Welcome to another episode of not investment advice, but very, very, very special episode today. We've got the man himself. Michael sailor is here. Welcome to the show. Michael, thanks for having me, trying. You just going to say that how this all came to be in the first place. This, this link up? Yeah, absolutely talked up the first question, I want to throw you had to do with how we were able to reach out to. You was the pier diamandis to eat. So I was born away. When I found out the Peter, diamandis the founder of X prize.
Went to school with your MIT,
right?
Yeah. I I was stated Delta, Chi, Fraternity. And Peter is also in the Theta, Delta, Chi Fraternity. So, he actually was a like he was four years ahead of me. So I guess he was like, a first-year grad student or a graduate student. When I was in freshman, but the grad students would always come back to the house. So,
He hung out we got to know each other and we had common interest because he was an Aeronautical Engineering grad, and I was an Aeronautical Engineering student, so sometimes I come across his notes. In the fraternity Library, sometimes you get into a difficult project, you call the upper-class ready to ask him. How did they deal with it? And Steve is also a very big and he found an organization called
It's for the exploration and development of space, my guess. And so everybody was into space, was kind of clustered around the aeroastro labs, and we would all get together and talk about different things. So, that's how I know him.
Absolutely. So that makes a lot of sense in the question, I want to ask was around his tweet where I had tweeted this video of you from 2012. When the
book The Mobile Revolution came out.
I know you've discussed it in the past, but I love to hear more about when you say, somebody knows enough but in a kind of a dilettante way but not super well that they can hurt themselves. Have you have you gone through that experience and how have you kind of, have you seen anything in this current
cycle where you're watching around them and seeing how pricey as a moves in Barre classes or happen? You saying people are not fully understanding what's going on
here.
Yeah, I mean that that phrase it refers to a dinner. I had with very rich rich fellow and we're talking about about iPhones and people that were in the business that were using the iPhone living on a breathing on, it could see the potential, you know and as you know the potential, the iPhone was to replace the tape recorder and the video camera and the photograph and rebuild our relationships and potentially topple small
Government change the way you thought about everything change Healthcare, but someone has studied the iPhone for like two hours with say. Oh, it looks like an expensive phone but eventually it'll get manufactured and commoditized and the price is going to go towards 0. So the people that were Outsiders that it's been a couple of hours playing with it didn't really think about the implications.
They would model it based upon something else and a lot of times they're just very dismissive, you know? And the point that I was making there was was not necessarily right if it's if it's if it's an industrial piece of equipment and the functionality is fixed and may very well commoditized, but if it becomes a fashion item and a personal item and you sleep with it right, you know any you use
In your and your social life, your business life and it keeps changing. Then there's no reason that whatever necessarily commoditize it'll either hold its price. You know, the example of holding us prices like, a very nice bag, a Birkin bag or a Gucci bag, they're holding their price for 5,000 years.
But of course you know comparing an iPhone to a handbag. You would think it ought to be able to do at least as well as a handbag, right. I mean in theory would technology, we're going to get in a Tesla car. In one day, it'll be strong enough to levitate hover and fly 500 miles an hour. So deciding that is getting commoditized is a presumption that there's no technology involved and it doesn't and it's it doesn't matter personally to us. So I think,
In general, you see that with all new technology, right? People are dismissive of it, how many people spent 1,000 hours thinking about the applications of the iPhone? Well, I mean, I did, I wrote a book about, right? I but I lived it right now. I'm in the business, but a lot of people didn't and they would dismiss it, but I think the same thing is true of, you know, Google Maps. Yeah. You know, search how many people underestimated the potential of a YouTube?
Type thing, right? I mean most people, right? Most people under when Google bought YouTube every thought they overpaid, they paid some what like a billion dollars for a company with no revenue or something.
And
do you still work at YouTube? Funny enough? Yeah, I know probably one of the best investments of all time. Now, right? Apart from your investment in Bitcoin. At one point we will look back at that. So yeah I think you could come back today and I'll today you got the same thing right? Which is if the average person spending an hour or two hours as Bitcoin this crypto stuff, it's all just speculation.
But and and even when I say this is digital energy, well, you know, I don't know two-thirds of the people in the crypto industry for the last decade they don't understand what I'm saying. So there are people that have been in the crypto industry for a decade that have master's degrees in computer science and they think that they're very informed and they don't even understand what I'm saying. And and they and they've got such a strong bias toward their point of view that they're unwilling to
Accept the new idea and even stop and think about it for a bit. So I don't think it's limited to non technologist. I think non technologists would lock and you would say, okay, well, what is bitcoin? Bitcoin is digital money. What is money there? Remember you guys set through 20 hours of my lectures? I want his money. Okay, I'm going to tell you a secret, I didn't know what money was when Robert Breedlove asked me to go and do the podcast. He said, come on my show called what is money and I said,
oh gosh, I guess I better think about what is money before I get on the show and then I ended up writing out a 10 page outline and it becomes 30 hours of discussions. But but you know I got to the year 2020 without thinking about what is money. Most of the people in the world, don't know what is money. So if you say it's digital money that doesn't click. And then you say it's digital property, most people don't know what property is. Emma thought about the definition of property.
Property rights? What is that really right? Do you own your own stuff? If you live in North Korea, do you own anything, right? I mean, what what does it mean to own anything? And then of course, you call it digital energy. Most people don't, well, they're like, oh no, it's not energy. You can't run a car on it but then they haven't thought about what is it digital map or digital music or digital Communications or digital relationship. And I had the advantage a little bit of that because of
You read the mobile wave. The mobile wave is about what happens when you have digital Maps, digital relationships. And the only difference is all that digital information is non conservative and the whole point of money is money is energy economic energy and therefore IE conservative. And so, when Satoshi invented something that allowed you to transfer value from two parties without an intermediary, not only did Satoshi invent the ability to transfer energy inside.
Space Satoshi invented the ability to manifest energy in cyberspace, something conservative. Well, people that are computer. Scientists don't understand, conservation of energy that, you know, if I'm criticizing the computer science Geeks right in this is not at MIT. They make you study Physics and thermodynamics right? And and mechanical engineering as well as computer science. But if all you did was study computer science and you never studied
Physics and thermodynamics and mechanical and Aeronautical Engineering, then your lulled into this false sense of security where you think you can just make any role and do anything because there's no conservation of energy. The reason that Aeronautical Engineering is a really good ground and understand what money is, or what crypto should be, or what Bitcoin should be is aerodynamic Aeronautical, Engineering is like the ultimate systems.
Engineering discipline, you have to master computer science, Computer Engineering mechanical engineering metallic metal Metallurgy. You have to master chemical engineering electronic, electrical engineering Control Systems. You have to master ocean, engineering, fluid dynamics, you know, propulsion, all of these things which are highly inconvenient for a computer scientist. So I
I guess, I guess what I'd say is, I think most people that grew up in the crypto industry, they only know enough to hurt themselves. I think most people that aren't technologists, they only know enough to hurt them self and if the people that really understand the thing, like if you go into Google and you find the person that worked on Google Maps for five years,
If they understood engineering and computer science, and they stood and stared 45, they're probably understanding the thing, right. The people that spend the most time and have the most invested in it, they typically understand the thing and generally the conclusion is, they invest 100x more than you would. They value it much more than the guys at Google, paid a billion dollars for something. That if you, if you had asked 1,000 investors on Wall Street, what is YouTube?
