The Saylor Series | Episode 8 | Bitcoin and Immortal Sovereignty

Link to the podcast: https://www.listennotes.com/podcasts/the-what-is-money/the-saylor-series-episode-8-oZhkfOHyBj-/

Robert Breedlove [03:27]: Hey guys! Welcome back to Episode 8 of the Saylor Series here on the “What is Money?” Show! Today we’re gonna talk about a number of interesting concepts getting even deeper into Bitcoin theory and how it has effects on the future of humanity. So if you haven’t seen Episodes 1–7, I highly recommend you check those out. A lot of the material we built upon there, it’s compounding as we get deeper into Bitcoin theory. So today we’re gonna talk about a number of things. Firstly is the divinity of engineering, actually, and how this creative impulse is sort of what defines Man and fulfills Man. We’re also gonna look at Bitcoin as a medium of exchange and talk about why Saylor thinks it’s actually a low frequency medium of exchange and a high frequency store of value. We’ll also learn why it’s a pretty bad idea to compensate people with Bitcoin. It turns out the tax codes are pretty hostile to that at the current time. We’ll also look at another monetary function of Bitcoin, and that’s as a unit of account. We’re gonna look at Bitcoin too in a macro context: How it sits as an asset class adjacent to other asset classes. We’re also gonna do a deep dive into crypto versus digital networks. This is a delineation that Saylor makes to distinguish decentralized crypto networks versus centralized digital networks. And we’ll talk about the trade-offs between the two. Then we’re gonna get into the really interesting topic of immortal sovereignty, which is something that crypto networks enable and actually allow us to project our preferences beyond our own life. I think that’s a really interesting part of the conversation. We’re gonna revisit money as power, we’re gonna talk about advanced technology as magic, and we’re gonna see what the two of those look like when they come together. And then finally we’ll discuss Bitcoin as a pure and principled ideology, which is something somewhat unique in the modern age. So this is another big episode! I hope you guys have seen 1–7. If not, again, go check those out now. And with that, let’s jump in!

Robert Breedlove [05:49]: I’m gonna bring up one more point on the religious aspect of Bitcoin that I’ve thought about. My religious tradition too was Southern Baptist — I was raised Southern Baptist — so I have Judeo-Christian underpinning in my thought. But the ancient idea in Genesis was that God was the force that confronts chaos with courage, truth, love, and converts that chaos into good, inhabitable order. So when we look at that through a thermodynamic lens, we know that the whole universe is everywhere and always trending towards increasing chaos and entropy, and that the only thing that works against that thermodynamic arrow of time is life, actually! Life converts entropy into order. So in a way we could say that life or even the God-aspect of life is the anti-entropic principle that propagates through all of life. And I can’t help but relate that and see Bitcoin in that lens, too, where we do have this system that’s actually reaching deeper into chaos than anything else. The SHA-256 mining algorithm is quite literally finding a single atom in an entire universe — that is the mining race, if you will, is identifying the single atom in the universe — and with that reach into chaos it is forging the most profound order we’ve ever had! You can’t argue with the Bitcoin blockchain. Whoever has those UTXOs has them! So it seems to me like there is a profound connection between truth and this principle of converting chaos into order, and the quote that took that home for me with G. K. Chesterton was, A dead thing can go with the stream, only a living thing can swim against it. So Bitcoin in that sense is quite literally alive!

Michael Saylor [08:06]: Bitcoin and beavers! The beaver is engineering the stream to create a dam, human beings are engineering systems. Bitcoin is an engineered monetary energy system. It’s the first well-engineered monetary system that we’ve built. Human beings through their intellect channel that energy, and within the [Bitcoin] system we extract order and we have a very efficient structure, and the price we pay is some disorder outside of our system. Some energy dissipation. But I’m not terribly concerned with that. The universe has got more energy than it needs and we’re just dipping our fingers into 0.000 — with a million kazillion 0’s after it — 0001%, right? So it can spare a little bit of energy! And when we create something beautiful — be it a railroad or Bitcoin network or social network or the like — we find a way to do something millions of times faster, smarter, stronger than before, and that drives forward the human race. So this is not the only great achievement of the human race, it just happens to be the most interesting achievement of the human race!

Robert Breedlove [09:39]: Would you say that’s the struggle then? We’re sort of pushing back entropy? That’s what civilization is, right? We’re creating a larger bubble of order within the universal bubble of entropy.

Michael Saylor [09:52]: I would say the highest calling of Man is to extract order from the chaos. And you could also say humans are divine when they engineer — through their intellect — a better habitat for themself and those that they love. The human that bridges the chasm. The human that constructs the city. The human that creates the machine. And that’s been going on for human history! That’s the most honorable and admirable thing that human beings can do. And if we didn’t do it, we’d be running around naked on the plains being chased by wolves and probably eaten by wolves. And that’s that. So to engineer is divine. Look at a problem, engineer a solution. That’s why we respect the engineers. You wanna talk about Bitcoin as a medium of exchange?

Robert Breedlove: Let’s do it!

