Michael Saylor: Bitcoin, Inflation, and the Future of Money | Lex Fridman Podcast #276
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Michael Saylor is the CEO of MicroStrategy and a prominent holder and proponent of Bitcoin. Please support this podcast by checking out our sponsors:
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EPISODE LINKS:
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MicroStrategy: https://microstrategy.com/
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OUTLINE:
0:00 - Introduction
1:43 - Grading our understanding
14:01 - Inflation
33:37 - Government
54:47 - War and power
1:05:57 - Dematerializing information
1:37:18 - Digital energy and assets
1:48:56 - Oil barrel vs Bitcoin
1:58:16 - Layers of Bitcoin
2:15:27 - Bitcoin's role during wartime
2:20:11 - Jack Dorsey
2:36:31 - Bitcoin conflict of interest
2:43:13 - Satoshi Nakamoto
2:48:38 - Volatility
3:01:03 - Bitcoin price
3:13:19 - Twitter verification
3:22:16 - Second best crypto
3:27:58 - Dogecoin
3:32:31 - Elon Musk
3:38:00 - Advice for young people
3:49:27 - Mortality
3:52:32 - Meaning of life

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 Remember George Washington, you know how he died? Well-meaning physicians bled him to death. And this was the most important patient in the country, maybe in the history of the country. And it's, and we bled him to death trying to help him. So when you're actually inflating the money supply at 7%, but you're calling it 2% because you want to help the economy, you're literally bleeding the free market to death. But the sad fact is George Washington went along with it because he thought that they were going to do him good. And the majority of the society, most companies, most conventional thinkers, you know, the working class, they go along with this because they think that someone has their best interest of mind and the people that are bleeding them to death believe, they believe that prescription because their mental models are just so defective. The following is a conversation with Michael Saylor, one of the most prominent and brilliant Bitcoin proponents in the world. He is the CEO of MicroStrategy, founder of Saylor Academy, graduate of MIT. And Michael is one of the most fascinating and rigorous thinkers I've ever gotten a chance to explore ideas with. He can effortlessly zoom out to the big perspectives of human civilization and human history and zoom back in to the technical details of blockchains, markets, governments, and financial systems. This is the Lex Friedman podcast. To support it, please check out our sponsors in the description. And now to your friends, here's Michael Saylor. Let's start with a big question of truth and wisdom. When advanced humans or aliens or AI systems, let's say five to 10 centuries from now look back at earth on this early 21st century, how much do you think they would say we understood about money and economics or even about engineering, science, life, death, meaning, intelligence, consciousness, all the big interesting questions? I think they would probably give us a B minus on engineering, on all the engineering things, the hard sciences. A passing grade. Like we're doing okay. We're working our way through rockets and jets and electric cars and electricity transport systems and nuclear power and space flight and the like. And, you know, if you, if you look at the walls that grace the great court at MIT, it's full of all the great thinkers and, and they're all pretty admirable. You know, if you could be with Newton or Gauss or Madam Curie or Einstein, you know, you would respect them. I would say they'd give us like a D minus on economics, like, you know, an F plus or a D minus. You see, I have an optimistic vision. First of all, optimistic vision of engineering because everybody you've listed, not everybody, most people you've listed is just over the past couple of centuries and maybe stretches a little farther back, but mostly all the cool stuff we've done in engineering is the past couple of centuries. I mean, Archimedes, you know, had his virtues. You know, I studied the history of science at MIT and I also studied aerospace engineering. And, and so I clearly have a bias in favor of science. And if I look at the past 10,000 years and I consider all of the philosophy and the politics and their impact on the human condition, I think it's a wash for every politician that came up with a good idea. Another politician came up with a bad idea, right? And it's not clear to me that, you know, most of the political and philosophical contributions to the, to the human race and the human conditions have advanced so much. I mean, we're still taking, you know, taking guidance and admiring Aristotle and Plato and Seneca and the like. And on the other hand, you know, if you think about what has made the human condition better, fire, water, harnessing of wind energy, like try to row across an ocean, right? Not easy. And for people who are just listening or watching, there's a beautiful sexy ship from 16th century, 17th century. This is a 19th century handmade model of a 17th century sailing ship, which is of the type that the Dutch East India's company used to sail the world and trade. So that was made, you know, the original is made sometime in the 1600s. And then this model is made in the 19th century by individuals. Both the model and the ship itself is engineering at its best. And just imagine just like rockets flying out to space, how much hope this filled people with exploring the unknown, going into the mystery, both the entrepreneurs and the business people and the engineers and just humans, what's out there, what's out there to be discovered. Yeah, the metaphor of human beings leaving shore or sailing across the horizon, risking their lives in pursuit of a better life is an incredibly powerful one. In 1900, I suppose the average life expectancy is 50. During the Revolutionary War, you know, while our founding fathers were fighting to establish, you know, life, liberty, pursuit of happiness, the constitution, average life expectancy of like 32, so between 32 and 36. So all the sound and the fury doesn't make you live past 32. But what does right? Antibiotics. Conquest of infectious diseases. If we understand the science of infectious disease, sterilizing a knife and harnessing antibiotics gets you from 50 to 70. And that happened fast, right? That happens from 1900 to 1950 or something like that. And I think if you look, look at the human condition, you ever get on one of those rowing machines where they actually keep track of your watts output when you're on that? Yeah. Yeah, it's like 200 is a lot. Okay, 200 is a lot. So a kilowatt hour is like all the energy that a trained athlete can deliver in a day. And probably not 1% of the people in the world could deliver a kilowatt hour in a day. And the commercial value of a kilowatt hour, the retail value is 11 cents today. And the wholesale value is two cents. And so you have to look at the contribution of politicians and philosophers and economists to the human condition. And it's like at best a wash one way or the other. And then if you look at the contribution of John D Rockefeller, when he delivered you a barrel of oil, the energy in oil, liquid energy, or the contribution of Tesla, as we deliver electricity. And what's the impact on the human condition if I have electric power, if I have chemical power, if I have wind energy, if I can actually set up a reservoir, create a dam, spin a turbine and generate energy from a hydraulic source. That's extraordinary, right? And so our ability to cross the ocean, our ability to grow food, our ability to live, it's technology that gets the human race from a brutal life where life expectancy is 30 to a world where life expectancy is 80. You gave a D minus to the economists. So are they too like the politicians to wash in terms of there's good ideas and bad ideas and that tiny delta between good and bad is how you squeak past the F plus onto the D minus territory? I think most economic ideas are bad ideas. Most. Take us back to MIT and you wanna solve a fluid dynamics problem. Design the shape of the hull of that ship or you wanna design an airfoil, a wing, or if you wanna design an engine or a nozzle in a rocket ship, you wouldn't do it with simple arithmetic. You wouldn't do it with a scalar. There's not a single number, right? It's vector math, computational fluid dynamics is n-dimensional higher level math, complicated stuff. So when an economist says the inflation rate is 2%, that's a scalar. And when an economist says, it's not a problem to print more money because the velocity of the money is very low, monetary velocity is low, that's another scalar. Okay, so the truth of the matter is inflation is not a scalar, inflation is an n-dimensional vector. Money velocity is not a scalar. Saying what's the velocity of money, oh, it's slow or it's fast, it ignores the question of what medium is the money moving through? In the same way that, you know, what's the speed of sound? Okay, well, what is sound, right? Sound, you know, sound is a compression wave, it's energy moving through a medium, but the speed is different. So for example, the speed of sound through air is different than the speed of sound through water. And sound moves faster through water. It moves faster through a solid and it moves faster through a stiffer solid. So there isn't one. What is the fundamental problem with the way economists reduce the world down to a model? Is it too simple or is it just even the first principles of constructing the model is wrong? I think that the fundamental problem is if you see the world as a scalar, you simply pick the one number which supports whatever you wanna do and you ignore the universe of other consequences from your behavior. In general, I don't know if you've heard of, like Eric Watson has been talking about this with gauge theory. So different kinds of approaches from the physics world, from the mathematical world to extend past this scalar view of economics. So gauge theory is one way that comes from physics. Do you find that way of exploring economics interesting? So outside of cryptocurrency, outside of the extra technologies and so on, just analysis of how economics works, do you find that interesting? Yeah, I think that if we wanna really make any scientific progress in economics, we have to apply much more computationally intensive and richer forms of mathematics. So simulation perhaps or? Yeah, when I was at MIT, I studied system dynamics. They taught it at the Sloan School. It was developed by Jay Forrester who was an extraordinary computer scientist. And when we've created models of economic behavior, they were all multi-dimensional nonlinear models. So if you wanna describe how anything works in the real world, you have to start with the concept of feedback. If I double the price of something, demand will fall and attempts to create supply will increase and there will be a delay before the capacity increases. There'll be an instant demand change and there'll be rippling effects throughout every other segment of the economy downstream and upstream of such thing. So it's kind of common sense, but most economics, most classical economics is always taught with linear models, fairly simplistic linear models. And oftentimes, I'm really shocked today that the entire mainstream dialogue of economics has been captured by scalar arithmetic. For example, if you read any article in New York Times or the Wall Street Journal, right? They just refer to it. There's an inflation number or the CPI or the inflation rate is X. And if you look at all the historic studies of the impact of inflation, generally they're all based upon the idea that inflation equals CPI and then they try to extrapolate from that and you just get nowhere with it. So at the very least, we should be considering inflation and other economics concept as a nonlinear dynamical system. So nonlinearity and also just embracing the full complexity of just how the variables interact, maybe through simulation, maybe have some interesting models around that. Wouldn't it be refreshing if somebody for once published a table of the change in price of every product, every service and every asset in every place over time? You said table. Some of that also is the task of visualization, how to extract from this complex set of numbers, patterns that somehow indicate something fundamental about what's happening. So like summarization of data is still important. Perhaps summarization not down to a single scale of value, but looking at that whole sea of numbers, you have to find patterns. Like what is inflation in a particular sector? What is it maybe change over time, maybe different geographical regions, things of that nature. I think that's kinda, I don't know even what that task is. You could look at machine learning, you can look at AI with that perspective, which is like how do you represent what's happening efficiently, as efficiently as possible. That's never going to be a single number, but it might be a compressed model that captures something beautiful, something fundamental about what's happening. It's an opportunity for sure. If we take, for example, during the pandemic, the response of the political apparatus was to lower interest rates to zero and to start buying assets, in essence printing money. And the defense was there's no inflation. But of course, you had one part of the economy where it was locked down, so it was illegal to buy anything. But you couldn't, it was either illegal or it was impractical. So it would be impossible for demand to manifest. So of course there is no inflation. On the other hand, there was instantaneous immediate inflation in another part of the economy. For example, you lowered the interest rates to zero. At one point we saw the swap rate on a 30 year note go to 72 basis points. Okay, that means that the value of a long dated bond immediately inflates. So the bond market had hyperinflation within minutes of these financial decisions. The asset market had hyperinflation. We had what you call a K-shape recovery, what we affectionately call a K-shape recovery. Main street shut down, Wall Street recovered all within six weeks. The inflation was in the assets, like in the stocks, in the bonds. If you look today, you see that typical house, according to the Case-Schiller index today is up 19.2% year over year. So if you're a first time home buyer, the inflation rate is 19%. The formal CPI announced a 7.9%. You can pretty much create any inflation rate you want by constructing a market back or constructing a market basket, a weighted basket of products or services or assets that yield you the answer. I think that the fundamental failing of economists is first of all, they don't really have a term for asset inflation. What's an asset, what's asset hyperinflation? You mentioned bond market swap rate and asset is where the majority of the hyperinflation happened. What's inflation, what's hyperinflation, what's an asset, what's an asset market? I'm gonna ask so many dumb questions here. In the conventional economic world, you would treat inflation as the rate of increase in price of a market basket of consumer products defined by a government agency. So they have like traditional things that a regular consumer would be buying. The government selects like toilet paper, food, toaster, refrigerated electronics, all that kind of stuff. And it's like a representative basket of goods that lead to a content existence on this earth for a regular consumer. They define a synthetic metric, right? I mean, I'm gonna say you should have a thousand square foot apartment and you should have a used car and you should eat three hamburgers a week. Now 10 years go by and the apartment costs more. I could adjust the market basket via they call them hedonic adjustments. I could decide that it used to be in 1970 you needed a thousand square feet, but in the year 2020, you only need 700 square feet because we've miniaturized televisions and we've got more efficient electric appliances and because things have collapsed into the iPhone, you just don't need as much space. So now it may be that the apartment costs 50% more, but after the hedonic adjustment, there is no inflation because I just downgraded the expectation of what a normal person should have. So the synthetic nature of the metric allows for manipulation by people in power. Pretty much. I guess my criticism of economists is rather than embracing inflation based upon its fundamental idea, which is the rate at which the price of things go up, right? They've been captured by mainstream conventional thinking to immediately equate inflation to the government issued CPI or government issued PCE or government issued PPI measure, which was never the rate at which things go up. It's simply the rate at which a synthetic basket of products and services the government wishes to track go up. Now the problem with that is two big things. One thing is the government gets to create the market basket and so they keep changing what's in the basket over time. So I mean, if I said three years ago, you should go see 10 concerts a year and the concert tickets now cost $200 each, now it's $2,000 a year to go see concerts. Now I'm in charge of calculating inflation so I redefine your entertainment quota for the year to be eight Netflix streaming concerts and now they don't cost $2,000, they cost nothing and there is no inflation but you don't get your concerts, right? So the problem starts with continually changing the definition of the market basket. But in my opinion, that's not the biggest problem. The more egregious problem is the fundamental idea that assets aren't products or services. Assets can't be inflated. What's an asset? A house, a share of Apple stock, a bond, a Bitcoin is an asset or a Picasso painting. Not a consumable good. Not an Apple that you can eat. Right, if I throw away an asset, then I'm not on the hook to track the inflation rate for it. So what happens if I change the policy such that, let's take the classic example, a million dollar bond at a 5% interest rate gives you $50,000 a year in risk-free income. You might retire on $50,000 a year in a low cost jurisdiction. So the cost of social security or early retirement is $1 million when the interest rate is 5%. During the crisis of March of 2020, the interest rate on a 10-year bond went to 50 basis points. So now the cost of that bond is $10 million. Okay, the cost of social security went from a million dollars to $10 million. So if you wanted to work your entire life, save money and then retire risk-free and live happily ever after on a $50,000 salary, live in on a beach in Mexico, wherever you want it to go, you had hyperinflation. The cost of your aspiration increased by a factor of 10 over the course of some amount of time. In fact, in that case, that was like over the course of about 12 years. As the inflation rate ground down, the asset traded up, but the conventional view is, oh, that's not a problem. Because it's good that the bond is highly priced because we own the bond. Or what's the problem with the inflation rate in housing being 19%? It's an awful problem for a 22-year-old that's starting their first job, that's saving money to buy a house, but it would be characterized as a benefit to society by a conventional economist who would say, well, housing asset values are higher because of interest rate fluctuation, and now the economy's got more wealth. And so that's viewed as a benefit. So what's being missed here? Like the suffering of the average person, or the struggle, the suffering, the pain of the average person, like metrics that captured that within the economic system. Is that, when you're talking about- One way to say it is a conventional view of inflation as CPI understates the human misery that's inflicted upon the working class and on mainstream companies by the political class. And so it's a massive shift of wealth from the working class to the property class. It's a massive shift of power from the free market to the centrally governed or the controlled market. It's a massive shift of power from the people to the government. And maybe one more illustrative point here, Alexis, is what do you think the inflation rates been for the past hundred years? Oh, are we talking about the scalar again? If you took a survey of everybody on the street and you asked them, what do they think inflation was? What is it? You remember when Jerome Powell said, our target's 2%, but we're not there. If you go around the corner, I have posted the deed to this house sold in 1930. Okay, and the number on that deed is $100,000, 1930. And if you go on Zillow and you get the Z Estimate- Is it higher than that? No. $30,500,000. Yeah. So that's 92 years, 1930 or 2022, and in 92 years, we've had 305X increase in price of the house. Now, if you actually calculate, you come to a conclusion that the inflation rate was approximately 6.5% a year, every year for 92 years. And there's nobody, nobody in government, no conventional economists that would ever admit to a $100,000 increase in price of the house. And it's extremely difficult to admit to an inflation rate of 7% a year in the US dollar over the last century. Now, if you dig deeper, I mean, one guy that's done a great job working on this is Seifedean Amos, who wrote the book, The Bitcoin Standard, and he notes that on average, it looks like the inflation rate and the money supply is about 7% a year, all the way up to the year 2020. The index, which is a market basket of scarce desirable stocks, it returned about 10%. If you talk to 10% a year for 100 years, the money supply is expanding at 7% a hundred years. If you actually talk to economists, or you look at the economy and you ask the question, how fast does the economy grow in its entirety year over year? Generally about two to 3%, like the sum total impact of all this technology and human ingenuity might get you a two and a half, 3% improvement a year. As measured by GDP. Is that, are you okay with that? I'm not sure, I'm not sure I'd go that far yet, but I would just say that if you had the human race doing stuff, and if you ask the question, how much more efficiently will we do this stuff next year than this year, or what's the value of all of our innovations and inventions and investments in the past 12 months? You'd be hard pressed to say we get 2% better. Typical investor thinks they're 10% better every year. So if you look at what's going on, really, when you're holding a million dollars of stocks and you're getting a 10% gain a year, you really get a 7% expansion of the money supply, you're getting a two or 3% gain under best circumstances. And another way to say that is, if the money supply stopped expanding at 7% a year, the S&P yield might be 3% and not 10%, it probably should be. Now that gets you to start to ask a bunch of other fundamental questions, like if I borrow a billion dollars and pay 3% interest and the money supply expands at 7% to 10% a year, and I ended up making a 10% return on a billion dollar investment paying 3% interest, is that fair? And who suffered so that I could do that? Because in an environment where you're just inflating the money supply and you're holding the assets constant, it stands the reason that the price of all the assets is going to appreciate somewhat proportional to the money supply. And the difference in asset appreciation is gonna be a function of the scarce desirable quality of the assets and to what extent can I make more of them? And to what extent are they truly limited in supply? Yeah, so we'll get to a lot of the words you said there, the scarcity and so connected to how limited they are and the value of those assets. But you also said, so the expansion of the money supply, which is put another way is printing money. And so is that always bad, the expansion of the money supply? Is this, just to put some terms on the table so we understand them, you nonchalantly say it's always on average expanding every year, the money supply is expanding every year by 7%. That's a bad thing? That's universally a bad thing. It's awful. I guess to be precise, it's the currency. I mean, money, I would say money is monetary energy or economic energy. And the economic energy has to find its way into a medium. So if you wanna move it rapidly as a medium of exchange, has to find its way into currency. But the money can also flow into property, like a house or gold. If the money flows into property, it'll probably hold its value much better. If the money flows into currency, right? If you had put $100,000 in this house, you would have 305X return over 92 years. But if you had put the money, $100,000 in a safe deposit box and buried it in the basement, you would have lost 99.7% of your wealth over the same time period. So the expansion of the currency creates a massive inefficiency in the society, what I'll call an adiabatic lapse. What we're doing is we're bleeding the civilization to death. What's the adiabatic, what's that word? Adiabatic lapse. Adiabatic. Right, and aerospace engineering, you wanna solve any problem, they start with the phrase, assume an adiabatic system. And what that means is a closed system. Okay, got it. I've got a container, and in that container, no air leaves and no air enters, no energy exits or enters, so it's a closed system. So you got the closed system lapse. Okay. What's a closed, okay, I'm gonna use a- There's a leak in the ship. I'm gonna use a physical metaphor for you because you're the jujitsu, right? Like you got 10 pints of blood in your body, and so before your next workout, I'm gonna take one pint from you. Now you're gonna go exercise, but you're one pint, you've lost 10% of your blood, okay? You're not gonna perform as well, it takes about one month for your body to replace the red blood platelets. So what if I tell you every month you gotta show up and I'm gonna bleed you? Yeah. Okay, so if I'm draining the energy, I'm draining the blood from your body you can't perform. If you, adiabatic lapse is when you go up in altitude, every thousand feet, you lose three degrees. You go 50,000 feet, you're 150 degrees colder than sea level, that's why you look at your instruments and instead of 80 degrees, you're minus 70 degrees. Why is the temperature falling? Temperature's falling because it's not a closed system, it's an open system. As the air expands, the density falls, right? The energy per cubic whatever falls, and therefore the temperature falls, right? The heat's falling out of the solution. So when you're inflating, let's say you're inflating the currency supply by 6%, you're sucking 6% of the energy out of the fluid that the economy is using to function. So the currency, this kind of ocean of currency, that's a nice way for the economy to function. It's the most kind of, it's being able to function most kind of, it's being inefficient when you expand the money supply, but it's the liquid, I'm trying to find the right kind of adjective here. It's how you do transactions at a scale of billions. Currency is the asset we use to move monetary energy around and you could use the dollar or you could use the peso or you could use the boulevard. Selling houses and buying houses is much more inefficient or like you can't transact between billions of people with houses. Yeah, properties don't make such good mediums of exchange. They make better stores of value and they have utility value if it's a ship or a house or a plane or a bushel of corn, right? Can I zoom out just for, can we zoom out, keep zooming out until we reach the origin of human civilization, but on the way, ask, you gave economists a D minus. I'm not even gonna ask you what you give to governments. Do you think their failure, economists and government failure is malevolence or incompetence? I think policymakers are well intentioned, but generally all government policy is inflationary and all government, it's inflammatory and inflationary. So what I mean by that is, when you have a policy pursuing supply chain independence, if you have an energy policy, if you have a labor policy, if you have a trade policy, if you have any kind of foreign policy, a domestic policy, a manufacturing policy, every one of these medical policy, every one of these policies interferes with the free market and generally prevents some rational actor from doing it in a cheaper, more efficient way. So when you layer them on top of each other, they all have to be paid for. If you wanna shut down the entire economy for a year, you have to pay for it, right? If you wanna fight a war, you have to pay for it, right? If you don't wanna use oil or natural