97. Bitcoin Strategy with Michael Saylor CEO of Microstrategy

hello and welcome to another episode of the  bitcoin standard podcast on today's podcast we   have a special guest coming back for the third  time the one and only michael saylor having   basically bought up all the bitcoins he's here to  tell us about the uh what he thinks of the bitcoin   market how things are going his expectations for  the way going forward then we're going to also   discuss my new book the fiat standard which  michael had a um enormously important role   in helping me develop and finalize into the final  book so michael thank you so much for joining us   thanks for having me safe so i guess a good place  to start is just your general ideas about the   bitcoin um space and the bitcoin market and the  development since the last time we spoke we spoke   i think it was for the last time we spoke was i  think in february it's been now almost 10 months   so it's been a while um so a lot has happened has  it been that long february really was it february   or march april okay anybody remember yeah a  lot has happened okay yeah a lot has happened   so um i i presume your bullishness is  still intact yeah so you want my summary   for the past six months um yeah and uh  i mean if whatever you find worthwhile   um yeah well i mean i think if we just focus upon  what's going on the china crackdown took place the   hash rate moved uh to the united states you know  we we drew down to you know 80 85 extra hash and   now we're back up hitting all-time highs again  so i think the the overall mining network has   redistributed itself and and further decentralized  itself and has been a western drift of the bitcoin   network so i would say geopolitically we saw  bitcoin drift west and i would say um economically   and uh that's all been a good thing i think i  think we've seen a substantial western embrace   of bitcoin since uh may even if we look  at the political winds that are blowing   clearly there's um there's a lot of support  there was a fear i think six months ago that   we might have government antipathy toward bitcoin  in the west you know you heard the most informed   criticism was you know ray dalio's well it's so  good someone's going to ban it right it kind of   first it was well i don't get it i don't like  it it's bad and then became i guess it's not   bad and then it became well i guess it's not  going away and it works but it works too well   then it became a jamie diamond ray dalio it's just  too good you know even you know frank g eventually   everybody kind of revolved around or settled upon  the narrative that yeah it's not bad it's good but   it's too good and that's why i'm afraid of it and  um i think in the last six months right we see in   fact the opposites happened the administration's  in favor we've got supporters of bitcoin in the   administration it seems to me like biden was a  positive check the entire set of administrative   regulators or positive checks uh most of the noise  around regulation is really just the alt coiners   right the d5 people the security token people the  staking protocols the you know stable coin issuers   and um you know they they want to generate a bunch  of noise that uh that regulators are hostile but   i can't see any activity in the past six months  from a regulator that was in my opinion uh   hostile to bitcoin um i think that uh  the politics right now are such that   you have kind of crypto versus bitcoin you have  all the all the alt coins versus bitcoin and and   generally uh generally if the alt coins could  drag bitcoin into the debate right if it's bad   for the altcoin they want it to be bad for bitcoin  so that all the bitcoiners will support their   position so i think you see a lot of that where  people will try to re-characterize utterances by   regulators as being bad for bitcoin when in  fact they're not bad for bitcoin they're bad   for security tokens defy exchanges unregulated  crypto exchanges nfts or something else but not   bitcoin i think the other dynamic you see here is  a little bit of tension between the entrepreneurs   that control the industry in the first decade  and the institutions coming in the next decade   like um everybody in the world agrees that digital  currency is a good idea i mean the chinese want   digital currency i think every country wants  it even the us wants it we just can't agree   on whether or not you should be an fdic and you  know chartered bank to issue it and whether or not   what what are the licenses you need to  issue a digital dollar versus versus um   anything else versus an analog dollar so i  think there's a lot of noise that's all about   all about will the entrepreneurs continue to be  able to do business unfettered or will they need   to come public right is it public investors  or private investors is it public companies or   private companies is it chartered banks or techno  entrepreneurial banks is it onshore offshore   um i think that in the past 30 30 to 60 days the  the thing that's surprising to me is actually   there's so much general support for everything  in congress in the senate right you know the   narrative was they're going to ban it i think that  i i think my observations they don't want to ban   anything right like which is which actually means  that you have um you have the administration in   the middle you have the politicians on the far you  know the far uh what is the word uh liberal side and then you kind of have uh a bitcoin  maximalist on the other side which is   which is uh to my mind interesting um i think  that the volatility in the market right now is it   is because bitcoin is still conjoined  with the rest of the crypto industry   like as far as i can see the people driving the  market uh in the near term from day to day are   large pools of hedge fund hedge fund capital  and investor capital highly leveraged fast money   that's cross-trading bitcoin versus every other  altcoin offshore and in d5 with huge leverage   and their time horizons are one minute  to one week like for example if you look   if you look at um minute by minute  trading patterns of bitcoin versus eth   they're trading in lockstep almost uh  every 60 seconds like you'll see um   you'll see a dump in the market in eth and it'll  be reflected in bitcoin in 30 seconds and so um   that's interesting and i've seen uh  that correlation going on for a while   uh irregardless of news and uh of course i  think that a lot of people have a lot of money   and they have a lot of leverage right you  can trade with 20x leverage you can trade in   theory if you you know if you cross-collateralize  through a defy exchange you know you could trade   with even more than 20 dex leverage so there's a  lot of fast money with a lot of leverage trading   across the c5 crypto exchanges and the d5  exchanges and they've got you know cardano   and dogecoin cloth cross-collateralized to eth and  it seems pretty clear to me someone's got a big   block of bitcoin tied up in eth in the eth network  and when eath trades down bitcoin's trading down   almost like they're they're a fused  currency pair or fused asset pair   and they couldn't on connect  that they can't uh dis   what is the word disintegrate that in the near  term over the long term like months quarters   years yeah but in minutes hours and days  it seems like there's a lot of integration   there so you know what what do i think in general  it's like obviously i'm bullish on the asset class   it seems to me that that uh we've got remarkable  consensus that bitcoin is digital property   we got market remarkable consensus that bitcoin  is the one universally accepted commodity we've   also got a consensus growing that everything  else is a security by the way safe which is   if you roll a clock back 12 months i think  it wasn't clear but i think right now   out of 6 500 cryptos i think that you might have  a debate over 12 of them being property and it   looks like everything else is a security and  and if you're not if you're not a proof-of-work   coin if you're a proof-of-work coin that's a fork  of bitcoin or something like that maybe there's   a debate about whether it can be property  half of them aren't half of them are but   everything that's got an ico everything on proof  of stake everything related to d5 all you know   all of the functional coins all the staking tokens  it's pretty clear the view of the regulators is if   it's if there's staking involved it's a security  if there's defy involved it's probably a security   right if there's a central organization if there's  a venture capitalist involved it's a security if   there's a central development head it's a security  right any of those things and our securities   and uh i think i think a lot of people don't want  to embrace that reality but that is kind of the   reality and so so we're in this very interesting  tension where where uh what should theoretically   happen is most of the altcoins should disappear  or they should you know probably they should be   disappear a few should become publicly listed  privately listed security tokens with disclosures   and different rails a lot of the entrepreneurs  should uh should exit right they get squeezed   out of the market a few entrepreneurs can come  public like cross the chasm can you get an fdic   license in order to issue a stable coin right that  kind of stuff can you actually get the appropriate   license can you hire the right lawyers in order  to get through that chasm and some do but 98 don't   and you know what's what i see coming from  the president's working group and all the   all the regular if you read the the stable coin  memo if you read the denial of the spot etf if   you read the crenshaw memo which was issued by a  commissioner of the sec caroline crenshaw and if   you parse all the testimony of the regulators  in congressional hearings and public speeches   the conclusion you come to is there are two  things that are acknowledged that the world wants   one thing the world wants is it wants digital  dollars stable coin digital dollars and it wants   10 trillion of it 20 trillion of it like  we've got a 160 billion dollar stable coin   market you know with tether and circle leading  but what the world really wants is it wants 10   20 30 50 trillion of it i mean they want  to replace their lira and their pesos and   you know every every currency in the world they  want to flip from local currency to dollars and   they want to go from analog dollars to digital  dollars right i don't i don't trust the peso or   the leerer so i want the dollar but i don't trust  the bank so i want it out of the bank right so   so if i were to go and interview a thousand people  on the street in africa or south america or asia   and i said would you rather convert your  local currency to the us dollar and would   you rather have your local your your  dollars in your hand versus in your bank   i think that you'd have like 90 95 90 98 uh  consensus that everyone would rather have custody   of their own currency and they'd rather have the  strongest currency in the world and the us dollar   is the strongest currency in the world for two  reasons one because you can trade cross borders   right you can trade between libya and lebanon  and turkey and paris and the us with the dollar   and you can't do it with the cny or the euro  or the local currency so so it's the cross   it's the worldwide global medium of exchange and  the second reason they want it is because it's   losing value the slowest i mean maybe there's  like two or three i don't know maybe the swiss   you know frank or something there might be two or  three currencies that look a little bit stronger   but it looks like you've basically got currencies  pegged to the dollar yeah and then you've got   currencies getting weaker than the dollar at a  gradual rate and you've got currencies getting   by the way you've got some getting weaker to the  adult than the dollar the gradual weight that's   shielded by capital controls like i think the  cny is getting weaker than the dollar but there's   capital control so it's not so obvious it's  pegged but with capital controls and we know like   the argentine peso is pegged with capital controls  well and it's still getting weaker at a rapid rate   right the 100 pesos to the dollar is the  official rate 200 pesos to the dollar is   the unofficial rate and it was 20 pesos to the  dollar 36 months ago so i think what you see   is the dollar is setting the standard everybody  pegged at the dollar that's got no capital control   they're just weakening at the same rate the  ones with weak capital controls are weakening 10   faster and the ones and others are weakening 20 30  40 50 faster and they're literally collapsing so   that's the currency story everybody wants digital  dollars and they don't trust their banks and then   the property story is and this is not uniform  right i think that smart people that are informed   know they want to swap out their weak property  for strong property or their weak asset for strong   asset but there's a lot of debate there right  so you know what what i would say i would say   every property is weaker than bitcoin so sell your  real estate sell your equity sell your bond sell   your gold sell your silver sell your commodities  so you're collectible sell everything by bitcoin   but um generally i not everybody fully  understands that i don't know we're two three four   five percent into the education and safe everybody  everybody in the world understands that the dollar   is better than their local currency there's there  is not a debate a 1.5 billion people in china   everybody in brazil everybody in argentina  everybody in africa so i'm sorry to tell you   but unfortunately i know from lebanon there  is significant debate about this people have   maintained the idea that their leader is  going to be recovering against the dollar   as the leader has gone from 1 500 to 25 000  there's still people delusional enough to say   oh 25 000 well this is clearly undervalued  now and we're going to come back to 12 000.   okay i'll defer to you since you're you're  on the ground there may and i will i will   retract my statement i'll state it fine absent  extraordinary patriotism you know idealistic   patriotism brainwashing is another word for right  most the great let's just say even like 80 right   the great majority of people absent the patriots  and the idealists know that they'd like to swap   out their weak currency for a strong currency on  the other hand there's a lot of debate in the u.s   or you know in other markets about do i want to  hold the s p index or do i want to have a second   investment property or do i i want to own some  gold or do i want to own commodity baskets now   let's come back to the whole point  though i'm talking about regulators   if you parse very carefully gary gensler's public  statements no less than five or six occasions he   said two there are two things that stick out  two things that are very important maybe three   three things i'm going to reduce the last you  know everything that's been uttered by the most   influential regulators in the world to three  things one thing satoshi's innovation is real   which is another way to say we have created truly  decentralized digital property in cyberspace that   is not owned and controlled by any company  any individual or any government we have   common property para pursue to gold or land or  commodities that's the first innova innovation   right the immaculate conception as we'd like to  call it here and it's another way of saying if i   understand securities law and if i understand  law and if i understand finance then i will   acknowledge that you can create digital property  assuming that you have a fair permissionless   network without an ico or a central party or an  investment contract so we know that bitcoin has   done it it may theoretically be done again by  somebody else maybe a fork a bitcoin right you   could probably your best argument would be a fair  fork of bitcoin now if it were to fork right now   then maybe the thing that was created could also  be deemed as uh property i'm not saying it would   succeed right like why not you know here's  here's your best idea what if the if the   chinese government forked bitcoin and then made it  illegal to use the first fork but the second fork   they kept in china you know and then they didn't  interfere with it any other way and maybe if elon   musk forked bitcoin and mars and you had mars  coin china coin and bitcoin and all three of them   started from the state of the network right now  and then they had some geographic political reason   to be separated and you could hold that china wall  or that mars wall up and there's nobody in mars   right but if there was right if you could do that  then maybe you have another digital property right   maybe and i i'm gonna i think that's the bar set  for altcoiners basically this is what you gotta do   that's a good way to say it satoshi said a  high bar but that's the bar right that's the   the bitcoin standard is the satoshi standard  is a is a fair distribution without an ico   without intent to profit on the efforts of  others that is just a community property right so   that's the that's the first uh thing to take  away the second utterance um though you know   to be able to trade 24 7 365 at the speed of  light with zero friction is useful in the world   of commerce that is to say um i think that uh  i think that gensler recognizes and i think any   fair affair regulator or economist or politician  recognizes that there's a benefit to be able to   move stuff at the speed of light friction free  24 7 365 the digital digital transformation of   the economy or fintech if you will and for that to  manifest itself uh effectively right now you need   a digital dollar right you need a digital currency  and i've said before why because there's a hundred   million companies that have collectively invested  trillions and trillions of dollars in accounting   systems and installed those systems over 30  years so that they can trade with each other   and because of the inertia of the accounting  systems the systems inertia the corporate   inertia and the existence of nation states it  means that it is either illegal or impractical   for for all the all the economic actors to not  trade in currencies so um as long as the eu and   the u.s dollar the us exists and as long as  the us dollar and the euro are legal tender   and as long as companies like sap and oracle  run the accounting for disney and mcdonald's and   pfizer and and the us government and the payroll  etc as long as that happens then you're going to   use dollars and euros but what we know what we  recognize is that not being able to move them   on the weekend with a computer is holding back  the worldwide economy you know even today just   about every day i pick up the phone right  and then i have to approve wire transfers like this is a 30 year old way to move  money around 30 years so so we we still   have a situation where