Bitcoin: There Is No Second Best | Michael Saylor at Bitcoin for Corporations

This, of course, is my favorite subject.

There's uh there's no better way, no no

way I'd prefer to start the day than

talking about Bitcoin

and uh why there is no second best.

Um and uh I had uh had an occasion uh to

consider this phrase as I prepared this

presentation

and uh I just thought it resonated

across so many different dimensions.

And so I started considering

you know what is the best idea

right what is the best and uh I think

that in the modern era in the in the

21st century I think we can agree that

uh the best idea has been digital

transformation and the companies that

have reshaped the world over the past 30

years are Microsoft and and Apple and

Google and Facebook and and Nvidia and

and they stand for digital books and

digital entertainment and digital

intelligence and digital communications

and digital memories and and uh of

course as they dematerialize

those products as as our recorders drop

away or dematerialize and our CDs and

our libraries dematerialize

and as our services dematerialize,

there's just a massive amount of

economic energy that's been given out.

There's an extraordinary amount of

efficiency. Now you can give a book to a

billion people or you can give

Beethoven's ninth symphony to a billion

people and you can do it for the cost of

some incremental electricity and and uh

the big winners were the investors in

these companies and the companies

themselves became you know as powerful

as nation states. Um now how good an

idea is digital transformation? Uh well

it's good enough that in many years a

100%

of the return for the S&P are

attributable to just seven companies. 1%

of the companies have all the result. In

other words, if you're not doing this

then you're just working very hard and

working harder just doesn't doesn't get

ahead. This is a snapshot in uh the year

2023 and it just shows you a how good

that idea is and b just how much trouble

you're in if you're not actually surfing

a digital wave here. Seven companies

have all the returns in the S&P index.

493 companies return nothing.

Okay, this is not a value judgment. The

truth is probably the people that work

for the 493 companies worked harder.

They worked harder. They're probably

smarter. They got paid less

and and they're taking an extraordinary

beat beating and a burden on their back

trying to fight against a digital wave.

But uh life isn't fair and uh and

certainly the global economy isn't fair.

uh if you are the winner, you're the

winner. And and if you get on the wrong

side of a trend, then you just get

gradually crushed. So, this is a

sobering observation, but it's a

reminder that if you're going to invest

and if you're going to align yourself

with an idea, it better be the best idea

because the second best idea, as you can

see, is worth nothing. You'll be lucky

if you just stay in business.

So

what's the best digital transformation

idea?

Digital capital is the best digital

transformation,

right? Wait. I mean, yeah. I for 30

years, we've been transforming books and

records and email or or letters and

packages and pictures and and VHS

cassettes and the like. But that's all

digital information. Uh digital

information is it's interesting. Uh it

does it does create enormous value. But

the truth is the first 30 years of

digital transformation will be an order

of magnitude less important than the

next 30 years of digital transformation.

And the real the real bull here uh the

extraordinary opportunity is the digital

transformation of capital,

the digital transformation of property,

the digital transformation of money.

And if you want to be a physicist and

and be deep about this, it's the digital

transformation of matter and energy.

Not the digital transformation of

information, but the diff digital

transformation of matter and energy. And

u where are we? Well, I mean, first of

all, you're talking about $900 trillion

of assets that are in the analog world.

So, I don't know what Apple's worth or

what Microsoft is worth, but you know,

books weren't worth 900 trillion when

they transformed them, and nor were CD

records worth 900 trillion.

As of today, 0.1%

of the capital on the world is digital.

99.9%

is this, right? We're very early in the

digital transformation cycle of capital,

right? The world is living in analog

assets. We have analog money. We have

analog bonds. We have analog real

estate. We have analog equity. We have

analog art. A lot of analog stuff.

900 trillion dollars of it. But the 900

trillion doesn't just reflect the value

of the physical stuff. It reflects a

monetary premium over and above the

utility value of the stuff. People buy

buy real estate not just to live in.

They buy real estate as a store of

value. And they buy equities not just

because they want to capture the cash

flows of the company. They buy equities

uh because they want a store of value

and they feel like it's preferable to

holding cash. And uh and for 500 years,

people have been buying art as a store

of value. It was scarce, desirable,

portable property. If you had to leave

the city, you could take it with you.

And gold is the same thing. People have

been buying gold as a store of value. So

something like half of all this capital

is really a monetary premium. And um and

the other half may be a utility.

