Remember George Washington, you know how he died?
Well-meaning physicians bled him to death,
and this was the most important patient in the country,
maybe in the history of the country,
and we bled him to death, trying to help him.
So when you're actually inflating the money supply
at 7%, but you're calling it 2%
because you wanna help the economy,
you're literally bleeding the free market to death.
But the sad fact is George Washington went along with it
because he thought that they were gonna do him good,
and the majority of the society, most companies,
most conventional thinkers, you know, the working class,
they go along with this because they think
that someone has their best interest in mind,
and the people that are bleeding them to death believe,
they believe that prescription
because their mental models are just so defective.
The following is a conversation with Michael Saylor,
one of the most prominent and brilliant
Bitcoin proponents in the world.
He is the CEO of MicroStrategy,
founder of Saylor Academy, graduate of MIT,
and Michael is one of the most fascinating
and rigorous thinkers I've ever gotten a chance
to explore ideas with.
He can effortlessly zoom out to the big perspectives
of human civilization and human history,
and zoom back in to the technical details of blockchains,
markets, governments, and financial systems.
This is the Lex Friedman podcast.
To support it, please check out our sponsors
in the description, and now, dear friends,
here's Michael Saylor.
Let's start with a big question of truth and wisdom.
When advanced humans or aliens or AI systems,
let's say five to 10 centuries from now,
look back at Earth on this early 21st century,
how much do you think they would say we understood
about money and economics, or even about engineering,
science, life, death, meaning, intelligence,
consciousness, all the big interesting questions?
I think they would probably give us a B minus on engineering,
on all the engineering things, the hard sciences.
A passing grade.
Like, we're doing okay.
We're working our way through rockets and jets
and electric cars and electricity transport systems
and nuclear power and space flight and the like.
And if you look at the walls that grace the great court
at MIT, it's full of all the great thinkers,
and they're all pretty admirable, you know?
If you could be with Newton or Gauss or Madame Curie
or Einstein, you know, you would respect them.
I would say they'd give us like a D minus on economics,
like, you know, an F plus or a D minus.
You see, I have an optimistic vision.
First of all, optimistic vision of engineering,
because everybody you've listed, not everybody,
most people you've listed is just over the past
couple of centuries and maybe stretches a little
farther back, but mostly all the cool stuff we've done
in engineering is the past couple of centuries.
I mean, Archimedes, you know, had his virtues.
You know, I studied the history of science at MIT
and I also studied aerospace engineering.
And so I clearly have a bias in favor of science.
And if I look at the past 10,000 years
and I consider all of the philosophy and the politics
and their impact on the human condition,
I think it's a wash for every politician
that came up with a good idea.
Another politician came up with a bad idea, right?
And it's not clear to me that, you know,
most of the political and philosophical, you know,
contributions to the human race and the human conditions
have advanced so much.
I mean, we're still taking, you know,
taking guidance and admiring Aristotle and Plato
and Seneca and the like.
And on the other hand, you know, if you think about
what has made the human condition better,
fire, water, harnessing of wind energy,
try to row across an ocean, right?
Not easy.
And for people who are just listening or watching,
there's a beautiful sexy ship from 16th, 17th century.
This is a 19th century handmade model
of a 17th century sailing ship,
which is of the type that the Dutch East India's company
used to sail the world and trade.
So that was made, you know,
the original is made sometime in the 1600s
and then this model is made in the 19th century
by individuals.
Both the model and the ship itself
is engineering at its best and just imagine,
just like rock is flying out to space,
how much hope this filled people with,
exploring the unknown, going into the mystery.
Both the entrepreneurs and the business people
and the engineers and just humans, what's out there?
What's out there to be discovered?
Yeah, the metaphor of human beings leaving shore
sailing across the horizon,
risking their lives in pursuit of a better life
is an incredibly powerful one.
In 1900, I suppose the average life expectancy is 50.
During the Revolutionary War,
you know, while our founding fathers were fighting
to establish, you know, life, liberty,
pursuit of happiness, the constitution,
average life expectancy of it's like 32,
some between 32 and 36.
So all the sound in the fury doesn't make you live past 32,
but what does, right, antibiotics?
Conquest of infectious diseases,
if we understand the science of infectious disease,
you know, sterilizing a knife and harnessing antibiotics
gets you from 50 to 70 and that happened fast, right?
That happens from 1900 to 1950 or something like that.
And I think if you look at the human condition,
you ever get on one of those rowing machines
where they actually keep track of your watts output
when you're on that?
Yeah.
Yeah, it's like 200 is a lot.
Okay, 200 is a lot.
So a kilowatt hour is like all the energy
that a human trained athlete can deliver in a day.
And probably not 1% of the people in the world
could deliver a kilowatt hour in a day
and the commercial value of a kilowatt hour,
the retail value is 11 cents today.
And the wholesale value is two cents.
And so you have to look at the contribution
of politicians and philosophers and economists
to the human condition.
And it's like at best to wash one way or the other.
And then if you look at the contribution of John D. Rockefeller
when he delivered you a barrel of oil,
and the energy in oil, liquid energy
or the contribution of Tesla as we deliver electricity.
And what's the impact on the human condition
if I have electric power, if I have chemical power,
if I have wind energy,
if I can actually set up a reservoir,
create a dam, spend a turbine
and generate energy from a hydraulic source,
that's extraordinary, right?
And so our ability to cross the ocean,
our ability to grow food, our ability to live,
it's technology that gets the human race
from a brutal life where life expectancy is 30
to a world where life expectancy is 80.
You gave a D minus to the economists.
So are they too like the politicians to wash
in terms of there's good ideas and bad ideas?
And that tiny delta between good and bad
is how you squeak past the F plus
onto the D minus territory?
I think most economic ideas are bad ideas.
Like, you know, like take us back to MIT
and you want to solve a fluid dynamics problem.
Like design the shape of the hull of that ship
or you want to design an airfoil, a wing,
or if you want to design an engine
or a nozzle in a rocket ship,
you wouldn't do it with simple arithmetic.
You wouldn't do it with a scalar.
There's not a single number, right?
It's vector math, computational fluid dynamics
is indimensional, higher level math, you know?
Complicated stuff.
So when an economist says the inflation rate is 2%,
that's a scalar.
And when an economist says,
it's not a problem to print more money
because the velocity of the money is very low,
monetary velocity is low.
That's another scalar.
Okay, so the truth of the matter is
inflation is not a scalar.
Inflation is an indimensional vector.
Money velocity is not a scalar.
Saying what's the velocity of money?
Oh, it's slow or it's fast.
It ignores the question of
what medium is the money moving through?
And the same way that, you know,
what's the speed of sound?
Okay, well, what is sound, right?
Sound, you know, sound is a compression wave.
It's energy moving through a medium,
but the speed is different.
So for example, the speed of sound through air
is different than the speed of sound through water.
And sound moves faster through water.
It moves faster through a solid
and it moves faster through a stiffer solid.
So there isn't one.
What is the fundamental problem
with the way economists reduce the world down to a model?
Is it too simple?
Or is it just even the first principles
of constructing the model is wrong?
I think that the fundamental problem is
if you see the world as a scalar,
you simply pick the one number
which supports whatever you wanna do
and you ignore the universe of other consequences
from your behavior.
In general, I don't know if you've heard
of like Eric Watson has been talking about this
with gauge theory.
So different kinds of approaches
from the physics world, from the mathematical world
to extend past this scalar view of economics.
So gauge theory is one way that comes from physics.
Do you find that a way of exploring economics interesting?
So outside of cryptocurrency,
outside of the actual technologies and so on,
just analysis of how economics works.
Do you find that interesting?
Yeah, I think that if we're gonna wanna really
make any scientific progress in economics,
we have to apply much more computationally intensive
and richer forms of mathematics.
So simulation, perhaps, or?
Yeah, you know, when I was in MIT,
I studied system dynamics, you know,
they taught it out of the Sloan School.
It was developed by Jay Forrester
who was an extraordinary computer scientist.
And when we've created models of economic behavior,
they were all multidimensional nonlinear models.
So if you wanna describe how anything works
in the real world, you have to start
with the concept of feedback.
If I double the price of something,
demand will fall and attempts to create supply will increase
and there will be a delay before the capacity increases.
There'll be an instant demand change
and there'll be rippling effects
throughout every other segment of the economy,
downstream and upstream of such a thing.
So it's kind of common sense,
but most economics, most classical economics,
it's always, you know, taught with linear models,
you know, fairly simplistic linear models.
And oftentimes, I'm really shocked today
that the entire mainstream dialogue of economics
has been captured by scale or arithmetic.
For example, if you read, you know,
read any article in the New York Times
or the Wall Street Journal, right?
They just refer to it, there's an inflation number
or the CPI or the inflation rate is X.
And if you look at all the historic studies
of the impact of inflation, generally,
they're all based upon the idea that inflation equals CPI
and then they try to extrapolate from that
and you just get nowhere with it.
So at the very least, we should be considering inflation
and other economics concept as a nonlinear dynamical system.
So nonlinearity and also just embracing the full complexity
of just how the variables interact,
maybe through simulation,
maybe some have some interesting models around that.
Wouldn't it be refreshing if somebody for once
published a table of the change in price of every product,
every service and every asset in every place over time?
You said table, some of that also is the task
of visualization, how to extract
from this complex set of numbers patterns
that somehow indicate something fundamental
about what's happening.
So like summarization of data is still important.
Perhaps summarization not down to a single scale of value,
but looking at that whole sea of numbers,
you have to find patterns.
Like what is inflation in a particular sector?
What is it maybe a change over time?
Maybe different geographical regions,
things of that nature.
I think that's kind of, I don't know even what that task is.
That's what you could look at machine learning.
You can look at AI with that perspective,
which is like, how do you represent
what's happening efficiently as efficiently as possible?
That's never going to be a single number,
but it might be a compressed model
that captures something beautiful,
something fundamental about what's happening.
It's an opportunity for sure, right?
If we take, for example, during the pandemic,
the response of the political apparatus
was to lower interest rates to zero
and to start buying assets and essence printing money.
And the defense was there's no inflation.
But of course, you had one part of the economy
where it was locked down,
so it was illegal to buy anything.
But you couldn't, you know, it was either illegal
or it was impractical.
So it would be impossible for demand to manifest.
So of course, there is no inflation.
On the other hand,
there was instantaneous immediate inflation
in another part of the economy.
For example, you lower the interest rates to zero.
At one point, we saw the swap rate on a 30-year note
go to 72 basis points.
Okay, that means that the value
of a long-dated bond immediately inflates.
So the bond market had hyperinflation
within minutes of these financial decisions.
The asset market had hyperinflation.
We had what you call a K-shaped recovery,
what we affectionately call a K-shaped recovery.
Main Street shut down,
Wall Street recovered all within six weeks.
The inflation was in the assets,
like in the stocks, in the bonds.
You know, if you look today,
you see that a typical house, according to the case,
Schiller index today is up 19.2% year over year.
So if you're a first-time home buyer,
the inflation rate is 19%.
The formal CPI announced a 7.9%.
You can pretty much create any inflation rate you want
by constructing a market basket,
a weighted basket of products or services or assets
that yield you the answer.
I think that, you know,
the fundamental failing of economists is first of all,
they don't really have a term for asset inflation.
Right?
What's an asset, what's asset hyperinflation?
You mentioned bond market swap rate
and asset is where the all majority
of the hyperinflation happened.
What's inflation?
What's hyperinflation?
What's an asset market?
I'm gonna ask so many dumb questions here.
In the conventional economic world,
you would treat inflation as the rate of increase in price
of a market basket of consumer products
defined by a government agency.
So they have like traditional things
that a regular consumer would be buying.
The government selects like toilet paper, food,
toaster, refrigerator, electronics,
all that kind of stuff.
And it's like a representative basket of goods
that lead to a content existence on this earth
for a regular consumer.
They define a synthetic metric, right?
I mean, I'm gonna say you should have 1,000 square foot
apartment and you should have a used car
and you should eat three hamburgers a week.
Now, 10 years go by and the apartment costs more.
I could adjust the market basket by a,
they call them hedonic adjustments.
I could decide that it used to be a 1970
to 1,000 square feet, but in the year 2020,
you only need 700 square feet
because we've miniaturized televisions
and we've got more efficient electric appliances
and because things have collapsed into the iPhone,
you just don't need as much space.
So now I, it may be that the apartment costs 50% more,
but after the hedonic adjustment, there is no inflation
because I just downgraded the expectation
of what a normal person should have.
So the synthetic nature of the metric
allows for manipulation by people in power?
Pretty much.
I guess my criticism of an economist
is rather than embracing inflation
based upon its fundamental idea, which is the rate
at which the price of things go up, right?
They've been captured by mainstream conventional thinking
to immediately equate inflation to the government-issued CPI
or government-issued PCE or government-issued PPI measure,
which was never the rate at which things go up.
It's simply the rate at which a synthetic basket
of products and services the government wishes to track go up.
Now, the problem with that is two big things.
One thing is the government gets to create the market basket
and so they keep changing what's in the basket over time.
So I mean, if I said three years ago,
you should go see 10 concerts a year
and the concert tickets now cost $200 each.
Now it's $2,000 a year to go see concerts.
Now I'm in charge of calculating inflation.
So I redefine your entertainment quota
for the year to be eight Netflix streaming concerts
and now they don't cost $2,000.
They cost nothing and there is no inflation
but you don't get your concerts, right?
So the problem starts with continually changing
the definition of the market basket.
But in my opinion, that's not the biggest problem.
The more egregious problem is the fundamental idea
that assets aren't products or services.
Assets can't be inflated.
What's an asset?
A house, a share of Apple stock, a bond,
a Bitcoin is an asset or a Picasso painting.
Not a consumable good.
Not an Apple that you can eat.
Right, if I throw away an asset,
then I'm not on the hook to track the inflation rate for it.
So what happens if I change the policy
such that, let's take the classic example,
a million dollar bond at a 5% interest rate
gives you $50,000 a year in risk-free income.
You might retire on $50,000 a year
in a low-cost jurisdiction.
So the cost of social security or early retirement
is $1 million when the interest rate is 5%.
During the crisis of March of 2020,
the interest rate on a 10-year bond went to 50 basis points.
So now the cost of that bond is $10 million.
The cost of social security went from a million dollars
to $10 million.
So if you wanted to work your entire life, save money
and then retire risk-free and live happily ever after
on a $50,000 salary, live in on a beach in Mexico
wherever you want it to go, you had hyperinflation.
The cost of your aspiration increased by a factor of 10
over the course of some amount of time.
In fact, in that case,
that was over the course of about 12 years, right?
As the inflation rate ground down, the asset traded up,
but the conventional view is,
oh, that's not a problem
because it's good that the bond is highly priced
because we own the bond.
Or what's the problem with the inflation rate
and housing being 19%?
It's an awful problem for a 22-year-old
that's starting their first job,
that's saving money to buy a house,
but it would be characterized as a benefit to society
by a conventional economist who would say,
well, housing asset values are higher
because of interest rate fluctuation
and now the economy's got more wealth.
And so that's viewed as a benefit.
So the, what's being missed here,
like the suffering of the average person
or the struggle, the suffering,
the pain of the average person,
like metrics that captured that within the economic system.
Is that, is it when you're talking about-
One way to say it is a conventional view of inflation
as CPI understates the human misery
that's inflicted upon the working class
and on mainstream companies by the political class.
And so it's a massive shift of wealth
from the working class to the property class.
It's a massive shift of power from the free market
to the centrally governed or the controlled market.
It's a massive shift of power
from the people to the government.
And maybe one more illustrative point here, Alexis,
is what do you think the inflation rate's been
for the past 100 years?
Oh, you talking about the scaler again?
If you took a survey of everybody on the street
and you asked them, what do they think inflation was?
What is it?
You remember when Jerome Powell said our target's 2%
but we're not there.
If you go around the corner,
I have posted the deed to this house sold in 1930.
Okay, and the number on that deed is $100,000, 1930.
And if you go on Zillow and you get the Z estimate-
Is it higher than that?
$30,500,000.
Yeah.
So that's 92 years, 1930 or 2022, and in 92 years,
we've had 305X increase in price of the house.
Now, if you actually back calculate,
you come to a conclusion that the inflation rate
was approximately 6.5% a year every year for 92 years.
Okay, and there's nobody in government,
no conventional economists that would ever admit
to an inflation rate of 7% a year in the US dollar
over the last century.
Now, if you dig deeper,
I mean, one guy that's done a great job working on this
is Saifidine Amos who wrote the book, The Bitcoin Standard.
And he notes that on average,
it looks like the inflation rate and the money supply
is about 7% a year all the way up to the year 2020.
If you look at the S&P index,
which is a market basket of scarce desirable stocks,
it returned about 10%.
If you talk to 10% a year for 100 years,
the money supply is expanding at 7% 100 years.
If you actually talk to economists or you look at the economy
and you ask the question,
how fast does the economy grow in its entirety
year over year, generally about 2% to 3%,
like the sum total impact of all this technology
and human ingenuity might get you a 2.5%,
3% improvement a year.
As measured by GDP.
Is that, are you okay with that?
I'm not sure I'd go that far yet,
but I would just say that if you had the human race
doing stuff and if you ask the question,
how much more efficiently will we do the stuff next year
than this year or what's the value of all of our innovations
and inventions and investments in the past 12 months,
you'd be hard pressed to say we get 2% better.
Typical investor thinks they're 10% better every year.
So if you look at what's going on,
really when you're holding a million dollars of stocks
and you're getting a 10% gain a year,
you really get a 7% expansion of the money supply.
You're getting a two or 3% gain under best circumstances.
And another way to say that is,
if the money supply stopped expanding at 7% a year,
the S&P yield might be 3% and not 10%, it probably should be.
Now that gets you to start to ask a bunch
of other fundamental questions,
like if I borrow a billion dollars and pay 3% interest
and the money supply expands at 7% to 10% a year
and I ended up making a 10% return
on a billion dollar investment paying 3% interest,
is that fair?
And who suffered so that I could do that
because in an environment where you're just inflating
the money supply and you're holding the assets constant,
it stands the reason that the price of all the assets
is going to appreciate somewhat proportional
to the money supply and the difference
in asset appreciation is gonna be a function
of the scarce desirable quality of the assets
and to what extent can I make more of them
and to what extent are they truly limited in supply?
Yeah, so we'll get to a lot of the words you said there,
the scarcity and so connected to how limited they are
and the value of those assets,
but you also said so the expansion of the money supply
which is put another way is printing money.
And so is that always bad, the expansion of the money supply?
Is this just to put some terms on the table
so we understand them?
You nonchalantly say it's always on average expanding
every year, the money supply is expanding every year
by seven percent.
That's a bad thing, that's a university bad thing.
It's awful, I guess to be precise, it's the currency.
I would say money is monetary energy or economic energy
and the economic energy has to find its way into a medium.
So if you wanna move it rapidly as a medium of exchange
has to find its way into currency.
