“This is A Once in a Lifetime Opportunity” Michael Saylor on how Bitcoin will boost your portfolio!

Summary

In this insightful episode, Michael Saylor passionately discusses the transformative potential of Bitcoin on financial portfolios, forecasting an optimistic growth to $13 million per coin. Saylor explains Bitcoin's journey from a speculative asset to a recognized digital capital, fueling its acceptance among financial institutions like BlackRock. MicroStrategy's success story is shared as a testament to Bitcoin's power, with Saylor advocating for its role as a secure store of value over traditional currencies. By emphasizing supportive government policies, Saylor envisions a future where Bitcoin could significantly influence the global financial landscape.

Highlights

• Michael Saylor discusses the potential of Bitcoin reaching $13 million per coin. 🚀
• Financial institutions like BlackRock are legitimizing Bitcoin as an asset. 💼
• MicroStrategy's success is linked to heavy investment in Bitcoin. 📈
• Bitcoin is seen as a global digital capital, preserving buying power better than traditional currency. 🌍
• Institutional adoption and progressive government policies can propel Bitcoin further. 🏛️

Key Takeaways

• Bitcoin has the potential to reach $13 million per coin, according to Michael Saylor's long-term forecast. 📈
• The legitimization of Bitcoin by financial giants like BlackRock is boosting its credibility and adoption. 💪
• Bitcoin is becoming recognized as digital capital, promising robust financial security. 🏦
• MicroStrategy's strategic adoption of Bitcoin has made it one of the most successful stocks recently. 🚀
• Government support and policies can greatly enhance Bitcoin's role in the financial ecosystem. 🏛️

Overview

Michael Saylor, in a riveting discussion with Tom Bilyeu, elaborates on how Bitcoin is a once-in-a-lifetime opportunity for investors. He forecasts Bitcoin could skyrocket to $13 million per coin, arguing that its adoption is bolstered by education and institutional acceptance. 🚀

With giants like BlackRock integrating Bitcoin into investment portfolios, its legitimacy is growing, Saylor claims. He points to MicroStrategy's strategic move to embrace Bitcoin, which has propelled the company’s success by aligning its financial strategies with Bitcoin’s growth. 📈

Saylor further highlights how Bitcoin serves as digital capital, offering a reliable store of value compared to traditional currencies. He suggests that government support and policies could turbocharge Bitcoin's integration into the mainstream financial ecosystem, underlining its potential to revolutionize economic stability. 🌍

“This is A Once in a Lifetime Opportunity” Michael Saylor on how Bitcoin will boost your portfolio! Transcription

• 00:00 - 00:30 Michael sailor welcome back to the show happy to be here it is very good to have you now at the time of recording Bitcoin is over 100k and has been for quite a while at this point so I think the question of is Bitcoin real is dead uh but now the question becomes how does Bitcoin go from where we're at at a little over 100k to the 13 million a coin that you consider the base case yeah I think I've always said
• 00:30 - 01:00 it's either something or it's nothing if it's if it's embraced as an Institutional asset if it's legitimized as an asset then it's not going to zero and if it's not going to zero it's going to a million and I think the the short answer to your question is education and with education comes adoption and at this point you just have
• 01:00 - 01:30 95% of the world that still doesn't quite understand what it is and that means I mean the way Bitcoin marches from 100,000 to 13 million and and by that's for your listeners you're referring to my long-term forecast I gave that forecast in Nashville in July of this year and is based upon the Bitcoin 24 model so the Bitcoin 24 model is an open- Source macro model of
• 01:30 - 02:00 Bitcoin adoption and macroeconomic development over the next 21 years anybody can go to uh Google and they can Google Bitcoin 24 they'll find it on GitHub you can download that model you can plug in all your own assumptions and you can check uh what we uh what we thought but my forecast is Bitcoin in essence it it's growing 60% a year uh for quite a while now and I'm forecasting it will decelerate to 20% a
• 02:00 - 02:30 year over 21 years but that means on average it grows about 29% a year ARR and that 29% a year for 21 years gets you to 13 million of coin and so what do I expect to happen well I expect um lots of high nut worth individuals uh that previously thought it's too risky or it's too scary they see it legit IED by Black
• 02:30 - 03:00 Rock now black rock is giving guidance that you could have 2% of your portfolio in Bitcoin and they're seeing the ETFs like ibit and they're noticing that this these are the most successful ETFs in the history of the world and black rock has got the most successful e ETF ever launched and now they're seeing the world's largest money manager Black Rock with more than 11 trillion dollars of money managed they're seeing them publish uh scholarly thoughtful
• 03:00 - 03:30 responsible white papers on portfolio allocation and instead of the 6040 model uh with 60% equity and 40% bonds now you've got 2% that they're saying you might want to put into a crypto asset like Bitcoin so I think that you've got uh that group of people that are finding it I also think you've got institutional investors that are moving into Bitcoin
• 03:30 - 04:00 more frequently now a lot of them are big investors in micro strategy a lot of them trade micro strategy options um and uh they have Micro strategy been the most successful stock in the S&P index we're not in the S&P but we're more successful than all 500 S&P companies for the past five four years I think this year too so we're getting the attention of mainstream investors and and that's bringing a set of new investors to the asset class
• 04:00 - 04:30 because when they buy our stock we buy Bitcoin with it I think the third uh driver is a bunch of Bitcoin standard companies a lot of companies are recapitalizing their balance sheets on bitcoin micro strategy was the first but mea has done it m and Riot just announced they doing it R IO and uh the most successful company in the Japanese stock market this year is metap planet and they just did did it
• 04:30 - 05:00 and similar scientific just did it and they tripled their stock in very short order so you've got like a half dozen companies that are recapitalizing to the Bitcoin standard um but you've got 60 companies that have Bitcoin and there's a lot of companies that are getting more heavily involved I think recent oh recently Hut 8 announced hut hut and then um Rumble rum and so a
• 05:00 - 05:30 bunch of public companies that are kind of uh they're innovators and they're they've got fairly open- mind and they're flexible and the really important thing about that Tom is when a public company adopts Bitcoin they start sweeping their cash flows into it but then after that they may start issuing equity and then after that they can borrow money so um uh Riot just this week issued uh a $500 million conver able Bond and then they bought Bitcoin
• 05:30 - 06:00 with it and Mara is this Riot games no Riot uh Riot Bitcoin mining are r i o t Riot um and so mea did the same thing they did a billion doll convertible Bond deal and they bought Bitcoin and then they did another $850 million Bond deal two weeks later and micro strategy when we announced uh we were going to pursue a Bitcoin treasury company model we we
• 06:00 - 06:30 announced that October 30th of just this year and we've raised uh you know something in the range of 15 billion dollars in the last six weeks and so you're talking about large sums of money that are flowing I mean much larger sums it it took us 30 years to accumulate $500 million in order to buy Bitcoin in 2020 it took us four years to accumulate
• 06:30 - 07:00 10 billion and we bought Bitcoin over the next four years but then it took us like four weeks or five weeks to accumulate the next 15 billion so you would check off that box which is company adoption then after that um you've got you've got like uh institutional adoption you know the endowments and the Pension funds you know there's now there's now Pension funds that are starting to allocate to bitcoin and there'll be big university endowments and and 50501 c3s and
• 07:00 - 07:30 insurance companies and so that's another driver and um and then you've got nation states and of course the news of uh the week is the United States strategic Bitcoin reserve and the US already has about 1% of the Bitcoin if they don't if they don't sell it that's a big deal and Donald Trump said never never sell your Bitcoin and
• 07:30 - 08:00 then he was elected president but now you have Senator Cynthia lumus advocating for a US strategic Bitcoin Reserve you have a very supportive cabinet lots of cabinet members that have been Pro Bitcoin and then Senator lumus just posted a tweet just a few hours ago having met with the incoming Secretary of the Treasury Scott bessent saying that uh she looks forward to working with him on this and presume that means that he is also supportive
• 08:00 - 08:30 and uh we know that the Trump White House and Trump is supportive he was asked on the New York Stock Exchange floor I think Yesterday by Jim Kramer about it will you do something like this and he said I think so I think we need to lead so I think that that's also positive so let's just say there's a lot of different entities in the world with capital I mean who doesn't want to keep their money who doesn't want more money
• 08:30 - 09:00 right everybody wants to either keep their money or they could use more money and so Bitcoin is digital money it's the greatest digital monetary Network in the world but maybe it's the first example of what I call digital Capital it's money just so I can help people not be confused money is a generic term but it decomposes in the modern world into two elements currency and capital currency is the dollar and the peso and the
• 09:00 - 09:30 Euro that is the medium of exchange asset it is designated legal tender that means you can swap it without paying a tax bill on it and it means it's liquid INF fungible and probably it's good for paying taxes and everybody prices things in it that's not going to change the world Reserve currency is the dollar the dollar has been the world Reserve currency since just after World War I and uh in different forms the dollar is getting stronger not weaker but there's
• 09:30 - 10:00 another aspect of money it's store of value if I had a liquid fungible asset that was a store of value that I could give to my children's children well nobody thinks that's the dollar and nobody think well nobody in the US thinks it's the dollar rich people in the US don't have 50% of their of their assets invested in dollar bills and uh what they do think it is in the modern world is they think it's the S&P index like the Vanguard 500 or P or some Index
• 10:00 - 10:30 Fund or maybe they think it's uh real estate and real estate's a store of value but it's not liquid in fungible so it's a little bit different to it's difficult to swap it out in units of a million dollars every day and so it's it's not quite money but it is capital in that regard and um and gold for 5,000 years was kind of capital it was go a bar of gold bullon was that long-term store of value asset that people
• 10:30 - 11:00 use Bitcoin is emerging as digital capital and people they're not going to use it as a medium exchange to buy a cup of coffee but if you want to buy something to give to your granddaughter that she can't mess up even though she's three years old and you just want and you don't want to worry about it every day and you don't want to trade it and you don't want to worry about anti trust and whether or not there'll be rent control on the building or or renting it out you just buy her one Bitcoin and you put it in
• 11:00 - 11:30 coold storage and then 60 years from now she'll be rich because the one Bitcoin will probably be worth 50 million or hundred million right and so that what's going on right now is the emergence of Bitcoin as a digital Capital Network for the world and the thing driving it from 100,000 to 13 million over the next 21 years is the adoption of it as a capital asset by people that have have the wealth have the capital all right A lot
• 11:30 - 12:00 of people in my audience are not going to understand why you can't just store your money in dollars um I have a whole tie rate about it but I'd love to hear why how do you explain to people why you can't just put your money in a bank account or under your mattress in dollars the simple answer is the supply of dollars expands about 7% a year every year for the past 100 years and what that means is that if you want to buy something
• 12:00 - 12:30 that is a very scarce desirable asset that the government can't make more of and that manufacturers can't make more of if technology and capital and machinery and robots can't make more of it it's scarce and desirable here's an example um an acre of beachfront property in Palm Beach or or a beach front house in the Hamptons or waterfront property in Miami Beach
• 12:30 - 13:00 that's a desirable place to live you can't make more of it and if you go back a 100 Years you'll see that the value of that acre was $110,000 and you go forward a 100 years and that is about $10 million and for those who are very quick at math they'll realize that works out to 7% increase in price every year for 100 years and that's why you know that's why people buy houses for $100 million
• 13:00 - 13:30 on the beach in Palm Beach and my house the house that I'm in right now it was sold in 1930 and I have the deed on my wall and it was sold for $100,000 in 1930 if you put that $100,000 in a vault and you kept it safe and sound for the 90 years and if you took it out it would pay about 8 to 12 weeks of my property tax
• 13:30 - 14:00 on this house like you literally couldn't keep the house for eight weeks go ahead you say it in my way tell me if this resonates with you the reason that you can't store your money in cash is that the government uh steals your buying power by printing more of it I find it's very sobering to look at it as theft um does that resonate with you or do you think I'm being hyperbolic no you're correct uh in essence the inflation of the dollar supply means that your wealth is cut in
• 14:00 - 14:30 half every 10 years if you hold all your wealth in cash and and uh it just it's the rule of 72 right you divide 7% into 72 that's the half life of the asset so the half life of your wealth is 10 years if you store it in cash if someone gives you an asset you can invest in that goes up 7% a year you're keeping up with inflation you're not getting wealthier but you're not getting poorer you're just treading water you know and
