Michael Saylor on Bitcoin

Michael Saylor Interview: The Future of Bitcoin | Bitcoin Magazine Podcast

Check out the Bitcoin Magazine Podcast Episode Page and Show Notes

Key Takeaways

  • Money and currency are two different things
    • Money is economic energy, while a currency is a method of moving economic energy across time and space that is typically designated by a government 
  • Fiat currencies are a method of moving economic energy, but they dissipate energy over time
    • For example, the US dollar dissipates energy at a rate of about 15% per year, and the Turkish Lira dissipates about 70% of its energy per year
  • Bitcoin could become a $250 trillion ecosystem without threatening any nation state by demonetizing gold, then real estate, then corporate bonds, equities, etc.
    • It doesn’t have to “replace” anything; it can partner with people, companies, and nations and improve them 
  • “If you want to watch how Bitcoin Hyperization happens, watch how dollarization happens … and does it happen with bloodshot or without bloodshed.” –  Michael Saylor
    • He doesn’t think it’s practical for the world to collectively adopt a Bitcoin standard anytime in the next few decades
  • As Bitcoin grows and becomes more understood, rational nations will embrace Bitcoin holders, miners, and companies, which will result in more favorable policies toward Bitcoin
  • “Sound money in the 19th century was gold. Sound money in the 21st century is bitcoin.” – Michael Saylor
    • Bitcoin is just the introduction of a better technology; it is not “coming to get” anyone or anything
  • There don’t have to be losers if Bitcoin adoption continues; everyone can win
    • Instead of “Bitcoin fixes this”, the more appropriate meme is “Bitcoin improves this

Podcasts Mentioned

Intro 

  • Michael Saylor (@saylor) is an American entrepreneur, executive, inventor, author, and philanthropist. He is the founder and CEO of MicroStrategy, a publicly-traded enterprise software company that specializes in business intelligence and analytics.
  • Check out these Podcast Notes from Michael’s appearance on the Lex Fridman Podcast
  • This chat with Michael Saylor and Aleks Svetski discusses the implications of Bitcoin and its effects on the world going forward
  • Host: Aleks Svetski (@SvetskiWrites

Money vs. Currency 

  • Money is economic energy  
  • Currency is an asset that is legally designated as an acceptable medium of exchange by a nation-state that can be transferred tax-free 
    • Currency is what the government says it is
    • 95% of people in the world haven’t thought deeply about the difference between money and currency
  • Property and currency are two aspects of money  
  • If there is an effective nation-state, it can designate a currency and award it certain advantages over other assets
    • No capital gains or property tax when transferred 
    • Financial accounting is much simpler when using the government-designated currency 
  • Bitcoin is a liquid property asset 
  • There are many ways to store your economic energy, and the best way to store your economic energy depends on your goals, how you plan to use the money, and your political and geopolitical nexus

Money as Energy

  • There are countless mediums that can be used to move energy, and they dissipate energy to varying degrees, which makes some mediums better than others
  • Fiat currencies are a method of moving economic energy
  • The US dollar dissipates energy at about a rate of 15% per year
  • Argentina and Turkey’s currency dissipates energy at an approximate rate of 70% per year
  • “The reason I don’t want to hold the currency forever is that it is bleeding off energy over time.” – Michael Saylor

The World on A Bitcoin Standard

  • On a Bitcoin standard, the costs of goods and services would get cheaper every year at the rate that the economy grew
    • For example, if the economy grew 2% per year, or productivity increased 2% per year, then goods and services would become 2% cheaper each year 
  • Saylor doesn’t think it’s practical for the world to collectively adopt a Bitcoin standard anytime in the next few decades
  • “If you want to watch how Bitcoin Hyperization happens, watch how dollarization happens … and does it happen with bloodshot or without bloodshed.” –  Michael Saylor
    • El Salvador dollarized but it was after a civil war 
    • Wars are fought over who controls the money
  • The formation of monetary unions requires the formation of a political union  

Bitcoin Doesn’t Have to Threaten Anyone

  • Bitcoin could become a $250 trillion ecosystem without threatening any nation state
    • According to Saylor, owning bitcoin is better than owning gold, an equity-index fund, a second investment property, a bunch of heavy metals, farmland, etc. 
  • No one is going to fight and die to defend gold; there is no president or agency designated to defend gold like there are for defending a nation’s currency 
  • Bitcoin can “partner” with nations, companies, and people instead of threatening them 
  • “If you want to improve the human condition as fast as you can with the least amount of confusion, friction, and unintended consequences, then you simply attack the “nation of gold” and swap out everyone that wants sound money in the form of gold for bitcoin. And after you finish that, you swap out $100 trillion of real estate and property investments for bitcoin. And after that, you swap out corporate bonds and equity indices and you demonetize equities and you demonetize corporate bonds.” – Michael Saylor
  • A country’s currency would likely become a Bitcoin-backed derivative, or they simply adopt Bitcoin sometime in the future

Intelligent Countries Will Adopt Bitcoin

  • A nation’s currency gets stronger if it does intelligent things and it gets weaker if it does irrational things
  • According to Saylor, the following are intelligent and rationale things a country could do to strengthen its currency and reduce inflation: 
    • Generate cheap and easy nuclear power 
    • Create good road systems, invest in technology, and establish a sound legal system
    • Use an efficient language and currency 
    • Adopt Bitcoin
  • As Bitcoin grows and becomes more understood, rational nations will embrace Bitcoin holders, miners, and companies, which will result in more favorable policies toward Bitcoin

Human Evolution & Bitcoin Adoption 

  • Bitcoin adoption is the future fighting against the past
  • “Sound money in the 19th century was gold. Sound money in the 21st century is gold.” – Michael Saylor 
  • Humans evolved from the best idea we had in the past to the best idea we have in the future 
  • Bitcoin is just the introduction of a better technology; it is not “coming to get” anyone or anything
    • Bitcoin doesn’t need to replace the banks; it can be used to improve the financial services that the banks offer 
  • Progress happens when a better technology emerges that benefits everyone

Developing a Higher-Level Digital Economy with Bitcoin

  • There don’t have to be losers; everyone can win as Bitcoin adoption continues 
  • Instead of “Bitcoin fixes this”, the more appropriate meme is “Bitcoin improves this”
    • Going to the extremes undermines adoption and utility 
  • Bitcoin will be layer one in the economy
    • 2nd Layer: The Lightning Network
    • 3rd Layer: Cash App, PayPal, etc., and the exchanges
    • 4th Layer: Securities like MicroStrategy and GBTC
    • 5th Layer: Products and services that incorporate Bitcoin 
  • Bitcoin adoption is economically, technically, and morally good for everyone
Bitcoin Magazine Podcast : , , , , , , ,
Notes By Stan Rizzo

More Notes on these topics

Top Insights and Tactics From

31 Best Podcasts of All Time

FREE when you join over 35,000 subscribers to the
Podcast Notes newsletter

No Thanks