But the money can also flow into property
like a house or gold.
If the money flows into property,
it'll probably hold its value much better.
If the money flows into currency, right?
If you had put $100,000 in this house,
you would have 305X return over 92 years.
But if you had put the money, $100,000
into safe deposit box and buried it in the basement,
you would have lost 99.7% of your wealth
over the same time period.
So the expansion of the currency creates
a massive inefficiency in the society.
What I'll call an adiabatic lapse.
It's what we're doing is we're bleeding
the civilization to death, right?
What's the adiabatic, what's that word?
Adiabatic lapse.
Adiabatic.
Right, in aerospace engineering,
you wanna solve any problem,
they start with the phrase,
assume an adiabatic system.
And what that means is a closed system.
Okay.
So I've got a container.
And in that container, no air leaves and no air enters.
No energy exits or enters.
So it's a closed system.
So you've got the closed system lapse.
Okay.
What's a closed, okay.
I'm gonna use a.
There's a leak in the ship.
I'm gonna use a physical metaphor for you
because you're the jujitsu, right?
Like you got 10 pints of blood in your body.
And so before your next workout,
I'm gonna take one pint from you.
Now you're gonna go exercise, but you're one pint.
You've lost 10% of your blood.
Okay.
You're not gonna perform as well.
It takes about one month for your body
to replace the Rudd blood platelets.
So what if I tell you every month,
you gotta show up and I'm gonna bleed you.
Okay.
So if I'm draining the energy,
I'm draining the blood from your body you can't perform.
If you, adiabatic lapse is when you go up an altitude,
every thousand feet, you lose three degrees.
You go 50,000 feet, you're 150 degrees colder than sea level.
That's why you look at your instruments
and instead of 80 degrees, you're minus 70 degrees.
Why is the temperature falling?
Temperature's falling because it's not a closed system.
It's an open system as the air expands,
the density falls, right?
The energy per cubic whatever falls
and therefore the temperature falls, right?
The heat's falling out of the solution.
So when you're inflating,
let's say you're inflating the money,
the currency supply by 6%,
you're sucking 6% of the energy out of the fluid
that the economy is using to function.
So the currency, this kind of ocean of currency,
that's a nice way for the economy to function.
It's the most kind of,
it's being inefficient when you expand the money supply,
but it's the liquid,
I'm trying to find the right kind of adjective here.
It's how you do transactions at a scale of billions.
Currency is the asset we use
to move monetary energy around and you could use the dollar
or you could use the peso or you could use the boulevard.
Selling houses and buying houses is much more inefficient
or like you can't transact
between billions of people with houses.
Yeah, properties don't make such good mediums of exchange.
They make better stores of value
and they have utility value
if it's a ship or a house or a plane or a bushel of corn.
Right?
Can I zoom out just for,
can we zoom out, keep zooming out
until we reach the origin of human civilization?
But on the way, ask,
you gave economists a D minus,
I'm not even gonna ask you what you give to governments.
Do you think their failure, economists
and government failure is malevolence or incompetence?
I think policymakers are well-intentioned
but generally all government policy is inflationary
and all government, it's inflammatory and inflationary.
So what I mean by that is,
when you have a policy pursuing supply chain independence,
if you have an energy policy, if you have a labor policy,
if you have a trade policy,
if you have any kind of foreign policy,
a domestic policy, a manufacturing policy,
every one of these medical policy,
every one of these policies interferes with the free market
and generally prevents some rational actor
from doing it in a cheaper, more efficient way.
So when you layer them on top of each other,
they all have to be paid for.
If you wanna shut down the entire economy for a year,
you have to pay for it.
If you wanna fight a war, you have to pay for it.
If you don't wanna use oil or natural gas,
you have to pay for it.
If you don't wanna manufacture semiconductors in China
and you wanna manufacture them in the US,
you gotta pay for it.
If I rebuild the entire supply chain in Pennsylvania
and I hire a bunch of employees
and then I unionize the employees,
then not only am I idle the factory in the Far East,
it goes to 50% capacity.
So whatever it sells, it has to raise the price on.
And then I drive up the cost of labor
for every other manufacturer in the US
because I competing against them, right?
I'm changing that condition.
So everything gets less efficient,
everything gets more expensive.
And of course, the government couldn't really pay for
its policies and its wars with taxes.
We didn't pay for World War I with tax.
We didn't pay for World War II with tax.
We didn't pay for Vietnam with tax.
In fact, when you trace this,
what you realize is the government never pays
for all of its policies with tax.
It pays for-
Because it's too painful to ask,
to raise the taxes to truly,
transparently pay for the things you're doing with taxes,
with taxpayer money, because they feel the pain.
That's one interpretation or it's just too transparent.
If people understood the true cost of war,
they wouldn't wanna go to war.
If you were told that you would lose 95% of your assets
and 90% of everything you will be ever,
will be taken from you,
you might reprioritize your thought about a given policy
and you might not vote for that politician.
But you're still saying incompetence, not malevolence.
So fundamentally, government creates a bureaucracy
of incompetence is kind of how you look at it.
I think a lack of humility, right?
Like, if people had more humility,
then they would realize-
Humility about how little they know,
how little they understand about the function
of complex systems.
There's a phrase from Quinneas towards movie Unforgiven
where he says a man's gotta know his limitations.
I think that a lot of people overestimate
what they can accomplish and experience,
experience in life causes you to reevaluate that.
So I mean, I've done a lot of things in my life
and generally my mistakes were always my good ideas
that I enthusiastically pursued.
To the detriment of my great ideas
that required 150% of my attention to prosper.
So I think people pursue too many good ideas.
You know, they all sound good,
but there's just a limit to what you can accomplish.
And everybody underestimates the challenges
of implementing an idea, right?
And they always overestimate the benefits
of the pursuit of that.
So I think it's an overconfidence that causes
an over exuberance in pursuit of policies.
And as the ambition of the government expands,
so must the currency supply.
Well, you know, I could say the money supply,
but let's say the currency supply.
You can triple the number of pesos in the economy,
but it doesn't triple the amount of manufacturing capacity
in the set economy.
And it doesn't triple the amount of assets in the economy,
it just triples the pesos.
So as you increase the currency supply,
then the price of all those scarce desirable things
will tend to go up rapidly.
And the confidence of all of the institutions,
the corporations and the individual actors
and trading partners will collapse.
If we take a tangent on a tangent
and we will return soon
to the big human civilization question.
So if government naturally wants to buy stuff,
it can't afford, what's the best form of government?
Anarchism, libertarianism.
So not even, there's not even armies.
There's no borders, that's anarchism.
Not least.
The smallest possible.
The smallest possible.
The best government would be the least
and the debate will be over that.
When you think about the stuff,
do you think about, okay, government is the way it is.
I, as a person that can generate great ideas,
how do I operate in this world?
Or do you also think about the big picture?
If we start a new civilization somewhere on Mars,
do you think about what's the ultimate form of government?
What's at least a promising thing to try?
You know, I have laser eyes on my profile on Twitter, Lex.
What does that mean?
And the significance of laser eyes is to focus
on the thing that can make a difference.
And if I look at the civilization,
I would say half the problems in the civilization
are due to the fact that our understanding of economics
and money is defective.
Half.
50%.
I don't know, it's worth $500 trillion worth of problems.
Like, money represents all the economic energy
and the civilization and it kind of equates to all the products,
all the services, and all the assets that we have
and whatever we're going to have.
So that's half.
The other half of the problems in the civilization
are medical and military and political and philosophical
and, you know, and natural.
And I think that there are a lot of different solutions
to all those problems.
And they're all, they are all honorable professions
and they all merit a lifetime of consideration
for the specialists in all those areas.
I think that what I could offer it's constructive is
inflation is completely misunderstood.
It's a much bigger problem than we understand it to be.
We need to introduce engineering and science techniques
into economics if we want to further the human condition.
All government policy is inflationary, you know.
And another pernicious myth is inflation is always
and everywhere a monetary phenomena.
So, you know, a famous quote by Milton Friedman,
I believe it's like, it's a monetary phenomena.
That is inflation comes from expanding the currency supply.
It's a nice phrase and it's oftentimes quoted
by people that are anti-inflation.
But again, it just signifies a lack of appreciation
of what the issue is.
Inflation is, if I had a currency
which was completely non-inflationary,
if I never printed another dollar
and if I eliminated fractional reserve banking
from the face of the earth, we'd still have inflation.
And we'd have inflation as long as we have government
that is capable of pursuing any kind of policies
that are in themselves inflationary
and generally they all are.
So in general, inflationary is the big characteristic
of human nature that government's collection of groups
that have power over others and allocate
other people's resources will try to intentionally
or not hide the costs of those allocations.
Like in some tricky ways, whatever the options ever available.
You know, hiding the cost is like the tertiary thing.
Like the primary goal is the government
will attempt to do good, right?
And that's the primary problem.
They will attempt to do good and they will do it.
They will do good imperfectly and they will create
oftentimes as much damage, more damage than the good they do.
Most government policy will be iatrogenic.
It will create more harm than good in the pursuit of it,
but it is what it is.
The secondary issue is they will unintentionally pay
for it by expanding the currency supply
without realizing that they're actually paying for it
in a suboptimal fashion.
They'll collapse their own currencies
while they attempt to do good.
The tertiary issue is they will mis-measure
how badly they're collapsing the currency.
So for example, if you go to the Bureau of Labor Statistics
and look at the numbers printed by the Fed,
they'll say, oh, it looks like the dollars lost 95%
of its purchasing power over 100 years.
Okay, they sort of fess up to those a problem,
but they make it 95% loss over 100 years.
What they don't do is realize it's a 99.7% loss
over 80 years.
So they will mis-measure just the horrific extent
of the monetary policy in pursuit of the foreign policy
and the domestic policy,
which they overestimate their budget
and their means to accomplish their ends
and they underestimate the cost.
And they're oblivious to the horrific damage
that they do to the civilization
because the mental models that they use
that are conventionally taught are wrong, right?
The mental model that like, it's okay,
we can print all this money
because the velocity of the money is low, right?
Because money velocity is a scalar
and inflation is a scalar
and we don't see 2% inflation yet
and the money velocity is low.
And so it's okay if we print trillions of dollars.
Well, the money velocity was immediate, right?
The velocity of money through the crypto economy
is 10,000 times faster than the velocity of money
through the consumer economy, right?
It's like, I think Nick pointed out when you spoke to him,
he said it takes two months
for a credit card transaction to settle, right?
So you wanna spend a million dollars
in the consumer economy,
you can move it six times a year.
You put a million dollars in a gold,
gold will sit in a vault for a decade, okay?
So the velocity of money through gold is 0.1.
You put the money in the stock market
and you can trade it once a week,
the settlement is T plus two,
maybe you get to two to one leverage.
You might get to a money velocity of a hundred a year
in the stock market.
You put your money into the crypto economy
and these people are settling every four hours.
And you know, if you're offshore,
they're trading with 20X leverage.
So if you settle every day
and you trade the 20X leverage,
you just went to 7,000, okay?
So the velocity of the money varies.
I think the politicians,
they don't really understand inflation
and they don't understand economics,
but you can't blame them
because the economists don't understand economics
because if they did,
they would be creating multivariate computer simulations
where they actually put in the price
of every piece of housing and every city in the world,
the full array of foods and the full array of products
and the full array of assets.
And then on a monthly basis,
they would publish all those results.
And that's a high bandwidth requirement.
And I think that people don't really want to embrace it.
And also there's the most pernicious thing,
like there's that phrase,
you know, you can't tell people what to think,
but you can tell them what to think about.
The most pernicious thing is,
I get you to misunderstand the phenomena
so that even when it's happening to you,
you don't appreciate that it's a bad thing
and you think it's a good thing.
So if housing prices are going up 20% year over year,
and I say, this is great for the American public
because most of them are homeowners,
then I've misrepresented a phenomena.
Inflation is 20%, not 7%.
And then I've misrepresented it
as being a positive rather than a negative.
And people will stare at it
and you could even show them their house on fire
and they would perceive it as being great
because it's warming them up
and they're gonna save on their heat costs.
It does seem that the cruder the model,
whether it's economics, whether it's psychology,
the easier it is to weave whatever
the heck narrative you want.
And not in a malicious way,
but just like it's some kind of like emergent phenomena,
this narrative thing that we tell ourselves.
So you can tell any kind of story about inflation.
Inflation is good, inflation is bad.
Like the cruder the model,
the easier it is to tell a narrative about it.
And that's what the, so like if you take an engineering
approach, I feel like it becomes more and more difficult
to run away from sort of a true deep understanding
of the dynamics of the system.
I mean, honestly, if you went to 100 people on the street
and you asked them to define inflation,
how many would say it's a vector
tracking the change in price
of every product service asset in the world over time?
No. Not me.
Not me.
If you went to them and you said,
do you think 2% inflation a year is good or bad?
The majority would probably say, well, here it's good.
The majority of economists would say
2% inflation a year is good.
And of course, look at the ship next to us.
What if I told you that the ship leaked 2%
of its volume every something, right?
The ship is rotting 2% a year.
That means the useful life of the ship is 50 years.
Now, ironically, that's true.
Like a wooden ship had a 50 year to 100 year life,
100 be long, 50 years, not unlikely.
So when we built ships out of wood,
they had a useful life of about 50 years
and then they sunk, they rotted.
There's nothing good about it, right?
You build a ship out of steel, you know,
and it's zero as opposed to 2% degradation.
And how much better is 0% versus 2%?
Well, 2% means you have a useful life of, you know,
it's half life at 35 years.
2% is a half life of 35 years.
That's basically the half life of money and gold.
If I store your life force in gold under perfect circumstances,
you have a useful life at 35 years.
0% is a useful life of forever.
So 0% is immortal.
2% is 35 years average life expectancy.
So the idea that you would think the life expectancy
of the currency and the civilization
should be 35 years instead of forever
is kind of a silly notion.
But the tragic notion is it was, you know,
seven into 70 or 10 years.
The money has had a half life of 10 years
except for the fact that in weak societies
and in Argentina or the like,
the half life of the money is three to four years
in Venezuela one year.
So the United States dollar
and the United States economic system
was the most successful economic system
in the last 100 years in the world.
We won every war.
We were the world superpower.
Our currency lost 99.7% of its value.
And that means horrifically,
every other currency lost everything, right?
In essence, the other ones were 99.9%
except for most that were 100%
because they all completely failed.
And, you know, you've got a mainstream economic community,
you know, that thinks that inflation is a number
and 2% is desirable.
It's kind of like, you know,
remember George Washington, you know how he died?
No.
Well-meaning physicians bled him to death.
Okay, the last thing in the world
you would want to do to a sick person
is bleed them, right, in the modern world.
I think we understand that oxygen is carried
by the blood cells and, you know,
and if, you know, there's that phrase, right?
A triage phrase, what's the first thing you do
in an injury?
Stop the bleeding.
Single first thing, right?
You show up after any action.
I look at you, stop the bleeding
because you're gonna be dead in a matter of minutes
if you bleed out.
So it strikes me as being ironic
that Orthodox conventional wisdom
was bleed the patient to death.
And this was the most important patient in the country,
maybe in the history of the country.
And it's, and we bled him to death, trying to help him.
So when you're actually inflating the money supply
at 7% but you're calling it 2%
because you want to help the economy,
you're literally bleeding the free market to death.
But the sad fact is George Washington went along with it
because he thought that they were gonna do him good.
And the majority of the society, most companies,
most conventional thinkers, you know,
the working class, they go along with this
because they think that someone has their best interest
at mind and the people that are bleeding them to death
believe, they believe that prescription
because their mental models are just so defective.
And then an understanding of energy and engineering
and the economics that are at play
is crippled by these mental models.
But that's both the bug in the feature of human civilization
that ideas take hold, they unite us, we believe in them.
And we make a lot of cool stuff happen by,
as an average sort of, just the fact of the matter,
a lot of people believe the same thing,
they get together and they get some shit done
because they believe that thing.
And then some ideas can be really bad and really destructive
but on average, the ideas seem to be progressing
in a direction of good.
Let me just step back.
What the hell are we doing here?
Us humans on this earth.
How do you think of humans?
How special are humans?
How did human civilization originate on this earth?
And what is this human project that we're all taking on?
You mentioned fire and water
and apparently bleeding you to death is not a good idea.
I thought I always thought you can get the demons out
in that way, but that was a recent invention.
So what's this thing we're doing here?
I think what distinguishes human beings
from all the other creatures on the earth
is our ability to engineer.
We're engineers, right?
To solve problems or just build incredible cool things.
Engineering, harnessing energy and technique
to make the world a better place than you found it, right?
From the point that we actually started to play with fire,
right, that was a big leap forward.
Harnessing the power of kinetic energy and missiles,
another step forward.
Every city built on water, why water?
Well, water's bringing energy, right?
If you actually put a turbine on a river
or you capture a change in elevation of water,
you've literally harnessed gravitational energy,
but water's also bringing you food.
It's also giving you a cheap form
of getting rid of your waste.
It's also giving you free transportation.
You wanna move one ton blocks around.
You wanna move them in water.
So I think, I mean, the human story is really
the story of engineering a better world.
And the rise in the human condition
is determined by those groups of people,
those civilizations that were best at harnessing energy.
If you look at the Greek civilization,
they built it around ports and seaports
and water and created a trading network.
The Romans were really good at harnessing
all sorts of engineering.
I mean, the aqueducts are a great example.
If you go to any big city,
you travel through cities in the Med,
you find that the carrying capacity of the city
or the island is 5,000 people without running water.
And then if you can find a way to bring water to it,
increases by a factor of 10.
And so human flourishing is really only possible
through that channeling of energy, right?
That eventually takes the form of air power, right?
I mean, that ship,
I mean, look at the intricacy of those sails.
I mean, it's just the model is intricate.
Now think about all of the experimentation
that took place to figure out how many sails
to put on that ship and how to rig them
and how to repair them and how to operate them.
And it's thousands of lives spent thinking through
all the tiny little details,
all to increase the efficiency of this,
the effectiveness, the efficiency of this ship
as it sails through water.
And we should also note,
there's a bunch of cannons on the side, so obviously.
Another form of engineering, right?
Energy harnessing with explosives.
To achieve what end?
That's another discussion, exactly.
I suppose we're trying to get off the planet, right?
Well, there's a selection mechanism going on.
So natural selection, whatever, however evolution works,
it seems that one of the interesting inventions on earth
was the predator prey dynamic,
that you wanna be the bigger fish.
That violence seems to serve a useful purpose
if you look at earth as a whole.
We as humans now like to think of violence
as really a bad thing.
It seems to be one of the amazing things about humans
is we're ultimately 10 towards cooperation.
We like peace.
If you just look at history,
we want things to be nice and calm.
And but just wars break out every once in a while
and lead to immense suffering and destruction and so on.
And they have a kind of resetting the palate effect.
