The Wolf Of All Streets - Why Michael Saylor Invested 700M Dollars In Bitcoin

Episode Date: November 5, 2020

Michael Saylor made headlines when his company MicroStrategy publicly purchased $425M worth of Bitcoin. This massive buy order ignited the “MicroStrategy Effect," forcing major companies to consider purchasing Bitcoin to hedge against inflation and dangerous monetary policy. On the day of the recording, Michael also divulged his own purchase of Bitcoin - in excess of $200M. Scott Melker and Michael Saylor further discuss Michael Saylor Bull, Bull, Bull, joining Crypto Twitter, falling in love with Bitcoin, channeling monetary energy, the “MicroStrategy Effect”, running a company with 1,000s of employees, the problem with inflation, COVID’s impact, the new normal, a “K shape recovery,” the FED injecting money, cash flow and monetary expansion, shorting the dollar and more. --- VOYAGER This episode is brought to you by Voyager, your new favorite crypto broker. Trade crypto fast and commission-free the easy way. Earn up to 9.5% interest on top coins with no lockups and no limits. Download the Voyager app and use code “SCOTT25” to get $25 in free Bitcoin when you create your account. --- ELECTRONEUM Electroneum, has gained widespread adoption providing a mobile-first payment solution to the world's unbanked, attracting more than 4M users worldwide in less than three years. They have since launched a new freelance marketplace, AnyTask.com, which is providing thousands of freelancers the opportunity to sell their services to buyers globally, without the need of a bank account. Learn more at Electroneum.com. --- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe.This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

I'd like to thank my sponsors, Voyager and Electroneum, for making this episode possible. Stay tuned for more info on them later. What is up, everybody? This is Scott Melker, and you're listening to the Wolf of All Streets podcast. Today's guest is a true trailblazer. Unless you've been living under a rock, you're well aware of the recent news that MicroStrategy, a business intelligence company, publicly announced their decision to buy $425 million worth of Bitcoin with their cash reserve. In this episode, I have the founder of MicroStrategy, Michael Saylor, here to discuss what led him to this epic decision to execute the first

public purchase of Bitcoin of this magnitude. Michael, it's an honor to have you. Thank you so much for coming on. Thanks for meeting with me, Scott. Absolutely. My pleasure. Once me, Scott. Absolutely. My pleasure. Once again, before we get into the questions, you're listening to the Wolf of All Streets podcast where twice a week I talk to your favorite personalities from the worlds of Bitcoin, finance, trading, art, music, sports, politics, anyone with a good story to tell. This show is powered by Blockworks Group, who have a network of podcasts, over 20 of

them. You can find them at blockworksgroup.io. And if you like the podcast and follow me on Twitter, you should check out my website, join my newsletter. You can do both of those things at thewolfofallstreets.io. Now for what's important. So, Michael, I wake up every single day, and the first thing that pops into my head is,

Michael Saylor, bull, bull, bull. I need to know if that song is stuck in your head as well and what you think of it. It's quite hypnotic, isn't it i i'm not even kidding right it's actually the first thing i think you know what i so first of all it is it's i cannot officially comment on the video but uh but uh it's hypnotic and it's and it and it does make me think this, which is one of the great strengths of the Bitcoin community and crypto Twitter is there's this massive amount of very creative, inspired, entrepreneurial people. And they're always thinking about how to communicate the message and how to drive awareness. And if I hired 100 people in marketing, and I spent $40 million a year, and I said, I'm going to market Bitcoin, they would all huddle and they would work through all their ideas. And in 90 days,

they would come up with an idea, which is about 140th as good as that. It would get knocked down by the lawyers. And there's none of that would ever happen. And yet in Twitter, you've got a thousand people trying a thousand different things. And if they're really awful, they get one like and they die. And if they're, you know, there's no guarantee. We don't know that someone else didn't create their own videos, just you didn't see it. So someone gets together with somebody else.

They produce something. They want to send a message. It picks up steam. It goes viral. It gets 600,000 views, right? And it happens in 24 hours while you're sleeping. And that's the real power of decentralization and the hive mind and the cyber swarm. And it's just awesome. I mean, you're squarely entrenched in the Bitcoin community now.

There's no question about that. I mean, what do you make of the community as a whole, the anonymous, you know, obviously there's a huge anonymous population there. Do you think that it will contribute to pushing Bitcoin and crypto forward? Do you think that there are parts of it that hold it back? What are your opinions on the community as a whole as you see it? I think the community is such an awesome asset to Bitcoin. It's the best discovery of the year for me. That's awesome. It's probably my favorite discovery of the year 2020.

There's a lot of things that happened in 2020 that resulted a lot of pain and unpleasantness and tragedy for a lot of people. And I don't want to talk about them. But one thing that I discovered that I find a source of joy is crypto Twitter. I think they're the most creative people I've pretty much ever seen. Sometimes you'll look at some of these tweets and the responses and the memes, and you just start laughing so hard. You just can't stop laughing. And then I think, well, you know, the people that are holding 30-year government bonds, I don't think they have that much fun. You know, and I've been a big Apple shareholder and an Apple and a Facebook shareholder and an Amazon shareholder and a Google shareholder and a Twitter shareholder.

They don't have as much fun. There's pretty much nothing that I can think of in my life that, in the financial sphere, that has the kind of culture and personality and aspiration and inspiration and creativity, along so i think it's i think it's an asset to the entire to the entire movement and even if it wasn't i just think it's kind of cool get up in the morning and you look at twitter and it's and it's entertaining and it's a lot more entertaining than watching cable news anything's more entertaining than watching cable news at this point and you've really embraced the community. I could tell. I mean, you, you, you have your own snarky comments and you're sort of crazy analogies and metaphors with everyone loves the Hornets. I mean,

it seems like it's been a lot of fun for you to really dive deep in and participate. Yeah. I would go on record as saying, I love the Hornets. Amazing. The Hornets are my favorite people in the world. Yeah, it's really awesome. So why do you think that this community or Bitcoin brings people together in this manner that those other assets that you talked about don't? Why do you think there's this inherent passion for it within this community and hopefully the wider world soon? Yeah, something I tried to explain to Keith the other day, when I said, don't you have anything

you love? Right? I think that what makes this community special is the whole idea of crypto is a decentralized network that nobody owns, that no company, that no country, that no central headquarters controls. It's of the people, right? It's software of the people, for the people, by the people. And once we start this idea of a crypto network, and Bitcoin is the greatest example of a successful crypto network. Now you have an application to store monetary energy, right? Bitcoin is monetary energy. Human beings are, you know, they rose from the apes.

