MICHAEL SAYLOR MASTERCLASS - FULL VIDEO

welcome everyone my name is Anon Marti

representing the AAS society and here we

are with Michael sailor good to see you

again how you been awesome great great

I'm I'm glad and also grateful for the

opportunity to interview you so i' like

to delve a bit into your background and

explore how your previous experiences

have influenced your your success as an

entrepreneur can you share with me how

important uh studying the history of

science for example was to your later

success as an entrepreneur while I was

in MIT one of the degrees I took was in

the history of Science and the focus was

science technology and Society of course

MIT is known as an engineering school

and uh my other uh my other degree was

in Aeronautical Engineering and uh

spaceship design so engineering's

normally thought of as uh dry and uh and

rigorous on the other hand um the

history of science is all about the

invention of new

techniques and how they got used within

the society where they're introduced and

so uh politics and economics and

sociology all have an impact and and I

think in the history of science it gave

me an appreciation for things like

Network effects for example um uh you

know the Romans developed a certain

width for Roman Road and Roman chariots

had an impact on that and eventually

that width found its way into a railroad

track and then if you made cars that

were that width then you could move them

on the

railroads but if a nation changed the

gauge of the railroad track then all the

trains would be incompatible from the

foreign country and then when you

shipped to the Border you'd have to

trans ship remove your cargo from one

set of trains and one Rolling Stock to a

different set of trains and so the

decision to create an

incompatible technology protocol might

have profound Economic Consequences

might have political consequences might

start a war or might uh might discourage

one you know the history of the science

is it's about lots of Sciences how do we

introduce um uh Steel in an age of iron

and what happens when iron comes along

and replaces

bronze and what happens if you don't

Master iron if you don't Master steel I

mean one of the famous books is Guns

Germs and Steel and it's all about the

impact of guns on the colonization of

the new world and why did the Europeans

end up dominating uh North America and

South American civilization and some of

it has to do with immunology and the

fact that the Europeans managed to

infect each other so much that they had

stronger immune system systems and when

they showed up in the new world the

germs they brought killed most of the

inhabitants without a fight if you just

study political

history uh often times political history

is told from the point of view of of

people said things and did things but

when you study the history of science

you realize that it didn't really matter

what the people said or what they did

um when uh Columbus showed up in the new

world uh they tried to bring back

something like 18 natives on the ship to

Spain every one of them just died they

didn't know why they died but they all

just dropped dead so the political

interest or the the the human ambition

is thwarted by something they don't

understand in this case they didn't have

natural immunity to the diseases that

all the Europeans carried I mean the

history of science causes you to think

about how the civilization developed uh

based not

upon

ideology not upon ambition you it's not

the story of a politician that came to

save us it's not the story of an

ideology the transcended uh perhaps it's

the story of this people had iron

deposits and that people did not and so

the people with the iron deposits made

harder weapons and kill the ones without

the iron deposits or this people had the

Nile River and the Nile River was hydr

power and if you have have a source of

of Hydro power energy then you have a

natural Advantage when it comes to

Agriculture and then your Society is

going to dominate two interesting

takeaways uh that are relevant to the

modern era one is you come to the

conclusion that the civilization of the

society that channels energy most

effectively generally wins whether it's

channeling energy by replacing a spear

with a bow and arrow or replacing a bow

and arrow with a catapult or replacing a

a catapult with a cannon or

replacing the cannon with a battleship

and replacing that with an aircraft and

replacing that with a nuclear weapon

land power you know is trumped by sea

power is trumped by air powers trumped

by space pow trumped by nuclear power

and uh there's just a relentless

regression of of these sophisticated

societies that learned how to channel

energy and channeling energy at a

certain rate and with a certain Focus

would be power almost the definition of

power the the rate at which you deliver

the energy the the second I think take

away from the history of science is that

is that science the history of science

is punctuated by Paradigm shifts there

was a time when uh people thought that

the Universe revolved around the Earth

capern

Revolution uh was this idea that maybe

it it uh didn't the Paradigm shifts take

place when you develop a new instrument