• 14:30 - 15:00 if you're beating that hurdle rate then you're getting a bit wealthier so you so once you understand that you can see that you can't um you can't preserve your wealth for long periods of time in a fiat currency and the best fiat currency in the world Tom is the dollar but in most other currencies they inflate 14% a year and that means the half life of your wealth is 5 years but in a weak currency like in Turkey or
• 15:00 - 15:30 Syria or Iraq or Venezuela or Argentina it used to be for 20 years the inflation rate looks more like uh 28% a year or 30% a year and we take example the peso the peso went from one peso to the dollar to a thousand pesos to the dollar over 20 years Jesus okay so I don't you know in America you got to keep in mind
• 15:30 - 16:00 you're an American you live in the greatest country of the last hundred years America won every war right we were the winner of World War I we got richer we were the winner of World War II we never lost the war we were the winners of the century our currency lost 99.9% of its economic power over the hundred years but if you went to Nigeria or like Germany the currency crashed like three times two or three times
• 16:00 - 16:30 right in Japan the currency crashed you know in Russia it crashed three last time the Russian currency crashed in 98 the the Brazilian currency crashed completely uh 25 years ago the Argentine currency crashed about four times in a 100 years so if you're an Argentinian and you're 30 years old you already know what it's like to have hyperinflation because you live the entire cycle it's just Americans don't and so when you're if you're taking
• 16:30 - 17:00 advice from an American Business person like Warren Buffett or Charlie Munger well I mean they didn't live through the Yar Republic they didn't live through the collapse of the current by the way the currency collapsed in Venezuela it collapsed in Argentina it collapsed in Brazil it collapsed in Cuba it collapsed in Russia it collapsed in every single country in Africa you see and so foreigners
• 17:00 - 17:30 actually get it a bit better right it's like the you the bank's going to take your money the currency is going to zero the government's going to promise you it'll be okay and tell you to put your money in the bank then they're going to inflate the currency freeze your bank account crash the currency and then tell you it's worthless that's what happened in Cypress not too long ago if you want to go and Google that and so the real promise of Bitcoin is very simple it's a bank in cyberspace that won't steal your money and it's an asset that you can store
• 17:30 - 18:00 your life savings in that nobody can debase or corrupt and those are two powerful promises for the first time in the history of the human race no one ever gave you that those two promises ever before now yeah the the thing that um and a lot of this started with me getting to know you researching cryptocurrency um realizing the just absolute devastation that even in America is happening with with inflation
• 18:00 - 18:30 uh and understanding this difference that you're now talking about in a really clear fashion that until I started researching you for this episode I'd never heard you delineate it this way that uh money is bifurcated into those two elements you've got the money that you spend cool but then you've got the money that you're trying to preserve your wealth over time uh when I tell people the way you should think about your house is not something that's going to go up in value over time you should think of your house as something that you pay an insurance policy against the upkeep the property tax as a way to match inflation which is unless your
• 18:30 - 19:00 area becomes disproportionately desirable and that does happen so like Austin went up in value because people just flooded into that area but for the most part uh what you're going to see is actually just keeping up with inflation that as the dollar is devalued it looks like the price and the value of your house is going up but it's really not now I think that's fair by the way I think that's that's definitely a good way to think of it yeah I think so my thing my own company when I start talking about this stuff uh my employees
• 19:00 - 19:30 look at me a little bit like I'm crazy because I'm so aggressive about getting people to understand and it'll be very interesting to have this conversation with you that ultimately the stock market is gambling and once you understand that people have been forced to become gamblers based on inflation that you have to find a way to outpace inflation otherwise you lose your money and they're really smart among us look at the capital system look at look at the equities market and they go oh oh cool I have a really complex way that I
• 19:30 - 20:00 can find Arbitrage basically in these moments where if I find an area of risk that I think I understand better than the next person I can come in I can buy that asset it goes up in value compared to what I can sell it for down the road and I'm able to sell it for a bigger win than inflation and and that forces everyone to play that game or to just have their buying power stripped away from them which of course is what happens to the vast majority of call it normal to undereducated they're they're
• 20:00 - 20:30 just going to get eaten alive because they don't have the time energy or intellect to figure out this relatively complicated game okay so with all of that as the structure of why even the average person should care about this to a screaming degree um there's an idea that that you say but you go by quickly that I think if people understood it's really going to help them so you you've said I want to see the entire world recapitalize in Bitcoin now when you say
• 20:30 - 21:00 recapitalize is what you mean hey that part of your wealth that you want to store to maintain purchasing power over time all of that instead of being in real estate instead of being in treasuries instead of being in equities that should move over to bitcoin is that what you mean yeah that's a good way to say it yeah you've articulated that quite well yes recap build yeah build your house on a firm foundation don't build it on
• 21:00 - 21:30 sinking sand don't build it on a swamp build it on a a granite rock on granite on shist and I guess if I could give the math the risk-free rate of the dollar if you're capitalized on US Dollars and you were to say buy uh treasury bonds the risk-free rate is something close to suur or the standard over night funding rate and you know that ranges but after
• 21:30 - 22:00 you after you get paid that rate and you get taxed on it you know you might get paid 5% you get to keep 3% after tax maybe if you're taxfree you get 4 and a half% and if you're taxed you get three so the risk-free rate of return of your capital on that dollar standard is like in the 3% range we'll get back to my conversation with Michael sailor in a moment but first first let's talk about digital security as a CEO of a media
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• 24:00 - 24:30 Theory and now let's get back to my conversation with Michael sailor the risk-free rate for Bitcoin as I just described it to you 29% over 21 years about 30% so the way I look at Investments is when you're pitching me an investment idea I say well I've got a lot of money in Bitcoin and I'm expecting about 30% risk-free for the next 20
• 24:30 - 25:00 years you have to actually pitch me an idea that generates more than 30% plus the risk premium plus the tax efficiency if you told me here's a thing that'll make me 50% a year but I it was going to be taxable that might be 40% a year or 35% a year and I'm like well after the risk it's still not as good as my risk-free rate of 30% so if you're capitalized on bitcoin if you understand it and if and if you understand uh and if you have a long
• 25:00 - 25:30 time Horizon if you're going to hold it more than four years you don't care about the volatility all you care about is the annualized return the annualized return hold on because there's a lot of assumptions in there so I know a lot of people are clutching their pearls right now about Bitcoin being referred to as risk-free so can you break down for us the difference between that volatility and then how you can have the confidence to look at this and say no no no the the risk is merely a timeline question because I think a lot of people will
• 25:30 - 26:00 will take exception to that yeah so well the dollar is zero ARR zero volatility that is to say the dollar goes up 0% against itself each year and the dollar is zero volatility against itself each year so if you're on the dollar you're living in flat land and and you're you're a stationary person in flat land a pedestrian in flat land Bitcoin is going up 60% a year
• 26:00 - 26:30 against the dollar how long well since micro strategy made its first investment 4 years ago it's 60% but if you stretch back 6 8 10 years I think it's also 60% so like a decade but you can measure it back a decade and you see it's going up 60% a year and it's 60 volatility it's it's a 60 Vol against the dollar so you should think of of Bitcoin as an asset it it's like you're on a speeding train going 60 M an hour and you've got a
• 26:30 - 27:00 Flywheel spinning 60 RPM and The Pedestrian on flat land is standing on the plane watching the train go by thinking this is scary it's going to suck the you know the oxygen out of my lungs and uh they're thinking my money isn't an asset because it goes up 0% a year so they have a different view toward money than the view of someone on the Bitcoin train the person the person with a million dollars of cash is going
• 27:00 - 27:30 to have a million dollars of cash in a decade a person with a million dollars of Bitcoin is going to double their Capital every 18 months if they just hold on to it right and so they're going to double it once twice three four four times at that rate right um the volatility really does come down to sorry and I'll let you get back to that but this uh this does come down to a belief that when you look into the
• 27:30 - 28:00 future that the the setup that makes it have the 60% ARR is going to continue because I look at this and I say the only reason that it has that kind of reward is that it is volatile that that there are question marks because if there were no question marks everyone would flood in near instantly it would hit homeostasis and that would be that um and so I I do I think Bitcoin is anything but risk-free uh but I do think
• 28:00 - 28:30 that the volatility is advantageous for the people who are going to be right uh about the if people are right about the upside that's the most Fair way to say it um why do you think the best way to conceptualize this is as risk-free Howard marks would say volatility is not risk volatility is volatility right a Margo round you know or a carnival ride or a roller coaster is volatile the risk part is if you fly
• 28:30 - 29:00 off the roller coaster right if if you if the marry go around stops working Etc um so the fundamental risk of Bitcoin is the existential risk of an extinction level event and Bitcoin right if space aliens come down and say we're taking your Bitcoin away from you right uh then I guess there's risk if if some Evil Genius finds a way to create a cyber virus that infects and destroys bit the
• 29:00 - 29:30 Bitcoin Network instantly irrevocably that is the risk so but that's kind of like the that's the existential risk you take when you get on the airplane if it crashes that's the existential risk you take when you cross the street that's the existential risk you take when you put a piece of food in your mouth and I say and you say well can you imagine that hurting man I say yeah if I put poison in the food you're dead Okay so do you trust me do you trust the waiter when you put the food in your mouth
• 29:30 - 30:00 right so yes there is some risk in life and the existential risk is that extinction level event you don't think there's another layer of risk in that not not existential because you're saying the risk-free return of Bitcoin is 60% but I think there is it it seems strange to me to not allocate some percentage of H maybe it doesn't grow that fast maybe it doesn't remain 60% you yourself say over the next whatever 21 years it's going to
• 30:00 - 30:30 come down it'll average out over about 29% what if that accelerates and uh the return ends up being substantively less than that um so I get saying that this has a better chance of having a higher uh annual rate of return than say the S&P 500 which maybe we clock at 15% we say nah ah we might not hit 60% but we're probably not going to drop below 15% therefore if 15% is our hurt rate it's going to be something north of that
• 30:30 - 31:00 but I think where people trip up with your language is this idea of the inevitability of the 60% what would you say to that so we're dealing with three concepts risk volatility and performance okay so I've I've addressed the risk issue by pointing out that there is existential risk in your given Network or frame of reference and I just want to make that point that once you understand that risk uh of being in that
• 31:00 - 31:30 frame of reference then you have to figure out what's the source of the volatility and the performance and if you don't understand why the asset does what it does if you don't understand the economic physics involved then you'll think it's random and you'll and you'll feel like it's RI the performance is risky but I want to give you an example of a physical metaphor I'm a hiker and I come across a
• 31:30 - 32:00 mountain lake and the mountain lake has 500 trillion gallons of water in it and yeah I don't know how it got there but it's there the water's chilly it's clear and I look down and there's a waterfall coming off the mountain lake and the waterfall you know it's very beautiful and and it's very turbulent right water is turbulent in a waterfall water is not turbulent in a glassy lake
• 32:00 - 32:30 so the the turbulence is volatility right and the and there's waterfall and then I look at it and now if you look and you say I don't know why that water falls downhill you know I don't know if it'll keep falling downhill but I hate the volatility then I guess you can take a selfie in front of the lake go swimming get cold and leave but if let's say you're not a tourist but you're an engineer so you come across the same Lake and you see the waterfall and you see the 500
• 32:30 - 33:00 trillion gallons and you think about gravity and you think about sunlight and now I know how the water got there the water got there because the sun Shone on the ocean the O the water evaporated from the ocean it rose up in the clouds the wind blew it against the mountain it condensed and it rained into the mountain and the and the water ran off the mountain into the mountain lake I know how it got there and then I think well if I create a dam near that waterfall I build myself a dam