gas, you have to pay for it. If you don't wanna manufacture semiconductors in China and you wanna manufacture them in the US, you gotta pay for it. If I rebuild the entire supply chain in Pennsylvania and I hire a bunch of employees and then I unionize the employees, then not only am I, I idle the factory in the Far East, it goes to 50% capacity. So whatever it sells, it has to raise the price on. And then I drive up the cost of labor for every other manufacturer in the US because I competing against them, right? I'm changing their condition. So everything gets less efficient, everything gets more expensive. And of course, the government couldn't really pay for its policies and its wars with taxes. We didn't pay for World War I with tax. We didn't pay for World War II with tax. We didn't pay for Vietnam with tax. In fact, when you trace this, what you realize is the government never pays for all of its policies with tax. It pays for it. Because it's too painful to ask to raise the taxes to truly transparently pay for the things you're doing with taxes with taxpayer money. Because they feel the pain. That's one interpretation or it's just too transparent. If people understood the true cost. Of war. They wouldn't wanna go to war. If you were told that you would lose 95% of your assets, and 90% of everything you will be ever will be taken from you, you might reprioritize your thought about a given policy and you might not vote for that politician. But you're still saying incompetence, not malevolence. So fundamentally, government creates a bureaucracy of incompetence. It's kinda how you look at it. I think a lack of humility. If people had more humility, then they would realize. Humility about how little they know. How little they understand about the function of complex systems. There's a phrase from Clint Eastwood's movie Unforgiven where he says a man's gotta know his limitations. I think that a lot of people overestimate what they can accomplish and experience. Experience in life causes you to reevaluate that. So I mean, I've done a lot of things in my life and generally my mistakes were always my good ideas that I enthusiastically pursued. To the detriment of my great ideas that required 150% of my attention to prosper. So I think people pursue too many good ideas. They all sound good, but there's just a limit to what you can accomplish. And everybody underestimates the challenges of implementing an idea. And they always overestimate the benefits of the pursuit of that. So I think it's an overconfidence that causes an over exuberance in pursuit of policies. And as the ambition of the government expands, so must the currency supply. I could say the money supply, but let's say the currency supply. You can triple the number of pesos in the economy, but it doesn't triple the amount of manufacturing capacity in the set economy. And it doesn't triple the amount of assets in the economy, it just triples the pesos. So as you increase the currency supply, then the price of all those scarce desirable things will tend to go up rapidly. And the confidence of all of the institutions, the corporations and the individual actors and trading partners will collapse. If we take a tangent on a tangent, and we will return soon to the big human civilization question. So if government naturally wants to buy stuff it can't afford, what's the best form of government? Anarchism, libertarianism. So not even, there's not even armies, there's no borders, that's anarchism. The least. The smallest possible. The smallest possible. The best government would be the least and the debate will be over that. When you think about the stuff, do you think about, okay, government is the way it is, I as a person that can generate great ideas, how do I operate in this world? Or do you also think about the big picture, if we start a new civilization somewhere on Mars, do you think about what's the ultimate form of government? What's at least a promising thing to try? You know, I have laser eyes on my profile on Twitter, Lex. And the significance of laser eyes is to focus on the thing that can make a difference. And if I look at the civilization, I would say half the problems in the civilization are due to the fact that our understanding of economics and money is defective. Half, 50%, I don't know, it's worth $500 trillion worth of problems. Like money represents all the economic energy in the civilization and it kind of equates to all the products, all the services, and all the assets that we have and we're ever gonna have. So that's half. Half the problems in the civilization are medical and military and political and philosophical and natural. And I think that there are a lot of different solutions to all those problems and they're all, they are all honorable professions and they all merit the same amount of money. And so I think that's half. Honorable professions and they all merit a lifetime of consideration for the specialists in all those areas. I think that what I could offer it's constructive is inflation is completely misunderstood. It's a much bigger problem than we understand it to be. We need to introduce engineering and science techniques into economics if we wanna further the human condition. All government policy is inflationary. And another pernicious myth is inflation is always and everywhere a monetary phenomena. A famous quote by Milton Friedman, I believe. It's like, it's a monetary phenomena that is inflation comes from expanding the currency supply. It's a nice phrase and it's oftentimes quoted by people that are anti-inflation. But again, it just signifies a lack of appreciation of what the issue is. Inflation is, if I had a currency which was completely non-inflationary, if I never printed another dollar and if I eliminated fractional reserve banking from the face of the earth, we'd still have inflation. And we'd have inflation as long as we have government that is capable of pursuing any kind of policies that are in themselves inflationary and generally they all are. So in general, inflationary is the big characteristic of human nature that governments, collection of groups that have power over others and allocate other people's resources will try to intentionally or not hide the costs of those allocations, like in some tricky ways, whatever the options are available. Hiding the cost is like the tertiary thing. The primary goal is the government will attempt to do good. That's the primary problem? They will attempt to do good and they will do good imperfectly and they will create oftentimes as much damage, more damage than the good they do. Most government policy will be iatrogenic. It will create more harm than good in the pursuit of it, but it is what it is. The secondary issue is they will unintentionally pay for it by expanding the currency supply without realizing that they're actually paying for it in a suboptimal fashion. They'll collapse their own currencies while they attempt to do good. The tertiary issue is they will mismeasure how badly they're collapsing the currency. So for example, if you go to the Bureau of Labor Statistics and look at the numbers printed by the Fed, they'll say, oh, it looks like the dollar's lost 95% of its purchasing power over 100 years. Okay, they sort of fess up to those problem, but they make it 95% loss over 100 years. What they don't do is realize it's a 99.7% loss over 80 years. So they will mismeasure just the horrific extent of the monetary policy in pursuit of the foreign policy and the domestic policy, which they overestimate their budget and their means to accomplish their ends, and they underestimate the cost, and they're oblivious to the horrific damage that they do to the civilization because the mental models that they use that are conventionally taught are wrong. The mental model that, it's okay, we can print all this money because the velocity of the money is low, because money velocity is a scalar and inflation is the scalar, and we don't see 2% inflation yet and the money velocity is low, and so it's okay if we print trillions of dollars. Well, the money velocity was immediate, right? The velocity of money through the crypto economy is 10,000 times faster than the velocity of money through the consumer economy, right? I think Nick pointed out when you spoke to him, he said it takes two months for a credit card transaction to settle, right? So you wanna spend a million dollars in the consumer economy, you can move it six times a year. You put the million dollars into gold, gold will sit in a vault for a decade, okay? So the velocity of money through gold is 0.1. You put the money in the stock market and you can trade it once a week, the settlement is T plus two, maybe you get to two to one leverage. You might get to a money velocity of 100 a year in the stock market. You put your money into the crypto economy and these people are settling every four hours. And if you're offshore, they're trading with 20X leverage. So if you settle every day and you trade with 20X leverage, you just went to 7,000. So the velocity of the money varies. I think the politicians, they don't really understand inflation and they don't understand economics, but you can't blame them because the economists don't understand economics. Because if they did, they would be creating multivariate computer simulations where they actually put in the price of every piece of housing in every city in the world, the full array of foods and the full array of products and the full array of assets. And then on a monthly basis, they would publish all those results. And that's a high bandwidth requirement. And I think that people don't really wanna embrace it. And also the most pernicious thing, like there's that phrase, you can't tell people what to think, but you can tell them what to think about. The most pernicious thing is, I get you to misunderstand the phenomena so that even when it's happening to you, you don't appreciate that it's a bad thing and you think it's a good thing. So if housing prices are going up 20% year over year, and I say, this is great for the American public because most of them are homeowners, then I have misrepresented a phenomena. Inflation is 20%, not 7%. And then I have misrepresented it as being a positive rather than a negative. And people will stare at it and you could even show them their house on fire and they would perceive it as being great because it's warming them up and they're gonna save on their heat costs. It does seem that the cruder the model, whether it's economics, whether it's psychology, the easier it is to weave whatever the heck narrative you want. And not in a malicious way, but just like it's some kind of like emergent phenomena, this narrative thing that we tell ourselves. So you can tell any kind of story about inflation. Inflation is good, inflation is bad. Like the cruder the model, the easier it is to tell a narrative about it. And that's what the, so like if you take an engineering approach, I feel like it becomes more and more difficult to run away from sort of a true deep understanding of the dynamics of the system. I mean, honestly, if you went to 100 people on the street and you asked them to define inflation, how many would say it's a vector tracking the change in price of every product service asset in the world over time? No. Not many. Now, if you went to them and you said, do you think 2% inflation a year is good or bad? The majority would probably say, well, here it's good. The majority of economists would say 2% inflation a year is good. And of course there's, look at the ship next to us. What if I told you that the ship leaked 2% of its volume, every something, right? The ship is rotting 2% a year. That means the useful life of the ship is 50 years. Now, ironically, that's true. Like a wooden ship had a 50 year to a hundred year life, 100 would be long, 50 years, not unlikely. So when we built ships out of wood, they had a useful life of about 50 years and then they sunk, they rotted, there's nothing good about it, right? You build the ship out of steel, you know, and it's zero as opposed to 2% degradation. And how much better is 0% versus 2%? Well, 2% means you have a useful life of, you know, it's half life at 35 years. 2% is a half life of 35 years. That's basically the half life of money and gold. If I store your life force in gold under perfect circumstances, you have a useful life at 35 years. 0% is a useful life of forever. So 0% is immortal. 2% is 35 years average life expectancy. So the idea that you would think the life expectancy of the currency and the civilization should be 35 years instead of forever is kind of a silly notion. But the tragic notion is it was, you know, seven into 70 or 10 years. The money has had a half life of 10 years, except for the fact that in weak societies and in Argentina or the like, the half life of the money is three to four years, in Venezuela one year. So the United States dollar and the United States economic system was the most successful economic system in the last hundred years in the world. We won every war. We were the world's superpower. Our currency lost 99.7% of its value. And that means horrifically, every other currency lost everything, right? In essence, the other ones were 99.9, except for most that were 100% because they all completely failed. And, you know, you've got a mainstream economic community, you know, that thinks that inflation is a number and 2% is desirable. It's kind of like, you know, remember George Washington, you know how he died? No. Well-meaning physicians bled him to death. Okay, the last thing in the world you would wanna do to a sick person is bleed them, right? In the modern world. I think we understand that oxygen is carried by the blood cells. And, you know, and if, you know, there's that phrase, right? A triage phrase, what's the first thing you do in an injury? Stop the bleeding. Single first thing, right? You show up after any accident, I look at you, stop the bleeding because you're gonna be dead in a matter of minutes if you bleed out. So it strikes me as being ironic that Orthodox conventional wisdom was bleed the patient to death. And this was the most important patient in the country, maybe in the history of the country. And we bled him to death trying to help him. So when you're actually inflating the money supply at 7%, but you're calling it 2% because you wanna help the economy, you're literally bleeding the free market to death. But the sad fact is George Washington went along with it because he thought that they were gonna do him good. And the majority of the society, most companies, most conventional thinkers, you know, the working class, they go along with this because they think that someone has their best interests at mind. And the people that are bleeding them to death believe, they believe that prescription because their mental models are just so defective. And that understanding of energy and engineering and the economics that are at play is crippled by these mental models. But that's both the bug and the feature of human civilization that ideas take hold, they unite us, we believe in them. And we make a lot of cool stuff happen by, I mean, as an average sort of just the fact of the matter, a lot of people believe the same thing, they get together and they get some shit done because they believe that thing. And then some ideas can be really bad and really destructive, but on average, the ideas seem to be progressing in a direction of good. Let me just step back. What the hell are we doing here, us humans on this earth? How do you think of humans? How special are humans? How did human civilization originate on this earth? And what is this human project that we're all taking on? You mentioned fire and water, and apparently bleeding you to death is not a good idea. I always thought you can get the demons out in that way, but that was a recent invention. So what's this thing we're doing here? I think what distinguishes human beings from all the other creatures on the earth is our ability to engineer. We're engineers, right? To solve problems or just build incredible, cool things? Engineering, harnessing energy and technique to make the world a better place than you found it. From the point that we actually started to play with fire, that was a big leap forward. Harnessing the power of kinetic energy and missiles, another step forward. Every city built on water. Why water? Well, water's bringing energy, right? If you actually put a turbine on a river or you capture a change in elevation of water, you've literally harnessed gravitational energy, but water is also bringing you food. It's also giving you a cheap form of getting rid of your waste. It's also giving you free transportation. You wanna move one ton blocks around. You wanna move them in water. So I think, I mean, the human story is really the story of engineering a better world. And the rise in the human condition is determined by those groups of people, those civilizations that were best at harnessing energy. If you look, the Greek civilization, they built it around ports and seaports and water and created a trading network. The Romans were really good at harnessing all sorts of engineering. I mean, the aqueducts are a great example. If you go to any big city, you travel through cities in the Med, you find that the carrying capacity of the city or the island is 5,000 people without running water. And then if you can find a way to bring water to it, it increases by a factor of 10. And so human flourishing is really only possible through that channeling of energy, right? That eventually takes the form of air power, right? I mean, that ship, I mean, look at the intricacy of those sails. I mean, it's just the model is intricate. Now think about all of the experimentation that took place to figure out how many sails to put on that ship and how to rig them and how to repair them and how to operate them. It's thousands of lives spent thinking through all the tiny little details, all to increase the efficiency of this, the effectiveness, the efficiency of this ship as it sails through water. And we should also note there's a bunch of cannons on the side, so obviously. Another form of engineering, right? Energy harnessing with explosives. To achieve what end? That's another discussion, exactly. Suppose we're trying to get off the planet, right? Well, there's a selection mechanism going on. So natural selection, however evolution works, it seems that one of the interesting inventions on Earth was the predator-prey dynamic. That you wanna be the bigger fish. That violence seems to serve a useful purpose if you look at Earth as a whole. We as humans now like to think of violence as really a bad thing. It seems to be one of the amazing things about humans is we're ultimately tend towards cooperation. We like peace. If you just look at history, we want things to be nice and calm. And but just wars break out every once in a while and lead to immense suffering and destruction and so on. And they have a kind of like resetting the pallet effect. It's one that's full of just immeasurable human suffering, but it's like a way to start over. We're quite the apex predator on the planet. And I Google something the other day, what's the most common form of mammal life on Earth? By number of organisms? By count. By count. And the answer that came back was human beings. I was shocked, I couldn't believe it. It says like, apparently if we're just looking at mammals, the answer was human beings are the most common, which was very interesting to me. I almost didn't believe it, but I was trying to, eight billion or so human beings. There's no other mammal that's got more than eight billion. If you walk through downtown Edinburgh and Scotland and you look up on this hill and this castle up on the hill, and you talk to people and the story is, oh yeah, well that was a British castle, before it was a Scottish castle, before it was a Pict castle, before it was a Roman castle, before it was some other Celtic castle, before it was, then they found 13 prehistoric castles buried one under the other under the other. And you get the conclusion that 100,000 years ago, somebody showed up and grabbed the high point, the apex of the city, and they built a stronghold there, and they flourished, and their family flourished, and their tribe flourished until someone came along and knocked them off the hill. And it's been a nonstop, never ending fight by the aggressive, most powerful entity, family, organization, municipality, tribe, whatever. All for the hill. For that one hill, going back since time immemorial. And you scratch your head and you think, it seems like it's like just this never ending wheel. But does not lead, if you just, all kinds of metrics, that seems to improve the quality of our cannons and ships as a result. It seems that war, just like your laser eyes, focuses the mind on the engineering tasks. It is that. And it does remind you that the winner is always the most powerful. And we throw that phrase out, but no one thinks about what that phrase means. Like, who's the most powerful, or the most powerful side won, but they don't think about it. And they think about power, energy delivered in a period of time. And then you think, a guy with a spear is more powerful than someone with their fist. And someone with a bow and arrow is more powerful than the person with the spear. And then you realize that somebody with bronze is more powerful than without. And steel is more powerful than bronze. And if you look at the Romans, they persevered with artillery, and they could stand off from 800 meters and blast you to smithereens. You study the history of the Balearic slingers, and you think we invented bullets, but they invented bullets to put in slings thousands of years ago. They could have stood off 500 meters and put a hole in your head. And so there was never a time when humanity wasn't vying to come up with an asymmetric form of projecting their own power via technology. An absolute power is when a leader is able to control large amount of humans, they're facing the same direction, working in the same direction to leverage energy. The most organized society wins. When the Romans were dominating everybody, they were the most organized civilization in Europe. As long as they stayed organized, they dominated. And at some point they overexpanded and got disorganized and they collapsed. And I guess you could say that the struggle of human condition, it catalyzes the development of new technologies, one after the other. It penalizes anybody that rejects ocean power, right? Gets penalized, you reject artillery, you get penalized, you reject atomic power, you get penalized. If you reject digital power, cyber power, you get penalized. And the underlying control of the property keeps shifting hands from one institution or one government to another based upon how rationally they're able to channel that energy and how well organized or coordinated they are. Well, that's a really interesting thing about both the human mind and governments that once they get a few good, and companies, once they get a few good ideas, they seem to stick with them. They reject new ideas. It's almost, whether that's emergent or however that evolved, it seems to have a really interesting effect because when you're young, you fight for the new ideas. You push them through, then a few of us humans find success, then we get complacent. We take over the world using that new idea, and then the new young person with the better new idea, challenges you, and you, as opposed to pivoting, you stick with the old and lose because of it. And that's how empires collapse. And it's just both at the individual level that happens when two academics fighting about ideas or something like that, and at the human civilization level, governments, they hold on to the ideas of old. It's fascinating. Yeah, an ever persistent theme in the history of science is the paradigm shift. And the paradigms shift when the old guard dies and a new generation arrives, or the paradigm shifts when there's a war and everyone that disagrees with the idea of aviation finds bombs dropping on their head, or everyone that disagrees with whatever your technology is has a rude awakening. And if they totally disagree, their society collapses and they're replaced by that new thing. A lot of the engineering you talked about had to do with ships and cannons and leveraging water. What about this whole digital thing that's happening? Been happening over the past century. Is that still engineering in your mind? You're starting to operate in these bits of information. I think there's two big ideas. The first wave of ideas were digital information. And that was the internet way been running since 1990 or so for 30 years. And the second wave is digital energy. So if I look at digital information, this idea that we wanna digitally transform a book, I'm gonna dematerialize every book in this room into bits. And then I'm going to deliver a copy of the entire library to a billion people. And I'm gonna do it for pretty much de minimis electricity. If I can dematerialize music, books, education, entertainment, maps, right? That is an incredibly like exothermic transaction. It's a crystallization when we collapse into a lower energy state as a civilization and we give off massive amounts of energy. Like if you look at what Carnegie did, the richest man in the world created libraries everywhere at the time and he gave away his entire fortune. And now we can give a better library to every six year old for nothing. And so what's the value of giving a million books to eight billion people, right? That's the explosion in prosperity that comes from digital transformation. And when we do it with maps, I transformed the map, I put it into a car, you get in the car and the car drives you where you wanna go. With the map, right? And how much better is that than a Ram McNally Atlas right here? It's like a million times better. So the first wave of digital transformation was the dematerialization of all of these informational things which are non-conservative. That is, I could take Beethoven's fifth symphony played for by the best orchestra in Germany and I could give it to a billion people and they could play it in a way when they could play it a thousand times each at less than the cost of the one performance, right? So I deliver culture and education and erudition and intelligence and insight to the entire civilization over digital rails. And the consequences of the human race are first order generally good, right? The world is a better place, it drives growth and you create these trillion dollar entities like Apple and Amazon and Facebook and Google and Microsoft, right? That is the first wave. The second wave. Do you mind, I'm sorry to interrupt, but that first wave, it feels like the impact that's positive, you said the first order impact is generally positive. It feels like it's positive in a way that nothing else in history has been positive. And then we may not actually truly be able to understand the orders and magnitude of increase in productivity in just progress and human civilization until we look back centuries from now. It just feels, or maybe I'm like, just looking at the impact of Wikipedia. Right. The giving access to basic wisdom or basic knowledge and then perhaps wisdom to billions of people. If you can just linger on that for a second, what's your sense of the impact of that? You know, I would say if you're a technologist philosopher, the impact of a technology is so much greater on the civilization and the human condition than a non-technology that is almost not worth your trouble to bother trying to fix things a conventional way. So let's take example. I have a foundation, the Saylor Academy, and the Saylor Academy gives away free education, free college education to anybody on earth that wants it. And we've had more than a million students. And if you go and you take the physics class, the lectures were by the same physics lecturer that taught me physics at MIT. Except when I was at MIT, the cost of the first four weeks of MIT would have drained my family's life, collective life savings for the first last 100 years. Like a hundred years worth of my father, my grandfather, my great grandfather, they saved every penny they had after a hundred years, they could have paid for one week or two weeks of MIT. That's how fiendishly expensive and inefficient it was. So I went on scholarship. I was lucky to have a scholarship. But on the other hand, I sat in the back of the 801 lecture hall and I was like right up in the rafters. It's an awful experience on these like uncomfortable wooden benches and you can barely