Michael Saylor on Why Bitcoin is the Key to Abundance

whether you own bitcoin plan to buy bitcoin believe in cryptocurrencies or not you need to educate yourself on what it is why it's important and why countries like el salvador have adopted it i just did a webinar with michael saylor the ceo of microstrategies and bill barnhart the ceo of abra what i consider two of the smartest people on the planet now in this webinar michael saylor provides what i consider the most clear and cogent arguments for bitcoin i've ever heard let's dive in let me do a proper introduction here um first and foremost uh michael welcome good morning good to see you thanks for having me peter yeah of course pal let me introduce michael michael saylor is the chairman and ceo of microstrategies a publicly traded business intelligence firm that he founded in 1989 um he is also founder of alarm.com named inventor and 40 patents author of the book mobile wave founded and served as a trustee of sailor academy sailor.org nonprofit organization that provides free education to 800 000 students inventors and veteran as i said over 40 patents uh he is an advocate of bitcoin um a strong advocate we'll get into that in a moment what i'm most shocked about is how how recently uh michael came to this realization and how powerfully he is engaged in this conversation um hope.com is his site uh that you should all go take a look at in terms of resource to understand this properly uh dual degrees in mit from aerospace engineering uh and history of science and full disclosure my fraternity brother effectively a roommate we uh we lived together for uh many years and very proud of that um uh at theta delta chi michael uh good to have you pal yeah thanks for having me peter yeah let me introduce bill barnhart as well um uh bill is ceo and founder of abra uh the leading crypto wealth management app about just about a billion dollars uh in uh in assets under management abra uh first service combining crypto brokerage a high-yield interest account a lending service for borrowing against crypto holdings which is a really for me critically uh critical innovation bill's uh multi-decade career in the internet spans everything from being a goldman sachs at nasa at netscape and he importantly i think gave the first ted talk on bitcoin back in 2012 has been a freaking frequent uh uh expert on many of the top media so guys uh here's my my mission for us today and uh we're gonna be focusing michael on you but these are the topics i really wanna hit hard for our our members what is bitcoin and more than an asset class uh why is it important for creating a world of abundance because i really do believe it's fundamental for that and and michael i credit you with really uh you know clicking that for me why is bitcoin important on a corporate balance sheet implications of el salvador's historic move what countries are next why do you think it's important for individuals consider holding bitcoin as a store of value you know michael you recently did a very interesting uh series of conversations about comparing it to gold we're going to regulation we're going to d5 a little bit of ethereum and all coins so those are our subjects for the day um michael i i was amazed that you came to a realization about the importance of bitcoin it wasn't five or eight years ago uh it was really at the at the beginning the pandemic uh can you tell that story uh and and let's let's let you go here man tell us about why it's so important um okay so the catalyst for me to discover bitcoin was the case shape recovery the the combination of the lockdowns and the expansion of the money supply and i think i think what we saw was in the k-shape recovery main street shut down for a year wall street recovered in a few weeks and there was a delamination between financial assets and mechanical uh mechanical mainstream type assets or operational assets and that caused me to question the nature of money because if if i had a billion dollars worth of wall street assets like the s p index i could have gone to sleep on my floatie in my hampton swimming pool for a year and i would have had the best year of my career doing nothing and if i actually ran a main street company selling something or doing something i could have worked 30 percent harder and generated 30 percent more cash flow and i would have got nothing and this this dichotomy between one class of of uh the economy working 30 harder to get nowhere and the other class of the economy not working at all to get 30 percent further caused me to lose a lot of faith uh in the economy and and it questioned my thought about money and so if we go to first principles peter i think the most important idea is money is financial energy or socioeconomic energy and i think a lot of people don't realize or don't think about it as an energy system and as soon as you think about it as energy then the light bulb goes off and peter you're an engineer i'm an engineer and i spent many years after i left mit not really thinking about engineering principles applying to money or finance and i think that in march of 2020 it shocked me out of that lithargy so i'll give you a simple analogy uh fat is organic energy it's it's an organic energy storage battery you know if you eat a bunch of food you uh your body generates insulin you store the organic energy is fat the benefit of storing that fat is that you can go without food for a month and you won't die now so fat is a energy system for storing organic energy there are other systems for storing organic energy i can have box food i can have twinkies i can have canned food i can have smoked food right i can have fish in a pond behind my house i can have cows outside in the pasture those are all systems for storing organic energy we call it agriculture or we call it packaging now now let's think about other energy systems you know i i put a sail on a ship that's a that's a way to harness wind energy a clipper ship with three sails is more complicated a bow and arrow harnesses kinetic energy or potential energy so does a dam i can have a gun i can have complicated machines the entire science of engineering is about channeling energy whether it's gravitational energy or wind energy or chemical energy like a fire or organic energy so now i get to money so money is a system for channeling that social economic energy that the ability to compel other members of the human race to do something or to you know will you give me your house will you give me your car will you drive your car for me will you build a building for me can i live on it for life will you feed me for the rest of my life well you work for me the rest of my life all of this is about channeling energy the human race has had energy systems for money we started with seashells we trade the giant stone cone of the yacht people eventually we settled upon gold and gold is uh commodity tokens but it wasn't just simple gold you know the lydians had gold coins the romans had different gold coins the you know the italians had the florins you know the british at the pound the sovereign comes along so eventually we realized that that moving around gold tokens or tokens in general isn't that efficient because you can't chop them into pieces and if you're holding them people club you overhead and steal them so sometime early on certainly 500 years ago we split and we had the underlying base layer money maybe gold and then you had gold paper like gold notes and you had paper money and the paper money uh uh issued by first goldsmiths and then issued by early uh early gold banks and the like that allowed us to trade trade credits and that went on for 500 years and and the world shifted between this base layer commodity and paper money uh we eventually had the quote-unquote gold standard which is you can trade a dollar for gold and trade the gold for the dollar then with the treaty genoa in 1922 we had a gold reserve standard which meant that um the dollar and the pound were the reserve currencies they were backed by gold and everybody else was backed by the dollar and the pound after world war ii we went to the treaty of bretton woods and that meant that the us dollar was a reserve currency it was backed by gold and then everybody else traded their currencies for the dollar um and uh what's the significance eventually in 1971 nixon took us off the gold standard completely and we went to all fiat not pegged to any underlying asset and what that meant was in the absence of any thermodynamic cost to print more money you don't need to mine gold you don't need to do anything we could just and expand the money supply and then that resulted in about monetary inflation of seven percent a year every year for forty years that i didn't figure out but what that means is if you're expanding the money supply by seven eight percent a year every year that means that your assets have to appreciate by seven percent to keep purchase power parity and that means if you're earning if you're not raising your salary by seven percent you're getting poorer now that went on a status quo from 1971 all the way to 2020. in 2020 the monetary inflation rate in the u.s went from seven percent to 21 it tripled and every other currency in the world is pegged to the dollar they at least tripled so the euro tripled uh the dram tripled the all the strong currencies tripled their inflation rate the weak currencies inflate at 40 percent a year uh and uh and so they're sinking against the dollar then you've got the peso with nominal 45 inflation rate but real inflation rates of 70 or more and then you have collapsing currencies like in el salvador the currency's collapsed in nigeria it's collapsing in lebanon it collapsed 80 85 in zimbabwe it collapsed so what is the significance of bitcoin bitcoin is the first engineered monetary system in the history of the human race uh and that's the light bulb going off we created an asset sitting on an open computer network and there's never going to be more than 21 million of them you can divide into 2.1 quadrillion satoshis so it's pretty infinitely divisible but what it means is the human race has perfected the idea of a bearer instrument like gold and we fixed all the defects of gold uh if i bought a billion dollars of gold the gold miners will keep dumping more gold on the market if the gold ever goes up by a factor of 10 gold jewelry gets melted down to dump gold on the market and the fundamental problem with the gold standard and the gold reserve standard is there is no hard mathematical protocol or engineering protocol that links the paper gold or the or the fiat derivatives to the underlying asset so as soon as the us got control of the gold supply after bretton woods they could keep printing more and more money and they weren't and and first it was 40 percent backed by gold and 30 percent and 20 percent and 10 then all the other countries in the world realized that the us was just going to print infinite dollars and the french got upset so they started asking for the gold back and when the french asked for the gold back all the gold was flowing out of the u.s and then nixon said oh my god we're gonna have no gold left and so we can't keep giving people gold back so we we defaulted on the gold standard and now everybody's free to print as much money as they wanted and and so that's that's by the way why you don't want to buy gold because if you buy gold uh a gold banker can basically sell a hundred tons of gold for every one gold ton of gold they own you call a repo hypothecation there is no integrity between the paper uh the paper derivatives and the underlying asset and the absence of that technical integrity means and we come back to engineering it means that um that i put energy into the system and it bleeds out ten percent a year so if i had a if i had a bathtub bleeding seven percent per period right the bathtub drains the swimming pool drains if i have a leak and a fuselage of an airplane it won't fly if i have a leak in a hall of a ship it won't sail so uh bitcoin's the first thermodynamically sound system it's a closed i love that analogy i love that analogy and you know one of the things that is clear is the majority of the world does not appreciate the level of inflation that's incurring and they don't realize they're moving backwards um or maybe they realize it but a bit too late they think you know everybody's working hard one of the points you made in particular was that this this economic thermodynamically sound economic system is probably more important for the developing world than it is even for the developed world can you speak to that um in the developed world you have banks and you can move money from point to point for a few dollars and you have wall street and you can buy assets like the s p 500 index if you don't put if you had a hundred thousand dollars if you don't put it in the s p index you lost purchasing power every year seven percent of it for a decade so the store of value in the western world is i shift my assets into etfs and index funds and stocks and i and i wire money around on apple pay or whatever it might be write a check it's cheap in the developer world two thirds of mexicans don't have a bank in el salvador they don't have banks billions and billions of people don't have banks and we say they're unbanked in india they don't have a bank but most people don't really think about what that means here's what it means you're a type a a type one diabetic and you don't have insulin and that means you can eat infinite food you can't form fat and you will starve to death that's what that means if you can't store economic energy over a long period of time it means that you can work yourself to death all your life savings gets drained to zero and in the in the month when you lose your job your family starves to death so unbanked in el salvador it means there's two million people in the u.s that send billions of 10 billion dollars back to el salvador every year one billion of it gets stolen by the money transfer agents okay they take a 10 commission okay you're taking 10 percent commissions from a wage laborer sending money to their mother 10 percent the the visa and mastercard network by the way take two and a half percent they're monopolies okay but 200 is painful 10 is is brutal then you have to get the money through uh through a western union office which means travel for two or three hours and maybe you get mugged on the way and when you get the money you get the money in a currency in in certain third world countries you get the money in the local currency which is losing 30 to 40 percent of its value a year so i send you a thousand dollars you get 900 then you spend another 100 to get it so you go down to 800 and then every month that goes by you lose 50. so it's pretty devastating that what's the problem you can't move the monetary energy and the second problem is you can't store it i mean in the us the typical us or western uh western individual is losing one to two percent of their energy a month if they stored in the currency the way they get around it is they buy s p index and the s p is up 32 year over year and they pretend they're rich right it's like good how does someone in el salvador buy s p index stocks they don't have robin hood they don't have a bank right so you're living hand to mouth so the significance of bitcoin for them is you can take a 50 android phone download uh a software wallet i can send you 87 instantly for free on a lightning network if you store it in bitcoin it's going to go up in value and otherwise you can spend it and and you're not uh you're not uh at the mercy of of i'd like to say banks but the banks don't care you're not the mercy of the money changers and the best case is el salvador where they use the u.s dollar so they're only losing one to two percent of their purchasing power a month the worst case is zimbabwe which means that somebody runs the country you have to buy the local currency and that person that runs the country gives billions of dollars that currency to their buddy and the and you better spend the currency because it'll only be worth half as much in four weeks or eight weeks and in the real worst case they tell you it's illegal to hold any any other asset i can't hold land i can't hold gold i can't buy stocks and so you know what it's literally like taking your insulin away and making all of you diabetics and saying it's illegal to store fat on your body good luck with that in the one day when you can't find food you will surely die so i want to just i