They rose through the Paleolithic times for one reason. We learned how to manage and master and channel energy. It starts with fire. If there's no fire, there's no humanity, right? We genetically wouldn't be what we are without fire. And then, you know, if you ever think about wrestling with a pack of wolves, pretty quickly you realize you don't want to do that. You don't want to spear them either. You don't want to chase after things either. You have to master missiles, which is kinetic energy. And then, you know, if I'm dropped a million years ago, I'd go find a river, dam the river, create a pond, let a bunch of fish swim into the pond. And I would like do my fishing by reaching

down in the pond and grab a fish, cook it. That's hydraulic energy. And at some point it becomes channeling gravitational energy, right? Because water is all about gravity. So we can go on from there, right? There's, there's after the chemical and the gravitational and the kinetic energy, there's other forms of energy. There's no human race. There's no civilization. There's no human race, there's no civilization, there's no nothing without channeling energy. All of that energy can become monetary energy. Monetary energy money is the apex energy. If I have a million dollars, I can convert it into kinetic energy or electrical energy or potential energy. If I have kinetic energy or electrical energy,

I can convert it back into monetary energy. Now, we put monetary energy on a crypto network. And why do we do that? Because we wanted the crypto network to transcend any company in any country. We wanted it to go long. We wanted it to be a long duration energy network. How long? Well, you know, you want it to last 100 years, you want you definitely want to last 10 years. Right. And I've made the point before that if you put $100 million into any bank in any city in the world, there's a 95% chance that you lost it when when the regime changed and when the government failed. And there's 100% chance that you lost 90% of your purchasing power, because gold miners keep producing government failed. And there's 100% chance that you lost 90% of your

purchasing power because gold miners keep producing more gold. And so that's an energy network that's bleeding power. And whether or not you could say it's bleeding 2% of power a year or 4% of power a year, but energy networks bleed power. Now what the hodlers understand and what crypto, Twitter, the Bitcoiners, what they understand intuitively, they don't always articulate it this way, is for the first time in human history, we created a monetary energy network that conserves power. It respects the laws of thermodynamics and conservation of energy. If you drop 100,000 or 10,000 or 1,000 or 1 million or 100 million or a billion dollars worth of energy into this network, you can reasonably expect 100 years from now, it'll still be there.

You won't have drained it because the miners aren't your enemies. They're not draining energy. Now, what does it take for your hundred million dollars or million or hundred thousand or one dollar to still be there in a hundred years? Well, it needs two things. Technology, right? It needs for the software to run and for the miners to operate. The hardware needs to be upgraded. The software needs to work in this trustworthy fashion. The second thing it needs is a bit of religious fervor and conviction that my son or my daughter or my heir is going to defend the network.

And if you adopt the idea that the Bitcoin network must be defended and it's more important to my company as more important than my country and it's more important than any short-term trade. Now you got to an interesting conclusion, right? And the conclusion is this. If money is power, if energy is power and if monetary energy is the highest form of energy,

and therefore monetary energy is money and money is power. And if I have a power network, which will store and channel energy with no power loss for a long, long time, like longer than I'm going to live. We're talking about immortal power. And if power is intrinsic to life, and it is, you got to feed yourself, you have to heat yourself, you have to protect yourself. You're talking about immortal life. And that's the fundamental idea that oftentimes isn't articulated. But Bitcoin is the closest thing we came up with in the history of the world to a network that offers the possibility of a mortal life. And I'm not saying a mortal life for an individual, obviously, of course, we're not gonna live forever. But my point is, I walk past a park, and I want it. And I think, wouldn't it be great

if the park stayed green and healthy for the next 100 years. And I have some money. And I endow it into the Bitcoin network, and I leave it and the Bitcoin network protects it, you know, and that money feeds the maintenance of that park, then I can actually bequeath a park to the city for seven years after I'm dead. And maybe it's generational wealth. Maybe I'm doing it for my family. Maybe I'm doing it for my religion. Maybe I'm doing it for my political persuasion. Maybe I think you should save the whales or save the seals or whatever you think. It doesn't matter, right? This is all about preserving energy and channeling it toward the thing that I love and I believe in for as long as I believe in it. And there's no other asset you can buy. There's no other place you can put

your money that holds that kind of promise that Bitcoin holds. And that's what I think makes it special and inspires so much passion and devotion amongst the hodlers. Was that your view on Bitcoin from the beginning or were you a skeptic like most? You know, I guess we all, first we start ignorant. Like first I was just ignorant. Then I was skeptical. Then my mind was opened by circumstance. And then I became interested.

That led to being enamored. That led to more study and eventually resulted in conviction. Was that circumstance the global events of 2020? Or are you talking about something previous? You know, I think the formative event for a lot of people that are coming into Bitcoin right now is March 2020. You know, if you want to specifically say what it is, it's the K-shaped recovery, Scott. Right. I mean, at the point that the economy shut down and Main Street went to, you know, what is it, 75% or 60% of economic output, you know, which is pretty obvious to anybody walking around. You could see that the economic output was compressed by 20, 30, 40%. At the point that that happened, and then we saw a V-shaped recovery in

Wall Street, it's like a set of financial assets had an immediate V-shaped recovery and a set of actual operational assets had not a recovery. And I'm very sensitive to that because I live in both worlds. Personally, I'm an investor. I'm a big tech investor in my personal portfolio for a decade. And so I rode that wave and I know what it's like to be an investor and think like an investor. My other day job is I run a company and I have thousands of employees and thousands of customers and we have to produce something. We have to make something, market the thing, sell the thing, service the thing in a competitive world. And so when you're on Main Street and you're thinking about selling and doing something, you have one set of requirements. And when you're on Wall

Street, you have a different set. And so I think when I saw that wall street had an immediate recovery and main street did not, I think, I think that, uh, that caused me to lose a bit of my, well, what would be the word? It's like, uh, it's, it's, it shakes your faith. Yeah. Remove the blinders to some degree. Yeah. Shakes your faith in the system. And, and, you know, the first thing that has to happen is, well, if stocks are, if all the stocks are immediately recovering,

even though Disneyland is closed, right. Yeah. If, you know, even though the airlines are, are down 95%, but airline stocks are moving up. If, if that's happening, then you have to ask the question, why is that happening? And that leads you to start to focus upon the role of central banks in Wall Street and the EU and the Fed. And when that happens, you start to question things you were taught, right? I think the greatest pernicious misunderstanding we have in our economy right now is the fiction that inflation is CPI. And I mean, I think this is the mistake, you know, that Keith, you know, and Hedgeye makes, and I try to point out to him,

you know, he's got a quad four, and the quad four is based upon inflation going down. And, and the problem with that is, well, CPI is not inflation. CPI is a fiction and, and, and everybody in the world, or at least I would say 90% of main street, they talk about inflation, like they understand it. And then they, and then they lament that there is none. Okay, well, it reminds me of just, it's the famous quote from propaganda field, which is all of our focus groups have shown us that we can't tell people what to think, but they've proven that we can tell people what to think about. Okay, so if you really want to drive people off a cliff, then you can't convince them of something that they know to be untrue. But we have the entire world focused on inflation and inflation equals CPI. And CPI is us tracking

