The Future is Bitcoin with Michael Saylor | EP #9 Moonshots & Mindsets

before we move to outer space we will

move to cyber space yes I agree with so

the next big move is how about if we

give property rights and we make Rich 8

billion people in the real world by

moving their wealth into cyers space

where we'll be protected from debasement

and

destruction and a massive transformative

purpose is what you're telling the world

it's like this is who I am this is what

I'm going to do this is the dent I'm

going to make in the

universe welcome to mindsets and

moonshots it's my pleasure to welcome a

longtime friend one of the smartest

people I know Michael sailor Michael is

an entrepreneur executive inventor

author philanthropist he is also perhaps

the most prominent and Brilliant Bitcoin

proponent on the planet he's the

executive chairman of micr strategies is

a company founded 1989 just out of MIT

where he served as CEO for 33 three

years straight micr strategies is the

largest independent publicly traded

business intelligence company and the

largest holder of Bitcoin on its balance

sheet he is a first principles thinker

extraordinaire and provides the most

clear and cogent Arguments for Bitcoin

I've ever heard Beyond Bitcoin as a

compelling he has a compelling Mastery

of financial markets history technology

inner workings of blockchain and makes a

compelling conversation to have and

listen to is the creator of the Sailor

Academy sail.org providing free

educational services to over 1 million

students to date full disclosure Michael

and I were both fraternity Brothers at

theod Delta Kai at MIT he was uh I think

three or four years behind me we both

earned degrees in aeronautical and

astronautical engineering and Michael

also got a degree in science technology

and Society Michael a pleasure to have

you here pal nice to see you again Peter

yeah know it's uh I think last time I

saw you uh was in your digs in Miami

just towards the beginning middle of the

pandemic you know one of the things I

remember we did that I'd love if you

would do again here was you walked

through uh the potential of Bitcoin as a

store of value you know what it could

potentially be worth in the future uh

that was uh was beautifully done I I had

a similar conversation with Kathy Wood

on my stage so I guess the question is

under certain circumstances in terms of

sovereign wealth funds or store of value

replacing gold what what could Bitcoin

get to what's the math behind that yeah

well the way I think about that is uh I

consider the value of all of the uh

property in the world that's used uh to

store wealth so right now if you're a if

you're a wealthy individual ual and you

wanted to give money to your

grandchildren you have a number of

choices you can either buy bars of gold

or you can buy ranches you could buy

blocks at Manhattan or buildings you can

buy uh shares of companies corporate

stocks you could put money in a savings

account and maybe buy sovereign debt or

bonds corporate bonds or or other

bonds and uh when you add up all this

stuff it's like 500 trillion dollars

worth of of stuff that people use and uh

the challenge with all these things is

is how do I know if I had a million

dollars today that it would still be

worth a million dollars a hundred years

from now a million dollars in in buying

power if you would yes yeah if you know

money is economic energy and so I want

to have a certain share of economic

energy and the civilization and I want

to maintain it for a a long time for

Generations

so if I buy a city block in Manhattan

it's kind of intuitive that over 200

years the value of that City Block will

go up as and if more people move in in

Manhattan it will go up and so the

positives are people move in the city

and I got a share of the economic

activity of the city the negatives are

it's going to get taxed by the mayor of

Manhattan there's going to be zoning uh

regulation by The Neighborhood zoning

board it's going to get potentially

taxed by the state of newor York some uh

it might be the politician decides they

really want to build Central Park on my

block of land and they just take it from

me and they pay me you know subm Market

or maybe they want to turn my land into

an airport or into a port so you own

property it sounds really good but you

have to fight to maintain that property

over a hundred years and your children's

children will have to fight to maintain