it's very challenging to  move uh to move currencies as a medium exchange   so the second thing that everybody wants is  they want the digital currency and they want   they want a small amount of local currency  digital rupees and digital pesos and digital   niara and digital as long as there's a nation  state that exists you need a small amount of   that hold it for a day right digital bowl of  ours and then they want a larger amount like   a month worth a month to a year of digital  dollars and then they won then after that   what you want is you want something to hold  a lifetime digital property right so so um   i think that uh the first observation is digital  properties and innovation the second observation   is we need digital currency and people  need to trust this stuff and nobody trusts   stable coins right now issued by entrepreneurs  offshore right the the never ending tether fund   right never ending right and you know tether is  an entrepreneurial company i'm glad they exist and   they exist to meet a need and if my choice was  to have money in a bank in afghanistan or hold   tether dollars and you know on my phone then  i would prefer the latter than the former   it's pretty obvious why they exist but but if jp  morgan issues a trillion dollars of stable coins   it'll be good for the industry it'll be  good for the world at the point that uh   that you have public silvergate bank a publicly  traded bank they just raised five 480 million   dollars last week by the way right a publicly  traded bank with an fdic license that issues   hundreds of billions and then trillions and then  tens of trillions of dollars of us dollars that's   the bargain that it takes for the us government  to trust the to trust the coin moving that's just   that that's the expectation they have and it's not  an unreasonable one because there's no way that   facebook or google or apple or amazon will ever  move trillions of dollars of stablecoin around   from tether it won't happen right and there's  no way that you will see microsoft and amazon   and ibm and pfizer do cross-border payment  remittance unless it comes from unless   they have access to a stable coin from a  bank of america or citigroup or whatever   so if you're looking for the big use cases for  uh for these things you're going to want to have   massive amount of stable coin for all  for for global remittance for payments   between 8 billion people and for the hundred  million companies to trade with each other   so that's the second observation and the third  observation that you get over and over again   is um most everything else is a security right if  if you know if if there's an ico and it was issued   in you know an expectation of earning a profit and  it is a small group of people if we're depending   on the efforts of others it meets the meets the  definition of investment contract security so   what we're waiting for right is clear guidance  about if you if you're currently owning   securities or you've issued one what do you  do next if you're trading them what do you do   next if you want to issue a stable coin  what do i have to do to get to a stable coin   and that creates a a lot of regulatory uncertainty  and overhang if you're if you're a crypto trader   if you're a default exchange if you're a security  token all of those but where is there no overhang   if you just want if you want to own bitcoin's  digital property for a hundred years   and hold it as a store of value it's crystal  clear right it's not going to be banned it's   not even banned in china i mean per official  guidance the chinese don't want you to trade otc   it's a capital control issue they have this issue  with mining bitcoin which is is silly but i i   have yet to see a bright line edict in chinese  that says you cannot own digital property they   haven't said it in fact they've said the opposite  and um everywhere else where there's regulatory   regulatory action it seems to me that it's  all touching on stable coin issuance stable   coin transfer its issue it's touching on tax it's  touching on securities laws and leverage and uh   you know that the frustration of the of the  other token holders and the entrepreneurs   is obvious and high right um  and i think that uh that bitcoin   suffers due to the volatility that's induced by  being conjoined by literally like there might be   billions of dollars of bitcoin that's actually  linked as a trading pair as collateral to eth   and every time it moves everything is moving  up and down literally second by second   minute by minute and uh you know it's like  it's illegal to trade with 20 to x leverage   on the nasdaq it's illegal right but but in fact  what you have in the other crypto markets is   20x 100x leverage and you can cross-collateralize  that stuff and uh you know it's it the regulators   have yet to give clear guidance i think they don't  really want to they don't want to crash the market   right i mean they they could literally crash the  market but but um i think that that's a 36 month   thing safe so i don't know if that helps yeah yeah  i think it's it's very astute what you said that   uh the alts are trying to drag bitcoin into this  and i think uh you know your average out coiner   is usually out there complaining about bitcoin  consuming so much energy and bitcoin is   uh boiling the oceans and um bitcoins outdated  and we don't need bitcoin and we need to move on   and you know just yesterday i saw some guy from  um one of the most centralized uh crippled um [ __ ] coins which i won't name  explicitly making a proposal for how to   advance bitcoin by moving off proof of work in  order to reduce electricity consumption so they're   always uh you know they're always so concerned  about bitcoin they need to change bitcoin and   they think bitcoin is dead and they want you to  not invest in bitcoin because they want you to   join the gains until the regulators come about and  which point they start getting angry at bitcoiners   because you know bitcoiners aren't supporting  us and bitcoiners are uh cheering on the sec   and bitcoiners are um being statists and  uh it's pretty uh it's pretty interesting   and i think that you also see that  as well from the um from a lot of the   organized lobbying i think um a lot of the dc coin  people um their modus operandis to try and get   i mean nobody lobbies for bitcoin that's the  thing a very few people um like if you get   bitcoin you realize it doesn't really need you  to lobby for it much and you realize there's   a very high opportunity cost for investing in  lobbyists and you'd rather just stack sats with it   because bitcoin is clear you know it's it's  very clear that it as you said um the satoshi's   innovation is real the immaculate conception it  wasn't the security there was it was obvious it   wasn't a security it was just a digital form of  property that emerged organically on the internet   nobody controls it so there's no point behind  wasting money on lobbying but there is a lot of   incentive for outgoingers to spend  a lot of money on lobbying because   it's very clear that their altcoins are securities  and so there's a lot of incentive to try and   bundle in the altcoins with uh bitcoin in order  to try and pass it off as and you know everybody   wants their altcoin to be part of the small  number of outs that are like bitcoin you know   well you know ours is decentralized ours and  bitcoin are decentralized but all these other ones   you know let the sec tear at them um i'm also  wondering what do you think in terms of i think   um in a sense like the the the attack on bitcoin  many people many bitcoiners have been pretty   paranoid about the idea that governments are going  to attack and it seems you know uh even the china   thing as you said yeah they banned the mining but  they haven't banned ownership and they haven't   they haven't thrown anybody in jail because they  own bitcoin you know they haven't criminalized it   it's not like owning cocaine you're not getting  searched and arrested for it you um but it seems   to me like you know fiat world is fighting back  in a sense by perhaps um you know people who are   from the fiat world they just sim i'm not saying  this is kind of a conscious conspiracy it's just   intellectually they think of it as um you know  the fiat coins as the alt coins because they're   centralized they allow us to do more tricks they  allow us to have more leverage they allow us to   have uh more credit more uh financing it looks to  me like that is kind of the attack on bitcoin like   um people who are uh not excited about the  prospect of hard money and escaping fiat   are thinking of you know boosting all the  non-bitcoin coins like you think of somebody   like um elon musk coming in and choosing to  pump dogecoin um i think that's not entirely   unrelated to the fact that you know the a lot  of people coming from traditional finance are   in the fiat mindset of money needs  to be controlled by a group of people well i mean i think that if um the  bitcoin community just embraced the idea   that uh bitcoin is digital property and is going  to coexist with digital currencies issued by the   united states or europe or china then 99 of all  of the resistance and friction just disappears   completely and then what you realize  is your debate is is with gold and your   debate is with real estate and your debate  is over whether you should buy the s p index   and just becomes an investment decision  and then everybody that doesn't want to own   bitcoin because they want to own apple stock  just looks like they like apple stock right   like if you want to invest in a in a vc  venture if you want to invest in a hotel   if you want to invest in a stock if you  want to invest in a collection of picassos   these are all just different investment decisions  that you made in lieu of buying bitcoin if you   characterize it like that then it becomes a  lot less uh controversial a lot less heated and   uh just step back and let and let the battle of  the currencies take place between the currencies   i mean the real the real battle right now is  between the dollar and the peso and the niara and   the rmb and the you know etc all the currencies  and and uh there's no reason bitcoin doubled   every year for the next decade it still wouldn't  be but a small fraction of the money in the world   so for the next decade we could simply be  good citizens watch uh watch digital property   grow from being one out of 500 trillion  dollars right we're one at one five hundredth   of the property in the world or something like  that why not just become 20 of the property in the   world become 200 tr you know if we're 200 trillion  and there's a thousand trillion right we'll be 20   so at the same time like if i'm gold it's like  the gold people they want us to agree that we're   both sound money and the enemy is the fed okay  well like let's think about that for a second   i'm going to basically give the gold bugs 90  of the money they're gonna they're going to be   worth 10 trillion i'm worth 1 trillion and we're  both going to collectively agree that we want to   topple 100 million businesses all the accounting  systems in every nation state in the world   together like why would i even bother right why  why not simply just destroy gold why not just take   the 10 trillion of gold and go from 1 trillion  to 10 trillion and how about you know try walking   into the boardroom of disney corp or coca-cola and  telling them that we've decided that we stand for   toppling nation states and the currency and  what we want them to do is buy bitcoin like   i i've said this before you you literally could  line up everybody in every corporation the world   hold a gun to their head and say you have to stop  taking dollars and switch your accounting systems   and you have to shoot them all because even if  they wanted to they couldn't right nobody can   change the fact that the world runs on dollars  and the accounting systems are wired for currency   so we're picking a pyrrhic battle like  we're going to we're going to war over   nothing because if if you just understand bitcoin  is property and you accept the fact that okay well   what's the negative the negative is if i  transfer it and i sell it i have to pay   tax on it that's the negative what's the  positive you're not supposed to sell it   like the positive it like the the worst thing  you could possibly do in my opinion is encourage   people to give up their bitcoin so it's it's  not a problem that you have to pay a tax   if you just never pay it the current tax code  implies that you should buy it and hold it forever   and the current tax code of currency implies  you should get rid of it as soon as you can   because there's no cost to get rid of it so  if we simply looked at the world like that   then we would stop wasting so much energy right  if you've looked at every single banker every time   they mention they say well is bitcoin a cr is it a  currency well i mean their answer is no it's not a   currency jerome powell can't admit it's a currency  christina lagarde saying it's not a currency   and then the bitcoin community oftentimes  recoils in horror like yes we are yes we are   why do you want to be like why can't you actually  be property worth 10 million dollars a coin   and not be a currency if i told you you could  you could basically go from zero to ten million   dollars a coin and everybody will help you along  the way every company every government will help   you along the way to become worth ten million  dollars a coin or you can fight with everybody   right the entire way and if you succeed you'll  have toppled every government and every political   group and every company and destroyed the entire  20th century economy but you'll have your currency   like what what's left right like if i rip  every single company to zero and i destroy   every country and every political system you'll  have your currency but what are you going to buy   with it when every company is non-existent and  every government doesn't exist right you can't   even buy bullets to defend yourself and that you  know and the post-apocalyptic anarchy that follows   because bullets get manufactured by companies they  use accounting systems that run on dollars right   so so i guess my point really is it's not a battle  of fight like ultimately there's a there's a view   the view is well you know the politicians have  too much power and they use the currency right uh   to to abuse that power yeah yeah right and the  solution is you basically demonetize everything   in the world that's that's in the physical realm  and you demonetize all the currency derivatives   and you just do it gradually in such a way that  every company and every government that's smart   enough to buy into it benefits from it and then  one day you wake up and instead of instead of 60   or 70 of the wealth in the world being a  currency derivative it's 10 and you know when 10   of the wealth in the world's a currency derivative  and the rest is like digital property then   inflation won't be so much a problem anymore right  very shortly right uh inflation's not going to be   like people in venezuela don't have to  worry about the government forcing them   to hold the bolivar and inflating it because the  boulevard has already lost so much of its energy   that at this point when the government can no  longer print the money and inflate it right what   you really have to worry about is the government  just seizing your property at the barrel of a gun   right they're just going to expropriate it  right there right the any government that   prints too much currency eventually loses their  currency privileges their currency collapses   and so i what you've got is this rippling  succession of currency collapses and eventually   what happens is you get down to like three or four  currencies and every single year the currency is   ten percent less of the economy than it was before  and at some point you know at some point they'll   be we'll be down to the cny and the usd maybe  like maybe there's like four currencies left   and instead of uh instead of how much money is  denominated in usd right now you've got you've got   all the usd you've got every other currency pegged  to the usd you've got 100 trillion dollars of   sovereign bonds or whatever then you've got 50  trillion dollars worth of currency derivatives   that are equities then you've got all of  the commercial real estate which has got   rents that are capped at cpi so they're currency  derivatives so if i stacked everything up what   i have like 300 400 trillion dollars worth of  currency derivatives all pegged to the dollar   about and if bitcoin grows to be 100  trillion to 200 trillion then you would have   a hundred trillion in currency derivatives pegged  to the dollar and now the ratios shift right   and as the ratios shift then inflation gets to be  less of an issue because the currency collapses   like like who when do politicians realize their  currency what they can't can fight the currency   i i think that in turkey and in argentina and in  venezuela they're figuring it out right now right   like you'll be astonished in lebanon nobody has  any idea that inflation is a problem it's truly   shocking like nobody thinks the money printing  is a problem people see that all the money in   their hands has been printed in the last two years  the the money supply has gone up about eight-fold   in the last two years eight-fold increase so  about 700 percent increase in the last two years   and you will almost never hear anybody  mention inflation as being part of the   problem it's astonishing but yeah you're  right eventually they're going to figure it   out it's just when their currency collapses  right when your currency like for example   what would be the market to issue argentine  sovereign debt right now in new york city   right not not high right not not very high so  at that point you have to switch to taxation or   rationalization right you have to start  to rationalize your expenditures down   yeah and physical printing physical printing is  what they're doing becomes taxation or you go to   rationalization or you go to expropriation and  confiscation we're going to get there and and   when that happens the result is a function  of lots of things that are above my pay grade   but um if i if i was sitting in any  country right now and i wanted to do   the best thing for the world i wouldn't  say you know buy bitcoin so that we can   defeat your central bank i would say buy bitcoin  because it's better than buying a building right i mean if i was sitting in turkey and i was  giving a presentation and erdogan was listening   my message would be you know you can invest in  a building or a company but bitcoin is probably   a better investment is even better investment  than gold because bitcoin is pure digital energy   it'll be good for turkey it'll be good  for you it'll be good for the turkish lira   don't you want everybody in turkey to get rich   yeah like like bitcoin isn't is an export  