a market basket of consumer goods. And in both the US and the EU, that market basket does not include the highly volatile energy and food. Okay. Okay. So first of all, it's like, how am I supposed to live my life without energy and food? Okay. Like if someone walked in and said, well, Scott, you know, we're going to give you a market basket of things, but there's going to be no energy and no food in the market basket. Exactly how many hours or days am I going to stay alive with that market basket? It's a pretty silly notion, right? Just on its surface to say, I'm going to track a market basket of consumer products with no energy and no food. But it gets said, you know, it's like the preferred inflation metric of the

central bank of the EU or the US. It's like, since why did they get to choose? Why did they get to choose what their preferred metric is? Second of all, everybody nods, oh yeah, we cannot include energy and food because they're highly volatile. That sounds like a Jedi mind trick to me. These are not the droids you're looking for. You're not the one. Okay. Tell me one person on the planet that doesn't want energy and food. Okay. But let's put that aside because it's a classic example of misdirection. Because the massive elephant in the room here is the market basket ought to include assets. It ought to include real estate. It ought to include education. It ought to include real estate. It ought to include education. It ought to include scarce art. It ought to include the number one asset that the

market basket should include is retirement, an annuity, basically a bond, a risk-free annuity. That is what everybody on earth strives for. They call it social security, security, the ability to live my life and not starve to death and not run out of stuff. If you actually put that into a market basket of consumer goods, you know, by the way, Bismarck started this and, you know, 1860 or whatever, you know, and he had this idea of social security. He declared that the modern German state was going to provide social security to all the citizens at age 65. The average life expectancy was like 45. Of course, again, misdirection, I'm going to get social security, you won't live to get there. But I'm

going to give it to you a typical political thing. Now we live 30 years past. We have the opposite problem. And we still think 65 is the right age. So the problem with inflation is what ought to be in the basket is social security or an annuity. And if it was in the basket, the inflation rate would start to track the monetary expansion rate. And this is the epiphany, the shattering understanding, which is inflation is not CPI. CPI is not a proper metric. Inflation is a vector. I can reasonably calculate any inflation rate I want, and I can get to a number between minus 4% or minus 10%. I can find deflationary things that'll be minus 10% to plus 25% or plus 25% in the US. And of course, other countries, you get something different. And presumably,

you know, like, if the long term, the interest rate, the risk free interest rate on a 10 year, right, the 10 year rates went from like two and.5% to 50 basis points in 12 months. And that means that that bond, the bond that gives me $50,000 a year in income, which is the retirement pay of someone that worked their entire life in the civil service. I know my father's a retired officer, retired non-commissioned officer from the Air Force. So, if you wanted that retirement, that was a million dollar asset in 2010. Right. You know, and in 2019, that was a two million dollar asset. Okay, So whatever, nine years, a hundred percent, go figure. Was that 8% inflation or something? And then in 12 months, you know, it went from 2 million to 10 million.

10 million. Yeah. Okay. So when something goes in cost from 2 million to 10 million in 12 months, what's the phrase we use for that? Hyperinflation? I would say hyperinflation. In this community, we would say scam, but hyperinflation. Yeah. So we saw hyperinflation and annuities when COVID hit, but no one called it hyperinflation. And every politician and the heads of the central bank stood up and lamented that we have no inflation right and so that's the jedi mind trick and and of course the hyperinflation was an asset the only way that you can see that a cruise line or an airline that's effectively grounded and and for all practical purposes bankrupt you. You know, it's got like a,

I looked at this and I looked at this in March and there's kind of two types of people, I guess, in the world. There's the people that look at it. And in the first 30 seconds, my brain, my brain clicks forward 10 years and I extrapolate everything that's about to happen for the next decade in the first 30 seconds. And it's pretty brutally painful, right? It is. Right? And it's pretty obvious that half the real estate assets are impaired. And it's pretty obvious that Disney World and cruise lines are not coming back the way they were. And I'm in the business where I have people flying around

everywhere. What happens? We had $30 million worth of travel events, marketing expenses. Not only did they go away, they were denied. Like I couldn't have had them if I wanted to. It wasn't discretionary. It was like, welcome to the world of you have no choice. Okay. So what happens when you can't have an event and you can't go there if you wanted to? Well, the next thing that happens is in four hours, you go from a video from hating video conferencing and thinking it's garbage to discovering it to zooming. And it doesn't take very much longer before you got yourself a nice microphone and an HD camera. Yep. Right? Because that's about the price of like a quarter of a plane ticket to Europe or something. So, you know, I think that what happens next,

it's like all my customers who want to meet with me via Zoom. And by the way, they won't meet with me without Zoom. Oh, and by the way, I couldn't with me without zoom oh and by the way i couldn't have a market even if i wanted to and then you know i don't really want to and then everybody you know this all happens in like a day or two days or maybe a week or maybe two weeks so then there's a part of the world that's thinking yeah well when we get back the way it used to be there is no way it used to be okay well so if it doesn't get back to the way it used to be. There is no way it used to be. Okay. Well, so if it doesn't go back to the way it used to be, then, then that means that you probably got four times as many commercial airlines as you need forever, at least for a decade. It, you know, it means that you start to see these headlines like such and such airline grounded half of their fleet per and decommission

them permanently. So this,, you're either living in that world where you come to grips with this, which is there's going to be a new normal and it's going to have profound consequences on everything we do for at least a decade. I can't see more than a decade. Maybe somebody invents like a sugar cube that gives you infinite energy and another bubble that makes you immune to all pathogens, right? There might be some massive breakthrough, but for the next decade, I don't think so. I think we're probably living in the world that we see right now. And that world has pretty profound consequences that aren't that hard to calculate. And once you calculate them, then you conclude that there's an irrational response

between, or they say there's a very disjointed inflation rate between assets and between consumer goods. And that jarring realization that the K-shaped recovery is a surprise six months afterwards, right? Not a surprise to anybody that thought about it. Like, you could have calculated a K-shaped recovery mid-March. Like, it's just a brutally painful thing to watch it. It's pretty obvious to, I think, a lot uh, fairly early on that there's a K-shaped recovery coming. Now, if there is a K-shaped recovery, the implication is that, uh, you know,

the war on COVID begats a war on currency and, uh, the war on Trotsky said, you know, you may not be interested in war, but war is interested in you. It's like, okay, well, in the world where I think the currency, you know, there's a 2% inflation rate or a 1% inflation rate, I can sit around and not pay much attention to it. But in a world where there's obviously something else going on, what happens next is you're jarred out of your apathy or out of your, you know, out of your comfort zone, and you start to search. And what do I do? I discover the Bitcoin community. I mean, you knew this, right? The Bitcoiners knew this. There are certain people that are sensitized to certain insights. If you're an Austrian economist, and if you're concerned about digital scarcity, you figured

it out earlier. And the OG Bitcoiners, you know, they saw it. I mean, Satoshi's sensitive to this 10 years ago. Well, this was born out. I mean, this was Bitcoin, you can argue, was born out of that, of this happening last time, out of the global recession, out of the events of 2007, 2008, 2009. And now you're seeing it again. So I've made the argument that it was born from that crisis and is maturing during this one, because anyone who missed it the first time, you have to put blinders on not to see it this time.