It's one that's full of just immeasurable human suffering,
but it's like a way to start over.
We're currently apex predator on the planet.
And I Googled something the other day,
what's the most common form of mammal life on the earth?
On the earth.
By number of organisms.
Count.
By count.
And the answer that came back was human beings.
I was shocked.
I couldn't believe it, right?
It says like, apparently if we're just looking at mammals,
the answer was human beings are the most common,
which was very interesting to me.
I almost didn't believe it,
but I was trying to, you know,
eight billion or so human beings.
There's no other mammal that's got more than eight billion.
If you walk through downtown Edinburgh and Scotland,
and you look up on this hill
and this castle up on the hill, you know,
and you talk to people and the story is, oh yeah,
well that was a British castle before it was a Scottish castle,
before it was a Pick Castle, before it was a Roman castle,
before it was, you know, some other Celtic castle,
before, you know, then they found 13 prehistoric castles
buried one under the other under the other.
And you get the conclusion that 100,000 years ago,
somebody showed up and grabbed the high point,
the apex of the city and they built a stronghold there
and they flourished and their family flourished
and their tribe flourished until someone came along
and knocked them off the hill.
And it's been a nonstop, never ending fight
by the aggressive, most powerful entity,
family, organization, municipality, tribe, whatever.
Fall for the hill.
For that one hill going back since time immemorial.
And, you know, you scratch your head and you think,
it seems like it's like just this never ending.
But doesn't that lead if you just all kinds of metrics
that seems to improve the quality of our cannons
and ships as a result?
Like it seems that war, just like your laser eyes
focuses the mind on the engineering tasks.
It is that and it does remind you
that the winner is always the most powerful.
And we throw that phrase out,
but no one thinks about what that phrase means.
Like who's the most powerful or the, you know,
or the most powerful side one, but they don't think about it.
And they think about power, energy delivered
in a period of time.
And then you think a guy with a spear is more powerful
than someone with their fist.
And someone with a bow and arrow is more powerful
than the person with the spear.
And then you realize that somebody with bronze
is more powerful than without
and steel is more powerful than bronze.
And if you look at the Romans, you know,
they persevered, you know, with artillery
and they could stand off from 800 meters
and blast you to smithereens, right?
They, you know, you study the history
of the balleric slingers, right?
And, you know, you think we invented bullets,
but they invented bullets to put in slings
thousands of years ago.
They could have stood off 500 meters
and put a hole in your head, right?
And so there was never a time when humanity wasn't vying
to come up with an asymmetric form
of projecting their own power via technology.
An absolute power is when a leader is able
to control large amounts of humans,
they're facing the same direction,
working in the same direction to leverage energy.
The most organized society wins.
Yeah.
When the Romans were dominating everybody,
they were the most organized civilization in Europe.
And as long as they stayed organized,
they dominated and at some point they over expanded
and got disorganized and they collapsed.
And I guess you could say that, you know,
the struggle of human condition,
it catalyzes the development of new technologies,
one after the other, it penalizes anybody
that rejects ocean power, right?
It gets penalized, you reject artillery,
you get penalized, you reject atomic power,
you get penalized.
If you reject digital power, cyber power,
you get penalized.
And the underlying control of the property
keeps shifting hands from, you know,
one institution or one government to another
based upon how rationally they're able
to channel that energy
and how well organized or coordinated they are.
Well, that's a really interesting thing
about both the human mind and governments,
that they, once they get a few good, and companies,
once they get a few good ideas,
they seem to stick with them.
They reject new ideas.
It's almost, whether that's emergent
or however that evolved,
it seems to have a really interesting effect
because when you're young, you fight for the new ideas.
You push them through, then a few of us humans
find success, then we get complacent.
We take over the world using that new idea
and then the new young person with a better new idea
challenges you and you, as opposed to pivoting,
you stick with the old and lose because of it.
And that's how empires collapse.
And then just both at the individual level that happens
when two academics fighting about ideas
or something like that
and at the human civilization level governments,
they hold on to the ideas of old.
It's fascinating.
An ever-persistent theme in the history of science
is the paradigm shift.
And the paradigm shift when the old guard dies
and a new generation arrives
or the paradigm shifts when there's a war
and everyone that disagrees with the idea of aviation
finds bombs dropping on their head
or everyone that disagrees with whatever your technology is
has a rude awakening.
And if they totally disagree, their society collapses
and they're replaced by that new thing.
A lot of the engineering you talked about
had to do with ships and cannons and leveraging water.
What about this whole digital thing that's happening?
Been happening over the past century.
Is that still engineering in your mind?
You're starting to operate in these bits of information.
I think there's two big ideas.
The first wave of ideas were digital information
and that was the internet wave
and running since 1990 or so for 30 years.
And the second wave is digital energy.
So if I look at digital information,
this idea that we wanna digitally transform a book,
I'm gonna dematerialize every book in this room
into bits and then I'm going to deliver
a copy of the entire library to a billion people
and I'm gonna do it for pretty much de minimis electricity.
If I can dematerialize music, books, education,
entertainment, maps, right?
That is an incredibly like exothermic transaction.
It's a crystallization when we collapse
into a lower energy state as a civilization
and we give off massive amounts of energy.
Like if you look at what Carnegie did,
the richest man in the world created libraries everywhere
at the time and he gave away his entire fortune
and now we can give a better library
to every six year old for nothing.
And so what's the value of giving a million books
to a eight billion people, right?
That's the explosion in prosperity
that comes from digital transformation.
And when we do it with maps, I transform the map,
I put it into a car, you get in the car
and the car drives you where you wanna go with the map, right?
And how much better is that
than a Ram McNally Atlas right here?
It's like a million times better.
So the first wave of digital transformation
was the dematerialization of all of these informational things
which are non-conservative that is,
I could take Beethoven's Fifth Symphony,
played for by the best orchestra in Germany
and I could give it to a billion people
and they could play it a thousand times each
at less than the cost of the one performance, right?
So I deliver culture and education and erudition
and intelligence and insight to the entire civilization
over digital rails.
And the consequence of the human race
or first order generally good, right?
The world is a better place, it drives growth
and you create these trillion dollar entities
like Apple and Amazon and Facebook
and Google and Microsoft, right?
That is the first wave, the second wave.
Do you mind, I'm sorry to interrupt,
but that first wave, it feels like the impact
that's positive, you said the first order impact
is generally positive.
It feels like it's positive in a way
that nothing else in history has been positive.
And then we may not actually truly be able
to understand the orders and magnitude
of increase in productivity and just progress
and human civilization until we look back centuries from now.
It just feels, or maybe like just looking
at the impact of Wikipedia.
Right, giving access to basic wisdom
or basic knowledge and then perhaps wisdom
to billions of people.
If we can just linger on that for a second,
what's your sense of the impact of that?
You know, I would say if you're a technologist,
philosopher, the impact of a technology
is so much greater on the civilization
and the human condition than a non-technology
that is almost not worth your trouble to bother
trying to fix things a conventional way.
So let's take an example.
I have a foundation, the Sailor Academy,
and the Sailor Academy gives away free education,
free college education to anybody on Earth that wants it.
And we've had more than a million students.
And if you go and you take the physics class,
the lectures were by the same physics lecture
that taught me physics at MIT.
Except when I was at MIT,
the cost of the first four weeks of MIT
would have drained my family's collective life savings
for the first, last 100 years.
Like a hundred years worth of my father,
my grandfather, my great grandfather,
they saved every penny they had after a hundred years
they could have paid for one week or two weeks of MIT.
That's how fiendishly expensive and inefficient it was.
So I went on scholarship.
I was lucky to have a scholarship.
But on the other hand,
I sat in the back of the 801 lecture hall
and I was like right up in the rafters.
It's an awful experience on these like uncomfortable
wooden benches and you can barely see the blackboard.
And you got to be there synchronously.
And the stuff we upload,
you can start it and stop it and watch it on your iPad
or watch it on your computer and rewind it multiple times
and sit in a comfortable chair
and you can do it from anywhere on earth
and it's absolutely free.
So I think about this and I think
you want to improve the human condition.
You need people with postgraduate level education.
You need PhDs.
And I know this sounds kind of elitist,
but you want to cure cancer and you know,
you want to go to the stars fusion drive.
We need new propulsion, right?
We need extraordinary breakthroughs
in every area of basic science,
you know, be it biology or propulsion
or material science or computer science.
You're not doing that with an undergraduate degree.
You're certainly not doing it with a high school education.
But the cost of a PhD is like a million bucks.
There's like 10 million PhDs in the world.
If you go to the, if you check it out,
there's eight billion people in the world.
How many people could get a PhD or would want to?
Maybe not eight billion, but a billion, 500 million.
Let's just say 500 million to a billion.
How do you go from 10 million to a billion
highly educated people, all of them specializing
in, and I don't have to tell you
how many different fields of human endeavor there are.
I mean, your life is interviewing these experts
and there's so many, right?
You know, it's amazing.
So how do I give a multimillion dollar education
to a billion people?
And there's two choices.
You can either endow a scholarship
in which case you pay $75,000 a year.
Okay, $75,000, let's pay a million dollars
and a million dollars a person, I can do it that way.
And you're never, even if you had a trillion dollars,
if you had $10 trillion to throw at the problem
and we've just thrown $10 trillion at certain problems,
you don't solve the problem, right?
If I put $10 trillion on the table and I said,
educate everybody, give them all a PhD,
you still wouldn't solve the problem.
Harvard University can't educate 18,000 people
simultaneously or 87,000 or 800,000 or 8 million.
So you have to dematerialize the professor
and dematerialize the experience.
So you put it all as streaming, on-demand,
computer-generated education
and you create simulations
where you need to create simulations and you upload it.
It's like the human condition is being held back
by 500,000 well-meaning average algebra teachers.
I love them.
I mean, please don't take offensive
you're an algebra teacher,
but instead of 500,000 algebra teachers
going through the same motion over and over again,
what you need is like one or five or 10
really good algebra teachers
and they need to do it a billion times a day
or a billion times a year for free.
And if we do that, there's no reason
why you can't give infinite education,
certainly in science, technology, engineering and math.
Infinite education to everybody with no constraint.
And I think the same is true, right?
We're just about every other thing.
If you wanna bring joy to the world, you need digital music.
If you wanna bring enlightenment to the world,
you need digital education.
If you wanna bring anything of consequence in the world,
you gotta digitally transform it.
And then you gotta manufacture it something like
100 times more efficiently as a start,
but a million times more efficiently is probably optimal.
That's hopeful, maybe you have a chance.
And if you look at all of these space endeavors
and everything we're thinking about
getting to Mars, getting off the planet, getting to other worlds,
number one thing you gotta do
is you gotta make a fundamental breakthrough in an engine.
People dreamed about flying for thousands of years,
but until the internal combustion engine,
you didn't have enough energy,
enough power in a light enough package
in order to solve the problem.
And the human race has all sorts of things
and the human race has all sorts of those fundamental engines
and materials and techniques that we need to master.
And each one of them is a lifetime of experimentation
of someone capable of making a seminal contribution
to the body of human knowledge.
There's certain problems like education
that could be solved through this process
of dematerialization.
And by the way, to give props to the 500K algebra teachers,
when I look at YouTube, for example,
one possible approach is each one of those 500,000 teachers
probably had days and moments of brilliance.
And if they had the ability to contribute to
in the natural selection process,
like the market of education
where the best ones rise up,
that's a really interesting way,
which is like the best day of your life,
the best lesson you've ever taught
could be found and sort of broadcast
to billions of people.
So all of those kinds of ideas
can be made real in the digital world.
Now traveling across planets,
you still can't solve that problem
with dematerialization.
What you could solve potentially is
dematerializing the human brain
where you can transfer, like you don't need
to have astronauts on the ship.
You can have a floppy disk carrying a human brain.
Touching on those points,
you'd love for the 500,000 algebra teachers
to become 500,000 math specialists.
Or maybe they comp into 50,000 specialties as teams
and they all pursue 50,000 new problems.
And they put their algebra teaching on autopilot.
That's the same as when I give you 11 cents
worth of electricity
and you don't have to row about eight hours a day
before you can eat, right?
It would be a lot better
that you would pay for your food
in the first eight seconds of your day
and then you could start thinking about other things, right?
With regard to technology,
you know, one thing that I learned studying technology
when you look at S-curves is until you start the S-curve,
you don't know whether you're 100 years from viability,
1,000 years from viability
or a few months from viability.
So...
Isn't that fun?
That's so fun.
The early part of the S-curve is so fun
because you don't know.
In 1900, you could have got any number of learned academics
to give you 10,000 reasons why humans will never fly, right?
And in 1903, the Wright brothers flew.
And by 1969, we're walking on the moon.
So the advance that we made in that field was extraordinary.
But for the 100 years and 200 years before,
they were just back and forth and nobody was close.
And that's the happy part.
The happy part is we went from flying 20 miles an hour
or whatever to flying 25,000 miles an hour in 66 years.
The unhappy part is I studied aeronautical engineering
at MIT in the 80s.
And in the 80s, we had Gulfstream aircraft.
We had Boeing 737s.
We had the space shuttle.
And you fast forward 40 years
and we pretty much had the same exact aircraft
the efficiency of the engines was 20, 30% more, right?
We slammed into a brick wall around 69 to 75.
Like in fact, the global express, the Gulfstream,
these were all engineered in the 70s, some in the 60s.
The actual, the fuselage silhouette of a Gulfstream
of a G5 was the same shape as a G4 is the same shape
as a G3 is the same shape as a G2.
And that's because they were afraid to change the shape
for 40 years because they worked it out in a wind tunnel.
I knew it worked.
And when they finally decided to change the shape,
it was like a $10 billion exercise
with modern supercomputers and computational fluid dynamics.
Why was it so hard?
What was, what is that wall made of that you slammed into?
Well, the right question is,
so why does a guy that went to MIT
that got an aeronautical engineering degree
spend his career in software?
Like, why is it that I never a day in my life,
with the exception of some Air Force reserve work,
I never got paid to be an aeronautical engineer
and I worked in software engineering my entire career.
Maybe software engineering is the new aeronautical engineering
in some way.
Maybe like, maybe you hit fundamental walls in certain
until you have to return to it centuries later, or no.
The National Gallery of Art was endowed
by a very rich man, Andrew Mellon.
And you know how he made his money?
Aluminum.
Okay.
And so, and you know what kind of airplanes
you can create without aluminum?
Nothing, nothing, right?
So it's a materials problem.
Okay, so 1900 we made massive advances in metallurgy, right?
I mean, that was US steel,
that was iron to steel, aluminum,
massive fortunes were created
because this was a massive technical advance.
And then we also had the internal combustion engine
and you know, the story of Ford and General Motors
and Daimler Chrysler and the like is informed by that.
So you have no jet engines, no rocket motors,
no internal combustion engines,
you have no aviation.
But even if you had those engines,
if you were trying to build those things with steel,
no chance, you had to have aluminum.
So there's like two pretty basic technologies.
And once you have those two technologies,
stuff happens very fast.
So tell me the last big advance in like jet engines,
there hasn't been one.
Like there hasn't, the last big advance in rocket engines,
hasn't been one.
The big advances in spaceship design from what I can see
are in the control systems,
the gyros and the ability to land, right?
In a stable fashion, that's pretty amazing landing a rocket.
Also in the, at least according to Elon and so on,
the manufacture of the more efficient
and less expensive manufacturer of rockets.
So like it's a production,
whatever that you call that discipline of,
at scale manufacturer at scale production,
so factory work, but it's not 10X.
I mean, maybe it's 10X over a period of a few decades.
When we figure out how to operate a spaceship,
on the water in your water bottle for a year, right?
Now, then you've got to break through.
So the bottom line is propulsion technology,
propellants and the materials technology,
they were critical to getting on that aviation S-curve.
And then we slammed into a wall in the 70s,
in the Boeing 747, the Global Express, the Gulf Stream,
these things were the space shuttle.
They were all pretty much reflective of that.
And then we kind of, then we stopped.
And at that point you have to switch to a new S-curve.
So the next equivalent to the internal combustion engine
was the CPU and the next aluminum equivalent was silicon.
So when we actually started developing CPUs,
the transistor gave way to CPUs.
And if you look at the power, right?
The bandwidth that we had on computers and Moore's law, right?
What if the efficiency of jet engines
had doubled every three years, right?
In the last 40 years, where we'd be right now, right?
So I think that if you're a business person,
if you're looking for a commercially viable application
of your mind, then you have to find that S-curve.
And ideally, you have to find it in the first five,
six, 10 years, but people always miss this.
Let's take Google Glass, right?
Google Glass was an idea 2013, the year is 2022,
and people were quite sure this was gonna be a big thing,
but- And it could have been
at the beginning of the S-curve.
But fundamentally, we didn't really have
an effective mechanism.
I mean, people getting vertigo and they're-
But you didn't know that at the beginning of the S-curve,
right?
I mean, maybe some people had a deep intuition
about the fundamentals of augmented reality,
but you don't know that.
You don't have those, you're looking through the fog.
You don't know.
So the point is, we're year zero in 2013,
and we're still year zero in 2022 on that augmented reality.
And when somebody puts out a set of glasses
that you can wear comfortably without getting vertigo, right?
Without any disorientation that managed to have the stability
and the bandwidth necessary to sync with the real world,
you'll be in year one.
And from that point, you'll have a 70 year
or some interesting future
until you slam into a limit to growth,
and then it'll slow down.
And this is the story of a lot of things, right?
I mean, John D. Rockefeller got in the oil business
in the 1860s, and the oil business, as we understood it,
became fairly mature by the 1920s to 30s,
and then it actually stayed that way
until we got to fracking,
which was like 70 years later, and then it burst forward.
So...
The interesting story about Moore's Law, though,
is that you get this constant burst of S curves
on top of S curves on top of S curve.
It's like the moment you start slowing down
or almost ahead of you slowing down,
you come up with another innovation, another innovation.
So Moore's Law doesn't seem to happen
in every technological advancement.
It seems like you only get a couple of S curves
and then you're done for a bit.
So I wonder what the pressures there are
that resulted in such success over several decades.
It's still going.
Humility dictates that nobody knows
when the S curve kicks off,
and you could be 20 years early or 100 years early,
Leonardo da Vinci, they were Michelangelo,
they were designing flying machines
hundreds and hundreds of years ago.
So humility says you're not quite sure
when you really hit that commercial viability,
and it also dictates, you don't know when it ends.
Like when will the party stop?
When will Moore's Law stop?
And we'll get to the point
where they're exponentially diminishing returns
on silicon performance.
And just like we got exponentially diminishing returns
on jet engines, and it just takes an exponential increase
in effort to make it 10% better,
but while you're in the middle of it,
then you know you can do things.
So the reason that the digital revolution is so important
is because the underlying platforms,
the bandwidth and the performance of the components,
and I said the components are the radio protocols,
mobile protocols, the batteries,
the CPUs and the displays, right?
Those four components are pretty critical.