wanted to double click on this because it's so important i mean the realization and this was the conversation we had down in your home in miami just a couple of i know a month or two ago is how absolutely critical this type of a engineered economic system is uh to allow people to have prosperity right i mean one of the things we talk about is exponential technologies are taking everything that used to be scarce into abundance whether it's food energy water health care and so forth but i love this system of the requirement people to store energy and money is economic energy what happened in el salvador um can you take a moment to to explain um the the implications and and how important this is well i think they had a civil war and they lost they lost their currency okay countries that are poorly managed lose their currency privileges and what we can see is that the at 100 company 100 countries in the world are all losing their currencies everybody's basically you know the venezuelan is not going to have a currency the zimbabwe don't have a currency any currency that collapses more than 20 to 30 percent against the us dollar eventually fails so people throw that over and they go to the dollar the euro is effectively pegged to the dollar you know most of the other currencies are pegged to the dollar so you've really got two currency systems you've got cny and even the chinese peg their currency to the dollar right if you look at it so you've got you've got the first wall currency system then you've got the developed world currencies they're all failing so in el salvador they had they didn't have a currency they used the us dollar and then they're at the mercy of two things one the money changers are basically stealing 10 to 20 percent of their money when they move it back and forth if i charge you 10 commission every time you move your money to your to a family member i mean how many times you get to do that right so that's a problem and the second problem is now i'm storing my money in the us dollar it used to lose half a percent a month and now it's losing two percent pursuing power a month because the fed's printing money so how do you crawl out of that abyss and i think the president of el salvador realized that that um what you want to do is back your currency or back your country with an asset which is appreciating in value so bitcoin's been appreciating 120 a year every year for a decade uh the s p is up twelve percent a year for a decade so bitcoin outperforms the s p by a factor of ten it outperforms gold which is up by i mean maybe one to two percent a decade so it's outperforming gold by a factor of 50. what's the what's like here's the big idea but bitcoin is not just an asset right it's it's the perfected apex property of the human race if you have a billion dollars and you want to give it to your grandchildren are you going to buy land in california a building in new york a billion dollar stack of gold are you going to buy a billion dollars of apple stock are you going to buy a billion dollars worth of art diamonds commodities corn futures oil what are you going to buy for a billion dollars that'll be here a hundred years from now and and if you think about it really hard you conclude that every other asset class is more easily impaired seized confiscated taxed or or regulated and and of course some are unpractical there's no way that five billion people in africa and asia are going to be walking around with apple stock on their mobile phones that's not happening you know how do you tr how do you pay for your you know for anything with apple stock on a saturday afternoon in south africa right that doesn't work and so yeah you could try to use a currency but now i've been in business 20 years i can't do business in nigeria after 20 years because if you want to do business in the fiat currency you have to have your bank deal with your central bank deal with their central bank deal with their bank can't do it on the weekend and you can't do it because the foreign corrupt practices act in russia or nigeria or whoever and so how do you get eight billion people trading with each other through a hundred million corporations you need a protocol what is the protocol bitcoin bitcoin monetary to link 8 billion people and 100 million companies with one another in the 21st century i'm gonna get back to el salvador give me a bitcoin 101 if you don't mind we probably have some people here who um have heard of it and are interested in learning about it and we had a wide range and i want to get back to what did the president of el salvador's just do but let's take a second and give us the the bitcoin 101 if you would okay let's say that i wan i wanted to store uh create a non-sovereign store of value i have a million dollars i want to save it for a hundred years and i don't want to trust anybody else with the money i can't put in the bank i had a i every single person in argentina had 90 of their us dollars and their argentine pesos seized overnight by the government 20 years ago by edict stroke of a pen it wasn't hard so i can't leave it in the bank i can't store it in a currency because the banks can steal it from me i can't save it in a stock this the company might not even exist and the ceo or the board might dilute it i can't put it in land because i can't move the land and they could tax in florida they tax you two percent a year on the land you lose your land in 20 years so i buy gold that's that's the traditional idea but the problem with gold is that every year gold miners produce two percent more gold and then i have to i can't carry a billion dollars a gold through an airport so i have to put it in a bank and then 95 of of the top hundred cities in the world 95 or more of them seized all your gold in the past hundred years when the regime changes okay so how do i fix that said this guy satoshi invented digital gold on an open protocol monetary network uh and we call that bitcoin and the way it works is i define 21 million gold coins i dematerialize them in cyberspace i make them infinitely divisible by 100 million units each and that's called a satoshi then i um make it impossible to ever make any more than 21 million and then i give you a protocol where any any computer can send the coin or or the the bitcoin to any other computer without a middleman and i make it possible for you to take personal custody of your asset so if i want a billion dollars worth of property i can carry it around in my head by memorizing the passphrase i can hold it on a hardware wallet i can i can hold it on a mobile phone i can put it to any computer in the world then i can move the billion dollars to any custodian in the world in a few minutes for a pittance so the idea is if i took gold and i said you can't mine any more gold check that would make gold more valuable and if i said uh you can't use it for jewelry there's no jewelry being melted down into gold that makes gold more valuable and if i capped it at 21 million and i numbered each of the gold coins that make it more valuable and if i made it infinitely divisible and if you could authenticate it in a split second with a mobile phone that would make it more valuable and if i made it programmable with a protocol and i made it possible for a computer to make a million transactions a second and talk to a hundred million other computers using intel semiconductors that would make it more valuable so in essence we created programmable gold on a network and then what's the last twist the last twist is you make it decentralized so that there's ten thousand different computers or maybe even a hundred thousand different computers running the software at the same time with an identical copy of the ledger so that no company no ceo no government no regulator can meddle with it the protocol so it is literally uh it's like a virus released into cyberspace a living life form you can't stop it without turning off every computer on earth at the same time and you have to keep them turned off forever right you can't kill it and so the idea of bitcoin is is apex property for the human race and for the first time in the history of the human race if you have a million dollars you can hold a million dollars in your head walk through a border send it across the world take custody or transfer it to any custodian or prove that you have it in a split second and uh you can't do that with anything else that's that's what bitcoin is beautiful thank you for that um so so let's go back to what el salvador just did and the implications thereof um please okay well um if the u.s dollar is losing 20 of its purchasing power a year which is what's happening right now the dollar is collapsing against scarce assets the reason the nasdaq or the stock exchange is an all-time high isn't because the companies are more valuable because your currency is weak and the currency keeps collapsing against uh scarce assets that's why we have inflation that's why houses in the hamptons or palm beach cost more that's why the average home in the us costs 15 percent more than it did 12 months ago so if el salvador is going to prosper as a country they need to invest their assets or invest their money in something which isn't going to collapse if you're holding a billion dollars of us dollars and if the us fed doubles the dollar supply they stole half your money from you that's what's going on right now so what else alberto why is that not obvious to everybody it's it's crazy it's because part of the world is rich and privileged and so if you if you are wealthy and the you and us and europe and you have a large stock portfolio you think you're a genius because your portfolio is up 32 percent or 47 year over year and you made wise investment decisions right and then you think oh yeah i see that everything's going up in price but you know you've already got your house right if you were trying to buy a house in the hamptons it went up in price 45 percent year over year if you already own the house in the hamptons you think well you know this is great my house is more valuable my stocks are more valuable you know i'm a genius i'm a good investor and so if you're if you're um asset rich and that's ten percent of the world you're in you just feel like everything's great on the other hand if you're a dentist working for 137 000 a year the the price of you know early retirement and the price of all those things you ever wanted to buy is is pulling away from you right you can't afford to buy it there's something wrong when people say we're going to pump up the price of assets to protect the economy because what you're doing is you're inflating the price of assets for everyone that works for a living that wanted to buy those things what what and so people don't understand it because either they're they're wealthy and they're beneficiaries of loose monetary policy right or uh i think that's the number one reason or they're stuck in their um they're stuck in a frame of reference if you have a strong ego it's like if if i take you to the top of a cliff and and i kick you off the cliff and you're humble you would look and you see oh that mountain is like zooming up really fast that's not a bubble i'm falling right but if you have a strong ego you think oh the mountain seems to be like going up really fast it's a bubble it's gotta eventually come back and and it says and the issue is it's not coming back you're going to smack into the earth because you're falling so i mean i guess the best example is most americans can't imagine their currency weakening their arrogant about it if you go to argentina the currency weakened from one peso to the dollar to 155 pesos to the dollar over 20 years you lost 99.5 of all your wealth because you're you know everything's going up in pesos are you getting richer or is the peso collapsing so i think people in zimbabwe venezuela and argentina they get it they understand that if the currency is collapsing your stocks aren't getting more valuable so my question is not getting more valuable you're just getting impoverished but americans can't conceive of american currency weakening and so if you're stuck in the american mindset let me just give you one more metaphor yeah sure like i'm sucking the oxygen out of the air if i inflate the currency by ten percent i sucked ten percent of the energy out of your dollar when i inflate the currency by a hundred percent i sucked half the energy out of the dollar i'm marching you up mount everest the oxygen is disappearing you're going to get hypoxia eventually you you know if i suck all the auction out of the currency the economy collapses and that's what happens in hyperinflation when i when the current currency collapses it's like your blood doesn't carry oxygen and the entire economy is is ripped back to stone age barter and and practically what happens is you know el salvador flips over to uh the us dollar as the next best currency and we just but here what's the problem with that how am i supposed to get dollars if you study the history of america before the american revolution in the chesapeake bay they used bales of tobacco as money because they could they couldn't get money so if you use dollars in zimbabwe or nigeria or el salvador and there's no bank and there's no visa and there's no apple pay because it's illegal then where's your dollars coming from right i mean that's a how do you operate a a 21st century economy without access to a currency and if the currency is losing its value fast enough then you have to have an asset in order to store your economic energy or else you get weimar republic so i i know you've got that different places in the world now i know you were involved in uh in elon's decision to uh put bitcoin on tesla's balance sheet we get to that a little bit later uh and i know you've been working or having conversations with sovereigns about making it the reserve currency um were you involved in in uh what happened in el salvador or is there other other countries that you're working to tip you know i mean we're we're all communicating everybody in the in the bitcoin world is working with an agenda to provide property rights to eight billion people right i mean and that means everybody's communicating with everybody sometimes it's explicit on twitter you'll see communications back and forth and and and we're very public about it on the record and sometimes they're back channel communications and you know if i'm talking to a you know a public company ceo or you know a politician obviously i keep it confidential you know but uh but sometimes we're very public about it and and twitter is a pretty good mechanism for that like i think the big picture here is if you want to boil down what's going on in the world right now uh we figured out how a technology to give the human race property rights for the first time we've applied engineering to economics via bitcoin for the first time i mean this is equivalent to google on on a feature phone right it's giving the world access to information and mobile telephones giving the world access to communications and bandwidth uh and this is giving them the ability to transfer energy in the same networks yeah google's information energy and this is monetary energy but putting this in perspective google spends 160 billion dollars to create 1.6 trillion in value or market cap and so they put one dollar in to get 10 out bitcoin spends 4 billion dollars to create nearly 800 billion dollars in in value so you put one dollar in to get up to two hundred dollars out certainly one hundred to two hundred dollars so it's it's 10x or more more efficient use of energy to create value because you've literally got a a big tech monetary network that is what's google move it moves a video okay i i get what's more valuable moving an image of the check or what if the check is written out for a billion dollars think about how valuable the information is in a billion dollar check right versus the value of a picture and so what you've got is the highest value digital network in the history of the human race and it's a paradigm shift peter because no economist ever when we went to mit they didn't teach course in monetary engineering that i mean monetary engineering will be a course in the future which is how do i create politically sound thermodynamically sound tokenized energy on a digital network it's it's complicated thing but people that are people that are sensitive to it they realize that this is an economic imperative because there's 400 trillion dollars of assets that are losing 10 percent