Why you shouldn't sell your Bitcoin for the next 100 years | Interview with Michael Saylor

michael saylor the ceo of microstrategy

made a billion dollar bet on bitcoin

last year

microstrategy has now acquired over 70

000 bitcoins

making it one of the largest public

holders of bitcoin in the world

so it's a gift once in a thousand years

do you actually see the invention of a

fundamentally new thing

this is our once in a thousand year

opportunity you get to buy into it early

in august 2020 microstrategy confirmed

it had made bitcoin its primary treasury

reserve

asset then in september the firm doubled

down by purchasing an

additional 175 million dollars of btc

sailor touted his commitment to bitcoin

on twitter by advising elon

musk to convert tesla's balance sheet

into bitcoin

a month later tesla did just that

however

sailor wasn't always a staunch bitcoin

supporter

in 2013 he claimed bitcoin's days are

numbered

and compared bitcoin with online

gambling times have changed since then

along with the opinions of large

corporations

sailors advocacy of bitcoin in 2020

earned him a spot in cointelegraph's top

100 notable people in blockchain

in fact he took fourth place so why does

the fourth

most important person in blockchain

claim his company will hold bitcoin for

the next

hundred years watch this interview to

find out

but before that don't forget to

subscribe to our channel

austin davis co-founder of community

electricity

sat down with michael saylor to bring

you this interview take it away austin

what's up everybody austin davis here

interviewing the

the uh famed michael saylor we're going

to be chatting about bitcoin

and about uh success and failure and

glory and all the above how you doing

michael

i'm well thank you amazing um

so last time i got to chat with you i i

wanted to ask you a question but i

kind of forgot what is that boat behind

you is this the uh queen anne's revenge

we're looking at here

what boat is that you know it's actually

it's a 19th

century antique model

handmade of a 17th century

galleon so it's a it's an old uh

an old galleon and and uh it was made

very intricately and

about 150 years ago by hand and it's a

it's kind of a work of art

and so i keep it around it's one of my

mascots it's very motivational

since you mentioned you know history and

that thing seems to like

has a lot of history to it um you're

you're a history buff right you've uh

you've uh have a background in the

history of science i believe

is that right yeah i got a degree in the

history of science at mit

so uh what what draws you to history

because that must have started

at an early age right i i always loved

history you know

from uh from the point i was in

secondary school and

i just think it's fascinating to read

about the exploits of humanity

what happened why did it happen how did

it all turn out

hopefully there's some there's some good

lessons in there that we can draw upon

for

the modern era absolutely yeah

and um and you also studied engineering

right

yeah spaceship design i studied uh

you know astronautical engineering

so i at mit you know there are a lot of

engineers but i

but i thought it was really nice to be

able to blend

to study the humanities and sociology

and economics and politics and history

of science

which is all about what happens to

civilizations when you have new

technology

introduced into them what happens when

we invent

x-rays or railroads or communications or

airplanes or roads in general and and

they all have a profound impact so

if you're just the engineer and you

don't consider the consequences

economically or politically then you

only get half the picture i i

think it's very interesting to see the

interplay of the two

so that that leads me to one of the uh

the interesting topics of today bitcoin

right it's bitcoin week in miami

um so there's a lot going on around

bitcoin around the world you're

obviously a huge advocate of it these

days and you believe in it which is

amazing um to have someone in your

position who uh

who actually has done the research and

and decided it was a good

investment and a good uh secure a way to

secure the future

um so so that leads me to the kind of

tying engineering to this so

i love it when you uh kind of bring the

thermodynamic principles and the laws of

thermodynamics into uh

explanations of bitcoin and why you

think it's a very sound money because of

that so

can you can you touch on that a little

bit um on thermodynamics and bitcoin

sure i mean i think that a lot of times

the bitcoin story is

is told through uh an economic lens

or spiritual lens or a mathematical

lens or sometimes a financial lens and

you know in the extreme it gets called

an uncorrelated speculative asset which

i hate

right uh i think the story that needs to

be told much more

is that bitcoin is a masterpiece of

monetary engineering

and there was no class in monetary

engineering at mit

but we studied servo mechanisms and

cybernetics and

the principles of control system uh are

are critical for aerospace engineering

the plane won't fly if you don't have

stability

avionics are all about control um

in electronics you know there's plenty

of examples of control systems

and in every other engineering

discipline people understand

uh the principles of controls

thermodynamics

uh you know the study of energy

as a manifest itself and heat and work

right is critical to making any machine

work and

um you know when i think about bitcoin i

think well

first of all it's the first successfully

engineered monetary network in the

history of the world

one day they'll probably have a a class

or they'll have a degree in monetary

engineering at universities

uh next to chemical engineering or

electrical engineering it makes sense

um what is money uh well

i think most people want to ask the

question i think money is monetary

energy

i think it's the apex energy and as soon

as you understand money to be

energy then it stands to reason

and that a monetary system that applies