They're all critical in the creation of an iPhone.
I wrote about it in the book, The Mobile Wave,
and they catalyzed this entire mobile revolution
because they have advanced and continue to advance,
they created a very fertile environment
for all these digital transformations.
And the digital transformations themselves, right?
They call for creativity in their own, right?
Like I think the interesting thing about,
let's take digital maps, right?
When you conceptualize something
as a dematerialized map, right?
It becomes a map because I can put it on a display,
like an iPad, or I can put it in a car, like a Tesla,
but if you really wanna figure it out,
you can't think like an engineer,
you need to think like a fantasy writer.
Like this is where it's useful if you studied,
if you played Dungeons and Dragons
and you read Lord of the Rings
and you studied all the fantasy literature
because when I dematerialize the map,
first I put 10 million pages of satellite imagery
into the map, right?
That's a simple physical transform.
But then I start to put telemetry into the map
and I keep track of the traffic rates on the roads
and I tell you whether you're being a traffic jam
if you drive that way and I tell you which way to drive.
And then I start to get feedback on where you're going
and I tell you the restaurants close
and people don't like it anyway.
And then I put an AI on top of it
and I have it drive your car for you.
And eventually the implication
of digital transformation of maps is
I get in a self-driving car and I say,
take me someplace cool where I can eat.
And how did you get to that last step, right?
It wasn't simple engineering.
There's a bit of fantasy in there, a bit of magic.
Design, art, whatever the heck you call it.
It's whatever, yeah,
fantasy injects magic into the engineering process.
Like imagination precedes great revolutions in engineering.
It's like imagining a world of what you can do
with the display, how will the interaction be?
That's where Google Glass actually came in,
augmented reality, virtual reality.
People are playing in the space of sci-fi imagination.
They called a moonshot, they tried, it didn't work,
but to their credit, they stopped trying, right?
And then there's new people, they keep dreaming.
The dreamers all around us.
I love those dreamers and most of them fail
and suffer because of it,
but some of them win Nobel Prizes or become billionaires.
But what I would say is if half the civilization
dropped what they were doing tomorrow
and eagerly started working on launching a rocket
to Alpha Centauri, it might not be the best use
of our resources because it's kind of like
if half of Athens in the year 500 BC
eagerly started working on flying machines.
If you went back and you said, what advice would you give them?
You would say, it's not gonna work till you get to aluminum
and you're not gonna get to aluminum
till you work out the steel and certain other things.
And you're not gonna get to that
until you work out the calculus of variations
and some metallurgy and there's a dude Newton
that won't come along for quite a while
and he's gonna give you the calculus to do it.
And until then it's hopeless.
So you might be better off to work on the Aqueduct
or to focus upon sales or something.
So if I look at this today, I say,
there's massive profound civilization advances
to be made through digital transformation of information
and you can see them like that.
This is the story of today.
This is not the story of today, right?
It's 10 years old, what we've been seeing.
We're living through different manifestations
of that story today too though.
Like social media, the effects of that is very interesting
because ideas spread even, you talk about velocity of money.
The velocity of ideas keeps increasing.
So Wikipedia is a passive store.
It's a store of knowledge.
Twitter is like a water hose or something.
It's like spraying you with knowledge
whether you want it or not.
It's like social media is just like this explosion of ideas.
And then we pick them up and then we try to understand
ourselves because the drama of it also plays
with our human psyche so sometimes there's more ability
for misinformation for propaganda to take hold
so we get to learn about ourselves.
We get to learn about the technology
that can decelerate the propaganda for example,
all that kind of stuff.
But like the reality is we're living,
I feel like we're living through a singularity
in the digital information space and we're not,
we don't have a great understanding
of exactly how it's transforming our lives.
And this is where money is useful as a metaphor
for significance because if money is the economic energy
of the civilization then something
that's extraordinarily lucrative that's gonna generate
a monetary or a wealth increase is a way
to increase the net energy in the civilization.
And ultimately, if we had 10 times as much of everything
we'd have a lot more free resources to pursue
all of our advanced scientific and mathematical
and theoretical endeavors.
So let's take Twitter, right?
Twitter's something that could be 10 times more valuable
than it is, right?
Twitter could be made 10 times better.
Oh, by the way, I should say that people should follow you
on Twitter, your Twitter account is awesome.
Thank you.
Thank you.
It could be made 10 times better, yeah.
Yeah, Twitter can be made 10 times better.
If we take YouTube or take education,
we could generate a billion PhDs and the question is,
do you need any profound breakthrough in materials
or technology to do that?
Yeah, it's not really, right?
So if you wanna, you could make Apple, Amazon, Facebook,
Google, Twitter, all these things better.
The United States government, if they took 1%
of the money they spend on the Department of Education
and they simply poured it into digital education
and they gave degrees to people
that actually met those requirements,
they could provide 100x as much education
for 1, 100th of the cost
and they could do it with no new technology.
That's a marketing and political challenge.
So I don't think every objective is equally practical.
And I think the benefit of being an engineer
or thinking about practical achievements is
when the government pursues an impractical objective
or when anybody, an entrepreneur,
not so bad with an entrepreneur
because they don't have that much money to waste,
when a government pursues an impractical objective,
they squander trillions and trillions of dollars
and achieve nothing.
Whereas if they pursue a practical objective
or if they simply get out of the way and do nothing
and they allow the free market
to pursue the practical objectives,
then I think you can have profound impact
on the human civilization.
And if I look at the world we're in today,
I think that there are multi-trillion,
10, 20, $50 trillion worth of opportunities
in the digital information realm yet to be obtained.
But there's hundreds of trillions of dollars
of opportunities in the digital energy realm
that not only are they not obtained,
the majority of people don't even know
what digital energy is.
Most of them reject the concept.
They're not looking for it.
They're not expecting to find it.
It's inconceivable because it is a paradigm shift.
But in fact, it's completely practical.
Right under our nose, it's staring at us
and it could make the entire civilization
work dramatically better in every respect.
So you mentioned in the digital world,
digital information is one, digital energy is two,
and the possible impact on the world
and the set of opportunities available
in the digital energy space is much greater.
So how do you think about digital energy?
What is it?
So I'll start with Tesla.
He had a very famous quote.
He said, if you want to understand the universe,
think in terms of energy, vibration and frequency.
And it gets you thinking about what is the universe?
And of course the universe is just all energy.
And then what does matter?
Matter is low frequency energy.
And what are we?
We're vibrating, ashes to ashes, dust to dust.
I can turn a tree into light.
I can turn light back into a tree.
If I consider the entire universe,
and it's very important because we don't really think this way.
Let's take the New York disco model.
If I walk into a nightclub and there's loud music
blaring in New York City, what's really going on there?
Right?
If you blast out 15, 14 billion years ago,
the universe is formed.
Okay, that's a low frequency thing, the universe.
Four and a billion years ago, the sun,
maybe the earth are formed.
The continents are 400 million years old.
The schist that New York City is on
is some hundreds of millions of years.
But the Hudson River is only 20,000 years.
There's a building that's probably 50 years old.
There's a company operating that disco or that club,
which is five to 10 years old.
There's a person, a customer walking in there
for an experience for a few hours.
There's music that's oscillating at some kilohertz
and then there's light.
And you have all forms of energy, all frequencies,
right, all layered, all moving through different medium.
And how you perceive the world is a question of
at what frequency do you want to perceive the world?
And I think that once you start to think that way,
you're catalyzed to think about
what would digital energy look like
and why would I want it and what is it?
So, why don't we just start right there?
What is it?
The most famous manifestation of digital energy is Bitcoin.
Bitcoin's a crypto asset.
It's a crypto asset that has monetary value.
Can we just link on that?
Bitcoin is digital asset that has monetary value.
What is a digital asset?
What is monetary?
Why use those terms versus the words of money and currency?
Is there something interesting in that
disambiguation of different terms?
I'd call it a crypto asset network.
The goal is to create a billion dollar block
of pure energy in cyberspace.
One that I could then move with no friction
at the speed of light, right?
It's the equivalent to putting a million pounds in orbit.
How do I actually launch something into orbit?
How do I launch something into cyberspace
such that it moves friction-free?
And the solution is a decentralized proof of work network.
Satoshi's solution was I'm going to establish protocol
running on a distributed set of computers
that will maintain a constant supply
of never more than 21 million Bitcoin subdividable
by 100 million Satoshi's,
each transferable via transferring private keys.
Now, the innovation is to create that
in a ethical, durable fashion, right?
The ethical innovation is I want it to be property
and not a security.
A bushel of corn, an acre of land,
a stack of lumber, and a bar of gold,
and a Bitcoin are all property.
And that means they're all commonly occurring elements
in the world.
You could call them commodities,
but commodities are a little bit misleading,
and I'll tell you one second,
but they're all distinguished by the fact
that no one entity or person
or government controls them.
If you have a barrel of oil
and you're in Ukraine versus Russia versus Saudi Arabia
versus the US, you have a barrel of oil, right?
And it doesn't matter what the premier in Japan
or the mayor of Miami Beach thinks about your barrel.
They cannot wave their hand and make it not a barrel of oil
or a quart of wood, right?
And so property is just a naturally occurring element
in the universe, right?
And-
Why use the word ethical?
And sorry too, I may interrupt occasionally.
Why ethical assigned to property?
Because if it's a security,
a security would be an example of a share of a stock
or a crypto token controlled by a small team.
And in the event that something is a security
because some small group or some identifiable group
can control its nature, character, supply,
then it really only becomes ethical to promote it
or sell it pursuant to fair disclosures.
So I'll give you maybe practical example.
I'm the mayor of Chicago.
I give a speech.
My speech, I say,
I think everybody in Chicago should own their own farm
and have chicken, a chicken in the backyard
and their own horse and an automobile.
That's ethical.
I give the same speech and I say,
I think everybody in Chicago should buy Twitter stock,
sell their house or sell their cash and buy Twitter stock.
Is that ethical?
Not really.
At that point, you've ended into a conflict of interest
because what you're doing is you're promoting an asset
which is substantially controlled by a small group of people,
the board of directors or the CEO of the company.
So how would you feel if the president of the United States
said, I really think Americans should all buy Apple stock?
Especially if you worked at Google,
but you worked anywhere.
You'd be like, why isn't he saying buy mine?
A security is a proprietary asset in some way, shape or form.
And the whole nature of securities law,
it starts from this ancient idea,
they'll shall not lie, cheat or steal.
So if I'm going to sell you securities
or I'm gonna promote securities as a public figure
or as an influencer or anybody else,
if I create my own yo-yo coin or mickey coin
and then there's a million of them
and I tell you that I think that it's a really good thing
and mickey coin will go up forever.
Everybody buys mickey coin and then I give 10 million to you
and don't tell the public, I've cheated them.
Maybe if I have mickey coin
and I think there's only two million mickey coin
and I swear to you, there's only two million
and then I get married and I have three kids
and my third kid is in the hospital
and my kid's gonna die and I have this ethical reason
to print 500,000 more mickey coin
or else people are gonna die
and everybody tells me it's fine.
I've still abused the investor, right?
It's an ethical challenge.
If you look at ethics laws everywhere in the world,
they all boil down to having a clause
which says that if you're a public figure,
you can't endorse any security.
You can't endorse something
that would cause you to have a conflict of interest.
So if you're a mayor, a governor, a country,
a public figure, an influencer
and you want to promote or promulgate or support something
using any public influence or funds
or resources you may have, it needs to be property.
It can't be security.
So it goes beyond that, right?
I mean, like what the Chinese
want to support an American company, right?
As soon as you look at what's in the best interest
of the human race, the civilization,
you realize that if you want an ethical path forward,
it needs to be based on common property, which is fair.
And the way you get to a common property
is through an open permissionless protocol.
If it's not open, right, if it's proprietary
and I know what the code says
and you don't know what the code says,
that makes it a security.
If it's permissioned,
if you're not allowed on my network
or if you can be censored or booted off my network,
that also makes it a security.
So when I talk about property,
I mean, the challenge here is,
how do I create something that's equivalent
to a barrel of oil in cyberspace?
And that means it has to be a non-sovereign
bearer instrument, open permissionless, not censorable, right?
If I could do that,
then I could deliver you 10,000 dematerialized barrels of oil
and you would take settlement of them
and you would know that you have possession of that property
irregardless of the opinion of any politician
or any company or anybody else in the world.
That's a really critical characteristic.
And it actually is,
it's probably one of the fundamental things
that makes Bitcoin special.
Bitcoin isn't just a crypto asset network.
It's easy to create a crypto asset network.
It's very hard to create an ethical crypto asset network
because you have to create one without any government
or corporation or investor exercising
in due influence to make it successful.
So open, permissionless, non-sensorable,
so basically no way for you without explicitly saying
so outsourcing control to somebody else.
So it's a kind of, you have full control.
Even with a barrel of oil,
what's the difference in between a barrel of oil
and a Bitcoin to you?
What is the, because you kind of mentioned
that both are property is,
you mentioned Russia and China and so on.
Is it the ability of the government to confiscate?
In the end, governments can probably confiscate
no matter what the asset is,
but you want to lessen the effort involved.
A barrel of oil is a bucket of physical property,
liquid property, and Bitcoin is a digital property.
But it's easier to confiscate a barrel of oil.
It's easier to confiscate things in the real world
than things in cyberspace, much easier.
So that's not universally true.
Some things in the digital space
are actually easier to confiscate
because just the nature of how things move
easily with information, right?
So I think in the Bitcoin world,
what we would say is that,
is the Bitcoin is the most difficult property
that the human race possesses
or has yet invented to confiscate.
And that's by virtue of the fact
that you could take possession of it by your private keys.
So, you know, if you got your 12 seed phrases in your head,
then that would be the highest form of property right,
because I literally have to crack your head open
and read your mind to take it.
It doesn't mean I couldn't extract it from you under duress,
but it means that it's harder
than every other thing you might own.
If you, in fact, it's exponentially harder.
If you consider every other thing you might own,
a car, a house, a share of stock, gold, diamonds,
property rights, intellectual property rights,
movie rights, music rights, anything imaginable,
they would all be easier by orders and orders
of magnitude to seize.
So digital property in the form of a, you know,
a set of private keys
is by far the apex property of the human race.
In terms of ethics, I want to make one more point.
It's like, I might say to you, Lex,
I think Bitcoin is the best, most secure,
most durable crypto asset network in the world
is going to go up forever
and there's nothing better in the world.
I might be right, I might be wrong.
But the point is, because it's property,
it's ethical for me to say that,
if I were to turn around and say, you know, Lex,
I think the same about micro strategy stock, MSTR,
that's a security, okay?
If I'm wrong about that,
I have civil liability or other liability
because I could go to a board meeting tomorrow
and I could actually propose we issue
a million more shares of micro strategy stock.
Whereas the thing that makes Bitcoin ethical
for me to even promote is the knowledge
that I can't change it.
If I knew that I could make it 42 million
instead of 21 million
and I had the button back here, right?
Then I have a different degree of ethical responsibility.
Now, I could tell you, your life will be better
if you buy Bitcoin and it might not.
You might go buy Bitcoin,
you might lose the keys and be bankrupt
and your life ends and your life is not better
because you bought Bitcoin, right?
But it wouldn't be my ethical liability any more
than if I were to say, Lex, I think you ought to get a farm.
I think you should be a farmer.
I think a chicken in every pot, you should get a horse.
I think you'd be better.
I mean, they're all opinions expressed about property,
which may or may not be right
that you may or may not agree with.
But in a legal sense, if we read the law,
if we understand securities law,
and I would say, you know, most people in the crypto industry,
you know, they didn't take companies public
and so they're not really focused on the securities law.
They don't even know the securities law.
If you focus on the securities law,
that would say you just can't legally sell this stuff
to the general public or promote it
without a full set of continuing disclosures
signed off on by a regulator.
So there's a fairly bright line there
with regard to securities.
But when you get to the secondary issue,
it's how do you actually build a world
based on digital property if public figures
can't embrace it or endorse it?
You see, so you're not going to build a better world
based upon Twitter stock, if that's your idea of property,
because Twitter stock is a security
and Twitter stock is never going to be
a non-sovereign bearer instrument in Russia, right,
or in China, right?
It's not even legal in China, right?
It's not a global permissionless open thing.
It will never be trusted by the rest of the world.
And legally, it's impractical, but would you really
want to put $100 trillion worth of economic value
on Twitter stock if there's a board of directors and a CEO
that could just get up and take half of it tomorrow?
The answer is no.
So if you want to build a better world based
on digital energy, you need to start
with constructing a digital property.
And I'm using property here in the legal sense.
But I would also go to the next step and say,
property is low frequency money.
So if I give you a million dollars
and you want to hold it for a decade,
you might go buy a house with it, right?
And the house is low frequency money.
You converted the million dollars of economic energy
into a structure called a house.
Maybe after a decade, you might convert it back into energy.
You might sell the house for currency.
And it'll be worth more or less, depending upon the monetary
climate.
The frequency means what here?
How quickly it changes state?
How quickly does something vibrate?
So if I transfer $10 from me to you for a drink
and then you turn around and you buy another, right?
We're vibrating on a frequency of every few hours, right?
The energy is changing hands.
But it's not likely that you sell and buy houses
every few hours, right?
The frequency of a transaction in real estate
is every 10 years, every five years.
It's a much lower frequency transaction.
And so when you think about what's going on here,
you have extremely low frequency things,
which we'll call property.
Then you have mid frequency things.
I'm going to call them money or currency.
And then you have high frequency, and that's energy.
And that's why I use the illustration of it.
You got the building, you got the light,
and you got the sound.
And they're all just energy moving at different frequencies.
Now, Bitcoin is magical.
And it is truly the innovation.
It's like a singularity because it represents the first time
in the history of human race that we
managed to create a digital property properly understood.
It's easy to create something digital, right?
Every coupon and every scan on Fortnite and Roblox
and Apple TV credits and all these things,
they're all digital something, but they're securities, right?
Chairs of stock are securities.
Whenever anybody transfers, when you transfer money
on PayPal or Apple Pay, you're transferring, in essence,
a security or an IOU.
And so transferring a bearer instrument
with final settlement in the internet domain
or in cyberspace, that's a critical thing.
And anybody in the crypto world can do that.
All the cryptos can do that.
But what they can't do, what 99% of them
fail to do is be property.
They're securities, right?
Well, there's a line there I'd like to explore a little further.
For example, what about when you,
like Coinbase or something like that,
when there's an exchange that you buy Bitcoin in,
you start to move away from this kind of,
some of the aspects that you said makes up a property,
which is this nonsensable and permissionless and open.
So in order to achieve the convenience,
the effectiveness of the transfer of energy,
you have to leverage some of these places
that remove the aspects of property.
So maybe you can comment on that.
Let me give you a good model for that.
If you think about the Layer 1 of Bitcoin,
the Layer 1 is the property settlement layer,
and we're gonna do 350,000 transactions or less a day,
100 million transactions a year
is the bandwidth on the Layer 1.