of their value every year through currency inflation it's a technical imperative because for the first time you can deliver property to six billion smartphones it's going to be the it's going to be the next evolution the mobile wave and then it's a moral imperative right i i do think i do think it's a moral imperative and that's a really human right it is about human rights it's about you know allowing people to have the the systems in place uh to seek uh abundance and prosperity to have it's not about a world of luxury for them it's a world of possibility what did el salvador actually pass what did what did the uh the country enable that's so unique just so folks have that piece of data they um they made bitcoin legal tender uh in the country which get which made it sort of pair pursue at parity with the us dollar so the us dollar is the official currency for medium of exchange and uh and unit of account and bitcoin becomes the official currency for store value and their and their equivalent so they legitimized it uh as an official uh asset they also um they said that anybody needs to accept it as a as payment for debt and that's a pretty big deal uh in the country and then they also said there's no capital gain on the transfer okay so that's that's a huge deal now it may not be a huge deal for american citizens because american citizens have obligations under the irs tax code for 10 years after leave the u.s you know you have to renounce your passport and wait 10 years but if you're an international citizen if you're an australian or you know south african or whatever and you go to uh to el salvador what it means is if you were holding highly appreciated bitcoin uh you could transfer it without paying capital gains tax on it and that's huge so they'll probably draw a huge international community now i mean of course it may not be so world shaking as like singapore and uae already have sort of tax havens so it kind of puts them kind of asymmetrically at parity with them in a way but it's a pretty good idea because anybody anybody with the wherewithal might decide to settle and of course i think it'll probably draw businesses any kind of bitcoin related business that might have um might have a tax advantage might decide to locate there and so or or entrepreneurs who want to develop uh products and programs let me let me use that as a moment to bring bill barnheit in uh bill um uh take one second and and and what is abra and you mentioned earlier to me that you have a large number of users in south and central america uh could you could you speak to that a moment yeah sure so abra is a crypto uh wealth management app and service uh we allow you to trade uh bitcoin versus dollars as well as about 140 other cryptocurrencies uh it's a great way to get in very easily if you're in the u.s you can wire unlimited amounts of money in via the traditional banking system buy bitcoin we run a high-yield service that allows you to deposit your crypto as well as cash and earn interest on it so we currently pay about five percent on crypto deposits and about 10 on dollar deposits and then lastly we allow you to borrow against your bitcoin holdings so if you're holding bitcoin or ethereum uh you can actually borrow dollars and so that's what we call holding the appreciating asset and borrowing uh in in the dollars which is the depreciating asset now what's really interesting about how our business has evolved over the past couple of years is that the two areas where we've seen the fastest growth are in the high net worth user base right it's people with uh seven figures and up of assets where they're putting significant amounts of money to work in uh in bitcoin and ethereum and other crypto assets because they see uh what's happening with the money printing that michael was talking about the other group of people where we're growing equally fast and some reasons even faster is in developing markets particularly in markets where the currency has either gone the [ __ ] in the past is going to [ __ ] now or is depreciating even faster than the dollar which is true in in most countries anyway or you know places like venezuela or argentina where it's effectively going to zero when they have no choice but to adopt a dollar standard so so we've seen hundreds of thousands of users flock to abra from places like the philippines guatemala el salvador who in the aggregate are doing as much volume in our business as the high net worth clients many of whom are on this call today who are depositing millions they're just you know smaller group because there's uh fewer uh millionaires out there uh so so it's astounding now the people who probably need the most education who don't intuitively get it quite yet are the people in the middle because as michael said if you're if you're holding an etf uh on the s p 500 and it's going up at the same rate as currency inflation it's not intuitively obvious that the government is actually inflating your currency to be worthless and what you're actually doing is keeping pace via some other uh intermediary asset like a stock and so those people who are able to keep pace at least not you know or treading water as you will or like the flintstones cycling in place or peddling in place forever are the hardest to educate because they're the ones who haven't suffered the most right people who are really worried about inflation at large scale high net worth and people who have seen those assets go to zero quickly are the people who uh seem to love the abram model the most uh which i find it's it's i've never seen anything like it i've never seen a model where i'll have a conversation in the morning with somebody who's gonna put 15 million dollars personally via family office or individual into bitcoin and then go on twitter uh a few hours later and talk to some customers in in guatemala who are asking questions about what it means to put ten dollars in bitcoin which might represent a big chunk of family savings using exactly the same platform the same platform and i just got to make a uh disclosure i'm an advisor to abra i hold my bitcoin and abra just wanna make sure that's clear out there not uh yeah um so so bill uh where where do you see the i mean uh the ultimate um uh agility here for this and in terms of uh the ability to move it versus as a bank or store to actually use it for daily life uh is it going to be easy enough is it going to be something that actually is you know equivalent to uh to an apple pay eventually yeah i see i see a multi-tier system emerging analogous to the existing system and it'll look different in emerging markets like we'll see in el salvador where they don't have a viable government-issued currency versus the u.s where the dollar is not going to die okay now what's the same in both cases is people will want to hold bitcoin and eventually everyone will get it and everyone will understand that bitcoin is the appreciating asset now will things will diverge is that in the us a lot of people will simply hold the bitcoin and get a credit line in dollars because why would you want to spend what's going up in value when you can spend what's going down in value right so i'll take the dollar loan against the appreciating asset all day long in places like el salvador and guatemala and the philippines there i predict that over time our users will hold and spend bitcoin because they effectively will have no choice meaning that the they won't have a dollar denominated system that's as easily accessible so technologies that michael mentioned like lightning which kind of look a little bit like a paypal or an apple pay but specifically for bitcoin make the ability to do very small dollar transactions near free right it's easy as taking out a dollar bill piece of paper and handing it to the person next to you using using a smartphone so so i see this new kind of crypto-centric or bitcoin-centric banking system emerging over the next the next decade that takes advantages of what takes advantage of what works in places like the us europe and probably china and what is failing in these developing markets where they may actually become completely bitcoin centric which makes total sense especially when you have a currency you can subdivide down to eight decimals i predict that in a few years in a lot of developing markets you're going to hear people quote prices in satoshi's makes no sense to put a price in bitcoin where it's point zero loser but if you can say the cup of coffee costs you know 0.15 satoshi's that makes a lot that's going to make a lot of sense to people and if you can pay for it in a fraction of a satoshi which is effectively zero why wouldn't you do that when you have no other currency but in the u.s we'll simply borrow against the bitcoin and continue to use the visa rails that we have that work just fine yeah can i break in when you get a moment i have two things i wanted to add i think are important um one um i think it's pretty important for people to understand that one of the reasons that bitcoin is an economic imperative even in the developed world is that most of the assets that people hold in the u.s and europe are currency derivatives like if you own a value stock it's it's value based on the value of the discounted cash flows and if you own real estate it's valued based upon the rents and if you own a bond it's valued based upon the coupon and so if the currency's losing 15 of its value a year then you have to apply a 15 discount rate to all those currency derivatives and you look out 10 years and you realize that that even though right now they might have got a bump in this v-shaped recovery or k-shape recovery ultimately if we have a loose money policy in the western world then they're all collapsing and that's why you'd want a non-sovereign bearer instrument store of value that's not based on cash flows and i i would just suggest everybody apply this mental model in their head if you were running a business in argentina and if i told you that the argentine currency was going to collapse from three pesos to the dollar to 150 pesos to the dollar over the next 15 years and then you tried to figure out what your investment strategy should be should you own argentine bonds argentine stocks argentine commercial real estate or argentine cash or should you own something else the answer is there isn't any strategy in a collapsing currency there is no mix of conventional assets that saves you because they're all eventually going to get ripped down by the collapse of the underlying currency so the only logical strategy when as the currency starts to collapse faster is you have to convert your monetary energy into an asset which is not a currency derivative in the frame of reference you're in right and so once you understand that idea it's a big idea then you then the light bulb goes off you say well in 2003 i should convert all my pesos to dollars because that's a stronger currency of the peso but in 2021 i should convert something to like a bitcoin because that's stronger than the peso and stronger than the dollar and it's a frame of reference so that's the first big idea and it's important because it plays to the 400 trillion dollars of conventional assets in the world and it's why bitcoin is a superior asset because it really it doesn't have that currency derivative risk and counterparty risk and i think the second big idea um is i do think we're going to actually see an explosion of of stable coins uh and that means that things like uh tether and die and usdc are dollars on crypto rails and we're going to see an explosion there's probably already 75 billion dollars worth of this stuff circulating around but we're going to see hundreds of billions of dollars of dollars circulating through africa asia it's already happening in china people are already circulating on crypto rails us dollars and um i i predict that what you'll see is five or six billion people with a mobile device and they'll have a a software wallet and the wallet will have digital currencies and digital assets and the king currency would be the dollar and after that maybe the euro or the yen or or renminbi and then the digital asset will be the bitcoin and maybe some other digital assets and uh sometimes people think well if bitcoin spreads the dollar has to be replaced not really it's what really happens with money is when you have a hyper inflation of money if money inflates it more than five to ten percent a year you have a delamination of the roles of money and the medium of exchange unit of account becomes the currency controlled by the sovereign government like the us weak governments adopt the u.s currency like el salvador and then the store of value devolves to the asset and so you have currency versus asset and everybody in the world is going to want both they'll want the asset for the long-term they'll want the currency for the short term and the strongest asset will be bitcoin another asset is s p 500 index another asset is any other crypto another asset would be anything you can digitize you know and people will flip between the us dollar and the local currency you can even see a three-tier i have a million dollars in in bitcoin i have a hundred thousand dollars in the u.s and i have one thousand dollars in the local zimbabwe currency because the government forces me to and i swap between the three and common sense is i hold the weakest currency for a week i hold the next currency for a year and i hold the asset forever and uh that that's evolving there'll be open source things like lightning wallet that can run anywhere in the world and they're what we call open source decentralized and then you've got paypal apple pay square that are centralized payment rails and these in mastercard and i think you know a lot of people in the world can't use mastercard and visa michael let me let me jump in here a second there are two questions i had asked you once and i want to hear your your answers and as well as bill the first is um to the members watching uh when you think about what percent of your of your assets or your cash to use that word us dollars um you're advising your family and friends to hold in something like bitcoin love that and then a second how do you address the wild fluctuations in price and what the ultimate value could be as compared to a store of value in gold can you hit on those two subjects for a second for money for money that you need like in our business we have 50 million dollars in u.s dollar and we have that as working capital for stuff we think we need in the 12-month period so we calculate the full the full fluctuation or volatility of our cash needs over the next 12 months we keep that in a very stable currency that's denominated in the same units as the obligations and then stuff we're not going to need we call treasury and then we invest in our treasury assets we invest in bitcoin but but my advice to anybody would be establish a treasury policy and and the right thing to hold for a decade would be a portfolio of scarce assets that will go up in value in the in the face of inflation so i'm biased toward bitcoin but if you're not going to do bitcoin i mean for god's sake buy a nice house you want to live in forever right buy furniture you want to use forever buy useful buy commodities you know that you uh can use buy uh buy if you if you want to buy stock buy high quality stocks that you think will be able to raise their revenues or their cash flows faster than the rate of money expansion i would rather own apple and facebook and google like a dominant digital monopoly that can apple can roll out a new product to a billion people over the weekend so their ability to create value is higher i wouldn't own a 19th century manufacturer because there's no way they can deploy a product to a billion people over the weekend so so buy companies that will last for the long term buy assets that people will want over the long term buy something scarce something desirable because if i if i increase the amount of us dollars by a factor of 10 ask yourself the question will the stuff that i own be ten times more valuable or not and i think common sense will answer that question that's such a fundamental question that people don't address so bitcoin is at 62 000 you know six weeks ago it's at 37 30 000 now the wild fluctuations in price how do you think about that i think that um if you're if you're buying bitcoin with a time horizon of less than four years i don't think you should buy it i you know no one's ever lost money buying bitcoin and holding it