Michael Saylor on Bitcoin Principles (SLP536)

so that that's what Bitcoin means to me

right it it is a rational foundation for

economics for the human race this is

Stefan laa podcast a show about Bitcoin

and Austrian economics brought to you by

swann.com today rejoining me is Michael

sailor he is the executive chairman and

founder of micro strategy known for

being a big Bitcoin Advocate and today

we're talking about Bitcoin principles

and Michael's view on this we maybe zoom

out a little bit from some of the

controversies of the day and really look

at things on a longer term time Horizon

what does that mean for Bitcoin and what

are the ways to assess bitcoin's value

proposition and what kind of changes

should be made to bitcoin if any at all

so I'm hoping you will enjoy this

discussion with

Michael welcome back to the show and uh

congratulations on Surviving the bare

Market yeah thanks for having me we all

we all survived

together well yeah I think it's uh great

to see um you know obviously a lot of

people can very easily get shaken out

and it was uh great to see that you you

huddled on and you're you're stacking

all the way through so that's great to

see um and today we're going to be

chatting a little bit about this idea of

Bitcoin principles and uh so do you want

to just set some of the context like why

are we talking about this now and what

are what are we hoping to achieve

here you know um I thought it was a

pretty useful conversation to have

because there's there's always a lot of

um back and forth on um X Twitter about

is this good for Bitcoin is this bad for

Bitcoin there's there's very colorful

conversations about um protocol

proposals uh about uh software proposals

about developer initiatives about

applications the latest is you know all

the debate around ordinals inscriptions

brc2 tokens but you've always got

covenants and drive chains and and uh

you know if we look back right the uh

probably the most formative period in

the history of Bitcoin was the blocksize

wars and uh that really did um it it did

Define uh the network and Define Bitcoin

uh in a very strong fashion but I I

think that if we look forward another

decade or two or three and certainly

over the course of a hundred years there

going to be more and more of these

issues that'll pop up there'll be more

constituents that will get involved in

the discussion and um I don't really

think uh having a debate in 240

characters or less on Twitter is

terribly constructive for you know a a a

topic which requires a lot of nuance and

subtlety and um I also I also think that

it's important to be principles based in

the way we discuss these things I think

if we all focus upon what are our

assumptions what are our principles then

I think there'll be less confrontational

uh and less combative and more

constructive right in the community so I

thought it would be useful to have kind

of a constructive dialogue about Bitcoin

philosophy Bitcoin principles Frameworks

of

analysis uh so there's a basis for

whatever comes

next right and as you point out I think

the blocksize wars of 2015 16 17 was

sort of a battle for the soul of Bitcoin

and maybe some people have discussed

about you know what really is Bitcoin

what are we what are we doing here and

you know what kind of changes are

acceptable and I guess people can

disagree on what kinds of you know

changes there like as an example some

people might say h it proved that the

block size should never increase and

other people might say no actually it's

more like not now not in this way and

maybe in the future you know and that's

just one example on the Block side so

let's talk a little bit I think we'll

bring it to this idea of you know

Bitcoin as a protocol and so do you want

to just spell out some of your thoughts

there like what if we're thinking about

the Bitcoin protocol and what are the

pieces of that that should remain right

what are those fundamental pieces that

must

remain yeah I mean like I would hate for

someone to Define me based upon one

tweet response on one issue or or six

response on six issues I think that uh I

think that when we all start to

understand each other's principles and

philosophies and how we how we think

about these things I think it lays the

framework for us to come to agreement or

at least a constructive cheerful

consensus so you know starting with the

basic on bitcoin and this is my this is

how I view it right everybody has the

ability and has the right to view

Bitcoin through their own lens and they

have their own uh their own view of what

is it what is it for and why are they

attracted to it so so I you know I'm not

here to tell everybody else you know

what to think I'm here just to

articulate one view of Bitcoin that I

have that I've formed over the course of

my life so i' I'd start with this

observation I'd say Bitcoin it's an

asset circulating on a network governed

by a protocol based on or rooted in an

ideology and it provides Humanity with a

rational scientifically sound economic

foundation for the first time so that

