Transcript for:
Michael Saylor's Bitcoin Journey

On average, the currency collapses every 30 to 40 years in most political jurisdictions for all of human history. Your storehouse of value, whatever it is, is going to be deflated terribly during your lifetime. The best currency of the last 100 years is the dollar. The winning currency of the 20th century, the best currency in the world, lost 99.9% of its value. That's a winner. Okay. Now you come across Bitcoin and you talked about it as if it was abstracted gold. If God's not going to set up divine bank and solve all your monetary problem, what's the second best idea? We don't trust the government. We don't trust a local bank. We don't trust each other. And we want the bank to last for a thousand years. Let's go ahead and build out this Bitcoin network. [Music] My guest today, Michael Sailor, started a number of um successful companies, successful by almost every standard. It it wasn't sufficient to expand out the full scope of his ambition. and I I would say that in the most positive sense he became deeply interested in 2020 in Bitcoin in consequence and has been at the forefront of a revolution in finance. Uh his company now owns 3% of the Bitcoin in circulation and the successful company that he built with blood, sweat, and tears let's say 10 years ago has become a hyper successful company. In consequence, he's been an evangelist for Bitcoin. He's used religious symbolism and terminology to describe it. He's on fire for Bitcoin. And we talked about things you really need to know today. You need to know who Michael Sailor is, where he got his ambition, his how his grounding in fantasy and science fiction allied with his with the encouragement of his parents to produce the ambition in him that has culminated in this consequence. You need to know that Bitcoin is increasingly becoming uh an accepted monetary standard like gold around the world. That's there are revolutionary transformations on that basis in the last year, not least because of the new Trump administration. If you're young or if you're middle-aged or if you're old and you're trying to understand how you will store the work that will comprise much of your life, you need to listen to this podcast and hear what Michael Sailor has to say. So, you discovered Bitcoin, as I understand it, in March of 2020, which was relatively recently, and it had been around for a while, and you had been doing a lot of other things, but it moved your life laterally as I understand it. And I'm curious, you're an engineer and a software engineer. I'm curious about what it was that you discovered and realized that produced this profound change in your orientation and why you think it's justified and why you evangelized for it as well. I guess I discovered Bitcoin 30 years into my career. So I started a company late 1989. For 30 years I had been running an enterprise software company, Micro Strategy. We brought it public uh on the NASDAQ in 1998. Initially, we were focused upon one line of business, which is to sell software that allows banks or or large retailers or insurance companies to analyze all of the data in their databases and assess risk and come up with marketing campaigns. Or if you wanted to figure out what sells with with what and do market basket analysis or or any kind of risk assessment and you're a large enterprise, you would want to build a proprietary analytical system. We call that business intelligence. So that was successful. Uh then I I was in my expansionary era in my 30s and in my 40s and I wanted to create lots of things and so I launched 10 other businesses. I uh I bought up all the domain names like angel.com and alarm.com and strategy.com and hope.com and and uh I launched businesses and and some of them were were singles, some were doubles. I bought voice.com. I sold it for $30 million. I I sold the angel business for about a hundred million. The Alarm.com business, uh, we spun off. It's a multi-billion dollar publicly traded company today. Um, and then I launched, I don't know, half a dozen, a dozen other things. They just whiffed. They failed. What was your what was your hit rate? Just out of curiosity, can you can you estimate it? I I would say that the number the thing I started with turned out to be the biggest success between 1990 and 2020 and then the next idea was a small, you know, was a double and the next one was a single and the rest uh sputtered out. I spent a lot of time. They they were my favorite idea, a great idea. I loved them. I invested a lot of money in them. It turned out the world didn't think the same way I did. I over complicated it. And so it's an important part of the story because by 2010 uh we had overexpanded as a company we'd launched I wanted to be the conglomerate 10 you know like the 10 different things and I found that the one thing worked and the other nine things didn't work and I couldn't I needed to focus so we refocused on the core business and for the next decade I had two dual experiences I had the experience professionally uh and I had an experience personally in finance Here's the professional experience. I worked 2,500 3,000 hours a year with 2,000 people doing a 100,000 things, right? I tried everything under the sun. We had a $500 million enterprise software business. And we found that we were the winner. 99 out of a hundred of our competitor or 99 other competitors had gone bankrupt or left the industry. We were the winner and we were competing against Microsoft and Microsoft is Microsoft and so we were the pure play the you know call it the David against the Goliaths and so for the next decade I spent huge amounts of money on development it didn't work I spent huge amounts of money on marketing it didn't work I worked I I rebuilt every information system in the company it didn't work I obsessed over systems for HR obsessed over systems for sales for marketing. I spent huge amounts of money on digital advertising, everything you can imagine. I I would fly around the world. I flew around the world for a month and I talked to I talked in every city everywhere in order to get the message out. So I had tried every conventional thing imaginable and 10 years later the company was still about a $500 million company. We were like a very low growth and we were banging our head against uh a company Microsoft which is more you could more easily leave the United States than you could leave the domain of Microsoft. It's they're just everywhere. So my professional experience is I figured I'm not a stupid guy. I worked very hard. I had brilliant people working with me. We tried everything imaginable, but we could not dent, you know, the digital monopolies of the world. And we were this we were this I'll call us a zombie company. It's a a publicly traded company that makes money that won't go out of business that's uninteresting because it's not growing 20% or 30% a year. It's not Google. It's not Facebook. It's not a It's not a monster, but it's But you know, there are 10,000 companies like ours. Right. Right. Most companies are like ours. So we were there and uh and then here's my personal experience. I uh got very fascinated with technology. I wrote a book called the mobile wave. And in the mobile wave back I was 2012 that I published it 2012. I wrote it 2010 2011 and and the book the theme of the book is what happens when software dematerializes when the software runs on a phone when the computer goes from under your desk to in your hand when it's no longer solid state or liquid state but it's vapor state and you go to sleep with the phone next to you and what kind of software would happen in the mobile world and of course we know all about it right the Instagrams the Facebooks the Ubers, all of these things became possible during the mobile era. They were inconceivable when the software ran on a computer. So, the theme of the book is, you know, uh software is going to leap from under our desk to our clothing. We'll wear it. We'll hold it. Uh and it's become ubiquitous 24/7 365 and it's going to change. We're going to dematerialize 27,000 devices. 20,000 device companies died so Apple could live. We're going to crush 20,000 retailers because everybody's going to want the Amazon. You're going to see 20,000 newspapers crushed because Google and Facebook eats them. And uh, you know, the message of the book is, you know, you probably ought to just buy the Amazon stock or buy the Apple stock. And as an investor, I took, you know, a a decent amount of money, call it $25 million that I'd made over the previous 20 years as a CEO and as a founder of a company. I invested in these stocks and I 20xed it. If you, you know, how do you make money in the tech world? You uh invest in something everybody needs, nobody could stop, and very few people understand. like most people will in the year 2010 if you had said hey I really think that Amazon's going to work people would have said you're crazy Amazon's losing money no one's going to do this you know and they would have thought you're nuts uh and if you had said I remember with Apple you say well Apple I think this iPhone's a cool thing they would say well no eventually it'll it'll go to the price of $25 a phone like Nokia it's going to be commoditized they can't hold their margins are too high they're going actually have their margins collapse like Dell or like Nokia. And of course, and of course the conventional wisdom was Apple's not a good investment. Amazon's not a good investment. Facebook, what is this goofy thing? And of course, for the next decade, here's what happened. I work an hour a month as an investor and I get rich. You know, make half a billion dollars. Not working. Embarrassing. All you got to do is just buy the Magnificent 7 in 2010. And and the conventional wisdom of Wall Street is if