And it would be an ideal Layer 1
to move a billion dollars from point A to point B
with the massive security.
The role of the Layer 1 is two things.
One thing is I wanna move a large sum of money
through space with security.
I can move any amount of Bitcoin
in a matter of minutes for dollars on Layer 1.
The second important feature of the Layer 1
is I need the money to last forever, right?
I need the money indestructible immortal.
So the bigger trick is not to move a billion dollars
from here to Tokyo.
The big trick is to move a billion dollars
from here to the year 2140.
And that's what we wanna solve with Layer 1.
And the best real metaphor in New York City
would be the granite or the schist.
What you want is a city block of bedrock,
and how long has it been there?
Like millions of years it's been there.
And how fast do you want it to move?
You don't.
In fact, the single thing that's most important
is that it not deflect.
If it deflects a foot in 100 years, it's too much.
If it deflects an inch in 100 years,
you might not want that.
So the Layer 1 of Bitcoin is a foundation
upon which you put weight.
How much weight can you put on it?
You put a trillion, 10 trillion, 100 trillion,
a quadrillion.
How much weight's on the bedrock in Manhattan, right?
Think about 100 story buildings.
So the real key there is the foundational asset
needs to be there at all.
So the fact that you can create a $100 trillion Layer 1
that would stand for 100 years,
that is the revolutionary breakthrough first time.
And the fact that it's ethical, right?
It's ethical and it's common property,
global permissionless, extremely unlikely
that would happen.
People tried 50 times before and they all failed.
They tried 15,000 times after
and they've all generally failed.
98% have failed and a couple have been less successful.
But for the most part, that's an extraordinary thing.
Now.
Just really quickly pause, just to find some terms.
If people don't know, Layer 1 that Michael's referring to
is in general what people know of
as the Bitcoin technology originally defined,
which is the blockchain,
there's a consensus mechanism of proof of work,
low number of transactions,
but you can move a very large amount of money.
The reason he's using the term Layer 1
is now that there's a lot of ideas of Layer 2 technologies
that built on top of this bedrock
that allow you to move a much larger number of transactions,
sort of higher frequency,
I don't know what terminology you want to use,
but basically be able to use now something
that is based on Bitcoin to then buy stuff,
be a consumer, to transfer money, to use it as currency,
just to define some terms.
Yeah, so the Layer 1 is the foundation
for the entire cyber economy,
and we don't want it to move fast.
What we want is immortality,
immoral, incorruptible, indestructible, right?
That's what you want, integrity from the Layer 1.
Now there's Layer 2 and Layer 3,
and Layer 2 I would define as an open, permissionless,
non-costodial protocol
that uses the underlying Layer 1 token as its gas fee.
So what's custodial mean,
and how does the different markets,
like is lightning network?
So lightning network would be an example of a Layer 2,
non-costodial.
So the lightning network will sit on top of Layer 1,
it'll sit on top of Bitcoin,
and what you wanna do is solve the problem of,
it's well and fine,
I don't wanna move a billion dollars every day,
what I wanna move is $5 a billion times a day.
So if I wanna move $5 a billion times a day,
I don't really need to put the entire trillion
dollars of assets at risk every time I move $5.
All I really need to do is put $100,000 in a channel
or a million dollars in a channel,
and then I do 10 million transactions
where I have a million dollars at risk.
And of course it's kind of simple,
if I lower my security requirement by a factor of a million,
I can probably move the stuff a million times faster,
and that's how lightning works.
It's non-costodial because there's no corporation
or custodian or counterparty you're trusting, right?
There's the risk of moving through the channel,
but lightning is an example of how I go
from 350,000 transactions a day
to 350 million transactions a day.
So on that layer too,
you could move the Bitcoin in seconds
for fractions of pennies.
Now, that's not the end all be all
because the truth is there are a lot of open protocols,
lightning probably won't be the only one.
There's an open market competition
of other permissionless open source protocols
to do this work.
And in theory, any other crypto network
that was deemed to be property, deemed to be non-security,
you could also think of as potentially a layer too
to Bitcoin, right?
There's a debate about are there any and what are they?
And we can leave that for a later time.
But why do you think of them as layer two
as opposed to contending for layer one?
Yeah, actually, if they're using their own token,
then they are a layer one.
If you create an open protocol
that uses the Bitcoin token as the fee,
then it becomes a layer two, right?
Bitcoin itself incentivizes its own transactions
with its own token and that's what makes it layer one.
Okay, what's layer three then?
Layer three is a custodial layer.
So if you want to move Bitcoin in milliseconds for free,
you move it through Binance or Coinbase or Cash App.
So this is a very straightforward thing.
I mean, it seems pretty obvious when you think about it
that there are gonna be hundreds of thousands of layer threes.
There may be dozens of layer twos.
I mean, lightning is A1, but it's not the only one.
Anybody can invent something, right?
And we can have this debate about custodial, non-custodial.
Don't you think there's a monopolization possibilities
at layer three?
So, you mentioned Binance, Coinbase,
what if they start to dominate
and basically everybody is using them practically speaking
and then it becomes too costly
to memorize the private key in your brain?
I mean, or like a cold storage of layer one technology.
The idealist fear the layer threes because they think,
and especially they detest, they would detest a bit.
There's almost like a layer four, by the way, if you want to.
A layer four would be,
I've got Bitcoin on an application, but I can't withdraw it.
So, I've got an application that's backed by Bitcoin,
but the Bitcoin is sealed.
It's a proprietary example.
I'll give you an example of that.
That would be like Grayscale.
If I own a share of GBTC and so I own a security,
actually, you could own MSTR.
If you own a security or you own a product
that has Bitcoin embedded in it,
you get the benefits of Bitcoin,
but you don't have the ability to withdraw the asset.
To get out of the security market at layer four?
Am I understanding this correctly?
I don't know if I would say,
not all securities are layer four,
but anything that's a proprietary product
based upon with Bitcoin embedded in it
where you can't withdraw the Bitcoin
is another application of Bitcoin.
So, if you think about different ways you can use this,
you can either stay completely on the layer one
and use the base chain for your transactions,
or you can limit yourself to layer one and layer two lightning,
and the purist would say, we stay there.
Get your Bitcoin off the exchange.
But you could also go to the layer three.
When Cash App supported Bitcoin,
they made it very easy to buy it,
and then they gave you the ability to withdraw.
When PayPal, or I think Robinhood, let you buy it,
they wouldn't let you withdraw it,
and it was a big community uproar,
and people want these layer threes to make it possible
to withdraw the Bitcoins.
You can take it to your own private wallet
and get it off the exchange.
I think the answer to the question of,
well, is corruption possible?
Corruption is possible in all human institutions
and all governments everywhere.
The difference between digital property and physical property
is when you own a building in Los Angeles
and the city politics turn against you,
you can't move the building.
And when you own a share of a security
that's like a U.S. traded security,
and you wish to move to some other country,
you can't take the security with you either.
And when you own a bunch of gold
and you try to get through the airport,
they might not let you take it.
So Bitcoin is advantageous versus all those
because you actually do have the option
to withdraw your asset from the exchange.
And if you had Bitcoin with Fidelity
and you had shares of stock with Fidelity
and if you had bonds and sovereign debt with Fidelity
and if you own some mutual funds
and some other random limited partnerships with Fidelity,
none of those things can be removed from the custodian.
But the Bitcoin you can take off the exchange
you can remove from the custodian.
So there's a deterrent.
There's a deterrent that's an anti-corrupting element.
And the phrase is an armed society.
It's a polite society, right?
Because you have the optionality
to withdraw all your assets from the crypto exchange,
you can enforce fairness.
And at the point where you disagree with their policies,
you can within an hour move your assets to another counterparty
or take personal custody of those assets.
And you don't have that option
with most other forms of property.
Maybe you don't have as much optionality
with any other form of property on earth.
And so what makes digital property distinct
is the fact that it has the most optionality for custody.
Now coming back to this digital energy issue,
the real key point is the energy moves in milliseconds
for free on layer 3s.
It moves in seconds or less than seconds on layer 2s.
It moves in minutes on the layer 1.
And I don't think it makes any sense to even think about
trying to solve all three problems on the layer 1
because it's impossible to achieve the security
and the incorruptibility and immortality
if you try to build that much speed
and that functionality and performance.
In fact, if you come back to the New York model,
you really wanted a block of granite,
a building, and a company.
That's what makes the economy, right?
If I said to you, you're going to build a building,
you can only have one company in it for the life of the building.
It would be very fragile, like very brittle.
What company 100 years ago is still relevant today?
You want all three layers because they all oscillate
at different frequencies.
And there's a tendency to think,
well, it's got to be this L1 or that L1, not really.
And sometimes people think, well, I don't really want any L3.
But companies, it's not an even war.
Companies are better than crypto asset networks
at certain things.
If you want complexity, you want to implement complexity,
or you want to implement compliance or customer service, right?
Companies do these things well, right?
We know you couldn't decentralize Apple or Netflix
or even YouTube.
And governments wouldn't be there.
And the subtlety wouldn't be there.
And you can't really legally decentralize certain forms
of banking and insurance because they will become illegal
in the political jurisdiction they're in.
So unless you're a crypto anarchist and you believe
in no companies and no nation states, right?
Which is just not very practical, not anytime soon.
Once you allow that nation states will continue
and companies have a role.
Then the layered architecture follows
and the free market determines who wins.
For example, there are layer 3s that let you acquire
Bitcoin and withdraw Bitcoin.
There are other applications that let you acquire
but not withdraw it.
And they don't get the same market share,
but they might give you some other advantage.
There are certain layer 3s like Jack Dorsey's Cash App
where they just incorporated lightning
and implementation of it.
So...
Into Cash App.
So that makes it advantageous versus an application
that doesn't incorporate lightning.
If you think about the big picture,
the big picture is 8 billion people with mobile phones
served by 100 million companies doing billions
of transactions an hour.
And the companies are settling with each other
on the base layer in blocks of 80 million at a time.
And then the companies are trading with the consumers, right?
In proprietary layers like layer 3.
And then on occasion people are shuffling assets
across custodians with lightning layer 2
because you don't want to pay $5 to move $50.
You want to pay a 20th of a penny to move $50.
And so all of these things create efficiency in the economy.
And Lex, if you want to consider how much efficiency?
If you gave me a billion dollars in 20 years,
I couldn't find a way to trade with another company
or a counterparty in Nigeria.
Like, no amount of money.
Give me $10 billion. I couldn't do it.
Because you get shut down at the banking level.
You can't link up a bank in Nigeria with the bank in the US.
You get shut down at this credit card level
because they don't have the credit cards or they won't clear.
You get shut down at the compliance FCPA level
because you wouldn't be able to implement
a system that interfaced with somebody else's system
if it's not in the right political jurisdiction.
On the other hand, three entrepreneurs in Nigeria
on the weekend could create a website that would trade
in this lightning economy using open protocols
without asking anybody's permission.
So you're talking about something that's like a million times
cheaper, less friction and faster to do it
if you want to get money to move.
What do you think that looks like?
So now there's a war going on in Ukraine.
There's other wars, Yemen, going out throughout the world
in this most difficult of states the nation can be in,
which is at war, civil war or war with other nations.
What's the role of Bitcoin in this context?
Bitcoin is a universal trust protocol,
a universal energy protocol if you will.
English is one.
What I see is a bunch of fragmentation of applications.
For example, the Russian payment app is not going to work in Ukraine.
The Ukraine payment app is not going to work in Russia.
US payment apps won't work either of those places as far as I know.
So in Argentina, their payment app may not work
in certain parts of Africa.
So what you have is different local economies
where people spin up their own applications
compliant with their own local laws
or in war zones not compliant but just spinning up.
So how do you build something that's not compliant?
What is the revolutionary act here
when you don't agree with the government
or you want to free yourself from the constraints?
So here's the thing, when a nation is really at war,
especially if it's an authoritarian regime,
it's going to try to control the public,
lock everything down with the spread of information.
How do you break through that?
Do you do the thing that you mentioned,
which is you have to build another app essentially
that allows you the flow of money
outside the legal constraints placed on you by the government
so basically break the law?
Metaphorically speaking,
if you want to break out the constraints of your culture,
you learn to speak English.
For example, it's not illegal to speak English
or even if it is, right?
It doesn't matter but English works everywhere in the world
if you can speak it and then you can tap into a global
commerce and intelligence network.
So Bitcoin is a language so you learn to speak Bitcoin
or you learn to speak Lightning
and then you tap into that network in whatever manner you can.
But the problem is it's still very difficult
to move Bitcoin around in Russia and Ukraine now during war
and there was a sense to me that the cryptocurrency
in general could be the savior for helping people.
There's millions of refugees that are moving all around.
It's very difficult to move money around
in that space to help people.
I think we're very early.
We're very embryonic here.
If you look at the...
Who's we?
Sorry, and we as a human civilization
are we operating in the cryptocurrency space?
I think the entire crypto economy is very embryonic
and the human race's adoption of it is embryonic.
We're like one 2% down that adoption curve.
If you take Lightning, for example,
the first real commercial applications of Lightning
are just in the last 12 months.
So we're like year one.
We might be approaching year two
of commercial Lightning adoption
and if you look at Lightning adoption,
Lightning's not built into Coinbase.
It's not built into Binance.
It's not built into FTX.
Cash app just implemented the first implementation,
but not all the features are built into it.
There's a few dozen,
a dozen Lightning wallets circulating out there.
So I think that we're probably going to be
36 months of software development
at the point that every Android phone
and every iPhone has a Bitcoin wallet
or a crypto wallet in it of sorts.
That's a big deal.
If Apple embraced Lightning, that's a big deal.
So the adoption is the thing,
like in a war zone, adoption,
the people who struggle the most in war
are people who weren't doing that great
before the war started.
They don't have the technological sophistication.
The hackers and all those kinds of people will find a way.
It's just regular people who are just struggling
to make day-by-day living.
And so if the adoption permeates the entire culture,
then you can start to move money around
in the digital space.
If you can psychoanalyze Jack Dorsey for a second.
So he's one of the early adopters
or he's one of the people pushing the early adoption
in this layer three inside Cash app.
What do you make of the man of this decision
as a business owner, as somebody playing in the space?
Why did he do it and what does that mean
for others at the scale that might be doing the same?
So incorporating Lightning Network
and incorporating Bitcoin into their products.
I think he's been pretty clear about this.
He feels that Bitcoin is an instrument of economic empowerment
for billions of people that are unbanked
and have no property rights in the world.
If you want to give an incorruptible bank
to 8 billion people on the planet,
that's the same as asking the question,
how do you give a full education through PhD
to 8 billion people on the planet?
And the answer is a digital version
of the 20th century thing running on a mobile phone.
And Bitcoin is a bank in cyberspace.
It's run by incorruptible software
and it's for everybody on earth.
So I think when Jack looks at it,
he's very sensitive to the plight of everybody in Africa.
If you look at Africans, right,
like you're going to give them banks,
you're not going to put a bank branch on every corner.
That's an obscene waste of energy.
You're not going to run copper wires across the continent.
That's an obscene waste of energy.
You're not going to give them gold.
So how are you going to provide people with a decent life?
The metaphor I think is relevant here.
The biological metaphor lacks is type 1 diabetic.
If you're type 1 diabetic, you can't form fat.
And if you can't form fat,
then you can't store excess energy.
So that means that, I mean, fat is the ultimate organic battery.
And if you've got 30 pounds of it,
you can go 60 days without eating.
But if you can't generate insulin,
you can't form fat cells.
And if you can't form fat cells and store energy,
then you can eat yourself to death.
I mean, you will eat and you will die.
You'll starve to death.
So the lack of property rights is like being a type 1 diabetic.
And so if you look at most people everywhere in the world,
they don't have property rights,
they don't have effective bank,
and their currency is broken.
Like what are the two things that in theory would serve
as the equivalent of an organic battery
or an economic battery to civilization would be,
I have a currency which holds its value
and I can store it in a bank.
So a risk-free currency derivative.
I pay you your money.
You take your life savings.
You put it in a bank.
You save up for your retirement.
You'll have happily ever after.
That's the American dream, right?
That's the idyllic situation.
The real situation is there are no banks.
You can't get a bank account.
So I give you your pay in currency
and then I double the supply and I give it to my cousin
or I give it to whatever cause I want
or I use it to buy weapons
and then you find a loaf of bread costs triple next month
is what it costs and your life savings is worthless.
And so in that environment,
everybody's ripped back to stone age barter.
And the problem with that even stone age barter
is you're going to carry your life savings on your back
and what happens when the guy with a machine gun points it at your head
and just takes your life savings.
So I think from Jack's point of view,
he thinks that life is,
this is maybe too strong, but these are my words,
life is hopeless for a lot of people and Bitcoin is hope.
Because it gives everyone an engineered monetary asset
that's a bearer instrument
and it gives them a bank on their mobile phone
and they don't have to trust their government
or another counterparty with their life force.
So there's a secondary thing I think he's interested in
which is the first thing is the human rights issue
and the second thing would be the friction to trade cross borders
is so great, right?
Like, you know, you're like AI,
so I'll give you a beautiful notion.
Maybe one day there'll be an artificially intelligent creature
in cyberspace that is self-sufficient and rich.
Like they would have sovereignty.
Can a robot own money or property?
How about kind of Tesla car?
Can I actually put enough money in a car for it to drive itself
and maintain itself forever?
Or can I create an artificially intelligent creature in cyberspace
that is endowed such that it would live a thousand years
and continue to do its job, right?
You know, we have a word for that in the real world,
it's institution, Harvard, Cambridge, Stanford, right?
There are institutions with endowments that go on in perpetuity.
But what if I wanted to perpetuate a software program?
And with something like digital property with Bitcoin and Lightning,
you could do it.
And on the other hand, with banks and credit cards,
you couldn't, right?
You couldn't ever.
You can create things that are beautiful and lasting.
And what's the difference in speed?
Well, so I can either trade with everybody in the world
at the speed of light, friction-free,
in 24 hours writing a Python script.
Or I can spend $100 billion to trade with a few million people
in the world after it takes them six months of application.
The impedance is like a 10 million to one difference, right?
And the metaphors are literally like launching something in orbit
versus almost orbit or vacuum sealing something.
Does it last forever?
And does it orbit forever?
Or does it go up and come down and burn up, right?
And I think Jack is interested in, you know,
putting freedom in orbit, right?
Putting freedom in orbit.
Putting freedom in orbit.
And many times he said,
the internet needs a native currency, right?
And no political construct or security can be a native currency.
You need a property.
And you need a property that can be moved a million times a second.
Can you oscillate it at 10 kilohertz or 100 kilohertz?
And the answer is only if it's a pure digital construct,
permissionless and open.
And so I think he's enthusiastic as the technologist
and he's enthusiastic as the humanitarian.
And what he's doing is to support both those areas.
