 Michael Saylor, the CEO of MicroStrategy, made a billion dollar bet on Bitcoin last year. MicroStrategy has now acquired over 70,000 Bitcoins, making it one of the largest public holders of Bitcoin in the world. It's a gift. Once in a thousand years, do you actually see the invention of a fundamentally new thing? This is our once in a thousand year opportunity. You get to buy into it early. In August 2020, MicroStrategy confirmed it had made Bitcoin its primary Treasury Reserve asset. Then in September, the firm doubled down by purchasing an additional 175 million dollars of BTC. Saylor touted his commitment to Bitcoin on Twitter by advising Elon Musk to convert Tesla's balance sheet into Bitcoin. A month later, Tesla did just that. However, Saylor wasn't always a staunch Bitcoin supporter. In 2013, he claimed Bitcoin's days are numbered and compared Bitcoin with online gambling. Times have changed since then, along with the opinions of large corporations. Saylor's advocacy of Bitcoin in 2020 earned him a spot in Cointelegraph's top 100 notable people in blockchain. In fact, he took fourth place. So why does the fourth most important person in blockchain claim his company will hold Bitcoin for the next 100 years? Watch this interview to find out. But before that, don't forget to subscribe to our channel. Austin Davis, co-founder of Community Electricity, sat down with Michael Saylor to bring you this interview. Take it away, Austin. What's up, everybody? Austin Davis here interviewing the famed Michael Saylor. We're going to be chatting about Bitcoin and about success and failure and glory and all the above. How are you doing, Michael? I'm well, thank you. Amazing. So last time I got to chat with you, I wanted to ask you a question, but I kind of forgot, what is that boat behind you? Is this the Queen Anne's Revenge? What boat is that? You know, it's actually a 19th century antique model handmade of a 17th century galleon. So it's an old galleon, and it was made very intricately about 150 years ago by hand, and it's kind of a work of art. So I keep it around. It's one of my mascots. It's very motivational. Since you mentioned history, and I think it seems like it has a lot of history to it, you're a history buff, right? You have a background in the history of science, I believe, is that right? Yeah, I got a degree in the history of science at MIT. So what draws you to history? Because that must have started at an early age, right? I always loved history. From the point I was in secondary school, and I just think it's fascinating to read about the exploits of humanity. What happened? Why did it happen? How did it all turn out? Hopefully there's some good lessons in there that we can draw upon for the modern era. Absolutely, yeah, and you also studied engineering, right? Yeah, spaceship design. I studied, you know, astronomical engineering. So at MIT, you know, there are a lot of engineers, but I thought it was really nice to be able to blend the study of the humanities and sociology and economics and politics and history of science, which is all about what happens to civilizations when you have new technology introduced into them? What happens when we invent x-rays or railroads or communications or airplanes or roads in general, and they all have a profound impact. So if you're just the engineer and you don't consider the consequences economically or politically, then you only get half the picture. I think it's very interesting to see the interplay of the two. So that leads me to one of the interesting topics of today, Bitcoin, right? It's Bitcoin week in Miami. So there's a lot going on around Bitcoin around the world. You're obviously a huge advocate of it these days, and you believe in it, which is amazing to have someone in your position who actually has done the research and decided it was a good investment and a good secure way to secure the future. So that leads me to the kind of tying engineering to this. So I love it when you kind of bring the thermodynamic principles and the laws of thermodynamics into explanations of Bitcoin and why you think it's a very sound money because of that. So can you touch on that a little bit on thermodynamics and Bitcoin? Sure. I think that a lot of times the Bitcoin story is told through an economic lens or a spiritual lens or a mathematical lens or sometimes a financial lens. And in the extreme, it gets called an uncorrelated speculative asset, which I hate. I think the story that needs to be told much more is that Bitcoin is a masterpiece of monetary engineering. And there was no class in monetary engineering at MIT, but we studied servomechanisms and cybernetics and the principles of control system are critical for aerospace engineering. The plane won't fly if you don't have stability. Avionics are all about control. In electronics, there's plenty of examples of control systems. And in every other engineering discipline, people understand the principles of controls and thermodynamics. The study of energy as a manifest itself and heat and