We are just one trillion out of the 900

trillion right now. Very early.

Crypto proof of work is the best way to

create digital capital. The world wants

digital capital. What's the best way to

do it? Crypto proof of work. That is to

say, when you're running a proofof work

mining operation that converts energy

into information

that can be secured and transferred

via cryptography.

Um, not all crypto is based on proof of

work and therefore not all crypto is

digital capital. A lot of it just looks

like a digital security. But what's

special about this particular approach

which is of course the Bitcoin

architecture is it creates a

decentralized asset. It creates a

physical asset. There's a there is a

physical linkage to the real world via

the electricity and the silicon that

makes it thermodynamically sound and

integrates it into the universe and not

just the metaverse. It's sovereign. You

can take custody of this. It's

egalitarian.

The protocol is open. Anybody anywhere

on earth can engage in this network.

It's permissionless. It's global. Right?

This is the best idea, the best way to

create digital capital.

What's the best crypto proofof work

asset? Bitcoin is the best. How how good

is it? It's 97%

of all of the market cap of crypto proof

of work. After Bitcoin, you have to go

all the way down to Dogecoin. Literally

a joke. Literally a joke created over

the weekend by an by an engineer as a

joke to find the second best. Obviously,

there is no second best proofof work

asset.

But you know what?

There's no second best crypto. Bitcoin

is the best crypto asset. Now, why is it

the best crypto asset? Because it's

increasingly clear that no other crypto

token is going to achieve institutional

acceptance this decade. Bitcoin is the

only crypto that's going to cross the

chasm. You could see the writing on the

wall when the spot ETF of Bitcoin was

approved in January. By the end of May,

you'll know that Ethereum is not going

to be approved. And when Ethereum is not

going to be approved sometime this

summer, it'll be very clear to everyone

that Ethereum is deemed a crypto asset

security, not a commodity. After that,

you're going to see that Ethereum, BNB,

Salana, Ripple, Cardono, everything down

the stack is just a crypto asset

security unregistered.

None of them will ever be wrapped by a

spot ETF. None of them will be accepted

by Wall Street. None of them will be

accepted by mainstream institutional

investors as crypto assets. This is the

one universal consensus accepted

institutional grade crypto asset in the

world. There won't be another one this

decade. I can't speak to 20 30 40 50

years out. Anything can happen that far

out. But between the year 2024 and the

year 2030 that the die is cast, the

writing is on the wall. This is the

winner. There is no second best.

And Bitcoin is the best crypto network.

It's not just the best crypto asset.

This is secured, this asset is secured

by the most powerful computer network in

the world. It's rapidly growing

stronger. Hash rates growing by 70% a

year. It's growing that fast and good in

bull markets, in bare markets. It's an

unstoppable

thing. How much is 624x aash? It's

enough that all of the computer power of

Microsoft or Amazon is not going to

outdo this, right? This this is a

silicon machine because the the genius

of of an open crypto proofof work

network is that very intelligent

engineers can harness the power of ASIC

chips to create orders of magnitude more

efficiency and Shaw 256 hashing. So the

silicon ratchet is 2000 to1 3000 to1

more powerful than a general purpose

CPU.

uh a GPU is not appropriate and is is

not capable of doing this. It's not the

right technique. So, you're not

threatened by all the GPU capacity.

And what you have here is enough hash

power to create a wall of encrypted

energy that's nation state resistant,

that's corporate resistant, that's Dr.

Evil resistant, that's hacker resistant.

There is no trick. There is no gimmick.

There is no social attack. This is just

raw digital power standing in the way of

anybody that would try to undermine the

integrity of the network.

And it's also it's also driven by

electricity. 20 gigawatts of

electricity. 20 full-on nuclear reactors

worth of electricity. But it's a lot

better than 20 full-on nuclear reactors

because this electricity is is spread

everywhere to the ends of the earth. The

network is feeding on electricity and

that creates a decentralizing dynamic

that drives all of uh all of the network

to the end of the grid in the quest of

stranded energy. So this is going this

network and the dynamic is going to

continually decentralize, continually

dissipate. It's going to continually

move away from population centers where

the electricity is expensive. It's going

to move to places where the electricity

is is stranded,

where it's where it needs to be

recycled.

And that 30 gawatt is going to create a

thermodynamic connection between the

virtual network and the physical world.

This is what makes the network stable.

This is what makes the network ethical.

