← Tom Bilyeu's Impact Theory
Tom Bilyeu's Impact Theory
Michael Saylor on The Bitcoin Revolution: Why Bitcoin at $13 Million Is Inevitable and Will Dominate the Global Economy | PT 2
00:51:46
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- [00:00]
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- [01:00]
Tom Bilyeu
I'm Tom Bilyeu and this is Impact Theory. Let's dive right back in to part two with Michael Saylor. Do you think that as quantum computing rises up because recently the Google made the Willow announcement that it's able to run computation so much faster, will Bitcoin simply adopt a new security protocol? What will that look like?
- [01:26]
Michael Saylor
I think that that was a marketing announcement by Google. I mean, there doesn't seem to be any single practical application for the benchmark. So they created a quantum benchmark. They announced that they perform well on the quantum benchmark, but there's not any useful application for it anywhere in the world. Right. That's, that's the first observation. So you might be getting concerned, but no one's come up with anything they can do with it. So the second, My second observation is if you create a powerful computer, the very obvious thing you could do with it to make money is to mine Bitcoin with it. And so the first place to use a powerful computer is to mine Bitcoin, which increases the security of the network. My third observation is if you really come up with a computer powerful enough to crack cryptography, the first thing you're going to crack is Google itself. Right? Do you think that Google would sell a computer that destroys its own network? Which is kind of ironic to me. Right? That's also the acid test. If you're going to crack the cryptography, you, you would actually crack the networks that Google, Apple, Amazon, Microsoft run, and then you would crack every single government network and every banking network. And if you could crack all those networks, you wouldn't need to steal the Bitcoin. 99.9% of the stuff in the world isn't in the bitcoin network. So if you hype and I don't think Google is selling such a device right, I don't know what'll happen. But the entire thing is a little bit of a parody to me. If we just.
- [03:13]
Tom Bilyeu
Because you never think it's going to happen or because bitcoin is nimble enough that when something like that happens they'd be able to adopt a new security protocol.
- [03:21]
Michael Saylor
What I'm saying is all the existing news is just climatology alarmism where someone is saying I invented a hyper powerful computer and then it's being used by an entrepreneur to market their new quantum token. Like I mean the number one use of it. Well that's why we're talking about it, right? The number one use of this is to actually market a yo yo token that some someone has that has a quantum resistant algorithm and they're hoping you think that the quantum threat is a threat. I'm just going to indulge the fantasy for a second. Let's say sometime in the next 30 or 40 years or whenever it happens, the someone comes up with a powerful computer which we will call a quantum computer which actually does something useful. And the useful thing is it craps cracks cryptography, then I would acknowledge it's a problem for the human race. It's a, it's a problem for every government, every company, every individual. Because if I really can crack cryptography, that means everything that's digital in your life is now at risk. That means I can launch, you know, nuclear weapons. That means I can take over the government. That means I can have the Interpol kick your door in and shoot you with a fake arrest warrant, right? So the point really is all of civilization breaks down into chaos. If Dr. Evil gets the hypothetical quantum computer that works with that really does work. Let's imagine that threat. What's my response? The response is obvious, which is every computer scientist on the planet has a vested interest in upgrading the cryptography that we use to secure our networks and our systems. We will do that. If the quantum computer, the quantum chip that Google offered actually threatened cryptography, Google's own engineers would be releasing a set of upgrades to their own encryption and they'd be huddled with Microsoft engineers right now because Google and Microsoft would be the two biggest losers. And if they didn't, Zuckerberg would be doing it at meta. So ultimately it's not a bitcoin specific thing. It's a human race specific thing. And let's just reframe it as what happens if we come up with a computer that can break our current Shaw 256, you know, techniques or our current cryptography. And the answer is we're going to upgrade it. We'll upgrade the software. Bitcoin is a. Bitcoin is at its core, it's a protocol. Like English, like math. If I come up with a way to hack your phone and send a message from you to the government saying you're going to topple the government, I have corrupted your communication technique. But you're not going to abandon English, are you? Right. And if I come up with a protocol to basically put false numbers into your database, that doesn't mean you're going to abandon base 10 math. I mean, Bitcoin is a bunch of honest people, smart money. They all decided that they were going to store their money in a bank in cyberspace that they trust. The bank is getting upgraded all the time. The software is upgraded every year, the hardware is upgraded every year. And so the implementation of the protocol will change over time. And if there is a quantum threat, we will react to the quantum threat. Just like if you were to go to the Microsoft shareholder meeting and said, hey, I heard Google just released the quantum chip and it looks like it's going to crack your cryptography. And therefore, should I sell my Microsoft stock and buy Quantum Yoyo stock, I bet you Satya Nadella would say, no, don't buy Quantum Yoyo stock because it's an overdone fear. And Quantum yoyo doesn't actually have the support of every company on earth and doesn't have a trillion, multi trillion dollar market cap. And it doesn't have all of our engineers and everybody on earth hasn't decided to standardize their office products on quantum yo yo. Whatever stock they're using. Microsoft, don't worry, we're adults. If it does become a threat in the future, we'll upgrade our software to deal with the threat when it happens. For now, the reason people buy Bitcoin is its better monetary protocol. And the reason that they use Google is it's a better search engine. And the reason they use Microsoft is it's a better enterprise software suite. All three of them have to deal with this uncertain thing we call the future. And I think that they'll probably figure it out. If they don't figure it out right, then they'll be replaced with something better. But I put my money on Bitcoin first because the Protocols, whether it's the metric system or the English language or base 10 math or Bitcoin, those protocols, they're the most durable thing in the human race, and they will outlast the companies and the countries.