it so um if I took a million dollars of

economic value in uh you know a hundred

years ago and I held it in dollars the

US dollar is is expanding about 7% a

year for the past 100 years so if you do

the math you find that you lose

99% of the economic value in cash and

that's why nobody in their right mind

would put a million dollars of cash in a

box and and uh put a Tim lock on it and

in the year 2120 expect their great

grandchildren to open the box and for it

to be worth anything it be wor nothing

sure if I put a million dollars of gold

in a box a hundred years from now the

challenge is uh will the bank or the

government seize the gold pretty much

every country on Earth stole everybody's

gold over the last hundred years if you

had it in Germany it got stolen multiple

times you know the British the French

the Japanese the Russians even the

American stole everybody's gold so and

if it didn't get stolen that's what

that's what we call counterparty risk uh

seizure confiscation if it didn't get

stolen if you if you increase the goal

Supply by 2% a year then you realize the

half life of money in Gold that that

same a half life of of energy in a

battery the half life of money in gold

is 35 years which by the way we we

increase it by 2% because we're mining

new gold every year right it isn't a

limited fixed amount you can't stop the

gold miners from mining gold so

ultimately the economic energy stored in

the container of gold is dissipating at

2 to 3% a year which means you're going

to cut it in half once twice three times

right so you're G to be down to 12 and a

half percent of what you had even if it

doesn't get seized so when you think

about these

things uh you realize that gold doesn't

really hold economic Energy Great it

just happens to be the best portable

nons Sovereign way to move energy around

and portable is a you know I'm not going

to pick up a ton of gold and move it

someplace yeah it's semi- portable you

couldn't move a million dollars a go

through an airport but it's more

portable than a building right you're

not moving your building out of La ever

right so you you've got this conundrum

which is things that hold their value

for a long time like soccer teams or

football teams maybe well they have

cultural risk will people still want to

watch football and soccer in 100 years

and they're not so portable and they're

very political then you have things that

look straightforward like owning a

thousand acres of land but if the if

your enemy takes over as governor of the

state they just pass a property tax so

they tax your land away from you and

then you you know the oldest uh oldest

cliche is lost the Family Farm because

we couldn't pay the property taxes sure

and by the way that's an important point

right because um it the value of your

land that you own dissipates over time

because it's taxed constantly and it's

like you know you could if you had a

deed to a piece of land for 100 years at

the end you don't own the land anymore

if you didn't pay your taxes yeah so if

you're a rich family in New York City

and you have real estate the re the the

reason that you still own it is because

you rented it out and you were very um

competent in the way you manage the

politics the tax and the rent and you

manage to get more rent than the tax and

then if if you do that well and if you

get lucky then you still have the land

but you know the families that keep

their land for hundreds of years and use

it to store wealth and they never have

and they never have it taxed away or

taken away you know who they are the

dictators the rulers the Kings the

sovereigns yes okay if you own the

country like let's say uh the Windor The

Windsor you know still own the middle of

Central London but that's because they

kind of own the the the government or at

least they're politically uh favored or

if you go to the Middle East you go to

Dubai you're you're a wealthy Foreigner

you're like I think I'll just buy a

bunch of beach front here no you're not

they don't sell the good property to

foreigners the you have to be a royal in

order to own the beach so many countries

what you find is the

sovereigns uh they own the land forever

in perpetuity and give it to their

children's children's children and the

reason they can afford to do it is

because there's no tax because they make

the tax laws hey thanks for listening to

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future of your longevity all right let's