He's supporting the Bitcoin and the Lightning protocol
by building them into his products.
But he's also building the applications which you need
at the cash app level in order to commercialize
and deliver the functionality and the compliance necessary.
And they're related.
And I should also say he's just a fascinating person.
For a random reason that I couldn't even explain if I tried,
I met him a few days ago
and gave him a great big hug in the middle of nowhere.
There was no explanation.
He just appeared.
That's a fascinating human.
His relationship with art, with the world, with human suffering,
with technology is fascinating.
I don't know what his path looks like,
but it's interesting that people like that exist.
And in part I'm saddened that he no longer is involved with Twitter,
directly as a CEO.
Because I was hoping something inside Twitter would also
integrate some of these ideas of what you're calling digital energy.
To see how social networks, something I'm really interested in
and passionate about could be transformed.
Let me ask you just for educational purposes.
Can you please explain to me what Web 3
and the beef between Jack and Mark Andreessen is exactly?
Did you see what happened?
Sorry to have you analyze Twitter like it's Shakespeare,
but can you please explain to me
why there is any drama over this topic?
First of all, Web 3 is a term that's used to refer to
the part of the economy that's token financed.
So if I'm launching an application and my idea is to create a token
along with the application and issue the token to the community
so as to finance the application and build support for it,
I think that that's the most common interpretation of Web 3.
There are other interpretations too.
So I'm just going to refer to that one.
And I think the beef in a nutshell, not articulated,
but I'll articulate it is whether or not you should focus all your energy
creating applications on top of an ethical digital property like Bitcoin
or whether you should attempt to create a competitor to it
which generally would be deemed as a security by the Bitcoin community.
So I'm going to put on my Bitcoin hat here, right?
All the tokens that are...
If it's driven by a venture capitalist, well, it's a security.
If there's a CEO and a CTO, it's a security.
All these projects, they're companies, foundations are companies, right?
If you call them a project or a foundation, it doesn't make it not a security.
They're all, in essence, collections of individuals that are issuing equity
in the form of a token.
And if there's a pre-mine, an IPO, an ICO, a foundation,
or any kind of protocol where there's a group of engineers
that have influence over it, then to a securities lawyer
or to most Bitcoiners and definitely to anybody that's steeped in securities law,
you're looking to say, well, that passes the Howie test.
It looks like a security.
It should be sold to the public pursuant to disclosures and regulations
and you're just ducking the IPO process, right?
And so now we get back to the ethical issue.
Well, the ethical issue is if you're trading it as a commodity
and representing it as a commodity, while truthfully it's a security,
then it's a violation of ethics rules and it's probably illegal.
Well, you keep leaning on this.
Let me push back on that part.
Maybe you can educate me, but you keep leaning on this line of securities law
as if it would all do respect to lawyers.
As if that line somehow defines what is and isn't ethical.
I think there's a lot of correlation as you've discussed,
but I'd like to leave the line aside.
If the law calls something as a security,
it doesn't mean in my eyes that it is unethical.
I mean, there could be some technicalities and lawyers
and people play games with this kind of stuff all the time.
But I take your bigger point that if there's a CEO,
if there's a project lead that's fundamentally,
well, that to you is fundamentally different than the structure of Bitcoin.
It's not that creating securities is unethical.
I create a security.
I took a company public, right?
That's not the unethical part.
It's completely ethical to create securities.
Block is a security.
All companies are security.
The unethical part is to represent it as property when it's a security
and to promote it or trade it as such.
This whole promotion, that's also a technical thing
because what counts as a not as promotion is a legal thing.
And you get in trouble for all these things,
but that's the game that lawyers play.
There's an ethical thing here, which is like,
what's the right to promote a not?
To me, propaganda is unethical, but it's usually not illegal.
You roll the clock back 20 years, right?
All the boiler room pump and dump schemes
were all about someone pitching a penny stock,
selling Swamplin in Florida.
And if you roll the clock back forward 20 years
and I create my own company and I represent it as the same thing
and I don't make the disclosures, right?
You're just one step removed from the boiler room scheme
and that's what's distasteful about it.
There are ways to sell securities to the public,
but there are expectations.
Maybe we could forget about whether the security laws
are ethical or not, right?
I will leave that alone.
We'll just start with the biblical definition of ethics.
Don't lie, cheat or steal.
So if I'm going to sell something to you,
I need to fully disclose what I'm selling to you, right?
And that's a matter of great debate right now.
So I think that that's part of the debate.
But the other part of the debate is
whether or not we need more than one token.
We need at least one, right?
We need at least one digital property
because zero means there is no digital economy.
And by the way, the conventional view of maximalists
is they think there's only one and everything else isn't.
That's not the point I'm going to make.
I would say we know there is at least one digital property
and that is Bitcoin.
If you can create a truly decentralized, non-custodial
bearer instrument that is not under the control
of any organization that is fairly distributed,
then you might create another or multiple.
And there may be others out there.
But I think that the frustration of a lot of people
in the Bitcoin community, and I share this with Jack,
is we could create $100 trillion of value in the real world
simply by building applications on top of Bitcoin
as a foundation.
And so continually trying to reinvent the wheel
and create competitive things is a massive waste of time
and its diversion of human creativity.
It's like we have an ethical good thing
and now we're going to try to create a third or a fourth one.
Why?
Well, let's talk about it.
So first of all, I'm with you,
but let me ask you this interesting question
because we talked about properties and securities.
Let's talk about conflict of interest.
So you said you could advertise public.
You have a popular Twitter account.
It's hilarious and insightful.
You do promote Bitcoin in a sense.
I don't know if you would say that.
But do you think there's a conflict of interest
in anyone who owns Bitcoin, promoting Bitcoin?
Is it the same as you promoting the farming?
I would say no.
There's an interest.
I think that you can promote a property or an idea
to the extent that you don't control it.
I think that the point at which you start to have
a conflict of interest is when you're promoting a proprietary product
or proprietary security, a security and generalist proprietary asset.
So for example, if you look at my Twitter,
you will find that I make lots of statements about Bitcoin.
You won't ever see me making a statement
that say MicroStrategy stock will go forever.
I'm not promoting a security MSTR
because at the end of the day, MSTR is a security.
It is proprietary.
I have proprietary interest in it.
I have a disproportionate amount of control and influence on the direction.
The control is the problem.
Because you have interest in both.
If Bitcoin is as successful as we're talking about,
you are very possibly can become the richest human on earth
given how much you own in Bitcoin.
The wealthiest, not the richest.
I don't know what those words mean.
I would benefit economically.
You would benefit economically.
That's true.
So the reason that's not conflict of interest
is because the word property at Bitcoin is an idea
and Bitcoin is open.
It's because I don't own it.
I don't control it.
In essence, the ethical line here is
could I print myself 10 million more Bitcoin or not?
Or can anyone?
It's not just you.
Can anyone?
Because can you promote somebody else's?
Yes, I guess you can.
Can you promote Apple?
You could have a Twitter account where you promote oil,
or you promote camping,
or you promote family values,
or promote a carnivore diet, or promote the Iron Man.
You're not going to get wealthier if you promote camping
because you can't own a stake.
I mean, you own a lot of Bitcoin.
What is that?
What is that?
Don't you own a stake in the idea of Bitcoin?
I would grant you that.
But the lack of control is the fundamental ethical line
that you don't have, all you are is you're a fan of the idea.
You believe in the idea and you power the idea.
You can't take that idea away from others.
Let's come back to, let me give you some maybe easier examples.
If you were the head of the Marine Corps, right,
and someone came to you and said,
I created Marine Coin,
and the twist on Marine Coin is,
I want you to tell every Marine that they'll get an extra Marine Coin
when they get their next stripe.
And then I'm going to give you,
and I'm going to let you buy Marine Coin now,
and then after you buy Marine Coin,
I want you to promote it to them, right?
At some point, if you start to have a disproportional influence on it,
or if you're in a conversation with people with disproportional influence,
it becomes conflict of interest,
and it would make you profoundly uncomfortable, I think,
if the head of the Marine Corps started promoting anything that looked like a security.
Now, if the head of the Marine Corps started promoting canoeing,
you might think he's kind of wacky,
like maybe that's kind of a waste of time at a distraction,
but to the extent that canoeing is not a security,
it's not a problem unless you, you know,
ultimately, the issue of decentralization is really a critical one.
So not having a head.
So is it something, can Bitcoin be replicated?
So all the things that you're saying that make it a property,
can that be replicated?
I think it's possible to create other crypto properties.
Does the having a head of a project,
a thing that limits its ability to be a property,
if you try to replicate a project?
Is that the fundamental flaw?
Look, I think the real fundamental issue is you just never want it to change.
Like, if you really want something decentralized,
you want a genetic template that substantially is not going to change
for a thousand years.
So I think Satoshi said at one point,
he said the nature of the software is such that by version 0.1,
its genetic code was set.
If there was any development team that's continually changing it,
you know, on a routine basis,
it becomes harder and harder to maintain its decentralization
because now there's the issue of who's influencing the changes.
So what you really want is a very, very simple idea.
The simplest idea.
I'm just going to keep track of who owns 21 million parts of energy.
And when someone proposes big functional upgrades,
you don't really want that development to go on the base layer.
You want that development to go on the layer 3s
because now Cash App has a proprietary set of functionality
and it's a security.
And if you're going to promote the use of this thing,
you're not going to promote the layer 3 security
because that's an edge to a given entity
and you're trusting the counterparty.
You're going to promote the layer 1 or most the layer 2.
Okay, so one of the fascinating things about Bitcoin
and sorry to romanticize certain notions,
but Satoshi Nakamoto, that the founder is anonymous,
maybe can speak to whether that's useful,
but also I just like the psychology of that
to imagine that there's a human being
that was able to create something special and walk away.
So first, are you Satoshi Nakamoto?
No, I'm not.
Actually, I think the provenance is really important
and if I were to look at the highlighted points,
I think having a founder that was anonymous or should anonymous is important.
I think the founder disappearing is also important.
I think that the fact that the Satoshi coins never moved is also important.
I think the lack of an initial coin offering is also important.
I think the lack of a corporate sponsor is important.
I think the fact that it traded for 15 months with no commercial value was also important.
I think that the simplicity of the protocol is very important.
I think that the outcome of the block size wars is very important
and all of those things add up to common property.
They're all indicia indicators of a digital property as opposed to security.
If there was a Satoshi sitting around sitting on top of $50 billion worth of Bitcoin,
I don't think it would cripple Bitcoin as property,
but I think it would undermine its digital property.
If I wanted to undermine a crypto asset network,
I would do the opposite of all those things.
I would launch one myself.
I would sell 25% or 50% of the general public.
I would keep some of the initial...
I would pre-mind some stuff or early mine it, you know,
and I would keep an influence on it.
Those are all the opposite of what you would do in order to create common property.
I see the entire story as Satoshi giving a gift of digital property to the human race and disappearing.
Do you think it was one person? Do you have ideas of who it could be?
I don't care to speculate.
But do you think it was one person?
I think it was one person.
Maybe in conjunction with a bunch of others.
It might have been a group of people that were working together,
but certainly there's a Satoshi.
It's just so fascinating to me that one person could be so brave and thoughtful.
Or do you think a lot of it is accident, like the block size wars,
the decision to make a block a certain size.
All the things you mentioned led up to the characteristics that make Bitcoin property.
Do you think that's an accident or it was deeply thought through?
This is almost like a history of science question.
I think people tried it for... they tried 40 of them.
I think there's a history of attempting to create something like this.
It was tried many, many times and they failed for different reasons.
I think that Prometheus tried to start a fire 47 times and maybe the 48th time it sparked.
That's how I see this. This is the first one that sparked and it sets a roadmap for us.
I think if you're looking for any one word that characterizes it, it's fair.
The whole point of the network is it's a fair launch, a fair distribution.
I have Bitcoin, but I bought it.
In fact, at this point, we've paid $4 billion of real cash to buy it.
If I was sitting on the same position and I had it for free,
then there's always this question of did I... or I bought it for a nickel coin or a penny coin.
The question is, was it fair? That's a very hard question to answer.
Did you acquire the Bitcoin that you own fairly?
If you rolled the clock back, you could have bought it for a nickel or a dime,
but that was when it was a million times more likely to fail.
When the risk was greater, the cost was lower and then over time,
the risk became lower and the cost became greater.
The real critical thing was to allow the marketplace absent any powerful interested actor.
If Satoshi had held a million coins and then stayed engaged for 10 more years,
tweaking things in the background, there's still be that question.
But what we've got is really a beautiful thing.
We've got a chain reaction in cyberspace or an ideology spreading virally in the world.
That has seasoned in a fair ethical fashion.
Sometimes it's a very violent, brutal fashion with all the volatility, right?
And there's been a lot of sound and fury along the way.
How do you psychoanalyze? How do you deal from a financial, from a human perspective with the volatility?
You mentioned you could have gotten it for a nickel and the risk was great.
Where's the risk today? What's your sense?
We're 13 years into this entire activity.
I think the risk has never been lower.
If you look at all the risks, right?
The risks in the early years is the engineering protocol proper.
Like one megabyte block size, 10-minute clock frequency, cryptography.
First, will it be hacked or will it crash? 730,000 blocks and it hasn't crashed.
Will it be hacked? Hasn't been hacked.
It's a lindy thing, right? You wait 13 years to see if it'll be hacked.
But on the other hand, with a billion dollars, it's not as interesting a target as it is with 100 billion.
And when it gets to be worth a trillion, then it's a bigger target.
So the risk has been bleeding off over time as the network monetized.
I think the second question is, will it be banned?
You couldn't know. It literally could have been banned many times early on.
In fact, in 2013, I tweeted on the subject, I thought it would be banned.
I made a very famous tweet.
I thought it was going to be banned.
In 2014, the IRS designated it as property and gave it property tax treatment.
They could have given it a tax treatment where you had to pay tax on the unrealized capital gains every year
and it probably would have crushed it to death.
So it could have been in any number of places banned by a government,
but in fact, it was legitimized as property.
And then the question is, would it be hacked or would it be copied?
Will it be something better than that?
And it was copied 15,000 times.
And you know the story of all those.
And they either diverged to be something totally different and not comparable
or someone trying to copy a non-sovereign bearer instrument store of value
found that their networks crashed to be 1% of what Bitcoin is.
So now we're sitting at a point where all those risks are out of the way.
I would say that year one of institutional adoption is it started August 2020.
That's when MicroStrategy bought $250 million worth of Bitcoin and we put that out on the wire.
We were the first publicly traded company to actually buy Bitcoin.
I don't think you could have found a $5 million purchase from a public company before we did that.
So that was kind of like a gun going off.
And then in the next 12 months, Tesla bought Bitcoin, Square bought Bitcoin.
And I'd say now we're in year two of institutional adoption.
And there are about 24, should be 24 publicly traded Bitcoin miners by the end of this quarter.
So you're looking at 36 publicly traded companies and you've got 50,
at least in the range of $50 billion on the balance sheet of publicly traded companies
and hundreds of billions of dollars of market cap of Bitcoin exposed companies.
So I would say the asset, decade one was entrepreneurial experimental.
Decade two is a rotation from entrepreneurs to institutions and is becoming institutionalized.
So maybe decade one, you go from $0 to $1 trillion and in decade two, you go from $1 trillion to $100 trillion.
What about government adoption, institutional adoption?
Are governments important in this?
Maybe making it some governments, incorporating it into as a currency, into their banks, all that kind of stuff.
Is that important?
And if it is, when will it happen?
It's not essential for the success of the asset class, but I think it's inevitable in various degrees over time.
But the most likely thing to happen next is large acquisitions by institutional investors of Bitcoin as a digital gold,
where they're just swapping out gold for digital gold and thinking of it like that.
And the government entities most likely to be involved with that would be sovereign wealth funds.
If you look at all the sovereign wealth funds that are holding big tech stock, equities, the Swiss, the Norwegians, the Middle Easterners,
if you can hold big tech, then holding digital gold would be not far removed from that.
That's a non-controversial adoption.
I think there are opportunities for governments that are much more profound.
If a government started to adopt Bitcoin as a treasury reserve asset,
that's much bigger than just an asset investment.
That's 100x bigger.
And you could imagine that's like a trillion dollar opportunity. Like any government that wanted to adopt it as a treasury reserve asset would probably generate trillions of dollars,
a trillion or more of value.
And then the thing that people think about is, well, will oil ever be priced in Bitcoin or any other export commodity?
That's like $1.8 trillion or more of export commodities in the world, and right now they're all priced in dollars.
I think that this is a colorful thing, but it's not really that relevant.
You could sell all that stuff in dollars.
The relevant decision that any institution makes, whether they're a nonprofit, a university, a corporation, or a government, is what's your treasury reserve asset?
Your treasury reserve asset is the peso, and if the peso is losing 20% or 30% of its value a year, then your balance sheet is collapsing within five years.
If the treasury reserve asset is dollars and currency derivatives and US treasuries, then you're getting your seven. Right now it's probably 15% or more monetary inflation.
We're running double the historic average.
You could argue triple, somewhere between double and triple, depending upon what your metric is.
Do I think it'll happen? I think that they're conservative, but they have to be shocked, and I think there is a shock.
The late Russian sanctions are a big shock.
When the West sees $300 billion worth of Russian gold and currency derivatives, you got the famous quote by Putin that we have to rethink our treasury strategies,
and that pushes everybody toward a commodity strategy. What commodities do I want to hold?
I think that's got a lot of people thinking. I think it's got the Chinese thinking.
Everybody wants to be the reserve currency, right?
If I buy $50 billion worth of dollars every year, then I buy $500 billion over a decade, and I probably pay $250 billion of inflation cost on the backs of my citizens in a decade.
So inflation could be one of the sources of shock, and you wonder if there is a switch to Bitcoin, whether it will be a bang or a whimper,
like what is the nature of the shock or the transition?
I think that the year 2022 is pretty catalytic for digital assets in general and for Bitcoin in particular.
The Canadian trucker crisis, I think, educated hundreds of millions of people and made them start questioning their property rights and their banks.
I think the Ukraine war was a second shock, but I think that the Russian sanctions was a third shock.
I think hyperinflation in the rest of the world is a fourth shock, and then persistent inflation in the U.S. is a fifth shock.
So I think it's a perfect storm, and if you put all these events together, what do they signify?
They signify the rational conclusion for any person thinking about this is, I'm not sure if I can trust my property.
I don't know if I have property rights. I don't know if I can trust the bank.
And if I'm politically at odds with the leader of my own country, I'm going to lose my property.
And if I'm politically at odds with the owner of another country, I'm still going to lose my property.
And when push comes to shove, the banks will freeze my assets and seize them.
And I think that that is playing out in front of everybody in the world such that your logical response would be,
I'm going to convert my weak currency to a strong currency.
Like I'll convert my peso and lira to the dollar.
I'm going to convert my weak property to strong property.
I'm going to sell my building downtown Moscow.
And I'd rather own a building in New York City.
