Michael Saylor Masterclass

Welcome everyone, my name is Santana Lamarque representing the Atlas Society and here we are with Michael Saylor.

Good to see you again, how you been?

Awesome!

Great, great, I'm glad and also grateful for the opportunity to interview you.

So I'd like to delve a bit into your background and explore how your previous experiences have influenced your success as an entrepreneur.

Can you share with me how important studying the history of science, for example, was to your later success as an entrepreneur?

Well, as an MIT, one of the degrees I took was in the history of science and the focus was science, technology and society.

Of course, MIT's known as an engineering school and my other degree was an aeronautical engineering and a spaceship design.

So, engineering's normally thought of as dry and rigorous.

On the other hand, the history of science is all about the invention of new techniques and how they got used within the society where they're introduced.

And so, politics and economics and sociology all have an impact.

And I think in the history of science it gave me an appreciation for things like network effects.

For example, the Romans developed a certain width for a Roman road and Roman chariots had an impact on that.

Eventually, that width found its way into a railroad track.

And then if you made cars that were that width and you could move them on the railroads, but if a nation changed the gauge of the railroad track, then all the trains would be incompatible from the foreign country.

And then when you shipped to the border, you'd have to transport or move your cargo from one set of trains and one rolling stock to a different set of trains.

And so, the decision to create an incompatible technology protocol might have profound economic consequences, might have political consequences, might start a war or might discourage one.

The history of the sciences, it's about lots of sciences. How do we introduce steel in an age of iron and what happens when iron comes along and replaces bronze?

And what happens if you don't master iron, if you don't master steel? I mean one of the famous books is Guns, Germs and Steel.

And it's all about the impact of guns on the colonization of the new world and why did the Europeans end up dominating North America and South America and Civilization.

And some of it has to do with immunology and the fact that the Europeans managed to infect each other so much of their stronger immune systems.

And so, when you showed up in the new world, the germs they brought killed most of the inhabitants without a fight.

If you just study political history, oftentimes, political history is told from the point of view of people said things and did things.

And when you study the history of science, you realize that it didn't really matter what the people said or what they did.

When Columbus showed up in the new world, they tried to bring back something like 18 natives on the ship to Spain.

Everyone of them just died. They didn't know why they died, but they all just dropped dead.

So, the political interest or the human ambition is thwarted by something they don't understand in this case.

They didn't have natural immunity to the diseases that all the Europeans carried.

I mean the history of science causes you to think about how the civilization developed based not upon ideology, not upon ambition.

It's not the story of a politician that came to save us. It's not the story of an ideology that transcended.

Perhaps it's the story of this people had iron deposits and that people did not.

And so, the people with the iron deposits may harder weapons and kill the ones without the iron deposits.

Or this people had denial river and denial river was hydro power. If you have a source of hydro power energy, then you have a natural advantage when it comes to agriculture and then your society is going to dominate two interesting takeaways that are relevant to the modern era.

One is you come to the conclusion that the civilization of the society that channels energy most effectively generally wins.

Whether it's channeling energy by replacing a spear with a bow and arrow or replacing a bow and arrow with a catapult or replacing a catapult with a cannon or replacing the cannon with the battleship and replacing that with an aircraft and replacing that with a nuclear weapon.

Land power is trumped by sea power is trumped by air powers, trumped by space powers, trumped by nuclear power.

And there's just a real unless progression of these sophisticated societies that learn how to channel energy and channeling energy at a certain rate, and with a certain focus would be power, almost a definition of power, the rate of which you deliver the energy.

The second I think take away from the history of science is that science, the history of science is punctuated by paradigm shifts. There was a time when people thought that the universal world around the earth.

The Copernican revolution was this idea that maybe it didn't. The paradigm shifts take place when you develop a new instrument. So it was optics. It was the telescope that caused human beings to realize that the universe did not revolve around earth.

Once they had the telescope and they could see the moons of Jupiter, they started to realize that you couldn't really explain the movement of certain moons and certain bodies in the solar system based upon the old theory, the Talmetic Theory of the World, and they had to adopt a new theory, maybe things revolved around something other than the earth perhaps, the Sun.

There's a similar breakthrough in medicine, not via the telescope, but via the microscope where we thought that disease was caused by spirits and demons and all sorts of other random things. There was a lot of superstition there, but then when we looked at blood and we looked at fluids realized there are actually living creatures in those fluids and we developed the entire medical science of immunology.

And we started to make breakthroughs because we could see. Then there's a pushback. The pushback against the idea that the earth might revolve around the Sun came from the forces of authority, the establishment.

Partly it was the church, but partly it was the monarchy and just government in general. The system had been constructed based on a system of authority where you got your truth from a very powerful central organization.

And that truth had adopted a certain set of theories and this challenged the theories and therefore challenged central power and there was naturally got to be a friction.

So much so that you might very well get jailed, de-platformed or burned or bankrupted if you push the new paradigm and Galileo is of maybe one of more famous examples of that.

There's Dr. Harvey in the history of medicine. He put forth the proposition that the heart pumped blood through the arteries and recycled it back to the veins.

And of course for thousands and thousands of years no one thought that they'd actually think the heart pumped blood. They didn't know, they didn't understand circulation at all. And Harvey discovered this and it was a pretty big breakthrough but it was so profound, the revolutionary that no one would accept it. The entire medical establishment rejected it.

And Harvey is very famous for a quote. He said, no doctor over the age of 40 will ever believe me.

And it leads us to one of the funniest statements in history of science, science advances one death at a time, which is maybe articulated by Thomas Cune as Herodom's shifts take place when the old generation or the old guard dies.

You have to wait for an entire generation of power and authority whether it's in science or whether it's in politics or whether it's in the religious establishment. You have to wait for them to just pass.

Or that dogma passes in the event of a war. You're adamantly in favor of fighting wars with horses and then someone comes along with tanks and machine guns and you realize your horses don't work anymore then you discard that.

Billy Mitchell was court martial because he suggested that air power would dominate future wars in the 20s or the 30s.

And the military establishment didn't like that. So they courted martial them and then of course by World War II we found it perhaps air power did matter in wars.

And so people change their views towards science when there's a mortality event.

If your country is coming to an end or your life is coming to an end you're going to be open minded. Otherwise if it's not a matter of life or death people typically cling to the old paradigm until they pass.

And you just have to wait for a new generation that has a new sort of circumstances to embrace new ideas.

I think that that's what I took away from the history of science and that has helped me a lot. My life is non-trupperner and when I eventually discovered Bitcoin it helped me to understand both why I was so profoundly powerful but also why I was profoundly difficult for the establishment to understand.

The last time we met I remember we had a very interesting conversation about astrophysics delving into concepts like entropy.

But let's consider the importance of applying physics to everyday life.

Let's for example think about the essential role of electromagnetism and the role that it has on like our daily routines.

50% of the world's GDP is based on some of Michael Faraday's theoretical developments and inventions related to electricity.

So once again why we should encourage the study of these subjects such as science, coding and physics to shape future.

If you want to provide prosperity to 8 billion people in the world if I was speaking to anybody anyone starting their life or their education or family said what should we teach our children in order to make them prosperous.

I would say master the protocols of prosperity.

So what are the protocols of prosperity? One of them certainly is math and physics and engineering.

Those are the science protocols of prosperity. The second would be something like the English language which is a communication protocol of prosperity.

The third would be Bitcoin and economic protocol of prosperity. Let's come back to the science protocols. Why are they so powerful?