see the blackboard and you got to be there synchronously. And the stuff we upload, you can start it and stop it and watch it on your iPad or watch it on your computer and rewind it multiple times and sit in a comfortable chair and you can do it from anywhere on earth and it's absolutely free. So I think about this and I think you want to improve the human condition. You need people with postgraduate level education. You need PhDs and I know this sounds kind of elitist but you want to cure cancer and you want to go to the stars, fusion drive, we need new propulsion, right? We need extraordinary breakthroughs in every area of basic science, be it biology or propulsion or material science or computer science. You're not doing that with an undergraduate degree. You're certainly not doing it with a high school education but the cost of a PhD is like a million bucks. There's like 10 million PhDs in the world if you check it out. There's 8 billion people in the world. How many people could get a PhD or would want to? Maybe not 8 billion but a billion, 500 million. Let's just say 500 million to a billion. How do you go from 10 million to a billion highly educated people, all of them specializing and I don't have to tell you how many different fields of human endeavor there are. I mean, your life is interviewing these experts and there's so many, right? You know, it's amazing. So how do I give a multimillion dollar education to a billion people? And there's two choices. You can either endow a scholarship in which case you pay $75,000 a year. Okay, 75,000, let's pay a million dollars and a million dollars a person. I can do it that way. And you're never, even if you had a trillion dollars, if you had $10 trillion to throw at the problem and we've just thrown $10 trillion at certain problems, you don't solve the problem, right? If I put $10 trillion on the table and I said educate everybody, give them all a PhD, you still wouldn't solve the problem. Harvard University can't educate 18,000 people simultaneously or 87,000 or 800,000 or 8 million. So you have to dematerialize the professor and dematerialize the experience. So you put it all as streaming on-demand computer-generated education and you create simulations where you need to create simulations and you upload it. It's like the human condition is being held back by 500,000 well-meaning average algebra teachers. I love them. I mean, please don't take offense if you're an algebra teacher, but instead of 500,000 algebra teachers going through the same motion over and over again, what you need is like one, or five, or 10 really good algebra teachers and they need to do it a billion times a day or a billion times a year for free. And if we do that, there's no reason why you can't give infinite education, certainly in science, technology, engineering, and math, right? Infinite education to everybody with no constraint. And I think the same is true, right? With just about every other thing. If you want to bring joy to the world, you need digital music. If you want to bring enlightenment to the world, you need digital education. If you want to bring anything of consequence in the world, you got to digitally transform it and then you got to manufacture it something like 100 times more efficiently as a start, but a million times more efficiently is probably, you know, that's hopeful. Maybe you have a chance. If you look at all of these space endeavors and everything we're thinking about getting to Mars, getting off the planet, getting to other worlds, number one thing you got to do is you got to make a fundamental breakthrough in an engine. People dreamed about flying for thousands of years, but until the internal combustion engine, you didn't have enough energy, enough power in a light enough package in order to solve the problem. And the human race has all sorts of those fundamental engines and materials and techniques that we need to master. And each one of them is a lifetime of experimentation of someone capable of making a seminal contribution to the body of human knowledge. There are certain problems like education that could be solved through this process of dematerialization. And by the way, to give props to the 500K algebra teachers, when I look at YouTube, for example, one possible approach is each one of those 500,000 teachers probably had days and moments of brilliance. And if they had the ability to contribute to in the natural selection process, like the market of education where the best ones rise up, that's a really interesting way, which is like the best day of your life, the best lesson you've ever taught could be found and sort of broadcast to billions of people. So all of those kinds of ideas can be made real in the digital world. Now, traveling across planets, you still can't solve that problem with dematerialization. What you could solve potentially is dematerializing the human brain where you can transfer... Like you don't need to have astronauts on the ship. You can have a floppy disk carrying a human brain. So based on those points, you'd love for the 500,000 algebra teachers to become 500,000 math specialists, and maybe they clump into 50,000 specialties as teams, and they all pursue 50,000 new problems, and they put their algebra teaching on autopilot. That's the same as when I give you 11 cents worth of electricity, and you don't have to row a boat eight hours a day before you can eat. It would be a lot better that you would pay for your food in the first eight seconds of your day, and then you could start thinking about other things. With regard to technology, one thing that I learned studying technology when you look at S-curves is until you start the S-curve, you don't know whether you're 100 years from viability, a thousand years from viability, or a few months from viability. Isn't that fun? That's so fun. The early part of the S-curve is so fun, because you don't know. In 1900, you could have got any number of learned academics to give you 10,000 reasons why humans will never fly. In 1903, the Wright brothers flew, and by 1969, we're walking on the moon. The advance that we made in that field was extraordinary, but for the 100 years and 200 years before, they were just back and forth, and nobody was close. That's the happy part. The happy part is we went from flying 20 miles an hour or whatever to flying 25,000 miles an hour in 66 years. The unhappy part is I studied aeronautical engineering at MIT in the 80s, and in the 80s, we had Gulfstream aircraft, we had Boeing 737s, we had the Space Shuttle, and you fast forward 40 years, and we pretty much had the same exact aircraft. The efficiency of the engines was 20, 30% more. We slammed into a brick wall around 1969 to 1975. In fact, the Global Express, the Gulfstream, these were all engineered in the 70s, some in the 60s. The fuselage silhouette of a Gulfstream, of a G5, was the same shape as a G4, is the same shape as a G3, is the same shape as a G2, and that's because they were afraid to change the shape for 40 years because they worked it out in a wind tunnel, they knew it worked. When they finally decided to change the shape, it was like a $10 billion exercise with modern supercomputers and computational fluid dynamics. Why was this so hard? What does that wall meet of that you slammed into? The right question is, so why does a guy that went to MIT that got an aeronautical engineering degree spend his career in software? Why is it that I never, a day in my life, with the exception of some Air Force Reserve work, I never got paid to be an aeronautical engineer and I worked in software engineering my entire career? Maybe software engineering is the new aeronautical engineering in some way. Maybe you hit fundamental walls in certain, until you have to return to it centuries later. Or no? The National Gallery of Art was endowed by a very rich man, Andrew Mellon, and you know how he made his money? Aluminum. Okay? And so, and you know what kind of airplanes you can create without aluminum? Nothing. Nothing. Right? So it's a materialist problem. Okay, so 1900, we made massive advances in metallurgy, right? I mean, that was US steel. That was iron to steel, aluminum. Massive fortunes were created because this was a massive technical advance. And then we also had the internal combustion engine and you know, the story of Ford and General Motors and Daimler-Chrysler and the like is informed by that. So you have no jet engines, no rocket motors, no internal combustion engines. You have no aviation. But even if you had those engines, if you were trying to build those things with steel, no chance. You had to have aluminum. So there's like two pretty basic technologies. And once you have those two technologies, stuff happens very fast. So tell me the last big advance in like jet engines, there hasn't been one. Like there hasn't, the last big advance in rocket engines. How's it been one? The big advances in spaceship design from what I can see are in the control systems, the gyros and the ability to land, right? In a stable fashion. That's pretty amazing, landing a rocket. Also in the, I guess according to Elon and so on, the manufacture of the more efficient and less expensive manufacturer of rockets. So like it's a production, whatever you call that discipline of at scale manufacture, at scale production, so factory work. But it's not 10X. I mean, maybe it's 10X over a period of a few decades. When we figure out how to operate a spaceship, you know, on the water in your water bottle for a year, right? Now, then you've got a breakthrough. So the bottom line is propulsion, propellant, propulsion technology, propellants, and the materials technology, they were critical to getting on that aviation S curve. And then we slammed into a wall in the seventies and the Boeing 747, the global express, the Gulf stream. These things were the space shuttle. They were all pretty much reflective of that. And then we kind of, then we stopped. And at that point you have to switch to a new S curve. So the next equivalent to the internal combustion engine was the CPU. And the next aluminum equivalent was silicon. So when we actually started developing CPUs, the transistor gave way to CPUs. And if you look at the power, right, the bandwidth that we had on computers and Moore's law, right? What if the efficiency of jet engines had doubled every three years? Right? In the last 40 years where we'd be right now, right? So I think that if you're a business person, if you're looking for commercially viable application of your mind, then you have to find that S curve. And ideally, you have to find it in the first five, six, 10 years. But people always miss this. Let's take Google Glass, right? Google Glass was an idea in 2013. The year is 2022. And people were quite sure this was going to be a big thing. And it could have been at the beginning of the S curve. But fundamentally, we didn't really have an effective mechanism. I mean, people getting vertigo and they're, you know. But you didn't know that at the beginning of the S curve, right? I mean, maybe some people had a deep intuition about the fundamentals of augmented reality. But you don't know that. You don't have those. You're looking through the fog. You don't know. So the point is we're year zero in 2013, and we're still year zero in 2022 on that augmented reality. And when somebody puts out a set of glasses that you can wear comfortably without getting vertigo, right? Without any disorientation that managed to have the stability and the bandwidth necessary to sync with the real world, you'll be in year one. And from that point, you'll have a 70-year or some interesting future until you slam into a limit to growth. And then it'll slow down. And this is the story of a lot of things, right? I mean, John D. Rockefeller got in the oil business in the 1860s. And the oil business, as we understood it, became fairly mature by the 1920s to 30s. And then it actually stayed that way until we got to fracking, which was like 70 years later, and then it burst forward. So the interesting story about Moore's law, though, is that you get this constant burst of S curves on top of S curves on top of S curve. It's like the moment you start slowing down or almost ahead of you slowing down, you come up with another innovation, another innovation. So Moore's law doesn't seem to happen in every technological advancement. It seems like you only get a couple of S curves and then you're done for a bit. So I wonder what the pressures there are that resulted in such success over several decades and still going. Humility dictates that nobody knows when the S curve kicks off. And you could be 20 years early or 100 years early. Leonardo da Vinci, you know, they were Michelangelo. They were designing flying machines hundreds and hundreds of years ago. So humility says you're not quite sure when it's when you really hit that commercial viability. And it also dictates you don't know when it ends. Like when will the party stop? When will Moore's law stop? And we'll get to the point where they're exponentially diminishing returns on silicon performance. And when you just like we got exponentially diminishing returns on jet engines, you know, and it just takes an exponential increase in effort to make it 10 percent better. But while you're in the middle of it, then you know you can do things. So the reason that the digital revolution is so important is because the underlying platforms, the bandwidth of and the performance of the components and I say the components are the radio protocols, mobile protocols, the the batteries, the CPUs and the displays. Right. Those those four components are pretty critical. They're all they're all critical in the creation of an iPhone. I wrote about it in the book, The Mobile Wave, and they catalyze this entire mobile revolution because they have advanced and continue to advance. They created a very fertile environment for all these digital transformations. And the digital transformations themselves, right, they they call for creativity in their own. Right. Like like I think the interesting thing about let's take digital maps. When you when you conceptualize something as a dematerialized map, right, it becomes a map because I can put it on a display like an iPad or I can put it in a car like a Tesla. But if you really want to figure it out, you can't think like an engineer. You need to think like a fantasy writer. Like this is where it's useful if you studied if you read played Dungeons and Dragons and you read Lord of the Rings and you you study all the fantasy literature because because when I dematerialize the map, first I put 10 million pages of satellite imagery into the map. That's a simple physical transform. But then I start to put telemetry into the map and I keep track of the traffic rates on the roads. And I tell you whether you'll be in a traffic jam if you drive that way and I tell you which way to drive. And then I start to get feedback on where you're going. And I tell you the restaurants close and people don't like it anyway. And then I put an AI on top of it and I have it drive your car for you. And eventually the implication of digital transformation of maps is I get in a self-driving car and I say, take me someplace cool where I can eat. And and how did you get to that last step? Right. It wasn't simple engineering. There's a bit of fantasy and they're a bit of magic design, art, whatever the heck you call it. It's whatever. Yeah. Fantasy injects magic into the engineering process like imagination. Like proceeds great revolutions in engineering. It's like imagining a world like of what you can do with the display. How will the interaction be? That's where Google Glass actually came in augmented reality, virtual reality. People are playing in the space of sci fi imagination. They called a moonshot. They tried. It didn't work, but to their credit, they stopped trying. Right. And then there's new people. They keep dreaming. Dreamers all about all around us. I love those dreamers and most of them fail and suffer because of it. But some of them win Nobel prizes or become billionaires. But what I would say is if half the civilization dropped what they were doing tomorrow and eagerly started working on launching a rocket to Alpha Centauri, it might not be the best use of our resources because it's kind of like half of Athens in the year 500 BC eagerly started working on flying machines. If you went back and you said, what advice would you give them? You would say, you know, it's not going to work until you get to aluminum. And you're not going to get to aluminum until you work out the steel and certain other things. And you're not going to get to that until you work out the calculus of variations and some metallurgy. There's a dude, Newton, that won't come along for quite a while, and he's going to give you the calculus to do it. And until then, it's hopeless. So you might be better off to work on the aqueduct or to focus on sales or something. If I look at this today, I say there's massive, profound civilization advances to be made through digital transformation of information. And you can see them like that. This is the story of today. This is not the story of today, right? It's 10 years old, what we've been seeing. We're living through different manifestations of that story today, too, though, like social media. The effects of that is very interesting because ideas spread even, you talk about velocity of money, the velocity of ideas keeps increasing. So Wikipedia is a passive store. It's a store of knowledge. Twitter is like a water hose or something. It's like spraying you with knowledge whether you want it or not. It's like social media is just like this explosion of ideas. And then we pick them up and then we try to understand ourselves because the drama of it also plays with our human psyche. So sometimes there's more ability for misinformation, for propaganda to take hold. So we get to learn about ourselves. We get to learn about the technology that can decelerate the propaganda, for example, all that kind of stuff. But like the reality is we're living. I feel like we're living through a singularity in the digital information space. And we are not we don't have a great understanding of exactly how it's transforming our lives. This is where money is useful as a metaphor for significance, because if money is the economic energy of the civilization, then something that's extraordinarily lucrative that's going to generate a monetary or a wealth increase is a way to increase the net energy in the civilization. And ultimately, if we had 10 times as much of everything, we'd have a lot more free resources to pursue all of our advanced scientific and mathematical and theoretical endeavors. So let's take Twitter. Twitter is something that could be 10 times more valuable than it is. Twitter could be made 10 times better. By the way, I should say that people should follow you on Twitter. Your Twitter account is awesome. Thank you. It could be made 10 times better. Yeah, Twitter can be made 10 times better if we take if we take YouTube or take education. We could generate a billion PhDs. And and the question is, do you need any profound breakthrough in materials or technology to do that? The answer is not really. Right. So if you want to, you could make Apple, Amazon, Facebook, Google, Twitter, all these things better. The the United States government, if they took one percent of the money they spend on the Department of Education and they simply poured it into digital education and they gave degrees to people that actually met those requirements, they could provide a hundred X as much education for one one hundredth of the cost. And they could do it with no new technology. That's a marketing and political challenge. So I don't think every objective is equally practical. And I think the benefit of being an engineer or or thinking about practical achievements is when the government pursues an impractical objective or when anybody an entrepreneur, not so bad with an entrepreneur because they don't have that much money to waste. When a government pursues an impractical objective, they squander trillions and trillions of dollars and achieve nothing. Whereas if they pursue a practical objective or if the or if they simply get out of the way and do nothing and they allow the free market to pursue the practical objectives, then I think you can have profound impact on the human civilization. And if I if I look at the world we're in today, I think that there are there are multi trillion, 10, 20, 50 trillion dollars worth of opportunities in the digital information realm yet to be obtained. But there's hundreds of trillions of dollars of opportunities in the digital energy realm that not only are they not obtained, the majority of people don't even know what digital energy is. Most of them reject the concept. They're not looking for it. They're not expecting to find it. It's inconceivable because it is a paradigm shift. But in fact, it's completely practical. Right under our nose. It's staring at us and it could make the entire civilization work dramatically better in every every respect. So you mentioned in the digital world, digital information is one digital energy is two and the possible impact on the world and the set of opportunities available in the digital energy space is much greater. So how do you think about digital energy? What is it? So I'll start with Tesla. He had a very famous quote. He said, if you want to understand the universe, think in terms of energy, vibration and frequency. And it gets you thinking about what is the universe. And of course, the universe is just all energy. And then what is matter? Matter is low frequency energy. And what are we? We're vibrating for ashes to ashes, dust to dust. I can turn a tree into light. I can turn light back into a tree. If I consider the entire universe, and it's very important because we don't really think this way. Let's take the New York disco model. What if I walk into a nightclub and there's loud music blaring in New York City? What's really going on there? Right. If you blast out 15, 14 billion years ago, the universe is formed. Okay, that's a low frequency thing. The universe. Four and a half billion years ago, the sun, maybe the earth or form. It's 400 million years old, the shift that New York City is on is some hundreds of millions of years. But the Hudson River is only 20,000 years. There's a building that's probably 50 years old. There's a company operating that disco or that club, which is five to 10 years old. There's a person, a customer walking in there for an experience for a few hours. There's music that's oscillating at some kilohertz. And then there's light. And you have all forms of energy, all frequencies, all layered, all moving through different medium. And how you perceive the world is a question of at what frequency do you want to perceive the world? And I think that once you start to think that way, you're catalyzed to think about what would digital energy look like and why would I want it? And what is it? So why don't we just start right there? What is it? The most famous manifestation of digital energy is Bitcoin. Bitcoin is a crypto asset. It's a crypto asset that has monetary value. Can we just linger on that? Bitcoin is a digital asset that has monetary value. What is a digital asset? What is monetary? Why use those terms versus the words of money and currency? Is there something interesting in that disambiguation of different terms? I'd call it a crypto asset network. The goal is to create a billion dollar block of pure energy in cyberspace, one that I could then move with no friction at the speed of light. It's the equivalent to putting a million pounds in orbit. How do I actually launch something into orbit? How do I launch something into cyberspace such that it moves friction free? And the solution is a decentralized proof of work network. Satoshi's solution was I'm going to establish protocol running on a distributed set of computers that will maintain a constant supply of never more than 21 million bitcoins subdividable by 100 million Satoshis, each transferable via transferring private keys. Now, the innovation is to create that in a ethical, durable fashion. The ethical innovation is I want it to be property and not a security. A bushel of corn, an acre of land, a stack of lumber and a bar of gold and a bitcoin are all property. And that means they're all commonly occurring elements in the world. You could call them commodities, but commodity is a little bit misleading. And I'll tell you why in a second. But they're all distinguished by the fact that no one entity or person or government controls them. If you have a barrel of oil and you're in Ukraine versus Russia versus Saudi Arabia versus the US, you have a barrel of oil, right? And it doesn't matter what the premier in Japan or the mayor of Miami Beach thinks about your barrel. They cannot wave their hand and make it not a barrel of oil or a cord of wood. And so property is just a naturally occurring element in the universe. Why use the word ethical? I'm sorry to interrupt occasionally. Why ethical assigned to property? Because if it's a security, a security would be an example of a share of a stock or a crypto token controlled by a small team. And in the event that something is a security because some small group or some identifiable group can control its nature, character, supply, then it really only becomes ethical to promote it or sell it pursuant to fair disclosures. So I give you maybe practical example. I'm the mayor of Chicago. I give a speech. My speech, I say, I think everybody in Chicago should own their own farm and have chicken, a chicken in the backyard and their own horse and an automobile. That's ethical. I give the same speech and I say, I think everybody in Chicago should buy Twitter stock, sell their house or sell their cash and buy Twitter stock. Is that ethical? Not really. At that point, you've entered into a conflict of interest because what you're doing is you're promoting an asset which is substantially controlled by a small group of people, the board of directors or the CEO of the company. So how would you feel if the president of the United States said, I really think Americans should all buy Apple stock? Especially if you worked at Google. But you worked anywhere. You'd be like, why isn't he saying buy mine? A security is a proprietary asset in some way, shape or form. And the whole nature of securities law, it starts from this ancient, ancient idea, thou shall not lie, cheat or steal. So if I'm going to sell you securities or I'm going to promote securities as a public figure or as an influencer or anybody else, if I create my own Yo-Yo coin or Mikey coin and then there's a million of them and I tell you that I think that it's a really good thing and Mikey coin will go up forever. Nobody buys Mikey coin and then I give 10 million to you and don't tell the public. I've cheated them. Maybe if I have Mikey coin and I think there's only 2 million Mikey coin and I swear to you there's only 2 million and then I get married and I have three kids and my third kid is in the hospital and my kid's going to die. And I have this ethical reason to print 500,000 more Mikey coin or else people are going to die. And everybody tells me it's fine. You know, I've still abused, you know, the investor, right? It's it's a ethical challenge. If you look at ethics laws everywhere in the world, they all boil down to having a clause which says that if you're a public figure, you can't endorse any security. You can't endorse something that would cause you to have a conflict of interest. So if you're a mayor, a governor, a country, a public figure, an influencer, and you want to promote or promulgate or support something using any public influence or funds or resources you may have, it needs to be property. It can't be security. So it goes beyond that, right? I mean, like what the Chinese want to support an American company, right? As soon as you look at what's in the best interest of the human race, the civilization, you realize that if you want an ethical path forward, it needs to be based on common property, which is fair. And the way you get to a common property is through an open permissionless protocol. If it's not open, right, if it's proprietary and I know what the code says and you don't know what the code says, that makes it a security. If it's permissioned, if you're not allowed on my network or if you can be censored or booted off my network, that also makes it a security. So when I talk about property, I mean, the challenge here is how do I create something that's equivalent to a barrel of oil in