that's what Bitcoin means to me right it

it is a rational foundation for

economics for the human race and um you

know Bitcoin with a small B is the

asset and we've created a digital asset

and we did it with the protocol and uh

the asset's no value it is of no value

unless there's a network for it to

circulate on so when I when I think

about the

protocol this is the way I look at it I

think Bitcoin uh it has three core

protocols that are critical to the

entire system working the first protocol

is a monetary protocol the second

protocol is a transaction protocol and

the third protocol is what I what I'm

going to call a power protocol it's it's

sort of it's near term realtime security

it's not security of the network over a

100 years but it's security over the

network over 100 days or 100 minutes

it's it's the here and now so that's

based on power who has the power over

the network so when I think about

Bitcoin in general well there's lots of

Bitcoin nodes and Bitcoin applications

out there anybody can create a version

of Bitcoin that runs on an iPhone an

Android phone it runs on Linux it runs

on a different type of computer etc for

them to be part of the network they kind

of have to share these three protocols

they're going to differ in lots of other

functions right there are other aspects

of software for example uh compatibility

is it compatible with this version of

Unix uh there's usability right does it

does it run on the iOS and does it

support like uh you know touch or not

you know there's compliance uh the

version of of of a Bitcoin wallet that

runs in the United States you know by a

publicly traded company you know will

have kyc AML restrictions for the state

of New York which will be dictated by

New York and by the US so there's com

there's there's differences in the

software that have to do with

compliance uh there's going to be

security differences and these this is

cyber security um so there there'll be

lots of Bitcoin uh nodes and they will

all be different in different countries

in different jurisdictions for different

platforms but the thing they all have to

share and common is this common monetary

protocol transaction protocol and power

protocol so the monetary protocol is is

the asint totically approaching 21

million right there will never be more

than 21 million and there's a lot of

there's been a lot of focus upon you

know the blocks of 50 and then 25 and

then 12 a half and 6.25 and the having

Etc but the truth is I I think about

this not over the course of 10 years or

the last 10 years I'm not even sure the

last 10 or 15 years matter right we're

approaching the 15year anniversary but

for the sake of our discussion let's

just say I accept Bitcoin as it is today

you know through all of its twists and

turns uh the blocksize wars you know Etc

and I look out over the next 100 years

is my short time frame and a thousand

years is a reasonable time frame so I'm

looking at this as as is this uh a

rational scientific economic framework

for the human race for the next many

many centuries okay and when you look at

it like that it's very clarifying and

it's simplifying for example once you

look out you know a thousand years

you're like well what is the monetary

policy it's 21 million it's 21 million

Bitcoin uh is the most it's ever going

to be and some of them will be lost and

that's the only thing you really need to

understand about that someone wants to

create a a software programmer a node

that has a different policy than 21

million they're breaking Bitcoin right

they've corrupted the monetary

protocol um and of course you can have

infinite monetary protocols you could

have 5% inflation a year you could have

five you know five five million Dogecoin

a year you could have all sorts of

things if you wanted

um it you can create uh a crypto asset

or a digital commodity that has a

monetary protocol which is inflationary

or inflationary for a hundred years and

stops right all sorts of things but in

this particular case bitcoin's monetary

protocol has gotten to be very simple

we're around 19 A5 million Bitcoin but

we're going to cap out at 21 million so

so to the truth is to debate all of the

nuances of of how you get to 21 million

is almost like second or third order at

this point maybe it was second order for

the last four years it's becoming third

order it certainly is less than third

order by 2035 when 99% of all the

Bitcoin has been issued and you've got

one% to be issued over the next 100 plus

years you realize that 1% is divided by

a 100 years is pretty Dem Minimus so so

the monetary protocol is is a hard cap

scarcity the transaction protocol is the

4 megabyte blocks every 10 minutes which

works out to you know Max you're going

to get to Seven transactions a second or

seven a half 4,500 transactions in a

block is pretty packed and so when you

work back into it you think well like a

slow network is 100 million transactions

a year and a a fast full network is 200

million transactions a year and uh and

