The Jordan B. Peterson Podcast - 554. What One Billionaire Knows About Outlasting a Dollar Collapse ｜ Michael Saylor

00:00:00.000 Financing your first home can feel overwhelming, but TD can help.

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00:00:14.740 On average, the currency collapses every 30 to 40 years in most political jurisdictions for all of human history.

00:00:23.400 Your storehouse of value, whatever it is, is going to be deflated terribly during your lifetime.

00:00:30.400 The best currency of the last 100 years is the dollar.

00:00:33.280 The winning currency of the 20th century, the best currency in the world, lost 99.9% of its value.

00:00:41.000 That's a winner.

00:00:41.700 Okay, now you come across Bitcoin and you talked about it as if it was abstracted gold.

00:00:46.300 If God's not going to set up Divine Bank and solve all your monetary problems, what's the second best idea?

00:00:51.960 We don't trust the government, we don't trust a local bank, we don't trust each other, and we want the bank to last for 1,000 years.

00:01:00.260 Let's go ahead and build out this Bitcoin network.

00:01:03.340 My guest today, Michael Saylor, started a number of successful companies, successful by almost every standard.

00:01:26.440 It wasn't sufficient to expand out the full scope of his ambition, and I would say that in the most positive sense.

00:01:35.740 He became deeply interested in 2020 in Bitcoin, in consequence, and has been at the forefront of a revolution in finance.

00:01:45.980 His company now owns 3% of the Bitcoin in circulation, and the successful company that he built, with blood, sweat, and tears, let's say, 10 years ago, has become a hyper-successful company in consequence.

00:01:59.300 He's been an evangelist for Bitcoin.

00:02:02.280 He's used religious symbolism and terminology to describe it.

00:02:06.100 He's on fire for Bitcoin, and we talked about things you really need to know today.

00:02:13.760 You need to know who Michael Saylor is, where he got his ambition, how his grounding in fantasy and science fiction allied with the encouragement of his parents to produce the ambition in him that has culminated in this consequence.

00:02:31.020 You need to know that Bitcoin is increasingly becoming an accepted monetary standard like gold around the world.

00:02:40.140 There are revolutionary transformations on that basis in the last year, not least because of the new Trump administration.

00:02:47.200 If you're young, or if you're middle-aged, or if you're old, and you're trying to understand how you will store the work that will comprise much of your life, you need to listen to this podcast and hear what Michael Saylor has to say.

00:03:01.020 So you discovered Bitcoin, as I understand it, in March of 2020, which was relatively recently, and it had been around for a while.

00:03:11.140 And you had been doing a lot of other things, but it moved your life laterally, as I understand it.

00:03:17.400 And I'm curious, you're an engineer and a software engineer, I'm curious about what it was that you discovered and realized that produced this profound change in your orientation, why you think it's justified, and why you evangelize for it as well, I guess.

00:03:34.920 I discovered Bitcoin 30 years into my career.

00:03:38.640 So I started a company late 1989.

00:03:41.920 For 30 years, I had been running an enterprise software company, MicroStrategy.

00:03:46.220 We brought it public on the NASDAQ in 1998.

00:03:48.920 Initially, we were focused upon one line of business, which is to sell software that allows banks or large retailers or insurance companies to analyze all of the data in their databases and assess risk and come up with marketing campaigns.

00:04:04.920 Or if you wanted to figure out what sells with what and do market basket analysis or any kind of risk assessment, and you're a large enterprise, you would want to build a proprietary analytical system.

00:04:16.980 We call that business intelligence.

00:04:18.940 So that was successful.

00:04:20.280 Then I was in my expansionary era in my 30s and in my 40s, and I wanted to create lots of things, and so I launched 10 other businesses.

00:04:30.360 I bought up all the domain names like angel.com and alarm.com and strategy.com and hope.com, and I launched businesses, and some of them were singles, some were doubles.

00:04:45.680 I bought voice.com.

00:04:47.000 I sold it for $30 million.

00:04:48.200 I sold the angel business for about $100 million.

00:04:53.020 The alarm.com business, we spun off.

00:04:56.040 It's a multibillion-dollar publicly traded company today.

00:05:00.320 And then I launched, I don't know, half a dozen, a dozen other things.

00:05:03.340 They just whiffed.

00:05:04.340 They failed.

00:05:05.220 What was your hit rate, just out of curiosity?

00:05:08.220 Can you estimate it?

00:05:09.460 I would say that the thing I started with turned out to be the biggest success between 1990 and 2020, and then the next idea was a double, and the next one was a single, and the rest sputtered out.

00:05:25.920 I spent a lot of time.

00:05:28.060 They were my favorite idea, a great idea.

00:05:30.580 I loved them.

00:05:31.260 I invested a lot of money in them.

00:05:33.180 It turned out the world didn't think the same way I did.

00:05:35.880 I overcomplicated it.

00:05:37.560 And so it's an important part of the story because by 2010, we had overexpanded as a company, and we'd launched all—I wanted to be the conglomerate, 10, you know, like the 10 different things.

00:05:50.040 And I found that the one thing worked and the other nine things didn't work, and I couldn't—I needed to focus.

00:05:55.100 So we refocused on the core business, and for the next decade, I had two dual experiences.

00:06:01.720 I had the experience professionally, and I had an experience personally in finance.

00:06:07.860 Here's the professional experience.

00:06:10.260 I worked 2,500, 3,000 hours a year with 2,000 people doing 100,000 things right.

00:06:17.880 I tried everything under the sun.

00:06:19.640 We had a $500 million enterprise software business, and we found that we were the winner, 99 out of 100 of our competitors, or 99 other competitors had gone bankrupt or left the industry.

00:06:31.320 We were the winner, and we were competing against Microsoft, and Microsoft is Microsoft.

00:06:39.140 And so we were the pure play, you know, call it the David against the Goliaths.

00:06:43.960 And so for the next decade, I spent huge amounts of money on development.

00:06:48.400 It didn't work.

00:06:49.020 I spent huge amounts of money on marketing.

00:06:50.860 It didn't work.

00:06:51.760 I worked—I rebuilt every information system in the company.

00:06:55.860 It didn't work.

00:06:57.020 I obsessed over systems for HR, obsessed over systems for sales, for marketing.

00:07:01.720 I spent huge amounts of money on digital advertising, everything you could imagine.

00:07:06.840 I would fly around the world.

00:07:09.060 I flew around the world for a month, and I talked in every city, everywhere in order to get the message out.

00:07:16.780 So I had tried every conventional thing imaginable, and 10 years later, the company was still about a $500 million company.

00:07:24.200 We were like a very low growth, and we were banging our head against a company, Microsoft, which is more—you could more easily leave the United States than you could leave the domain of Microsoft.

00:07:36.500 It's—they're just everywhere. 0.94

00:07:38.720 So my professional experience is, I figured I'm not a stupid guy. 0.92

00:07:45.440 I worked very hard.

00:07:46.960 I had brilliant people working with me.

00:07:49.120 We tried everything imaginable, but we could not dent, you know, the digital monopolies of the world.

00:07:55.140 And we were this—we were this—I'll call us a zombie company.

00:08:00.200 It's a publicly traded company that makes money that won't go out of business that's uninteresting because it's not growing 20% or 30% a year.

00:08:09.980 It's not Google.

00:08:10.860 It's not Facebook.

00:08:12.220 It's not a monster.

00:08:14.660 But it's—but, you know, there are 10,000 companies like ours.

00:08:17.940 Right, right, right.

00:08:18.720 Most companies are like ours.

00:08:20.120 Sure.

00:08:20.340 So we were there, and then here's my personal experience.

00:08:27.060 I got very fascinated with technology.

00:08:29.480 I wrote a book called The Mobile Wave, and in The Mobile Wave back—

00:08:33.000 That was 2012, that book?

00:08:34.700 I published it 2012.

00:08:36.440 I wrote it 2010, 2011.

00:08:38.380 And the book—the theme of the book is what happens when software dematerializes, when the software runs on a phone, when the computer goes from under your desk to in your hand, when it's no longer solid state or liquid state, but it's vapor state, and you go to sleep with the phone next to you.

00:08:57.960 And what kind of software would happen in the mobile world?

00:09:02.380 And, of course, we know all about it, right?

00:09:04.060 The Instagrams, the Facebooks, the Ubers, all of these things became possible during the mobile era.

00:09:10.100 They were inconceivable when the software ran on a computer.

00:09:13.660 So the theme of the book is, you know, software is going to leap from under our desk to our clothing.

00:09:20.600 We'll wear it, we'll hold it, and it's become ubiquitous 24-7-365, and it's going to change—we're going to dematerialize 27,000 devices.

00:09:32.080 20,000 device companies died so Apple could live.

00:09:35.340 We're going to crush 20,000 retailers because everybody's going to want the Amazon.

00:09:40.300 You're going to see 20,000 newspapers crushed because Google and Facebook eats them.

00:09:46.460 And, you know, the message of the book is, you know, you probably ought to just buy the Amazon stock or buy the Apple stock.

00:09:53.540 And as an investor, I took, you know, a decent amount of money, call it $25 million that I'd made over the previous 20 years as a CEO and as a founder of a company.

00:10:06.280 I invested in these stocks, and I 20x'd it.

00:10:10.420 You know, how do you make money in the tech world?

00:10:12.900 You invest in something everybody needs, nobody can stop, and very few people understand.

00:10:22.760 Like, most people would—in the year 2010, if you had said, hey, I really think that Amazon's going to work, people would have said, you're crazy, Amazon's losing money, no one's going to do this, you know? 0.96

00:10:34.940 And they would have thought, you're nuts.

00:10:36.220 And if you had said, I remember with Apple, you say, well, Apple, I think this iPhone's a cool thing.

00:10:43.180 They would say, well, no, eventually it'll go to the price of $25 a phone like Nokia.

00:10:47.580 It's going to be commoditized.

00:10:49.140 They can't hold—their margins are too high.

00:10:51.760 They're going to actually have their margins collapse like Dell or like Nokia.

00:10:55.520 And, of course, the conventional wisdom was Apple's not a good investment, Amazon's not a good investment, Facebook, what is this goofy thing?

00:11:06.460 And, of course, for the next decade, here's what happened.

00:11:09.080 I work an hour a month as an investor, and I get rich, you know?

00:11:14.680 Make half a billion dollars.

00:11:17.460 Not working on—embarrassing.

00:11:19.000 All you've got to do is just buy the Magnificent Seven in 2010, and the conventional wisdom of Wall Street is if the stock doubles, you should diversify.

00:11:28.700 You should sell half of it.

00:11:29.960 If Apple doubles in price, go buy some IBM and some HP and some other computer company.

00:11:35.580 If it doubles again, you sell some more of the portfolio and you buy the thing.