Well because the laws of physics supply without prejudice or bias everywhere on or simultaneously on the climb.

So they're not subject to political distortion and ideological distortion. If you know how to start a fire, if your goal is to avoid burning your house down that's useful and if your goal is to avoid freezing to death that's equal useful.

And it doesn't matter whether you're a communist, a socialist, a capitalist, a liberal or conservative or what race or what religion you are.

It's quickly tested. For example on my field, Aeronautical Engineering. I remember having a picture of an airplane lodged at a tree and there was a quote underneath something to the effect of the laws of our Aeronautics are cruel and unforgiving.

But you don't get to break them. If you build a plane and you don't build a correctly a crash and it burns and there are no irrational aircraft engineers or at least the aren't irrational ones for very long. You can't get away with something which isn't truthful for very long and the engineering discipline.

So I think mastery of physics, mastery of mathematics, they're useful, they're truthful, they're hard, but they're critical to life. If you wish to not starve to death, if you wish to not crash into the ocean, if you wish to not sink your ship, try rowing across the ocean by yourself and then you'll realize that an internal combustion engine of the ship would be useful, not running out of fuel, knowing how to calculate how much fuel you need in order to get across the ocean and how much water you need to get across the ocean.

If you need to get across the ocean in the center of balance of the ship, all those things would be matters of life or death. Having set all that, they're useful protocols, but they're not the only protocol.

For example, base 10 math that illustrates a point which is it's a mathematical or it's a scientific protocol which is useful, but there are others. There's base 2 math. There's Roman numerals. There's base 16 math, hexadecimal math.

The Babylonians divided the day into these 12 hours of daylight, 12 hours of darkness, 360 degrees, and a compass. You have different systems of math.

So what do you want to learn one? You want to learn one because all the machines built in the civilization operate on that one.

Take a calculator and it's got zero through nine on the keypad. It's a base 10 calculator. If you master the protocol, you can use the calculator, you can use the computer, the program's work, the accounting ledger's work.

Not only do you not sound like an idiot, which is useful to get the cooperation of other people, but you can actually type a problem into your computer and get an answer that will save your life.

That's why I think we want to teach our children useful scientific protocol. We're going to need it in order to move, in order to breathe, in order to make the electricity work.

And of course, Faraday gave us an essence, the laws of electromagnetic and electricity is, you know, is, is electromagnetic energy.

Not the only form of energy. There's acoustic energy. Sound. There's, there's potential energy. There's nuclear energy. There's a lot of forms of energy.

John D. Rockefeller gave us an essence, chemical energy and the form of a barrel of petroleum. But the magic of electromagnetic energy, right, is it's clean. It's very efficient. You put it into your house, put it into your plane, put it into your ship.

You can build appliances with it. You can, you know, perhaps wear it on your wrist. You can transmit it through the atmosphere. And of course, everybody, all the modern civilization was profoundly affected by it.

People were profoundly fearful of it when, when that new, that new technology was developed. But every corporation that resisted it, became obsolete.

And it's just a reminder that when new technology arrives for channeling energy, you have to master it in a responsible fashion. You can't live in fear of it.

Even though the word and the English language for an encounter with technology that is painful and unexpected is shocked.

So when you touch an electric wire, it shocks you, right, it can electrocute you. It may burn your house down, it may start fire. It's a very scary thing. We're shocked.

But in fact, as you pointed out, half of the civilization is based upon overcoming this fear and mastering a new technology for good, as opposed to, you know, countering and fear of the new and resisting it.

So now that we're talking about that in the 21st century, one of the most prominent concepts has been digital transformation.

The companies that have reshaped the world in the last few decades have pursued dematerialization. How can you describe this concept that you use? And why is so important?

The first generation of technology paradigm shift was, I think, the digital transformation of information.

Okay, so what did we do? We took an entire library and we dematerialized it and we put it onto an iPad or we put it into a computer.

It used to be a wealthy person had a library of 10,000 books. But then Google scanned all the books and Apple sold you an iPad and now anyone for a few hundred dollars could have a library of millions of books.

So we dematerialized all the books in the world. We dematerialized in the sense that if you had a hundred billion books, they all collapsed into bits.

We got rid of the material. We got rid of the physical energy and the matter. And therefore, when the essence of the book became information, it became non-conservative.

And if I want to manufacture more, I have to chop down a bunch of trees and burn a lot of coal and run a lot of factories. And I have to deliver a lot of paper, a lot of books.

And I have to store them and they're heavy. And anybody that ever carried a hundred books up a fight of stairs knows that it's not easy moving books around.

I can zap the electrons and now I can actually give a billion people a hundred books each. What if I give everybody that ever lived or everyone that lives, every book ever written?

And what does it cost to do that? In the physical world, it's impossible to do practically and to accomplish 0.1% of what I just described probably sucks up all of the economic energy and the civilization.

We've just found a way to give every student and the world every book they're ever going to read for free.

This is non-trivial because sometimes people pay $3,000 for college textbooks. So if every student pays $3,000 for college textbooks and self-opacant afford to pay $3,000 to get to college, you can see how the physicality of the book is going to be an impediment for the world to be educated.

When we digitally transformed the book, we released huge amounts of economic energy. That's almost like a crystallizing reaction.

When the steam becomes water, it gives off energy and when the water becomes ice, it gives off more energy. If you want to reverse the transaction, you heat the ice to get water and heat the water to get steam. You put energy back in.

Well, that energy that falls out of the system, where did it go? It went to Google, went to Apple. The biggest companies in the world, Apple, Google, Facebook, Microsoft, Amazon, how did they become more $2 trillion?

Well, they dematerialized the retail storefront, that's Amazon, they dematerialized all books and music to a certain degree that was Apple, to a certain degree that was Google.

Facebook dematerialized relationships used to be, you took pictures of your family, you put them in a shoe box, and you printed a bunch of photos, and you had a bunch of shoe boxes, and you had an album, and you paid for the album, and you put it on a shelf, and you bought the shelf, and you bought the space, and you bought the album, and you bought the chemicals, and you bought the dark room, and you bought the camera, and all that went away, and what you had was a Facebook album, and the money went to Facebook.

So, digital transformation of information is profound, if maybe there's 10 to 20 million people in the world with a PhD. There's 8 billion people, but there's only 10 million with a PhD.

So, why is it that only a small fraction of the world gets max education? Well, part of it is cost, right? You could argue some people don't want to have a PhD, but the cost is extreme, and my cost is a million dollars to give somebody a PhD.

Okay, but if I digitally transform it, it costs the electricity. So, that first 30 years, we had explosions in digital information, digital entertainment, digital education, digital merchandising.

Microsoft has built on the digital transformation of business processes, pretty soon every company shuffling all of their files around on Microsoft.

Rails, if you want to give music to a billion people, well, how much did it cost to listen to Beethoven's seventh symphony in 1850?

You have to be a king. You have to have 100 professional musicians, right? The kings actually had their own royal orchestras, and they hired and retained 100 musicians to be always ready to play for royalty.

And I guess you can calculate what it costs. In the western world, a full orchestra has millions of dollars a year, and you divide it by listening 20 times, and you conclude that it's extremely expensive.

On the other hand, I could deliver you Beethoven's seventh symphony on a phonograph record for the price of the record player and a phonograph.

And then when we finally dematerialized the phonograph, the record player, and the record itself, and we dropped them into a file that runs on an iPhone or an Android phone, now you could give Beethoven's seventh symphony to everyone for the cost of the electrons, and that's probably not even a penny.

