Bitcoin As Property: What Perfection Looks Like with Michael Saylor | The Bitcoin Layer

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[Music]

welcome back to the Bitcoin layer I'm

Nick Bhatia and today we have an

extremely special guest for you all

Michael Saylor Michael thank you so much

for joining us here today at the Bitcoin

layer

yeah thanks for having me Nick I'm

looking forward to this I'm really

excited to have you you have you offer

so much perspective for the investment

audience in terms of why Bitcoin and I

think that it's one of the things that

the world has identified you as one of

the best

metaphor Messengers on bitcoin so I was

hoping that going into bitcoin's 14th

birthday here in a couple months you

could give us a refreshed look and take

on what you feel the best metaphor or

two are for Bitcoin not necessarily

Bitcoin as of five years ago but how do

you see it explained best today

as Bitcoin has evolved uh through a few

Cycles

you know I tweeted this morning that uh

that Bitcoin is property

and I think

a lot of people are getting the idea

that Bitcoin is really technology to

manifest property rights to 8 billion

people

um but if we look at it look at Bitcoin

as perfected property or engineered

property

uh

that thing which you would need to

provide to an individual so that they

would have property rights

then I think that's an ideal metaphor I

think

I think a lot of people have have uh

talked about it as a currency and we've

and we've discussed other metaphors for

it but probably the most constructive

thing to do is to compare Bitcoin to

other forms of property and other other

assets to deliver property rights

to individuals

so can you talk to us about your view

about Bitcoin in terms of the potential

demonetization of other asset classes so

I've heard you describe how you believe

some of the capital that's allocated to

real estate and equities for example is

allocated to those to those two asset

classes because there is no other

alternative for that storage and Bitcoin

represents that so explain that to The

Listener please

sure

well um

in the absence of sound money

uh if my if fiat currency or the

currency of Any Given Society is not

holding its purchasing power

then then rational actors be they

corporations or or individual investors

or families will tend to take uh their

weak currency or their weakening

currency and they will want to invest it

in some stronger asset that'll be a

store of value

and so if we if we uh look at the United

States

the s p index has emerged as a store of

value there was a time when you could

actually take your cash put it in a bank

account and generate five percent

interest

and if you thought you're getting five

percent interest and then natural

inflation rate was less than you would

do that

um most people concluded that uh that

wasn't good enough and they actually

became stock market investors or Real

Estate Investors but uh there was a

debate about what the inflation rate is

and so if you roll the clock back 30

years some people less sophisticated

would have put their money in a savings

account other other mid-sophisticated

would have put their money in a mutual

fund and I'd say the highly

sophisticated put their money in

commercial real estate or real estate

Ventures and the reason they put them in

real estate Ventures is because real

estate offered greater property rights

and greater leverage you could lever a

real estate five to one ten to one and

more readily Finance it without a mark

to Market so I would say they're really

sophisticated long-term investors looked

to commercial real estate or some real

estate play

the uh you know the convention was I put

it with a mutual fund or I invested in

an s p index and uh you know I would say

the working class solution is I put it

in the bank in a savings account or a

credit union and I get three four five

percent interest

um

that uh that regime kind of disappeared

maybe 20 years ago or certainly 10 years

ago when the yield on credit uh on on

when the yield on savings accounts went

to zero so when the yielding savings

account is zero then there's no one

thinking they're saving money at zero

percent interest

the perception was still the inflation

rate was two or three percent even

though it was much higher than that

so now uh long-term store value uh moved

to a focus upon uh stock indexes

and real estate and other and ETFs Randa

we the king of all ETFs was the spider

the s p index but we had an explosion in

ETFs in the past decade and there were

all sorts of other types of exchange

traded funds that represent ownership of

a share of Commodities or companies or

or something and so so all of those

things are um the ETFs are securities

and if you're not going to save with uh

Securities you're going to buy

individual stocks which is a bit

complicated and some people did that and

the last thing is maybe again you go

back and you invest in real estate now

commercial real estate investment is is

really very Capital intensive so you

have to be in a 0.1 percent or the one

percent uh of the investors to have the

capital to do that most of the rest of

the investors if they wanted to pursue a

real estate strategy

they would get a second investment

property right the classic would be I

bought an apartment to Airbnb or I

bought a rental apartment a rental

property

or uh or I I bought some kind of share

and a Reit