the stock doubles, you should diversify. You should sell half of it. If if Apple doubles in price, go buy some IBM and some HP and some other computer company. If it doubles again, you sell some more of the portfolio and you buy the thing. And their thought was, you got to stay diversified. But the problem is Apple won. Everybody else lost. At one point, Apple made all the money in the mobile phone business. Everybody else collectively lost money to compete with them. Amazon won. Samsung as well. All of them. Yeah. If you look at the winners, Yeah. in this era, right? I mean, Apple was a winner. Amazon was a winner. Google, Facebook were a winner. Samsung is the winner in the in the Far East. Um Walmart kept up. every other retailer. You know, it's like there's two or three that kind of keep up. Maybe a Walmart, maybe a Target, but there's 20,000 that went out of business. I know as a clinical psychologist that any given teenager is going to fall prey to peer pressure from time to time. If you listen hard enough, people are likely to tell you everything. Our son, who's in seventh grade, he's starting to fall in with a with a bad friend group. Teenagers are desperate to fit in. and obviously desperate to have friends and not to be the isolated target of exclusion and bullying. How do we as parents get involved and engaged? The reason people don't have these sorts of conversations is cuz they don't want the emotion. And the longer you let it go on, the more mess you're going to have to clean up. Our daughter was bullied at her school. How do we protect our kids when this is happening? Don't let your kids drift away when they're teenagers. They don't want to, but they will if you don't pay [Music] attention. Do you think that's partly a consequence of the like is there a radically centralizing tendency of the mobile world? There is. And so it's increasingly a winner take all because when everyone's connected, the prito distribution goes out of control. That's what it looks like to me. There's like one person occupies each niche or one company because everything's connected. There's no micro markets anymore. These all became dominant digital monopolies and and they became dominant because Apple can ship a new feature to the iPhone over the weekend to a billion people. the cost the electricity and before Apple you would have to Kodak or Polaroid or or fill in the blank would have to create a new device it would take a year and then they would have to sell it and it would take another year and there's a variable cost to it so when the functionality becomes software there's a 99% gross margin and you can give it to 100 million a billion right Apple could do Apple music and give it to IP ownership matters right and so they They dominated the rails and they be and they had these you know I used to say Apple's going to be the most valuable company in the world because it's the most valuable company in the world because it's the first time one company could deliver a feature to a billion people overnight that you know we never had that 30 years ago or 40 years ago. So there were all these natural monopolies that built and at some point you know Microsoft dominated you know business software and Facebook. How did you see that early? I mean you the the companies you listed off that was pretty good that was a pretty good hit list and like you said you know you worked you worked yourself half to death but all the money that you made or the majority of the money you made was actually a consequence of an hour you said an hour a month in investment strategy but like what and this is gerine to the Bitcoin question because one of the things you're doing is setting up the circumstance you could you saw the direction the digital world was going you bet money on it which is actually an indication of commitment to it and the bets that you made paid off and they paid off in in some ways more than your hard work on the business front. You know, you got to roll back to, you know, first grade. My parents told me they'd give me a dime for every book I read and I had a comic book addiction. So, one summer I read a hundred books and won some reading competition. I started reading in first grade and that led me to a love of science fiction and fantasy, especially science fiction. And I read the big three, Heinline, Clark, and Azimov. And my entire generation, you know, Elon Musk, Jeff Bezos, a lot of us were influenced by that. So yeah, I was reading 10 a week when I was well in grade three and four. My neighbor across the street had a wall of science fiction and he let me come in once a week and take, you know, as many books as I wanted. And this I was reading exactly the same crew that you described. I liked Ray Bradbury, too. One of the Well, the a famous book by Heinland is Have Space It Will Travel. And in the book, uh, uh, precocious youth builds a spaceship, gets picked up by, you know, bugeyed monsters or by space aliens, gallivance around the universe, saves the human race from bugeyed monsters, comes back, and because he saved the human race through his uh, courage and his capability, he gets a full tuition scholarship to MIT. Well, I read that I guess by sixth grade and I just thought I was going to MIT. Oh, yeah. So uh so I you know I liked you know and then my era you know we used to play Dungeons and Dragons. We used to do board games. We play all these simulation games and and uh you know when you play these games they give you a 64 page uh set of rules and a set of dice and you're creating a simulation of a naval battle or army battle or or you know whatever it might be. That was just before computers got big. Mhm. So I got very interested in all that. That drove me down a path where I went to MIT. I studied spaceship engineering, astronautics really. And while I was there, you know, I studying uh studying uh astronomical engineering, I stumbled across uh another course at the school of management there called system dynamics and I became fascinated with that. It was the computer simulation of uh human behavior. So the so people were building the big names in system dynam dynamics. J Forester founded the school and uh the idea was build a computer simulation that shows what happens if you change uh the dynamics of a traffic system in a city. I mean the classic example is I build a beltway around the city and I build hub and spoke system and I build superighways because I want to speed up travel time. M but invariably what happens is the city increases by a factor of 10 and the travel times go back to what they were because of the because of the feedback right if you built the roads and then no one reacted to it then you would be able to get around faster but the world would be a much simpler place yeah another classic example is you remember the club of Rome study you know they declared that the world was going to run out of resources within 10 years and they declared it because all the oil reserves were for 10 more years. But if you thought about it, you would realize that an oil company only has an incentive to identify 10 years worth of reserves and everything after that's a diminishing return. So we always have 10 years, right, worth of reserves. And so if it's a time horizon issue, not a resource issue. If you see the world as a dynamic nonlinear feedback system and you consider the the human behavior or the reaction to what you do, then you're much more sophisticated and you start to realize the simplistic linear models don't work and you have to consider human behavior and economics and and uh urban planning and and um and business planning. And so I uh I studied that. I did my thesis in it. I started building computer simulations. I learned from the computer scientist in the in the school of management. I I got very fascinated in in the school got very interested in politics, philosophy, economics. I ended up taking another degree in the history of science and uh you know as I started where did you take that? At MIT. It was at MIT too. So at the same time when were you there? 1983 to 1987. And when I was there, I was also an Air Force cadet. You know, the Air Force paid for my education to go through MIT. I was very fortunate in that regard. So this is all just backstory, but I had the background as as you know, a cadet, a commissioned officer in the Air Force. I I grew up on Air Force bases my entire life. My father was career non-commissioned officer, so I lived on military bases. Move a lot. Moved a lot. So I saw the world. I had the science fiction background. I I had the Dungeons and Dragons, the fantasy background. Um I got very interested in the history of science that's all about paradigm shift you know uh you know how do people embrace new ideas whether it's the capernac revolution or whether it's you know whether it's relativity and and Einstein's ideas or whether it's quantum physics or whether it's uh whether it's what happens when I introduce railroads or electricity or crude oil or radio. How does it change the culture? How does it change the politics? How does it change the economics of the civilization? So that was my academic background. So and so I always was fascinated by science and technology. I was surrounded by technologists at MIT. I got I got into the space and but I but the fantasy background was very important because in fantasy um there's this idea that if you know the name of a demon, you can summon them. you can control them. Names are very powerful. And uh when the internet hit, I was typing out uh sailor [email protected] in my email and I thought, well, it'd be a lot better if I just typed out sailor strategy.com. And I started thinking about domains and it inspired me to go and buy up all the domains I could. So I bought hope, you know, like how would you like to own