the

the principle of conservation of energy

is a pretty good idea if i create a

bathtub with a

you know with the sink open it doesn't

work if i have a swimming pool with a

leak in it it doesn't work if i have a

ship with a leak it doesn't work a plane

with a leak doesn't work

electrical engineering systems you know

and power grids with short circuits

don't work

in fact nothing in the engineering world

aqueducts don't work right bridges with

a leak in them don't work

so every engineer knows you have to

apply the laws of thermodynamics you

need to apply conservation of energy

if you're a mathematician you'd call it

arithmetic right

the rule that says that if i add 9 plus

9 it better add up to 18 because on the

day that it adds up to 19

some horrific thing is going to happen

right uh so once you understand money as

monetary energy and you understand

bitcoin is a monetary energy network

then uh you start to appreciate the fact

that

it either does or does not respect the

laws of thermodynamics

if it doesn't then that means that uh it

has a leak

you know the the term the colloquial

term for a leak

in uh in monetary economics is inflation

inflation is the leak and you know

inflation is

is a hole you know

in the container and in the reactor

and and uh your water your electrical

power

your reservoirs your hydraulic systems

your pneumatic systems

your fuselages and your holes

they all fail everybody dies

if you don't have conservation of energy

and so um i you know i respect bitcoin

because

a it's a monetary system b it's

engineered

uh in a conservative fashion and the

classic

definition of conservative would be

derived from conservation of energy

if i give you 10 items will you give me

back the 10 items

or will you change the number to 11 or

downgrade it to nine

and if you're not conservative in your

appreciation of energy

then no machine works nothing works

that's right yeah i wish more of our

economic policies would

would learn from uh the principles of

thermodynamics as well right i don't

think

i don't think printing uh was it between

23 and 26

i believe in 2020 we printed of the

entire

us dollar amount ever created that's

pretty

it's pretty insane right because it goes

back to what you're talking about the

expanding monetary supply your salaries

are staying roughly the same

the monetary supply is expanding your

purchasing power of your dollar is

shrinking

most people don't even think about that

they just spend their dollars and

you know maybe if you're not holding the

dollars it doesn't matter as much but

it's that's the problem they try to i

guess the powers that be want to hold

everybody in that position

to some degree so that they can keep

printing so that kind of takes me to uh

to scarcity a bit because based on those

principles there's only 21 million

bitcoins that will ever be created

now i had some some folks yesterday

asking questions about the scarcity of

that you know

what happens as we approach that you

know in your mind what happens as we

approach 2141 when

the last bitcoins are being mined um

what does the world look like

um you know regarding bitcoin and the

use of it at that point

well i think scarcity uh just means

integrity it means math

mathematical purity or it means

conservation of

energy and if you have integrity in any

engineered body

or reactor that just means that you're

not going to be leaking

pressure or leaking fluids it's a closed

system

thermodynamically or an adiabatic system

and of course what you learn in

engineering is you can't solve

for a non-adiabatic system there's no

solution

because it's uncertain as to how much

fluid or how much mass will enter

or leave the system that makes it

impossible so

scarcity really to my mind just means

we've decided to create a conservative

adiabatic system

such that we can solve an economic

problem

um you know once we've done that what do

i think will happen

i i think that uh the system uh

you know the bitcoin monetary network

will gracefully evolve

into a monetary network that's funded by

transaction fees

and the transaction fees will finance

the miners to provide transaction

processing power and security

and it'll be all market driven and as

the network gets more broadly

distributed

the demand for scarce bandwidth on the

network will increase

and the transaction fees will increase

and the

and uh and the transaction size

and monetary value will increase we'll

end up moving large blocks of money

million dollars 10 million 100 million

whatever the fiat currency is it'll be

large blocks

with high transaction fees and then all

the small

blocks will move off chain in

in essence bitcoin banks like paypal

or square or binance or coinbase which

are in essence bitcoin banks

that are moving hundreds of millions of

small transactions

off-chain or maybe enlightening if you

will

and uh and and it'll be great it'll be

fine

so do you think that uh you know let's

say invoices will be

thought of in bitcoin in the future

instead of right now it's

i guess globally accepted that the us

dollar is a good comparative

uh currency um when you're invoicing do

you think that

we'll start to switch because it's so

universal

what i what i think is there's going to

be five

let's say today there's 500 trillion

dollars worth of monetary energy

money in the system and it's divided

between currencies like the euro and the

dollar

it's divided in tangible hard assets

maybe real estate trophy assets art

gold silver bitcoin and then there's a

portion of it sitting in bonds and

stocks

and bitcoin is going to grow from that

600 billion dollar asset to become a 10

trillion dollar asset like gold

then it will subsume gold and it'll

become a 20 30 40 50 100 trillion dollar

asset and that'll be the core

of the monetary planet if you will right

now

we're still going to have picasso and

people will have value for their picasso

paintings

you're still going to have your diamonds

you're wearing and your gold rings and