and uh that takes us uh up to the stage

where people started to notice Bitcoin

and I I think that

it's pretty clear you know

by the end of 2021 uh after the pandemic

crisis we had monetized a lot of

different assets we had we had a spike

in uh housing prices where we're

monetizing we're basically putting a

premium on housing and excess of its

utility value we had a spike when

commercial real estate we had a spike in

meme stocks and their value we saw

extraordinary spikes and collectibles

and watches and sports cars and artwork

so so as the central Bankers were

flooding the economy with excess

currency the currency is trying to find

a tangible asset uh that will hold its

value as the currency uh debases and

everybody chooses a different one

depending upon what they know and what

they're comfortable with

um

Bitcoin right is one of those assets

which is now being monetized and it is

rising through this

chaos

to be the Apex property asset or the the

Apex monetizing asset

so I I'm I'm of the opinion that we're

going to see

um a consistent demonetization

of other key assets and

and uh you know one asset that you'll

see demonetized that we're seeing

demonetized right now is bonds

I mean I guess the big three category

right are maybe the big four currency

bonds

real estate

and Equity right those are the four big

asset classes that have been monetized

by excessive money printing

um we we see uh we see and gold is a

small one right gold is 10 trillion all

the other 4 or 10x more than that so the

big four are the the currencies the

bonds the equities and the real estate

they're starting to be demonetized now

um and I I'm not going to dwell on bonds

that's probably a discussion for another

time except to state that you know

obviously they're they're crashing you

know they've lost 20 30 40 percent of

their asset value as interest rates come

up

um

what I'm going to do is I'm going to

focus upon real estate

because I really think the interesting

discussion here is

how Bitcoin demonetizes real estate and

what will it demonetized what does it

mean to demonetize well there's a value

of real estate uh to a utility value to

someone that's using it right the true

utility rental value

and that doesn't matter whether it's a a

consumer or a business there there's a

utility value to the real estate and

then to the extent that the that the

price of the real estate is beyond that

that is the monetary premium and there's

a whole lot of commercial real estate

that has a monetary premium the way that

you would know

that it has a monetary premium

is you think about all the people that

have excess cash and they don't want to

store it in cash they don't they don't

have a safe bank account or a savings

account to put it in and their view is

I've got to buy an investment property

right that the world is full of people

that have said I bought a second

investment property or

I uh I bought a piece of commercial real

estate or I'm an investor in commercial

real estate because that is the place

that I wish to store my money

right why do you even want to store your

money why do you even want to be an

investor right the only reason anybody

wants to invest in anything is because

they believe that the risk-free rate of

return on their money is too low to keep

up with inflation

if I told you that the money was going

to grow in value 10 a year and you knew

the inflation rate to be zero you

wouldn't invest in anything right you

would you would just put your money in

in a safe place and wait for it to

create in value 10 a year so so an

extreme hard money environment

um

the the average person right the

non-expert isn't an investor the only

people that really should be investors

in theory are professional investors

right professional Venture capitalists

and professional investors have spent

all of their time analyzing

opportunities to ascertain uh the true

long-term value the cash flows

but the world is full of people

that are actually making investments in

order to preserve their wealth and

they're doing it because of the weak

money and so one of the places they make

their Investments is in real estate

investment properties it could be I got

a second home and I rented out it could

be I bought an apartment and I and I

rent it out it could be I Airbnb

something it could be I I went in and

partners with three of my friends and we

bought you know a small garage or we

bought some Warehouse or something uh

that's that's going on everywhere in the

world

so

how does Bitcoin demonetize that well I

think that you just want to start from

first principles and you want to ask

what is property

and and you can either get to Pure

property by taking away all the defects

of real property or you can start from

nothing but let's start with real estate

real property and strip every defect

away from it

so let's say you had a piece of

commercial real estate maybe um

maybe it's a a two million dollar

building

called a warehouse or two million

dollars that's a 100 Bitcoin

100 Bitcoin building as of right now

and uh I uh I happen to pull out a Genie

in a Bottle and the genie comes out and

says well Michael I'll give you infinite

wishes

and uh so I start casting magic spells

to fix the defects in my warehouse

so what's the first defect

well the warehouse has got a finite life

it's only going to last 100 years

and after 100 years the warehouse is

going to fall down a rust it's got It's

