PBD Podcast | EP 128 | Patron Saint of Bitcoin: Michael Saylor
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PBD Podcast Episode 128. In this episode, Patrick Bet-David is joined by Adam Sosnick and co-founder of MicroStrategies Michael Saylor.
Follow Michael Saylor on Twitter here: https://bit.ly/35472iG
Instagram: https://bit.ly/3JQYASZ
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Text: PODCAST to 310.340.1132 to get added to the distribution list
About:
Michael J. Saylor is an American entrepreneur and business executive, who co-founded and leads MicroStrategy, a company that provides business intelligence, mobile software, and cloud-based services. Saylor authored the 2012 book The Mobile Wave: How Mobile Intelligence Will Change Everything. Connect with him on social media here: https://bit.ly/35472iG
About Co-Host:
Adam “Sos” Sosnick has lived a true rags to riches story. He hasn’t always been an authority on money. Connect with him on his weekly SOSCAST here: https://youtube.com/playlist?list=PLw4s_zB_R7I0VW88nOW4PJkyREjT7rJic
Patrick Bet-David is the founder and CEO of Valuetainment Media. He is the author of the #1 Wall Street Journal bestseller Your Next Five Moves (Simon & Schuster) and a father of 2 boys and 2 girls. He currently resides in Ft. Lauderdale, Florida.
To reach the Valuetainment team you can email: booking@valuetainment.com
0:00 - Start
1:27 - Why Michael Saylor Invested into Bitcoin
8:03 - Why Micro Strategy invested to much into Bitcoin
16:54 - Why Michael Saylor thinks the dollar will collapse
28:04 - How would Cyber warfare affect Bitcoin?
35:18 - How Bitcoin is really a form of 'Digital energy'
38:35 - Michael Saylor explains why 'diversification' is a bad strategy
49:40 - Michael Saylor explains why everything collapses if the currency collapses
1:02:18 - El Salvador & It's Bitcoin Endavor
1:07:52 - Why Michael Saylor is so confident about Bitcoin
1:20:52 - Michael Saylor's thoughts on Ethereum
1:28:12 - What happens if the politicians go after bitcoin
1:40:41 - Why more people from the crypto community need to get into politics
1:47:34 - Michael Saylor vs. Peter Schiff
Today, I would say this is the first time we got a billionaire in the vault, Michael Saylor.
For some of you guys that don't know his story, I'll kind of set him up and then we'll get right into it.
Get your pens ready, get your papers ready, get your mind ready.
It's about to go for a workout the next two hours.
I promise you.
And for some of you guys that maybe still have doubts of cryptocurrency or maybe even Bitcoin, this man may change your mind.
Here's why.
MIT Grad, he is the CEO and founder of MicroStrategy, nearly 2,000 employees.
They started in 89, went public in 98, over 40 patents.
If you own one Bitcoin today, a Bitcoin as of right now is worth $44,512.
If you own 10, that's $440,000.
If you own $100,000, that's $4.4 million.
But he owns personally 17,732 Bitcoins.
And his company, MicroStrategy, Brace for Impact, owns 125,000 Bitcoins.
Let me say that one more time.
125,000 Bitcoins.
So with that being said, Michael Saylor, thank you so much for being a guest on the podcast.
Happy to be here.
Yeah, so here's the craziest thing about what you were just talking about off camera.
You just got into this, summer of 2020.
It's not like you've been a true believer from day one.
It's not like you bought in, you know, 12 years ago, 10 years ago, and these guys are talking.
You just got in two years ago.
For a guy as smart as you, what made you switch and say this is the way to go?
You know, most people don't think about money and we just kind of take it for granted.
And I really took it for granted up until about 2020.
But I think in March of 2020, a lot of people's worldviews were shaken, right?
I had some deeply held beliefs.
You know, one belief is everybody should work in an office and you had to come show up and work in the office.
And then during the lockdowns, I found that I had to question that belief.
And pretty soon we're all working remotely.
And I, along with probably a billion other people, went through that same transformation.
So that was like a digital transformation of work.
In the second quarter of 2020, we had what we'll call a K-shaped recovery.
But in my opinion, the K-shaped recovery was Main Street got shut down and locked down.
And if you manufactured anything or provided services, your business was wrecked.
And then Wall Street had a rapid, miraculous recovery within six weeks of the pandemic.
And they had the best year of their life.
And I could have basically sat on a floaty in my poll in the Hamptons and got a 30% return in that year doing nothing, which would be the best year of my entire business career if I'm a financier.
But if I was running a restaurant or running a manufacturing facility or doing something with raw materials, I would have had to generate 30% more cash flow to get nothing.
You would have had, and of course that was impossible.
Can you explain?
Can you explain to the average guy what that means?
30% more cash flow.
The value of the currency collapsed in the year.
In essence, the Fed printed 40% of all the dollars in existence in the 18 months that followed the pandemic.
So when Jerome Powell said we're not even thinking about thinking about raising interest rates, you know, and forecast four years of 0% interest.
And when the Fed loosened the reserve restrictions on banks and allowed banks to, in essence, print infinite money with no reserve ratio, then the economy was flooded with liquidity.
What happened was the stock market immediately recovered.
People thought that that was something good.
It wasn't good.
It was the money collapsing.
It was the value of the dollar collapsing in real time against scarce assets.
So most of the time, if you owned a portfolio of stocks, if you had a billion dollars worth of stocks and your portfolio went up by 30%, you would have thought you were a genius in that year for doing what?
For staying invested in stocks.
Why?
Because Jerome Powell printed 30% more money.
Okay.
If you didn't own a portfolio of stocks, if you thought you were going to work as a dentist or a doctor or do things in the real world, your business is shut down, the cost of all your materials is going up, your labor has disappeared and no one's showing up to buy your stuff, the world doesn't look so good.
So you had this dichotomy, I think, and the people on one side of the economy thought everything was just fine and people on the other side of the economy got destroyed.
I was sitting in the middle.
I had a Main Street company that generated $500 million in revenue and generated cash flow.
And I had a $500 million treasury that was sitting in conservative instruments, basically invested in short-dated sovereign debt.
You know, the conventional strategy for any publicly traded company is you take your treasure and you buy one to five-year T-bills and otherwise you hold it in cash.
Now, if the interest rates were 3 or 4% and the money supply was expanding at 2%, you might think that that was rational.
When the interest rate goes to 0% and the money supply is expanding at 2% or 3%, it looks a little bit painful.
But when Wall Street recovers 30% in a matter of weeks when Main Street's completely shut down, and it's pretty obvious it's shut down, you're catalyzed to consider your premises, check your premises and ask the question, is the economy 30% better than it was before the pandemic, or is there something else going on here?
And I think the answer is there's something else going on here.
The actual inflation rate isn't 2% or 0%.
The inflation rate was 30%, but the inflation was hitting the assets.
It wasn't hitting consumer goods.
And so what I realized is maybe the money supply is expanding faster than 0% or 2% a year.
And I started on a search and I discovered the Bitcoin standard and some Austrian economists.
And what I realized is the money supply had really been expanding at 7% to 10% a year for the last decade.
That's why the S ⁇ P index is appreciating at 10% a year for a decade.
And once I realized that assets like the S ⁇ P and equity portfolios and real estate are driven primarily by monetary policy of the central banks, then I realized that holding money at 0% interest when the money supply is expanding at 10% is losing 10% of your wealth a year.
And then I realized that in fact the money supply was expanding not at 10%, but about 25% a year starting with the pandemic.
And I was going to lose half my wealth on that treasury within 36 months.
And once I realized that, I realized I was destroying about $250 million of shareholder value.
If I did nothing, I started thinking I needed to do something.
So in an environment where the money is losing 15, 20, 25% of its value a year, and you're sitting in all cash instruments, you either need to give the money back to the shareholders or you need to invest it in some scarce desirable asset.
So the reason I did what I did at MicroStrategy was if I gave the $500 million back to the shareholders, That was $60 a share.
The stock was $120 a share.
I basically was valued at one time's revenue plus the cash.
When I gave the money back to the shareholders, the stock was going to go to $60 a share.
When that happened, all my employees' stock options were going to be underwater, right?
And we were going to get beat to death by Amazon, Apple, Facebook, and Google.
It was going to steal all our employees when the stock crashed.
And that would mean that instead of growing 5% or 10% a year, I was going to be shrinking 5% or 10% a year.
Instead of my cash flows doubling or tripling, they were going to be cut to zero.
And once your revenues start falling, your cash flows go to zero.
You have no capital.
All your employees quit.
When your employees quit, the company unwinds.
We're going to go to zero.
So giving the cash back to the shareholders was a fast death.
Holding the cash at 0% interest when it was losing 20% of its value a year is a slow death.
Doing something was the alternative.
And so we decided to do something, which is invest the money in a property or in an asset that would go up faster than the rate at which the money was collapsing.
And that set us on a search and we considered buying a portfolio of scarce art.
I thought about $500 million worth of real estate.
Really, you thought about mine art.
Yeah, I thought everything.
Do you buy gold?
Do you buy art?
Do you buy real estate?
Do you buy a portfolio of stocks?
Do you buy it?
You're going through an array of different options before you settled on Bitcoin.
You were thinking art.
You're thinking real estate.
You're thinking anything other than cash.
Everything.
In fact, we put out a press release to our entire shareholder base when the stock's $120.
And you can go read it today.
It said, over the next 12 months, we're going to buy back $250 million worth of our stock, and we're going to invest $250 million worth of our treasury assets in some asset in order to avoid inflation.
And we listed a litany of these things, and we included Bitcoin as one of the things we're evaluating.
Ultimately, so we went from first principles.
We said, you have a bunch of money, and I'll tell you why we said we're going to buy back $250 million of our stock in a second.
But you have a bunch of money, say $250 million.
You want to hold it for 100 years.
Give it to your great-grandchildren.
Where do you invest it?
Well, if you put it into the dollar, the dollar is losing at least, it's been losing 7% to 10% of its value a year for 100 years.
That means over the course of 100 years, the dollar loses 99% of its value.
My house in Miami Beach was purchased for $100,000 in 1930.
Okay, I bought it for $14 million 2012.
Today, yeah.
So $100,000 to $50 million in less than 100 years, that's not the house getting more valuable.
That's the currency getting less value.
So then these are 200 million 100 years from now.
Nothing.
$2 million.
Okay, if you took any amount of money, take $100 million in the year 1900 and invested in any currency in the world, you would have lost 100% of your money in every currency except for the dollar or maybe the pound.
Every currency collapse.
The winner of every war in the 20th century was the United States.
And so the winning currency loses 99.5% of its value.
Everybody else, you lose everything.
Now, if you put that money in gold, there's a 95% chance it would have been seized in the 100 years, because there's only a couple of cities on earth, maybe Zurich or Geneva, where you wouldn't have had it stolen.
And maybe then they still would have stole it, you know, if you were the wrong citizen in the wrong country.