work is critical to making any machine work. And when I think about Bitcoin, I think, well, first of all, it's the first successfully engineered monetary network in the history of the world. One day, they'll probably have a class or they'll have a degree in monetary engineering at universities next to chemical engineering or electrical engineering. It makes sense. What is money? Well, I think most people don't ask the question. I think money is monetary energy. I think it's the apex energy. And as soon as you understand money to be energy, then it stands to reason that a monetary system that applies the principle of conservation of energy is a pretty good idea. If I create a bathtub with the sink open, it doesn't work. If I have a swimming pool with a leak in it, it doesn't work. If I have a ship with a leak, it doesn't work. A plane with a leak doesn't work. Electrical engineering systems in power grids with short circuits don't work. In fact, nothing in the engineering world, aqueducts don't work. Bridges with a leak in them don't work. So every engineer knows you have to apply the laws of thermodynamics. You need to apply conservation of energy. If you're a mathematician, you'd call it arithmetic. The rule that says that if I add nine plus nine, it better add up to 18 because on the day that it adds up to 19, some horrific thing is going to happen. So once you understand money as monetary energy, and you understand Bitcoin as a monetary energy network, then you start to appreciate the fact that it either does or does not respect the laws of thermodynamics. If it doesn't, then that means that it has a leak. The colloquial term for a leak in monetary economics is inflation. Inflation is the leak. Inflation is a hole in the container and in the reactor, and your water, your electrical power, your reservoirs, your hydraulic systems, your pneumatic systems, your fuselages, and your hulls, they all fail. Everybody dies if you don't have conservation of energy. So I respect Bitcoin because A, it's a monetary system. B, it's engineered in a conservative fashion. And the classic definition of conservative would be derived from conservation of energy. If I give you 10 items, will you give me back to 10 items? Or will you change the number to 11 or downgrade it to nine? And if you're not conservative and your appreciation of energy, then no machine works. Nothing works. That's right. Yeah, I wish more of our economic policies would learn from the principles of thermodynamics as well. Between 23 and 26%, I believe in 2020, we printed of the entire US dollar amount ever created. That's pretty insane because it goes back to what you were talking about, the expanding monetary supply. Your salaries are staying roughly the same. The monetary supply is expanding. Your purchasing power of your dollar is shrinking. Most people don't even think about that. They just spend their dollars. And maybe if you're not holding the dollars, it doesn't matter as much, but that's the problem. They try to, I guess, the powers that they want to hold everybody in that position to some degree so that they can keep printing. So that takes me to scarcity a bit because based on those principles, there's only 21 million Bitcoins that will ever be created. Now, I had some folks yesterday asking questions about the scarcity of that. What happens as we approach that? In your mind, what happens as we approach 2141 when the last Bitcoins are being mined? What does the world look like regarding Bitcoin and the use of it at that point? Well, I think scarcity just means integrity. It means mathematical purity or it means conservation of energy. And if you have integrity in any engineered body or reactor, that just means that you're not going to be leaking pressure or leaking fluids. It's a closed system thermodynamically or an adiabatic system. And of course, what you learn in engineering is you can't solve for a non-adiabatic system. There's no solution because it's uncertain as to how much fluid or how much mass will enter or leave the system that makes it impossible. So scarcity really, to my mind just means we've decided to create a conservative adiabatic system such that we can solve an economic problem. Once we've done that, what do I think will happen? I think that the system, the Bitcoin Monitoring Network will gracefully evolve into a monetary network that's funded by transaction fees. And the transaction fees will finance the miners to provide transaction processing power and security. And it'll be all market-driven. And as the network gets more broadly distributed, the demand for scarce bandwidth on the network will increase. And the transaction fees will increase. And the transaction size and monetary value will increase. We'll end up moving large blocks of money, million dollars, 10 million, 100 million, whatever the fee on currency is. It'll be large blocks with high transaction fees. And then all the small blocks will move off-chain in essence Bitcoin banks like PayPal or Square or Binance or Coinbase, which are