got a problem there it won't last a

thousand years it won't last a hundred

thousand years

so I say the genie why don't you make uh

once you make the building last forever

like literally Immortal okay how do you

do that well just make it out of

something which is literally

indestructible how about like you know

Pure Energy pure uh Pure Solar Energy

Right Stars last a billion years so make

it out of star stuff

okay fine the building is uh is Immortal

now the second the second problem is uh

buildings are are uh prone to damage if

there's a hurricane

or if there's an earthquake or someone

drives a truck into it or if someone

sets a bomb off in it or if uh if if uh

it gets rained on and and the water runs

into cracks in the buildings and the

water expands and the building facade

decays and it crumbles

so I say the genie make it

indestructible

no problem you know when I made it

Immortal I also made it indestructible

right so it doesn't matter how often

gets rained on and if it gets struck by

lightning or rained on or crashed into

it or exploded it's not going anywhere

okay indestructible Immortal building

okay remember the building was worth uh

two million dollars a hundred Bitcoin

well

is the building that's indestructible

and Immortal worth more or less now

right a little bit more right maybe a

lot more you could say well I got to

discount it uh for the cash flows that

you're going to generate in years 100 to

10 000 right

but but generally a building that will

last forever that you can't destroy is

more valuable now the issue is uh the

building has maintenance fees

there are all sorts of fees normally on

an ordinary building and you're paying

Insurance that's a maintenance fee well

the insurance goes away if the building

is indestructible right

and uh then I have to always if I have a

building with uh steel or or something

in it I have to paint it to keep it from

rusting well that goes away no

repainting no changing out the roof

so uh no caulking no fixing cracks so uh

the maintenance fees go away and if the

maintenance cost of the building goes

away then it's worth even more

oftentimes maintenance fees could be one

two three percent of the commercial

value of the building so if you pay

three percent of the value of the

building for the next hundred years

right that's 300 percent

if I took the 300 percent and I took it

to zero building is worth more okay

so that's good so the genie basically

makes the maintenance cost makes it a

low maintenance or zero Maintenance

building now what else draws down the

drives down the value of the building

property taxes the building is sitting

in the middle of the city and there's a

city tax there might be a state property

tax there's some kind of property tax

those taxes can range from

10 20 basis points a year to 250 basis

points a year in Florida the property

tax on a building that's held as a

residence is 200 basis points a year 10

million you know the 10 million dollar

building costs you 200 000 a year to

hold it that's another form of

maintenance so I say the genie well uh

make the property tax go away well how

do we do that well we move it out of

space it's not in a city it's not in a

country it's in cyberspace

so in cyberspace there's no property tax

if I could if I could move the building

you know in into orbit around Jupiter

there'd be no property tax right move

the building

so now I've got an indestructible

Immortal maintenance-free building with

no property tax

it's getting a bit more valuable

um

now what's your next wish well um the

building is sitting in California and

nobody wants to rent a building in

California but all the customers are in

New York City

so I blink and the building is

teleported in New York City great well

now they want the building in Tokyo

during the Tokyo Olympics so I blink and

the building is there

so I say the genie will make the

building teleportable if I could

instantly teleport the building anywhere

they'll be better building okay I've

just upgraded the property a bit more

now

what impairs the value of the building

well a limitation on who you can rent it

to right so when I can teleport the

building

then I can move it to any City to or any

place where there are people and I can

rent it to them but um the other problem

is you can only rent a building maybe by

the month maybe by the year maybe by the

decade

well what if I've got someone that's

willing to pay me

a hundred thousand dollars a day but

they only want to rent it for three days

during the Monaco Grand Prix that's an

example you know during during the

inauguration in DC when there's infinite

demand and people will pay 10x as much I

need an office space NDC for three weeks

can you teleport the billing there

well that would be a that would be an

easier to monetize piece of real estate

so I say to the genie let me rent it to

anyone for any period or another way to

say it is is I want to be able to run it

at any frequency

anywhere at any frequency that upgrades

the value of the real estate

now

um someone comes along and looks at my

uh my warehouse and they go yeah this is

great I would pay you quadruple normal

rent but I only want a quarter of it

okay I'd like to be able to subdivide it

what if I could subdivide the building

into four pieces and ship it to four

different cities and sell it to the

highest bidder

the ability to uh freely subdivide and

read and recombine the the property

at any frequency