get back to the conversation in the

episode so let's assume uh as you've

said and I completely agree gold is

getting diluted uh you said we said

three-fold over the course of 100 years

uh land and buildings are being taxed

and evaporated if you would by taxation

so if people start realizing Bitcoin as

a strong store of value that isn't uh

dissipating uh isn't being taxed um what

is your you you walk through some of the

numbers if it if it takes a percentage

of the store of value of land or gold

and so forth what could be the the price

of Bitcoin in the future not making any

guarantees but when you think of it as

digital gold then it should replace gold

Gold's worth1 trillion dollar and that

takes Bitcoin to

500,000 but when you think of it as

digital property like replacing

buildings and and land and and other

long stor holds of wealth then you know

you're up by a factor of 20 or 30 from

there I mean it should not be that it's

much better than digital gold because I

can move Bitcoin at the speed of light

and I can program it to a million

transactions an hour on an iPhone or a

website you can't do that with gold so

it's got more utility than gold which

means it's probably worth 20 or or 30

trillion if it just replaces the gold

but instead of buying the fountain blow

hotel which is a nice hotel uh you know

worth whatever billions in Miami Beach

instead of buying that instead of buying

the equivalent amount of Bitcoin if you

bought the Bitcoin you can move that to

any city in the world every hour of the

day compose it decompose it recompose it

dematerialize it and you know when

there's a nasty tax on it you can just

move yourself to a different

jurisdiction where there's a better tax

treatment and uh if you think of it like

that then it's a it's a multi hundred

trillion dollar asset class so at 10

trillion it's 500,000 at 100 trillion

it's 5 million so I think you know we're

marching toward 10

trillion which is sorry sorry $10

million a coin which is is why uh

Bitcoin Enthusiast see it's it's just a

very great long-term store of value and

it's a great investment idea because it

meets the needs of eight billion people

the the average person the middleclass

person that drives an Uber or works as a

dentist they can't buy $387 worth of a

building in New York City every month is

their savings plan right but and a guy a

person in Africa can't buy a small share

of a nice piece of property they can't

buy $127 worth of aico painting So

Bitcoin offers property rights uh at any

scale any amount of money anybody in the

world and you can you don't have to

worry about will people like picassos

will they still want buildings in Vegas

or New York will some politician tax it

away from me well you know ex can I take

it through an airport so uh if you're

looking for an egalitarian utilitarian

way for people to save money and protect

their life force or protect their

economic wealth for the next hundred

years and you are looking for something

that's kind of consistent with the

mobile wave Android phones iPhones

websites that's truly Global that that

is it's more appealing to people in

Nigeria and Argentina than it is

appealing to people in I'm going I'm

going to get there right because it

really is part of creating a world of

abundance it is critically important as

a means for that you know Michael I wake

up every morning with you uh in your

tweets uh I enjoy I enjoy your tweets

it's definitely good I love this one

from a little bit ago and it was it was

important and prophetic you said uh I

thought it was late you you said I

thought I was late to bitcoin but

apparently not yeah and and that's one

of the important things that I think

people need to get it's not too late to

Bitcoin especially if if we are had the

potential to hit 500,000 5 million $10

million of Bitcoin it's still early in

the deceptive phase of its growth I

thought you know I thought when Google

came public I was too late but you know

if you look at uh the really great

successes of our lifetime Peter the the

digital monopolies the Apple the Google

you know the YouTube the Facebook you

know these things micro strategy we

thought that we were late to them but

the truth is Google would have been a

good idea to invest in you know all the

way up to like a few months ago like

yeah no I I was it's still getting more

powerful and you think you've fully

embraced Google in the year 2018 but

Google was going to get more powerful

and Surge and if you thought you

understood it in 2020 by 2021 it was

more powerful and the same is true with

apple and these Apple and Google

probably more powerful than most nation

states same with Microsoft we thought

Microsoft we understood that one and

Microsoft got more powerful in the past

24 months I agree who would you rather

go to war with as your ally you know

Google or Greece or Ghana or you know

it's like it you would rather have one

of these companies you know people think

you've been involved in Bitcoin for like

for a decade since you know the

beginning um because you become such a

strong both knowledgeable and

protagonist on you but you it wasn't it

was just a few years ago can you tell

the story of what happened that got you

uh excited and and gave you for lack of

a better term religion on this you know

Bitcoin represents a paradigm shift it's

the digital transformation of money

property and

energy and Paradigm shifts are so

profound that you're staring at them and

you don't realize they took place

because your worldview is constructed

based upon a bunch of assumptions that