hope? Like the nice thing about owning Hope that was when what year was that? Between 94 and 98. Pretty early. Pretty early on. I And and so I thought, how many do domain names do you think you bought? I bought lot I bought a bunch, but I bought about 30 of the classics. My idea was the most valuable thing in the is is a constructive uh word in the English language that has a positive connotation that everyone understands, everybody can spell. So, I bought Emma. I bought Michael. My own Michael.com. I bought mike.com. I bought hope. I bought voice. I bought angel. I bought alarm. I bought speaker. How did you pick the words? I mean, you you laid out I bought every good word that I could buy. I was It was a real estate a digital real estate gold rush. Right. If you would sell it to me, I would buy it. I figured, you know, what did I think? I think if a billion people learn to speak English, I'll give you an example. A billion people learn to speak English. How many of them know how to spell strategy? How many of them have a positive impression of strategy? Now, right now I name my company Micro Strategy. Let me tell you, for 30 years, half our customers mispronounced it. Micro Strategies. Like when you pick a word that's not in in the English language, if you teach it to third graders or sixth graders, the education system is burning the word. What does hope mean to you? Right? That's different than naming a company [Music] celebrity to be able to buy words which is essentially what happened and it and it happened in the internet era. Yeah. Right. Now if we go to mobile, my fascination was this idea that if software goes from the back office to the desk to my pocket. It goes from solid state to liquid state to vapor state. It's all around me. What happens when I can talk to it? What happens when it can talk back to me? Well, you know, now you have to you have to have an imagination. sci science fiction it's valuable because it says if you learn science and engineering you can you can figure out like what's the optimal way to get to Mars from the US you start to understand gravity wells you understand physics that's very important for one part of the story but the other part of the story is fantasy you know it I'm creating something in cyerspace I'm an engineer and I can imagine uh throwing a baseball in orbit and And if I throw it fast enough, it stays in orbit. And if I throw it harder, it breaks Earth's gravity field and it orbits the sun. And if I throw it harder, it breaks the sun's gravitational field and it spins off into, you know, Milky Way. Well, that's what that's what science fiction or engineering teaches you. Fantasy teaches you. I can throw the baseball and will it to be a flock of seagulls that land on my head and turn into a pot of gold. So those are those are little paradigm revolutions fantasy frame breaking. The significance is in the hardware world you're subject to thermodynamics and physics and you better know it. But in cyberspace you could you're not subject to thermodynamics and physics. You could imagine uh you know I look at mirror mirror on the wall who's the fairest of them all right and Snow White gave you the answer right because you know when when that happens in a in a fairy tale the mirror talks back to you it comes to life you know and eventually we got to you know zoom and video and pretty soon your iPad became a magic mirror and pretty soon you could talk to, you know, a a relative of your of yours 8,000 mi away and that was pretty magical. But then when you put the AI behind it and the AI generates an AI image, you're not talking to a person, you're talking to an angel or a demon, right? And so now, if you want to design that stuff, if you want to design uh magic software, why those words an angel or a demon? Yeah. Yeah. Because you see, one of the things I wanted to talk to you about today was the use of imagery, the your use of imagery in your tweets and your marketing for Bitcoin because like you you have a strange mind in many ways because you're you have your engineering background and you think that way, but you also have a foot in the world of fantasy. And that's a that's not a that's I mean there's a lot of well there's lots of engineers that are sort of possessed by the world of fantasy. you know, they live in a Star Wars ethos, right? And and many of them had their philosophy shaped by the science fiction that they read when they were in their early adolescence. And that really produced the religious and fantasy substrate of their thought. But there's not a lot of examination of that. But you thought about fantasy by all appearances a lot more in a lot more detail than that. Shopify powers millions of businesses worldwide, supporting everyone from established brands to entrepreneurs just starting their journey. You can create your professional storefront effortlessly with Shopify's extensive library of customizable templates designed to reflect your brand's unique identity. Boost your productivity with Shopify's AI powered tools that craft compelling products, descriptions, engaging headlines, and even enhance your product's photography, all with just a few clicks. Plus, you can market your business like a pro without hiring a team. Easily develop and launch targeted email campaigns and social media content that reaches customers wherever they spend their time, online or offline. If that's not enough, Shopify offers expert guidance on every aspect of commerce, from inventory management to international shipping logistics to seamless return processing. If you're ready to sell, you're ready for Shopify. Sign up for your $1 per month trial period and start selling today at shopify.com/jbp. Go to shopify.com/jbp. Again, that's shopify.com/jbp. Yeah. Well, when I was at MIT, I was surrounded by some of the most brilliant mathematicians and engineers in the world. But what distinguished me is is I was a pretty good engineer. Like I probably wasn't like a Fields metal mathematician, right? I I wasn't like that, but I was a good engineer. But I had a liberal arts bent. And the truth is, if I could have afforded it, I would have gone to Yale and studied history as an undergraduate. I just didn't have any money and they didn't have an ROC program and the government wasn't paying Air Force cadets to go study history at Yale. So my my love was history that you know history, science fiction, imagining the future, fantasy, uh imagining an alternative future. Would you say you think in pictures or words? Images. You think? I'm a synthesist. So I generally uh I'm the person that would tell you why the steam engine, you know, and the governor of steam engineer is similar to a political process that was implemented in medieval Russia. Like I I'm thinking about the mechanisms and how they function in the physical world, the political world, the economic world, the the fantasy world, the magic world, the whatever world. So I I would always be thinking simultaneously across that. So when I went to MIT most of them were there to do engineering. I was actually half liberal artist half engineer. And that was that was what was uh different about me. And when I and of course when I came out of MIT I didn't work for I don't want to work for someone else doing something they told me to do. I wanted to create something. And I think that I think that um you know when you're that that entrepreneurial bent probably goes along at least to some degree with that proclivity to appreciate fantasy because well entrepreneurial activity is associated with trade openness which is the creativity dimension. And so it it it it makes sense that you would have that entrepreneurial bent combined because you have to imagine possibility to be an entrepreneur. Right? So that's the fantastic element. You have to conjure up something that doesn't yet exist and then you have to pursue it and it has to captivate you. So you have to have the temperament for that. So you've got Do you like fi Do you still read fiction? I do not as much as I used to in my current stage in life. Um, I spend a lot more time reading history like like cover to cover Durant's history of story of civilization every volume all 15,000 pages or all the history of uh America be you know you know conceived in liberty Rothbart's history of America before the revolutionary war or history of economic thought. So, a lot of history, a lot of biography, a lot of monetary theory. And of course, today I spend my time reading legislation, all of the developments in the political economic world relevant to digital assets, digital technology because there's a a flood of it and I'm expected to have an opinion on it. But when I can sneak away, I'll I'll go read his artistic interests, landscape, architecture, residential archite when I first came here I went to Talison West Franklidd Wright's architecture all architecture everywhere in the world right well that's a good blending of aesthetic and engineering as well so very much but uh to address two of your points that are important one in fantasy there's this idea of casting a spell right so if you can imagine it you can you can cast it that's a very interesting idea Can you make the world a better place? Can you shape it in a certain way? Um and um the second the second point you brought up about metaphor, right? Imagery. Yeah. That was in relationship to the angels and the demons. You know, if you if you write a book about something, you know, write a book about Bitcoin and it's 200 pages long. I I wrote the book about something, what I discovered is 1% of the people will read the book in five years. maybe 0.1%. It's very, you know, and when they read the book, if you wanted to explain something in 200 pages or 500 pages, they might have forgotten what they read on the first 50 pages by the time