makes the property more valuable you

know

here's the trick you know convert the

building into a hotel divided into a

hundred rooms and make it into 30 Suites

and then rent the Suites for 30 hours

each and then recombine it into one big

banquet hall and then convert it back

into a warehouse and and what you're

doing is you're morphing the building

day by day place by place to maximize

the rents

now you look at it like that you say

well you know that that building I

started with doesn't feel that good you

know it could it was static it couldn't

move it couldn't reconfigure this one

sounds much better

a flexible building

so then my issue is well it's only a

warehouse or it's only a whatever I want

to use it for anything

so if the genie basically casts a spell

and allowed me to convert the building

into a school or into a sports Stadium

or into a hotel

right or how about this one into a

container ship

people don't want hotels they want

container ships that carry natural gas

right now

well it'd be a lot more valuable if my

real estate could become a different

form of property

so if you can use it for anything that's

a big upgrade

um

you know that

the other thing you want right with any

property is you want to upgrade it over

time yeah like I've got a piece of

property I've got uh 10 acres and it's a

parking lot

well it's worth X but what if I could

develop a thousand story uh parking lot

parking garage on top of the same

acreage and I could uh I could develop

you know a thousand story building on it

well my development rights are worth a

lot in fact in New York City oftentimes

you see these people that are operated

parking lots and they sold their air

rights

the rights to build above the parking

lot to the hotel or the or or the

commercial office building to their left

or their right

and you know the air rights might be

worth 10 million dollars

or 20 million dollars

the parking lot's never going to

generate 20 million dollars but but the

right to develop is so uh my property

would be a lot more valuable if I had

the right to develop it

now who controls that right

well um it's your neighborhood your

Precinct your city your state controls

your right but if I had property in

cyberspace

I would have no limitations on my

ability to develop it

you know like uh you would say to me

well wait a minute Michael

um what's the point

of of selling the rights to build a

thousand story building when the tallest

building that anybody is allowed to

build in New York City is a hundred

stories

see there is it's impaired by code right

but then you might say to me as an

engineer what's the right of selling a

thousand story building when the tallest

building that any architect is built

anywhere in the world is you know 50 150

stories

I would say well this century

what about next Century what about you

know 200 years from now when we have

adamantium steel right or or some some

new uh construction technique do you

really believe that the tallest building

in the year 2022 will remain the tallest

building and all of humanity for the

next Thousand Years

right I mean roll the clock back 100

years how far we come roll the clock

back 200 years in the tallest building's

six stories just about everywhere

so

the ability to to continue to upgrade

the property

or the ability to sell the lien on it

right the bill to sell the right

like for example I am the humble uh I'm

the humble uh parking lot operator and

I'm going to sell you the right as Mr

developer to the hundred stories above

my parking lot

and you're going to give me money today

even though you know it will take you 10

years to find a buyer for those rights

maybe it will take you 30 years maybe

you will die and you will pass the

rights to the development of the land to

your heir

and in 30 years someone in your family

will actually develop that property or

develop that right and they'll make a

lot of money

right uh do those property rights have

value well ask the people that own the

property rights to Michael Jackson music

right or the Beatles catalog right or or

fill in the blank right a intellectual

property rights have value over time so

do

so will property property rights now the

funny thing is we talk about property

rights I just gave you property rights

how many people have managed to sell

their property rights

not not not often because we never

thought of them that way

so I'm making some progress and getting

rid of the defects in real estate and I

think the next defect is right now real

estate and the physical world is

upgraded with tractors and machines and

steel

and electricity

right and material

but what if I could upgrade the property

using computer chips

right uh if I look at the efficiency of

a computer chip they've improved by a

factor of a million over the past 10 to

20 years but if I look at the efficiency

of construction cranes in New York City

they have not improved by a factor of a

million in the past 20 years so clearly

moving into the to The computational

Domain for development out of the

physical domain is a way to upgrade the

value of the property and that's another

really nice thing about digital property

versus physical property

now all of those are upgrades but then I

but then uh the genie says to me I got

an idea for you uh I'm going to make

your property invisible to those who

would do you harm

what is the definition of privacy

one definition of privacy is my property