you've always taken for granted and so

what Thomas cun says in the structure of

scientific revolutions and what we studi

MIT is there's only two circumstances

under which people willingly undergo a

paradigm shift and one way is you wait

for the Old Guard to die and the

Millennials kind of they get it because

they're different and and uh the uh

Einstein you know said God does not play

dice with the universe Einstein never

liked quantum theory you know you could

be a brilliant person but you won't

embrace the Paradigm Shift while you're

alive in the absence of a crisis there

the second way you get paradigm shift is

a war you right when there's a war and

there are bombs dropping from about you

you don't believe in atomic power but

then someone drops a nuclear weapon and

the city evaporates and all of a sudden

you become a Believer and you reassess

your priorities I would pause it there's

another way which is when something is

10 times better than anything else 10

times cheaper 10 times faster 10 times

better it's like how I got my mom and

dad to go to a digital camera or to use

Google or the web right it's like when

it's that much better yeah I will say

though like even even when it's 10 times

better what you have is a commercially

successful

Venture but for example Warren Buffett

never invested in Microsoft and Warren

Buffett never invested in

Amazon right even though it's 10 times

better right if you have enough money

and enough power you can ignore stuff

you know my dad didn't use any of the

new technology until at some point we

gave him um we gave him a television in

YouTube and YouTube did it like he

didn't care about all the other things

but if you can sit and you can talk uh

to the remote and you can stream on

YouTube to anything all of a sudden 80y

old man decides he loves this now and so

it has to just click yeah right and

clicked what clicked for you with

Bitcoin was it when was it was it uh

March of was it you know it's the second

quarter of 2020 the second quarter of

2020 and what clicked was was uh a

couple of things uh we had a k-shape

recovery Main Street was shut down it's

pretty you know millions of people have

lost their jobs the economy is

Contracting and then Wall Street

exploded and recovered and hit all-time

highs and we and what I saw six weeks

later right yeah Financial assets were

having the best year ever people had

great years I mean a lot of these hedge

fund managers they had the best year of

their life in 2020 or 2021 yeah and Main

Street assets were having the worst year

in 30 years and I had a company with

$500 million in in cash that was dead

money it was idle it was generating 0%

interest the Federal Reserve said we're

not going to raise interest rates for

four years

the company's stock was in the tank at

one point in essence when we were going

through this our our company was valued

at $60 a share in cash and $60 a share

in uh in the software business and that

was like one times

revenue and so you know I looked at the

world and I said you know if the cash is

dead money and if our stock is viewed as

dead money we've got a choice between a

fast death a slow death or we or we ride

out of the castle we take a risk okay

the the the fast death is I just give

the 500 million back to the shareholders

in a dividend or a buyback now I knew

that wasn't going to save the company

because I've been buying back the stock

for the last five years I bought $300

million worth of stock back or something

and the only thing that would happen

would be this the stock would go from

$120 a share to $60 a share and then all

the stock options the employees be

underwater then all the employees would

get head hunted Away by Amazon and

Google and Facebook you know and and

then we wouldn't be able to compete with

Microsoft and you know we compete

against a company which has more power

than God right Microsoft right every

company on Earth is their customer

they're more powerful than all but about

a handful of countries on this Earth and

they can do whatever they want wrap it

into their product give it away for free

if they want so so uh the challenge of

giving up the capital was first we'd

lose our financial capital and then we'd

lose our human capital and then we'd

have no reason to exist and the company

was going to zero so not withstanding

whether you care whether a company lives

or not I didn't see uh it in the

interest of my shareholders to watch the

stock go to $60 a share and then watch

us slide you know we'd have to sell the

company so the second strategy is hold

the cash but the cash is you know cash

is trash Ray Delio says that is gener

generating 0% interest and the money

supply expanded by 20% a year for the

past two years you can see it in US

single family homes which shot up 40% in

price and so if the money's being

devalued 20% a year and you're

generating 0% interest you got a

negative real yield of minus 20% and I

did the math in my head and I concluded

that pretty much the $500 million in

purchasing power would be cut into $250

million of purchasing power in 36 to 48

months so that's that's a slow death

it's it's uh I could use cash to pay my

employees But ultimately we were sitting

and

mired and uh and so that doesn't work

and so in that

situation we decided we should do

something

transformational and you know and if you

went into a Harvard be school class and

corporate strategy said what are you g

to do the investors want the cash back

you can't generate a yield on the cash

the company needs to grow well the