the bandwidth is scarce right and the

transaction

protocol changed a little bit more over

the last 15 years than the monetary

protocol the monetary protocol is is

pretty much pristine since you know

Satoshi defined it the transaction

protocol you know jerked a little bit or

or or adjusted with

segwit and uh tap rot sort of adjust it

because they they changed the

theoretical bandwidth and the the itical

nature of transactions what kind of

transactions will the network process

and how much bandwidth can it process

the third protocol is the power protocol

and in this particular case it's not

electrical power it's computing power

but but what kind of computer power

digital power you can Define all sorts

of power protocols to control a network

for example democracy is a protocol one

person one vote you know aristocracy one

rich family one vote you know violence

one gun one bullet one vote right the

world's full of power protocols that you

know the the deer with the antlers have

their power protocol um the power

protocol for the Bitcoin network is Shaw

256 hashen right and um it could have

been any other right it could be a proof

of stake protocol it could be all sorts

of all sorts of other interesting power

protocols but the question is who at the

end of the day gets to to create the

block every 10 minutes and what kind of

power do they have to project in order

to create the block and you know if I if

I had an algorithm which was a CPU

friendly algorithm right it's a a

non-gpu a non- Asic friendly CPU well

then um then you're allowing any general

purpose computer to participate and

generate that computing power if you had

an algorithm that didn't include

computing power at all it's just

electricity but of course electricity

isn't terribly scarce and computing

power isn't terribly scarce so the idea

of Shaw 256 hashing creates a very

unique digital power protocol it's

something where you can create custom

silicon so you have custom as6 that are

generating lots of Shaw 256 hashes and

now we're we just crossed 500 x a hash

that's a lot of power but what's what's

really critical I think about the the

power protocol is that it allows you to

construct a silicon machine with a

massive mechanical advantage like a a a

custom as custom silicon gives you a

100000x or 2000x advantage over a

general purpose CPU and what that means

is that what we have here is three

interacting protocols which create four

types of scarc it the first level of

scarcity is asset scarcity the second

level of scarcity is bandwidth scarcity

there's a third type of scarcity which

is power scarcity Shaw 256 hashes are

very scarce form of power right they and

they can only be created by Bitcoin

mining equipment and so there's a fourth

type of scarcity which is technical

scarcity technology scarcity the the

ability to design

you know a high

performance semiconductor chip that does

Shaw 256 hashing right what bit main has

as as a core

competency right if you can create that

so in order to guarantee the asset

scarcity you have to have bandwidth

scarcity and in order to guarantee the

bandwidth scarcity you have to have

power scarcity and in order to guarantee

the power scarcity you need technology

scarcity and so you really looking at

like four harmonics or or you know four

uh types of scarcity and they come

together and they create a a they create

a Network that has integrity and

efficiency right I need I need the

efficiency like like what's efficient uh

here's an efficient power protocol I

have a gun I'm in a room with 100 other

people one person with a gun that cost

$300 has the ability to secure a billion

dollars in a room of hundred other

people it's a very efficient way to

secure the money right Whoever has the

gun the gun now now take away the gun

put the billion dollars in the middle of

the room and now your new power protocol

is your

fist now you can imagine now you've got

20 people punching 30 other people right

now now the the outcome becomes very

ineffective uh another Power protocol is

I'm going to secure the billion dollar

with $100 million of staked money you

can see that the issue with that is in a

staked economy I have to actually

allocate 10 or 20% of the capital to to

protect the rest of the capital that

doesn't scale very well so when you

actually get to the point where you're

creating machines whether it's a

construction crane or whether it's a gun

or whether it's a semiconductor chip you

have you have inserted knoow in order to

channel energy in order to actually uh

exert power and when I talk about you

know scarcity of power well the Bitcoin

miners own all the shaw 256 Asic chips

so you know on any given day if every

Power Company or electricity company in

the world wakes up and decides to attack

the Bitcoin Network they can't really do

it because the computing power the

digital power is scarce and they don't

have it any government wants to attack

the network they can't do it because

they don't have the power the the actual

silicon machine is in the hands of the