Michael Saylor [11:08]: You know, a lot of people, they focus upon the whitepaper and we debate it ad infinitum and I think that everybody that we agree with notes that peer-to-peer cash means a settlement network for a bearer instrument. And it’s important that, in that regard, you be able to exchange assets. It’s, in my opinion, utterly unimportant that you be able to engage in high frequency small transactions on the Bitcoin network. And I think that it’s dysfunctional to pursue that vision. I think that Roger Ver is just wrong! I mean it was a nice idea. Roger Ver thinks the magic in Bitcoin is to be able to pay for coffee with your phone. And it’s a tragic error of insight — that was not the magic of Bitcoin then and it isn’t now! The magic of Bitcoin is being able to catapult energy 100 years into the future and not lose the energy. And then the other magics are the magics that come from wrapping the Bitcoin with software to make it smarter, faster, and the stronger — that’s the magic! The ability to do a minor transaction, it’s trivially inconsequential. Number one, only 1–2% of your wealth needs to be in these high frequency transactions. So a logical thing for anybody is just to keep 1, 2, 3% of their wealth in fiat. And then operate it on the Paypal network or the Visa network or the Apple Pay network or some centralized network. I think Saifedean’s already made the point: A proof of work network is a billion times or a trillion times less efficient than the centralized version. So you’re gonna get a billion times more speed and a billion times more economy by running the 1% of your life on a centralized network. And if you didn’t need to move it to off-chain — I don’t even think it’s a crypto, I just think off-chain’s just a centralized network! You might as well just put it on Square or Apple, because nobody cares whether they go out of business in a year, 2 years or 5 years. And if you’re in a country, the fact that those transactions are being monitored just means that, well, 1% of the value of your transactions are being monitored! If you want to do something illicit, you would do it 0.01% of the time on the Bitcoin network! So the one time in your life when you need to flee Iraq or Syria as a refugee, and that’s when you need to do your on-chain transaction, well then you use Bitcoin and you can wait 30 minutes — you’ll probably be okay. By definition: If you move $1 Billion once, it’s a billion times more valuable than moving $1 once. And so the use case of moving $1 Billion back and forth is valuable, and you can pay high transaction fees. And the use case of moving $1, $2, $3, $5, $10, or $50 or $100 is not valuable, because it falls exponentially or at least linearly with the amount of money being moved. Now there’s some other reasons why Bitcoin doesn’t make sense as a medium of exchange right now. And maybe never! I tend to think never. I think what’s gonna happen is — well we can debate semantics about what medium of exchange means — but I think Bitcoin is a high frequency store of value, low frequency settlement network. Or low frequency medium of exchange. Once a month is more than enough! Once a year? Maybe enough! Once in a lifetime? Might be enough! If the rest of the ecosystem develops, there will be a point at which there’s a crypto bank and Robert Breedlove has 200 Bitcoin in the account and he points the bank toward the Bitcoin and the Bitcoin’s worth $1 Million a Bitcoin and the bank will forward you fiat on credit at good rates to do whatever you want your entire life — the Bitcoin will never move. And the bank will do whatever, and if the bank fails, what do you care? The bank failed, not you. It doesn’t matter, you’ve got 1%, you’ve got nothing at risk, they actually took all the risk! So you don’t need to do things with a high frequency to create value other than protect the money. Now there are some accounting and systems and tax reasons why it doesn’t make sense as a medium of exchange. The obvious thing is: Every time you actually take revenue in Bitcoin, it would be a taxable event. You would mark the Bitcoin. So if you paid me in Bitcoin while Bitcoin is trading at $10,500, I have to mark it. You pay me $27 in Bitcoin, I have a ledger entry: $27 of Bitcoin with $10,400 basis. If your friend bought another $32 book, I have another ledger entry! If I sold a million things in Bitcoin, I’d have a million ledger entries with a million different basis prices. And then if I paid you a salary in Bitcoin, I would then have to figure out capital gain on it, and then I’d have to pay the tax. So if I have $100 Million in Bitcoin and then next year I pay $100 Million in expenses in Bitcoin and Bitcoin went up by a factor of 2, I would actually generate $100 Million in capital gains and I would owe $20-$30 Million to the federal government within 12 months for the privilege of running Bitcoin, which runs a billion times slower than Apple Pay! So how many ways is this awful? Well first of all, it takes a decade to get your accounting systems to work. It’s worthwhile to note: How does a global multinational work? I have 27 subsidiaries in 27 countries. I do business in about 10–15 different currencies: US, Euro, Yuan, Yen, Pesos, Real, Mexican Peso, Argentine Peso — you name it! We’ve got lots of currencies! By law we do that. By law we pay all the medical bills in those currencies, all the insurance, all the vendor relationships — took 10 years. It takes 10 years to set up a global multinational from start to finish! [18:17] It probably takes 5 years to get all your accounting systems to work right, $20, $30, $40 Million to get it all working right. If I buy $500 Million in Bitcoin, I put it in the treasury, I stare at it, I never do another transaction hopefully for the next decade. Until we’re in an insolvency event, we’re not moving it, right? Why would we? The truth is, we want to put it in the vault and throw away the key! Like, I would say to anybody, I don’t want to be able to move it! I just want it to sit there! I’m gonna wait for it to appreciate. Then we sell stuff in Yuan and Yen and Euro and Dollar, and we put that into our accounts. We sweep all the fiat into maybe one currency, into one thing: Dollar. We balance, and if we need to shuffle some stuff around in working capital accounts we put it back. If we don’t need it for working capital we sweep it into the treasury. If it’s in the treasury, we convert it to the treasury reserve asset — Bitcoin! It goes in, never comes out! You know, a vendor wants — they send me a bill, I pay them in a local currency. No vendor’s gonna bill me in Bitcoin. People say — I’ve heard this — Well, don’t your employees want to get paid in Bitcoin? Well the answer is, No, they don’t! But let’s say the answer was, Yes. Let’s say all of them were Bitcoin maximalists. Exactly how much Bitcoin do they want to get paid in? They have mortgages. They have bills. So the answer is, We pay them in the local currency, and if they want to buy Bitcoin, or if they want Bitcoin, they buy it! Why would it be an awful mistake to pay them in Bitcoin? Because we would accelerate the tax bill by 100 years. And as Bitcoin is volatile, we will generate all sorts of tax obligations. The second thing is, we would increase our accounting complexity by an order of magnitude. And the third is, our employees will then have to sell the Bitcoin and generate their own taxable accounting complexity in order to get cash to pay their mortgage and pay for their kids’ school or whatever they’re doing, right? So you’re creating lots of complexity here. If I’ve got 2,000 employees and 200 of ‘em want to own Bitcoin then I pay all 2,000 in Euros and Dollars and Pesos and Yen and Yuan and they go on their local exchange and they buy the Bitcoin and they HODL it! Because like, Do I want to HODL it? So the point is, when you’re running a company with Bitcoin as an operating system, the logical thing to do is you just sweep your fiat into your treasury, convert your treasury into Bitcoin, let it sit there, and then let every — if a vendor wants to get paid in Bitcoin, I pay them in Dollars, they buy Bitcoin! If an employee wants to get paid in Bitcoin, I pay them in Dollars, they buy Bitcoin! The whole ethos of Bitcoin is: Take responsibility for yourself! Don’t treat adults like children. So it’s patronizing in a way for me to say, Well Robert you work for me, but I’m gonna help you by paying you in Bitcoin! It’s like, You’re a smart enough person — if you want to buy Bitcoin with it, here’s the money. Buy Bitcoin with it — have at it! It’s what you do. The money has a constant value at the time I’ve transferred it from me to you, and the thing that really cripples a cryptocurrency and a thing like Bitcoin as a medium of exchange is the tax treatment that the local regulatory domain makes. At the point that the United States IRS decided that this was going to be taxed as a capital gain on the moment of sale, it was utterly impossible for it to be a currency. It’s just that simple. It’s done. For anybody to even maintain it — the only way you could think that you could use it as currency is if you’re gonna run a black market, grey market operation with no accounting, no accountants, no lawyers on staff. And it’s like, Good luck with that! I mean, how many discos and bars got shut down for sales tax or income tax evasion, right? What was it, like — most of them! Small businesses, they’re eventually going to all run afoul of the regulators and get shut down. So it’s just not practical from a systems point of view. It would take me a decade to rewire the systems. It’s not practical from a complexity point of view. You’ve just made your accounting a hundred times as complex. And it’s not practical from a tax point of view. [23:38] You’ve just tripled the tax rate. And it’s not practical from a whatever employee point of view because it’s making everybody else’s life more complicated too. So that’s why I think that Bitcoin really isn’t a medium of exchange as much as it is just a low frequency settlement network. I’ll make one more point, this is back to via negativa: The fact that you could settle peer-to-peer means that you might not have to for 100 years! The fact that I say to you, Robert you do as I say, or else! — if you have the ability to leave the country and depart with all of your wealth and I know you have the ability — right? Robert Heinlein has a phrase, An armed society is a polite society. I live in Miami Beach. Sometimes I run around, and people have guns in Miami. You can carry concealed carry permit, right? A young debutante that looks harmless could be walking around with a gun in her purse, and you think twice when it’s 2 in the morning and you’re in a bar and everybody’s drunk, before you’re pushy or rude. And then you think, Maybe I shouldn’t be in a bar at 2 in the morning when people are drunk! And then you think, Maybe I shouldn’t mouth off to someone that just cut me off on the highway. Somebody pulls over and they shoot you dead! And you think, I just oughta be very polite to everybody walking down the street, because every single person could have a gun concealed on their person. And maybe I’ll be nice to people today! It’s a deterrent, right? So the ability to cash settle, or the ability to settle and exchange, that’s the deterrent. Because the fact that I know you could means that I’m gonna treat you with respect! If I knew you couldn’t, if I thought that you were trapped — if you were stuck in my monopoly and I had total power over you—then I start to take you for granted. And then I start to abuse that power. Because as Lord Acton said, Absolute power corrupts absolutely. So the power to do a thing is more important than the doing of the thing. And that’s what the Bitcoin Cash guys, they miss. They miss the fact that: If I can move all the money when I need to, then I won’t need to! And so yeah I need to be able to move it so it will hold $100 Trillion in value, but no I don’t need to move it now! And maybe I don’t need to move it more than once, ever, just to make an example. It’s like nuclear deterrence. I use it once, maybe I used it twice — I haven’t used it since. But do you think that doesn’t — you know, it’s not effective? You think it doesn’t matter to have it?

Robert Breedlove [26:56]: Yeah I think that’s a great point. And this gets back to the difference between a free market and a monopoly. In a free market, you know that your customers have options. They can go to other providers, they could settle elsewhere, they could move their capital out. And because they have that optionality, you as the producer or provider are accountable to their preferences. You have to listen to the customer. You have to listen to their wishes and desires and make sure you’re satisfying their wants. Whereas on the other end of that spectrum is the monopolist that, to your point, he just doesn’t care about the preferences of his customer because his customers have no choice! They’re stuck in his little fiefdom. I mean it’s the difference between an economic democracy and an economic dictatorship. So the fact that Bitcoin is just totally movable anywhere, anytime and you can’t put the gate around it and monopolize it is what makes it such a game-changer!

Michael Saylor [28:00]: Just because you can do a thing doesn’t mean you should do a thing. That’s basic Stoic philosophy. And there’s the line that comes from the movie, the guy says, The loudest man in the room is the weakest man in the room.

Robert Breedlove: American Gangster, I think!

Michael Saylor: That’s it! American Gangster. The loudest man in the room is the weakest man in the room. If you know I can do it, if Robert Breedlove can teleport anywhere on Earth anytime with all of his energy and I can’t stop it, that gives you a lot of power! I’m gonna give you a lot of respect, but that doesn’t mean you want to flit around back and forth like a firefly. You know you can do it — now do something constructive with the knowledge that you can do it. It’s quiet confidence. And don’t get distracted by shiny objects. Faster transaction rates, low transaction costs — they’re shiny little lures at the end of the hook that the stupid fish grabs. It doesn’t matter! It’s the Cracker Jack box prize or something like that! If you look at the value on Earth, there’s $250 Trillion of value in assets. What’s the value of being able to move money back and forth to buy coffee? And what’s the likelihood you’re gonna beat Apple in that race?

Robert Breedlove [29:55]: Right. This is the picking up pennies in front of a steamroller type thing, right?

Michael Saylor: Basically! It’s just not worth doing. And given the fact that it’s a million times more expensive from a tax point of view, and given the fact that it’s a billion times more expensive from a computing power point of view, the only reason to want to do it is regulatory arbitrage, i.e. grey market, black market operation. Not a very profitable pursuit of human ingenuity! You know, you ask Meyer Lansky, What’d you learn in all your years as a gangster? He said, It was so hard I realized if I’d have to do it again I just would’ve gone straight! It’s a lot easier to make money just being legitimate, so inventing some kind of technology to evade the regulators explicitly? It’s like, they might let you invent something that will carry energy 100 years forward, because it seems like something that legitimate law-abiding citizens might want to do. They’re not gonna let you invent something that allows you to evade taxes, and so: Why try so hard? It’s just not worth the trouble! I’m reminded of the stories of Pablo Escobar, and he made the billions of dollars selling all the drugs and cocaine and they said at the end of his life he’s sitting on the run and they’re burning $100 bills in order to stay warm! It’s like, Yeah! Good luck with all that!

Robert Breedlove: Talk about money as energy!