digital energy is an export industry whereas   uh investing in a building or a piece of land in  istanbul is a domestic industry so i think that   it doesn't matter who you are everybody pretty  much gets the idea that we're better off   if we have uh 21st century clean export  industries that are generating huge   you know huge cash flows or huge uh benefits to  the domestic economy so i i i would say pair it as it is property by law and the only way it you know  it's a it's a legal definition that's defined by   the communist central party by the federal by  the irs by the eu central you know or by the eu   in brussels you can either embrace that and say  it's property okay it's better property let's go   ahead and replace the other 500 trillion dollars  of property with a better property why don't we   grow 500 to one and somewhere around 200 or 300  to one we can come back to our political debate   about whether we like the idea that governments  can have a currency like if you don't like the   idea that the government gets to designate the  currency while you can run for office and you can   you know you can try to change that right but  at this point in time the likelihood that you're   going to get the eu or the chinese you know party  or the united states to abandon their currencies   is next to nothing and all you're going to do  is you're going to divert 99 of your energy   from something constructive and the  constructive thing is is to stop   people from making mistakes of buying a second  rental property as an investment or buying gold or keeping yeah a checking account right or saving  account which is the same thing these days yeah   you don't need to be the enemy of the  people or the enemy of the government   to to promote digital property yeah i'm a better  idea i must say you've kind of won me over a lot   on this regard um you may not be able to tell from  my twitter and my public pronouncements but i can   i i sympathize with the idea that uh you know  we'll cross that bridge when we get to it it's   still a very long way away and um at this point  i think the the the comparative advantages of   bitcoin is just that it is a much better form of  property and a much better store of value and the   political implications will come later and i think  you know the engineering side of me sometimes   begins to think we're better off just focusing on  this engineering aspect of it rather than just um   you know thinking about the political implications  because a you know the political implications are   just going to get people in trouble which you know  we don't want especially when you know if you're   holding if you're holding the royal flush in  your hands and you know that this is going to um   this is going to win eventually whatever  happens it is just going to win out against   all the other kind of combinations of cards that  you could come up with then you don't need to be   going around telling everybody that you're  going to be winning in fact generally it's   it's it's it's it's a very bad tactic to celebrate  victory before it happens and i can see the point   that yes i think you're absolutely correct on  the demonetization of gold it's something that   i think is uh it doesn't really appeal much to me  um being a hard money person austrian economics   but i think it's it's reality at this point and  i think um clinging on to gold was probably the   biggest financial mistake that i've ever made i i  even after i heard about bitcoin for many years i   still consider no no you know it's still tiny and  gold is the big deal gold is the real thing there   have been pretenders against gold before but  i think this is it it's over i think it's uh   bitcoin is only about a tenth of gold at this  point and that's just within throwing distance   by bitcoin standards so it's uh it's clear that  gold is being demonetized it's not rising as   everything is rising you know you keep pointing  out that lumber and copper and nickel have been   rising more than gold and so that's an enormous  10 trillion dollar market of people who still save   money in gold and still buy gold and i think it's  at this point it's uh you may as well be holding   fiat currency in fact you are in a sense holding  fiat currency because central banks hold about   a sixth of all the world's gold so you're just  basically pumping central bank bags when you're   buying gold that's the reality of it they  control the market for gold they control the   market for settlement and clearance of gold  they won't let there be uh free markets in   gold so that you could have a bank built around  gold moving all around is still enormously   expensive it can't compete with fiat or bitcoin  in terms of moving it around and in a global   economy that's a death sentence and i think in the  last century um you know you could have resisted   that death sentence because you didn't have an  alternative to gold but now we do we have bitcoin   um and i think i also agree with you on the fact  that the us dollar is going to basically eat   all the other fiat currencies um it's it's very  obvious that all over the world people would   rather hold dollars and i think it's just a matter  of um you know the same analysis that i use in the   bitcoin standard about the hard money driving out  the easy money definitely applies for the dollar   and all the other currencies the us has  an enormously larger margin for inflation   um without than all the other currencies because  the currency is just so much bigger and so you   know the turkish leader erdogan needs a whole lot  of inflation in order to squeeze out a tiny little   bit of extra money whereas the us government needs  a very tiny little bit of inflation to finance   itself and its military so i i think i i i agree  with that but i'm wondering like how do you see   how do you see this playing out do you really  think that the central banks are going to just   um legalize and um allow their banks to hold on  to digital currencies and how does that fit in   you know you said jp morgan is going to issue a 1  trillion of stablecoin but will won't it just be   central bank digital currency why do you even need  jpmorgan because you know you look at the chinese   model with a digital yuan and you can see you know  with the universal basic income stuff coming along   why do we even need jpmorgan why  doesn't the center why doesn't the fed   just add an app to the pla to the google and apple  store and everybody can get a dollar well i mean first of all the government couldn't do it if  they wanted to but if you go back and parse   jerome powell's comments on the subject uh  six months to 12 months ago he was pretty much   saying that in about four years we'll study  it and maybe in eight years we'll do something   and then i think uh christina lagarde at the same  time said well we've decided we're going to start   studying it and the chinese were testing it so  in terms of the spectrum the chinese were were   sort of aggressively testing it the europeans were  thinking about studying it and americans weren't   even thinking about thinking about studying it yet  to paraphrase um there's no political consensus   there's no political will in this country for the  for the um central bank to actually issue currency   um you can see that the utterances of senators and  congressmen for the past three months there they   recall in horror at that idea you can also see  it with the with the withdrawal of the name of   of the candidate for the occ do you see like she  just withdrew her not her candidacy because she   had articulated support for such a notion as you  just described and nobody wanted to see that so   keep in mind that uh you know you think  the banks you think jp morgan bank of   america citigroup or the like you think  they would like to see it so sometimes   sometimes i think we just we're too what is the  word uh imaginative in our conspiracy theories   you can't simultaneously have a strong  banking lobby that's your enemy and   then also imagine the government overcoming the  same strong banking lobby to also be your enemy   right uh so if you see the world in that  adversarial way you you think the worst but but um   a different view is this which is it's not  bad for the united states dollar to spread   around the world it is not bad if the banks  start issuing the dollar and if people could   move the dollar faster on some kind of high-speed  crypto rail then maybe that'd be good for bitcoin   right everybody advances together so what do i  think will happen yeah i mean i think that um   that you're going to see big banks you're going  to see it's not clear to me whether jp morgan or   goldman sachs will jump on this as aggressively  as silvergate bank it's not clear but it is   clear that someone's going to get on this very  aggressively it'll either be like an avanti you   know moving forward or it'll be a silvergate  bank who have already said they're doing it i   mean they've been very explicit about it or it'll  be a jp morgan or a bank of america that'll do it   um government you know again governments have to  be very adept at doing things and and oftentimes   they're not so so uh i don't expect any of these  governments to do it effectively even in china   i don't think the chinese government is nearly as  effective as their private sector i mean we saw   that with the alipay alibaba wechat type issues  they they still have companies and there's still   tension between the companies the regulators and  the central party right i mean there's a there's a   federal a federal level of the chinese government  then there's a provincial level it was provincial   politicians supporting bitcoin mining in china and  then there's regulators and then there's companies   so it's just hard and uh and ultimately you  have to have the technical wherewithal to do it   but i guess even then it it  doesn't really so much matter what   any other regulator thinks right the single  most important entity here is the united states   and the administration right because if  the dollar is the world's reserve currency   then the digital dollar right as defined by uh  the administration and the regulators treasury et   cetera are gonna set the standard for how digital  dollars move and um i think it's pretty clear   what they want what they want is either you're  an fdic approved bank or some public regulated   entity that meets the same standards if you read  um the sec denial letter on the spot etf what they   say over and over again is they're troubled by  the fact that bitcoin trades on crypto exchanges   that do not meet uh the standards and abide by  the principles of national securities exchanges   and those principles include ideas like don't  lie cheat and steal from the customer right right   so if you look at the principles there they're  basically saying we want transparency and a   set of principles and we want them to  be abided by in the crypto exchanges   and with the stablecoin they're saying you know  we want to be able to trust that just like a bank   and uh we don't want some i mean the real you know  the nightmare scenario would be some entrepreneur   offshore has 10 billion in capital what if i  put you know 10 billion of an altcoin backed by   you know i i could have a hundred million dollars  in capital i could spin up yo-yo coin and have 10   billion of yoyo coin i could mint an nft on it  and i could trade it to myself three times from   100 000 to a million to 10 million i could print  it all in all with basically wash trades i could   lever it up twenty to one have twenty five thirty  forty billion of yoyo coin and then i could use it   to back a stable coin and the stable coin becomes  200 billion or 500 billion worth of us dollars   that's the nightmare scenario right where you've  got like nothing at the bottom you've got a crypto   punk that circulated six times in blind wash  sales that was levered up to an altcoin that was   levered up to a stable coin that was released  and now that stuff gets into consumers wallets   and it gets used for commerce and it becomes a  systemic risk so i you know you can't blame the   regulators in that way when they say uh we  don't like the idea that there's blind wash   trades with no surveillance agreements  and we don't like the idea that   the stable coin issuers don't meet our standards  as banks and uh you know the crypto community will   say oh yeah well that's like you know that's the  regulators attacking bitcoin there's nothing to   do with bitcoin like i saw today you know some  crypto punk thing traded for 10 million dollars   okay but you know like if i sold it to myself  six times and i started by buying it for a nickel   you know how much is it worth who could  say right and there's no there's no way   to even figure out whether the person  that owned the thing sold it to themself   like it used to be my concern in an auction would  be you've got your best friend bidding on it   but but we're much worse than that we're at a  point right now in cyberspace where you could spin   up a hundred versions of yourself and you could  be bidding against yourself selling to yourself   buying from yourself what's it worth you know it's  like what do you want it to be worth how do you   know it's opaque right so i think um i think that  uh you know these opaque markets are a challenge   and uh for the industry to grow up you know  you've got to go to the point where there's more   transparency securities have transparency banks  have transparency regulators have transparency   you know i i think ultimately all this stuff has a  huge impact on high velocity digital assets right   like nfts and stuff like this high velocity  bitcoin if you're holding it as digital property   properly understood is low velocity the whole  idea of bitcoin is i just buy it and i hold it   like i own a building for 27 years and if you're  holding low velocity money for 27 years right then   is that a threat to anybody not really i mean you  kind of get to the maybe at the end of the day   you'll get to a point where someone will  be concerned about that capital moving   out of a capital control environment  but it's like so far down the list of   regulatory priorities compared to all these other  things like rigged auctions and you know and hyper   lever levered you know self-dealing that um i  think that uh it's almost like not even worth   being on the radar right now yeah i think  a lot of bitcoin is worry too much about   some of the noises from the regulators but i  think it is far more concerning for these other um projects and shady dealings um moving on a little  bit to the sailor strategy what do you think of   the sailor strategy well first of all what do you  think about the el salvador situation in general   and also what do you think about the volcano  bond that they're issuing it is kind of the   application of the sailor strategy to  uh the sovereign level does that kind of   make you revise your uh analysis of  the dollar and uh bitcoin because i   mean they are essentially doing the same  thing they're issuing a billion dollars   um of um bonds and then they're using half  of that at least to buy bitcoin um you know   i my view would be you should issue a billion  dollars of bonds and buy a billion a bitcoin the sailor my strategy is very simple and orthodox  which is buy bitcoin with cash they're doing half   a billion on infrastructure and stuff which  you know is that just makes a sovereign debt   yeah sovereign debt yeah it's 50 something safe  like the truth of the matter i don't have an   opinion on that and i i i wouldn't endorse  everything done by everyone that happens to   have bitcoin attached to it right it's like it's  like you're asking me about the business plan of a   bitcoin miner well would i buy the bitcoin mining  stock some yes some no but you're now you've moved   into the you've moved into the realm of securities  right if you pick you know do i endorse paypal   versus square versus coinbase you know versus  ftx that's a that's a securities issue do i   endorse a a minor that's a securities issue do i  endorse any any country doing anything they want   no but what do i endorse i think they should buy  bitcoin right i'm here's what i think makes sense   you should buy bitcoin with uh with assets um  i think that makes sense i think that it makes   sense to deploy 24 7 365 light speed systems to  move assets around probably even the dollar right   so for example i think it makes sense to have  a digital wallet that has dollars on it and has   bitcoin in it and it moves on the lightning  network at the speed of light but you know   what i i would i would endorse you moving on  the what's up network too like or the apple   pay network of the go if google apple amazon  facebook if they all agreed to just move bitcoin   and digital dollars on their own networks  i'm very i'm open to that now is that better   than lightning like now you're back into a it's a  proprietary competitive issue right what's better   lightning or apple pay well i mean what's better  youtube or twitter what's but i mean these are all   there are what if i had a choice of bitcoin  versus the other thing i always choose bitcoin   that's better yeah because bitcoin but  here's the distinction it's an ethical   distinction bitcoin is property property  is property is ethically superior to   a security like for example if you ask me should  i own bitcoin or microstrategy stock the answer   is bitcoin is a property microstrategy stock is a  security when you when you're buying the security   you're taking you're taking management team risk  competitive risk execution risk you're you've got   nexus in a nation state microstrategy is a u.s  regulated company twitter has got a headquarters   so does apple right so so look when you go to el  salvador well el salvador is a nation state right   so so should i live with my bitcoin in el salvador  or live with my bitcoin in florida or live with my   bitcoin in lebanon or live with my bitcoin i mean  very complicated question right i mean yeah no   but i mean i guess i don't i i don't really think  there's one answer i think you've got to respect   everybody's choice when it comes to these  things if they have to make a choice   right i i guess i would applaud the idea   that you're buying bitcoin anything that's  buying bitcoin i applaud but uh you know   i'd rather actually see you say i took a billion  dollars worth of cash and i bought bitcoin and   then i'd rather see you say i borrowed a billion  and i bought bitcoin right i think the purest   right is is the best approach i mean when you're  when you're asking me would i endorse a bond   that's going to invest in blank well if  the blank is something other than bitcoin   then you've just enticed me to make a securities  statement right i i'm taking like should you or   should you not do that well i'm not i'm not  asking you if you should that's a risk or not   i think i'm i was asking it in terms of you know  the previous question where we were discussing the   evolution