- [08:52]
Tom Bilyeu
All right, makes sense. I want to talk more about the U.S. strategic reserve. Doing that in bitcoin. If you had time to sit down with President Trump, what exactly would you advise him to do?
- [09:07]
Michael Saylor
I would say that money decomposes into currency and capital. The US Dollar is the world's reserve currency. Bitcoin is emerging as the world's reserve capital. Gold used to be the world's reserve capital network. Gold became ineffective in the 20th century. Bitcoin is becoming the digital gold of the 21st century. You understand gold and you understand digital gold. If you want the US to remain the world's greatest power, the economic leader, then your agenda ought to be economic wealth and technical leadership. That means create a regulated stablecoin. Make it possible for a U.S. bank or a U.S. company to issue a dollar back stablecoin like tether, like circle. Create a regulatory environment, a digital assets framework, if you will, where tether can relocate to the US and then expand the stablecoin market from $150 billion to $10 trillion. And you will create $10 trillion of demand for US Treasuries custody in a.
- [10:37]
Tom Bilyeu
How do you do that, though?
- [10:40]
Michael Saylor
The demand. How do you create the demand? Create the demand because there's $10 trillion of stablecoins issued. The reason there's $10 trillion of stablecoinS issued is because American companies can do it. Are you asking why will people want to buy the stablecoin no, no, no.
- [10:57]
Tom Bilyeu
I'm saying how. How are we creating the stable coins? Is it. Are we locking up? Are we backing it with securities, Treasuries? Excuse me, Are we talking about money printing?
- [11:09]
Michael Saylor
What I'm saying is the US should create a law that allows a US bank or a US Corporation to issue a US Dollar stablecoin like USDC or usdt, and back it with US Dollar equivalents. The definition of the stablecoin would be you have to hold U.S. dollar equivalents. That would create the demand for $10 trillion of U.S. treasury bills. Right. The big idea here is.
- [11:41]
Tom Bilyeu
Well, okay, so let me just. Sorry, let me say it slightly differently, make sure I understand. You're saying if you back the stablecoin with treasuries to the tune of $10 trillion.
- [11:49]
Michael Saylor
No, I'm saying you define the law so that you have to do. It's not an if the definition of digital currency is a token pegged to the dollar backed by US Treasuries. That's the definition of the currency.
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Tom Bilyeu
That's what the government stable coins are by definition tied to treasuries.
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Michael Saylor
What I'm saying. Not now. Like what I'm saying. You're asking me what the government should do. And what I'm saying is the government should create a law that allows U.S. companies and U.S. banks to issue stablecoins. And the definition of the stablecoin. The def. A stablecoin is a digital currency. The definition of the state of the digital currency is a token pegged to the dollar backed by US dollar equivalents sitting in a US bank that's missing right now. That doesn't exist. The reason that tether is not in the US is because it is impossible for tether to come to the US and do that thing. If the US did that, then the stablecoin float would go from 150 billion to a trillion to 10 trillion. And the US dollar would become the world reserve digital currency on every iPhone and every Android phone and everywhere in the world.
- [13:13]
Tom Bilyeu
And so I don't know if I'm going crazy. Are you picking numbers just sort of randomly, or is there math that backs up? It would go to 10 trillion.
- [13:23]
Michael Saylor
That's what I think it would do. That's the demand for that asset, 10 trillion. Because there's $900 trillion of wealth in the world. We could go back to the Croesus chart. About 450 trillion of it is for assets held for use for their use case. And the other 450 trillion is store of value, but you can see it's pretty easy to get to 10 trillion. Are you. Are you suggesting that's too much or too little?