Worth
the high bidder was probably Google and there were probably five out of 1,000 that would have said it's worth a lot and 99% of them. What is said, are you out of your mind? It's worth nothing. And so I I think that the if you're looking for a big idea or the grand idea, it
isn't
you really have to focus upon a small area and then
If you focus on something, spend thousands and thousands of hours, 10,000 hours focused on that thing. And if you have an open mind, maybe you can, maybe your opinion matters and then like, I'm not going to give you a my opinions on the 99% of the stuff in the world. That's really important.
Because I haven't focused on it like asking me about vaccines and biomed and gene splicing and you know, even the latest propulsion technology. I even spent thousands of hours still thinking about rocket propulsion technology, breakthroughs in the last decade. So I think that the lesson you learn is probably better to stay in your lane
But if you're going to invest money or your reputation or your or your life savings, you probably ought to really, really focus on that. And you shouldn't be Cavalier or nonchalant because it's, it's really easy to make mistakes today, completely. Well, Michael, we talked a lot about like, memes and money. What money actually is, I think Jack had a question on, like, a higher level question on what?
What Bitcoin is and how money ties into that.
Yeah, I think actually, what you just mentioned, Mike was like reshaped the question for me. So if you use like the iPhone analogy, where the software built on the iPhone, gave it this platform where people could make use of use of it without doing hundreds of thousands of hours or thousands of hours of research. Is there like an analogous application for Bitcoin? We're like at what point do
Adopted that haven't done the thousands of hours of research and get the feel confident to make that decision. Does that question make sense?
Yeah. Like what's the killer app for Bitcoin?
Yes.
Yeah. Well so
first of our framework you know like the iPhone was it was not going anywhere until the Apple to the application store hit and they had the iOS is a programming language. If you look at the iPhone one of the iPhone to, there's no cut and paste. There's no app store. It's kind of a dead thing. And then iPhone 3 hits. And I've got an app store and now you got an explosion of thousands of applications and its own ecosystem, and the killer apps, you know,
What's up, you know, Facebook Instagram, right, the world's never the same again, go I mean Google. But if you look at Bitcoin
and think, think
superconducting Network superconducting energy Network. Okay, I want to move energy at the speed of light, for friction, free for free. And I want to instantiate it forever like it, put it in a crucible.
So when I look at Bitcoin miners that's what I see right. I see I see the cashion's of the digital energy are caissons of a digital energy Network, right? They they have created the ability to digitize energy and so once I convert the energy by, you know, it could be electrical engineer in energy, but it could be political energy. I take a billion dollars of Yin, I take a billion dollars in electricity, either way it
Shop has Bitcoin. Now, I've got it on the base
layer
and that the base layer is, is the foundation of the digital economy of the 21st century kind of like, you know, the iPhone and the App Store is the base layer of the mobile economy, you know? And then the issue is, what comes next.
Well,
I think that if you, if you think about the Bitcoin economy layer 2 is is open permissionless transaction, protocols? Okay, layer one is the Mana, the open permissionless, monetary protocol, which is the thing we call Bitcoin. And layer to the most famous example, of a layer 2 is lightning and open permissionless transaction protocol. But by no means,
It's the only possible layer 2 and theory. If you create an open permissionless protocol that integrates with Bitcoin, it could be a competitor to lightning but right now lightning looks like the dominant open paren open permissionless, transaction protocol. Then you got layer 3?
Layer through be an application and maybe a famous example would be like PayPal or cash app payment applications, any application that's moving Bitcoin around. Now you can you can have a proprietary application. Like Robin Hood was an application to buy Bitcoin, but you couldn't withdraw or deposit the Bitcoin. So initially PayPal was the same way initially their proprietary. But then light,
Comes along and there's a lot of pressure to open them and make them open applications. So in the past couple of months, Kraken,
Kraken. Well actually I'd say Kraken and and cash app have supported lightning and so they're extremely open high performance, whereas PayPal. Like I could be wrong here you could correct me but I think PayPal and Robin Hood supported withdrawal and deposits when the layer 1. So there are kind of lower performance open,
but I think that you're going to see
You're going to see pretty much store of value applications that use the base layer if you want to do cool transactional applications, like a billion transactions a day at the speed of light for free. You're not going to do it with layer one, you need, if you want to be open, you do it layer to. But if you want to be proprietary, well, heck that's already happening right by Nance and coinbase. And, and the like even cash app. Lets you send Bitcoin cache tag to Cache tag and a proprietary way.
I think that that was the status quo, we're kind of at at the beginning of 2022,
but
there's additional layers, right? That the next layer is going to be Bitcoin. Derivatives, like microstrategy is a derivative of a Bitcoin gbtc, is a derivative of Bitcoin, all the Bitcoin mining stocks are derivatives of Bitcoin. So, you say, how do you get Mass adoption? Well, pretty much every shareholder of microstrategy is,
Bitcoin user, right? Because via the derivative if a country buys a bunch of Bitcoin and in issues of currency, the currency becomes a Bitcoin derivative. So when a company issues stock backed by Bitcoin, the equity is a derivative and when it comes to Country issues currency the currency is a derivative. Now you've got that's the layer for those are spreading right I mean Beto is a Bitcoin derivative and if the if
and when The Regulators allow a spot ETF, that will be the mother of all Bitcoin derivatives,
Then you've got layer five and six layer 5 would be Bitcoin products like opened. I'm like any hardware wallet or or something like opened I'm, which is even more than a hardware wall products. Hardware devices with the protocol either, the lightning protocol or the underlying Bitcoin protocol built into it. Those are products. You know, you could think about the simplistic
Products like opened I'm I have like a thousand dollars hanging on a necklace. I give it to you. You have a thousand dollars. Well, that's interesting. But when it becomes a hundred thousand dollars becomes very interesting when it becomes a hundred thousand dollars locked up for the next 25 years subject to, you know, some multi signature conditions. That becomes
unique.
Well, how about this for Unique? People aren't very creative, but I think that when you, if you going to do technology, my advice is well, you want to read
Science fiction, but you also want to read fantasy. Go back and read all the fantasy novels, that's the theme of the mobile wave, right? You know, when you read L, make Elric of manipulating a or you'd play Dungeons and Dragons and you combine that with everything that Heinlein Clark and Asimov wrote, and then you kind of have the best of all worlds. So what's an example of magic mirror? I'm staring at one right now. Right. We have a magic mirror brought to life by a zoom
All right, like mirror isn't that kind of amazing, you know, when did that instantiate? Well, I mean, the entire world adopted, it March of 2020 before that it was like, you know, people are skeptical today. People aren't so. Skeptical, what about a magic car that drives itself forever? Okay, well, if I take a Tesla,
And if I put a Bitcoin in the Tesla, what if I sell you a car with a Bitcoin embedded in the car, right? And now the natural yield on the Bitcoin. If I put 20,000 dollars a Bitcoin or let's say 50,000, I was a bit coin into a car that cost 50,000, maybe the car pays for its electricity in his maintenance forever. It's a Perpetual
car
Are you saying the energy you're saying basically by learning through the Bitcoin is I mean yeah I like what I mean is what if I actually sold you a watch or sold, you a car that had money embedded in it?
Let me give you a another idea. I give you a watch. I put enough Bitcoin in it that the watch generates the equivalent of a hundred thousand dollars a year increasing with the Bitcoin economy. It's a perpetual watch that makes you Rich Forever.