cyberspace? And that means it has to be a non-sovereign bearer instrument, open permissionless, not censorable, right? If I could do that, then I could deliver you 10,000 dematerialized barrels of oil and you would take settlement of them. And you would know that you have possession of that property, irregardless of the opinion of any politician or any company or anybody else in the world. That's a really critical characteristic. And it actually is probably one of the fundamental things that makes Bitcoin special. Bitcoin isn't just a cryptoasset network. It's easy to create a cryptoasset network. It's very hard to create an ethical cryptoasset network because you have to create one without any government or corporation or investor exercising into influence to make it successful. So open, permissionless, non-censorable. So basically no way for you without explicitly saying so, outsourcing control to somebody else. So it's a kind of you have full control. Even with a barrel of oil, what's the difference between a barrel of oil and a Bitcoin to you? What is the... because you kind of mentioned that both are property. You mentioned Russia and China and so on. Is it the ability of the government to confiscate? In the end, governments can probably confiscate no matter what the asset is, but you want to lessen the effort involved. A barrel of oil is a bucket of physical property, liquid property. And Bitcoin is a digital property. But it's easier to confiscate a barrel of oil. It's easier to confiscate things in the real world than things in cyberspace. Much easier. So that's not universally true. Some things in the digital space are actually easier to confiscate because just the nature of how things move easily with information, right? I think in the Bitcoin world, what we would say is that Bitcoin is the most difficult property that the human race possesses or has yet invented to confiscate. And that's by virtue of the fact that you could take possession of it via your private keys. So if you've got your 12 seed phrases in your head, then that would be the highest form of property, right? Because I literally have to crack your head open and read your mind to take it. It doesn't mean I couldn't extract it from you under duress, but it means that it's harder than every other thing you might own. In fact, it's exponentially harder. If you consider every other thing you might own, a car, a house, a share of stock, gold, diamonds, property rights, intellectual property rights, movie rights, music rights, anything imaginable, they would all be easier by orders and orders of magnitude to seize. So digital property in the form of a set of private keys is by far the apex property of the human race. In terms of ethics, I want to make one more point. It's like I might say to you, Lex, I think Bitcoin is the best, most secure, most durable crypto asset network in the world is going to go up forever. And there's nothing better in the world. I might be right. I might be wrong. But the point is, because it's property, it's ethical for me to say that. If I were to turn around and say, you know, Lex, I think the same about micro strategy stock, MSTR. That's a security. Okay. If I'm wrong about that, I have civil liability or other liability because I could go to a board meeting tomorrow and I could actually propose we issue a million more shares of micro strategy stock. Whereas the thing that makes Bitcoin ethical for me to even promote is the knowledge that I can't change it. If I knew that I could make it 42 million instead of 21 million and I had the button back here, right, then I have a different degree of ethical responsibility. Now, I could tell you your life will be better if you buy Bitcoin and it might not. You might go buy Bitcoin, you might lose the keys and be bankrupt and your life ends and your life is not better because you bought Bitcoin, right? But it wouldn't be my ethical liability any more than if I were to say, Lex, I think you ought to get a farm. I think you should be a farmer. I think a chicken in every pot, you should get a horse. I think you'd be better. I mean, these are all opinions expressed about property, which may or may not be right that you may or may not agree with. But in a legal sense, if we read the law, if we understand securities law, and I would say, you know, most people in the crypto industry, you know, they don't they didn't take companies public. And so they're not really focused on the securities law. They don't even know the securities law. If you focus on the securities law, that would say you just can't legally sell this stuff to the general public or promote it without a full set of continuing disclosures signed off on by a regulator. So so there's a fairly bright line there with regard to securities. So when you get to the when you get to the secondary issue, it's how do you actually build a world based on digital property if public figures can't can't embrace it or endorse it? You see, so you're not going to build a better world based upon Twitter stock, if that's your idea of property, because Twitter stock is a security and Twitter stock is never going to be a non sovereign bearer instrument in Russia, right? Or in China, right? It's not legal in China, right? It's not a global permissionless open thing. It will never be trusted by the rest of the world. And legally, it's impractical. But, you know, would you really want to put $100 trillion worth of economic value on Twitter stock of there's a board of directors and a CEO that could just get up and like take half of it tomorrow? No. So if you want to if you want to build a better world based on digital energy, you need to start with constructing a digital property. And I'm using property here. Open permissionless legal sense. But I would also go to the next step and say, property is low frequency money. So if you if I give you a million dollars. And you want to hold it for a decade, you might go buy a house with it. Right. And the house is low frequency money. You converted the the million dollars of economic energy into a structure called a house. Maybe and after a decade, you might convert it back into energy, you might sell the house for currency. And it'll be more worth more or less depending upon the monetary quality means what here. How quickly it changes state how quickly does something vibrate. So if if I transfer $10 from me to you for a drink and then you turn around and you buy another right we're vibrating on a frequency of every few hours. Right. The energy is changing hands. But it's not likely that you sell and buy houses every few hours. Right. The frequency of of a of a transaction and real estate is every 10 years, every five years. So it's a much lower frequency transaction. And so when you think about what's going on here, you have extremely low frequency things, which we'll call property. Then you have mid frequency things. I'm going to call them money or currency. And then you have high frequency. That's energy. And that's why I use the illustration of you got the building, you got the light and you got the sound and they're all just energy moving at different frequencies. Now, Bitcoin is magical and it's it is truly the innovation. It's like a singularity because it represents the first time in the history of human race that we managed to create a digital property properly understood. It's easy to create something digital, right. Every coupon and every scan on Fortnite and Roblox and Apple TV credits and all these things. They're all digital something, but they're securities, right. Chairs of stock are securities. Whenever anybody transfers, when you transfer money on PayPal or Apple Pay, you're transferring in essence a security or an IOU. And so transferring a bearer instrument with final settlement in the Internet domain or in cyberspace, that's a critical thing. And anybody in the crypto world can do that. All the cryptos can do that. But what they can't do, what 99 percent of them fail to do is be property. They're securities. Well, there's a line there I'd like to explore a little further. For example, what about when you like Coinbase or something like that, when there's an exchange that you buy Bitcoin is in, you start to move away from this kind of some of the some of the aspects that you said makes up a property, which is this. Nonsensical and permissionless and open. So in order to achieve the convenience, the effectiveness of the transfer of energy, you have to leverage some of these places that remove the aspects of property. So maybe you can comment on that. Let me give you a good model for that. If you think about the layer one of Bitcoin, the layer one is is the property settlement layer and we're we're going to do 350,000 transactions or less a day. A hundred million transactions a year is the bandwidth on the layer one. And it would be an ideal layer one to move a billion dollars from point A to point B with the massive security. The role of the layer one is is two things. One thing is I want to move a large sum of money through space with security. I can move any amount of Bitcoin in a matter of minutes for dollars on layer one. The second important feature of the layer one is I need the money to last forever. Right. I need the money indestructible, immortal. So so the bigger trick is not to move a billion dollars from here to Tokyo. The big trick is to move a billion dollars from here to the year 2140. And and that's that's what we want to solve with layer one. And and the best real metaphor in New York City would be the granite or the schist. What you want is a city block of bedrock. And how long has it been there? Like millions of years it's been there. And how fast do you want it to move? You don't. In fact, the single thing that's most important is that it not deflect. If it deflects a foot in 100 years, it's too much. If it deflects an inch in 100 years, you might not want that. So the layer one of Bitcoin is a foundation upon which you put weight. How much weight can you put on it? You put a trillion, 10 trillion, 100 trillion, a quadrillion. How much weight is on the bedrock in Manhattan? Right. Think about 100 story buildings. So the real key there is the foundational asset needs to be there at all. So the fact that you can create a hundred trillion dollar layer one that would stand for a hundred years, that is the revolutionary breakthrough first time. And the fact that it's ethical, right, is ethical and it's common property, global permissionless, extremely unlikely that would happen. People tried 50 times before and they all failed. They tried 15,000 times after and they've all been, they've all generally failed. 98% have failed and a couple have like been less successful. But for the most part, that's an extraordinary thing. Now, just really quickly pause just to define some terms. If people don't know, layer one is that Michael's referring to is in general what people know of as the Bitcoin technology originally defined, which is the blockchain. There's a consensus mechanism of proof of work, a low number of transactions, but you can move a very large amount of money. The reason he's using the term layer one is now that there's a lot of ideas of layer two technologies that built on top of this bedrock that allow you to move a much larger number of transactions. So sort of a higher frequency, I don't know what terminology you want to use, but basically be able to use now something that is based on Bitcoin to then buy stuff, be a consumer, to transfer money, to use it as currency, just to define some terms. Yeah. So the layer one is the foundation for the entire cyber economy and we don't want it to move fast. What we want is immortality, immortal, incorruptible, indestructible. That's what you want, integrity from the layer one. Now there's layer two and layer three and layer two I would define as an open permissionless non-custodial protocol that uses the underlying layer one token as its gas fee. So what's custodial mean and how does the different markets like, is Lightning Network? The Lightning Network would be an example of a layer two, non-custodial. So the Lightning Network will sit on top of layer one. It'll sit on top of Bitcoin and it solves the, what you want to do is solve the problem of it's well and fine. I don't want to move a billion dollars every day. What I want to move is five dollars a billion times a day. So if I want to move five dollars a billion times a day, I don't really need to put the entire trillion dollars of assets at risk every time I move five dollars. All I really need to do is put a hundred thousand dollars in a channel or a million dollars in a channel and then I do 10 million transactions where I have a million dollars at risk. And of course it's kind of simple. If I lower my security requirement by a factor of a million, I can probably move the stuff a million times faster. And that's how Lightning works. It's non-custodial because there's no corporation or custodian or counterparty you're trusting. Right? There's the risk of moving through the channel. But Lightning is an example of how I go from 350,000 transactions a day to 350 million transactions a day. So on that layer too, you could move the Bitcoin in seconds for fractions of pennies. Now that's not the end all be all because the truth is there are a lot of open protocols. Lightning probably won't be the only one. There's an open market competition of other permissionless open source protocols to do this work. And in theory, any other crypto network that was deemed to be property, deemed to be non security, you could also think of as potentially a layer two to Bitcoin. Right? There's a debate about are there any and what are they? And we can leave that for a later time. So why do you think of them as layer two as opposed to contending for layer one? Yeah, actually, if they're using their own token, then they are a layer one. If you create an open protocol that uses the Bitcoin token as the fee, then it becomes a layer two. Right? Bitcoin itself incentivizes its own transactions with its own token. And that's what makes it layer one. Okay, what's layer three then? Layer three is a custodial layer. So if you want to move Bitcoin in milliseconds for free, you move it through Binance or Coinbase or Cash App. So this is a very straightforward thing. I mean, it seems pretty obvious when you think about it that there are going to be hundreds of thousands of layer threes. There may be dozens of layer twos. I mean, Lightning is a one, but it's not the only one anybody can invent something. Right? And we can have this debate about custodial, non custodial. Don't you think there's a monopolization possibilities at layer three? So, you know, coin, you mentioned Binance, Coinbase. What if they start to dominate and basically everybody's using them practically speaking, and then it becomes too costly to memorize the private key in your brain? I mean, or like the cold storage of layer one technology. The idealist fear the layer threes because they think and especially they detest. They would detest it a bit. There's almost like a layer four, by the way, if you want to. A layer four would be I've got Bitcoin on an application, but I can't withdraw it. So I've got an application that's backed by Bitcoin, but the Bitcoin is sealed. It's a proprietary example. And I'll give you an example of that. That would be like grayscale. If I own a share of GBTC and and so I own a security, actually, you know, you could own MSTR. If you own a security or you own a product that has Bitcoin embedded in it, you get the benefits of Bitcoin, but you don't have the ability to withdraw the asset. To get on the security market at layer four. Am I understanding this correctly? I don't know if I would say I don't not all securities are layer four, but but anything that's a proprietary product based upon what with Bitcoin embedded in it, where you can't withdraw the Bitcoin is another application of Bitcoin. So if if you think about different ways you can use this, you can either stay completely on the layer one and use the base chain for your transactions, or you can limit yourself to layer one and layer two lightning. And the purist would say we stay there. Get your Bitcoin off the exchange. But you could also go to the layer three when cash app supported Bitcoin, they made it very easy to buy it. And then they gave you the ability to withdraw when PayPal or I think Robin Hood let you buy it. They wouldn't let you withdraw it. And there was a big community uproar. And people want they want these layer threes to make it possible to withdraw the bitcoins. You can take it to your own private wallet and get it off the exchange. I think the answer to the question of, well, is corruption possible is corruption is possible in all human institutions and all governments everywhere. The difference between digital property and physical property is when you own a building in Los Angeles and the city politics turn against you, you can't move the building. And when you own a share of a security that's like a US traded security and you wish to move to some other country, you can't take the security with you either. And when you own a bunch of gold and you try to get through the airport, they might not let you take it. So Bitcoin is advantageous versus all those because you actually do have the option to withdraw your asset from the exchange. And if you if you had Bitcoin with Fidelity and you had shares of stock with Fidelity and if you had bonds and sovereign debt with Fidelity, if you own some some mutual funds and some other random limited partnerships with Fidelity, none of those things can be removed from the custodian. But the Bitcoin you can take off the exchange, you can remove from the custodian. So it's still possible. There's a deterrent. There's a deterrent. There's an anti-corrupting element and the phrase is an armed society is a polite society. Right. Because you have the optionality to withdraw all your assets from the crypto exchange, you can enforce fairness. And at the point where you disagree with their policies, you can within an hour move your assets to another counterparty or take personal custody of those assets. And you don't have that option with most other forms of property. Maybe you don't have as much optionality with any other form of property on Earth. And so what what makes digital property distinct is the fact that it has the most optionality for custody. Now, coming back to this digital energy issue, the real key point is the energy moves in milliseconds for free on layer threes. It moves in seconds or less than seconds on layer twos. It moves in minutes on the layer one. And I don't think it makes any sense to even think about trying to solve all three problems on the layer one because it's impossible to achieve the security and the incorruptibility and immortality. If you try to build that much speed and that functionality and performance. In fact, if you come back to the New York model, you really wanted a block of granite, a building and a company. That's what makes the economy right. If you said if I said to you, you're going to build a building, but you can only have one company in it for the life of the building. It would be very fragile, very brittle. What company 100 years ago is still relevant today? You want all three layers because they all oscillate at different frequencies and and you know, there's a tendency to think, well, it's got to be this L1 or that L1. Not really. And sometimes people think, well, I don't really want any L3. But companies, it's not an even war. Companies are better than crypto asset networks at certain things. If you want complexity, you want to implement complexity or you want to implement compliance or customer service, right? Companies do these things well, right? We know you couldn't decentralize Apple or Netflix or even YouTube. The performance wouldn't be there and the subtlety wouldn't be there. And you can't really legally decentralize certain forms of banking and insurance because they will become illegal in the political jurisdiction of their end. So unless you're a crypto anarchist and you believe in no companies and no nation states. Right. Which is just not very practical. Not anytime soon. Once you allow that nation states will continue and companies have a role, then the layered architecture follows and the free market determines who wins. For example, there are layer 3s that let you acquire Bitcoin and withdraw Bitcoin. There are other applications that let you acquire but not withdraw it. And they don't get the same market share, but they might give you some other advantage. There are certain layer 3s like Jack Dorsey's Cash App where they just incorporated Lightning, an implementation of it. So that makes it advantageous versus an application that doesn't incorporate Lightning. If you think about the big picture, the big picture is 8 billion people with mobile phones served by 100 million companies doing billions of transactions an hour. And the companies are settling with each other on the base layer in blocks of 80 million at a time. And then the companies are trading with the consumers. Right. In proprietary layers like layer 3 and then on occasion people are shuffling assets across custodians with Lightning layer 2 because you don't want to pay $5 to move $50. You want to pay a 20th of a penny to move $50. And so all of these things create efficiency in the economy. And Lex, if you want to consider how much efficiency? If you gave me a billion dollars in 20 years, I couldn't find a way to trade with another company or a counterparty in Nigeria. Like no amount of money. Give me $10 billion. I couldn't do it because you get shut down at the banking level. You can't link up a bank in Nigeria with a bank in the US. You get shut down at this credit card level because they don't have the credit card. So they won't clear. You get shut down at the compliance FCPA level because you wouldn't be able to implement a system that interfaced with somebody else's system if it's not in the right political jurisdiction. On the other hand, three entrepreneurs in Nigeria on the weekend could create a website that would trade in this Lightning economy using open protocols without asking anybody's permission. So you're talking about something that's like a million times cheaper, less friction and faster to do it if you want to get money to move. What do you think that looks like? So now there's a war going on in Ukraine. There's other wars. Yemen going out throughout the world in this most difficult of states that a nation can be in, which is at war. Civil war or war with other nations. What's the role of Bitcoin in this context? Bitcoin is a universal trust protocol, a universal energy protocol, if you will. English is one. What I see is a bunch of fragmentation of applications. For example, the Russian payment app is not going to work in Ukraine. The Ukraine payment app is not going to work in Russia. The US payment apps won't work either of those places, as far as I know. So, you know, and in Argentina, their payment app may not work in certain parts of Africa. So what you have is different local economies where people spin up their own applications compliant with their own local laws or, you know, in war zones, not compliant, but just spinning up. So how do you build something that's not compliant? What is the revolutionary act here when you don't agree with the government or what you want to free yourself from the constraints? So here's the thing. The when a nation is really at war. Is the especially if it's an authoritarian regime, it's going to try to control the pipeline, lock everything down. Yeah. The spread of information. How do you break through that? Do you do the thing that you mentioned, which is you have to build another app essentially that allows the flow of money outside the legal constraints placed on you by the government? So basically break the law. Metaphorically speaking, if you want to break out the constraints of your culture, you learn to speak English. For example, it's not illegal to speak English or even if it is right, doesn't matter. But but English works everywhere in the world. If you can speak it and then you can tap into a global commerce and intelligence network. So Bitcoin is a language. So you learn to speak Bitcoin or you learn to speak lightning and then you tap into that network in whatever manner you can. But the problem is it's still very difficult to move Bitcoin around in Russia and Ukraine now during war. And there was a sense to me that the cryptocurrency in general could be the savior for helping people. There's millions of refugees. They're moving all around. It's very, it's very difficult to move money around in that space to help people. I think we're very early. Like like we're very embryonic here. If you look at the. Who's we, sorry, we as a human civilization, are we operating in the cryptocurrency space? I think the entire crypto economy is very embryonic and the human race's adoption of it is embryonic. We're like one, two percent down that adoption curve. If you take lightning, for example, the you know, the first real commercial applications of lightning are just in the last 12 months. So we're like year one. We might be approaching year two of commercial lightning adoption. And if you look at lightning adoption, lightning is not built into Coinbase, is not built into Binance, is not built into FTX. You know, Cash App just implemented the first implementation, but not all the features are built into it. There's a few dozen, a dozen lightning wallets circulating out there. So I think that, you know, we're probably going to be 36 months of software development at the point that every Android phone and every iPhone has has a Bitcoin wallet or crypto wallet in it of sorts. That's a big deal. If Apple embraced lightning, that's a big deal. So the adoption is the thing like in a war zone adoption, the people who struggle the most in war are people who are weren't doing that great before the war started. They don't have the technological sophistication. The hackers and all those kinds of people will find a way. It's just regular people who are just struggling to make day by day living. And so if the adoption permeates the entire culture, then you can start to move money around in the digital space. What if from a psycho, if you can psychoanalyze Jack Dorsey for a second. So he's one of the early adopters or he's one of the people pushing the early adoption this layer three. So inside cash app, what do you make of the man of this decision as a business owner, as somebody playing in the space? Like what, why did he do it? And what does that mean for others at the scale that might be doing the same? So incorporating lightning networking, incorporating Bitcoin into their products. I think he's been pretty clear about this. He feels that Bitcoin is an instrument of economic empowerment for billions of people that are unbanked and have no property rights in the world. If you want to give an incorruptible bank to eight billion people on the planet, that's the same as asking the question, how do you give a full education through PhD to eight billion people on the planet? And the answer is a digital version of the 20th century thing running on a mobile phone. And Bitcoin is a bank in cyberspace, it's run by incorruptible software and it's for everybody on earth. So I think when Jack looks at it, he's very sensitive to the plight of everybody in Africa. If you look at Africans, right? Like you're going to give them banks, you're not going to put a bank branch on every corner. That's an obscene waste of energy. You're not going to run copper wires across the continent. That's an obscene waste of energy. You're not going to give them gold. So how are you going to provide people with a decent life? The metaphor I think is relevant here, the biological metaphor, Lex, is type one diabetic. If you're a type one diabetic, you can't form fat. And if you can't form fat, then you can't store excess energy. So that means that, I mean, fat is the ultimate organic battery. And if you've got 30 pounds of it, you can go 60 days without eating. But if you can't generate insulin, you can't form fat cells. And if you can't form fat cells and store energy, then you can eat yourself to death. I mean, you will eat and you will die. You'll starve to death. So the lack of property rights is like being a type one diabetic. And so if you look at most people everywhere in the world, they don't have property rights. They don't have effective bank and their currency is broken. Like what are the two things that in theory would serve