- [13:50]
Tom Bilyeu
Now, whether that number is tied to something that I should already be aware of, or if you're just giving an
- [13:57]
Michael Saylor
example, it's 1% of the global economy. Right. 1% of the global economy wants to be a medium exchange in the dollar. Yeah. So we can stipulate it's my opinion, if you like. You asked me what advice I'd give the administration, though, so I'm giving you my advice, which is you want the US dollar to be the world's reserve currency and you want the US to own the world's reserve capital network for the US dollar to be the world's reserve digital currency. If you want to be the world's reserve currency and you want to cement your control for the next hundred years, then you want the US Dollar to move at the speed of light on billions and billions of devices. Okay, how do you do it? You need a stable coin backed by US Dollar equivalents. Who should issue it? A company in the US Either a bank or a public company like Circle. Right. And how do you ensure it's good for the dollar? Well, you just make sure that it's pegged one for one to US Dollar equivalents. Now let's go to bitcoin. Bitcoin isn't medium exchange. It isn't the currency. It's capital. It's digital gold. What the government ought to do is sell their gold. They have $600 billion of gold. They ought to just sell it and buy bitcoin with it. And you could buy 20 or 25% of the Bitcoin network with the proceeds from selling the gold. The goal ought to be for the US just to buy 4 or 5 million bitcoin. After you do that, you've demonetized the gold network. So the gold Network is the 19th century world reserve capital network. You might as well just sell it. All the people that will own it will be the enemies of the United States. And the gold network will go from being worth $20 trillion to being worth 4 trillion or 3 trillion. You'll just drive it into the ground. Gold will go to two, $300 an ounce. And anybody holding gold as a reserve asset is bankrupted or has a worthless rock, just a shiny heavy rock, and you're buying bitcoin in the swap. And then bitcoin goes to hundreds of trillions of dollars a coin and you end up with 50 trillion to $100 trillion of capital. And then what happens to the U.S. the U.S. becomes the economic leader of the world for the next hundred years. We're the richest country in the world. We negate the entire debt. If you generate a $50 trillion capital gain with bitcoin, you offset the existing national debt and you become a net creditor nation. And the dollar permeates everywhere. Okay, what's going to pay for this, Tom? Well, first of all, everybody with CNY or rubles or any African currency, any South American currency, even the euro, they're probably just going to trade all their currency for the U.S. dollars for the digital currency of the U.S. second, anybody with capital assets outside the U.S. that can't get access to the dollar to capitalize their their company, they're going to use the stable coins to capitalize their entity. So you're going to have capital flows from currency and you're going to have a Lot of other capital flows. There's a, there's a lot of people in the world in Cuba and Venezuela and Argentina, they would sell their real estate, they would sell their equity, they would sell their currency, they would sell their bonds just to buy the US Dollar. I mean, that's been proven in Argentina, that's been proven in Turkey, that's proven in Lebanon. So you'll have a lot of currency, a lot of money just flow into the US Dollar via the stablecoin. And by the way, an anecdote is, you know, in Europe, if Europeans are given a choice between the digital euro and the digital dollar, they 99% of the time choose the dollar. That means people in France and Germany and Italy and Greece want the dollar. Now if I go to China and I give them a choice between the digital CNY and the digital dollar, the vast majority of the money chooses the dollar. That's why it's illegal. That's why the Chinese have a law making it illegal for you to trade crypto. Because everybody wants it so bad they would all buy it. So we're talking about economic physics now, right? Water flows downhill and money flows to its most secure best home. So on the capital side, with regard to bitcoin, what would happen is time
- [18:43]
Tom Bilyeu
for a short pause, but don't go anywhere. More from Michael Saylor is up next. And we're back.
- [18:53]
Michael Saylor
So on the capital side with regard to bitcoin, what would happen is everybody in Africa, South America, Asia, they would all dump their physical assets and their low quality bonds, currencies, real estate, equity, and they would buy bitcoin because everybody would rather have a piece of cyber Manhattan. They would all rather be in the US they'd all rather have the high quality property. But they can't buy it. They can't physically. It's illegal for. Do you know it's illegal in Nigeria for you to hold dollars?
- [19:31]
Tom Bilyeu
I did not.
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Michael Saylor
You know, I mean there's a lot of countries, you know, it's illegal in China for you to trade in US stocks or, or buy dollars. So there are a lot of places you can figure it's probably illegal in Russia too. I think most places in the world they have capital controls. And the capital controls can range from you can't take your money out of the country to you can't even hold those foreign assets.