Michael Saylor [31:36]: I mean the vignette, just sitting burning stacks of $100 bills because no one will let you spend it. It’s an example of just trying too hard—not worth the trouble! So let’s talk about unit of measure. Bitcoin as a unit of measure: I think Bitcoin is the universal language of economic truth. I think it will evolve as a unit of monetary energy. It makes sense in that way. Before Bitcoin, if you go back 50 years, people talked about ounces of gold. So I think a Bitcoin will be like an ounce of gold — an immutable, self-sovereign unit of economic energy — it makes sense to think of it like that! On the other hand, it will generally always be converted into local fiat in the political domicile in question for buying and selling things. And that’s okay. There will be countries that allow stronger, better currencies. There will be countries that’ll have weaker currencies and they’ll crash their currencies and they’ll replace their currencies. And as long as you HODL Bitcoin in your account you’ll be able to go into a new country. You know, I’ve been to a country after they crashed their currency. We’ve all been to Germany, they crashed their currency, we bought the new currency. Then they got rid of the Mark and it was the Euro, we bought the Euro! So the right way to think of it is as just a standard unit of economic energy or monetary energy and not overthink it, anything more than that. It can be interesting to say divide stock price by gold ounces — you can divide the cost of living by ounces of gold or by Bitcoin — it’s interesting! It’s okay. It’ll give you a pretty good read on inflation. If 1 Bitcoin buys you a car in the US but 1 Bitcoin buys you a skyscraper somewhere else then you’ll have relative cost of living. People did that with the Dollar, right? They used to say you could live in Mexico on the beach for $187 a month and live like a king. There are relative strengths. I think Bitcoin will be like that! But I don’t think we need to stretch it any further than that. I think that’s enough! I think ultimately, people focus too hard on medium of exchange, unit of measure, and they underestimate the value of Bitcoin as a store of value and as an asset. I think they undersell it and they don’t do it justice! Because it’s so much better than every other asset! And then I think the entire community of crypto, it’s too much engaged in debates between the various crypto networks, with each other. Because I’ll post something — Bitcoin is a great way to transmit energy into the future — and then the Ripple people will start fighting, and the Bitcoin Cash people, someone gets triggered and takes offense. The way I see it is: Crypto is a $300 Billion pond sitting on the beach next to a $300 Trillion ocean of capital, of energy. That’s 99.9% of all energy of humanity, is sitting in alt-assets, not altcoins! Not cryptocurrency! So I see all the crypto enthusiasts working on all the altcoins and they’re just trying to drag down Bitcoin. It reminds me of a bunch of crabs in a bucket and the bucket’s kind of hot or overheating and the one crab wants to crawl out and the other crabs just want to drag it back in instead of crawling on its back and getting out! It’s like, all the crabs just keep pulling each other back into the bucket. It’s totally self-sabotaging and it doesn’t matter, because what they ought to be thinking is, How do we get $30 Trillion of the $300 Trillion to flow into our pond? In fact, they ought to be thinking, We want to go from $300 Billion to $3 Trillion, and from $3 Trillion to $30 Trillion, and from $30 Trillion to $300 Trillion. And the way you’re gonna get there is not by attacking each other. The way you’re gonna get there is by dividing the market and focusing! So if you want to be a cryptocurrency, well currency means you have to have a stable asset value because the IRS is gonna tax you to death if it changes. So Tether can be a currency, and it cannot change! Do we need one? I don’t know. It’s a centralized stablecoin, and maybe we need a decentralized stablecoin. The market will decide that. But that’s a thing in its own. And if you want to build a crypto application, there are applications of things that people might want that Bitcoin doesn’t do like: total privacy, or maybe you want to issue title or provenance, or maybe you want to do a decentralized exchange or wrap something or implement insurance or lending. That’s fine — DeFi. There are applications — have at it! You’d be better off to, say, Ethereum is 60% of the application market, Tether is 52% of the currency market — cryptocurrency and crypto app — and then Bitcoin is 95% of the crypto asset market. And if you believe in another type of asset, I don’t think that it’s impossible to ever come up with one, I just think that right now the only clearly successful crypto asset is Bitcoin.

Robert Breedlove: Right, agreed!

Michael Saylor [38:05]: And all the crypto enthusiasts would be better just to accept the success of Bitcoin, because it’s the gateway drug for all the alt-asset holders to move into crypto, and they really ought to be encouraging the next $3 Trillion to come and the number one way to do that is not to relentlessly, ruthlessly attack and sabotage and undermine Bitcoin, but rather to celebrate its success, because as it gets bigger, the opportunities for other crypto networks to interact with it will also get bigger.

Robert Breedlove: Absolutely! And to people that don’t understand this space, I like to articulate it that Bitcoin is digital gold. It has essentially already run and won that race. And that for the same economic and game-theoretic reasons there’s only one analog of gold, there’s only ever likely to be one digital gold. So it’s almost like you just have to accept that. And then I describe the rest of the crypto-asset universe as liquid venture capital subjected to little, if any, due diligence! Some of them may succeed meaningful in markets orthogonal to money, but it’s very high risk. And the fact that anyone can spin up one of these assets in 15 minutes on the Ethereum blockchain, there’s a very low barrier to entry, very low diligence, so invest accordingly! I’d suggest no one — if you’re gonna have a crypto-asset portion of your portfolio, I think the highest risk position you could ever be in is 80:20 Bitcoin to everything else. And the conservative position would be 100% Bitcoin, 0% everything else.

Michael Saylor [39:52]: I would agree with you. I think we see it the same way. And I guess it’s a good segue just to general crypto theory: the emergence of magic in cyberspace. What’s a crypto network, what’s a digital network? How do I view it? And you tell me if I’m right or wrong. I’m a newcomer — you’ve been around for a while. My view of crypto network is: A crypto network is a software application running on a decentralized network with a consensus mechanism, ideally proof of work, arguably maybe proof of stake or some other consensus mechanism that theorists would agree promotes decentralization and antifragility. And a digital network is a centralized network. It’s a Facebook or Twitter or Google or Apple or whatever—a more conventional client-server network. So as we look in the future of cyberspace we’re gonna see crypto networks and digital networks. Why would you want a crypto network? You want a crypto network for immortal sovereignty and antifragility. We know Bitcoin is doing that right now. If you want to convey humanity across time and space — especially across time — maybe across time and domain, domain might be even better than space. You know, crypto networks aren’t necessarily faster than digital networks for moving shit through space, but they’re better at moving it across domains, and the reason for that is that sometimes you have lowest common denominator regulatory or compliance constraints that cripple the innovation in a digital network. Apple Computer will never do certain things because they’re subject to the US law, even though they could do them in 98 countries! And so a crypto network may in fact develop faster across regulatory domains if digital networks are crippled. There’s obviously trade-offs between digital and crypto, and I think about it as like: Trust, Security, and Duration are attributes of crypto. Economy, Performance, Functionality, and Compliance are attributes of digital. If I want to do it cheap, it’s a billion times cheaper on a digital network. [42:37] If I want performance, it’s a million times faster on a digital network. If I want functionality, it’s likely much more functional. There’s nobody that would dispute that Apple Pay or Apple or Google, they’re beautiful, functional products. Apple or Google Maps. Trying to do Google Maps on a decentralized crypto network would probably be a disaster! And then compliance — digital networks are better at compliance. Sometimes we regret their compliance. They shut down stuff and they censor things. But they’re better at compliance. So the very things that make crypto attractive — Trust, Security, Duration — are purchased at the price of giving up Economy, Performance, Functionality and Compliance. The conclusion is: Some stuff makes better sense to be doing digitally, and other stuff maybe with crypto. It’s early days, and the only obvious conclusion we both agree on is Bitcoin is a successful crypto network as a store of value. We know that. Everything else is an experiment and when it hits $100 Billion it’s not an experiment anymore. And we can debate whether it’s an experiment at $50 Billion, but I would say at $100 Billion it’s a thing, and it’s pretty clear. And it might be a thing we all know and recognize below that, but you’d need a lot more education to determine that.

Robert Breedlove [44:18]: I think — just to throw in my 2 cents here — it is distinguishing between a decentralized network and centralized. And this reminds me of an old quote, If you want to go fast, go alone. If you want to go far, go together. So the centralized solution is kind of like going alone, because it’s just according to one single plan, it can innovate very quickly and move in a certain direction very quickly. Decision-making is concentrated. Whereas the decentralized solution has more of a dynamic equilibrium that lets it persist further across time. So the centralized solution is going to be really compliant, really fast, really innovative, but the decentralized solution is really only useful when you need censorship resistance. You need to know that it will persist across the maximum duration of time, and that no individual group or individual for that matter can shut it down or manipulate it. So Bitcoin is at the extreme end of that decentralized end of the spectrum, whereas something like Apple would be at the other end.

Michael Saylor [45:27]: Yeah you could use a metaphor like an Aspen forest or some massive biomass versus an animal. A vertebrate versus invertebrates. Different life — plants versus animals. They’re different creatures. And they have different life spans! You want to live for 2,000 years? Or do you want to live for 80 years? One of them moves faster than the other, but one of them is more vulnerable than the other. I think from a human point of view, the real question for humans is: Do you want to put your trust in Man, trust in the organization, trust in a company, trust in a government? And/or: Do you want to put your trust in a crypto network? And we’re gonna solve our problems with a segmentation, mixture of these trusts. We’re probably not gonna put the functionality into Bitcoin—in a total decentralized proof of work network — that will do what Amazon does or Uber does or Pandora or YouTube does. Probably not! But do we really need to? We probably don’t need to. So when we think about the crypto industry segmentation, I think you really want to divide and conquer. A crypto network is a life form. And I think that’s different. I mean there’s a genetic encoding in a crypto network, and it’s very different than solving the problem with a human being or solving the problem even with a digital network. When you design the protocol, Bitcoin, and you let it go, it becomes a life form and it multiplies and all these nodes spread and all these miners spread. And you can’t easily pull the genie back in the bottle and re-engineer the genetics of it when you’ve released it into the wild. In fact, you would almost say that once plankton is spread out to dominate all the ecosystem — if God had a better idea — he created that and made those minnows! Or he created bacteria — he created a new species. You have a better idea? Create something different, and if that something different is in the same energy ecosystem as the plankton it’s not gonna make it! [48:01] If you take a bird, the bird can coexist with a deer, but it’s hard to create two apex predator birds and put them in the same space at the same time—one of them eats the other one! One apex predator creature. And that’s the same thing with crypto, I think. You gotta think of it as an evolution of a new life force in cyberspace, and the genetic code is of paramount importance! So if you really hope to be successful — and this is my opinion — when you release the privacy coin, you need to say, This is for this thing, and this is what it is, and we’re going to get it just right and we’re gonna let it breathe and let it live and we’re not gonna mess with it or monkey with it. And we’re not gonna decide that we wanted the monkey to have wings and also have gills and swim. And if I’m watching TV and I see these cool antler things and I want to put the antlers on it! You can’t be a technology-tinkering enthusiast with a crypto. You have to have more of the mindset of, It’s the crazy guy in the lab coat in the laboratory creating a new kind of life, virus, creature. It’s like you get one shot, and it’s at a lab — and you’re done! You can’t get it back! And so you should be aware of just how important it is. It’s a protocol. Life is a strand of DNA and that DNA is going to go and it’s going to do whatever it’s going to do. You’re creating life. And so how devastating is it for God to say, I created human beings. I made a mistake. I’m gonna recall them and then tinker and then do a human being 2.0. It’s a problem, right? [50:04] In the Bible, the biblical analogy is the flood where everybody just gets killed. Or some crazy stuff in the Garden of Eden. But with things like Ethereum, right? You’ve got Ethereum 1.0 and now you try to do Ethereum 2.0 — you’d almost be better off just to do something different as opposed to like retrofit something, because it’s going back and trying to force-fit the DNA. You could do it with a digital network. It’s okay if you’re running on a single server and you can throw a switch and everybody switches with it. But the whole point of a decentralized life form is that they’re all different and they all get to make their own decisions! And if you can order them to do something, it doesn’t feel that decentralized anymore, does it?