• 33:00 - 33:30 I put a turbine on the dam and then I drop a billion gallons of water I Channel a billion gallons of water through the dam drop it 60 ft and then I plug that into a hydroelectric power plant I spin the Dynamo I make electricity and then if I'm really smart I run the Electric power line to a village down in the valley and I light up the village or I light up the city now someone can come along that doesn't understand physics and they can say good idea Junior but what are you going
• 33:30 - 34:00 to do when the water stops flowing downhill well I'm like uh well I actually think the water's flowing downhill because of gravity new Newton solved that for me and then someone else comes along and says good idea Junior but what are you going to do when you run out of water in the lake I'm like well there's 500 trillion gallons and I take out my calculator and a billion gallons or whatever it's going to last a long time like well it's eventually going to run out I say well you know the Sun keeps shining on the ocean and the
• 34:00 - 34:30 ocean keeps lifting the you know the water out of the ocean and it drops it on this mountain and that's why there's water in the mountain but you're right there's some kind of natural limit and I suppose there's a limit to the amount of energy I can pull off of this Dam but it's a large number it's a lot more than your donkey cart and it's a lot more than your steam you know wood stove and it's a lot more than your Coal Power Plant and maybe it's a lot cleaner than burning you know gasoline so I'm an
• 34:30 - 35:00 engineer and you're seeing you're seeing performance thinking it's random and that's why it's going to stop and you're seeing volatility and you're thinking it's random and maybe it'll stop and and here with Bitcoin the reason bitcoin's performing is is a it's volatile but B it's more en it's a more energy efficient State the water is Flowing down 5,000 fet because it's more it's a lower energy State a th000 feet below
• 35:00 - 35:30 the mountain you know it's a it's a low energy State you've got potential energy in the water and it wants to go to ground and that's just physics the 500 trillion gallons of water is $500 trillion dollar and the $500 trillion dollars of assets are sitting in real estate and currency and B and Sovereign bonds and corporate bonds and artwork and equity and they're s they're invested in the stock of a company in
• 35:30 - 36:00 Africa that's going bankrupt right there's in they're invested in real estate in Cuba in Venezuela in Nigeria they're sitting in a warehouse that's crumbling it's got a 40 useful 40-year life and so entropy and inflation there you know you you invested hundred billion dollar in a war zone and then a war broke out and your money got Deval your asset got
• 36:00 - 36:30 devalued all of the things going on in the world the war the chaos the competition the inflation the entropy the passage of time the hurricane the covid you know vac vaccine the covid virus all of these things impaired the value of your assets what the reason Bitcoin is going up it's not an accident it's because capital is is economic Mass it is Flowing from a high
• 36:30 - 37:00 energy State the Mountaintop to a lower energy state to a more efficient state it is steam condensing to W condensing to water condensing to ice giving off energy just like in any chemistry lab you would learn this and at the same time there's this volatility driver Tom which is you have an open Capital Market and and on Saturday night when there's a missile crisis someone can make A1
• 37:00 - 37:30 billion short bet levered up 100 to one and panic and they can do it in Bitcoin and then on Sunday morning when the missell crisis is has passed and nuclear war did not break out they can go long and they can reverse the trade and bitcoin's the only asset where you can sell a billion dollars of it in a minute at a 100 to one leverage and you can buy a billion back in a minute with a 100 to one Leverage on Saturday night and Sunday morning if you could do
• 37:30 - 38:00 that with your upper east side apartment then property values in the Upper East Side would also be more volatile and if you could do it with picassos that would be more volatile because if people get drunk and they panic and they short your ass at 100 to one and change their mind six hours later when they get up with the hangover you're gonna have volatility so the volatility is a feature it's not a bug it's because it's the most useful
• 38:00 - 38:30 thing in the world from a capital Market point of view and if and if it is that useful then a a Bloomberg jockey in in Singapore is going to raise 20 billion in capital and they're going to make it available for you to trade one Saturday night or they're going to make $10 billion do of credit available to you on Sunday morning because they're getting paid an obscene fee to do it and once you understand the assets
• 38:30 - 39:00 appreciating because it is thermodynamically sound and it represents a lower more efficient energy state for capital or for money and once you understand it's volatile because the network is more useful and more leverageable it it is basically the number one it is the number one source of credit or leverage in the world for everybody all the time and once you understand understand it like that you see the volatility and the performance
• 39:00 - 39:30 are a feature of the engineering and the technology they're not a happen stance they're not accidental they're going to continue in the same way that water will flow downhill and you're just like the Normie that sees a fire and and it's like I'm GNA harness the fire and I'm going to sell it and the Nory goes well what if the fire goes out and the engineer goes I'm actually going to create a machine an internal combustion engine with eight
• 39:30 - 40:00 cylinders and the fire is not going to go out and don't you see how the six-year-old boy scout like the fire goes out and then Henry Ford creates a machine such that the fire doesn't go out and when you get on a jet airplane and fly across the Atlantic for 12 hours do you realize that your life depends upon the fire not going out in the Jet Engine and you're surely dead you will freeze death before you before you
• 40:00 - 40:30 happen to um suffocate should that fire go out and Engineers solve that problem for you and so the difference between fear and risk and anxiety and and competence and commitment is understanding the physics and the engineering of the money involved okay uh I think treating it like um physics is brilliant I think the
• 40:30 - 41:00 more we can get out of the metaphor into the reality the better off we're going to be so let me set the stage and I'm going to walk us through some of these beats of the non-m metaphor version of this so um you just made a presentation to Microsoft uh to get them to recapitalize using Bitcoin and they voted against it so was 0.55% of people were for it uh the rest were not so when we when I listen to you I often get the sense that you really have come to
• 41:00 - 41:30 understand the nature of capital Flows In A Way certainly as it integrates Bitcoin better than anybody else and so I feel a bit like I'm talking to the Future um so I really do want to map what you just said about it being the physics I thought the the waterfall analogy is really really brilliant um I'm curious to see if you think this is a water if the waterfall is the better metaphor or if a siphon cup is a better metaphor um so let me walk through what
• 41:30 - 42:00 I'm understanding so when you say high energy state of money I assume you mean High entropy that that there's so much chaos happening the goal would be to get out of a high chaos environment with inflation money printing all of the the chaos that that reeks on one's ability to store Capital this is where again people need to differentiate between currency and capital so we want to move that into what you're calling a low energy state but it's basically uh there are fewer influences on it it is it is going to be there um it has the
• 42:00 - 42:30 volatility which we'll get to in a minute but in terms of a place to store your Capital once you're not in a short-term time Horizon you're in a longer term time Horizon there are just less influences on it so far so good yeah yeah so far so good okay so I think what makes that metaphor so powerful is that if I'm understanding you um I'm going to use a siphon metaphor instead of perhaps the more complete waterfall metaphor I'm not sure yet so let me use the the siphon metaphor and see if I'm
• 42:30 - 43:00 understanding where you're going here's what I read when I if I were going to make a um a bull case for why this is going to play out exactly like you're saying I go uh everybody who's awake and paying attention to Capital markets is going to watch people get their 60% ARR year after year after year after year after year for people I know you said the stats but for If people really understood what you did with micro
• 43:00 - 43:30 strategies taking it from a company where you're like well I guess this is dead to being uh perhaps the most valuable stock on the stock market insane and we'll talk more in a minute about how you did that but the siphon effect is capital paying attention so it will first be smart Capital who actually understand what's going on they'll move first this is obviously what we're seeing play out then all the adoption Stacks that you walk people through and then it it and this is why I say it's a
• 43:30 - 44:00 siphon it just gets to the point where you can't justify the money not going into it and so now it's just by you no longer need people to understand what's happening just just in the same way that there are bonds of water there sort of bonds of narrative about where one should be preserving their capital and of course people are still going to preserve their capital in buildings and an art to some extent you've mapped this out for people you estimate that um I think it's I have the exact numbers here but there's a a percentage of capital
• 44:00 - 44:30 that people store into so 450 trillion this is rough numbers 450 trillion in assets are held for utility so buildings things like that it's not going to change but there's 450 trillion that's long-term capital pure store value and so the siphon becomes everyone will see over time that by moving out of this chaotic state where there's inflation etc etc uh down into the low energy state of Bitcoin where there is not uh
• 44:30 - 45:00 that over time you will approximate I don't think you would ever say 100% but just for Simplicity you will approximate 100% of that long-term store of value Capital going to the most efficient highest return place and as of today there's nothing even close to bitcoin yeah I think I think that's reasonable to say I mean I'm not saying 100% of long-term capital becomes Bitcoin what I'm really saying is uh
• 45:00 - 45:30 long-term capital is like 450 trillion I think there's 3% entropic lapse there there's 3% loss in that Capital every year either due to inflation or entropy whether it's a financial asset or it's a physical asset and that works out to 13 you know 13 to 15 trillion dollars a year of efficiency and that's just uh
• 45:30 - 46:00 people or institutions owning things and the building falls down the company fails right Etc I think uh I I would liken it to well I mean all the waters in the lake and all I got to do is carve a channel and the water's going to flow downhill and why because that's just the law of physics if I took all your money like I don't know how much of your money do you have stored in a bank in Africa right
• 46:00 - 46:30 now Tom what percentage of your wealth what if I took it what if I took it all what if I'm what if I'm Dr Evil and I took all your wealth and I moved it into a random Bank in Africa and then I said hey uh April fools Tom I moved your money here but here's the key you can leave it there or you can move it back to the US would you leave it there or might you move it back I would be moving it back yeah but so
• 46:30 - 47:00 would I have to force you to move it back I mean what wouldn't there be a natural tendency on your part to move the money to a place where you feel more secure with the money like human nature is such that that uh there's a lot of people in the world um do you know that if you went to China and you gave everybody in China the option to move their money to the US not all of them would but a lot would enough so that the
• 47:00 - 47:30 Chinese government makes it illegal to do so right the reason there are capital controls there's a limit of $50,000 a year is because if people could they would so there's a natural tendency of people to want to move their capital from a less secure more chaotic more uncertain place maybe where their property rights are left less I mean you remember the you know remember in Cuba when the boat people when everybody wanted to leave Cuba and come to
• 47:30 - 48:00 Florida right uh people generally want to move from the less secure to the more secure place they want to move their person they want to move their money Etc it's it's human nature I think if we come to this uh to this siphon analogy well what there's just so much energy that gets released um when you move uh from uh from an uncertain unsafe uh environment to a to a more certain
• 48:00 - 48:30 safer uh more sound environment that sometimes you don't have to convince people like for example a lot of times if if the head of the household could leave uh a war zone don't you think they'd bring their entire family with them like the kids might not want to go my dad made me go to places I didn't want to go you know why when I was growing up because his job you you know how many children go to a place they don't want to go because their their parents get a job that
• 48:30 - 49:00 they're chasing money Tom so people Che you know why why did everybody come to the New World money you know everybody comes up with different ideas it was all about property rights and property rights was money that's why the dupants came that's why everybody came so so generally you will find why did people go west money they went they went West for land they went they went left West for property so um if you come back to
• 49:00 - 49:30 micro strategy stock well micro strategy capitalized on bitcoin and our stock started working so people started buying the stock and uh it was volatile well it's so volatile that we have a hundred billion doll options Market that's formed on top of our stock so our our company went from a billion doll market cap to a hundred billion doll market cap in four years our options Market went went from zero to100 billion in four