of the dollar and bitcoin i guess the  question here is this if um if el salvador and   this is not entirely out of the question if they  go and announce that uh you know if they produce   a new currency if they revive their old colon  but this time it's 100 redeemable for bitcoin   basically they just rename the you know they  all they need to do basically is just change the   denomination on their chivo app from being satoshi  to being colon you know they could make it so that   one satoshi is one colon and then anybody in the  world can download that app and send bitcoin to it   and then that complicates things because now  um the colon is a foreign currency and that uh   changes the treatment of it in uh in u.s law  if i'm not mistaken then you can use that as a   currency because it is a foreign currency  so it's like you're buying and selling euros   and then that probably um you know legally and  taxation-wise does that change the analysis   that you've offered what do you think i  think it's a b it's above my pay grade say   like getting into the creation of a new you know  national currencies a bit above my pay grade i   i have a different point of view i i think that  all the currencies are going to go away except   for the dollar and the rmb like you want to when  when everything is reduced to the end game here   it seems to me like you've got the dollar you've  got currencies in the western world pegged to   the dollar and by the way the chinese currency is  pegged to the dollar right now okay so if i look   at it i wouldn't i'm not sure how much effort  i would spend on creating another one i mean i   think that ultimately you've got everybody's going  to dollarize and if they're not going to dollarize   maybe uh maybe the chinese can stand against the  u.s dollar i mean they're making a good run at it   but the only way that they're actually pegging to  the dollar is through capital controls if their   capital controls fail this the cny is going  to collapse against the dollar okay so so uh   it seems to me that if you look forward a  decade you've got 8 billion people that have   a couple of digital currencies in their wallet  they have the local currency they hold for a   couple of days they have the worldwide currency  they hold for a couple of months and they have   some assets and uh and bitcoin is the king asset  but there are other assets like i'm not i'm not   saying other crypto assets but for example maybe  you want to own a share of stock and apple if they   ever tokenize apple stock then maybe that'll  be an asset you would hold in your wallet now   80 of the world can't buy securities i  mean they have they can buy crypto but they   can't buy securities because securities aren't  tokenized they don't trade 24 7 365. so you know   let me ask you this question right  what do you think the world needs more   like apple and google token or uh dogecoin  son of dogecoin for the puppy coin token   right like what if we ever go forward right  puppy coin the cool could do without but   probably google and apple the world still wants so  i actually think the only reason you have so many   crypto assets is because they trade 24 7 365 and  they're egalitarian and everybody can hold them   and people can't buy facebook token or apple  token or google token in africa on a saturday   afternoon friction free so it's possible when  the dust settles that the sec will actually   create a path for securities to roll off of  nasdaq and new york stock exchange and trade   365 days a year 24 7. and if that happens then  you'll have assets you'll have some property   and maybe you'll have a gold token if you're  silly i don't know i mean a bitcoin token a   something token and you have some security assets  and that's your portfolio of uh investments that's   your treasury portfolio and then you'll have  your wallet your your checking account and   that'll be dollars and pesos or dollars and  euros or something like that or dollars in cny   and you can see why i mean we we're not going  to make apple computer go away in the next five   years we need apple computer we're not going to  make the chinese government go away we need the   chinese government some stuff will go away weak  companies will go away weak tokens will go away   weak currencies you know will just collapse but  but you know wherever the currency collapses   that means the government collapsed right  i mean didn't you just tell me that people   still like the lyra in lebanon so when the  government completely collapses then the   the lebanese currency will also be gone  until that point what you have what you've   really got is just a question of ratios like what  portion of your money is in each of those things   right and if 57 of your money is in bitcoin  and 22 of your money is in equity tokens   and then uh ten percent of your money is the  dollar and two percent or one percent of your   money is in the local currency then that seems  rational and uh you just move that speed of light   so i i guess what i would say constructively  is we would be better to spend our bandwidth   focusing upon the macroeconomic situation  which is in 10 years bitcoin's up 161 percent   a year for the last 10 years gold is up  one percent every year for the ten years   the s p is up fourteen percent long bonds are up  two point three percent okay so the real issue is   how do you let eight billion people  pick their mix of those macro assets and   you know we can see what's happened the  past 12 months right gold's down three   percent bitcoins up 163 percent s p  is up 27 bonds are down six percent   okay so what you really want to do is you  just want bitcoin to continue to demonetize   monetary assets real estate's monetized equities  are monetized why are they monetized safe well one   reason they're monetized is because you can't buy  real estate and you can't buy equities on binance   like finance does a really good job of trading  stuff right like the crypto world here's what we   should like about the the crypto world they really  push really hard this idea of let's be let's   upload any token and let you trade it 24 7 365.  like i mean ftx maybe is between ftx and binance   they kind of put all the traditional exchanges to  shame right you want to monetize or if you want to   liquidate your property it's uh six to 12 months  and six percent fee and amounts of paperwork so   it's really hard to to to liquidate it  once i'm into it and it's hard to buy it   how do you buy a piece of uh las vegas  real estate if you live in uh south africa   can't right so i feel like the discretionary  money is finding its way into crypto tokens   but it's quite possible if we tokenize all the  other assets in the world that then there's a   different balance right there's there's too much  money and currency derivatives and there's not   enough money in other things but if you know  if we demonetize some of the other things like if you're international you're more likely to buy  apple stock if it's tokenized in a crypto exchange   but you're less likely to buy apple stock if  you live in america once you trust bitcoin   right so we have this war of capital and a  flow of capital and capital is going to flow   from traditional assets to digital assets in  one system while uh while capital uh flows   from crypto assets back into traditional assets  in another system if if every all eight billion   people in the world had equal access to everything  right which they don't i think the short of it is when you get into this issue of currency wars  you've moved into debates between nation states   and i i just don't think it's a good use of time i  think it's much more constructive for us to focus   upon upon um getting people to reallocate energy  from the 99 of the assets which are not currently   bitcoin and not currently digital and  if they just sweep them all to digital   right then then you'll get to see a  rationalization of investment portfolios   yeah i think ultimately what is driving all  of this you know the reason people have to   be trading all this stuff is as you call it  money is like an ice cube i think if the u.s   dollar was inflating every year and the supply  was increasing every year at only one percent   i think that would just um kill all of these  uh markets you know if it was if the supply   was increasing on one percent the value of the us  dollars in real term would be probably going up by   two three four percent depending on obviously what  good you're looking at but i think for most people   holding on to dollars at that point becomes a  very good option it's no longer a melting ice cube   so of course that's a very very big if we're not  going to move to that kind of world but i think   the um i i agree with you and i don't want to be  too much of a devil's advocate here and i don't   want to be putting you on the spot but i think um  i i think there's a bit of an unstable equilibrium   as long as the dollar is inflationary we're  going to have all of that money moving around   looking for a home and the only way  this resolves is when it finds its home   in the best asset and the tricky part here is  that there's no stopping the strain you know   you said if it doubles every year for the next  10 years if it doubles every year for the next   10 years it's going to be at around a thousand  trillions which is a quadrillion dollar which is   currently in in today's dollars it's double the  size of all the assets that are in the world   um even if it goes up to 150 percent it'll be  at around a thousand trillion or a quadrillion   in about 18 years so you know by that time i think  there's no escaping the political implications of   the fact that you've basically eaten up the bond  market and really the the the the i think the   the main course here in the grand prize is not so  much the dollar as much as it is the bond market   because the bond market is what allows the dollar  to be inflationary it's what allows governments   to continue to borrow so i guess i guess my point  here is is why would you want to extrapolate out   20 years imagine a revolution in the world and  then invite someone to assume you're correct and   therefore shut you down now wouldn't it be smarter  if you simply focused upon demonetizing gold because you might be wrong i mean isn't it i  mean there's a certain arrogant presumption   would do is to assume that you know what  the world will look like in 15 years   there's a different world which is what if  everything just becomes digitally transformed   and bitcoin grows as digital property and we  have digital assets in the form of equity tokens   and apple stock spreads around the world and then  capital flees from this currency to that currency   and may you know everybody thinks the dollar  is going to weaken but the dollar is going   to strengthen before the dollar weakens and uh  what if what if what happens is everything gets   digitally transformed and capital moves faster and  the world gets rational and in the you know and if   you know if if uh if capital flows out of  sovereign debt it'll flow out of third you   know other nations sovereign debt first which will  strengthen the dollar which may which may actually   have the counter effect so capital is going to  flow out of all these things if capital does flow   let's say capital flows out of bonds and  the bond market collapses well the yields   are going to triple and then there are a lot  of people that are holding capital in value   stocks are going to sell their value stocks and  they're going to migrate into the bonds again   right and so you're going to have you're going  to have all sorts of trading for the next decade   to two decades and it's very difficult to know  what'll happen but you know there there is a   pessimistic view which is well i'm sure it's  going to pretty much collapse the world and   we're either going to get away with it or please  stop us or or there's another optimistic view   which is the world's going to get more rational  and as the world gets more rational capital   is going to be allocated more rationally and  political systems going to be rationalized and   as the world gets more rational things will  get better and at some point we will you know   if you believe in the political process  at some point people will spend less money   or they will rationalize the tax in some way and  there'll be some peaceful resolution to the thing   so be it big like we still do  need we still need companies right   you still need companies so at some point  apple stock's going to be worth something   even if it goes to a dollar there'll be someone  that'll think it's a good investment right   so you need companies you you know you still need  countries like maybe they'll reorient right maybe   canada will break into french speaking and english  speaking or not right but you still have political   systems um are bonds destined forever you know  i mean there's still a place for bonds it's just   different bonds a different rate right if bond if  bond yields go up then capital will flow back into   them it's the the argument that i make in the fiat  standard is that what's driving the bond market   is not the credit worthiness worthiness of the  borrower but rather the um the demand for a store   of value you know the reason people are buying  greek bonds and brazilian bonds and up until very   recently lebanese bonds is because where else  are they going to put their money they don't   they still don't know about bitcoin and they just  think that there aren't any good ways where you   don't get equity risk but now you know with the  discovery of bitcoin it becomes much um it becomes   a much more compelling place than you know lending  to all these governments so yields will go up but   then governments won't be able to service those  yields and so i think we'll likely witness the   bond market shrink and yeah i mean i i think there  is there's also kind of middle ground between my   view and yours here and which is that governments  will just learn uh discipline and they'll be able   to buy bitcoin they'll be able to save their uh  you know save themselves by buying bitcoin and   they'll continue to be able to operate but they  won't but they'll operate responsibly and they'll   have to shift towards uh you know they'll get a  big boost from their bitcoin holdings going up   but it won't be um a system where they can  continuously run eternal deficits they'll   get a boost that'll allow them to phase out their  irresponsibility um hopefully you know relatively   uh bloodlessly and smoothly but then you know  the the the big kind of high time preference   party of the 20th century has to come to some  kind of end and the governments that managed   to transition to some form of responsibility will  obviously do much better than the ones that don't yeah yeah i agree okay great i mean couldn't  you say that at the end of the day there'll be   three classifications of political reaction  there'll be some governments that that uh   resist reality and they collapse and and maybe  they collapse into civil war or they just collapse   into chaos and there'll be some governments that  that fight resist struggle and eventually uh   reconfigure themselves after great deals of  pain and agony and they'll be some governments   that that look at the world and they they  uh transform themselves in an agile fashion   and they maybe they don't get through  without k without stress but they morph   into something different and accommodate the  world right what happens if a small country   the best example would be what if a small  country that still has a currency starts   printing the currency to buy bitcoin the first  one right there's a little bit of room right like   like what if uae right or or saudi arabia  what if they were to go and just start   buying bitcoin with their currency like how  long could i mean in theory couldn't you if   you ran a country like uh emirates couldn't  you go ahead and buy billions two three five   ten billion of this before anybody noticed before  and it might never weaken your currency right yeah they've got an annoying  strength capital right   yeah they're hosting world cups that you know cost  them a lot of money they could be buying bitcoin   and watching the world cup on tv like a good  uh i mean a good model to consider is norway   and sweden and other sovereign wealth funds  right the the really they're you know you've   got regressive you've got cuba and venezuela  right and north korea and they're not really   good at embracing property rights and then  you've got the middle of the road conventional   and their central banks are holding you know u.s  sovereign debt or gold but mainly just sovereign   debt and then you've got progressive nations  and norway is one norway's got a massive equity   portfolio right switzerland's got a massive they  they didn't use gold they actually used big tech   as a store of value um you know ksa and uae  in fact all of the middle eastern countries   they generally have sovereign wealth funds that  are holding diversified portfolios of property   including equity they own banks they own big tax  sometimes sometimes they own like tons of property   real estate reits not to mention commodities right  oil rights like mineral rights and the like so i think uh i think generally the world is a  more complicated place then we are able to   predict right like you're trying to predict what  the market will do and is is it the whole basis   of austrian economics right that nobody can really  predict the market you know yeah it's human action   at the end of the day and so everybody has free  will right like microstrategy can do what it did   like microstrategy stock was 120 and then we  flipped and it's up by a factor of five and   and what do we do we basically bought some bitcoin  and then we started issuing stock to buy bitcoin   isn't that the same as a country buy some bitcoin  and starts issuing currency to buy bitcoin yeah right yeah so i guess it's a slightly  different because it devalues the currency   when you issue more of it but if you back it  up it isn't slightly different because when you   issue stock you devalue the stock right you'd if  you're issuing equity you're diluting the equity   and if you issue currency you're diluting the  currency but but the equity is a claim on the uh   on the cash flows of the company and the currency  is a claim on the assets of the bank that issued   the currency if it is redeemable and uh if  it's redeemable in gold or bitcoin then yeah   so that's what they've got to do they have  to go on a bitcoin standard let's let's be   extreme right what happens if uae buys 10  billion dollars of bitcoin and the price of   bitcoin then increases by a factor of 20. and  next thing you know they've they've got 200   billion dollars worth of bitcoin and everybody  in the world knows they've got 200 billion   worth of the first thing that's going to bitcoin  is the saudis are going to want to buy more then yeah so i think i think the  point here really is