Robert Breedlove: It’s not decentralized, exactly.

Michael Saylor [51:09]: So with regard to this, I look at the crypto industry and I think, The logical segmentation is: Assets versus Applications versus Currencies. It is the purpose of the crypto network to be an asset, and Bitcoin clearly is. And then Bitcoin Cash and Bitcoin Satoshi’s Vision and the rest are trying to be. It seems pretty clear that Bitcoin is 93–94% of all the assets and the other ones are probably going to zero! And the only way you don’t go to zero is: You have to be differentiated in a way that the marketplace appreciates you. It’s a species, right? I can’t be almost like a bunny rabbit, I need to be a wolf! I need to be different than a bunny rabbit! And it’s an important caveat: Differentiated in a way that the marketplace appreciates. In other words: Differentiated in a way such that Nature gives you an advantage in natural selection. So taking Bitcoin, forking it, and making it do transactions 10 times faster isn’t good enough because you’re a million times slower than the other way to do transactions. So that’s just not a genetic mutation that works. It’s an example of a faulty genetic mutation that kills the carrier — it’s an extinction-level mutation. Genetic mutations happen all the time in Nature. Most of them are mistakes. But some of them might work! If I can stand up on two feet and if my eyes start to work 10 times better than your eyes and I can fashion missiles then maybe that’s gonna work for me. And maybe I will procreate. So it’s not impossible to have a genetic mutation on Bitcoin that would be naturally advantageous. It’s not impossible. It’s just, the ones you look at right now, like, what do you have? I mean, transaction speed? That’s really no good. Privacy? It’s a regulatory threat and so therefore it’s probably a nice thing but it’s a bullseye in its forehead which means that when the regulators go to shut down crypto exchanges the first thing they’ll do is pass a law against that, right? And so, give me an example of a mutation on Bitcoin that would make it a distinct asset as a store of value that would deserve to have its own life?

Robert Breedlove: I’ve thought about this a lot and written about it, and I have yet to identify one. Like Bitcoin sort of perfects the main properties of money that you need, and then the added caveat to that is that even if a mutation or innovation occurred such that the market identified it as useful and you saw this reflected in its market cap, Bitcoin also has this capacity to absorb feature set from competitors. So if something becomes market proven, Bitcoin can assimilate that into its existing UTXO set!

Michael Saylor [54:24]: Just as living organisms do! Just as companies do! You get a tough competitor: That which does not kill me makes me stronger.

Robert Breedlove: Right! Instagram absorbing Snapchat’s Story feature, right? Totally destroyed Snapchat.

Michael Saylor [54:39]: So we don’t see another one right now. It’s not impossible to conceptualize that maybe there would be one, but right now it looks like Bitcoin is 94% of the crypto-asset market. You can’t include Ethereum because although it’s proof of work now it’s going to proof of stake, and they don’t even have an intellectual commitment to be proof of [work 55:04]. And proof of stake is—it’s not clear to me that proof of stake is intellectually defensible over the long term. It’s not proven. It seems like it may be defective as an idea, right? It’s like an example — we’re back to this issue: It’s like I want to hobble the antelopes. It’s like somebody complained we’re using too much energy! It’s almost like the environmentalists took over and they’ve decided that they’re just mad that someone’s using too much energy so they want to pass a law to stop it. But it’s a law against Mother Nature, and it’s [brooding 55:44] to hobble the antelope. So the 4–5% of crypto-assets that are left — the Satoshi’s Vision, Bitcoin Cash — none of them are differentiated enough that they would seem to have any future in a Darwinian world that I can see. So they’re destined to [hugely 56:04] to go to zero. So then we go to cryptocurrencies. That’s a simple one — stablecoins. People go ballistic if you say they’re cryptocurrencies because everybody wants Bitcoin to be a cryptocurrency! But if the definition of currency is money that you can legally spend in a country without incurring taxes, Bitcoin is not a currency, but Tether is! Because—it’s kind of simple — read the IRS tax code. You’ll find, most places on Earth, they’re gonna tax it as an asset. And there’s nothing wrong with that! In fact, that’s better. It’s actually a mistake: Why would you want to create a short-term currency that’s a billion times more expensive to implement computationally than the other way? It’s like, the only reason you’d want to do something a billion times more expensive is for immortality — immortal sovereignty! That’s a good reason. But you’ve got that. If you had that on 99% of your assets 99.9% of the time, then you’re good. Then you could afford to have a little bit of risk in order to have a billion times faster performance on a digital network. So that’s currencies. The only reason for a cryptocurrency is for regulatory arbitrage or maybe innovation due to decentralization. If you can make the argument that we’re gonna innovate faster because we’re governed by the laws of Singapore and people in Malta can use a Singaporean cryptocurrency and it’s not technically illegal, it’s just a hundred times better because we’re able to tap into that regulatory arbitrage opportunity, you could call it a [free? 57:55] market, then I think, Okay! Fine! Then I think there’s a place for a cryptocurrency.

Robert Breedlove: I guess you could add the speed factor too. That Tether can be moved 24/7, whereas US Dollars would face certain restrictions in terms of time or jurisdiction — capital controls as well.

Michael Saylor [58:16]: On the other hand you can move Apple Pay 24/7, you can move Square Cash 24/7. So there’s no reason why you couldn’t have run a digital network 24/7. By the way, Binance is a digital network, and you can trade 24/7 on Binance. So Binance could simply move it — if I’m moving money on an exchange or between exchanges, I could do that on a digital network. I don’t need a crypto network to do it! So whether or not people use a digitally-based stablecoin or a crypto stablecoin, it’s a function of regulatory arbitrage. I mean there are privacy issues that people have. And then there are trust issues.

Robert Breedlove: I guess you could say Tether is a digital network in this framework. It’s not decentralized. You trust a counterparty.

Michael Saylor [59:11]: Because there’s a central authority that can actually redeem, right? And so you could almost argue that if Tether is the king of stablecoins, it’s running on a digital network, not a crypto network. Like, DAI — the irony is that DAI is a truly decentralized one — but people don’t like it because it’s inefficient and it doesn’t quite peg the value. But you could create a cryptocurrency as a stablecoin using an oracle, using some information feed, and using Bitcoin as the underlying collateral and create a synthetic Dollar and a synthetic Euro! You could! And will we need it? It depends. I mean that takes us to crypto applications and digital applications. I mean Binance and Coinbase and Huobi and the like, they’re digital exchanges. They’re digital networks for exchange. And then you’ve got the decentralized exchanges, right? Uniswap, SushiSwap. There’s a very romantic notion, like, Decentralized exchanges will beat digital exchanges. I’m not so sure! We’ll see! The point that I made in one of my Tweets is: So I buy $400 Million worth of Bitcoin. I do it in 7 days. For 7 days, I have some exposure on a digital exchange. I move it to cold storage for the next 10 years or 20 years. So for the next 7,500 days it’s off the digital exchange. So 99.9% or more of the time I’m not exposed to the risk of a digital exchange, and so everyone that days, Well digital exchanges are risky. Well it’s risky in the same way that walking across the street is risky, Robert. But you do it! In theory when you cross the crosswalk, if the red light failed, couldn’t you get slammed into with a truck and killed? Okay, so are you gonna take the position that we’re gonna have to build flyovers on every crosswalk in the world? Eh, pretty expensive! You know? So what will happen there? I don’t know, but it seems to me that Binance is doing just fine as a centralized exchange. And it seems that Square works fine as a digital client application. And if Apple Computer announced that you could send Bitcoin or cash via Apple Pay or iMessage tomorrow, I think a lot of people would be pretty happy to do that! No one would be complaining about it! And it really comes down to this issue of: Economy — it’s a million times cheaper, Performance — it’s a million times faster, Functionality — it’s a million times more functional, and Compliance — they’re probably more compliant in the country you’re in! So if you can do it on a digital network, you probably will! When you think about crypto, you really have to ask this question: What is so important that I want immortal sovereignty? What is so important? And certainly my life force. If you said to me, Michael, I’m gonna take all of your energy and I’m going to protect it and I’m going to fulfill your wishes from now to 1,000 years from now — I think that’s worth it! That’s a religion! That’s a crypto! You know, I have a park. I’d like for the park to be trimmed and the trees to be kept nice and I’d like for the park to be beautiful for the next 1,000 years and it’ll cost $1 Million a year. And so if I put $50 Million into endowment and it generates 2% yield, then I could reasonably say to Robert, Robert, why don’t you take my $50 Million endowment and put it into Bitcoin. And then it becomes the question of: How am I gonna see my wishes through for 1,000 years? Well the current way you would do it is you would create an institution like the Rockefeller Institution or the Hughes Institute. [1:04:08] And you trust human beings. What we’re really talking about is: We’re talking about the crypto-asset network of Bitcoin taking the base layer and holding all the monetary energy for 1,000 years. Or 100 years, if you think 1,000 years is crazy — we’ll go 100 years. And then we’re talking about a digital network. Maybe it’s gardners.com or Amazon will probably do it because they’ll probably do everything by the time we get through the decade. There will be nothing that they’re not doing! Let me make it easier: Let’s just say I want to send flowers to everyone in my family on their birthday for the next 100 years with a little note from me telling them how much I love them — that’s a simpler thing. I endow an account with Bitcoin, I create an Amazon account, I wire it up with flowers, I create some kind of mechanism so that when children are born they get added to the family unit, and the thing drips out a little bit of monetary energy in Bitcoin, converts to fiat, buys the flowers for $187,000 a dozen roses in the year 2047, and it ships them for the person, and I die happy, and for the next 100 or 1,000 years, flowers get delivered to people in the Saylor family line because that was my last will and testament! And how would I do it if I was John D. Rockefeller 100 years ago? I would have a crapload of assets, probably a lot of gold and stock — and he owned every oil company and they’re still around — and then you would put some of that into a foundation. A non-profit foundation, because you need tax-free, tax-advantaged. That’s why you need to go non-profit. By the way, all of your capital gains become tax free, tax-advantaged, and all your income becomes tax-advantaged, right? So that’s a good idea. And then you have a board of governance and you have 5 advisors and they appoint a money manager and they appoint a business manager and when one of them retires they have a selection committee process that puts someone else. We’re probably on the 7th generation of advisors to the Rockefeller Institute. By the way, John D. Rockefeller created the University of Chicago. It’s still running. Rockefeller created a lot of stuff that’s still running! Rockefeller University. So I can do it the old-fashioned way, but to do it well you’re probably talking about $100 Million of assets and a $5 Million a year operating budget. You get down to $1–2 Million it’s not really — $5 Million a year is the minimum. Your best bet is you have to become a university, a religion, a church, or a non-profit, a Hughes Institute. So that’s the way that you get immortal sovereignty, or like some long-range sovereignty. Another standard way people do it is like, Rockefeller bought up all the land on the Hudson River and he gives it to the state of New York, turn it into a state park or national park like Grand Teton National Park, and you get the federal government, the state government to agree to fund it in perpetuity per the Smithsonian Institution. The problem with all those things is that sometimes you just can’t even trust the governments, right? But your best bet is you lay it off on a state or a federal government, and that’s okay until the government fails or it reneges on something or other. The bottom line is that it’s not really within the grasp of a small or mid-size business or the individual. What is YouTube? YouTube allows you to become your own TV station! So what are we talking about here? The cliché, Be your own bank, if we look at it a different way it’s like, I’m a normal person, I endow my own monetary energy into Bitcoin, I plug it into to some digital network, I give the keys to someone I trust — family member, heir — maybe I do multisig, right? Instead of having 5 people on a board — if you have 5 people on a board of an endowment with $100 Million or $1 Billion in the endowment, they’re kept honest by filing annual tax forms with the IRS. And in theory they could be personally liable if they defraud the foundation or abuse their fiduciary trust. But you know it’s kind of like a 20th Century idea! A better idea would be: I put the money into Bitcoin and I have 3 or 5 digital keys. And it takes 3 out of the 5 to vote on anything. And every 3 months they have to register that they’re online and of healthy mind and spirit, and if someone stops registering then that remaining 4 automatically appoint a 5th, and whenever anybody retires they automatically transfer their key, and then what I’ve done is I’ve dematerialized an endowment, board of directors, corporation, institution. And it’s just become maybe a simple application in cyberspace plugged into a base layer of monetary energy. And it’s doing something! Whatever the something is. And so that’s a combination of (1) people and (2) digital networks and (3) crypto networks in order to allow people to achieve their hopes and desires over long periods of time.