is invisible to those who would do me

harm and available

to my friends and family

right so you think about walking down

the street saying a wall and you see the

sign private property

it's like well it's not private to the

family of the owner it's not private to

the Friends of the owner it's private to

the criminals with guns outside the

fence that might want to jump the fence

and do you harm

okay the ultimate private property

though is property that's so private

that no one that can do you harm whether

they're a criminal or they're a

competitor

right they could be a competitor they

could be a criminal they could be a

corporation

that wants your property it could be a

government or a state actor

when you don't have property if you if

you have um

if you did have a hundred story

indestructible shining building in the

middle of a city don't you think that

people in the city would start staring

at the building and resenting the person

that owns that

so so making it invisible or just making

it go away

I don't want to own a perfect piece of

property in the middle of a city

where there are where there are male

factors that would do me harm I want the

property to be in the middle of the

Milky Way nebula somewhere a billion

billion years from now

where no one can see it no one can get

to it and no one will resent the fact

that I have it

that is that is what privacy is

so

so the genie gives me privacy to my

property and they upgrade the value of

the property what you what would you

rather have the skyscraper in the middle

of uh the capital of a hostile nation

state or the equivalent skyscraper

Somewhere In The Ether that's just as

useful to you

right well you know the mythical

Brigadoon right the Magic City the

Emerald City Over the Horizon Over the

Rainbow it's good for you you know we

have other phrases for those uh

sometimes we call it heaven right

somebody sometimes we call Paradise

right you know uh and so that's what

private property really means

now

we haven't gotten rid of all the

deficiencies in property for example if

you want to buy a piece of real estate

or sell a piece of real estate if it's

uh residential it costs you six percent

coming and going

six you know a two million dollar

residential real estate is 120 000 of

fees to buy it 120 000 of fees to sell

it heck you know you turn it over once

and you pay 12 percent of the value of

the thing

with commercial real estate the fees are

a bit lower but there's still percentage

points one two percent or something like

that

so I think I'd ask the genie to allow me

to buy and sell the property at no fee

or five basis points make it make it

possible to transfer it at zero

you know you can you can transfer uh

Bitcoin uh you know on on chain or or on

the lightning chain at numbers that are

either you know anywhere from

10 basis points to one basis point

and on Lightning less than one basis

point

so that would be nice

right I mean no one's got a cartel on

fees

make the genie get rid of the uh of the

oppressive transaction fees

that takes me my next my next point I

want uh I want my property not to be

private

I want it to be unconfiscatable

okay if you own a farm outside of a city

and the city wants an airport they can

seize your farm by eminent domain

now they can buy it at the rate they

want to pay and if you don't want to

sell it for that amount they can just

pass the law taking it

and they can pay you whatever they want

and in a war they're going to take it

for nothing

right they'll just declare it's a war

and they'll say you have to give it to

the public for the public good and in

peace time they'll take it for whatever

they want and maybe they'll take it for

their Road and maybe they'll take it for

the airport maybe they'll take it for

their public park or maybe they'll just

take it because they don't like you

right maybe you're the wrong religion or

the wrong color the wrong shape or the

wrong look or you've said the wrong

thing

so

everything that I've said before to the

genie

it still doesn't solve this problem

right how do you make it unconfiscatable

well so if if you actually put title

to the property in your head

as opposed to anywhere else then it does

become unconfiscatable

right they may not assuming that they

get past you know your other defenses

like the fact that you can teleport it

anywhere and it's private then you still

have the option to keep it it can't be

seized

I'm not done with that Genie right uh as

I pointed out before the the idea of

teleporting it is not just teleporting

it in uh space but also moving it

through jurisdictions different

jurisdictions uh put different uh

different restrictions on it so I want

the property not to be able to be

impaired by developmental restrictions

right and uh and anything physical by

definition can be impaired but anything

in the cyberspace you have a decent a

decent opportunity to keep it from being

impaired simply by moving it

um

I talked about renting it at any

frequency but the other right you have

with property is to mortgage it to

actually borrow money against it when I

have a building in uh in a state in

Atlanta I can mortgage it to banks that

do business in Atlanta that are licensed

by the nation state but by the the state

of Georgia by the city of Atlanta that

have a license to do business in the

United States

but I if someone offers me a better

mortgage if they offer me a mortgage at