So you want to give music or culture to everybody on earth, you've got to do it digitally. That's what created the internet wave. That was very characteristic in the mobile wave.

But there's a fundamental distinction between information and energy. And so I would say the first generation, the first 30 years, was the digital transformation of information, and information is non-conservative.

I can give you my copy of Moby Dick as a book, and I'm transferring something embedded in energy, and if I give you the book, I don't have the book.

But if I send you the PDF file of Moby Dick, I still have the file, and you have the file, we both have the book.

So I can give all 8 billion people the book in a non-conservative way if it's information. But if there's energy in it, energy content, I have to transfer the thing from me to you.

So the first 30 years of this revolution were all about digital transformation of information, and only recently we moved into the next stage, which is the digital transformation of energy.

And the conservation of energy is one of the most basic laws of physics. And conservation of energy means that potential energy becomes kinetic energy, but that the potential energy is gone.

When I'm up here, and I dive to here, I'm no longer there. And if I could dive to here and also be there, the universe would work.

So I think Bitcoin represents the most profound application of the creation of digital energy, and the channeling of digital energy.

And it's a paradigm shift, because everyone that has engaged in the digital revolution and the digital transformation of anything else, all of their learning was about the transformation of information, and not energy.

And so they have a hard time grasping the fundamental difference between a conservative and a non-conservative interaction.

Another we mentioned Bitcoin. I want to know what did you think when you heard about Bitcoin for the first time?

What I thought about Bitcoin when I heard about the first time is probably what somebody in 1905 thought when they heard that someone in their neighborhood was playing with electricity.

And then somebody's house burned out. And someone got shocked and they got electrocuted. I thought, it's kind of dangerous, but there probably not going to let people keep doing that, or I don't know what will happen.

And then I switched back to whatever I was focused on. So what I heard about Bitcoin, it must have been 2011, 2012, was very new. And it was one of a hundred things.

I was fascinated by the mobile revolution. I was interested in iPhones, I was interested in smart watches, I was interested in everything Facebook was doing, everything Microsoft was doing, everything Google was doing, everything Amazon was doing, and also there was the Bitcoin thing happening.

And they were all just flickering. But you know, in my personal investments, I didn't invest in Bitcoin, I invested in Apple and Amazon and Facebook and Google.

And in my business life, I didn't really think I needed Bitcoin. It wasn't an institutional great asset, I wouldn't have thought about that.

And our business was about selling enterprise software in order to manage information, which was analytics. And that was it. I didn't really think about it again for about eight more years or seven more years.

And the second time I thought about it was during war. And so I said, you know, why do people embrace new paradigm? You need a near death experience, a mortality experience.

When I give you a diagnosis and I tell you, you know, you're going to die of this disease, you all the sudden go back to the internet, you start researching the disease. And if you find that there's some kind of experimental therapy, you read up about it, maybe you're going to apply and you fly somewhere to do something about it because, because you have more to gain the loose and you're quite motivated.

So in March of 2020, the pandemic struck the world locked down. The world kind of turned upside down. All the offices were emptied.

People started working from home. The monetary system went haywire, interest rates went negative in large parts of the world. There were 18, 18 trillion dollars of negative yielding debt floating.

Like, how does money be negative yielding and the interest rates in the US were lower to zero? And so I thought the cost account went to zero. I think that's like making time stop or making, you know, and negative yielding money is like making water flow uphill.

And I thought, okay, well, I'm in a world where time is flowing backwards. Water is flowing uphill. You ever see those, those movies of all the people on the beach just before the tsunami hits. And there's a tidal wave coming. And it's all just fine. And the sun is, the sun is shining and everybody's having a good time. And then the water starts to recede and it goes out half a mile.

Then the entire world is about to turn upside down. You're about to get struck by a 50 foot or 100 foot wall of water and you have to run for your life. And if you look at that and you say the world's, there's something really profoundly wrong, but I can't keep on going business as usual. I really need to take urgent action.

That's what I felt in March of 2020. And I think I wasn't the only person that felt it. A lot of people felt quite concerned to straw.

Our first thought was what do we do about, you know, our people, our employees and our customers, and then how do we run the business. And then after that, we realized that we were sitting on five, 600 million dollars of cash that was yielding zero.

The central banking system was pursuing a policy that was very inflationary. We were going to pump a lot of currency, a lot of dollars into the system.

And it wouldn't be noticed immediately, but we were going to have inflation if not hyperinflation. If we take Argentina, for example, the peso was 20 pesos to the dollar in 2018 or so.

I'm not worried because we used to obsess over it. It must have been 40 or 50 to the dollar by 2020. And of course today it's 1000, 150 on the blue dollar rate.

So I could see that there was going to be currency collapses all around the world. And I could even see the US dollar collapsing or weakening.

And my opinion actually, I think if you look at a surrogate for the strength of the dollar, it'd be the S&P 500 index. And it is 50% up, which means the dollar lost like 35, 40% of its value since that time measured it up portfolio of desirable assets.

So I looked at that and I thought, well, our cash is a melting ice cube. It's worth it's worth 500 million right now, but it's not going to be worth 500 million in four years.

And our businesses under stress were locked in our homes. It's very and people are working via zoom.

It's hard to grow the business P&L and it's hard to see the employees. So on one hand, my human capital, my people are going to be rated by the big tech companies like Amazon, Google and Microsoft.

It used to be that people like to come to the office and they like to work together and they're not going to just quit and move across the country for a new job.

But in June of 2020, it was clear people were going to be working from home for a while and you don't have to move across the country.

You could just point your web browser or point your zoom at a different IT CP IP address and get a new job.

So we started thinking, this is not good. We may lose all of our employees. And then we looked at all of our cash and on one hand, our cash was earning 0% interest.

But the S&P index rallied and stocks were hitting an all time high. It was pretty clear that financial assets were going up.

The cost of capital is like 12%. If the cost of capital is 12%, if I have to generate a 12% return on my capital, I'm generating a 0% return for the next four years. There's going to be a shareholder revolt.

So we were worried about losing our employees and we were worried about losing our shareholders and we had this big pile of cash which was worthless.

And then the central bankers said, we're not even thinking about thinking about raising interest rates.

And some central bankers said, well, we think we should make interest rates negative.

So our primary asset was a liability. Our human asset was maybe going to drift away from us. And our shareholders were unhappy.

And the stock hit $90 a share. It was maybe $100 to $120, where we're thinking this through.

And we were in the midst of the war on COVID and what I think was a currency war, a war on capital.

When someone says, I'm going to charge you 1% for all your money in the bank. That's pretty close to a war on capital, right?

In that situation, we had to choose between a fast death, a slow death, or taking a risk.

That is the essence of the paradigm shift. What's the fast death? The fast death is give the capital back to the shareholders.

If we simply bought the stock back, we would have a company not growing with the employees working from home with no shareholders.

And the stock was trading $2 million a day and no volatility. And so there's no volatility and there's no liquidity, the stock options are worthless.

But the stock options are how you compensate your employees. They're going to get hired away by the trillion dollar companies that have infinite money and have stocks and companies that are growing and stocks that are stock options that are valuable.

So giving the capital back would just make us die fast. We'd have to sell the company.

The slow death is keep the capital. But the stock options are worthless. The human capital bleeds off.

The shareholder base bleeds off. We get lost. Right? And we can't crawl out of that. There's just no catalyst to get out. How do you work harder?

I mean, we were working as hard as we could together and then pretty soon we were all stuck in our kitchens trying to work through a little zoom link. And that was not better or easier.