as the equivalent of an organic battery or an economic battery to civilization? It would be I have a currency which holds its value and I can store it in a bank. So a risk, a risk free currency derivative. I pay you your money. You take your life savings. You put it in a bank. You save up for your retirement. You'll have happily ever after. That's the American dream, right? That's the idyllic situation. The real situation is there are no banks. You can't get a bank account. So I give you your pay in currency and then I double the supply and I give it to my cousin or I give it to whatever cause I want. Or I use it to buy weapons and then you find a loaf of bread cost triple next month is what it costs. And your life savings is worthless. And so in that environment, everybody's ripped back to Stone Age barter. And the problem with that, even Stone Age barter is you're going to carry your life savings on your back and what happens when the guy with the machine gun points it at your head and just takes your life savings. So I think from Jack's point of view, he thinks that life is this is maybe too strong, but these are my words. Life is hopeless for a lot of people and Bitcoin is hope. Because it gives everyone an engineered monetary asset that's a bearer instrument and it gives them a bank on their mobile phone. And they don't have to trust their government or another counterparty with their life force. So there's a secondary thing I think he's interested in, which is the first thing is the human rights issue. And the second thing would be the friction to trade cross borders is so great. You're like AI, so I'll give you a beautiful notion. Maybe one day there'll be an artificially intelligent creature in cyberspace that is self-sufficient and rich. Like that we would have sovereignty. Can a robot own money or property? How about Tesla car? Can I actually put enough money in a car for it to drive itself and maintain itself forever? Or can I create an artificially intelligent creature in cyberspace that is endowed such that it would live a thousand years and continue to do its job? We have a word for that in the real world is institution. Harvard, Cambridge, Stanford. There are institutions with endowments that go on in perpetuity. But what if I wanted to perpetuate a software program? And with something like digital property, with Bitcoin and Lightning, you could do it. And on the other hand, with banks and credit cards, you couldn't, right? You couldn't ever. So you can create things that are beautiful and lasting. And what's the difference in speed? Well, so I can either trade with everybody in the world at the speed of light, friction free in 24 hours, writing a Python script. Or I can spend a hundred billion dollars to trade with a few million people in the world after it takes them six months of application. The impedance is like a 10 million to one difference. Right. And the metaphors are literally like launching something in orbit versus almost orbit or vacuum sealing something. Does it last forever and does it orbit forever or does it go up and come down and burn up? Right. And I think Jack is interested in, you know, putting freedom in orbit. Putting freedom in orbit. And he said it many times. He said, this is the Internet needs a native currency. Right. And no political construct or security can be a native currency. You need a property and you need a property that can be moved a million times a second. Can you oscillate it at 10 kilohertz or a hundred kilohertz? And the answer is only if it's a pure digital construct, permissionless and open. And so I think he's enthusiastic as the technologist and he's enthusiastic as the humanitarian. And what he's doing is to support both those areas. He's supporting the Bitcoin and the Lightning protocol by building them into his products. But he's also building the applications, which you need at the cash app level in order to commercialize and deliver the functionality and compliance necessary. And they're related. And I should also say he's just a fascinating person. I for a random reason that I couldn't even explain if I tried. I met him a few days ago and gave him a great big hug in the middle of nowhere. There was no explanation. He just appeared. That's a fascinating human. His relationship with art, with the world, with human suffering, with technology is fascinating. I don't know what his path looks like, but it's interesting that people like that exist. And in part, I'm saddened that he no longer is involved with Twitter directly as a CEO, because I was hoping something inside Twitter would also integrate some of these ideas of what you're calling digital energy to see how social networks, something I'm really interested in and passionate about could be transformed. Let me ask you just for educational purposes. What's the can you please explain to me what Web 3 and the beef between Jack and Mark Andreessen is exactly? Did you see what happened? Sorry to have you analyze Twitter like it's Shakespeare. But can you please explain to me why why there is any any drama over this topic? First of all, Web 3 is a term that's used to refer to the part of the economy that's token finance. So if I'm launching an application and my idea is to is to create a token along with the application and issue the token to the community so as to finance the application and build support for it, I think that I think that that's the most common interpretation of Web 3. There are other interpretations, too. And so I'm just going to refer to that one. And I think the beef in a nutshell, not articulated, but I'll articulate it is whether or not you should focus all your energy creating applications on top of an ethical digital property like Bitcoin or whether you should attempt to create a competitor to it, which generally would be deemed as a security by the Bitcoin community. So I'm going to put on my Bitcoin hat here. Yeah. Right. All the tokens that are if it's driven by a venture capitalist was security. If there's a CEO and a CTO, it's a security. All these projects, their companies, foundations or companies. Right. If you call them a project or a foundation, it doesn't make it not a security. They're all in essence collections of individuals that are issuing equity in the form of a token. And if if there's a pre mine, an IPO, an ICO, a foundation or any kind of any kind of protocol where there is a a group of engineers that have influence over it, then to a securities lawyer or, you know, to most Bitcoiners and definitely to anybody that's steeped in securities law, you look and say, well, that passes the Howie test. It's it looks like a security. It should be sold to the public pursuant to, you know, disclosures and regulations. And you're just ducking the IPO process. Right. And so now we get back to the ethical issue. The ethical issue is if you're trading it as a commodity and representing it as a commodity while truthfully, it's a security, you know, then it's a violation of ethics rules and it's probably illegal. Well, you're you keep leaning on this. Let me push back on that part. Maybe you can educate me. But you keep leaning on this line of securities law as if it with all due respect to lawyers, as if that line somehow defines what it what is and isn't ethical. I think there's a lot of correlation, as you've discussed. But I'd like to leave the line aside. If the law calls something as a security, it doesn't mean in my eyes that it is unethical. I mean, there could be some technicalities and lawyers and people play games with this kind of stuff all the time. But I take your bigger point that if there's a CEO, there's a project lead that's fundamentally well, that to you is fundamentally different than the structure of Bitcoin. It's not that creating securities is unethical. I created security. I took a company public. Right. That's not the unethical part. It's completely ethical to create securities. You know, block is a security. All companies are securities. The unethical part is to represent it as property when it's a security. And and to promote it or trade it as such. This whole promotion, that's also a technical thing, because you're like what counts as a not as promotion is a legal thing. And you get in trouble for all these things. But that that's the game that lawyers play. There's an ethical thing here, which is like what's the right to promote a not? You know, to me, propaganda is unethical, but it's usually not illegal. If you roll the clock back 20 years, right, all the boiler room pump and dump schemes were all about someone pitching a penny stock, you know, selling Swampland in Florida. And if you roll the clock back forward 20 years and I create my own company and I represent it as the same thing and I don't make the disclosures, right? You're you're just one step removed from the boiler room scheme. And that's what's distasteful about it. There are ways to sell securities to the public, but there are but there are expectations. Maybe we could forget about whether the security laws are ethical or not. Right. I will leave that alone. We'll just start with the biblical definition of ethics. Yes. Don't lie, cheat or steal. So if I'm going to sell something to you, I need to fully disclose what I'm selling to you. Right. And and that that's a matter of great debate right now. And so I think that that's part of the debate. But the other part of the debate is whether or not we need more than one token like. We need at least one. Right. We need we need at least one digital property. Because zero means there is no digital economy. Yes. And by the way, you know, the conventional view of maximalist is they think there's only one and everything else isn't. That's not the point I'm going to make. I would say we know there is that as there is at least one digital property and that is Bitcoin. If you can create a truly decentralized, non-custodial, you know, bearer instrument that is not under the control of any organization that is fairly distributed, then you might create another or multiple. And there may be others out there. But I think that the frustration of a lot of people in the Bitcoin community and I share this with Jack is we could create a hundred trillion dollars of value in the real world simply by building applications on top of Bitcoin as a foundation. And so continually trying to reinvent the wheel and and create competitive things is a massive waste of time and its diversion of human, human creativity. It's like we have an ethical good thing. Yeah. And now we're going to try to create a third or a fourth one. Why? Let's talk about it. So first of all, I'm with you. But let me ask you this interesting question because we talked about properties and securities. Let's talk about conflict of interest. You said you could advertise public. You have a popular Twitter account. It's it's hilarious and insightful. You do promote Bitcoin in a sense. I don't know if you would say that. But do you think there's a conflict of interest in anyone who owns Bitcoin promoting Bitcoin? Is it the same as you promoting the farming? I would say no, there's an interest. I think that I think that you can promote a property or an idea to the extent that you don't control it. I think that the point at which you start to have a conflict of interest is when you're promoting a proprietary product or proprietary security, a security in general is proprietary asset. So, for example, if you look at my Twitter, you will find that I make lots of statements about Bitcoin. You won't ever see me making a statement that say MicroStrategy stock will go up forever. I'm not promoting a security MSTR because at the end of the day, MSTR is a security. It is proprietary. I have proprietary interest in it. I have a disproportionate amount of control and influence on the direction. The control is the problem. The control is the problem because you have interest in both. You can very if Bitcoin is successful, as we're talking about, you are very possibly can become the richest human on Earth, given how much you own in Bitcoin, right? The wealthiest, not the richest. I don't know what those words mean. I would benefit economically. You would benefit economically. That's true. So the reason that's not conflict of interest is because the word property that Bitcoin is an idea and Bitcoin is open. It's because I don't own it. I don't control it. In essence, the ethical line here is could I print myself 10 million more Bitcoin or not? Or can anyone? It's not just you. It's can anyone? Because can you promote somebody else's? Yes, I guess you can. Like, can you promote us, Apple? It's like you could have a Twitter account where you promote oil or you promote camping or you promote family values or promote, you know, a carnivore diet or promote the Iron Man, right? You're not going to get wealthier if you promote camping because you can't own a stake in. I mean, you own a lot of Bitcoin. What is that? What is that? Don't you own the stake in the idea? I would grant you that. But the lack of control is the fundamental ethical line that you just you don't have. All you are is you're a fan of the idea. You believe in the idea and the power of the idea. Yeah, I think you can't take that idea away from others. Let's come back to let me give you some maybe easier examples. If you were the head of the Marine Corps. Right. And. And someone came to you and said, I created Marine Coin and and the twist on Marine Coin is, is I want you to tell every Marine that they'll get an extra Marine Coin. You know, when they when they get their next stripe. And then I'm going to give you, you know, I'm going to let you buy Marine Coin now. And then after you buy Marine Coin, I want you to like promote it to them. Right. At some point, if if you start to have a disproportional influence on it or if you're in a conversation with people with disproportionate influence becomes conflict of interest. And it would make you profoundly uncomfortable, I think. Yeah. If the head of the Marine Corps started promoting anything that looked like a security. Now, if the head of the Marine Corps started promoting canoeing. You might think he's kind of wacky, like maybe like that's kind of a waste of time and distraction. So but but but to the extent that canoeing is not a security, not a problem unless you, you know, ultimately the issue of decentralization is really a critical one. So not having a head. So is it something can Bitcoin be replicated? So the all the things that you're saying that make it a property, can that be replicated? I think it's possible to create other crypto properties. Does it does the having a head like of a project, a thing that limits its ability to be a property if you if you try to replicate a project? Is that the fundamental flaw? I look, I think the real fundamental issue is you just never want it to change. Like like if you really want something decentralized, you want a genetic template that substantially is not going to change for a thousand years. So I think Satoshi said it at one point, he said the nature of the software is such that by version point one, its genetic code was set. If if there was any development team that's continually changing it, you know, on a routine basis, it becomes harder and harder to maintain its decentralization. Because now now there's the issue of who's influencing the changes. So what you really want is is a very, very simple idea, right? The simplest idea. I'm just going to keep track of who owns 21 million parts of energy. And when someone proposes big functional upgrades, you almost don't you don't really want that development to go on the base layer. You want that development to go on the layer threes because now cash app has a proprietary set of functionality and it's a security. And if you're going to promote the use of this thing, you're not going to you're not going to promote the layer three security because that's an edge to a given entity. And you're trusting the counterparty. You're going to promote the layer one or most the layer two. OK, so one of the fascinating things about Bitcoin and sorry to romanticize certain notions, but Satoshi Nakamoto that the founders anonymous. Maybe you can speak to whether that's useful, but also I just like the psychology of that to imagine that there's a human being that was able to create something special and walk away. So first, are you Satoshi Nakamoto? I'm certain I'm not. No, actually, I think the providence is really important. And if I were to look at the highlighted points, I think having a founder that was anonymous or sort of anonymous is important. I think the founder disappearing is also important. I think that the fact that the Satoshi coins never moved is also important. I think the lack of an initial coin offering is also important. I think the lack of a corporate sponsor is important. I think the fact that it traded for 15 months with no commercial value was also important. I think that the simplicity of the protocol is very important. I think that the outcome of the block size wars is very important and all of those things add up to common property. They're all indicia, indicators of a digital property as opposed to security. If there was a Satoshi sitting around sitting on top of 50 billion dollars worth of Bitcoin, I don't think it would cripple Bitcoin as property, but I think it would undermine its digital property. And if I wanted to undermine a crypto asset network, I would do the opposite of all those things. I would launch one myself. I would sell 25% or 50% to the general public. I would pre-mine some stuff or early mine it, and I would keep an influence on it. Those are all the opposite of what you would do in order to create common property. And so I see the entire story as Satoshi giving a gift of digital property to the human race and disappearing. Do you think it was one person? Do you have ideas of who it could be? I don't care to speculate. But do you think it was one person? I think it was one person, maybe in conjunction with a bunch of others. I mean, it might have been a group of people that were working together, but certainly there's a Satoshi. I mean, it's just so fascinating to me that one person could be so brave and thoughtful. Or do you think a lot of his accent, like the block size wars, the decision to make a block a certain size, all the things you mentioned led up to the characteristics that make Bitcoin property. Do you think that's an accident or it was deeply thought through? This is almost like a history of science question. I think people tried it for, they tried 40 of them. I mean, I think there's a history of attempting to create something like this, and it was tried many, many times. And they failed for different reasons. And I think that it's like Prometheus tried to start a fire 47 times and maybe the 48th time it sparked. And that's how I see this. This is the first one that sparked. And it sets a roadmap for us. And I think if you're looking for any one word that characterizes, it's fair. The whole point of the network is it's a fair launch, a fair distribution. Like, yeah, I have Bitcoin, but I bought it. In fact, at this point, we've paid $4 billion of you real cash to buy it. If I was sitting on the same position and I had it for free, then there's always this question of, did I pay, you know, or I bought it for a nickel a coin or a penny a coin. The question is, was it fair? And that's a very hard question to answer. Right. Did you acquire the Bitcoin that you own fairly? And if you roll the clock back, you know, you could have bought it for a nickel or a dime. But that was when it was a million times more likely to fail. When the risk was greater, the cost was lower. And then over time, the risk became lower and the cost became greater. And the real critical thing was to allow the marketplace absent any powerful interested actor. Right. It's almost like if Satoshi had held a million coins and then stayed engaged for 10 more years, tweaking things in the background, there'd still be that question. But what we've got is really a beautiful thing. We've got a we've got a chain reaction in cyberspace or an ideology spreading virally in the world that that has seasoned in a fair ethical fashion. Sometimes it's a very violent, brutal fashion with all the volatility. Right. And there's been a lot of a lot of sound and fury along the way. How do you psychoanalyze? How do you deal from a financial, from a human perspective with the volatility? You mentioned you could have gotten it for a nickel and the risk was great. Where's the risk today? What's your sense? You know, we're 13 years into this entire activity. I think the risk has never been lower. If you look at all the risks, right, the risk, the risks in the early years are is the engineering protocol proper, like one megabyte block size, 10 minute clock frequency cryptography is first. Will it be hacked or will it crash 730,000 blocks and it hasn't crashed? Will it be hacked? Hasn't been hacked, but you know, it's a Lindy thing, right? You wait 13 years to see if it'll be hacked. But on the other hand, with a billion dollars, it's not as interesting a target as it is with 100 billion. And when it gets to be worth a trillion, then it's a bigger target. So so the risk has been bleeding off over time as the network monetized. I think the second question is, will it be banned? You couldn't know it could literally could have been banned at any time many times early on. In fact, in 2013, I tweeted on that subject. I thought it would be banned. I made a very famous tweet. I thought it was it was going to be banned in 2014. The IRS designated it as property and gave it property tax treatment. So they could have given it a tax treatment where you had to pay tax on the unrealized capital gains every year and it probably would have crushed it to death. Right. You know, so so it could have been in any in any number of places banned by a government. But in fact, it was legitimized as property. And then the question is, would it be hacked or would it be copied? Will it be something better than that? And it was copied 15000 times and you know the story of all those and and they either diverged to be something totally different and not comparable or someone trying to copy a non sovereign bearer instrument store of value found that their networks crashed to be one percent of what Bitcoin is. So now we're sitting at a point where all those risks are out of the out of the way. I would say that year one of institutional adoption is it started August 2020. That's when MicroStrategy bought 250 million dollars worth of Bitcoin and we put that on the wire. We were the first publicly traded company to actually buy Bitcoin. I don't think you could have found a five million dollar purchase from a public company before we did that. So that was kind of like a gun going off. And then in the next 12 months, Tesla bought Bitcoin, Square bought Bitcoin. And I'd say now we're in year two of institutional adoption. And there are about 24, should be 24 publicly traded Bitcoin miners by the end of this quarter. So you're looking at 36 publicly traded companies. And you've got 50, at least in a range of 50 billion dollars on the balance of Bitcoin on the balance sheet of publicly traded companies and hundreds of billions of dollars of market cap of Bitcoin exposed companies. So I would say the asset decade one was entrepreneurial, experimental. Decade two is a rotation from entrepreneurs to institutions and is becoming institutionalized. So maybe decade one, you go from zero to a trillion and decade two, you go from one trillion to a hundred trillion. What about governments? Government adoption, institutional adoption. Is our governments important in this? Maybe making it some governments incorporating it into as a currency into their banks, all that kind of stuff. Is that important? And if it is, when will it happen? It's not essential for the success of the asset class, but I think it's inevitable in various degrees over time. But the most likely thing to happen next is large acquisitions by institutional investors of Bitcoin as a digital gold. Where they're just swapping out gold for digital gold and thinking of it like that. And the government entities most likely to be involved with that would be sovereign wealth funds. If you look at all the sovereign wealth funds that are holding big tech stock equities, the Swiss, the Norwegians, the Middle Easterners. If you can hold big tech, then holding digital gold would be not far removed from that. That's a non-controversial adoption. I think there are opportunities for governments that are much more profound. If a government started to adopt Bitcoin as a Treasury Reserve asset, that's much bigger than just an asset investment. That's a hundred X bigger. And you could imagine that's like a trillion dollar opportunity. Like any government that wanted to adopt it as a Treasury Reserve asset would probably generate trillions of dollars. A trillion or more of value. And then, you know, the thing that people think about is, well, will oil ever be priced in Bitcoin or any other export commodity? I think there's like one point eight trillion dollars or more of export commodities in the world. And right now they're all priced in dollars. I think that this is a colorful thing, but it's not really that relevant. Like you could sell all that stuff in dollars. The relevant decision that any institution makes, whether they're a nonprofit, a university, a corporation or a government, is what's your Treasury Reserve asset? And if your Treasury Reserve asset is the peso, and if the peso is losing 20 percent or 30 percent of its value a year, then, you know, your your balance sheet is collapsing within five years. And if the Treasury Reserve asset is dollars and currency derivatives and U.S. Treasuries, then you're getting your seven. Right now it's probably 15 percent or more monetary inflation. We're running double the historic average. You could argue triple, somewhere between double and triple, depending upon what your metric is. So, you know, do I think it'll happen? I think that they're conservative, but they have to be shocked. And I think there is a shock. The late Russian sanctions are a big shock. When the West sees 300 billion dollars worth of Russian gold and currency derivatives, I think, you know, you got the famous quote by Putin that, you know, we have to rethink our Treasury strategies. And that pushes everybody toward a commodity strategy. What commodities do I want to hold? I think that's got a lot of people thinking. I think it's got the Chinese thinking. Everybody wants to be the reserve currency, right? So if I buy 50 billion dollars worth of dollars every year, then I buy 500 billion over a decade and I probably pay 250 billion dollars of inflation cost on the backs of my citizens in a decade. So inflation could be one of the sources of shock. And you wonder if there is a switch to Bitcoin, whether it will be a bang or a whimper. Like, what is the nature of the shock or the transition? I think that the year 2022 is pretty catalytic for digital assets in general and for Bitcoin in particular. The Canadian trucker crisis, I think, educated hundreds of millions of people and made them start questioning their property rights and their banks. I think the Ukraine war was a second shock. But I think that the Russian sanctions was a third shock. I think all three of them. And I think hyperinflation in the rest of the world is a fourth shock and then persistent inflation in the US is a fifth shock. So I think it's a perfect storm. And if you put all these events together, what do they signify? They signify the rational conclusion for any person thinking about this is, I'm not sure if I can trust my property. I don't know if I have property rights. I don't know if I can trust the bank. And if I'm politically at odds with the leader of my own country, I'm going to lose my property. And if I'm politically at odds with the owner of another country, I'm still going to lose my property. And when push comes to shove, the banks will freeze my assets and seize them. And I think that that is playing out in front of everybody in the world, such that your logical response would be, I'm going to convert my weak currency to a strong currency. Like I'll convert my peso and lira to the dollar. I'm going to convert my weak property to strong property. I'm going to sell my building downtown Moscow. And I'd rather own a building in New York City. I'd rather own in a powerful nation than be stuck with a building in Nigeria or a building in Argentina or whatever. So I'm going to sell my weak properties to buy strong