Order of Man - MICHAEL SAYLOR ｜ A Primer on Bitcoin

00:00:00.080 No doubt that you've heard of Bitcoin and crypto, but with the increasing popularity

00:00:04.760 of digital currency, you might still have a lot of questions and a lot of skepticism

00:00:10.180 about the validity of what exactly it is and if it's even worth paying attention to.

00:00:15.960 My guest today is Bitcoin expert and dual degree MIT graduate Michael Saylor.

00:00:20.720 Today, him and I discuss what Bitcoin is and whether or not it's a valid form of currency

00:00:25.580 for the future. We also get into some higher level type discussions about what is the nature

00:00:32.260 of money, value, our individual property rights. We also cover the concerns of inflation, government

00:00:37.980 risk, whether or not digital currency is quote unquote real and also the incorruptible nature

00:00:44.160 of Bitcoin.

00:00:45.300 You're a man of action. You live life to the fullest. Embrace your fears and boldly chart

00:00:50.000 your own path. When life knocks you down, you get back up one more time, every time.

00:00:55.100 You are not easily deterred or defeated, rugged, resilient, strong. This is your life. This

00:01:01.880 is who you are. This is who you will become at the end of the day. And after all is said

00:01:06.940 and done, you can call yourself a man.

00:01:10.000 Gentlemen, what is going on today? My name is Ryan Michler. I'm your host and the founder

00:01:13.880 of this podcast and the Order of Man movement. Welcome here and welcome back. I'm going to give

00:01:19.480 you the tools, resources, everything you need. And in the light of what we're doing here,

00:01:24.000 the conversations that you need with incredible men to help you become a better father, husband,

00:01:28.660 business owner, community leader, man in general. So today we're going to talk about something

00:01:33.520 that's on a lot of people's minds right now, and that is digital currency, specifically

00:01:37.740 Bitcoin. We're going to get into the ins and outs and all the things that you want to learn

00:01:41.800 about. And this will give you a good introduction and primer from somebody who is extremely, extremely

00:01:46.740 qualified to talk about it.

00:01:47.820 Uh, before we get into that conversation, just a quick mention of my friends and show sponsors

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00:02:15.820 to specifically give a quick shout out for their joint warfare. That's their supplement,

00:02:22.100 uh, partnered up with Jocko with Jocko fuel. Uh, it's called joint warfare and it's good 0.99

00:02:27.060 for the knees and the elbows and the shoulders and the fingers. If you have any sort of joint

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00:02:44.800 check out their other things as well. Super krill, mulk, which is their protein supplement

00:02:49.720 and their energy drink. Go. I personally like, uh, after burner orange by Dave Burke. I also

00:02:55.400 like sour apple sniper, JP Danelle. Uh, maybe you have your own favorites. Let me know what

00:03:00.280 they are, but check it out at Jocko fuel.com. And when you do use the code order O R D E R at

00:03:06.000 checkout, and you're going to save some money there. All right, let's get to it with my guest

00:03:10.900 today. Again, his name is Michael Saylor. He's the chairman and CEO of micro strategy,

00:03:15.140 uh, also alarm.com. He's also the author of the mobile wave as well as hundreds of probably not

00:03:21.020 thousands of other video and audio and written resources on the world of Bitcoin and digital

00:03:26.380 currency. He's a dual degree graduate from MIT. And this guy's been immersed, absolutely immersed

00:03:32.720 in the world of digital technology for over 30 years. And at this point has dedicated his life

00:03:38.460 to making sure that others understand and learn how they can harness and ultimately capitalize

00:03:44.140 on newly developed and discovered technology. Michael, good to see you. Thanks for joining me

00:03:51.200 on the podcast today. Yeah. Happy to be here. Uh, crypto. That's what we're going to talk about

00:03:55.940 today. And, and even specifically maybe dive into the world of, uh, of Bitcoin. I know it tends to be

00:04:01.380 quite confusing for a lot of people. Uh, so maybe we can start this entire conversation out with

00:04:07.540 a 30,000 foot view or synopsis of what in the world are we even talking about when it comes to

00:04:14.300 this whole crypto world and Bitcoin and Ethereum and all these others as well. Sure. Why don't we

00:04:21.500 start with a fundamental problem? Uh, the fundamental issue is as a human being, do you have property

00:04:30.920 rights? If you work your entire life and, uh, you've saved everything you've ever made? How do

00:04:38.760 you store that life energy? How do you store your life's work? And how do you keep someone from

00:04:44.960 stealing it from you? Uh, you know, at the end of a barrel of a gun, uh, how do you carry it with

00:04:50.800 you? If you have to flee for your life from a hostile regime, if you live in F Afghanistan or Iraq or,

00:04:57.160 or, uh, Syria or, and you had to leave, or you had to, you know, leave Cuba, how do you take your

00:05:03.380 money with you? And then how do you store that energy and give it to your grandchildren? You know,

00:05:10.520 you want to leave a legacy and you want to give it to your kids or your grandchildren. How do you keep

00:05:14.680 it? So it's this fundamental issue of property. Uh, the reason people came to the United States

00:05:20.900 was in pursuit of, of, you know, they got life, liberty, happiness, but really property rights.

00:05:27.560 They, they left Europe because if you're the wrong religion, you couldn't have a job, you couldn't have 0.99

00:05:32.340 a house. Um, the Huguenots fled for that reason. The Jews fled the Spanish inquisition for that reason. 0.85

00:05:39.060 My family came, uh, to the new world in 1736, they were Swiss Palantines. They were Protestants in a 0.88

00:05:46.520 Catholic country. And it's, you know, if you're just the, the wrong sect, the wrong person, and the 0.66

00:05:54.300 government just decides you can't own anything and you can't do anything, you're herded into a ghetto

00:06:00.280 and that's the end of you. So that, that the human condition has been that search, you know, the,

00:06:06.520 the American dream, the farm, you know, how do I live happily ever after? So that's the fundamental

00:06:13.680 issue. Now let's think about, uh, the, how do you lose your life, either inflation or confiscation?

00:06:20.920 Let's talk about inflation. Um, I live in a house that, um, costs 305 times more money today

00:06:32.080 in the year 2022 than it cost in 1930, 305 times. Right. So what's the inflation rate, right? If you

00:06:43.580 do the calculation, go ahead. I'm sorry. I was just going to say, which is a beautiful thing.

00:06:49.160 If you own property, if you don't, that's where it becomes a problem.

00:06:54.920 Well, I, yeah, the, the point here is if I gave you a hundred thousand dollars in cash in 1930,

00:07:02.440 and you put it in a safe deposit box and held it for 92 years, you'd have a hundred grand.

00:07:08.900 But if you actually bought this house, you'd have a house worth $30 million.

00:07:13.680 Right. Right. Okay. Now what's the inflation rate? Well, a lot of times people tell you the

00:07:19.200 inflation rates 2%. It's not the inflation rate and the U S dollar for a hundred years is 8%.

00:07:25.420 Okay. When it gets to seven to 8%, it means your, your wealth or your economic energy is cut in half

00:07:32.760 every 10 years. It means that in this particular case, the value of the dollar has fallen by 99.7%

00:07:40.800 over 90 years. Now, most people don't really, it doesn't register with it. But if I told you that

00:07:47.180 if you, uh, if you had money in a bank, you would lose 99% of your wealth and the course of your

00:07:53.400 lifetime. Like that, that's just how bad it is. By the way, that's the best it's ever going to be,

00:07:59.200 Ryan, because the U S dollar is the strongest currency for the last hundred years. So what it

00:08:04.560 means is the winner lost 99% of its value. The losers lost everything. Okay. So if you're a wage

00:08:14.060 earner and you're generating cash, if you're running a cash business and your strategy is I work as hard

00:08:20.200 as I can. And I take my excess money and I store it on a mattress or I keep it in a box or I put it in

00:08:25.620 a bank, right? You're in essence, having your life force sucked out of you by inflation. Now that 8%

00:08:33.920 a year, right? That's, that's understated by the government. The government will tell you the

00:08:37.940 inflation rate is 2% because they calculate inflation based upon CPI, the consumer price index.

00:08:45.160 So manipulated data essentially is what it is. They're not going to calculate cost of milk.

00:08:50.580 They're not going to calculate gas. They're going to manipulate the data to keep it low. Of course.

00:08:54.520 If I create a list of things that don't go up in price and I calculate the inflation rate of them,

00:09:00.820 it'll be low. Right. Right. Now, uh, for example, the CPI right now is, is officially 7.9%.

00:09:08.480 But yesterday the case Schiller index reported by the wall street journal was 19.2%, which means that

00:09:15.380 if you wanted to buy a house in a major city in the United States, your inflation rate was 19.2%.

