into astrophysics so when you use

physics uh explanations such as orbit

and the type of ground that you build on

that's very helpful for me to understand

what are some of the ways that you first

came to understand what Bitcoin is and

what do you think are the ways that we

can help the masses understand what

Bitcoin is that'll really resonate with

them you've said that education is the

biggest thing that we need to teach

people about this Bitcoin paradigm shift

well I think um

I think education is key

um the way I think about Bitcoin is it's

and it's purest form I think of it as

digital energy

and if I look out at the history of the

human race and the advance of

civilization I think the civilization

was Advanced by fire form of chemical

energy and it's Advanced by water right

which is which is a form of

gravitational energy when you when

you're channeling gravity through water

you know and wind right we sail the

oceans wind energy

and um and if you look at uh the

conversion of uh potential energy to

kinetic energy and the form of missiles

right Advance the civilization

explosives another another type of

chemical energy

electricity right electromagnetic energy

nuclear energy or atomic energy

um all of these forms of energy uh move

us forward as a civilization if you roll

the clock back 120 years and and you

think about the impact of electricity

in a society and you went to everybody

that operated a town or a hotel or a

building or a ship and you said this

electricity is really going to have a

profound impact on your life

people would have thought I don't I

don't you know how do I think about this

right is electricity a good thing or a

bad thing

will it burn my house down will it Shock

Me

why a lot of people die

right fires take place uh what happens

if you have electrical fire on a ship

big problem right so uh

it probably took people 30 years 40

years before they had him had absorbed

what electricity meant and and you know

you're like well I don't want it because

it'll be regulated

well is regulation of electricity a bad

thing or a good thing

you know that it's a thing right I mean

you probably can't roll out electricity

throughout a City without some

regulation you you know to get a

certificate of occupancy on a building

you need to you know you need to pass a

fire inspection and part of the fire

inspection is make sure that the

electric wiring is not going to burn the

house down

and so electricity was uh it's profound

idea how I move energy efficiently right

over wires over copper using

electromagnetic electromagnetism but now

there's this concept of digital energy

and people think well what is it I don't

I don't believe it is

what well I mean I could put a billion

dollars you know

on on one end of the planet convert a

billion dollars of fiat currency into a

billion dollars of Bitcoin move it to

the other end of the planet in an hour

and convert it back into Japanese Yen

and convert that into electricity and

electrocute you with it or convert it

into you know mechanical energy or

converted into cars or converted into

buildings

right a billion dollars moving over a

wire becomes whatever you want it to be

and what is energy energy is matter

matter is energy there is conservation

of energy matter is low frequency energy

you slow down energy and you get steel

you know you speed it up I set things on

fire you know I take a piece of wood

looks like matter I set it on fire and

it becomes light and heat what happened

to the wood right all of these are just

transformations

and um

the human race really hasn't really had

the ability to transform uh energy into

digital form

and once you do it you realize that it's

profound impact in the concept of

property

what if I could have digital property

what is property property is low

frequency money

what is money mid frequency energy if if

I have a billion dollars and hold it for

30 years at digital property if I could

put in a building then it's physical

property I could put in a Bitcoin

this digital property what if I speed it

up a bit and I pay for your coffee with

it now it's like digital money what if I

speed it up a lot and I do a hundred

thousand transactions a minute with it

that's digital energy

right what's the difference right

they're just they're just different

frequencies vibration frequency right of

energy moving through a medium and um

the world uh doesn't quite understand

that yet and you can't blame everybody

for not quite understanding that the

human race had hundreds of thousands of

years to figure out fire right how long

did we spend trying to figure out bronze

Iron and Steel

a while how about explosives

what could go wrong we're still learning

about those question yeah what could go

wrong a bit how long does it take to

figure things out air power C power land

Power Nuclear Power you know arguably we

still haven't figured out nuclear power

right like the Germans shut down their

nuclear reactors okay but on the other

hand the United States won a World War

with nuclear power right you've just

been 10 years away for a half a century