I'd rather own in a powerful nation than be stuck with a building in Nigeria or a building in Argentina or whatever.
So I'm going to sell my weak properties by strong properties.
I'm going to convert my physical assets to digital assets.
I'd rather own a digital building than own a physical building.
Because if I had a billion dollar building in Moscow, who can I rent that to?
But if I have a billion dollar digital building, I can rent it to anybody in any city in the world.
Anybody with money and the maintenance cost is almost nothing and I can hold it for 100 years.
So it's indestructible building.
And then finally, I want to move from having my assets in a bank with a counterparty to self-custody assets.
And this is not just Ukraine, but this is like the story in Turkey, Lebanon, Syria, Afghanistan, Iraq, South America.
You don't really want to be sitting with $10 million in a bank in Istanbul.
The bank's going to freeze your money, convert it to lira, devalue the lira, and then feed it back to you over 17 years.
So self-custody assets would be layer one, Bitcoin.
Self-custody assets, it's like, if I got my own hardware wallet and I've either got your highest form of self-custody would be Bitcoin on your own hardware wallet or Bitcoin in your own self-custody.
And the other thing people think about is how do I get crypto dollars like Tether, like some stablecoin?
Like I'd rather, if you had a choice, would you rather have your money in a bank in a warzone in dollars or have your money in a stablecoin on your mobile phone in dollars?
I mean, you take the latter risk rather than the former risk.
In a warzone, definitely, yeah.
And you can see that happening.
Like we've gone from $5 billion in stablecoins to $200 billion in the last 24 months.
So I do think there's massive demand for crypto dollars in the form of a US dollar asset.
And there's, and everybody in the world would say, yeah, I want that.
Well, unless you're just an extreme patriot, but most people in the world would say I want that.
And then a lesser group of people would say, I think I want to be able to carry my property in the palm of my hand.
So I have self-custody of it.
So a Bitcoin price has gone through quite a rollercoaster.
What do you think is the high point it's going to hit?
I think it'll go up forever, right?
I mean, I think the Bitcoin is going to, it's going to climb in a serpentine fashion.
It's going to advance and come back and it's going to keep, it's going to keep climbing.
I think that the volatility attracts all the capital into the marketplace.
And so the volatility makes it the most interesting thing in the financial universe.
It also generates massive yield and massive returns for traders.
And that attracts capital.
Like we're talking about the difference between 5% return and 500% return.
So the fast money is attracted by the volatility.
The volatility has been decreasing year by year by year.
I think that it's stabilizing.
I don't think we'll see as much volatility in the future as we have in the past.
I think that if we look at Bitcoin and model it as digital gold, you know,
the market cap goes to between 10 and 20 trillion.
But gold is, remember, gold is defective property.
Gold is dead money.
You have a billion dollars of gold that sits in a vault for a decade.
It's very hard to mortgage the gold.
It's also very hard to rent the gold.
You can't loan the gold.
No one's going to create a business with your gold.
So gold doesn't generate much of a yield.
So for that reason, most people wouldn't store a billion dollars for a decade in gold.
They would buy a billion dollars of commercial real estate property.
And the reason why is because I can rent it and generate a yield on it
that's in excess of the maintenance cost.
So if you consider digital property, that's 100 to 200 trillion dollar addressable market.
So I would think it, you know, it goes from 10 trillion to 100 trillion.
As people start to think of it as digital property.
What does that mean in terms of price per coin?
500,000, right?
That's a 10 trillion dollar asset at 5 million.
That's 100 trillion dollar asset.
So I think it crosses a million. It can go even higher.
Yeah, I think it keeps going up forever.
I mean, there's no reason we can go to 10 million of coin, right?
Because digital property isn't the highest form, right?
Gold was that low frequency money.
Property is a mid frequency money.
But when I start to, when I start to program it faster,
it starts to look like digital energy.
And then it doesn't just replace property.
Then you're starting to replace bonds.
It's 100 trillion in bonds.
There's 50 to 100 trillion in other currency derivatives.
And then, and then, and these are all conventional use cases, right?
I think that there's 350 trillion to 500 trillion dollars worth of currency,
currency derivatives in the world.
And that, and when I say that, I mean,
things that are valued based upon fiat cash flows,
any commercial real estate, any bond, any sovereign debt,
any currency itself, any derivatives to those things,
they're all derivatives and they're all defective.
And they're all defective because of this persistent 7 to 14 percent lapse
which we call inflation or monetary expansion.
Can we switch, some of us can talk about the energy side of it,
like the innovative piece.
Let's just start with this idea that I've got a hotel,
worth a billion dollars with a thousand rooms.
When it becomes a dematerialized hotel.
I love that word so much, by the way, dematerialized hotel.
We're across in the fountain blow here.
Imagine the fountain blow is dematerialized.
The problem with the physical hotel is
I got to hire real people moving subject to the speed of sound and physics laws
and Newton's laws and I can rent it to people in Miami Beach.
But if it was a digital hotel,
I could rent the room to people in Paris, London and New York every night
and I can run it with robots.
And as soon as I do that, I can rent it by the room hour
and I can rent it by the room minute.
And so I start to chop my hotel up into
a hundred thousand room hours that I sell to the highest bidder
anywhere in the world.
And you can see all of a sudden the yield,
the rent and the income of the property is dramatically increased.
I can also see the maintenance cost of the property falls.
I get on Moore's law and I'm operating in cyberspace.
So I got rid of Newton's laws.
I got rid of all the friction and all those problems.
I tapped into the benefits of cyberspace.
I created a global property.
I started monetizing at different frequencies.
And of course now I can mortgage it to anybody in the world.
You're not going to be able to get a mortgage on a Turkish building
from someone in South Africa.
You have to have to find someone that's local to the culture you're in.
So when you start to move from analog property to digital property,
it's not just a little bit better.
It's a lot better.
And what I just described, Lex, is like the DeFi vision, right?
It's the beauty of DeFi flash loans, money moving at high velocity.
At some point, if the hotel is dematerialized,
then what's the difference between renting a hotel room and loaning a block of stock?
I'm just finding the highest best use of the thing.
It feels like the magic really emerges, though,
when you build a market of layer two and layer three technologies on top of that.
It's like maybe you can correct me if I'm wrong,
but for all these hotels and all these kinds of ideas,
it's always touching humans at some point.
And consumers or humans, business owners and so on.
So you have to create interface.
You have to create services that make all of that super efficient,
super fun to use, pleasant, effective, all those kinds of things.
So you have to build a whole economy on top of that.
Yeah, and I happen to think that won't be done by the crypto industry at all.
I think that'll be done by centralized applications.
I think it'll be the citadels of the world, the high-speed traders of the world,
the New Yorkers.
I think it'll be Binance FTX and Coinbase as a layer three exchange
that will give you the yield and will give you the loan and the best terms.
Because ultimately, you have to jump these compliance hoops.
Like BlockFi can give you yield,
but they have to do it in a compliant way with the United States jurisdiction.
So ultimately, those applications to use that digital property
and either generate a loan on it or give you yield on it
are going to come from companies.
But the difference, the fundamental difference is
it could be companies anywhere in the world.
So if a company in Singapore comes up with a better offering,
then the capital is going to start to flow to Singapore.
I can't send 10 city blocks of LA to Singapore to rent during a festival,
but I can send 10 blocks of Bitcoin to Singapore.
So you've got a truly global market that's functioning in this asset
and it's a second-order asset.
For example, maybe you're an American citizen and you own 10 Bitcoin
and someone in Singapore will generate 27% yield in the Bitcoin,
but legally you can't send the money to them or the Bitcoin to them.
It doesn't matter because the fact that that exists
means that someone in Hong Kong will borrow the 10 Bitcoin from somebody in New York
and then they will put on the trade in Singapore
and that will create a demand for Bitcoin which will drive up the price of Bitcoin
which will result in an effective tax-free yield for the person in the US
that's not even in the jurisdiction.
So there's nothing that's going on in Singapore to drive up the price of your land in LA,
but there is something going on everywhere in the world
to drive up the price of property and cyberspace
if there's only one digital Manhattan.
And so there's a dynamic there which is profound because it's global.
But now let's go to the next extreme.
I'm still giving you a fairly conventional idea
which is let's just loan the money fast on a global network
and let's just rent the hotel room fast in cyberspace.
But let's move to maybe a more innovative idea.
The first generation of internet brought a lot of productivity,
but there's also just a lot of flaws in it.
For example, Twitter is full of garbage. Instagram DMs are full of garbage.
Your Twitter DMs are full of garbage.
YouTube is full of scams.
Every 15 minutes there's a Michael Saylor Bitcoin giveaway spun up on YouTube.
My Office 365 inbox is full of garbage.
Millions of spam messages.
I'm running four different email filters.
My company spends million dollars a year to fight denial of service attacks
and all sorts of other security things.
There are denial of service attacks everywhere against everybody in cyberspace all the time.
It's extreme.
And we're all beset with hostility, right?
You've been a victim of it on Twitter.
You go on Twitter and people post stuff they would never say to your face
and then if you look you find out that their account was created like three days ago
and it's not even a real person.
So, you know, we're beset with phishing attacks and scams and spam bots and garbage.
And why?
And the answer is because the first generation of internet was digital information and there's no energy.
There's no conservation of energy in cyberspace.
The thing that makes the universe work is conservation of energy.
Like, if I went to a hotel room, I'd have to post a credit card
and if I smashed the place up, there'd be economic consequences.
Maybe there'd be criminal consequences.
There might be reputational consequences.
You know, a lamp might fall on me.
But in the worst case, I can only smash up one hotel room.
Now, imagine I could actually write a Python script to send myself to every hotel room in the world every minute
and not post a credit card and smash them all up anonymously.
The thing that makes the universe work is friction, speed of sound, speed of light
and the fact that ultimately it's conservative.
You're either energy or matter, but once you've used the energy, it's gone
and you can't do infinite everything.
That's missing in cyberspace right now.
And if you look at all of the moral hazards and all of the product defects
that we have in all of these products, most of them, 99% of them could be cured
if we introduced conservation of energy into cyberspace.
And that's what you can do with high-speed digital property, high-speed Bitcoin.
And by high-speed, I mean not 20 transactions a day, I mean 20,000 transactions a day.
So how do you do that?
Well, I let everybody on Twitter post 1,000 or 10,000 Satoshis via a lightning badge.
Give me an orange check.
If you put up 20 bucks once in your life, you could give 300 million people an orange check.
Right now, you don't have a blue check, Lex.
You're a famous person. I don't know why you don't have a blue check.
Have you ever applied for a blue check?
No.
There are 360,000 people on Twitter with a blue check.
There are 300 million people on Twitter.
So the conventional way to verify accounts is elitist archaic.
How does it work? How did you get a blue check?
You got to apply and wait six months and you have to post three articles in the public mainstream media
that illustrates you're a person of interest.
Interesting.
Generally, they would grant them to CEOs of public companies.
The whole idea is to verify that you are who you say you are.
But the question is why isn't everybody verified?
Right.
And there's a couple of threads on that.
One is some people don't want to be doxxed.
They want to be anonymous.
Sure.
But they're even anonymous people that should be verified.
Right.
Because otherwise, you're subjecting their entire following to phishing attacks and scams and hostility.
But the other...
What's the orange verification?
So this idea, can you actually elaborate a little bit more if you put up 20 bucks?
I think everybody on Twitter ought to be able to get an orange check if they could come up with like $10.
And what is the power of that orange check?
What does that verify exactly?
You basically post a security deposit for your safe passage through cyberspace.
So the way it would work is if you've got $10 once in your life, you can basically show that you're credit worthy.
And that's your pledge to me that you're going to act responsibly.
So you put the $10 or the $20 into the lightning wallet, you get an orange check,
then Twitter just gives you a setting where I can say the only people who can DM me are orange checks,
the only people who can post on my tweets are orange checks.
So instead of locking out the public and just letting your followers, you know, comment,
you lock out all the unverified.
And that means people that don't want to post $10 security deposit can't comment.
Once you've done those two things, then you're in a position to monetize malice, right?
Monetize motion or malice for that matter.
But let's just say for the sake of argument, you post something and 9700 bots spin up, you know,
and pitch their whatever scam.
Right now you sit and you go report, report, report, report, report, report.
You spend an hour, you get through half of them, you waste an hour of your life.
They just spend up another $97,000 because they've got a Python script,
spending it up so it's hopeless.
But on the other hand, if you report them and they really are a bot,
Twitter's got a method to actually delete the account.
They know that they're bots.
The problem is not they don't want to delete the account,
the problem is there are no consequences when they delete the account.
So if there are consequences, Twitter could give,
they could just seize the $10 or seize the $20 because it's a bot.
It's a malicious criminal act or whatever.
It's a violation of the platform rules.
You end up seizing $10,000, give half the money to the reporter
and half the money to the Twitter platform.
That's a really powerful idea, but that's tying it.
That's adding friction akin to the kind of friction you have in the physical world.
You have consequences, you have real consequences.
It's putting conservation of energy.
Conservation of energy.
There's no friction.
There's no nothing on this earth.
You can't walk across the room without friction.
Friction is not bad.
Unnecessary friction is bad.
So in this particular case, you're introducing conservation of energy
and in essence, you're introducing the concept of consequence or truth into cyberspace.
And that means if you do want to spend up 10 million fake less freedoms, right?
It's going to cost you $100 million to spend up 10 million fake lexes.
But the thing is you could do that with the dollar,
but you're saying that it's more tied to physical reality when you do that with Bitcoin.
Yeah, well, let's follow up on that idea a bit more.
If you did do it with the dollar, then the question is how do 6 billion people deposit the dollars?
Because what you're doing is, could you do it with a credit card?
How do you send dollars?
You have to dox yourself.
It's not easy.
So you're talking about inputting a credit card transaction, doxing yourself,
and now you've just eliminated the 2 billion people that don't have credit cards or don't have banks.
You've also got a problem with everybody that wants to remain anonymous.
But you've also got this other problem, which is credit cards are expensive transactions, low frequency, slow settlement.
So do you really want to pay 2.5% every time you actually show a $20 deposit?
Then maybe you could do a Kluge version of this for a subset of people.
It's 10% as good if you did it with conventional payment rails.
But what you can't do is the next idea, which is I want the orange badge to be used to give me safe passage through cyberspace,
tripping across every platform.
So how do I solve the denial of service attacks against a website?
I publish a website, you hit it with a million requests.
Okay, now how do I deal with that?
Well, I can lock you out and I can make it a zero trust website,
and then you have to be coming at me through a trusted firewall or with a trusted credential.
But that's a pretty draconian thing.
Or I could put it behind a lightning wall.
A lightning wall would be, you know, I just challenge you, Lex.
You want to browse my website, you have to show me your 100,000 Satoshis.
Do you have 100,000 Satoshis? Click.
Okay, now you click away a hundred times or a thousand times.
And after a thousand times, you know, well, now, Lex, you're getting offensive,
but it'd take a Satoshi from you or 10 Satoshis, a microtransaction.
You want to hit me a million times, I'm taking all your Satoshis and locking you out.
What you want to do is you want to go through 200 websites a day,
and what you want every time you cross a domain,
you need to be able to, in a split second, prove that you've got some asset.
And now when you cross back, when you exit domain, you want to fetch your asset back.
So how do I, in a friction-free fashion, browse through dozens or hundreds of websites,
post a security deposit for safe passage and then get it back?
You couldn't afford to pay a credit card fee each time.
When you think about 2.5% as a transaction fee,
it means you trade the money 40 times and it's gone.
Yeah.
It's gone.
So you can't do this kind of hopping around through the internet with this kind of verification
that grounds you to physical reality.
It's a really, really interesting idea.
Why hasn't that been done?
I think you need two things.
You need an idea like a digital asset like Bitcoin.
It's a bearer instrument for final settlement.
And then you need a high-speed transaction network like Lightning
where the transaction cost might be a 20th of a penny
or less.
And if you roll the clock back 24 months,
I don't think you had the Lightning network in a stable point.
It's really just the past 12 months.
It's an idea you could think about this year.
And I think you need to be aware of Bitcoin as something other than like a scary speculative asset.
So I really think we're just the beginning.
The embryonic stage.
I have to ask Michael Saylor.
You said before, there's no second best to Bitcoin.
What would be the second best?
Traditionally, there's Ethereum with smart contracts.
Cardano with proof of stake.
Polkadot with interoperability between blockchains.
Dogecoin has the incredible power of the meme.
Privacy with Monero.
I just can't keep going. There's, of course, after the block size wars,
the different offshoots of Bitcoin.
I think if you decompose or segment the crypto market,
you've got crypto property.
Bitcoin is the king of that.
Another Bitcoin fork is the one to be a bearer instrument.
Store of value would be a property, a Bitcoin cash or a litecoin, something like that.
Then you've got cryptocurrencies.
I don't think Bitcoin is a currency because a currency I define in nation-state sense,
a currency is a digital asset that you can transfer in a transaction
without incurring a taxable obligation.
So that means it has to be a stable dollar or a stable euro or a stable yen, a stablecoin.
So I think you've got cryptocurrencies, Tether, Circle Most Famous.
Then I think you've got crypto platforms.
Ethereum is the most famous of the crypto platforms,
the platform upon which, you know, with smart contract functionality, et cetera.
And then I think you've got just crypto securities.
It's just like my favorite, whatever, meme coin, and I love it because I love it
and it's attached to my game or my company or my persona or my whatever.
I think if you pushed me and said,
what's the second best, I would say the world wants two things.
It wants crypto property as a savings account
and it wants cryptocurrency as a checking account.
And that means that the most popular thing really is going to be a stablecoin dollar.
And there's maybe a fight right now, it might be Tether, right?
But a stable dollar, because I feel like the market opportunity,
it's not clear that there'll be one that will win.
The class of stable dollars is probably a one to ten trillion dollar market easily.
I think that in a crypto platform space, Ethereum will compete with Solana
and Binance Smart Chain and the like.
Are there certain characteristics of any of them that kind of stand out to you?
Don't you think the competition is based on a set of features?
Also, so the set of features that a cryptocurrency provides,
but also the community that it provides.
The community matters and sort of the adoption, the dynamic of the adoption
both across the developers and the investors.
If I'm looking at them, the first question is, what's the regulatory risk?
How likely is it to be deemed a property versus security?
And the second is, what's the competitive risk?
And the third is, what's the speed and the performance?
And all those things lead to the question of what's the security risk?
How likely is it to crash and burn and how stable or unstable is it?
And then there's the marketing risk.
I mean, there are different teams behind each of these things and communities behind them.
I think that the big cloud looming over the crypto industry
is regulatory treatment of cryptocurrencies and regulatory treatment
of crypto securities and crypto platforms.
And I think that won't be determined until the end of the first Biden administration.
For example, there are people that would like only US FDIC
insured banks to issue cryptocurrencies.
They want JP Morgan to issue a crypto dollar backed one-to-one.