Robert Breedlove [1:10:19]: That’s really interesting that you can lock up the base layer money and then appoint this multisig schema as almost a decentralized organization, in a way, among these 5 members. And then that gives the ability for your will and testament to be carried out in a more dynamic way across time. As governments fail, organizational landscape changes, or other macroeconomic conditions change, these 5 people can adapt. So they’re sitting on this money that you’ve put behind the wall of encrypted energy, but it also gives it some dynamism in a way, that they can adapt to your will and testament.

Michael Saylor [1:11:00]: Until computers get so smart that they do it all for us, the most likely outcome is: I appoint 3 or 5 people, and then they plug into digital networks that do all the stuff that we want done. Maybe you want to host all of your writings and all of your videos for the next 1,000 years in cyberspace. Okay so you appoint 3 trustees of the Breedlove Institute, you endow it with some amount of Bitcoin. You live a fine life, you depart, and their rules are: Every 10 years they have to find someone to replace them. You put your own term limits in there! By the way, you could put all sorts of rules in. You could say that everyone that actually reads my stuff and passes the test can vote on who the 5 trustees are gonna be. Or, you can’t even be a trustee unless you’ve watched and read everything and understood everything and passed my quiz that I left for you. What if Ludwig von Mises left all of his stuff in cyberspace and we’d need to read all his stuff and pass it and pass an oral exam by him in order to become a fellow. And if we become a fellow we’re invited into the academy of Austrian Economists, and that goes on to all eternity. And then the academy adds to the body of knowledge and they can upgrade the protocols and they can upgrade the tests and they can pass the flame down from generation to generation and the entire thing becomes antifragile and it’s the religion of Austrian Economics! I’m thinking the guild system. If you want something to be an immortal sovereign crypto network, then you think like the guilds. It’s gotta be something that people are so passionate about they’ll pass it down from parent to child, father to son, mother to daughter, master to student. There are things like that: schools of martial arts, Brazilian jiu-jitsu, religions, etc. And the medieval guilds were like that! Maybe there would be a — for example, I like environmental causes. What if I had a park and I said, Well people have to go in and they have to work in the park and support the park, but the park is this private/public entity where you can be a member and you get to use it but only if you can contribute to it and protect it. And then I endow it and it becomes a self-sovereign entity for 1,000 years. It’s like a park-owner’s association, right?

Robert Breedlove [1:13:50]: Yeah that’s really interesting! You’ve called previously I think domain names akin to digital real estate. And so what’s coming to mind is that you could also do this with a domain. You could fund a domain in perpetuity and then populate it with these institutional factors that you’ve described.

Michael Saylor: Bitcoin.org.

Robert Breedlove: Yeah!

Michael Saylor [1:14:12]: Or any domain. It could be wisdom.com and people put wisdom in and there are curators and there’s a governance mechanism and there’s a support mechanism and you just want it to go on forever like a monument in cyberspace. Think of it as a monument in cyberspace! It’s something that has some functionality. But you know the real question here is just: What do you love? And what is it you want to achieve in your lifetime? Are you a family man? Are you a political man? Are you religious? Do you love art? Maybe you want to create a website that allows people to upload their art. You can upload digital art, and then other people can check it out or use it subject to some licensing and you just want that to become a Wikipedia-type thing, right? It’s a commons service that you just want it to go on forever, not subject to fragile or human failure.

Robert Breedlove [1:15:28]: It’s so interesting that another way to think about money is a medium for expressing preferences. When you buy a car or sell a house the economy responds dynamically by making more cars and less houses. So now with Bitcoin you can actually express these preferences transcendentally of space and time! You can express them, in theory, for all eternity.

Michael Saylor: I’ll give you two examples: All the time you have examples of rich donors if they endow a professoral chair at a university and the money gets hijacked to build a new football stadium. Or, I want to endow a professorship of Austrian Economics — but then someone takes over the university and so they divert the money to buy a new hot dog truck. So—I’m dead — how do I make sure that someone doesn’t, that they really fulfill my last dying wish? How do I make sure? Well I can do it if I have a Rockefeller Institute and they hold the purse strings and they dole it out annually and then they watch. But then I have to actually have a bunch of people that I trust that 100 years from now will remember what my wishes were! And maybe nobody cares about that. It’s a challenge for people. I went to Naples this year. And if you go to Naples, you go into the port, you have all these superyachts in the port, and very very wealthy people on the superyachts. But if you walk out of the port there’s puddles on the floor and there’s this park in the middle of Naples right next to the port and it runs about 10 blocks. And 50 years ago it was beautiful and the jewel of Naples and it was like Central Park and everyone could come there and enjoy the day. Now if you walk through it, all the buildings are spray-painted, they’re all closed, there’s pooling stinking water, no grass grows, it’s just mud. It looks like something 40 years after the apocalypse! It’s in the middle of like the third largest city in Italy. There’s money everywhere, and yet somehow neither the municipal government nor the state nor the federal government of Italy, nor any wealthy person, can manage to come up with $100,000 Euros a year to water the grass and mow the lawn. In the middle of a city of a million people — the public jewel the city, the single most important piece of real estate in the entire city—is suffering from a tragedy of the commons. Now I ask myself: If I was that wealthy person and I wanted to bring that park to life, if you wanted to do it top-notch you need $1 Million Euros a year. You want to do spectacular? $10 Million Euros a year. If you want to just mow the lawn and water it and keep it from being a stinking, mud-infesting war zone? $100,000 Euros a year. How do I actually endow that park without having the money hijacked by whoever hijacked the money? Because obviously none of the economic energy is making it to that park in the middle of Naples. It might be a more worthy cause just giving a third of my money to the government as tax on my death, or two-thirds when I die for them to — whatever they’re doing, like, What could you say about a civilization that can’t keep its central park in its most important city in the province from being a stinking, post-apocalyptic zone?

Robert Breedlove: Right, it’s terrible.