00:09:20.940 Now the political spin on that would be, Hey, homeowners are great. Their, their home is worth

00:09:26.860 19% more. But if you're a first time home buyer, then the inflation rate is 19.2%. Unless you're

00:09:35.340 actually getting a raise of 20% a year, you can't keep up. So the road to serfdom is working exponentially

00:09:43.240 harder for a currency growing exponentially weaker. The currency has been growing. Uh, it's been,

00:09:49.540 the money supply is expanding at 8%. Therefore the price of all scarce desirable assets, like

00:09:54.980 a Miami beach home or house in the Hamptons or Picasso or a share of stock in a, in a successful

00:10:02.080 company. Those are all going up at that rate. The S and P or even rural Maine. I mean, that's where I live.

00:10:08.620 And I'm, I, you know, we, my wife and I bought this home three years ago and yeah, like, it's a

00:10:15.120 beautiful thing. I'm looking at my property values, but also I don't really care because it isn't real.

00:10:22.440 Like, I'm not going to sell this right now. Um, maybe if something comes up, you know, maybe we'd buy,

00:10:28.460 but probably right now we wouldn't, but aren't you glad you bought three years ago?

00:10:32.300 Of course, a hundred percent. Okay. So now let's think about this. Uh, and from the point of view

00:10:39.840 of an investor, if I told you that the money supply was going to expand at 8% a year, and if the supply

00:10:46.800 of decent housing is constant, logically, that means the price of the house goes up 8% a year.

00:10:52.540 If the price of the house is going up 8% a year, what's your best strategy? Well, don't wait 30 years

00:10:58.980 and save cash and then buy the house because you won't catch up. You buy the house before you have

00:11:05.120 the cash to pay for it. You take a mortgage. If you're lucky enough to be able to borrow the money

00:11:09.260 to buy the house. If you're borrowing money at 3% interest and you're buying a house going up 8%

00:11:15.300 in value, then in fact, you're getting a plus 5% yield on your investment. You buy a million dollars

00:11:21.200 of property. You pay 30,000 in interest. You get an $80,000 appreciation. You make 50,000 in a,

00:11:28.220 in an unrealized capital gain every year, right? So I've just described the strategy of leveraged

00:11:34.700 long property. If you know that the money supply is going to inflate at a rapid rate and you're a

00:11:42.300 smart business person, you would go and you would borrow as much money as possible. First step.

00:11:48.920 Second step, uh, buy the highest quality property, commercial real estate, you know, a home,

00:11:57.380 um, a sports team, football team, a Picasso. Um, maybe you buy a share of stock and a, you know,

00:12:05.320 pick the right stock. So how do you get wiped out in that strategy? Well, you buy crappy property that

00:12:10.640 doesn't go up in value. Like not all property is equally desirable. I mean, there's infinite land

00:12:15.920 in the Rocky mountains, right? Fly over the United States. And you see everybody kind of lives on the

00:12:21.000 East or the West coast. So if you don't buy the right land, it might not be good. And the second way you

00:12:26.080 get wiped out is if you take this loan where you get forced liquidated, right? If the bank's not going

00:12:31.440 to mark your property to market every minute of the day, if you've got a 30 year mortgage and they're

00:12:36.140 not going to come and mark down your house and foreclose on the loan, then you're good. So get

00:12:40.800 the right loan, get the right property and just wait for, uh, the money supply to expand. Most rich

00:12:48.540 families in New York city, that's what they did. If your grandfather bought a city block in Manhattan

00:12:52.940 in 1900, you did fine. So that that's the setup, right? And the human condition is if you don't

00:13:01.480 own property, if you're working class and not property class, then inflation is draining,

00:13:06.780 draining money away from you and it's putting in the pocket of the property class, right?

00:13:12.020 So there are winners and losers. And if you happen to be, yeah.

00:13:16.280 Well, I was just going to ask you a question on the first thing you, you, you led off with was this

00:13:21.740 transferability of, of, of wealth, really. Like how do you maintain it? How do you keep it? How do

00:13:27.840 you transfer it? Right. I think what a lot, what a lot of people get concerned with, and let me be

00:13:33.580 full disclosure. Like I own quite a bit of my portfolio is actually in crypto between Bitcoin

00:13:38.460 and Ethereum and some others. I think the, one of the concerns that I see a lot is that,

00:13:44.180 you know, if, if we're in this dire situation within the world and all of our money is basically

00:13:50.580 zeros and ones, which it is now, let's be honest, it is now. But I think a lot of people have concerns

00:13:57.360 about tying up money and crypto, knowing that if things go South, like I'm not going to trade you,

00:14:04.060 Michael, if I need some food in, in, in the zeros and ones on my bank account, because frankly,

00:14:10.920 I won't even have access to that. Have you seen that? Um, I, I don't think that you can buy anything,

00:14:16.820 right? I think that, uh, you have to decide what you want to own. So for there's, there's 17,500

00:14:23.480 cryptos. There's only one that I own, which is Bitcoin. Um, so we, we could discuss the others,

00:14:29.500 but it's kind of like, where do you want to own property? Do you want to own it in Maine or

00:14:32.760 Manhattan, or do you want to own it in Moscow? Right. There's some place that, do you want to own it

00:14:38.040 in Zimbabwe? Do you want to own it anywhere in Africa? Pick a place in South America, you want 0.59

00:14:43.120 to own property. Um, so I, you know, if you consider the basis of, of Bitcoin, I'm going to

00:14:50.980 focus on Bitcoin right now. We talk about crypto after that. The idea of Bitcoin was, can I create

00:14:56.500 a high quality property in cyberspace, a digital property? Because if I have, if I have, um, my life

00:15:04.020 savings, I can either dump it in my house, that's fine, but, um, you can't take the house with you.

00:15:12.600 Right. And, uh, you can't necessarily generate any yield on the house after you've got a place to live

00:15:17.960 and on, maybe you don't want to, maybe you don't want to put your money in a house in Afghanistan,

00:15:22.240 right. If you live in Afghanistan, right. Maybe it's an easy decision for somebody in Maine. It's 1.00

00:15:27.040 not a very easy decision for someone in, uh, Syria, Iraq, you know, or Ukraine right now,

00:15:33.320 there's 4 million refugees coming out of Ukraine, right? They can't even potentially here. 1.00

00:15:37.480 I mean, there's risk here too. Let's not pretend there isn't risk of buying property in, uh, you

00:15:42.160 know, somebody might've said 40 years ago, 50 years ago, buy property in Detroit. And now you look at

00:15:47.800 it and think maybe not so good of an idea. Yeah. So there's a quest for portable property,

00:15:53.660 right? Um, what's the best portable property? Well, I mean, in theory it's, you know, there's gold for

00:15:59.600 10,000 years. The problem with gold is it's kind of hard to take gold through an airport.

00:16:04.980 You know, you don't really want to store bars of gold in your house. It makes you a target.

00:16:09.440 People might know you can't generate rent. You can't rent out your gold bar. No one's going to

00:16:14.540 pay you $10,000 a year to rent a hundred thousand dollar gold bar to hold, right? That's not going to

00:16:20.380 happen. So you're talking about loans. Is that, is that what that would equate to is loaning out that

00:16:25.360 money with a, with a rate of return? Is that what you're saying? What I'm saying is you can't rent

00:16:29.600 it. If you got a second house in Maine, you could rent the second house to someone that wanted to

00:16:35.340 stay in Maine for the summer and it would generate income for you, right? Tracking. Sure. Right. If I

00:16:39.860 bought a warehouse in New Jersey that, you know, held industrial supplies, I could rent the warehouse

00:16:45.140 out. So the reason that gold is not ideal property is there's no yield on it. It's very hard to

00:16:51.240 mortgage and it's very hard to rent. So people then step up and they buy commercial real estate,

00:16:56.200 a building, a warehouse, a second home, an Airbnb. Okay. Well, the benefit is I can mortgage it

00:17:03.060 and I can rent it. But the problem is a, it's an old idea. People have been doing it for thousands

00:17:09.040 of years, right? You didn't invent anything new. B it's not a technology idea. You're not going to see

00:17:15.100 8 billion smartphone users, you know, dematerialize their commercial warehouse and move it at the speed of

00:17:21.060 light on an iPhone. It's not tech idea. And the third problem is, is there, before you get to that

00:17:26.920 third problem though, is there, is there value though, in it not being a tech idea, meaning that

00:17:33.840 we've been doing it for, like you said, thousands of years, is there some safety and security and

00:17:39.500 a proven track record of success in that, which might make it appealing?

00:17:44.020 Absolutely. If we're having this conversation 20 years ago and you said, Mike, you know,

00:17:48.580 how do I protect myself against inflation? I say, go buy some real estate, right? And in fact,

00:17:54.580 lots of people have it. It's probably the best idea in the 20th century. If you've got good real

00:18:00.020 estate and you like it, am I telling you to sell it? No, right? The question is, what is crypto?