so it was Optics it was the telescope

that caused human beings to realize that

the Universe did not revolve around the

earth once they had the telescope and

they could see the moons of Jupiter they

started to realize that you couldn't

really explain the movement of certain

moons and and certain bodies in the

solar system based upon the old Theory

right the toic theory of the world and

they had to adopt a new Theory maybe

maybe things revolved around something

other than the earth perhaps the sun

there's a similar breakthrough in

medicine not by the telescope but by the

microscope where we thought that disease

was caused by spirits and demons and all

sorts of other random things and there

was a lot of superstition there but then

we looked at blood and we looked at at

fluids realized there are actually

living creatures in those in those

fluids and we dis developed the entire

uh you know medical science of

immunology and and germ Theory and we

started making breakthroughs because we

could see then there's a push back the

push back against uh the idea that the

Earth might revolve around the sun came

from the forces of of authority the

establishment partly it was the church

but partly it was it was uh the monarchy

and just government in general the

system had been constructed based on a

system of authority where you got your

truth from a very powerful Central

organization and if and that truth had

adopted a certain set of theories and

this challenged the theories and

therefore challenged Central Power and

there was naturally going to be a

friction so much so that you might very

well get jailed deplatformed or burned

or bankrupted if you push the new

paradigm and Galileo is a maybe one of

the more famous examples of that there's

a doct harvey in the history of medicine

uh he put forth the proposition that the

heart pumped blood through the arteries

and and recycled it back to the veins

and of course for thousands and

thousands of years no one thought that

they didn't actually think the heart

pumped blood they didn't know they

didn't understand circulation at all and

and Harvey discovered this and it was it

was a pretty big breakthrough but it was

so

profoundly revolutionary that no one

would accept it the entire medical

establishment rejected it and Harvey's

very famous for a quote he said no

doctor over the age of 40 will ever

believe me right and uh it leads us to

one of the funnier statements the

history of science science advances one

Death at a time which is which is uh

maybe articulated uh by Thomas cun as

Paradigm shifts take place when the old

generation or the Old Guard dies you

have to wait for an entire generation of

power and authority whether it's in

science or whether it's in politics or

whether it's in the religious

establishment you have to wait for them

to just

pass or um that uh Dogma passes in the

event of a war you're adamantly in favor

of fighting Wars with horses and then

someone comes along with tanks and

machine guns and you realize your horses

don't work anymore then you discard that

I think uh Billy Mitchell was Court

Marshal because he suggested that air

power would dominate future wars in the

20s or the 30s and the military

establishment didn't like that so they

Court marshaled him and then of course

by World War II we found that perhaps

air power did matter in wars and so

people change their views towards

science when there's a mortality event

uh you know if if your country is coming

to an end or your life is coming to an

end you're going to be open-minded

otherwise if it's not a matter of life

or death people typically cling to the

old

Paradigm until they pass and you just

have to wait for a new generation that

that has a new set of circumstances to

embrace new ideas I think that that's

what I took away from the history of

Science and that has helped me a lot my

life as an entrepreneur and and when I

event

uh you

know discovered uh Bitcoin it helped me

to understand both why I was so

profoundly powerful but also why it was

profoundly difficult for the

establishment to understand right the

last time we met um I remember we had a

very interesting conversation about

astrophysics uh delving into Concepts

like entropy but uh let's consider the

importance of a in physics to everyday

life let's for example think about the

essential role of um

electromagnetism uh and the role that it

has on like our daily routines 50% of

the world's GDP is based on some of

Michael Faraday's theoretical

developments and inventions related to

electricity so once again why we should

encourage the study of these subjects

such as science coding and and physics

to shape you know future if you want to

provide prosperity to 8 billion people

in the world if I if I was speaking to

anybody uh any anyone starting their

life or their education or family said

what should we teach our children in

order to make them prosperous I would

say master uh the protocols of prosp

erity so um what are the protocols of

prosperity one of them certainly is is

uh math and physics and Engineering

right those are the science Protocols of

prosperity the second would be something

like the English language which is which

is a communication protocol of