00:11:39.620 And their thought was you've got to stay diversified, but the problem is Apple won.

00:11:43.760 Everybody else lost.

00:11:44.880 At one point, Apple made all the money in the mobile phone business.

00:11:48.880 Everybody else collectively lost money to compete with them.

00:11:52.160 Amazon won.

00:11:52.980 Samsung as well?

00:11:54.220 All of them?

00:11:55.180 Yeah.

00:11:55.400 If you look at the winners in this era, right?

00:11:58.660 I mean, Apple was a winner.

00:12:01.620 Amazon was a winner.

00:12:03.060 Google, Facebook were a winner.

00:12:04.540 Samsung is the winner in the Far East.

00:12:08.500 Walmart kept up.

00:12:11.000 Every other retailer, you know?

00:12:12.640 It's like there's two or three that kind of keep up.

00:12:15.380 Maybe a Walmart, maybe a Target, but there's 20,000 that went out of business.

00:12:19.740 Do you think that's partly a consequence of the—is there a radically centralizing tendency of the mobile world?

00:12:28.800 There is.

00:12:29.700 And so it's increasingly a winner-take-all?

00:12:32.580 Because when everyone's connected, the Pareto distribution goes out of control.

00:12:36.360 That's what it looks like to me.

00:12:37.580 There's like one person occupies each niche or one company because everything's connected.

00:12:42.400 There's no micromarkets anymore.

00:12:44.240 These all became dominant digital monopolies.

00:12:47.660 And they became dominant because Apple could ship a new feature to the iPhone over the weekend to a billion people for the cost of the electricity.

00:12:57.860 And before Apple, you would have to—Kodak or Polaroid or fill in the blank—would have to create a new device.

00:13:04.500 It would take a year, and then they would have to sell it, and it would take another year, and there's a variable cost to it.

00:13:09.140 But so when the functionality becomes software, there's a 99% gross margin, and you can give it to $100 million, a billion, right?

00:13:19.420 Apple could do Apple Music and give it to YI and people. 0.98

00:13:22.020 YIP ownership matters. 1.00

00:13:23.540 Right, and so they dominated the rails, and they had these—I used to say Apple's going to be the most valuable company in the world because it's the most valuable company in the world because it's the first time one company could deliver a feature to a billion people overnight.

00:13:41.460 You know, we never had that 30 years ago or 40 years ago.

00:13:46.180 So there are all these natural monopolies that built, and at some point, you know, Microsoft dominated, you know, business software and—

00:13:55.320 How did you see that early?

00:13:57.060 I mean, the companies you listed off, that was pretty good—that was a pretty good hit list.

00:14:01.420 And like you said, you know, you worked yourself half to death, but all the money that you made or the majority of the money you made was actually a consequence of an hour—you said an hour a month in investment strategy.

00:14:11.200 But like what—and this is germane to the Bitcoin question because one of the things you're doing is setting up the circumstance.

00:14:17.320 You could—you saw the direction the digital world was going.

00:14:21.840 You bet money on it, which is actually an indication of commitment to it, and the bets that you made paid off.

00:14:28.020 And they paid off in some ways more than your hard work on the business front.

00:14:31.740 You know, you got to roll back to, you know, first grade.

00:14:35.120 My parents told me they'd give me a dime for every book I read, and I had a comic book addiction.

00:14:40.440 So one summer, I read 100 books and won some reading competition.

00:14:43.780 I started reading in first grade, and that led me to a love of science fiction and fantasy, especially science fiction.

00:14:50.300 And I read the big three—Heinlein, Clark, and Asimov.

00:14:54.560 And my entire generation, you know, Elon Musk, Jeff Bezos, a lot of us were influenced by that.

00:15:00.660 So—

00:15:01.300 Yeah, I was reading 10 a week when I was, well, in grade 3 and 4.

00:15:04.800 My neighbor across the street had a wall of science fiction, and he'd let me come in once a week and take, you know, as many books as I wanted.

00:15:12.380 And this time I was reading exactly the same crew that you described.

00:15:16.460 I liked Ray Bradbury, too.

00:15:18.420 One of the—well, a famous book by Heinlein is Have Spacesuit, Will Travel.

00:15:22.060 And in the book, a precocious youth builds a spaceship, gets picked up by, you know, bug-eyed monsters or by space aliens gallivants around the universe, saves the human race from bug-eyed monsters, comes back.

00:15:36.360 And because he saved the human race through his courage and his capability, he gets full tuition scholarship to MIT.

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00:16:43.620 Well, I read that, I guess, by sixth grade, and I just thought I was going to MIT.

00:16:47.320 Oh, yeah.

00:16:47.720 So I, you know, I liked, you know, and then my area, you know, we used to play Dungeons and Dragons.

00:16:54.360 We used to do board games.

00:16:55.740 We'd play all these simulation games.

00:16:57.720 And, you know, when you play these games, they give you a 64-page set of rules and a set of dice,

00:17:05.060 and you're creating a simulation of a naval battle or an army battle or, you know, whatever it might be.

00:17:13.040 That was just before computers got big.

00:17:14.940 So I got very interested in all that.

00:17:17.340 That drove me down a path where I went to MIT.

00:17:20.200 I studied spaceship engineering, or astronautics, really.

00:17:24.760 And while I was there, you know, studying astronautical engineering,

00:17:33.240 I stumbled across another course at the School of Management there called System Dynamics,

00:17:38.420 and I became fascinated with that.

00:17:40.300 It was the computer simulation of human behavior.

00:17:43.840 So people were building—

00:17:46.240 Who are the big names in System Dynamics?

00:17:48.240 Jay Forrester founded the school, and the idea was build a computer simulation that shows what happens

00:17:56.020 if you change the dynamics of a traffic system in a city.

00:18:01.500 I mean, the classic example is I build a beltway around the city, and I build a hub-and-spoke system,

00:18:06.840 and I build superhighways because I want to speed up travel time.

00:18:10.940 But invariably, what happens is the city increases by a factor of 10, and the travel times go back to what they were.

00:18:16.960 Yeah.

00:18:17.560 Because of the feedback, right?

00:18:20.500 If you built the roads and then no one reacted to it, then you would be able to get around faster.

00:18:25.840 Yes, and the world would be a much simpler place.

00:18:28.240 Yeah.

00:18:28.500 Another classic example is, you remember the Club of Rome study, you know,

00:18:32.700 they declared that the world was going to run out of resources within 10 years,

00:18:36.320 and they declared it because all the oil reserves were for 10 more years.

00:18:41.040 But if you thought about it, you would realize that an oil company only has an incentive to identify 10 years' worth of reserves,

00:18:48.100 and everything after that's a diminishing return.

00:18:49.960 So we always have 10 years worth of reserves.

00:18:54.060 It's a time horizon issue, not a resource issue.

00:18:56.720 If you see the world as a dynamic, non-linear feedback system,

00:19:00.480 and you consider the human behavior or the reaction to what you do,

00:19:05.480 then you're much more sophisticated, and you start to realize the simplistic linear models don't work,

00:19:11.340 and you have to consider human behavior and economics and urban planning and business planning.

00:19:21.120 And so I studied that.

00:19:23.940 I did my thesis in it.

00:19:25.260 I started building computer simulations.

00:19:27.040 I learned from the computer scientist in the School of Management.

00:19:31.880 Man, I got very fascinated in this school.

00:19:35.200 I got very interested in politics, philosophy, economics.

00:19:39.500 I ended up taking another degree in the history of science.

00:19:43.260 And, you know, as I started—

00:19:45.020 Where did you take that?

00:19:46.060 At MIT.

00:19:46.600 It was at MIT, too.

00:19:47.460 At the same time.

00:19:48.220 When were you there?

00:19:49.520 1983 to 1987.

00:19:52.100 And when I was there, I was also an Air Force cadet.

00:19:54.660 You know, the Air Force paid for my education to go through MIT.

00:19:58.200 I was very fortunate in that regard.

00:20:00.300 So this is all just backstory, but I had the background as, you know, a cadet and commissioned officer in the Air Force.

00:20:08.400 I grew up on Air Force bases my entire life.

00:20:10.760 My father was career non-commissioned officer, so I lived on military bases.

00:20:15.480 Moved a lot?

00:20:16.240 Moved a lot.

00:20:16.820 So I saw the world.

00:20:18.420 I had the science fiction background.

00:20:20.900 I had the Dungeons and Dragons, the fantasy background.

00:20:23.920 I got very interested in the history of science.

00:20:28.540 That's all about paradigm shift.

00:20:32.100 You know, how do people embrace new ideas?

00:20:35.880 Whether it's the Copernican Revolution or whether it's, you know, whether it's relativity and Einstein's ideas.

00:20:43.160 Or whether it's quantum physics or whether it's, whether it's, what happens when I introduce railroads or electricity or crude oil or radio.

00:20:55.380 How does it change the culture?

00:20:57.160 How does it change the politics?

00:20:58.960 How does it change the economics of the civilization?

00:21:02.580 So that was my academic background.

00:21:04.760 And so I always was fascinated by science and technology.

00:21:08.680 I was surrounded by technologists at MIT.

00:21:12.040 I got into the space.

00:21:14.260 But the fantasy background was very important because in fantasy, there's this idea that if you know the name of a demon, you can summon them.

00:21:23.520 You can control them.

00:21:25.080 Names are very powerful.

00:21:26.300 And when the internet hit, I was typing out sailoratmicrostrategy.com in my email.

00:21:36.860 And I thought, well, it'd be a lot better if I just typed out sailoratstrategy.com.

00:21:41.020 And I started thinking about domains and it inspired me to go and buy up all the domains I could.

00:21:46.520 So I bought Hope.

00:21:47.900 You know, like, how would you like to own Hope?

00:21:49.840 Like, the nice thing about owning Hope is...

00:21:51.620 That was when?

00:21:52.240 What year was that?

00:21:53.080 Between 94 and 98.

00:21:57.080 Right.

00:21:57.360 So pretty early.

00:21:58.560 Pretty early on.

00:21:59.880 And so I thought...

00:22:01.540 How many domain names do you think you bought?

00:22:03.880 I bought a bunch, but I bought about 30 of the classics.

00:22:07.360 My idea was the most valuable thing is a constructive word in the English language that has a positive connotation that everyone understands, everybody can spell.

00:22:19.020 So I bought Emma.

00:22:20.440 I bought Michael.

00:22:21.880 Michael.com.

00:22:22.840 I bought Mike.com.

00:22:24.120 I bought Hope.

00:22:24.900 I bought Voice.

00:22:25.740 I bought Angel.

00:22:26.660 I bought Alarm.

00:22:27.620 I bought Speaker.

00:22:28.700 How did you pick the words?

00:22:30.020 I mean, you laid out some of the criteria.

