January 17, 2021
Michael Saylor on The Physics of Bitcoin | Into the Impossible Podcast
Check out Into The Impossible Podcast episode page and show notes
Key Takeaways
- The virtual wave: “You can Zoom anywhere at the speed of light and bend time and space” – Michael Saylor
- You can, from your living room, have meetings all over the world, record something, and share it across time, or share auto-translations across cultures
- Money is a technology to store and trade value. The easier something is to produce, the weaker it is as money
- Bitcoin is a decentralized system running on thousands of nodes, to overtake the Bitcoin network one has to overtake all of its nodes
- Money is stored energy, it’s the apex of all energies because anything can be converted into money
- Bitcoin is rapidly growing and capturing the monetary energy of traditional assets
- Bitcoin is a closed system, similar to mathematics and physics. In such systems, energy cannot be created or destroyed and 2+2=4
- By contrast, the fiat monetary system leaks monetary energy whenever a banker prints money, akin to sucking out temperature till you freeze
- The power to print money is the source of all wealth and power discrepancies in our society, Bitcoin fixes the Cantillon effect
- Educational curriculums should be openly available online with people progressing at their own pace
- A handful of good teachers captured online can teach the next billion people
- “Technology Fails Until It Succeeds” – Michael Saylor
Introduction
- Michael Saylor (@michael_saylor) is the CEO of MicroStrategy, Saylor Academy, and author of The Mobile Wave
- Michael is known for using $1.2Bn of MicroStrategy funds to buy Bitcoin
- Check out the Podcast Notes from his appearance on The Stephan Livera Podcast and The Investor’s Podcast
- Host: Brian Keating (@DrBrianKeating)
The Mobile Wave Changed Software
- The rise of iOS and Android dematerialized software from being constrained to a PC to round the clock coverage of the planet.
- In the process, software leaped an order of magnitude in users
- People now live with software (Software to drive a car, book restaurants, and hotels, pay bills, take photos, etc.)
- In the virtual wave, we will witness the virtualization of entire classes of products and services normally delivered by human beings
- This will come with profound implications on how you compete and provide value
- Ponder this, “You can Zoom anywhere at the speed of light and bend time and space” – Michael Saylor
- You can now, from your living room, have meetings all over the world, record something and share it across time, or share auto-translations across cultures
- The virtual wave basically means having God-like power
- You can now, from your living room, have meetings all over the world, record something and share it across time, or share auto-translations across cultures
Technologies to Store Value
- Money is a technology to store and trade value. To that end, humans used various commodities as money (Seashells, glass beads, copper, silver, gold, etc.)
- However, humans can always produce more of a commodity when its price rises. Thus, the easier the commodity to produce, the weaker it is as money
- In that sense, if gold’s price increases 10x, miners will have the capital and incentive to develop new mining technologies
- Moreover, gold can be seized, centralized, shorted, and defaulted on (e.g. Nixon going off the gold standard)
- However, humans can always produce more of a commodity when its price rises. Thus, the easier the commodity to produce, the weaker it is as money
- “Technology Fails Until It Succeeds” – Michael Saylor
- Every industry is founded on a breakthrough that utilizes earlier technologies
- Similarly for Bitcoin, 40 years of developments and attempts preceded the breakthrough
- Moreover, it took 10 years of endless attacks for bitcoin to mature to its current size, and now the pandemic is accelerating its adoption
Bitcoin Is Next Generation Money
- Bitcoin is a rapidly growing virtual monetary network, and it’s capturing the monetary energy of traditional assets
- In the process, virtualizing entire balance sheets of companies and individuals
- Bitcoin is a decentralized system running on thousands of nodes, to overtake the Bitcoin network one has to overtake all of its nodes
- Think of bitcoin as virtual gold, it has no mass, can travel at the speed of light, and it’s infinitely smarter
- Bitcoin network effects are akin to gravitational energy, people resist switching once gravity catches them. Moreover, gravitational pull increases with mass
- In that sense, a billionaire can’t bring a billion to friends to a social network, but they can bring a billion dollars’ worth of pulling force into Bitcoin
- Bitcoin is past the event horizon and is getting more powerful
- In that sense, a billionaire can’t bring a billion to friends to a social network, but they can bring a billion dollars’ worth of pulling force into Bitcoin
Bitcoin Thermodynamics
- Money is stored energy, it’s the apex of all energies because you can convert anything into money
- In that sense, wealth is energy to be channeled how you will is based on your values (e.g. build Amazon, Netflix, found a university, etc.)
- Bitcoin is a closed system, similar to mathematics and physics. In such systems, energy cannot be created or destroyed and 2+2=4
- By contrast, the fiat monetary system leaks monetary energy whenever a banker prints money, akin to sucking out temperature till you freeze
- This manifests at varying degrees from the US to faster rates around the world (Turkey, Venezuela, Lebanon, etc.)
- Whereas politicians can ignore math, energy, and time, engineers can’t
- By contrast, the fiat monetary system leaks monetary energy whenever a banker prints money, akin to sucking out temperature till you freeze
Bitcoin Denial is Expensive
- Bitcoin has been growing 200% per year, every year, how long can you afford to stare in denial?
- Some people worry about regulations against bitcoin. However, put it this way, if an oxygen mask drops on a plane, you put it on.
- Moreover, the more airplane depressurizes, the more you shouldn’t wait to use it
- Else, you roll over and die, that’s what politicians expect you to do
- The problem: everyone will lose their money if they do nothing. The solution: An incorruptible monetary network that doesn’t dissipate energy
- Bitcoin is a technology for you to avoid becoming impoverished
Trust Doesn’t Belong in a Monetary System
- “The root problem with conventional currency is all the trust that’s required to make it work” – Satoshi Nakamoto
- No regime has ever executed a strong monetary policy in history. Thus, a monetary system that doesn’t rely on trust makes sense
- While the US dollar is backed by 9 nuclear aircraft carriers, it has lost 98% of its purchasing power over its 50 years of existence
- The question is what will you, as an individual, choose to use as a money technology?
- The power to print money is the source of all wealth and power discrepancies in our society
- Under MMT, it’s ok for a government to print endless money
- Bitcoin fixes this Cantillon effect
Dematerialization of Education
- Educational curriculums should be openly available online with people progressing at their own pace
- A handful of good teachers captured online can teach the next billion people
- Keep in mind, 99% of what you need to know shouldn’t be copyrighted
- Put it this way, we won’t tackle advance civilization with undergraduate degrees (e.g. cure cancer, interstellar travel, global warming, etc.)
- A handful of good teachers captured online can teach the next billion people
- Universities’ business model is to create certification scarcity. However, certifications are becoming less valuable with the market increasing valuing knowledge over certificates
- Once companies can assess skill and knowledge themselves, certifications will no longer be needed