The issue is what do I do with $500 million? What do I invest it in that's going to yield more than the cost of capital?

You know, it's the summer of 2020. You need to find something to buy that's going to appreciate and price or in value more than 12% a year after tax or tax deferred tax efficient fashion.

It was not bonds. You couldn't buy any individual set of companies because companies are securities and and there are prohibitions on a publicly traded operating company holding more than 40% of its liquid assets and security.

So we couldn't just buy all securities. So then you got to buy commodities, but every commodity is generally inflationary buying silver or soybeans or petroleum or natural gas or lim or timber.

Those aren't good stores of value because people keep making more commodities. The king of commodities is gold, but gold supply increases 2% a year. And so if you so gold itself is not outperforming the S&P index, you can't so that wouldn't work either.

So then we started thinking can we buy real estate, but how do you buy a liquid portfolio of $500 million worth of real estate and the problem was real estate's value based on interest rates.

So if interest rates go to zero real estate values triple. And so the real estate values by the summer of 2020 were extremely high because the interest rate was extremely low.

So then you start thinking what's left art. How do I find a diversified portfolio of high quality art that's fairly value not easy.

We crossed all those things off the list and we thought well what if we could fix the defects of gold. What about digital gold and that led us to crypto and the idea of of digital gold is what if I actually could create 21 million gold coins.

De-materialize them, move them at the speed of light and then make it impossible for anybody to make any more of the gold coins. What if I could move them on a computer.

And I thought well that sounds like magic gold. But if God came down from heaven and said look I'm going to run the monetary system. I'm going to create 21 million holy coins.

I'm going to store them in heaven. I'm going to let you decompose them infinitely. I'm going to let you telepath way move them between any two counter parties and make sure nobody cheats each other.

And I promise to do the work for next to nothing forever. You would probably think that's okay. I mean that's probably an upgrade to every existing deal you're going to get.

But in the absence of a deity offering to do that for you, then the next best thing is what if we actually created that system with cryptography and the internet and some semiconductor technology.

And that in essence is what Satoshi did. Satoshi created a crypto network which is like perfect pharmaceutical grade gold. Satoshi called it appeared a peer electronic cash system. But what that meant was I'm going to create 21 million crypto coins, make them subdividable by 100 million Satoshi.

So 2.1 quadrillion Satoshi's I'm going to enforce the protocol with semiconductor technology called Shaw 256 hashing. I'm going to let you do that hashing using a semiconductor chip.

And then I'm going to distribute that Bitcoin system on a node and give it to anybody on earth and make it open and free.

And so that system became a form of crypto gold. We were looking around for something to replace our dollars with what what is our treasury assets.

And by process of elimination, everything else was overpriced or defective, you know, or not acceptable from a regulatory point of view because there are securities and not commodities.

So we found the one thing that might work and you have to go through this analysis. Well, there's 10,000 copies. What's the winner? Well Bitcoin was the winner of the 10,000 copies. Was it banned? No, it looked like it wasn't going to be banned because the IRS had designated its property in 24 years.

And then the last part is that it had been hacked. And Satoshi has a million coins. It was worth $10 billion at the time we were looking today. It's worth $60 billion.

And no one can get the they can't hack it to get those 1 million coins in that wallet. And I figured if no one's figured out how to steal $10 billion hiding in plain sight, then it must be pretty hard to hack.

And once we determined all that, we embarked on a Bitcoin journey.

So I want to take you back to the concept of entrepreneur. When one says the word entrepreneur or even wealth, it always seems to carry a negative connotation.

So the entrepreneur is completely demonized. How do we break away from that perception? Like when you talk about entrepreneurs, what do you mean? What does it mean to be an entrepreneur for you?

Well, I suppose entrepreneur has different meanings of different cultures.

We're lucky in the American culture, entrepreneur normally has very positive connotation, but in certain more authoritarian cultures are more conservative cultures or traditional cultures, maybe there's a negative connotation.

An entrepreneur is an economic engineer. That's how I would call it. How I would interpret them. It's an engineer is attempting to use their mastery of scientific protocols, mathematics, physics, all sorts of engineering disciplines, metallurgy, chemistry, you know, aeronautics to create some product or some service.

Whether it's clean water, whether it's an x-ray machine, whether it's an airplane, whether it's a Henry Ford's car automobile, the engineer is creating something.

And they're doing that in humble submission to the laws of nature. Water won't go uphill. Not without some serious engineering, ships that are unstable, capsized and sink.

Unsuccessful entrepreneurs create products that don't work. Right? So the first element is you have to successfully engineer a product or a service. And in that regard is admirable. I mean, that's why we like Henry Ford.

That's why we like John D. Rockefeller because John D. Rockefeller came up with standard oil, a barrel of oil. And we take it for granted, but the oil didn't explode in your face and burn your house down.

That's why it's standard oil meant that it wasn't likely to explode in the lamp and it wasn't likely to be a health risk. And that mattered at a time when people would die if it wasn't. Right?

If you go to the Hershey's factory, the craft factories, they were the early clean engineering experts to actually create ketchup or create food, put it in a bottle.

And then and then keep the bacteria out and be able to store it on a shelf for a month or a year or even a week.

That was a quite amazing technical achievement because if you didn't do it right, you would open the bottle of whatever and it would make you sick.

My kill you food poisoning. And so the original branded food, it was important because if I saw the brand it meant that the food probably wasn't rotting or you know, the food was safe to eat.

And we take it for granted today because all foods safe to eat were really good at it now. But there was a time when people weren't good at it.

And the reason that we that we bought all of our food from Kellogg or from Kraft or from Hershey's was because they were really good at manufacturing clean food and clean rooms.

And it's non trivial to figure out how to do that.

The first half of the entrepreneur is is engineered the product or service so it's safe. It's effective. It flies. It doesn't make you sick. Right? It doesn't blow up in your face.

The second element of being successful entrepreneur is the economic engineering part. How do you manufacture the product for less than it's worth?

Right? How do you provide the service that is better than a competing service? How do you provide the best service? And that means struggling with the issue of how much labor do you employ and what, you know, is it better to produce the food with expensive, you know, inputs?

Or with cheap inputs? And what does the market think and what do the customers think? So I think on trepon are sometimes just means anyone who's an economic adventurer. Right? So I start with a million of them.

The successful economic adventure that means the winner and the winner had a good product but also produced a good product at the right price in the right way.

And the thing that's available about them is they have to master not just engineering but economics. Practical economics not not theoretical ideological economics. You know, they teach you things in school that just aren't true. Right?

They'll be like, well, in school, just tell the people that work for you to do blank and then you go in the real world and tell the people that work for you to do blank and they get up and walk out and quit.

And then the factory shuts down. Right? And then your best customer quits you and then you go back and then the bank calls your loan and you get bankrupted into the company fails because you did something that you read in the books somewhere.

And the truth is, you know, doing things with real people in the real world calls for a much greater degree of sophistication and subtlety, you know, an acumen, then, then doing things in the theoretical world where you treat, you know, people like robots, people aren't machines.

And your employees are machines, your customers are machines, the mayor of the city where your factory is isn't a machine, the governor isn't a machine. The country isn't a machine.

You know, everybody's got opinions and you have to work in the world of politics and sociology and economics.

You have to compete with someone else who's just as smart as you, maybe smarter than you, more motivated than you that wants to take away your market from you. You have to deal with that.

You have to keep your shareholders happy and the shareholders are considering your returns versus everything else they can invest in.

