Saylor_Bitcoin

The Bitcoin Bull Case with Michael Saylor | Business Casual Podcast

Check out the Business Casual Episode Page & Show Notes

Key Takeaways

  • Assets appreciated by 30% in March of 2020, this triggered Michael to find a solution to his $1Bn cash reserve problem
    • Gold is hard to secure and easy to seize, and historically it’s always seized. Additionally, it inflated at 2% annually, in contrast to bitcoin’s absolute scarcity and inflexible supply.
      • Simply put, if you are going to use something to allocate all the wealth in the world, you should use something that nobody can make more of
  • “Fundamentally, Bitcoin is property for a 21-century cyber economy” – Michael Saylor
    • Property that you can program on an open protocol, that moves at the speed of light and is  beyond corruption by a government or a company
    • “If you think it’s a speculative asset, you are dismissing it, and you are missing the biggest thing of the 21st century” – Michael Saylor
  • Bitcoin transcends local laws and allows you to arbitrage jurisdictions. Instead of the impossible task of predicting the future, bitcoin gives you speed, portability, optionality.
  • “The facts of the matter are Bitcoin is the most efficient use of energy of any major industry in the world” – Michael Saylor
    • Bitcoin miners thrive on cheap, stranded, and waste energy. They go to the edge of the grid and convert stranded energy into $750Bn worth of value.

Intro

MicroStrategy is a Bitcoin Bull

  • Over the past year, MicroStrategy has transitioned its balance sheet from cash reserves to holding bitcoins, and currently holds nearly $3Bn worth of bitcoin
  • Post march 2020 saw assets appreciate by 30% and cash losing its purchasing power. It seemed like Wall Street got lucky while Main Street had all the odds stacked against them
  • Michael lost faith in the currency and traditional investment strategies, he set out to find a solution to his billion-dollar melting cash reserve problem
    • Conventional treasury strategy is to put your life savings in a bank to yield 0% interest. In other words, you lose 38% of your purchasing power per year, and 75% in 4 years.
      • The move was to move the balance sheet to a scarce asset, bitcoin is the apex property of the human race and “The single most desirable asset in the world”

Just Buy Gold?

  • “Gold is like a bunch of kids in a playground using bottle caps for money” – Michael Saylor
    • Gold is hard to secure and easy to seize, and historically it’s always seized. It may have been the best token under the circumstances, but it’s not that good
    • “If you own gold, at the end of the day, the mayor, the governor, the bank, and the country all hold you hostage” – Michael Saylor
    • Even worse on smaller scales, gold is expensive to both buy and sell, and physical delivery comes with weeks of delay.
  • Gold naturally inflates at 2% annually, half its value will be inflated away in 30 years when compared to bitcoin’s fixed supply. Furthermore, unlike with bitcoin, gold’s production can increase as the price rises.
    • Simply put, if you are going to use something to allocate all the wealth in the world, you should use something that nobody can make more of
  • Unlike any other property in history, you can even set up a multi-signature arrangement with your family without trusting anyone or having counterparty risk

Tech of our Generation

  • “The future of the world is 8 billion with a mobile phone doing billions of transactions an hour with each other at the speed of light with computers that think a billion times a second”
    • “Fundamentally, Bitcoin is property for a 21-century cyber economy” – Michael Saylor
      • Property that you can program on an open protocol that’s beyond corruption by a government or a company
  • “If you think it’s a speculative asset, you are dismissing it, and you are missing the biggest thing of the 21st century” – Michael Saylor
    • Akin to dismissing electricity in 1910, but people fear what they can’t understand

Government regulation

  • Tax codes and regulations will keep dynamically changing by jurisdiction and use case, with implications on property values
    • Bitcoin transcends local laws and allows you to arbitrage jurisdictions. Instead of the impossible task of predicting the future, bitcoin gives you speed, portability, optionality.
      • By contrast, investing in real estate means you are buried up to your knees in concrete

On Bitcoin’s Volatility

  • Bitcoin is the highest quality property for long-term value storage, think a year or more. With that in mind, one can keep their short-term needs in cash.
  • Good investments carry more return than risk, even if volatile. For instance, Amazon lost 80% of its value many times over history, yet Jeff Bezos had the conviction to hold throughout.
    • “If you want to be rich, then you are going to have to have conviction […] and if you don’t have conviction then you are definitely not going to be rich” – Michael Saylor
  • The apex property is the superior savings vehicle. Ask “What’s the thing that you think one day every affluent intelligent educated person is going to want to own”
  • All being said, if you care and want to accumulate wealth then put in the time into studying and learning
    • It takes dedication to understand bitcoin, spending 1-10 hours studying bitcoin is gambling.

Bitcoin Energy Concerns

  • “The facts of the matter are Bitcoin is the most efficient use of energy of any major industry in the world” – Michael Saylor
    • If the human race converts energy into prosperity, bitcoin is the best use of energy ever
      • Bitcoin generates 500x value from consumed energy whereas Google, the second-best, generates 10x.
  • Bitcoin miners thrive on cheap, stranded, and waste energy. They go to the edge of the grid and convert stranded energy into $750Bn worth of value.
    • Bitcoin allows the monetization of any energy source on the planet. Using volcanoes miles away from civilization to mine bitcoin is one such example.
    • “There is really a no more disruptive force in the energy world, but there is no more disruptive force in the money world either” – Michael Saylor
  • Facebook and Google move around data, their data centers are built for high bandwidth and redundancy.
    • Bitcoin moves around billions of dollars, its mining farms are focused on harnessing energy anywhere on the planet.
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Notes By Mostafa Khaled

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