in essence Bitcoin banks that are moving hundreds of millions of small transactions off-chain, or maybe enlightening, if you will. And it'll be great. It'll be fine. So do you think that, you know, let's say invoices will be thought of in Bitcoin in the future? Instead of right now it's, I guess globally accepted that the US dollar is a good comparative currency when you're invoicing. Do you think that we'll start to switch because it's so universal? You know, what I think is there's going to be five, let's say today, there's $500 trillion worth of monetary energy, money in the system. And it's divided between currencies like the euro and the dollar. It's divided intangible hard assets, maybe real estate, trophy assets, art, gold, silver, Bitcoin. And then there's a portion of it that's sitting in bonds and stocks. And Bitcoin is going to grow from that $600 billion asset to become a $10 trillion asset like gold. Then it will subsume gold and it'll become a $20, $30, $40, $50, $100 trillion asset. And that'll be the core of the monetary planet, if you will. Now, we're still going to have Picasso and people will have value for their Picasso paintings. You're still going to have your diamonds you're wearing and your gold rings and you're going to have your beach house because you're going to want your beach house. If you're going to own stocks, you're going to own them because you love the companies because you wanted to make an investment in the company because you love the company. You think it's going to go up faster than the rate of monetary expansion. I think that the currencies will be mandated by the governments. As long as there's a United States government, there'll be a dollar and the dollar will be legal tender. And people will buy things and sell things transactionally in dollars. And the reason why is because the IRS gives the dollar currency tax treatment. If I give you $100 a year ago, and if the dollar appreciates against the peso over the next year, and it's worth 10 million gazillion pesos and you give me the $100, the US government is not going to charge you a capital gains tax. So it makes sense for you to move dollars as currency because there's no tax obligation. But if I give you a bitcoin a year ago, and the bitcoin was worth $10,000 a year ago and it's worth $100,000 next year and you give it back to me, you're going to owe the federal government $35,000 in capital gain. You're not giving me the bitcoin. Keep the bitcoin. Give me the dollars. Right? You want to give me money, borrow against the bitcoin, fund in the bitcoin currency and then give me the dollars or convert something into dollars. And that's your currency is dictated by the government. You start your own island, Austin. You can spend satoshes on your own island if you want to. But as long as there's the EU central bank or the US or the whatever, their tax authority will determine the currency based upon whatever they designate as currency. If the IRS had designated bitcoin as currency, there would be no capital gain to move that back and forth. When the IRS designated as property, it implies it's digital gold, you should treat it like gold, you should buy it and hold it forever. And then my advice to you would be to borrow against it tax free, never pay capital gains, never take an operating income. If you must sell it, I don't think you should because it's the highest quality property in the world and in the history of the world. We never invented a technically more thermodynamically sound, pure monetary property than this. This would be the container for the money you're going to hold for your grandchildren. This is it, better than gold, better than a stock, better than real estate, better than a Picasso, even if you love a Picasso, right? So I think that, I think bitcoin is property and cyberspace. And I think that currencies aren't going away as long as governments are with us. And I'm going to hope the government will stick around because I think there's good things about having a government. And when the dust settles, you're going to have maybe $100 trillion worth of pure monetary energy and bitcoin. You're going to have $100 trillion worth of stocks or $200 trillion and there'll be price discovery, the value of the stock should decrease until the returns are expected risk adjusted returns on the stocks are rational. You would expect the value of bonds would decrease such that the coupon on the bond is rational price that is called price discovery returning those markets. You would expect that the value of gold will decrease and will start to equalize to its ornamental value. What is it worth to you as an ornament? What's your art worth as an ornament? What is your beach house worth for your value and use? And then there'll be a layer of cash and dollars and euros and pesos and yen and won that will circulate around and that layer of cash will probably not hold value because we know we're going to keep inflating it. And you ever calculate in the one? I do. It's like a $10,000 to the dollar