And then you have to deal with the laws of physics. And if that gets out of balance, your plane falls out of the sky or your bridge collapses or your orange.

Or your building collapses or your company collapses or your capital structure collapses or your stock collapses, you know, if there was no John D Rockefeller, you know, we wouldn't have had oil.

And if we didn't, an oil itself probably stretched people's life expectancies 10 or 20 years, you know, try, try rolling across the Atlantic, right?

Or next time you need to go somewhere, use wind power, right? And then figure out what your life would be like with wind power and horsepower to get from here to there.

And Rockefeller doesn't sound like a robber baron so much as he sounds like the person that gave us the gift of chemical energy.

And, you know, you have general electric and Edison that gave us, you know, practical electrical energy and Westing house. And then you had melon who gave us aluminum.

And aluminum is pretty important. You can't make an airplane without aluminum. Everything falls out of the sky made out of steel.

If you don't make it out of aluminum won't fly. There is no, there is no modern air travel without it. And of course, you know, Ford gave us the automobile. And if you don't think it's important, read the history of everyone that ever died because they were walking from point A to point B or trying to write a horse from point A to point B, right?

And so all of these entrepreneurs, they were very profound in the way they revolutionized the civilization. And they all mastered engineering and economics in a very difficult chaotic political world and competitive economic world in order to bring us where we are today.

And again, many people take those achievements for granted. But let's move to philosophical ideas. But first, can you talk about the role of science fiction and fantasy novels in shaping your thoughts about yourself and the world?

Yeah, I think a lot of people in my generation, they were shaped by science fiction and fantasy. I mean, the science fiction is important because it was very creative writers considering the implications of technical advances. They could imagine, but we had not yet realized.

For example, Heinlein, who's one of my influences and a big influence of a lot of people in my generation, he wrote, have space who will travel and the moon is a harsh mistress and time enough for love and a bunch of other things.

He talks about artificial intelligence back in the 60s and the 70s, what happens if it takes over and talks about the implications of genetic engineering or the implications of space travel.

And I think it stretches your mind. It forces you to imagine how would you use this technology if you had it. And of course, so many technologies that came along afterwards, the computer, the internet, the mobile phone and all the applications and networks right there.

They were driven and they were inspired by those science fiction writers. I think if you think about William Gibson, some of the early cypher punk and cyberspace writers, Gibson-posited cyberspace and between neural mansor and many of his short stories, burning chrome.

And the like, he started getting a thinking about what happens in a network world where money moves at the speed of light and where security or the loss of security even for a split second can destroy your company.

And one of his books, I think burning chrome, you know, one of the actors loses security for a split second and they lose everything completely impoverished and it's completely permanent and irreversible.

And so those science science fiction works, they evoke terrifying, terrifying possibilities, electrifying possibilities, inspiring possibilities.

And they motivate you to want to study science and then want to apply and build products and build services.

In some cases it means it inspires Bezos and Musk to build rockets to go to space.

But it also inspires us to go to cyberspace and to think about the consequences of that and how it's empowering and how it distorts social norms and political norms.

And to a certain extent it even predicts what happened. I think Lailan referred to the 2020s as the crazy years in one of his books is very interesting and what they predict.

But now fantasy is a little bit different. The difference between science fiction and fantasy is science fiction, they try to imagine you in space and when you're there what happens when you throw the baseball.

And the answer is the baseball may be depending upon the trajectory it re-enters the atmosphere and burns up or it gets in an orbit and it circles the earth and it's stable orbit forever.

Or maybe you launch it and it escapes velocity and it escapes earth orbit but circles around the sun or maybe it's circle, you know, it escapes solar orbit.

So there are all these possibilities and you think about them and maybe they're inspirational. But fantasy is different in some ways it's inferior in some ways it's superior.

But fantasy is what happens in a world where the laws of physics don't apply. So what if I just throw the baseball and it morphs into a dragon and it flies down to earth and it breeds fire on a lump of coal which is transmuted into a pot of gold.

And then it waxes the pot of gold with its tail and an electron jumps out and they wave their wand and you're in an immoral city.

Okay, that can happen in fantasy. It can't happen in science fiction. Fantasy introduces other ideas like a lot of magic. It's all about do you know the spell.

There's also a theme that pops up over and over again. If I know your name I can control you if I know the name of a demon I can control the demon so I don't want you to know my name.

Well, this idea of casting a spell and protecting your true identity pops up a lot in cyberspace where the spell, by the way, Satoshi spell would be the private keys to the million Bitcoin.

And if you knew Satoshi spell you would be one of the richest people in the world. Maybe you'll be the richest person in the world at 10 years. If you know the spell and the spell is just some words.

If I take all my money and I put in a Bitcoin wallet and I can remember 12 words I know the spell to unlock all the money.

Okay, so spells matter and we don't know who Satoshi was right there's there's this reverence for the pseudonomous in the world of of the digital.

And you can start to create things that look more magical than physical in cyberspace. Now now cyberspace is just this very interesting mix.

The stuff that's magical is is the flow of information at the speed of light but the physical is I can't grant them all Satoshi's coins I can only grant one person or one thing or if I split it I split it right.

So there are some things that look physical because they're energetic and conservative and their physical physicality and there are other things that look virtual.

And and a study of fantasy is the study of the virtual because things are non conservative you have a you have a conjurer that basically you ever see the movies where.

Where a person that's 200 pounds and they're able to transmute themselves into 200 pound wolf that looks more like science fiction you can imagine that with nanobots but when the 200 pound person makes them self into a 20,000 pound dragon that's non conservative like where the extra mass come from right.

And so the magic is about is about being able to do anything you can imagine and the science part is about only being able to do things that conform with the laws of thermodynamics you know and the laws of motion and and you know either relativistic physics or something I think.

You want to study both you know sometimes the engineers are just two orthodox in their thinking right there to they're too constrained it's like well I can imagine these three things and everything has to be one of these three things that's all I can imagine.

You end up with a problem skew morphism I have a when people created mobile apps the first thing they would do is they would take a product in the real world the keyboard and I put the keyboard onto the phone but then you realize it you know yeah it's got no mass.

But it's not that much better than a physical keyboard and maybe it's worse than a physical keyboard and the fantasy world wizards don't type on keyboards when they want to give an order they just talk to the mirror or they talk to the genie and they say genie you know blast castle or genie fly me to the top of the mountain.

Okay so if you study fantasy or like I'm going to take the physical keyboard and I'm going to talk to it or where's the keyboard why we we don't use the keyboard anymore because why would you that that was an accommodation right.

You got to think different right and if I think different I'm not going to just reproduce the the best physical version of the way the world used to do things I'm going to actually reimagine it and that takes you to you know.

Mirror mirror on the wall who's the fairest of them all well what is zoom you know people said we got a shut down the office I don't want to shut down the office we have to shut down the office okay we shut it on the office now what are we going to do well we try the first technology it doesn't work that well we discard it we try the second technology it doesn't work that well we discarded we try the third technology zoom it sort of worked okay so okay and then the next morning an email goes to.

I'm going to go through the training course get ready that was the paradigm shift technology fails until it succeeds that's just something I learned in the history of science and the second thing and this is in blazoned on the back of our perspectives that perspective up there on the back of this quote by Arthur C Clark any sufficiently advanced technology is in distinctly advanced technology is in the history of science.