yeah   you can spend a lot of time fantasizing about how  you never want any banks to buy bitcoin you never   want any companies to buy bitcoin and you never  want any governments to buy bitcoin and since   they're not going to ever buy any bitcoin you're  the enemy of the banks and the companies and the   government right yeah right and and you see that  narrative right like like banks are the enemy of   bitcoin companies are the enemy of bitcoin  not your keys not your coin the government's   the enemy of bitcoin but the other possibility  which just turns the entire thing on its head is   what how would you feel if you woke  up tomorrow and you found out that   goldman sachs did buy 10 billion dollars of  bitcoin and uae bought 20 billion of bitcoin   would you be angry by the way your bitcoin would  be trading at like four million dollars of bitcoin and you could be angry and say no no give that  back to us i want to go back to 50 000 bitcoin   look if institutions weren't involved in bitcoin  bitcoin would be trading at like 8 000 right now   right if you look at you know the  last 18 months so you could like just   we could unwind that and you go back to  8 000 bitcoin or you can move forward but   it's just a taste so you know  my what's my big point here it's   it's like nobody can predict how the future  will evolve except to make this one observation   people are generally rational and they take the  path of least resistance and so at some point   it's possible that someone's going to buy  the bitcoin not because they agree with with   your most extreme vision of no governments and no  companies and living together peacefully in one   world currency maybe that's not why they're going  to do it maybe they just want the money right yeah   for sure uh bitcoin is is far more popular than  anarchist ideology that's for sure i i totally   so when she has that right when that happens then  uh the entire thing is going to tilt a different   direction inconceivable right you don't you just  don't even know which direction it's going to go   but the world is going to find its way forward and  and uh you know like when the lockdowns took place   right there's this phrase life finds a way right  you know like the jurassic park phrase when the   lockdowns took place we shut down cruise lines and  we shut down airlines and we shut down theme parks   and we shut down movie theaters and if you're if  you're uh an investor in the disney corporation   you could look at the disney corporation and  you could say well they're in cruise lines   oh and hotels hotels airlines cruise lines  theaters everything's shut down you know   and if you're if you're an analyst you  could say well it's pretty obvious the stock   is impaired the company is impaired i should  just dump my stock or i should short the stock   but at the end of the day someone went on  television and said how's disney going to react   and someone went and disney went on top and said  we're just going to do disney plus streaming   and they said well how many customers do you  have like right now you know at the time of the   lockdown they were like the ninth largest you  know non-launch streaming service and it would   have accounted for 0.1 of their revenue or 1 of  their revenue and minus nothing of their profit   and you could just focus on that narrative or you  get on tv and say yeah well we think by the year   2025 we're going to actually be growing a hundred  percent year over year and everybody said this is   great they've got a plan stuck at an all-time high  yeah and so you know and so the point really is   are you going to bet on everybody to lose  or and not come up with the right strategy   or what are the odds that they're just going to  find a strategy which is a winning strategy and   a winning way to accommodate right i mean nobody  on d nobody from disney got on television and said   you know the you know streaming video will never  replace the theme parks it will never replace   you know the the movie experience we believe  families need to come together in our hotels   and be in our you know disney world rides  i mean they didn't spend a lot of time   you know wallowing in self-pity and dealing with  that reality just completely change the focus   talk about the new thing and move forward so  i i think that uh everybody loves a winner   and bitcoin's a winner and the winning strategy  is let everybody win with us right nice   definitely everybody can win with is it i don't  care what government you know can governments win   yes all of them even the ones i don't like even  the ones i don't like right can companies win all   of can the banks win yeah sure they can i don't  you know you don't like that company because they   censor this thing no they could still win like at  the end of the day if everybody wins with you and   your you know you have the most extreme values  like multi-sig coal storage with you know   guns and a cabin and your own source of water  and your own food supply you're still going to   be better off right yes you know your bitcoin's  still going to be worth 10 million a bitcoin   yeah my view on all of this is to tell people  that you know bitcoin is permissionless and that   includes that it's complete you can't stop people  from selling ious for bitcoin you know people   think about it as if we need to stop people from  buying bitcoin ious well no it's bitcoin holders   who are selling ious and there's nothing you  can do about it and i think you know generally   as a libertarian leaning anarchist i i i don't get  upset at things that are peaceful i can't oppose   people doing peaceful things that don't hurt  others so i'm definitely with you on that now   i wanted to talk a little bit more about your um  strategy for buying debt buying bitcoin with debt   i think you know your your appearance with this  strategy was really the kind of um the glue that   held the fiat standard book together it's what  allowed me to finalize this book because it really   made it all click to me that the way to win in  bitcoin is to stack or gold with you know with a   hard monetary system the way to win is to stack as  many units as you can you know get as many sats as   you can as many gold coins as you can and you know  the more you get the more secure you are the more   you can feed your family the better off they are  the more you can guarantee their future into um   into the future um when you're not there and  that's how you win but then with fiat it really is   the other way around you want to stack a negative  balance as much as you can you know and you've   said this before and it blew my mind but really  the point with fiat is to die with as much debt   as you can you know you want to keep on rolling on  debt as much as you can throughout your life and   um that and and so acquire hard assets and take on  fiat debt you want to have fiat as your liability   and i think that just makes a lot of sense and  it's really clarified my thinking about the fiat   standard in that this is this is this is really  how rich people get rich under fiat they borrow   in fiat poor people hold on to savings in fiat  and then they witness their savings depreciate   and the returns that you make from holding  money in the bank don't keep up with inflation   and if you're borrowing you're benefiting from the  fact that you're uh benefiting from the inflation   so i think this is this is um and you know i  come from a background where i used to think   you know borrowing is bad and i you know for the  first few years that i've heard about bitcoin i   first didn't buy and then i didn't borrow to buy  and i thought you know i'll just wouldn't borrow   but in retrospect that was probably the second  biggest mistake other than um holding on to gold   is that i could have borrowed lebanese liras um  and bought bitcoin and like i've run the numbers   on it and it's just absolutely it's an absolute  no-brainer in retrospect when especially when   the leader has lost 95 of its value in the last  couple of years and bitcoin has gone up many many   multiples so i want to ask you um what do  you think is the correct strategy to do   in terms of debt because we had this discussion in  the last time and it was in late february when you   came here for the last time and you know you said  things are going to be different from now on we're   not going to get major drawdowns in bitcoin i said  you said you know something like 30 40 percent   probably i said well i i can see us losing 70 80  since then we haven't had 1780 but we did have   56 percent which is significantly large numbers  so a lot of people who might have taken on the   strategy of borrowing um might have gotten wrecked  and lost their bitcoin so what do you think is the   correct strategy to do so you want to borrow but  then if you're borrowing you're leaving yourself   vulnerable to price fluctuations you could get  liquidated okay well i mean the first question is   is who's loaning the money to you right and what  are the terms of the loan so bitcoins up 163 on average each year for a decade  if your time horizon is four years right i mean i think no one ever lost  money holding bitcoin four years right   i mean there's like a two-year time  period when it was pretty brutal   otherwise you want to have  a four-year time horizon and um look if you if you um were borrowing you  could have borrowed money on your credit cards   right i mean like you could have borrowed money  at 15 interest and you still would have made a 150   yield right so there's almost no interest rate i  mean nothing between 0 and 15 that would have been   too much in that entire time period now if you  look out for the next decade what's your forecast   i mean i i think that expecting a 20 appreciation  is not unreasonable on the next two three four   five years like will it go faster i mean  yeah you would expect faster than that but   what it means is that any interest rate between 0  and 15 is probably fine as long as you have intent   to hold for four years or longer because  you could in theory get a drawdown   12 months right that would put you  underwater so you can't have any   any loan that comes due so if you look  at the loans that are safe right any   loan you can roll forward you know for  a reason amount of time is probably good   um a home loan a 10-year 15-year and 30-year  mortgage against property is a no-brainer the best   sources of debt are subsidized by the countries  the nation-states right so in the united states   we subsidize debt against real estate property  especially conforming law but even non-conforming   we subsidize conforming loans via freddie mac  and fannie mae and you could borrow money at   two and a half percent interest it's not mark  to market so if you had any equity in property   you could pretty much borrow at two and a half  percent and you could invest at a hundred and sixty one percent right so what's the risk  of that i i don't see the risk right like   is bitcoin gonna go up more than three percent a  year for the next decade you know if if so then   it's a mistake not to maximize any  kind of home equity loan right now   the united states government is supporting  the mortgage market um even in jumbo loans   via buying mortgage-backed securities each month  so even on jumbo loans and the like right i mean   isn't the cost of debt for lots of things  three four five percent um i think that uh   any of these loans that are that are south  of eight percent they seem to me like pretty   good money for an asset which we can reasonably  ex it's going up at 20 x that rate right so   so if they're not marked to market against the  bitcoin it's a non-question right now i think   the real issue is what would you borrow against  your own bitcoin well if you borrowed against   bitcoin with a loan to value 25 percent you're  probably safe that but i i would i try to avoid   if i was going to be marked to market i mean the  rules in the equity market the us are you can't   normally lever up more than 50 loan to value and  there's good reason for that right if you if you   had a million dollars of assets and you borrow  500 000 and then you have 1.5 million in assets   if you were to get a 70 a 66 draw down right then  you're gonna get a margin call right so so i think   that uh when you lever more than two to one you  put yourself in a situation where you can get   wiped out obviously everybody in the crypto area  in the community is leveraging between two to one   and twenty to one or two to one and a hundred one  that's why they get forced liquidated all the time   because they're doing massive leverage  i i personally aren't i i wouldn't   i'm not a real big believer in and borrowing  money that gets marked to market because you get   this destructive cycle right where the asset  trades down and if you ever do get a margin   call and you're uniformly in that you could get  liquidated then you're wiped out permanently so   i don't think that's a very  good thing but if um if i had um   a million dollars of bitcoin and my choice  was to sell a hundred thousand dollars of it   to pay my living expenses or borrow a hundred  thousand dollars against it at six percent or   seven or eight percent i would probably borrow  the hundred thousand pay the eight percent   and keep the million dollars of exposure then sell  it because if you sold 100 in order to sell it   you would have to actually sell in some cases  up to 200 000. like if you live in california   and you have a million dollars of bitcoin you  would have 800 000 of bitcoin the next day you   would pay a hundred thousand in tax of the state  of california you would have a hundred thousand to   live on and your stack would be reduced to eight  hundred thousand right so if on the other hand   you were just to borrow a hundred thousand  you would have a loan to value ten percent   and uh you would incur eight thousand  dollars in interest over the course of a year   and you would have a million dollars appreciating  it whatever bitcoin appreciates that so   if a bitcoin appreciates it 20 you'd have 1.2  million the next year right and then you could   do it again you could do it out infinite right at  that level so you just have to be able to stomach   the volatility the way you stomach the volatility  is you keep your loan to value really low   really low uh even smarter idea though is um  is uh if you're a dentist or you're you're you   have some kind of business finance your  cash flows like find it like you have a   business right if you can sell equity in the  business that's a way of financing the business   and if you sell if you mortgage the business  that's a way of financing the business and   both of those have the benefit of  not being marked to market loans   well let's take the extreme what if i offered  you a million dollar loan for a hundred years on a on on against your personal signature  and the interest rate was three percent   would you feel it's risky to buy bitcoin with that like what's the worst that could happen not much  nothing right you'll be dead in a hundred years   the worst that could happen is in a hundred years  after you're dead the bitcoin is less worth less   than a million dollars right see so small chance  i maybe you can come up with some way bitcoin   goes to zero the day after you take the loan  and you can't pay the three percent interest   then i guess it comes due so slight risk of owning  the bitcoin but you see as that as the term of the   loan extends as the interest rate falls and as  the collateral changes you know debt goes from   being debt to being equity what if i just gave you  the million dollars forever and no interest rate   and no redemption rate that's equity right yeah  would you take that and buy bitcoin with it probably why wouldn't you yeah like like if you're  a dentist and your dental practice is going to   appreciate fi it's going to grow 5 a year you're  going to grow your top line 5 your cash flow is   5 percent and someone said they want to invest  in your dental practice and buy half of it and   they'll give you a million dollars would you give  them half of your upside and then take the million   invested in bitcoin which you thought was going  to grow at 20 a year for the next 20 years you see in that particular case  what you're doing is you're   diversifying your portfolio from a cash rich value stock right your cash  practice to now a property portfolio   so i think when you're really thinking  about financing the question is   what kind of money can you raise and  and what strings come attached to it   and it's different for everybody right  it depends on what country you live in   if you live in the u.s you have fannie mae and  freddie mac and you have like you need a car you   can pay for the car in cash or you can borrow  money at two percent interest to buy the car   well everything is a choice of  do i own bitcoin or not right   if i pay for the car in cash it's  like i paid for it in bitcoin right   it may be worse it may be like if i pay for the  car with bitcoin not only did i pay for the car   but i paid for it twice because i got to pay tax  on the bitcoin if i owned the bitcoin so the worst   case would be to give up a hundred thousand  in bitcoin to get a fifty thousand dollar car   the next worst case would be i had fifty thousand  in cash i could either buy bitcoin with it or   i could buy a car with it and the best case  would be i got i bought the car for nothing   and i accepted a three  percent loan against the car   that i paid off over seven years and i kept  the bitcoin you see or i bought bitcoin so ask me a question would i rather borrow money at  three percent sometimes by the way you can borrow   money at like zero percent interest to buy a car  have you noticed like if the dealer has a subsidy   sometimes the dealer will subsidize the  loan and they'll give you a no interest   loan or a one percent loan to buy the car  so mike should i buy should i borrow money   to buy the car or should i pay for it in  bitcoin yeah and and not invest bitcoin   the answer is i think i would take the loan  i would take all the credit you would give me   and i would maximize the portfolio i think the  general principle if you step back is um in an   inflationary environment right if the inflation  rate is 15 percent the monetary inflation rate   is 15 and it's at least 15 right now if the  inflation rate is 15 and the cost to capital is 5   and you have a use of proceeds if you've got  a property that you believe will appreciate   faster than 15 let's say 30 right then all  day long what you would do is you would borrow   you would take on debt and pay the 5 you would  invest the capital into the property yielding 30   percent you would scrape the 25 arbitrage and the  only thing you would spend your time focused on   is how do i negotiate the terms of the loan so i  don't get forced liquidated by a capricious lender   like i don't want for example um if you could buy  a house and the house was a three percent mortgage   and you could either pay for it in cash