and it's measured in billions of won. It used to be a peso was one peso to the dollar and it's shooting up to 140 Argentine pesos to the dollar on the black market right now. So eventually the currencies will fall but they'll be used from day to day transactions. And if you're wise, your wealth preservation strategy would be put all your money into Bitcoin. Don't ever sell it and then borrow against it. You know, and if you borrow against 10% of your Bitcoin and then your living expenses don't go up more than 10% a year and a Bitcoin goes up 20% a year, your debt to equity ratio will fall forever. You will never pay capital gains tax. You will never have income tax. You just need a bank that handles Bitcoin and the bank will be there for Bitcoin is evolving right now. So also earlier, you mentioned something about scarcity. I'm thinking about precious metals, right? Like, yeah, in the near term, they're probably going to do good and go up. But long term, there's a non-trivial effort going into asteroid mining right now. One person gets it right. One group of people get that right and they start bringing payloads back. Let's say they hire Elon Musk and say, you've got a lot of assets up there. Help me get this stuff from A to B. And all of a sudden we've got a steady stream 24 hours bringing precious metals to the planet. There's more platinum on one asteroid than we've ever mined on planet Earth. So I think precious metals long-term don't make sense forever, but Bitcoin could get thousands of years out of it, right? It depends on what happens to humanity, I guess. Look, the problem is if I want a system of mathematics or engineering, it needs to be based on arithmetic, mathematical integrity, or conservation of energy. It can't be based upon an analog approximation of integrity. Like, it's really hard for us to find rocks. And we found 21 rocks. And we're going to, as long as nobody finds a 22nd rock, then we're going to add up to 21. It can't be an approximation, which is what gold is. It needs to be an exact thing. So Bitcoin, arithmetic is a protocol. Bitcoin is a protocol. English is a protocol. A language is a protocol. If everybody in the world agrees to communicate with the English language, a thousand years from now, we'll still be using the English language. And we'll be using it because billions of people agree to communicate in the English language, right? If everybody agrees to move their money around in Bitcoin, a thousand years from now, we'll be storing our money in Bitcoin. So worrying about whether we find some more silver or some more gold, right, is kind of silly, right? It's like the truth is we just should abandon commodity monies in the same way that you abandon the abacus or, I don't know, I'm trying to imagine like caveman with like 47 rocks in the dirt. And they're like, this is our way of keeping track of what we have. And at night, there's someone standing guard over the 42 rocks to make sure that someone doesn't accidentally drop a 43rd rock and destabilize the power structure. And it's like, that's, you know, it's an open system, not a closed system, it's defective. And it's kind of like just changing the rules arithmetic, your bridge is going to crash, your ship is going to sink, your airplane is going to crash and burn. So I don't even think about asteroid mining, because it's such a silly notion to think that I'm going to save my money in gold and hope that no one minds an asteroid. It's about a stupid is saying, I'm going to save my money in gold beads in sub-Saharan Africa and hope that nobody with a ship shows up with more gold, with more glass beads, right? Right. It's like the glass bead money or like the seashell money. As long as no one treks over to the, to the beach and finds more seashells, I'll be a rich man. We're good luck with that. I mean, that didn't work with any civilization that I can remember. It's about as dumb as the giant stone coin of the YAP people. And so if you're saving your money in gold, it's the modern equivalent of saving your money in the giant stone coin of the YAP people. And as long as no westerner and a ship shows up with other stones, you're going to be fine. You think about it, you know, and the asteroid mining thing is the equivalent of what if someone shows up with a ship with glass beads or seashells or stone coins and crashes our economy? Yeah. The answer is maybe you actually had computers and arithmetic. You should have used the computers and arithmetic to base your economy on and not stone coins of the YAP people. Yeah, yeah, for sure. You mentioned something earlier about, you know, money being a kind of a language. And I've kind of kind of agreed with that. I've said that over the years. And it just dawned on me like, man, the guys who invented Esperanto, I forgot who it was back in the day and tried to create a universal language, right, that everybody could easily learn and use. Bitcoin kind of is that new thing, right? Everybody can use it. It doesn't take much to understand it, at least not understand