You just have to wear it, you understand what I'm saying? I like that idea. Like if you're if you're if you're not creative you're like okay well I need a how do I make a car run forever. Well, I have to put a battery in the car that holds enough energy to make the car run for 100 years. Well, there is no such batter right batteries lose 2% of their energy and months at best, right? So the energy loss and a battery is 24 percent a year.
R. The half-life of energy and battery is at best is three years, maybe one year. Okay, what's the half-life of energy in Bitcoin? Well, it's forever. You see? So if I put the energy, if I take the electricity that I would use the run, the car for 100 years, and I put it in the car. I'm going to lose it because of depreciation, but the depletion, but I take the same energy and I sell it to the grid, take the money by the Bitcoin, attach the Bitcoin to a chip in the Tesla.
In the car, the car will run itself forever.
Okay, I like where that this is. This is a product. Now, it's a kind of a bizarre idea, right? Energy embedded in a car that causes that makes the car self-charging for 100 years, right? Or at least for free. But you what if you applied it to a life insurance policy?
All right, so you want to buy life insurance, you give me money and I invested in what? Bonds, that, he'll 3% interest and the face of eight percent inflation. That's a crappy life insurance policy. So what if you give me money and I invest the money in Bitcoin
Right, what can I do with that? Well, I can either pay you 10 x as much money on the back end of the policy or I can cut that premium by a factor of 5. So so layer 5 is, is products with digital energy embedded in them and layer 6 is services with digital energy embedded in them.
And like an insurance policy. Okay. So now you're asking what's the killer app?
Well I mean I I
can't be sure what the killer app but I mean, it seems like life insurance, which is 10 times better as a killer app. It seems like a bond portfolio where, you know, fixed income portfolio. That is 10x better than existing bonds. That might be killer app if you live. I think it depends on where you live. For example, if you look at
What's going on right now in Argentina, the currency's collapsed by 50% in 12 months. The blue dollar rate is 270 pesos to the dollar and it was 15 pesos to the dollar four years ago. And that case the killer app is is like the ability to maintain digital property on your phone and self custody it, so you don't get poor and I think that they're already calls for them to Dollar eyes.
Right? But I think a heart, a wallet a wallet. You can trust that will hold a large supply of currency like dollars and property like Bitcoin. That's a killer app for 8 billion people. So, I think the obvious thing to do would be for Apple Google or Facebook to build that wallet into their device. And probably apple is the company that could build it most effectively because Apple already,
Has a secure element in the phone and they control all the entire strip stack of the iPhone. And if you want to create something which is really safe and easy to use the people trust, you kind of have to control the Silicon layer. The operating system layer, and the application layer, and the cloud layer. And Apple has those the closest company to competing with them and say Google. But Google doesn't control the hardware and the
chipsets to the way to the degree that Apple does. So it's like a Google Samsung production and then I mean Facebook they could become I mean this could be a strategy for them but they kind of like have gone the opposite direction instead of actually building Bitcoin in to Novi and giving it to a billion people, which they probably should have done. They kind of, you know, try to create their own currency with Libra and it crashed and burned it and they shut down Novi and gave up
Oops, not
good but I so I think that the obvious application is a digital wallet 48 billion people where you can hold a currency and property right? That what currency to they want, they all want the dollar. They don't want pesos, they don't want nayara. They don't want see and why they don't. If you look at all the currencies that are that are currently circulating right now, this
Year at the pounds, down, 14% the Euros down 16 percent, the Polish lottie's down 22% the ends down 23%, the Turkish leader is down 60%.
Right every currency outside, the United States is crashing. So the near term inflation hedge is you swap out your local currency for dollar indisputable, every single person in the world knows that the long-term inflation hedge is you strap out swap out your week property for strong property.
Like like you don't want to own a rental apartment building in Istanbul. You want to own the the equivalent amount of Bitcoin, right? Because at some point, if the economy of Argentina or turkey crashes, then the value of your rental property and Argentina in Turkey will also crash right there.
Derivatives
So that's the killer app. I mean, everything else is an opportunity, right? And as for, who's going to ship the killer app, is it Google? Google's got more reach but a weaker stack, is it? Apple they've got the best stock lesser reach. But best stack. Is it Facebook? They've got reach but, you know, slightly weaker, who needs it? The most Facebook needs it, the most by far, right? And what's going to happen? If neither a none of the big three do it,
It. Well then it's an opportunity. I mean for you know block is going to is going to chase it. PayPal will chase it the payment guys, you know, maybe Microsoft or Amazon jumps into the into The Fray or some other Dark Horse. Otherwise the entrepreneur's and the crypto industry will will step up Michael just just to build on what you just said that. I like the example, you said about Argentina and in the short run, you
People should be sent to using dollars to, you know, to essentially be in a stable place. But longer term Bitcoin for you is is the replacement for that. I guess that to play devil's advocate for people on the other side. A lot of people asked us questions like this when we asked listeners, what we should ask you and that that sounded like a store of value, kind of use case to me what you just said. And you know we've used the meme of digital gold and last few years have been has been
A prominent for Bitcoin as well, but as we know in the last, you know, six to 12 months or six months or so Bitcoins value is down. Is it like 70% and a lot of the other crypto assets of down? Even even more than that. So what would you say to someone who says, well, why don't we just continue to use a digital stable coin, like a u.s. DC or whatever else might be out there and yes, we've got, you know, eight ten percent inflation or more. But that's better than a 70% drop right now. And at least, I
I kind of know what I'm going to be paying for a loaf of bread tomorrow in Venezuela.
Yeah, so I think that you got to think of
money as a currency component and a property component, and the currency is the medium of exchange that you're going to use to pay your day-to-day bills. And that's a Government monopoly every place. There's a nation state, they're going to control the currency. And then the property is your long-term store of value, right? Whether it's your ranch or it's your Collectibles or whether it's your company.
Or whether it's Bitcoin. The cut off the clear theoretical cut off. I think it's four years but you want to Safe, really save, cut off. Look at the Fourier moving average of Bitcoin. If you have money that you can afford to put away and hold for more than 40 years, your you would be foolish to store it in a currency, like, even the strongest currency world that the dollar is the strongest currency in the world, but you would be foolish to store money for more than four years in the doll.
So I think that you look on, you say, well stuff, I've got that I want to hold for four to forty years. I have to find a property portfolio and we're just going to debate. Whether you should buy a building by a company by a Bitcoin, by a bunch of, you know art, right? That's another story for less than four years. Maybe you want a currency, you know, I would think that, you know, I would normally keep currency for one to two years conservative, two years, two to four years.
Is being almost too conservative but you know, you want to be really conservative, you could keep for years of cash. Now, what would I say to people that said why not use currency? Well first, I would say if you live in Lebanon or turkey or Argentina or Venezuela or anywhere in Africa or most places in Asia, you don't have the option to use the dollar
and so your it's the wrong comparison, it's not a comparison of Bitcoin versus the dollar for the next four years. It's a comparison a Bitcoin versus the Turkish lira or Bitcoin versus the Venezuelan Bolivar or Bitcoin, you know, go Google blue dollar and check the black market rate of the current
Bolivars. Sorry, the current Pace. All right now and
I'll do it just for our benefit.
Blue dollar and formal rate, 267.
Okay, and you look at the
chart
and you roll the clock back to 2017. It was 18. Okay, so what would I say to that person? I would say in the last five years you have lost 95% of your wealth.
Holding
currency.
Okay, you're like well why can't they just all by dollars? Well because it's illegal to buy the dollars. Go to go check the formal rate. The formal bank rate is 127 pesos to the dollar. The actual rate is 270. What's the difference? The difference is the bank won't sell you the dollars.