• 49:30 - 50:00 years our volatility went from 20 or or 15 very low Vol to 120 okay you can look at that as a negative or a positive but here's the positive 120 is like hot money it's it's it's like Fast RPM um it's only risk if the volatility comes from doing risky things if it comes from gambling or doing stupid
• 50:00 - 50:30 things if I go into a casino and I play a game where the odds are against me and I'm winning well my I'm also going to be volatile but I'm volatile by taking risk maybe stupid risk but if I build a centrifuge or a flywheel and I spin it really hard I might be volatile it might look volatile to someone that doesn't understand polar geometries or doesn't
• 50:30 - 51:00 understand physics but it's not risk it's just it's just a machine that's that's creating motion or kinetic energy so when micro strategy created that 120 Vol and to be clear for your listeners um to put that in perspective if you stacked up all of the S&P 500 companies 120 Vol would mean you're the number one most volatile company the S&P index okay just just to oversimplify here or not
• 51:00 - 51:30 even oversimplify it but to State it as plainly as possible uh it means that you are doing wild swings up and wild swings down very rapidly yes yeah in price we're oscillating we're oscillating uh maybe in an unpredictable way it's it's like um you know like if I do this with a piece of balsawood it's like a kid's propeller toy like it's little toy you know maybe those things that scare away the
• 51:30 - 52:00 mosquitoes at your at your uh tropical barbecue if I do this with a five pound weight it's a weapon or a weat eater or a lawn mower or something right I mean it's it's a piece of farm machinery if I do this with $40 billion it's a turbine it's a it might move your jet across the Atlantic Ocean right there's
• 52:00 - 52:30 you know there's 15,000 pounds of trust thrust in a jet engine but it's more like why is it a turbine what what is the um God this is where I don't know physics but what is the energy output uh is it that money is moving from one person to another I mean that's all I think about when I think about volatility you get one guy panics he bought high he sold low and then the next guy comes in and buys low and sells high and so one wins one loses it's if I give you a stock option on the dollar bill and I say Tom the dollar
• 52:30 - 53:00 bill is zero volatility but I'm going to give you an option to buy 10 more dollar bills for $1 for the next year well what is the option worth it's nothing right because the dollar is going to be worth the dollar I mean so a stock option with no volatility is worthless the black schs equation is the a is the conventional way to value a stock option suffice it to say when the
• 53:00 - 53:30 stock op when the volatility goes to 15 there's a little bit of optionality when it goes to 60 there's a lot of optionality when it goes to 120 you know the options exploding in value and let me give you let me give you the Practical value of it if if you had um ,000 or a million let's say a million dollars you have a million in the bank well with zero volatility
• 53:30 - 54:00 you can probably get paid Sofer so you're getting paid 4% to take the risk of holding dollars in the bank 4% when you hold that money in the S&P index with the volatility of the vix or 15 you get you might get paid uh 12 to 15% interest to take the risk of holding one share of spy the index when you buy when you hold a share of Bitcoin via ibit or a Bitcoin the
• 54:00 - 54:30 volatility is 60 you might get paid 70% 80% to hold that that million dollars in Bitcoin and you're taking the downside risk but you're getting paid that that that call rate when you hold a share of micro strategy if you were holding a million dollars of micro strategy and you were selling the calls at the market with 100 20 VA you could get paid 200% annual
• 54:30 - 55:00 interest you might not even know what it is like you don't know what Bitcoin is you don't know what micro strategy does all you know is that if you if it's not going to zero in the next 12 months someone will pay you 200% interest so your break even point is six months right it's like if I can hold it for six months and it doesn't go to zero I'm getting paid 200% getting paid my money back my break even point is six months on something I don't
• 55:00 - 55:30 understand uh there was an options Trader on television today he was saying yeah I mean none of them really understand what micro strategy does by the way like understanding what we do takes an hour understanding what Bitcoin does takes a $100 they don't know that here's what they say uh while the share of stocks about $400 and we just sold a $700 call option for 180 bucks for one year and so someone's going to pay us
• 55:30 - 56:00 $180 and the worst case is micr strategy rallies and we'll double our money and we'll get taken out of the trade but we're thinking that it'll whatever it'll do unless it gets cut in half immediately and goes south from there we're even if it does get cut in half we still made money right so you so this is indicative of your your point which is when there's enough performance and enough volatility you don't just attract the
• 56:00 - 56:30 smart money I you're you can attract the Bitcoin Maxis the people that have spent a thousand hours and their view is hey micro strategy 2x Bitcoin I'll buy it well you might also attract the the investors that say Hey I don't know what it is but it's up 120% a year for the past four years so I might as well buy the hot thing but you may attract the volatility Traders and they're like well I don't know what it is but I trade volatility
• 56:30 - 57:00 and it's got and I need volatility you can't trade dollar bills today for dollar bills in the future and make money off of that so uh what I guess it's Ain to being you're in a crowd and everybody starts surging toward uh an an exit you're going to go with them or you're going to get trampled or you get caught up in in the crowd and that's a dynamic but that but to be clear that's not what I endorse what I would say is
• 57:00 - 57:30 Bitcoin is the first perfect money the first monetary instrument in the history of the world that is an that is a properly engineered store of value the second best money is gold and the and and the second best money has a halflife of 30 years and the first best money has a halflife of forever and so the first best is so much better of course intelligent physicist e economists that understand physics or
• 57:30 - 58:00 capitalists that understand physics are going to discover that and as they discover that they're going to buy it and build an industry around it and recapitalize on it and they're going to draw concentric circles of other investors that that I I basically Channel billions of dollars into the Bitcoin ecosystem Tom from investors that don't understand Bitcoin they just want to do convertible Arbitrage or they want to do option trading there are a
• 58:00 - 58:30 lot of people that hate Bitcoin and they come into the ecosystem because they just want to short my stock so they short my stock and buy Bitcoin and create demand for Bitcoin you see so so those are all secondary and tertiary investors they they have Capital they have money and they want to play some game whether it's short long trading fixed income people that have bought my bonds and they just wanted interest on the bonds and they they indirectly funded Bitcoin so so my company is an
• 58:30 - 59:00 actor to recruit other investors anybody else in the ecosystem is recruiting other investors but the fundamental physics of the of this equation is this is the world's first perfect money that's Bitcoin the asset and Bitcoin the network is is the greatest Global open Capital Network in the world it is free digital Capital
• 59:00 - 59:30 247365 1500 crypto exchanges are plugged into it and it is the number one source of credit you know and Capital Access everywhere in the world right now and so that's why it is performing that's why it's attracting capital okay so um what you've done with micro strategy I think is really fascinating let me explain it in a simplistic way tell me if this is accurate what you guys have done is
• 59:30 - 60:00 essentially replicate the financial markets with Bitcoin which was at least for a while completely out of reach of institutional investors uh so you could do calls puts uh bonds like all kinds of uh financial instruments but all with uh Bitcoin as the essential element is that correct we issue securities backed by Bitcoin and the $500 trillion Capital
• 60:00 - 60:30 Market I'm referring to they have to buy Securities they need option regulated options they they need regulated derivatives they need regulated Equity or they need regulated fixed income securities that means it has to come from a publicly traded regulated company like micro strategy and we are unique because we were the first company to build a large pool of Bitcoin as collateral so if you actually accumulate
• 60:30 - 61:00 $40 billion of Bitcoin then you can issue these tranches of high performance Equity or lowrisk fixed income instruments and then all of the other Traders they can construct all of their various trades and all their derivatives based on those instruments and they can do it on the NASDAQ or the CME or the New York Stock Exchange from their comp cant institutions and they could not buy
• 61:00 - 61:30 Bitcoin and they cannot trade on crypto exchanges they can't trade on durabed or binance and they can't trade offshore and they can't hold the underlying commodity either because it's a legal or because it's against their Charter and and they promised their Executives their board of directors and their limited partners and investors that they would only trade public company Equity options fixed income convertible bonds so that's
• 61:30 - 62:00 what they do that's what they need in order to function and what we and what we do is we convert crypto Capital crude crypto Capital we convert it into refined traditional Securities and in the process we strip away some of the volatility we strip away some of the risk we strip away some of the performance and that stuff that we strip away that they want Stripped
• 62:00 - 62:30 Away becomes uh leverage for our common stock and we give it to the company and the common stock shareholders that's how we outperform Bitcoin and that's why we're more volatile than Bitcoin because we took the volatility away from the fixed income investors that didn't want it and we gave it to equity investors and derivative investors that need it we're just that Gateway sitting in the middle managing that okay so many people
• 62:30 - 63:00 speculated that when the spot ETF was granted for Bitcoin that micro strategy would not be uh relevant anymore but that didn't come to pass why not because the ETFs are SEC 40 companies that makes them investment trusts and so a a trust company is is a special vehicle it's constructed to own an asset and and hold it in trust and not do anything other than hold it so if
• 63:00 - 63:30 what you wanted to do was buy a bar of gold you might want to buy GLD or IOU those are gold trust and they're allowed to take your money and they buy gold and then the asset's dead money it's a dead asset just well let's say a stationary asset in custody and you have the shares and if you were to sell your shares or redeem them they have to then uh sell the gold and give you your cash back so think of them
• 63:30 - 64:00 as like overnight depository Banks I I could have a hundred billion dollars in that bank it's overnight deposits I invest it in gold or soybeans or oil and then when you want to redeem I sell the soybeans and the oil and the gold I give you back your money um and I charge you 20 basis points fee every year micro strategy is an operating company we're regulated by the SEC 33 act an operating
• 64:00 - 64:30 company can raise permanent Capital we we can actually sell a billion dollars of equity to take risk um and so if I sell a billion dollars of equity and I buy a billion of Bitcoin it's not an overnight deposit it's a permanent investment so you've got the equity forever and I've got the Bitcoin forever you don't have a Redemption right you can't just show up and say here take my micro strategy shares back and give
• 64:30 - 65:00 me cash no it's permanent equity and I have the Bitcoin so we don't have $40 billion do of overnight deposits we're I'm not a bank with $40 billion of somebody else's money that I got to give back making 10 basis points a year I'm a guy with $40 billion it's mine okay now if I'm a company or I'm an with $40 billion I can go and I can borrow um $3
• 65:00 - 65:30 billion from the convertible bond market for five years and agree to pay them 0% interest but I have to B pay back the three billion in five years in either Equity or in cash okay that's a risk they take they give me the three billion it's an obligation I take you know uh and then I take the three billion by the way if I took the three billion and I bet it on black in a casino and I lost it I took a stupid risk I lost your money the equity
• 65:30 - 66:00 holders are hurting you know I'm GNA have to dilute the equity or come up with the three billion some other way right so I can do something irresponsible you are trusting the management team of an operating company to not do stupid things but let's say I take the $3 billion and I buy Bitcoin with it we'll get back to the show in just a moment but first let's talk about future proofing your business in business your competition
• 66:00 - 66:30 isn't just other companies it's time itself well everyone's arguing about bull markets and interest rates leaders are busy seizing opportunities and that is where netw suite comes in over 38,000 businesses use it to see clearly in uncertain times it's not just another business tool it brings your entire operation into one powerful platform accounting inventory HR financial management all all in one place no more switching between systems no more reconciling different reports just
• 66:30 - 67:00 Crystal Clear visibility that lets you seize opportunities instantly while they're still closing their books from last month you are planning next quarter's expansion speaking of opportunity download the cfo's guide to Ai and machine learning at netsuite.com Theory the guide is free to you at netsuite.com Theory again that's netsuite.com Theory and let's say you're an equity investor and you just gave me your money and you like Bitcoin well what I just
• 67:00 - 67:30 did was I just borrowed billions of dollars for free to buy the thing that you like and if you think Bitcoin is going down you're not you're not owning my stock for a minute you're not long my stock the only people that are long my stock are people thinking Bitcoin is going up so if if you have any forecast for Bitcoin whether you think it's going up 3% 5% 50% 100% all circumstances it's smart for