answer is you do a transform

acquisition so if I could have bought

VMware or if I could have bought

WhatsApp or if I could have bought

Snapchat or if I could buy like a super

high growth digital

Monopoly or some uh some moonshot thing

that would go to the sky then yeah maybe

that saves the company but those are few

and far between most of the time these

Acquisitions that you do are dtive and I

knew they're dilutive because like Pete

it's not my first rodeo I lived through

this I invented uh you know I launched

12 different product lines to grow the

business and I and there were singles

and doubles or whiffs and I know that

just innovating won't always help you

and then I bought the stock back and I

you know and I knew that didn't work and

then I spent hundreds of millions of

dollars on sales and marketing to expand

the business and that didn't work and so

I and then I watched all my competitors

business objects cognos every company I

watched them do Acquisitions to try to

grow and every one of them failed

in that strategy there was a 99%

mortality rate wow every the reason we

the biggest independent B business

intelligence company left is because the

other hundred all went private got

bought up got Amalgamated and sucked

into the bowels of IBM and Oracle and

then dismantled over the course of 20

years so I kind of knew I tried

everything for a decade I knew it wasn't

going to work from first you know from

first observations so I thought well

what if I could find a digital gold

which was better gold than gold

something that is better than gold but

also a big Tech

Monopoly and here are my three criteria

I want it to be a better gold and gold I

want it to be a big Tech Monopoly and I

want no one else to appreciate it I want

it to be

underappreciated and that's what Bitcoin

was in the second quarter of 2020 the

instant no one thought was an

Institutional asset even though Amazon

stock had doubled in the second quarter

uh Bitcoin was trading about the same as

it had been trading in 2018 or 2019 you

know it been it got up to 10,000 it had

smashed down to 4,000 was back at 10,000

so I looked at and I said well you know

based on all the information you would

think that uh digital property Network

or a global digital money network is

more valuable knowing

that people are losing confidence in

currencies losing confidence in central

banks losing confidence in governments

and this is a nons sovereign open

decentralized system so it struck me

that the fundamentals were good yeah you

think but it wasn't appreciated yeah so

we're there we have to take a risk we

literally have to or we got to sell the

company right we're done one way or the

other and I said well this is a

reasonable risk because it looks like it

looks like the Facebook of money or the

Google of money in the year 2010 or

2011 while 98% of the world doesn't

understand it it's a bit too complicated

they're afraid of it but just because

you don't understand it doesn't mean it

isn't true it just means you know and I

had the experience of writing the mobile

Wave Y and I'm the guy in 2011 that

bought Amazon Apple Facebook and Google

stock and you know and they all worked

out well and I thought the year's 2020

we're at the end of the mobile wave you

know I I tell a story of you know I tell

a funny story in the mobile wave about

my niece on a beach and she's like I

don't know eight years old and she wants

the Big Apple and I said oh you want to

go to New York City uh she like give me

the Big Apple for my birthday and I said

you want to go to New York City she goes

no I want the iPad and I thought okay

little girl wants an iPad that means

that the entire world wants this and

this is going to be a big deal so buy

Apple stock well in 2020 I'm talking to

the same niece and I said what do you

thinking she goes yeah well I just

bought some Amazon stock and like

Amazon's trading like

$3,300 a share you know and and it just

doubled I'm like okay well if 20s

somethings now know they should buy

Amazon and Apple and Google this is not

an this is not a misunderstood

technology Trend anymore every Uber

driver understands that this is like the

2001c bus where every every uh tax

driver back then was telling you what

what stocks they were buying so get off

the mobile wave get on the crypto

wave and and think that through and and

uh so that that kind of made the

decision straightforward it wasn't

without risk but the alternative was

pretty much throw in the towel and just

get either get Beat to Death fast or

Beat to Death slowly and so we got into

this business at that time and of course

the last two years have been uh I think

fairly good ones in terms of

commercialization institutionalization

of digital assets yeah this was the

number right since August 10th of 2020

when you adopted Bitcoin um micro

strategies has outperform 97% of all S&P

500 stocks congratulations that's

amazing do you have a self-described

purpose you know I one of the things

that I'm super that I'm focused on uh in

in the show is helping people sort of

get compelled to a purpose because I

think a an individual an entrepreneur

with a purpose uh is the way we make the

world a better place right the right

mindsets and a a driven purpose what's

your purpose right now Michael engineer

Better

World MIT man I can hear you buddy

engine engineer a better world I think

that I I think that engineering is

divine I mean you got to respect

Engineers if you look at what it takes

to build a bridge what it takes to build

an aircraft a spaceship a nuclear

reactor a ship a building a skyscraper