over four years but if you're if you're buying if you want something to not fluctuate in value in four weeks or four months then you should buy something else so it all comes down to time horizon the volatility itself is uh is because it's not controlled it's a global market anybody can trade it 24 7. you could if people could trade apple stock on on saturday night in singapore with 10x leverage okay you would have more volatility in apple stock right uh but so what you've got is you've got exchanges that give you a lot more leverage you can get you know you can read something on twitter at 10 32 p.m on saturday night and panic and then you can sell it and then someone else will pile on to that and and there are reasons it's volatile one reason is because it trades with 10x leverage no one trades with more than 2x leverage on the us stock exchange with equity you can't so it trades with more leverage it trades everywhere in the world the other reason it's more volatile peter is because it's property not a security and that means it's not subject to the 30-day wash rule the irs says if you were to dump apple stock right now at a 20 loss you have to wait 30 days to buy it back and so you would think well i might not i like it long term so i think i'll take my lumps and i'm just going to hold it i'm not going to trade it you can't dump it on saturday night while you're drunk you can't dump it on 10x leverage and you can't dump it on saturday night with 10x leverage and buy it back on sunday morning you see but okay so bitcoin and crypto in general it's the wild west it's true price discovery it's true freedom there is more volatility we could say oh this is a bad thing but is it really a bad thing because on one hand you would say the hedge funds will sell a billion dollars at a 20 loss knowing they can buy it back four hours later and harvest the tax gain you could say that's a bad thing but you could say that's a good thing because because hedge funds everywhere in the world think this is a much more favorable asset class to trade let's do a calculation for the group here simple uh math about uh if bitcoin achieves a store of value similar to gold what the price uh ends up being it goes to about five it depends on how you look at it but anywhere from three hundred thousand to five hundred thousand dollars a coin like a ten trillion dollar asset class some of it's jewelry though four billion five billion is jewelry so so the monetary portion of gold is five to six trillion dollars and and so that means bitcoin goes up to three hundred thousand three hundred fifty thousand if it just replaces that monetary supply bill you want to add anything about the fluctuations and volatility and price and uh yeah so so we we talked about this all the time with high net worth clients we talk about time horizon constantly and i agree i mean we usually quote three years but but if you're if your time horizon is less than three to four years you're doing it for the wrong reason and you're going to be disappointed at some point right but when you have an asset class that's going up one to three hundred percent a year and versus another asset class in the dollar or fiat currencies which are basically being printed into uh you know [Music] worthlessness right so so what what is it what is it that you're trying to accomplish you know we run our treasury at a much smaller scale the same way the same way mike was talking about we're profitable so we keep a certain amount of cash we generate our revenue in bitcoin and and we're comfortable leaving it there uh because we're no we want to be the the crypto bank for people for the next 100 years and we're putting our money where our mouth is and it's been great for us but again we tell people you know if you're if you're day trading bitcoin right uh you know and you don't know what you're doing you're probably going to get wiped out especially when there's people who are trading with it's actually not even 10x you can actually trade with 100x leverage which you know for most americans is just complete insanity but that's the reality the second thing i would say is we're on the front lines as early bitcoin holders towards the creation of a new asset class a digital asset class that didn't exist before that's growing exponentially you need to look at to truly understand this in my opinion you need to look at the price of bitcoin on on log charts not linear charts it's very difficult to look at hockey sticks uh and then you know not expect or even to fully appreciate what's going on when you're on the front lines we've never had a new asset class created like this before so when i explain it to people i take out a log chart and say look you know a 25 30 percent pullback in price is irrelevant when you've got a system that's being adopted exponentially but has a a finite right as as guaranteed finite scarcity right and we've never had that before so it's very first of all it's it's it's difficult for most human beings to get their mind around exponential growth or just compound interest but now we're talking about something going up 200 percent a year it's very difficult right so we're going to go to a member member questions now really uh justin uh you were patient please uh jump on in yeah thanks first of all i can imagine peter and michael's fraternity wow that had to be it was an intense place it was yeah wow it was very intense and i are both arrow astras too yeah right there you go to the moon i used to cheat off of michael's uh problem sets because he's just smarter than i am he's a liar he was four years ahead of me i looked at all of his course notes and problem sets i had the benefit of him going first go ahead yep there you go sure no problem the um so it's interesting i'm a simplifier so i like to simplify things and um you know i look at the san jose sharks you know first nhl team you talk about hockey sticks uh bill you know they're the first nhl team a couple days to adopt bitcoin and you saw uh the ivy league last year in the spring was the first big league to shut down everything because of covid and then you look at el salvador to be the first country to adopt uh you know legal tender bitcoin so you have the wealthiest elite at one end and then the poorest of the poor like you said bill but you know the black and white and in the middle so so my question is where where does the gray start to come in and where how does it get adopted to the gray meaning is it more teams like the nhl sharks or the nba's kings or the oakland days which they have have adopted bitcoin or cryptocurrency in some aspect or is it i've seen bitcoin machines and gas stations a few times is it that like what's the mechanism to getting it to not the poorest of the poor and not the wealthy that's the wealthiest which is most of the people in this room but where where's the middle how does it get very happening it's already happening look it's the fastest adopted technology in history to my knowledge right i mean michael correct me if i've got this wrong but i've never seen the internet itself right those not adopted smartphones which we referred to 10 years ago as the fastest adopted new technology on the planet right we're not as uh we're not as quickly adopted as bitcoin is being adopted now i believe we're at about 160-175 million uh bitcoin wallets that are out there obviously they hold other crypto currencies in addition to bitcoin like with avra but it's happening already i think you know there's one important point to make it's an open protocol that's permissionless which means that any any company on earth and anybody can adopt it any time they want and so to bill's point i think we're adding three million people a week at least yeah three million a week and it is spreading faster than anything else it's the fastest growth of a digital network in the history of the world faster than google or facebook or apple uh to value but now how does it spread well look like microstrategy one company starts buying it and now every one of our shareholders every one of our employees every one of our debt holders i just i just uh sold bond issuance and 100 institutions and they collectively represent about 20 trillion dollars of assets participated so one way it happens is corporations get involved another way is all the banks are getting involved and there and the banks will deliver it i think uh coinbase ads added a million accounts a week bills companies adding millions of accounts binance is square is adding millions and millions of accounts so it's going to be spread by big tech ultimately i think that the most powerful dynamics going to be six billion mobile phones with bitcoin uh bitcoin software or bitcoin assets on the mobile phone i mean that's how you really deliver it to the world but you can't underestimate the power like when an insurance company buys bitcoin and they've got or fidelity fidelity's got 20 million customers an insurance company's got 50 million customers when they buy bitcoin coin you just delivered an insurance policy that's a derivative of bitcoin to 50 million people right if a government let's say government if el salvador buys bitcoin then any currency issued by el salvador becomes a bitcoin derivative here's a good idea turkey goes and prints uh turkish lira buys billions of dollars of bitcoin announces it and now the entire everybody in turkey is carrying turkish lira which is a bitcoin derivative it's backed by bitcoin in their pocket so so this is this spreads in lots of different ways every corporation every government in essence can create derivatives of bitcoin simply by owning the bitcoin on their balance sheet and every big tech company can build bitcoin and the protocol into their software and uh is there any one no there's like 10 000 entities that are acting simultaneously independently you know there's stuff going on in korea and japan right now and and singapore and china we don't even know about and the beauty of bitcoin is somebody you saw the president said we're just going to take our volcano and we're going to punch a hole and and we're going to vent out 95 megawatts of power 95 megawatts of power will generate three exahash which will give you three percent almost three percent of the revenues of the bitcoin network which means three percent of 20 billion dollars right so you're talking about 600 million dollars a year from a volcano did anybody ask permission no can you do it in iceland or greenland sure you can can you fire up a nuclear reactor in siberia yep you know can i keep track of it nope do i can't not even trying it's the power of a decentralized permissionless protocol people that you and here's the other irony peter i make this i apologize but dude don't apologize you're changing you got a billion dollars if you have a billion dollars in new york and you put it in gold you're depending upon the mayor of manhattan and the governor of new york and the united states uh government to protect your billion dollars if you have a billion in bitcoin then there's going to be a bitcoin miner in siberia and another one in xi juan and another one that might be in venezuela and they're protecting your billion dollars the enemy of your enemy of your enemy is actually protecting your asset without even knowing that they're doing it because somebody in china thinks he's got extra hydroelectric power and they just want to utilize it so the the incentives of bitcoin are to drive everybody everywhere on earth to do innovative things all the time without asking permission from anybody else instead of having a chain as strong as its weakest link the chain is as strong as its strongest link one got one last point there's a basis trade in singapore you can sell the forward future you can buy the spot you can lock in 35 percent overnight interest americans can't do it legally but if you have a pool of billions of dollars of capital in china or russia or cayman islands you can go get 35 overnight interest and if you live in alabama and you take one bitcoin and bury it in your backyard and don't think about it for a decade you're getting the benefit of some trader in russia or china or hong kong taking advantage of that trade and so it is truly a beautiful global network where where money managers are driving up the value of your asset and then bitcoin miners are driving up the security of your asset and you can be asleep for 30 years and and somebody that you don't know in some place you don't know we'll do something that's illegal and the place you live without you knowing it to your benefit amazing that's bitcoin michael i you know i hope everybody is appreciating why this is such an important conversation joe uh johannan you're next hi thanks peter hey michael and bill i enjoyed both of your talks at the bitcoin conference last week i appreciate that very much i wanted to ask you both hopefully a little bit of a sensitive question because i want to amp up the conversation here a little bit so michael for you i'd love to understand what your view about this whole bitcoin maximalism one coin to rule them all kind of scenario is versus other altcoins many of them have outperformed bitcoin over the last 12 months so i'd love to understand that and then for you bill things like metamask and and these in these decentralized wallets that aren't that aren't centralized i'd love to hear your opinion on that and if you think that that is a a threat to your business uh over over yeah sure let me let me address the first one i think you've got crypto assets and you've got crypto applications and the idea of a crypto asset is i want to build i want to put a billion dollars on a network that'll be here a hundred years from now so i'm all about durability and integrity and i don't want anybody to mess with the functionality or to break the thing and so i don't want any more functionality i just want to put a billion dollars on a on a coin and wait a thousand years and a thousand years from now you could make these incremental security improvements but the truth is a billion dollars of money now and a billion dollars of money a thousand years from now it's it's fine so the theory behind bitcoin is is optimize the architecture so it doesn't change it's secure it's in high integrity and all the functionality is on the layer two and so the the functionality which is perform applications performance and functionality speed you can get that from square cache app that's a compliant app and you can move a billion transactions a day for free it has to be compliant and you trust jack dorsey and square or you're doing a paypal or you're doing a visa or you're doing a mastercard or you build an application with the lightning network the lightning network is a decentralized staked network where you stake bitcoin in order to do a billion transactions instant fast and you build functionality each of those app by the way you can also use ethereum or use any other crypto assets so i could if i wanted to move money privately i could flip it from bitcoin to monero or bitcoin to z cash and i use their functionality and if i wanted to do smart contracts or defy i could flip from bitcoin and i could wrap the bitcoin in ethereum or go to cardano or go to buying a smart chain or go to solana you have a whole set of applications i think you have decentralized applications we'll call those crypto apps and the idea is i do proof of stake because i need super high speed and i can't afford a proof of work and those tend to be more centralized but higher performance and then you and then you change and upgrade the functionality there's an entire market dynamic nobody knows whether ethereum beats binance smart chain or whether or not aetherium destroys central banking or or fractional reserve banking i don't have an opinion on that i do have an opinion that that um there's a layer one which is just give me a billion dollar bearer instrument asset and if there's an open protocol then all the functionality should come from the layer 2 and and as gary gensler would say you have basically permissionless blockchains and permissioned blockchains a proof of stake is sort of more permissioned it's higher performance it's it's more decentralized and more fault-tolerant than a than a centralized conventional app and there are a lot of benefits there if you want something like that but we're not going to shut down visa or apple pay either and so i i would say um bitcoin serves this role as like a long-term 100 year old store of value and if what you want is that integrity and trust and you