• 67:30 - 68:00 the company to borrow money for free and buy Bitcoin right it just doubles it increases your performance so so operating companies we can do things like like I can borrow money in from the convertible bond market and I can I can sell the you know when I do that I'm basically posting shares that are trading uh that are valued at four times the underlying Bitcoin that I own so if I were to do a billion dollar Bond deal
• 68:00 - 68:30 I would be selling a billion dollars of Securities back by $250 million of Bitcoin I'd then buy a billion dollars of Bitcoin I would capture in the Arbitrage $750 million of Bitcoin yield or Bitcoin gain the beneficiary is the common stock shareholder right the the guy that bought mstr stock so I'm doing a c i i just generated 750 million in like three days you see so you're saying what is it that I
• 68:30 - 69:00 can do that a trust can't do they can't make $750 million in three days if I go sell a billion dollars of equity and My Equity is trading at three times the underlying asset I'm selling a billion dollars of equity back by $333 million of Bitcoin but I'm buying back a billion dollars of Bitcoin and I'm capturing $666 million in the Arbitrage so as an oper if I were to go
• 69:00 - 69:30 borrow a billion dollar and just pay 6% interest in a junk bond well then you're just getting a billion dollars of Bitcoin and if Bitcoin goes up less than 6% a year that was not a good risk I would lose money on that but if bitcoin's going up 60% a year I'm going to scrape a 54% yield and I'm going to make you know $540 million a year for my shareholders by taking that swap so I just gave you fast I want
• 69:30 - 70:00 I want to Anchor I want to Anchor this down for people so um when when I think about what the stock market is and why the rich get richer and the poor get poorer a a substantive part of this is that this is an extremely complicated game uh that as many times as I've researched you and followed this I'm just now beginning to put all the pieces together of how this all actually works but there is this incredible opportunity that you know like you said if you've got somebody that really understands the economics
• 70:00 - 70:30 and the physics of it all There's an opportunity that's staring everybody in the face you guys have built in a layer that the way the analogy that you use of turning crude crypto money into refined um Capital equities or equities excuse me uh absolutely brilliant and so you guys have set up a what I think of and you didn't say one way or the other if this felt right to you but it it continues to feel right to me is you've taken a microcosm of the entire um equity's Financial Market all the ways
• 70:30 - 71:00 my words that people are able to bet on equities and backed it by Bitcoin allowing people this incredible again my words Casino layer on top of Bitcoin so that people can take the kind of risk that they're comfortable taking that uh their the governance bodies of their organizations uh force them to interface in that way I mean just absolutely brilliant uh so now my question becomes given the freakish success that you've had with
• 71:00 - 71:30 this that one at least I look into the future and say okay this is going to keep going for a while uh were you shocked when Microsoft voted against and I know you were not uh presenting them to do the the full Casino layer my words on top of the Bitcoin but were you shocked that even just getting them to think of recapitalizing in Bitcoin was was so soundly rejected did you just look look at that and say they're stupid they don't get it like what's happening we say in Bitcoin um the
• 71:30 - 72:00 bitcoin's on a need to know basis so the people that get Bitcoin get Bitcoin because they need to if you're uh wet freezing to death and you walk past a fire you're going to stop throw a Log on the Fire and you're going to draw your clothes because otherwise you're going to freeze to death you have a need to know it if
• 72:00 - 72:30 on the other hand you're a rich man and you have you know a massive ski chalet in Aspen with 10 people working for you and Modern Heating and Air Conditioning and a chef you know and three cars and a helicopter in the back you know and you've got a dinner party planned and you're walking past a little flickering fire you're probably going to think I should put it out you know I'm G I'm probably going to step on that that fire
• 72:30 - 73:00 because it looks like a threat to me Microsoft is probably one of the five most successful companies in the world out of 50,000 publicly traded companies and 400 million private companies they're not exactly the Shivering naked starving dude running through the forest on the mountain side right they don't need it it's quite optional for them
• 73:00 - 73:30 right the people that discover Bitcoin are when you live in Nigeria and the bank or or Lebanon or and the bank freezes your assets and you're either going to starve to death and be bankrupt or you're going to have learned about Bitcoin they have a need to know if you live in a hyperinflated economy in Russia or in Venezuela or in Argentina you're going to know if you remember your family fleeing Nazi Germany in the 30s and losing everything if that
• 73:30 - 74:00 story's been told to you by your grandfather or your great grandmother right then that resonates and you think I think I'd like to be able to flee with my money you know when the government goes bad on me so uh I think that the message of this is uh shareholders in a well-run public company do whatever management tells them because they're not looking to pick a fight and if you're an
• 74:00 - 74:30 affluent investor in the first world you're um ingrained in your conventional wisdom and you don't have a need to know it's not that you're not smart I mean the world's full of very charismatic and Brilliant hardworking Rich powerful people that is not the criteria for discovering a new technology the analogy I give you here
• 74:30 - 75:00 is Led Zeppelin a bunch of teenagers and 20s somethings pick up electric guitars and they create lead Zeppelin and rock and roll and there were probably some very genius classical musicians in Carnegie Hall around the same time and if you ask the music critics what they thought and the music professors what they thought and the classical musicians what they thought they would said you know this will never amount to anything
• 75:00 - 75:30 this is you know this is bad for the society every generation gets a new set of Technologies right you're a podcaster but you know 60 years ago you know as Walter KRON kite and it was a different media thing and uh 100 years before that it was William Randolph Hurst and a different media thing and so so Bitcoin is an opportunity for the new generation it it is uh the people that
• 75:30 - 76:00 Embrace new technology they're either the youth the 20-some the 30s somethings at the beginning of their career that have everything to gain nothing to lose and no op and no chance by the way no no chance if they stick with conventional technology right it's it's like my advice to you is don't create Symphonies you know Mozart and Beethoven kind of did it you know piano listen to chopan between chopan and Beethoven or Mozart
• 76:00 - 76:30 they kind of did most of the stuff people want to hear right and so if you really want to make a name for yourself make Fame and Fortune you pick the new technology right and then the other group of people that Embrace new technology are people in a war zone right people dismiss remember World War I and we had horses and Cavalry and like oh that doesn't work and then people just missed the air for the Air Force they they Court marshaled Billy Mitchell I guess air power that'll never mean
• 76:30 - 77:00 anything and then people start stop dropping bombs on your head and you become a believer in air power you know and so I think I think the the real phrase from Max plun and he said it in the history of Science and the study of science he said uh science advances one funeral at a time it's like the old guard doesn't have a need to know they're going to reject it the younger generation they do have a need
• 77:00 - 77:30 to know and then and then people that are under duress that are fighting for their life they you know maybe maybe you'll start the War uh not believing in airplanes and not and believing that we should fight with horses you know and swords but you won't end the war with the general that believes that right you'll replace the first general with the next general you'll scramble to embrace the
• 77:30 - 78:00 new technology and and the side that Embraces the new technology is going to is going to win the side that channels power most effectively is the winner that's the story of History uh but the other story of history is the people that got to where they are with a different technique they become entrenched in that technique that's part of their self-image I don't look you're the world's greatest piano player and someone invents an electric guitar and you're 70 years old and they say what do
• 78:00 - 78:30 you think of the electric guitar and you're like it's a brutish instrument you know for long-haired hippies when I talk to people that really understand Bitcoin uh you go deep into uh the those rabbit holes you start getting people talking about how do we secure the network when we um mine the last coin so what's your take on that how are how are we going to secure it um well the network uh reward is a
• 78:30 - 79:00 function of the block rewards of the miners and they will continue between now and the year 2140 and the transaction fees and the transaction fee economy is um is an open free market economy if you want your transaction to be processed in the next 10 minutes you have to be the high bidder and there's only 5,000 slots and so the the most important 5,000 transactions in the world are going to get to the top of the
• 79:00 - 79:30 queue based upon the transaction fee of the broadcaster um this is why it's important to have scarce block space because as long as the block space is scarce the transaction fees will Trend up over time and as more people uh want to SP to do more transactions they will bid up the transaction fees and right now they're a small fraction of the rewards but I think 10 years from now
• 79:30 - 80:00 they'll be the majority of the rewards for sure and I think by you know by 2035 and onward most of the revenue that comes from the minors will be based on transaction fees and and transaction fees are a durable business model forever I mean every real estate company you know every financial service provider they all work on transaction fees I mean it's it's fine like I want to move a billion dollars from point A to point B would I pay 10 bucks of course I would would I pay a 100 bucks
• 80:00 - 80:30 sure if you wanted to buy a billion doll building and take clear title of it in Manhattan what do you think the transaction fees are on that right I mean you could spend a million dollars to move a billion dollar you could easily spend 10 basis points how about the last time you sold your house what's the transaction fees to sell a house to someone else and how long does it take by the way right
• 80:30 - 81:00 so when you think about it that way like if I could sell my house in 30 days and it was a million doll house would I pay one two three 4% interest or in fees yeah I would if I paid 1% fees i' think that's cheap well 1% fees on a million dollar transfer of Bitcoin right that's going to support the network so so the beauty is um I don't think the transaction I think I think bitcoin's always going to be a hundred times to a thousand times more
• 81:00 - 81:30 efficient to transact in than other instruments but I do think there will be transaction fees I think the fees will support the mining Network and the mining will continue forever because there's always going to be stranded energy and there's always going to be stranded capital and so if you're sitting at the edge of the grid and you have a dam in the Himalayas well you're going to want to run Bitcoin mining with the dam in the
• 81:30 - 82:00 Himalayas because that's the highest bidder for your electricity you're saying that'll get us to the end of the blocks themselves but uh when no I'm saying that will go forever I mean the transaction fees will gone for a million years I see you're saying that uh there will always be somebody willing to do the work for the securing of the network based on that's the highest bidder for the electricity there are no block rewards uh for
• 82:00 - 82:30 Selling Houses why does why does why is there a real estate industry they're all based on transaction fees why the banks give you mortgages because of transaction fees you see but what about gold so when I think about this as a a static thing that I'm using to store my Capital you just think that there's going to be enough once it's Global there's going to be enough reason for enough people to be selling their long longterm capital assets at any one time that we're still going to have uh a constant desire to have those 5,000
• 82:30 - 83:00 blocks filled I'm saying that the airlines operate on transaction fees and if people decided they didn't want to go from New York to Singapore I guess there would be no Airline from New York to Singapore and I'm saying that if I have a billion dollars of capital and a a bank in Singapore wants to wants to borrow that capital or they want uh they want to lend me a billion dollars of capital I will be
• 83:00 - 83:30 happy to pay a transaction fee to Move It from their Bank to my hands I'm said why do visa and MasterCard work they charge transaction fees so what I'm saying is in the finance everything in the finance industry runs on transaction fees so I'm just I what I'm hearing you saying is that you don't have a concern on that because ultimately you think there's going to enough velocity of transactions that transaction fees are going to handle it and anybody that's paranoid
• 83:30 - 84:00 that there won't be enough movement they're just incorrect of course it seems obvious it's like saying well how about every other service on Earth they all run on transaction fees right so what's the most important service you got to offer right this the service of of moving money I mean everybody pays M pays fees to move money it's a massive business right Visa
• 84:00 - 84:30 Mastercard the entire the worldwide banking establishment it's all based on fees all of it so yeah I mean I think I think when you get to the point where you have trillions and trillions of dollars of capital then people are going to pay a fee to do the transaction we do it now when I buy bit coin I have to pay a fee to receive the Bitcoin then I have to pay another fee to move it in Coal