so the human race is moving forward

through channeling energy

bitcoin's just the latest chapter in

that story it's uh what if I could take

a billion dollars worth of electricity

and put it in the palm of my hand send

it anywhere on Earth store it for a

hundred years and not lose any of it

that's a pretty profound idea I think

that the the key to advancing this is

examples

we need to build it into technology like

when cash app builds support for Bitcoin

that was this big step forward

when they built support for

lightning a second step forward

when cash app lets you send uh move one

Bitcoin from me to you for free on the

cash Network that's the layer three it's

a third step forward

right so here's big idea right bitcoin's

got 800 billion dollars worth of energy

on the main net on the level one you can

move that energy

um in minutes

for dollars

but when that energy flows to the layer

two lightning you can move that energy

in seconds

for a penny pennies maybe fraction of

pennies

and when that energy moves to layer

three Cash app is Layer Three binance is

a layer three coinbase is a layer three

FTX is a layer three when it moves to a

layer three you can move that in

milliseconds

for nothing

and so

where we're now just coming to grips

with

what does it mean to move energy at the

speed of light and how do the layers

play into this and and one big idea is

high velocity money High Velocity energy

flexible portable property but the

second big idea is

um

property with a half-life of forever

that's a big idea that's huge human race

is never what's the longest lived

property

before Bitcoin right you say gold well

gold you can burn a building and the

goal will still be underneath the

building so yeah it's kind of

indestructible in that way but

as property as an energy container

it's still bleeding at 30 you know every

35 years is bleeding out under the best

of circumstances half its energy

so the best conceivable idea I think we

had

is gold

you know I mean it's storing my money in

a Picasso or in a Leonardo da Vinci

painting strikes me as being a bit of a

crap you know crap shoot right because a

lot of people don't like

Leonardo da Vinci in 500 years so so

coming up with a way to store economic

energy for 100 years or a thousand years

is a challenge and what if I told you

right the human race the longest we ever

managed to get anything to live

economically was 35 years

and now we just came up with this thing

that has a theoretical life of forever

it's like that that's a singularity

right it's like it's like the world

before oil and after oil you ever try to

you know

try to row a boat across the Atlantic

okay and then compare that to a ship

with a sail

that was a pretty big step change

right from mechanical Power to sail

power now uh that ship with the sale was

six to twelve week journey and then

replace that with a ship with a diesel

engine

right and and you tell me whether you

like that or not but of course you

probably would like liquid energy or

chemical energy in liquid form and now

you know when you flip that uh to a

nuclear-powered aircraft carrier

becomes different again

and so we're we're stepping through

energy paradigms

and each paradigm is uh order of

magnitude or orders of magnitude more

powerful than the previous paradigm

and ultimately the challenge is how do

you get the society to adopt a paradigm

shift

I mean the definition of a paradigm is

it's it's so unexpected that people

can't even conceive it exists so of

course they don't choose to spend the

time to understand what it is because

they reject it reflexively out of hand

as an impossibility or they diminish it

as you know it's tulips

you know it's like the it's just a bunch

of tulip bulbs or it's a speculative

thing

because they're not looking for digital

energy that lasts forever that moves at

the speed of light in milliseconds right

they're not looking for it

probably because they don't even

understand a lot of times people don't

understand the distinction of

of matter and energy as it relates to

economics they don't understand that

money is energy

if you don't think money is energy then

you don't think property is low

frequency money

so as soon as you see money is energy

and I'd say two-thirds of the people on

Twitter or two-thirds of the people I

try they don't you know they don't

really get the idea of digital energy

because just in their mind they're just

prejudiced against the idea though you

know what they say they go oh it's not

digital energy because it doesn't

generate electricity on the other end

but these are the same people that don't

really think about what is the

definition of digital music

like if I give you an MP3 file or I give

you an mp4 file is it digital music if

there's no speaker

sure it is

it's a file that has uh has a song on it

okay but but but how does it become

music well I have to send it over a

network to a computer to decode it and

then I have to plug it into a speaker

which is electrified and it becomes

digital music the file

is Beethoven's Fifth Symphony take away