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Tom Bilyeu
And do you think that tether or something like that lets them get around those regulations?
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Michael Saylor
That's why Tether is successful today. The reason that tether is $100 billion plus network is because people want dollars so bad, they're willing to buy it from a company that isn't public, that isn't a bank, because they want the dollar. Right. If Tether were allowed to incorporate in the US and operate in the US it would probably go from 100 billion to a trillion dollar network in a hurry. Right? But there'll be competition. Let them compete with Goldman Sachs and JP Morgan and Circle and whoever and maybe made the better company win. But the point I'm getting at here is the capital from the 20th century is going to flow into the 21st century. People are going to sell gold and they're going to buy digital gold. They're going to sell antiquated real estates and aged apartment buildings and natural gas fields and they're going to sell soybeans or whatever in Siberia and they're going to buy 21st century assets. And that means bitcoin, among other things. And then capital in foreign nations is going to flow toward the west and it's going to capital flow from the east to the west and it'll flow from Europe to the US and the only reason it doesn't is because we don't make it easy for the money to move. And the way to make it easy, embrace bitcoin. And anybody can buy bitcoin anywhere on the world. There's 15,000 crypto on ramps and you can do it peer to peer. So embrace bitcoin. And that is a capital network that the United States would own and benefit from and all of the capital from your enemies and all foreign capital and all antiquated capital and all inefficient, thermodynamically unsound capital. It would all flow into the bitcoin network. And if we issued that digital currency, that stablecoin, then all of the world currencies would immediately swap to the dollar for, you know, for all, except for their next four weeks of cash flows. Because everybody wants the dollar everywhere outside the U.S. and so this is an example of leading through a digital assets framework. And the two most important digital assets in the world are digital currency in the form of the dollar and digital capital in the form of bitcoin. And the Trump trade is I swap the gold for the bitcoin and I make $80 trillion in the trade and I catapult the United States to worldwide economic dominance for the next hundred years. That's the advice I'd give you.
- [23:03]
Tom Bilyeu
Very good advice. But given how many people in the US hold gold, what do you think the odds are that he'll actually do that?
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Michael Saylor
I don't know. But it doesn't. You know, the gold is the last twist, that the reason to sell the gold is because foreign central banks and the competitor to bitcoin over the long term is gold. So the entire trade becomes free and it becomes geopolitically wise because not only do you enrich yourself with an extra hundred trillion, but you also bankrupt your enemy's banks. So that's why you should do it. But will they do it? Maybe not. But the fallback would be you keep the gold. By the way, gold's getting demonetized whether you like it or not. Like I will just say, you know, gold is failing as a capital asset. It'll either fail because a nation state puts a stake in the heart of it, or it'll fail because the free market's going to short sell it. I mean, every rational investor that holds gold is going to dump the gold to buy bitcoin every year. So it's going to be demonetized no matter what. So the reason to sell it is because it's a bad investment and it's happening anyway. But let's say that they don't. Well, you just use $600 billion of US dollars or borrow 600 billion to do it. It still becomes effectively transaction. You're going to borrow 600 billion and you're going to pay off 40 trillion or you're going to make 60. 80. 60 to 80 trillion. So, so it's a, it's a pretty obvious swap even with just currency.
- [24:42]
Tom Bilyeu
And would you be perfectly happy to see them inflate the money supply to do it?
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Michael Saylor
Yeah, as I said, I mean if you're, if you're buying the bitcoin before it goes up by a factor of 100 is not inflation, it's accretion. Right. You could spend a trillion dollars to buy the bitcoin and make 100 trillion and it's 100 to 1 gain. So if you look at the history of the US we actually bought Louisiana from Napoleon. I think it was like whatever, 12 or 15 million dollars. We bought Alaska from the Russians for 6 million dollars. We bought California for the Mexicans for 12 million dollars. There was inflation to do that, or they just paid with a check or currency. They were all good investments. New York was bought, but what, 60 guilders or something? Nothing. Yeah, so I think that the. Look, the point I'd really make is you as an individual ought to borrow money against your house and buy Bitcoin. If you're borrowing the money at 6% or 3% and investing it at 30 to 60%. It's a good idea for if you could sell 10% of the equity in impact theory, the corporation at a fair value, I would say inflate your equity, sell 10% of your stock, buy Bitcoin with it, because bitcoin's going up 30 to 60% a year. In the worst case, you'll have diversified. In the best case, you'll actually grow faster. And the first nation to print money, the first nation to print their own currency to buy Bitcoin, wins. Tom, look what MicroStrategy did. We basically issue our own currency, our stock, and we buy Bitcoin. What happened? We went from a billion to $100 billion market cap is what happened. Is it inflation? It's only inflation if you print the currency to make a bad investment, right? If you, if you print the currency to buy something that's appreciating faster than your inflation rate, it's actually accretion, right? So the, the hurdle rate is the 7%. And the problem generally is, is most governments print the currency to make a poor investment instead of printing the currency to make a good investment. And that's why they can't get out of their hole.