or  pay three percent mortgage an inflationary   environment you would probably take the mortgage  right probably now what if the bank had a clause   in the in the loan that said every month we can  send an appraiser to your house and if we think   that your house is worth less because it got  struck by lightning or your neighbors moved in   and they blur loud music or because people because  the mayor instituted lockdowns in your city if we   think it's worth less we can mark down the price  of the house by 25 and then if it gets marked down   below you know below the value of your loan then  we can call the loan and you owe us the principal   immediately on demand now would you take the loan  no yeah so the problem is the terms not the loan   basically borrowing on exchanges  is the worst thing you could do   because the exchange could mark down the value  of your collateral while you're asleep based upon   a manipulation and force liquidate you and take  your life savings yeah it's like it's like you   went to bed and bitcoin was 49 000. and uh during  the night it traded down to 16 000 for 13 seconds   and then the exchange force liquidated you  and they took all your money and sold your   bitcoin at 23 000 and you've lost everything  and now bitcoin is trading at 59 000 again and how do you feel like you got  yeah it's happened abused right yeah   okay so that's the problem with mark to market   especially mark the market when you when you post  your collateral in the hands of a counterparty   you know and that could even be some like  dogecoin guy manipulated the market down   like that the real problem in the crypto world  is it could be yo-yo coin levered up a hundred   to one force liquidated rippling into each  rippling into bitcoin in fact i'm certain   i'm certain that volatility from all these other  cryptos does ripple into bitcoin you can watch it   right it's like someone hammers this thing 37 and  the ripple is felt over here because bitcoin is   cross-collateralized they're pledged as collateral  to each which is pledged as collateral to   yo-yo coin or something and these things are  all highly levered and traded all the time   so i think you got to be really careful like in  general about pledging collateral that could be   forced liquidated but i think that if you can  actually raise debt with um fixed collateral   right the best thing is i mortgage a property i  mortgage a building i mortgage a car i mortgage a   business i borrow money on a personal non-recourse  loan you know something like that and then i use i   use that because you want long-term capital that's  got a low interest rate but even at the end of the   day the interest rate is really secondary like  whether you pay four percent or eight percent   at the end of the day isn't really as important as  whether or not the collateral is marked to market   and forced liquidated on volatility right that's  really the material thing that'll destroy you   right the likelihood that bitcoin will trade  down 50 um for one minute sometime in the next   five years is high but the likelihood that it will  trade fifty down 50 percent and stay there forever   is low right so you just got to understand that   yeah but you know now by the way safe i think  one more point to make which is important is   the monetary inflation rate is um  is the risk of doing nothing so   if the monetary inflation rate was seven percent  seven percent monetary inflation every year and   you were thinking about investing in something  right um you would you would think well there's only a seven percent cost to do nothing  but if the monetary inflation rate went to 21   now the cost is 21 per you have to  believe you're going to get wiped out 21   of the time not to do something and if the  monetary inflation rate went to 60 percent   then you would have to believe  that there's a 60 chance of losing   all your money in the next 12 months to do  nothing so as the monetary inflation rate   let's take lebanon right in lebanon if you if  the currency lost 90 of its value in 12 months   and i gave you any other option as long as the  other option doesn't liquidate you it doesn't wipe   you out with ninety percent probability you would  have been better off to take the other option   so i think that uh the decision decision-making  here your thought about um taking on leverage   becomes easier as the economy hyper inflates  let's take the extreme i ca i tell you that   the local currency is going to lose 95  percent of its value in the next 12 months   wouldn't you think you really just want to  mortgage up just about everything because that's   like 2 a week almost so yeah i mean certainly  if you could get credit card debt or whatever   you'd be you know the the local currency  return on digital property is going to be   180 200 300 a year like what is what does the  number look like in turkish lira or argentine   pesos right now for bitcoin well we lost 12  months it's probably pretty ridiculous right yeah   yeah absolutely well what are your thoughts on  inflation moving forward where do you see it going   do you see us sticking around the 15 20 range uh  for the next few years or going higher or lower   or do you just not know much about the future  and prefer not to speculate that's perfectly   acceptable answer by the way you know um on  inflation you know what i i s a couple of points   one one thing i said today on twitter as i said  there's four big myths the first myth is at cpi   the second big myth is that it's even a single  number the third big myth is it's caused only   by monetary policy and the fourth big myth is that  it can be cured by manipulating the interest rate   and i think that people have misconceptions about  all those things on inflation it's it's caused by   by uh unhealthy policies of government by  by the government meddling in the economy   in an unhealthy fashion that's what causes  inflation in the same way that inflammation   is caused by unhealthy chronic practices in your  personal life right and and if you continue them   the information continues and if you continue  with the government engagement with the economy   the inflation will continue and you can't just  stop it by raising interest rates to 15 right if   if we if we jacked all the interest rates through  the roof tomorrow as long as there are tariffs   and there are you know there are labor controls  and there are manufacturing controls and there are   travel controls and there are other government  edicts and medical interventions those things   even without money printing if the money supply  didn't expand at all you still have inflation   right if you do the simple thought test  if the money supply was constant and i   pretty much made it illegal for anybody  to work except on tuesday and thursday   the price of everything goes up right if i say  that you have to have a seat in between you   and the next person on airplane the price of the  ticket doubles you know there's they're also every   single every single edict drives inflation and you  know we have more of them than in our lives right   never in our lives have we seen so much  government engagement with the economy and   that's what's called the inflation rate if  i wanted so so with that as a caveat right   since there is there is no one number the closest  thing we can get to one number is a single a   single number for the rate of monetary inflation  the cost of capital if we simply liquidated all   the capital in the civilization and we reduced  it to dollars and we said at what rate are we   inflating that index and i guess i guess i'm  persuaded it was seven percent for the a decade   for in the us and western europe from 2010 to  2020. i think um you know safe this is interesting   if i look at if i look at the s p index it was  about 10 for that time period it's 13 right now   but we we include this massive 2020 before covid  about 10 percent and i got a figure 7 percent was   monetary inflation 3 was some kind of  productivity or something that's my best   guess and if i look at it right now in the past 12  months we've got 23 24 almost 24 on the s p index and that means at least 20 21 monetary inflation  that doesn't account for the dilution from issuing   excessive debt and equities in the s p 500 so if  you allowed for that then you could you could make   an argument that we've got monetary inflation  equal to the s p or or slightly but we're   looking at monetary inflation in the western world  tripling and if i look forward the next four years   i there's no circumstance under which  you can't you wouldn't consider it's   got to go at double the rate it was from  2010 to 2020 so it's minimally 15 a year   i figure and then it's logic says between  14 and 22 percent is the best guess and and i would allow for a  little bit of flexibility there   like i i would swear no chance it's  going below 14 no chance but but you   know if you're a pessimist you would say 22  23 and if you're an optimist you'd say 14   and then you would say maybe and then you would  say that for four years and then maybe we'll   get some paper 2024 between 2028 and maybe  we can taper from 14 to 12 to 11 to 10 but   you know at the end of the decade could we get  back to being to in fighting at seven percent right maybe that would be success right and  and the catalyst for that would be digital   transformation of the economy maybe digital you  know the the growth of digital property a lot of   bitcoin the digital transformation of everything  else of assets the digital transformation of   products a massive com what we're really  we're distorting the economy so much though   that we're really changing the definition  of gdp and maybe even i mean for example   if no one goes to a movie theater ever again and  if we eliminate 90 of business travel then both of   those are deflationary and we could say we have  more business meetings and we watch more movies   but the economy will contract so i think that that  that will start to come into play it's like that's   like a hedonic adjustment in a way like it's it's  not that different than your sirloin steak became   soy burger or like meat meat derivative product  something but you know it's been so long that   we forgot that we ever had the other thing so we  don't know to miss it i think we'll see some of   that when you get out when you get out more than  a decade that's what makes this really difficult   but i i think you want to plug in a number plug  in 14 but now i think that the wild card here   is that's in the united states and western  europe but i really think that what we're   seeing is the system cracking in on the fringe  in turkey in argentina in all south america   you know the interest rates in brazil are what  right nine percent right now and the interest   rates in turkey have been 16 15. so i think that  uh in the developing world you're going to see   something different right if if the  us inflates at 14 what people haven't   really factored in is that everywhere else  they're inflating 20 percent to 30 percent   and the question is what are the consequences  and i think i think there are two really big   trends right which is people are going to  snap up digital currency if it's available   as much as they can get their hands on and  they're going to snap up digital assets   a la bitcoin and no it won't be like everybody  because to your point there's so much stubbornness   there's so much inertia right you're really  telling me their people are believing in the   lebanese local currency even today yeah it was  it was stunning like one of these blogs that i   follow which generally has semi-decent analysis on  economics so they're anti-price controls and stuff   they were saying the lebanese lira is the most  undervalued currency in the world and it should be   at 12 000. and i've heard from many friends that  a lot of people had sold their dollars at certain   points you know at three thousand they thought oh  it's going to go back to two at fifteen thousand   they thought i was gonna get back to 10 and at  25 now they think it's going to go back to 12 and   they continue with it you know  you can call this a currency war   right this is like a war so let's come back  to war there's conscientious objectors to wars   what what happens if you're against a certain  war vietnam war world war one the rebel you   know tar and feather comes from what we did  to people there were conscientious objectors   in the revolutionary war so i think when things  get to be wars patriotism kicks in and you end   up with the leader of the country saying it's  your patriotic duty to buy the bonds and the   and to own the currency and to sell your foreign  currency right so i think we'll get some of that   but you know wars also have winners and losers  too safe right so like like ev at the beginning   of world war one everybody was on their side and  they and they had a lot of conviction but in the   day the war did end and there was a winner and  there were losers i mean everybody struggled but   i think that here what what we see is we  see this um this conflict but i i think it's   important like it's important if you want to be  effective if you want to be effective and and uh   and maintain your sanity and not get distracted  it's important to frame the war as the conflict   between currencies and the conflict between  assets and ultimately the struggle is   the dollar versus the peso and the lira and that's  gonna and that's nation states jocking with each   other and ultimately there's gonna be a call you  know to the state department by the president of   a country saying we don't like the digital dollar  circulating around here stop it right like what   what is the united states what's the secretary of  state gonna say if the president of of a nation   that's got a currency which is dollarizing or  collapsing calls and complains the ambassador   and that it's going to become a geopolitical  thing right maybe we don't like that   but leave that that's above our pay grade right  like it's it's better for it's better for turkey   and argentina and brazil and venezuela  to work it out with the united states   and the diplomats and foggy bottom is how  they want to deal with that currency issue   and then the other war the struggle is going to be  bitcoin versus you know stocks and equities versus   real estate reits versus gold versus commodities  right and and that's going to be a hard-fought one   and there's there's a hundred trillion dollars  at stake in both of those struggles for the   next decade right that's going to play itself  out but if you really think of it like that   then if you want to be effective you know let the  diplomats sort through the issue of currencies   right that's their job and  then if you're an evangelist or   or an educator in the world of bitcoin focus  upon explaining to people why it's better for   you to buy bitcoin than buy a house in istanbul  it's better to buy bitcoin than buy a bar of gold   right help with those things you know  because ultimately you can win that one   right that that's a that's a battle you can win   and you gotta you gotta choose your battles and  choose battles you can win that make you stronger   right you don't start by  picking a battle you can't win   that you don't even need to fight so what  are your thoughts on small businesses um   you've mentioned tahini's restaurant bitcoiner's  favorite middle eastern restaurant uh adopting   the bitcoin standard do you have any tips in  general for small businesses what they should do well i mean you design define your treasury  strategy and and have a have um a savings account   a checking account so i would keep somewhere  between one month to one year's cash flows   in uh in the currency that uh that  most of your cost of denominated in   so if i had liabilities in dollars or canadian  or euros or whatever i'd keep a balance   in those liabilities and then all the excess  capital you have i'd sweep into bitcoin and   i'd sweep cash flows and access like we we have  a target number and normally it's like 50 million   and if you know i'm always talking to my finance  people are we more than 50 million do we have a   little bit of extra you know and then we  sweep the extra into bitcoin and then um   otherwise if you're a small business look  if if you can um negotiate a credit line   against uh against bitcoin it doesn't hurt to have  one you know silvergate bank gave a credit line   uh and issues credit lines to people like  marathon the bitcoin miner and they can   borrow money against bitcoin so if you have a  credit line against bitcoin and you and you can   establish a banking relationship at some point  that could be interesting the other thing is   if you're an inflationary environment  once you've adopted a bitcoin strategy   you have a use of proceeds for capital if  you didn't have a use of proceeds for capital   then selling equity is dilutive but if you have a  use of proceeds for the capital that actually has   a higher theoretical return than the growth rate  of your business then selling equity is a creative   like microstrategy sold equity we sold you saw  just this week i announced we sold 82 million   dollars of equity and we bought 82 million dollars  of bitcoin now for 20 years we didn't really sell   much equity and the reason why is we didn't really  need the capital so we'd just be diluting our eps   and diluting our cash flows but if you're if your  small business is going to grow at 10 a year and   you think bitcoin is going to grow at 40 a year  then if you sell equity at a fair price and you   convert it to bitcoin then in fact you're actually  strengthening your balance sheet and you're   increasing the growth rate of your business right  you just quadrupled it right in theory if you   basically sold equity equal to your entire company  and put it in bitcoin you just did a merger with a   company growing at bitcoin rate 160 a year with  your small business growing five percent a year   okay so that's uh microstrategy did that right we  took a 500 million dollar company with 500 million   in capital growing zero percent a year and we  turned it into a 500 million dollar company   growing five percent or 10 percent a year   with six billion dollars of capital growing  160 a year right so that's the bitcoin strategy   so i think small businesses if they can  raise equity or if they can raise debt   like if i again if i was a doctor's practice  or a dentist practice or a restaurant   you know if you could borrow money against that  at a reasonable term and conver and convert   to bitcoin i would do that i would finance my  equipment i would finance my real estate i would i   would finance my cash flows and i would do it with  any combination of debt or equity now the caveat   here is anytime you do a financial transaction  like that you got to find a counterparty trust   that isn't a vulture right i mean you could do an  equity raise where you thought you were getting a   good deal but they insert a clause that says if  you don't show up to