don't want people monkeying with the system then that's bitcoin if you go to ethereum they're changing the system all the time right i mean they're going to go from ethereum 1.0 to 2.0 if you listen to charles hoskinson he'll say next quarter we're releasing this feature and next quarter we're releasing this feature and so those are decentralized but quasi-engineered pursuits of technology functionality and the idea of money base layer money is why couldn't i just have one percent of all the money in the human race for 10 000 years without changing the functionality right so they're different things and they're engineered to a different purpose ultimately the applications will live or die based upon competing with other application functionality and the assets will live or die based upon who's got the best asset i don't think i would say it's impossible to have other assets like the chinese could create a crypto asset that might that might sit out there but you know an asset is deflationary looks on the surface better than one that's inflationary bitcoin competes against bitcoin cash same kind of architecture i like one better than the other one other people might like the one that moves a little bit faster with a higher block size the marketplace determines it and uh and in terms of uh overall architectures look there's a and if i create a virtual currency in a virtual world and i create a virtual network and give it to my virtual friends and if they stake that virtual currency to create virtual security so i can trade virtual products i'll be virtually successful until one of my virtual friends copies my virtual idea which is virtually certain okay and so that's that's like farm bill or second life or fortnight but you can't say they're not successful fortnight is successful it's a game you can't say you know casinos have casino chips they're successful you can have a d5 i want to get through the other questions so i'm going to dude yeah so i'll shut up i can wind you up there's a market dynamic here and the market has a place for all these things i i don't think you can dismiss them i just think they're going to sort itself out depending upon what you want yeah agreed the functionality bill your question yes so so look i i i agree in terms of the store value role for bitcoin i see myself as a as a very i have a simplistic perspective uh for store value uh i think it's it's uh you know it's it's the sistine chapel of cryptography of mathematics in terms of bitcoin being able to be the ultimate store value um and so i put that aside and say look you know i want that to evolve at as slow a rate as possible if it works don't break it don't [ __ ] with it however there are other applications of you know michael referred to them as crypto apps and we're in inning one of understanding what the potential there is uh is ethereum going to enable them at scale right so you know obviously uh stable coins being one that we've talked about right all built upon mostly ethereum and others like stellar and other networks are starting to come up you know defy applications which might replace applications of centralized banking insurance other services for yield generation uh which may actually move to bitcoin at some point but haven't yet right um you know arts collectibles uh you know you've referred to them as nft sometimes all basically also being built on a uh uh layer other layer competing later on protocols like ethereum wax uh solana yeah et cetera et cetera and and you know our take is is that that is going to be uh a massive market which is getting yeah and and and for me as somebody who's been at this you know from my netscape days to now the the developer support tends to be a key indicator for me right and if you look at where developer interest is going it's moving in the direction of these crypto based apps bitcoin doesn't need a massive army of layer one protocol developers right it really needs stability it needs to be secure it needs to be reliable right crypto apps to figure it out is going to need the charles hoskins name developers experimentation massive radical experimentation exactly and the other question about uh metamask you know as as kind of a a user interface right this is indicative of where we are the average person cannot use metamask it's too complicated right so one of the things we're looking at at abra is how do we actually create user experiences that are viable for the average consumer to be able to take advantage of decentralized applications at scale but we're so early right this is still guys we're still in the deceptive phase going to disruptive right i mean we talk about this whenever you digitize something it enters a deceptive phase and then 30 doublings later it's a billion-fold improvement it's you know disruptive monetizes democratizes right so that's what we're doing in this regard right um can i go to the question next real quick i've used dabra for four or five years probably five years since i saw you at a360 many years ago and it's a fantastic app so i i i'm one of your aunts on that so appreciate that ben sim you're next hey uh thank you so much uh questions for all three of you uh michael bill and peter if you have a long-term view uh what mix would you sort of put in bitcoin versus ether and why long term being 10 000 year or long term like a couple hundred year lifespan which couple 100 years well i'll go first because my answer is simple i think bitcoin can go up by a factor of a hundred is a hundred times less risky than everything else and and the human race needs a base layer digital gold money and it's and and base money is a winner take all phenomena so if the addressable market for base money is 200 trillion dollars and you've got one solution and it's first the path dependence suggests that it goes to 200 trillion so everything else is a hundred times riskier and a hundred times smaller so it's ten thousand times less compelling so 100 bitcoin zero percent everything else and then wait for the other 10 000 applications to find their home and if if something's as successful as google it's worth a trillion or 2 trillion but i'm thinking that there's only one thing that's been invented in the history of the human race it's worth 200 trillion dollars and you're staring at it so why would you why would you squander your capital on anything that is less compelling when you have the single it's like i invented electricity and you can own one percent of all the electricity the human race is ever going to use or you're john d rockefeller you can own five percent of all the chemical energy or oil the human race is ever going to use or how about five percent of the fire we're ever going to burn i mean the way you get really rich is own the thing and so how do you really that's what i think bill where do you enter i'll give you uh i have a more i let's let's call it a more nuanced answer but i i would say you know look i'm going to give you my perspective on the the crypto part of a portfolio and you can decide within that which piece goes into crypto uh because i've got friends that are 100 in the model i'm describing and friends that are one percent of the model of describing i think it's it for me that that that one versus 100 comes down to time horizon uh and basically emotions right if you're the kind of person regardless of time horizon you just can't deal with the volatility can't think in terms of looking at a log chart versus a linear chart then you know you need to move towards the one percent scale until you basically can adjust your emotions to deal with what i'm saying so within that you know i'm going to be 90 bitcoin probably you know 10 ethereum and then separately from that mix and then the reason is is because right now ethereum owns everything that's not that's not true store value right and and i also for my cash you know i i will put that in i will hold more cash right now than i normally would because i'm earning ten percent on it if i can't safely pay that ten percent uh interest i'm going gonna dramatically lower the amount of cash i'm holding um and and so you know i am totally comfortable with having 70 of of my you know net worth in bitcoin and you know let's call it another 10 in ethereum the rest in in in everything else with a small amount of cash earning 10 percent and that's what i tell everyone and i say if you can't handle the risk and if you can't stop staring at the charts all day and the price all day then you need to adjust your mindset because you're either not thinking long term enough you don't understand well enough why you're doing it right don't do it because bill said put 70 in or michael said put 100 and you need to understand sound money is what inflation how inflation erodes the value of your money over time what an asset is versus a currency right if you can't understand that then you're never going to get past the emotional issues that i'm talking about yeah trent you're next pal thanks peter um i had a couple questions um the first ones i wanted to hear your thoughts um about wallet security um the reason i bring this up is is uh i have a ledger wallet that um that about six months after i had put all my crypto on it i received a couple messages through ledger um that i had that there were two different attempts of somebody trying to access my wallet uh from china and uh and they told me what to do in that scenario and and you know and everything ended up okay but uh but that just gave me pause as far as what's the actual security of what's on my crypto my hardware wallet um and my second question is is that um i think uh obviously a very important part of bitcoin's case for being a store of value um is the fact that there's no one person or entity that's in charge of it and no one can produce more than the 21 million bitcoins um and my question is is this exclusive to bitcoin since i know most other coins can be you know printed if you will or they can be altered uh by either a person or a company or group um so is this is this exclusive to bitcoin or are there others that also um have the same protocol and by the way can i just one say one thing while on this um if you're watching on the youtube link uh please uh we've had some scam artists on on past uh transmissions we've had where people are saying send point three bitcoin here and i'll send you a bitcoin please be careful uh don't don't fall for any scam no no viable service provider will ever ask you to send bitcoin to them for any valid reason whatsoever it doesn't exist uh don't do it mike okay so quickly answering your question i think bitcoin's by far the most decentralized you know crypto network in the world and if i look at the monetary universe or the economic universe i think the bitcoin is the single most predictable most stable uh highest integrity body in that universe so if there's if you're asking me about the volume of any stock any index any credit any real estate any currency or or anything on earth i think that the one thing that's more certain than any of those things is 21 million bitcoin is the limit and uh i think it's it's uh it's properly decentralized in such a way that i can't see anybody in the world with the power to change that not i that i think is important because that gives you the fulcrum you know if i if i have a lever long enough and a fulcrum on which to place it i can move the world bitcoin is the fulcrum against which you can apply leverage other things aren't my second observation on the on the wallet question there's hundreds of different approaches you know i would tell my father you know buy a grayscale stock and don't actually hold your keys because he can't if you're you know other institutions by nature are going to either want to own a fund or institutions will want to own their bitcoin with an institutional grade audited sarbanes-oxley compliant custodian because they have to if your high net worth office who knows maybe you want to you'll want to take personal custody maybe you won't if you choose to take custody you could do it you know you can buy it smash buy it on square cash app that's a very simple experience you can do it on exchange a more complicated experience you can try to do it in a hardware wallet that's more complicated you can try to memorize a 12 phrase seed key seed key that's more complicated 24 phrases even more complicated is there a right answer no there's not a right answer what i would say is you know you've got the crypto anarchists that that our end are on one end of the scale which is they're ready for the entire meltdown of every government on earth and god bless them we need them because they keep everybody honest and and their conviction and their integrity is what prevents the corruption of most of the rest of the network but i would say the optionality to take custody is it's like they say you know i i have a gun and you know i have a gun and for the rest of my life when we're together you know i have a gun but hopefully i don't ever shoot the gun right so if you have the option to leave people treat you better if you have the option to take custody they treat you better if you should take custody you can take custody in a hundred different ways there are some things that are complicated and risky right i know people that you know have cabins in the woods with machine guns and three years worth of food and i believe in their freedom they should have the freedom to do that but i don't choose to do that maybe i don't think you have to self custody in order to own bitcoin but i would suggest you're in a better position when you buy it to have the option if you can but even then look at your insurance company i'd rather the insurance company buy the fund you know because it's better than not buying it and they can't do what an individual could do and we just go well you're gonna find you're gonna add on to that then i'm gonna go to gary next yeah two things one uh you know i would look i had the long hair endearing i was a cryptographer i was part of the cypherpunk movement on the mailing list in the 90s so so i i agree we need that we need that community two things i would say one you know this all comes down to the fact that bitcoin's best feature is is its lack of centralized governance right which means that there's no benevolent dictator that's going to say oh half the bitcoins disappeared so we got to raise the limit to 42 million bitcoin right that that lack of benevolent dictator means it moves at a snail's pace a slower than snail's pace and it will forever and that's a feature not a bug okay many people think it's a bug i actually think it's probably its best feature okay two in terms of personal custody right you know obviously i'm biased towards abra for both retail and institutional clients but i think our best feature is in that regard personal control you don't use a service that doesn't let you move the crypto off if you want to or on when you want to whether it's app or anybody else right for most people ledgers are simply too complicated the only people i know that successfully do that are very like technically astute can deal with the nuances of of a ledger every time i have a degree in computer science every time i use a ledger i got to re-learn how to use it it's it's just not meant those little tiny displays are not meant for the non-techie in my humble opinion but if you are going to trust someone else for what is meant to be a trustless system then make damn sure you can get out when you want to as well as as easily as you can get in when you want to and test that right gary you're an expel [Music] gary yeah thank you very much for this morning it's been very informative i'd like to hear both of your opinions with regard to u.s regulators and where we stand right now in particular with impairment rules with the sec and also with the irs and what some of these uh activities are what pressure it's putting on those uh regulatory agencies such as el salvador uh japan and other countries yeah i think it's going to be bitcoin's legitimized as a digital asset and i think there's consensus forming everywhere in the world that is a digital asset i think that uh the the decision that would be a digital currency is much more controversial in el salvador they designated a currency but i think most places in the world it will be designated as an asset not a currency you can expect to have a deemed as property or a commodity you'll have tax rules you'll pay capital gains tax short or long term when you transfer it per any other asset and i think