This is what makes the network

politically sound. The fact that that

electricity is going to be coming off of

a a dam in Bhutan or or a a volcano in

South America or Africa means that this

is going to be a global neutral asset.

There's no way anybody's going to

centralize the Bitcoin network on top of

a a single uh data center. That's what

makes Bitcoin uh the best crypto

network.

Now, beyond that, Bitcoin's the best

crypto brand.

Why is it the best crypto brand? Well,

220 million Bitcoin holders, people that

have an economic interest in Bitcoin,

420 million crypto users around the

world. The crypto industry has been

aggressively marketing and aggressively

expanding on the on the backs of lots of

different use cases. Not just Bitcoin as

store of value or property, but also

cryptocurrencies, stable coins, NFTTS,

everything under the sun. And this

continues to grow. It's a it's a

incredibly aggressive, fast growing

creative market. The marketing is

extraordinary. But there's an important

point to be made here

as the other crypto assets fail because

of competition

as as the you know Salana competes with

Ethereum competes with whatever as they

fail due to regulation as they get shut

down or they get t they get labeled

unregistered securities by regulators as

they fail due to entropy just the

complexity of what they're attempting to

accomplish and they crash crash or they

get hacked or they unwind or as people

move away from their projects. As as

those failures take place, all the users

in the crypto ecosystem and all the

capital in the crypto ecosystem is going

to flow into the best network. It's

going to flow into Bitcoin because

Bitcoin has 100% crypto acceptance. If

you talk to everybody in the world uh

and you say, "Well, do you like crypto?"

"Yeah, I do." Well, is Bitcoin

legitimate? What what's the most secure?

What's the most credible crypto network?

Well, it's Bitcoin. Bitcoin is the O

positive, right? It's the universal

donor, right? Everybody can't agree on

anything else. If you talk to people in

the crypto ecosystem and you ask them

whether or not they like Salana better

than this or Tether better than that or

NFTTS better than this, they can't agree

on that. That's competitive. That's

controversial.

Uh, that's confusing. Everybody agrees

on this one thing. Bitcoin. Bitcoin will

be around for the long term. The

industry was built on it. It'll be

around long after most of the other

industry participants are gone.

Well, Bitcoin is not just the best

crypto brand. It's the best investment

brand. There is no second best

investment brand. that people know about

the dollar, but dollar is not an

investment unless you're in a country

with the currency collapsing. And if the

currency is not collapsing, then you

need a different investment. Okay,

Bitcoin is the most widely held

investment asset in the world, right?

People are coming to grips with that. I

travel all over the world. I get on I I

get on the runway in the middle of

Switzerland and the guy with the with

the yellow vest knows me. He's buying

Bitcoin for his daughter. He just got

married. I walk to the beach in Italy

and somebody swimming off the beach

yells at me and they know me. I walk

into a room full of billionaires, they

know me. I walk to a bar and the guys at

the bar turn around and they know me.

This happens in Urguay. It happens in

Mexico. It happens in Brazil. It happens

in Italy. It happens in Greece. Happens

in Switzerland. It happens in London.

Happens in New York City. Happens in

Asia. Right? Why? Right? Bitcoin's a

sports team with hundreds of millions,

arguably 400 million fans,

you know, and they're all rooting for

the same thing. And when Bitcoin's doing

well, they're all in a good mood. It's

like their blood sugar's up.

When Bitcoin is doing poorly, it's all

they're in a sirly mood. Their blood

sugar is down.

But, you know, give me another example

of a team that's got 400 million

passionate fans and they're all winning

or losing together, right?

What What's making news on Sunday

afternoon? Bitcoin.

When there's a when there's a scare of a

war, what's crashing? What can you sell?

Bitcoin. When you decide the war is not

coming, what can you buy? Bitcoin. What

is there to tweet about? talk about

Bitcoin. What do you cover on YouTube on

a Saturday or Sunday or midnight on on

the East Coast? Bitcoin,

right? Everybody's got something to say

about it. What is it? Well, and why is

it? Well, first of all, it's the most

widely held asset in the world because

it's a it's a standardized

economic unit, right? I mean, maybe we

own watches, but we own different

watches. Maybe we own buildings. We own

different buildings, right? Maybe your

building is worth more in Paris, but how

does that help my building in Los

Angeles? We're not on the same team.

We're not on team building, right? We're

not on team watch, you know, you know,

and and and good luck, you know, trying

to invest in like Apple's stock in

Nigeria, right? And so what is Bitcoin?