properties. I'm going to convert my physical assets to digital assets. I'd rather own a digital building than own a physical building. Because if I had a billion dollar building in Moscow, who can I rent that to? But if I have a billion dollar digital building, I can rent it to anybody in any city in the world. Anybody with money and the maintenance cost is almost nothing. And I can hold it for 100 years. OK, so it's indestructible building. And then finally, I want to move from having my assets in a bank with a counterparty to self custody assets. Right. So and this is not it's not just Ukraine, but this is like the story in Turkey, Lebanon, Syria, Afghanistan, Iraq, South America. You don't really want to be sitting with 10 million dollars in a bank in Istanbul. The bank's going to freeze your money, convert it to lira, devalue the lira and then feed it back to you over 17 years. Right. So self custody assets would be layer one Bitcoin. Self custody assets. It's like if I if I got my own hardware wallet and I've either got your highest form of self custody would be Bitcoin on your own hardware wallet or Bitcoin in your own self custody. And the other the other thing people think about is how do I get crypto dollars like tether like some stable coin? Yeah, like I'd rather if you had a choice, would you rather have your money in a bank in a war zone in dollars or have your money in a stable coin on your mobile phone in dollars? Right. I mean, you take the latter risk rather than the former war zone. Definitely. And you can see that happening like we've gone from five billion in stable coins to 200 billion in the last 24 months. So I do think there's massive demand for crypto dollars in the form of a US dollar asset. And there's and everybody in the world would say, yeah, I want that. Well, unless you're just an extreme patriot, but most people in the world would say I want that. And then a lesser group of people would say, I think I want to be able to carry my property in the palm of my hand so I have self custody of it. So Bitcoin price has gone through quite a roller coaster. What do you think is the high point is going to hit? I think it'll go forever. Right. I mean, I think the Bitcoin is going to it's going to climb in a serpentine fashion, it's going to advance and come back and it's going to keep it's going to keep climbing. I think that the volatility attracts all the capital into the marketplace. And so the volatility makes it the most interesting thing in the financial universe. It also generates massive yield and massive returns for traders. And that attracts capital. Like we're talking about the difference between five percent return and five hundred percent return. So the fast money is attracted by the volatility. The volatility has been decreasing year by year by year. I think that that it's stabilizing. I don't think we'll see as much volatility in the future as we have in the past. I think that if we look at Bitcoin and model it as digital gold, you know, the market cap goes to between 10 and 20 trillion. But gold is remember gold is is defective property. Gold is dead money. You have a billion dollars of gold that sits in a vault for a decade. It's very hard to mortgage the gold. It's also very hard to rent the gold. You can't loan the gold. No one's going to create a business with your gold. So gold doesn't generate much of a yield. So for that reason, most people wouldn't store a billion dollars for a decade in gold. They would buy a billion dollars of commercial real estate property. And the reason why is because I can rent it and generate a yield on it that's in excess of the maintenance cost. So if you consider digital property, that's a hundred to two hundred trillion dollar addressable market. So I would think it, you know, it goes from 10 trillion to 100 trillion as people start to think of it as digital property. What does that mean in terms of price per coin? At five hundred thousand. Right. That's a 10 trillion dollar asset. At five million. That's a hundred trillion dollar asset. So you think it crosses a million. It can go even higher. Yeah, I think it keeps going up forever. I mean, there's no reason we're going to go to 10 million a coin. Right. Because digital property isn't the highest form. Right. Gold was that low frequency money. Property is a mid frequency money. But when I start to when I start to program it faster, it starts to look like digital energy. And and then it doesn't just replace property. Then you're starting to replace bonds. It's 100 trillion in bonds. There's 50 to 100 trillion in other currency derivatives. And then and then and these are all conventional use cases. Right. I think that there's three hundred fifty trillion to five hundred trillion dollars worth of currency, currency derivatives in the world. And that and when I say that, I mean things that are valued based upon fiat cash flows, any commercial real estate, any bond, any sovereign debt, any any currency itself, any derivatives to those things. They're all derivatives and they're all defective and they're all defective because of this persistent seven to 14 percent. Laps inflate, which we call inflation or monetary expansion. Can we switch subjects to talk about the energy side of it? Like the innovative piece. Yeah. Let's just start with this idea that I've got a hotel worth a billion dollars with a thousand rooms when it becomes a dematerialized hotel. I love that word so much, by the way, dematerialized. We're crossing the fountain below here. Imagine the fountain blow is dematerialized. The problem with a physical hotel is I got to hire real people moving subject to the speed of sound and physics laws and Newton's laws. And I can rent it to people in Miami Beach. But if it was a digital hotel, I could rent the room to people in Paris, London and New York every night. And I can run it with robots. And as soon as I do that, I can rent it by the room hour and I can rent it by the room minute. And so I start to chop my hotel up into one hundred thousand room hours that I sell to the highest bidder anywhere in the world. And you can see all of a sudden the yield, the rent and the income of the property is dramatically increased. I can also see the maintenance cost of the property falls. I get on Moore's law and I'm operating in cyberspace. So I got rid of Newton's laws. I got rid of all the friction and all the all those problems. I tapped into the benefits of cyberspace. I created a global property. I started monetizing at different frequencies. And of course, now I can mortgage it to anybody in the world. Right. I mean, you're not going to be able to get a mortgage on a Turkish building from someone in South Africa. You have to have to find someone that's local to the culture you're in. So when you start to move from analog property to digital property, it's not just a little bit better. It's a lot better. And what I just described, Lex, is like the DeFi vision. Right. It's the beauty of DeFi flash loans, money moving at high velocity. At some point, if the hotel is dematerialized, then what's the difference between renting a hotel room and loaning a block of stock? Right. I'm just finding the highest best use of the thing. It feels like the magic really emerges, though, when you build a lot, a market of layer two and layer three technologies on top of that. So maybe you can correct me if I'm wrong, but for all these hotels and all these kinds of ideas, it's always touching humans at some point. And consumers or humans, business owners and so on. So you have to create interface. You have to create services that make all that super efficient, super fun to use, pleasant, effective, all those kinds of things. So you have to build in a whole economy on top of that. And I happen to think that won't be done by the crypto industry at all. I think that'll be done by centralized applications. I think it'll be the citadels of the world, the high speed traders of the world, the New Yorkers. I think it'll be Binance, FTX and Coinbase as a layer three exchange that will give you the yield and will give you the loan and the best terms. Because ultimately you have to jump these compliance hoops. It comes like BlockFi can give you yield, but they have to do it in a compliant way with the United States jurisdiction. So ultimately, those applications to use that digital property and either generate a loan, give you a loan on it or give you yield on it are going to come from companies. But the difference, the fundamental difference is it could be companies anywhere in the world. So if a company in Singapore comes up with a better offering, then the capital is going to start to flow to Singapore. I can't send 10 city blocks of LA to Singapore to rent during a festival, but I can send 10 blocks of Bitcoin to Singapore. So you've got a truly global market that's functioning in this asset. And is there a second order asset? For example, maybe you're an American citizen and you own 10 Bitcoin and someone in Singapore will generate 27% yield in the Bitcoin. But legally, you can't send the money to them or the Bitcoin to them. It doesn't matter because the fact that that exists means that someone in Hong Kong will borrow the 10 Bitcoin from somebody in New York and then they will put on the trade in Singapore. And that will create a demand for Bitcoin, which will drive up the price of Bitcoin, which will result in an effective tax free yield for the person in the US that's not even in the jurisdiction. So there's nothing that's going on in Singapore to drive up the price of your land in LA. But there is something going on everywhere in the world to drive up the price of property in cyberspace if there's only one digital Manhattan. And so there's there's a dynamic there, which is profound because it's global. But now let's go to the next extreme. I'm still giving you a fairly conventional idea, which is let's just loan the money fast on a global network and let's just rent the hotel room fast in cyberspace. But let's move to maybe a more innovative idea. The first generation of Internet, you know, brought a lot of productivity, but there's also just a lot of flaws in it. For example, Twitter is full of garbage. Instagram DMS are full of garbage. Your Twitter DMS are full of garbage. YouTube is full of scams. Every 15 minutes, there's a Michael Saylor Bitcoin giveaway spun up on YouTube. My Office 365 inbox is full of garbage. Millions of spam messages. I'm running four different email filters. My company spends a million dollars a year to fight denial of service attacks and all sorts of other security things. There are denial of service attacks everywhere against everybody in cyberspace all the time. It's extreme. And we're all beset with hostility, right? You've been a victim of it in Twitter. You know, you go on Twitter and people post stuff they would never say to your face. And then if you look, you find out that the account was created like three days ago and it's not even a real person. So, you know, we're beset with phishing attacks and scams and spam bots and garbage. And why? And the answer is because the first generation of Internet was digital information and there's no energy. There's no conservation of energy in cyberspace. The thing that makes the universe work is conservation of energy. Like, if I went to a hotel room, I'd have to post a credit card. And then if I smash the place up, there'd be economic consequences. Maybe there'd be criminal consequences. There might be reputational consequences. You know, a lamp might fall on me. But in the worst case, I can only smash up one hotel room. Now, imagine I could actually write a Python script to send myself to every hotel room in the world every minute, not post a credit card and smash them all up anonymously. The thing that makes the universe work is friction, speed of sound, speed of light, and the fact that ultimately it's conservative. You're either energy or you're matter. Once you've used the energy, it's gone and you can't do infinite everything that's missing in cyberspace right now. And if you look at the look at all of the moral hazards and all of the product defects that we have and all of these products, most of them, ninety nine percent of them could be cured if we introduced conservation of energy into cyberspace. And that's what you can do with high speed digital property, high speed Bitcoin. And by high speed, I mean not 20 transactions a day. I mean 20,000 transactions a day. So how do you do that? Well, I let everybody on Twitter post a thousand or ten thousand Satoshi's via lightning wallet, a lightning badge. Give me an orange check. If you put up 20 bucks once in your life, you could give 300 million people an orange check. Right now, you don't have a blue check, Lex. You're a famous person. I don't know why you don't have a blue check. Have you ever applied for a blue check? No. There are three hundred sixty thousand people on Twitter with a blue check. There are three hundred million people on Twitter. So the conventional way to verify accounts is elitist archaic. How does it work? How do you get a blue check? You got to apply and wait six months and you have to post, you know, like three articles in the public mainstream media that illustrates you're a person of interest. Interesting. Generally, they would grant them to CEOs of public companies or the whole idea is to verify that, you know, that you are who you are. You say you are. Right. But the question is, why isn't everybody verified? Right. And there's there's a couple of threads on that. One is some people don't want to be doxed. They want to be anonymous. But but they're even anonymous people that should be verified. Right. Because otherwise you're you're subjecting their entire following to phishing attacks and scams and hostility. But the other the other what's the orange verification? So the this idea, can you actually elaborate a little bit more if you put up 20 bucks? I think everybody on Twitter ought to be able to get an orange check if they could come up with like ten dollars. And what is the power of that orange check? What what does that verify exactly? You basically post a security deposit for your safe passage through cyberspace. So the way it would work is if you if you've got ten dollars once in your life, you can basically show that you're credit worthy. And that's your pledge to me that you're going to act responsibly. So you put the ten or the twenty dollars into the lightning wallet, you get an orange check, then Twitter just gives you a setting where I can say the only people who could DM me are orange checks. The only people that can post on my tweets are orange checks. So instead of locking out the public and just letting your followers, you know, comment, you lock out all the unverified. And that means people that don't want to post ten dollar security deposit can't comment. Once you've done those two things, then you're in position to monetize malice. Right. Monetize motion or malice for that matter. But let's just say for the sake of argument, you post something and ninety seven hundred bots spin up, you know, and pitch their whatever scam. Right now you sit and you go report, report, report, report, report, report. And if you spend an hour, you get through half of them, you waste an hour of your life. They just spin up another ninety seven gazillion because they've got a Python script spinning it up. So it's hopeless. But on the other hand, if you report them and they really are a bot, Twitter's got a method to actually delete the account. They know that they're bots. The problem is not they don't know how to delete the account. The problem is there are no consequences when they delete the account. So if there are consequences, Twitter could give they could just seize the ten dollars or seize the twenty dollars because it's a bot. It's a malicious criminal act or whatever. It is a violation of the platform rules. You end up seizing ten thousand dollars, give half the money to the reporter and half the money to the Twitter platform. And it's a really powerful idea, but that that's tying it. That's adding friction akin to the kind of friction you have in the physical world. You're tying. You have consequences. You have real consequences. Putting conservation of energy conservation of energy. There's no friction. There's no nothing on this earth. Right. I mean, you can't walk across the room without friction. Right. So friction is not bad. Right. Un unnecessary friction is bad. So in this particular case, you're introducing conservation of energy. And in essence, you're introducing the concept of consequence or truth into cyberspace. And that means if you do want to spend up ten million fakes, fake less Freedman's. Right. It's going to cost you one hundred million dollars to spend up ten million fake Lexus. But the thing is, you could do that with the dollar. But your case, you're saying that it's more tied to physical reality when you do that with Bitcoin. Yeah. Well, let's follow up on that idea a bit more. If you did do it with the dollar, then the question is, how does six billion people deposit the dollars? Right. Because what you're doing is, could you do it with a credit card? Like, how do you send dollars? Well, you have to dock yourself. Like, it's not easy. So you're talking about inputting a credit card transaction, doxing yourself. And now you've just eliminated the two billion people that don't have credit cards or don't have banks. You've also got a problem with everybody that wants to remain anonymous. But you've also got this other problem, which is credit. You know, credit cards are expensive transactions, low frequency, slow settlement. So do you really want to pay two and a half percent every time you actually show a twenty dollar deposit? And maybe you could do a Kludgy version of this for a subset of people. It's like it's 10 percent as good if you did it with conventional payment rails. But what you can't do is the next idea, which is I want the orange badge to be used to give me safe passage through cyberspace, tripping across every platform. So when I how do I solve the denial of service attacks against a website? I publish a website. You hit it with a million requests. OK, now how do I deal with that? Well, I can lock you out and I can make it a zero trust website. And then you have to be coming at me through a trusted firewall or with a trust, trusted credential. But that's that's a pretty draconian thing. Or I could put it behind a lightning wall. A lightning wall would be, you know, I just challenge you, Lex, you want to browse my website. You have to show me your hundred thousand Satoshi's. Do you have a hundred thousand Satoshi's? Click. OK, now you click away a hundred times or a thousand times. And after a thousand times, you know, well, now, Lex, you're getting offensive over to take a Satoshi from you or 10 Satoshi's a microtransaction. You want to hit me a million times. I'm taking all your Satoshi's and locking you out. What you want to do is you want to go through 200 websites a day. And what you want every time you cross a domain, you need to be able to in a split second. Prove that you've got some asset. And now when you cross back, when you exit domain, you want to fetch your asset back. So how do I in a friction free fashion browse through dozens or hundreds of websites, post a security deposit for safe passage and then get it back? You couldn't afford to pay a credit card fee each time. When you think about two and a half percent as a transaction fee, it means you trade the money 40 times and it's gone. Yeah, it's gone. Yeah. So you can't do this kind of hopping around through the Internet with this kind of verification that grounds you to physical reality. It's a really, really interesting idea. Why haven't that hasn't that been done? I think you need two things. You need an idea like a digital asset like Bitcoin. That's a bearer instrument for final settlement. And then you need a high speed transaction network like lightning where the transaction cost might be a twentieth of a penny or or less. And if you roll the clock back 24 months. I don't think you had the lightning network in a stable point. It's really just the past 12 months. It's an idea you could think about this year. And I think you need to you need to be aware of Bitcoin as something other than like a scary speculative asset. So I really think we're just the beginning. The embryonic stage. I have to ask Michael Saylor, you said before there's no second best to Bitcoin. What would be the second best? Traditionally, there's Ethereum with smart contracts, Cardano with proof of stake, Polkadot with interoperability between blockchains. Dogecoin has the incredible power of the meme. Privacy with Monero. I just can keep going. There's, of course, after the block size wars, the different offshoots of Bitcoin. I think if you if you decompose or segment the crypto market, you've got crypto property. Bitcoin is the king of that. You know, and other Bitcoin forks that want to be in a bearer instrument store of value would be a property, a Bitcoin cash or Litecoin, something like that. Then you've got crypto currencies. I don't think Bitcoin is a currency because a currency I define in nation states since a currency is a digital asset that you can transfer in a transaction without incurring a taxable obligation. So that means it has to be a stable dollar or a stable euro or a stable yen, a stable coin. So I think you've got crypto currencies, Tether, Circle, most famous. Then you've got crypto platforms, you know, and Ethereum is the most famous of the crypto platforms, the platform upon which, you know, with smart contract functionality, et cetera. And then I think you've got just crypto securities. It's just like my favorite whatever meme coin. And I love it because I love it. And it's attached to my game or my company or my persona or my whatever. I think if you push me and said, well, what's the second best? I would say the world wants two things. It wants crypto property as a savings account and it wants cryptocurrency as a checking account. And that means that the most popular thing really is going to be a stable coin dollar. Right. And there's maybe a fight right now. It might be Tether. Right. But a stable dollar, because I feel like the market opportunity, it's not clear that there'll be one that will win. The class of stable dollars is probably a one to ten trillion dollar market easily. I think that in a crypto platform space, Ethereum will compete with Solana and Binance Smart Chain and the like. Are there certain characteristics of any of them that kind of stand out to you? Don't you think the competition is based on a set of features? Also, the set of features that a cryptocurrency provides, but also the community that it provides. Don't you think the community matters and sort of the adoption, the dynamic of the adoption, both across the developers and the investors? If I'm looking at them, I mean, the first question is, what's the regulatory risk? How likely is it to be deemed a property versus security? And the second is, what's the competitive risk? And the third is, what's the speed in the performance? And all those things lead to the question of what's the security risk? How likely is it to crash and burn? And how stable or unstable is it? And then there's the marketing risk. I mean, there are different teams behind each of these things and communities behind them. I think that the big cloud looming over the crypto industry is regulatory treatment of cryptocurrencies and regulatory treatment of crypto securities and crypto platforms. And I think that won't be determined until the end of the first Biden administration. For example, there are people that would like only U.S. FDIC insured banks to issue cryptocurrencies. They want JP Morgan to issue a crypto dollar backed one to one. But then in the U.S. right now, we have Circle and we have other companies that are licensed entities that are backed by cash and cash equivalents, but they're not FDIC insured banks. There's also a debate in Congress about whether state chartered banks should be able to issue these things. And then we have Tether and others that are outside of the U.S. jurisdiction. They're probably not backed by cash and cash equivalents. They're backed by stuff. And we don't know what stuff. And then finally, you have, you know, UST and DAI, which are algorithmic stablecoins, right, that are even more innovative further outside the compliance framework. So if you ask who's going to win, the question is really, I don't know, will the market decide or will the regulators decide if the regulators get out of the way and the market fall out? Well, then it's an interesting discussion. And then I think that all bets are off if the regulators get more heavy handed with this. And I think you could have the same discussion with crypto properties like the DeFi exchanges and the crypto exchanges. I think the SEC would like to regulate the crypto exchanges. They'd like to regulate the DeFi exchanges. That means they may regulate the crypto platforms and at what rate and in what fashion. And so I think that I could give you an opinion if it was limited to competition and the current regulatory regime. I think that the regulations are so fast moving and it's so uncertain that you can't make a decision without considering the potential actions of the regulators. I hope the regulators get out of the way. Can you steal me on the case that Dogecoin is, I guess, the second best cryptocurrency, if you don't consider Bitcoin a cryptocurrency, but instead a crypto property? I would classify it as crypto property because the US dollar is a currency. So unless your crypto asset is pegged algorithmically or stably to the value of the dollar is not a currency, it's a property or it's an asset. So then can you still man the case that Dogecoin is the best cryptocurrency then? Because Bitcoin is not even in that list. The debate is going to be whether it's property or security. And there's a debate whether it's decentralized enough. So let's assume it was decentralized. Well, it's increasing at not quite 5%, what, 5% a year inflation rate, but it's not 5% exponentially. It's like a plus 5 million, 5% something captain is less. I forget the exact number, but it's an inflationary property. It's got a lower inflation rate than the US dollar and it's got a much lower inflation rate than than many other fiat currencies. So I think you could say that. But don't you see the power of meme, the power of ideas, the power of fun or whatever mechanism is used to captivate a community? I do, but there are meme stocks. It doesn't absolve you of your ethical and securities liabilities if you're promoting it. So like I don't have a problem with like people buying a stock. It's just the way I divide the world is right. There's investment, there's saving and there's speculation and there's trading. So Bitcoin is an asset for saving. If you want to save money for 100 years, you don't really want to take on execution risk or the like. So you're just buying something to hold forever for you to actually endorse something as a property. Like if you said to me, Mike, what should I buy for the next 100 years? I say, well, some amount of real estate, some amount of scarce collectibles, some amount of Bitcoin. Right. You can run your company, right. But running your company is an investment. So the savings are properties. If you said, what should I invest in? I'd say, well, here's a list of good companies, private companies. You can start your own company. That's an investment. Right. If you said, what should I trade? Well, I'm trading as like a proprietary thing. Like I don't have any special insight into that. If you're a good trader, you know you are. If you said to me, what should you speculate in? We talk about meme stocks and meme coins and it kind of sits up there. It sits right in the same space with what horse should you bet on and what sports team should you gamble on and should you bet on black six times in a row and double down each time? I mean, it's fun. But at the end of the day, it's a speculation. Right. You can't build a civilization on speculation. It's not an institutional asset. And in fact, where I'd leave it, right, is Bitcoin is clearly digital privacy, which makes it an institutional grade investable asset for a public company, a public figure, a public investor or anybody that's risk adverse. I think that the other the top 100 other cryptos are like venture capital investments. And if you're a VC and if you're a qualified technical investor and you have a pool of capital and you can take that kind of risk, then you can parse through that and form opinions. Just orders of magnitude more risky because of competition, because of ambition and because of regulation. And if you take the meme coins like, you know, when some rapper comes out with a meme coin, it's like maybe it'll peak when I hear about it. Right. It's like, I mean, ship was created as the coin such that it had so many zeros after the decimal point that when you looked at it on the exchanges, it always showed 0000. And it wasn't until like six months after it got popular that they started expanding the display so you could see whether the price had changed. That's speculation. You you've been maybe you can correct me, but you've been critical of Elon Musk in the past in the crypto space. Where do you stand on Elon's effect on Bitcoin and cryptocurrency in general these days? I believe that Bitcoin is a massive breakthrough for the human race that will cure half the problems in the world and generate hundreds of trillions of dollars of economic value to the civilization. And I believe that it's an early stage where many people don't understand it and they're afraid of it. And there's FUD and there's uncertainty, there's doubt, there's fear. And it's a very noisy crypto world. And there's 15000 other cryptos that are are seeking relevance. And I think most of the FUD is actually fueled by the other crypto entrepreneurs. So the environmental FUD and the other types of uncertainty that surround Bitcoin generally, they're not coming from legitimate environmentalists. They don't come from legitimate critics. They actually are guerrilla marketing campaigns that are being financed and fueled by other crypto entrepreneurs because they have an interest in doing so. So if I look at the constructive path forward, first, I think it'd be very constructive for corporations to embrace Bitcoin and build applications on top of it. You don't need to fix it. There's nothing wrong with it. Like when you put it on a layer two and a layer three, it moves a billion times a second at the speed of light. So every beautiful, cool DeFi application, every crypto application, everything you could imagine you might want to do, you can do with a legitimate company and a legitimate website or mobile application sitting on top of Bitcoin or Lightning if you want to. So I think that to the extent that people do that, that's going to be better for the world. If you consider what holds people back, I think it's just misperceptions about what Bitcoin is. So I'm a big fan of just educating people. If you're not going to commercialize it, then just educate people on what it is. So for example, Bitcoin is the most efficient use of energy in the world by far. Most people don't necessarily perceive that or realize that, but if you were to take any metric, energy intensity, you put like $2 billion worth of electricity in the network every year and it's worth $850 billion. There is no industry in the real world that is that energy efficient. Not only that energy efficient, it's also the most sustainable industry. We do surveys. 