what it takes to cold roll steel you

know you know or crate steel or or to

extract petroleum out of the ground or

navigate celestially or build a you know

build a a mobile phone or radio or a

television it's pretty clear as uh if

you look at the history of humanity and

look at the history of science that that

um great improvements in the

civilization and The Human Condition

they're all tied to technology 100% if

you master fire electricity oil nuclear

power you know fill in the blank higher

level

mathematics these things make a

difference uh

antibiotics it's unquestionable if you

study it and you know on the other hand

there's a lot of other things people

engage in and you know some Pursuits you

know I like art music they're good

politics is like half and half right

half the time it helps and half the time

it hurts and it's unclear whether it's

hurting when they think they're helping

or whether they're helping when they

think they're hurting but uh I think

clearly engineering is a better moral

High Ground to stand on and yes and the

engineering you're doing right now is

engineering the Global Financial system

with with uh with Bitcoin is that your

focus I mean we're not building Rockets

any uh anymore or at least you and I

aren't I've had a passion for a lot of

things in in life but if we just focus

upon Bitcoin right now I think the

fundamental issue is the energy balance

in the civilization is broken I think if

you look at the civilization you could

say half of it is is um we provide goods

and services and we trade with each

other in in order to uh upgrade The

Human Condition and build things of

value right we build Bridges and

buildings we provide goods and services

but the other half is the money uh the

financial Assets in the economy that

create the uh financing the liquidity

that allow the

trading and uh

money the way I see money is is in the

ideal World there'd be a certain Ledger

a certain amount of money a 100 million

units or 100 billion units and no one

would make any more and God would keep

track of The Ledger and if I owed you

you know it's it's in the celestial

Ledger and then when you owe me it's the

same nobody can cheat anybody everybody

can trade with everybody and the more

value the more value I create for

society the more of it I get yeah yeah

and it's all it's just fair fair and a

fair and

Equitable medium to tra our system for

trading but the real world is we use

currencies and we use property

instead of having true money so if you

use the dollar and we trade it it loses

7% of its value a year except for the

last two years when it loses 20% of its

value a year but that's the best

anybody's going to get because if you're

trading in pesos or you're trading in

Nigerian currency right now these these

currencies are losing 50% of their value

a year and so this is the same as as

you're an athlete Peter and I bleed you

a pint to blood every year and it takes

you about four weeks to recover and so

you don't run the marathon in the four

weeks after I bleed you that's like 5%

inflation but you know what happens when

I bleed you a pint of blood every

month right now now you're just getting

BL yeah you know I'm reminded that

George Washington died because his

well-meaning Physicians bled him to

death and uh they thought they were

helping they I mean the medical

establishment literally thought that

they were going to help bleed off the

you know the ill humors yes but they

bled him to death and uh and this is not

complicated if you look at a hyper

inflating economy be it viar Republic or

Zimbabwe or look what's going on right

now in Lebanon or turkey or Argentina

when the currency collapses the

businesses collapse this is the same

thing as when I when you're in a car

accident and you open an artery and

you're literally bleeding out on the

pavement well eventually when you bleed

out your brain stops your hearts you get

a heart attack your lungs don't work you

know suffocate system collaps so what's

the fundamentals of triage which is

first stop the bleeding did not like I

see you there it doesn't matter your arm

is broken right it that what matters is

first are you breathing and there you

know make sure there's oxygen and then

second stop the bleeding and then we can

work on the rest of you so I think that

inflation monetary expansion is is

bleeding to death we just saw a country

collapse uh Sri Lanka yeah just

collapsed about a month ago literally uh

and um and the currency stops and when

the currency stops you can't buy energy

and that you know they have an edict

where they say private citizens can't

buy gasoline anymore okay so what

happens when your currency loses value

you don't have liquid energy you can't

buy food right you're going to starve to

death freeze to death if you don't get

beat to death by your neighbor okay so

so if you ask me what is my mission my

mission is fix the money but what does

that mean it means fix the energy

balance in the civilization there's

there's a bunch of inefficiencies one

inefficiency is eight billion people

can't trade with each other they can't

you if you wanted to trade between a

country a company in South America and a

company in Africa you would have to get

access to your local currency then the

dollar then go through the Federal

Reserve or a central bank in New York

City then go through the Central Bank in

Africa then another local bank and

there's seven people that can steal the

money along the way and there's three

billion people can't even get a bank