- [27:17]
Tom Bilyeu
When you look at the hole that we've dug for ourselves and the adding a trillion dollars every 100 days to the debt, do you see this as like a no brainer way to get out of that?
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Michael Saylor
Yeah, I do. Because, because you want to grow your way out, you don't want to tax your way out. Austerity isn't a good idea. Tax isn't a good idea. What's a. What, what, what is this the way you get out? Well, if we create a billion robots and a billion AIs and they all do the work smarter, faster, stronger, cheaper by a factor of a million, then that's probably good for the economy, right? I mean, you're going to harness digital technology and that's going to help us grow our way out. If you remember what I said at the beginning of the podcast, and I said it's a 10 to $15 trillion entropic lapse every year due to physical and financial capital. So I'm point, you know, you're saying, how are we going to pay off a 30 or 40 trillion dollars debt? What I'm saying is I have a network that's worth trillions of dollars a year, maybe 10 trillion a year. And so if you actually install the network, it's worth $10 trillion a year. To the human race. How long does it take running a thing worth $10 trillion a year to pay off a $40 trillion bill? It's like what I'm coming back to is you have a problem and I invent a modern fusion reactor, a pocket thermo, you know, a pocket fusion reactor that will run for a million years and give you infinite power, a bottle of water, and I offer it to you and you're like, no, I'd rather just tax everybody to death. I think that if you're smart, you figure out we'll just take a few of these and this is how we're going to grow our way out of our problem. And I'm offering you the same thing, a crypto reactor. And I'm saying the solution to our economic problem is harness technology to generate trillions of dollars of economic value a year. The conventional thing that everybody understands is creating a trillion dollars worth of new products and services that didn't exist before, right? That's the. I got to produce more candy bars, more cars, more planes, more trains, more travel, more concerts, more buildings, more houses. More, more, more, more, more, more, more. That's conventional. That's the P and L side. Robots and AI will help with that. But the unconventional, the monetary, the economic side, the very deep paradigm shifting idea is, here's my idea, eliminate the toxic capital from the civilization that's destroying $10 trillion a year worth of products and services. The part the average life expectancy of a human was like 30. When we drank dirty water and we had dirty food and we had dirty air and we had dirty blood and we had doctors with dirty instruments and everybody's just dying. And you can't grow your way out of that with a better factory. But if I come along and say, this is clean water, give this to your kids, they won't die. Okay? It's the taking away of the germs from the food and the water that makes you live twice as long. Bitcoin is about taking away the germs, right? The toxins from the capital of the civilization.
- [31:17]
Tom Bilyeu
Stick around. Michael Saylor continues right after this
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Michael Saylor
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Tom Bilyeu
Good reason.
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Grainger Announcer
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- [31:32]
Michael Saylor
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Tom Bilyeu
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Michael Saylor
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Tom Bilyeu
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- [32:08]
Tom Bilyeu
We're back. Let's dive right in. I was going to ask what the most devastatingly bad capital is.
- [32:16]
Michael Saylor
It's just all imperfect, right? Like every, every hyper inflating economy. Go to Africa and ask, why are they poor? They're poor because all the capital is toxic. What about the Weimar Republic? What happens when the capital collapses? Okay, the government collapses. What happens next? Nazi Germany, what happens next? World War II, okay? 100 million people eventually die, right? So the crumbling capital creates a crumbling civilization. Every single civilization for 10,000 years, everyone in recorded history has as one of its root causes, the capital crumbles, the monetary system collapses. You know, and then what happens is they can't feed everybody. So then what happens is the people complain, so the soldiers kill them. Then what happens? Well, eventually you can't pay the soldiers and the soldiers mutiny because they're not being paid. And then what happens? The people that pay their soldiers come over your border and defeat you. And then the historians write, oh, yeah, the barbarians came and they toppled our civilization due to no fault of our own. But the fault was the capital crumbles.