That's why it's cheap, right? So Bitcoin is an option for for anybody in the world that lives in a nation, where they can't trust the bank, or they can't trust the local currency and that's the killer app for them. And that case this is common sense, right? If I told you the currency was going to collapse in a month
And you lived in Venezuela, you know, you would keep three days worth of cash and the bowl of our, you would keep a month, worth the cash in the peso, you would keep a year worth of cash and the dollar and you would keep the rest of the money that you owned and property.
Go buy a car, go by something because I'm telling you right that that whatever, whatever you bought, if you bought a hundred houses, five years ago, 95 of the 100 are getting burned and you'll have five houses in five years, it's not complicated. So I think that the problem with all the currencies over the long term, is the best currency in the world is going to lose 99.9 percent of its value on hundred years, the best
The dollar is going to lose 99.9 percent of its value over 100 years, okay? So it's really just a question of what is your time frame? And if you look at the monetary inflation rate, you know, in a good year for ninety four ninety years on average before 2020, it was 7% a year in the dollar 14 percent a year in the developing world. And that's not this is not, you know, controversial, you know, go study the history of currency collapses in our
Agent, Tina and Mexico in Africa and Russians currency collapse. In 98. They all collapse. So I'll go study them. And you'll realize that so most currencies are losing 15 percent of their value, a year and the dollar is losing eight percent of its value a year. But in 2020, we stamped down on the accelerator and the dollar started losing 16 percent or more of its value actually 20% of its value a year for two years running. If you look at the M2 money supply and that means everybody.
L started losing double that.
And that's why you have riots in Sri Lanka right now, right? That's why you have riots in Argentina. That's why you have a collapse and all sorts of places because the currencies losing when it's week, it's losing 40 percent of its value year when it's strong, its losing 15 to 20 percent of its value a year and the only reason that you're not panicked in the u.s. is because the CPI is manipulated to create the lowest possible inflation. Number
Right. Which is, you know, the lowest number. They can that they can possibly create. It's like eight percent right now.
But you don't gotta be a rocket scientist to figure out that the rate at which stuff you need to buy is going up in price as more than 8%, right? Energy food, you know, I I have I have friends. They run all sorts of normal. Real World Companies they go. Yeah, I like everything that everything we used to buy 24 months ago, is 50% more expensive now and we pass the price increase on to all of our customers and they accepted it.
And that's in the US.
But, in Sri Lanka, do you guys know what happened in Sri Lanka this weekend? Yes, I'm going to videos, craziest, great time. I when you search it and you know what, caused the riots, where they deposed the entire government, what was the breaking point?
It was well, they're running 60 percent 70 percent inflation that they if the government admits admits 70 percent inflation, that means it's probably double right? Start start from that. But here's that, here's the breaking point. The government put out, an edict saying that private citizens are not allowed to buy gasoline.
That's how they're going to
do. If you want to crash an economy. How do you do it? Well, you lock down the economy, right? Put everybody under home arrest and that will crash in economy. But the other way to crash an economy is I just tell you, you're not allowed to drive a car, they can't go anywhere and you can't do
anything.
Okay? So I mean, it's, I'm sure that someone that can with the idea thought it was prudent.
But of course, at the end of the day, if you print so much money, I think they were also modern monetary theorists, and they had the idea you could print money. You you cannot the people that think you can print money or the people that don't understand conservation of energy.
Right, you can eat. You can't print infinite money. If you have finite energy, right? The price of everything, you know, escalates exponentially and it's pretty obvious that in this case. If if we, as if we shut down the economy, if I want to crash the economy, I cut out put in half by telling people, they can't work, they shouldn't work and they should be afraid to work, right, or I don't let them work.
then I close off the borders right by shutting down the Shipping Lines, raising tariffs, and shutting down all the Air transport and then I double the money supply
Okay. So what I've done is, I've just basically double the money supply, cut the output in half, prices, have to go up by a factor of four, and then I deny that they've gone up by a factor of 4, and then stuff starts
breaking
My God question. Oh God gun from question related to that was so you're seeing for example, the Sri Lanka,
examples are great
Linda said a use case answer Bitcoin but the idea that you're seeing these things happen and and you're mad
at, you two, use cases. If you live in Sri Lanka and you had money in a bank, you've lost it all your rooms at all. And if you have money and property in Sri Lanka, it's kind of hard to rent your property or Airbnb, it out when the government makes it a illegal for
Show up.
So, what is it? That is a good example. Yeah. It's
how you avoid starving to death if you live in a, in a economy, that is mismanaged.
So, the reason I brought that up is when you see that happening, okay, well, there is
very clear, use case of
rhetorical question. I have is kind of reverse and you talk
about studying something 10,000 hours, knowing it and to
back and you've done that with Bitcoin. So the question I had was what would make you believe that your thesis on bitcoin was incorrect like it is
Or something an event, like a single type of event. Where you been, okay? This is actually making me question my
conviction if I saw something
better. Okay.
It's like yeah if you invent a
fusion reactor that can run a Tesla on a sugar cube for 100 years and you asked me whether I would buy that instead of the Tesla all other things being equal. I think I like the car with the fusion motor or the atomic overthruster.
I just haven't seen it. Okay, that makes sense. I mean, Bitcoin in his core is more of an ideology. The ideology is, let's Implement conservation of energy in cyberspace via protocol which is fair and
Equitable,
they have done that, right? So can someone Implement about, you know, and every other thing that competes with it isn't a fair and Equitable protocol for implementing conservation of energy and cyber.
It's something different, right? When you start inflating the supply, the tokens by 5%, or when you have a foundation or an issue, or an IC o---- or an investment contract and its proprietary, or you keep hard forking and hard forking, right? That's not conservation of energy via an open permissionless protocol in cyberspace. It's something different the things that are closest to bitcoin right where the Bitcoin Forks Bitcoin cash, Bitcoin Satoshi vision. And if you look at Bitcoin,
Can cash. It has collapsed by 99.5%, right? It's now like 50 basis points of Bitcoin. So the and I would say Bitcoin cash, right? Is probably the closest thing to bitcoin. Those supposed to be an improvement.
Obviously, not
so I. Yeah, I think that the most important Point here
is
Somebody invented mathematics
and we were living without mathematics. And now, you've got mathematics base 10 and you can design planes and Trains and Automobiles and electric, electric power plans and radios and modern technology and you can fly to the moon with mathematics. Now, are you going to quibble with me over whether the mass should be base 10 or base 8?
Or base for we like Isaac Newton wrote principia Mathematica, and it was pretty much all the math that 99.99% of the people will ever need or knowing their life there. It's done right? 200 years ago, it's pretty good. And now if entrepreneurs keep launching base 8 math and base, 16 math, and base format, and based 32 math and they come up with all these other, we don't want our Arabic numerals anymore. We want Roman numerals or we
Like, the Cylon warrior numerals. Yeah, they're all different forms of math, but the question is, is this good
enough? And the answer is, it's good enough,
if you can create nuclear weapons with it and you can create Tesla's with it and you can create airplanes with it, it's and create Bridges with it and create skyscrapers
with it.
It's good enough. So at some point, all of the tinkering trying to reinvent the wheel is dysfunctional.
I think most of the people in the crypto industry they keep trying to reinvent the wheel because there's some measure of ignorance and arrogance, right? And greed. They kind of want to get rich but if you're greedy a better way to get rich as build an application on top of Bitcoin using the
token,
it's like all the people that want to reinvent the iOS which is not going to happen, right? It's not going to happen. How about build an app on top of the iOS I mean you're going to have to do something
new.