00:22:31.360 Oh, I bought every good word that I could buy.

00:22:33.320 It was a real estate, a digital real estate gold rush.

00:22:36.840 Right, right.

00:22:37.560 If you would sell it to me, I would buy it.

00:22:40.040 I figured, you know, what did I think?

00:22:42.020 I think if a billion people learn to speak English...

00:22:44.840 I'll give you an example.

00:22:46.120 A billion people learn to speak English.

00:22:47.720 How many of them know how to spell strategy?

00:22:50.100 How many of them have a positive impression of strategy now?

00:22:56.500 Now I name my company MicroStrategy.

00:23:00.320 Let me tell you, for 30 years, half our customers mispronounced it, MicroStrategies.

00:23:05.880 Like, when you pick a word that's not in the English language, if you teach it to third graders or sixth graders, the education system is burning the word.

00:23:15.460 What does hope mean to you, right?

00:23:18.280 That's different than naming a company Celebrelix.

00:23:22.520 You know, Celebrelix is not a word we can spell and it's not a word that has a meaning, but hope, angel?

00:23:29.980 It's a pretty strange opportunity to be able to buy words, which is essentially what happened.

00:23:34.800 And it happened in the internet era.

00:23:36.580 Now, if we go to mobile, my fascination was this idea that if software goes from the back office to the desk to my pocket, it goes from solid state to liquid state to vapor state.

00:23:54.020 It's all around me.

00:23:56.040 What happens when I can talk to it?

00:23:58.880 What happens when it can talk back to me?

00:24:01.380 Well, you know, now you have to have an imagination.

00:24:06.160 Science fiction, it's valuable because it says if you learn science and engineering, you can figure out, like, what's the optimal way to get to Mars from the U.S.?

00:24:15.720 You will start to understand gravity wells.

00:24:17.500 You understand physics.

00:24:19.720 That's very important for one part of the story.

00:24:22.960 But the other part of the story is fantasy.

00:24:26.480 You know, I'm creating something in cyberspace.

00:24:30.860 I'm an engineer, and I can imagine throwing a baseball in orbit.

00:24:35.200 And if I throw it fast enough, it stays in orbit.

00:24:38.520 And if I throw it harder, it breaks Earth's gravity field and it orbits the sun.

00:24:42.680 And if I throw it harder, it breaks the sun's gravitational field and it spins off into, you know, Milky Way.

00:24:49.320 Well, that's what science fiction or engineering teaches you.

00:24:52.800 Fantasy teaches you I can throw the baseball and will it to be a flock of seagulls that land on my head and turn into a pot of gold because they like me.

00:25:02.820 Those are little paradigm revolutions, that fantasy.

00:25:06.000 The significance is in the hardware world, you're subject to thermodynamics and physics, and you better know it.

00:25:14.220 But in cyberspace, you're not subject to thermodynamics and physics.

00:25:19.980 So you could imagine, you know, I look at mirror, mirror on the wall, who's the fairest of them all, right?

00:25:27.580 And Snow White gave you the answer, right?

00:25:30.980 Because, you know, when that happens in a fairy tale, the mirror talks back to you.

00:25:38.200 It comes to life, you know?

00:25:40.560 And eventually, we got to, you know, Zoom and video, and pretty soon your iPad became a magic mirror, and pretty soon you could talk to, you know, a relative of yours 8,000 miles away, and that was pretty magical.

00:25:55.340 But then when you put the AI behind it and the AI generates an AI image, you're not talking to a person.

00:26:01.360 You're talking to an angel or a demon, right?

00:26:04.940 And so now, if you want to design that stuff, if you want to design magic software—

00:26:11.680 Why those words?

00:26:13.280 An angel or a demon?

00:26:14.940 Yeah.

00:26:16.000 Yeah, because, you see, one of the things I wanted to talk to you about today was the use of imagery, your use of imagery in your tweets and your marketing for Bitcoin.

00:26:24.960 Because, like, you have a strange mind in many ways, because you have your engineering background, and you think that way, but you also have a foot in the world of fantasy.

00:26:37.040 And that's not a—that's—I mean, there's a lot of—

00:26:40.380 Well, there's lots of engineers that are sort of possessed by the world of fantasy.

00:26:44.240 You know, they live in a Star Wars ethos, right?

00:26:47.220 And many of them had their philosophy shaped by the science fiction that they read when they were in their early adolescence.

00:26:54.820 And that really produced the religious and fantasy substrate of their thought.

00:26:59.360 But there's not a lot of examination of that.

00:27:01.840 But you thought about fantasy, by all appearances, in a lot more detail than that.

00:27:07.760 Yeah, well, when I was at MIT, I was surrounded by some of the most brilliant mathematicians and engineers in the world.

00:27:14.420 But what distinguished me is I was a pretty good engineer.

00:27:20.160 Like, I probably wasn't like a field's medal mathematician, right?

00:27:24.040 I wasn't like that, but I was a good engineer.

00:27:27.200 But I had a liberal arts band, and the truth is, if I could have afforded it, I would have gone to Yale and studied history as an undergraduate.

00:27:34.620 I just didn't have any money.

00:27:35.960 And they didn't have an ROTC program, and the government wasn't paying Air Force cadets to go study history at Yale.

00:27:41.820 So my love was history, you know, history, science fiction, imagining the future, fantasy, imagining an alternative future.

00:27:54.240 Would you say you think in pictures or words?

00:27:57.340 Images.

00:27:58.500 You think in images?

00:27:59.120 I'm a synthesis, so I generally—I'm the person that would tell you why the steam engine, you know, and the governor on a steam engine are similar to a political process that was implemented in medieval Russia.

00:28:15.160 Like, I'm thinking about the mechanisms and how they function in the physical world, the political world, the economic world, the fantasy world, the magic world, the whatever world.

00:28:26.500 So I would always be thinking simultaneously across that.

00:28:31.720 So when I went to MIT, most of them were there to do engineering.

00:28:35.240 I was actually half liberal artist, half engineer, and that was what was different about me.

00:28:44.520 And when I—and, of course, when I came out of MIT, I didn't work for—I don't want to work for someone else doing something they told me to do.

00:28:53.520 I wanted to create something.

00:28:55.220 And I think that—I think that, you know, when you're—

00:28:58.520 That entrepreneurial bent probably goes along at least to some degree with that proclivity to appreciate fantasy because, well, entrepreneurial activity is associated with trade openness, which is the creativity dimension.

00:29:12.740 And so it makes sense that you would have that entrepreneurial bent combined because you have to imagine possibility to be an entrepreneur, right?

00:29:23.420 So that's the fantastic element.

00:29:24.880 You have to conjure up something that doesn't yet exist, and then you have to pursue it, and it has to captivate you.

00:29:30.100 So you have to have the temperament for that.

00:29:32.320 So you've got—do you like—do you still read fiction?

00:29:34.820 I do not as much as I used to.

00:29:37.500 In my current stage in life, I spend a lot more time reading history, like cover-to-cover Durant's history of—story of civilization, every volume, all 15,000 pages, or all the history of America, you know, conceived in liberty, Rothbard's history of America before the Revolutionary War, or history of economic thought.

00:30:00.760 So a lot of history, a lot of biography, a lot of monetary theory, and, of course, today, I spend my time reading legislation and all of the developments in the political economic world relevant to digital assets, digital technology, because there's a flood of it, and I'm expected to have an opinion on it.

00:30:23.080 But when I can sneak away, I'll go read history.

00:30:26.560 Artistic interests?

00:30:28.960 Landscape architecture.

00:30:30.760 Residential architecture.

00:30:32.700 When I first came here, I went to Taliesin West.

00:30:35.840 Frank Lloyd Wright's architecture, all architecture, everywhere in the world.

00:30:40.080 Right.

00:30:40.360 Well, that's a good blending of aesthetic and engineering as well.

00:30:43.440 Very much.

00:30:44.180 Yeah.

00:30:44.840 But to address two of your points that are important, one, in fantasy, there's this idea of casting a spell, right?

00:30:54.380 So if you can imagine it, you can cast it.

00:30:57.940 That's a very interesting idea.

00:30:59.720 Can you make the world a better place?

00:31:02.000 Can you shape it in a certain way?

00:31:03.940 And the second point you brought up about metaphor, right?

00:31:11.160 Imagery.

00:31:11.720 Yeah, that was in relationship to the angels and the demons.

00:31:14.300 You know, if you write a book about something, you know, write a book about Bitcoin and it's 200 pages long, I wrote the book about something.

00:31:24.360 What I discovered is 1% of the people will read the book in five years, maybe 0.1%.

00:31:31.240 It's very, you know, and when they read the book, if you wanted to explain something in 200 pages or 500 pages, they might have forgotten what they read on the first 50 pages by the time they get to the end.

00:31:42.380 And so a 200-page explanation isn't nearly as powerful as to say, oh, that's a demon coming out of cyberspace.

00:31:51.180 Right.

00:31:51.560 Well, that's the power of poetry.

00:31:53.060 Because it's like, oh, what is that?

00:31:55.200 That's an actor in cyberspace with hostile intent that I should be afraid of.

00:32:00.900 And so there's a lot of over-explaining in the world.

00:32:05.880 And what I've discovered is, you know, in the modern world, we live in an age of abundance and there is so much infant information.

00:32:13.520 You know, I watched your podcast on YouTube.

00:32:16.180 I came to know you before COVID and I was fascinated by them.

00:32:19.840 But then I stumbled across chess videos and then I found you could spend your entire waking day watching chess videos.

00:32:26.680 And then I realized you could spend your entire life watching Magnus Carlsen chess videos.

00:32:31.320 And then I realized you could probably spend an entire day watching different chess commentators covering one Magnus Carlsen game from 30 different points of view.

00:32:41.520 And if you want to go down that rabbit hole, whether it's, you know, diets, the carnivore diet or chess or pocket knives or someone sailing around the world, there is literally infinite depth content.

00:32:56.360 Yeah.

00:32:56.580 You know, and, you know, then comes along Netscape and YouTube, you know, and all these other streaming.

00:33:02.120 And then, Lord help you, you fall into a TikTok hole, you know, and you're like, you start swiping and then YouTube decided to steal it and they have these shorts.

00:33:09.620 And when you pull up the YouTube short, you know, the algorithm is thinking, what is the statistically most likely thing to capture your attention and punch your buttons and hit your dopamine and you find yourself going.

00:33:22.820 Yeah.

00:33:23.060 Is that an angel or a demon, that algorithm?

00:33:25.460 Yeah.

00:33:26.060 And you are, you know, you are stuck and it's an addiction if you're not careful.

00:33:30.080 And as a spouse, a parent or a leader, people count on you.

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00:34:17.900 And of course, while it's optimized to grip short-term attention, you know, and there's something really distressing about that, because the more immature a mind is, the more it's gripped by short-term attention.