- [33:37]
Tom Bilyeu
Agreed, but you're, you're dealing with countries that want control. You've talked about China won't allow you to transact in dollars. A lot of these places want to make sure that you're using their capital. So even if bitcoin is this perfect system, why won't it hit an immune response from these nations that want control?
- [33:55]
Michael Saylor
They will. Bitcoin's not going to solve the world's problems. What I'm saying is, if I give you clean water, it solves a bunch of problems. If I give you electricity, it solves a bunch of other problems. If I give you clean food, right? Healthy food and sterile jars, it solves a bunch of problems. Even in the civilizations you don't agree with. I think you would agree that if we turn off the electricity, they have a problem, right? If I kill the water and the power in New York City, everybody's going to die. It's just that simple, right? I mean, so what I'm proposing is we inject digital energy into the civilization. Bitcoin is digital energy. It's digital capital, right? And I'm telling you, I think it's worth $10 trillion. And I'm saying if you have an economic problem, if you were running a factory and you were in debt, and I came to you in 1900 and you said, well, Mike, what should I do? I'm thinking about cutting the wages of all my employees, making them work twice as hard and whipping them occasionally and then barking at the customers and denurturing the product because that's what I need to do to stay in business. What do you think? I would say, well, Tom, I'm an engineer. What I think is I'm really interested by what this Edison guy is doing with electricity. And I think you can rip out the coal powered steam engine in your factory and maybe electrify it. And then I think you ought to look at what Henry Ford did with the assembly line and the internal combustion engine. And maybe instead of whipping the people in your horseless carriage buggy whip factory and then begging a politician to buy your buggy whips and your horseless carriages, maybe you ought to invent a car and maybe you ought to do it with electricity and maybe you ought to use this physics and then maybe it'll be such a delightful product that demand for the product will go through the roof. And that's what I think about this. I think that bitcoin is a digital technology that solves an economic problem that's worth trillions of dollars. I don't think it cures cancer. I don't think it'll stop wars. People had wars after electricity and clean water. I'm just pointing out that Henry VIII dies of gout because he didn't have clean water. And of all the things that Henry VIII would have liked to have bought with all of his power, and he was the most powerful man in the uk, he would have liked that, right? This thing we take for granted, this thing that makes us go from living 32 years to living 80 years. Clean Capital, clean money, digital money, high frequency programmable money. It is a protocol for prosperity. And I think that if you're looking for a politically sound strategy, the most politically sound strategy is not to tell people that austerity is the solution or bludgeon them to death. It's just to introduce a new technology that delights and enriches everyone and spreads like wildfire. And I think bitcoin is spreading like wildfire. Just like if it's a good thing, whether it's the Internet or an iPhone, or clean water or air conditioning or an automobile. You don't gotta bludgeon people. You don't gotta bark at them. The average person looks and they know why they want to drive in a car or fly in a plane or have air conditioning. I mean, I live in Florida. All of Florida is due to air conditioning. Right. The entire state wouldn't be here without electricity and H Vac. And that is my contention with regard to digital capital. I think that the world's full of problems, but half of them are economic problems. And if you want to solve your economic problems, solve it with technology, which is egalitarian, utilitarian. Right. That is nonpartisan because no one can agree on religion and political issues. But they can all agree that they would like to be more powerful, more prosperous, more comfortable, more capable. And generally the only countries on earth that are anti technology don't last long. You know, I remember the Japanese, they denied gunpowder powder. That didn't work well. The Chinese tried to keep guns out of China. That didn't work well either. I mean, eventually, you know, technology is coming to your shores and if you resist it, you know, your government's going to collapse and your ideology is going to collapse. So I, I think this is a very straightforward, practical approach to making the world a better place.
- [39:19]
Tom Bilyeu
Yeah, agreed. I don't think it will be adopted as such. So it'll be interesting to see the, the war powers with different countries taking different approaches. I'm certainly encouraged by Japan. Seems like they're contemplating having a strategic reserve of Bitcoin. That's amazing, especially given the economic troubles that they're having. But here in the US what do you think about David Sachs? Is he going to be somebody that's in the President's ear that's pushing this agenda? Have you heard him talk about this issue?
- [39:47]
Michael Saylor
I don't think there's anybody better qualified to do that job than David Sachs. I think he has extraordinary good judgment with regard to economics, human behavior, technology, and good intentions for the US and the world. So I think he'll be great. And I think that in general, the leadership that's in the incoming administration is very pro technology, pro freedom, pro pro property rights, pro entrepreneurial and pro innovation. So I think that it's a good team and I'm very optimistic.