work on tuesday we get to   seize your business and everything you know  so and you know i i once borrowed money uh   to buy to lease some computer equipment and i  thought it was good terms like six percent or   four percent interest and when the uh when the  lease came due there was a clause in the lease   that required that we return all the computer  equipment with all of the plastic face plates   in perfect order with the serial numbers intact  and the face plates were worth like 15 cents   and one and they've been removed like three years  earlier and thrown away and so the bank basically   tried to hit us with like a four or five million  dollar penalty cost which would have tripled the   cost of the lease because on page 98 of  the lease we were supposed to return a 15   face plate with a 3 000 computer so my caveat  here is assuming you know how to do these equity   transactions and assuming you can borrow the money  from someone you trust that is not a loan shark   then you should take the capital  and you should buy bitcoin   if you don't know how to do that you're in over  your head right you'll probably just hurt yourself   so uh i mean it's always possible to snatch defeat  from the jaws of victory through poor execution   that's extremely valuable information i really  appreciate it i think a lot of people will benefit   from learning these lessons um dorian has a  very good question for you which is have you   considered taking on debt in currencies other  than the dollar since you think that they're   getting inflated faster and i think  i agree wouldn't it make sense to   use all of your businesses abroad and lever  up on it's an interesting thought actually um   you know i i'd have to talk to my finance people  like in theory if we could take on on debt in uh   in weaker currencies like a credit line that  is a good idea well i think we've just been   focused on other things but it but it is good uh  if you can get it to the a size that's material to   be worth the trouble yeah all right well you have  to poach dorian from my website he works on my   website now we have to enter a bidding war on him  um but yeah very i give you points very creative   excellent very creative excellent all right  marquita has a question for you marquita you   want to go ahead and ask it hey guys um yep so  my question was in the mobile way you predicted   um the dematerialization of certain industries  like retail um books education etc sorry for the   background noise um when are you going to write  a book that will help to explain um how we'll get   into more digital finance and the demonetization  of property and assets all the things you talk   about and evangelize about because i'm certainly  waiting for it yeah i mean thank you i'm flattered   uh maybe at some point i'll be able to settle  down and write a book i've just been really busy   i've you know this i think i think safe has  kind of got the book thing cornered he's   you know whenever i have a choice whenever  anybody asks me i give the bitcoin standard and   maybe i'll give him the fiat standard  i think he's done a pretty good job so   if i were to write a book i might it might be  like derivative to him and then it would be   kind of dilutive so i i think uh most the people  that i'm targeting like the politicians and the   billionaires and the corporate executives  they have like one book in them you know   i you know they say what should i read i said read  the bitcoin standard but if i said read that plus   my book or the third book i don't know that they  would get around to the second or the third one so   i'm going to promote seyfadin's book for uh for  the time being and uh and i am flattered maybe at   some point if i feel like there's something unique  to say but right now the world moves pretty fast   and you kind of you know i kind of feel like my  best role is to put things into like two-minute   sound bites on twitter and hope that i can get  that to run a few hundred thousand times and then   i see newt here newt wrote pretty good book  too there's actually really good authors in   the bitcoin community i'm going to do my  best to promote them and uh and yeah you   you make money and we write books that's  a good deal i guess yeah but thank you all right uh browning you have a question um i  have a couple of questions and the first one is   uh do you think bitcoin is money yeah i do think  bitcoin is money um i think but i think you can   conceptualize bitcoin as digital gold as digital  property as digital money as digital energy all   of those are reasonable metaphors and if money  is uh you know money is the is the universal   most desirable commodity that we use to exchange  value right in theory it could become the unit   of account and the media exchange and the store  of value for all the capital and the civilization   and if i had to pick one thing to capitalize  the civilization i would say bitcoin like   if there's 500 trillion dollars worth of stuff  in the world right and i was trying to figure   out where the where the you know i think money  is energy money is monetary energy it's economic   energy liquid energy in the civilization and  and uh if i'm looking for a container to hold   the energy i think it's bitcoin that's the best  container i think i i just i will distinguish that   i think in a hyperinflation in the pure austrian  economic world where you had a single sound money   that like the gold coin and the theoretical world  if we if we lived in the idealistic world then uh   the currency would be equal to the money would  be equal to the store value is equal to unit of   time it's all equal but i think uh i i'm not sure  we've ever had that for example like even if you   go back to the civil war you had the greenbacks  versus the gold coin and i think for the last   10 000 years there's always been like a ledger  credit account which is kind of like weaker money   and then there's always a stronger base layer  money and then you know at some point there's the   paper money that's not worth anything anymore so i  think that generally when there are nation states   involved political entities or any time there's  a strong it's not just a nation-state by the way   if you look at the history of robber barons right  there the stories of like the robber barons would   set up a mining town and then they would create  their own monetary system of credits where they   would credit the worker and then the worker could  only spend that credit in the company store and so   companies created their own money and and the like  so i think that whenever there's a powerful entity   they create a currency that's weaker than the  base layer uh store of value money and then the   currencies in invariably what you end up with  is a currency is a medium of exchange that is   uh inflationary and it's losing value and it's  constrained and then there's a store of value   asset that will hold and accrete value over time  the money decomposes into property and currency   we'll say and i think right now bitcoin  is really the property component of money   and then the cr and uh the currency you know the  us dollar is like the currency component of money   and in a hyper-inflating economy like uh  venezuela you know there's still a currency   it's just collapsing and then there's a  property but then in the middle what's   interesting is if the dollar is sitting in  venezuela it looks like a store of value   to the pa to the venezuelans because the dollar  will hold value for like three to seven years or   three to ten years and the venezuelan boulevard  will hold value for three to seven weeks   or less and then bitcoin will hold value for three  centuries and so i almost look at these assets as   having a different time a different half-life like  that like what's the half-life of your money and   i would say the half-life of bitcoin is money is  forever and the half-life of the dollar as money   10 years ago was 10 years and that half-life  of dollar is money today is three years three   years yeah right and so if you think about and the  half-life of uh of the boulevard is money might be   three weeks or three days i don't know  but if we if we start thinking about   these assets in that way then i think it's  kind of helpful because what you realize is   there are very powerful political interests  that will designate one asset and as long as   that interest as long as they exist as long as the  united states exists they will have some influence   but you don't have to you don't have to  be a victim to uh to uh what is the word   to the i the orthodoxy that there  could only be one thing that's money   once you understand that there are three things  that could be money then you can simply mix   your portfolio with a mixture of a little bit  of the weak one a little bit more of the mid   one and a lot of the good one and i think  that's a very helpful metaphor for people   do you think that that bitcoin as  digital energy is the most important   attribute of bitcoin or the most  forward-thinking concept about it right now i think i i ran the survey on twitter i don't  know if you saw i asked people bitcoin i asked   is bitcoin digital gold digital property digital  money or digital energy it's like on my twitter   it's very interesting so here's what i what i  think i think that the most powerful concept   is energy and digital energy uh  because i think that um i think   that the entire universe is made of  energy like if you the earth is energy   a building is energy matter is energy and i think  that energy is a more powerful idea than matter   matter is a static a static instantiation of  energy but energy is the pure idea so if matter   is energy and energy is matter then energy is the  highest you know cleanest purest most useful form   you know what we talk about money money is money  is capital as energy or you know as i can look at   all the capital stock in the society and say all  the buildings all the companies all the products   all the commodities that's one view of the capital  stock and the other view the capital stock is   all the money and they should balance sort of in  some way and i could look at the world as saying   it's all the matter in the united and the world  and then i could uh snap my fingers and i can turn   it into energy right and then i could turn it back  into matter and that's what einstein told us so i i think that once you  understand it as digital energy   then you realize that it's a lot more than a store  of value if i if i wrap myself and like right now   if i wrap myself in digital energy i could move  through cyberspace with uh with greater substance   and uh credit worthiness like i think that the  solution for example to cyber security is is   everybody has to post a certain amount of satoshis  as their credit paul as their credit deposit or   their security deposit and then whenever you hit  a website or dm someone or show up to a meeting   or or you post an offer or you make a  comment then you have that security deposit   and then if you break the rules like you lie or  try to cheat someone then you would get fined   by that platform like a speed speeding ticket or  the like and in that world uh in that world that   bitcoin on a lightning rail becomes digital energy  which provides cyber security the speed of light   and and it's a very big idea a lot bigger  idea than i'm just going to store money in   digital property instead of in a house right  it's like that might be worth a short book it's like if i want to if i want to give uh  form and substance and and if i want to give um   consequence in cyberspace then i need  digital energy right now right now   there are no consequences to bad behavior so  there are a billion malicious attacks an hour   and there are no consequences and uh one  of the problems is because we can't convey   digital energy in cyberspace but it's probably  it's it's beyond the scope of a quick answer   i would say right now coming back to my survey  most people like 40 percent thought digital gold   that resonated with them so digital gold is the  narrative that the public is ready to embrace   and that would make bitcoin 10 to 20 times bigger  than it is right now you can argue that digital   gold is easily takes you from a trillion to  20 trillion dollar market cap and maybe that's   fine right so we can basically double three more  times or four more times before we outrun that   idea digital property is the idea that we  dematerialize every building and all the land and   everything you could possibly own as a store of  value and that's a bigger idea than digital gold   but digital energy digital money is it's  even more powerful than digital property   right it's like all the economic energy  uh and so that's a more powerful idea   people don't really appreciate money right  now you could almost say this since 1971   there's been a attack like a psychological ops  attack on the value of money like where the   political system attempts to undermine the value  of money i mean money's gotten a bad name because   what is money if it's the dollar and the dollar  loses seven percent of its value a year for 50   years then i then the idea that money is valuable  has been kind of systemically undermined for   two generations almost but uh if money  was properly understood sound money   then sound money would appreciate in value  and uh then then um once you understood it as   sound money you're like well sound money means  digital property that's reasonably liquid for   commerce it's a medium of exchange and not just  a store of value and i think that takes it from   100 trillion dollar type value proposition to  250 trillion dollar or more value proposition   i think digital energy takes us to the  next step which is if i want to construct   anything with substance in the universe i need  energy and the ability to move and store energy   to break it down to any scale move it at the  speed of light and do it without friction yeah   it's amazing that's worth 500 trillion or more  that's that's worth half of the civilization   presumably yeah thanks if we had digital you know  everything on the internet digital information   like google and facebook and apple they're  moving digital information around if we had   digital energy the significance what's the  difference between energy and information   information is non-conservative and energy  is conservative so if we had digital energy   that respected the laws of conservation of  energy and it was truly conservative at the   point you've implemented conservation of energy  in cyber space you would be able to elevate   the safety and the civility and the efficiency  and the trust of all discourse in the civilization   so digital energy is kind of critical to to  the next step in the world because you need   a hundred million businesses trading with eight  billion people at the speed of light for free   with trust and they can't do it  with digital information alone   right you can't you can't trust anything i can't  even open my dms on twitter or instagram without   99 of the [ __ ] in my dms is malicious bots  or spam or scam do you know that we actually   we take down 20 20 to 25 uh malicious spam bots on  google every hour people keep posting on twitter   they're like you know someone's impersonating you  on youtube and why haven't you taken that down yet   it's like well i did 37 minutes ago like literally  every hour there are 20 of these things get spun   up and you know they show 18 000 people listening  to michael saylor giving away free bitcoin advice   and giving away bitcoin there's legitimately  eighteen thousand like spam bots and google   can't stop them and if it costs you say a thirty  dollar security deposit then you'd have to post   you know sixty thousand dollars and you would lose  sixty thousand dollars every time we reported you   and that stuff would stop in a hurry if there was  a thirty dollar fine per per malicious fake person   and so you could you could literally monetize  all that malicious behavior and you could you   could shut down 99.9 of the the hostility online  and that's just one little example but of course   you can't imagine just how much inefficiency  there is in the world because of a lack of   trust or the fact that i imagine sure  you do i'm sure you imagine it yeah i do   yeah so i guess i would say digital energy is  the most powerful idea and i i'm a big fan of it   because it's apolitical yeah right see i i'm not  a big fan of digital money because it's political   and digital currency is digital currency is  going to be the province of every of every   government and so if you wish to wrest control of  the currency from the government it is you know   it is literally a revolutionary idea you're  not going to do well with the mainstream and   it's going to be a difficult road to hoe so if you  said what i've got is digital energy what will it   do it will improve your efficiency by a factor  of a million and bring safety and civility to   cyberspace and protect your children from being  molested by pedophiles and stop terrorism online   and stop criminal behavior and stop con men and  protect the investing public there's nobody that's   going to object to the idea of doing those things  did i mean the chinese government would agree with   that every government would agree with that even  at some point you would even have the koreans and   the cubans they won't agree on digital property  but they could probably agree on digital energy   like name someone that doesn't that wants to  outlaw fire and electricity in their country   or steel like there are communist  societies without law property   everybody outlaws private currency  right yeah but nobody outlaws energy   and so i i think that it's it's not  just the most powerful intellectual idea   it's the most powerful political idea  and the most powerful marketing idea   if you want to to spread this technology to the  four corners of the earth as rapidly as possible   and also it uh it's a lot it's a lot clearer  narrative i think than the web 3.0 thing   right it's like what what i want to do  is i want to go from the internet which   was a layer of digital information to the next  generation which is a layer of digital energy   overlaying digital information and who's the  winner google facebook amazon apple they can   all be winners twitter can be a winner youtube  can be a winner every government can be a winner   who's the loser this is this is probably the  single most important point my number one   question if you if you properly explain bitcoin  as digital energy who's the loser there's nobody   there's no reason anybody needs to be a loser only  people you know offering inferior horse and buggy   technologies that just don't work so well and i  think that that's that's the key for us we should   we should communicate to people the technology  promise here because technology is apolitical   and it's a universal universally desirable  thing everywhere in the world and always will be   and everything else you want