00:18:04.840 Why does Bitcoin exist? And so the answer to what is crypto and why do Bitcoin exist is after people

00:18:11.460 thought about gold and they said gold doesn't generate yield and they went to real estate, they thought

00:18:16.780 about real estate and they said, how can I improve that? Well, I mean, this is a good idea for you to

00:18:21.120 own real estate in New Jersey. How good is it an idea for you to own real estate in Ukraine or Russia

00:18:25.580 right now? What if you have a warehouse in the outsource of Moscow right now, right? The point is,

00:18:31.720 what if you're a, you know, what if you're a rancher in Rhodesia when the regime changed? How good

00:18:36.160 was that, you know, an idea to own real estate in Rhodesia? The country doesn't exist anymore,

00:18:40.580 nor would your real estate exist. So real estate doesn't solve the problem for everybody. It

00:18:46.800 definitely doesn't solve the problem for 400 million or refugees, right? Or a billion people

00:18:53.940 in a combat zone. So now what is the, what is the next idea? It's digital property. What if I could

00:19:01.940 take your hotel, snap my fingers and dematerialize it and put it in cyberspace and it became a digital

00:19:09.600 hotel? Okay. Why would it be better? Well, instead of a thousand rooms that I rent out to the highest

00:19:15.320 bidder in Miami beach, I could rent out the thousand rooms to people in London, Paris, Tokyo, New York.

00:19:22.220 I could rent out a hundred of the rooms in Tokyo and a hundred of the rooms in New York and a hundred

00:19:26.820 of the rooms in Paris. Now I get, get a little bit cuter. I can have a computer rent out the rooms.

00:19:32.060 Then I get a little bit cuter and I have the computer rent out the rooms by the hour.

00:19:35.260 Now I get smarter and I rent out the rooms by the minute. Now this is a very high velocity hotel.

00:19:41.660 You couldn't do this in real world, but you can do this in cyberspace. So now I have a digital

00:19:47.000 property. Why is a digital property better? Theoretically, theoretically it's better because

00:19:54.000 you don't have to buy flood insurance on it, right? There's never going to be a tornado that'll wipe it

00:20:00.180 out. It doesn't have the maintenance requirements of a physical piece of property. It's theoretically,

00:20:05.200 better because I can move it at the speed of light. It's theoretically better because I could split

00:20:10.240 it into a million pieces, send it to a million people and then fetch it back on the weekend every

00:20:15.760 hour, right? So it's, it's, it's theoretically better because it's virtual. It's not physical.

00:20:21.900 It's also theoretically better because nobody knows I have it. So when I walk past your hotel in the

00:20:27.760 middle of Kiev and I want your hotel, I just put a gun to your head and take the hotel or I blow it up,

00:20:32.780 but it's hard to blow up your digital hotel. And it's hard to know that you have it. So

00:20:38.100 it's much more confiscation resistant. Go ahead. What's your question?

00:20:45.440 Well, so I was going to say, let's take that scenario of this digital hotel. Number one is

00:20:50.140 like, how do you sell a digital hotel? That's, that's a, I think an obvious question. Number two,

00:20:55.240 doesn't it devalue the hotel? Because instead of actually owning the hotel now, Michael, you,

00:21:01.880 who does not actually own a physical hotel can create one in cyberspace. XYZ can create one in

00:21:08.560 cyberspace and 10 million people can create the exact same thing in cyberspace. So doesn't it actually

00:21:14.880 devalue the tangible property that, that actually exists in reality?

00:21:20.020 Yeah. It's, there's two thoughts here. One, instead of having to store all your money and

00:21:27.260 property, like buying a home and monetize the house or monetize the commercial real estate,

00:21:33.380 I could sell the second home and I could buy a Bitcoin. And if I sell the second home and the

00:21:38.540 third home and the fourth home, and I buy three Bitcoin with it, the price of second, third and

00:21:43.940 fourth homes go down in value in price, right? The price of the Bitcoin goes up. What you've got is a

00:21:49.860 surge of capital that moves from the physical realm to the digital realm. This is a good thing for the

00:21:55.980 society because if everybody has to store their excess money in property, then the price of houses

00:22:01.540 go up 20% a year and then no one can buy a house, right? Pretty soon you've got a class of real estate

00:22:07.560 property owners and then people that have to rent, right? Because if you're not rich, you can't afford

00:22:12.700 to own the property. You're talking about supply and demand here.

00:22:19.180 Yeah. I suppose you could think of it as supply and demand. What you could just say is, is when,

00:22:26.320 if I increase the money supply by a factor of 10, I hyperinflate the money supply, but I keep the

00:22:32.520 products, the cars, the watches, the houses constant. And all you can do is buy cars, watches,

00:22:38.900 and houses. Then what do people do with their money? They go and they buy cars, watches, and

00:22:44.580 houses. And then what do you read? Well, you read there's a shortage of luxury cars. There's a shortage

00:22:49.200 of watches. There's a shortage of houses and the prices adjust, right? And that's what's going on

00:22:54.860 right now in our economy for the past 18 months. Basically, everybody takes their excess money and

00:23:00.880 they buy something that's tangible of value. And we have monetized, we have put a monetary premium

00:23:06.320 on the cars, watches, and houses, right? And so their utility value is X, but their overall value

00:23:15.980 of the price is Y, it's double X, because people are just looking for a place to park their money,

00:23:21.920 right? Which I think is what gold is. Like gold isn't, I mean, maybe outside of some microchips

00:23:27.160 and things like that, and maybe some minor technologically utilized reasons, like gold is

00:23:33.660 gold. There isn't a whole lot of utilitarian value in it other than you can wear it in a Rolex.

00:23:39.780 Yeah. So if the price of gold went to its utility value, it'd probably go to like $700 an ounce.

00:23:45.760 Right. Exactly.

00:23:46.660 Right now it's close to $2,000 an ounce. And the difference is that monetary premium,

00:23:52.220 what we call a store of value. I've got $5 trillion. I got to put it somewhere.

00:23:58.500 So what if I put it in the bank earning 0% interest? Well, you're losing 15% to 20% of the

00:24:04.840 value of your money every year. Okay. That's the currency debasement or the collapse. What if I put

00:24:11.340 it into debt, like sovereign debt? Well, a bond's yielding 2%. The money's losing 18% of its value a

00:24:18.000 year. You've got a negative 16% real yield. That's awful. So people don't want to put their money in

00:24:24.820 currency or currency derivatives. So I either got to go buy stocks in the stock market. And that's

00:24:30.860 why you see meme stocks explode. You see the stock market advance in 18 months. Or I got to go buy

00:24:38.080 houses. That's why houses are up 18% or 19% year over year. Or I got to go buy luxury stuff. That's

00:24:43.620 why you can't get luxury watches. And that's why there's a two-year wait for the next Ferrari.

00:24:48.660 Because people are buying everything they can buy. Because the money is collapsing.

00:24:53.180 Let me take it to the extreme. If I told you your money was going to be worth nothing in 12 months,

00:24:59.440 wouldn't you just go buy anything? Anything and everything.

00:25:03.060 Anything, right? So I'm describing the phenomena of monetizing a utility.

00:25:08.820 The benefit of Bitcoin is Bitcoin is the dominant crypto asset network. It is the king of the asset

00:25:14.940 networks. It's the most secure, most well-known, most well-engineered. And it's backed by the

00:25:22.260 strongest network of miners and the strongest network of nodes and the strongest network of

00:25:27.980 holders. So that's why it's interesting. As a money, it makes great sense because there's no

00:25:35.500 utility value for anything else. So if you're monetizing a Bitcoin, you're not going to starve

00:25:40.400 anybody. It's not like monetizing corn or monetizing oil, right? You're basically buying

00:25:46.280 a digital synthetic bearer instrument that has no other utility value.

00:25:52.000 It's better than gold because I can loan it out. I could take one Bitcoin on a Saturday afternoon

00:25:59.620 and I could loan it to somebody in Singapore and get paid interest on it. And if somebody in London

00:26:05.020 wanted to pay me a higher rate, I could move it to London. I'll never do that with my Airbnb in

00:26:11.560 Bangor, Maine. I want people to move it. How are you going to do that? Right. So the audience of

00:26:17.200 people that will rent my Airbnb is limited to tourists in Maine in the summer. But the audience

00:26:22.800 of people that will rent my Bitcoin is everybody on earth. Okay. So it's a more easy to mortgage and

00:26:33.560 easier to rent out asset that makes it better property than physical property. And of course,

00:26:39.940 it makes it much better property than gold because I can send the money around the world in its virtual

00:26:48.280 form. Whereas with gold, I probably wouldn't be able to get it across a border without it being seized

00:26:54.560 under the best of circumstances. I think where people get hung up and I do too is, and so that's why

00:27:03.900 I diversify where I put my money, but you can't spend your summers in vacation land in a Bitcoin.