you're going to have your beach house

because you're going to want your beach

house if you're going to own stocks

you're going to own them because you

love the companies because you wanted to

make an investment in the company

because you love the company you think

it's going to go up faster than the rate

of

monetary expansion i think that the

currencies will be mandated by the

governments as long as there's a united

states government there'll be a dollar

and the dollar will be legal tender and

and people will buy things and sell

things

transactionally in dollars and the

reason why

is because the irs gives the dollar

currency

tax treatment if i give you a hundred

dollars a year ago

and if the dollar appreciates against

the peso

over the next year and it's worth 10

million gazillion pesos

and you give me the hundred dollars the

us government is not going to charge you

a capital gains tax

right so it makes sense for you to move

dollars as currency

because there's no tax obligation but if

i give you a bitcoin a year ago

and the bitcoin is now worth it was

worth ten thousand a year ago and it's

worth a hundred thousand next year and

you give it back to me

you're going to owe the federal

government 35 000 in capital gain

you're not giving me the bitcoin keep

the bitcoin

give me the dollars right you want to

give me

you want to give me money borrow against

fund in the bitcoin currency and then

give me the dollars

or convert something into dollars and

that's

so your your currency is dictated by the

government

you know you start your own island

austin you can have your own

you know you can spend satoshis on your

own island if you want to

but as long as there's the eu central

bank or the u.s or the whatever

their tax authority will determine the

currency based upon whatever they

designate

as currency if the irs had designated

bitcoin as currency

there would be no capital gain to move

that back and forth when the irs

designated as

property it implies it's digital gold

you should treat it like gold you should

buy it and hold it forever

and then my advice to you would be to

borrow against it

tax free never pay capital gains never

take an operating income

you know if you must sell it i don't

think you should because it's the

highest quality property in the world

in the history of the world we never

invented a technically

more thermodynamically sound pure

monetary property than this right this

should be the container for the money

you're going to hold for your

grandchildren

this is it better than gold better than

a stock better than real estate

better than a picasso even if you love a

picasso right right so i think that

i think bitcoin is property in

cyberspace and i think that currencies

aren't going away as long as governments

are with us and i'm going to hope the

government will stick around because i

think there's some good things about

having a government

and when the dust settles you're going

to have

maybe a hundred trillion dollars worth

of pure monetary energy in bitcoin

you're gonna have 100 trillion dollars

worth of stocks or 200 trillion and

they'll be pri

price discovery the value the stock

should decrease

until the returns are expected risk

adjusted returns on the stocks are

rational

you would expect the value of bonds

would decrease such that the coupon on

the bond is rational

price that is called price discovery

returning those markets

you would expect that the value of gold

will decrease and or

will start to equalize to its ornamental

value what is it worth to you as an

ornament what's your art worth as an

ornament

what is your beach house worth for your

value and use

and then there'll be a layer of cash and

dollars and euros and pesos and yen and

juan

that will circulate around and that

layer of cash will probably not hold

value

because we know we're going to keep

inflating it and you know you ever

calculate in the wan

i do it's like it's like a 10 000 won to

the dollar

and it's it's measured in billions of

won

it is you know it used to be a peso was

one peso to the dollar

and you know it's shooting up to 140

argentine pesos to the dollar on the

black market right now so

eventually that the currencies will fall

but they'll be used from day-to-day

transactions

and if you're wise your wealth

preservation strategy would be

put all your money into bitcoin don't

ever sell it

and then borrow against it you know and

if you borrow against 10

of your bitcoin and then your living

expenses don't go up more than 10

a year and a bitcoin goes up 20 percent

a year your debt to equity ratio will

fall forever

you will never pay capital gains tax you

will never have income tax

yeah you just need a bank that that

handles bitcoin and the bank

for bitcoin is evolving right now so

also earlier you mentioned something

about

scarcity um tying it to you know

thinking about precious metals right

like

yeah in the near term they're probably

going to do good and go up but long term

there's a non-trivial effort going into

asteroid mining right now one person

gets it right one group of people get

that right and they start bringing

payloads back

you know let's say they they hire elon

musk and say you've got a lot of assets

up there help me get this stuff from a

to b

and all of a sudden we've got a steady

stream 24 hours bringing precious metals

to the planet

you know there's more platinum on one

asteroid than we've ever mined on planet

earth so i think precious metals

long term don't make sense uh forever

but bitcoin

you know could get thousands of years

out of it right depends on what happens

to humanity i guess

look the i mean the problem is if i want

a system of mathematics

or engineering it needs to be based on

arithmetic

mathematical integrity or

conservation of energy it can't be based

upon

an analog approximation of integrity

like

it's really hard for us to find rocks

and we found 21

rocks and we're gonna as long as nobody

finds a 22nd

rock then we're going to add up to 21.