If you were a Swiss citizen in Switzerland for the 100 years, you might have kept gold.
But, you know, Churchill seized the gold.
Roosevelt seized the gold.
If you'd lived in Germany, you would have had your gold seized multiple times.
In Japan, they lost it two or three times.
In Russia, count the number of times.
So there's nowhere on earth where you could have kept your gold.
And now you're stuck with, okay, well, what do you invest it?
Land?
Take $100 million worth of money and buy land in Florida.
Tax bill is $2 million a year.
If you buy property in Florida, it's 2% property tax a year.
It gets assessed up every year.
You have the ownership of the land for about 20 years before the government takes it back from you.
You don't own your property.
You can't use the land.
Yeah, plus the maintenance.
So if you want to move money through time, how do you do it?
You can't do it with the currency.
The money is broken.
The money was always broken.
It's been broken for 100 years, losing 7% to 10% of its value.
But in hyper-inflating economies like Venezuela, Argentina, fill in the blank, the money loses 20, 30%, 40% of its value a year, sometimes 80% of its value a year.
In that case, you can't even carry money for a decade.
You might not be able to hold money for a year in those economies.
The Russian ruble has lost 35% of its value in the past few weeks.
That's how fast it collapses.
So fundamentally, we have this issue.
I want to move money through time.
I have a 100-year timeframe.
I'm an institution.
The whole point is an institution is supposed to go on.
And so how do you do it?
No currency will work.
Can you use gold?
Well, gold as money is the best idea humanity had for like 5,000 years, but it's not a perfected idea.
The problem with gold is gold miners produce 2% more gold a year.
Okay, that's no better than the state of Florida seizing 2% of your property a year in a property tax.
The half-life of gold, therefore, becomes about 30 years.
You divide 2% into 70.
In 35 years, your money's cut in half.
Hold it for 100 years, it's cut in half three times.
The second problem is it'll be stolen by a criminal or politician that disagrees with you.
And the third problem with it is that gold is a property you have to put in a vault.
And if you have to put in a vault, then the counterparty, the bank, is able to hypothecate it and re-hypothecate it, which means they basically sell 100 ounces of gold paper for every ounce of gold you hold.
And they keep shorting it naked and they hold the price down and manipulate the price.
You can't hold your own gold.
So ultimately, the problem with gold is holding money in gold over the course of 100 years is going to lose 85 to 90 percent of your wealth under the best of case.
The other problem is you can't move money through space with gold.
I need to move money through time and space.
I need to hold it for 100 years and I need to move it from here to Tokyo.
If I want to move, you know, a billion dollars of gold is like 30,000 pounds or something.
You want to move a bunch of money through space, it's going to cost you three to six months and $5 million to move it once.
If you want to move it through time, you're going to lose 80, 90% of your money through time, and it's going to be seized.
So gold's a pretty expensive way to move money.
Currency is an ineffective way to move money.
Property is only good so long as the nation state that the property is in chooses to allow you to continue to possess it.
But of course, the oldest story in the world is, oh, we lost the family farm because we couldn't pay the property taxes.
You can hold the land.
Buy 10,000 acres of land.
Someone moves in and sets up shop next to you.
They incorporate a city.
Then they bring 50 people in the city.
Then they make themselves mayor.
Then they pass a property tax.
Then they annex your farm.
Then they give away free money to anybody that wants free housing in the city.
Then they double your property tax.
You can't pay your property tax.
Then they seize the property because you can't pay the property tax.
So ultimately, property is not a very effective way to hold money for a long period of time.
And you can't move money through space.
So this is a problem.
I started going down this rabbit hole of thinking about what is money when I realized that I was in essence going to lose my company, right, and destroy the livelihoods of all my employees and waste 30 years of my life.
And so when I started thinking about it, and it's helpful when Jerome Powell says, we're not even thinking about thinking about raising interest rates, you know your strategy of investing in bonds is broken.
When I started thinking about it, what I realized is money is energy.
Money is economic energy, sociopolitical energy.
Currency is a medium through which the energy moves.
If you wish to hold energy and transport energy, you need a technology.
We're not using gold anymore.
When we use gold, as I pointed out, it's expensive and it's cumbersome.
Currencies don't work.
The U.S. dollar is the strongest currency in the world, but it's losing 15% to 20% of its value a year.
The peso is losing 40% to 50% of its value a year.
The Bolivar is losing 100%, 95, 98% of its value a year.
So once you start thinking about it that way, you start thinking, well, what's a better way to store economic energy through time?
And you realize that the currencies don't work.
Gold doesn't work.
So what is money?
Well, money in the last 30 years became the S ⁇ P index.
You buy a diversified portfolio of companies, of stocks, which is a little bit better because maybe you're getting bled 2% a year by the management team, but the company's making money, and so maybe you can hold value.
It turns out that the money is losing about 10% of its value a year, and the S ⁇ P index is going up about 10% a year.
And you look at that for 100 years, and there's a very interesting correlation there.
A diversified portfolio of assets is tracking the money supply.
Okay, interesting.
What's the problem with that?
Well, the problem with holding stocks as a store of value is if the stock goes up by a factor of 10, there's a management team that has a fiduciary obligation to issue more stock.
There's a temptation to issue stock.
Stocks aren't scarce.
The amount of equity shares will also go up.
If the stock is overvalued versus the fundamentals of the company, the CEO is almost certainly going to issue more stock.
And so that's one problem.
The second problem is stocks have political nexus.
They have management teams.
They're in countries.
They can be unionized.
I can put a tariff on the product.
I've got a competitor.
What if the CEO goes bonkers?
All sorts of interesting problems.
What if the company gets expropriated by the government or the jurisdiction it operates within?
So stocks are an imperfect approach, better than gold.
The other approach is buy a bunch of buildings in New York City, buy scarce desirable real estate in Miami, Los Angeles, London.
That's an interesting idea.
And the best idea in the 20th century, if you're going to try to either create wealth or hold your wealth, if you want to hold your wealth, you buy a billion dollars worth of property.
If you want to create wealth, you borrow a billion dollars and you buy a billion dollars of property and you start with a million dollars of equity.
A sliver of equity and what you're doing is you're going short the currency and you're going long the property.
So if I told you, let's go to Argentina.
If I told you in Argentina, the peso is going to go from one peso to the dollar to five pesos to the dollar to 10 pesos to the dollar to 20 pesos to the dollar to 40 to 80 to 100.
The black market rate right now is 210 pesos to the dollar, 220.
If I told you it was going to collapse from 1 to 220 and you had 20 years of notice, what's your best strategy?
Take your million pesos, convert it to dollars, and you're going to have 220 million pesos in 20 years.
You're going to look rich.
Better strategy is borrow a million pesos, convert it to dollars.
Wow.
Best strategy would be mortgage your entire company in pesos, sell equity in your company in pesos, convert it all to dollars, and then get the dollars out of the country.
Because if they're in the country, if the million pesos is converted to dollars in a bank in Argentina, then the government will basically pass a law, force your dollars to be converted back into pesos, devalue them.
And I happen to have some experience with that because I actually had a million dollars in Argentina during the last currency collapse.
They converted it to pesos.
They devalued it 10 to 1.
A day later, I lost 90% of my money.
So, simple idea.
Short the currency, which is collapsing, go long property, and then get the property out of the country.
Because the property in the country is also going to devalue because the property is valued based upon the stream of cash flows, right?
If the building has got a rentor and it's got a lease, and the lease is capped at CPI or denominated in local currency, when the currency collapses, the value of the rental income also collapses.
So wouldn't it be great if I could buy a virtual building in Argentina using borrowed pesos, and then what if I could spirit the building out of the country and rent it to people in London or New York City?
That's what Bitcoin is.
Bitcoin is digital property that you can teleport anywhere in space instantly, and it's also perfected property with with the lowest maintenance cost.
You know, you don't have the property tax that you have on a building, you don't have to repaint the thing every 10 years, you don't have to worry about leaks in the roof.
So if I could buy a big billion dollars worth of property and it was in cyberspace and if you couldn't make any more of it if I capped it at 21 million city blocks in cyberspace and if I could hold it for a thousand years, I might have a better idea than buying a city block in Manhattan or a building in London or even a company,
and it's a lot better idea than buying 30,000 pounds worth of gold.
Why?
Because real estate developers are going to create more buildings, gold miners going to create more gold, mayors are going to pass a property tax and they're going to.
They're going to put some kind of uh enjoinder or some kind of restriction on your rents.
Rent, control your building something you know.
Acts of god are going to create earthquakes and floods and lightning strikes, and none of that stuff's happening in cyberspace.
So the whole idea of bitcoin is it's perfected, engineered gold, crypto gold with none of the, none of the defects of gold.
You can't mine anymore of it.
It's.
It's weightless.
I can move it at the speed of light.
It never decomposes.
I can decon, I can.
I can break it into a thousand pieces in a second, send it to a thousand places and recompose it.
Uh, all using a computer program and I can take personal custody of it.
Maybe the most, the most powerful two ideas are, I can hold possession of a billion dollars of bitcoin in my head, just holding a password or a set of private keys.
That's a pretty big idea, maybe the first, the first time in the history of the human race that you can actually take possession of your wealth and take it to the grave with you or take it anywhere else on earth with you.
And even if I put a gun to your head, the most I can do is kill you.
I can't take it and this is a very interesting idea every other form of property in the history of the human race.
I pull the gun, I get it all right.
My incentive is to violence with bitcoin.
I pull the trigger, I get none of it.
So the incentive is the negotiation.
I'd rather have half than zero right, and it's a very interesting idea, a big idea.
And the second big idea is super intimidated, by the way i'm yeah, I.
The second big idea is, it's a monetary, it's a virus, it's.
It's a cyber virus, it's a, it's a chain reaction in cyberspace or it's a life form in cyberspace.
Bitcoin is a bank in cyberspace run by incorruptible software.
And the software, the software itself is going to basically protect your money.
The problem with software is I don't trust the computer it's on.
If it's on a single phone, I can seize the phone and reprogram the software.
So if I came up with a bank that was run by software, how do I prevent any human being from corrupting it?
The thing that makes it incorruptible is I release thousands, tens of thousands or hundreds of thousands of identical copies in cyberspace and it's self-replicating.
And all of the copies keep track of each other.
And when one of them is corrupted, it gets kicked off the network.
So you could think of it as I released a life form, plankton, or a virus, and I let it go, or a swarm.
Now, you're a part of the swarm.
I shoot you.
It doesn't help.
You have the genetic code.
I shoot you.
It doesn't help.
I obliterate all of the algae in the Atlantic.
Won't stop it.
I eliminate all of the bacteria in your body.
Won't stop it, right?
It's a virus.
It's going to keep spreading.
And the beauty of the system is it's in essence this chain reaction in cyberspace.
And the only purpose of the chain reaction is to protect the integrity of the network.
There will never be more than 21 million Bitcoin.