they get to the end. And so, a 200page explanation isn't nearly as powerful as to say, "Oh, that's a demon coming out of cyerspace." Right? Well, that's the power of poetry because a de a it's like, "Oh, what is that? That's an actor in cyberspace with hostile intent that I should be afraid of. And so there's a lot of overexlaining in the world. And what I've discovered is in that, you know, in the modern world, we live in an age of abundance and there is so much infinite information. I, you know, I watched your podcast on YouTube. I I I came to know you before COVID and I was fascinated by them. it. Then I stumbled across chess videos and then I found you could spend your entire waking day watching chess videos. And then I realized you could spend your entire life watching Magnus Carlson chess videos. And then I realized you could probably spend an entire day watching different chess commentators covering one Magnus Carlson game from 30 different points of view. And if you want to go down that rabbit hole, whether it's uh you know, diets, the carnivore diet or chess or pocket knives or someone sailing around the world, there is literally infinite depth content. Yeah. you know, and and you know, then comes along Netscape and YouTube, you know, and all these other streaming and then Lord help you, you fall into a Tik Tok hole, you know, and you're like, you start swiping and then YouTube decided to steal it and they have these shorts and when you pull up the YouTube short, you know, the algorithm is thinking, what is the statistically most likely thing to capture your attention and punch your buttons and hit your dopamine and you find yourself going, "Yeah, is that an angel or a demon?" That algorithm. Yeah. And you are, you know, you are stuck and it's an addiction if you're not careful. And and of course, well, it's optimized to grip short-term attention, you know, and that's there's something really there's something really distressing about that because the more immature a mind is, the more it's gripped by short-term attention. And these bloody algorithms maximize for short-term attention. And the attention fragments are getting shorter as the content gets shorter. And so we're literally training super intelligent AI systems to hook us in keeping with our hedonistic drive. It's just so that's a demon I would say. And that that you know that it's not a fair fight. It's not a fair fight. It's a 16-year-old boy against the smartest, you know, AI in the world trying to addict the boy to the imagery they feed, right? And and so yeah, the smartest the smartest engineers and the smartest AI systems that are actually operating in ways that we don't even understand because they're reinforced. They learn by reinforcement. But so they understand things about us that we don't understand. They understand. Coming back to my communication style, then what I realize is people just don't have the time. Like you can, for example, in in life, you can equivocate. You could say, well, you know, you might do this and you might do that and do your own research and if you think blah blah blah that this might happen and read these 82 pages. Yeah. Yeah. Or you can say this is digital gold, but it's going to crush real gold by a factor of Okay. So, let's let's leap ahead into the Bitcoin issue because I I still want to know cuz you set up the background now. You've described how your mind works. You described the fact that you recognize patterns and that you see possibility. I want to hear how that translated into your discovery of Bitcoin and where that went. Okay, it's March of 2020 and in March of 2020, uh, Michael Sailor, the CEO, is slaved for a decade, working infinitely hard, working his 2,000 employees infinitely hard uh to compete against Microsoft and Magnificent 7 and to and to put growth back into this public company called MSTR. The company is perfectly fine company, but we're, you know, a company growing one, two, three, four percent a year is uninteresting to every professional investor in the capital markets and we've tried everything under the sun and we cannot break free and our our our employees are paid in stock options and the stock's not going anywhere, right? And so I am at a dead end there. Very frustrated. My wit's in. Mhm. And then Michael Sailor, the individual, occasionally buys some Apple and Amazon stock and he's made a fortune. And I'm thinking this is not good. Why is it not good though? Like because you I mean let let because I want to dig into that a little bit. You had a company that was growing moderately. Let's say it wasn't spectacularly interesting. There were stock problems, but the company is quite functional and it's doing quite well and it does its thing well. And then as an individual, you've made these like home run investments. So what is it that's dissatisfying you? Exactly. What's dissatisfying is to think that you peaked 10 years earlier. You've hit a plateau and you cannot you cannot go any further. I I see. So it's a plateaued adventure, right? We plateaued. We can't break free. You know what's the And work isn't fixing that. What's the satisfying is to see the Elon Musks or the Mark Zuckerbergs, you know, of the world have extraordinary success and you grow up in that generation and you feel like you hit the wall. They they launched the Instagram, they launched the Facebook, they launched the you know electric car and you uh you somehow have created this this uh it's a successful business but it's now a low growth business which is you know comparable. Why do you think why do you think that that why do you think that ground at you like I mean because in by many by many indices you're multi-dimension you were multi-dimensionally successful already. Now, you talked about the fact that the the big league leap, so to speak, didn't occur, but why in the world do you think that particularly disturbed you and drove you to seek other avenues of of expansion? I just thought, is this all there is? There's got to be more. I wanted to change the world. You know when you you know you start you think you can change the world and you get to some point where you realize you fulfill one 2% of the demand of a given niche of the world which has now become a mature cash cow business and the world's done with you. Do you have any idea where that ambition came from? Oh. Uh, must have come from my mother when I was, uh, my first job was as a paper boy and, uh, you know, so I'm delivering papers in Dayton, Ohio, uh, through the bitter cold, the Blizzard 78. And at some point there's going to be a competition uh, for the best paper boy of the Dayton Daily News. And my mother enters me in the competition and, you know, she creates this book of entries. you know, I'm the musician, I've got the book collection, I'm the gamer, I'm a this, I'm a that. And I swear she must have thought I was God's gift, you know, and and it never occurs to me that being, you know, the number one honor paper boy in Dayton, Ohio, isn't necessarily the pinnacle of achievement, but in her eyes, it was. And she entered me in the competition and I end up number two. She had faith in you. But I thought, you know, she thought I was the greatest person on earth. She's like, you're going to change the world. Freud's mother thought that about him and he said that it had given him a tremendous advantage. You know, it's it's really something to have a parent who has like unblinking faith in you, especially if they've actually identified those elements of you that are useful. I was a smart guy. Like I was like number one in my class normally, but being number one in your class in a public elementary school in middle Ohio is no statistical justification for thinking someone's going to grow up and change the world. But my mother believed it. She believed in me. She imbued it in me. And for whatever, if your parents think that about you, they program you and it works. So somehow in my head, I I was programmed at an early age, you know, believe that you could do it by an inspirational figure to believe I could do it. Do you think that was ambition exactly or do you think that was faith in your ability to solve problems? Cuz those aren't the same thing, right? I mean, you could you could imagine a situation like that that would produce someone who is narcissistic. That's that's a different that's a very different outcome than someone who believes that if they hit a problem hard enough, they can crack it and move forward. You know, uh if you combine the influence of my parents and my mother especially with my father is a very inspirational figure as well. He's like the He's the Air Force sergeant, you know, at 6:30 in the morning saying, "Hit the ground running, son." Okay. He was the So that's the work ethic. He was the work ethic, you know, you know, straight arrow, work hard, you know, and uh and do your job and do your duty. And my mother was I I have the smartest son in the world. He's going to change the earth, right? And and so that was the two. But, you know, once I got into into reading, you know, if you read Heinland, Heinland's, you know, stories, his juvenile stories are and his stories are here's a teenage kid that's going to go off and go to Mars and make peace with the Martians and change the course of human history. Right. Right. Or, you know, and you name them, every one of these. So, you found that hero mythology in, you know, like all of his figures are inspirational figures, you know? Yeah. Right. If you think about the Highland uh ethic, right? It's like uh self-reliance, resourcefulness, you know? Well, he was a libertarian, too. Very much so. It's like when I know the lefties used to think of Heinland as a fascist. I remember that. It shocked me. I never I never realized when I was like 13 that the science fiction I was reading had political implications. I didn't I didn't think that. And that's not my takeaway. My takeway is he says when when wherever you're living gets too crowded and there's too many bureaucratic busy bodies telling you how to live and how to breathe and what to do it's time for you to find a new frontier go somewhere else go west go to cyberspace go to out in his case go to outer space right it's you have to you know well there are frontiers everywhere and you found them in the digital world and and something you know it's always a struggle but something good always comes of it right in all of his books Right. Right. Right. And so you have the inspiration of of him as you know as kind of a a a figure and then you have the inspiration of you know your parents in a different way. And then of course once you start reading books right you if you read enough you're inspired by the lives of human beings that came before you. So I think uh all of that okay made me think I was put here to do something. Okay. Right. Okay. And I get to 2020 and uh I'm frustrated and it's it's a very pivotal point in my career. I'm just deciding am I going to sell this company? Am I going to retire and drift quietly out of history? Right. How old are you at this point? 