00:27:12.820 You can't eat Bitcoin, right? And so like a commodity, or you can't feel your vehicle with

00:27:18.140 Bitcoin. I mean, you can use it to purchase what you need to live, but I think the biggest concern

00:27:23.220 is people see it as a disappearing or it just not being even real. Like who's to say what a Bitcoin

00:27:31.120 is worth? Is it just a collective, we agree on it as this is what it's worth?

00:27:37.680 Well, I mean, the key to understanding Bitcoin is it's digital property and it's perfected gold.

00:27:42.480 So there's only 21 million Bitcoin that will ever exist. So the most important thing about Bitcoin

00:27:47.980 is knowing that nobody on earth can create more than 21 million of them. That's the most important

00:27:54.520 thing. And under, and if you understand the protocol and the way the network works, you understand that,

00:28:00.120 that no company, no individual, no nation state, no one can find a way around that. If, if, if you

00:28:06.520 could create more, it wouldn't be scarce. So the idea of it being 21 million is important beyond that.

00:28:13.600 But you, you know, you're, you got to look at it as, as a replacement for a second house. You're not

00:28:24.260 going to live in your second house. You're living in your first house. So you should probably keep

00:28:28.980 your car, right? Keep your first house, keep, keep food, keep all your primary assets. And if, if that's

00:28:37.240 all the money you have, then you're done. But after you've accumulated more, then, then you've got to

00:28:42.740 choose. Do you want to buy a share of stock? Do you want to buy a piece of Bitcoin? Do you want to buy

00:28:49.440 some gold or silver, right? Do you want to buy an investment property? And when you consider it

00:28:55.480 versus all those other assets, then, then you start to understand it better. The reason that you would

00:29:02.180 prefer to have Bitcoin to gold is because Bitcoin is capped hard cap to 21 million coins and gold is

00:29:10.920 increasing in supply every year because gold miners keep creating more of it.

00:29:14.820 We just mine it. Sure. Right.

00:29:16.320 So if, if you're buying, it's like, if you bought a piece of property and I said, well, I'm just going

00:29:21.280 to create more of it every year forever. Well, then your share of that asset keeps deteriorating,

00:29:27.420 right? You know, you don't want to do that. You want to buy the one of one. So Bitcoin is,

00:29:33.220 is a scarcity. Everything else you can buy as a commodity. We keep making more of it.

00:29:37.580 And the higher the price goes of the commodities, the more, more incentive to make more. So gold,

00:29:44.180 silver, land, industrial property, all these things, I mean, you make more of it. Now, not,

00:29:50.940 not the physical land, but the, but the point with land is if you look at Manhattan or you look at,

00:29:56.040 say Dubai, when the price goes up per square foot, people will literally reclaim land from the ocean.

00:30:01.700 And of course they will build straight up. Right. They'll build up, they'll build out,

00:30:06.780 they'll put dirt and fillers. I mean, or they'll make more land available that maybe was not

00:30:12.740 accessible before. You know, I was, I drive around Maine all the time and I see all sorts of land that

00:30:17.520 is just owned by the state or federal government. Like some of that will become available. You know,

00:30:22.200 these things happen. Yeah. So you want, uh, you want a hard asset where it's totally capped at 21

00:30:29.600 million. And then when you're buying a Bitcoin, you're buying one 21 millionth of all the energy

00:30:34.720 and the network forever. That's the big idea, right? Okay. When you're buying one 21 millionth

00:30:41.020 of Apple stock, is that all there's ever going to be? No, they can create more shares and the world can

00:30:47.320 create more companies and the world can create more, more companies that are like Apple, you know?

00:30:53.400 And so not only do you know, it's not scarce, but the other problem is there's risk, right? You just,

00:30:58.360 if you're buying companies, there's, uh, there's risk from the employee base. There's risk from the

00:31:04.680 management team. There's competitive risk. There's, uh, there's tax risk. Uh, there's, there's

00:31:10.600 regulatory risk, all sorts of interesting risks because they have to do complicated things to stay in

00:31:16.840 business. So, uh, a company, if, if you knew that it was going to be the digital monopoly for the next

00:31:23.480 hundred years and no one would screw that up, then maybe it's okay, but that's a big leap.

00:31:29.940 So the next best idea is like I go to Manhattan and I buy some real estate. Well, do I buy the

00:31:36.760 building? Do I buy the company in the building or do I buy the land underneath the building? Well,

00:31:42.820 if I just buy the land underneath the building, the pure property, that's the least risky thing

00:31:48.560 because they could knock down the building and they can replace all the companies in the building

00:31:52.560 and the land still has value right there. I'm kind of bet. What's the risk? The risk is everybody

00:31:58.880 leaves Manhattan and they all move to LA, right? Or Manhattan is not that desirable city in a hundred

00:32:05.520 years. So, so you've got the city risk, but it's the least risky proposition when you're buying the

00:32:11.260 underlying property. So what if I wanted to buy a block of Manhattan and cyberspace?

00:32:18.480 There's a place in cyberspace. It's a covent of Manhattan. It's Bitcoin. And there's 21 million

00:32:23.000 blocks and you can buy one. And, uh, and in cyberspace, there's a value to be able to, to have

00:32:32.720 that property because anybody that wants to do business in cyberspace can benefit from getting

00:32:37.940 their hands on that digital property. Apple computer could use it. Google could use it.

00:32:42.660 Facebook, Twitter could use it. Every wealthy person on earth could use it. If you're a, you know,

00:32:48.260 if, if you're an oligarch in China or Pakistan or Russia or Ukraine and your choices own a building

00:32:55.240 or own a yacht or own the equivalent amount of Bitcoin, well, the equivalent amount of Bitcoin is

00:33:01.440 a lot safer than the building or the yacht, the property you only own as long as you control the

00:33:06.840 country, but the Bitcoin is in cyberspace. And so it has a certain universal appeal to everybody in the

00:33:13.600 world. Man, let me hit the pause button on the conversation very quickly. Then we'll get right

00:33:18.760 back to it. As you know, life comes at you very, very fast. And if you're not prepared for it,

00:33:24.260 it will catch you off guard. Absolutely. Uh, but in addition to that, you have other motivations and

00:33:30.100 ambitions beyond just, you know, waiting for life to happen. And since that's the case, you better be

00:33:35.400 ready to seize opportunities when they come your way. This is where our free battle ready program

00:33:40.580 comes into play. When you sign up for battle ready, you're going to receive access to a series of 17

00:33:46.940 emails that is going to walk you through the system that I have developed for maximizing every

00:33:52.100 facet of your life. And then when you're all done with all the challenges and assignments that we

00:33:56.220 share with you, uh, you're going to be hardened and ready for life relationships, business, health,

00:34:02.200 every other facet of your life. So if you want to learn more and you want to get signed up for our

00:34:06.700 free, free battle ready course, head to order a man.com slash battle ready. Again, that's order

00:34:12.860 a man.com slash battle ready. You can do that right after the show for now, I'll get back to it with

00:34:17.680 Michael. But let me ask this, let's just, let's bring it back and say, you know, digital space.

00:34:25.600 So when you say that, you know, I immediately think of a website. So I own, for example,

00:34:30.020 order of man.com. That's a digital environment. I own it. It's mine. If somebody wants it,

00:34:35.620 they can't have it, or they're going to have to pay me a premium to own it.

00:34:39.400 But there's nobody out there or nobody, there's nothing out there to keep somebody from buying,

00:34:45.140 you know, order of men.com and clone, which I own as well, but just for the sake of argument,

00:34:51.960 cloning exactly what I've created and then replicating the entire process. And now all of a

00:34:59.980 sudden my order of man.com is devalued. I hope that makes sense in the, in the context of a digital

00:35:06.720 currency. Yeah. The question is whether or not the network that you're buying into is the winner.