And in
this case, I just think a lot of energy is wasted either worrying, like like people come up with all these products, all these creative possible scenarios under which Bitcoin might be in trouble, so that they can justify their shit coin flip. I have a Quantum resistance, shit coin, and do you know that theoretically I can imagine blah blah blah. It's like this is, this is the it's just silly ridiculous stuff but it goes on
And it's it's an incredible waste of energy. It's like you're wasting your life. And and and if it, if it causes you to ver into the practice of issuing, your own unregistered security, it takes you to a down a dark unethical path to like it's illegal, it's unethical and it's also stupid waste of time. So like, I think it's worthwhile to consider carefully right and defend the network. Think about
Not work. But for the most part, the the creativity that's going to increase the ecosystem. The economy by factor of 100, is mostly going to take place on layers. 2, 3, 4 5 & 6 Bitcoin at layer
1.
It's good enough, it's good. Enough to be a hundred trillion dollar base layer, it's going to be 200 x bigger than it's good enough. To be a 500 trillion, dollar base layer, right? That's not the part that needs fixing that, that's the base 10.
Mass at this point,
everybody ought to be working on applications. Derivatives Services, other protocols on the ought to stop trying to reinvent the wheel. I mean, it's just, it's just not very productive, right?
Why do you think that that Talent hasn't been attracted to the Bitcoin ecosystem? Like, why don't you think why is there not like a flourishing like crazy effort to build applications?
On top of Bitcoin. In the same way, you see, in other parts of crypto, at least they're more. Yeah, I'd like Twitter cultural is
I think that the rest of crypto takes a shortcut, right? The shortcut is issuing an unregistered security. So, so there really isn't an example that I can think of, of any kind of smart contract Network, or proof of steak or crypto Network that competes with Bitcoin that didn't take the shortcut of an unregistered securities.
Leti, they're not decentralized. So, all of all of the legitimate Talent is working on top of the Bitcoin ecosystem and they are there, right? If you're honest, and ethical and competent, you're building stuff on lightning or you're building an application, right? That's right, you can't. And so it is going on. The thing that, like cash app is an example of an application, the truth of the matter,
Is like any exchange trading? Bitcoin is an example of an application, right?
Microstrategy is an application. It's a derivative of Bitcoin, right? We put four billion dollars into it. So you could say well, why aren't people doing things? They are doing things. Gbtc is a sign is a thing. I think that the reason you didn't see so many sexy applications is because we're waiting for lightning to harden and the lightning protocol.
Is it has taken a few years for it to mature. I would say year one of lightning was 20 21.
So the protocol to grow, we're kind of in year 2. And I think, you'll see an explosion of really cool applications built on the lightning protocol, right? Because lightning reduced the cost to move Bitcoin by a factor of 100,000 or something and increase scalability by
100,000.
But the vision has been
there. I think the
most of the other stuff is just short cuts. The problem when the shortcut is, is ultimately,
You can get away with it, but your live at the pleasure of the regulator's, right? If you're selling an unregistered security to the general public and you haven't taken and you haven't issued a registration statement.
Right. It's non-compliant which means you're only going to exist until someone takes a look at it and then the legal system is going to shut you down. So a lot of energy has been poor, been poured into these other applications I think by entrepreneurs that don't really understand the law or don't want to understand the law like that. Like it's like I just want to intentionally be ignorant but if you look at people that understand the law
And understand the
ethics.
They're the ones that started thinking about lightning. How many years ago? 2017 2016, right. So they've been working on Lightning. They've been working on on the Bitcoin layer they've been working on the derivatives like grayscale. They've been working on on exchanges to trade Bitcoin, they've been working on Hardware wallets you know opened I'm custody Solutions multi signature Solutions
The reason that that hasn't been as lucrative is, there's nothing more lucrative than selling an unregistered security to the retail public. That's it's just illegal and unethical. It's lucrative but that's the Dilemma, right? If I'm willing to break the law and an unethical way then yeah I can get it financed it's just there's nothing right about it like a Luna right? You generate 50 billion dollars of tokens and you had you know and you Jen up the token and you have
Billion dollars, you know, at some point when you're manipulating your unregistered security, you know, offshore you know, and dumping it on the general public, what could go wrong. It's pretty obvious that you can generate if I wanted to generate a ten billion dollar market cap, right? I just I issue a token. I put one percent in the float.
And then I just buy the one percent of the float and then I publish it. And then I tell her about us a ten billion dollar market cap, that's what it looks like. So well, you know, I can connect, just give it to you, right? If I give it to you and and I get you to promote my nft or my something. Then I basically used an unregistered security stock offering without disclosure to pump the underlying Network, it's highly unethical, but it has been going on.
And so like that's that's why it happens. There's your choices you do you do the ethical legal thing and it's not that lucrative. You do the unethical non-compliant thing. It looks looks lucrative but you've got a long tail of liability that will be coming at you for the next decade of lawsuits and actions in the like so Michael can we just talk specifically about a theorem because I think we're talking about Leia twos and we're talking about kind of this big bucket of
Of of like Bitcoin and everything else. Right and I definitely agree with you on the fact that Bitcoin is the o.j. is the original. You know, that is the Innovation that is set up this whole industry but I would say to on the theorem side I wouldn't even group with theorem with you know I've been lunar is this on thing. I think Salon has its own thing. Of course there might be some parallels between them as well but I'm curious to get your take on a theorem of on a theorem specifically because I think you were your mentor.
You really don't open. This can of worms. Well I just think like that would be the the other side, right? I'm just trying to give a fair okay. Well fine, I'd tell you. I mean if you want to know like the issue with with eith is
If you want a decentralized
network,
you have to actually ask install a protocol and it has to run unmolested. You know, unmodified for five to 10 years before you can conclude that it is decentralized and censorship resistant and eith hasn't even got there yet. The clock on E that won't start until after the problem with eighth, is after the merge. They've still left all sorts of questions.
And what's the issue and schedule going to be for the next thousand years? You know what's you know what are the staking rules? What are the you know there's so much the such an ambitious technology agenda that the protocol never stops mutating. And the problem with a never mutating DNA structure, is you generally end up with a monstrosity, right? You can't keep mutating the protocol for obvious reasons, so, Ethan isn't
Really something that you could have an opinion on yet because they haven't stopped mutating it. If you had, if I had to have an opinion on what I see in front of me, what you see is this is this is something that was sold as an IC, o---- to the public the 8th, Foundation, can thering Foundation controls it. It's an investment contract, right? It's been hard for worked. Multiple times in the hard Forks, aren't just hard for us to fix the Fatal bug. They're hard Forks to change the underlying monetary protocol.
And the protocol keeps materially changing and it is never stabilized right now, you've got a Neath mining, anyth Mining constituency and every, you know, every year for the past five years, they've had a difficulty bomb to destroy it and they keep putting it off. Well, who's they? The miners don't want to destroy themselves so who's controlling the network, not the miners, right? There's a small group of developers that control what the network is. And that's
Company. It's a software company and eath is an equity and they've sold it to the general public and they keep changing the protocol hard Forks are just software upgrades that are mandatory. So it's not a decentralized network, it's not a commodity, there's no reasonable person. That understands the law or ethics could conclude that that etherium is a commodity, right? You can't Gary, Gensler doesn't think it's a commodity. You can read his
Videos on it, right? It does it passes the Howey test as an investment contract. The question you got to ask yourself is who makes the decisions and what's the basis they make the decision, right? And it doesn't help the vote on these things. Either by the way, like if you vote on them, companies vote on things. If the shareholders get a vote that makes it a security, right? The only way to establish a commodity in cyberspace, is someone has to has to
Follow satoshis example. The example is you create the software. You give it to the world with no economic motive, right? And the protocol is set forever.