uh you can expect uh aml kyc regulations around regulated custodians comparable to any other asset if you're gonna hold a million dollars worth of stock or a million dollars with currency or a million dollars worth of bitcoin you'll probably have the same disclosure obligations i think the good news is we're past the point where there's a question of whether it would be banned it's very clear that it won't be banned as property or as an asset as long as you hold it you know subject to aml kyc i think there's a lot of debate back and forth over how much aml kyc there will be and there'll be a lot of noise there and i think that i i don't think most of the world will adopt it as a medium of exchange i think the medium exchange is going to be the dollar i think that we'll do transactions on high-speed payment rails with dollars i think that we will we will store in our investment accounts bitcoin and as a long term and as for the other things like impairment you know the gap fazbee right now requires that companies treat it as an indefinite intangible for gap accounting there's a movement afoot to get them to review that uh tom emmer wrote a letter signed by seven congressman to fasby i think that i think we'll see what happens there anything could happen the consensus of of i think most people in the industry is that fasb should review it um because the last time they really opined on it they simply took the most conservative treatment because no one was really using it yeah billy wanted anything there yeah a couple of things i mean uh one i think we have a lot more regulatory clarity than people think uh we deal with you know users in a hundred countries i meet with central banks all over the world um you know most countries the storage of crypto is dealt with via e-money and money transmission licensing which implies kyc and aml uh rules that michael was alluding to uh the sec does not oversee bitcoin uh the only time the sec is involved is if there's some attempt to securitize bitcoin such as with the grayscale product or with hedge funds that are largely unregulated because they deal with the credit and investors or more importantly with these pending etf applications which up until now they have not been willing to approve but eventually i believe they will um and and in most countries uh they also deem bitcoin a commodity and and the virtual currency uh rules tend to apply again which puts you uh in well-defined e-money or in the u.s msb uh money transmission regulation thank you let's go to judy next judy uh superb conversation and i think the points just recently about clarity on currency versus assets helped me a lot question in the developing countries like african nations we're really seeing an emergency of a financial data api tech companies to merge you know citizens permissioned um maybe the data hasn't been collected yet and merging that all either so they can get access to financial institutions and i'm you know i think you've said bitcoin applications are more for you know longer term assets but do you see a risk of of this merging technology on on the api front being leapfrogged and if so you know in this deceptive to disruptive how long do you think that would take to happen yeah i don't think so i think it's like tcpip it's a base layer protocol and all the innovation and all the risk is being taken at the application layer so the leapfrogging is going on between paypal and square and lightning and ethereum and binance smart chain and solana and everybody else in the space and there's a massive war over who's going to create the most compelling applications the underlying base layer of bitcoin would allow any of if paypal wanted to settle with square every four hours for 97 million dollars they can do it with the underlying blockchain so what you just need is is a base layer monetary protocol to allow hundreds of thousands of innovators to do their thing and they are right in zimbabwe you'll have a regulated mobile app in zimbabwe that'll be using the bitcoin protocol and they'll be compliant to zimbabwe and then the government will change the rule and they will change their app and they will fail and they will succeed you know it'll be a free-for-all but i think that that the key with bitcoin is is they perfected a monetary a digital monetary network for the first time in human history it wasn't the first try it was just the first successful one now it works now everybody has a frame of reference and a protocol and it's spreading like wall fire and so no i don't think the protocol gets leaked i think the key is it's like english language it's you know once once you have the language companies come and go people come and go governments come and go the language it kind of evolves a bit but it's pretty sticky or you know when i was a kid they were trying to switch out the english system for the metric system that was 50 years ago that was going to happen presently it still hasn't happened in the us i remember that check your wall jack and look at the electric power plugs in the us versus europe and ask yourself when's that switching and the answer is the protocol is just incredibly difficult you did is it the best one no it's not the best one like there's always a theoretical better one but uh it if a billion people all agree on the protocol and it gets trillions of dollars of monetary energy behind it it's good enough we all move forward and then you bridge the the defects at the application layer square cache app will move a billion transactions a day for free on the cash app you don't like that well then try it enlightening and then let the market slug it out but there's a lot in it here's the big idea people should take risk with the application layer don't risk all the money on earth by screwing around with the base layer right that's a that's a that's a beautiful way to if bill's going to crash his company at abra he can do that at his lair but he shouldn't destroy everybody else's money right so so that's the idea behind the protocol that's why i tried to do neither yeah i was gonna say i was gonna i'm sure you'll do neither thank you and i'm from canada where we're still a mix of metric and imperial yeah right yeah um let me go to guillermo but before let me just inject one thing uh that i don't know the right place to put it but uh we'll use this uh webinar as a a point in time to say we're going to accept bitcoin for a360 memberships so i just want to plug that out there it's it's time that we start using this as a medium of exchange as well guillermo thank you peter amazing session uh hi bill hi michael um two quick questions one is about d5 uh there are we have seen like in this 50 drop uh d5 projects have performed pretty good so how are those projects that are giving 130 percent a year like pancake swap or cake against other uh staking options so how trustable they are based on the amount of apys that they are offering a third question and second which would be two stocks that could correlate with bitcoin for people that have to do collaterals or stuff like that that the banks are not accepting bitcoin assets as collateral but you have to put it just for not to put it on a bank account you have to put it on the stock market maybe for looking at your money performing as a as it's there as a collateral and bill when you're when you're addressing defy can you take a second and just for those who don't know give us a simple explanation if they're sure i'll i'll pump michael some more and say hey if you if you want exposure to bitcoin right now micro micro strategy stock may be your best bet i was going to i was going to put that i don't know if michael's allowed to say that mstr so i'll say it for mstr and alternatively of course you can buy the grayscale uh the grayscale uh trust which might actually not be a bad time since i think it's still trading at a discount uh and they have an etf application pending but i have no you know michael and i are not involved in each other's companies directly so so i'm okay i think in in saying that on the stock question on the d5 question decentralized finance is an attempt to use effectively what are called smart contracts to replicate uh aspects of the traditional centralized banking system and and the question that uh uh i think guillermo was asking was related specifically to contracts that are used to generate yield meaning you put into a contract a certain amount of an asset like ethereum or a dollar stable coin and you get out more than what you put in how is that happening okay so uh and and the simple answer is is the most important reason that's happening is is that these protocols are creating their own new tokens like cake like pancake and they're actually paying you in those new tokens which are usually in the case of of the bigger ones liquid right away so that you can change it from there you know uh you know smaller agave or pancake token into something like a stable coin so you're not going to take long-term risk in holding some other token okay the challenge with defy and this is why i tell people to tread very carefully especially if you're not a technologist okay is that when you create a smart contract on these systems and you put that contract out there that promises this yield if there's a bug in that code okay that bug by definition is now a feature because you can't change it you can create a new contract but any money that's sitting in the old contract that you can't get out you know could be stuck forever so tread very carefully and i would always only use c5 systems in very small amounts initially look up you know code audits and if you don't know what you're doing let us do it for you right and and for the vast majority of the people who are never going to be able to read smart contract code you're better off with you know abra or one of our other competitors that will help you generate that yield using defy as opposed to you know going after what looks like too good to be true numbers which often are so tread very carefully with uh with d5 in in general yeah my take on the space is bitcoin is just a base layer asset and you can build applications in central and traditional banks like the jp morgan or morgan stanley they can actually become banks in this area they're not right now but they're get but they will eventually enter you can you'll see companies like square and paypal they're getting in the business they're another way to bank it you'll see uh you see with opera and you see with block fi and those types you see companies there they're giving you loans or giving you yield against bitcoin all of those are are part of the emergent uh bitcoin banking industry it's early days it's the first decade and so it's very early i mean genesis and nydig are commercial and forms of bitcoin banks on the d5 side in the crypto world they have constructed their own uh surrogates or their or their own model of banking and they do it with decentralized systems and and they're all competing right people will say the only way to generate yield is with d5 well not really you can generate yield and c5 or d5 right you know it just comes down to how you want to do it if you don't own a bank and if you don't have capital like then maybe you want to create your own bank in cyberspace and you go the crypto route and if you if your fidelity you could go the other route i think the market will determine those if if you're investing in any of the other cryptos you're you're investing in a crypto venture it's an it's at best it's an investment like in a stock at worst it's an investment like a like a venture capital investment and the risk the risk and the complexity you know is much higher by orders of magnitude so if you're a professional and that's what you do for a living then maybe you should play in that space you know i wouldn't tell my sister or my brother if they needed a loan against bitcoin or yield against bitcoin to go do that i would say go to opera or go to block fi or or or go to some and i and if they're hyper conservative i would say just own bitcoin and wait a year and i'll wait two years until everybody's old and proven in the space and then at some point creep into some of the more interesting opportunities yeah everybody's got to decide their risk tolerance yeah right probably just one comment maybe take a little contrarian perspective over what you'll probably hear in the marketplace and that is i actually predict that you're going to see a lot of d5 applications built on bitcoin eventually i think that as these layer two protocols that we've talked about michael mentioned lightning i talked about lightning earlier become usable you're going to start to see side chains and other projects that actually use bitcoin for this as opposed to ethereum it hasn't happened yet because it's too expensive for for small dollar applications but i predict it's coming and i think it's going to be super exciting to see some of these banking applications run directly on bitcoin and if i get a piggyback on that i think there's one important point to make about durability integrity and and stability over long periods of time the reason that bitcoin is a stable network is because it's staked with energy capital you need a volcano or a nuclear reactor or or something or when farm to run it it's staked with political capital you need a nation state or governor or mayor to endorse it to let you run the bitcoin mine it's staked with technical capital you need to buy hundreds of millions of dollars of of hardware to run your bitcoin miners it's staked with energy engineering capital and human capital you have to build these bitcoin mining centers and it takes years to do it and they're complicated and and it's staked with time it takes four years or three years to set this up and it's staked with financial capital from wall street like us dollars bitcoin miners are raising hundreds of millions of dollars to build bitcoin mines so bitcoin itself is sitting on a pyramid and underneath bitcoin is us dollars and people capital and political capital from everywhere in the world a lot of time and so that's what makes bitcoin stable what makes lightning stable is bitcoin stakes lightning you know the the more state the reason ethereum is somewhat stable is the ethereum network has proof of work and it took them a long time to get there but if i create michael sailor coin tomorrow and then i and i stake my network with my own yoyo coin then i kind of i created funny money and i gave myself funny security and and it becomes a marketing exercise so to the extent that a network is staked or is wrapped with an asset that is not part of the network if a theory a mistake with bitcoin is more stable than ethereum mistake with ethereum right and and yo-yo coin stake with bitcoin or yo yo network you know square cash has 10 billion dollars of bitcoin in it right which makes square more stable and we're and we're all more stable if we are relying upon some other aspect of the system but bitcoin is thermodynamically sound because it takes so much energy and time to run the network but it's politically sound because i can't sneak a bitcoin mine underneath the the governor of texas's nose the governor of texas knows i got the bitcoin mine there and the governor of texas passes a law endorsing it and that means i've in fact got texas or a nation state endorsing my network and and so that's that's an important mathematical concept here or conceptual concept when you're thinking about taking risk over the long term if your time horizon is four weeks or eight weeks you know if you're buying dogecoin based upon what elon musk is going to say on saturday night live tonight you don't really care right i mean it's a very short-term time horizon but if you're looking at a hundred years you're thinking i want nation states to support this and not all of them all the time but as long as there's a critical mass of nation states at any given time that support it then you're stable we're going to be going to deborah and then we're going to john brock and then we'll go to our abundance digital community for uh through nia so deborah you're next yeah yeah i'm off uh so first of all peter thank you for doing this two hours has flown by so it really has right is this changed the way you're thinking about about bitcoin it it feels a lot more legitimate and nuanced and and in some odd way but yes absolutely and i see many many potentials for investment here maybe not directly in bitcoin but in some of the platforms and functionality that's coming