So what you've got is truth and integrity released as a cyber virus.
And if you choose to join that network, you avail yourself of all of the benefits of that network.
How many of the 21 million Bitcoin have been mined already?
About 18.5 million.
I want to read you something.
I want to read you something because I'm trying to see more of the, I like the way you processed everything with real estate, with stocks, you know, management team, CEO, what could happen to the market, government can regulate them, et cetera, et cetera.
Okay, fine.
Cash, got it.
If you have $200 million, $2 million, $100,000 house in Miami, now it's a $50 million house.
Okay, so maybe that's also a risk because what Florida would do within 20 years.
So here's what just took place.
I'm trying to see for somebody that's wanting to play devil's advocate and be a skeptic.
Ukrainians are preparing to lose internet access.
Okay, this is crypto briefing article.
Per Forbes in Ukraine, apps that permit basic services like communication and mapping without internet access are topping the downloads charts right now.
Such applications utilize radio signals or Bluetooth for offline functionality and are common with when civil conditions deteriorate.
Amid war, government crackdown, a similar surges in such downloads occurred in 2019 with Hong Kong protests, right?
While there has been an influx of cryptocurrency donations to the country and its invasion, cryptocurrency usage is generally impossible without internet connection.
Parts of Ukraine's third most populous city, Odessa, have already lost power, and Forbes sources indicated their expectation that Ukraine could lose power and internet connectivity on a more widespread basis.
This is where I'm going with this.
So, you know, COVID takes place.
Whatever you agree with it, there's a lot of different stories.
It's a virus, it came from this.
Your lab, it came from this.
We don't know what market is a lab.
We haven't done the investigation.
We still don't know.
The tribunal courts got to get out there and say, look, we got to do a real investigation.
But there was a community that says, look, China is known for investing most of their money in the military bio-warfare.
That's what their strength is at, right?
And Russia is known for cyber warfare.
That's where, you know, they got the nuclear weapons.
We all know they're very powerful with the nuclear weapons.
But we experienced what, you know, if we had a biowarfare the last 30 months, if we did, we experienced a glimpse of it.
What it did, it shut down the entire world, right?
What is your concern with what a cyber warfare would look like?
How would that affect Bitcoin and cryptocurrency?
Bitcoin is a nuclear-hardened protocol.
It's pretty much the most robust, resilient thing the human race has yet to invent.
For example, it's running on tens of thousands of nodes.
You can't even identify the nodes, and there's an identical copy of the Bitcoin ledger on every one of them.
So if all of the electricity got shut off everywhere on Earth and every computer failed everywhere on Earth for 10 years, the protocol just goes dormant for 10 years.
And as soon as one person turns one node back on, the entire protocol comes back to life again.
There's nothing like that, right?
All your money in a bank and Bank of America could be wiped out with a keystroke.
You go and you wipe out a few servers.
Your building can be wiped out with a bomb, right?
Lots of things can be wiped out.
But Bitcoin is the most resilient thing in cyberspace because it is so incredibly decentralized.
If you took an entire country offline, that's irrelevant.
In fact, we just saw last year during the China crackdown that China banned Bitcoin mining.
They took 40 to 50% of the entire network offline.
Half of Bitcoin mining was taking place in China.
The network didn't miss a beat, not even for a minute.
It just kept running completely secure.
You could literally wipe out 99% of all the nodes you wouldn't notice in the network.
There's nothing else that you rely upon.
I can take down Google and Twitter and Facebook and Apple and Amazon and the US government.
And, you know, there's a lot of other systems you can take down much more easily.
You take down Bitcoin.
So I don't really worry about Bitcoin's fragility to any cyber attack.
In fact, the whole point of proof of work was to create something which is impervious to a denial of service attack.
And it turns out that if you dig a bit deeper, what you realize is that not only is Bitcoin impervious to cyber attacks, it's also the solution to cyber attacks.
Because if you want to eliminate denial of service attacks, which are the most common brute force attacks, or you want to eliminate phishing and scam and spam attacks and other sorts of imposter and malicious behavior in cyberspace, the way to do it is to integrate a layer of monetary energy, which is what Bitcoin is, into the internet.
You need to wrap the avatars.
You need to wrap the people, the websites, and the services that we have in cyberspace with a layer of digital energy.
If you did that, you could prevent all the denial of service attacks.
You could shut them down.
You could probably shut down most of the scam videos on YouTube, all the scamming on Twitter, all the spam in your inbox.
A simple principle is you simply have to post a monetary security deposit in order to hit my website or message my inbox or post a comment.
And if you're found to be a scammer or a phisher or a malicious actor, you're fined.
And we just take your money.
Now, this is not a problem for an ordinary person.
You would post $10 once in your life and you will trip through cyberspace as you will.
But 1,000 times a week, someone spends up a Michael Saylor Bitcoin giveaway on YouTube, and those are live YouTube class.
They'll probably take this interview we have, they'll rip it out, they'll put it into a Michael Saylor Bitcoin giveaway, they'll run it on YouTube with 40,000 fake people listening, and they'll have some number where you can send Bitcoin to get send one to get two back.
For those people that are listening, I won't get one scam.
Never send your Bitcoin to someone to get two back.
You're getting ripped off.
So they'll do that, and they will have spun up 40,000 fake actors.
If you actually required someone to post $10 of Bitcoin in order to trip through YouTube or use YouTube, it would cost you $400,000 every 10 minutes because they get taken down every 10 minutes and they get spun up every 15 minutes.
It's literally 1,000 times a week.
And so imagine trying to spend $40,000 or $400,000 1,000 times a week to do this.
Michael, what type of people fall for those scams?
I mean, you said you've been a victim of using your name for this type of thing.
I've probably one out of a thousand.
One out of a thousand, but yeah, they obviously work because they do them every 15 minutes.
If you went online right now and typed Michael Saylor crypto giveaway or something, you would probably.
I just bought a few before I got here.
Just kidding.
Yeah.
Yeah, so Bitcoin is digital energy, right?
This is a big idea.
We've encrypted money.
It's such a huge idea.
Since most people don't know what money is, it doesn't occur to them that money is energy.
Since they don't understand what money is, they don't really understand that money's defective, that the energy is bleeding out of their currency.
By the way, if money is energy, the energy finds its way into a currency.
It also finds its way into stocks and into bonds and into property.
They're all bleeding energy over time or over space.
And if you're an engineer and you understand that a well-engineered system is a system that allows you to move energy through time and space with no power loss, no impedance, superconducting, which is that we call that like, you know, it's an adiabatic system or a thermodynamically sound system.
If you're an engineer, you totally get it when you're designing a pneumatic system, electrical system, you know, even a heating system in a house or a swimming pool.
If the water drained out of your swimming pool, it wouldn't work so well, right?
If your bathtub, you know, drained out, it doesn't work so well.
So engineers understand this, but economists don't really think of money as energy.
And so it doesn't occur to them that the energy is bleeding out of the systems.
Once you figure that out, you realize that Bitcoin is truly brilliant because what they've done is they've created a thermodynamically sound monetary network that allows you to store any amount of energy for any period of time and move it at essentially no cost anywhere in space as frequently as you want.
Pat, have you ever heard?
And it's lossless.
He's saying lossless, yeah.
Yeah, that's a key word.
You've heard that money is a tool, money enables.
I've never really heard money being used as energy.
Is this something that you've heard before?
The energy thing.
Listen, I mean, it makes sense, though.
It totally makes sense on what he's saying, the way he's describing it.
For me, when I'm listening to him speak, all I'm thinking about, and I hope the audience is doing this as well, is how this man processes issues.
I mean, as an investor, everything he went through was common sense.
Nothing that he went through on how he came to the processing of why he wants to do this is now you can sit there and disagree and you can say, I disagree with him.
I'm going to go this way.
I'm going to go that way, which is totally fine.
But I'm just listening to the way he's processing issues.
Tyler, can you pull up that story of what happened with Canada?
Because for me, one of the things I'm watching, Michael, very closely right now is the following.
All I watch is, you know, I got four kids.
I watch the kids on how they handle a crisis.
I watch kids how they handle a loss.
I watch kids how they handle a, you know, a breakup, how they handle a rejection, how they handle a bullying, how they handle all that.
Because that's how we're learning about the personality of the individual.
And maybe there's an opportunity there to coach and walk the kid through what he's going through.
I also watch what's going on with crisis, how the market reacts to crisis.
You said a few different things.
You said, you know, what COVID did to me is it made me question a few things.
One of them was working remotely.
It's one of the things you talked about, right?
The other one was, you know, this and this and that.
Some of the things that, you know, I was looking at was, number one, we've been told, you know, when I went and started working on Morgan Stanley Dean with her day before 9-11, even when I was in the Army, everybody would say, buy a Roth IRA and diversify.
Okay?
Diversification.
That's a concept we've heard for a long time.
Inflation increases gold.
Whenever there's inflation, Peter Schiff, oh my gosh, gold's going to go because, you know, we printed 40% of the U.S. dollar has been printed the last 18 months.
Gold's going to go up.
We didn't see that cause and effect.
We didn't see the cause and effect with that taking place.
What are your thoughts with some of these things where the traditional conventional way of things have been questioned based on the last 18, 24 months?
Inflation and, you know, inflation and diversification are both bromides.
There are these simplistic terms that people toss around, but no one really thinks very deeply about them in my experience.
I mean, let's start with inflation.
Inflation is not 2%.
Inflation is not the CPI.
It's not 7.5%.
Inflation, properly understood, is simply the rate at which the price of anything appreciates in the currency, which is the frame of reference, which means that you can calculate an inflation rate for a Picasso painting, which is different than a building in New York, which is different than a bond, which is different than a market basket of goods and services that you wish to buy, which is different than the market basket of goods and services I want to sell you.
So what's the real inflation rate?
It's a vector right?
It's not a scalar.
A scalar is like 2%.
No, it's not.
It's like an n-dimensional vector, and there's a different inflation rate for everything in every place for every time period dynamically evolving, right?
Once you understand that, you realize that there's probably two inflation rates of interest.
One inflation rate is the rate at which cost of living is going up for a middle-class family.
That's not the CPI because the CPI is a manipulated market basket set by a politician or a bureaucrat that is engineered not to go up in price very fast.
Most average people would find that their inflation rate is higher than the CPI.
And if, for example, we don't include the cost of buying a home in the CPI, even though it sounds the reason that just about any reasonable person would want to buy a house at some point in their life.
So you can calculate a consumer inflation rate, which is different than CPI, but you can also calculate an asset inflation rate.
That's the cost of getting rich or staying rich.
If you want to be wealthy, it's not good enough to keep up with CPI.
You have to actually keep up with the rate at which assets are appreciating.
The cost of housing went up 18.8% year over year.
This is Kay Schiller, according to the Kay-Schiller Index, right?
That's another, that's a common asset.
But if you look at the S ⁇ P index, which is a market basket of desirable companies, that gives you a surrogate for a monetary inflation rate.