Well, Bitcoin is the economic solution

to everybody. It's a global economic

solution to billions of people, right?

And what has it become? It's become

cool. Bitcoin's cool. It's useful.

It's global. It's standard.

Who's the last person to standardize

something? Well, I mean, people have

been standardizing things for thousands

of years. But you might know the name of

one company, one Standard Oil. John D.

Rockefeller launched Standard Oil. And

it became such a household word. In

fact, just about every oil company in

America came from John D. Rockefeller's

company. Half the oil companies in

Europe came from John D. Rockefeller's

company. We all zoned out and we thought

oil, we forgot about the standard part.

The standard part was this is the oil

that's not going to blow up in your face

and set your house on fire. This is the

oil that's actually got clean chemical

properties. Standardizing energy was the

most powerful idea in the 20th century.

made the richest man in the 20th century

and created every single energy company.

But what is this? This is standard

capital. This is standard wealth for

eight billion people. It's, you know, so

tell me the next standard, right? Give

me another asset that goes up in value,

not down in value that's standardized,

open to and global to everybody, right?

And the answer is there is no second

best, right? There's there's a standard

investment brand. It's called Bitcoin.

It's always interesting.

It's egalitarian. You can buy a billion

dollars worth of it and it's a pretty

good idea to buy a billion, but you can

buy $23 worth of it.

And if you look at the wealthy in the

world, they buy buildings, but you know,

how's a cab driver in Nigeria supposed

to buy a fraction of a building, right?

How's it how's it impact the other 7.9

billion people that can't afford a

building, right? This is egalitarian

capital, egalitarian property, and it's

prestigious,

right? So, this is the ultimate luxury

brand.

You know, people used to buy the nice

watch, so they figure they could sell it

if they ever needed uh to eat or pawn

it, right? But you'd much rather have

Bitcoin in your watch.

Bitcoin's the best digital commodity.

There's no second best digital

commodity. What is a digital commodity?

It's the only crypto in the world

recognized as an asset without an issuer

by all major regulators.

By all major regulators. Okay. The

Chinese recognize it. The Russians

recognize it. Right? The enemies of the

US recognize it. That, you know, in

Singapore, in the UAE, in the US, in

Brazil, everywhere. This is the one

thing everybody recognizes. So the

question is why? Why? It's not the

first. It's not the only. There's two

and a half million copies. Why? It's

because of the immaculate conception.

What is the immaculate conception? By

the way, it's such a simple idea and yet

everybody that's copied Bitcoin hasn't

got this simple idea in their head.

Satoshi created away.

He gave it away.

and he went away.

Walked away. That's the idea.

There's not a single major company in

the world where someone created the

company, gave it to the world, and

walked off. And in fact, if you look at

every other crypto asset, there is no

Satoshi, right? In fact, the way you

know that they're they're not

commodities is they're all arguing that

they're commodities.

Satoshi's not arguing anything. Satoshi

went away, gave it to you. Right? And

and this is the essence of it. If

something's going to be a commodity

there, there can't be a beneficiary.

Satoshi gave up control of the protocol.

Satoshi gave up the Satoshi coins.

Satoshi stopped trying to influence the

network. It was a gift to the world.

That's what makes it an asset without an

issuer. If you go and make a list of the

next 100 cryptos and you go down the

list, you're going to be hardressed to

find that. But that's a simple asset

test. By the way, it's a lot easier than

the Howie test. You know, if you wanted

to figure out whether you're a security,

if you created something, did you give

it all away to someone else? Did you

never sell it? And are you gone and not

arguing over it? And then maybe it is.

So I I have simple advice for someone

that wants to create a digital

commodity, right?

give it away and walk away.

Bitcoin is not just the best digital

commodity. It's the best commodity.

Right? Bitcoin is the only commodity in

the world a that's digital. Everything

else is a physical commodity.

And because it's digital, it's fixed in

supply.

Everything else is physical, therefore

not fixed in supply. That makes Bitcoin

superior to gold. And gold is the king

of commodities.

You know, when I started my career at

DuPont, commodity was a dirty word.

Every single business decision made by

the DuPont Corporation was to escape a

commodity business and create a

specialty business. Nobody wanted to to

manufacture or sell commodities. And the

reason why is they knew they were all

eventually driven to zero profitability

or your or every commodity provider

eventually has to produce the commodity

at a loss

in order just to run their capital. And

so commodities are awful investments

and uh gold is simply you know the least

worst of an awful investment. Why is

Bitcoin the best? It's global. It's

digital. It's programmable.