• 84:30 - 85:00 storage if I ever want to sell it or if I ever want to pledge it or if I ever you know want to do anything with it I have to pay a fee to move it on the blockchain so transaction fees are going to continue right people going about Quantum Computing you you mentioned that earlier do you think that uh as Quantum Computing Rises up because recently the Google made the willow announcement that it's able to run computation so much
• 85:00 - 85:30 faster um will Bitcoin simply adopt a new security protocol what will that look like I think that that was a marketing Announcement by Google I mean there doesn't seem to be any single practical application for The Benchmark so they created a Quantum Benchmark they announced that they perform well on the quantum Benchmark but there's not any useful application for it anywhere in the world right that's the that's the first observation so you might be getting concerned
• 85:30 - 86:00 but no one's come up what they can do with it so the second uh my second observation is if you create a powerful computer the very obvious thing you could do with it to make money is to mine Bitcoin with it and so the first place to use a powerful computer is to mine Bitcoin which increases the security the network my third observation is if you really come up with a computer powerful
• 86:00 - 86:30 enough to crack crack cryptography the first thing you're going to crack is Google itself right do you think that Google would sell a computer that destroys its own network which is kind of ironic to me right like that's also the acid test right if if you're going to crack crack the cryptography you would actually crack the networks that Google Apple Amazon Microsoft run and then you would crack every single government Network and every banking Network and if you could
• 86:30 - 87:00 crack all those networks you wouldn't need to steal the Bitcoin 99.9% of the stuff in the world isn't in the Bitcoin Network so if you hyp it and but I don't think Google is selling such a device right I I don't know what'll happen but the entire thing is a is a little bit of a parody to me um if we just because you never think it's going to happen or because Bitcoin is Nimble enough that when something like that happens they'd
• 87:00 - 87:30 be able to adopt a new security protocol what I'm saying is all the existing news is just climatology alarmism where someone is saying I invented a hyper powerful computer and then it's being used by an entrepreneur to Market their new Quantum token like the number one use of it well that's why we're talking about it right the number one use of this is to actually Market uh a a yo-yo token that some someone has that has a Quantum resistant algorithm and they're
• 87:30 - 88:00 hoping you think that the quantum threat is a threat I'm just going to indulge the fantasy for a second let's say sometime in the next 30 or 40 years or whenever it happens someone comes up with a powerful computer which we will call a quantum computer which actually does something useful and the useful thing is it craps cracks cryptography then I would acknowledge it's a problem for the human race it's a it's a problem for every government
• 88:00 - 88:30 every company every individual because if I really can crack cryptography that means everything that's digital in your life is now at risk that means I can launch you know nuclear weapons that means I can take over the government that means I can have the interpole kick your door in and shoot you with a faked arest arrest warrant right so the point really is all of civilization breaks down into chaos if Dr Evil gets the hypothetical quantum
• 88:30 - 89:00 computer that works with that really does work let's imagine that threat what's my response the response is obvious which is every computer scientist on the planet has a vested interest in upgrading the cryptography that we use to secure our networks and our systems we will do that the that the if if the quantum computer the quantum chip that Google offered actually threatened cryptography Google's own Engineers
• 89:00 - 89:30 would be releasing a set of of uh upgrades to their own encryption and they'd be huddled with Microsoft Engineers right now because Google and Microsoft would be the two biggest losers and if they didn't Zuckerberg would be doing it at meta so ultimately it's not uh it's not a Bitcoin specific thing it's a human race specific thing and let's just
• 89:30 - 90:00 reframe it as what happens if we come up with a computer that can break our current Shaw 256 you know techniques or current cryptography and the answer is we're going to upgrade it we'll upgrade the software Bitcoin is a Bitcoin is at its core it's a protocol like English like math if I come up with a way to hack your phone and send a message from you
• 90:00 - 90:30 to the government saying you're going to topple the government I have corrupted your communication technique but you're not going to abandon English are you right and if I come up with a protocol to basically put false numbers into your database that might doesn't mean you're going to abandon base 10 math I mean Bitcoin is a bunch of honest people smart money they all decided that they
• 90:30 - 91:00 were going to store their money in a bank in cyberspace that they trust the bank is getting upgraded all the time the software is upgraded every year the hardware is upgraded every year and so the implementation of the protocol will change over time and if there is a Quantum threat we will react to the quantum threat just like if you were to go to the Microsoft shareholder meeting and said hey I heard Google just released the quantum chip
• 91:00 - 91:30 and it looks like it's going to crack your cryptography and therefore should I sell my Microsoft stock and buy Quantum yo-yo stock I bet you satch and Nella would say no don't buy Quantum yo-yo stock because it's an overdone fear and Quantum yo-yo doesn't actually have the support of every company on Earth and doesn't have a trillion multi-trillion dollar market cap and it doesn't have have all of our engineers and everybody on Earth hasn't decided to standardize their Office Products on Quantum yo-yo
• 91:30 - 92:00 whatever stock they're using Microsoft don't worry we're adults if it does become a threat in the future we'll upgrade our software to deal with the threat when it happens for now the reason people buy Bitcoin is it's better monetary protocol and the reason that they Ed Google is it's a better search engine and the reason they use Microsoft is it's a better enterprise software suite all three of them have to deal
• 92:00 - 92:30 with this uncertain thing we call the future and I think that they'll probably figure it out if they don't figure it out right then they'll be replaced with something better but but I put my money on bitcoin first because the protocols whether it's the metric system or the English language or base 10 math or Bitcoin those protocols they're the most durable thing in the human race and they will Outlast
• 92:30 - 93:00 the companies and the countries all right makes sense um I want to talk more about the US strategic Reserve doing that in Bitcoin uh if you had time to sit down with President Trump what exactly would you advise him to do I would say that um m decomposed into currency and capital the US dollar is the world's Reserve
• 93:00 - 93:30 currency Bitcoin is emerging as the world's resered Capital gold used to be the world's Reserve Capital Network gold became ineffective in the 20th century Bitcoin is becoming the digital gold of the 21st century you understand gold and you understand digital gold if you
• 93:30 - 94:00 want the US to remain the world's greatest power the economic leader then your agenda ought to be economic and Technical leadership that means create a regulated stable coin um make it possible for a US Bank or a US company to issue a dollar back stable coin like tether uh like Circle create a
• 94:00 - 94:30 regulatory environment a digital assets framework if you will where tether can relocate to the US and then expand the stable coin Market from 150 billion doar to10 trillion and you will create1 trillion of demand for us treasuries custody in a US Bank the demand how do you you create the demand they create the demand because there's 10 trillion of stable coins issued the reason there's 10 trillion do of stable coins issued is
• 94:30 - 95:00 because American companies can do it the if you are you asking why will people want to buy the stable coin no no no I'm saying how how are we creating the stable coins is it are we locking up um are we backing it with Securities treasuries excuse me uh are we talking about money what I'm saying is what I'm saying is the US should create a law that allows a US Bank or a US Corporation to issue a US dollar stable
• 95:00 - 95:30 coin like usdc or usdt and back it with us dollar equivalents the definition of the stable coin would be you have to hold US dollar equivalents that would create the demand for1 trillion do of us treasury bills right the big idea here is let sorry let me say it slightly differently make sure I understand you're saying if you back the stable coin with treasuries to the tune of1 trillion saying you
• 95:30 - 96:00 define the law so that you have to do it's not an if it's the definition of digital currency is a token Pegg to the dollar backed by us treasuries that's the definition of the currency that's what the government stable coins are by definition tied to treasuries what I'm saying what I'm for not now like what I'm saying is you're asking me what the government should do and what I'm saying is the government
• 96:00 - 96:30 should create a law that allows us companies and US Banks to issue stable coins and the definition of the stable coin the def a stable coin is a digital currency yep the definition of the St of the the digital currency is a token pegged to the dollar backed by US dollar equivalent sitting in a US Bank that's missing right now that
• 96:30 - 97:00 doesn't exist the reason that tether is not in the US is because it is impossible for tether to come to the US and do that thing if the US did that then the stablecoin float would go from 150 billion to a trillion to 10 trillion and the US dollar would become the world Reserve digital currency on every iPhone and every Android phone and everywhere in the world and so I know if I'm going crazy are you are you picking numbers just sort of randomly or is
• 97:00 - 97:30 there math that backs up it would go to 10 trillion that's what I think it would do that's the demand for that asset 10 trillion because there's $900 trillion dollar of wealth in the world we could go back to the Cris chart about $450 trillion of it is uh is you know for assets held for use for their use case and the other 450 trillion is store of value but you can see it's pretty easy to get to 10 trillion are you are you suggesting
• 97:30 - 98:00 that's too much or too little no I'm trying to track whether that number is tied to something that I should already be aware of or uh if you're just giving an example it's 1% of the global economy right 1% of the global economy wants to be a medium of exchange and the dollar yeah but so it we can stipulate it's my opinion if you like you asked me what I would what advice I'd give the administration though so I'm giving you my advice which is you
• 98:00 - 98:30 want the US dollar to be the world's Reserve currency and you want the US to own the world's Reserve Capital Network for the US dollar to be the world's Reserve digital currency if you want to be the world's Reserve currency and you want to cement your control for the next hundred years then you want the US dollar to move at the speed of light on billions and billions of devices okay how do you do it you need to stable coin backed by US dollar equivalence who should issue it a company in the
• 98:30 - 99:00 US either a bank or or a public company like Circle right and uh and how do you ensure it's good for the dollar well you just make sure that it's pegged one for one the US dollar equivalence now let's go to bitcoin Bitcoin isn't medium exchange it isn't the currency it's Capital it's digital gold what uh what the government ought to do is is sell their gold they have $600 billion doll of gold they ought to just sell it and buy Bitcoin with it and you could buy 20
• 99:00 - 99:30 or 25% of the Bitcoin network with the with the proceeds from selling the gold the goal ought to be for the us just to buy four or five million Bitcoin after you do that you've demonetized the gold Network so the gold network is the 19th century World Reserve Capital Network you might as well just sell it all the people that will own it will be the enemies of the United States and the gold network will go from being worth $20 trillion to
• 99:30 - 100:00 being worth four trillion or three trillion you'll just drive it into the ground go will go to $2 $300 an ounce and anybody holding gold as a reserve asset is bankrupted or has has a worthless Rock just a shiny heavy Rock um and you're buying Bitcoin in the Swap and then Bitcoin goes to hundreds of trillions of dollars of coin and you end up with 50 trillion to1 trillion dollars of capital and then what happens to the US
• 100:00 - 100:30 the the US becomes the economic leader of the world for the next hundred years we're the richest country in the world we negate the entire debt if you generate a $50 trillion capital gain with Bitcoin you offset the existing national debt uh and you become a net creditor nation and the dollar permeates everywhere okay what's going to pay for this Tom well first of all everybody with CNY or rubles or any African currency any South
• 100:30 - 101:00 American currency even the Euro they're probably just going to trade all their currency for US dollars for the digital currency of the US second anybody with capital assets outside the US that can't get access to the dollar to capitalize their their company they're going to use the stable coins to capitalize their entity so you're going to have Capital flows from currency and you're going to have a lot of other Capital flows there's a there's
• 101:00 - 101:30 a lot of people in the world in in Cuba in Venezuela in Argentina they would sell their real estate they would sell their um their Equity they would sell their currency they would sell their bonds just to buy the US dollar I mean that's been proven in Argentina that's been proven in turkey that's proven in Lebanon so you have a lot of currency a lot of money just flow into the US dollar via the stablecoin um and by the way an anecdote is you know
• 101:30 - 102:00 in Europe if Europeans are given a choice between the digital Euro and the digital dollar they 99% of the time choose the dollar that mean people in France and Germany and Italy and Greece want the dollar now if I go to China and I give them a choice between the digital CNY and the digital dollar the vast majority of the money chooses the dollar that's why it's illegal that's why the Chinese have a law making it illegal for you to trade