network operators so that creates a

certain type of efficiency and

stability and you can't really build a

civilization without it I mean it's the

same kind of efficiency you get when you

build a dam right you you Dam a lake and

all of a sudden you're generating Hydro

power uh or the same efficiency you get

when you have a construction crane and a

150 pound person can LIF 20 tons in air

a th000 feet right it's it's clear

you're not going to do it without having

a machine so I look at the entire

network and I think it's it's a pretty

beautiful set of uh integrated

protocols um because the power protocol

protects the the transactions every 10

minutes and the transactional protocol

is is a market driven protocol where

people are bidding to put their

transactions into the block space so as

as the the ecosystem grows the bid for

transactions grows in a in a classic

market economy fashion um and what you

have is Austrian economics dictating

which transactions will get implemented

based upon subjective value of all the

participants in the

ecosystem the miners over the course of

a thousand years it's quite obvious

right the minors are paid by transaction

fees

the um the block rewards were a

bootstrap or an initial subsidy in the

first 20 years of the network but as far

as I can see by the year 2035 the block

rewards just looked am minimouse 1% of

all the Bitcoin comes out over 100 years

after that so block rewards don't really

matter they fall away over the long time

toward Infinity what matters is is uh

transaction

revenues and and over time uh I think we

can expect the transaction revenues will

grow to far outstrip the block rewards

and and then if you look at uh Bitcoin

miners they're really Bitcoin power

producers or digital power centers that

are defending the network they're the

first line of defense in the network in

the sense that anybody that wants to

hack or or interrupt the blocks in the

next 10 minutes they have to get through

that hash wall they're also the second

line of defense of the network because

the Bitcoin miners all have invested

millions or tens of millions or hundred

millions or billions of capital that

they can't recoup in in less than four

to eight years and perhaps longer some

cases because they have to recoup their

capital investment they form corporate

entities in every single nation state

and every jurisdiction and then they

become active engaged lobbyists uh for

pro Bitcoin policy everywhere in on

Earth where they operate so so you

really could think of uh the Bitcoin

miners you know kind of as all of the

The Citadel on the wall that are

defending what is bitcoin and they

they're they are in essence the defense

uh the defense arm of Bitcoin in the uh

in the shortterm in the midterm so that

being the case once you adapt accept the

fact that you've got these three

protocols and then you you ask yourself

well how should I look at the network

and proposals to change the protocols

well I think there are a lot of models

you can adopt you know one is the New

York model the New York model is New

York City is sitting on top of granite

for 200 million years so Bitcoin is the

granite Bitcoin is 21 million blocks of

granite underneath New York City now

over the course of thousands of years

you've got had different nation states

you had 100 Indian tribes then you had

the Dutch then you had the British then

you then you had the New York colony

then you had uh you know the United

States and a thousand years from now you

may have another nation state on

Manhattan but here's what changes right

the granite doesn't change but the roads

and the sewers and the the City layout

changes and the parks

change and and the buildings change and

the people come and go and the PO itions

come and go and the rules and and the

political regimes come and go and the

businesses come and go and customs and

fads come and go and markets come and go

and those are all the things that you

can build on the island of Manhattan

because you have the granite and so if

you look at it that way you start to

think well Bitcoin is layer one it's the

granite what's important is I know I

need to know it's going to be here in a

million years that's what you know at

the very least I build a building I need

to know it's going to be here in a

hundred years but if you told someone

you know my building's good for a 100

years well 50 years from now they're not

going to want to buy the building from

you you really want to know the building

the land that the building is built on

is good for a thousand years if I if I

forecast a sinkhole in the middle of a

acre of of Manhattan in 37 years it

wrecks Havoc with the economy you know

in that jurisdiction so it's very

important that you have uh that kind of

of uh Outlook and stability uh the layer

twos the layer 3es the layer fours and

the layer fives and the layer sixes can

all have very high frequency Evolution

and there's not that much to risk

whether lightning and an open

permissionless Layer Two will compete

with other open permissionless layer