Thomas Kuhn in The Structure of Scientific Revolution, which is like the seminal work on how new science, how paradigms shift. How do people embrace jarring new ideas? He says there's two ways. One is the old guard dies. You just got to wait for the new generation. You know, your parents don't get Snapchat. The kids get Snapchat. Parents don't get Snapchat, the kids get Snapchat, parents don't get whatever, the kids get it. Okay, so that's one way and that takes 30 years, 40 years. The other way is a war, you know, and when World War II, when there's a war and it's a life or death thing and you don't have a choice, you're either going to die or you've been forced to by circumstances.

That's another point at which people embrace paradigm shift. And so I think that what we've got is a COVID war that created a currency war that has been a jarring come to Jesus for a lot of people that didn't have a need to address the subject. Look, if you're sitting on a position of Apple and Amazon and Facebook and Google from 2010 to 2020, how do you think you feel about the world? Do you have any problems with the way it's working out? That worked out for you. You'd make 20x your money, right? So, if the world is that, if you're floating on that liquidity pool and it seems to be working out, then of course, you don't go digging deeper. When the world comes to this jarring halt and everything starts to look irrational and you've got a delamination between

the reality on Main Street and the perception on Wall Street, if you're honest, if you're an honest thinker and you're honest to yourself or you're truthful, or at least you've still got something going on here, you have to question your premises. And so that question, the premises leads you to things like the Bitcoin standard. And that leads you to the expansion of the monetary supply of 7% for the past decade. And that leads you to ask the question of what's the monetary supply going to expand at in the next five years. And that leads you to a question of what is the definition of currency? And currency is blood and blood carries oxygen and oxygen is energy.

And if I suck the oxygen out of your blood, I will kill you. If I march you up Mount Everest, you know, up 20,000 feet, I will simultaneously freeze you to death and suffocate you. And an engineer knows this. I'm an aeronautical engineer. It's adiabatic lapse. If I take you up 50,000 feet, the temperature drops 150 degrees from sea level. You're minus 80 below sea level. If you jump minus 80 degrees below Fahrenheit, if you jump out of the airplane, if you don't freeze to death first, you'll suffocate. Right. Not good. Now what's happening when the Fed is pushing 15% more currency into the system, they're in essence expanding the chamber and they're sucking 15% of the energy out of each unit of a dollar. And so if I do it three years in a row, I've sucked 15% of the energy per

year, three years in a row. If I just keep doing it, it's like the fish in that fish tank when there's no oxygen left in the fish tank and the fish all die. We're sucking the oxygen out of the room. And if you don't suffocate, you're going to freeze to death. And now it's parabolic. I mean, it's not a new policy, right? It's not like we've never seen central banks printing before, but as you said, starting in March, now it's literally gone parabolic and I don't think there's any reversing it.

Now, how can you ignore it? Like, I pointed this out, and I don't think everybody fully grasps this idea, because I didn't grasp the idea, to tell you the truth, Scott. And I thought I was a good investor. But this year made me a much more sophisticated thinker with regard to this than maybe previous years. You don't learn from success. You learn from failures and from jarring experiences. So, why does Google, why did Google, Apple,

Amazon, Facebook, why do they work in the last decade? Well, one reason they work is because their cash flows are growing faster than the rate of monetary expansion. If the money supply is expanding at 7% a year, and if Google is turning in 20% a year, year over year growth, and they were, and Amazon is, and if Facebook is, and if Apple is, right? I'll leave Apple for a second. The other three, they're obvious growth stories. If you can grow your cash flows 20% and the monetary supply expands for 7%, that's a store of value. Okay. What happens if you can grow your cash flow 3% and the money's expanding 7%? Well, you're going to actually, you're going to dilute value because the net present value of the discounted cash flows looking into

the future, you have to discount it by the monetary expansion. And so, the net present value of the cash flows doesn't hold value once your cash flow growth is less than the rate of monetary expansion. You're losing more from the money printing than you're gaining from the growth. So how do you solve that? And the answer is you short the dollar. Another way to say it is I buy back half my stock with debt. And if I take out half of my equity, then my cash flows aren't growing at 3% or my EPS isn't growing at three, it's growing at six or seven, right? So if I want to get my EPS growth ahead of the monetary expansion growth so that I hold value, I have to load up in debt or I have to leverage up. So one conventional way to actually keep ahead of cost of capital,

but this is an epiphany too. The cost of capital for a company is equal to the rate of monetary expansion. If the money supply was fixed, if it wasn't expanding and you generated 4% cashflow growth a year, it actually is a pretty good store of value. Yeah. Right. The problem is when the money is expanding at 10% and you're growing 4% and the cash flows you're putting into the treasury are being debased faster than the rate at which you can grow them. That's not a good store of value. So, the conventional approach of every CFO, I think for the past decade, is if you get this,, I guess I got to borrow a lot of cheap money, right? Low interest. I borrow money. I buy my stock back. And the critics would say, Oh yeah,

they're just buying their stock back to manipulate their stock up. But what they don't get is when someone's sucking all the oxygen out of the room, like if, if the, if the, if the Fed is, is sucking the oxygen out of the room, like if the Fed is sucking the oxygen out of the room by expanding the money supply, then you have to push back on your capital structure to make the room smaller again. So I've got 10 million shares and the Fed expands this way by a factor of two. If I can cut my share count in half, I can maintain the oxygen level and oxygen is store of value is energy. So

it's not an irrational thing for a company to leverage up, but it is a dangerous thing. They're forcing everybody out on a limb because I have to decapitalize my company in order to not suffocate. And by the way, so that takes us to Apple. The reason Apple is working is because they're buying their stock back aggressively with debt, with cash and with debt, right? Go look at the Apple balance sheet. They borrow a lot of cheap money and they funnel all their cash into it. Their cash flows are not growing faster than the rate of monetary expansion, but they've got the combination of a marquee asset where people think they're too big to fail. You can't replace them. Plus they're doing some intelligent things on the balance sheet.

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interesting. I've never really heard that perspective on buybacks. I think, as you mentioned, the common perception on buybacks is it's to inflate stock, pay dividends to stockholders, pump the price. But isn't there a fine line there where part of it makes sense for your balance sheet, but most of it maybe is irresponsible? Airlines not having enough cash reserves to survive for two weeks. Well, they're in this awful situation where if they don't buy back their stock, their stock goes to zero. And if they don't take on the debt, right? Like for example, right now, if these companies hadn't taken on debt, they would be insolvent, right? I mean, like for the past six months. So you're either insolvent or your stock

goes to zero. And if your stock goes to zero, that creates another parade of horribles. So, I mean, what's the culprit here, Scott? I mean, the real culprit is- The central bank. Look at your room. If I go into your room and I start sucking 15% of the air out of your room, how long are you going to stay there? Not very long. I'm going to need a bigger room. And it's like, what if I put a crypto, a crypto tank or a crypto scuba, a breather, right? A crypto regulator that was pumping oxygen there in the corner. And I said, well, Scott, you know, this is my new thing. It's crypto oxygen. And you look at it and you're like, I never done that before. That looks kind

of strange. And I don't think I need it, right? When you're at a resort and the sun is shining and there's beautiful sandy beaches and a nice pool and you're swimming around and someone comes out with scuba equipment and a regulator and they say, you want to try this? And you're like, well, I don't know, maybe not. Maybe I'd rather have a margarita and sunbathe. If I pick you up and I drop you in the middle of the ocean and I strap you with a 200 pound weight and you go down 50 feet and you've got like two minutes to live. And then I throw the scuba gear in there with you. And I say, you want to try this, Scott? At that point, it goes from being a, you know, discretionary, luxurious, but it's a speculation when you're in the resort. It's not a speculation when you're 50 feet below water.