And no one changes it. So if you're going to like, if you're going to change it,
Like you could, you could justify fixing a bug.
But if someone hard for to bitcoin to be 42 million coins, instead of 21 million coins or they hard forked it to change the issue and schedule, right? All the sudden you've centralized it, you reset the clock, it looks like it looks like something which is controlled by an entity and now you have to wait a decade to figure out whether or not it's stabilized. And so I think the real issue with is a decade after they finish changing it and screwing with it, you can have an opinion.
In on it but it doesn't look to me. Like they'll stop hard forking it for the next 3 years.
Like like the plan is to keep hard forking and hard-working. I'll give you a question. You stake your wreath? Okay. Well, what's the yield schedule in the state? Eat for the next decade? And then when can you get your steak teeth out?
I don't know the answer to that but I guess I couldn't question. Nobody knows and nobody knows the answer that. Yeah is no answer that now. So here's the problem, right? If you let you saying there is no second best, Michael what I'm saying is you have to go back to First principles when you design a digital commodity. It needs to be a protocol that, that is like, you know, the Bitcoin protocol determines the amount of Bitcoin, and the way it's issued and the way the network works for the next
Here's
and that protocol was established on Pizza day when it traded for nothing and it hasn't changed, right? So like some small change to make it more, make it more secure maybe but you can't keep changing the protocol. That's the problem. If you change the protocol then you probably instantiated a security. And now the problem is, if it's a security, your trading it illegally,
Lie right, on unregister exchanges, without a license to trade a security. And you haven't disclosed all the risk factors on the security. So it doesn't work as money, right? It's something different. If you want to create a software company and sell Equity, then you do it pursuant to an IPO. Google did it microstrategy did it? Microsoft did? It Oracle did it, there's an ethical way to do it, but it's not ethical, and it's not legal to sell Equity to the General Public.
Like, without registration statement and without disclosing the risk factors and that it's not black and white. I mean, it's There's No Gray here. I mean, I wish there was gray, but I mean, I don't see how anybody could look at it as being anywhere gray. I mean, if you actually take an objective view toward it, it does just happen to be extremely defeat diffused in the world. There's a lot of people with it. They've got that going for them. Michael would you not say though that the very nature of
She is dying of olives and changes and I think the way you're describing, you know, Bitcoin is a protocol obviously is a different frame for what people might describe, the theorem Network or something like that. As something that is building a technology stack for real use cases and you could argue that a lot of the interesting things that happen in crypto currency from defy. 2nf TS2. You know, little all sorts of things that have been built in the last few years, a lot of those have been done on something like etherium.
You know, it looks like Bitcoin, you know, people on the lightning that will will replicate some of those things now, and in your opinion, with a better base layer. But, you know, a lot of things were to question. The question, is that with a lot of? Yeah, a lot of, with a lot of Technologies, you do. There is no law for them because they're there on think, right? So when Airbnb starts or Uber starts, we're all saying, why would you go into the random person's house? Why would you go into around a person's car, Etc? And it takes time for regular, it's a catch up with that. So,
Right? And I'm not saying this is the case, but as a technologist first and foremost, which you are, would you not say? That is the very nature like the law, normally plays catch up with new things. Well, you've got a technical issue. You're going to ethnic economic issue, and you've got an ethical issue. So, if you look at the ethical issue, the ethics are, it's an unregistered security and it's unethical, right? So, so a lot of people have an objection. They just
Fact that it's unethical, right? It's unethical to murder the entire eith mining industry just because you want to write, it's just not right and, and it's unethical to sell something as commodity that's just cured. So, that's the first issue. The second issue is, which is economic, is it economically sound? The problem with that is, is it's not economically sound because you don't have an issue in schedule and a protocol that set in stone for the next Thousand Years.
You do with Bitcoin, you've got to, you've got block issuance out to 2140, and you've got a transaction fee model, that will just go on and and it's not changeable. No one thinks they can change it. So you've got an economically sound protocol with eith. It's not, you know, you can't make 100 Year bet or even a ten-year bit. I mean the protocol changes every year. Like every time you hard for to chat, it's not just there's a precedent for hard Forks. There's a
An inch for hard Forks, that make materially different changes to the monetary protocol. It keeps radically changing and and it means there's a small group of people that are going to make something up and they'll just keep making it up and they haven't made up what they wanted to be it again. Like, what's the issuance schedule for the next hundred years? You don't know. That's because no one's made it up yet. So economically it is not sound and then technically technically it's just too ambitious. The problem with this
Part yet. It's cool. But there's like billions and billions of dollars of hacks. I mean, starting with the, you could see the writing on the wall. Have you guys read the crypto beans? You should read the crypto paeans, right? It's the entire story, right? I mean, the network was hacked within, you know, a short period of time after it was launched and then it was hard, forked, right? And an ethical lapse and it's, and that's that difficulty bomb plus a, plus a pattern of hard.
Alex continues to this day. So, you know, it seems to me that if you look at the entire industry right now. Yeah, the smart contract things are interesting but they're just not technically sound.
I mean like like the axi Infiniti hack? How many, how many hacks have there? Been 15 billion dollars worth of hacks over two years or something? So if your point is yeah this is interesting technology and it's inspired people. Yeah.
If your point is because it's interesting technology, you should invest in it or it should be allowed. What? I think people should be allowed to experiment with technology but you know, like if you go back to the Wolf of Wall Street just because you have an interesting idea, doesn't mean you can run a boiler room pump and dump scheme and defraud. The general public just because it's a cool business, right? There's a distinction between whether the business has value.
And whether or not the way you raise money is
appropriate. So not
I think that the world's full of technology companies that are innovating right now, there's a lot of private companies. There's a lot of public companies, there's a lot of people building stuff on different
protocols
if you ask me to to sift through the crypto industry and say what's valuable well, what's valuable is the idea of a stable coin, clearly the world wants.
Trillions of dollars of digital currency in the form of the US dollar, the digital Euro excetera, that's valuable. What's valuable is digital property which is what Bitcoin is the establishment of a non of a open and open censorship resistant digital commodity with a protocol that is universally understood, right? That is not got an issuer.
That fails, the Howey test. That is not investment contract. That is an innovation that is satoshi's innovation, right? And so that's the second thing is valuable. I think the third thing is valuable is being is the ability to move crypto assets Point peer-to-peer.
Right instantly for free. I think 24/7 365 trading is valuable and I think the idea of tokenizing tokenizing things tokens, they're interesting. They're valuable and FTS are tokens their valuable, right? So ultimately all those things will probably find their way into the ecosystem but just because
Just because those things are valuable, doesn't justify anybody buying any random token, or any random coin, right?
Right. That's a different thing entirely, right? It's it's like when Instagram came out or Amazon came out. The entire world was full of promoters and they're all saying, hey, I found the Amazon, you know, of the UK or the Amazon of women's shoes or the Amazon of cat toys, and of course the point is Amazon, is going to be the Amazon of all those things.
And so, everybody's raising money just like everybody, we raise money to be the next Instagram. Well, for like everyone Instagram, there's like 10,000 failed companies.