twos you can have competition we don't

have to agree on which one is the right

one you can have layer threes you can

have Bitcoin moving from cash app to

coinbase you know across somebody else's

mobile app and the layer threes can come

and go you can have layer fours and

layer fives applications and services

and derivatives you know you can have

this this ETF and it could be replaced

by that ETF they can come and go as well

and and then there'll be people that

will actually create derivatives of

derivatives I've got an ETF I trade

options on it and then I create an ETF

to trade the options on the ETF and you

know you could thinkwell these are

stupid things right maybe they are right

art in New York City will come and go

the art of 1700 is different than the

Arts of 1,00 BC is different than the

art of 2000 ad I mean they'll change all

these things so if you look at Bitcoin

you know all these things on the Bitcoin

base layer whether it's art or property

or applications or or lightning channels

and layer 2 all of these things are

going to change with what's going to

look like a very high frequency if if

you were a creature and your lifespan

was 10,000 years th think about how you

would perceive Bitcoin and all these

things that people are doing on Twitter

and talking about and developing you

know you would blink every 10 years and

then another 10 years go by and your

view would be very different and and in

that particular case you would have a

good feeling of granite underneath

Manhattan you know everything else would

change and then you would think these

mere mortals are debating you know this

and that like gramy Park the use of it

yeah that's been significant for a

hundred years but over a thousand years

insignificant and so I I think that the

New York model is kind of helpful I

think that um if if you take another

view of a protocol that's helpful you

know Bitcoin is our un ival econ

rational economic protocol well English

math fire electricity and gold those are

five other protocols English is a

protocol that you know has been around

about a thousand years it's changed a

bit you know there there's a lot of

debates but for example there are

certain things you can't say in with the

English language in certain

countries and yet we speak English right

so you're three-year-old probably can't

use the English language the way you use

the English language and if you were in

a court you wouldn't use the English

language the same way and if you were in

a foreign country you know you might not

use the language the same way so the

protocol will be used many different

ways but at the end of the day the

threat to the protocol is is to redefine

the word good to be bad and redefine the

word bad to be good and that starts to

create chaos right and I think you know

if you look at math it's a similar thing

like base 10 math is a very specific

protocol we didn't always have it the

way that we use math and and certainly

Bas 10 math isn't isn't that old but

it's used across nationalities good

people use it evil people use it people

debate how to use it some people are

really good at using it some people are

awful at using it and yet and yet the

protocol uh contributes something of

value to the human race and and

civilization benefits from having that

protocol I think that you know fire is

the same thing I mean you're not let

eight-year-olds use fire the way that

you would let uh an aeronautical

engineer use Fire or the way you would

let um you know even your campfire

instructor you know or your survival

training instructor use fire so they're

all different and gold gold is a

monetary protocol formed over thousands

of years you know and it was used across

lots of different different nations and

lots of different

cultures um some Nations use it better

than others right the Aztecs the Incas

didn't use gold so much as a monetary

protocol the Spaniards did they thought

they were winning when they used it they

had lots of chaos and the way that they

used it there are people that have used

the protocol

effectively uh but there are ways that

uh you know the protocol has been

Twisted I think the one the one takeaway

from all of this though is is uh these

Protocols are much more

powerful to the the extent that you you

believe they'll maintain their integrity

over long periods of time and at the

point that people start to lose faith in

the protocol if if if the number two

means four and the number four means

eight think about the chaos like think

about how many machines and how many

computer programs break if someone

redefines four to be two or plus to be

minus or or certain rules right and uh I

think um when when Bitcoin is seen as

that as that long-term protocol we can

create economic machines and and there's

this debate in the community but most of

the community debate is is Bitcoin

developers that actually want to change

uh that want to change the core

protocols they have ideas for how to

make it more functional and more more uh

more

performant but really I think that