55. Right. Right. Okay. Lots of people stop at 55. Right. They decide they're retired, whatever that means, and then they're well looking they're looking for purpose for the next 20 years, which is not a good fate. It's not a good fate. I've watched this many people at right around that age, you know, they decide in a way that they're old and they stop looking for further adventure and generally that's a catastrophe. But you, when you hit it, you thought you hadn't hit an apex. You hadn't had the apex that you wanted and then you you found Bitcoin in 2020. Yeah. Well, you know, I felt like I'm not done yet. But I had invented 10 things and that didn't work to invent something and then I had tried 10 different business strategies and not bit small like I bought $30 million of my stock back. I was like I'm going to spend hundreds of millions of dollars and this is against a company that made 75 million a year, right? So I spent huge amounts of money to try to fix it. I literally rewired every single IT system, rebuilt everything, rethought every business process as the you know thinking if I just work if I work harder and focus more air force dead. Yeah. Yeah. Well, the thing is the funny thing is so that's the contradiction between conscientiousness and openness, right? Because the conscientious types are managers and administrators, incrementalists. Their solution to a problem would be make what we're doing better. But the fantasy people, the open people think, "No, no, like no matter how efficiently we go down this road, it's not the right road. There has to be something else. 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Stop guessing, start leading and start with mealth. Now we get to some very transformational things. So, so Thomas Cune in the structure of scientific revolution, he introduces this idea of the paradigm shift and what he notes is that when a new paradigm comes along, it's embraced by the youth. Yeah. Or all the people who had the old paradigm died. And the only reason the adults ever embrace it is a war. So you know, you know, and there's the the famous phrase, science advances one funeral at a time. Exactly. Right. So we're waiting for the old guard to die. But the one time when it's possible for an old dog to learn new tricks, if you will, is when there's a war. So when I first saw Bitcoin, it was 2013. I was fascinated by Apple, fascinated by Amazon, making a lot of money in my private investments. That was my tech ride and uh I was working hard my business. And I, you know, I had 20 things that I thought I was going to do to fix that business. Mhm. And I looked at Bitcoin. I was like, well, this is an interesting thing. You know, you know, some decentralized monetary system. But you know, right around then, uh, the government shut down. There was a a a online betting site called Trade Sports and you could go and you could bet on the outcome of anything. You could bet on the outcome of elections, you could bet on sports, you could bet on whether it's going to rain and it was kind of a cool idea. The government shut it down because a lot of times when there, you know, remember they they shut down online gambling. I was watching this in 2013. I looked at uh Bitcoin and I I tweeted very famously. This is back when I tweeted, but no one cared. So, I aired my opinion and my opinion was, you know, Bitcoin's interesting, but I think it's going to go the way of online gambling. Okay. Oh, you think it'd be shut down? I thought it was going to be shut down. I Well, that was a likely that was a likely outcome. Yeah. And and in my defense, I had a lot of good arguments why. And it wasn't until 2014 that the IRS designated Bitcoin as property. 2013, it was unclear what it was what it was going to uh be designated as. But in any event, I did it. I forgot about it for the next seven years. I went off and we roll into March of 2020. And in March of 2020, you know, this entire COVID thing developed, right? So, first the world shut down and I'm not happy about it and I don't agree with it. Um, and the second thing that happens is we all go remote. And the third thing that happens is is all of the big tech companies, the Amazons, the Microsofts, their number one disadvantage in recruiting away our employees is all of our employees would have to get up, move across the country, take their kids out of their school, sell their house, and their wife would probably have to get a new job or their husband have to get a new job. and and our advantage was we we had a tight group and we all had lunch together and we met in the office and we had a face-to-face uh community. So imagine how you feel when your best engineer is basically sitting at a house in Arlington or Vienna and they can simply point their computer to a Microsoft server, change jobs, get a pay raise. all these mega companies going to steal all my employees. And if they hire away all my engineers, then maybe my product's good. Now, I have a better product, but I'm I'm fighting against monster corporations with a better product, but I'm not going to be better once they've hired my best engineers away, and they're going to slurp them, you know, off. So the company had one more ace. The the thing that we had in our back pocket that kept us that we had relied on was we had $500 million in cash. I have 2,000 hardworking employees. I have a operating business that's a cash cow and I have 500 million in cash. And that cash, you know, in the best period, uh, back in 2010, just before the great financial crisis or, you know, in that range, interest rates got to 5%, 5 12%. And, you know, maybe you can make 25 million a year on that. And then interest rates got hammered down. The central bankers kept printing money and they and they actually forced the interest rates down. I didn't understand that they were manipulating the interest rates to make them lower during that decade. I was a techie. I would say I was very technically sophisticated and I was very good at running a business. I I was in the category of work very very hard and know my business. But what I didn't understand was money and I didn't understand banking. And I didn't realize that as hard as I was working, they were taking it out the back door through inflation. Mhm. So the interest rates are maybe 2 and a.5% as we roll into the year. And here's what what happened. COVID lockdown takes place. There's a massive panic. All of these stocks crash because we're shutting down the world for the next two years. Of course, they should crash. And uh you know the administration looks at it and and you know the hue and cry comes from the mainstream media and from from the leaders in business and from the politicians lower the interest rates. So Jerome Pal turns around and lowers the interest rates and lowers the interest rates and pretty soon we've got got interest rates going from 250 basis points like overnight rates to zero. Well, what happens to the stock market? And this is the most perverse thing imaginable. By the summer of 2020, all of the stocks have recovered. It's like, oh, we had a crisis, but we solved it by taking the interest rate to zero. We printed money and the stocks recover. Amazon's recovered. Apple's recovered. Disney is trading higher. People are basically taking Disney up to double. And they're trading it based upon forward expectations of Disney streaming video revenue year 2024. And I'm watching this And this was a what happened in 2020 I would characterize as a bifurcation of Main Street and Wall Street. What you saw was Main Street was destroyed by these policies, right? Main Street got shut down. The private manufacturer, the person that works with their hands, the guy that shows up, the small business, the midsize business. This is the Trump constituency, by the way. Mhm. Mhm. These people get destroyed, right? And they're wiped out. Like, okay, it's illegal for you to open your gym. You're going to jail if you go to work. Mhm. Okay. And then Wall Street was, you got guys running $5 billion uh equity investment funds living in New York and the Hamptons. They had the best year of their life. Jordan, 2020 was the best year in 30 years for these investors. They're making all you had to do was be holding the stocks or playing the market. When interest rates go to zero, the PTE of any company that generates cash goes, it doubles, it triples. The cap rates on real estate doubled. So the perverse irony is you own a building, no one's in it. the value of the building doubles in four weeks. You're owning a company, all