prosperity the third would be Bitcoin an

economic protocol of

prosperity let's come back to the

science protocol why are they so

powerful well because the laws of

physics apply without prejudice or bias

you know everywhere on Earth

simultaneously all the time and so so

they're not subject to political

Distortion and ideological Distortion if

you know how to start a fire you know

how to start a fire if your goal is to

avoid burning your house down that's

useful and if your goal is to avoid

freezing to death it's equally useful

and it doesn't matter whether you're a

communist a socialist a capitalist a

liberal a conservative right uh or what

race or or what religion you are It's

Quickly

tested right uh for example on my field

Aeronautical Engineering uh I remember

having a a picture of an airplane uh

lodged in a tree and uh there was a

quote underneath something to the effect

of the laws of Aeronautics are are cruel

and unforg giving right but you don't

get to break them uh if you build a

plane and you don't build it correctly

it crashes and it burns and there are no

irrational Aircraft engineers or at

least there aren't irrational ones for

very long you can't get away with

something which isn't

truthful uh for very long in the

engineering discipline so I think uh

Mastery of physics Mastery of

mathematics

useful they're truthful they're hard but

they're critical to life if you wish to

not starve to death if you wish to not

crash into the ocean if you wish to not

sink your ship try rowing across the

ocean by yourself and then you'll

realize that you know an internal

combustion engine and the ship would be

useful not running out of fuel knowing

how to calculate how much fuel you need

in order to get across the ocean and how

much water you need to get across the

ocean in the center of balance you know

of the ship all those things would be

matter of life or death having said all

that they're useful protocols but

they're not the only protocol for

example um base 10 math it illustrates a

point which is it's a mathematical it's

a scientific protocol which is useful

but there are others there's base 2 math

there's Roman numerals there's base 16

math hexadecimal math you know the

Babylonians you know divided the day

into you know these 12 hours of daylight

12 hours of Darkness

360° and a compass you have different

systems of math and so why do you want

to learn one you want to learn one

because all the machines built in the

civilization operate on that one take a

calculator and it's got zero through

nine on the keypad it's a base 10

calculator if you master the protocol

you can use the calculator you can use

the computer the programs work the

accounting ledgers work you not only do

you not sound like an idiot which is

it's useful to get the cooperation of

other people but you can actually uh

type a problem into your computer and

get an answer that will save your life

so that's why I think we want to teach

our children useful scientific protocol

we're going to we're going to need it in

order to move in order to

breathe in order to make the

electricity work and and of course

Faraday gave us in essence the laws of

magnetics and electricity is you know is

is electromagnetic energy not the only

form of energy there's acoustic energy

sound there's there's uh potential

energy there's nuclear energy there's a

lot of forms of energy um John D

Rockefeller gave us in essence chemical

energy in the form of a barrel of uh

petroleum but the magic of

electromagnetic energy

right it's it's clean it's very

efficient you put it into your house put

it into your plane put it into your ship

you can build appliances with it you can

you know perhaps wear it on your wrist

you can transmit it through the

atmosphere and of course everybody all

of modern civilization was profoundly

affected by it people were profoundly

fearful of it when when that new Pro

that new technology was developed but

every corpor ation that resisted it uh

became Obsolete and it's just a reminder

that when new technology arrives for

channeling energy you have to master it

in a responsible fashion you can't live

in fear of it even though uh the word in

the English language uh for an encounter

with technology that is painful and

unexpected is shocked

so when you touch that electric wire it

shocks you right it can electrocute you

may burn your house down may start a

fire it's a very scary thing we're

shocked but in fact as you pointed out

half of the civilization is based upon

overcoming this fear and uh and

mastering a new technology for good as

opposed to you know cowering in fear of

the new and resisting it so now now that

we're talking about that um in the 21st

century one of the most prominent

Concepts uh has been digital

transformation the companies that have

reshaped the world in the last few

decades have pursued

dematerialization how can you describe

this concept that you use and why it's

so important the first the first

generation of um of Technology Paradigm

Shift was I think uh the digital

transformation of information okay so

what did we do we we took an entire

library and we dematerialized it and we

put it onto an iPad or we put it into a

