What Bitcoin Did | Bitcoin is Digital Energy | With Michael Saylor

Check out the What Bitcoin Did podcast page

Key Takeaways

  • “People joke like, ‘are you going to be 5% exposed, or 100% exposed,’ I’m 500% exposed. I’m not 5%, 50%, we started with $250 million of capital, we bought $3.5 billion of Bitcoin.”
  • You can think of Microstrategy as the first digital property development company. 
  • It doesn’t make sense for Bitcoin to be spent on anything. 
  • Bitcoin fixes every company and governmental institution.
  • Unless you’re willing to default on your taxes to your nation-state, you can’t use property as currency. 
  • One useful thing to do for everyone every day is to convert some piece of property to Bitcoin. 

Intro

  • Host of the “What Bitcoin Did” Podcast, Peter McCormick discusses Bitcoin with the walking encyclopedia himself, Michael Saylor. 
  • Saylor is the CEO of Microstrategy and a graduate of MIT where he studied the history of science and aeronautical engineering. 

How Saylor is 500% Bitcoin

  • “Bitcoin was at first a defensive move, then opportunistic, then strategic”. 
    • First, Microstrategy announced a possible bitcoin buy to shareholders.
    • Agreed to buy out shareholders (if they weren’t comfortable with the strategy) in order to buy $250 million of Bitcoin.
    • After the “dutch auction” Microstrategy had an extra $175 million which was used to purchase more Bitcoin Now $425 million in. 
    • When the stock hit the $300 range, they raised $650 million dollars in convertible debt with a 37.5% premium with 1.25 -1.75% interest. With a strike price of $398 and bought bitcoin with this money. 
    • *Some above-mentioned details were from Saylor’s appearance on the Pomp podcast.
  • Due to Bitcoin, Microstrategy is more widely known which is good for the employees, shareholders, and business, and Saylor is having fun with it.

From Analog to Digital

  • Saylor wrote “The Mobile Wave” which emphasizes the change of the world via software. 
  • The book covered the digitalization of photos, music, relationships, storefronts, maps, and movies. Which gives you Google, Apple, Amazon, and Facebook.
  • Bitcoin is now the second mobile wave. The digitalization of money, gold, and energy. 

How to save 100k for life. 

  • Gold
    • Going up 0% past 10 years. It’s a “Dumpy dead metal thing”
    • Can’t rent or mortgage your gold. 
    • Can you build an app on gold? Jewelry, which may lose value. 
  • Income Property
    • 20th-century idea, 21st-century twist with Airbnb
    • Better than gold because you can mortgage, sell, put a lien on it, or rent it.
    • Illiquid.  
    • “Not a bad idea”
  • Buy 100k of S&P 500 or “Big Tech”
    • Up 14% and 19% for the past decade
    • Lower headache than owning a property. Not as many costs. 
    • No real property rights for owning securities. 
    • Liquid
  • Bitcoin
    • Liquid. 
    • It moves everywhere in the world cheaply.
    • Up more than 100% a year for the past decade. 
    • You can rent and borrow against it with no maintenance cost.

Forms of Energy

  • Einstein – “Matter is energy and energy is matter”.  
  • Civilizations are built on energy systems and currency is political energy.
  • Property is economic matter. Money is economic energy. You can convert the property into money and money into property. 
  • The 20th century was built on Oil and Steel. Liquid energy is oil. Rockefeller used this energy to create an empire. Metallic energy is steel. Carnegie harnessed this energy to build. 
  • Bitcoin is digital energy. You can think of Microstrategy as the first digital property development company. 

Bitcoin Revolution vs Evolution

  • The world wants digital property AND the world also wants dollars, especially in countries with failing or weak currencies. 
  • What you want is to construct a system that makes you wealthy, keeps you wealthy, and keeps all the gears of commerce spinning. 
  • The best system according to Saylor is for everyone holding a digital currency and digital property. The long-term strategy would be to keep financing the digital property to the currency.  

A  Bitcoin Revolution

  • This take considers all banks, currencies, governments, and taxes as bad. 
  • To get rid of centrally issued currencies would “arm wave away every government and every corporation… which is definitely not going to happen in this decade”. 
  • Accounting systems are the nervous systems of corporations. Completely abandoning the old system would dismantle governments and corporations according to Saylor. 

Stablecoins

  • Tether, Circle, etc are the first issuers of stablecoins. They are entrepreneurial and a security. There’s about $130 billion of stablecoins- Saylor
  • Saylor – It’s undisputed that the world wants trillions of dollars of stablecoins. “The real opportunity is a digital currency, you just have to trust it”

Bitcoin Evolution

  • Apolitical, constructive, and cooperative.  
  • Saylor compares Bitcoin to other technological breakthroughs such as steel, calculus, oil, and electricity and how every country can benefit from these breakthroughs.  
  • Bitcoin is digital property and it improves the balance sheet so every company can and should buy Bitcoin. Every country should put Bitcoin in their treasury reserves and peg their currency to it. 

How Saylor Sees it 

  • If there’s $100T with of property in the form of gold, silver, rental income properties, bonds, etc., that are overvalued and Bitcoin replaces them all. And every bank, investor, country is more successful and we all live happily ever after. Is that such a bad thing?
  • The path of least resistance to a Bitcoin future would be to give 8 billion people the strongest currency (dollar) and move it on lightning rails or a centralized finance system. 
  • We don’t need to rewire the entire government and accounting systems for Bitcoin to work. You can’t use property as currency. 
  • We’re moving from the entrepreneurial phase to the institutional phase. For example, Silvergate bank is issuing a stable coin and needs an FDIC charter. 
  • The fallacy is thinking of Bitcoin as a currency instead of a property. 

Focus Vs. Distraction

  • It doesn’t make sense for Bitcoin to be spent on anything
  • One useful thing for you to do every day is to convince one person to change some other form of property into Bitcoin. Evangelize and educate. 
  • Channel everything towards a laser-like focus on Bitcoin. “We’re spreading virtue, bit by bit”. 

Saylors Twitter View

  • You should be cheerful and constructive. It’s a battle to capture the hearts and the minds of people who don’t know what to think yet. 
  • When a popular person offers criticism to Bitcoin, offer a resource to the person and their followers in a cheerful way. 
  • “I want everybody that doesn’t know about Bitcoin to know about Bitcoin”

One Last Quote from the Legend

  • What “Saylor the Engineer,” thinks people really need is DIGITAL ENERGY. “I think the entire 21st-century economy needs digital energy, which means $500T worth of digital energy moving at the speed of light, friction-free from 8 billion devices across 100 million companies, no power loss, super-conducting network”
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Notes By Paul Keating

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