the customers are being bankrupted. The value of the company doubles. So what happened was the government printed money. We had hyperinflation not in consumer products, not in producer products. We had hyperinflation in financial assets. That hyperinflation meant that the stock market rallied, real estate rallied. If you owned a portfolio of real estate or perfor portfolio of stock, you got rich. And the thought that I had was this investment manager sitting on his floaty at his house in the Hamptons is having the best year of his life and I'm having the worst year of my life. He's not working at all. He's literally not working at all. is watching television, getting rich, taking high fives, and I'm watching all these people I care about wiped out, destroyed, jailed, abused, bankrupted, fired, stripped of all hope, and then I have this $500 million asset and the interests go to zero. And Jerome Pal goes on television and he gives a speech and these are his words. We've taken interest rates to zero. I'm not even thinking about thinking about raising interest rates to the year 2024. But my observation was I had an asset is now non-performing. You know, my finance is non-performing. My equity is dead in the water. My chances of turning this around are zero because after doing a hundred things for a decade, they're zero. My human capital is about to be stripped away. And uh so I have a choice between a fast death or a slow death. And so it was time to make a decision to choose a side. And I felt like if I if I give the money back to the shareholders, conventional wisdom is, you know, re re give the capital back to the shareholders because you idiot. You're getting 0% interest and us brilliant investors are getting, you know, S&P's up 25% this year. Okay? So, I could just give the money away. Well, I took 30 years to accumulate the money. Why should I give up 30 years of my life? 2,000 people did a million things right, and I'm just going to give it up and slink into my hole and disappear from history. I thought that's not very appealing. Well, I can keep the money at 0% interest, but I'm boiling, right? the the the environment is boiling my employees off and it's just a it's a slow death not a fast death but it's a it's a slow certain death or I can fight right and so paradigm shift war it wasn't the war on COVID it was the war on currency combined with the war on co and in that circumstance yeah I'm standing there and I'm thinking I wasn't put on the earth to lose like this like this this is not how I'm going to go out. And so I started looking for a solution and I said, "Well, it's pretty obvious operating companies are discriminated against. People that do things are being discriminated against. I want to be one of those guys that owns things. But I don't want to own sovereign debt. If I'm owning the T bill, the government's just told me tea bills are worthless. I better go find something else to own." So I started thinking, well, what can I buy? Am I going to buy art? Am I going to buy a building? Well, how much time were you spent thinking about this at this point? Like, is this like 16 hours a day? Well, you know, so I was there and uh I thought, what can you buy? It's like, can I buy real estate? And the answer is, well, real estate just doubled in value over a few weeks because Jerome jacked the price of the of interest to zero. So, that's not good. Can I buy a portfolio of stocks? They just went to an all-time high because we jacked the interest rates zero. That's no good. Can I buy a portfolio of collectible art? Oh yeah, good luck with like how do I find $500 million of Picassos and Mones attractively priced? That's not and and by the way, we're now meet we're we're struggling with you're looking at a guy after 30 years in business and an engineering education, reasonably educated but not a classically trained economist, not an Austrian economist. I am struggle with struggling with the time-honored question. What is money? I need a liquid fungeable asset which will store my economic energy for an indefinite period of time. That that is and so what is money? I'm looking for money and I you know eventually I get to gold and I'm look I'm thinking should I buy $500 million of gold? And you know, my attorney, he looks at me and goes, "You know, Mike, I remember when gold was $800 an ounce back in the 70s or the 80s and then it went nowhere for 20 years, and you should be careful about that, and it might not. It's kind of dead money." And then I So, I'm sitting at this table, and I'm watching the world burn while all the Wall Street guys get rich and the talking heads on CNBC say what they're saying. And I'm looking out at Miami Beach and I'm looking at Collins Avenue and every car is not there's no cars on the road except for an Amazon truck which just makes me angry. One Amazon truck going by and I've got 82 birds in my backyard and they're hunting for worms because all the restaurants in Miami Beach shut down. So that whatever whoever was feeding them is not feeding them. So I'm watching uh us strip the world back to the stone age, right? a a devolution. And I'm I'm staring over my pole and I look at Eric and I say, "Eric, tell me about that Bitcoin thing again." And Eric was a crypto entrepreneur and he had been investing in digital assets in crypto. And I had dismissed him two years earlier in 2018. I was like, "Oh, that's probably just a scam coin that's going to collapse." But uh you know everybody finds this when you you know if I tell you you got 6 months to live you would go looking for a cure. And if I told you every asset that you hold in Canada is going to be seized from you within 6 months that could happen. You would think about how you're going to get your money out of Canada. Yeah. We already thought about that you know and like and the point is you didn't think about it for the 20 years of your career when it just wasn't the priority. Yeah. And then when when you're faced with a crisis, a challenge, you start thinking. So I said, ' Eric, tell me about that Bitcoin thing again. And he started describing it. And I started thinking, how can I get more information on that? And he said, well, you can go and watch this podcast. And you can learn anything on YouTube, right? You can learn it if you want to learn, right? I learned a lot from you on YouTube. I learned a lot a lot about diets and ketogenic diets and the carnivore diet. And I learned a lot about uh food politics and I learned a lot about psychology and well so I started studying up on crypto and I and I started speed watching and intensely watching and I went and I saw the work of Andreas Antonopoulos and I saw all the podcast of the early crypto uh developers and I started looking for the books and I read the Bitcoin standard and I I got quote unquote dragged down the rabbit hole and uh and I came to the opinion that uh that the solution was was a non-s sovereign store b value bearer instrument of which gold had been the best of those but then I applied my engineering mind and I and and I thought the way hein would thought would have thought about it and I said okay over a long enough timeline what's the mortality rate okay short You know, people that think short time think about weeks or months or years. I thought, well, let's try a 100 years. I looked over a hundred years and I realized that at a 2% inflation rate, and that's the rate at which we mine more gold. At a 2% inflation rate, that means the halflife of gold is about 36 years. Which means that the value of the gold you hold is cut in half three times over a 100 years. Which means that if you started with the 100, you ended up with 12.5% of the money you started with over a 100. Explain that in a little more detail. How does that happen with gold? Say you owned 100% of the supply of gold this year. The gold miners produce 2% more gold every year. It compounds which means it takes 36 years before they've doubled the supply of gold. Got it. Got it. Because you supply of gold in 30 years. You own a quarter of the supply of gold in the relative scarity increases as you hold it. It's inflating. Okay. Okay. Okay. And and so gold although it's quote unquote sound money and in the Austrian economy school of thought it was the best money, it's not perfect money. The reason that you had stable prices uh throughout the gold era, you know, the the gold standard age is gold was inflating about 2% a year and the economy is growing 2% a year. And so if the output of goods and services grow at the rate of the money supply, the price is constant. Okay. Okay. If the I if the money supply is fixed and the economy grew 2% a year, prices will fall 2% every year. Right. Right. The na when and by the way in technology when you look at technical um products where the company grows productivity faster than 2%. In a gold world the price would fall very fast. Okay. So what's going on is is there's a race between productivity and money supply. And if I can drive the price of the product down 20% a year, I can inflate the amount of money 10% a year and the price of that thing will fall 10%. But but if I didn't inflate the price of money, it would fall 20%. You see? So I looked at gold. I said, I need something like gold, but the problem the problem with gold is it's a conventional asset. it had kind of recovered a bit and I thought it's not perfect. It's the it's the best idea in the 19th century and and it's not quite working in the 20th century. And so I started thinking what if someone designed digital gold? What if I you know now we go back to the engineer saying can you perfect gold and the engineering idea how do you fix gold and make it perfect? Well, you make it impossible to mine anymore. What if and then we get into the fantasy thing. What if you know what if uh if God came down