00:34:30.320 And these bloody algorithms maximize for short-term attention, and the attention fragments are getting shorter as the content gets shorter.

00:34:37.240 And so, we're literally training super-intelligent AI systems to hook us in keeping with our hedonistic drive.

00:34:45.820 You know, it's just—so that's a demon, I would say.

00:34:48.700 And that—you know, that—

00:34:50.080 It's not a fair fight.

00:34:51.500 It's not a fair fight.

00:34:52.600 It's a 16-year-old boy against the smartest, you know, AI in the world trying to addict the boy to the imagery they feed, right?

00:35:01.720 And so—

00:35:03.000 Yeah, the smartest engineers and the smartest AI systems that are actually operating in ways that we don't even understand, because they're reinforced—they learn by reinforcement.

00:35:12.280 But so, they understand things about us that we don't understand they understand.

00:35:16.340 Coming back to my communication style, then, what I realize is people just don't have the time.

00:35:22.400 Like, you can—for example, in life, you can equivocate.

00:35:26.260 You could say, well, you know, you might do this, and you might do that, and do your own research.

00:35:30.040 And if you think, blah, blah, blah, that this might happen, and read these 82 pages.

00:35:33.660 Yeah, yeah, yeah.

00:35:34.800 Or you can say, this is digital gold, but it's going to crush real gold by a factor of 10.

00:35:40.000 Okay, so let's leap ahead into the Bitcoin issue, because I still want to know—because you set up the background now.

00:35:46.540 You've described how your mind works.

00:35:48.180 You've described the fact that you recognize patterns and that you see possibility.

00:35:52.380 I want to hear how that translated into your discovery of Bitcoin and where that went.

00:35:57.400 Okay, it's March of 2020.

00:36:00.040 And in March of 2020, Michael Saylor, the CEO, is slaved for a decade working infinitely hard, working his 2,000 employees infinitely hard to compete against Microsoft and Magnificent 7 and to put growth back into this public company called MSTR.

00:36:22.400 The company is a perfectly fine company, but we're, you know, a company growing 1, 2, 3, 4% a year is uninteresting to every professional investor in the capital markets.

00:36:33.160 And we've tried everything under the sun, and we cannot break free, and our employees are paid in stock options, and the stock's not going anywhere, right?

00:36:43.180 And so I am at a dead end there, very frustrated, my wit's in.

00:36:49.660 And then Michael Saylor, the individual, occasionally buys some Apple and Amazon stock, and he's made a fortune.

00:36:55.960 And I'm thinking, this is not good.

00:36:59.160 Why is it not good, though?

00:37:00.600 Like, because I want to dig into that a little bit.

00:37:05.080 You had a company that was growing moderately, let's say.

00:37:08.600 It wasn't spectacularly interesting.

00:37:10.580 There were stock problems.

00:37:11.500 But the company is quite functional, and it's doing quite well, and it does its thing well.

00:37:15.340 And then as an individual, you've made these, like, home-run investments.

00:37:18.540 So what is it that's dissatisfying you exactly?

00:37:22.760 What's dissatisfying is to think that you peaked 10 years earlier, you've hit a plateau, and you cannot go any further.

00:37:30.340 I see.

00:37:30.880 So it's a plateaued adventure.

00:37:32.240 Right.

00:37:32.440 We've plateaued.

00:37:33.340 We can't break free.

00:37:34.780 And work isn't fixing that.

00:37:37.280 What's dissatisfying is to see the Elon Musks or the Mark Zuckerbergs, you know, of the world have extraordinary success,

00:37:44.480 and you grow up in that generation, and you feel like you hit the wall.

00:37:49.560 They launched the Instagram.

00:37:51.380 They launched the Facebook.

00:37:52.800 They launched the, you know, electric car, and you somehow have created this.

00:38:01.220 It's a successful business, but it's now a low-growth business, which is, you know, comparable to—

00:38:07.680 Why do you think that ground at you?

00:38:13.600 Like, I mean, because by many indices, you're multi-dimension—you were multi-dimensionally successful already.

00:38:23.340 Now, you talked about the fact that the big league leap, so to speak, didn't occur.

00:38:28.540 But why in the world do you think that particularly disturbed you and drove you to seek other avenues of expansion?

00:38:38.180 I just thought, is this all there is?

00:38:40.260 There's got to be more.

00:38:41.140 I wanted to change the world, you know, where you, you know, you start, you think you can change the world,

00:38:46.760 and you get to some point where you realize you fulfill one, two percent of the demand of a given niche of the world,

00:38:54.820 which has now become a mature cash cow business, and the world's done with you.

00:38:59.300 Do you have any idea where that ambition came from?

00:39:01.820 Oh, it must have come from my mother.

00:39:05.440 When I was—my first job was as a paperboy, and, you know, so I'm delivering papers in Dayton, Ohio, through the bitter cold, the blizzard of 78, and at some point there's going to be a competition for the best paperboy of the Dayton Daily News,

00:39:24.060 and my mother enters me in the competition, and, you know, she creates this book of entries, you know, I'm the musician, I've got the book collection, I'm the gamer, I'm a this, I'm a that.

00:39:35.360 And I swear she must have thought I was God's gift, you know, and it never occurs to me that being, you know, the number one honor paperboy in Dayton, Ohio isn't necessarily the pinnacle of achievement,

00:39:49.140 but in her eyes it was, and she entered me in the competition, and I end up number two.

00:39:52.820 She had faith in you.

00:39:53.800 But I thought, you know, she thought I was the greatest person on earth.

00:39:57.000 She's like, you're going to change the world.

00:39:58.120 Freud's mother thought that about him, and he said that it had given him a tremendous advantage.

00:40:02.600 You know, it's really something to have a parent who has, like, unblinking faith in you, especially if they've actually identified those elements of you that are useful.

00:40:12.100 I was a smart guy.

00:40:13.580 Like, I was, like, number one in my class normally, but being number one in your class in a public elementary school in middle Ohio is no statistical justification for thinking someone's going to grow up and change the world.

00:40:26.620 But my mother believed it.

00:40:28.080 She believed in me.

00:40:29.060 She imbued it in me.

00:40:29.980 And for whatever, if your parents think that about you, they program you, and it works.

00:40:35.280 So somehow in my head, I was programmed at an early age, you know.

00:40:39.700 To believe that you could do it.

00:40:40.640 By an inspirational figure.

00:40:42.140 To believe I could do it.

00:40:43.200 Do you think that was ambition exactly, or do you think that was faith in your ability to solve problems?

00:40:49.460 Because those aren't the same thing, right?

00:40:51.060 I mean, you could imagine a situation like that that would produce someone who is narcissistic.

00:40:57.820 That's a very different outcome than someone who believes that if they hit a problem hard enough, they can crack it and move forward.

00:41:05.560 You know, if you combine the influence of my parents and my mother, especially, with my father is a very inspirational figure as well.

00:41:15.960 He's like the, he's the Air Force sergeant, you know, at 6.30 in the morning saying, hit the ground running, son.

00:41:22.180 Oh, yeah, okay, okay.

00:41:22.920 Oh, that's interesting.

00:41:24.340 So that's the work ethic element.

00:41:25.400 He was the work ethic.

00:41:26.700 Okay, okay, okay.

00:41:27.620 You know, straight arrow, work hard, you know, and do your job and do your duty.

00:41:32.920 And my mother was, I have the smartest son in the world.

00:41:35.940 He's going to change the earth, right?

00:41:37.740 And so that was the two.

00:41:39.940 But, you know, once I got into reading, you know, if you read Heinlein, Heinlein's, you know, stories, his juvenile stories and his stories are, here's a teenage kid that's going to go off, go to Mars and make peace with the Martians and change the course of human history.

00:41:57.860 Right.

00:41:58.340 Right?

00:41:58.680 Or, you know, and you name them, every one of his.

00:42:01.360 So you found that hero mythology in science fiction.

00:42:03.720 You know, like all of his figures are inspirational figures, you know?

00:42:07.640 Yep.

00:42:07.940 Right.

00:42:08.420 If you think about the Heinlein ethic, right?

00:42:12.400 It's like self-reliance, resourcefulness, you know, liberty.

00:42:16.220 Yeah, well, he was a libertarian too.

00:42:17.860 Very much so.

00:42:18.640 Yeah, yeah, yeah.

00:42:19.240 I know the lefties used to think of Heinlein as a fascist.

00:42:22.060 I remember that.

00:42:23.060 It shocked me.

00:42:23.880 I never realized when I was like 13 that the science fiction I was reading had political implications.

00:42:28.700 I didn't think that, and that's not my takeaway.

00:42:31.340 My takeaway is he says, wherever you're living gets too crowded and there's too many bureaucratic busybodies telling you how to live.

00:42:37.940 And how to breathe and what to do.

00:42:39.620 It's time for you to find a new frontier.

00:42:41.780 Go somewhere else.

00:42:42.560 Yeah, right.

00:42:43.000 Go west.

00:42:43.960 Go to cyberspace.

00:42:45.360 Go to out.

00:42:46.180 In his case, go to outer space.

00:42:48.100 Yeah, yeah.

00:42:48.860 You have to, you know.

00:42:50.180 Well, there are frontiers everywhere.

00:42:51.600 And you found them in the digital world.

00:42:54.120 And something, you know, it's always a struggle, but something good always comes of it, right?

00:42:59.520 In all of his books.

00:43:00.920 Right, right.

00:43:01.660 Right?

00:43:01.920 And so you have the inspiration of him as, you know, as kind of a figure.

00:43:10.540 And then you have the inspiration of, you know, your parents in a different way.

00:43:14.820 And then, of course, once you start reading books, right, if you read enough, you're inspired by the lives of human beings that came before you.

00:43:23.480 So I think all of that made me think I was put here to do something.

00:43:28.700 Okay, okay, okay.

00:43:29.280 Right?

00:43:29.780 Okay.

00:43:30.080 And I get to 2020, and I'm frustrated, and it's a very pivotal point in my career.

00:43:37.040 I'm just deciding, am I going to sell this company?

00:43:39.220 Am I going to retire and drift quietly out of history, right?

00:43:44.000 How old are you at this point?

00:43:45.360 55.

00:43:46.540 Right, right.

00:43:47.420 Okay, lots of people stop at 55, right?

00:43:50.000 They decide they're retired, whatever that means.

00:43:52.240 And then they're, well, looking, they're looking for purpose for the next 20 years, which is not a good fate.

00:44:01.140 It's not a good fate.

00:44:02.360 I've watched this many people at right around that age, you know, they decide in a way that they're old.

00:44:08.500 And they stop looking for further adventure.

00:44:11.780 And generally, that's a catastrophe.