Bitcoin is already offered us the

ability to create a 100 trillion economy

without changing any of the protocol and

you have this interesting tradeoff which

is the more you screw with the

underlying protocol the more you

interfere with the rest of the economy

and all of you know layer two layer

three layer four layer five so let me

change subjects to one other point which

is I think there's a lot of debate

because of people's vision of what

Bitcoin should be for for example crypto

currency has saddled the entire industry

with so much baggage because if you

believe that Bitcoin is a digital

currency you immediately put yourself in

opposition to nation states Banks

political currencies governments laws

Etc and and you're by necessity a

rebel because to be able to use Bitcoin

as a currency you have to actively break

laws or topple regimes and that's a very

uh a very combative view of the world if

you actually conceptualize Bitcoin as

property you know or money if if money

is collateral that backs the currency

then you actually have a very peaceful

resolution to this problem I'm going to

hold um hold my my money as a store of

wealth and Bitcoin competes with

property or gold as a store of wealth or

it competes with stock portfolio as a

store of wealth and I'm going to make

that my savings account or my savings

portfolio and then my checking account

my medium of exchange is going to be the

currency dictated by the regime where I

live whether it's Venezuela or Argentina

or the us or China or whatever and when

you just divide those two and you say

Bitcoin is money but it's not

currency then all of a sudden you

realize that you're competing against

other stores of value and and really

your Crusade every day is to convince

people to store their wealth in in

Bitcoin instead of art real estate gold

S&P uh indexes bond funds

Etc and you can have a completely uh

neutral view toward tax law legal tender

political uh laws Customs tariffs

Capital controls price controls trade

controls Wars ideologies

religions right politicians right the

entire work so I I I definitely think

it's so much more constructive to think

of it as property than currency and I

think the The Twist there is if I take

property and I make it fungible and

liquid then it really is money and it's

Capital right so bitco if you think of

Bitcoin is digital Capital digital money

or digital property held for the long

term as collateral

against uh against uh a local currency

and then you say as a citizen of the

world I'm going to swap into whatever

currency I need to spend wherever I am

then you found uh a peaceful resolution

to the question of do we have you know

do we have to be martyrs or can we be

winners and I I've said a lot I'd Rather

Be A Winner than a martyr and I instead

of saying we have to use Bitcoin as a

currency and therefore you have to

repeal all your tax laws and change your

legal tender laws much easier to say

we're going to use it as uh money or as

uh as a property and then we will move

peacefully and in a compliant fashion

through every single regime and then

we're going to convert every company

every government every politician every

institution into Bitcoin supporters

because it's not inconsistent with their

worldview either everybody would like to

store their value

forever um I think

uh you know the future if you look at

the future uh the future contains

property art money currency equity and

credit all those things are going to

exist there'll be thou there's currently

a 100 million companies as long as there

are 100 million companies there's going

to be equity in the companies whether

it's Apple stock or Amazon stock right

and and there are always going to be

companies

because if you look at economics it's

always going to be more efficient for a

certain group of people to do something

for you than for you to do it yourself

you know if you if you roll the clock

back to say you know 14th century

Florence you know in the textile

industry they need like 36 different

Specialists with 36 different machines

just to weave a a piece of cloth so the

good old days of we're just going to do

everything ourself you know on a

homestead they never existed I you know

I think I think that you know I I read

uh the other day about finding a axe

Factory a stone axe Factory that's more

than a million years old you know so

they find this like Neolithic you know

paleolitic whatever axe Factory and

there's hundreds of axes in the axe

Factory and what that's telling you is a

million years ago a bunch of human

beings organized a society that was

sophisticated enough that they could

dedicate one group of of the society to

do nothing other than create Stone axes

and trade those Stone axes for food

clothing shelter Services Etc so there's

never been a time in human history when

people weren't

specialized we're going to have

companies and if you're going to have

companies you're going to have Equity

the question is do we monetize the

equity or does the equity trade at its