It's inelastic. It's durable. It's

divisible. It's portable. These are all

the things that every other commodity is

not.

Okay. Well, the numbers don't lie. You

know, I can give you words and rhetoric,

but look at the last four years in a in

an inflationary environment. Gold is up

13%, Bitcoin is up 394%.

Any good investor will tell you all

physical commodities make poor

investments. Gold's just the least

worst. Now, uh, for those of you who are

Bitcoin advocates and you go and you

talk to people, right, what you'll find

is the very controversial narrative of

Bitcoin is this digital currency that

gets everybody racked around the axle

because they think, well, it's competing

with the yen and the dollar and the euro

and the rubble and the CNY and and the

like and it's a medium exchange and it's

needs to be legal tender and it's t it

shouldn't be taxed. It becomes a very

controversial thing. If you put that

aside for a second, that's the ugly

narrative and you go to the bad

narrative. Bitcoin is digital gold.

Uh it's sort of true, but it's not a

very good narrative. Why? Because if you

talk to a thousand billionaires and you

say, "Well, how many of you how many of

you made a billion dollars investing in

gold?" The answer is zero. And if you go

to a thousand wealthy families and say,

"Now that you're wealthy, you know, are

you going to go buy a billion dollars of

gold?" The answer is no.

And you say, 'Well, we've got digital

gold. It's great. It moves at the speed

of light. It's programmable. You can

teleport it. It's great. And and they

go, "Well, that's that's nice, but I

don't own any gold."

Okay, I can't find anybody that owns

gold. The people that are advocates of

gold don't own gold. Peter Schiff, on

the record, has spent 15 years

advocating gold.

And when you ask him, Peter, do you own

any gold? He's like, "Oh, no. I don't

own gold."

It's a very small part of my portfolio.

Okay. So, find me someone that actually

owns gold that you could even debate on

the topic. And the answer is it just

seems to be 1 to 3%

oddity,

you know, in any portfolio. So, yeah,

Bitcoin is the best commodity, but the

truth is all commodities are dogs. And

Bitcoin actually fixed the commodity.

But that but that word commodity is a

dirty word. Every intelligent business

person, every intelligent investor knows

that you should run as fast. Run, don't

walk away from commodities.

So what is Bitcoin really? Bitcoin is

the only scarcity. It's not a commodity.

A commodity is something you can create

infinite amounts of. And anybody's

allowed to create infinite amounts of

and dump it on the market. And uh if you

want to hold, you know, a billion

dollars of soybeans for a hundred years,

that's probably not going to be

generational wealth for your

granddaughter,

right? Pretty obvious why. Um but a

billion dollars of gold won't be

granddaughter either. Um

Bitcoin's the first absolutely scarce

commodity in human history. So you have

to say it represents an entirely new

asset class. It's not an equity. It's

not a property. It's not a commodity.

It's something different. It's new.

Given the fact that it's new, there's

nothing to compare it to. So, you got to

ask the question, if there is no scarce

commodity in the world,

what is scarce?

Find me, find me anything that's scarce.

And and

I got the hourglass up here to make a

point.

No amount of money will buy you more

time

or more Bitcoin.

So if you consider the nature of the

universe as a physicist,

the one thing that's that's scarce is

time,

right? No politician can make more of

it. No capitalist can manufacture more

of it. No AI bot can create more of it.

Time is the is the true ultimate scarce

yard stick, right? That's how the

universe works. That's that's how God

makes the universe work. Einstein had a

lot to say about it. Physicists have a

lot to say about it.

What have we done with Bitcoin? We have

bottled time in a Bitcoin, right? that

the process of proofof work mining is in

essence digitally transforming time into

an asset.

Our goal was to create a digital money

but now it gives new meaning to the

phrase time is money.

How do I actually create digital time?

Digital scarcity and then how do I put

it you know on a hardware wallet? How do

I move it? How do I compute with it?