it can't be an approximation which is

what gold is it needs to be a

it needs to be an exact thing so bitcoin

arithmetic is a protocol you know

bitcoin is a protocol

english is a protocol a language is a

protocol

you know if everybody in the world

agrees to communicate with the english

language

a thousand years from now we'll still be

using the english language

and we'll be using it because billions

of people

agree to communicate in the english

language

right if everybody agrees to move their

money around in bitcoin

a thousand years from now we'll be

storing our money in bitcoin

so worrying about whether we find some

more silver or some more gold

right is is kind of silly right it's

like the truth is

we just should abandon commodity monies

in the same way that you abandon the

abacus or

i don't know i'm trying to imagine like

caveman with like 47

rocks in the dirt and they're like this

is our way of keeping track of what we

have and at night there's someone

standing guard over the 42

rocks to make sure that someone doesn't

accidentally drop a 43rd rock

and destabilize the power structure it's

like that's

you know it's a it's an open system not

a closed system

it's defective and it's kind of like

just changing the rules of arithmetic

your bridge is going to crash your

ship is going to sink your airplane is

going to crash and burn

so i i don't even think about asteroid

mining because it's such a silly notion

to think that

i'm going to save my money in gold and

hope that no one mines an asteroid it's

about as stupid as saying

i'm gonna save my money in gold beads in

sub-saharan africa

and hope that nobody with a ship shows

up with more gold

with more glass beads right right it's

like the glass bead money or like the

seashell money as long as no one treks

over to the

to the beach and finds more seashells

i'll be a rich man

right well good luck with that i mean

that didn't work with any civilization

that i can remember it's about as dumb

as the giant

stone coin of the app people and so

if you're saving your money in gold it's

the modern equivalent of saving your

money in the giant stone

coin of the yak people and as long as no

westerner and a ship

shows up with other stones

yeah you're gonna be fine you think

about it

you know and the asteroid mining thing

is the equivalent of what if someone

shows up with a ship with glass beads or

sea shells or oh

it's exactly the same thing it crashes

our economy

yeah the answer is maybe you'll actually

have computers and arithmetic

you should have used the computers and

arithmetic to base your economy on

and not stone coins of the yap people

yeah yeah for sure you mentioned

something earlier about um

you know money being a kind of a

language and i've kind of

kind of agreed with that i've said that

over the years um and it just dawned on

me like man

the guys who invented esperanto i forgot

who it was um

back in the day and tried to create a

universal language right that everybody

could

easily learn and use bitcoin kind of is

that new thing right everybody can use

it

it doesn't take much to understand it at

least not under to understand how to use

to understand it takes a lot of brain

power and time really to understand it

if you look back but but at a high level

to use it and understand how to use it

doesn't take

any just it's pretty simple um

especially since more and more companies

are supporting it um

so at any rate i don't want to dive into

that too much but i thought that was

interesting um

well look i'll say on that subject the

people that are skeptical of bitcoin

they

generally they don't have historical

appreciation of protocols

like they think like well like i even

see a famous hedge fund manager saying

well bitcoin is something and someone

will invent a better version of it one

day or replace it it's like

well do do you not realize that railroad

tracks are that width because roman war

chariots were that width and 2 000 years

have gone by and nobody managed to

change the railroad gauge

right good luck with that we still have

i mean latin lasted 800 years the

english language is circulating we're

using a arabic

arithmetic how trace those numbers back

and try to figure out

how come no one change the system of

arithmetic

yeah you know and why don't you look at

the power plug in the wall

look at the power supply and the voltage

and the prongs

and then ask yourself how hard would it

be to change that