The monetary inflation rate's been running 7% to 10% a year in the U.S. at the same time that the CPI has been running 1%.
If you understood that, you understand that your cost of capital is more like 10%, which meant that any investment you made that didn't yield 10% was making you poorer.
You were losing wealth.
Any business person understands that.
I couldn't get you to accept a 2% ROI on an investment.
So if you understand inflation is a vector, then you start to realize that the inflation rate in Miami Beach is different than it is in Kansas City.
And you understand that the inflation rate, if you want to stay wealthy, is much higher.
The inflation rate in 2020 was about 25% for assets.
The inflation rate for bonds was at one point higher.
You could have bought a bond for a million dollars that yielded $50,000 in interest a decade ago.
If you wanted Social Security, if you wanted $50,000 in income risk-free the rest of your life, the cost was $1 million.
When the 10-year yield went to 50 basis points, you would have to pay $10 million for the same bond.
The bond went up by a factor of 10.
What's the inflation rate?
The inflation rate in that particular case was 100%.
It was like hyperinflation.
You had hyperinflation in the bond market.
You had massive inflation in the asset market.
You had no inflation in the dominoes pizza delivery Netflix market for a while.
And if what you want to do is live in your parents' basement and watch Netflix and order pizza, then the inflation rate, much, much lower for you.
And if you wanted to stay wealthy or you wanted to get wealthy or hold shareholder value, your inflation rate looks more like 30, 40% in like 18 months.
So once you understand inflation is a vector, then you stop paying attention to just one cherry-picked number.
Because what you realize is I can manufacture any inflation rate you want simply by adjusting the market basket of products and services.
And by definition, by definition, if I never include assets in the market basket of desirable goods, then you will always ignore asset inflation, which is the most pernicious inflation.
So we have had hyperinflation since 1971, but the inflation has manifested itself in the assets.
And here's the pernicious thing about it.
I've literally brainwashed you into thinking that asset inflation isn't a bad thing.
It's a good thing.
And it isn't inflation at all.
It's actually investment gain.
So that's when I convince you that a bad thing is a good thing, right?
We've come to a bizarre point.
So we're living in inflation since we went off the gold standard.
It's just manifesting the assets.
We have hyperinflation right now.
It's just manifesting itself in the assets more so than in the goods and services.
Now, if you go to diversification, it's another bromide, another silliness.
You should be diversified.
Lots of people say that.
A lot of times the people that say that to you want you to give them your money.
It's like I'm a hedge fund manager, and so I'm going to stand up and tell you you need a broadly diversified portfolio of like international equities and domestic equities and like some of these commodities and it changes all the time.
It's very complicated.
It's too complicated for you to figure out.
So you just give me your money.
I'm going to charge you a 2% fee, keep 20% of the upside, and I'm going to invest it in this hyper-complicated array diversification of stuff, right?
I'll give you a simple idea.
Go buy Bitcoin.
Don't give me anything.
I don't want your money.
I don't want the 2%.
I don't want 20% of the upside.
And Bitcoin is a diversified index of the entire world economy.
And certainly the crypto economy as it comes to its senses.
You can believe one thing or the other thing.
You can imagine if you're in the business of managing people's money, the last thing you want to do is tell them the answer is just buy this one thing and hold it for 100 years.
How do I make money off of that?
On the other hand, what's the problem with diversification?
Well, first of all, the problem with diversification is diversification is selling the winner to buy the losers.
And the second problem with diversification is you're not really diversified at all because everything you own is probably correlated to one currency, which is collapsing.
So let's deal with them one at a time.
If you own Apple stock in the year 2010, a mutual fund manager or a hedge fund manager would tell you he's going to diversify you because when Apple stock doubles, he's going to sell some of that so he can buy some HP or some Dell or some other IBM or some other computer company.
And when Apple doubles again, he's going to sell some more to keep you diversified in the computer sector because he wouldn't want you to have too much exposure to Apple.
The problem with that is that at one point, Apple became 150% of all the profit in the entire mobile phone industry.
That is to say, the winner eats everybody.
Not only does it eat everybody, everyone competing against Apple is losing money to compete against Apple.
So you're selling the winner to buy the losers.
You're going to sell Facebook to buy the newspapers.
You're going to sell Google so that you can buy every company competing against Google.
You're going to sell Amazon to buy the other retailers.
Amazon won.
Walmart almost kept up.
15,000 retailers lost.
Right?
And why is that?
Well, it should be pretty obvious why it is right now.
When you have a dominant digital monopoly, the digital monopoly eats everything else.
And Apple Computer is the most valuable company in the world because Apple Computer is literally the most valuable company in the world.
They can ship a product to a billion people over the weekend for a nickel and their competitors can't.
So selling the winner to buy the loser is an awful strategy.
The only people that made money in the stock market last decade were the people that owned Fang.
They owned Apple, Amazon, Facebook, Google, Microsoft.
There's no diversification here at all.
So if you're investing in a stable currency, you have to keep in mind that digital monopolies are dominant and they crush everything else and everything else goes to zero.
So the only- Everything else goes to zero.
Name another retailer you'd rather own than Amazon.
So you're saying Ethereum is going to go to zero?
What I'm saying is that Ethereum is a different subject.
We can talk about it in a bit.
What I'm saying is if you're a conventional investor, the winners tend to crush the losers by far.
And so diversification of selling the winner to buy the losers is not a good idea.
You know, eventually all, you know, what portion of the S ⁇ P return is attributable to five companies out of the 500?
It's like 80% or something ridiculous like that, right?
So now here's the other problem.
I'm going to put you in Venezuela.
Okay.
So you're in Venezuela and you have a choice.
You can buy one company in Venezuela or the entire index of Venezuelan stocks, or you can buy one building in Venezuela or all the buildings in Venezuela, or you can buy one bond in Venezuela or all the Venezuelan bonds.
Give me a diversification strategy which is going to actually keep you from losing all your money over five years if you're sitting in Venezuela five years ago.
What is it?
They're all correlated.
You see?
It's like you're shuffling deck chairs on the Titanic.
The ship is sinking.
You're shuffling these deck chairs.
The fundamental elephant in the room here is when the currency collapses, give me a diversification strategy for Russian stocks right now.
Which of those do you want to own?
When the currency collapses, the bonds collapse that are linked to the currency.
All the companies that generate cash flows and the currency, they all collapse because they're valued as a stream of cash flows.
And if the cash is worthless, how is the company going to be valuable?
You sell beef in Argentina, the peso collapses, the people are buying the beef in pesos.
So you want to sell the beef to Europeans for Euros.
The government passes a law keeping you from selling the beef or exporting your beef.
Export controls come, wage and price controls come.
So the problem is every equity, every piece of debt, every piece of property linked to the currency is correlated to the currency.
So your diversification strategy with any given currency, whether it's the peso, the dollar, the Euro, the rubble, the lira, the whatever, they're all correlated.
So then you're like, okay, well, this is great.
I'm just going to buy the dollar.
All the currencies are correlated to the dollar, and the dollar is collapsing.
How fast is the dollar collapsing?
Well, you can watch it against real estate in Miami Beach, right?
All you got to do is look at the dollar versus any scarce desirable piece of property.
So what's the dollar valued in versus a Picasso, a Leonardo da Vinci, a city block in New York City, a desirable piece of beachfront property?
And how about Palm Beach, right?
What's happened to Palm Beach property in the past 10 years?
So ultimately, the problem with diversification is nearly everything, every stock is correlated and every conventional asset is generally correlated.
The only true diversification is if you find non-sovereign stores of value, stores of value that derive their value based upon something other than the cash flows that you could derive from them.
So think hard about what those are.
Pristine trophy properties might protect you.
But I think that the problem ultimately is if you're on a sinking ship, you have to get off the ship.
And the problem with diversification, when you're in the retail industry and when it's completely getting obliterated by Amazon, you have to get off.
You have to get out.
There's no winning strategy no matter how you diversify in.
And so most of the time, these models, inflation is 2% or CPI and, you know, we should say diversified, they're based upon this very conventional wisdom that I live in this safe world and nothing has changed.
Like there is no – when Godzilla shows up to the playground, the rules of the game change, right?
If there's an external factor, right, you have this model.
It's like it's always been like this.
It's always traded like this in the last 30 years.
Well, the US dollar never collapsed in the past 30 years.
The US dollar is losing 7% of its value for 30 years.
So your model says buy property and buy the SP index.
What happens when the US dollar is losing 21% of its value?
It's like that's a different thing.
And I think that if we come back to energy, energy is life.
And if I suck the energy out of this room, I freeze you to death.
When I suck the energy out, the temperature keeps falling.
If the temperature is falling one, two percent, you can crank it up and try to deal with it.
But when the temperature is falling 10%, at some point you'll start to freeze if I pull enough energy out of the room fast enough.
And at that point, you have to entertain a new notion, an oxygen mask, you know, put on a coat.
You got to exit the room eventually.
And if we come back to this issue, right, the issue of the day is Ukraine.
But what's really going on here?
The currency and the banking systems have collapsed in Afghanistan, in Iraq.
They're falling and collapsing in Turkey.
They've collapsed in Lebanon, in Syria.
They're not trustworthy.
In Ukraine, and in Russia.
Now, I've just lassoed about 400 million people.
And those 400 million people don't have a currency that they can use as a medium of exchange or a store of value.
They don't have banks that they trust that work effectively.
And what's the fundamental issue here?
It's like if you don't have a property or a currency with which you can store economic energy, that's like being a type 1 diabetic.
You cannot store fat on your body.
It means that you can eat as much as you want.
You will literally starve to death, right?
Because you don't have the ability to store energy.
Fat is organic energy.
Just like property is a manifestation of energy in low frequency.
I give you a billion dollars in the currency.
It's high frequency money.
I buy a billion dollar building.
I hold it for 30 years.
It's low frequency money.
Right?
Either way, okay, I give you a billion dollars.
You buy a building in some Central African Republic.
Someone puts a gun to your head, takes your building.
Now you have no building.
You buy a billion dollars worth of currency.
The currency collapses because the guy that runs the country prints more of it.
It goes to zero.
You know, like paper money in Venezuela is not as valuable as toilet paper right now.
What is it?
Right?
Not clear.
So what you have is an economic collapse.
And it's a global phenomenon today.
And it was accelerated in March of 2020.
The catalytic event, the catalyst for these things normally is a war, a war on COVID, a war on currency, a war on a lot of things.
We're fighting a lot of wars right now, and now we've got real wars, right?
A political, an actual war in Ukraine.
Wars collapse currencies.
They always have.
World War I collapsed the currency.
World War II also damaged the currency.
You can actually trace it if you look at real estate values in the years that followed the war.
So what we're doing is we're collapsing the currency.
And you could describe the entire world right now as 8 billion people.
There's one strongest currency, the dollar, which is losing 15 to 20% of its value a year.
That's how fast it's bleeding out.