Right?

scarcity is it's it's very underwhelming

to say, "Oh, Bitcoin is like it's

digital currency or it's digital

property or it's digital gold or it's

digital something because what it really

is is this digital time, this constant,

right? If I if I give you a hundred

trillion quadrillion dollars, you won't

get more than 21 million Bitcoin. If I

give you all the money in the world and

you crank the miner up, we know how fast

Bitcoin is coming out every 10 minutes,

right? We have created the perfect

monetary asset because we have figured

out how to duplicate the benefits and

the characteristics of time. And

ultimately when you measure your life

and everything in your life, you have to

measure it against time because time is

the one thing you're not getting back no

matter how rich you are.

Now people oftenimes they try to buy

land, right? Land is the scarce asset.

They not making any more beachfront

property, right? I want to buy land, you

know? And the truth is in the 20th

century

if you're a rich family and you didn't

make money on technology then you made

money on property and the property you

bought was the middle of London or Paris

or New York or you bought some

beachfront in the Hamptons or Palm Beach

or something but probably you bought

very desirable commercial real estate in

the middle of a city

but you know it's it's kind of a

broomemide people you know people will

say things oh yeah well I guess

commodities can be manufactured but land

they're not making that anymore not

making any more land right when the Mark

Twain said that okay look at the picture

here the truth is they are making more

land this is Boston over the course of

300 years half of Boston was made

I live in Miami Beach

3/4 of Miami Beach was manufactured in

the last hundred years it's all made

right they dredged it Dubai I made they

make land. Amsterdam, Roderdam, they

made the land. The truth is given enough

money you can make land. And if you want

it, you'd be surprised how much of it

you make, right? Most people don't think

about this. But at the end of the day,

storing all of your economic energy in

land is is not truly uh going to be

effective because it's going to it's

going to inflate and it's going to be

it's going to be impaired by a whole set

of other challenges.

So, Bitcoin's the best property. What's

the best property? Bitcoin's the best

property. What's the second best

property? There is no second best

property, right? This is the greatest

city in digital city in the world.

There's 220 million inhabitants there

right now. What's the second best

digital city in the world? Right? There

isn't a second best city in the world.

Why is this so powerful? It's global.

Anybody can go there. It's digital. You

can zap there on a mobile phone and

there's billions of mobile devices. It's

open. This is a city that's got no mayor

to tell you what you can't do. And on

the other hand, everybody can zap there

with their capital when they want. It's

permissionless. And you don't have to

buy a building. And you don't I mean,

how many people can afford apartment in

New York? Most people can't afford an

apartment in New York. You can buy a

fraction of a piece of property in this

city. It's totally divisible. And this

is the immortal city. Maybe New York is

there a couple hundred years. This this

city could be there 10,000 years. It's a

virtual city. And you know, we talk

about sustainability, but sustainable

here means there's no painting. There's

no tornado going to hit the city.

There's not a there's there's not a

flood insurance obligation on this city.

You don't have to worry about, you know,

neighbors getting together and creating

a zoning ordinance. This city will last

and this property in the city will last.

Bitcoin's the best property, right? Why

do you why would you buy it? you would

buy it because it's a heck of a lot

better idea than buying an apartment to

Airbnb for the rest of your life. What

are you going to do when you die? You're

going to leave instructions for your

grandchildren on how to operate the

Airbnb

and you know and then where where are

the instructions for how to actually

convince the mayor to not tax away or

rent control your Airbnb? You know, one

one of the problems with property is

it's inherently corrupting in the

physical world because

if you're not a political actor and you

own property, then the politicians take

it away from you and that convinces you

that you have to then influence the

political process and take control of

the government, whether it's the city,

the county, the state, right? Entire

states were created, right?

Why is Las Vegas here?

Why are you in the city? You know why

you're here? because they drove all the

way down to the cross the straight this

the state line and when they were out of

California they said okay this is a good

state and we'll put the city here in

this part of the desert if the city had

been a few miles on the other side of

the highway there'd be no Las Vegas

everything that's going on here would

have been shut down regulated away made

illegal or taxed away sometime in the

last 50 years so the problem with

physical property is you have to become

the political actor or another political

actor will just take it away from you.

And there's no there's no middle ground.

And at the point that you're no longer

politically capable of defending your

property when your children or

grandchildren aren't as wellwired and

not aren't as politically sophisticated

or charming or charismatic as you are.

Then uh then the county, the city, the

state, the the whatever,

they just crank your property taxes,

expropriate your property, turn it into

an airport or a school or whatever

utility line, and someone writes a

little obituary saying, "Oops, third

generation, they lost the family farm. I

guess they weren't as smart as their

grandparents were. They probably

deserved it, right?"