I believe that enough to put that on the cover of our IPO perspectives in 1998 and that's something I learned from my science fiction reading but you notice how we we managed to put technology and magic into the same sense you wonder if you were to go back to Roman times and you showed them the modern zoom they would think that's a magic mirror

right and of course we're one step from artificial intelligence and AI bots and it's it's kind of a almost a ghost but I worry about the version three versions ahead of this one where you'll definitely have intelligences you'll have artificial intelligences which will not exist in space though is this in cyberspace in the ether

and now I go to my magic mirror my zoom and instead of zooming to talk to my brother or my employee or my investor I'll just talk to galactagus you know or economist and economist is just an artificial intelligent agent that's read everything the human race is ever written and everything about economics and is scanned every piece of news up until the end of the day.

So 100 milliseconds ago and then you're going to say economist you know I really like high act or or or maybe maybe you'll bring on ran back to life right and tell me what I should think about blank or what is your opinion of blank and now we're back to snow white and the wicked witch and okay am I talking to a demon or am I talking to a demagogue or am I talking to the ghost in the machine

I saw pictures of Winston Churchill online and I thought and videos and I thought given everything he wrote and everything we know I wonder if someone won't actually bring an apple the ghost of Winston Churchill back to life in cyberspace load it with everything Winston ever said then load it then then you can interpret his principles and his values

right just like we know the values of Aristotle we know the values of brand we know the values of high act or the you know the values of many different philosophers that's why we study them because they had values you just put those together then you plug in a large learning model then you plug in all the modern information and you say Winston what do you think the prime minister of the UK should do today

when it'll start talking to you now does it sound like a meandering or is it possible that I have been inspired by a combination of the readings of fantasy the readings and science fiction the observation that advanced technology is

into English War for magic and the thought that you know maybe I can what are you doing magic you bring things back from the dead there are a lot of fantasies you know fantasy books where people have the power to talk to dead

right that's a fantasy idea but you know at some point you start to bend time and space right there's a fantasy in the game of Thrones brand start can

actually move through time and space and go back and see anything and he can actually tilt it well when you pull up YouTube and in our video and you say well I want to know what it what it was like to live in Florence in the 14th century it'll actually sift through everything and find someone that created it you know an instructional video or simulation on Florence in the 14th century

and and it's pretty interesting how everything that's ever been uttered by the human race and everything ever recorded is uploaded starting to be there and the question is what's the different between brand start and you if you can talk to YouTube

and now that we're talking about authors and politicians you also mentioned game of thrones and I'm trying to connect some characters and movies to political theory I would say do you like Star Wars

the rebels fighting against the overpowering crush of the authoritarian empire and yeah that theme I think resonates that's that's always resonated resonates with youth when you're when you're youthful and you're in school or you're at the beginning of your life and you're rising up to the world and what you see is authorities whether it's your parents the community the school

you know the industry right you're struggling and so that that resonates it resonates with those that believe in freedom right if I if I had my religious freedom or or my economic freedom deprived of me by an authoritarian guild you know a regulated economy you know an overbearing nation state or whatever community then it resonates there it's like you know

it resonates with the entrepreneurs the most famous apple commercial 1984 and it's like you know the PC the individual have their own computer and you don't have to be slave to the IBM mainframe owned by big authoritarian corporation mega corp

and so I think that that's a very powerful theme I think it's constructive and empowering an inspiration yeah I mentioned I mentioned Star Wars because I remember when Palpatine the Claire's the emergence of this first galactic empire in Padme says so this is how liberty dies with thunderous applause you think that's a description of populism

that's a point it's a it's a reasonably good one you know generally you know authoritarian's never think they're authoritarian they think that they're imposing a new rule of law to save the people from themselves or or from some other greater enemy so it's like you know the the word barbarian right it's just it's just people that speak a different language

than us the others that they have a different language and it's helpful if they have a different God because if they have a different God then our God told us to kill it it pops up 10,000 times throughout history it's always the charismatic leader that raises the army and rallies the people that thunderous applause right it's like there's almost no example you know where Pete where a nation starts a war

where everybody's not applauding it's very easy to rally people you know to a particular cause by either pointing toward another enemy or by forecasting the doom of the society we need this law because otherwise you know we will boil the oceans or we need this law or else we'll all die of this disease

or we need this law or or else the barbarians will kill us all or we need this law or else we'll chaos and disorder and there's there's always a justification it just turns out to you end up with a hundred thousand of those things and and no one of them ever sounds that bad but they all seem like good ideas but it's like it's as death by a thousand cuts or death by virtue signaling and

and and eventually you've strage acted the entire society I'm I'm reminded even Frederick the great was admired by Voltaire and Voltaire was this great icon you know iconic progressive thinker right of the 18th century you know foreshadowing the French revolution and you know and and Durant

and Durant in his story of civilization he has an entire book dedicated to the age of Voltaire and and Voltaire is full of a lot of wisdom and one person that Voltaire idolized or admired was Frederick the great for a while because he was supposed to be the philosopher king he was that he was a genius and area died and and a polymath and good at everything and and admired philosophers I think there's a point where Frederick the great

Frederick the great just randomly declared war on it on a neighboring country and its justification was well they're not attacking us now but if we don't declare war and then they eventually will attack us so we have to we have to attack them first and that was one of the you know the points when you realize that you know maybe nobody's perfect but the number of examples where the good guys declared war proactively because they know they're going to be attacked that's a lot of the

lot and then the rest is then they end up fighting the war you know for another reason and that just goes on but it's all there's always a populist reason to do it and they're always unintended consequences.

So you mentioned I ran and all of I ran inspection and philosophy celebrates human achievement you have called Bitcoin the apex achievement of the human race and think of it as a living creature in what way and how's that.

You know that the human race is a story of civilization is about harnessing channeling energy so it's technical advances that allow us to channel energy and you know and the first most famous figure Prometheus right Prometheus is the Promethean right is its own word but the mythical figure is the one that we're going to do is

the first word but the mythical figure that actually gave us fire and you know fire is is chemical energy and fire was was pretty instrumental in humans rising to rule the world you know and there are a lot of good arguments to say it affected our biology you know it's short but I just have track it it to increase the size more brain you know what can you do with fire right so many different things you can defend yourself

against animals you can pre-digest cook your food you can heat your your yourself and avoid freezing to death you can melt ice you can clear a forest right it's it's a pretty good idea and you can't if we didn't have fire right you try to imagine where would humanity be right now it would be it's not clear we would be out doing the apes maybe they would do better than us you know we didn't have that one trick.

And now the issue is what is the significance of Bitcoin and what is the significance of Satoshi well Satoshi is the Prometheus digital energy like I'm sure I don't know Prometheus ever lived right we don't know it's a mythical character and maybe there were 10 different human beings that saw fire but once we figured it out we kept it that's that stretch over millions a year so it really is.

You know kind of mythical nature Satoshi is kind of mythical character as well but what is Satoshi do Satoshi figured out how to manifest something of value in cyberspace forever and transfer it without the intermediaries what does that really mean if you can put a dollar of value in cyberspace you can put a billion dollars of value in the cyberspace if you put a billion you put a trillion.

And in the last 15 years we put 1.3 trillion well there's 900 trillion dollars of traditional wealth in the world we have met we have opened a portal Satoshi opened a portal a technique and we started seeing economic energy moving from the analog world and the traditional world and the physical world the analog world into the digital world to appear digital representation.

And that's like putting payloads and orbits right like that I put a satellite in orbit and it circles the earth forever I put a satellite almost in orbit how long can you fly oh 15 hours and then you're playing crashes so almost an orbit is 15 hours and in orbit is 15 billion years as far as we know right so so there's pretty big difference because you know there's a lot of things that you can do.