00:35:14.200 So for example, what if someone copied Bitcoin, uh, would the money stay on the Bitcoin network or

00:35:21.280 would it go to the network? And, uh, if the year was 2009, it was January 3rd, 2009, that's when the

00:35:28.880 network launched. And the next day there were 10,000 copies. You wouldn't really know which of

00:35:34.240 the 10,000 was the winner. Right. Okay. But if you could roll the clock forward 12 years or 13 years,

00:35:40.640 what if people did copy it 10,000 times and what if they all failed and it, and it grew from nothing

00:35:48.680 to $850 billion in money? Well, after 13 years and after 10,000 attempts to copy it, after everybody

00:35:58.280 had decided this is the winner, you'd have a lot more confidence that this is the winner. The network

00:36:03.700 is stronger. You know, you want, you want a real world experience, a real world, uh, like a parallel

00:36:10.340 Coca-Cola. Like for example, what's to keep someone from copying Coca-Cola and selling carbonated

00:36:16.660 beverage? Well, they've had for 120 years to do it. Have they done it? Sure. They've done it. Well,

00:36:22.520 who won Coca-Cola one is Coca-Cola worth nothing. No, Coca-Cola is pretty valuable as a brand. Why is it

00:36:29.280 valuable? Because it, because over the course of a hundred years, it's been burned in everybody's

00:36:35.120 head that this is, uh, this is the winning, the dominant beverage brand. And if I destroyed all

00:36:44.220 the Coca-Cola factories and all the beverage and everything, every physical instantiation of Coca-Cola

00:36:50.340 in the world today, would the brand have value? And the answer is, yeah, it was still a value because

00:36:57.060 I'd have to murder 8 mil, 8 billion people, right? If I killed all 8 billion people, I would get rid of 0.94

00:37:03.400 Coca-Cola in their head, right? Maybe it has no value, but as long as the brand is out there and

00:37:10.520 everybody in the world knows this is the safest thing to drink, then the brand has value irregardless

00:37:18.260 of the physical assets in the real world. Now it turns out the Coca-Cola has, has two values. One is the

00:37:25.600 brand, but the other is the physical distribution center. It's got bottlers everywhere and relationships

00:37:31.120 everywhere. By the way, when, if I go into a restaurant and I said, they said, what do you

00:37:35.860 want to drink? And I said, you know, I want to drink a, you know, Dr. Pepper. Like we don't have it.

00:37:39.880 I said, I want to drink a diet Pepsi. We don't have it. I don't, I want to drink blah, blah, blah. We don't

00:37:44.280 have it. Well, what do you have diet Coke? Okay. I'll drink that. You know, it's the point where

00:37:49.960 hundreds of thousands of restaurants are all hardwired to serve you diet Coke. So now when I

00:37:57.220 go into a restaurant, I don't even bother to ask for anything other than diet Coke. Cause I know I'm

00:38:01.180 just going to get denied, right? That's the, the network effect plus the distribution plus the

00:38:07.380 brand. Now let's talk about Bitcoin. What's the equivalent? Well, everybody knows what Bitcoin is

00:38:12.420 everybody, right? It's, it's the most famous, um, you know, crypto brand in the world. But second,

00:38:18.680 it's like the gold standard, right? Everyone knows what gold is. Took a while to get there.

00:38:23.180 The second thing though, is there's like a $20 billion Bitcoin mining network. That's a set of

00:38:29.080 special purpose equipment run by Bitcoin miners everywhere in the world that are throwing up a

00:38:33.920 hash wall in order to defend the network. Now, if you wanted to create something which was as good or

00:38:40.160 better, you would have to come up with your own $20 billion, but you'd probably take you four years,

00:38:47.420 probably 10 years. If you had 10 years and you had $20 billion, you could attempt to do what

00:38:52.800 Bitcoin is now. But of course, Bitcoin won't be what it is now in 10 years. It'll be ahead. Sure.

00:38:58.960 And if, so let's say Apple computer and Facebook and Amazon and Microsoft all got together in

00:39:05.300 dollars of their money so they can create a duplicate to Bitcoin and they're going to put

00:39:09.100 all their effort behind it still wouldn't work. And the reason it wouldn't work is because those

00:39:14.180 are securities, their companies, and legally they can't create property. The distinction between a

00:39:21.320 property and a security is property is common to the people like gold or oil or land. And that means

00:39:30.600 it's beyond the control of any company. That's almost the definition of property. If Mark Zuckerberg,

00:39:38.080 it's an important securities law distinction, but it's very important ethically and legally and

00:39:44.280 technically for why Bitcoin is important or to understand why it's the winner. If Mark Zuckerberg

00:39:51.080 creates his own currency, he runs a company, it becomes a security. Okay. It's unethical for a public

00:39:57.940 figure to endorse a security. Like if I'm the mayor of Atlanta, I can't say to the citizens of Atlanta,

00:40:04.660 I think you should all buy a share of Facebook stock, right? Because that's a conflict of

00:40:09.460 interest. I'm pumping a stock, right? It's pretty obvious. So if you, if you use just basic ethics,

00:40:14.980 you're like, well, I can't really have a conflict of interest. If I'm the mayor of Atlanta though.

00:40:19.740 And I said, I think everybody should own a home. You understand that seems kind of sure. You should own

00:40:25.680 a house, a chicken in every pot, a house and a car. Those are three pieces of property,

00:40:33.000 which is ethical for me to endorse. I can go further. I can say, I'm going to give you a

00:40:38.220 subsidy on your tax return to help you buy a house. That's ethical. Now, Ryan, what if I said,

00:40:44.620 I'll give you a tax refund to buy Apple stock? Yeah. You understand how that crosses a line?

00:40:51.840 Or to buy a house in a subdivision that I own. It's like, all right, obviously there's a conflict

00:40:56.500 here. Okay. So what you've got is a network that organically grew without any, without any large

00:41:04.240 company pushing it. Like Bitcoin traded with no price for a year and a half. When it traded,

00:41:09.280 it traded for a penny or two pennies. There was never a venture capital investment. There was never

00:41:14.920 an IPO. There was never an ICO. There was never a big corporation behind it. Nobody thought it would

00:41:20.280 be worth anything. It had to grow and monetize itself in this random chain reaction so that it

00:41:29.640 would be free of any nation state controlling it or any company controlling it. And that's a very

00:41:36.100 difficult thing to do. Now, it could have been any of 10,000 tries. People tried it 50 times before

00:41:41.900 Bitcoin. They all failed. They tried it hundreds of times in the year after Bitcoin. They just didn't

00:41:46.960 take, right? There's got to be a winner. This is the winner. It's a path dependent winner of the

00:41:53.380 digital property competition. So when you're buying into the Bitcoin network, you're buying the dominant

00:42:02.260 digital property network, right? It's not the same as deciding to invest all your money in Apple stock.

00:42:09.440 That's a security. It's not the same as investing in Mikey coin. If I launched Mikey coin or sailor coin

00:42:16.520 or something, that's a security, right? Those things are investments. You can invest in them.

00:42:24.140 Like an NFT would be more of a security. Got it.

00:42:26.700 Yeah. They're investments. And it's not that you can't make money in investment,

00:42:30.240 but the point is a nation state and a mayor and a governor can't endorse a security without it being

00:42:38.000 a conflict of interest. And if it becomes a security, like right now, if you were to say to me,

00:42:44.380 what do you think will happen with Bitcoin, Michael? I would say, I think it's going to go

00:42:48.480 up forever, right? And if you said, what do you think will happen with your micro strategy stock?

00:42:54.140 Like, I have no opinion. See, micro strategy is a security. I'm not going to give you my forecast

00:42:59.700 for that, right? That's governed by securities law. I have civil liability, criminal liability,

00:43:06.120 right? If I tell you something that I thought was right and it turned out to be wrong,

00:43:10.360 I get sued. But if I told you, I thought you should have a chicken and own a house. And it

00:43:16.240 turns out I was wrong. And you buy a house and a chicken and the chicken pecks you, right? And it

00:43:21.680 gives you a disease and the house burns down and you sue me. You're like, well, you know, that's

00:43:27.300 property, right? I'm sorry it turned out badly, right? But there is an ethical and a legal distinction

00:43:34.300 between me giving you advice about property and endorsing property versus endorsing a security.

00:43:41.540 So Bitcoin is this dominant digital property. And I don't think it should totally replace

00:43:48.280 physical property. I think you should own some physical property. And I think it's okay to own

00:43:53.660 a business. You have your own business. You could have your own business that you run and you could

00:43:57.660 own shares in somebody else's business if you think you understand them. And if you think that

00:44:02.160 they're good and they're going to grow and be more successful and they're going to stay ahead

00:44:07.600 of inflation, then that's good. If you owned a business in Zimbabwe, and I told you the 1.00

00:44:13.040 currency is going to zero, or if you owned a business in Venezuela, I would say probably not a

00:44:17.800 good business investment, right? So businesses can be in hostile currency regimes or hostile political

00:44:25.620 regimes. If you owned a business in Cuba in 1959 and you asked me my advice, I'd say, well, 0.80

00:44:31.600 that's kind of risky business. You might lose everything, right? So a business is risk,

00:44:37.000 you know, so take the risk. If you understand what you're doing, physical property is to eat

00:44:41.880 and live on and drive. Okay, fine. You're a physical person. Digital property is a way to store

00:44:50.720 your life force, to store your life savings. It's like a bank in cyberspace. Now, which bank? Well,

00:44:57.920 Bitcoin is, I think, the most secure bank in cyberspace. It's run by incorruptible software.