the internet take away electricity take

away the speaker take away the computers

is the MP3 file still Beethoven's Fifth

Symphony

yeah I mean I suppose if you obliterate

every computer on the planet and you

obliterate the internet and you

obliterate every power source then you

won't be able to hear

Beethoven's Fifth Symphony

the file still got the music and coded

on it and the same is true with um the

metaphor holes for digital books digital

Maps

digital energy right if I if I give you

a map a Google map but you don't have an

iPad or a monitor is it a Mac

sure it is

you just need the right decoding device

you need a decoder chip with the monitor

with some electricity and then it

becomes a map for you okay so but you

you know people say well it's not real

Google Maps is not really a digital map

because you need electricity on the

other end to decode it

well yeah

so let's come back to digital energy

it's a Bitcoin digital energy

well if I send it to you and you're in

Tokyo what does it take for you to

convert it back into electricity

just all you got to do is run it through

your computer plug it into a local Fiat

exchange exchange it for Yen and buy

yourself some kilowatt hours and it

becomes electricity but maybe you don't

want electricity maybe you want fire you

could buy some coal and you can set it a

fire

maybe you want oil maybe you want it in

low frequency form so you turn into a

building

is it energy sure it's energy why

because Satoshi solved the double spin

problem and the double spin problem is a

very low brow

colloquial phrase

that equates to the highbrow

conservation of energy

right the solution of a double spin

problem is the solution of implementing

conservation of energy in cyberspace and

at the point that you implemented

conservation of energy in cyberspace you

converted the file from holding digital

information

which is non-conservative holding

digital energy

which is conservative right messages

Maps music or information and they're

non-conservative and that was the first

instantiation of the internet but what

Bitcoin delivers us is digital property

digital matter digital energy things

that are conservative in cyberspace

things that if I transfer a billion

dollars from me to you I can't have it

and now you do have it and and that is

the magic of the solving the double

spend problem and that is the big

paradigm shift

you could say well Bitcoin represents

the singularity where we introduce

conservation of energy to cyberspace

and

that's a pretty profound idea

now we haven't just figured out how to

conserve energy forever

we've confit we've figured out how to

transfer energy through space with

negligible friction and finally we

figured out how to introduce matter

and energy and matter is energy right

matter is low frequency figure it out

how to introduce matter

into cyberspace

right which is which means that now as

you move through cyberspace you can

literally get killed you can you can

right the problem in cyberspace today is

I can launch 10 million denial of

service attacks on your website at de

minimis cost there's not really a price

to pay but what if each one of those uh

avatars was wrapped in twenty dollars of

digital energy and I launched it 10

million times and now it cost me 200

million dollars to attack you for an

hour

right now now you can go bankrupt in

cyberspace screwing around right now

there are there are consequences and so

what I'd say is

we're introducing truth

and consequence into cyberspace

and that is also profound because that

lays the foundation for us to create

beautiful safe elegant uh artistic

products in cyberspace because right now

what we have is a bunch of garbage

you know on the social networks Twitter

and Instagram and YouTube and Linkedin

they're just full of spam and phishing

attacks and scammers and like how you'll

give somebody two Bitcoin back if they

give you one Bitcoin that's a scam

obviously but you know what and and a

thousand Michael Saylor Bots offering to

do that spin up every week you know like

one every like 10 minutes yep they do it

to me too yeah and they're winning

because we report them every 15 minutes

I spend a million dollars a year

reporting them wow and they just have a

little python script that just keeps

spinning them up so you you really can't

fight

that are you

what I would say is the reason the real

world works

is because if I walk into a hotel room

in the real world they normally ask for

a credit card and if I Smash Up the

hotel room they charge my credit card

now if they let me walk in the hotel

room and didn't take a credit card

I might still I might be more likely to

smash up the hotel room but there still

might be a criminal or physical risk

maybe somebody would see me come out of

the hotel and beat me up or maybe I get

arrested or be bad for my reputation so

it's still not easy

what happens if I actually could make a

billion clones of myself going to every

hotel room every hour and smash them all

up for free with no consequence

like that there's no Hotel industry