Of course. It's not a hedge, right? That's why, you know, that's why I say, like, if you're looking at someone $10 billion, it doesn't care. They can look at Bitcoin as a speculation or a hedge. But if you're sitting in a situation where you're about to drown or, you know, or suffocate, like maybe hyperinflation in Argentina or Turkey, or if you're just sitting at $500 million in cash and you're about to lose 15% a year for the next five years, it doesn't necessarily look like a speculation or a hedge anymore. It looks kind of like scuba gear. It does. And when you say that these companies are forced to short the dollar effectively, is that your aha moment where you say the best way for me to effectively short the dollar is to buy Bitcoin en masse? Well, your two choices are you either got to buy Bitcoin or short the dollar, right?

And I looked at it and I was like, we could buy back $500 million worth of our stock, cut our share count in half and double our EPS. But on the other hand, the problem with that, Scott, is if you're selling a bunch of stuff in USD, and if the Fed keeps debasing the USD by 15%, can you raise your prices by 15%? And can you rate, give me an example of a company that can raise its prices by 15% a year for the next four years? Yeah, it's obviously impossible. Well, so then you have to increase your user base by 15% on a zero variable cost offering every year for the next four years. Name me a company that can

do that. Especially when everybody else is tightening their belts. So it's not like there's this grand expansion of new potential customers who are flush with cash and looking to spend, right? Well, you know, the world's full of half the companies couldn't if they wanted to, right? There's no way that an airline or anybody with a high variable cost or high energy component or high manual labor component in their offering, there's no way they can do it even if they wanted to. And then the ones that have zero variable costs, the pure tech, pure software networks, well, their strategy is I got to expand my user base, which means I get very aggressive about giving away stuff for free or driving the price down. Okay. Well, that creates a winner take all and,

you know, Facebook and Amazon and Google and Apple crush everybody, which is kind of brutally painful if you're competing against them. But even while they're crushing everybody, it's not clear to me that they're going to grow their cash flows 15% or 20% a year for the next four years. In fact, I don't believe they will, right? I think that, you know, is Apple growing its cash flows 20% for the next four years? No. Right. And so you have $250 trillion worth of assets out there looking for a store of value. And they're sitting in real estate and sovereign debt and corporate debt and municipal debt and equity and gold and, you know, you name it, everything you can think of.

And a lot in cash and cash equivalents. Well, they all have to find a store of value and you've got bankers that are debasing the currencies. So the immediate impact of debasing a currency and then the first order impact is you suck all the energy out of the currencies, out of euros and dollars. Then you suck the energy out of your fixed long-term bonds, right? And then you suck the energy out of equities that are based on cash flows. I mean, you know, the textbook definition of an equity, it's the discounted value of the sum of the cash flows ad infinitum, right? Right. So, you suck all the value out of that because the discount rate,

the discount rate's got to be the risk-free return plus the risk premium. Okay. So, if big tech is risk-free equity, let's just say they're monopolies and they're risk-free and it is impossible for you not to buy from them. If they're risk-free equity, then the discount rate becomes the monetary expansion rate. So I guess here's a question for you, Scott, what's your estimate of the rate of monetary expansion for the next four years in the United States? I mean, I can't give a specific estimate, but all I can tell you is that from looking at any chart or any rational thinking is that it's going to be parabolic. As I said, if it was seven, it'll be 15, then it'll be 25, then it'll be 35. And then it will

be... Okay, so my premise was it's like 10 to... It's 15% a year for three to four years. You have a more pessimistic view than me. If it's really parabolic. I do because what indication do we have that it would remain fixed for three to four years based on what we're seeing from the Fed? Now apply a parabolic discount rate to the valuation of every equity. Right. right name me a company but name me an equity that's value is not based upon the forecast of its future cash flows tesla

and by the way you know when you know you know the way you get to an equity that's uh value is not based on its future cash flows is you have financial assets on the balance sheet. If Apple owned, if it owned $200 billion worth of the S&P 500, then you could say maybe it'll, its value will track the index, right? If Apple owned $200 billion worth of Bitcoin, now that's interesting, right? So MicroStrategy is, you know, it's a company and part of the company is based upon our expectation of our future revenues and our, you know, that's one. And then our future cash flows, which is a function of how well we manage our cost structure, that's two. And of course, if we dramatically improve our product and make it a hundred times as accessible and we grow it, that's three. So, I can lean on the cost structure,

I can lean on the product, right? And I can lean on the sales and marketing strategies. So those are things I can do. And the success of that over the next decade or your forecast of that gives you one number based upon what you plug in as your discount rate. And then the other part of it is the balance sheet, which is, okay, so I own $500 million worth of Bitcoin. Now, what's your opinion of that? And those two elements, the balance sheet plus the P&L are going to drive your opinion of the equity. And so we did what I thought was just the only obvious rational thing I could find to do. Right. You know, people say, well, you know, aren't you worried about the risk? It's like, you know, I threw, I put a weight around your neck and I threw you 50 feet below the Atlantic ocean and I dropped a scuba tank with a regulator with some oxygen in it. Okay. And you've never

used the regulator and you're not sure who packed the oxygen. And for about 15 seconds, you might obsess over that risk. And then at some point when you need the oxygen, you're going to do this. And I can't guarantee you for the next hundred years that Bitcoin is going to be the immortal power source that's going to be perfect. I can't guarantee that. It's just I can guarantee you one thing, which is that the central banks are going to print

a lot of money. And at some point, you have to balance the obvious 100% likely risk in front of your face with the ineffable potential theoretical. You know, like, if I have to hear one more freaking crypto Twitter person tell me aren't you concerned about quantum computer attacks like it's it's like that like you guys like you're gonna sit and hide in your basement you know shivering you know never never making any decision, never taking any investment choice because you're afraid of a quantum computer theoretical attack. Well, let me tell you what I think when I hear those things. I think if some dude ever does invent the all-powerful quantum computer that can crack anything. Got bigger problems. They have the option to start a war, topple a government,