00:44:13.880 But you, when you hit it, you thought you hadn't hit an apex.

00:44:17.360 You hadn't hit the apex that you wanted.

00:44:19.100 And then you found Bitcoin in 2020.

00:44:21.160 Yeah, well, you know, I felt like I'm not done yet.

00:44:23.900 Yeah, I'm not.

00:44:24.580 I'd invented 10 things, and that didn't work to invent something.

00:44:28.060 And then I had tried 10 different business strategies, and not small.

00:44:32.620 Like, I bought $300 million of my stock bag.

00:44:35.560 I was like, I'm going to spend hundreds of millions of dollars, and this is against a company that made $75 million a year, right?

00:44:41.280 So I spent huge amounts of money to try to fix it.

00:44:44.380 I literally rewired every single IT system, rebuilt everything, rethought every business process as the, you know, thinking, if I just work, if I work harder and focus more.

00:44:57.780 That's your Air Force dad.

00:44:59.060 Yeah, well, the thing is, the funny thing is, so that's the contradiction between conscientiousness and openness, right?

00:45:05.360 Because the conscientious types are managers and administrators, incrementalists.

00:45:09.840 Their solution to a problem would be, make what we're doing better.

00:45:13.760 But the fantasy people, the open people, think, no, no, like, no matter how efficiently we go down this road, it's not the right road.

00:45:21.640 There has to be something else.

00:45:22.960 There has to be a radical transformation.

00:45:25.580 Now we get to some very transformational things.

00:45:29.500 So Thomas Kuhn, in The Structure of Scientific Revolution, he introduces this idea of the paradigm shift.

00:45:35.180 And what he notes is that when a new paradigm comes along, it's embraced by the youth.

00:45:40.960 Yeah, all the people who have the old paradigm die.

00:45:44.840 And the only reason the adults ever embrace it is a war.

00:45:48.860 So, you know, and there's the famous phrase, science advances, one funeral at a time, right?

00:45:54.480 Yes, exactly, yes, yes.

00:45:54.980 So we're waiting for the old guard to die.

00:45:57.560 But the one time when it's possible for an old dog to learn new tricks, if you will, is when there's a war.

00:46:03.920 So when I first saw Bitcoin, it was 2013, I was fascinated by Apple, fascinated by Amazon, making a lot of money in my private investments.

00:46:14.860 That was my tech ride.

00:46:16.820 And I was working hard in my business.

00:46:19.400 And, you know, I had 20 things that I thought I was going to do to fix that business.

00:46:22.520 And I looked at Bitcoin, I was like, well, this is an interesting thing, you know, you know, some decentralized monetary system.

00:46:31.020 But, you know, right around then, the government shut down, there was an online betting site called Trade Sports.

00:46:38.400 And you could go and you could bet on the outcome of anything.

00:46:41.200 You could bet on the outcome of elections.

00:46:42.820 You could bet on sports.

00:46:44.240 You could bet on whether it's going to rain.

00:46:46.400 And it was kind of a cool idea.

00:46:48.800 The government shut it down because a lot of times when they're, you know, remember they shut down online gambling.

00:46:54.940 I was watching this in 2013.

00:46:56.900 I looked at Bitcoin and I tweeted very famously.

00:47:00.700 This is back when I tweeted, but no one cared.

00:47:02.840 So I aired my opinion.

00:47:04.000 And my opinion was, you know, Bitcoin's interesting, but I think it's going to go the way of online gambling.

00:47:09.820 Oh, you think it'd be shut down.

00:47:11.000 I thought it was going to be shut down.

00:47:12.140 I dismissed it.

00:47:12.860 Well, that was a likely, that was a likely outcome.

00:47:14.940 You know, and in my defense, right, a lot of good arguments why.

00:47:18.560 And it wasn't until 2014 that the IRS designated Bitcoin as property.

00:47:23.120 2013, it was unclear what it was going to be designated as.

00:47:27.640 But in any event, I did it.

00:47:29.120 I forgot about it for the next seven years.

00:47:31.440 I went off and we roll into March of 2020.

00:47:34.680 And in March of 2020, you know, this entire COVID thing developed, right?

00:47:39.840 So first, the world shut down and I'm not happy about it.

00:47:43.820 And I don't agree with it.

00:47:46.320 And the second thing that happens is we all go remote.

00:47:50.700 And the third thing that happens is, is all of the big tech companies, the Amazons, the Microsofts,

00:47:58.820 their number one disadvantage in recruiting away our employees is all of our employees would have to get up,

00:48:05.140 move across the country, take their kids out of their school, sell their house.

00:48:08.640 And their wife would probably have to get a new job or their husband have to get a new job. 1.00

00:48:13.640 And our advantage was we had a tight group and we all had lunch together and we met in the office and we had a face-to-face community.

00:48:23.760 So imagine how you feel when your best engineer is basically sitting at a house in Arlington or Vienna

00:48:29.800 and they can simply point their computer to a Microsoft server, change jobs, get a pay raise.

00:48:36.360 All these mega companies are going to steal all my employees.

00:48:40.080 And if they hire away all my engineers, then maybe my product's good now.

00:48:44.620 I have a better product, but I'm fighting against monster corporations with a better product,

00:48:51.500 but I'm not going to be better once they've hired my best engineers away and they're going to slurp them, you know, off.

00:49:00.260 So the company had one more ace.

00:49:02.480 The thing that we had in our back pocket that kept us, that we had relied on was we had $500 million in cash.

00:49:10.600 I have 2,000 hardworking employees.

00:49:12.600 I have an operating business that's a cash cow and I have $500 million in cash.

00:49:17.300 And that cash, you know, in the best period back in 2010, just before the great financial crisis or, you know, in that range,

00:49:26.860 interest rates got to 5%, 5.5%.

00:49:29.900 And, you know, maybe you can make $25 million a year on that.

00:49:34.400 And then interest rates got hammered down.

00:49:36.660 The central bankers kept printing money and they actually forced the interest rates down.

00:49:41.520 I didn't understand that they were manipulating the interest rates to make them lower during that decade.

00:49:47.440 I was a techie.

00:49:48.780 I would say I was very technically sophisticated and I was very good at running a business.

00:49:53.080 I was in the category of work very, very hard and know my business.

00:49:59.480 But what I didn't understand was money and I didn't understand banking and I didn't realize that as hard as I was working, they were taking it out the back door through inflation.

00:50:11.500 So the interest rates are maybe 2.5% as we roll into the year.

00:50:19.000 And here's what happened.

00:50:21.120 COVID lockdown takes place.

00:50:22.880 There's a massive panic.

00:50:24.000 All of these stocks crash because we're shutting down the world for the next two years.

00:50:28.000 Of course they should crash.

00:50:29.080 This is Dr. Jordan B. Peterson.

00:50:32.540 Watch Parenting.

00:50:33.780 Available exclusively on Daily Wire+.

00:50:36.080 We're dealing with misbehaviors with our son.

00:50:38.460 Our 13-year-old throws tantrums.

00:50:40.200 Our son turned to some substance abuse.

00:50:42.840 Go to dailywireplus.com today.

00:50:45.200 And, you know, the administration looks at it and, you know, the hue and cry comes from the mainstream media and from the leaders in business and from the politicians, lower the interest rates.

00:50:59.300 So Jerome Powell turns around and lowers the interest rates and lowers the interest rates and pretty soon we've got interest rates going from 250 basis points, like overnight rates, to zero.

00:51:09.700 Well, what happens to the stock market?

00:51:12.120 And this is the most perverse thing imaginable.

00:51:14.280 By the summer of 2020, all of the stocks have recovered.

00:51:19.280 It's like, oh, we had a crisis, but we solved it by taking the interest rate to zero.

00:51:23.920 We printed money.

00:51:25.780 And the stocks recover.

00:51:27.640 Amazon's recovered.

00:51:28.740 Apple's recovered.

00:51:29.800 Disney is trading higher.

00:51:32.320 People are basically taking Disney up to double and they're trading it based upon forward expectations of Disney streaming video revenue year 2024.

00:51:40.880 And I'm watching this and this was a, what happened in 2020, I would characterize as a bifurcation of Main Street and Wall Street.

00:51:51.680 What you saw was Main Street was destroyed by these policies, right?

00:51:59.180 Main Street got shut down, the private manufacturer, the person that works with their hands, the guy that shows up, the small business, the mid-sized business.

00:52:09.000 This is the Trump constituency, by the way.

00:52:11.400 These people get destroyed, right?

00:52:14.660 And they're wiped out.

00:52:15.660 Like, okay, it's illegal for you to open your gym.

00:52:19.200 You're going to jail if you go to work.

00:52:22.960 Okay?

00:52:23.220 And then Wall Street was, you got guys running $5 billion equity investment funds living in New York and the Hamptons.

00:52:33.740 They had the best year of their life, Jordan.

00:52:37.180 2020 was the best year in 30 years for these investors.

00:52:43.640 They're making, all you had to do was be holding the stocks or playing the market.

00:52:48.640 When interest rates go to zero, the P to E of any company that generates cash goes, it doubles, it triples.

00:52:57.120 The cap rates on real estate doubled.

00:52:59.720 So the perverse irony is you own a building, no one's in it, the value of the building doubles in four weeks.

00:53:08.440 You're owning a company, all the customers are being bankrupted, the value of the company doubles.

00:53:14.980 So what happened was the government printed money.

00:53:18.840 We had hyperinflation, not in consumer products, not in producer products.

00:53:25.040 We had hyperinflation in financial assets.

00:53:29.740 That hyperinflation meant that the stock market rallied, real estate rallied.

00:53:35.720 If you owned a portfolio of real estate or portfolio of stock, you got rich.

00:53:40.760 And the thought that I had, which is this investment manager sitting on his floatie at his house in the Hamptons is having the best year of his life.

00:53:49.300 And I'm having the worst year of my life.

00:53:53.340 He's not working at all.

00:53:56.300 He's literally not working at all.

00:53:58.140 He's watching television, getting rich, taking high fives.

00:54:01.620 And I'm watching all these people I care about, wiped out, destroyed, jailed, abused, bankrupted, fired, stripped of all hope.

00:54:13.680 And then I have this $500 million asset and the interest rates go to zero.

00:54:17.760 And Jerome Powell goes on television and he gives a speech.

00:54:22.100 And these are his words.

00:54:23.800 We've taken interest rates to zero.

00:54:26.220 I'm not even thinking about thinking about raising interest rates to the year 2024.

00:54:32.460 But my observation was I had an asset.

00:54:36.900 It's now non-performing.

00:54:38.180 You know, my finance is non-performing.

00:54:42.600 My equity is dead in the water.

00:54:44.800 My chances of turning this around are zero because after doing 100 things for a decade, they're zero.

00:54:51.560 My human capital is about to be stripped away.