right

now what what keeps me what keeps me

from doing that right and the answer is

one uh economic deterrent when the hotel

operator asks for the credit card but

two there is conservation of energy in

the real space in Newtonian space I

can't physically be in a million places

at the same time

right I can't move at the speed of light

too much friction right shock waves I

burn myself up I can't do it and so the

real world has things of beauty and

functionality because there is

conservation of energy and because there

are consequences either political

or economic consequences

cyberspace is without truth it's without

consequences there is no conservation of

energy absent Bitcoin and that's why all

these products right are are crippled

and impaired and the solution

to cleaning up cyberspace and the

solution to creating beautiful products

in cyberspace is to introduce

conservation of energy and to do that

you need digital money digital property

but but mostly you need digital energy

you need the ability to wrap your avatar

in a layer of digital energy so that if

you click through ten thousand things a

day or a hundred thousand things a day

as long as you're a decent uh

well-mannered cyber citizen you move

friction free but if you go and attempt

to smash up someone's website a million

times a day there should be a penalty if

you attempt to a cost or victimize or

abuse or harass a million people an hour

there should be a penalty

and when there is

we will be monetizing uh malice

and malicious behavior will be degraded

by

99.99 most likely

that will be a beautiful world

truth and consequence

in cyberspace that that's that's the

Here and Now opportunity slash

imperative it's the technology

imperative for Bitcoin and it you know

sure I want to live forever or I want my

money to live forever but that's a

thousand years out I would like for

things to be beautiful and safe and

functional now

and that's also a useful application of

digital energy

so that's something I've been talking

about for a very long time that Bitcoin

solves the problem of not having

scarcity online before you could just

take a JPEG and copy it 100 million

times they cost you nothing and of

course as you talked about that makes

attacking anything much more easy

because you don't have to build tanks

and bombs and all these things you don't

attack somebody you can just write a

python script as you said to do that and

but until I started studying you and

watching what you had said I had never

connected the dots that what Bitcoin

essentially is is the first example of a

superconducting thermodynamically sound

system built online it's it's a

digitally sound system that doesn't leak

in erode energy that can be transacted

frictionless but if it is truly a

thermodynamically sound system meaning

that its energy cannot be created nor

destroyed while it can be created it was

initially creation after the initial

creation its creation process can't

change perhaps we should say if it truly

is a thermodynamically sound system then

that means that its energy cannot be

created so that 800 billion dollars

worth of economic energy that has come

into Bitcoin had to come from somewhere

so people always ask where does Bitcoin

get its value from people will often

compare Bitcoin to to Le Mania as you

referenced or a Picasso painting that

people could fall out of favor with what

do you say to the people that say well

one where did bitcoin's economic energy

come from in the first place and two

what happens if people decide we don't

want this economic energy anymore and

they stop using it uh the energy is

Flowing from people that adopt Bitcoin

as a store of value so if a hundred

people put a billion dollars each into

the network by buying the Bitcoin

they're putting a hundred billion

dollars of economic energy into the

network if you put a trillion dollars of

economic energy into the network then

then that's uh that's the capacity yeah

think of it as a battery and you're

pumping energy into the battery now

let's let's pick uh let's pick a

mechanical uh example a water tower

okay I create a water tower in the

middle of the city and the water tower

has a thousand gallons capacity but

there's no water in it

okay so at the bottom of the water tower

maybe is a is a bicycle and if I ride

the bicycle it turns on the pump and I

pump water up to the top of the tower

so I'm doing work to pump water to the

tower now how much energy is the tower

holding

depends on how much water you pumped

into the tower right okay if the towers

got a thousand gallons of water in it

right how much energy is that well you

measure you know you measure the weight

of the water and the height of the tower

right and then you calculate the

potential energy and how do you tap into

that energy well you turn it the other

way and you open the gate and the water

flows down and now you've got you can do

work right you've got energy and you can

do work so what if I have a dam and it

can hold 10 million gallons

how'd the energy get there well I mean

this with the dam generally the idea is