and there's a bit of theology here if you for allow me. If God came down and wanted to fix gold, it's impossible to make any more gold, right? How can you make it better? It'd be really great if it was weightless. Mhm. How do you make it better? I'm going to cast a spell and allow you to teleport the gold anywhere on Earth. If God said, you know, I'm going to implement a system of 21 million gold coins, but we're going to call them God coins, and I'm going to keep them in a bank in heaven, and I'm going to let you transfer, you know, any amount. I'm going to let you subdivide it by 100 million, and we'll call them Satoshi's and and I will let you transfer peer-to-peer and pay anybody any time instantly at the speed of light. And I will keep track of the ledger of who you know corruptible way. I will never cheat you. Mhm. And I will do it forever for free. You know, if if if God offered you that kind of divine bank and you were sitting in Argentina when the currency was collapsing to zero, the Argentine peso went from a dollar to the peso to a,000 pesos to the dollar over 20 years and it did it five times over the century. Right. Right. Right. Or if you saw it happen in Russia where their currency collapsed, it hap the currency collapsed in Brazil. Yeah. Not 25 years ago. Uh currency collapsed in Germany a few times. If you read the history of civilization, read Durant. Durant's talking about currencies collapsing in Russia in 16th century. Yeah. Yeah. You know, the Roman emperor, it's a substantial lifetime risk. Pretty much on average the currency collapses every 30 to 40 years in most political jurisdictions for all of human history. And if you get a currency to last for, by the way, the best currency of the last hundred years is the dollar. The US won every war of the 20th century. My house in Miami Beach traded for $100,000. In 1930, it would trade for hund00 million hundred years later. 99.9% collapse in the value of the dollar. The winning currency of the 20th century, the best currency in the world, lost 99.9% of its value. That's a winner. If you do the math fast, just for the viewers, it works out to 7% a year. 7% inflation over in the best currency. And how how do you calculate the infla like the inflation calculations have always need to do is take the take the number divide it into 72 and that means that you're having or you're doubling every 10 year seven into 70 is a 10year halflife. So the issue is what's the halflife of your money against what basket of goods? Okay. And that is the trick. That's for sure that's the trick because what's the yard stick? the yard the the government wants to calculate inflation by constructing a a market basket of consumer goods. Yes. And then uh the trick is they just keep changing what's in the basket. So they call it a hydonic adjustment. Yeah. So Exactly. Well, I create a basket of By the way, I create a basket of goods that are not likely to go up in price as I print money and I put that into the basket. You know, it's like if if I said organic inflation of the inflation standard grass-fed be Yeah. This pops up in uh organic diet or you know, carnivore diet or diet in general where people note that if everybody ate meat and if it was all organic, then we probably couldn't support the 8 billion people on the planet, we could support 800 million people. So, it behooves us to convince everybody that they should eat biscuit. And that's what the Egyptians figured out 5,000 years ago that you know if you grow grain and you feed the population biscuit you can raise an army and it's very cheap. How does the army travel? They travel on biscuit. So you know is this good for 40 50 years? No. Your teeth are going to fall out. It's awful for your health. You're going to die 20 years early. But it doesn't matter when the people fighting the war between the ages 15 and 30. Like you won't kill yourself with an awful diet fast before the age 25, right? You're gonna, by the way, in a war, you're going to die from influenza, right? You're going to die from the pathogens first if the bullet doesn't get you second. You're not going to die from malnutrition, except that I can't give you a cow, so I can only give you the biscuit. So at the end of the day, the government's view toward inflation is it's in their best interest to construct um Mhm. to to construct a single number. There's the old phrase, you can tell people, you can't tell people what to think, but you can tell them what to think about, right? And so I want you to think that inflation is CPI. It's not. Yeah. Yeah. I want you to think 2% is acceptable. And you estimated at seven. Now, this is where you got to come back to being an engineer. When you look out at a bay and the wind is blowing on the bay and you see all the white caps and the water is moving and I ask you in one sentence to describe the motion of the bay, you there a semantic representation is imperfect way to describe fluid flow. you know, watch, you know, water and it's spinning like this going down a drain. How do you describe fluid flow? Well, the answer is every component of the water has a different uh velocity. It's a different vector, right? It's they're all moving like and it's dynamic. And now blow some bubbles in it. Describe that with words. Give me the number. There's no number. That's a field. It's a vector, right? You you know, so my background at MIT, I studied thermodynamics. I I studied very hard math. I mean, the math you use to design a jet engine, the math you use to design, you know, anything that goes supersonic through the air, the math is complicated. You know, you need vector calculus. You need you need nonlinear dynamic systems of equations. You need field theory. What's the gravitational field of the Earth? Tell me that in like a number. Well, you know, like it's it's different everywhere. It's changing. But no, but but that's too complicated, right? For the rank and file. So what is inflation? Inflation's a vector. There's a different inflation rate for every single thing in this room. And it would be a different rate for this room if I put this room in Toronto. Mhm. Right. And it's changing every week. It's changing every minute. So the inflation rate of there's a 100,000 things you might want. And the rate of inflation on all of those 100,000 things is changing minute by minute. And it's different in Hong Kong than it is in China. It's like, okay, there's a war going on. Guess what? We shut down the economy. There's a war. World War I, World War II, there's no inflation. Why? Cuz it's illegal to buy anything. Okay? There was no inflation in 2020 when we printed money. Except what? What are you allowed to buy when you're under home arrest? You can buy stocks. The inflation was in the stocks. The inflation was in Amazon stock in in March of 2020. It wasn't in restaurant bills because it was illegal to go to the restaurant. It wasn't in the cruise lines. It wasn't in the airlines. And so I want you to think now this 2% inflation is so let me abstract back a bit here. So just Okay. So we we laid the groundwork for why this Bitcoin revelation hit you hard. And then you laid out an economic argument which was that your assessment of the situation was that the standard story with regards to the reliability of currency and the inflation rate is radically offkilter. The most successful currency hasn't been particularly successful at all. And the inflation rate that's reasonably estimated is much higher than the official inflation rate which means that your storehouse of value whatever it is is going to be deflated terribly during your lifetime. Okay. Now you come across Bitcoin and you talked about it as if it was you know this abstracted gold with the properties that you already described. So, it has the rarity of gold. Let me ask you a couple questions about that because some people have actually asked me about this. Is quantum computation going to break the Bitcoin passwords? Like I can imagine, are there two things that would take it out? What about a solar flare that wipes out the electronics? Does that wipe out Bitcoin? What about quantum computation and cracking the the passwords to the short answer is is no. and uh this is the most anti-fragile indestructible thing in the world. Um the long distribution the longer answer is uh Bitcoin is an ideology. Yeah. That is manifested as a protocol materialized as a network across which an asset runs. So okay okay. is the most real aspect of the ideology. Let me say it's like is quantum computing if it hacks your email account going to destroy the English language. You see, is quantum computing going to actually break base 10 math? Base 10 math is a protocol. If you have a computer program and it becomes insecure, you have to upgrade the program. But but the reason that we use numbers 1 through 9 or 0 through 9 is because over the course of about 900 years, Western civilization realized that we could actually calculate things more efficiently with that protocol. But it's not the only protocol, Jordan. There's base two. There's base, you know, 16, right? There's why do we have 12 months in the year? Why do we have 360 degrees? Because the Babylonians had other systems of math. Mhm. We have a system of math. There's other languages. Why do we use English? Well, we all decided, the scientists, the economist, Western civilization, there's a lot of reasons why. We could trace it to geography of England and the English Channel and a bunch of stuff. We don't have time for that. It's a protocol. Bitcoin, it's a protocol. What kind of protocol? It's an monetary protocol. Why? What's it informed by? An ideology. What is the ideology? sovereignty, truth, sound, thermodynamic soundness. Um, why thermodynamic soundness? Cuz 1 + 1 has to equal two. And if 1 + 1 equals three some days