58% of Bitcoin mining energy is sustainable. So there's a very good story. In fact, every other industry, planes, trains, automobiles, construction, food, medicine, everything else, is less clean, less efficient. So the basic debate was... I wouldn't say there is a debate. I would just say that to the extent that the Bitcoin community had any issue with Elon, it was just this environmental uncertainty that he fueled in a couple of his tweets. Which I think just is very distracting. Well, that was one of them, but I think it's like the Bitcoin maximalists, but generally the crypto community, what you call the crypto entrepreneurs, are, you know, it's also they're using it for, I mean, for investment, for speculation, and therefore get very passionate about people's kind of celebrities, including you, like famous people. Right. Saying positive stuff about any one particular crypto thing, a thing you can buy in Coinbase. And so they might be unhappy with Elon Musk that he's promoting Bitcoin and then not, and promoting Dogecoin, then not. And this kind of... There's so much emotion tied up in the communication on this topic. And that's, I think that's where a lot of the... Look, I don't have a criticism of Elon Musk. He's free to do whatever he wishes to do. It's his life. In fact, Elon Musk is the second largest supporter of Bitcoin in the world. I think that the Bitcoin community tends to eat its own quite a bit. It tends to be very, very self-critical. And instead of saying, well, Elon is more supportive of Bitcoin than the other 10,000 people in the world, you know, with serious amounts of money they focus upon. Yeah, this is strange. Eating your own is just... I mean, I think he's free to do what he wants to do. Like, and I think he's done a lot of good for Bitcoin in putting it on the balance sheet of Tesla and holding it. And I think that sent a very powerful message. Do you have advice for young people? So you've had a heck of a life. You've done quite a lot of things. Start before MIT, but starting with MIT. Is there advice you have for young people in high school and college? How to have a career they can be proud of, how to have a life they can be proud of? I was asked by somebody for quick advice for his young children. He had twins when they enter adulthood. He said, give me your advice for them in a letter. I'm going to give it to them when they turn 21 or something. So then he handed it. I thought I was at a party and then he handed me this sheet of paper and I thought, oh, he wants me to write it down right now. So I sat down, I started writing and I figured, well, what would you want to tell someone at age 21? You wrote it down. So I wrote it down. And I tweeted it and it's sitting on Twitter, but I tell you what I said. I said, my advice if you're entering adulthood, focus your energy. Guard your time. Train your mind. Train your body. Think for yourself. Curate your friends. Curate your environment. Keep your promises. Stay cheerful and constructive. And upgrade the world. Like that was the 10. Upgrade the world. That's an interesting choice of words. Upgrade the world. Upgrade the world. It's like an engineer. Focus your energy. It's a very, yeah, it's a very engineering themed. Keep your promises too. That's an interesting one. I think most people suffer because they just, they don't focus. You got to figure out, I think the big risk in this world is there's too much of everything. Yeah. Like you can sit and watch chess videos a hundred hours a week and you'll never get through all the chess videos. Right. There's there's too much of every possible thing. Every too much of every good thing. So figuring out what you want to do and then everything will suck up your time. Right. There's a hundred streaming channels to binge watch on. So you got to guard your time and then train your body, train your mind and control who's around you. Control what surrounds you. So ultimately in a world where there's too much of everything, then your success. It's like those laser eyes. It's like those laser eyes. You have to focus on just a few of those things. Yeah. I mean, I got a thousand opinions we could talk about and I could pursue a thousand things, but I don't expect to be successful. And I'm not sure that my opinion in any of the 999 is any more valid than the leader of thought in that area. So how about if I just focus upon one thing and then and then deliver the best I can in the one thing? That's that's the laser eye message. The rest get you distracted. How do you achieve that? Do you find yourself, given where you are in life, having to say no a lot? Or just focus comes naturally when you just ignore everything around you. So how do you achieve that focus? I think it helps if people know what you're focused on. So you everything about you just radiates that people know people know this. If they know what you're focused on, then you won't get so many other things coming your way. If you know, if you dally or if you if you flirt with twenty seven different things, then you're going to get approached by people in each of the twenty seven communities. Right. You mentioned beginning a PhD and given given your roots at MIT. Do you think there's there's all kinds of journeys you can take to educate yourself? Do you think a PhD or school is still worth it? Or is there other paths through life that is worth it if you have to pay for it? Is it worth it to spend the time on it? The time and the money is a big cost. I think time, probably the bigger one. It seems clear to me that the world wants more specialists. It wants it wants you to be an expert and to focus on in one area. And it's punishing generalist jack of all trades, especially people that are generalists in the physical realm, because if you're a specialist in the digital realm, you might very well. Well, you're the person with seven hundred thousand followers on Twitter and you show them how to tie knots. Or, you know, you're the banjo player, you know, with one point eight million followers. And whenever he types banjo, it's you. Right. And so the world wants people that that do something well, and then it wants to stamp out 18 million copies of them. And so that argues in favor of focus. Now, I mean, the definition of a PhD is is someone with enough of an education that they're capable of or have made. I guess I guess to get a PhD, technically you have to have have done a dissertation where you made a, you know, a seminal contribution to the body of human knowledge. And if you haven't done that, technically, you know, you have a master's degree, but you're not a doctor. So if you're interested in any of the academic disciplines that a PhD would be granted for, then I can see that being a reasonable pursuit. But there are many people that are specialists. You know, you know, the Agimator. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. He's the world's greatest chess commentator. Yeah. And I've watched his career and he's got progressively better and he's really good. He's going to love hearing this. Yeah. The Agimator here is this. I'm a big fan of the Agimator. I have to cut myself off, right? Because otherwise you'll watch the entire Paul Morphy saga for your weekend. But the point really is YouTube is full of experts who are specialists in something. And they rise to the top of their profession. And Twitter is too. And the Internet is so I would advocate that you figure out what you're passionate about and what you're good at and you do focus on it, especially if the thing that you're doing can be automated. The problem is, you know, back to that 500,000 algebra teacher type comment, the problem is if it is possible to be automated, then over time someone's probably going to automate it. And that squeezes, you know, the state space of everybody else. It's like after the lockdowns, it used to be there are like all these local bands that played in bars and everybody went to the bar to see the local band. And then during the lockdown, you would have like the six super groups and they would all get 500,000 or a million followers. And all these smaller local bands just got no attention at all. Well, the interesting thing is one of those 500,000 algebra teachers is likely to be part of the automation. So it's like it's an opportunity for you to think where's my field, my discipline evolving into. I talked to a bunch of librarians, just happened to be friends with librarians. And that's libraries will probably be evolving. And it's up to you as a librarian to be one of the one of the one of the few that remain in the rubble. If you're going to give commentary on Shakespeare plays, I want you to basically do it for every Shakespeare play. Like I want you to be the Shakespeare dude, because once I once just like Lex, you're like, I don't know what kind of you're the deep thinking podcaster. Right. Or you're the you're the podcaster that goes after the deep intellectual conversations. And once I get comfortable with you and I like you, then I start binge watching Lex. But but if you change your format through 16 different formats so that you could compete with 16 different other personalities on YouTube, you probably wouldn't beat any of them. Right. You would probably just kind of sink into the you're the number two or number three guy. You're not the number one guy in the format. And I think that that the algorithm, right, the Twitter algorithm and the YouTube algorithm, they really reward the person that's focused on message consistent. The world wants somebody they can trust that's consistent and reliable. And they kind of want to know what they're getting into because this is taken for granted, maybe. But but there's 10 million people vying for every hour of your time. And so the fact that anybody gives you any time at all is a huge privilege. Right. And you should be thanking them. And you should respect their time. It's interesting. Like everything you said is very interesting. But of course, from my perspective and probably from your perspective, my actual life has nothing to do with it's just being focused on stuff. And in my case, it's like focus on doing the thing I really enjoy doing and being myself and not caring about anything else. I don't care about views or likes or attention. And that just maintaining that focus is the way from an individual perspective, you live that life. But yeah, it does seem that there's the world and technology is rewarding the specialization and creating bigger and bigger platforms for the different specializations. And and that and that lifts all both actually, because the specializations get better and better and better at teaching people to do specific things and they educate themselves. And it's just everybody gets more and more knowledgeable and more and more empowered. The reward for authenticity more than offsets the specificity with which you pursue your mission. Like, like, another way to say it is like nobody wants to read advertising. Like if you were to spend 100 million dollars advertising your thing, I probably wouldn't want to watch it. Yeah. But if you see the death of that. Yeah. And so that the commercial shows are losing their audiences and the authentic specialist or the authentic artists are are gaining their audience. And that's a beautiful thing. Speaking of deep thinking. You're just a human. Your life ends. You've accumulated so much wisdom, so much money, but the ride ends. Do you think about that? Do you do ponder your death, your mortality? Are you afraid of it? When I go, all my assets will flow into a foundation and the foundation's mission is to make education free for everybody forever. And if if I'm able to contribute to the creation of of a more perfect monetary system, then maybe that foundation will go on forever. The idea, the foundation of the idea. So not just the each of the foundations. It's not clear we're on the S curve of immortal life yet. Like that's a biological question. And you ask that, you know, on some of your other interviews a lot. I think that we are on the threshold of of immortal life for ideas or immortal life for certain institutions or computer programs. So if we can fix the money, then you can create a technically perfected endowment. And then the question really is, what are your ideas? What do you want to leave behind? And so if it's a park, then you endow the park. Right. If it's if it's free education, you endow that if it's if it's some other ethical idea. Right. Does it make you sad that there's something that you've endowed some very powerful idea of digital energy that you put out into the you help put it into the world and your mind, your conscious mind will no longer be there to experience it. It's just gone forever. I rather think that the the thing that Satoshi taught us is you should do your part during some phase of the journey and then you should get out of the way. And I think Steve Jobs said something similar to that effect in a very, very famous speech one day, which is, you know, death is a natural part of life and it makes way for the next generation. And I, I think the goal is you upgrade the world, right? You leave it a better place, but you get out of the way. And I think when when that breaks down, you know, bad things happen. I think nature cleanses itself. There's a cycle of life. And speaking one of great people who did also get out of the way is George Washington. So hopefully when you get out of the way, nobody's bleeding you to death in hope of helping you. What do you think? Do a bit of a callback. What do you think is the meaning of this whole thing? What's the meaning of life? Why are we here? We talked about the rise of human civilization. It seems like we're engineers at heart. We'll build cool stuff, better and better use of energy, channeling energy to be productive. Why? What's it all for? You're getting metaphysical on me. Very. There's a beautiful boat to the left of us. Like, why do we do that? This, this boat that sailed the ocean. Then we build models of it to celebrate great engineering of the past to engineer is divine. You can make lots of arguments as why we're here. We're here to we're here to entertain ourselves or we're here to to create something that's beautiful or something that's functional. I think if you're an engineer, you entertain yourself by creating something that's both beautiful and functional. So I think all three of those things, it's entertaining, but it's ethical. You know, you got to admire, you know, the first person that built a bridge crossing a chasm or the first person to work out the problem of how to get running water to a village. On the first person to figure it out, how to, you know, dam up a river or mastered agriculture or the guy that figured out, you know, how to grow fruit on trees or created orchards, you know, and maybe one day had like 10 fruit trees is pretty proud of himself. So that's functional. There is also something to that. Just like you said, that's just beautiful. It does get you closer to, like you said, the divine something. When you when you step back and look at the entirety of it, a collective of humans using a beautiful invention or creation or just just something about this instrument is creating a beautiful piece of music. That seems just right. That's what we're here for. Whatever the divine is, it seems like we're here for that. That and I of course love talking to you because from the engineering perspective, the functional is ultimately the mechanism towards the beauty. Isn't there something beautiful about about making the world a better place for people that you love your friends or family or yourself? You know, and when you think about the entire arc of human existence and you roll the clock back 500,000 years and you think about every struggle of everyone that came before us and everything they had to overcome in order to put you here right now. You know, you kind of you got to admire that right. You got to respect that. That's a heck of a gift they gave us. It's also a heck of a responsibility. Don't screw it up. If I dropped you 500,000 years ago and I said figure out steel refining or or you know, figure out rate, silicon chips, fab reproduction or or whatever it is. Why? Or fire. And so now we're here and I guess the way you repay them is you fix everything in front of your face. You can. Right. That means to someone like Elon, it means get us off the planet. Right. To someone like me, it's like I think, you know, fix the energy and the system. And that gives me hope. Michael, this is an incredible conversation. You're an incredible human. It's a huge honor. You would sit down with me. Thank you so much for talking to you. Thanks for having me. Thanks for listening to this conversation with Michael Saylor to support this podcast. Please check out our sponsors in the description. And now let me leave you with a few words from Francis Bacon. Money is a great servant, but a bad master. Thank you for listening and hope to see you next time.
 Remember George Washington, you know how he died?
 Well-meaning physicians bled him to death.
 And this was the most important patient in the country,
 maybe in the history of the country.
 And it's, and we bled him to death trying to help him.
 So when you're actually inflating the money supply at 7%,
 but you're calling it 2% because you want to help the economy,
 you're literally bleeding the free market to death.
 But the sad fact is George Washington went along with it
 because he thought that they were going to do him good.
 And the majority of the society, most companies,
 most conventional thinkers, you know, the working class,
 they go along with this because they think that someone has their best
 interest of mind and the people that are bleeding them to death believe,
 they believe that prescription because their mental models are just so
 defective.
 The following is a conversation with Michael Saylor,
 one of the most prominent and brilliant Bitcoin proponents in the world.
 He is the CEO of MicroStrategy, founder of Saylor Academy,
 graduate of MIT.
 And Michael is one of the most fascinating and rigorous thinkers I've ever gotten
 a chance to explore ideas with.
 He can effortlessly zoom out to the big perspectives of human civilization and
 human history and zoom back in to the technical details of blockchains,
 markets, governments, and financial systems.
 This is the Lex Friedman podcast. To support it,
 please check out our sponsors in the description.
 And now to your friends, here's Michael Saylor.
 Let's start with a big question of truth and wisdom.
 When advanced humans or aliens or AI systems,
 let's say five to 10 centuries from now look back at earth on this early 21st
 century,
 how much do you think they would say we understood about money and economics or
 even about engineering, science, life, death, meaning, intelligence,
 consciousness, all the big interesting questions?
 I think they would probably give us a
 B minus on engineering, on all the engineering things,
 the hard sciences.
 A passing grade.
 Like we're doing okay.
 We're working our way through rockets and jets and electric cars and
 electricity transport systems and nuclear power and space flight and the like.
 And, you know, if you,
 if you look at the walls that grace the great court at MIT,
 it's full of all the great thinkers and, and they're all pretty admirable.
 You know, if you could be with Newton or Gauss or Madam Curie or Einstein,
 you know, you would respect them.
 I would say they'd give us like a D minus on economics,
 like, you know, an F plus or a D minus.
 You see, I have an optimistic vision.
 First of all,
 optimistic vision of engineering because everybody you've listed,
 not everybody, most people you've listed is just over the past couple of
 centuries and maybe stretches a little farther back,
 but mostly all the cool stuff we've done in engineering is the past couple of
 centuries.
 I mean, Archimedes, you know, had his virtues.
 You know, I studied the history of science at MIT and I also studied aerospace
 engineering.
 And, and so I clearly have a bias in favor of science.
 And if I look at the past 10,000 years and I consider all of the philosophy and
 the politics and their impact on the human condition,
 I think it's a wash for every politician that came up with a good idea.
 Another politician came up with a bad idea, right?
 And it's not clear to me that, you know,
 most of the political and philosophical contributions to the,
 to the human race and the human conditions have advanced so much.
 I mean, we're still taking, you know,
 taking guidance and admiring Aristotle and Plato and Seneca and the like.
 And on the other hand, you know,
 if you think about what has made the human condition better,
 fire, water,
 harnessing of wind energy,
 like try to row across an ocean, right?
 Not easy.
 And for people who are just listening or watching,
 there's a beautiful sexy ship from 16th century, 17th century.
 This is a 19th century handmade model of a 17th century sailing ship,
 which is of the type that the Dutch East India's company used to sail the
 world and trade. So that was made, you know,
 the original is made sometime in the 1600s.
 And then this model is made in the 19th century by individuals.
 Both the model and the ship itself is engineering at its best.
 And just imagine just like rockets flying out to space,
 how much hope this filled people with exploring the unknown,
 going into the mystery,
 both the entrepreneurs and the business people and the engineers and just
 humans, what's out there, what's out there to be discovered.
 Yeah, the metaphor of human beings leaving shore or sailing across the
 horizon, risking their lives in pursuit of a better life is an incredibly
 powerful one.
 In 1900, I suppose the average life expectancy is 50.
 During the Revolutionary War, you know,
 while our founding fathers were fighting to establish, you know, life,
 liberty, pursuit of happiness, the constitution,
 average life expectancy of like 32,
 so between 32 and 36.
 So all the sound and the fury doesn't make you live past 32.
 But what does right? Antibiotics.
 Conquest of infectious diseases.
 If we understand the science of infectious disease,
 sterilizing a knife and
 harnessing antibiotics gets you from 50 to 70.
 And that happened fast, right?
 That happens from 1900 to 1950 or something like that.
 And I think if you look, look at the human condition,
 you ever get on one of those rowing machines
 where they actually keep track of your watts output
 when you're on that?
 Yeah.
 Yeah, it's like 200 is a lot.
 Okay, 200 is a lot.
 So a kilowatt hour is like all the energy
 that a trained athlete can deliver in a day.
 And probably not 1% of the people in the world
 could deliver a kilowatt hour in a day.
 And the commercial value of a kilowatt hour,
 the retail value is 11 cents today.
 And the wholesale value is two cents.
 And so you have to look at the contribution
 of politicians and philosophers and economists
 to the human condition.
 And it's like at best a wash one way or the other.
 And then if you look at the contribution
 of John D Rockefeller,
 when he delivered you a barrel of oil,
 the energy in oil, liquid energy,
 or the contribution of Tesla,
 as we deliver electricity.
 And what's the impact on the human condition
 if I have electric power,
 if I have chemical power,
 if I have wind energy,
 if I can actually set up a reservoir,
 create a dam, spin a turbine
 and generate energy from a hydraulic source.
 That's extraordinary, right?
 And so our ability to cross the ocean,
 our ability to grow food, our ability to live,
 it's technology that gets the human race
 from a brutal life where life expectancy is 30
 to a world where life expectancy is 80.
 You gave a D minus to the economists.
 So are they too like the politicians to wash
 in terms of there's good ideas and bad ideas
 and that tiny delta between good and bad
 is how you squeak past the F plus onto the D minus territory?
 I think most economic ideas are bad ideas.
 Most.
 Take us back to MIT
 and you wanna solve a fluid dynamics problem.
 Design the shape of the hull of that ship
 or you wanna design an airfoil, a wing,
 or if you wanna design an engine
 or a nozzle in a rocket ship,
 you wouldn't do it with simple arithmetic.
 You wouldn't do it with a scalar.
 There's not a single number, right?
 It's vector math, computational fluid dynamics
 is n-dimensional higher level math, complicated stuff.
 So when an economist says the inflation rate is 2%,
 that's a scalar.
 And when an economist says,
 it's not a problem to print more money
 because the velocity of the money is very low,
 monetary velocity is low, that's another scalar.
 Okay, so the truth of the matter is
 inflation is not a scalar,
 inflation is an n-dimensional vector.
 Money velocity is not a scalar.
 Saying what's the velocity of money,
 oh, it's slow or it's fast,
 it ignores the question of
 what medium is the money moving through?
 In the same way that, you know, what's the speed of sound?
 Okay, well, what is sound, right?
 Sound, you know, sound is a compression wave,
 it's energy moving through a medium,
 but the speed is different.
 So for example, the speed of sound through air
 is different than the speed of sound through water.
 And sound moves faster through water.
 It moves faster through a solid
 and it moves faster through a stiffer solid.
 So there isn't one.
 What is the fundamental problem with the way
 economists reduce the world down to a model?
 Is it too simple or is it just even the first principles
 of constructing the model is wrong?