how to use it. To understand it takes a lot of brain power and time really to understand it if you look back. But but at a high level to use it and understand how to use it doesn't take any just it's pretty simple, especially since more and more companies are supporting it. So at any rate, I don't want to dive into that too much, but I thought that was interesting. Look, I'll say on that subject, the people that are skeptical of Bitcoin, they generally they don't have historical appreciation of protocols. Like they think like, well, like I even see a famous hedge fund manager saying, well, Bitcoin is something and someone will invent a better version of it one day or replace it. It's like, well, dude, do you not realize that railroad tracks are that width because Roman war chariots were that width and 2000 years have gone by and nobody managed to change the railroad gauge? Right? Look at that. We still have Latin lasted 800 years. The English language is circulating. We're using an Arabic arithmetic how trace those numbers back and try to figure out how comes no one changed the system of arithmetic. Yeah, you know, why don't you look at the power plug in the wall? Look at the power supply and the voltage and the prongs and then ask yourself how hard would it be to change that? And then once you go change like, you know, pounds and inches for the metric system, because people have been talking about doing that since I was a kid in first grade. Yeah, protocols last TCP IP last English language last all of these technical protocols and weights and measures, we have things that go back 1000s and 1000s and 1000s of years, they go back 2000 years before Christ. And we're still stuck with certain of these protocols. Because once they get in to the civilization, and everybody agrees that they're going to use those protocols, you know, it's a basic common sense idea, even Warren Buffett articulated it, but he didn't understand it as a protocol when he says brands have value. The reason Coca Cola as a brand has value is because a billion people on the planet have in their head that the word Coke means something safe, I can drink that tastes fizzy and good. And when a billion people have it in their head, if you were to nuke all factories, all distribution, the entire supply of Coca Cola, everything on earth, the idea of Coca Cola in the head of a billion people has value. And you have to murder the billion people and start again with the civilization to replace the brand with something else. And so the Bitcoin brand and the protocol for moving money around is something which very well can go for hundreds of years if not thousands of years. And once people realize that, they realize, no, it's not about inventing something better. There's, you know, any number of people came up with the better railroad car that was 12 inches wider. Good luck with putting that on a hundred billion dollars worth of rails railroad tracks and bribing 10,000 politicians that let you rebuild the railroad so that you can run your rail car with an extra one foot of width. It doesn't work. Do you think there's a future of decentralized mining for Bitcoin where everybody, you're not going to make a ton of money, but you'll be supporting the network, right? You know, the virtual power plant would be the centralized thing that is maybe earning the most money, but individuals could be running nodes as a lot already are. I think it's most likely that it's going to scale up and it'll be containerized, like people building these big shipping containers that are full of miners, have thousands of miners in a container that they can ship anywhere on earth and just drop on a pad. And I think it'll migrate in these containers to the edge of the power network. It's going to migrate to the place where you're not going to be stealing power from Manhattan where you're competing against human beings because human beings are going to bid more for the power. It's worth, for example, you would pay 10 cents a kilowatt hour. You would pay a dollar a kilowatt hour. You would pay $10 a kilowatt hour if your choice was to do it yourself or do it with the mule or buy electricity. So human beings are always going to pay more for the power. You have to go to places where there is power and there are no human beings, places where the humans can't consume all the power and where the power is either, it's either stranded, where we have to keep producing it. We can't stop producing it and there are no human beings or there's no other uses of the power. And then presumably, you know, it'll be some combination of I find renewable power, you know, in a place that's very cold. So my cooling is free. What you really want is an infinitely renewable power stranded in a place where it's freezing and I don't have to pay to cool the thing. I dropped it and there are no people there and I run a long line there and I just mined Bitcoin. And you know, offsetting that will be these containers will be moving because politicians will be changing the laws and