destroy and kill anybody or anything, take anything they want from anybody they want. You think they're really going to bother to try to take 0.1% of the wealth in the world when they could have the other 99.9%? And by the way, why would I bother to take the 250 trillion of assets when I could just murder everybody or control everything or make myself God? I mean, like, it's like, there are people that have more power than billionaires, right? They run countries. And so, yeah, I'm not concerned about the dude with the atomic overthruster magic genie that can do anything. because I think that

when you have infinite power, there's other things that are more interesting to do with it. And of course, nobody's a shareholder of Apple or Amazon or Facebook or Google gets up in the morning and says, Oh my god, I got to sell my Apple stock because someone might have been a quantum computer. If you had a quantum computer, do you realize you could crash the Facebook network? Do you realize you could hijack the Facebook network? Do you realize you could hijack Donald Trump's Twitter account and declare war on the Soviet, you know, on the Russian Empire and launch nuclear missiles? Apparently you can do that now by just guessing his password. Apparently we read recently somebody hacked him last week by guessing his password. So, yeah. So the bottom line is there are people paralyzed in fear. And then there are others that engage in creative mental gymnastics to conceptualize some snarky comment to keep you from doing some common sense thing. You know, it's like I'm sucking the oxygen out of the room, you're freezing

to death. The obvious answer is, stop marching the Boy Scout troop up Mount Everest while you declare the altimeter to be at zero. At some point, march them down to sea level where there's oxygen and where it's 70 degrees, and then try to live your life there and stop worrying about the fact that, well, that's a place we've never been before. Yeah, I know the history of migrations is people go places they'd never been before because the alternative is to stay in some place that's untenable. You've mentioned the analogy a few times of being placed underwater 50 feet and being given an oxygen tank. Right. And I think that it's an obvious analogy that anyone in their right mind, you know, will eventually take the oxygen instead of dying. One could argue, though, that you and your personal situation and certainly micro strategy, you are still probably sitting on the beach.

Right. I mean, by no means were you 50 feet underwater or at risk. You talk about, obviously, people who've held FANG stocks for the last 10 years. They don't really worry about it. Their premise is not altered. But you jumped ahead, right? And you saw the scenario where you could be 50 feet under. Why did you care enough, right? I mean, you have plenty of money. You yourself have said you own over $200 million worth of Bitcoin. Your company owns a half a billion dollars worth of Bitcoin. Why did you make that jump when it wasn't the desperate situation that you described? I suppose I became disenchanted with the status quo. And I felt like it was the right thing to do.

But most people who are doing well don't think that way. In my experience. I said to somebody on a previous podcast, I said, you know, when the war breaks out, you got to choose sides. And I thought about who I wanted to be aligned with, right? And I looked at the world and I thought that the Bitcoiners and the maximalists and the Austrian economic economists and the libertarians and the freedom lovers and those who worship truth and those that are optimistic about the future of humanity and the entrepreneurs and everybody's struggling to create something beautiful on this earth that uh that offers the prospect of of personal, you know, long-term value.

I thought that those were the right people. And I didn't feel good about not doing anything about it, right? And I can't fix every problem in the world. I know that you've got to choose your battles. There's a lot of unpleasant stuff that happened this year. And there's a lot of tragic things that happened this year. This is something I could do. So I decided I was going to do this thing.

It's the right thing to do. And I wouldn't, you know, I got to the point in my life where it's like, I don't really need anything else. Right. I got a lot of in my life where it's like, I don't really need anything else. Right. I got a lot of stuff. Seven yachts, seven yachts, six houses, five jets. Like I have a lot of stuff. Don't need anything else.

But there's one thing you need, which is you need a reason to live. And I kind of felt like I ran out of that thing at some point. I can't feel proud. I don't feel proud of winning if I win the wrong way. Like, it's just, it's not right. There's just something that's not right. And so I looked around, I said, well, Bitcoin's right. Bitcoin's right.

So I guess everybody comes to this in their own way. They, they got their own personal drivers. That's my driver. It's really interesting to hear. And I'm curious, since obviously you've been evangelizing for Bitcoin now, and it's very, very much at the forefront, what you've done, are you hearing from other CEOs, other people in similar positions who are now considering this since you've had the balls to be first? Yeah. I, you know, like I, I didn't do it because I thought, well, if I do it, other people will follow, or I didn't do it to go to him and to do it.

It's like, like I say to you, if I turn the temperature in your room down to 30 degrees and then I start sucking the oxygen out of the room, at some point, aren't you going to get up and walk out of the room into the sunlight? You know, and at some point, if 50,000 people like you also had the temperature turned down, and they also had the oxygen sucked out of the room, when you got out of your room and you look to the left and the right, you think you might find some rational people or some people that shared your values that might also walk out of their room. And then you might say, well, that's good. I'm not alone. You know, you find some brotherhood in that, right? So, you know, the truth is, I'm really delighted to the people I've met, right? I've met some great people. And to the extent that we can make other people comfortable of walking, of breaking out of that traditional mindset and moving to the new world, then yeah, I would do it. Like, for example, we bought Bitcoin as a publicly traded company. It wasn't easy. I could have just not, I could have just bought it privately. It's a lot easier to make the decision as an individual

person. I could have done it privately. It was, believe me, 50 times harder for a public company to do this. You've got to get sign off of the officers, the directors, the auditors, the lawyers, the public investors, right? And you have to, it's very intricate to do that. But first of all, I thought it was the right thing for my shareholders. Like, it's not the, it takes a bit of courage to do it. And you have to take a bit of risk to do it. And I could have done nothing and not been criticized. If I'd done nothing, I would not be criticized. No one would know. No one thought about it. But it wouldn't be the best thing for the shareholders. And at some point, you have to have some courage of conviction if you're going to lead. And I am a fiduciary for all of the outside shareholders in my company.

So, you know, you just do what you do the best thing you can think to do for them in a responsible, respectful, honorable fashion. So I thought it was the best thing for them. And I worked hard to communicate it in the most responsible fashion. And I think we've done that pretty well. But after we did it, right, that takes a bit of the stigma off of doing it for other public companies. And now we're still leading the way and we've got a lot more work to do in communicating and creating that roadmap. But to open up the channel for publicly traded companies to invest in Bitcoin, I thought was appropriate and a good thing, not just for them. But if I was sitting and talking to, if I was talking to Jack Dorsey right now, I'd say, you know, and to his board of directors,

I'd say, well, Jack, maybe your board doesn't want to do this, but let me talk to them. Guys, you have $5 billion here at Twitter, $4 billion at Square, whatever the number is, you're losing 20% a year. You you know according to scott you're going to lose 80 of it if you don't believe him you know come up with your own discount rate if you guys went and bought five billion dollars worth of bitcoin do you know that you would probably make 25 billion dollars off of that trade like you want to you know so you want to do something a couple hundred you're up a couple hundred million bucks. Yeah. I mean, it was, I think.