• 102:00 - 102:30 crypto because everybody wants it so bad they would all buy it so so one we're talking about economic physics now right capital capital flow money water flows downhill and money flows to its most secure uh best home so on the capital side with regard to bitcoin what would happen is everybody in Africa South America Asia they would all dump their physical
• 102:30 - 103:00 assets and their low they're low quality bonds currencies real estate equity and they would buy Bitcoin because everybody would rather have a piece of cyber Manhattan they would all rather be in the US they'd all rather have the high quality property but they can't buy it they can't phys basically it's illegal for do you know it's illegal in Nigeria for you to hold dollars I did not you know I mean
• 103:00 - 103:30 there's a lot of countries you know it's illegal in China for you to trade in US Stocks or or buy dollars so there are a lot of places you can figure it's probably illegal in Russia too I think um most places in the world they have Capital controls and the capital controls can range from you can't take your money out of the country to you can't even hold those foreign assets and do you think that tether or something like that lets them get around those regulations that's how they're
• 103:30 - 104:00 that's why tether is successful today the reason that tether is a hundred billion dollar Plus network is because people want dollars so bad they're willing to buy it from a company that isn't public that isn't a bank because they want the dollar right if tether were allowed to uh incorporate in the US and operate in the US it would probably go from a hundred billion to a trillion dollar Network in a
• 104:00 - 104:30 hurry right but there'll be competition let them compete with Goldman Sachs and JP Morgan and circle and whoever and may may the better company win but the point I'm getting at here is the capital from the 20th century is going to flow into the 21st century people are going to sell gold and they're going to buy digital gold they're going to sell Antiquated real estates and aged apartment buildings and
• 104:30 - 105:00 natural gas fields and they're going to sell soybeans or whatever in Siberia and they're going to buy 21st century assets um and that means Bitcoin among other things and then capital in foreign Nations is going to flow toward the west and it's going to Capital will flow from the East to the west and it'll flow from Europe to the US and the only reason it doesn't is because we don't make it easy for the
• 105:00 - 105:30 money to move and the way to make it easy Embrace Bitcoin and anybody can buy Bitcoin anywhere in the world there's 15,000 crypto on ramps and you can do it peer-to-peer so Embrace Bitcoin and that that is a capital Network that the United States would own and benefit from and all of the capital from your enemies and all foreign capital and all Antiquated capital and all inefficient thermodynamically unsound Capital it
• 105:30 - 106:00 would all flow into the Bitcoin Network and if we issued that digital currency that stablecoin then all of the world currencies would immediately swap to the dollar for you know for all except for their next four weeks of cash flows because everybody wants the dollar everywhere out the US and so this is an example of leading through a digital assets framework right and the two most
• 106:00 - 106:30 important digital Assets in the world are digital currency in the form of the dollar and digital capital in the form of Bitcoin and the Trump trade is I just swap you know I swap the gold for the Bitcoin and I make 80 trillion in the trade and I catapult the United States to worldwide economic dominance for the next hundred years that's the advice I'd give you very good advice uh but given
• 106:30 - 107:00 how many people in the US hold gold what do you think the odds are that he'll actually do that I don't know but it doesn't you know the gold is the last twist that the reason to sell the gold is because uh foreign central banks and the competitor to bitcoin over the long term is gold so the entire trade becomes free and it becomes geopolitically wise because not only do you enrich
• 107:00 - 107:30 yourself with an extra 100 trillion but you also bankrupt your enemies Banks so that's why you should do it but will they do it maybe not but the fallback would be you keep the gold by the way Gold's getting demonetized whether you like it or not like I will just say you know gold is failing as a capital asset it'll either fail because a nation state puts a heart puts a a stake in the heart of it or it'll fail because the free Market's going to short sell it I mean
• 107:30 - 108:00 every rational investor that holds gold is going to dump the gold to buy Bitcoin every year so it's going to it's going to be demonetized no matter what so the reason to sell it is because it's a bad investment and it's happening anyway but let's say that they don't well you just use $600 billion dollar of US dollars or borrow 600 billion to to do it it still becomes a effectively a free transaction you're going to borrow 600 billion and you're going to pay off 40 trillion or you're going to make 60 80
• 108:00 - 108:30 60 to 80 trillion so so it's a it's a pretty obvious swap even with just currency and would you be perfectly happy to see them inflate the money supply to do it yeah as I said I mean uh if you're if you're buying the Bitcoin before it goes up by a factor of a 100 is not inflation it's a cre right you could you could spend a trillion dollars to buy the Bitcoin and
• 108:30 - 109:00 make a 100 trillion and it's 100 to one gain so if you look at um if you look at the history of the us we actually bought Louisiana from Napoleon I think it was like whatever 15 12 or15 million we bought Alaska from the Russians for $6 million we bought California for the Mexicans for $12 million there was inflation to do that or they just paid with a check or
• 109:00 - 109:30 currency they were all good Investments you know New York was bought but what 60 gilders or something nothing yeah so so I think that the look the point I really make is you as an individual ought to borrow money against your house and buy Bitcoin if you're borrowing the money at 6% or 3% and investing it at 30 to 60% it's it's a good idea for you if you could sell 10% of the equity in Impact Theory the corporation at a fair value I would say
• 109:30 - 110:00 inflate your Equity sell 10% of your stock buy Bitcoin with it because bitcoin's going up 30 to 60% a year in the worst case you'll have Diversified in the best case you'll actually grow faster and the First Nation to print money the First Nation to print their own currency to buy Bitcoin wins right Tom look what micro strategy did we basically issue our own currency our stock and we buy Bitcoin what happened
• 110:00 - 110:30 we went from a billion to hundred billion doll market cap is what happened is it inflation it's only inflation if you print the currency to invest to make a bad investment right if if you if you print the currency to buy something that's appr appreciating faster than your inflation rate it's actually a cre right so the C the hurdle rate is the
• 110:30 - 111:00 7% and the problem generally is uh is most governments print the currency to make a poor investment instead of printing the currency to make a good investment and that's why they can't get out of their hole when you look at the hole that we've dug for ourselves and the adding a trillion dollars every 100 days to the debt do you see this as like a no-brainer way to get out of that yeah I do because because you want to grow your way out you don't want to
• 111:00 - 111:30 tax your way out and austerity isn't a good idea tax isn't a good idea what's a what what what is this the way you get out well if we create a billion robots and a billion AIS and they all do the work smarter faster stronger Cheaper by a factor of a million then that's probably good for the economy right I mean you're going to harness digital technology and that's going to help us grow our way
• 111:30 - 112:00 out if you remember what I said at the beginning of the podcast and I said it's a 10 to 15 trillion do entropic lapse every year due to physical and financial Capital so I'm point you know you're saying how are we going to pay off a 30 or $40 trillion debt what I'm saying is I have a network that's worth trillions of dollars a year maybe 10 trillion a year and so if you actually uh install
• 112:00 - 112:30 the network it's worth1 trillion dollar a year to the human race how long does it take running a a thing worth1 trillion doll a year to pay off a $40 trillion bill it's like what I'm coming back to is is you have a problem problem and I and I invent um a modern Fusion reactor a pocket Thermo you know a pocket Fusion reactor that will run for
• 112:30 - 113:00 a million years and give you infinite power you know from a bottle of water and I offer it to you and and you're like no I'd rather just tax everybody to death like I I think that if you're smart you figure out we'll just take a few of these and this is how we're going to grow our way out of our problem and I'm offering you the same thing a crypto reactor and I'm saying the solution to our economic problem is
• 113:00 - 113:30 harness technology to generate trillions of dollars of economic value a year the conventional thing that everybody understands is creating a trillion dollars worth of new products and services that didn't exist before right that's the I got to produce more candy bars more cars more planes more trains More Travel More concerts more buildings more houses more more more more more more more that's conventional that's the
• 113:30 - 114:00 p&l side robots and AI will help with that but the unconventional the monetary the economic side the very deep Paradigm shifting idea is here's my idea um eliminate the toxic capital from the civilization that it's destroying $1 trillion dollar a year worth of products and services the
• 114:00 - 114:30 part the average life expectancy of a human was like 30 when we drank dirty water and we had dirty food and we had dirty air and we had dirty blood and we had doctors with dirty instruments and everybody's just dying and you can't grow your way out of that with a better Factory but if I come along and say this is clean water give this to your kids they won't die okay it's it's the taking away of the germs from the food and the water
• 114:30 - 115:00 that makes you live twice as long Bitcoin is about taking away the germs right the toxins from the capital of the civilization right when you see crumbling devastatingly okay is that I was gonna ask what the most devastatingly bad capital is it's just it's just all imperfect right like every every hyper inflating economy go to Africa and ask why are they poor
• 115:00 - 115:30 they're poor because all the capital is toxic what about the Yar Republic what happens when the capital collapses okay the government collapses what happens next Nazi Germany what happens next World War II okay a 100 million people eventually die right so the crumble Ling Capital creates a crumbling civilization every single civilization for 10,000 years everyone in recorded
• 115:30 - 116:00 history has as one of its root causes the capital crumbles the monetary system collapses you know and then what happens is they can't they can't uh feed everybody so then what happens is the people complain so the soldiers kill them then what happens well eventually you can't pay the soldiers and and the soldiers Mutiny because they're not being paid and then what happens the people that pay their soldiers come over your border and
• 116:00 - 116:30 defeat you and then the historians write oh yeah The Barbarians came and they and they toppled our civilization due to no fault of our own but the fault was the capital crumbles agreed but you're you're dealing with countries that want control you've talked about uh China won't allow you to transact in dollars a lot of these places want to make sure that you're using their Capital so even if Bitcoin is this perfect system why won't it hit an immune response from these
• 116:30 - 117:00 nations that want control they will bitcoin's not going to solve The World's problems what I'm saying is if I give you Cen water it solves a bunch of problems if I give you electricity it solves a bunch of other problems if I give you clean uh clean food food right healthy food and ster sterile jars it solves a bunch of problems even in the civilizations you
• 117:00 - 117:30 don't agree with I think you would agree that if we turn off the electricity they have a problem right if I kill the water and the power in New York City everybody's going to die it's just that simple right I mean so what I'm proposing is we inject digital energy into the civilization Bitcoin is digital energy it's digital Capital right and I'm telling you I think it's worth1 trillion
• 117:30 - 118:00 dollar and I'm saying if you have an economic problem if if you were running a factory and you were in debt and I came to you in 1900 and you said well Mike should what should I do I'm thinking about cutting the wages of all my employees making them work twice as hard and whipping them occasionally and then barking at the customers and den nurturing the product because that's what I need to do to stay in business what do you think I would
• 118:00 - 118:30 say well Tom I'm an engineer what I think is I'm really interested by what this Edison guy is doing with electricity and I think you can rip out this the coal you know the coal powered steam engine in your factory and maybe Electrify it and then I think you ought to look at what Henry Ford did with the assembly line and the internal combustion engine and maybe instead of whipping the people in your Horseless
• 118:30 - 119:00 Carriage buggy whip Factory and then you know and then and then begging a politician to buy your buggy whips and your Horseless carriages maybe you ought to invent a you know a car and maybe you ought to do it with electricity and maybe you ought to use this this physics and then maybe it'll be such a delightful product that you know demand for the product will go through the roof and that's what I think about this I think that Bitcoin is a digital technology that solves an
• 119:00 - 119:30 economic problem that's worth trillions of dollars I don't think it cures cancer I don't think it'll stop Wars people had Wars after electricity and clean water I'm just pointing out that Henry VII dies of gout because he didn't have clean water and of all the things that Henry VII would have liked to have bought with all of his power and he was the most powerful man in the UK he would have liked that right this thing we take for granted this thing