account and you can't write a computer

program right so I I get it and the only

thing that's changed this over you know

and it's it's extraordinary the life

that we're living living today even in

the developing world compared to 100

years ago or 500 years ago definitely

thousand years ago you know the it used

to be just the king and the Queen on the

on the hilltop and everybody else an

abject squalor and even the king and the

queen had a a life far less than than

you know people living in in on the

street in Venice here have but it's

always it's always been technology

that's changing the game and so when I

talk about this uh and I want to break

it down a little but I talk about what I

call the 6ds of exponentials right that

when you digitize something uh in the be

in the beginning it begins a process of

very deceptive growth it's very slow

until you know 30 doublings later you're

a billion times better and it's

disrupting an entire ecosystem and along

the way it's dematerializing

demonetizing and democratizing and so

Bitcoin is very much all of those those

things the deceptive period of time

uh Bitcoin isn't the first

cryptocurrency uh to be proposed as a

digital store of cash right it's it's

but it is the one that survived yeah

they tried it they tried it with you

know e gold digit cash they tried it for

20 years uh before and all of those

failed for one reason the other uh

Bitcoin is the first Spark that catch

hold and became a fire in cyberspace and

it's because it it it drew liberally

from all the previous experiments okay

and it and it combined you know the

cryptography and uh the the general Tech

ideas with proof of work which meant

that you had an open permissionless

system uh that could work everywhere in

the world without a counterparty or a

trusted intermediary and no one could

gain the system and uh and so it is the

it is the first you know digital

commodity that kind of caught fire that

sparked I remember hearing about it

actually at Singularity University back

in 2010 11 12 from some of the The

Fringe it was just in the earliest

days I think there were there were uh

life-ending uh uh situations that it did

avoid along the way right I mean it's is

it St now fully stable is is the risk

gone I think that it's pretty stable at

this point I think that the great risk

came in the first few years yeah it's

just it's just like again coming back to

the metaphor of a fire if you start a

fire right and you can put the fire out

in the in the first few minutes but at

some point when the fire is taken over

the entire Warehouse or it's broken out

into the entire Forest you can't put the

fire out so I think I think at this

point it's it's beyond that event

horizon but certainly back in 2012 2011

2013 there a lot of questions like would

it be deemed property by the IRS you

know would it be banned or outlawed you

know online gambling got banned and they

just shut it down Dead on Arrival there

so there are a lot of things that that

do get squelched this this had to get to

a sufficiently decentralized

diffused point where uh no one regulator

no one nation state would think they

could stop it and I think we're

currently there now we you you can see

that now with the utterances coming out

of the White House the secret of the

treasury and the head of the SEC and the

head of the cftc but you couldn't have

been sure about that in 2012 and so inst

you know

institutions companies like yourself uh

and micro strategies uh uh you know Elon

started putting on the balance sheet I

think I think you reached out to Elon

and had that conversation originally

didn't you yeah I did and uh how hard

was it to convince him to put it on the

on the balance sheet for Tesla I I don't

it wasn't it didn't take that long it

wasn't terribly difficult he's a smart

he's a smart engineer most people don't

realize you know uh the the Engineering

Systems around SpaceX are are he's the

he's the CEO he's also the chief

engineer there which is always always

nice to see it's a process of of of

dematerialization and disruption that's

coming what is it dematerializing and

what is it disrupting Einstein tells us

matter is energy and energy is matter

and

um if you look at the advances of the

human civilization many people don't

think in terms of energy but if you

thought about it you'd realize that

steel is highly concentrated metallic

energy and the reason you can build a

100 story skyscraper is because you put

so much energy in into a material that

it could with withstand the force of

gravity up to a 100 stories and so

because you have steel you can build a

bridge you can build a skyscraper it'll

last a hundred years so that

concentrated energy allowed your

aspirations to become expansive in time

and space right that's why we have the

Bronze Age giving way to the steel age

right uh oil is

concentrated liquid energy right and

John D Rockefeller kind of gave us

standardized liquid energy Standard Oil

was a pretty big deal and if you you

know consider trying to cross the

Atlantic with wind energy instead of

with oil you could see that it really

did catapult the civilization

forward Bitcoin represents digital

energy and and in that way if you think

hard about it you realize it represents

digital matter too it's the first time

it's the singularity whereby we open

this portal and energy can flow into the

digital realm okay when Satoshi invented

a way to transfer um value from me to

you without a trusted intermediary I can

send you a million dollars no Bank

involved okay the the critical thing

with solving what they call the double