It's only been a couple months. What do you think happens if Twitter buys a billion dollars worth of Bitcoin? It's the question I ask myself every day, right after I wake up and hear that song in my head, I start asking myself when, what's going to happen when big companies start buying billions of dollars worth of Bitcoin. Yeah. So I thought it was the right thing for our shareholders. I think it's the right thing for Twitter shareholders and it's the right thing for Square shareholders and it's the right thing for Apple shareholders because it's the right thing for every publicly traded company because otherwise you're taking on debt and decapitalizing the company if you do that, right? Or you're taking on debt and decapitalizing the company. If you do that, right? Or you're

sitting on a pile of cash, which is melting at 10 to 15% a year or more. And so you're a fiduciary, you're a treasurer or CFO. What's your choice? You're going to decapitalize the company and make it potentially insolvent, or you're going to melt your ice cube. What's the point of growing cash flows at 15% a year if your treasury is debasing at 20% a year? I mean, you're literally, it's pointless, right? Your entire business is pointless, Everything you're doing. And by the way, pointless is hopeless. Right. And so, you know, I repathed hope.com to Bitcoin. I said, Bitcoin is hope. I mean, it's a deep thought, which is you really are hopeless. If you don't find a way to channel your energy into a network that doesn't bleed power, then all of your work becomes hopeless and pointless,

as long as the central banks are printing at this rate. And so I did it because I thought it was good for our shareholders. I did it because I thought it would be good for other shareholders. I did it because I thought it'd be good for Bitcoin. And did I know anybody would follow me? No, I didn't know. But it's a matter of conviction and character, you know, and like, there's a lot of people doing difficult things in the world. And so am I going to sit and cower, you know, in my basement and not when I could. And so I thought I should do it. And then on the on the personal side, I don't believe you should ask people to take a risk that you wouldn't take yourself. It's a basic cornerstone of leadership in every profession,

in every school, of every field of endeavor, at every stage in life, whether you're a six-year-old on a soccer field, whether you're in the military, whether you're in business, whether you're in politics, whether you're in anything, right? For me to ask my public shareholders or my outside shareholders or my officers of director, my employees to take a risk that I wouldn't take. And I think that the crypto community and the Twitter community, they have been very kind to me. Because when I actually, when I announced that we actually made this investment, they declared, oh, yeah, you're GigaChad, you know, and you're a believer. What they didn't say is, you're betting other people's money. Now, it's a lot of my money. I mean, I kind of 25% of the

economic interest in the business. So 25% of it is my money, but 75% of it is somebody else's money. Right. Right. And so they could have said, well, you know, if you really believed, you know what you say, why don't you put your own personal money where your mouth is? And so the reason that I made public that I had acquired Bitcoin personally is because I wanted to be clear that this is a matter of conviction and character. And also, it's just the right thing to do. I wouldn't ask you to take a risk. I wouldn't take. And yes, I know that the future is uncertain

and maybe God will come down with his freaking quantum computer ray gun and point it at the head of every miner and wreck them all maybe that will happen and maybe a meteorite will hit the earth and maybe so every government in the world will simultaneously declare Bitcoin is death sentence. Maybe that will happen. I get it. But on the other hand, I also got to get up and walk through the street, you know, and you know, you could fall down accidentally while you cross the street and that might kill you too. And so that doesn't keep me cowering in bed every morning. So you got to take a risk. So the issue is not, is there a risk? The issue is it, is it

less risky to do this than do nothing? And then the next question is, am I willing to take the risk myself that I would, that I would encourage other people to take? And so when I talk to the hodlers and their individuals, and they're putting their life savings into this, I think they should know that, yeah, I am. I'm in this too. And when I actually suggest that, yeah, I think it's a good thing to hold for a hundred years, I'm not speaking on behalf of other outside investors in my company, like I'm going to cajole them into doing it with their money. No, I'm talking about it on my own personal account. This is what I believe. As a public company officer, I have a fiduciary responsibility to the outside shareholders, and I've got regulatory and statutory requirements and

all sorts of other things that I have to take into account in all the decisions we make. And that's different than the requirements and constraints on you as an individual. And so I think that one should separate those two things. What gets me is we know the answer, at least we have conviction that Bitcoin is part of the answer, of course, but most people are not going to come to that conclusion. And I wonder what the end game is for your average person who just remains in the system as it is, is a victim of central bank policy and never either has the means to buy Bitcoin or just it's never on the radar and they don't care or they don't find another solution. I mean, what is the end game of this central bank monetary policy

now, seeing it as an out of control truck, obviously? Well, for the ones in the most extreme regimes where the currency is debasing the fastest, right? The billion people in the developing world, it's pretty tragic. And if you don't have access to convert any of your existing assets into Bitcoin or into Bitcoin specifically, right? Then that's definitely tragic. If you have access, but you don't know to do it, right? Because you're just unaware, that can also be tragic. So I think the best thing we can do is do our best to educate the world. There's a billion people out there that are just, that are uneducated, they're ignorant, and they're skeptical. And so you could start on the 1 billion, make them enlightened and

enthusiastic. So we just start to work on that. And then the other part of the equation is the on-ramps. And that's, I think it's a good thing. By the way, if you want to help the billion people that have $1,000 a year in annual income, the best way to help them, and this will be controversial, would be if a company like an Apple or Twitter or Google or Facebook bought $10 billion worth of Bitcoin, and if the Bitcoin price went to the moon, there would be such a surge of electricity

that you would have a thousand exchanges spin up, and you would have the Binances and the Coinbases and the Kraken's and the Hobies of the world and the VC of the worldances and the Coinbases and the Krakens and the, you know, and the Hobies of the world and the VC of the world, and they would launch a thousand of these exchanges and they would ripple through Africa and Asia and South America and every part and the publicity and the awareness would go through the roof and the amount of political lobbying and the amount of marketing would go through the roof. And we would extend the gift of, you know, we would extend the gift of an instrument of economic empowerment to everyone. You know, you want to make the world a better place, deliver water as a universal utility, then deliver

electricity. You know, across Africa, I think that people have more access to mobile phones than they do to water and electricity. For sure. And I wrote about this in the mobile wave, right? You know, you put a cell tower within 50 miles of anybody and you get a mobile phone. And if I can put it on the mobile phone, I can give you empowerment. So if I can put a bank on a mobile phone and I can plug Bitcoin into the bank, then anybody has the ability to either receive value or generate value and store value and not have it debased away. But the real issue is you got to develop the ecosystem. And developing the ecosystem is, it's about practically speaking, number one, we want large investors to buy into this thing because that'll help.