- [40:33]
Tom Bilyeu
Have you spoken to Sachs directly?
- [40:36]
Michael Saylor
I talk to a lot of people, but I don't share what I say. So it's in confidence.
- [40:45]
Tom Bilyeu
Yeah, very fair. I certainly think we have a sense of how you would be approaching this. What do you think about Japan and what they're doing. Do you think that they'll move forward with that? Do you think that they have any other way out of the situation that they're in? And could Bitcoin be the solution to their whatever, 40 year stagnation?
- [41:05]
Michael Saylor
You know, I, I think that adoption of bitcoin, it starts with retail, then investors, then small corporations, then larger corporations. I, I don't think large governments will adopt it first. I think small governments will adopt it, but, but primarily it'll be adopted at the institutional level next. So. And I don't really think it's even necessary. I mean, I'm not holding my breath for that. I, I think that there are examples like Meta Planet in Japan that are. Metaplan, I think is the number one stock in the Japanese stock market. They're going to get noticed and I think people in Japan will start to learn about Bitcoin. But, but it'll be a solution for the individuals and the families and the investors and then it'll be a solution for the companies long before it's a solution for the country. Governments are normally the most conservative actors in the last to move. You know, just, just like any technology, right? Think about how all technology propagates. Your iPhone, your web browser, your electricity or whatever. It starts with the, you know, the early adopters, the innovators and then the small companies and the startup and the big companies, they dismiss it and then eventually the big companies get threatened by it and then they embrace it and then after that it ripples into government. But it's government. Normally when they try to do something, they're a little bit slower than normal.
- [42:36]
Tom Bilyeu
Yeah, it'll be interesting. Do you think that the red wave here is going to buck any of that trend in the US Are we going to see a pretty gross acceleration in adoption of anything innovative? Or do you think that we'll get bogged down in the normal quagmire and the traditional system will still make it a slow, slow.
- [42:55]
Michael Saylor
I think that the US is now actually the worldwide leader in digital assets. I mean we're going to catapult from being 25, 30% of the way back from the pack. In the middle of the pack, we're going to catapult to number one because most of the rest of the world is fearful of innovation if they're fearful of getting ahead of the U.S. so even if it's good idea, like all the ideas I just laid out, I mean, and the digital assets framework is a great idea, I think that other countries would be afraid to adopt a Good one if they thought the US Was more regressive. So now I think very progressive digital assets ideas will get adopted by the US And I think the US has the economic capability, the financial power, the political power and the technical power to commercialize all those. So at this point, the US has gone from being right in the middle and not very progressive to actually being number one, the greatest opportunity. I do think it's quite likely in the next four years we'll have an incredible crypto renaissance in the US and as I just pointed out, I really think the US is positioned to dominate digital currency and digital capital. And it's a $10 trillion opportunity on the currency side and it's $100 trillion opportunity on the capital side. I don't think any other country has an opportunity that big. I think the US is really in the pole position at this point. And before November 5th, if you thought it was going to be a blue wave, you would have thought there won't be a digital assets framework and the US Is going to grudgingly accept Bitcoin, but they're not going to embrace the other ideas. But after November 5th, I think now it's more likely than not that we will get a digital assets framework. You will get digital tokens, digital securities, digital currencies, digital capital, digital exchanges, and the US will be the big winner in all those things. That's what I think. Now, not without some, you know, some political maneuvering back and forth and, you know, and some, some negotiation and compromise, but it seems the writing is on the wall and the path of least resistance right now is the creation of a multi hundred trillion dollar digital assets ecosystem and a multi hundred trillion dollar digital capital ecosystem as part of it. That's what I expect.
- [45:43]
Tom Bilyeu
Now, when you talk about the people that are really going to get this, or people that understand economics and physics, somebody like Elon, who certainly, maybe he understands economics, maybe he doesn't, but certainly understands physics, still continuing to at a minimum, sort of troll with the idea of Doge. Are you surprised at all that he for a minute seemed to be really into Bitcoin, had it on the balance sheet, seems to have moved away from that. Peter Thiel has also moved away from it. What's your take on, on Elon specifically and Bitcoin?