computer it used to be a wealthy person

had a library of 10,000

books but then Google scanned all the

books and Apple sold you an iPad and now

anyone for a few hundred dollar could

have a library of millions of books

so we dematerialized all the books in

the world uh we we dematerialized in the

sense that if you had a 100 billion

books they all collapsed into bits we

got rid of the material we got rid of

the uh the physical energy and the

matter and therefore when the the

essence of the book became information

it became non-conservative uh and if I

want to manufacture more I have to chop

down a bunch of trees and burn a lot of

coal and run a lot of factories and I

have to deliver a lot of paper or a lot

of books and I have to store them and

they're heavy and anybody that ever

carried 100 books up a fight of stairs

knows that it's not easy moving books

around I can zap the electrons and now I

can actually give a billion people 100

books each what if I give everybody that

ever lived or everyone that lives every

book ever written and what does it cost

to do that in the physical world it's

impossible to do practically and to to

accomplish 0.1% of what I just described

probably sucks up all of the economic

energy and the civilization we've just

found a way to give every student in the

world every book They're ever going to

read for free this is non-trivial

because sometimes people pay $3,000 for

college textbooks so if every student

pays $33,000 for college textbooks and

some can't afford to pay $3,000 to get

to College you can see how the

physicality of the book is going to be

an impediment for the world to be

educated when we digitally transformed

the the book we released huge amounts of

economic

energy um that's a that's almost like a

crystallizing uh reaction it's like it's

like when uh when the steam uh when the

steam becomes water it gives off energy

and when the water becomes ice it gives

off more energy and if you want to

reverse the transaction you heat the ice

to get water and you heat the water to

get steam you put energy back in well

that energy that falls out of the system

where did it go it went to Google went

to Apple right the biggest companies in

the world Apple Google Facebook

Microsoft Amazon how did they become

worth a trillion dollars well they

dematerialized the retail storefront

that's Amazon they dematerialized all

books and music to a certain degree that

was Apple to a certain degree that was

Google uh Facebook dematerialized

relationships used to be you took

pictures of your family you put them in

a shoe box right and you printed a bunch

of photos and you had a bunch of shoe

boxes and you had an album and you paid

for the album and you put it on a shelf

and you bought the shelf and you bought

the space and you bought the album and

you bought the chemicals and you bought

the dark room and you bought the camera

and all that went away and what you had

was a Facebook album and the money went

to Facebook so digital transformation of

information is is profound if maybe

there's uh 10 to 20 million people in

the world with a PhD there's 8 billion

people but there's only 10 million with

a PhD so why is it that only a small

fraction of the world gets Max education

well part of it is cost right you could

argue some people don't want to have a

PhD but the cost is Extreme it might

cost a million dollars to give somebody

a

PhD okay but if I digitally transform it

it costs the electricity so that first

30 years we got we had explosions in uh

in digital information Digital

entertainment digital educ ation digital

uh digital

merchandising Microsoft was built on the

digital transformation of business

processes and pretty soon every company

shuffling all of their files around on

Microsoft rails if you want to give

music to a billion

people well how much did it cost to

listen to Beethoven 7th Symphony you

know in

1850 you have to be a king you have to

have 100 professional musicians right

the the Kings actually had their own

Royal orchestras and they hired and

retained 100 musicians to be always

ready to play for royalty and I guess

you can calculate what it cost you know

in the Western World of you know a full

Orchestra is millions of dollars a year

and you divided by listening 20 times

and and you conclude that it's it's

extremely expensive on the other hand uh

I could deliver you Beethoven 7 Symphony

on a photograph record for the price of

the record player and the photograph and

then when we finally dematerialize the

photograph uh the record player and the

record itself and we drop them into a

file that runs on an iPhone or an

Android phone now you could give

Beethoven s 7th Symphony to everyone for

the cost of the electrons and that's

probably not even a penny so you want to

give uh music or culture to everybody on

Earth you got to do it digitally that's

what created uh the internet wave that

was very characteristic in the mobile

wave but there's a fundamental

distinction between information and

energy and so I would say the first

generation the first 30 years was the

digital transformation of information

and information is

non-conservative I can give you my copy

of Moby Moby Dick as a book and I'm

transferring something embedded in