Michael Saylor [1:19:29]: It’s one of my values! So people have wishes. They have a hard time realizing their wishes. There’s a lot of ways to do it, and the theoretical magic way to do it is: I create a program on a crypto network in cyberspace, it runs on a blockchain network — nobody can stop it, ever, it’s unstoppable code — it’s literally a magic spell! A less intense way is: I power it with crypto network and I use a combination of people and digital networks to do it. I think ultimately people can achieve what they want in a variety of ways. If I want to be fed, I can feed myself by hunting a deer, hunting some chickens, growing some corn — these are all different ways to achieve what you want. The real key is: I need to have mastered the technology of hunting, cultivating animals, wildlife, and farming. And if I have all three of those technologies on my fingertips that I can mix and match, then I can actually do something interesting. I think that’s the potential here. We talked about: Money is power. Any sufficiently advanced technology is indistinguishable from magic. So if you apply advanced technology to money, then you can give someone magic power. The source of magic power is providing an instruction into the digital and crypto network space and powering it with crypto network space such that you cast a spell in the future, or cast a curse into the future when you’re long gone. That’s real magic, right? Like, casting a curse 30 years after I die — that’s impressive magic! Less interesting but more practical is: I just want to cast a spell while I’m alive. And the magic spell I would cast, were I a magician, is I would go to that park in Naples and I’d wave my hand and it would become a beautiful paradise with gorgeous trees and nice grass and water flowing and cleanliness and safety and free ice cream cones for the kids and flowers and happy music and concerts on the green. And it would be like that forever, because that’s my magic! By the way, in fantasy, the great magicians, the demi-gods, the powerful wizards, they have magic power — they can do that! And the more powerful they are, the longer the spell lasts. So if I have $1 Million, I can do it for a year. If I have $100 Million, I can do it forever. If I have $1 Billion, I can allocate 10% of my power to do it there forever. Magic power, right? Money is power. You got enough money, you can snap your fingers, materialize a jet, it’ll fly you to Tokyo on 10 hours notice. It’ll cost you about $250,000, if that’s how you want to expend your energy. If you don’t have enough energy it doesn’t matter. If you don’t have $250,000 — right? The other part in those magic stories is the mere mortal that wants that same trip, their life force is sucked out of them and they’re aged 82 years and they die! If I take a middle-class person making $72,000 a year and they need to fly from New York to Tokyo for $250,000, that’s all the savings they’re ever gonna have! I just sucked their life force out of them to cast that spell. And so how much power do you have? And how much magic can you bring to bear? Look, John D. Rockefeller had magic. He just did it the old fashioned way. And his son did, John D. Rockefeller, Jr. They went to all the beautiful places on the Earth, they bought them all up, and then they ended up turning them into national parks. The US Virgin Islands is a Rockefeller Park. St. John, they bought. Acadia, they bought a lot of Mount Desert Island, made it a national park. Grand Tetons, they bought all that land, made it a national park. Most of the land up and down the Hudson River — between they and J.P. Morgan — they bought it and made it a state park. They were casting spells.

Robert Breedlove: And they turned it over to the governmental organization which was the best method he had at the time based on the technology, right?

Michael Saylor [1:24:40]: They gave it to the longest-lived sovereign power. They did the best they could do. And they played the cards that were dealt them: they had gold, they had state governments—by the way, most of the state and federal trusts, that law was written by lawyers paid for by Rockefeller — so they created a political system. You think 501c3 law just came out of nowhere? I mean, all of these laws, they were created! John D. Rockefeller’s son married Abby Aldrich. And Abby Aldrich, who became Abby Rockefeller — the richest woman in the world at the time — was the daughter of I think Nelson Aldrich. And Nelson Aldrich was the head of the Senate Banking Committee — happened to be key in the creation of the Federal Reserve — but he was one of the most powerful men in the country for quite a long time. And so there was an example where they were working to influence the political system, and critics say they influenced it to the detriment of people, but you can also see many ways they influenced it to the benefit of people! If you’ve ever enjoyed a national park, half of them are endowed by guys like Rockefeller!

Robert Breedlove [1:26:13]: Right. Interesting angle, yeah. Aldrich, of the Aldrich Plan, that failed right before the Federal Reserve Act.

Michael Saylor: Yeah he was — from all the way through 1920 or something — for 30 years he was dominant. The senator from Rhode Island. So I think that in a nutshell is my views on crypto. I think ultimately we’re moving into an exciting world where people are gonna be able to achieve great things with a variety of digital networks and crypto networks. What we can see right now for sure is: There is at least one successful crypto network — Bitcoin — there are many successful dominant digital networks — YouTube, Google, Facebook, Amazon, Apple, etc., plenty of them —and the future is gonna be defined by these networks, and you just gotta decide what’s the best tool for the problem? You can solve problems with people. I can pick up the phone, I can call you and I can say, Robert, buy me $100 Million worth of Bitcoin! And I solve the problem with a person. Or I can solve the problem with a digital network. I can go online on Binance and I can start like typing and trading, and I can buy $100 Million worth of Bitcoin. Or I could solve the problem with Uniswap — with a decentralized total crypto network. What will happen? The market will determine—what we know is that over time, what was done by people will start to be done with digital networks, and what was done by digital networks may in fact float into crypto networks to the extent that sovereign immortality is worth the trouble. And if you’re gonna make a crypto network — if they’re just doing it for regulatory arbitrage it’s probably got a 10-year life span and it’s shaky — because who’s gonna lay down in front of a tank for something like the difference between Binance and Uniswap? Would you sacrifice your life to try to trade on Uniswap instead of Binance? Because I wouldn’t! Let me tell you what they’ll lay down in front of a tank for: They’ll lay down in front of a tank for Freedom, for their Religious Values, for the Future of their Family, for the Future of their Ideology. If they have a passionate belief, they will lay down in front of a tank in order to defend it. The principles of Science and Justice and Humanity and Truth. Not everybody! But you don’t need everybody! You need the keepers of the flame. You need the maximalists. The 1% who are willing to fight and die for the principles. We hold these truths to be self-evident. We didn’t come up with it here today in this call. It was a basic truth that founded a lot of things including the United States of America. And if you go back to the Roman Republic, there were a lot of Romans when the Roman Republic was healthy, and they were willing to fight and die for Roman principles. To a certain extent, a lot of good Romans assassinated Julius Caesar because they thought they were fighting for Roman principles. And a lot of wars were fought over it. So if you really want a crypto to be successful over 100 years, the technology is only a part of it, right? It’s the ideology paired with the technology. And you’re gonna have to have an ideology that is so pure and so straightforward that people will fight to the death to defend the ideology. And that’s why I’m probably not gonna sacrifice my life for the 13th iteration on smart contracts! It’s not that important! On the other hand, if you tell me that we’re about to suck all of the economic energy out of the civilization and plunge ourselves into the Dark Ages, then I think I’ll fight for it. That’s worth fighting for.

[END]

Commentary:

Robert Breedlove [1:31:00]: Alright guys! That was Episode 8, and man! Just another big, deep dive into Bitcoin and its implications! Globally, really. So we started the episode out talking about how divinity of engineering. As Saylor mentioned, the beaver — which is the mascot for MIT — the reason the beaver is the mascot of this engineering-focused school, MIT, is because the beaver is really special! He actually goes into nature and harvests materials and re-sculpts the flow of rivers, frankly, by damming it and using his wits and ability to build a habitable structure for himself and his family when he goes to reproduce. So the beaver ends up being this symbol for this divine quality — that really life has — which is engineering. This divine quality of engineering has found its highest expression in Man. At least as far as we know, we are the animal most capable of harnessing this quality that the ancients would call the Logos, which is the ability to confront the chaos of nature, dissect it with the categorical capabilities of our mind and our words, communicate about its properties and qualities to learn about nature, and basically convert this unexplored territory into explored territory, and convert chaos into good and habitable order. And this is a really deep and ancient idea, but it’s something fundamental to life and to humans. And civilization itself we can think of as just a bubble of this habitable order amid the unlivable entropy of the universe. And you can see this even in like the Southeast United States, there were areas in say Mississippi that were just not habitable whatsoever prior to the invention of the air conditioner! So that’s maybe one extreme example but there were literally places — geographic locations on Earth — that we simply could not live until we became sufficiently advanced technologically. And Saylor has a great quote on this. He says, “Humans are divine when they engineer a better habitat for themselves and those they love through their intellect.” So again this to me points back to work, which Bitcoin—as we’ve discussed — it’s money rooted in proof of work as gold was. Work itself is a noble pursuit, right? It is the means by which we convert chaos into good and useful order, and I would argue that it elevates our timelessness. It’s actually allowing us to accomplish greater results with less efforts in terms of making productivity gains. It’s also lowering our time preference, making us more long-term oriented. And in this process we develop more morality, more selflessness even, and we also develop greater survivability as a species. So when the entropy of nature inevitably creeps in, we have the ability to respond to it. If there’s a natural disaster or something out of sort, we can harness resources from other pockets of civilization and channel them into the affected areas such that they can recuperate. So I thought that was just a really interesting topic, and it points towards the instrumentality of Bitcoin in helping us better focus on this divine quality. Bitcoin really is money purpose-built for entrepreneurial experimentation which involves engineering and problem-solving. Whereas you could look at something like fiat currency: much more based on bureaucratic theft. We’re talking about individuals and organizations that add no value to the productive economy and just siphon value off of those that do [out in 1:35:30] the world and engineer. So in that sense, by re-enabling and re-energizing work itself, we could view Bitcoin as a form of divine money, in a way. And then we got into Bitcoin as a medium of exchange. And in 2017 during the Bitcoin Cash fork wars, there was a bit of a delusion in related to this word “cash” in the whitepaper where Satoshi called Bitcoin originally peer-to-peer cash. And the thought was — at least by the Roger Vers of the world who represented Bitcoin Cash—that Bitcoin needed to be used in day-to-day transactions. What this is ignorant of actually is the original meaning of the word cash, which comes from the French word caisse, which meant money box. And this was used as a term in the 19th Century to indicate final settlement. So it was a bearer-asset money. Physical gold, physical silver was said to be cash. And only in the modern age have we sort of repurposed this word to mean the government debt certificates that we trade with today and call money. And knowing what a genius Satoshi was, I am confident he was clear on this meaning of cash, and did not mean Bitcoin needed to be used as a day-to-day medium of exchange to proliferate. And by the way, even if he did, it doesn’t matter, because the market selects the purpose and utility of a tool. So Bitcoin is being selected — has been selected — by the market as a store of value. And that’s the direction we think it’ll keep going. So the magic of Bitcoin if you will — as we’ve discussed in earlier episodes — is this ability to transfer monetary energy in a loss-minimized way. So you can send energy across time and space with minimal loss, essentially. And that’s what’s important, not the ability or speed or low transaction fee to move it at a high frequency — it just doesn’t make any sense. So to Saylor’s point on that, the Bitcoin network is optimized for suviveability — that’s what decentralization is, is that it’s a very slow and inefficient database, but with that slowness and inefficiency comes maximal redundancy. And with that redundancy comes resistance to large attacks, specifically nation-state level attacks, which would be the most powerful organizations in the world today. So if you needed a medium for high frequency transaction, so you’re always going to get more economy and efficiency by moving to a centralized system like PayPal, Venmo, Apple Pay, Visa, whatever. Because the database only needs to be updated once. Versus Bitcoin has to be replicated everywhere and nowhere across all nodes and miners. So that’s the trade-off and we’ll get into more of that shortly. But in a nutshell I like the description Saylor uses that Bitcoin is a low frequency medium of exchange, meaning you only need to move it occasionally, maybe never if you custody it correctly. But it’s a high frequency store of value. So every time you’re HODLing, you’re using it. So the people who argue that Bitcoin has no utility, they don’t understand this economic principle whatsoever. And further to that, even if you absolutely wanted to use Bitcoin as a medium of exchange, most tax codes in the world today are hostile to that. They’ll actually trigger capital gains realization at each transaction. [1:39:31] So it really suppresses its use as a medium of exchange. And another way to think about this — it gets a little more complicated — but actually when you’re holding something as a store of value, trades are not just with other people. Trades are also with ourselves. Like infinite slices of our future selves. So every time you choose to hold cash or hold Bitcoin or hold gold — cash in its original sense — and not trade it, you are basically trading with your future self. So you are giving away the opportunity that the cash could have otherwise been traded for — whatever its cash value in the market is, it could go out and buy you X assets — you’re forgoing those assets and choosing to hold the optionality of cash. Whereas those assets may have real yield! They may be productive assets, rent-generating real estate or whatever it may be, whereas hard money doesn’t actually create yield. So you’re actually—the most trades you do in life are not actually with present others but they are with your future self. All these infinite slices of your future self. Every action or inaction even is a set of trades with those future slices of yourself. So we could look at the actual store of value function truly being much more important as a medium of exchange than a present medium of exchange with present others. So that’s just an interesting way to conceive of money, that it’s something that you’re holding onto to have maximum optionality into the future, and that holding is a trade with you even though it’s not a trade with others. And this also dovetailed into why Saylor chooses not to compensate people in Bitcoin and why he thinks it’s a bad idea to do so, because again if you’re using it primarily as a store of value you may not sell it ever or for say at least 100 years. By choosing to compensate people in Bitcoin you’re accelerating that tax bill 100 years into the future, so that’s a really bad idea. You’re also increasing the accounting complexity of the business which would be the payer and the payee. They both need to mark Bitcoin to market at each point of transaction. You’d also be forcing — say if you’re compensating your employee with Bitcoin — you’re forcing them to sell it later to actually cover the tax bills generated as a result, so that doesn’t make a lot of sense. In a nutshell, as Saylor said, the ethos of Bitcoin is self-responsibility. So you should pay and settle in whatever the generally accepted medium of exchange is, the one the tax code is not hostile against, which tends to be currency. And then if you have savings — you have excess currency or excess assets — you would, as Saylor does, sweep them into your savings or your treasury for long-term storage. That’s the optimal and intelligent and low-complexity strategy. We get into a bit about how optionality itself is freedom. The more options you have the more free you are. And this has direct impact on the stability of society. Saylor quoted Robert Heiland who said, “An armed society is a polite society.” So to tie that back to Bitcoin and capital it’s like, when people have this option of capital flight — they have this perpetual option to move their money across domain, across time, across custodian — and settle finality nearly instantly, that governments and institutions and service providers, they’re gonna tend to be more respectful because the customer holding the capital has such a high degree of optionality. So you could think about this too: When you go to the amusement park, the food and drink cost in an amusement park tend to be really high. A soda that you may pay $3 for at your local convenience store might be $8–10 in that amusement park. And it’s because the amusement park has what’s called a captive audience premium. You have no other choice. You have no other options to buy food or drink once you are within the bounds of that amusement park, and they can effectively charge you monopoly-style prices. And if you look at Bitcoin capital through that lens it’s kind of removing that captive audience premium that legacy institutions or nation states tended to have over users. And we could say that if users have the ability to move the money whenever they want, they don’t actually need to, it’s just the fact that that option exists keeps everyone honest, keeps everyone listening to one another’s preferences, because no one wants the capital to move. So the point of this is that a symmetry of options, a symmetry of optionality between buyer and seller and stability of the rules and the protocols through which they interact, this is the bedrock of peace. This is what preserves peace. But when you get asymmetries, when one group has a lot of optionality over another, that’s when you get predatory treatment. And I would say central banking falls much more into that model, where they get this perpetual call option on society basically, that they can allocate cash into businesses, the shareholders values being increased, the dividends being paid, and if there’s ever a shock to the economy and the institutions that have deployed that capital into risky positions get wiped out, well the central bank just siphons more value from the productive economy through printing money and allocates again. So it’s a Heads I Win, Tails You Lose situation for central banks over productive economies. So Bitcoin is just eliminating this, this captive audience premium or asymmetry of optionality. Another way to think about this too is — to get back into Bitcoin is Money — we can actually consider the monetary premium itself on an asset as its optionality value. So the more tradable an asset is, the more a component of its market value is its expected future exchange. So for instance if ammo has a very specific use — it can be put into a gun and fired and a gun can be used to kill people or animals or whatever — but if in an environment of ammunition scarcity, people may also be willing to trade other goods and services for that ammunition, so that ammunition will start to trade at a premium not just for its utility value — not that its utility value has increased necessarily — but that its exchange value or its optionality value has increased. The extreme example of this would be gold. Gold has a — I think we’re at an almost $12 Trillion market cap for gold — the industrial demand for that is less than $2 Trillion, I want to say it’s closer to $1 Trillion. The rest of that demand or the rest of that market cap for gold is reservation demand for gold as money. It best fulfilled the properties of money which made it maximally exchangeable across space and time. In that lens too we could say that Bitcoin is like the world’s first pure money. It’s pure monetary premium. There’s not really an industrial use beneath it. Some have argued that actually the transaction network was kind of the original utility that bootstrapped its monetary premium into existence. Maybe you could make that argument. But the point is that it’s a tool of pure optionality, because it’s pure monetary premium. Whereas you could look at things that are less tradable, where a much larger part of their market value would be their use, their industrial use value versus their trading value. So money exists on this gradient is the point. Something that’s very not-tradable, high non-fungible, very specific — purple telescopes or something weird like that — it’d be valued just on its use, mostly just on its use. Not on its future expected exchange value. But something like Bitcoin and money itself — at the other end of the spectrum — is valued on its expected future exchange value. I think it was Naval said that Money is the bubble that never pops. Because this delta between market and industrial use value has been called a bubble by some people. But what it actually is underlying that is the value of the monetary properties giving rise to that exchangability. So that got us into Bitcoin as a unit of account. Saylor had a great quote on this. He expects that, “Bitcoin will be a universal language of economic truth.” I fully agree! It is the predictability of the supply of money that gives rise to its utility and pricing of goods and services with it. That’s what gold was, it had the most predictable supply of any monetary metal and that’s why all of the liquidity and market capitalization coalesced to gold. And that’s too for that reason we used to think actually in ounces of gold. Even dollars themselves represented ounces of gold originally. The time and energy of market actors that produce every good and service in the world, this tool — money, or gold — most closely mapped onto the absolute scarcity of time and energy. So gold was the supply curve that was closest to the absolute immutable perfectly scarce supply curve of time and energy. And this gave it the ability to basically generate prices that were generally the most stable — not saying that they enforced stability — but they tended to be most stable because gold had the lowest and most predictable inflation which also meant prices were more useful in calculation. They weren’t fluctuating wildly over time. And they were communicable. So we could actually start to just think in ounces of gold for goods and services instead of needing to think in all these countless exchange ratios — how many chairs a car is worth or whatever it may have been. So I agree that Bitcoin is gonna go that way. But as far as