spend problem but the double spend

problem means I send you the million I

don't have it you have it okay that's a

very low

colloquialism right in engineering at

MIT we would refer to that as respecting

the laws of conservation of energy sure

like I I move a 100 kilograms From Me To

You Right that it can't be in both

places at the same time I converted

matter into energy energy into matter

right I can have one or the other energy

can neither be created nor destroyed it

can only change forms it can vibrate

right Nicola Tesla said you understand

the Universe think in terms of energy

frequency and vibration so this is a big

eye opener because what you see is that

everything in the digital realm before

Bitcoin was non-conservative it was

digital information I send you

Beethoven's Fifth Symphony as an MP3

file you've got it I've still got it and

it can be redistributed 18 billion times

sure so no you don't own it you just

have a copy

so all of those all of those businesses

Facebook Google Apple they're all based

upon digital information revolution

first on uh the web and then on a mobile

phone and bitcoin's big innovation was

we don't just move digital information

anymore we move digital energy it's a

it's a not it's a conservative property

and if I can move a million dollars of

of energy for me to you I can move a

billion dollars of energy from me to you

but if I can move it uh from me to you

if I can move it over 10,000 miles I can

move it over 10,000 days I can move a

billion dollars from here into the

future 30 years and so that that's a

second breakthrough and then the third

breakthrough is if I can move energy

through time and space I can m

materialize manifest energy in

cyberspace right the big breakthrough is

the creation of a billion dollars of

something in cyberspace there's a f JP

Morgan had a phrase he said gold is

money everything else is credit and uh

and what that means is you have a bar of

gold that is money that is valuable

everything else a piece of paper which

just is a derivative of or is a security

that represents someone else's gold so

you want the money you don't want the

credit now in in the world we live in

right now before

Bitcoin you can have a million dollars

in your bank account but it's credit

it's the bank says you have it and the

bank can take it away from you yes and

you can only move it pursuant to their

permission to move it and right now the

bank doesn't give you an API to move

money there is no yeah you could have a

billion dollars and 10,000 programmers

you can't create a program that'll

pay $22 transactions between here and

Africa on a Saturday afternoon you just

can't do it and guess what for 30 years

you can't do it and and so all progress

has come to a grinding halt in the

financial world in the absence of money

in cyberspace because Credit in

cyberspace is a is a monopoly which is

caught up in a bureaucracy so if we come

back to bitcoin what is it really it

represents the true digital

transformation of money of property of

energy of

matter right this is this is uh four

fundamental things the civilization is

made of for example can you figure out

how to create a wall in the real world

right I I use steel I use bricks I have

a brick wall Peter run as hard as you

can into my brick wall okay well so you

run as hard as you can and you smash

your face and you end up in the hospital

you ran into a brick wall you can do

that as an engineer in the real world

because you have matter and if you have

energy you can convert to matter convert

into a brick wall you can do the

opposite right I can aim a gun at the

brick wall blow it up or I can burn it

and vaporize it right so so we have that

in the real world and that's the basis

of the Civilization now how do I create

a wall in

cyberspace see here's the idea if I have

money if I if I have uh Bitcoin in

cyberspace I can actually create a

program where um you want to come to my

website you have to post a million

Satoshi and then if you I don't know

start swearing at me I debit you a

thousand Satoshi for every swear word

okay or if you start trying to fish me

or steal from me right or if you just

hang out on my website I start charging

you micr transactions like I charge you

a a thousand Satoshi a

second okay um I can't do that uh with a

credit card because a credit card is

credit I can do it like can you think of

any way to lose a billion

dollars in 30 seconds in cyberspace

besides losing my uh my my my uh keys

that's one way yeah I once you if you if

you've got uh Bitcoin you could do it

that way there's a famous example of the

chairman of I think the HCA

corporation uh the the wealthiest man in

China he's on vacation in the

Mediterranean a couple of years ago he's

worth like $30 billion do richest guy

maybe 40

billion he's walking around the uh you

know some 2,000 year old Roman ruin he

stands up for a selfie on the wall he

takes a step backwards he plunges to his

death by the way the number of people

who die from selfies is a ridiculous

number it's you know it's it's Darwinism

yeah it's a yeah it's sad it's the

tragedy of our time but I tell the story

because in a world of credit this is a

guy that that you know you couldn't have

undone he could have hired an army of

lawyers to bend reality Every Which Way

with 16 different Appeals but when

you're subject to the laws of nature and

conservation of energy there is no

appeal for a mistake and his life was

snatched away from him in a couple of

seconds or less because he made a

mistake because those are the