00:45:03.460 There are other places to store money in cyberspace, all the other cryptos. They're all

00:45:08.460 more risky, in my opinion, and some are extremely risky and some are somewhat risky and some are less

00:45:14.100 risky. You know, it's like you have to analyze them and decide how much risk you want to take

00:45:19.480 based on the return. And that's an individual decision. Bitcoin itself, though, is Bitcoin is,

00:45:28.080 I think, the apex property of the human race. It's the least risky, best idea we've come up with in

00:45:35.900 10,000 years. And you couldn't know that 10 years ago. It's every year for the last 12 years,

00:45:42.900 we're getting more information. It's becoming more hardened. It's becoming more seasoned,

00:45:49.860 what Nicholas Taleb would call Lindy, right? It's like a house that stands for 100 years

00:45:56.100 is probably well-built. A house that you built last year and you promised me it will stand for 100

00:46:02.100 years, it's not clear. What would you rather have, a house that stood for 100 years or a house that stood

00:46:08.620 for one year where I've got 1,000 pages of reasons why it ought to last 100 years?

00:46:14.200 Yeah, sure.

00:46:14.420 Like, I can't be, you know, one of them is a security, the other is a property in a way,

00:46:19.020 right? It's unclear. So Bitcoin is, it's the most robust, resilient, well-engineered,

00:46:29.380 dominant crypto asset network that humanity has created. And that's why it engenders so much passion.

00:46:36.300 I want to hit on the risk of Bitcoin and crypto. I think before we get into the risk,

00:46:44.760 because obviously there is a risk element to it, it would be best to talk about two things.

00:46:51.760 Number one, what is Bitcoin? Like if you had to describe that, what would that be?

00:46:57.060 And then number two, and this has always been a question of mine, what in the world is mining?

00:47:01.460 If there's already, if there's 21 million Bitcoin and we know that, what, when I hear mining, I'm

00:47:07.700 like, oh, we're trying to discover, we're trying to unpack, we're trying to make accessible.

00:47:10.940 So if we already know that there's 21 million, then what is the mining process? And then from

00:47:15.720 there, I think we can get into the risk element of it. Okay. Let's say I wanted to create perfect

00:47:21.160 money. I, you know, God came down from heaven above and gave us perfect money. Okay. What would that

00:47:27.020 be? Well, that would be some number of tokens. Let's pick a number, 21 million tokens and subdividable

00:47:35.440 by a hundred million each. So if I came up with 2.1 quadrillion tokens, it doesn't matter how much

00:47:42.860 it is. It just needs to be a fixed amount. A hundred million. It's an arbitrary number.

00:47:46.840 Sure. So God says there's a fixed amount of tokens. And when you owe me money, you pay me.

00:47:51.220 And when I owe you money, I pay you. And God creates a ledger and there's a central ledger

00:47:56.700 and, and everybody in the world knows what it is. And it's incorruptible. It's what we call an

00:48:02.300 immutable shared ledger. You know, he's making a list. He's checking it twice. Right. Perfect.

00:48:11.640 You can never lie. I can never lie. Someone that owes you money has to pay the money. Right. And,

00:48:17.940 and it's, it's a deity incorruptible keeps track of it. That would be perfect money. You work your

00:48:26.200 entire life and you save your money. And then if the economy grows, if it doubles,

00:48:31.880 since the money is fixed, you would have twice as much wealth. If the economy grew by 3% a year and

00:48:39.640 the money was fixed every year, whatever you own would be, would buy you 3% more. And the price of

00:48:44.680 everything would go down by 3% a year. If you had just a complete fixed money supply,

00:48:49.780 this is the theoretical perfect situation, but in the real world, we don't have fixed money supply.

00:48:57.100 And you know, the current world, we print a trillion dollars. And then I get up one day and

00:49:02.000 I print another trillion dollars and the money supply doubles and the price of everything doubles.

00:49:06.600 And if you had money in the bank, it's only worth half as much. And what happens? I took half of

00:49:11.880 your money and I gave it to myself when I put the money and then I distributed it somewhere else.

00:49:18.220 Right. So in the current, in a fiat world, anybody in charge of the government can take

00:49:23.480 an arbitrary amount of your money and they can, and by not just the money you have,

00:49:27.860 I can take half of everything you're going to ever have. I can take half of everything you will ever

00:49:33.600 beat. Right. When I devalue the currency by 50%, that means your salary, $82,000 a year is only worth

00:49:40.940 $42,000 a year for the rest of your life. I took the next $800,000 worth of your salary away from you

00:49:48.920 in a heartbeat. And the only recourse you have is walk into your boss's office, knock on the door

00:49:55.020 and say, give me a raise. And your boss says, no, you lost your job and you lost half the, you know,

00:50:00.840 you lost all the money. So you either lose half your life work or you lose all your life's work.

00:50:05.320 So, so that's an imperfect monetary system. Bitcoin is an attempt to make a perfect monetary

00:50:14.240 system. If God's not going to run our money supply, what's the next best idea? The next best idea is I

00:50:20.960 write a computer program that keeps track of 21 million coins and lets you divide them into a hundred

00:50:26.520 million Satoshis each. So the computer program keeps track of the money supply. And whenever I send you

00:50:33.060 money, the computer program keeps a track and debits me and credits you. And I think the key here is

00:50:39.880 that no one person owns the ledger. It's public, correct? Yeah. The ledger is shared, right? The

00:50:48.160 shared part is anybody can, you know, take a two, $300 computer and they can run a Bitcoin node and

00:50:55.360 they can see the entire ledger, every transaction in the world from now to the beginning of time.

00:51:00.440 So you can have the full ledger and I can have the full ledger. So it's completely transparent

00:51:06.940 and, and anybody in the Himalayas can have the full ledger. And so it's open and permissionless.

00:51:13.360 Nobody can stop anybody from knowing the truth. Okay. That's the first part. And the second part

00:51:19.340 is the immutable part. How do I keep someone from corrupting the software? If the software is,

00:51:26.820 is programmed by one, one programmer, they might cheat. If it's running on one computer,

00:51:31.960 they might cheat. So the, the reason, the way that Bitcoin becomes immutable is through

00:51:37.960 decentralization or this technique of letting anybody in the world run the ledger and letting

00:51:44.000 anybody in the world mine the Bitcoin. And then the software ends up distributing over millions and

00:51:51.020 millions of computers everywhere in the world. You end up with, with hundreds of millions of people

00:51:57.140 with millions of computers and it's all running the same software. Now, if you're a diabolical evil

00:52:03.380 genius programmer and you write some new software, no, one's going to use your software because they

00:52:08.620 don't have to run it. Right. So you can write any software you want, but no, one's going to run it.

00:52:13.500 Right. And this, the network doesn't change very rapidly. They're very, very slow, you know,

00:52:20.260 like once every four years and everybody in the community has to all agree that they like the idea

00:52:26.500 before they change the nodes. Then everybody has to change the software on their node. So what you have

00:52:33.760 is, is when you're running a node, you're actually running an altar to freedom and truth, right? In your

00:52:40.700 home. And when you're running a Bitcoin mining rig, what is it? What is a Bitcoin mining rig? It's,

00:52:47.140 it's really the security node for the network. There are millions and millions of computers.

00:52:54.920 They take energy. They convert it into Shaw 256 hashes or encrypted an encrypted energy stream.

00:53:03.040 They're hashing continually. We call it a hash wall. Now that hash wall is protecting the network or the

00:53:10.380 tip of the network. If you want to every 10 minutes, we update the ledger. And if you want

00:53:15.920 to actually create the next block of transactions, you have to win that Shaw 256 lottery. You have to be

00:53:24.300 the winning node. And the only way you do that is compete with the other millions of nodes to

00:53:29.900 actually build that block. And nobody knows which of those computers will win. Then you have to keep

00:53:36.740 winning because, because it's not until about six more blocks that eventually the transaction becomes

00:53:44.300 deemed as permanent. And then biners don't get paid until, until many blocks after that, like a hundred 0.98

00:53:50.260 blocks later. So the mining network is the security network for Bitcoin and the, and the people running

00:53:57.720 those miners get compensated in the Bitcoin. So as the Bitcoin price goes up, the, the economic incentive

00:54:04.920 to mine, the Bitcoin goes up. And then the amount of investment in the Bitcoin mining rigs goes up.