we hope that uh The Sun Shines it

evaporates the water the clouds rain

water down on the mountains the water

flows down the mountain to the dam right

we let nature or the sun do the work

right because it's not so easy for us to

haul the water up the mountain right but

a dam is also holding a huge amount of

potential energy so Bitcoin represents I

think of it like uh it's like an

aqueduct Dam type system I have a dam or

a reservoir and I have a set of pipes

how much energy is in the system

well none if there's no water in the

system what's the cost to build the dam

and the and the pipes right when the

Romans built the aqueduct system right

they probably had a dam and they

probably had aqueducts there's a cost to

build it that's a fixed cost

then there's a cost to maintain it

now how much energy can you Channel with

it

well you know plus or minus a factor of

10 or a factor of 100 right

probably probably orders of magnitude

difference is the amount of energy now

what what's the equivalent here well

Bitcoin miners

right the Bitcoin mining system is is in

essence it's it's the fixed and the

variable cost to maintain the system

and today probably four or five billion

dollars a year is going into Bitcoin

mining if you consider the energy that

flows into in this case the money that

goes into buying energy and the money

that goes into buying mining rigs

right that that's the maintenance cost

of the system

and then how much economic energy can it

move and the answer is you know could

move to 800 billion and it could store

800 billion I think there's two numbers

of Interest right there's how much is it

storing

we know that number about 800 billion

and then it's how much is moving right

that's the transaction amount on the L1

blockchain

and that's more than 800 billion a year

I think so

could I actually put 8 trillion on it

yeah sure you could put 8 trillion on it

as easy as 800 billion could I put 80

billion on it yeah

so what determines how much economic

energy is in the system well

you know if the US government decides to

buy a hundred billion dollars of Bitcoin

right and probably the value of Bitcoin

is going to be squeezed up now you

Andy and the potential energy in the

system is much higher

um you see that potential energy in a

bow when you pull the the bow back or

the string back on the bow how about

compressed air if you look at the you

know an engineering a compressed air

canisters okay I give you a SCUBA tank

well how much energy is in it well it

depends on whether I filled it up or not

right like

right I mean it's a tank right it's it's

got some amount of compressed air is it

one atmosphere

one atmosphere isn't that useful unless

you're in outer space when it becomes

somewhat useful but what if it's 10

atmospheres

what if it's a hundred atmospheres

right it's a hundred atmospheres worth

of uh air and a bottle more energy than

one atmosphere of air and a bottle

yeah how to get there

you pumped it in right what's you ever

try to create a hundred atmosphere air

bottle with balsa wood as a container

how about glass right how about cloth

how about

fill in the blank clay

why didn't we do it with clay or balsa

wood it's too fragile because we didn't

have the right material yep Steel

steel is a better material now how do I

pump 10 trillion dollars of monetary

energy into something

well I need a I call it a a crypto

Crucible right a crypto container what

is bitcoin it's a crypto container

what are the other containers for money

uh metallic container in the form of

gold

but the problem with gold is it's not a

closed system it's an open system

right if if uh I could I got six billion

ounces of gold in the world and we keep

adding two percent more a year but if

I've only got 21 million ounces of gold

in the world and you could never make

any more then it would be a better

container but no one's come up with a

physical commodity which is hard capped

we can't figure it out

so Gold's not a very good monetary

Crucible what about uh what about fiat

currency well

you know the best one in the world was

the dollar and it lost 99.5 percent of

its energy over 80 years so not that

good

what what's the theoretical best one

you know well if God comes down from

heaven above and creates this perfect

Ledger and God said there's 21 million

tokens

and I'm and God's going to keep track of

it and God is Incorruptible and no one

can get to God and subpoena God to

double the token Supply

and if God makes a ledger Ledger

available to everybody on Earth and make

sure that whenever I give you two I get

debited too then you've got a perfect

monetary container right a perfect

Ledger

but since uh God's not interested in

running our money supply for us

then what's the next best idea

the next asbest idea is a software

system but it can't be a centralized

Software System because centralized

software systems are corruptable by

companies by programmers or by

government so it has to be a completely

decentralized system that it's the

decentralized system that makes it

incorruptible

and so Bitcoin is that