You've got a set of currencies pegged to the dollar, Singapore, the Middle East, the Euro that are fairly close to the dollar.
Then you've got a set of second-tier currencies, the peso and the Turkish Lyr and the like, and they're losing 40%, the rubble now, losing 40%, 50% of their value a year.
And you've got the third-tier currencies, the Venezuelan, the Bolivar, et cetera.
They pretty much hyperinflate.
They all collapse, and they're all going to dollarize.
This trend is going to continue.
Crypto falls into this trend because what's happening is people realize they can't trust their local currency.
They can't trust their local bank.
If you don't trust the bank, why don't you trust the bank?
In Canada, right, the bank might seize my assets if they disagree with me.
In Afghanistan, the banks all failed, you know, when the U.S. pulled out.
In Lebanon, the banks basically closed, froze everybody's assets, seized and converted all their foreign currency assets into local Lebanese money, devalued the money, and they locked it up for 10 years.
Okay, so when you have hundreds of millions, if not billions of people losing faith in the currency, losing faith in the banks, what do you do?
You look for the digital solution.
And the digital solution is I download a mobile app to my phone, and then I convert whatever asset or work or property I have into a cryptocurrency.
And there's two things that I really want badly.
One thing I want badly is crypto dollars, like Tether or Circle or the like.
It's basically U.S. dollars sitting on crypto rail.
Stablecoin.
Stablecoin.
And the world's bought $180, $190 billion of that from like $5 billion over the past 24 months.
It's exploding.
It will go to 10 trillion if they could, right?
The market has a trillion to $10 trillion demand for that stable coin.
What will happen when that happens?
Every one of these local weak currencies collapses, right?
There's not a single currency in Africa, in South America, in Asia, you would rather hold than the dollar right now.
The Chinese don't even want to hold the CNY.
They would all convert to the U.S. dollar.
How do you know that?
Because there are capital controls.
Every country that implements a capital control, making it illegal to convert their currency or move their capital out of the country, is signaling to you that their currency is weak.
And that includes the Chinese currency.
So that's one dynamic.
You've got 130 currencies floating in the world.
There's probably only two or three that will be left when the dust settles.
You've got the Euro, the CNY, the USD.
Everything else either gets pegged to those or it collapses into those.
And then the second thing the world wants is it wants crypto property.
It wants money to give to your grandchildren.
I want to hold my money for 100 years, if not 1,000 years.
The dollar won't work.
The dollar is losing 2% of its value a month, which is horrific and horrific over 36 months.
It's catastrophic over 10 years.
And people are getting smart enough to realize that that won't work.
So the issue is, where do I put my long-term money?
I need a savings account.
So hence, this is where Bitcoin comes in.
Bitcoin is the dominant crypto property network in the world.
It's pretty much the only perfected digital property network the human race has created.
It's a proven digital property.
Everything else is a speculation that it may become property over time.
Bitcoin is the success.
And every like-kind competitive Bitcoin has collapsed against it, such that Bitcoin is the 95% dominant network in this space.
The dollar is clearly the dominant currency, and it wants to be the dominant digital currency.
It is really the dominant digital currency as well, despite the fact that the U.S. government doesn't have U.S. banks issuing them yet, and we've been slow on the uptake.
You can see where this is headed.
And the driver is the stampede of everybody else in the world.
You're a rich American and you feel comfortable with your banking structure.
Okay, maybe you can ignore this.
But name somebody in Africa, Asia, or South America that can ignore this issue right now.
I mean, I invite you to sell all your money and move to a country in Africa and then invest it in local property, local companies, local currencies, and put it in a local bank and feel good about yourself.
You've mentioned South America, Latin America multiple times, Venezuela.
You must have some strong feelings on what's going on in El Salvador with Naeib Bukele, the president of El Salvador.
Is that someone you follow or you're in touch with or anything like that?
The situation in El Salvador is instructive because El Salvador doesn't have their own currency.
They had a war, a civil war.
And following the Civil War, their currency collapsed and so they dollarized.
So the medium of exchange in El Salvador has been the dollar.
And so their problem is and was that the banking system, the U.S. banking, or the traditional 20th century banking system is too expensive and cumbersome to serve the people of El Salvador.
Over 100 years, they managed to put 2.5 million people into a banking relationship.
Over three weeks, they rolled digital assets than they accomplished in 300 years.
And now I can put up one tower and give internet access to millions and millions of people for one one thousandth of the cost of doing it with the copper line technique.
So if you think about digital banking, the future of the world is 8 billion people with mobile phones.
I download an application in 60 seconds.
And on that mobile phone, I carry a digital currency like the dollar, maybe the Euro, maybe a local, maybe the yen or the won, maybe if there's an effective nation state.
If there's not an effective nation state, I just really swap out to the dollar immediately.
Everybody would want to do that.
And then I also carry a digital property, Bitcoin.
I want to hold it for 100 years.
Instead of holding a building, which you can tax or seize or rain on, or instead of holding a bar of gold, which you can take from me, I'm just going to hold my digital bar of gold on my phone.
And then maybe I have some other assets.
Maybe I have digital art.
Maybe I have digital securities.
Maybe copies of ownership of something else that I might like sitting in a wallet.
But certainly, this I can give to everybody on earth, and I can move the money at the speed of light.
And what do I trust?
I'm trusting a piece of software, which is a lot cheaper and a lot more reliable than trusting a building, a bank, a board of directors.
When you actually have your money in this bank vault, I mean, look at it.
Imagine money in the – think about that.
When you had your money there, you were trusting the guy that ran the bank, the manager, the bank, the mayor, the head of the police force of the bank, the head of security of the bank, the dude that came to actually fix the lock, everyone that touched the thing, the governor of the state.
Then you're trusting the head of the country, the central bank that managed the country, the military system.
Who do you trust with Bitcoin?
Nobody.
That's the point.
Nobody.
Bitcoin's a bank in cyberspace run by software, incorruptible software.
And this is the beauty, right?
Really great engineering takes a corruptible element and puts corruptible or imperfect elements together in a system such that they cancel out their imperfections to create perfection.
Where did this happen?
Happens in the thermostat.
In a thermostat, I have a strata or a metal, and the metal contracts when it gets cold and expands when it gets hot.
Okay, now I tell you, build something which doesn't contract and expand when it gets cold and it gets hot.
You're an engineer.
How do you do it?
You take the piece of metal that's going to contract and you put it in opposition to another piece of metal that contracts the other way.
But if they're both the same and they both contract with the same force and you pin them, they cancel each other out and then you actually get a zero tolerance perfect machine.
That's how John Harrison created a perfected clock.
He basically used that insight that imperfect elements can create a perfect mechanism in a clock.
That clock was used to calculate longitude on the ocean.
That's how we actually navigated for 300 years.
It's all based upon a bunch of imperfect elements that create a perfect mechanism.
Bitcoin is the same thing.
I've got a piece of software.
It runs on a machine.
Is it perfect?
No.
Why?
Because you can corrupt it.
How do I fix it?
I give another piece of software to him.
Now the two of each of your machines check each other.
Well, what if you're both corrupted?
Well, I throw another 10,000 of those pieces of software into the ether.
Well, who do I give them to?
People I don't know.
How do I corrupt them?
How do I even find them?
Okay.
What if I promise to murder everybody in the U.S. that doesn't change their Bitcoin nodes?
Doesn't help.
Doesn't help.
What if I murder everybody I can find with a Bitcoin node?
Doesn't help.
I can't, right?
How do you stop a fire?
How do you stop a fire in cyberspace?
Right?
It's like you've released this thing.
You've operated, you've invested, you've seen things.
You saw Amazon drop, I don't know, what was it, 95% in 05, whatever the year was when the stock went down 95%.
I may be wrong on the year.
You've seen a lot.
Okay, you've seen a lot of what's happening.
Yeah, so you seem 100% certain about what you're talking about, which history doesn't favor 100% certainty.
You know, it typically, you know, and it's not even the, I'm not even talking about the trust, but verify.
There's got to be an element of skepticism, but you're like, no, it's almost a combination of a person who has experience running a business, investor, genius, but also a salesperson.
You're very, very good at persuading as well.
Are you 100% certain about the future of Bitcoin and that it has zero risk?
There's no risk that you can do anything.
I don't think you can state that.
No, I think that everything in life has risk.
So there's a black swan risk, an unknown, unknown, and anybody intellectually honest has to admit that there is that risk.
That's not what I would say.
What I would say is you have to, you've got a bucket of money.
Let's come back to Africa.
Okay.
You've got $100,000 in Africa.
You've got to invest it in something.
You've got to put it into a building, into land, into an African currency, into something else.
What are you going to do?
There is a hundred percent certainty that you're going to lose 80 percent of your money in most currencies over the next decade.
There's a hundred percent certainty you're going to lose ninety-five percent of your wealth over 30 years in just about every currency.
And so you have to work through each of these issues and say, what's the cost of doing nothing?
What's the cost of not taking a risk?
What's the risk-free rate?
Well, I mean, the risk-free rate is the monetary inflation rate.
So the price that you pay to not do something is the rate at which the money is collapsing.
If you were in Russian, they just lost 35% of their wealth by not doing anything in the matter of weeks.
So in this particular case, you just have to look at the array of options.
If you're an investor in South America or Asia or Africa, I would say the risk-free rate is much higher for you, right?
Like you're in Lebanon.
What are you going to do in Lebanon?
How about Afghanistan?
How about Iraq, right?
What are you going to do?
In all those situations, they're thinking maybe I'll trust my money to Tether.
You know, Tether's run by Bitfinex.
It's just a company.
So why is it that people in many countries are more willing to trust a company out of Hong Kong that's running a stable coin on the crypto network than they're willing to trust their local bank?
Well, because in fact, Tether is probably a better bet than betting your money on most currencies in the world, other than the top 12 currencies.
The rest are collapsing.
Why do Tether if you can just do the US dollar or USDC?
Well, you can't.
That's the point.
Why do Tether if you could just do the U.S. dollar?
Okay, how many people in Africa can walk into a Bank of America in New York City, open an account, and then get the U.S. dollar?
None of them.
That's the whole point.
Right?
And okay, I did it.
I'll give you an example.
I put a million dollars into Bank of America in Argentina when the dollar was worth one peso because I didn't trust the peso.
I did it.
What do you think happened?
The government basically shut down for one day.
They sent an edict to the bank saying all dollars must be converted back into pesos.
Then they went off the dollar peg and they devalued the peso 10 to 1.
And I lost 90% of my money.
Okay.
So why do Tether instead of trust Bank of America in Argentina?
You tell me.
Right?
Because what's the odds that Tether is going to go to zero in the next year?
If the odds were 90% your money is going to zero in the next year by putting it somewhere else, then you would think maybe that's a risk I want to take.
So, you know, people are forced out the risk curve based upon the monetary policy.
And in a hyper-inflating economy in Zimbabwe, right, you're going to take everything you've got.