• 119:30 - 120:00 that makes us go from living 32 years to living 80 years clean Capital clean money digital money high frequency programmable money it's the it is a protocol for prosperity and I think that if you're you're looking for if you're looking for a politically sound strategy the most politically sound strategy is not to tell people
• 120:00 - 120:30 that austerity is the solution or bludgeon them to death it's just to introduce a new technology that Delights and enriches everyone and spreads like wildfire and I think Bitcoin is spreading like wildfire just like if it's a good thing whether it's the internet or an iPhone or clean water or air conditioning or an automobile you don't got to bludgeon people you don't got to bark at them the average person
• 120:30 - 121:00 looks and and they know why they want to drive in a car or fly in a plane or have air conditioning I mean I live in Florida all of Florida is due to air conditioning right the entire State wouldn't be here without electricity and HVAC and that is my contention with regard to digital capital I think that the world's full of problems but half of them are economic problems and if you want to solve your economic problems
• 121:00 - 121:30 solve it with technology which is egalitarian utilitarian right that is nonpartisan because no one can agree on religion and political issues but they can all agree that they would like to be more powerful more prosperous more comfortable more capable and generally the only countries on Earth that are anti- technology don't last long you know remember the Japanese
• 121:30 - 122:00 they denied gun powder powder that didn't work well the Chinese tried to keep guns out of China that didn't work well either I mean eventually you know technology is coming to your Shores and if you resist it you know your government's going to collapse and your ideology is going to collapse so I I think this is a very St forward practical approach to making the world a better place yeah agreed I don't think it will be adopted as uh such so it'll be
• 122:00 - 122:30 interesting to see the the war of the powers with different countries taking different approaches I'm certainly encouraged by Japan seems like they're contemplating having a strategic reserve of Bitcoin that's amazing especially given the economic troubles that they're having but here in us what do you think about David saaks is he going to be somebody that's in the president's ear uh that's pushing this agenda have you heard him talk about this issue I don't think there's anybody better qualified uh to do that job than
• 122:30 - 123:00 David saaks I think he has extraordinary good judgment with regard to economics human behavior technology right and and good intentions uh for the US and the world so I think he'll be he'll be great and I think that in general the leadership that's in the incoming Administration is is very Pro technology pro- Freedom pro pro property
• 123:00 - 123:30 rights pro- entrepreneurial in and pro-innovation so I think that uh it's a good team and I'm very optimistic have you spoken to saaks directly uh I talked to all a lot of people uh but I don't share uh what I say so it's inconfidence yeah very fair uh I certainly think we have a sense of um how you would be approaching this uh what do you think
• 123:30 - 124:00 about um Japan and what they're doing do you think that they'll move forward with that do you think that they have any other way out of the situation that they're in and could Bitcoin be the solution to their whatever 40-year stagnation you know I I think that adoption of Bitcoin it starts with retail then investors then small corporations then large corporations I I don't think large governments will adopt it first I think small governments will adopt it but but primarily it'll be
• 124:00 - 124:30 adopted at the institutional level next so and I don't really think it's even necessary I mean I'm not holding my breath for that I I think that uh there are examples like metap planet in Japan that are metap Planet I think it's the number one stock on the Japanese stock market they're going to get noticed and I think people in Japan will start to learn about Bitcoin but um but it'll be a solution for the individuals and the families and
• 124:30 - 125:00 the investors and then it'll be a solution for the companies long before it's a solution for the country uh governments are normally the most conservative actors in The Last to move you know ju just like any technology right think about how all technology propagates your iPhone your web browser your electricity or whatever it starts with the you know the early adopters the innovators and then the small companies and the startup and the big companies they dismiss it then eventually the big companies get
• 125:00 - 125:30 threatened by it and then they embrace it and then after that it ripples into government but it's government normally when they try to do something they're a little bit slower than normal yeah it'll be interesting do you think that the Red Wave here is going to Buck any of that Trend in the US are we going to see a pretty gross acceleration in uh adoption of um anything Innovative or do you think that we'll get bogged down in the normal Quagmire and uh the
• 125:30 - 126:00 traditional system will still make it a slow slow I think that the US is now actually the worldwide leader in digital assets I mean we're going to catapult from being you know 25 30% of the way back from the pack in the middle of the pack we're going to catapult to number one because most of the rest the world is fearful of innovation if they're fearful of getting ahead of the US so even if it's a good idea like all
• 126:00 - 126:30 the ideas I just laid out I mean and the dig a digital assets framework is a great idea I think that other countries would be afraid to adopt a good one if they thought the US was more regressive so now I think very Progressive digital assets ideas will get adopted by the US and I think the us has the economic capability the financial power the political power and the technical power to commercialize all those so at this
• 126:30 - 127:00 point the US has gone from being right in the middle and and not very Progressive to actually being number one the greatest opportunity I I do think it's quite likely in the next four years we'll have an incredible crypto Renaissance in the US and I I just pointed out I really think the US is positioned to dominate digital currency and digital capital and it's a 10 trillion dollar opportunity on
• 127:00 - 127:30 the currency side and it's a hundred trillion dollar opportunity on the capital side I don't think any other country has a has an opportunity that big I think the US is really in the pole position at this point and before November 5th if you thought it was going to be a Blue Wave you would have been you would have thought there won't be a digital assets framework and the US is is going to grudgingly accept Bitcoin but they're not going to embrace the other
• 127:30 - 128:00 ideas but after November 5th I think now it's more likely than not that we will get a digital assets framework you will get digital tokens digital Securities digital currencies digital Capital digital exchanges and the US will be the big winner and all those things that's what I think now not without some you know some Poli iCal maneuvering back and forth and you know and some some negotiation and compromise but it seems the writing is
• 128:00 - 128:30 on the wall and the path of Le lease resistance right now is the creation of a multi hundred trillion doll digital assets ecosystem and a multi hundred trillion dollar digital Capital ecosystem as part of it that's what I expect now when you talk about the people that are really going to get this are people that understand economics and physics somebody like Elon who certainly maybe he understands economics maybe he
• 128:30 - 129:00 doesn't but certainly understands physics uh still continuing to uh at a minimum sort of troll with the idea of Doge uh are you surprised at all that he for a minute seemed to be really into Bitcoin had it on the balance sheet seems to have moved away from that Peter teal has also moved away from it um what's your take on on Elon specifically and Bitcoin well there's a lot of things going on in the world right now right there's a there's a 100 different Industries and there's a lot of dynamic
• 129:00 - 129:30 um questions right so solving the problem of space travel and solving the problem of electric guitar electric cars and solving the problem of satellites and solving the problem of government efficiency and solving the problem of free speech and solving the problem of digital capital and solving the problem of digital currency and solving the problem of War and solving the problem of medicine and solving the problem of health and solving the problem of overregulation and solving the problem of overbearing
• 129:30 - 130:00 Capital markets and solving the problem of climate and solving the problem of filling the blank I could go on for another hundred problems that's a lot of problems um I think uh this Administration has the greatest number of problem solvers we've ever seen um I think that Elon is the number one sponsor of Bitcoin and the Magnificent 7 I mean if you look at it right take the top seven companies in the world
• 130:00 - 130:30 okay which one has Bitcoin on the balance sheet Tesla right so truthfully Elon is the leader in understanding digital Capital you know on the Bas Tesla has C has Bitcoin SpaceX has Bitcoin so I think elon's been a great Advocate but so is um VC you know um ramas Swami and and uh you know so is I think David saaks understands this and I think the
• 130:30 - 131:00 Secretary of the Treasury Scott bessent and Atkins the head of the SEC and Trump you know both Donald Trump and Eric Trump you know and Howard lutnick the head of Commerce so I think that you've got a lot of people that understand it I think if you're parsing people words and saying did they say the perfect exact thing like I don't talk about the other 99 things I don't utter my opinions on health and vaccines and
• 131:00 - 131:30 foreign policy and the like because you might not exactly parse your words correctly or there might be someone that spent 100x as much time as you that's a bit more nuanced so uh I think it's in very inevitable that when you are asked to opine on a 100 subjects you'll occasionally say you'll communicate uh with uh a Precision that leaves you open to criticism from someone but I don't really get worked up
• 131:30 - 132:00 over it I think that uh we've got a good team right now and I and I think that they understand the need for digital transformation for in Innovation and uh they will pursue it as uh as effectively and as as as rapidly as they can you know subject to the constraints of God and man so at the risk of getting you to
• 132:00 - 132:30 comment on something that you don't have enough uh time looking at as you look at the first call it 18 months of the Trump presidency what what to you would just be an unbelievable win if they actually got across the finish line and whether that's dumping gold and and buying uh or getting in place a strategic reserve of Bitcoin or simply making a statement about we're never going to sell um what what would a real Victory look like in the first 18 months I think a digital assets framework could be a huge win it'll
• 132:30 - 133:00 bring the entire digital assets industry to life and it'll that from an SEC perspective like hey here's exactly what you can and can't do I think if they have a digital assets framework that's a big a big milestone if they put in place um a much lighter regulatory environment if they if they remove a bunch of crippling overbearing regulations that that um prevent entrepreneurial
• 133:00 - 133:30 activity that uh that make it very difficult uh for companies to do anything I think that would be a big win and you know it's and then beyond that um avoid in avoid placing a crushing burden on on the capital markets or or on free free market so that people can move about and fix the problems in the world I think that I think that all of those things are quite possible they all be good in the first 18 months they'd be
• 133:30 - 134:00 great for the world and what do you think is going to be the intersection of AI and uh Bitcoin specifically AI represents digital intelligence it's going to go into every product every service every company you know everything it's going to permeate everything in the economy uh the result is they're going to be very valuable companies and I think those companies as they get more valuable are going to buy Bitcoin I it's gonna I think AI is going
• 134:00 - 134:30 to fuel the Capital Market so it's going to create lots of capital lots of productivity and I think that that will flow into Bitcoin and I think um I think long term uh the AI will want to move money at a faster speed they'll want programmable high frequency money and that'll be Bitcoin and so I think that I think
• 134:30 - 135:00 that the uh the growth of AI systems will result in demand for digital capital from directly from the AIS and indirectly from the companies that create the capital I think it'll it'll drive both of those and that that would be my first order and second order uh impact there are some other possible things that could happen with AI but they're more they're more speculative and I think
• 135:00 - 135:30 those first two things are the things that drive multi-trillion dollar impact on the capital markets I love it Michael every time I get a chance to either research you or spend time with you it is uh absolutely mind-blowing how many more pieces of the economic system I begin to put together um where can people follow along with you learn more about what you're up to I post everything uh every day on X sailor s y l r and so if you want to
• 135:30 - 136:00 follow me follow me on Sailor and otherwise uh we collect a bunch of Bitcoin materials on hope.com hop and my personal website is michael.com and I post a lot of my personal speeches on that just michael.com so those are the three logical resources any wants to anybody wants to follow me or or look at anything that I've uh posted excellent all right everybody if
• 136:00 - 136:30 you have not already be sure to subscribe and until next time my friends be legendary take care peace if you like this conversation check out this episode to learn more you are being slaughtered and you don't realize this there could be a dollar crisis they debasing the currency by 15% a year I mean it is inevitable that it's going to happen but does that just mean that we're crazy and it's going to be fine I'm not saying everybody is wrong I'm saying that people that believe in Bitcoin are wrong