00:54:55.140 And so I have a choice between a fast death or a slow death.

00:55:00.300 And so it was time to make a decision to choose a side. 0.99

00:55:05.500 And I felt like if I give the money back to the shareholders, conventional wisdom is, you know, give the capital back to the shareholders because you idiot, you're getting 0% interest. 0.95

00:55:18.300 And us brilliant investors are getting, you know, S&P's up 25% this year. 0.94

00:55:23.200 Okay, so I could just give the money away.

00:55:25.400 Well, I took 30 years to accumulate the money.

00:55:27.660 Why should I give up 30 years of my life?

00:55:31.940 2,000 people did a million things right and I'm just going to give it up and slink into my hole and disappear from history.

00:55:39.680 And I thought that's not very appealing.

00:55:42.320 Well, I can keep the money at 0% interest, but I'm boiling, right?

00:55:48.340 The environment is boiling my employees off and it's a slow death, not a fast death, but it's a slow certain death.

00:55:58.420 Or I can fight, right?

00:56:01.200 And so paradigm shift, war.

00:56:04.640 It wasn't the war on COVID.

00:56:06.280 It was the war on currency combined with the war on COVID.

00:56:09.740 And in that circumstance, I'm standing there and I'm thinking, I wasn't put on the earth to lose like this.

00:56:17.580 Like, this is not how I'm going to go out.

00:56:20.600 And so I started looking for a solution.

00:56:22.820 And I said, well, it's pretty obvious operating companies are discriminated against.

00:56:27.460 People that do things are being discriminated against.

00:56:30.340 I want to be one of those guys that owns things.

00:56:33.780 But I don't want to own sovereign debt.

00:56:36.380 If I'm owning the T-bill, the government's just told me T-bills are worthless.

00:56:40.080 I better go find something else to own.

00:56:42.160 So I started thinking, well, what can I buy?

00:56:44.820 Am I going to buy art?

00:56:45.760 Am I going to buy a building?

00:56:47.160 How much time were you spending thinking about this at this point?

00:56:50.180 Like, is this like 16 hours a day?

00:56:52.480 Well, you know, so I was there.

00:56:54.500 And I thought, well, what can you buy?

00:56:57.140 It's like, can I buy real estate?

00:56:58.640 And the answer is, well, real estate just doubled in value over a few weeks because Jerome jacked the price of interest to zero.

00:57:04.680 So that's not good.

00:57:06.060 Can I buy a portfolio of stocks?

00:57:08.260 They just went to an all-time high because we jacked the interest to zero.

00:57:11.760 That's no good.

00:57:13.480 Can I buy a portfolio of collectible art?

00:57:16.780 Oh, yeah.

00:57:17.220 Good luck with, like, how do I find $500 million of Picassos and Monets attractively priced?

00:57:23.740 That's not, and by the way, we're now, we're struggling with, you're looking at a guy after 30 years in business and an engineering education, reasonably educated, but not a classically trained economist, not an Austrian economist.

00:57:39.840 I am struggling with the time-honored question, what is money?

00:57:43.500 I need a liquid fungible asset which will store my economic energy for an indefinite period of time.

00:57:53.980 That is, and so what is money?

00:57:55.620 I'm looking for money, and, you know, eventually I get to gold, and I'm thinking, should I buy $500 million of gold?

00:58:03.420 And, you know, my attorney, he looks at me and goes, you know, Mike, I remember when gold was $800 an ounce back in the 70s or the 80s, and then it went nowhere for 20 years, and you should be careful about that.

00:58:14.460 And it might not, it's kind of dead money, and then I, so I'm sitting at this table, and I'm watching the world burn while all the Wall Street guys get rich and the talking heads on CNBC say what they're saying.

00:58:29.040 And I'm looking out at Miami Beach, and I'm looking at Collins Avenue, and every car is not, there's no cars on the road except for an Amazon truck, which just makes me angry.

00:58:40.440 One Amazon truck going by.

00:58:42.180 And I've got 82 birds in my backyard, and they're hunting for worms because all the restaurants in Miami Beach shut down, so whatever, whoever was feeding them is not feeding them.

00:58:52.680 So I'm watching us strip the world back to the Stone Age, right, a devolution.

00:59:00.760 And I'm staring over my pool, and I look at Eric, and I say, Eric, tell me about that Bitcoin thing again.

00:59:08.640 And Eric was a crypto entrepreneur, and he had been investing in digital assets and crypto, and I had dismissed him two years earlier in 2018.

00:59:17.780 I was like, oh, that's probably just a scam coin that's going to collapse.

00:59:22.920 But, you know, everybody finds this when you, you know, if I tell you you got six months to live, you would go looking for a cure.

00:59:31.600 And if I told you every asset that you hold in Canada is going to be seized from you within six months.

00:59:37.900 That could happen.

00:59:38.980 You would think about how you're going to get your money out of Canada.

00:59:42.020 Yeah, we already thought about that.

00:59:43.920 You know, and like, and the point is, you didn't think about it for the 20 years of your career when it just wasn't the priority.

00:59:49.960 And then when you're faced with a crisis, a challenge, you start thinking.

00:59:56.860 So I said, Eric, tell me about that Bitcoin thing again.

01:00:00.520 And he started describing it, and I started thinking, how can I get more information on that?

01:00:05.000 And he said, well, you can go and watch this podcast, and you can learn anything on YouTube, right?

01:00:09.720 You can learn it if you want to learn, right?

01:00:12.220 I learned a lot from you on YouTube.

01:00:13.740 I learned a lot about diets and ketogenic diets and the carnivore diet, and I learned a lot about food politics, and I learned a lot about psychology, and also I started studying up on crypto, and I started speed watching and intensely watching, and I went and I saw the work of Andreas Antonopoulos, and I saw the podcast of the early crypto developers, and I started looking for the books, and I read the Bitcoin standard,

01:00:42.940 and I got, quote-unquote, dragged down the rabbit hole.

01:00:47.560 And I came to the opinion that the solution was a non-sovereign store value bearer instrument of which gold had been the best of those.

01:01:01.900 But then I applied my engineering mind, and I thought the way Heinlein would have thought about it, and I said, okay, over a long enough timeline, what's the mortality rate, okay?

01:01:17.900 Short, you know, people that think short time think about weeks or months or years.

01:01:22.700 I thought, well, let's try 100 years.

01:01:24.660 I looked over 100 years, and I realized that at a 2% inflation rate, and that's the rate at which we mine more gold, at a 2% inflation rate, that means the half-life of gold is about 36 years, which means that the value of the gold you hold is cut in half three times over 100 years, which means that if you started with 100, you ended up with 12.5% of the money you started with over 100 years.

01:01:48.900 Explain that in a little more detail.

01:01:51.160 How does that happen with gold?

01:01:52.360 Say you owned 100% of the supply of gold this year.

01:01:57.700 The gold miners produce 2% more gold every year.

01:02:00.720 It compounds, which means it takes 36 years before they've doubled the supply of gold.

01:02:04.660 Got it, got it.

01:02:05.660 You own half the supply of gold in 30 years.

01:02:08.320 You own a quarter of the supply of gold in 70 years.

01:02:11.740 Right, so the relative scarcity decreases as you hold it.

01:02:14.640 It's inflating.

01:02:16.020 Okay, okay, got it.

01:02:17.180 And so gold, although it's quote-unquote sound money, and in the Austrian economy school of thought it was the best money, it's not perfect money.

01:02:26.520 The reason that you had stable prices throughout the gold era, you know, the gold standard age, is gold was inflating about 2% a year, and the economy is growing 2% a year.

01:02:41.120 And so if the output of goods and services grow at the rate of the money supply, the price is constant.

01:02:50.360 Okay.

01:02:50.800 Okay?

01:02:51.240 If the money supply is fixed and the economy grew 2% a year, prices will fall 2% every year.

01:03:00.640 Right.

01:03:01.160 Right?

01:03:01.600 And by the way, in technology, when you look at technical products where the company grows productivity faster than 2%, in a gold world, the price would fall very fast.

01:03:17.220 Okay, so what's going on is there's a race between productivity and money supply, and if I can drive the price of the product down 20% a year, I can inflate the amount of money 10% a year, and the price of that thing will fall 10%.

01:03:34.740 But if I didn't inflate the price of money, it would fall 20%, you see.

01:03:38.740 So I looked at gold, I said, I need something like gold, but the problem with gold is its conventional asset had kind of recovered a bit, and I thought, it's not perfect, it's the best idea in the 19th century, and it's not quite working in the 20th century.

01:03:59.720 And so I started thinking, what if someone designed digital gold?

01:04:05.900 What if I, you know, now we go back to the engineer saying, can you perfect gold?

01:04:12.760 And the engineering idea, how do you fix gold and make it perfect?

01:04:16.260 Well, you make it impossible to mine anymore.

01:04:19.500 What if, and then we get into the fantasy thing.

01:04:22.460 What if, you know, what if, if God came down, and there's a bit of theology here, if you allow me, if God came down and wanted to fix gold, it's impossible to make any more gold, right?

01:04:37.480 How can you make it better?

01:04:39.340 It'd be really great if it was weightless.

01:04:41.900 How do you make it better?

01:04:43.440 I'm going to cast a spell and allow you to teleport the gold anywhere on earth.

01:04:47.580 If God said, you know, I'm going to implement a system of 21 million gold coins, but we're going to call them God coins, and I'm going to keep them in a bank in heaven, and I'm going to let you transfer, you know, any amount.

01:05:01.300 I'm going to let you subdivide it by 100 million, and we'll call them Satoshis. 0.93

01:05:06.060 And I will let you transfer peer-to-peer and pay anybody, anytime, instantly at the speed of light, and I will keep track of the ledger of who, you know, who owes what.

01:05:15.320 In an incorruptible way.

01:05:16.540 I will never cheat you, and I will do it forever for free, you know?

01:05:23.880 If God offered you that kind of divine bank, and you were sitting in Argentina when the currency was collapsing to zero, the Argentine peso went from a dollar to the peso to a thousand pesos to the dollar over 20 years, and it did it five times over the century.

01:05:44.380 Right, right, right.

01:05:45.240 Or if you saw it happen in Russia, where their currency collapsed, the currency collapsed in Brazil, not 25 years ago, currency collapsed in Germany a few times.

01:05:56.120 If you read the history of civilization, read Durant, Durant's talking about currencies collapsing in Russia in the 16th century.

01:06:04.120 Yeah, yeah.

01:06:04.580 You know?

01:06:05.000 The Roman emperors were flipping the coins.

01:06:05.960 It's a substantial lifetime risk.

01:06:07.860 Pretty much, on average, the currency collapses every 30 to 40 years in most political jurisdictions for all of human history.