There's a lot of things that you can do between putting something in outer space versus putting it in space and there's a big difference between putting something in cyberspace versus versus leaving it in real space.

Morgan said money said gold is money everything else is credit what he meant was if I hand a bar of gold to you that's worth a million dollars you have a million dollars gold but if I hand you a check that has a million dollars written on it you have an IOU and if you go to the bank cash the check there may not be any money in the bank you may not get your million dollars but if you have the gold you have the gold the gold is the bearer.

The instrument it is the object the check is monetary information the gold is monetary energy one of them is conservative I gave you the gold bar I don't have the gold bar the check I wrote to you for a million dollars and you walked out of the room so I wrote him a million dollars check and I wrote another million dollars check and I'm a banker I wrote 10 million dollars of checks

I only have a million dollars I asked for 5% interest in each one I maybe make myself $500,000 a year in interest off of money that doesn't exist and I maintain that's called fractional reserve banking and I maintain that illusion as long as I can and when the illusion finally comes crashing to earth right all of my creditors are bankrupted

right and the economy collapses so Satoshi finds a way to put money in cyberspace Bitcoin is money everything else is credit everything you ever process is a digital payment on a computer when you use Apple pay or Google pay or when you used your bank account you weren't moving money you were moving credit and the problem with credit is credit is an IOU and IOU to who it's actually an IOU to a system that's not going to be a good thing

I'm going to have a stack of counter parties basically for you to cash that check you need to get the local bank the correspondent bank the central bank of the country you're in the central bank of the other country that corresponded bank of the other country and the issuing bank and they all have to concur

and then the person that actually transferred they have to not decay or reject the transaction so there is sometimes there's seven intermediaries that might actually represent a credit risk or might actually be a credit default to you and any one of them can default on their obligation

now how long does it take for that to settle might take 45 days so when I tell you I sent you money over over the internet I told you I make a representation is an IOU you won't know whether you have the money for 45 days

now what's the problem with that well what if you slammed into a brick wall but you didn't know you hit the brick wall until 45 days after the collision what happens to creatures that have no pain receptors

you get squeezed out of the gene pool generally because there's no feedback so so the problem with the world today is cyberspace is corrupted by its non-conservativeness it's we have too much information the information is toxic all of the signals in cyberspace or toxic signals

because there is no cost to do anything what's the toshie gave us was a money but the money is energy and the energy is matter and the matter creates substance and the substance creates friction

and friction isn't a bad thing friction is air resistance but friction is how you walk across the floor here if I take the friction away from the floor you'll fall and hurt yourself

you need the friction now what's practical example of this well most of the signals a lot of the signals in cyberspace right now are toxic or misleading criminal not even real

in on YouTube every 15 minutes there's a fake Michael sale or a Bitcoin giveaway video spot up and it looks like me and I'm talking and I'm telling you that you have just a few minutes to send me one of your Bitcoin and I'll send you two back

and I give you a little barcode okay every 10 minutes we scan for that and we then report it and we get one taken back but then they keep putting them up

and they put up thousands and thousands of them every month sometimes tens of thousands so you've got continual attacks in cyberspace from what we'll call demons right

if I'm evil genius I can come up with all sorts of bot attacks that attack your website attack your product attack your service you know and you end up with cat fishing you end up with intelligence attacks

it's a you know one of the interesting things I've observed you know using social media is oftentimes I post something in the most toxic responses were actually not even people you would have 97 bots that would post inflammatory responses or attacks in order to get me angry or to get my followers angry

and I would watch real people arguing in cyberspace with bots and I'm thinking like you know they spun that up in a few milliseconds so they have 10 million of them operating and you're a real person and you're arguing with the machine how's that going to end right and and you know I'm not a conspiracy theorist but you can imagine if you wanted to actually bring the society to its knees you would you would have a chance to do that

you would you would have leftist bots that are attacking those on the right right is bots attacking those on the left people of one race attacking people the other is and you would just so racial racial division class division ethnic division you know you would go and and act like a male insulting females act like a female insulting males make them all hate each other and just crank up

the gain right and just step out of the way and let them all kill each other you could have a situation where 99.99% of population loves each other and I just introduce a machine right and the machine goes and just sounds decent so how do you avoid that right this that takes us back to Satoshi if you want to build something of beauty and cyberspace you have to introduce Matt or an energy

you have to introduce truth and consequence you have to introduce the idea of time and we never had a way to do that before and Bitcoin is the first chance is is the way for us to create something that's real I can create an actual material wall I can create a wall it says you want to go through this wall you have to post $10 I can create a wall that says you want to go through this it'll take you this way

much time I can I can put a time barrier I can put a a capital there I can say you want to come into my home you have to place a deposit of of X $20 worth of of money and but I only want to be in your home for 187 milliseconds OK post it come in and leave 188 milliseconds

later and I give it back to you OK now how do you do that with a credit card you can't because most of the world doesn't have a credit card but if you did the credit card doesn't settle for 30 days how do I actually have 187 millisecond transaction on something with a frequency of once every month it's like and if the transaction fee is 2%

what that means when I do 50 transactions in 16 seconds I lost all my money right so Tesla who is who is truly a great figure he said if you want to understand the universe think in terms of energy frequency and vibration vibration is the is the transformation of one form of energy to another form of energy when I pluck a guitar

when I put it here it's potential energy and when I let go it's kinetic energy and it's either in a state of high potential energy or high kinetic energy just like this pendulum potential kinetic potential this is the vibration and the vibration is the rate of which that energy is transforming itself through phases we're hearing it

right and the hear and when you hear it's music and when and when you hear the vibration in harmony it's beautiful music and and the and the human being is gifted with the ability to sense this music right frequency we hear the frequency let me tell you how powerful it is I have a parrot I have a parrot that's 18 minutes and I think it's not going to be a lot of time to talk about it

I have a parrot that's 18 months old the other day the someone started playing Bob Marley Ray game music and the parrot started dancing and got happy okay how is it possible that a parrot evolved over millions of years all the sudden decides he likes Bob Marley music it's it's not it didn't go to music school

you think that you think that energy frequency and vibration don't change things when parents actually react to music and the six month old parents also react to music what that's telling you is that is genetically coded in our DNA and the DNA is is resonating and vibrating with frequency of the universe over the course of millions and millions of years

and so now the question is how you're going to put energy into cyberspace right how you're going to vibrate it at a certain frequency and our world our world before Satoshi is built on no energy it's it's it's built on credit it's built on shadows on ghost on disembodied spirits it's not built on on real things real matter real

matter real energy the things in cyberspace are dead their dead shadowy representations of something that was real is real there's a real thing in the real world but the thing in cyberspace is a dead thing it's a reflection of the real thing

Satoshi let life into cyberspace and and energy is life life feeds off of energy and if you want to create things of beauty right then you have to you have to be able to release the energy and then the energy has to start to evolve

what's the frequency of that that digital credit 30 days let me say a different 10 times a year okay when I talk of 10 hurts 10 hurts is 10 times a second right where talk there's not even a word for how slow that is we think 10 to once every six weeks we can vibrate

well you ever listen to Beethoven's seventh symphony or play a trumpet or a guitar or a piano right a 440 you know I write the rate at which the economy runs on on 20th century rails with with analog assets and credit

to say it's a thousand times slower is understatement it might be a million times slower I give you a billion dollars of gold how long take to move it 10,000 miles you could probably move it once a year at great expense I give you a billion dollars a bit coin I might move it a million times an hour once I've mastered the technology

so you know how do you how do you advance the civilization you channel energy what's the main channel energy frequency and vibration how do we know it's good the phrase in English is its music to our ears that's how we know it's good

right and and it's literal but that's just acoustic energy someone's good singer is good at channeling acoustic energy and so touchy gave us digital energy it's paradigm shift the world doesn't understand it they didn't know that they didn't expect to find it it's something we didn't expect to find just like we didn't expect electricity

so this brings us to the final question of the interview how can Bitcoin help citizens in Latin American countries countries where we have very high inflation rates