00:54:11.460 So right now that's about something on the order of a $15 billion a year industry, anywhere from 15 to

00:54:19.980 20 billion. And so people will go ahead and invest billions and billions of dollars in the mining rigs

00:54:26.960 and then build out data centers so that they can run the Bitcoin mining protocol. And if you wanted

00:54:35.040 to attack the network, you have to buy yourself billions of dollars of equipment and you have

00:54:41.320 to set up the data centers. And then you have to get more than 51% of the network to have a 50,

00:54:48.460 50 chance, right? Which is pretty difficult. And even then it probably doesn't work very,

00:54:54.560 it doesn't work for you for other reasons. What I'm hearing you say is that if you wanted to,

00:54:59.180 to hack the system, let's say you would need to hack billions or millions. I don't know what the

00:55:07.300 number is, but let's just say million. You can probably tell me what it is, uh, of, of ledgers

00:55:13.000 available. And the more miners that are out there, the more difficult it becomes to own 51%

00:55:20.220 of the information for lack of a better term. That's what I'm hearing you say.

00:55:26.040 If you wanted to attack the network, it's going to take you four years and probably a hundred

00:55:30.220 billion dollars. And then you'd have to do it without anybody noticing. But, but there's 250

00:55:36.880 million people that if they actually know, knew anybody had a plan to spend a hundred billion

00:55:42.340 dollars on a four-year effort to undermine the network, it would be all over Twitter in like 30 seconds.

00:55:47.880 Right. Right. So it's, it's, it's not an easy thing to do. Right. What is the risk? What is the

00:55:55.640 risk with Bitcoin and crypto then? Cause we've talked a lot about the risk for these others. And,

00:56:00.700 and that's very, that has a proven track record of being the actual risk. What is the risk associated

00:56:06.360 with some of these cryptocurrencies? Well, I mean, the risk on the other cryptocurrencies is any,

00:56:11.920 is many of them are, most of them are securities, which means that they could all be they're all

00:56:17.980 centralized and there's some party that controls the protocols. So I, you know, I'm not, I wouldn't

00:56:24.800 really recommend any, anybody buy the other cryptos. I mean, the other cryptos are securities. It's kind

00:56:30.100 of like, if you've said to me, give me your stock recommendations. Well, I mean, there's 10,000 stocks,

00:56:36.120 there's 10,000 cryptos, you know, where give me your real estate property investment recommendations.

00:56:42.280 There's 10,000 buildings you could buy. Okay. I'm not, I'm not telling you, you can't make money

00:56:47.740 investing in real estate, investing in crypto and investing in stocks. I'm just saying they're all

00:56:51.660 investments, right? Bitcoin itself is unique because it's the dominant digital property network.

00:56:58.620 I don't view it as an investment. I view it as a saving strategy. And the risk is, well, one black 1.00

00:57:06.580 swan, the unknown unknown, right? We don't know what it is, but, but you could imagine some unknown

00:57:14.500 unknown and you got it. You got to allow for that if you're intellectually honest. The other risks

00:57:19.880 generally are volatility. What would it, what would it be? Sure. Volatility. I want to get to that.

00:57:24.800 But like you say, the unknown and unknown, you're obviously well-versed in this. If, if you're

00:57:29.660 looking at it as, as an expert in Bitcoin, what could you foresee that unknown, unknown being? Like,

00:57:37.200 what could you anticipate that potentially it could be? I really, that's my point. It's an unknown,

00:57:43.140 unknown. If I could anticipate it, I'd tell you what it was. It's like, it's literally a black swan.

00:57:49.280 It's like an unknown, unknown. That's the risk. Let me say it a different way. I think the Bitcoin

00:57:54.780 is less risky than everything else in the world, right? If you understand the engineering,

00:57:59.900 it's less risky than buying a building. It's less risky than buying a share of stock. It's less

00:58:04.880 risky than buying a car. It's less risky than buying a plane. It's less risky than any other

00:58:09.600 crypto. It's less risky than buying a bar of gold. So, you know, it's, it's, you can't say there's

00:58:17.580 zero risk because there's risk just to live on this earth. We can all get hit with an asteroid and

00:58:22.040 life on the planet ends tomorrow, but it is digital property. And at this point, we know enough to know

00:58:29.060 it's the dominant network and it's the network that's best engineered to be a long-term store of

00:58:35.680 value. You know, all the centralized networks are securities. And so they're subject to regulatory

00:58:42.240 attack and they've got corporate risk and competitive risk. All the other cryptos, most of

00:58:48.180 them are also securities. And so they've got the same issues with them. And the ones that aren't

00:58:52.720 securities, if they're, if they're identical to Bitcoin, they've already been subsumed by it.

00:58:57.780 And otherwise they're functionally trying to be something different. And so if you're trying to

00:59:01.820 be something different, a smart contract platform, an NFT platform, a DeFi platform, then you've just

00:59:07.580 got more moving parts. And that means more things to break. And that makes them investments.

00:59:13.120 I mean, from the outside looking in, I think the most advantageous component of this is

00:59:19.620 decentralization. It seems to me that anytime one party gets involved or one organization gets

00:59:26.320 involved, there's a high risk of corruption of the data and then all the value that comes with it.

00:59:33.440 Yeah. I would, I would say my characterization is Bitcoin is a bank in cyberspace run by incorruptible

00:59:43.220 software. It's offering a global, affordable, simple, secure savings account for people that

00:59:49.200 have neither the need, the means nor the inclination to run their own hedge fund. If you're looking for a

00:59:54.900 bank in cyberspace run by software, that's what Bitcoin is. The thing that makes it incorruptible is

01:00:00.960 the decentralization. So the most important thing about it is, is that it stay distributed and

01:00:06.960 decentralized and that it's, it's simple as things get complicated, they centralize. If you, you know,

01:00:14.460 if you have to update the software every month or every quarter, it becomes centralized, right? The

01:00:20.120 whole beauty of Bitcoin is the, is the simplistic notion that we're just going to keep track of the

01:00:25.280 ownership of 21 million coins. That's all we're doing period. And in a hundred years, what do you

01:00:31.940 want it to be? The same thing in a thousand years, the same thing. Is that valuable? Yeah. That's like

01:00:39.240 worth half of everything in the human race, right? That that's just what we're talking about as a pure

01:00:43.500 energy reservoir. You're, you're basically storing your energy in an incorruptible, basically a shared

01:00:52.220 immutable ledger. Is there value to that? Yeah, of course there's value to that. There, the other

01:00:58.560 half of the human race is, you know, creating things, making products, creating food, providing

01:01:03.920 services, right? There's a lot to be done in that area. And so simply running a bank, a uncorruptible

01:01:11.340 bank doesn't solve the problems of humanity. But given the fact that the money supply is currently

01:01:17.860 toxic and given the fact that banks are currently inexpensive and defective, then curing the problem

01:01:25.940 of money and curing the problem of the bank is a pretty profound leap forward for the human race.

01:01:35.200 Where do you, as we kind of wind things down today, where do you see somebody who's listening to this and

01:01:41.100 says, you know, this is starting to make sense. I need some more information. Obviously I want to direct

01:01:45.700 them to what you have available, but where, where does somebody start on this path if they've not

01:01:51.820 already taken the first step or immerse themselves to some degree in this world of Bitcoin?

01:01:57.560 Yeah, good points. First of all, I would say that you shouldn't do anything in the crypto world and

01:02:02.600 you shouldn't do anything with Bitcoin until you've spent the time to study it and come to your own

01:02:06.500 conviction. That luckily there are a lot of good resources. I have a website, hope.com, H-O-P-E.

01:02:13.300 And on hope.com, we've curated all sorts of videos on the subject. We've got lists of books. There are

01:02:21.260 great books on this, like the Bitcoin standard, the bullish case for Bitcoin, et cetera. We've

01:02:27.600 curated resources and papers and research. There are courses. There's a Bitcoin for everybody course.

01:02:35.540 It's free. You can find a link on the website. There's a course taught by the current head of the

01:02:40.580 SEC, Gary Gensler. It's on the website. Um, so lots of courses, uh, there are lots of leaders,

01:02:47.720 uh, you can follow, right. And, uh, and there's also lots of websites to keep track of this. So

01:02:54.320 if you go to hope.com, that's one place, obviously you can go on Twitter. You can follow me on Twitter.

01:02:59.660 I post a lot of stuff. I post commentary on, uh, political developments and market developments

01:03:06.420 every day on Twitter. Um, which I really enjoy. I really enjoy your Twitter feed by the way.

01:03:12.080 And I, you know, I think that at this, the right way to think about this is once every 30 years,

01:03:18.000 there's something new and profound in the world that you should probably spend a hundred hours

01:03:22.200 studying. Like in 1900, it was like electricity, you know, around 1930 or 40 is like commercial

01:03:29.580 airlines or maybe atomic power came along. And when the nuclear warhead came along, you probably

01:03:34.260 should pay attention to it. And then it came along radio and television. And then 30 years later,

01:03:39.360 the internet came around internet theaters. Sure. Social media. So we're kind of living in a world

01:03:44.840 today where we're a digital energy, digital property, digital money, right? These are the

01:03:52.300 things the crypto revolution stands for. It's the digital transformation of three ideas that have

01:03:59.520 always lived in the analog world. And, uh, most people, they, they don't know to look for them.