or one and a half other days, you can't solve any problem. in engineering and in aeronautical engineering uh there's a phrase called adiabatic an adiabatic system and adiabatic system means a closed system um and so whenever you're whenever you're building anything the the problem always starts with assume an adiabatic system right right if I introduce this heat source if I you know if I fly through what they're saying is assuming it's a closed energy system there's noter external factor, right? Uh assuming assuming an adabatic system, how long will our podcast go? About two and a half hours. If Godzilla steps on your studio in the next 30 seconds, the podcast will go shorter because of new energy. So when Godzilla shows up to the playground, all bets are off. Right. Right. Okay. Right. So Right. So if if I have a an a bathtub or I have a swimming pool with a leak in it, you can't jump into the swimming pool without risking breaking your neck, right? If I have a leak in a fuselage of an airplane, we can't fly. Explosive decompression. You can if you're an engineer and you're engineering airplanes or internal combustion engines or spaceships, you have to do the engineering properly. And that includes make it a closed system or a thermodynamically sound system. When it's not, there's leakage, right? There's either a friction cost or there's a leakage cost. And you have to account for the leakage in a replenishment if you want the machine to work. The machine will not work if you don't actually solve the problem. So when when we come uh to this idea of the ideology of Bitcoin, Bitcoin is based upon engineering principle, scient mathematical soundness, consistency, integrity, truth, right? Um and and those are all the principles incorruptibility of the le ledger. Those are the principles of libertarians and Austrian economists, right? Yeah. And those are also that is someone that believes that we should be governed by natural law, right? So we go back to John Lockach and we go back to natural rights and natural law, right? Uh nature governs, right? Whether nature nature gives you gravity. If you tip the glass there, it's falling to the floor. You don't get to break the rule. That is just the rule. You have to comport yourself accordingly knowing that there's a gravitational field in this room right now. You can't wish it away, right? A lawyer would like to wish you'd like to if if the politicians could pass a law, they'd pass a law suspending gravity rights, you know, for the time being in certain places, but the you can't as Elon Musk says, you don't get to break the laws of physics, right? So, so Bitcoin starts with this ideology of the engineers, the scientists, the mathematicians, right? Uh, and we create a protocol. The protocol is what if a bunch of smart people in the world um what if they wanted to keep their money? What if uh or or in this case I gave you the example of the divine bank that God gave you except if God's not going to set up divine bank and solve all your monetary problem. What's the what's the the second best idea? The second best idea would be a smart engineer takes advantage of semiconductors, the internet and cryptography and you create a system where 21 million bitcoins circulate subdividable by a 100 million satoshi's each. That system uh is protected by public and private key cryptography. And should you actually have possession of the private key, you have control over your coins, that means that you've created a bank in cyberspace. Now imagine a hundred rich families. They live all over the world. They all get together one day and they say, "Well, you know, God won't solve our problems for us, so we got to solve our problems oursel. Let's go ahead and build out this Bitcoin network." And uh this is a bank and we're all going to be able to deposit our money in this bank. Why? We don't trust the government. We don't trust a local bank. We don't trust each other. We don't, you know, and we want the bank to last for a thousand years. Okay. Who's going to run the software? Well, the answer is everybody's going to run the software because nobody I trust you, you trust me, but your your idiot great grandson I might not trust. Or maybe my idiot great grandson might not get along with your idiot great grandson. So, you know, and this is where history of science comes in. You know how we studied longitude or uh long longitude was the breakthrough they gave the British control of the seas and and the longitude prize was instantiated by the parliament. They offered £10,000 to whoever could figure out how to calculate longitude on the ocean. Every physics professor at uh at Cambridge and Oxford tried it. They all failed. Every mathematician failed. They could not figure it out. A clock maker by the name of John Harrison makes clocks. He solved the problem. Just like the Wright brothers figure out how to fly without their aeronautical engineering degree, the clock the bicycle makers figure out how to fly. The clock maker figured out how to solve the problem. He created a perfect clock. He gave you two clocks. And when you get in the British ship, you sail past Greenwich, which is where the Royal Observatory is. You set your first clock to Royal Observatory time. Grinnwich meantime. That's where we got universal time. The second clock is set at the local time. The ship sails to the West Indies. You look up, you figure out what high noon is. You compare the second clock to the first clock. You subtract two hours. You multiply by 15 degrees. You've got your longitude on the ocean. Now, what's the breakthrough? No one could make a perfect clock. How do I create a perfect clock? Because the metal in the clock expands and contracts, John Harrison created a perfect machine from imperfect materials. What he realized is yes, the metal does expand and contract. We can't stop it from expanding and contracting with humidity and with temperature. What we can do is take two identical pieces of metal and put them in tension with each other. So, this one is contracting the same amount that one is contracting. they they actually uh compensate neutralize each other and you end up with a perfect machine. That is brilliant engineering. Not through math, not not through science, but through uh practical engineering. Harrison creates a perfect clock. The clock inadvertently gives us longitude. Longitude gives the British Navy command of the seas. And we're speaking English right now, right? Satoshi got it. Satoshi has to create a perfect monetary network and you got to create it with imperfect components. The imperfect components are the people, the governments, the actors, the computers. They're going to fail. What happens if the power goes out? What happens if that gets hacked? The answer is I create a machine that's running the protocol. This one's running the protocol. This one's running the protocol. They're all running at the same time. They're all hashing in order in order to guess the answer to that's required to build the next block. One out of a million of these things will win. The entire thing is a fault tolerant shared nothing, you know, mission critical nuclear hardened system because what is it? It's a virus, right? It's a it's a it's an internet virus, a monetary virus, an ideological virus. And everyone that chooses to run the node is feeding the network, you know, participating in the network. All of the miners are defending the network. Um people will but but once you understand it like that then you realize that what's going on with this with Bitcoin is a bunch of people with the same ideology we just all like to keep our money. Mhm. Running a protocol have instantiated that protocol in software that runs on mobile phones that runs on computers. We should also say you know it's not exactly that you want to keep your money. It's it's you want to keep the fruits of your labor and you want to keep your reputation and you want to do that over the longest amount of time possible with the least amount of parasetism and corruption u manageable. And so, you know, because when you say you want to keep your money, it's it's got that kind of evil capitalist ring to it. But you know, if you spent your entire lifetime building up a storehouse of value and you did that in a way that also brought prosperity to other people, it's only natural justice of the sort that keeps hardworking people working and everything abundant in order to not allow people like that to be parasitized and taken out. If you would indulge me, this is where we should probably veer off into libertarian politics and philosophy. Let's wait. Let's do that on the Daily Wire side because we should bring this part to a close. Well, you you had a good landing there with regards to, you know, your summary of how Bitcoin worked and all the things that we talked to culminated into that. And on the Daily Wire side, we'll talk about the relevance of this for young people. We'll talk about what you think is going to transpire in the next 5 to 10 years on the Bitcoin side, and we'll flesh out the libertarian discussion. But that's an excellent place to stop. Thank you for your time. Thank Thank you very much for the thorough investigation and explanation. And so we're going to continue on this road on the Daily Wire side for all of you watching and listening. And so um you might feel inclined to attend to that so that we can delve into this. I want to hear Michael's thoughts on well what's going to happen in the next 5 years and what you should do if you're young concretely speaking. And so join us there. Thank you everyone here today uh in Scottsdale film crew and thank you very much for showing up and talking. It's been a real pleasure and very informative that's for sure. So thanks everybody. We'll see you on the daily wire side. [Music]