about but my question is really thinking about unintended consequences or for instance the impact on the environment so we know that bitcoin every year creates 11.5 kilotons of e-waste so with every new technology there's a good part and there's significant you know change that can happen here worldwide but how do how do you all think about the negative implications so you know the e-waste what what's happening there and what is there anything that can be done to mitigate that here in the early days yeah i'll start first of all bitcoin uses less than 0.1 percent of all the energy in the world and and a quarter of a point of all the wasted energy in the world so 99.9 percent of the energy issue is something else and about one-third of all the energy in the world is just wasted in general so if the world doesn't want to burn coal you know it solves a problem by just shutting down coal in terms of efficiency bitcoin's the most efficient industrial application of energy the human race has ever developed if you think about it we're actually moving pure money on an electric network so in terms of comparison one dollar in bitcoin energy creates two hundred dollars in value one dollar in google energy uh creates ten dollars in value because they're just moving commodity information one dollar in the s p 500 if you look at every single company generates four dollars in value and one dollar of energy put into american airlines generates 40 cents in value so if you're looking at real energy eaters it's the air it's airlines and if you want to see you know industries that consume energy it's planes trains automobiles heating air conditioning in fact i think somebody calculated that uh clothes dryers or or you know clothes dryers in the united states use more energy than bitcoin soda christmas tree lights so uh i mean i think elon may did a disservice by by pulling this uh pulling this conversation into the mainstream right i mean one of the things that tim draper tweeted which i love is you know have you ever looked at the amount of energy used by fiat money by the legal system by wall street by all of those systems are probably orders of magnitude more wasted money than than bitcoin is yeah at some other point bitcoin is the highest value use of energy on earth the latest bitcoin miners generate about 40 cents a kilowatt hour in revenue the typical industrial company company in the western world would pay 10 cents a kilowatt hour in revenue so if you have a volcano in el salvador you can monetize it at 40 cents a kilowatt hour if you have a geothermal well in iceland or if you have a nuclear reactor in greenland if you have any stranded power if you have a dam in the middle of africa and you want to monetize it it's your single best hope to monetize stranded energy to recycle wasted energy and to catalyze renewable energy so it's more of a solution to the problem that it is any kind of problem and if you uh there's one last interesting dynamic here google can't put a data center in iceland because they can't they can't monetize all the energy and they need high bandwidth lines a typical data center like aws or google it needs super high bandwidth triple redundancy and so you would never put it a thousand miles from civilization on the other hand with a bitcoin mine you could put it a thousand miles from the nearest human being on a on a very thin pipe you could monetize the entire nuclear reactor or the entire volcano and you could generate prosperity for a country like el salvador or or you could just you want a wind farm put it ten thousand miles from the nearest human being and let the wind blow because bitcoin monetizes intermittent energy too so it's a pretty it's a pretty effect effective technology and in my opinion the most efficient way to convert energy into prosperity the human race has yet come up with so it's really sad when people criticize it for being environmentally unfriendly i mean the only the only truth is it's the single most valuable use of energy on earth so you can justify you can you can on mothball any energy plant but if you choose to fire up a coal plant in manhattan and the mayor of new york does nothing about it it's not the bitcoin network's fault right right what just happened yesterday is the chinese are clamping down and they're shutting down all the bitcoin mines running on coal power plant in their provinces and the network's cleaning itself so the political process naturally will shut down the dirty power and will migrate all the mining to clean renewable energy where it's politically accepted and supported so that the problem works itself out over time if we just let the process work we should also mention the e-waste point that you raised right so e-waste is separate just from energy consumption it's true that most the vast majority of energy consumption for bitcoin is via energy that was being created anyway uh and uh there's very little incremental new energy production because of bitcoin almost done on the e-way side however every report that i've read incorrectly explains and i've talked to the miners themselves about this and they said they don't understand why people are you know they don't actually don't care because they have no incentive to care but when i talk to them directly they're like we don't understand why these people writing these reports don't understand and don't ask us questions about the basic model for what happens when chips become outdated it doesn't become e-waste in the vast majority of cases when you have a gaming rig let's just talk about games okay if you have a gaming rig that you can no longer play a game on because the cpu or the gpu is outdated you don't throw out the entire rig you replace the chips okay this is what's happening with the super large mining facilities they upgrade they don't throw out all this stuff to become tons of waste every report i've read on this has this incorrect and and the but the miners don't complain because they honestly don't care they're going to do it anyway so so that just because somebody who has an agenda writes that a box a metal box that's being used on monday might get thrown out on tuesday doesn't mean it's true it turns out that when we dig in we found out these things aren't getting thrown out we should we should probably take the other questions yeah let's go to john brock next peter michael and bill thank you for being here it's great to be on here and i think you've clarified some of this for me but i'd still like to ask the question i mean what stops the us from either banning creating their own coin or even pushing this more forward because it almost makes them have to be fiscal responsible and that's almost impossible for most governments i can i don't know let me just take this one first because i spend a lot of time writing about this issue on banning bitcoin look i mean at the end of the day bitcoin is software right i mean let's let's get into the nuances of what it is you would be banning bitcoin is software the supreme court has talked about this over decades right you know software is effectively protected free speech in the united states okay that ship has sailed now china is another issue as we've talked about before right the threat of going to prison when you have a network where every packet is read is a totally different story okay but in a market where you have a a very clear delineation between what is free speech and what is not there's simply no way now you can regulate banks that touch the custodians but you're never going to have a law that protects that prevents you from storing ones and zeros in your pockets it's not going to happen okay the other thing on the on the on the the central bank currency at some point the u.s will issue a digital dollar as as the chinese are talking about but that will not create in and of itself sound policy that would just allow the government to bypass the banks to distribute currency the ability to print more of that currency is going to remain nothing is going to change it will just be easier to distribute that's the only thing that's going to change yeah i would say that uh you know the government will print currencies and the digital dollar is going to spread to billions and billions of people around the world and and again it doesn't really threaten an asset because the currency is the currency the asset is the asset uh and there's not a single politician that i've i i can't find anybody on record by the way it's you know it's not illegal to own bitcoin in china bitcoin is not banned in china what's banned in china is the conversion of bitcoin on the fiat exchanges it's not even illegal to do bitcoin mining in china they're doing bitcoin mining in china they just don't want people to do bitcoin mining on uh you know on dirty coal or to steal the energy so unregulated uh mining and unregulated uses of the asset are banned otherwise in every place in the world where people talk about bans or clamp downs it's legal to own the asset and it's legal to own the asset in the u.s and if you look at central banks jerome powell christina lagarde the deputy governor of um of uh the bank of china and mark carney the head of the bank of england have all stated on the record it's an asset and and uh if you want to really understand where the regulatory environment is going if you go on youtube and you google blockchain and money you'll find 30 hours of lectures by gary gensler who's the current head of the sec you can i listen to all 30 hours every minute of every 30 hours 3 million people started the lectures 30 000 people finish the lectures most people don't actually bother to figure out what he said he said it all before he was put in charge of the sec the summary is bitcoin's a digital asset it needs to be regulated for for the benefit of the world but but we don't want to over regulate it such that we would eliminate you know the 21st century fentech economy from forming and and that seems to be the consensus here like the the government doesn't seem to show any interest in wanting to shut it down all they want to do is make sure you pay taxes on it and you uh and you abide by anti-money laundering laws and know your customer laws before we go to our digital members uh one of our one more of our patrons patricia please after you under mute yourself there we go hi how are you thank you peter and thank you michael and and bill michael i'm in construction so my question is with regards to the three trillion dollars the this current administration is about to release into the economy some of it is going to be in infrastructure considering the the length of time these projects take and the inflation that we're facing or you know it's happening what is the likelihood the government the federal government will use bitcoin or allow us to receive funds get paid in bitcoin how do you see that conversation is it ever happening soon i i don't know that the us government will get involved in that i think that's a that's a free decision amongst amongst vendors and employees to decide how they'll act i think bitcoin is an asset so getting paid in bitcoin is like getting paid in shares of apple stock so so i think that i i would say if you got paid you should convert your money into apple stock if you like apple or convert your money into bitcoin but um but the tax regime in the us is it's a it's a taxable accounting event every time you transfer bitcoin so generally i think the unit of account the medium exchange will be the dollar and then i think every individual corporation individual make their own decision about how much bitcoin they hold yeah it's where do you hold your excess cash and what treasury and how do you do it and it's uh i mean going back to the beginning of the conversation what michael said you know for if we're truly facing a 21 inflation rate holding cash on your balance sheet balance sheet is not a smart economic move right the the the concern is that if if a project takes four years and you agree to an amount you know in u.s dollars and the project takes this long material price increase you know that that's the the the the way i i think about it yeah you get a dilemma if you if you sign a long-term contract delivered a fixed price and if the cost of your materials is going up well like look at lumber right which jumped that that's that is the inefficiency of inflation inflation creates uncertainty into the future which makes it very difficult for vendors and companies to manage their operations and that is that is why wall street is advantaged over main street in wall street you just hold you've got eight people that hold 10 billion dollars in assets and the assets go up in value and main street you have 80 000 people doing lots of work and their costs are going up and they're rev and they're locked into contracts and relationships and and it and uh inflation wrecks havoc with main street but it benefits wall street and if you don't have lots of assets on your balance sheet then the havoc you know outweighs the benefit and it is what it is unfair but it is what it is yeah and there's a risk you're going to take in the short term if you if you're taking if you convert to bitcoin right so as i take uh bitcoin for for a360 memberships and so forth that's a risk i'm going to take but it's how do you help move the mindset because one of the things michael you said another thing that we're staking bitcoin on is uh global mindset it's people's uh acceptance of this it's a network it's by the way bitcoin is a brand and it's an and what is a a lot of times people say well bitcoin what's it backed by well what's coca-cola backed by if everybody if you know you can walk into a million restaurants around the world order a coca-cola drink it and it won't kill you and they'll sit and they'll smile and bring you one that's a very powerful brand and if you know that you know that you can accept bitcoin or pay bitcoin or hold bitcoin and you know what it means that's a powerful brand people underestimate the power of that brand it is really critical and it creates this powerful network effect and you know displacing bitcoin is like displacing coca-cola it's like isn't there something better than coca-cola yeah sure there is what's the name i try to go into a restaurant and order anything other than you know coke zero tastes better than coca-cola i have failed 100 times to order a coke zero in a restaurant they're always like you wanted a diet coke it's like it's only 10 years late and you still haven't upgraded to coke zero 10 years and the answer is yeah it that's the network effect like and and it plays into money too right i agree all right nia let's get to some of the uh abundance digital members um please great so two related questions from lena and rick what other tools or supporting technologies for crypto should be on our radar for future investment aka skating to where the puck is going and rick asked what is the best online website resources for learning about and following crypto news and what websites do you follow michael um i i'm not going to give you any any investment ideas for for crypto because i think there's a 10 000 private companies and and a thousand public companies and and uh it's it's managing your own risk and and so i don't have any opinions there with regard to websites um hope.com is our website we posted a lot of stuff about bitcoin on it and we also have on hope.com a collection of all the bitcoin podcasts all the bitcoin leaders all the bitcoin websites that we found and so if you just remember bitcoin is hope and go there it'll it'll direct you to a bunch of other resources and so that's that's the first place i'd start bill you have any suggestions yeah i mean we have a ton of content so we publish videos um generic on how bitcoin works how the other cryptocurrencies work uh how our app works we actually link to third-party apps on occasion uh so average.com has a ton of content actually we have links to even hope uh on our website as well uh so uh so that's another another place um another place you can go for sure neil what do you have next one moment i was on a different screen um let's see i had one for melanie how will the advent of quantum computing affect bitcoin and the security to one's private keys great question yeah sometimes this pops up generally it's just fud uh spread by some other crypto project that thinks they've got a different algorithm and they just want to create anxiety uh i think the generic answer is technology is advancing and software techniques are advancing