and then once you go change like you

know pounds and

inches for the metric system because

people been talking about doing that

since i was a kid

in first grade yeah protocols last

tcpip last

english language last all of these

technical protocols and weights and

measures

we have things that go back thousands

and thousands and thousands of years

they go back two thousand years before

christ

and we're still stuck with certain of

these protocols because once they get in

to the civilization and everybody agrees

that they're going to use those

protocols

you know it's a basic common sense idea

even warren buffett articulated it but

he didn't understand

it is a protocol when he says brands

have value

the reason coca-cola as a brand has

value is because a billion people on the

planet have in their head that the word

coke means something safe i can drink

that taste

fizzy and good and when a billion people

have it in their head

if you were to nuke all factories all

distribution the entire supply of

coca-cola

everything on earth the idea of

in in the head of a billion people has

value

and you have to murder the billion

people

and start again with the civilization to

replace the brand with something else

and so

the bitcoin brand and the protocol for

moving money around

is something which very well can go for

hundreds of years

if not thousands of years and once

people realize that

they realize no it's not about inventing

something better

there's you know any number of people

came up with the better

railroad card that was 12 inches wider

good luck with

putting that on a 100 billion dollars

worth of

rails railroad tracks and bribing

10 000 politicians that let you rebuild

the railroad so that you can run your

rail car with an extra one foot of width

it doesn't work do you think there's a

future of decentralized mining for

bitcoin where everybody

you're not going to make a ton of money

but you'll be supporting the network

right you know

the virtual power plant would be the

centralized thing that is maybe earning

the most money but

individuals could be running nodes as as

a lot already are

i i think it's most likely that it's

going to scale up

and it'll be containerized like people

building these big shipping containers

that are full of miners

that have thousands of miners in a

container that they can ship anywhere on

earth and just drop on a pad

and i think it'll migrate in these

containers to the edge

of the power network it's going to

migrate to the place where

you're not going to be stealing power

from manhattan where you're competing

against human beings because human

beings are going to bid

more for the power like it's worth for

example you would pay

10 cents a kilowatt hour you would pay a

dollar a kilowatt hour

you would pay ten dollars a kilowatt

hour if the if your choice was to do it

yourself or do it with the mule

right or buy electricity so so human

beings are always going to pay more for

the power

you have to go to places where there is

power

that and there are no human beings

places where the humans

can't consume all the power and where

the power is either it's either stranded

where we have to keep producing it we

can't stop

producing it and there are no human

beings or there's no

other uses of the power and then

presumably

you know be some combination of i find

renewable power

you know in a place that's very cold so

my cooling is free

what you really want is infinitely

renewable power stranded

in a place where it's freezing and and i

don't to pay to cool the thing i dropped

it

and there are no people there and i run

a long line there

and i just mine bitcoin and and uh you

know

offsetting that will be these containers

will be moving because politicians will

be changing the laws and they'll be

seizing them

they'll be taxing they'll either tax

them they'll outlaw them they'll seize

them

or they'll leave you alone and the rates

will change and so i

you know i don't think it makes a lot of

sense to build fixed

mining capacity because eventually the

politicians will tax you

or or the power will go up if you want

to play this game

you have to have access to the equipment

you have to be able to spin up the data

center quickly but you have to find

stranded power energy that there

for which there is no better use where

you can buy it in essence buy it for

effectively zero

right near zero a penny is good

zero is better of course