fair value based upon the cash flows

that the corporation can generate and

there's and credit's not going away you

canot like bonds but the end of the day

you know you're always going to want to

be able to borrow some money from

somebody a company will want to be able

to borrow money governments will borrow

money and there will be creditors that

will want to loan the money and the real

issue is will it be a fair cost of

capital will I get a fair rate for the

money or not and you know currencies

will exist as long as there are

government

right and and uh when when uh nation

states break down and there's Anarchy uh

then you then you resort to Stone Age

barter and maybe you barter gold and

maybe you barter food and maybe you

barter bullets or maybe you'll barter

Bitcoin as as the most you know tradable

money in the future but at the end of

the day you know you don't really want

to live in a war zone because you know

if you study the history of War zones

the 30 Years War in Germany

well when it's done onethird of the

people are dead on the battlefield you

know and everybody has lost everything

and civil been ripped down to zero it's

it's not you know a desirable situation

so human beings are generally going to

run from war zones so you you know

you're not going to make currencies go

away as long as there governments you're

not going to make equities go away as

long as they are companies you won't

make credit go away and you won't make

art go away right the debate right now

is over inscriptions good or bad or nft

is good or bad well you know here's

here's a story for you Velasquez the

greatest artist in the Spanish Court who

painted the the Spanish Kings he after a

lifetime of service was spent on a he

was sent on a mission to Italy to

acquire art for the king of Spain with

the king of Spain's you know checkbook

and it was a reward to him so this is

about 15 I know

1650 so he goes to Italy and he searches

around and he can't find any art because

nobody wants to sell it all the good

stuff is not available for sale right

and the footnote in the history book is

millionaires in you know post

Renaissance Italy were using art as a as

a a hedge against inflation and a store

of value that's 300 years ago 400 years

ago hundreds of years people you know

people have been doing this and at the

same time there have been r Dart

auctions you know there there have been

you know art the entire art business is

its own Insider game and people will

establish one Artist as being special

and there'll be collectors and there's a

massive debate about whether or not the

art is worth what it's worth well that

debate's been going on for hundreds of

years and today that debate goes on not

just with art but it goes on with uh

with um you know luxury cars sports cars

it goes on with Rolex watches and luxury

watches it goes on with nfts it'll go on

with inscriptions and ordinals it will

just continue to go on and you know when

I when I hear that someone is a

collector of like rare whatever fill-in

the blank I'm like well I would never

buy that like I I don't want to store my

money in you know in someone's $500,000

sports car but somebody does it right

and and uh and it will continue so if

you think about this again New York

right in the city of New York you'll

have the art and you'll have the

businesses and you'll have the credit

you'll have the bankers and you'll have

the

politicians it'll always go on and what

you're going to want is the granite not

to

shift and uh and if you were the the the

granite and you just looked up you would

say all these silly human beings you

know they're doing silly things I would

never put a bakery there I would never

buy that piece of art what are they

thinking and maybe be right maybe be

wrong

but it is The Human Condition and uh and

that's the market economy so if we

actually humbly submit to the market

economy and we say we just want a

protocol to allow Humanity to pursue its

million different aims with high

frequency every minute hour day week

year decade right um then uh it kind of

gives us a a really nice framework for

thinking about Bitcoin and I I think

when I look at it I just say bitcoin's a

global Dynamic cyber economy and we want

it to be open transparent permissionless

Timeless immutable fair and Satoshi got

pretty damn close with the first

iteration and you could say there are

some second order tweaks to it over the

next 15 years through segwit and route

but at this point it feels to me like

we've achieved that and and on the

margin there have been hundreds of

attempts that failed you could you could

almost argue not hundreds but thousands

tens of thousands or hundreds of

thousands of attempts that have failed

we have one that is succeeding and uh it

takes me you know to the you know to the

next part of our discussion which is you

know under what circumstances should we

entertain proposals to change the

protocol back to the show in a moment

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yeah um so let's yeah so I think I I can