energy and if I give you the book I

don't have the book but if I send you

the PDF file of Moby Dick I still have

the file and you have the file we both

have the book so I can give all 8

billion people the book in a

non-conservative way of it's information

but if there's energy in it energy

content I have to transfer the thing

from me to you so the first 30 years of

this revolution we all about digital

transformation of

information and only recently we moved

into the next stage which is the digital

transformation of energy and the

conservation of energy is one of the

most basic laws of physics it's it and

conservation of energy means means that

potential energy becomes kinetic energy

but then the potential energy is gone

when I when I'm up here and I dive to

here I'm no longer there and if I could

dive to here and also be there it be the

universe wouldn't work right so I think

Bitcoin represents the most profound

application of the creation of digital

energy and the channeling of D digital

energy and it's a paradigm shift because

everyone that has engaged in in the

digital Revolution and the digital

transformation of anything else all of

their learning was about the

transformation of information and not

energy and so and so they have a hard

time grasping the fundamental difference

between a conservative and a

non-conservative

interaction and now that we mentioned

Bitcoin I want to know what did you

think when you heard about Bitcoin for

the first

time you know uh what I thought about

Bitcoin when I heard about the first

time is probably what somebody in 190

five thought when they heard that

someone in their neighborhood was

playing with

electricity I you know and then and then

somebody's house burned out and someone

got shocked and they got electrocuted I

thought uh it's kind of dangerous but

they're probably not going to let people

keep doing that or I don't know what'll

happen and then I switched um switched

back to whatever I was focused on it was

H so what I heard about Bitcoin it must

have been 2011 2012 it was very new and

it was it was one of 100

things I was fascinated by the mobile

Revolution I was interested in iPhones I

was interested in SmartWatches I was

interested and everything Facebook was

doing everything Microsoft was doing

everything Google was doing everything

Amazon was doing and also there was the

Bitcoin thing happening and they were

all just

flickering but you know in my personal

Investments I didn't invest in Bitcoin I

invested in apple and Amazon and

Facebook and Google and in my business

life I didn't really think I needed

Bitcoin it wasn't a it wasn't an

Institutional great asset I wouldn't

really have thought about that and our

business was about selling enterprise

software in order to manage

information which was

analytics and that was it I didn't

really think about it again for about

eight more years or seven more years and

the second time I thought about it was

during a

war and so I said you know why why do

people Embrace new paradigms h

right you need a near-death experience

uh a mortality experience when I give

you a diagnosis and I tell you you know

you're going to die of this disease you

all of a sudden go back to the internet

you start researching the disease and if

you find that there's some kind of

experimental therapy you read up about

it maybe you get on a plane you fly

somewhere to do something about it

because uh because you have more to gain

to to lose and you're quite motivated so

in March of

2020 uh the pandemic truck uh the world

locked down the world kind of turned

upside down um all the offices were

emptied um people started working from

home the monetary

system went haywire interest rates went

negative in large large parts of the

world there were

1818 trillion

dollar of negative yielding debt

floating like how does Mone

be negative yielding and the interest

rates in the US were lower to

zero and so I I thought the cost of

capital went to

zero I think that's like making time

stop or making you know and and it

negative yielding money is like making

water flow

uphill and I thought okay well I'm in a

world where time is Flowing backwards

water is Flowing uphill you ever see

those um

those movies of all the people on the

beach just before the tsunami hits and

there's a tidal wave coming and it's all

just fine and the Sun is the sun is

shining and everybody's having a good

time and then the water starts to recede

and it goes out half a mile then the

entire world's about to turn upside down

you're about to get struck by a 50 foot

or 100 foot wall of water and you have

to run for your life and if you look at

that and you say the world's there's

something really profoundly wrong but I

can't keep on going business as usual I

really need to take urgent

action that's what I felt in March of

2020 and I think I'm I wasn't the only

person that felt it a lot of people felt

uh quite uh concerned

distraught our first thought was what do

we do about you know our people our

employees and our customers and then how

do we run the business and then after

that we realized that we were sitting on

5 600 $ million of cash that was

yielding zero the central banking system