half the cost but that is coming from a

different nation state I can't take that

mortgage

because I can't move the building

so when the property becomes flexible it

becomes possible to mortgage it to

anywhere to anyone

on Earth or in the heavens right any any

Bank could become the counterpart in the

mortgage

but um

you know mortgages come in flavors like

uh generally you know multi-year one

decade 30 years what if I wanted to

mortgage it at any frequency what if I

just wanted to borrow some money for the

next 30 seconds

so the ability to mortgage uh to anyone

at any frequency is an upgrade now why

would I want to do that well here's

here's a an

real world or a practical example I want

to actually borrow money against my

property and every month someone offers

me a higher bid or or a lower cost a

better offer so I just move it you know

one month I mortgage it to a bank in

Singapore another month I mortgage it to

a bank in London a third month I

mortgage it to a bank in Atlanta the

fourth month I mortgage it to a

different type of company

right it's it's a very flexible piece of

property and I can move it at any

frequency and I'm in essence driving

down the cost of my capital

in the same way that when I rent it at

any frequency

I'm driving up the yield on my asset and

and uh that makes it a better business

last ideas

well I say to the genie um can I just uh

store an entire

billion dollar building you know in the

palm of my hand

what if I could store a 10 000 floor

building and I could uh

wear it around my finger

right

infinite economic density

right the black hole right the white

dwarf of money

in this particular case if I can get to

infinite economic density that would be

fairly convenient because if I don't

have infinite economic density when it

takes you an entire city block to have

you know a warehouse

well then you run out of the ability to

manage that warehouse and so this

infinite density gives me a lot of

flexibility uh to manage the property

however I want

and then I think my last twist

as I say to the genie

you know I like the way you fixed my

property and made it maintenance free

and indestructible and Immortal and

allow me to program on a computer and

move at the speed of light and make it

non-confiscatable

Etc but now I'd like I'd like you to

guarantee me uh that you don't sell more

than 21 million blocks of this or do

this for more than 21 million in the

universe forever

so if you actually could get the

universe to agree that there will never

be more than 21 million blocks of

perfect property

that's the icing on the cake right

when I when I did everything else I

created

uh digital property

but when I capped it at 21 million

blocks I made it digital scarcity or the

ultimate scarce property

it's it's what happens to property

values when the city passes a law

saying that no one can develop any more

real estate you cannot build any more

buildings or you can't build a building

more than 10 floors forever in city

limits when you put a restriction on the

property development it drives up the

value of all the property within the

city dramatically

so here we're talking about putting a a

hard cap limit on digital property in

the universe for all time

that's even much better than 21 million

for the next hundred years or until you

know the administration changes or

someone passes a law or 21 million but

only until the United States of America

ceases to be a nation-state that's not

quite as good as 21 million forever

so

what I just did there was I you know

made about 18 wishes

to my genie

and uh each wish removed the defect in

the property

and it doesn't take a rocket scientist

to figure out that now now I've got two

million dollars to invest

do I want to own a two million dollar

Warehouse

in any city in the world or do I want to

own a hundred Bitcoin

seems pretty obvious right when you buy

the two million dollar Warehouse you are

marrying the neighborhood

zoning board you're marrying the city

you're marrying the county you're

marrying the state

right uh you're you're permanently

you're married for life to the country

right you're you're conjoined to uh and

and if you think all of those will go on

forever or for your useful Horizon

perfectly

you've still got the issue of Acts of

God

right now you're you're exposed to

earthquakes

tsunamis

floods fires lightning strikes hail

storms

global warming

Etc

and uh

it's it's pretty clear right that that

uh

commercial real estate was a good idea

for property preservation in the 20th

century

but in the 21st century

it's an Antiquated idea

right it it becomes Antiquated as as the

as the governments and as the society

around the property decays the property

itself decays for example you wouldn't

really want to own uh the most beautiful

building there is in a country where the

regime collapses

right you could have you could have a

luxury hotel but if the currency

collapses and the government collapses

your luxury hotel isn't going to hold

its value so

so as as uh various nation states

collapse the the pro properties collapse

uh a great case in point you would be to

go look at say luxury properties in Cuba

and look at what happened to luxury

hotels and luxury houses in Cuba with

the rise of Castro right it kind of

peaked in 1960 and then for the next 60

years uh all those properties decayed

gradually gradually gradually and you

know another 40 or 50 years whatever