agree with a lot of what you're saying

there around uh the New York the New

York City analogy this idea of a a solid

base that everybody can build up on top

of we can use it as our digital property

our store of value and as you said some

of these things will still exist

obviously Equity will still exist

there'll still be debt and credit now

maybe the form would be different the

artwork will still exist but you know

the form may change uh but there'll be

people who are doing this because

they've done it for thousands of years

before and they'll do it for thousands

of years into the future and so I think

it might be useful then to talk a little

bit about the purpose of Bitcoin because

I think that's that's where some of the

disagreement lies now I think I broadly

you know when it comes to let's say the

controversy of the day right the ordinal

inscriptions blc2 Etc I think basically

it's a matter of just wait it out right

like I'm I'm not interested in that

stuff but you know I'm not really trying

to because if you look at what some of

the protocol developers are saying

they're saying fundamentally you can't

really stop people finding ways to hack

and store data on on the chain per se

but they're paying a price for that and

fundamentally they I believe that will

be outcompeted over time with high value

monetary transactions now whether that's

high value you know people are trading

for property or to sell business or to

open and close the lightning channels

and all these kinds of things over time

those uses will get competed away so

bringing you back to the the

conversation around how should we think

about changes to the protocol I think it

it comes back to what people see as the

purpose of Bitcoin so as an example

there's a big debate I mean this is kind

of one of those things where people look

at the white paper and they say oh look

look at the white paper it's Bitcoin a

peer-to-peer electronic cash system

right and of course that's where some

you know bcer big blocker types will

sort of say a see you can't use it as

cash anymore and then maybe somebody

else might counter to that and say well

actually we what we mean by cash is

final settlement and by that we're sort

of something thinking closer to this

idea of as you said digital property

digital money um and so do you want to

just spell out some of your ideas on

bitcoin principles as they relate to you

know what the purpose of Bitcoin is and

what what sorts of changes if any should

be

considered yeah I mean I I think that um

you got to start by saying you know bit

bitcoin's primary role is to serve as an

economically sound technically sound

ethically sound foundation for the

future digital economy it it it is in

essence sound digital property or sound

digital money I've described it as

digital energy but you could think of it

as digital material how do we manifest a

hundred trillion dollars of real value

in cyberspace right H how do we do that

and make that stable right um before

Bitcoin all money uh you know all all uh

Financial transactions in cyberspace are

based on credit right there is no

digital money there's only Digital

Credit in the world before Bitcoin so I

send you a billion dollars or a million

dollars it's a credit on Visa Network or

on a banking Network and if the if the

uh the analog real world institution

chooses to honor the credit then the

money changes hands but you know we

we've talked about the problem with that

before like I I want to send um a

million dollars 40 times and every time

I lose two and a half% and it takes one

month and so it takes four years to move

the money 40 times and I lose all the

money right in essence after 40

vibrations of the money it's gone so so

um the world of credit money isn't uh it

isn't a foundation to build anything

lasting or functional in cyberspace so

bitcoin's primary role is to serve as a

digital monetary foundation for the

future of humanity and if there's $900

trillion dollars worth of stuff

circulating right now 0.1% of that is

digital money as we understand it withs

Bitcoin if we want to actually move into

the 21st century into the Cyber economy

you could imagine that we should be

getting to 100 200 300 500 trillion

dollars worth of monetary value

circulating digitally so it's the

foundation in the same way that the

granite is the foundation of Manhattan

but it's not the applications it's not

the buildings it's not the businesses

it's not the political

systems and uh so so to think it's that

it's currency is a mistake it's it's not

meant to replace Equity it's not meant

to replace currency it's not meant to be

a medium of exchange it's meant to be

the underlying um conservative

foundation of the entire economy now

that being the case it's I I think that

uh yeah it's a people that they they

they live for digital currency they just

waste all their time chasing after the

wrong thing and debating the wrong thing

currency is not even that valuable I

mean if if if you look at the entire

world economy and you ask what portion

of the economy is in currency used as a

medium of