right and and two cents is okay

but ultimately anybody on earth can

compete and mining against you

and so you're going to be competing

against nation states that we'll give

away the power for free

yeah in order to generate the hard

currency and so

you know you really got to you almost

got to be thinking about will nature

give me free cooling so i got to go the

arctic circle

can i find free energy with a

hydroelectric

power supply that was accidentally built

can i find a political government that

won't tax me out of existence

and then can i keep uh first generation

or our current generation

shaw 256 hash power i don't know

we'll see but uh you know it's it's

going to be a very dynamic business

very dynamic very competitive business

and it's good for bitcoin

but it's like if i had a hundred million

dollars right now i wouldn't

invest it in mining i'd invested in

bitcoin

right okay coin is the monopoly digital

dominant network

mining is you choosing to compete

against everybody on earth

right but you better have a built-in

edge

you know if you're intel or you build

chips or if you're amazon you have data

centers or if you

if you're iceland and you already own a

bunch of

hydroelectric or geothermal power that

yeah

you're if you're bit made and you're

you're using your first gen and selling

all of your second gems to

you know whatever you know vice versa

you're selling the

the new models but you've already used

the old models and you're just rotating

them something like that like if you're

first in line at bitmain or one of the

miners right um so yeah that's

interesting i just wanted to touch on

that and get your perspective on

bitcoin mining um all right so so we can

wrap but uh before we do

any any uh motivational words for folks

that uh

should get into uh to bitcoin i know

you've been great at calling people out

you know top level people that that

should get in but

in general to the public any uh

motivational words of uh

why they should pay attention to this

thing called bitcoin

look i think bitcoin's a bank in

cyberspace it's

you know and your choices are you save

your money in a traditional conventional

fiat bank and you're going to watch your

purchasing power dwindle

down over the next decade to the point

where it'll buy nothing

or you can gamble in the stock market

that's maybe rigged against you you know

and if it's not rigged against you

then then you'll be buying companies

that are generating

cash flows and fiat currency

that is collapsing in value so

even if you think you've avoided the

problem of currency weakening

of storing your money in a bank you

haven't really because if you're buying

real estate bonds or stocks that also

generate fiat currency and that currency

is collapsing in value you've got the

same problem it's a

now you have a fiat derivative or

you can uh save your monetary energy

save your purchasing power and your

wealth and bitcoin

which is not a fiat derivative that is

not collapsing in value

that is going to appreciate against all

these other currencies

as they collapse in value and you don't

have to

gamble on whether or not apple will ship

a good iphone 14 or

you know the next generation of this

product or that product or this service

or what that government will do to this

company and what that ceo will do

all very complicated anxiety inducing

bitcoin is a simple thing right it's

you're buying into

a thermodynamically sound engineered

monetary network the first

workable monetary network in the history

of the world

first digital monetary network in the

history of the world

you know it's it's a gift once in a

thousand years

do you actually see the invention of a

fundamentally new thing

this is our once in a thousand year

opportunity you get to buy into it early

you know what would be like if you own

10 of all the electricity

that was ever gonna be pumped or what if

you could buy one percent of all the

running water

that's ever going to be pumped right

that's what this is right it's

one percent of all the fire that's ever

going to be lit

you have a chance to buy a percentage of

of the future

seems like a no-brainer to me thank you

for uh

for being the way you are and taking the

moves that you're doing uh because i

know that you're probably facing

opposition

but you know what's right so thanks for

uh sticking true to yourself yeah

thanks for hosting me austin thanks so

much michael we'll talk to you next time

bye