was pursuing a

policy that was very inflationary we're

going to pump a lot of currency a lot of

dollars into the system and it wouldn't

be noticed immediately but we were going

to have inflation if not

hyperinflation if we take uh Argentina

for example uh the peso was 20 pesos to

the dollar in 2018 or so I remember it

because we used to we used to

obsess over and it must have been 40 or

50 to the Dollar by 2020 and of course

today it's

1,50 on the on the blue dollar rate so I

could see that there was going to be

currency collapses all around the world

and I could even see the US dollar

collapsing or

weakening uh you know in my opinion

actually I I think if you look at a

surrogate for the strength of the dollar

it' be the S&P 500 Index

and it is 50% up which means the dollar

lost like 35 40% of its value since that

time uh measured in a portfolio of

desirable assets so I looked at that and

I thought well our cash is a melting Ice

Cube It's Worth it's worth 500 million

right now but it's not going to be worth

500 million in four

years and our business is under stress

we're locked in our homes it's and

people are working via Zoom it's hard to

grow the business p&l and it's hard to

see the employees so on one hand my

human capital my people are going to be

raided by the big tech companies like

Amazon and Google and Microsoft

and it used to be that people like to

come to the office and and they like to

work together and they're not going to

just quit and move across the N the

country for a new job but

in June of 2020 it was clear people are

going to be working from home for a

while and you don't have to move across

the country you could just point your

web browser or Point your Zoom at a

different it TCP IP address and get a

new job so we started thinking this is

not good we may lose all of our

employees and then we looked at all of

our cash and and on one hand our cash

was earning 0% interest but the S&P IND

rallied and stocks were hitting an

all-time high and it was pretty clear

that Financial assets were going up and

the cost of capital is like 12% if the

cost of capital is 12% if I have to

generate a 12% return on my Capital I'm

generating a 0% return for the next four

years there's going to be a shareholder

Revolt so we were worried about losing

our employees and we were worried about

losing our shareholders and we had this

big pile of cash which was worthless and

then the central Bankers

said we're not even thinking about

thinking about raising interest rates

and some Central Bankers said well we

think we should make interest rates

negative so our primary asset was a

liability our human asset was was maybe

going to drift away from

us and our shareholders were

unhappy and the stock you know hit $90 a

share uh it was maybe 100 100 to 120

when we're thinking this

through and we were you know in the

midst of the war on covid and what I

think was a currency War a war on

Capital when someone says I'm going to

charge you 1% for all your money in the

bank that's pretty close to a war on

Capital right in that

situation we have had to choose between

a fast death a slow

death or taking a risk right that is the

essence of the Paradigm Shift what's the

fast death the fast death is give the

capital back to the shareholders if we

simply bought the stock back we would

have a company not growing with the

employees working from

home with no

shareholders and the stock the the stock

was trading $2 million a day

and no volatility and so if there's no

volatility and there's no liquidity the

stock options are worthless but the

stock options are how you compensate

your employees they're going to get

hired Away by the trillion doll

companies that have infinite money and

have stocks that and companies that are

growing and stocks that are that are

stock options that are valuable so

giving the capital back would just make

us die fast we'd have to sell the

company the slow death is keep the

capital

but the stock options are worthless the

employ the human capital bleeds off the

shareholder base bleeds off we get lost

right and and we can't crawl out of that

there's just no Catalyst to get out you

can how do you work harder I mean we

were working we're working as hard as we

could together and then pretty soon we

were all stuck in our kitchens trying to

work through a little Zoom link and that

was not better or easier the issue is

what do I do with $500 million what do I

invest it in that's going to yield more

than the cost of capital you know the

it's the summer of 2020 you need to find

something to buy that's going to

appreciate in price or in value more

than 12% a year after tax or in a tax

deferred tax efficient fashion was not

Bonds you couldn't buy any individual

set of companies because companies are

securities and and there are

prohibitions on a public traded

operating company holding more than 40%

of its liquid assets and securities so

we couldn't just buy all Securities so

then you got to buy Commodities but

every commodity is generally

inflationary buying silver or soybeans

or petroleum or natural gas or Lim or or

Timber those aren't good stores of value

because people keep making more

Commodities the king of Commodities is