I think if you understand Bitcoin as digital capital or capital a capital asset or think of it as the element of money which is store of value the long term store of value element then it provides you with a capital asset to build to build your life on if you're an individual

then it represents a savings account in cyberspace run by incorruptible software for someone that doesn't have the wherewithal to run their own hedge fund right it's simple it's secure if you just need a savings account where you you work your entire life you put money there and the money goes up in value

and you don't worry about the bank seizing it the government debasing it some company failing you what does everybody want they just want to not lose their money but more importantly if you have a certain amount of money and it buys less every single year then you work your entire life and when you retire the money you've got is worthless if it's if it's in a western bank it's still there it's just not buying anything

if you live in an African nation the money would be worthless maybe within a few years so Bitcoin represents that global incorruptible savings account for individuals you know there's there's the biblical phrase you know build your house on rock and not sinking sand you wouldn't build a house on a swamp

you wouldn't build your house on shifting sand you wouldn't build it on a sinkhole when you build a building you want to put it on granite and if you want to build the last for a hundred years you have to put it on granite outside of the floodplain so if you think about a company and you have money in the company if you take your cash flows and you convert them into us dollars they're losing seven percent of their value a year

okay so you have ten you have ten million dollars you're losing seven hundred thousand a year in in capital value when we started this interview you asked me how to get interested in Bitcoin well what I realize is the company micro strategy at two thousand people making about seventy five million dollars a year in cash flow and the five hundred million dollars in the treasury was going to lose seventy five million dollars in the company

and dollars a year in value just sitting there so what we realize is the treasury asset was losing all of the money that everybody created through the work for the year so that's a classic example of running as hard as you can't stand still you know the idea you're negating two thousand

many years of work because your treasury strategy is defective so what Bitcoin represents is a non defective treasury asset to the world right if the if the cost account was twelve percent a year in dollars and you store your money and

teabills your aftertacks yield is three percent so that means that the conventional strategy for every corporation and government and institution would be to invest at three percent but lose twelve percent and therefore your minus your minus nine percent you're losing nine percent of your capital every year so if someone came along and said I'm going to actually give you a capital asset that's going up twelve percent a year

that would be the same as building the house on granite and it doesn't sink okay so at least you're you're not doing any damage by your savings but you're not creating any value either by your

savings you're simply not destroying any if you had an asset going up twenty four percent a year and Bitcoin's been going up much more than that like it's got forty fifty percent a year for the last four years but but if it goes up faster than the cost capital

you're actually putting your corporation on a rising platform that's what rich people do right if you are a very successful business person you would say I work for ten years and I invested it and I bought a bunch of apartment buildings and now the rent on the apartment buildings pay and I don't have to work anymore and I retire early while the reason you're doing that is because you're using a appreciating property as your capital asset

you just have to have a lot you have to be very lucky and you have to be very talented to use property as capital asset because of you invest in the wrong buildings and the wrong neighborhood in the wrong country maybe that doesn't work Bitcoin represents this very straightforward global capital asset where a person working can save their life's work in a capital asset and eventually they can retire and not work anymore

and that becomes the the endowment for their family maybe forever some organizations understand this if you look at universities they have endowments they don't invest their endowment in cash or bonds they invest the endowment in property sometimes in equity

and that's why Harvard University or Yale that's why they can go on forever but operating companies they don't have an endowment they normally just use bonds and bonds are credit they're crumbling and their capital structure is crumbling it's like you built a building in a swamp you don't see buildings stand for a thousand years built on a swamp you have to actually have a firm foundation

an example an example of that is my company so my company had that six hundred million dollars of cash that was that was generating zero percent interest and our stock was was dead money nobody wanted to buy it and we were like worth a hundred twenty dollars share

we actually converted to a Bitcoin standard and we started buying Bitcoin and then Bitcoin kept going up in price and in 44 months our company went from a six hundred million dollar enterprise value to a twenty five billion dollar enterprise value

and we ended up with somewhere in the range of fourteen billion dollars a Bitcoin and so it Bitcoin just goes up ten percent a year we would generate one point four billion dollars a year of investment gains the company the company was only generating seventy million dollars a year in profit

so we generate twenty years of profit an entire generation of profit even in a bad year with Bitcoin or another way to say is we have a hundred years you know worth of money I mean in essence the entire company is now endowed with a bulletproof balance sheet and before what we had was a melting ice cube it's kind of simple you choose something going up twenty four percent a year

twenty four percent a year versus something going up three percent a year you compound that over the course of multiple years and what you realize is that you know at twenty four percent a year you double your wealth every three years and you double your wealth thirty three times in a hundred years right

and if you're if you're only compounding a three percent a year but the money is collapsing at the rate of seven or ten percent a year then you'll never catch up you'll just be in pauper so I think Bitcoin it represents a way out of that economic malaise you can do it with twenty dollars a week you could do it with twenty thousand dollars a week you could do it with twenty million dollars a week and and everybody has the same rights

and you can do it Nigeria or you can do it in Argentina you could do it on the other side in Manhattan there's no difference in access no one gets special privileges it's fair it's equitable you're buying a piece of property that every intelligent person in the world wants to make more valuable

so like if you bought ten acres in Alabama there's nobody in Argentina trying to make the land in Alabama more valuable and traders in Singapore aren't going to do anything with a computer to make the land in Alabama more valuable

but if you buy a Bitcoin in Alabama then the more chaotic it is in Argentina the more people want to buy Bitcoin in Argentina making your Bitcoin more valuable and in the smarter the trader in Singapore is the more Bitcoin he or she needs making your Bitcoin more valuable so you're plugged into the global digital economy and your Bitcoin is going to go up as technology advances it's going to go up and you can do it with a computer

it's going to go up as people come up with new ideas it's also going to go up as more capital gets created it's also going to go up with more chaos and that's the second the second fascinating thing here you know Satoshi created Bitcoin and Bitcoin has embedded into chaos engine the more chaos in the world the more valuable the Bitcoin is

and every single time economy collapses it creates a stampede toward Bitcoin every time someone prints too much money it drives up the value of Bitcoin

Bitcoin is at an all time high in Argentina it's an all time high in Turkey right if if the Turkish government collapses Bitcoin will be even more valuable so Bitcoin is is this fascinating way to harness entropy right and and to

be powered by chaos there's a certain piece of mind that comes from saying I have plugged into a network that is fed by chaos and also fed by order simultaneously because the genius in Singapore will find a way to make billions of dollars with Bitcoin and make the Bitcoin price go up

and then the bad shit crazy dictator in Africa will destroy their economy and make the price of Bitcoin go up and I'm just going to hold and let the rest of the world unfold as it will.

So we started the conversation talking about entropy and we and the conversation talking about entropy I love this connection between Bitcoin and physics so I really enjoyed the conversation Michael for your support and for your time.

Yeah thanks for having me.