01:04:04.940 They can't really conceive of digital energy or digital money or digital property. Like takes a

01:04:09.900 while. It's not a one hour thing. It's like a hundred hour thing, maybe a two or 300 hour thing,

01:04:14.640 but, um, you know, like, you know, you understand the power of YouTube and social media,

01:04:20.660 right? You're in the business, right? I described, you know, digital video and, you know,

01:04:25.960 you're watching your cable television show, or you're watching, you know, CBS when we were

01:04:30.900 broadcasting it to rabbit ears, you know, antenna. And I said, one day there's going to be this

01:04:36.800 digital video and anybody can broadcast themselves, you know, from anywhere to anywhere. You're like,

01:04:43.700 I don't get it. How's that going to work? That's the exact same thing. I said, when somebody

01:04:48.520 introduced me to Facebook, I don't get it. That's stupid. And here I am using Facebook and all the

01:04:53.660 other social media platforms out there. Yeah. So we're, we're kind of like at that stage in our

01:04:58.960 life. And I would encourage people to dig in, spend some time to understand it. It'll take you

01:05:06.380 down a rabbit hole. And first you'll start to understand macroeconomics, this issue of what

01:05:11.340 is inflation. And by the way, there's nothing to be ashamed of. Two years ago, I thought inflation was

01:05:15.220 2%. So, and I was running a publicly traded company, but over the course of 24 months, I realized the

01:05:21.980 inflation rate for a hundred years have been 8% in the dollar and 16% in other currency. So

01:05:26.400 you'll start to figure out macroeconomics aren't what you thought it was. And then you'll start to

01:05:31.180 think about, you know, investment theory. There's conventional thoughts about investment, 60,

01:05:36.500 40 portfolio, put 40% of your wealth into bonds. Well, bonds currently generate 2% yield and there's an

01:05:43.460 18% increase in price of houses. And that's a negative real yield.

01:05:47.200 And they're going to work for you every long.

01:05:48.580 So conventional thoughts about investment need to be challenged. Conventional thoughts

01:05:53.520 about inflation need to be challenged. Conventional thoughts about property.

01:05:58.540 I'm just going to go buy a house. Okay. Well, that's one property. It's not the only property.

01:06:03.400 Right. And then you're, then you're like, well, I just don't trust it.

01:06:06.980 It's like, you know, I give you an MP4 file and it's got Beethoven's fifth symphony in it. And I tell

01:06:12.200 you, I'm giving you music, digital music. Well, I don't get it. Of course you don't get it.

01:06:17.020 Cause you haven't played the file right on a computer now. So yeah, of course you don't

01:06:21.680 trust it. People didn't trust Google maps. People didn't trust the iPhone, right? People didn't

01:06:26.960 trust Amazon, right? People didn't trust Google. Of course you don't trust it. You should be

01:06:32.580 skeptical. Everybody's skeptical. I was skeptical. You were skeptical. Right. And the only, the only

01:06:40.280 real question is, do you need it? And are you going to take the time to figure it out? If you don't

01:06:48.000 need it, you won't take the time to figure it out. If you do need it and you live in a country where

01:06:55.340 the currency is going to zero, it's a life or death thing, right? It's going to save your life

01:07:00.260 if you need it and you grab it. And if you don't, then you're going to lose everything,

01:07:06.580 right? Should you need it? And hopefully you won't ever need it too much, but you know,

01:07:12.220 the world around us is a very complicated place. And I think a lot of us, you know,

01:07:16.780 are pretty surprised to see what happened the last 24 months. One thing that's pretty clear is,

01:07:22.200 is, uh, in the aftermath of the Canadian trucker crisis and the Ukraine war and all of these

01:07:29.860 asset seizures and the breaking down the banking system and hyperinflation, a lot of people are

01:07:37.680 questioning deeply seated beliefs that they once had. And there's never been a time when the ROI on

01:07:45.440 education, especially financial education was higher, right? Now, now's the time to, to open up

01:07:53.080 your mind, allocate some hours and, and learn some new things, you know? And once you've come to your

01:08:01.660 own opinion, do whatever you think is best. Well, and also the barrier that you talk about the

01:08:07.840 importance of financial education, the beautiful thing is the barrier to entry has never been lower.

01:08:12.700 And that's an amazing, that comes with the decentralization of the internet.

01:08:16.780 And that's a beautiful thing as well.

01:08:19.340 Used to be had to pay 75,000 a year for an MBA education or an undergraduate degree.

01:08:25.600 And, uh, most of those courses I took at MIT, uh, now we've uploaded them. I've got a website

01:08:31.560 called sailor.org. We give away free education, free college education. You can go to sailor.org and

01:08:37.020 get the same lectures for zero. So there's really no excuse for not educating yourself.

01:08:42.700 Because the variable cost of the information has gone from 75 grand a year to zero. You just got

01:08:49.480 to decide how to spend your time, right? And maybe the great challenge for all of us is there's too

01:08:55.700 much content. We've only got a certain number of hours in the day and everybody's got to figure out

01:09:01.800 who do they trust and how do they want to spend those scarce minutes? Because you can sit and you

01:09:06.760 can binge watch, you can binge watch chess games, a hundred hours a week, you know, and you won't

01:09:14.420 get through them all, right? You can binge watch anything, right? Anything at all.

01:09:21.820 So we're going to sync everything up. So the guys know where to go, but I do have one more question.

01:09:25.460 And that is, I'm very, very curious because I've seen it in the videos, the story of the ship behind

01:09:31.440 you. I'm curious about that. Yeah. In the 17th century, the Dutch East India Company had an

01:09:40.680 empire, right? And the Netherlands was one of the richest countries on earth. They developed a

01:09:46.400 banking system. They developed a mercantile network and ships like these sailed all over the world.

01:09:51.960 This is a Dutch, you know, merchant warship, you know, it's part warship, part merchant ship and

01:09:59.500 extraordinarily beautiful, you know, intricate machine that channeled energy, explosive energy,

01:10:08.680 as well as wind energy to change the world. And in the 19th century, some people made a handmade

01:10:16.980 model of it. This is a 19th century antique model of a 17th century Dutch warship. And it was given to

01:10:24.120 me as a gift. So I keep it, you know, as a reminder, right? Of the power of human beings to create

01:10:33.200 incredibly intricate machines, right? To better their condition.

01:10:39.360 It's very cool. I knew there had to be a story behind it. So I had to ask about it.

01:10:43.200 Well, Michael, I appreciate you joining me. This gives us a good primer into what it is we're

01:10:47.320 talking about. And guys, highly encourage you to go check out his stuff, see what he's all about,

01:10:52.120 see how it might serve you and get yourself educated. Michael, thanks for joining us today.

01:10:56.140 Appreciate you. Yeah. Thanks for having me, Ryan.

01:10:59.520 All right, you guys, there it is. My conversation with the one and only Michael Saylor.

01:11:03.480 This one was good. Really good. Lots of good information. I've been skeptical. I own Bitcoin and

01:11:08.340 some other cryptos. I've always been a little skeptical, although I am invested in it. I want

01:11:13.860 to know. I want to be well-versed and researched and knowledgeable in the things that I'm investing

01:11:18.700 my hard-earned dollars and money into. So I've done a lot of my own research and Michael is somebody

01:11:24.580 I've been following for some time. He's got great, great commentary over on Twitter. So if you're on

01:11:29.620 Twitter, make sure to follow him. I believe it's at Saylor, S-A-Y-L-O-R. Also connect with me on

01:11:35.260 Twitter, connect on Instagram, take a real quick screenshot, share this with people, send a text,

01:11:41.040 share it on the socials, Twitter, Instagram, Facebook, YouTube, wherever you're doing the

01:11:44.440 social media thing. Let's blow this up. We have the highest for the month of March,

01:11:50.060 the highest monthly downloads to date with a podcast. So we're on the up and up. That is in

01:11:56.640 large part to you and you sharing this and you believing in what we're doing and also most

01:12:00.660 importantly, applying it. So if you're curious about Bitcoin, you're curious about crypto,

01:12:05.860 you want to know about new technology, Michael's got a lot of great information. Pick up his books,

01:12:10.120 watch his videos, connect with them on the gram and on Twitter, and you'll be better off as you do.

01:12:15.440 All right, guys, we'll be back next week. Remember the battle ready program,

01:12:18.800 orderofman.com slash battle ready. And we'll be back next week. Until then, go out there,

01:12:23.440 take action and become the man you are meant to be.

01:12:26.160 Thank you for listening to the order of man podcast. You're ready to take charge of your life

01:12:30.960 and be more of the man you were meant to be. We invite you to join the order at orderofman.com.

Order of Man - April 05, 2022

MICHAEL SAYLOR ｜ A Primer on Bitcoin

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