to everything else   you want to say you could probably  say through the lens of technology other questions uh david has a question for you  david you want to go ahead yeah sure thanks uh   guys so michael and just to that point as well i  think that the correlation also between bitcoin   and time there's a very big correlation in that  people basically take their time exchange it to   work at a day job and as they create inflation  you work twice as hard for the same dollars   so they're actually robbing time which is  i would argue the most valuable asset even   probably more than energy because you never get  the time back um i think it's super interesting   um my question was with regards to purchasing  crypto assets uh primarily bitcoin as opposed to   the option of also mining for bitcoin  and basically purchasing the hardware   to acquire that bitcoin uh and then  with that a follow-up to that is the   um correlation between the miners and the pricing  of those miners so are they setting the price of   bitcoin setting with the hash rate the complexity  um are they are they partially in control   of bitcoin price based off the the mining um i  don't really i don't buy the notion that there's   any correlation between hash rate and price of  bitcoin i think that that hash rate determines   the security of bitcoin uh but i don't see it and  it determines how competitive bitcoin mining is   but i don't really see it as as having any serious  impact on the price when bitcoin's hash rate   decreased by 50 percent or 100 when it was cut  in half i didn't see bitcoin as less valuable   uh and if it doubled i i think anything within an  order of magnitude feels pretty secure to me so i   don't really get caught up in that um with regard  to mining versus buying it let's just say there's there's a a million ways to  get bitcoin if you're a dentist   you can uh fix teeth take cash flow and buy  bitcoin if you're a doctor you can set bones   take cash flow by bitcoin if you're a country  you can print your currency by bitcoin if   you're a company you can sell your product and buy  bitcoin if you're a miner you can mine for bitcoin   if you are a semiconductor company you could  create sha-256 asic chips compete with bitmain   sell them to miners take cash flow and buy bitcoin  um i i tend to think that mining is one of the   most competitive industries in the world right  it's almost by design right it's totally open   globally competitive no monopolies no government's  gonna pass a law giving you a monopoly on bitcoin   production in the world uh your odds of getting  a monopoly you know for your restaurant or or   for your uh for your hospital or for  your power company are much higher   so you're competing in a brutal  fashion against everybody else um   i tend to think that everybody ought to figure  out how you can best generate cash flows to buy   or how you can max out the amount of bitcoin  you could buy for example is safe for dean if   he writes books i would say write good books  sell the books convert the cash buy bitcoin   i wouldn't if safe said should i write another  book or should i teach or should i start a   bitcoin mining company i would say probably  you know generally i i believe in capitalism   i think bitcoin's all about capitalism and  really the ethos of capitalism is you need   to be the best in the world in your niche of  what you do if you're going to be a restaurant   you better be the best restaurant of that  type in your neighborhood and if you are   then maybe you'll make money but maybe you won't  make money there's all sorts of existential risks   right maybe your restaurant will get forcibly shut  down right so you have risks in every business   there are risk in mining um if you can raise lots  of capital mining is a capital intensive industry   if you can raise a lot of capital cheap then that  would be a good reason to go into bitcoin mining   if you have a lot of rigs that's a good reason  to be mining i if you had energy i don't if it   was free maybe but enter but the truth is energy  is really the tail wagon the dog here the world's   full of too much energy and energy is only like  one two three percent of the proposition um if   you become a miner and you buy power from somebody  else and they cut you off they could destroy you   so so it's a risk factor but if you told me i  have energy at two cents a kilowatt hour forever   should i be a bitcoin miner not necessarily if  you're if you can't raise capital you're still   gonna get wiped out right now there's politics  there's capital there's execution et cetera so   i like bitcoin mining i think it's good  business i also think it's gonna get   uh i also think that it's a business that that  calls for a very aggressive business strategy   like you want to get big fast like raise billions  of dollars of capital and buy up all the other   miners and buy up all the equipment and then  raise billions of dollars of more capital and   i know there's um there's the bitcoin ideal which  is we want uh distributed mining and okay i'm in   i'm okay with that but i just see that when  you see someone with three football fields   full of mining rigs right and they're  engineering the stuff you know you   start to think this is getting to be a very  scale intensive capital intensive business so i don't think that um i would go into  that business unless you really knew   what you were doing i just i would just  evaluate every business opportunity   companies like uh compass mining or  block stream where they're basically   data centers and then you can bring your  hardware there or they supply the hardware   well you're splitting the returns with them you're  the limited here's here's the issue right like   bitcoin is like the best thing  in our lifetime you could own   the property and be the general partner  of the property of full property rights   or you can buy a share you can be a  limited partner in someone else's business so do you want to be a half part do you  want to be partners with someone else   in a speculative business that has risk that may  or may not pay off like for example do you want   to be a franchisee to mcdonald's or do you want to  be mcdonald's like like do you know i used to work   i did consulting work for mcdonald's and if you  did the analysis after you did the conclusion   you concluded that running restaurants is  really not a good industry to be in it's not   a good business you don't make that much money  at the end of the day and in fact all the profit   at mcdonald's was based upon the real estate  leases and the fact that they were assigned   long-term leases with their franchisors that they  couldn't get out of data monopoly on the lease   so so mcdonald's had twenty thousand  thirty thousand limited partners and uh and the limited partners are wanna  they want to be their own business right so   so your family you want to be in business you  want to be a bitcoin miner but you don't want   to run your own data center so you go ahead  and you sign up with someone else you're like   a mcdonald's franchise is that a good idea i don't  maybe would i do it instead of buying bitcoin no   like i would i would buy the bitcoin because if  you own bitcoin you've got your own franchise   you own x percent of the dominant monopoly  monitoring network and you're the property owner   so you're cert you have to consider what am i  surrendering in order to do the other thing and so   if you have a billion dollars and you have to  invest in securities then you go buy bitcoin   miners because you don't have a choice your choice  is to invest in non-bitcoin companies or that's   the bitcoin companies right so bitcoin miner is  better than not a bitcoin mine but that's because   you have a billion dollars of strategic capital  and you can't move anywhere else but if you had   a billion dollars and you could buy bitcoin  with it buy the bitcoin right now if you're   if you're wanting to start a company and take it  public you probably can't start a company to buy   bitcoin and take it public but you can start a  bitcoin miner and take that public you see so   so uh you gotta ask the question what  are you trying to accomplish my view is the most valuable property in the universe  is bitcoin the second most valuable property   in the universe presumably is a bitcoin  mining rig that's producing right now   and then after that you've got these concentric  circles after that you can own companies that are   bitcoin companies but they're competitive with  each other some can win some can lose and then   you can own non-bitcoin companies right  and then some are better than others so you know it i guess uh my answer to your  question depends on what your question is really   uh caveat mtor is what i would say generally to  everything right like if you had a million dollars   and you could either buy it today or you could put  a million dollars towards mining hardware today   three years from now when your hardware becomes  somewhat obsolete from uh a computation if i had   a million dollars i've already answered that  for you i'd buy the bitcoin okay if i if i   had a million dollars of cash there's nothing  i would do with it other than buy bitcoin right   bitcoin is the theoretical apex asset of the  human race the theoretical return on bitcoin   is is higher than anything else everything else  is dilutive you know you could take your million   and you could invest in a bitcoin miner and you  could wake up in the hash rate could increase   by a factor of 10 and the guy that actually  did the deal with you could steal your rigs   okay then where does that leave you i mean  the point is you've got counterparty risk   you've got hash rate risk you could you can invest  it in kazakhstan and find out the government of   kazakhstan put like a triple windfall capital  gains tax on your bitcoin mining so so you've got   political risk you've got execution risk you've  got technical risk you've got all sorts of risks   and against that maybe there's a return but is the  risk-adjusted return higher than buying bitcoin   i don't think so if bitcoin goes to zero your  bitcoin mining investment goes to zero if bitcoin   mining goes to the moon then some bitcoin  miners will be successful and some will not   be successful and some might be more successful  than a bitcoin and some might not but who knows   right that's just complicated issue yeah i guess  uh in my opinion i think people when people ask   about mining as if it's just uh one uh thing where  there is a clear answer whether it's better than   or worse than bitcoin then i don't think they've  really looked at all the complexities involved and   all the potential i mean it comes down to the cost  of your power primarily but also all these other   factors that michael has mentioned you've got  energy risk political risk hardware risk execution   risk counterparty risk tax risk all those things  and you don't have any of those things if you buy   the bitcoin with bitcoin you just have to avoid  like losing it right and and and with a lot of   miners what they say is basically it's only viable  at the two extremes either you get one small miner   you put at home if you have very cheap electricity  or free electricity in your apartment or you know   you become one of these very public big miners  it's the miners in the middle that really   struggle the most you know an operation with a  couple of dozen rigs or whatever a couple of dozen   machines or something like that that's where  it gets really hard uh do you have a question uh yeah uh first of all thanks for the compliments  michael and great to finally talk to you uh   i have a completely off-topic question uh  i've been thinking about it since since i   heard the story about you moving money out  of argentina i believe by buying a yacht   i didn't buy the yacht i tried to  buy the uh my lawyers wouldn't let me   all right so you never bought the yacht  why don't you just get new lawyers my question would have been if you were on the  yacht or not sailing it to the west indies but   since you never bought the yacht that's uh so  i thought that was a real story but it was just   an example then i've heard you mention it in a  couple of points what i said was i i suggested   that they told me i couldn't okay one one time  i ended up losing the money and the other time   i ended up having to buy some sovereign  debt from the government or so some kind of   technique that was that was regulated approved  but i ended up taking a haircut you know 10 20   30 haircut on the money to get it out and then you  never really get it all off it's just all right   it is what it is uh another off-topic question  then what's the name of the ship behind you   do you know there's no name it's just uh it's  just a 19th century model it's handmade i think   it's supposed to be sort of modeled on the  amsterdam or one of the dutch east india's um   ships from the 17th century that they use yeah  why i ask it's it's it's not just because of   asking something else ship related because i used  to work on on a vessel that looked almost exactly   like that one and a historical ship called called  the gothenburg it was also an east india man uh   uh the company who who who ran the whole thing was  called the east india company they started it up   again yeah it's an east india ship i think  like part warship part cargo ship that they   they ran yeah they they they sell sale  better than you think those things   yeah well thank you anyway um yeah if i if i could  just clarify on that last conversation i think   that the best way to think about bitcoin mining  versus buying bitcoin is everybody in the world   has two decisions to make one is their business  strategy and the other is their investment   strategy and the investment strategy is how do i  allocate my portfolio of assets and what do i do   with my free cash flows and and buying bitcoin  is an investment strategy business strategy is   how do i generate cash flows and you can have  a business which is selling anything ice cream   cones writing books broadcast television mining  bitcoin mining you can mine gold and then you can   sell the gold to convert it to bitcoin yeah so the  point is you can have there's a million businesses   and if you're asking you know what would i  do my answer is you ought to be engaged in   the business that you're good at where you have  assets and you have skill where you can compete   and then you ought to you ought to uh set your  investment strategy you know based upon your risk   tolerance and i would say high quality property  digital property is best and if you can't stomach   that you know buy analog property or big tech  stocks or real estate or something and uh if you   if you do it that way then i think once you  ask yourself the question am i competitive   am i better am i am i best of the best in the  world if you are then that makes sense to do it if   where you really get to this acid test is is if  you have to put your own capital into the business   you have to ask the question is this business  going to give a better yield than bitcoin the   answer is probably no if you don't have  to put your own capital in the business   if you can go to someone else and raise millions  of dollars to start up a bitcoin mining venture   then by all means you should do it it's someone  else's capital right and so you're drawing capital   into the ecosystem so that the right way  to think of it is launch a bitcoin bank   like silvergate raise 480 million launch  a bitcoin miner raise hundreds of millions   launch a bitcoin anything you know raise  money bring it in the ecosystem and compete   but when you have excess cash flow sweep  them into bitcoin that's that would be   my view on that and if you think of it that  way then i think everything's a lot simpler i think also to that point the ability to  depreciate the assets which are the mining rigs   yeah there are a lot of business advantages a  lot of adventure to having an operating business   right like you're right like you get if  you buy the mining rigs and you can take   immediate depreciation yeah assuming you have  cash flows or you have profits that you can   use that against tax credit against so there's a  lot of other times when it makes sense like if you   have natural gas and you're stre of natural gas  it's stranded and you have to shut in the wells   then you should launch a bitcoin mining business  so you don't have to shut it a natural gas if   you have a cash generating real estate company  you pair it with a bitcoin mining company then   you could really use some of the tax benefits  listen right it's it's just a business discussion   and one thing that i try to do is um i try  to keep all of my commentary on just bitcoin   like laser like the laser eyes thing is just  bitcoin i don't give you advice about what socks   to buy i don't give you my opinions about facebook  or apple i don't even tell you to invest in mstr   right you'll if you look at every one of my tweets  i've never said buy mstr stock that's a security   risk comes with it there's 24 pages of disclosures  right i mean there's 57 pages of parade of   horribles of everything could possibly go wrong  so i i don't really tend to want to give people   business advice about what's the best business  because it's a very complicated thing it's very   individual i think you got to find your own way  what i would say is study bitcoin think about it   really hard and then think about you know how does  it fit into your circumstances you have capital   you're in a country you have business expertise  you have a reputation you can raise certain   amounts of money figure out what's the most  constructive thing you can do then do that thing fantastic well this has been absolutely  amazing uh and very very informative   and helpful i've learned a lot and  this is you know beyond the usual uh   massive poetry and uh nuggets of wisdom i think  there was a lot of very practical business advice   here which i think is very useful for a lot of  us who have not built billion dollar companies   like you michael i very much appreciate your  time and i thank you so much for joining us and   i hope we do this again um um when you've bought  a lot more bitcoin as always thanks i appreciate   the invitation i will look forward to the next  time safe and thank you for everybody that uh   that went through the seminar with us i  enjoyed talking to all of you cheers take care you

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Keywords: bitcoin news, crypto news, financial news, cryptocurrency news, bitcoin price, bitcoin analysis, business news, btc price, michael saylor interview, michael saylor live, michael saylor debate, michael saylor latest interview, michael saylor bitcoin prediction, michael saylor, btc, btc news, bitcoin interview, bitcoin, michael saylor bitcoin, microstrategy bitcoin, michael saylor microstrategy, anthony pompliano bitcoin, bitcoin price analysis

Id: eRvBj7j24B0

Length: 175min 30sec (10530 seconds)

Published: Thu Dec 16 2021