approximation of a perfect monetary

Crucible every 10 minutes clicking

forward you know running across millions

of computers in the form of Bitcoin

Miners and

10 20 50 100

000 nodes as ledgers but the way to

think of it really is there's millions

and millions of computers that are all

keeping each other in check

it's a cybernetic system in homeostasis

right in dynamic equilibrium it tends to

it tends to stabilize itself

maybe the most beautiful thing that

could be said is uh Bitcoin is a perfect

machine composed of imperfect Parts

um

I've heard you talk about that with

watchmaking about how you take two

imperfect pieces and then you bring them

together to make a perfect wash that'll

maintain nearly perfect time anyway

that's really really interesting I've

got a background I've gotta you know I

never went to college for it I've never

studied it you know professionally but I

do have a lot of uh nerdy hours on

YouTube studying physics over the last

10 years or so and it's very interesting

to me that in the last five years I've

been in crypto I've never thought about

Bitcoin as a water tower or a dam or a

container but that's such a elegant

solution to explaining what Bitcoin is

it's just the first container that

doesn't leak it doesn't leak it doesn't

leak economic energy in the same way

that gold or property or stocks and

bonds and the oil Market does it's the

first container that does that but let's

pivot a little bit I want to be

respectful of your time we'll go for

just a little bit more here I want to

ask you one more question it's a little

more topical

I'm sure you saw it because you keep

very close tabs on the fed and the fonc

meetings and Jerome Powell and

everything you probably saw that they

just raised the interest rates the

federal funds rate by 0.25 25 basis

points yesterday uh at the time

recording this we're recording this on

the 17th of March what do you think

Rising interest rates are going to do to

the Bitcoin market and what do you think

the relationship between the interest

rates and the inflation of the US dollar

and Bitcoin is in general

but you know I think in the near term

there's always a Crazy Fast Money hedge

fund traders that want to trade these

things uh at 2 pm yesterday when the fed

put out their press release the market

sold off radically NASDAQ and Bitcoin

and they all dumped and then uh as

Jerome Powell started talking by three

o'clock it rallied and raged forward you

know and what you can see is that you

know people sort of want to read

something into it and they're just

running around you know chasing their

tails making fools of themselves in a

way and if you panicked and you panic

sold you lost some money and you know

you panic buy you know you're just as as

caught up in the moment

uh let's let's step back and look at the

big picture

um the big picture is the uh the

government CPI in the U.S is nearly

eight percent that's the published

number the published producer price

index is ten percent

um the published CPI numbers in other

countries are higher as much as double

or triple higher

all of the published numbers are

manipulated to be the lowest figure you

could possibly create

by a Market Basket adjustments and

hedonic adjustments so

uh if I talk to people that I know they

would say well a real cost for producers

are going up 15 or 20 so the PPI is 10

but the real number is 20. the CPI they

say is eight but the real number for

many consumer things are 12 to 16.

um

the asset inflation rate is at least

double the CPI so if your goal is you

know we know that the case Shiller index

is showing about 18 so middle middle

class home is up 18 year over year

you talk to a lot of people in big

cities that say like in Miami or New

York or other places they're up 20 or 25

percent

so the actual inflation rates on either

assets or or desirable goods are running

probably double

what the CPI is

classic conventional wisdom would say

that if the inflation rate was eight

percent you need to raise interest rates

to eight percent

well inflation rates higher the interest

rates go into 25 basis points so I don't

think that raising interest at this

level has any long-term impact it has a

near-term skittish trading impact but

but even if you believed inflation was

eight percent there's no way you can

conclude the 25 to 200 basis points is

going to stop it

um

the negative real yield on bonds

if you calculate it must be running

minus 15 percent uh the the swap curve

is flat it's like I think yesterday uh

three-year treasury swaps were 226 basis

points and 30-year treasury swaps where

229 basis points

that that means that in theory somebody

wants to wants to pay you 2.3 percent

interest for money for the rest of your

life and the inflation rates running 8

to 15 percent right now which means that

the negative yield is minus 12 13 14

percent

which means that under the best of

circumstances the half-life of the of

your money stored in sovereign debt is

five years

and it's going to be cut in half twice

in the next 10 years but probably worse

than that

so