So I think that it's clear, there's 20,000 kryptos there's gonna be a 99 percent failure rate of not a 99.9 percent failure rate, some stuff will rise. Like, if you want to actually build a business moving money around, you're going to have to be good at working out the compliance issues, right? I mean, if you're going to move money around, if it's, if it's property, then you have to have a sound economic basis and
A sound sound ethical basis, right? You can't use Securities to Securities will not work as property for 100 years and if you want to move currency around, you have to have a sound legal, ethical basis for the currency. And that means you're going to have to also apply. You're going to have to comply with KY caml rules. You're a bank for all practical purposes, right? And so anybody in that business, you're going to have, you're going to have to solve those.
And issues. And, and I think that,
Most of the crypto industry, it was it just went fast broke things, lacking adult supervision, right? Very entrepreneurial and that works until it doesn't work anymore and right. It's pretty clear it's not working anymore, right? And the next decade you're going to have to have lawyers and
accountants
And people are saying, well, I guess, I guess, you know, Celsius, should have disclosed what they were
doing,
you know, who discloses, what they're doing publicly traded companies. You know why? Because it's a legal requirement to sell your stock to the General Public.
You know? So I mean, go read my disclosures read mstr SEC, filing, this hundreds of pages of disclosures and risk factors,
right?
And then, you know, you look at all these, the crypto wildcat banks and they were pretty much running unregulated hedge funds making massive bets. Massive loans, undisclosed taking in retail money deposits. And then they implode they lose all the money. What could go wrong right? Then I mean, the answer is the industry's got to grow up. Yeah. Right and the industry's going to grow up, right? One way or the other. The Regulators are
But
by the end of the day, just keep in mind, the basis of Securities laws.
Our Biblical, they go back, thousands of years. They mean, Hammurabi's Code. Even the basis of Securities laws are val, shalt not lie, cheat or steal.
That's the basis of the law. So saying, these are Antiquated laws from 1933 that don't apply to crypto. That's kind of a, it's a Dead on Arrival argument. The law is don't lie, cheat or steal? It's just instantiated in different years and different places. And so the future of the industry is going to have to be based on an ethical foundation and ethically sound Foundation, a technically sound foundation and it
He's sound foundation. And as you can tell right, I think Bitcoin is economically technically and ethically sound, you've got a million reasons why we could talk about it for thousands of hours. If you want to build a business in this industry, you need to be inspired by those those three principles. And the simple thing to do is just use Bitcoin as your token and then build on top of that of, that monetary protocol.
All and on top of that monetary asset but if you're not going to do that, you definitely have to think long and hard about the economic ethical and Technical implications of what you're doing.
Joe trunk. Did you have a question? They are so you unmute did either of you have a
question. Well, I know we're coming up on time here, Michael. I really appreciate that answer and blah, insisting to push on it and I'm drunk it. The last question I had was on my side was for young 22. Year old grad coming out of
school right now. What would you say to them their professional career?
Obviously you like
Bitcoin is very important. It has become your legs work.
How do you coach somebody?
Starting their career.
I think.
The
world's increasingly specialized.
And it's platform driven. So you need to focus on first, you need a basic set of skills, the basic tools you need to get by in the modern world would be English.
Important, the build of
code,
right? Some computer science or be computer literate. Be be English literate because anything, you sell in the world will sell for a higher price in English, anything you buy, you buy for a lower price in English. So it's a universal protocol. So master that protocol obviously master math as a protocol, but especially especially applied statistics.
For example, if you have a complicated theoretical math problem, you can generally plug it into a computer or you applying, you know, you can, you can have programs that will solve calculus in calculus of variations and those forms of math. But the kind of math that you use every single day of your life is applied statistics.
Like, for example, what's the likelihood that coin is going to 0 how much risk is in the protocol? If I change the protocol every year, what's the risk that that will actually blow up in my face? So you have to be able to assess risk all the time. So that's statistics, especially applied statistics. So, I would study that I would study coding. I would study English Then, I then Master to keep lat.
Forms, right? You can you can create music or you can create something but if it's not on the big platforms, you know, if you don't understand YouTube, it doesn't matter that you posted your video on the number of for most important streaming video service. No one's going there. So figure out Google and YouTube and Twitter and Facebook. If you're going to, if you're going to do anything that matters. So then after you've got those skills, you know they're all Protocols of sorts, right?
Thinking skills and then you've got to be able to create something right. What what that something is, depends what your talent is, but you probably better better, figure out what your talent is hone it. If you don't have talent, don't bother because someone else in the world will have it. If you have talent Focus mass of the talent then figure out how to deliver something on those platforms. You know, compatible with those protocols like don't sing.
Fabulous, music and Swahili on YouTube, no one understands Swahili. Right. Figure out where is the money, right? People figure out where are the people with the money? And how do I communicate with them? And how do I serve them and you then you do that thing with the awareness that the world is increasingly Global interconnected and and
There's a winner-take-all type environment where we're the number one gets, you know, most of the market, the number two, gets a little bit. The number three gets noticed, and the numbers for through 40,000 or the long tail of mediocrity.
So figure that out, make your career there and then and then if you come back to the metaphor of laser eyes, the whole quote, the whole point of laser eyes is yes, you have 100 opinions, but the world only cares about one. Yes, you can do a hundred things but the world only wants to pay you to do one thing.
Right? And, and once you do that one thing, if you have a modicum of success and you start thinking that you can do a second, a third and a fourth thing, you're wrong. You can't.
Right? Because when you're when you're the most successful person in your Niche and you're doing the one thing, there's someone that's smarter than you more talented than you, that has more to gain less than less to lose that wants to replace you and they're thinking about that 80 hours a week and you're deciding to put your thing on autopilot and move on to conquer some new thing. Because you know, that's what you know, alpha males, do
When you think about that, you just remember what happened to Napoleon when he charged into Russia and then Hitler when a charge into Russia and then napoleoni charge into Egypt and then Julius Caesar when he fought charge into Egypt. It's like people reach too far, right? And then it slips from their grasp because you have to run as hard as you can with 150 percent focus in order to keep your position in a world that is continually wanting to squeeze you out.
And it won't miss you. Mmm,
that was great. That sounds just like that. Just like that sounded like, Jack. Your your last few year Twitter business strategy was summarized by Michael there.
Yeah, I watch you on up only Michael and like a version of that advice is deeply resonates and is absolutely true and our experience here on the podcast and people we've interviewed
To so thank you for thanks so much. I gonna,
you know, if there's a theme to all of this, the theme of Bitcoin, the theme of everything, it's it's the thing that's wrong with the world. Is we dissipate too much energy?
And the Cure is stop dissipating. Stop wasting energy.
Hmm.
Right. And a laser just happens to be an example of the device, the concentrates energy and Optical form more effectively than anything else we can think of, and, and it's a good metaphor.
But generally most things that don't work, they just they just dissipate energy and government policies that don't work. They're inefficient policies. If you think about them for a while, you think it's is the economy is not going to work like that and products that dissipate energy don't work and people, you know, you get on Twitter and you're the World's expert in chicken soup. People don't want to hear your political opinion. They want to hear about chicken soup, right? You know,
If you're, if you're a really good guitar player, they want to hear you play guitar. They don't they don't want to hear you prognosticate about something, you know nothing about right? And so when you start to divert your focus, I mean first your first, you get unfocused and then your Communications get unfocused and then your audience gets confused and then you start to lose your
audience.