where it is today — I love this point — Saylor was saying there’s a lot of in-fighting in the crypto community about is Bitcoin gonna be the thing or Ethereum or this or that, but it’s all essentially pointless. The crypto-asset ecosystem at the time we recorded was around a $300 Billion pond sitting next to a $300 Trillion ocean of assets which a lot of them are just intended to hold value over time. Store of value assets — gold, bonds, real estate — all fall into this ocean. And that’s where our energy should be focused is actually carving a little spill-away from the ocean into the pond here, not competing amongst ourselves because frankly as we’ve covered in previous episodes, Bitcoin is just highly resistant to disruption as money. It’s not like other crypto-assets won’t succeed in something orthogonal to money, something that’s not in the market for money. There’s technology that may have other use cases, there’s a lot of theory out there. But today it’s just not proven! So I agree completely that our focus as educators or ambassadors for Bitcoin needs to be geared towards those still holding and interacting with these other alternative stores of value so they can understand why Bitcoin is possibly the sole store of value asset for the 21st Century, the only way you could successfully transfer value 100 years into the future with the least loss. So I agree with that completely. We then jumped into crypto versus digital networks. Again crypto network we can think of as a decentralized consensus model. And this is using Saylor’s nomenclature: The digital network would be centralized consensus. So just sort of one entity or decision-making body deciding. And there are different use cases for the two and there are different trade-offs between them, clearly. So crypto network would be useful for establishing what Saylor calls immortal sovereignty or antifragility, which means that they are able to persist over time. Decentralized crypto networks have a high degree of survivability and they impart properties like trust-minimization, security, and duration. So you don’t need to trust the centralized decision-making body. Instead you trust the aggregate self-interest of all market actors in a centralized network. And this is clearly gold or this is Bitcoin. Again gold — it’s not built on cryptography per se, but the inability of producers to create gold in a lab basically meant that the whole world was decentralized around gold as money. There was no political actor that could control it until central banks accumulated a large stake in the supply and started manipulating it in the gold derivatives market which we talked about before. On the other hand of the spectrum from a crypto network is a digital network. Which as opposed to survivability is useful for squeezing efficiency out of a system, eliminating redundancy. Where a decentralized network is gonna be fully redundant—you’re talking about all these nodes and miners all over the world all running a copy of Bitcoin and updating all the time, so it’s a huge expenditure of energy to establish your redundancy — a digital network is gonna just have one record base that can be updated very quickly, very low latency, very low redundancy. So the properties that it imparts are Economy, Performance, Functionality, and Compliance. And to draw back to — where you could say gold is decentralized money — you could say fiat is more like a centralized money. So because gold was expensive to move across space, we could introduce this centralized database on top of it called fiat currency that let us do ledger entries really quickly in gold. So we picked all of this transactability across space but we introduced this attack vector for intermediaries that actually compromised gold’s store of value function over time. The only market-proven crypto network in the world today is non-state digital store of value Bitcoin — everything else is theoretical. This is not to say that actually a digital network can’t evolve into a crypto network! It kind of reminded me of our earlier discussion of the Steel Age where newly charted industrial spaces tend to have monopolists won out in the beginning, and then those monopolists set standards, and then over time that market becomes commodified and tends back toward a more freely competitive domain based on this standard. So it’s as if a digital network could establish certain protocol standards for a decentralized network and then turn over the keys so to speak to the market. And then if there was sufficient demand for whatever utility it’s providing, it could become decentralized over time if you handled it correctly. We haven’t really seen that yet. We’ve seen some attempts at it but I don’t think we’ve seen it done really cleanly yet. But this evolution, a successful evolution from a digital to a crypto network, would require sufficient differentiation. One that would end up being useful as a competitive advantage in this market-driven natural selection process. Again I think Bitcoin has already run and won the race for money, so it would have to be a different market. And it’s difficult! It’d be really difficult to accomplish this differentiation given Bitcoin’s capacity to absorb a competitor’s feature set. In a biological sense we call this horizontal gene transfer. Where — Brandon Quittem has written and talked about this — Mycelium has this ability when it encounters a threat in the environment, if it neutralizes the threat and consumes it, a competing Mycelium or an insect or whatever, it can actually digest its genetic code and incorporate that information into its own genetic code! So we typically think of animals having vertical gene transfer from parent to offspring, but there’s something more competitive in nature — this horizontal gene transfer where you can just slurp up genetic material from competitors. And Bitcoin exhibits that in the digital domain! So the point is that the differentiation necessary for a digital network to evolve into a crypto network would have to overcome this horizontal gene transfer of Bitcoin as well, which would otherwise just absorb it and render the attempted evolution unnecessary. So finally we got into this concept of immortal sovereignty which I thought was just incredibly interesting. [1:59:33] You can think about this as channeling ones preferences beyond ones own life, and this is not a new idea actually. Saylor gave this general example of: If he wanted to buy flowers for everyone in his family for the next 100 years on their birthday, how would he accomplish that? He drew on examples from John D. Rockefeller and he said, Rockefeller would have established — using the tech of his time — to accomplish this “immortal sovereignty” by either establishing a non-profit foundation, an endowment, a university, or possibly even a national state park. But this necessitated really big numbers and was limited to just a few ultra-rich people that could do it. And again these are — when Rockefeller was alive I guess almost 100 years ago now, you’re talking about $100 Million in assets with $5 Million a year operating budget in 1920 Dollars. So big, big numbers were necessary to achieve this immortal sovereignty that Bitcoin delivers to us in a much more cost-effective way today! Additionally, no matter what you set up — foundation, endowment, university — you would still encounter this counterparty risk because you’d have to trust the institution, you’d have to trust the government protecting the institution. But Bitcoin gives us an interesting thing which is a monetary layer that enables us to dematerialize these institutions but still achieve similar — this immortal sovereignty if you will. And it does because you can actually assign the trustees — in say a multisig setup — keys to the funds to accomplish the aims of the digital foundation. But because their property rights wouldn’t be exposed to counterparty risk in the form of an institution or a government, they would actually gain a great deal of dynamism to roll with or get through geopolitical changes such that they could preserve the original mission of that institution. So you could think of it as immortal sovereignty at just a much lower cost! Which I think just speaks to the grander vision of Bitcoin, right? It’s like: Why do we have these stories like the nation state and universities organizing us, and what is possible when we instead maximize the sovereignty of the individual? Like how relevant do those institutions remain? The other example he gave is if you wanted to host your website reading material for 1,000 years into the future, you could code all kinds of interesting rules around that! Maybe requiring people to pass a test and become a certified student of your knowledge, and then maybe they gain a voting right to choose the next trustee of the institution, and it becomes this dynamic digital autonomous democratic organization that just rolls forward in time. It’s really wild when you imagine the possibilities. It points towards all the new institutional possibilities enabled by Bitcoin. Which in my opinion it calls into question the structure and the purpose of the firm today. So Bitcoin gives us this monetary layer capable of dematerializing these institutions we’ve needed in the past for sovereignty, to establish what Saylor called immortal sovereignty. And it does it in a way that empowers the trustees of these organizations to be self-sovereign, so that they can actually resist geopolitical sea changes and adapt to changes in political climates of the time. Whereas historically you would’ve needed to trust that institution itself, and should it be invaded in wartime or broken down due to a civil dispute within the country, then you would’ve lost the sovereignty that you would’ve vested trust in the state park or whatever the will you were trying to project beyond your life — its fate would’ve been vested with the survivability of the sovereignty of that institution. So Bitcoin—by being a monetary base layer that maximizes the sovereignty of individuals and being optimized for survivability —actually gives us a whole new way of establishing this immortal sovereignty across time! Another way to think about that is: Bitcoin is collapsing the cost of money, it’s collapsing transaction cost, it’s collapsing the costs of satisfying the functions of the central bank, and it also just collapses this cost of immortal sovereignty. Which again, the Rockefeller’s needed $100 Million in assets and a $5 Million annual operating budget to achieve to establish the Rockefeller Foundation. Now you can do that in theory at least with just a much smaller Bitcoin stash, some software, and some really long-term strategic thinking! So I like the analogy too that Saylor used: If you wanted to host your website reading materials for the course of 1,000 years, you could actually chop up the keys to that institution — the Bitcoin endowment for that institution — give it to 5 trustees, encode a set of rules such that people have to read your materials and pass a test to maybe gain a voting right so that they get to decide the [successor] to each trustee. And in that way the thing kind of becomes this decentralized autonomous organization over time that just preserves your will and testament which was to have this body of knowledge go into the future for the benefit of humanity. So I thought that was really cool and points to just the new possibilities that Bitcoin brings into the world! It not only causes us to question the purpose of the firm itself and other organizational models we use, but it’s also creating something that’s truly timeless. And this is where— Saylor called this, Creating monuments in cyberspace — I thought that was a really cool way to look at it, is that by gaining immortal sovereignty through Bitcoin-enabled institutions, we can actually create things that well-outlive us yet still are shaped and influenced by our living will and testment beyond our own life. Finally we got into a topic we touched on earlier which was that money is power. And we combined it with another topic that we touched on previously which was that sufficiently advanced technology is magic. So by combining these two concepts we’d say that a sufficiently advanced monetary technology is magical power, effectively! And it lets its users cast spells or cast curses. On the spell side we went into this park in Naples that as Saylor described was surrounded by wealth but for whatever reason was not receiving an allocation of that wealth to preserve the park and keep it pristine. So again to establish that immortal sovereignty historically they had to go out and buy up this land and basically turn it into national parks because they were then vesting their will and testament with the longest-lived sovereign power of the time — which was the nation state — to maximize the chances of preserving their intention across time. The point there was that the 501c3 non-profit foundation laws — they were actually written by Rockefeller’s attourneys! So this shows the relationship between money and government. The common misconception is that the government is the originator of money, but what is in fact true is that money is the originator of government! That wealth itself tends to shape the laws around it that determine its management, preservation, and distribution over time. On the other side where we were talking about casting a curse — we didn’t talk a lot about this but just thinking out loud, if you had an organization like Anonymous, which is this anonymous set of computer hackers distributed all over the world, you could in theory fund them in perpetuity with a Bitcoin-based smart contract enabled endowment that would effectively fund their hacking attempts or attempts to say dissolve the power structures of government or to remedy any government mistreatment of civilians — things like that. So it could be used in both a defensive way — say to defend the park in Naples — but it could also be used offensively to attack hostile organizations like national government. So that’s just an incredible way to think about how many ways Bitcoin not only shapes and influences our willpower and intention by lowering our time preference and elevating our morality, but also gives us this medium through which to project it over much longer time and space horizons! So it really is one of those tools that is just radically shaping who we are. We touched on the religious aspects of Bitcoin, but even if you just strip that out and said it’s just an ideology, it is perhaps one of the most pure and principled ideologies there’s ever been! If you respect Fairness, Equality, Natural Law, Thermodynamics, Mathematics, Freedom — that’s what Bitcoin positively embodies essentially! And such a pure and pristine ideology is something people find worth fighting and even dying for. So it does have these qualities of a religion or of its own independent nation state if you will. It’s just challenging all of our language even to describe what it is. Although we focus on its monetary properties exploring it as money by asking this question, What is Money?, I think we come to see Bitcoin as even much more than that. Or perhaps even saying money is much more than that! Money is foundational. It’s like the base operating system to all these other higher order operating systems we have like the nation states and religious institutions, etc. As I said once before, people come to Bitcoin for the profits, I think almost everyone’s drawn in by Number Go Up, but I think the people that really come and stay and find roots in Bitcoin and purpose and meaning and devoting their lives to this space, they stay for the principles! Bitcoin — come for the profits, stay for the principles. So that was it, that was Episode 8 guys. I hope you enjoyed that one. This has just been a dynamite series so far. We’ve got at least one episode left so I look forward to that and I’ll see you at the next one!