01:06:18.120 And if you get a currency to last for a—by the way, the best currency of the last hundred years is the dollar.

01:06:24.280 The U.S. won every war of the 20th century.

01:06:26.760 My house in Miami Beach traded for $100,000 in 1930.

01:06:32.480 It would trade for $100 million a hundred years later.

01:06:37.140 99.9% collapse in the value of the dollar.

01:06:43.740 The winning currency of the 20th century, the best currency in the world, lost 99.9% of its value.

01:06:52.020 That's a winner.

01:06:54.000 Right.

01:06:54.260 If you do the math fast, just for the viewers, it works out to 7% a year.

01:06:59.060 7%.

01:06:59.580 Inflation over—

01:07:00.860 In the best currency.

01:07:02.120 And how do you calculate the inflation—like, the inflation calculations have always okayed to me because—

01:07:07.240 The easy thing to do is take the number, divide it into 72, and that means that you're halving or you're doubling every 10 years.

01:07:13.820 7 into 70 is a 10-year half-life.

01:07:17.840 So the issue is, what's the half-life of your money?

01:07:20.980 Against what basket of goods?

01:07:23.260 Okay, and that is the trick, right?

01:07:24.880 That's for sure.

01:07:25.660 That's the bloody trick.

01:07:26.560 Because what's the yardstick?

01:07:28.040 The government wants to calculate inflation by constructing a market basket of consumer goods.

01:07:35.960 Yes.

01:07:37.520 And then the trick is they just keep changing what's in the basket.

01:07:41.840 So they call it a hedonic adjustment.

01:07:44.040 Yeah, exactly.

01:07:45.080 I create a basket of—by the way, I create a basket of goods that are not likely to go up in price as I print money, and I put that into the basket.

01:07:53.720 You know, it's like if I said—

01:07:56.380 So it's inflation of the inflation standard.

01:07:58.540 Grass-fed—this pops up in organic diet or, you know, carnivore diet or diet in general, where people note that if everybody ate meat and if it was all organic, then we probably couldn't support the 8 billion people on the planet.

01:08:14.640 We could support 800 million people, so it behooves us to convince everybody that they should eat biscuit.

01:08:20.780 And that's what the Egyptians figured out 5,000 years ago, that, you know, if you grow grain and you feed the population biscuit, you can raise an army, and it's very cheap. 0.61

01:08:32.900 How does the army travel?

01:08:34.140 They travel on biscuit.

01:08:36.060 So, you know, is this good for 40, 50 years?

01:08:39.040 No, your teeth are going to fall out.

01:08:40.740 It's awful for your health. 0.89

01:08:41.880 You're going to die 20 years early.

01:08:43.680 But it doesn't matter when the people fighting the war are between the ages 15 and 30.

01:08:47.880 Like, you won't kill yourself with an awful diet fast before the age 25, right?

01:08:55.000 You're going to—by the way, in a war, you're going to die from influenza, right?

01:08:59.780 You're going to die from the pathogens first if the bullet doesn't get you.

01:09:05.580 Second, you're not going to die from malnutrition except that I can't give you a cow, so I can only give you the biscuit.

01:09:13.400 So, at the end of the day, the government's view toward inflation is it's in their best interest to construct a single number.

01:09:25.020 There's the old phrase, you can't tell people what to think, but you can tell them what to think about, right?

01:09:32.040 And so, I want you to think that inflation is CPI.

01:09:36.340 It's not.

01:09:37.020 Yeah, yeah.

01:09:37.540 I want you to think that 2% is acceptable.

01:09:40.560 And you estimated that it's 7%.

01:09:42.520 Now, this is where you've got to come back to being an engineer.

01:09:46.820 When you look out at a bay and the wind is blowing on the bay and you see all the white caps and the water is moving,

01:09:53.280 and I ask you in one sentence to describe the motion of the bay.

01:09:58.580 A semantic representation is an imperfect way to describe fluid flow.

01:10:07.220 You know, watch, you know, water, and it's spinning like this, going down a drain.

01:10:12.300 How do you describe fluid flow?

01:10:13.880 Well, the answer is every component of the water has a different velocity.

01:10:18.780 It's a different vector, right?

01:10:20.160 It's, they're all moving like, and it's dynamic, and now blow some bubbles in it.

01:10:25.120 Describe that with words.

01:10:27.220 Give me the number.

01:10:28.540 There's no number.

01:10:29.680 That's a field.

01:10:30.620 It's a vector, right?

01:10:31.720 You know, so my background at MIT, I studied thermodynamics.

01:10:35.300 I studied very hard math.

01:10:37.680 I mean, the math you use to design a jet engine, the math you use to design, you know, anything that goes supersonic through the air.

01:10:46.040 The math is complicated.

01:10:47.860 You know, you need vector calculus.

01:10:50.900 You need nonlinear dynamic systems of equations.

01:10:54.140 You need field theory.

01:10:55.960 What's the gravitational field of the Earth?

01:10:58.000 Tell me that in like a number.

01:10:59.380 Well, you know, like it's different everywhere.

01:11:02.780 It's changing, but that's too complicated, right, for the rank and file.

01:11:07.680 So what is inflation?

01:11:09.500 Inflation is a vector.

01:11:11.140 There's a different inflation rate for every single thing in this room, and it would be a different rate for this room if I put this room in Toronto, right?

01:11:19.520 And it's changing every week.

01:11:21.240 It's changing every minute.

01:11:22.320 So the inflation rate of there's 100,000 things you might want, and the rate of inflation on all of those 100,000 things is changing minute by minute, and it's different in Hong Kong than it is in China.

01:11:35.440 It's like, okay, there's a war going on.

01:11:37.700 Guess what?

01:11:38.260 We shut down the economy.

01:11:39.820 There's a war.

01:11:40.620 World War I, World War II, there's no inflation.

01:11:42.820 Why?

01:11:43.440 Because it's illegal to buy anything, okay?

01:11:45.840 There was no inflation in 2020 when we printed money, except what are you allowed to buy when you're under home arrest?

01:11:52.780 You can buy stocks.

01:11:54.760 The inflation was in the stocks.

01:11:57.120 The inflation was in Amazon stock in March of 2020.

01:12:01.580 It wasn't in restaurant bills because it was illegal to go to the restaurant.

01:12:05.460 It wasn't in the cruise lines.

01:12:07.180 It wasn't in the airlines.

01:12:09.040 And so I want you to think, oh, there's 2% inflation.

01:12:13.320 It's okay.

01:12:13.760 So let me abstract back a bit here.

01:12:15.880 So just, okay.

01:12:16.920 So we laid the groundwork for why this Bitcoin revelation hit you hard, and then you laid out an economic argument,

01:12:27.360 which was that your assessment of the situation was that the standard story with regards to the reliability of currency

01:12:36.980 and the inflation rate is radically off kilter.

01:12:41.340 The most successful currency hasn't been particularly successful at all, and the inflation rate that's reasonably estimated is much higher than the official inflation rate,

01:12:53.460 which means that your storehouse of value, whatever it is, is going to be deflated terribly during your lifetime.

01:13:01.040 Okay, now you come across Bitcoin, and you talked about it as if it was, you know, this abstracted gold with the properties that you already described.

01:13:10.040 So it has the rarity of gold.

01:13:11.680 Let me ask you a couple of questions about that because some people have actually asked me about this.

01:13:15.320 Is quantum computation going to break the Bitcoin passwords?

01:13:20.280 Like, I can imagine, are there two things that would take it out?

01:13:23.420 What about a solar flare that wipes out the electronics?

01:13:26.840 Does that wipe out Bitcoin?

01:13:28.260 What about quantum computation and cracking the passwords?

01:13:31.480 Yeah, so, I mean, the short answer is no, and this is the most anti-fragile, indestructible thing in the world.

01:13:41.860 Because of its distribution.

01:13:44.120 The longer answer is Bitcoin is an ideology that is manifested as a protocol

01:13:55.380 that has materialized as a network across which an asset runs.

01:14:02.660 Okay, okay.

01:14:03.500 So, is the most real aspect of the ideology?

01:14:07.040 Let me say, it's like, is quantum computing, if it hacks your email account, going to destroy the English language?

01:14:13.220 You see, is quantum computing going to actually break base 10 math?

01:14:18.060 Base 10 math is a protocol.

01:14:19.800 If you have a computer program and it becomes insecure, you have to upgrade the program.

01:14:24.860 But the reason that we use numbers 1 through 9 or 0 through 9 is because over the course of about 900 years,

01:14:33.080 Western civilization realized that we could actually calculate things more efficiently with that protocol.

01:14:39.900 But it's not the only protocol, Jordan.

01:14:42.480 There's base 2.

01:14:43.520 There's base, you know, 16, right?

01:14:45.400 Why do we have 12 months in the year?

01:14:48.120 Why do we have 360 degrees?

01:14:51.100 Because the Babylonians had other systems of math.

01:14:53.820 We have a system of math.

01:14:55.840 There's other languages.

01:14:57.160 Why do we use English?

01:14:58.700 Well, we all decided, the scientists, the economists, Western civilization,

01:15:02.980 there's a lot of reasons why.

01:15:04.640 We could trace it to geography of England and the English Channel and a bunch of stuff.

01:15:09.120 We don't have time for that.

01:15:10.360 It's a protocol.

01:15:11.640 Bitcoin, it's a protocol.

01:15:13.820 What kind of protocol?

01:15:15.420 It's a monetary protocol.

01:15:17.900 Why?

01:15:18.660 What's it informed by?

01:15:20.100 An ideology.

01:15:21.120 What is the ideology?

01:15:22.920 Sovereignty?

01:15:24.100 Truth?

01:15:26.260 Sound?

01:15:27.620 Thermodynamic soundness?

01:15:29.520 Why thermodynamic soundness?

01:15:32.860 Because 1 plus 1 has to equal 2.

01:15:36.860 And if 1 plus 1 equals 3 some days or 1 and a half other days, you can't solve any problem.

01:15:47.100 In engineering, in aeronautical engineering, there's a phrase called adiabatic, an adiabatic system.

01:15:54.840 An adiabatic system means a closed system.

01:15:58.140 And so whenever you're building anything, the problem always starts with, assume an adiabatic system.

01:16:06.340 Right, right.

01:16:07.000 If I introduce this heat source, if I fly through, what they're saying is, assuming it's a closed energy system,

01:16:15.840 there's no external factor, right?

01:16:19.920 Assuming an adiabatic system, how long will our podcast go?

01:16:24.000 About two and a half hours.

01:16:24.860 If Godzilla steps on your studio in the next 30 seconds, the podcast will go shorter because of new energy.

01:16:33.060 So when Godzilla shows up to the playground, all bets are off.

01:16:36.900 Right, right, right.