gold but gold Supply increases uh 2% a

year

and so if you so gold itself is not

outperforming the S&P index you can't so

that wouldn't work either so then we

started thinking can we buy real estate

but how do you buy a liquid portfolio of

$500 million worth of real estate and

the problem was real estate's valued

based upon interest rates so if interest

rates go to zero real estate values

triple and so the real estate values by

the summer of 2020 were were extremely

high because the interest rate was is

extremely low so then you start thinking

what's left art how do I find a

diversified portfolio of high quality

art that's fairly valued not easy we

crossed all those things off the list

and we thought well what if we could fix

the defects of gold what about digital

gold and that led us to crypto and the

idea of of

uh digital gold is what if I actually

could create 21 million gold coins uh

dematerialize them move them at the

speed of light and then make it

impossible for anybody to make any more

of the gold coins and what if I could

move them on a computer and I thought

well that sounds like magic gold but if

God came down from heaven and said look

I'm going to run the monetary system I'm

going to create 21 million holy coins

I'm going to store them in heaven I'm

going to let you decompose them

infinitely I'm going to let you

telepathically move them between any two

counter parties and make sure nobody

cheats each other and I promise to do

the work for next to nothing

forever you would probably think that's

okay you would I mean that's probably an

upgrade to every existing deal you're

going to get but in the absence of a

deity offering to do that for you then

the next best thing is what if we

actually created that system with

cryptography the internet and some

semiconductor technology and that in

essence is what Satoshi did Satoshi

created uh a crypto Network which is

like perfect pharmaceutical grade gold

Satoshi called it a peer-to-peer

electronic cash system but what that

meant was I'm going to create 21 million

crypto coins make them subdividable by

100 million Satoshi so 2.1 quadrillion

Satoshi

I'm going to enforce the protocol with

semiconductor technology called Shaw 256

hashing I'm going to let you do that

hashing using uh a semiconductor chip

and then I'm going to distribute that

Bitcoin system on a node and give it to

anybody on Earth and make it open and

free and so that system became a form of

crypto gold we were looking around for

something to replace our dollars with

what what is our treasury asset and by

process of elimination everything else

was overpriced or

defective you know or not acceptable

from a regulatory point of view because

they're Securities and not

Commodities so we found the one thing

that might work and you have to go

through this analysis well there's

10,000 copies what's the winner well

Bitcoin was the winner of the 10,000

copies was it banned no it looked like

it wasn't going to be banned cuz the IRS

had designated his property in 2014 and

then the last part is had have been

hacked and Satoshi has a million coins

it was worth1 billion at the time we're

looking today it's worth $60

billion and no one can get the they

can't hack it to get those 1 million

coins in that wallet and I figured if no

one's figured out how to steal $10

billion hiding in plain sight then it

must be pretty hard to hack and once we

determined all that we embarked on our

Bitcoin Journey so I want to take you

back to the concept of entrepreneur when

one says the word entrepreneur or even

wealth it always seems to carry a

negative connotation so the entrepreneur

is completely demonized how how do we

break away from that perception like

when you talk about entrepreneurs what

do you mean what does it mean to be an

entrepreneur for you well I suppose

entrepreneur you know has different

meanings in different

cultures uh we're lucky in the American

culture entrepreneur normally has very

positive connotation but in certain more

authoritarian cultures or more

conservative cultures or traditional

cultures maybe it's a negative

connotation um an entrepreneur is a

is an economic

engineer that's how call how I would

interpret them it's a an engineer is

attempting uh to use their Mastery of

scientific protocols mathematics

physics all sorts of engineering

disciplines Metallurgy

chemistry you know

Aeronautics uh to create some product or

some service right whether it's clean

water whether it's a whether it's a you

know an x-ray machine whether it's an

airplane whether it's a you know Henry

Ford's car

automobile right the engineers are

creating something um and they're doing

that in humble submission to the laws of

nature water won't go uphill right not

not without some some serious

engineering you know ships that are

unstable caps siiz and sink unsuccessful

entrepreneurs create products that don't

work right uh so the first element is

you have to successfully engineer a

product or a service and in that regard

it's admirable I mean that's why we like

Henry Ford that's why we like John D

Rockefeller because Johnny Rockefeller

came up with standard oil a barrel of

oil and we take it for granted but the