And that's the best thing about this

property. Here's a city you can move to

a cyber Manhattan. There's never going

to be more than 276

to the3 blocks. 276 cubed. That's the

number I want to plant in your head. If

Bitcoin was a city in cyerspace, it

would be 276 blocks wide, 276 blocks

high,

276 blocks deep. When you buy Bitcoin,

you're buying one of those blocks.

That's all there is. 276 is the cube

root of 21 million to the nearest

integer.

There's no second best property.

But again, as I say, property is really

uh it's an it's underelling what Bitcoin

is. Bitcoin is much better than digital

property.

Bitcoin is the best capital asset.

Capital. What is capital? Pure economic

energy.

Bitcoin's digital capital. It is the

first occurrence of pure economic energy

in the history of humanity.

If we look at every other asset,

there's no other asset. There's no

second best capital asset. There's no

asset that represented pure economic

energy. The closest thing we have to it

is the myth of gold and the idea that,

you know, if I'm successful in business,

I'll I'll basically convert that success

into gold. When I'm a powerful king,

when my kingdom is successful, it'll be

the kingdom of gold. When my city is

successful, it'll be the city of gold,

right? The gold standard, right? We talk

about gold, but gold was never pure

economic energy. just asked the Spanish

when they had all their gold wash up in

Queen Elizabeth's

harbor during the Great Wars and she

took it all and then they lost the war

in the Netherlands because she took

their gold because their gold had to be

shipped on wooden ships. It wasn't

wasn't quite energy at all. It was a

little bit too clumsy. And uh and gold,

of course, as we talked about, it's a

commodity. It's inflationary.

The Spanish had hyperinflation,

you know, in the in the

16th century after they brought all the

gold back from the new world. Uh 500%

inflation. They collapsed their entire

civilization. They destroyed their

empire because they found too much gold.

Must not have been pure economic energy

the way it worked out.

The problem with every other asset and

and the primary capital assets are

equity, credit, bonds, that is currency

and property.

They're all impaired by physical

constraints.

The physical constraints lead to

political constraints

lead to lead to entropic effects, chaos,

disorder,

fragility,

risk.

Bitcoin's better than that. Bitcoin's

immortal, immutable, indestructible.

The whole idea of Bitcoin is I create an

asset

which doesn't live in the physical world

that lives in the virtual world. And

because it's immortal, I mean, immortal

is a pretty big word. I mean, what's the

difference between inflating the gold

supply 2% a year and inflating the

Bitcoin supply 0% a year over 10,000

years? Well, the useful life of gold,

the half life of money in gold is or

half life of capital in gold is 30

years. It's a difference between dying

in 30 years or living forever. That's

what when people tell you 2% inflation

doesn't matter. Well, 0% inflation is

live forever immortal and 2% inflation

is die or half die in 30 years, die

fully in 60 to 70 years. It really does

matter. So the idea of immortality

in your in your energy is pretty

critical.

Immutable,

right? Is someone going to corrupt it?

indestructible is an act of God a force

majour gonna destroy it everything else

all these other capital assets they

suffer from those risks and because

Bitcoin doesn't it's inevitable it's

inevitable idea why

look at Bitcoin man here

not stupid right people aren't stupid I

mean go back 10,000 years and then find

everyone that disagreed with you on

every ideology and every religion and

then ask the question what they all

agree on and they generally all agreed

that they didn't want to lose their

stuff, right? Just about everybody

whether you know whether they're

socialist, communist, capitalist, every

possible ideology, they all agree that

that generally being wealthier or having

economic power is better than not having

economic power. Now I there's a few

people that kind of forsake all their

property and and surrender their

economic power. they end up losing

control of the government and lose

control of the society and they

certainly lose control of the armies

because one of the lessons of history is

if you can't pay your soldiers then

they're going to mutiny and then your

empire is going to collapse. So in this

particular case every self-interested

human being that that's going to compete

in a Darwinian world is going to agree

that they want immutable mutable

immortal indestructible capital. Right?

who doesn't.

So, back to the numbers.

What's the best capital asset? Bitcoin.

What's the second best capital asset?

Well, actually, the SNP is the modern

surrogate for cost of capital.

So, that's been the case at least for 30

years, probably 30, 40 years since the

Vanguard 500 and since Spy was launched

by State Street. And so if you're

looking for the cost of capital, what is

the cost of capital? It's kind of like

the rate at which your capital has to

return for you to not get poorer. And

it's kind of interesting here. 50% over

four years is about 12% a year. The cost

of capital is about 12%. If I had to

guess, at what rate does the US dollar

money supply expand? Probably 12%.