and the bitcoin network is being upgraded all the time to uh to address uh software threats and opportunities and so in general i'm not concerned about quantum computing as a threat i think that the bitcoin network is the most secure network in the world and um and over time if somebody comes up with some hacking idea they'll probably hack a centralized app first like for example twitter got hacked and the hackers took over the president united states account and they could have started world war three and they did it with something which is a billion times or a hundred billion times less powerful than quantum computing so yeah they'll be they'll be security threats but bitcoin is by far the most secure thing we've got in the universe right now and it's upgrading in the software and the hardware all the time so i think and the algorithms that bitcoin uses are upgradable so you know we're probably 25 to 30 years away from uh computing hardware that can crack um you know the signature digital signal out the digital signature algorithms bitcoin uses and at that point uh we will have long since upgraded those algorithms anyway uh just like we're under the network is undergoing an upgrade right now to this new technology taproot there will be others over the in the coming decades as well we've got 15 minutes left in the uh in the two and a half hours and and this has flown by um i want to uh we'll take more questions from uh from digital and from the members here if you have just uh raise your hand but michael um what hasn't been said i mean you've you've delivered this in in beautiful anal analogies and and probably the clearest messaging and i think the thing i want people to get is this isn't just about the first world it isn't just about us it's about how do we create a more stable world right when we're looking at uplifting every man woman and child on the planet um they're going to be trillionaires living forever on mars that's great but how do we give every man woman and child access to an economic system as well as a health and educational system and and bitcoin as an underlying layer uh is fundamental in global security and our and our futures i mean i just can't i can't stress that enough if you want stability you want people not revolting and starving in the streets yeah i i think the things i haven't said that are probably important one bitcoin is a bank in cyberspace offering a global affordable safe simple savings account for every but for billions of people that that either can't run their own hedge fund or choose not to it it's just a bank in cyberspace and it's the first it's the first engineered monetary network in the history of the human race and the significance of a monetary system is the monetary system is backhauling the energy of the economy when i give you goods or services or property if we want the economy to work you have to trade me back the monetary energy and every civilization is based upon harnessing harnessing energy and and generally every civilization needed of a effective monetary system if i want to crash the civilization i crash the money because the money is what allows humanity to cooperate so for the first time in the history of the world we have a protocol that lets eight billion people on the planet with a mobile device or any device take personal custody of their own life force which life force equals money equals monetary energy equals assets equals life savings right they can take personal custody of their life energy in the form of a digital asset and that protocol allows a hundred million companies to spin up websites and applications that all trade with each other across regulatory jurisdictions across space and across time and the magic of this is it's not just moving a billion dollars 10 000 miles it's a it's moving a billion dollars 10 000 days away civil bitcoin is elemental to the civilization in the same way that steel or electricity or fire or aluminum is elemental to the civilization no steel and no buildings every building is maxed out at six stories in the masonry world and then it goes to a hundred with steel no aluminum no airplanes and and pete knows this better than anybody no fire no humanity no electricity no nothing and so we invented the equivalent of a crypto steel and what it means is i can create an organization that could last a hundred years and i can power it with an asset that will last a hundred years and and generally humanity hasn't had a long duration power source so so when you think about it like that like the rockefeller foundation had conventional assets and boards of directors to stay rich and stay effective for a hundred years or the hughes institute but the average person they can't endow something that would last a hundred years or 500 years and bitcoin is the first thing we ever came up with that is uh that has the ability to convey monetary energy across time and space and across political jurisdiction with no energy loss and in that way call it a battery that doesn't leak or call it a canister of compressed air without a leak in it and next time somebody tells you that inflation is critical i want you to imagine someone saying i really need a hole in your balloon a hole in this ship or a hole in the battery or a short circuit and you're here's the beauty everybody in economics thinks you need inflation and there's not a single engineering discipline or a single machine that was ever built in the history of engineering that worked with inflation and and so the the application of conservation of energy to human action and human economics that is the singularity that is the bitcoin that is that is going on right now and that's i think why uh pete is interested in this and excited about it and that's why i see it as is the most important thing in my life one of the reasons one of the reasons people don't talk the average mainstream american consumer doesn't spend a lot of time complaining about inflation right the reality is is 90 plus percent of dollar stored net worth is gone right over the course of a lifetime um but the biggest challenge is is that most people are dying uh at such a young age that it doesn't manifest itself in a way that matters for the average person but you start to integrate longevity into this conversation all of a sudden it has a whole new meaning right what happens when people are living to 125 or 130 or 140 uh it's it totally changes the dynamics of what inflation means what money means what sound money means et cetera et cetera bitcoin is immortal sovereignty right the general idea the reason it's got a quasi-religious overtone is you're achieving immortality in cyberspace by creating something that is self-replicating like dna [Music] we're going to take a couple more questions here in the last 10 minutes nia and then eli a question from greg uh i co-founded impact scope an mtp of bringing cryptocurrency and blockchain to carbon negativity working with crypto exchanges building apis which provide their customers with the opportunity to offset their transactions with high quality carbon offsets in real time do you support this type of initiative and or have other initiatives or suggestions to tackle this critical issues for example ways for encouraging that mining is done with renewable energy i think mining is already the cleanest industry in the world i think i think bitcoin mining uses more renewable energy and more wasted energy than any other industry on earth and i think people are only now just starting to realize it i support anything that anybody does that they they are doing in pursuit of a better world uh eli and then uh jason beckerman if you want to ask you have a couple questions in the chat here i'll invite you to ask those eli great great thanks peter uh for michael and bill what approaches have you found to be effective on a personal level is shifting mindset or at least encourage consideration regarding the spreading of the power of bitcoin in the effort to help and drive adoption so your friends and family members that just kind of want to get a handle of it i think it helps to get out of your get out of your own frame of reference so if you go study what happened in argentina or venezuela or zimbabwe or you go to any country outside the us and africa and you study study their economic system go google argentine currency devaluations it will be a very long article you know with about 20 of them and then just read it and then imagine that in the us and that that gives you empathy so it stretches your it stretches your system i mean engineers know that you know the the gravitational constant is the same in the uh in on the earth but on mars it's different and so because they know it's different in different uh places they have a much more open set of mathematic protocols sometimes we just get very myopic and we just imagine only life in our little sphere of influence and we start to cut corners and make assumptions that we shouldn't make we're also our mindsets are are uh very short right we're only remembering what's happened in the last even weeks months and we uh we sort of glorify the past we forget how how challenging and difficult it was um it's partly just the wiring of the human brain that's local and linear in that regard nia did you want to ask a question but jason beckerman do you want to ask first yeah thank you very much peter for putting this on and michael and bill thanks for taking the time today a huge fan michael um so i've been in uh bitcoin since 2012 this is my third cycle and roller coaster uh that happens every time um we've talked a lot about the power of what could happen over the next you know 50 hundred years in your mind from an engineering perspective what do you think the the biggest risk factor to the bitcoin network is over that time period i mean the only legitimate risk that's material i could say is just a black swan an unknown unknown because if you're humble you can't dismiss the fact there's something you don't know that might be a material threat but i think that the most likely turbulence just comes from fudd cont you know the chinese mind too much bitcoin crash the chinese aren't going to mind bitcoin crash the fbi can't trace it crash the fbi traced it crash the irs will ban it crash oh the irs says i can keep it but i got to pay taxes on it crash right i mean it's just continual you know anxiety due to some news because it trades 24 7 365 on leverage and on twitter someone amps up something on sunday morning and it does something so i think that's the most likely you know headache at what asset class level do you think the volatility starts to taper off to the point where it doesn't you know swing the way that it has over the last three cycles 10 trillion maybe yeah bill do you agree with that um on the volatility question probably probably i would have i would have said probably 25 but it doesn't really matter i mean at that point i mean it's it's it's certainly going to asthmatically you know approach some other number as we grow um but yeah somewhere in that range and yeah so bitcoins would say bitcoin is truth and and the it's giving you true price discovery and it's the price discovery 27 365 everywhere on earth and so sort of by definition the prices are going to be a little bit more volatile or a lot more volatile because there's there's freedom and there's transparency and there's truth the freedom being somebody wants to bet two thousand to one leverage on saturday morning for a minute they have the freedom to do it right so that freedom plus that truth makes it a little bit more volatile but i think that it's clear that it's less volatile today than it was three years ago and i think that every single time it grows by a factor of two three four it'll get less volatile and once it gets 10 to 20 trillion it'll still move volatility is the price we pay for winning right right lebron james they're the most volatile players right the winners are volatile yeah on the on the risk issue though i i you know michael and i've talked about this i i we may disagree a little bit on this but i think i think there one thing i would like to see a protocol upgrade on in the next five years uh and that's how long we have to think when you have a non-centralized governance structure is this issue of privacy and fungibility and i think this is a it's not a systemic risk um but i think it's a limiting factor that i would just like to see go away um and that governments would have no say in this idea of white-listed addresses and blacklisted addresses and all this other [ __ ] and the easiest way to deal with that is just address the fundability issue do a series of network upgrades over the next 10 years and slowly right and and the issue will go away bitcoin will work just fine without it but in my opinion it will work a little bit better with it and that's it's not a systemic risk but it gives governments fodder to meddle in something that they don't totally understand and if you remove the opportunity for meddling the network is going to be you know even more usable at the end of the day i'm going to end our conversation on this question from jason english who asks uh how can we as bullish supporters of bitcoin help use our companies to promote the bitcoin story and michael you've done that uh others have i'm going to be doing that um but can you can you address that uh both of you yeah well my answer is every company on earth can do one simple thing which is put bitcoin on their balance sheet right adopt bitcoin as a treasury asset either 10 20 50 100 some amount as a treasury asset that's easy one person can do it in a matter of a day a more complicated thing you can do is some companies can build bitcoin into their product or their service like square like paypal like fidelity like grayscale if you're an insurance company a bank a fund company a tech company a device company you may be able to build it the protocol into your service or product if so that could be good for you square sold three and a half billion dollars worth of bitcoin last quarter right it could be good but i think that comes down to what your p l is and so those are the that's my quick answer to that i'll just make one plug for for bill and abra here i've gone to my service people who provide me services and i say open the abba account and i'll pay you in bitcoin right just in terms of getting that kind of mindset going bill you want to add something here yeah i mean look we're on boarding institutional customers every day now companies are coming to us mid-sized companies are coming to us and saying hey um we we love your dollar high-yield product but we would also like to start to put a small amount of our long-term holdings into crypto uh you know bitcoin or a little bit of a theorem can you explain to us what the risks are how does it work um should we dollar cost average as a company or should we go all in and so you know we'll spend time with people to explain our perspective on doing that but that's by far the best thing that companies can do today uh to support the ecosystem it's it's i mean accepting bitcoin as payment is fine you know i think the way elon did it i probably wouldn't have done it um but but the more important thing that you can do when you're dealing with the digital gold narrative is to accept it as digital gold and use it as digital goal which is long term holdings yeah so uh michael bill uh thank you guys thank you for your time for your generosity uh michael uh you've got one of the clearest uh strongest messages around bitcoin is abundance in the world uh and it's a message i'm super excited for us to be sharing here today bill thank you for your work um to give it up for michael and bill thanks for having us peter yeah thank you so much great to see you guys everybody for indulging us for this last few hours it's awesome all right thank you and awesome thank everybody thanks for hosting thank you

Channel: Peter H. Diamandis

Views: 489,108

Keywords: peter diamandis, peter h diamandis, abundance, Abundance 360, inspiration, bitcoin, michael saylor, crypto, crypto currency, alt coins, bitcoin crash, cryptocurrency, cryptocurrency explained, michael saylor bitcoin podcast, michael saylor bitcoin prediction, michael saylor debate, michael saylor inflation, michael saylor podcast, michael saylor interviews, michael saylor interview, michael saylor bitcoin, michael saylor ethereum

Id: pFxEM29LyeE

Length: 144min 50sec (8690 seconds)

Published: Mon Jun 21 2021

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