01:16:37.740 So if I have a bathtub or I have a swimming pool with a leak in it, you can't jump into the swimming pool without risking breaking your neck, right?

01:16:49.840 If I have a leak in a fuselage of an airplane, we can't fly.

01:16:53.740 Explosive decompression.

01:16:54.900 If you're an engineer and you're engineering airplanes or internal combustion engines or spaceships, you have to do the engineering properly.

01:17:06.960 And that includes make it a closed system or a thermodynamically sound system.

01:17:12.720 What is not, there's leakage, right?

01:17:15.100 There's either a friction cost or there's a leakage cost and you have to account for the leakage in a replenishment if you want the machine to work.

01:17:23.440 The machine will not work if you don't actually solve the problem.

01:17:27.340 So when we come to this idea of the ideology of Bitcoin, Bitcoin is based upon engineering principles, mathematical soundness, consistency, integrity, truth, right?

01:17:47.600 And those are all the principles of the—

01:17:49.680 And that's the incorruptibility of the ledger.

01:17:52.120 Those are the principles of libertarians and Austrian economists, right?

01:17:56.360 Yeah.

01:17:56.520 And those are also—that is someone that believes that we should be governed by natural law, right?

01:18:04.340 So if we go back to John Locke and we go back to natural rights and natural law, right, nature governs, right?

01:18:13.260 Whether nature—nature gives you gravity.

01:18:15.860 If you tip the glass there, it's falling to the floor.

01:18:19.100 You don't get to break the rule.

01:18:20.600 That is just the rule.

01:18:21.760 You have to comport yourself accordingly knowing that there's a gravitational field in this.

01:18:26.500 You can't wish it away, right?

01:18:30.220 A lawyer would like to—if the politicians could pass a law, they'd pass a law suspending gravity rights, you know, for the time being in certain places.

01:18:39.920 But you can't—as Elon Musk says, you don't get to break the laws of physics, right?

01:18:44.480 So Bitcoin starts with this ideology of the engineers, the scientists, the mathematicians, right?

01:18:53.260 And we create a protocol.

01:18:56.260 The protocol is, what if a bunch of smart people in the world—what if they wanted to keep their money?

01:19:05.240 What if—or in this case, I gave you the example of the divine bank that God gave you, except if God's not going to set up divine bank and solve all your monetary problem, what's the second best idea?

01:19:20.020 The second best idea would be a smart engineer takes advantage of semiconductors, the internet, and cryptography, and you create a system where 21 million bitcoins circulate, subdividable by 100 million satoshis each.

01:19:37.900 That system is protected by public and private key cryptography, and should you actually have possession of the private key, you have control over your coins.

01:19:51.680 That means that you've created a bank in cyberspace.

01:19:55.580 Now imagine a hundred rich families.

01:19:59.040 They live all over the world.

01:20:00.920 They all get together one day, and they say, well, you know, God won't solve our problems for us, so we've got to solve our problems ourselves.

01:20:08.120 Let's go ahead and build out this Bitcoin network.

01:20:12.220 And this is a bank, and we're all going to be able to deposit our money in this bank.

01:20:17.980 Why?

01:20:18.960 We don't trust the government.

01:20:20.900 We don't trust a local bank.

01:20:22.880 We don't trust each other.

01:20:25.360 We don't—you know, and we want the bank to last for a thousand years.

01:20:29.860 Okay.

01:20:31.140 Who's going to run the software?

01:20:33.640 Well, the answer is everybody's going to run the software because nobody's— 1.00

01:20:37.840 I trust you, you trust me, but your idiot great-grandson I might not trust, or maybe my idiot great-grandson might not get along with your idiot great-grandson. 1.00

01:20:49.700 So, you know, and this is where history of science comes in. 1.00

01:20:54.180 You know how we study longitude?

01:20:56.500 Or longitude was the breakthrough that gave the British control of the seas.

01:21:01.080 And the longitude prize was instantiated by the parliament.

01:21:08.120 They offered 10,000 pounds to whoever could figure out how to calculate longitude on the ocean.

01:21:12.420 Every physics professor at Cambridge and Oxford tried it.

01:21:18.440 They all failed.

01:21:19.140 Every mathematician failed.

01:21:20.840 They could not figure it out.

01:21:22.980 A clockmaker by the name of John Harrison makes clocks.

01:21:28.580 He solved the problem.

01:21:29.800 Just like the Wright brothers figured out how to fly without the aeronautical engineering degree, the bicycle makers figured out how to fly.

01:21:35.780 The clockmaker figured out how to solve the problem.

01:21:37.960 He created a perfect clock.

01:21:39.060 It gave you two clocks.

01:21:41.220 And when you get in the British ship, you sail past Greenwich, which is where the Royal Observatory is.

01:21:45.980 You set your first clock to Royal Observatory time, Greenwich mean time.

01:21:50.660 That's where we got universal time.

01:21:52.760 The second clock is set to local time.

01:21:55.820 The ship sails to the West Indies.

01:21:58.620 You look up.

01:21:59.480 You figure out what high noon is.

01:22:01.180 You compare the second clock to the first clock.

01:22:03.520 You subtract two hours.

01:22:05.900 You multiply by 15 degrees.

01:22:07.380 You've got your longitude on the ocean.

01:22:10.440 Now, what's the breakthrough?

01:22:12.740 No one could make a perfect clock.

01:22:14.520 How do I create a perfect clock?

01:22:16.620 Because the metal in the clock expands and contracts.

01:22:21.640 John Harrison created a perfect machine from imperfect materials.

01:22:25.340 What he realized is, yes, the metal does expand and contract.

01:22:30.340 We can't stop it from expanding and contracting with humidity and with temperature.

01:22:35.060 What we can do is take two identical pieces of metal and put them in tension with each other.

01:22:41.020 So, this one is contracting the same amount that one is contracting.

01:22:45.000 They actually compensate, neutralize each other, and you end up with a perfect machine.

01:22:52.480 That is brilliant engineering.

01:22:54.660 Not through math.

01:22:56.600 Not through science.

01:22:57.860 But through practical engineering, Harrison creates a perfect clock.

01:23:03.580 The clock inadvertently gives us longitude.

01:23:06.540 Longitude gives the British Navy command of the seas.

01:23:09.160 And we're speaking English right now.

01:23:11.360 Right.

01:23:11.840 Got it.

01:23:12.640 Satoshi has to create a perfect monetary network.

01:23:17.680 And you've got to create it with imperfect components.

01:23:20.320 The imperfect components are the people.

01:23:22.940 The governments, the actors, the computers.

01:23:26.120 They're going to fail.

01:23:27.680 What happens if the power goes out?

01:23:29.980 What happens if that gets hacked?

01:23:32.520 The answer is, I create a machine that's running the protocol.

01:23:37.700 This one's running the protocol.

01:23:39.660 This one's running the protocol.

01:23:41.140 They're all running at the same time.

01:23:43.760 They're all hashing in order to guess the answer that's required to build the next block.

01:23:51.220 One out of a million of these things will win.

01:23:54.600 The entire thing is a fault-tolerant, shared-nothing, mission-critical, nuclear-hardened system.

01:24:03.560 Because what is it?

01:24:05.620 It's a virus.

01:24:07.420 Right?

01:24:07.500 It's an internet virus, a monetary virus, an ideological virus.

01:24:13.620 And everyone that chooses to run the node is feeding the network, you know, participating in the network.

01:24:20.520 All of the miners are defending the network.

01:24:26.640 People will—but once you understand it like that, then you realize that what's going on with this, with Bitcoin, is a bunch of people with the same ideology—we just all like to keep our money—

01:24:38.860 Mm-hmm, running a protocol, have instantiated that protocol in software that runs on mobile phones, that runs on computers.

01:24:47.840 We should also say, you know, it's not exactly that you want to keep your money.

01:24:51.460 It's you want to keep the fruits of your labor, and you want to keep your reputation.

01:24:55.260 And you want to do that over the longest amount of time possible, with the least amount of parasitism and corruption manageable.

01:25:03.340 And so, you know, because when you say you want to keep your money, it's got that kind of evil capitalist ring to it.

01:25:08.760 But, you know, if you spent your entire lifetime building up a storehouse of value, and you did that in a way that also brought prosperity to other people,

01:25:16.520 it's only natural justice of the sort that keeps hardworking people working and everything abundant in order to not allow people like that to be parasitized and taken out.

01:25:27.200 If you would indulge me, this is where we should probably veer off into libertarian politics and philosophy.

01:25:33.140 Let's wait. Let's do that on the Daily Wire side, because we should bring this part to a close.

01:25:38.400 Well, you had a good landing there with regards to, you know, your summary of how Bitcoin worked,

01:25:43.740 and all the things that we talked to culminated into that.

01:25:46.860 And on the Daily Wire side, we'll talk about the relevance of this for young people.

01:25:51.140 We'll talk about what you think is going to transpire in the next five to ten years on the Bitcoin side,

01:25:56.600 and we'll flesh out the libertarian discussion.

01:25:58.780 But that's an excellent place to stop.

01:26:00.840 Thank you for your time.

01:26:01.440 Thank you very much for the thorough investigation and explanation.

01:26:05.900 And so we're going to continue on this road on the Daily Wire side for all of you watching and listening.

01:26:12.820 And so you might feel inclined to attend to that so that we can delve into this.

01:26:18.040 I want to hear Michael's thoughts on, well, what's going to happen in the next five years

01:26:24.900 and what you should do if you're young, concretely speaking.

01:26:28.180 And so join us there.

01:26:29.320 Thank you, everyone here today in Scottsdale, film crew, and thank you very much for showing up and talking.

01:26:35.840 It's been a real pleasure and very informative, that's for sure.

01:26:39.260 So thanks, everybody.

01:26:40.540 We'll see you on the Daily Wire side.

01:26:41.820 The Daily Wire side.

01:26:52.940 Radio ska play.

01:26:53.860 The Daily Wire.

01:26:54.560 The Daily Wire.

01:26:55.060 The Daily Wire.

01:26:56.000 THE Daily Wire.

01:26:56.520 The Daily Wire.

01:26:56.660 You.

01:26:56.880 The Daily Wire.

01:26:59.580 The Daily Wire.

01:26:59.700 The Daily Wire.

01:27:01.220 You.

01:27:01.560 The Daily Wire.

01:27:02.360 The Daily Wire.

01:27:02.660 The Daily Wire.

01:27:03.640 The Daily Wire.

01:27:05.160 The Daily Wire.

01:27:06.580 The Daily Wire.

01:27:07.580 The Daily Wire.

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01:27:09.200 The Daily Wire.

01:27:09.760 The Daily Wire.

The Jordan B. Peterson Podcast - June 09, 2025

554. What One Billionaire Knows About Outlasting a Dollar Collapse ｜ Michael Saylor

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