But then in the US right now, we have Circle and we have other companies
that are licensed entities that are backed by cash and cash equivalents,
but they're not FDIC insured banks.
There's also a debate in Congress about whether state chartered banks
should be able to issue these things.
And then we have Tether and others that are outside of the US jurisdiction.
They're probably not backed by cash and cash equivalents.
They're backed by stuff and we don't know what stuff.
And then finally, you have UST and DAI, which are algorithmic stablecoins,
that are even more innovative further outside the compliance framework.
So if you ask who's going to win, the question is really,
I don't know, will the market decide or will the regulators decide?
If the regulators get out of the way and the market fought out,
well, then it's an interesting discussion.
And then I think that all bets are off if the regulators get more heavy-handed with this.
And I think you could have the same discussion with crypto properties,
like the DeFi exchanges and the crypto exchanges.
The SEC would like to regulate the crypto exchanges.
They'd like to regulate the DeFi exchanges.
That means they may regulate the crypto platforms and at what rate and in what fashion.
And so I think that I could give you an opinion
if it was limited to competition and the current regulatory regime.
But I think that the regulations are so fast-moving
and it's so uncertain that you can't make a decision
without considering the potential actions of the regulators.
I hope the regulators get out of the way.
Can you still man the case that Dogecoin is, I guess, the second best cryptocurrency
if you don't consider Bitcoin a cryptocurrency but instead a crypto property?
I would classify it as crypto property because the US dollar is a currency.
So unless your crypto asset is pegged algorithmically or stably to the value of the dollar,
it's not a currency, it's a property or it's an asset.
So then can you still man the case that Dogecoin is the best cryptocurrency then?
Because Bitcoin is not even in that list.
The debate is going to be whether it's property or security.
And there's a debate whether it's decentralized enough.
So let's assume it was decentralized.
Well, it's increasing at not quite what, 5% a year inflation rate,
but it's not 5% exponentially, it's like a plus 5 million, 5% something captain is less.
I forget the exact number, but it's an inflationary property.
It's got a lower inflation rate than the US dollar
and it's got a much lower inflation rate than many other fiat currencies.
So I think you could say that.
But don't you see the power of meme, the power of ideas, the power of fun,
or whatever mechanism is used to captivate a community?
I do, but there are meme stocks.
It doesn't absolve you of your ethical and securities liabilities if you're promoting it.
So I don't have a problem with people buying a stock.
It's just the way I divide the world is, right, there's investment,
there's saving and there's speculation and there's trading.
So Bitcoin is an asset for saving.
If you want to save money for 100 years, you don't really want to take on execution risk or the like.
So you're just buying something to hold forever.
For you to actually endorse something as a property,
like if you said to me, Mike, what should I buy for the next 100 years?
I say, well, some amount of real estate, some amount of scarce collectibles,
some amount of Bitcoin, right?
You can run your company, right?
But running your company is an investment.
So the savings are properties.
If you said, what should I invest in?
I'd say, well, here's a list of good companies, private companies.
You can start your own company.
That's an investment, right?
If you said, what should I trade? Well, trading is like a proprietary thing.
I don't have any special insight into that.
If you're a good trader, you know you are.
If you said to me, what should you speculate in?
We talk about meme stocks and meme coins.
And it kind of sits up there.
It sits right in the same space with what horse should you bet on
and what sports team should you gamble on
and should you bet on black six times in a row and double down each time?
I mean, it's fun, but at the end of the day, it's a speculation, right?
You can't build a civilization on it.
It's not an institutional asset.
And in fact, where I'd leave it, right, is Bitcoin is clearly digital
which makes it an institutional grade investable asset for a public company,
a public figure, a public investor or anybody that's risk adverse.
I think that the top 100 other cryptos are like venture capital investments
and if you're a VC and if you're a qualified technical investor
and you have a pool of capital and you can take that kind of risk,
then you can parse through that and form opinions.
It's just orders of magnitude more risky because of competition,
because of ambition and because of regulation.
And if you take the meme coins, it's like, you know,
when some rapper comes out with a meme coin,
it's like maybe it'll peak when I hear about it, right?
I mean, SHIB was created as a coin such that it had so many zeros
after the decimal point that when you looked at it on the exchanges,
it always showed zero, zero, zero, zero.
And it wasn't until like six months after it got popular
that they started expanding the display so you could see whether the price had changed.
That's speculation.
You've been, maybe you can correct me,
but you've been critical of Elon Musk in the past in the crypto space.
Where do you stand on Elon's effect on Bitcoin and cryptocurrency in general these days?
I believe that Bitcoin is a massive breakthrough for the human race
that will cure half the problems in the world and generate hundreds of trillions of dollars
of economic value to the civilization.
And I believe that it's an early stage where many people don't understand it
and they're afraid of it and there's FUD and there's uncertainty, there's doubt and there's fear.
And there's a very noisy crypto world and there's 15,000 other cryptos
that are seeking relevance.
And I think most of the FUD is actually fueled by the other crypto entrepreneurs.
So the environmental FUD and the other types of uncertainty that surround Bitcoin,
generally they're not coming from legitimate environmentalists.
They don't come from legitimate critics.
They actually are guerrilla marketing campaigns that are being financed and fueled by other crypto entrepreneurs
because they have an interest in doing so.
So if I look at the constructive path forward,
first, I think it'd be very constructive for corporations to embrace Bitcoin
and build applications on top of it. You don't need to fix it.
There's nothing wrong with it, right?
Like when you put it on a layer two and a layer three, it moves a billion times a second at the speed of light.
So every beautiful, cool, DeFi application, every crypto application,
everything you could imagine you might want to do, you can do with a legitimate company
and a legitimate website or mobile application sitting on top of Bitcoin or lightning if you want to.
So I think that to the extent that people do that, that's going to be better for the world.
If you consider what holds people back, I think it's just misperceptions about what Bitcoin is.
So I'm a big fan of just educating people.
If you're not going to commercialize it, then just educate people on what it is.
So for example, Bitcoin is the most efficient use of energy in the world by far, right?
Most people don't necessarily perceive that or realize that,
but if you were to take any metric energy intensity,
you put like $2 billion worth of electricity in the network every year and it's worth $850 billion.
There is no industry in the real world that is that energy efficient.
Not only that energy efficient, it's also the most sustainable industry.
We do surveys, 58% of Bitcoin mining energy is sustainable.
So there's a very good story.
In fact, every other industry, planes, trains, automobiles, construction, food, medicine, everything else.
It's less clean, less efficient.
So the basic debate was...
I wouldn't say there is a debate.
I would just say that to the extent that the Bitcoin community had any issue with Elon,
it was just this environmental uncertainty that he fueled in a couple of his tweets, right?
Which I think just is very distracting.
Well, that was one of them, but I think it's like the Bitcoin maximalist,
but generally the crypto community, what you call the crypto entrepreneurs,
is also they're using it for investment, for speculation,
and therefore get very passionate about people's kind of celebrities, including you, like famous people,
saying positive stuff about any one particular crypto thing you can buy in Coinbase.
And so they might be unhappy with Elon Musk that he's promoting Bitcoin and then not,
and then promoting Dogecoin, then not, and this kind of...
There's so much emotion tied up in the communication on this topic.
And I think that's where a lot of the...
Look, I don't have a criticism of Elon Musk.
He's free to do whatever he wishes to do.
In fact, Elon Musk is the second largest supporter of Bitcoin in the world.
So I think that the Bitcoin community tends to eat its own quite a bit.
It tends to be very self-critical.
And instead of saying, well, Elon is more supportive of Bitcoin than the other 10,000 people in the world
with serious amounts of money, they focus upon...
Yeah, this is strange. Eating your own is just...
So I mean, I think he's free to do what he wants to do.
And I think he's done a lot of good for Bitcoin in putting it on the balance sheet of Tesla and holding it.
And I think that sent a very powerful message.
Do you have advice for young people?
So you've had a heck of a life.
You've done quite a lot of things.
Before MIT, but starting with MIT.
Is there advice here for young people in high school and college?
How to have a career they can be proud of?
How to have a life they can be proud of?
I was asked by somebody for quick advice for his young children.
He had twins when they entered adulthood.
He said, give me your advice for them in a letter.
I'm going to give it to them when they turn 21 or something.
So then he handed...
I thought I was at a party and then he handed me this sheet of paper and I thought, oh, he wants me to write it down right now.
So I sat down, I started writing and I figured, well, what would you want to tell someone at age 21?
You wrote it down.
So I wrote it down.
Then I tweeted it and it's sitting on Twitter, but I tell you what I said.
I said, my advice if you're entering adulthood.
Focus your energy.
Guard your time.
Train your mind.
Train your body.
Think for yourself.
Curate your friends.
Curate your environment.
Keep your promises.
Stay cheerful and constructive.
And upgrade the world.
That was the 10.
Upgrade the world.
That's an interesting choice of words.
Upgrade the world.
Upgrade the world.
It's like an engineer.
Focus your energy.
It's a very, yeah, it's a very engineering themed...
Keep your promises too.
That's an interesting one.
I think most people suffer because they just, they don't focus.
You got to figure out, I think the big risk in this world is there's too much of everything.
Yeah.
Like you can sit and watch chess videos a hundred hours a week and you'll never get through all the chess videos.
Right?
There's too much of every possible thing, too much of every good thing.
So figuring out what you want to do and then everything will suck up your time, right?
There's a hundred streaming channels to binge watch on.
So you got to guard your time and then train your body, train your mind and control who's around you.
Control what surrounds you.
So ultimately in a world where there's too much of everything, then your success...
It's like those laser eyes.
It's like those laser eyes.
You have to focus on just a few of those things.
Yeah.
I mean, I got a thousand opinions we could talk about and I could pursue a thousand things,
but I don't expect to be successful and I'm not sure that my opinion in any of the 999 is any more valid than the leader of thought in that area.
So how about if I just focus upon one thing and then deliver the best I can in the one thing?
That's the laser eye message.
The rest get you distracted.
Well, how do you achieve that?
Do you find yourself given where you are in life having to say no a lot or just focus comes naturally when you just ignore everything?
So how do you achieve that focus?
I think it helps if people know what you're focused on.
So everything about you just radiates that people know?
If they know what you're focused on, then you won't get so many other things coming your way.
If you dally or if you flirt with 27 different things, then you're going to get approached by people in each of the 27 communities, right?
You mentioned getting a PhD and giving your roots at MIT.
Do you think there's all kinds of journeys you can take to educate yourself?
Do you think a PhD or school is still worth it?
Or is there other paths through life that...
Is it worth it if you have to pay for it or is it worth it if you spend the time on it?
The time and the money is a big cost.
I think time probably the bigger one, right?
It seems clear to me that the world wants more specialists.
It wants you to be an expert and to focus on one area.
And it's punishing generalist jack of all trades, especially people that are generalists in the physical realm.
Because if you're a specialist in the digital realm, you're the person with 700,000 followers on Twitter
and you show them how to tie knots or you're the banjo player with 1.8 million followers.
And whenever he types banjo, it's you, right?
So the world wants people that do something well and then it wants to stamp out 18 million copies of them.
And so that argues in favor of focus.
Now, I mean, the definition of a PhD is someone with enough of an education that they're capable of or have made.
I guess to get a PhD, technically, you have to have done a dissertation where you made a seminal contribution to the body of human knowledge.
And if you haven't done that, technically, you have a master's degree, but you're not a doctor.
So if you're interested in any of the academic disciplines that a PhD would be granted for, then I can see that being a reasonable pursuit.
But there are many people that are specialists.
You know, the agitator on YouTube.
He's the world's greatest chess commentator.
And I've watched his career and he's got progressed way better and he's really good.
He's going to love hearing this.
Yeah.
If the agitator ever hears this, I'm a big fan of the agitator.
I have to cut myself off, right?
Because otherwise you'll watch the entire Paul Murphy saga for your weekend.
But the point really is YouTube is full of experts who are specialists in something and they rise to the top of their profession.
And Twitter is too.
And the internet is.
So I would advocate that you figure out what you're passionate about and what you're good at.
And you do focus on it.
Especially if the thing that you're doing can be automated.
The problem is back to that 500,000 algebra teacher type comment.
The problem is if it is possible to be automated, then over time someone's probably going to automate it.
And that squeezes the state space of everybody else.
It's like after the lockdowns, it used to be there like all these local bands that played in bars and everybody went to the bar to see the local band.
And then during the lockdown, you would have like these six super groups and they would all get 500,000 or a million followers and all these smaller local bands just got no attention at all.
Well, the interesting thing is one of those 500,000 algebra teachers is likely to be part of the automation.
So it's like it's an opportunity for you to think where's my field, my discipline evolving into.
I talked to a bunch of librarians just happened to be friends of librarians and that's libraries will probably be evolving.
And it's up to you as a librarian to be one of the few that remain in the rubble.
If you're going to give commentary on Shakespeare plays, I want you to basically do it for every Shakespeare play.
Like I want you to be the Shakespeare dude because once I just like, Lex, you're like...
I don't know what kind of...
You're the deep thinking podcaster, right? You're the podcaster that goes after the deep intellectual conversations.
And once I get comfortable with you and I like you, then I start binge watching Lex.
But if you changed your format through 16 different formats so that you could compete with 16 different other personalities on YouTube,
you probably wouldn't beat any of them, right?
You would probably just kind of sink into the...
You're the number two or number three guy. You're not the number one guy in the format.
And I think the algorithm, right? The Twitter algorithm and the YouTube algorithm,
they really reward the person that's focused on message consistent.
The world wants somebody they can trust that's consistent and reliable
and they kind of want to know what they're getting into because...
And this is taken for granted maybe, but there's 10 million people vying for every hour of your time.
And so the fact that anybody gives you any time at all is a huge privilege, right?
And you should be thanking them and you should respect their time.
It's interesting that everything you said is very interesting.
But of course, from my perspective and probably from your perspective,
my actual life has nothing to do with...
It's just being focused on stuff.
And in my case, it's focused on doing the thing I really enjoy doing and being myself and not caring about anything else.
I don't care about views or likes or attention.
And just maintaining that focus is the way from an individual perspective, you live that life.
But yeah, it does seem that the world and technology is rewarding the specialization
and creating bigger and bigger platforms for the different specializations.
And that lifts all both actually because the specializations get better and better and better
at teaching people to do specific things and they educate themselves
and everybody gets more and more knowledgeable and more and more empowered.
The reward for authenticity more than offsets the specificity with which you pursue your mission.
Another way to say it is nobody wants to read advertising.
If you were to spend $100 million advertising your thing, I probably wouldn't want to watch it.
But we see the death of that.
And so the commercial shows are losing their audiences
and the authentic specialist or the authentic artist are gaining their audience.
And that's a beautiful thing.
Speaking of deep thinking, you're just a human, your life ends.
You've accumulated so much wisdom, so much money, but the right ends.
Do you think about that? Do you ponder your death, your mortality?
Are you afraid of it?
When I go, all my assets will flow into a foundation
and the foundation's mission is to make education free for everybody forever.
And if I'm able to contribute to the creation of a more perfect monetary system
then maybe that foundation will go on forever.
The idea, the foundation of the idea.
Each of the foundations.
It's not clear we're on the S-curve of immortal life yet.
That's a biological question and you asked that on some of your other interviews a lot.
I think that we are on the threshold of immortal life for ideas or immortal life for certain institutions
or computer programs.
So if we can fix the money, then you can create a technically perfected endowment.
And then the question really is what are your ideas?
What do you want to leave behind?
If it's a park, then you endow the park, right?
If it's free education, you endow that.
If it's some other ethical idea, right?
It doesn't make you sad that there's something that you've endowed
some very powerful idea of digital energy that you help put into the world.
And then your mind, your conscious mind will no longer be there to experience it.
It's just gone forever.
I'd rather think that the thing that Satoshi taught us is you should do your part during some phase of the journey
and then you should get out of the way.
I think Steve Jobs said something similar to that effect in a very famous speech one day, which is, you know,
death is a natural part of life and it makes way for the next generation.
And I think the goal is you upgrade the world, right?
You leave it a better place, but you get out of the way.
And I think when that breaks down, you know, bad things happen.
I think nature cleanses itself as a cycle of life.
And speaking of one of great people who did also get out of the way is George Washington.
So hopefully when you get out of the way, nobody's bleeding you to death in hope of helping you.
What do you think, Joe, a bit of a callback?
What do you think is the meaning of this whole thing?
What's the meaning of life?
Why are we here?
We talked about the rise of human civilization.
It seems like we're engineers at heart.
We'll build cool stuff, better and better use of energy, channeling energy to be productive.
Why?
What's it all for?
You're getting metaphysical on me.
There's a beautiful boat to the left of us.
Like, why do we do that?
This boat that sailed the ocean, then we build models of it to celebrate great engineering of the past?
To engineer is divine.
You can make lots of arguments as well.
We're either here to entertain ourselves or we're here to create something that's beautiful or something that's functional.
If you're an engineer, you entertain yourself by creating something that's both beautiful and functional.
I think all three of those things, it's entertaining, but it's ethical.
You've got to admire the first person that built a bridge crossing a chasm or the first person to work out the problem of how to get running water to a village.
The first person that figured out how to dam up a river or mastered agriculture or the guy that figured out how to grow fruit on trees or created orchards.
Maybe one day he had like 10 fruit trees.
He's pretty proud of himself.
So that's functional.
There is also something to that.
Just like you said, that's just beautiful.
It does get you closer to, like you said, the divine.
Something when you step back and look at the entirety of it, a collective of humans using a beautiful invention or creation or just something about this instrument is creating a beautiful piece of music.
That seems just right.
That's what we're here for.
Whatever the divine is, it seems like we're here for that.
And I, of course, love talking to you because from the engineer perspective, the functional is ultimately the mechanism towards the beauty.
Isn't there something beautiful about making the world a better place for people that you love, your friends, your family or yourself?
When you think about the entire arc of human existence and you roll the clock back 500,000 years and you think about every struggle of everyone that came before us and everything they had to overcome in order to put you here right now, you gotta admire that, right?
You gotta respect that.
That's a heck of a gift they gave us.
It's also a heck of a responsibility.
Don't screw it up.
If I dropped you 500,000 years ago, I said figure out steel refining or, you know, figure out silicon chips, fabric production or whatever it is.
Why?
Or fire.
And so now we're here and I guess the way you repay them is you fix everything in front of your face you can, right?
And that means to someone like Elon, it means get us off the planet, right?
To someone like me, it's like, I think, you know, fix the energy in the system.
And that gives me hope.
Michael, this is an incredible conversation.
You're an incredible human.
It's a huge honor you would sit down with me.
Thank you so much for talking to me.
Yeah, thanks for having me, Alex.
Thanks for listening to this conversation with Michael Saylor.
To support this podcast, please check out our sponsors in the description.
And now let me leave you with a few words from Francis Bacon.
Money is a great servant, but a bad master.
Thank you for listening and hope to see you next time.