Number two, I don't think we want like extreme dogma. For example, if PayPal deploys Bitcoin to 100 million people in their wall garden, and you can't take control of your keys into your cold storage wallet. Okay, rather than complain and attack them for doing it, what you ought to say is, PayPal just introduced Bitcoin to 100 million people. And if you're the person that feels so strongly about cold storage on a hardware wallet, well, then you should be happy because you still have a business, right? You can still go sell that and offer that more secure solution. And PayPal just didn't obliterate your business. So it's actually good for the ecosystem that you have Square or

PayPal or anybody else offer a constrained version of this thing because you know what happens next? Yeah. PayPal is not going to put the cold storage wallet guys and the Bitcoin, you know, the light, they're not going to put the lightning network out of business. They're actually going to feed the value in the lightning network and cold storage. And you know what else they're going to do? They're going to go lobby every politician and every jurisdiction in the world in order to benefit, protect, and defend the interest of Bitcoin. And so the perfect can't be the enemy of the good. What you want is billionaires, billion-dollar investment entities, large corporations, all of them to embrace at least some piece of Bitcoin and spread it everywhere in the world. And then if you have a particular view about something that should be done and they're not doing it, instead of criticizing them, take it as an opportunity to do it yourself. And if you're right, you'll make a crap load of money. And if you're wrong, the market will determine that you're

wrong. And maybe your idea wasn't that important after all. And you know, Scott, like one of the things is that that's one of the benefits I have is I have 30 years in business, and I've had a lot of ideas, and I launched a lot of ideas, and some worked worked and some didn't work. You have to have the, and by the way, I never launched an idea that I didn't passionately believe in and love. I never launched a bad idea. They were all good ideas. You know, bad ideas aren't what sink us. It's good ideas that just don't work, that sink us. And so the market determines whether it's a commercial idea. And in this particular case, I think what we want to do is grow the ecosystem, let all the ideas fight it out in the marketplace. And as the entire Bitcoin community gets bigger, if your agenda is

you just want to make money for some evil capitalist, well, that can be good for all of us. And if your agenda is to help the billion people in sub-Saharan Africa, that's good too. And they actually both have aligned interest at this point in time, which is kind of a thing of wonder, isn't it? I mean, it's kind of a beautiful thing that you have so many different constituencies that all have an aligned interest and you can benefit everybody in every way if you move forward constructively. Which disincentivizes bad actors as well. Even it disincentivizes bad actors. I mean, that's the beauty of cryptocurrency, Bitcoin in general. And then you can obviously, there's the sort of infinite regress going into the different altcoins and stuff.

But, I mean, you have a system where greed can be good. And it benefits you if you want to be greedy to help the system. You know, it's greed in search of truth and life and beauty. And if that's greedy, then questing for truth, life, and beauty, and timeless elegance isn't something to be ashamed of. By the way, there's one more point that should be made, which is economists think Bitcoin is unique because it's scarce. And in the financial community, it's the scarcest asset. And that is unique in finance. But if you're an engineer, and I'm an engineer, and I was surrounded by engineers at MIT, civil engineers, nuclear engineers, aeronautical engineers, electrical engineers, all sorts of engineers,

and the purest engineer, not software engineers are kind of quasi engineers, because they can cheat on a lot of things. Because in cyberspace, you get to, you know, you're not really subject to the laws of relativity and thermodynamics and the likes. So computer scientists, I put it a different category. But if we think about all the other engineers, hydro engineers, you know, naval architects, naval engineers, chemical engineers, scarcity is not unique. Scarcity is the law of thermodynamics. Scarcity is conservation of energy. Scarcity is Newton'ston's loss scarcity is pretty much all physical laws conservation of energy mass mass energy they must be conserved the entire universe works on the principle and what follows from that principle is you can't make a machine that works by breaking the laws of thermodynamics.

And you can't break Newton's laws and make a machine that works in most regimes. So engineers know the plane won't fly, the ship will sink, the building will fall apart, the bridge will shake itself apart, the HVAC won't work. Pneumatic systems, you know, people like, they talk about, oh, well, Bitcoin is interesting, but it doesn't form a leak. Build a pneumatic system with a leak. Build an electrical system with a short circuit, right? Build any hydraulic system with a leak. They don't work. And so what's interesting here is if you're an engineer that built anything that ever worked, which our world is based on, they all know you have to bow down to the laws of physics and respect the laws of physics and bitcoin is special because it's the first economic system that respects the laws of physics and everybody's

breaking the law everywhere else they're breaking the rules and and bonds and equities and cash and and gold and silver all of these things have leaks in them. And the only reason that economists didn't have to face this fact is because we never actually created a system that didn't have a leak in it. This is the first time someone figured out how to create something that respects the law of conservation of energy and apply it to monetary economics and the human condition. And so that is profound. And yet it's profound to an economist. It's utterly ordinary to an engineer, a freshman engineer in their first semester at MIT, if they had turned in a paper designing a hydraulic system that did not respect the law of conservation of energy, they would have flunked.

F. And so you ask, well, how can I get convicted about this? How can I be passionate about it? It's like we finally respect the engineering principles of the world and we apply it to monetary energy we created a software network that stores monetary energy without power loss i say that people still don't get it like most finance they just don't it's not clicking with them we invented fire here we invented fire it's like what could be more profound to the economy of the world than creating a network which will store power store and channel

power through time and space with no energy loss and if you you understood that, you would do everything you could possibly do to make that work. I was going to ask you how you convinced the board and the lawyers and everybody that this was a good idea, but I think you just showed me in the last almost hour and a half. And I know that we are up against it with time. I have to say, personally, I know it's only anecdotal, but being in this space for a long time and having people call me crazy, you know, all my friends, I went to University of Pennsylvania, Wall Street, you know, everybody headed to private equity and hedge funds. And when MicroStrategy made their purchase,

a lot of those people called me for the first time and didn't think I was crazy anymore. So I have to thank you even personally, just for that. Look, I think it's important for us to evangelize at this point. And I was hoping that I would get public companies and private companies to talk about their belief in Bitcoin when we did what we did. But, you know, as of today, when I put out that tweet about my own personal holdings, I'm hoping we'll get private individuals to talk about Bitcoin and, and to share it with the, with the public because, yeah, there's this, there's security issues and people say, well, you should never talk about your crypto. I get it. For 99.99% of the people, they shouldn't. But we need 10 leaders to step up and say, as I said to Keith,

I said, what happens when 10 billionaires say, I bought it. I'm not ashamed of it. I'm going to buy more. We need 10 people to say that, not be ashamed of it, because that actually breaks the, you know, breaks the dam open. And then everybody else feels like, okay, it's okay to follow. This is not an irrational thing. This is a rational thing. And I hope they will. And I hope the cyber hornets go and they start to attack on crypto Twitter. Everybody else that has Bitcoin that's hiding it, we want them to stand up and say, I have it, I'm proud of it.

You might want to get some too, just in case it catches on. I think it'd be a good thing if we get some leadership there for everybody. Well, you've led the charge, so hopefully we will see that. I have to thank you once again for taking the time. If you ever feel like you have too much stuff and want to lend out one of those yachts, I'm in the market for borrowing a yacht in case you're wondering. But so just let me know anytime. I know how to find you.

I'm sure you do. Everybody else seems to be able to, but thank you so much. I really appreciate the conversation. I honestly, I feel like I could have done this for three more hours. So we're going to have to circle back soon and do it again. I'll look forward to it. Thank you, Scott. Thank you, Michael. Bye.