You're going to buy anything.
I don't know if you saw, you'll buy toilet paper, you'll buy boxes of cereal, right?
You'll buy anything.
There's pictures in Turkey, people, and this is this year, people go into, they go into a car lot and they buy all the cars.
Okay, so here's the news story.
The government in pounds 54 cars that were bought by a hoarder.
Someone had the temerity to actually convert their currency into automobiles because they thought the automobiles would hold their value better than the currency.
And then the government seizes their automobiles.
Okay, if you look at every single war, right, the war always has the story of the speculators, right?
The speculators, the smugglers and the hoarders.
What's your crime?
Your crime was not holding your money in the currency, which was losing 90% of its value, but rather deciding to buy too many automobiles.
No, your crime was hedging.
Yeah, something like that.
Picking an alternative asset as a storehouse of what you perceive to be security until the sovereign comes back and does one of two things that they're good at.
Sovereigns know that debt long term, there's the Jubilee Theory, and they also inflate your way out.
It says, or seize and force conversion, which basically feeds right back into inflate your way up.
Eventually, all these countries will just inflate their way out and the currencies collapse.
And that's why they're all collapsing, right?
The currencies are weaker today than ever.
And I think that it's pretty obvious the dollar will also be printed to pay off the debt.
And that will just manifest itself in the dollar continuing to lose value against scarce assets.
It will gain value.
It'll be stronger than the other currencies because they're just collapsing faster.
So eventually we'll see a world where there's a dollar in the CNY, right?
If you're not a very powerful empire, you can't maintain your currency.
And that'll be the medium of exchange.
And everything will be pegged to it or correlated to it.
And then you're going to see monetary energy flowing out of weak property and weak assets into strong property.
Like I would sell all the land I have in Africa and convert to Bitcoin.
I would sell all the land in Africa and I would move it to Europe and I'd probably sell my land in Europe, move it to the U.S. and I'd sell my land in the U.S. and move it to Bitcoin.
You're just swapping from a weaker thing to a stronger thing.
And the definition of weak is a function of what's the risk it'll be seized, taxed, or impaired, right?
Regulated.
So calculate that, right?
Will the government, the jurisdiction that your property is in, be seized, confiscated, taxed away, impaired away?
And the last issue is we'll be inflated away.
The reason that Bitcoin is magical is because there's only 21 million.
I can create more real estate in New York City.
I can create more cars.
I can create more luxury watches.
I can create more gold.
I can create more shares of stock.
I can create more bonds.
I can create any commodity.
They're commodities by definition.
Given enough money and time, I can create infinite of any of them.
Bitcoin is a scarcity.
Name another scarcity in the world.
And technically, it's not clear there is another scarcity.
A scarcity is something of which it is absolutely capped.
If the price goes up by a factor of 1,000 or 1 million, it is absolutely capped.
That is not the case with gold, soybeans, silver, stock, bonds, real estate, single-family homes, ships, planes, trains, nothing else.
Everything else could be manufactured.
And of course, if the price goes up, the incentive to manufacture more will go up, which is why, you know, buying a house isn't necessarily going to be a great store of value in an inflating economy because you're going to have incentives for someone else to dilute the value of your house.
If you do buy a house, better off to buy a house on land than a condo on the 57th floor of a building.
And if you do buy it on land, better off to buy it on waterfront property.
And if you buy waterfront property, better off to buy it on the beach.
And if you buy it on the beach, you're better off to buy it in the most desirable location of affluent, intelligent people for the next 30 years.
Sure, Pat has scarce pristine, which you had talked about, right?
You're better to be at scarce pristine or as close as you can.
And you can do that for 10, 20, 30 years.
That's Palm Beach.
That's the Hamptons, right?
You can figure that out.
Now figure it out for 100 years.
This is the problem, right?
When you go out of 10 years.
For the individual, though, who cares for 100 years?
The individual.
How many individuals think 100 years, though, Michael?
Institutions think 100 years.
Institutions do, but how many, even some institutional leaders only care about the return they're going to give you for a decade or two.
They don't sit there and think about 100 years.
I think here's the problem.
I mean, that's one of the problems we have with our current political system, even we have in America.
The guy who gets elected, he only cares about two terms.
How much can he really do?
It's tough.
The issue is the asset's reflexive.
If I told you that you could buy this digital asset and it would lose all of its value in 17 years, then people start to amortize it down.
And when it gets to be 12 years old, people start to discount it.
It's like you don't want to own a building in London where there's a ground lease that expires in 37 years.
That's not as valuable as owning the land outright for 1,000 years.
So if I told you it's good for 10 years, I think, and the other thing is good for 100 years, everybody wants the thing that's timeless.
And the difference is going to create a marginal difference in the price.
Let's say it's 2% or 3%.
Okay, so all the intelligent money go, they stampede in the thing that's 2% better.
And when they stampede in the thing that's 2% better, liquidity is 10x more.
And then the money collapses out of the other thing.
And it goes to zero.
That's why Bitcoin cash collapses.
Bitcoin Satoshi Vision collapses.
Anything that's sort of like the same thing, but not quite as good will go to zero.
That's why YouTube is YouTube.
It's like there is a tendency of winner-take-all in these things.
And it does matter, right?
You have children, you have grandchildren, right?
I never met anybody that said, you know, I just, I kind of want to keep my family generational wealth intact for 12 years, but then I don't care anymore.
You sort of care.
And there's one more element to this.
It's not just the ability to know that the asset will hold value 100 years out.
It's the portability.
You know, if you're living in Nazi Germany in 1932, having portable property versus non-portable property makes a difference.
It might make a life or death.
There are people that are dead because they couldn't move the property, right?
It does make a difference to be able to move it.
So you can't blink your eyes and teleport a billion dollars of real estate in Los Angeles somewhere else in the world.
You can't even move it somewhere else in the country.
Being able to move the money from a city to another city, from a state to a state, from a country to a country, and from a counterparty to a different counterparty, all of these things are extraordinarily valuable.
They're the difference between life and death in many cases.
And that's what Bitcoin gives you that you don't get with anything else.
I brought up Ethereum earlier.
You said we can cover that as well.
There's a lot of guys that are pro-Ethereum and they swear by it.
Oh, NFT, most of the purchases, 50% is being done by Ethereum.
Ethereum's eventually going to get a better than Bitcoin or Ethereum is going to be right there next to Bitcoin.
What are your thoughts on Ethereum?
So first of all, if you look at the crypto ecosystem, there's crypto property, there's crypto currencies, there's crypto platforms, and there's crypto securities, and there's even crypto art.
These are just asset classes.
Maybe they'll be crypto commodities.
NFT is crypto art.
It's like art cryptographically protected.
Stable coin is cryptocurrency, a dollar or a euro moving on crypto rail.
It's currency because I can move it as a medium of exchange without paying a tax bill on it.
Ethereum's crypto platform.
People are building other things on that platform, and that's the principle appeal, smart contracts and the fact that you can build something.
Bitcoin is crypto property.
It is a long-term store of value.
And it is the dominant crypto property.
And the way it establishes itself as crypto property is through Nakamoto consensus and proof of work.
You have a decentralized mining network that is encrypting energy with the SHA-256 hash function in order to create this wall of encrypted energy and make it resistant to denial of service attacks, other sorts of attacks.
It needs to be robust and have integrity over time and space.
And that's the technique that we've developed.
Now here's the big idea, an important idea.
Most people don't understand securities law.
Bitcoin's the only proven digital property that we have created in the world.
We have created a property and not a security.
The definition of property is a common commodity that is beyond the control of any one individual or corporation.
If something is deemed property in a legal sense, it means it wouldn't be regulated as a security by the SEC.
Gold is property.
Soybeans are property.
Wood, lumber, land is property.
Bitcoin is property.
Did the SEC come out and officially state that?
That it's not a security?
It's understood that Bitcoin is not regulated by the SEC.
Bitcoin is property.
It's the only thing we all agree on in the crypto marketplace, that Bitcoin is property.
Securities are regulated by the SEC, and you can create a security.
MicroStrategy, MSTR, is a security.
Go read my 10K statement.
It's 123 pages of disclosures that are legally required for that stock to trade, that security to trade.
It costs $20 million a year for us to maintain all the disclosures to be compliant with securities law.
If you're a security, it's a different thing.
Bitcoin is property.
Ethereum, everything else in the crypto ecosystem, likely they're all securities.
Why are they securities?
They're controlled by groups of developers.
They're issued pursuant to ICO's initial coin offerings.
That makes them security.
If there's a pre-mine and there was a group of individuals that initially control the thing, it makes it security.
If anyone can exercise undue influence, it becomes a security.
And technically, if you look at the definition, it's when you're making an investment of money, relying upon the efforts of others and expectation of profit, it becomes an investment contract, a security.
The fundamental difference between Bitcoin and Ethereum is Ethereum's monetary policy changes every six months.
Every few months it changes.
There's a difficulty bomb in Ethereum that's been getting pushed back since 2016.
They keep pushing it back.
When it goes off, it will wipe out, obliterate a $50 billion Ethereum mining industry.
Just wipe it out, completely change the protocol, flip everything to proof of stake.
They keep putting it off.
That sounds like a group of people exercising influence over the protocol.
The thing you need to know about Bitcoin is on Pizza Day, May 22nd, 2010, Bitcoin is trading for a couple of pennies for the first time in 15 months or something like that.
The protocol hadn't changed and has not changed.
When it was a penny, the protocols were all the same.
Today, they're the same exact protocol.
There was a war fought over this, the block size war.
In the block size war, all of the powerful holders and miners and exchanges wanted to change the protocol and double the block size.
It would have changed all the economics of Bitcoin forever for the next thousand years.
It would have screwed up the economics of the miners.
It would have shifted the balance of power in favor of some holders versus others.
That war was lost.
The original Bitcoin protocol continued on, and that means it's an unadulterated protocol, and it's shown itself to be resistant to the influence of any group of people.
That's what makes it property.
Property is critical because property makes Bitcoin, being property makes it the ethical foundation of the crypto economy.
And by ethical foundation, I mean it's unethical for a public figure to endorse a security.
If you're the mayor of a city, the governor of a state, if you're a politician, a congressman, a senator, a president of a nation, you can't endorse a security, nor can you make a security underpinning of the balance sheet of a public organization, right?
It's like I couldn't say, I really think that every citizen of Kansas City should buy Twitter stock because it's a better store of value.
It's conflict of interest.
It's probably illegal, right?
It probably violates all sorts of foreign corrupt practices acts, as well as all the ethics laws.
And so this is a very bright line, property versus security.
And as soon as you start to exercise influence over the protocol, it becomes a security.
If you look at all the cryptos, you know, there might be a dozen that you could debate or property, a debate.
Of the ones that you could debate or property, there's one that's dominant, which is Bitcoin.
There's 17,000 securities.
As the SEC and the regulators move, there's going to be a massive shakeout.