whatever beauty or value that was there

is gone because they haven't maintained

them and they can't maintain them

this not without not without fixing the

other economic ills

and Bitcoin is the opposite of that

whereas uh

whereas commercial real estate peaked

you know as for when it peaked it peaked

at different points in different uh

jurisdictions over the last hundred

years

um Bitcoin is now just beginning to come

into its prime

and every time a new lightning wallet is

shipped Bitcoin is upgraded and every

time a new layer 3 app is created

bitcoin is upgraded and every time a new

Miner comes online Bitcoin is upgraded

and every time a new regulatory

guideline is is laid out Bitcoin is

upgraded

so Bitcoin is just continuing uh to

improve its property real estate is

continuing to Decay his property

if we come back to your question you

know how does it get this get

demonetized well you can see that the

only reason that a casual investor

wouldn't start to shift their allocation

of savings from commercial real estate

to bitcoin is they don't understand

Bitcoin

right most of them if you walked up to

the typical real estate investor and say

quick give me the 18 crippling defects

in your real estate

they couldn't name the 18 things I just

laid out to you and you know what I

couldn't either before I knew Bitcoin

you don't understand the defects in your

property until you see perfect synthetic

property or digital property just like

currency until you see perfect currency

if you don't understand Bitcoin you

don't know what's wrong with gold

right and you don't understand wrong

what's wrong with fiat currency really

until you understand what's right about

Bitcoin and I think the same is true

with with property holders they don't

understand what's wrong with their

investment until they understand what

Perfection looks like

and most of them when they hear Bitcoin

they just are afraid you know their

reaction is just oh it's it's scary I'm

afraid I don't know much about it it's

too volatile and and

the brain shuts off and that's like as

far as it goes

so

as we educate the population on bitcoin

I think uh people start to create tables

of

the 10 defects in real estate

versus Bitcoin and then you go wow the

only thing not to like about Bitcoin is

it's new and volatile

right and once you understand it's new

and volatile well you know what is the

negative uh oftentimes people have

managed to not mark their real estate to

Market if you can avoid a mark to Market

loan on real estate then you're in good

shape

any big property development family that

went bankrupt they normally went

bankrupt because their real estate

assets got marked down and their loans

got called by the bank

so it's that volatility which is the

number one risk and as bitcoin's

volatility decreases over time the loan

to value ratio that you could incur

uh if you're acquiring Bitcoin will

start to advance right now it's a low

loan to value but it will it will grow

as the volatility deteriorates and and

you know as I've Illustrated you know

even in commercial real estate there

still is some volatility and there are

still some Mark to Market uh loan

defaults sometimes

but having said all that you know that

doesn't whether or not the asset is

volatile doesn't change

um all the other strategies with regard

to real estate investment if your only

strategy is I wanted to borrow money to

buy real estate well then you're you're

going to lean toward non-volatile uh

traditional assets that your bank won't

remark every day

but if you're not using debt

to make the investment if if in fact you

were holding two million dollars in cash

right now

and your choices

you know do I actually put it into

Bitcoin or do I put it into something

else

right uh then it's a slightly different

uh a different calculation

so I I think that uh education will

cause people to gradually demonetize

their real estate and move it into

Bitcoin

I think if we switch subjects to the

second question you had which is how you

know how's it impact equity

well uh the most vulnerable Equity is

the equity indexes like the s p index

like some broad uh broad index of the

Russell 2000 or the S P 500 or the

NASDAQ index

those are things that people buy just

have a store of value without expressing

an opinion on a given company

like I don't want to pick which of the

500 S P 500 companies is undervalued

I just want to park my money somewhere

so I think Bitcoin there is emerging as

as the monetary index or a monetary

index that you can acquire

and you just don't have to an Express

opinion about a commercial entity

you don't have to be worried about the

quality of the management team or the

cash flows or or regulatory concerns and

so it it will tend to demonetize those

indexes and as those index get

demonetized

if

if a billion dollars gets pulled out of

the s p index and put into Bitcoin then

that's a billion dollars of demand for

stocks of the underlying 500 companies

in the s p that goes away

so as the money gets pulled out of the

indexes and the ETFs then that will

demonetize the equities of the

underlying constituents and as that

happens uh if some if one of the

constituents is undervalued on a

standalone basis then a professional

investor will come in and they will buy

that stock in order to Arbitrage the

difference

and so I I think that uh

that that's uh that's the dynamic there

I'll pause

and so do a little bit of fun math with