Right? And then and then even worse you start to just turn them against you. So I would say focus focus on on the thing.
and stay that way, and
You know, the average person takes 40 years to get an undergraduate degree and after and if you had an undergraduate degree, the consensus in the engineering world is you're not competent to actually lead the project or do anything. It's the masters degree phds that they want the post graduate or graduate people. They want to actually do those things. So the consensus in the world is after 12 years of under of, you know, secondary education in six years of
College education. Maybe we'll let you do something.
Okay. That's 18 years to do something six years from the point that you're an adult to do something. So in the real world, figure out what you're going to do focus on it and if you focus on it every day for six years,
And you didn't get distracted, right? Maybe you've started to do something. And if you're successful, somebody else in the world is going to try to try to actually replace you. So first do something and then to defend the something that you're doing and then be grateful to have the opportunity to do that.
well said,
I have a I don't know how much time you have. We're
getting close to the end. He got too close. I was just going to ask
and this may not be a an answer. We can get in the time. But the the idea of conservation of energy as a principle of Bitcoin being very like almost interpreted as the opposite in the mainstream culture. So like Bitcoin as an instrument to conserve energy whereas you know, a Layman who is not it does.
I'm an engineering degree would think of Bitcoin as an instrument that consumes energy. Is it, you have a way to like consolidate that
Contradict like the wrong contradiction. There were people think that this thing represents pain, energy versus stored energy?
Well, I mean, the only people that would think that it is not energy efficient or people that don't understand it. And either don't understand it because they're completely outside of the space, or they don't understand it. Because it's in their professional interest, not to understand it and they're competing to promote a proof of stake. Not work.
For most of the anti Bitcoin energy usage narratives are actually under there under written by the proof of stake promoters, right? And that's where most of that food comes from. It doesn't really come from Outsiders. The Outsiders would look at and say it's a Data Center and you put electricity in and you spit out blocks of digital energy blocks a Bitcoin. You know, as for how do you communicate it? How do you educate people? I guess.
There's a lot of different ways to do it. You can start by calculating the energy intensity a bit coin and you can show that it's the most efficient energy user of any industrial application. If you put a billion dollars worth of energy into an airline,
Right? You probably get five hundred million dollars of equity out, you put a billion dollars of energy and a Bitcoin. You get a hundred billion dollars of value out. So you can compare the energy intensity to the input of electricity or the input of energy to the output the value. And you can calculate that for Google for Netflix for American Airlines, you can calculate it for the real estate industry, the banking industry, the S&P 500 and Bitcoin is the most efficient
So if you're really analytical, that's a that's a way to approach it. You can also just point to other metaphors like how expensive is it to create a cable network versus how expensive is it to move a message over the network?
If you think about the cost to build aquaducts, you know, those are water networks. The cost of move to build a highway system and the cost to build to build an Information Network. Our radio network they're all very high fixed
cost
but that's the price you pay in order to calculate the energy needed to walk from New York to San Francisco over the dirt.
Right and then count and how long it takes. And then calculate the energy used to roll down a highway from New York to San Francisco and now justify the highway and say is it Justified answers? Of course, it's Justified it's basically the input to create a superconducting network where the friction drops by a factor of 10,000, can't you drive across the entire country and like two days? Three days now.
3,000 miles. I guess it's 50 hours right? 40 to 50 hours. How long did it take in a wagon to you know, pull by a donkey or a horse. Right. Well, Bitcoin, basically is the equivalent of like the superhighway versus people with horses and wagons. That's the different. And and anybody that studies the thinks about it, though, they'll see that. You can also point out other Observer.
Are other examples, for example, put a billion dollars of energy into a gold Network 100 years ago and lose 95% of it, put a billion dollars of energy into the US dollar and lose 99.9% of it, put a billion dollars of energy into Bitcoin, keep it all.
All right, so what's it worth?
Right. I think that anybody, that just that thinks about this objectively, once you, once you illustrate the comparisons to a battery or gold, or Fiat money, or any other engineering comparison, they all look at. And they say, okay, it's just another engineered system. It's just better engineer. The people that don't, that don't really want to hear that, or the ones that are just pitching, the idea of proof of steak, but proof of steak is just a software program that is created by a software development team to
Emulate a virtual world. It's not real. Its virtual. And that for that reason is not the same thing as like
proof of State comparison to proof of work are like comparing a real hospital to a Second Life Hospital saying like in Second Life we didn't have to, you know, get medical degrees and we didn't need a building and and Medical Care is free and we just took your appendix out and it didn't hurt and the drugs are better, okay? But in real life you need real doctors, real buildings, real drugs and it hurts, right? And that's so, you know, virtual systems aren't the same.
Is real systems. And when you compare Bitcoin, as a real system to other real systems other ways to do this,
How how would you move 10 billion dollars worth of gold from New York to Tokyo? And how much would that cost? And how long would that take?
Right? And what you began to realize
is.
I give you one more metaphor. It's like Bitcoin is 7, transactions. A second.
Well if I if I told you it's seven transactions a second and it cost you know, 50 cents or a dollar a transaction you might think that's expensive compared to some other Visa network but but Visa is a virtual Network that coins are real Network. The real analogy is, what if I told you, I could teleport seven aircraft carriers, every second anywhere, in the Universe for free, or for five bucks, right? You would think what if I told you, I could move every
Building in San Francisco.
Every hundred and forty milliseconds, you would think, well, it sounds pretty cheap, don't you think? Can you move a building and San Francisco to London? In 140, milliseconds for 50 cents? Because Bitcoin can write, you put a billion dollars, a billion dollars of Bitcoin and move it.
Literally for fifty cents so and you can do it seven times a second.
So so if people start to think of it like that, once you get once you get your metaphors right, your us, wait a minute, we found a way to teleport property, every 130 milliseconds, any amount of property anywhere on
Earth.
For next to nothing,
the alternative is. Oh, you know, the alternative is you have to basically blow up the building and rebuild it in London and that takes about 10 years and that cost you 10 billion dollars. Oh
yeah, right.
So it's a breakthrough.
Most of the world doesn't understand it at all. And then there's, you know, a lot of crypto and fighting between people that want to push their own crypto protocols, and they intentionally don't understand it or they have a vested interest and not thinking too hard because if I explain to you how it could all be done using Bitcoin, then you don't have a justification to sell 100 million dollars worth of your altcoin and you own 50% of the supply, the old coin. So of course you want to. So I don't blame you look. It's again. It's
It's not unreasonable to create a company and sell Equity. The general public, it's just unethical to do it without fairly disclosing it as risk factors and complying with appropriate laws and mores. So you just got to do it the right way, if it's Equity fine, it's just not a commodity. If you want to do a commodity, you have to go back and look at what Satoshi did.
And Satoshi gave you the you know, you've got the Playbook, which is you have to create it, release it into the general public and not benefit from it.
Right side, if the people that sold you the Ico still on the token, right?
That's that's not. What Satoshi did you know? The best thing about Bitcoin is it traded without any commercial value for a year-and-a-half. The Satoshi coins never moved and Satoshi disappeared and it's left to the world as a gift to the world.
But that's that's really the magical thing here and now, the question is, what we're going to do
with it.
Love, it's called cast, that's it. Yeah that's part two of that. I podcast a microcellular marquis, we've gone a little bit over time so we appreciate you taking so much time with us today. This was definitely you know something year and a bit in the making with wanted to have you on it for a long time. So we really appreciate you coming on and spending time with us today anytime. Thank you. Michael have a great day guys. Thank you. Much - have a good one. All right.