If they ever do clarify what the securities laws are, there's a whole set of disclosures and obligations, and then you're going to see the entire industry rationalize in a big way.
What happens if they do categorize Bitcoin as a security?
Well, Bitcoin's not a security.
We've already crossed that chasm.
The real question you should be asking yourself is what happens if they categorize Ethereum and every other crypto as a security?
You're underestimating the power of politicians to screw things up.
You're underestimating the power of them, not like in a person like you, to get up and say whatever you want to say, and you offend them.
You offend politicians.
You know, people who are...
I just read an article right now from political...
Can you pull up the political article?
It's just the way they get it.
I get that.
But the real point here is there's 17,000 cryptos and all the rest are much more centralized.
Yeah, but they know the most powerful one is the one that you're supporting.
And the reason it's powerful is because it's completely decentralized and no one nation state can shut it down.
Not even all of them could shut it down even if they wanted to.
So these sweet, amazing, nice, kind, supportive people who love independent thinkers like you, politicians, you don't think behind closed doors they're sitting there trying to figure out a way to regulate or get their hands on Bitcoin because they're starting to lose a little control with the Bitcoin community.
Because the Bitcoin community, essentially, the crypto community, forget, you know, let's just say Bitcoin one side and the crypto community.
I said this the other day.
I think it's becoming a political party.
I think the crypto community is a political party and first of all, there's like 250 million people that are pro-Bitcoin right now.
And this is spreading at millions per week.
So you can't find any large constituency that's anti, right?
It's a virus that's spreading.
You're not going to get any votes by being against Bitcoin.
There is no constituency that is anti-Bitcoin.
Second, regulation is not bad.
Sometimes people say, oh, they're going to regulate it as bad.
No, the truth of the matter is the faster the regulation comes, the faster the 17,000 other cryptos get sorted into their buckets as securities, platforms, art, et cetera.
And that will actually shake out a lot of the noise in the system, result in a lot of capital focusing upon the winner, which is Bitcoin.
And it'll also accelerate the entry of institutional capital into the space because there's $100 trillion worth of money that's not in the crypto space that's afraid to come into the space because they're not sure about the definitions between the securities, the financial systems.
And that's a valid concern.
That's the property.
Yeah, that's a valid concern.
So in fact, the regulation probably would be the best thing that ever happened.
I've seen you say that.
I read a quote that you've actually said.
It's on page four.
Bitcoin evangelist Michael Saylor says clear crypto regulations would speed institutional adoption.
It's a CNBC story.
Tighter government crypto regulations would actually be a positive catalyst for Bitcoin, MicroStrategy co-founder Michael Saylor says.
Additional regulatory on what the regulation is.
Well, yeah, that's what I wanted to clarify.
He says additional regulatory clarity from the Biden administration is going to benefit Bitcoin and accelerate institutional adoption of that asset.
Stressing a major Bitcoin believer and holder, he's looking for clear, bright line definitions of a digital property versus a digital security versus a digital currency and the operating rules of the digital exchange.
You know, you said something.
You said there's 250 million people that are pro-crypto, right?
Or pro-Bitcoin.
But 250 million people.
Probably more after this week.
Okay.
We probably made 200 million fans.
I don't disagree, but I think because of Ukraine.
Yeah, but not just Ukraine, Canada.
There's a lot of different things that's going on.
But here's what I would also say, Michael.
There's 7.5 billion people in the world that are pro-freedom, except for the people that are pro-communism and control.
You're underestimating the power.
Don't you think, because we're part of the same party underthinking, but don't you think we're underestimating the power of the few who hate independent thinkers who go make their money and they're sitting around, you know, constantly advancing and questioning them?
And in a way, cryptocurrency is a big middle finger to all the politicians.
And they don't want to have 250 million middle fingers, right?
So how do you address that part amongst these few that like to control people like you?
It looks like Bitcoin's winning.
If we look at what's happening, Bitcoin is spreading everywhere in the world.
It's only been a few years.
Right?
I mean, it's the most powerful, disruptive force in the decade.
Look at the rate at which it's spreading, zero to 250 million people.
And if you turn on CNBC and watch, you know, count the number of minutes that'll go by before you'll see the Bitcoin ticker flip up on the screen or before they'll start talking about it.
As far as I can see, the idea of the idea of Bitcoin and the idea of digital property and digital money and digital freedom is spreading pretty aggressively, very aggressively.
I don't really so much worry about it because, I mean, I've met with a lot of people, including a lot of politicians.
I think you might find one out of 20 that will be trollish, that'll be negative because they think it gets them attention.
But if you speak to most people in private, they all think it's a pretty good idea.
I think you probably find a lot of advocates in Russia right now, a lot of advocates.
Remember what happened when the Russian bank said they were going to ban it, and then all of a sudden they reversed their stance within 24 hours?
Right?
You see the same thing happening in every single other place in the world.
If you look at the Senate and Congress, the consensus in Congress right now is very pro-crypto and it's very pro-Bitcoin.
It's not anti.
If you look at the administration, the administration is moving forward with guidelines that'll be beneficial to the industry.
There is a schism between the institutions and the entrepreneurs, by the way.
Like, for example, if J.P. Morgan can issue a stable coin, then the existing stablecoin issuers would view that as being competitive to them.
So there's a lot of tension between institutions and entrepreneurs and between states and federal government.
But I don't think anybody disagrees with the idea that Bitcoin's here to stay and this is spreading.
And so I'm not much worried about it.
But look, you can choose to be pessimistic and say, oh yeah, well, somebody somewhere will take it away because it's too good an idea.
But what are you going to do?
Roll over and die?
I don't think it's pessimism.
You started your company in 89, and you went public in 98.
You got a $10 million deal with McDonald's in 92.
From 1990 to 96, your company grew out 100% every year.
If I'm getting these facts right, you come from an era where Andy Grove was God, and Andy Grove wrote a book where he ran Intel.
I think they ran the company at what pace they were growing.
He wrote a book called Only the Paranoid Survive.
So there's a difference between pessimism and paranoia.
The paranoia from a few comes from supporting the cause of crypto.
Nobody's sitting there saying, I mean, in so many ways, this makes sense.
It's tough to argue this.
Who doesn't want to not be controlled by the bank?
I can't think of any time where a bank has been the low-income, middle-income, or the average guy's best friend.
Who's ever liked the bank?
I don't think any time anybody's ever liked the bank.
The low to middle-income and the rich, unless when the rich was just getting money without, you know, what you're talking about, it's being printed.
I'm just, my skepticism is to be a little bit paranoid about what these politicians who sit around wanting their names to be on a bill and a law that can regulate to brag about it.
That's the only paranoia that exists.
And the rational response to that is go educate the world.
So if you go to hope.com, Bitcoin is hope.
Go to hope.com.
There's courses and books and educational materials on Bitcoin.
If you go to my website, sailor.org, we've got a free Bitcoin for everybody course.
We've given it to tens of thousands of people.
Why do you think I'm sitting here talking to you today?
But I think it's a level above that, though.
If I was arrogant and presumptuous, I just sit back and wait for the inevitable to take place.
But I don't think we can sit back and wait.
I think we got to go and speak with every politician, every influencer.
We've got to reach out to every community.
You got to go on television, you know, go on CNBC, Fox, CNN, Bloomberg, and educate.
Look, Bitcoin is the digital transformation of, and we are living through the digital transformation of property, money, and energy.
And once you understand this idea, digital transformation of property, money, and energy, you realize that, you know, the world's not going to understand that for a decade.
It'll take 10 years, 15, 20 years before people get their hands around what is that.
I mean, it's so inconceivable.
If you go back 100 years and you look at electricity, how long did it take before people really understood the concept of electric energy?
Can't touch it, right, without getting shocked by it, but it was a scary thing.
By the way, it was regulated, right?
It was regulated, and it took a long time for people to embrace it, and it changed the entire world.
The same happened with chemical energy in the form of standard oil.
It was regulated, took a long time for people to appreciate it.
Aviation, air power, nuclear power, all of these things.
You know, digital energy is cyberpower.
Bitcoin is cyber power, right?
The next war will be fought in cyberspace.
If you don't master digital energy, you're not going to win it.
You can't even defend against it.
Most people haven't even figured this out right now that digital energy is critical.
But you know, like even I got a lot of Twitter followers.
When I post on Twitter, only about a third of my followers understand what digital energy is, right?
They don't really get the idea.
We have created a file which we can move at the speed of light on a layer two or layer three network on an Apple Pay network or a WhatsApp network or any website that moves energy in a conservative fashion through cyberspace for the first time in human history.
That's a profound idea.
They don't get it, right?
If I have a digital music file and I send it to you and you run it through your headphones or you run it through a speaker, you can listen to music.
If I take away the computer and I take away the headphones, is it still digital music?
Sure, it is a digital music file, but you need to actually decode it and run it through a speaker with electricity for it to be digital music.
That's profound.
If I have a file that's digital energy and it holds a billion dollars in it and I send it to you in Tokyo and you run it through that decoder and then you go and you buy a billion dollars of electricity or a billion dollars worth of weapons or a billion dollars worth of buildings, I have moved digital energy through cyberspace.
I have to decode it.
It's a big idea.
We never did it before.
It's like putting something in orbit.
Everything's ballistic until it finally hits escape velocity and then it orbits the Earth forever and orbiting forever in orbit is a pretty big idea.
That's what's going on here.
It'll take a while for people to figure it out.
We've got to educate them.
So I like that point about education.
I think the other part would be, which is one above that, is guys got to get involved in politics and office.
They got to get involved there as well.
I think some of the guys from the crypto community have to get involved in political arenas, Congress, Senate, governor, even some being inspired to go into presidency.
Look at the president of El Salvador, what kind of an edge he has.
I think the strategy for a guy like you going and talking, maybe a part of it is also inspiring some of these other guys to want to pursue politics.
Because most of the world, when we think about, oh my gosh, Warren Buffett, he doesn't believe in Bitcoin.
Oh my gosh, Bill Gates is against Bitcoin.
Peter Schiff says Bitcoin's going to zero, which I believe you said in 2013 Bitcoin's going to zero, but you flipped, you started educating and getting a little bit more clear, and then you went to a different direction.
Even Munger recently said, Charlie Munger said the following.
He says, I wish it, and this was last week, I wish it had been banned two weeks ago immediately.
And I admired the Chinese for banning it.
Can you imagine Charlie Munger, a capitalist, agreeing with China?
Munger said Wednesday at Daily Journal Corp annual meeting, which was held virtually.
I certainly didn't invest in crypto.
I'm proud of the fact I've avoided it.
It's like a veneeral disease or something.
I just regard it as beneath contempt.
The 98-year-old billionaire has been a long critic of Bitcoin, previously calling it rat poison.
And I mean, he just certainly the great short squeeze in GameStop was wretched excess.
Certainly the Bitcoin thing is wretched excess.
I would argue that venture capital is throwing too much money too fast and there are considerable wretch excess and venture capital and other forms of private equity.