they'll be seizing them. They'll be taxing, they'll either tax them, they'll outlaw them, they'll seize them or they'll leave you alone and the rates will change. And so I, you know, I don't think it makes a lot of sense to build fixed mining capacity because eventually the politicians will tax you or the power will go up. If you want to play this game, you have to have access to the equipment. You have to be able to spin up the data center quickly, but you have to find stranded power energy that there for which there is no better use where you can buy it in essence, buy it for effectively zero, right near near zero. A penny is good, zero is better. Of course. Right. And two cents is okay. But ultimately, anybody on earth can compete in mining against you. And so you're going to be competing against nation states that will give away the power for free in order to generate the hard currency. And so, you know, you really got to, you almost got to be thinking about will nature give me free cooling? So I got to go to the Arctic Circle. Can I find free energy with a hydroelectric power supply that was accidentally built? Can I find a political government that won't tax me out of existence? And then can I keep first generation or current generation shaw 256 hash power? I don't know. We'll see. But you know, it's going to be a very dynamic business. Very dynamic, very competitive business. And it's good for Bitcoin. But it's like, if I had a hundred million dollars right now, I wouldn't invest it in mining. I'd invest in Bitcoin. Right. Bitcoin is the monopoly digital dominant network. Mining is you choosing to compete against everybody on earth. Right. You better have a built in edge. You know, if you're Intel or Intel chips, or if you're Amazon, you have data centers, or if you if you're Iceland and you already own a bunch of hydroelectric or geothermal power, the you know, if you're Bitmain and you're using your first gen and selling all of your second gems to you know, whatever, you know, vice versa, you're selling the new models, but you've already used the old models and you're just rotating them something like that, like your first in line of Bitmain or one of the miners, right. So yeah, that's interesting. I just wanted to touch on that and get your perspective on Bitcoin mining. All right. So we can wrap it up before we do any any motivational words for folks that should get into Bitcoin. I know you've been great at calling people out, you know, top level people that that should get in, but in general to the public, any motivational words of why they should pay attention to this thing called Bitcoin. Okay, I think Bitcoin is a bank in cyberspace. It's, you know, and your choices are you save your money in a traditional conventional fiat bank, and you're going to watch your purchasing power dwindle down over the next decade to the point where it'll buy nothing, or you can gamble in the stock market that's maybe rigged against you, you know, and if it's not rigged against you, then you'll be buying companies that are generating cash flows and fiat currency that is collapsing in value. So even if you think you've avoided the problem of currency weakening of storing your money in a bank, you haven't really because if you're buying real estate bonds or stocks that also generate fiat currency and that currency is collapsing in value, you've got the same problem. It's a now you have a fiat derivative, or you can save your monetary energy, save your purchasing power and your wealth and Bitcoin, which is not a fiat derivative that is not collapsing in value that is going to appreciate against all these other currencies as they collapse in value. And you don't have to gamble on whether or not Apple will ship a good iPhone 14 or, you know, the next generation of this product or that product or this service or what that government will do to this company and what that CEO will do, all very complicated anxiety inducing Bitcoin is a simple thing, right? It's a you're buying into a thermodynamically sound engineered monetary network, the first workable monetary network in the history of the world, first digital monetary network in the history of the world. You know, it's a it's a gift. Once in a thousand years, do you actually see the invention of a fundamentally new thing? This is our once in a thousand year opportunity. You get to buy into it early. You know, what would be like if you own 10% of all the electricity that was ever going to be pumped? Or what if you could buy 1% of all the running water that's ever going to be pumped, right? That's what this is, right? It's 1% of all the fire that's ever going to be lit. You have a chance to buy a percentage of of the future. Seems like a no brainer to me. Thank you for being the way you are and taking the moves that you're doing because I know that you're probably facing opposition, but you know what's right. So thanks for sticking true to yourself. Yep. Thanks for hosting me, Austin. Thanks so much, Michael. We'll talk to you next time. Bye bye.