Because that's

kind of copying it. I mean that probably

the dollar supply expands a little bit

faster that probably slightly

underperforms the monetary inflation

rate but but if you had to pick one

metric and say what's the metric that

gives you a sense of how rapidly the

world currency supply is expanding in

dollars probably the S&P 500 that's the

cost of capital and as you can see when

you have inflation the money finds its

way into the strongest asset and it does

not find its way into the weakest asset.

So this is another way to see inflation.

This is per last four years. And what do

you see here? You see that when uh the

money supply expands perhaps 50 60%.

I wouldn't be surprised if it didn't

expand 60%. Uh I don't think we measure

it by the way. I think that all all of

the the official measurements of M2 I

think all of them are incomplete

imperfect in the same way that

unemployment statistics are imperfect in

the same way that GDP statistics are

imperfect in the same way that inflation

is imperfect. They're just synthetic

numbers that a certain organization

decides to focus on. But what do you

what's the story here? The story here is

that uh that bonds don't hold value,

right? They're awful capital assets.

Silver doesn't work. Gold bear doesn't

keep up with the cost of capital. The

NASDAQ, you know, interesting. It

underperforms the S&P. Why? Well, you

know, sometimes you get you get some big

winners with technology and sometimes

you don't. But maybe the S&P is a more

broad index and just uh got a little bit

less of a sharp edge to it, less risk in

it. There's a lot of lowrisk businesses

in the S&P 500

and then count and then obviously what

we see is uh Bitcoin is the only asset

that exceeds the cost of capital.

Another way to say that is everything

else is dilutive. You invest in anything

other than Bitcoin, you're destroying

capital. You're destroying wealth,

right? You invest in the S&P 500, it's a

conventional capital asset. You won't

look stupid. you're probably still

losing a bit of wealth, but nobody will

notice because the rest of the society's

using that as the benchmark,

but you know, if you if you're not doing

the 50%, then you know, you're running a

hedge fund underperforming the S&P 500.

You're destroying value. Most of them

underperform the S&P 500 and they

destroy value.

What's the second best? There is no

second best.

That makes Bitcoin the best treasury

Treasury meaning you got a company, a

private company, a public company.

You've got a treasury. You know, a

treasury means you got a country, you've

got a city, you know, you have

municipality, you have an institution,

you have an endowment, you have a

treasury.

Well, most operating companies surrender

their capital to avoid shareholder

dilution,

right? Because if they hold the capital

and they invested in T bills,

they're going to get 3% after tax

against a 12% cost of capital per year.

And so you hold a hundred billion dollar

of capital, you destroy $9 billion of

shareholder value a year.

You know, Berkshire Hathway's got 160

billion of capital.

That's a $15 billion a year cost in or

in order to use that as a treasury

asset. Cash and credit are both

dilutive.

Bitcoin is the first treasury asset

that's accretive. That is, you carry a

hundred billion dollars of Bitcoin. It

goes up 40% a year. You're earning $40

billion of accretion a year instead of

$9 billion of dilution a year.

That means Bitcoin changes the rules of

modern corporate finance.

Finance for the past 50 years in B

school, you know, is taught like this.

You have to uh operate on the P&L to

strip away all volatility. We want you

to pursue the Microsoft model. We're

going to sell you three-year enterprise

agreements and they're fixed for the

next three years. We'll renew them every

three years. The CFO of Microsoft can

predict the quarterly results 12 months

in advance plus or minus 50 basis points

or 100 basis points. The only moving

part is the cost and the cost are

controlled by the corporation. So modern

finance says you're a good CFO if you

strip the volatility off the P&L

and then you're a good CFO if you return

all the capital to the shareholders via

buyback or a dividend. no matter how tax

inefficient it might be. And then if you

want to be a really good CFO, you borrow

$50 billion

and you give that back to the

shareholders. So you actually go to

negative working capital.

Well, so you know, and that's happening

where? It's happening at Apple. It's

happening at Meta. It's happening most

places.

Why? Well, I mean, partly it's happening

because you need to get your EPS to go

up by 12% a year if you're going to beat

the 12% cost of capital and make your

stock a store of value. And if you're

organically only growing 1, two, 3% a

year, which is the I mean, people do the