- [46:16]
Michael Saylor
Well, there's a lot of things going on in the world right now, right? There's a, there's a hundred different industries and there's a lot of dynamic questions, right? So solving the problem of space travel and solving the problem of Electric guitar, electric cars, and solving the problem of satellites, and solving the problem of government efficiency, and solving the problem of free speech, and solving the problem of digital capital, and solving the problem of digital currency, and solving the problem of war, and solving the problem of medicine, and solving the problem of health, and solving the problem of overregulation, and solving the problem of overbearing capital markets, and solving the problem of climate, and solving the problem of fill in the blank. I could go on for another hundred problems. That's a lot of problems. I think this administration has the greatest number of problem solvers we've ever seen. I think that Elon is the number one sponsor of Bitcoin and the Magnificent Seven. I mean, if you look at it right, take the top seven companies in the world, okay, which one has Bitcoin on the balance sheet? Tesla. Right. So, truthfully, Elon is the leader in understanding digital capital, you know, on the basis Tesla has Bitcoin, SpaceX has Bitcoin. So I think Elon's been a great advocate, but so is Vivek, you know, Ramaswamy, and, you know, so is. I think David Sacks understands this, and I think the Secretary of the Treasury, Scott Besant and Atkins, the head of the sec, and Trump, both Donald Trump and Eric Trump, and Howard Lutnick, the head of Commerce. So I think that you've got a lot of people that understand it. I think if you're parsing people's words and saying, did they say the perfect exact thing? I don't talk about the other 99 things. I don't utter my opinions on health and vaccines and foreign policy and the like, because you might not exactly parse your words correctly, or there might be someone that spent 100x as much time as you that's a bit more nuanced. So I think it's inevitable that when you are asked to opine on 100 subjects, you'll occasionally say you'll communicate with a precision that leaves you open to criticism from someone. But I don't really get worked up over it. I think that we've got a good team right now, and I, and I think that they understand the need for digital transformation, for innovation, and they will pursue it as, as effectively and as, as, as rapidly as they can, you know, subject to the constraints of God and man.
- [49:20]
Tom Bilyeu
So at the risk of getting you to comment on something that you don't have enough time looking at as you look at the first, call it 18 months of the Trump presidency, what to you would just be an unbelievable win if they actually got across the finish line, and whether that's dumping gold and buying or getting in place a strategic reserve of Bitcoin or simply making a statement about we're never going to sell, what would a real victory look like in the first 18 months?
- [49:49]
Michael Saylor
I think a digital assets framework will be a huge win. It'll bring the entire digital assets industry to life and it'll come out.
- [49:56]
Tom Bilyeu
Is that from an SEC perspective, like, hey, here's exactly what you can and can't do.
- [50:00]
Michael Saylor
I think if they have a digital assets framework, that's a big, a big milestone. If they put in place a much lighter regulatory environment, if they remove a bunch of crippling, overbearing regulations that prevent entrepreneurial activity that make it very difficult for companies to do anything, I think that would be a big win. And then beyond that, avoid placing a crushing burden on the capital markets or on free markets so that people can move about and fix the problems in the world. I think that all of those things are quite possible. They'd all be good in the first 18 months. They'd be great for the world.
- [50:56]
Tom Bilyeu
And what do you think is going to be the intersection of AI and Bitcoin?
- [51:00]
Michael Saylor
Specifically, AI represents digital intelligence. It's going to go into every product, every service, every company, you know, everything. It's going to permeate everything in the economy. The result is they're going to be very valuable companies. And I think those companies, as they get more valuable, are going to buy Bitcoin. I think AI is going to fuel the capital market, so it's going to create lots of capital, lots of productivity. And I think that that will flow into Bitcoin. And I think, I think long term the AIs will want to move money at a much faster speed. They'll want programmable, high frequency money and that'll be Bitcoin. And so I think that, I think that the, the growth of AI systems will result in demand for digital capital from, directly from the AIs and indirectly from the companies that create the capital. I think it'll, it'll drive both of those. And that, that would be my first order and second order impact. There are some other possible things that could happen with AI, but they're more, they're more speculative. And I think those first two things are the things that drive multi trillion dollar impact on the capital markets. I love it.
- [52:31]
Tom Bilyeu
Michael, every time I get a chance to either research you or spend time with you, it is absolutely mind blowing how many more pieces of the economic system I begin to put together? Where can people follow along with you? Learn more about what you're up to?
- [52:46]
Michael Saylor
I post everything every day on Axe Saylor S A Y L O R and so if you want to follow me, follow me on Saylor. And otherwise we collect a bunch of bitcoin materials on hope.com h o p e and my personal website is michael.com and I post a lot of my personal speeches that just michael.com so those are the three logical resources anybody wants to follow me or or look at anything that I've posted.
- [53:21]
Tom Bilyeu
Excellent. All right, everybody, if you have not already, be sure to subscribe. And until next time, my friends, be legendary. Take care. Peace.