oil didn't explode in your face and burn

your house down that's why it's Standard

Oil meant that it wasn't likely to

explode in the lamp and it wasn't likely

to to be a health risk and and that

mattered at a time when when people

would die if it wasn't right if you go

to the Hershey's factory the craft

factories they were the early clean

engineering experts to actually create

ketchup or create food put it in a

bottle and then and then uh keep the

bacteria out and be able to store it on

a shelf for a month or a year or even a

week that was a quite amazing technical

achievement uh because if you didn't do

it right you would open the bottle of

whatever and it would make you sick

might kill you with food poisoning and

so the original branded food it was

important because if I saw the brand it

meant that the food probably wasn't

rotting or you know the food was safe to

eat and we take it for granted today

because all food safe to eat we're

really good at it now but there was a

time when people weren't good at it and

the reason that we that we bought all of

our food from Kellogg or from Craft or

from Hershey's was because they were

really good at manufacturing clean food

in clean rooms and it's non-trivial to

figure out how to do that the first half

of the entrepreneur is is engineer the

product or service so it's safe it's

effective it flies it doesn't make you

sick right doesn't blow up in your face

the second element of being Su

successful entrepreneur is the economic

engineering part how do you manufacture

the product for less than it's worth

right how do how do you provide the

service that that is better than the

competing service how do you provide the

best service and and that means

struggling with the issue of how much

labor do you employ and what you know is

it better to produce the food with

expensive you know inputs or with cheap

inputs and what is the market think and

what do the customers think so I think

entrepreneur sometimes just means anyone

who's an economic

Adventurer right so I start with a

million of them the successful economic

Adventure that means the winner and the

winner had a good product but also

produced a good product at the right

price in the right

way and um the thing that's admirable

about them is they have to master not

just

engineering but

economics practical economics not not

theoretical ideological economics you

know they teach you things in school

that just aren't true right and they'll

be like well in school just tell the

people that work for you to do blank and

then you go in the real world and tell

the people that work for you to do blank

and they get up and walk out and quit

and then the factory shuts down right

and then your best customer quits you

and then you go bank and then the bank

calls your loan and you get bankrupted

and the company fails because you did

something that you read in a book

somewhere and and the truth is you know

doing things with real people in the

real world calls for a much greater

degree of sophistication and

subtlety you know and Acumen than uh

than doing things in the theoretical

world where you treat you know people

like robots people aren't

machines and your employees aren't

machines your customers aren't machines

the mayor of the city where your factory

is isn't a machine the governor isn't a

machine the country isn't a machine you

know everybody's got opinions and you

have to work in the world of politics

and sociology and

economics you have to compete with

someone else who's just as smart as you

maybe smarter than you more motivated

than you that wants to take away your

Market from you you have to deal with

that you have to keep your shareholders

happy and the shareholders are

considering your Returns versus

everything else they can invest

in and then you have to deal with the

laws of physics and if that gets out of

balance your plane falls out of the sky

or your Bridge collapses or your or or

your building

collapses or your company collapses or

your capital structure collapses or your

stock collapses you know if there wasn't

no John D Rockefeller you know we would

we wouldn't have had oil and if we

didn't and oil itself probably stretch

people's life expectancies 10 or 20

years you know try try rolling AC acoss

the Atlantic right or or next time you

need to go somewhere use wind power

right and then figure out what your life

would be like with wind power and

horsepower to get from here to there and

and Rockefeller doesn't sound like a

Robert Baron so much as he sounds like

the person that gave us the gift of

chemical energy and you know you have

General Electric and Edison that gave us

you know practical electrical energy and

westing house and then you had melon who

gave us aluminum and and uh aluminum is

pretty important you can't make an

airplane without aluminum everything

falls out of the sky made out of steel

if you you know if you don't make it out

of aluminum won't fly there is no there

is no modern air travel without it and

of course you know Ford gave us the

automobile and if you don't think it's

important read the history of everyone

that ever died because they were walking

from point A to point B or they're

trying to ride a horse from point A to