He just doesn't stop.
He keeps going and going and going.
So the world looks at these guys, the people who have been influencers in the finance world for a while, who are totally against it.
And then somebody sits there and says, well, I trust Buffett more than I do Michael Sutter.
Why should I believe these guys that are talking about Bitcoin?
What you're seeing is a shockwave moving through the culture.
You're seeing the most disruptive force in the world right now and is slamming into people and institutions faster than they can absorb it and appreciate it and understand it.
And this is like shockwaves in the real world, right?
If I move an airfoil through the air faster than the speed of sound, the speed of sound is the rate at which air communicates with itself.
The air can't get out of the way.
I pound into it.
I create massive turbulence and noise.
The way to solve it is you go slower, but then you're not supersonic.
Charlie Munger wasn't an advocate of Apple Computer, right?
How about Amazon?
How about Microsoft?
Warren Buffett's a friend of Bill Gates for how many years and he still hasn't bought Microsoft stock?
And Microsoft is an idea that was, you know, fairly well understood 40 years ago, 30 years ago.
So what you have is something so powerful that everyone's being asked to have an opinion, right?
Presidents, you know, the president of Russia, the president of most nation states, they're asked to have an opinion.
Every investor is asked to have an opinion.
But what if I told you you couldn't really understand it without 100 hours of time invested?
How many people after the age of 40 spend 100 hours studying anything?
You know, like once you get to how about age 65?
You don't think of Munger, Buffett, Gates, these guys spent 100 hours studying Bitcoin?
Aren't you sure they didn't?
Isn't it obvious?
I would say it's almost certain that he hasn't spent 10 hours.
And so, like, I would say the same with most macro investors, though, right now.
You know what?
I would say the same with a lot of crypto investors.
The world is full of.
Okay.
How many people?
I mean, I see it because I see it in my feed.
Most people in the crypto space haven't spent 100 hours studying this.
How many people spend 100 hours studying the stock that they hold in their portfolio?
True.
How many people spend 100 hours studying Facebook?
But based on what you're saying, you don't need to study Bitcoin.
Just trust you and buy Bitcoin.
No, no, he's not saying that.
He's not a good person.
not saying that i'm saying that i spent a thousand hours before i what i'm saying is you're basically saying look i've done the research You don't need to do it yourself.
Just buy Bitcoin and hold it for 100 years.
Have a great day.
Bye.
It's basically what you're saying.
I'm actually saying that people should do the research until they get the conviction necessary to make their own decision.
Like at the end of the day, this is property.
I don't run a, I'm not promoting my own security.
I'm not promoting an exchange.
I'm basically suggesting go west, young man, get some land, right?
It's like, go to America, right?
Get some property and make a life for yourself.
But you decide whether you're wanting to do that or not.
Here's the more important point, though.
Every single influential person in the world is being asked to have an opinion, but they're not spending 100 hours on the opinion.
If I roll the clock back 100 years and I went to every politician and every rich person in the world in the year 1900 and I asked them what they thought about electricity, what do you think they'd say?
How about airplanes in the year 1904?
What was the opinion then?
So it's not unreasonable.
And I don't think we should be spending a lot of time fixating upon the opinions of famous and powerful and rich people about a technology that they have not chosen to make a focal point of their interests.
Well, especially when they're 98 years old, Mike.
That has to be a fact.
I think the more important point is everybody thinks for themselves.
So you wouldn't go to Charlie Monger and ask him to pick out stocks and your stuff.
Name every winning stock in the past decade.
Netflix, Google, Apple, Facebook, Amazon.
How many of them were recommended to you by any of these people that you're getting opinions on?
None of the Bitcoin antagonists or critics would have recommended or did recommend any of those stocks, right?
So it's kind of a moot point.
It's really just marketing or sparks that are being sent up because what happens is these guys in the media, they interview them and they want to get a rise out of them.
So they actually throw this out there.
Nobody is asking Warren Buffett's opinion of silver or gold right now because no one's interested in hearing the answer.
Here's the next one I want to show you.
You and Peter Schiff going back and forth on Twitter.
Do you have the one in regards to gold?
Is this the one in regards to gold?
Tyler, is this the one?
So you're going back and forth.
Okay, so also instead of just posting irrelevant replies, Michael, go all the way to the top.
Let's see what Peter Schiff said, Gold, because he's a big proponent of gold.
CEOs who follow Michael Saylor's asinine advice to plug their balance sheets into Bitcoin to hedge against the expected annual inflation rate of 2% now down as much as 34% of their hundred money month.
That's 17 years of expected inflation losses.
Time to pull the plug.
Michael Saylor responds with returns on gold versus Bitcoin.
Then he responds.
Also, instead of just posting irrelevant replies to my tweets, why don't you agree to debate me?
So far, you have turned down every opportunity to do so.
It's clear to me that you're afraid to actually confront me and defend your ridiculous views.
So you take your coward's way out.
By the way, we invited him to be on the podcast today.
He said, get me a private jet.
And we invited him to be on the Zoom.
And he said he's not available.
I'm just letting you know, we don't get typically people saying, get me a private JIT.
That was his request.
And then you say it's not clear what we could debate.
We would debate.
Your position appears to be buy some more gold, buy some gold or silver or gold stocks or government bonds or corporate bonds or dividend stocks or value stocks or emerging market stocks or small company stocks or anything, really just not too much.
The debate would be about Bitcoin.
You think it's digital gold.
I think it's digital fool's gold.
You think everyone who doesn't own it should buy it.
I think everyone who owns it should sell it.
The fundamental point here is you have to give the world a solution to their problem, not just be a critic.
If you want to be a critic, you can criticize everything, but what's his answer?
If you listen to Peter's debates, what he says is he only has 5% of his portfolio invested in gold, which means that he has 95% invested in something else.
But what is the something else?
And the point is, you're back in this same hedge fund shuffle mentality.
It's like, just give me all your money and I'm just going to shuffle it with random 95% opacity on random stuff back and forth, but don't question it.
What about the five?
If it was a recommendation, he would own more than 50% of his portfolio in the gold, but he doesn't believe in it.
But his argument would be, his argument would be, I don't recommend people to buy 50%.
I recommend people to buy 2% to 5%.
That's his position.
He doesn't have an answer to the – that means that you're going to lose 95% of your wealth.
So what's the answer?
And your point is that diversity.
By the way, I already, I have a debate.
If you go online and you Google Michael Saylor gold debate, you'll find a pretty good debate that's got more than 2 million views right now where I go point by point through the differences between Bitcoin and gold.
The issue with Peter is Peter's not offering a solution to the world, right?
He's simply trolling Bitcoin.
And he's not trolling Bitcoin with any real concrete criticism other than he just doesn't like it, right?
But wouldn't the world benefit if you guys did have a debate?
Wouldn't the world benefit?
I guess the question is, I don't see it.
He doesn't have a concrete argument.
But you're not dodging a debate with him.
I don't see the point of debate.
When Peter buys a billion dollars worth of gold, then I'll have a debate with him.
So you're saying you don't see him as a true believer even in the, he says, hey, gold is your hedge against, as Pat properly pointed out to him on the Fox interview that Peter and Pat had, said, listen, Peter, you're selling Armageddon to sell gold, and you're saying, and yet Peter only owns 5%.
Peter is short gold.
Peter is anti-everything.
For example, he's got more investment in gold stocks, gold miners, than gold.
Well, gold miners are short gold.
Gold miners' incentive is to dump as much gold on the market as possible as fast as possible.
If you read the balance sheets of the gold miners, what you'll find is they don't hold gold as an asset.
So gold miners don't believe gold is money.
If they did, they wouldn't sell it.
They'd buy it.
And Peter doesn't believe gold is money.
If he did, he wouldn't allocate 95% of his wealth to something other than it.
And ultimately, the fundamental issue with Peter is, you know, he's just debated, you know, he's debated this issue for a decade.
All of his argument is just, I don't like Bitcoin.
He hasn't come up with anything worth refuting that I can see.
And if you go online, you'll find three, four, five, six Peter Schiff debates.
And he just doesn't say anything other than just bark at the person that he's debating with.
So I can't see it's constructive.
This is a reasonably constructive debate if you go to me and Frank Giestra, where we actually had a lot of back and forth.
Fundamentally, though, find me somebody in the world that has invested more than 50% of a portfolio in gold at a billion dollar level.
My position is pretty clear.
I've invested almost $4 billion in Bitcoin.
And I'm not telling you you need to invest half your portfolio in it.
I'm just saying that I think that it is money.
It is an asset.
It will appreciate in value.
And one can create a strategy where it is the dominant part of the strategy.
There are other people that have invested in companies.
Amazon was Jeff Bezos' strategy.
I get it, big tech.
Other people have bought city blocks in New York City.
That's a valid strategy.
So investing in property or investing in technology is a valid strategy.
But on the other hand, find me someone that has actually bet $5 billion on gold where it constitutes more than 50% of their portfolio and it's their own money.
And Peter's not one.
Peter hasn't bet on gold.
Peter's betting on gold going down.
He's buying the Bitcoin, the gold miners that are dumping the gold, making the gold price decay.
So that doesn't make any sense.
If you dig into the gold miner balance sheets, read the two, three biggest gold miners, what you'll find is they overmine the gold, dump the gold, then they pay an income tax, then they divide in out their excess and pay a dividend tax, then they pay off their debt, which is 2%.
So another way to say it is they would rather loan money out to the world for 2% interest than hold gold.
That's how bad they don't like gold, right?
And they're the ones that mine the gold.
It's a crippling indictment of the entire industry, right?
That they think it's going to zero.
That's why they keep dumping the gold on the market.
Find me somebody that really believes in gold.
In fact, every single gold proponent you'll find on the internet, if you listen to them, they'll start their conversation with, well, first of all, I don't recommend you invest more than 5% or 10% of your money in gold.
It's just like it's a hedge thing.
Which makes the gold miner is really no different as a commercial enterprise than timber cutting.
How are you processing?
Here's how I'm processing it.
We're one minute over.
I want to respect the time as well as we got meetings that we got to go to as well.
Michael, we don't have enough time with you.
You just talk and person's got to listen to how you're processing your decisions.
This was extremely, I hope the audience enjoyed it as much as I enjoyed it.
I feel we needed two or three more hours together.
I'm assuming Peter Schiff wouldn't mind sitting next to you for a debate.
And if you're up for educating the world, maybe it would be a great educational moment for the audience if we can get him here.
We can't get him in a private jet, maybe we get him on a greyhound that floats from Puerto Rico to here.
Who knows?
Or get him to the private jet in front of a Zoom and then he'll accept it.
But having said that, would love you have to back on.
Michael, thank you again for taking the time to come now.
This was wonderful.
Appreciate you.
Yeah, thanks for having me, guys.
Absolutely.
Take care.
Gang, we're not going to do podcasts again this week because I'll be out of town, but we will do it again next week.