 I think that the fundamental problem is
 if you see the world as a scalar,
 you simply pick the one number
 which supports whatever you wanna do
 and you ignore the universe of other consequences
 from your behavior.
 In general, I don't know if you've heard of,
 like Eric Watson has been talking about this
 with gauge theory.
 So different kinds of approaches from the physics world,
 from the mathematical world to extend past
 this scalar view of economics.
 So gauge theory is one way that comes from physics.
 Do you find that way of exploring economics interesting?
 So outside of cryptocurrency,
 outside of the extra technologies and so on,
 just analysis of how economics works,
 do you find that interesting?
 Yeah, I think that if we wanna really make
 any scientific progress in economics,
 we have to apply much more computationally intensive
 and richer forms of mathematics.
 So simulation perhaps or?
 Yeah, when I was at MIT, I studied system dynamics.
 They taught it at the Sloan School.
 It was developed by Jay Forrester
 who was an extraordinary computer scientist.
 And when we've created models of economic behavior,
 they were all multi-dimensional nonlinear models.
 So if you wanna describe how anything works
 in the real world,
 you have to start with the concept of feedback.
 If I double the price of something, demand will fall
 and attempts to create supply will increase
 and there will be a delay before the capacity increases.
 There'll be an instant demand change
 and there'll be rippling effects
 throughout every other segment of the economy
 downstream and upstream of such thing.
 So it's kind of common sense,
 but most economics, most classical economics
 is always taught with linear models,
 fairly simplistic linear models.
 And oftentimes, I'm really shocked today
 that the entire mainstream dialogue of economics
 has been captured by scalar arithmetic.
 For example, if you read any article in New York Times
 or the Wall Street Journal, right?
 They just refer to it.
 There's an inflation number or the CPI
 or the inflation rate is X.
 And if you look at all the historic studies
 of the impact of inflation,
 generally they're all based upon the idea
 that inflation equals CPI
 and then they try to extrapolate from that
 and you just get nowhere with it.
 So at the very least, we should be considering inflation
 and other economics concept
 as a nonlinear dynamical system.
 So nonlinearity and also just embracing the full complexity
 of just how the variables interact,
 maybe through simulation,
 maybe have some interesting models around that.
 Wouldn't it be refreshing if somebody for once
 published a table of the change in price of every product,
 every service and every asset in every place over time?
 You said table.
 Some of that also is the task of visualization,
 how to extract from this complex set of numbers,
 patterns that somehow indicate something fundamental
 about what's happening.
 So like summarization of data is still important.
 Perhaps summarization not down to a single scale of value,
 but looking at that whole sea of numbers,
 you have to find patterns.
 Like what is inflation in a particular sector?
 What is it maybe change over time,
 maybe different geographical regions,
 things of that nature.
 I think that's kinda,
 I don't know even what that task is.
 You could look at machine learning,
 you can look at AI with that perspective,
 which is like how do you represent
 what's happening efficiently,
 as efficiently as possible.
 That's never going to be a single number,
 but it might be a compressed model
 that captures something beautiful,
 something fundamental about what's happening.
 It's an opportunity for sure.
 If we take, for example, during the pandemic,
 the response of the political apparatus
 was to lower interest rates to zero
 and to start buying assets, in essence printing money.
 And the defense was there's no inflation.
 But of course, you had one part of the economy
 where it was locked down,
 so it was illegal to buy anything.
 But you couldn't, it was either illegal
 or it was impractical.
 So it would be impossible for demand to manifest.
 So of course there is no inflation.
 On the other hand,
 there was instantaneous immediate inflation
 in another part of the economy.
 For example, you lowered the interest rates to zero.
 At one point we saw the swap rate on a 30 year note
 go to 72 basis points.
 Okay, that means that the value of a long dated bond
 immediately inflates.
 So the bond market had hyperinflation within minutes
 of these financial decisions.
 The asset market had hyperinflation.
 We had what you call a K-shape recovery,
 what we affectionately call a K-shape recovery.
 Main street shut down,
 Wall Street recovered all within six weeks.
 The inflation was in the assets,
 like in the stocks, in the bonds.
 If you look today, you see that typical house,
 according to the Case-Schiller index today
 is up 19.2% year over year.
 So if you're a first time home buyer,
 the inflation rate is 19%.
 The formal CPI announced a 7.9%.
 You can pretty much create any inflation rate you want
 by constructing a market back
 or constructing a market basket,
 a weighted basket of products or services
 or assets that yield you the answer.
 I think that the fundamental failing of economists
 is first of all, they don't really have a term
 for asset inflation.
 What's an asset, what's asset hyperinflation?
 You mentioned bond market swap rate
 and asset is where the majority
 of the hyperinflation happened.
 What's inflation, what's hyperinflation,
 what's an asset, what's an asset market?
 I'm gonna ask so many dumb questions here.
 In the conventional economic world,
 you would treat inflation as the rate of increase in price
 of a market basket of consumer products
 defined by a government agency.
 So they have like traditional things
 that a regular consumer would be buying.
 The government selects like toilet paper, food, toaster,
 refrigerated electronics, all that kind of stuff.
 And it's like a representative basket of goods
 that lead to a content existence on this earth
 for a regular consumer.
 They define a synthetic metric, right?
 I mean, I'm gonna say you should have
 a thousand square foot apartment
 and you should have a used car
 and you should eat three hamburgers a week.
 Now 10 years go by and the apartment costs more.
 I could adjust the market basket
 via they call them hedonic adjustments.
 I could decide that it used to be
 in 1970 you needed a thousand square feet,
 but in the year 2020, you only need 700 square feet
 because we've miniaturized televisions
 and we've got more efficient electric appliances
 and because things have collapsed into the iPhone,
 you just don't need as much space.
 So now it may be that the apartment costs 50% more,
 but after the hedonic adjustment, there is no inflation
 because I just downgraded the expectation
 of what a normal person should have.
 So the synthetic nature of the metric
 allows for manipulation by people in power.
 Pretty much.
 I guess my criticism of economists
 is rather than embracing inflation
 based upon its fundamental idea,
 which is the rate at which the price of things go up, right?
 They've been captured by mainstream conventional thinking
 to immediately equate inflation to the government issued CPI
 or government issued PCE or government issued PPI measure,
 which was never the rate at which things go up.
 It's simply the rate at which a synthetic basket
 of products and services the government wishes to track go up.
 Now the problem with that is two big things.
 One thing is the government gets to create
 the market basket and so they keep changing
 what's in the basket over time.
 So I mean, if I said three years ago,
 you should go see 10 concerts a year
 and the concert tickets now cost $200 each,
 now it's $2,000 a year to go see concerts.
 Now I'm in charge of calculating inflation
 so I redefine your entertainment quota for the year
 to be eight Netflix streaming concerts
 and now they don't cost $2,000, they cost nothing
 and there is no inflation
 but you don't get your concerts, right?
 So the problem starts with continually changing
 the definition of the market basket.
 But in my opinion, that's not the biggest problem.
 The more egregious problem is the fundamental idea
 that assets aren't products or services.
 Assets can't be inflated.
 What's an asset?
 A house, a share of Apple stock, a bond,
 a Bitcoin is an asset or a Picasso painting.
 Not a consumable good.
 Not an Apple that you can eat.
 Right, if I throw away an asset,
 then I'm not on the hook to track the inflation rate for it.
 So what happens if I change the policy such that,
 let's take the classic example,
 a million dollar bond at a 5% interest rate
 gives you $50,000 a year in risk-free income.
 You might retire on $50,000 a year
 in a low cost jurisdiction.
 So the cost of social security or early retirement
 is $1 million when the interest rate is 5%.
 During the crisis of March of 2020,
 the interest rate on a 10-year bond went to 50 basis points.
 So now the cost of that bond is $10 million.
 Okay, the cost of social security
 went from a million dollars to $10 million.
 So if you wanted to work your entire life,
 save money and then retire risk-free
 and live happily ever after on a $50,000 salary,
 live in on a beach in Mexico, wherever you want it to go,
 you had hyperinflation.
 The cost of your aspiration increased by a factor of 10
 over the course of some amount of time.
 In fact, in that case,
 that was like over the course of about 12 years.
 As the inflation rate ground down, the asset traded up,
 but the conventional view is, oh, that's not a problem.
 Because it's good that the bond is highly priced
 because we own the bond.
 Or what's the problem with the inflation rate
 in housing being 19%?
 It's an awful problem for a 22-year-old
 that's starting their first job,
 that's saving money to buy a house,
 but it would be characterized as a benefit to society
 by a conventional economist who would say,
 well, housing asset values are higher
 because of interest rate fluctuation,
 and now the economy's got more wealth.
 And so that's viewed as a benefit.
 So what's being missed here?
 Like the suffering of the average person,
 or the struggle, the suffering,
 the pain of the average person,
 like metrics that captured that within the economic system.
 Is that, when you're talking about-
 One way to say it is a conventional view of inflation
 as CPI understates the human misery
 that's inflicted upon the working class
 and on mainstream companies by the political class.
 And so it's a massive shift of wealth
 from the working class to the property class.
 It's a massive shift of power from the free market
 to the centrally governed or the controlled market.
 It's a massive shift of power
 from the people to the government.
 And maybe one more illustrative point here, Alexis,
 is what do you think the inflation rates been
 for the past hundred years?
 Oh, are we talking about the scalar again?
 If you took a survey of everybody on the street
 and you asked them, what do they think inflation was?
 What is it?
 You remember when Jerome Powell said,
 our target's 2%, but we're not there.
 If you go around the corner,
 I have posted the deed to this house sold in 1930.
 Okay, and the number on that deed is $100,000, 1930.
 And if you go on Zillow and you get the Z Estimate-
 Is it higher than that?
 No.
 $30,500,000.
 Yeah.
 So that's 92 years, 1930 or 2022,
 and in 92 years, we've had 305X increase
 in price of the house.
 Now, if you actually calculate,
 you come to a conclusion that the inflation rate
 was approximately 6.5% a year, every year for 92 years.
 And there's nobody, nobody in government,
 no conventional economists that would ever admit
 to a $100,000 increase in price of the house.
 And it's extremely difficult to admit
 to an inflation rate of 7% a year
 in the US dollar over the last century.
 Now, if you dig deeper,
 I mean, one guy that's done a great job working on this
 is Seifedean Amos, who wrote the book,
 The Bitcoin Standard, and he notes that on average,
 it looks like the inflation rate and the money supply
 is about 7% a year, all the way up to the year 2020.
 The index, which is a market basket
 of scarce desirable stocks, it returned about 10%.
 If you talk to 10% a year for 100 years,
 the money supply is expanding at 7% a hundred years.
 If you actually talk to economists,
 or you look at the economy and you ask the question,
 how fast does the economy grow in its entirety
 year over year?
 Generally about two to 3%, like the sum total impact
 of all this technology and human ingenuity
 might get you a two and a half, 3% improvement a year.
 As measured by GDP.
 Is that, are you okay with that?
 I'm not sure, I'm not sure I'd go that far yet,
 but I would just say that
 if you had the human race doing stuff,
 and if you ask the question,
 how much more efficiently will we do this stuff next year
 than this year, or what's the value of all of our innovations
 and inventions and investments in the past 12 months?
 You'd be hard pressed to say we get 2% better.
 Typical investor thinks they're 10% better every year.
 So if you look at what's going on, really,
 when you're holding a million dollars of stocks
 and you're getting a 10% gain a year,
 you really get a 7% expansion of the money supply,
 you're getting a two or 3% gain under best circumstances.
 And another way to say that is,
 if the money supply stopped expanding at 7% a year,
 the S&P yield might be 3% and not 10%, it probably should be.
 Now that gets you to start
 to ask a bunch of other fundamental questions,
 like if I borrow a billion dollars and pay 3% interest
 and the money supply expands at 7% to 10% a year,
 and I ended up making a 10% return
 on a billion dollar investment paying 3% interest,
 is that fair?
 And who suffered so that I could do that?
 Because in an environment
 where you're just inflating the money supply
 and you're holding the assets constant,
 it stands the reason that the price of all the assets
 is going to appreciate somewhat proportional
 to the money supply.
 And the difference in asset appreciation
 is gonna be a function of the scarce desirable
 quality of the assets and to what extent
 can I make more of them?
 And to what extent are they truly limited in supply?
 Yeah, so we'll get to a lot of the words you said there,
 the scarcity and so connected to how limited they are
 and the value of those assets.
 But you also said, so the expansion of the money supply,
 which is put another way is printing money.
 And so is that always bad, the expansion of the money supply?
 Is this, just to put some terms on the table
 so we understand them,
 you nonchalantly say it's always
 on average expanding every year,
 the money supply is expanding every year by 7%.
 That's a bad thing?
 That's universally a bad thing.
 It's awful.
 I guess to be precise, it's the currency.
 I mean, money, I would say money is monetary energy
 or economic energy.
 And the economic energy has to find its way into a medium.
 So if you wanna move it rapidly as a medium of exchange,
 has to find its way into currency.
 But the money can also flow into property,
 like a house or gold.
 If the money flows into property,
 it'll probably hold its value much better.
 If the money flows into currency, right?
 If you had put $100,000 in this house,
 you would have 305X return over 92 years.
 But if you had put the money, $100,000
 in a safe deposit box and buried it in the basement,
 you would have lost 99.7% of your wealth
 over the same time period.
 So the expansion of the currency
 creates a massive inefficiency in the society,
 what I'll call an adiabatic lapse.
 What we're doing is we're bleeding
 the civilization to death.
 What's the adiabatic, what's that word?
 Adiabatic lapse.
 Adiabatic.
 Right, and aerospace engineering,
 you wanna solve any problem, they start with the phrase,
 assume an adiabatic system.
 And what that means is a closed system.
 Okay, got it.
 I've got a container, and in that container,
 no air leaves and no air enters,
 no energy exits or enters, so it's a closed system.
 So you got the closed system lapse.
 Okay.
 What's a closed, okay, I'm gonna use a-
 There's a leak in the ship.
 I'm gonna use a physical metaphor for you
 because you're the jujitsu, right?
 Like you got 10 pints of blood in your body,
 and so before your next workout,
 I'm gonna take one pint from you.
 Now you're gonna go exercise, but you're one pint,
 you've lost 10% of your blood, okay?
 You're not gonna perform as well,
 it takes about one month for your body
 to replace the red blood platelets.
 So what if I tell you every month you gotta show up
 and I'm gonna bleed you?
 Yeah.
 Okay, so if I'm draining the energy,
 I'm draining the blood from your body you can't perform.
 If you, adiabatic lapse is when you go up in altitude,
 every thousand feet, you lose three degrees.
 You go 50,000 feet, you're 150 degrees colder than sea level,
 that's why you look at your instruments
 and instead of 80 degrees, you're minus 70 degrees.
 Why is the temperature falling?
 Temperature's falling because it's not a closed system,
 it's an open system.
 As the air expands, the density falls, right?
 The energy per cubic whatever falls,
 and therefore the temperature falls, right?
 The heat's falling out of the solution.
 So when you're inflating,
 let's say you're inflating the currency supply by 6%,
 you're sucking 6% of the energy out of the fluid
 that the economy is using to function.
 So the currency, this kind of ocean of currency,
 that's a nice way for the economy to function.
 It's the most kind of, it's being able to function
 most kind of, it's being inefficient
 when you expand the money supply,
 but it's the liquid, I'm trying to find the right
 kind of adjective here.
 It's how you do transactions at a scale of billions.
 Currency is the asset we use to move monetary energy around
 and you could use the dollar or you could use the peso
 or you could use the boulevard.
 Selling houses and buying houses is much more inefficient
 or like you can't transact between billions of people
 with houses.
 Yeah, properties don't make such good mediums of exchange.
 They make better stores of value
 and they have utility value if it's a ship or a house
 or a plane or a bushel of corn, right?
 Can I zoom out just for, can we zoom out,
 keep zooming out until we reach the origin
 of human civilization, but on the way,
 ask, you gave economists a D minus.
 I'm not even gonna ask you what you give to governments.
 Do you think their failure, economists and government
 failure is malevolence or incompetence?
 I think policymakers are well intentioned,
 but generally all government policy is inflationary
 and all government, it's inflammatory and inflationary.
 So what I mean by that is, when you have a policy
 pursuing supply chain independence,
 if you have an energy policy, if you have a labor policy,
 if you have a trade policy, if you have any kind
 of foreign policy, a domestic policy,
 a manufacturing policy, every one of these medical policy,
 every one of these policies interferes with the free market
 and generally prevents some rational actor
 from doing it in a cheaper, more efficient way.
 So when you layer them on top of each other,
 they all have to be paid for.
 If you wanna shut down the entire economy for a year,
 you have to pay for it, right?
 If you wanna fight a war, you have to pay for it, right?
 If you don't wanna use oil or natural gas,
 you have to pay for it.
 If you don't wanna manufacture semiconductors in China
 and you wanna manufacture them in the US,
 you gotta pay for it.
 If I rebuild the entire supply chain in Pennsylvania
 and I hire a bunch of employees
 and then I unionize the employees,
 then not only am I, I idle the factory in the Far East,
 it goes to 50% capacity.
 So whatever it sells, it has to raise the price on.
 And then I drive up the cost of labor
 for every other manufacturer in the US
 because I competing against them, right?
 I'm changing their condition.
 So everything gets less efficient,
 everything gets more expensive.
 And of course, the government couldn't really pay
 for its policies and its wars with taxes.
 We didn't pay for World War I with tax.
 We didn't pay for World War II with tax.
 We didn't pay for Vietnam with tax.
 In fact, when you trace this, what you realize is
 the government never pays for all of its policies with tax.
 It pays for it.
 Because it's too painful to ask to raise the taxes
 to truly transparently pay for the things you're doing
 with taxes with taxpayer money.
 Because they feel the pain.
 That's one interpretation or it's just too transparent.
 If people understood the true cost.
 Of war.
 They wouldn't wanna go to war.
 If you were told that you would lose 95% of your assets,
 and 90% of everything you will be ever
 will be taken from you,
 you might reprioritize your thought about a given policy
 and you might not vote for that politician.
 But you're still saying incompetence, not malevolence.
 So fundamentally, government creates
 a bureaucracy of incompetence.
 It's kinda how you look at it.
 I think a lack of humility.
 If people had more humility, then they would realize.
 Humility about how little they know.
 How little they understand about the function
 of complex systems.
 There's a phrase from Clint Eastwood's movie Unforgiven
 where he says a man's gotta know his limitations.
 I think that a lot of people overestimate
 what they can accomplish and experience.
 Experience in life causes you to reevaluate that.
 So I mean, I've done a lot of things in my life
 and generally my mistakes were always my good ideas
 that I enthusiastically pursued.
 To the detriment of my great ideas
 that required 150% of my attention to prosper.
 So I think people pursue too many good ideas.
 They all sound good, but there's just a limit
 to what you can accomplish.
 And everybody underestimates the challenges
 of implementing an idea.
 And they always overestimate the benefits
 of the pursuit of that.
 So I think it's an overconfidence that causes
 an over exuberance in pursuit of policies.
 And as the ambition of the government expands,
 so must the currency supply.
 I could say the money supply,
 but let's say the currency supply.
 You can triple the number of pesos in the economy,
 but it doesn't triple the amount of manufacturing capacity
 in the set economy.
 And it doesn't triple the amount of assets in the economy,
 it just triples the pesos.
 So as you increase the currency supply,
 then the price of all those scarce desirable things
 will tend to go up rapidly.
 And the confidence of all of the institutions,
 the corporations and the individual actors
 and trading partners will collapse.
 If we take a tangent on a tangent,
 and we will return soon to the big human civilization
 question.
 So if government naturally wants to buy stuff
 it can't afford,
 what's the best form of government?
 Anarchism, libertarianism.
 So not even, there's not even armies,
 there's no borders, that's anarchism.
 The least.
 The smallest possible.
 The smallest possible.
 The best government would be the least
 and the debate will be over that.
 When you think about the stuff,
 do you think about, okay, government is the way it is,
 I as a person that can generate great ideas,
 how do I operate in this world?
 Or do you also think about the big picture,
 if we start a new civilization somewhere on Mars,
 do you think about what's the ultimate form of government?
 What's at least a promising thing to try?
 You know, I have laser eyes on my profile on Twitter, Lex.
 And the significance of laser eyes is to focus
 on the thing that can make a difference.
 And if I look at the civilization,
 I would say half the problems in the civilization
 are due to the fact that our understanding of economics
 and money is defective.
 Half, 50%, I don't know,
 it's worth $500 trillion worth of problems.
 Like money represents all the economic energy
 in the civilization and it kind of equates
 to all the products, all the services,
 and all the assets that we have and we're ever gonna have.
 So that's half.
 Half the problems in the civilization
 are medical and military and political
 and philosophical and natural.
 And I think that there are a lot of different solutions
 to all those problems and they're all,
 they are all honorable professions
 and they all merit the same amount of money.
 And so I think that's half.
 Honorable professions and they all merit a lifetime
 of consideration for the specialists in all those areas.
 I think that what I could offer it's constructive is
 inflation is completely misunderstood.
 It's a much bigger problem than we understand it to be.
 We need to introduce engineering and science techniques
 into economics if we wanna further the human condition.
 All government policy is inflationary.
 And another pernicious myth is inflation is always
 and everywhere a monetary phenomena.
 A famous quote by Milton Friedman, I believe.
 It's like, it's a monetary phenomena
 that is inflation comes from expanding the currency supply.
 It's a nice phrase and it's oftentimes quoted
 by people that are anti-inflation.
 But again, it just signifies a lack of appreciation
 of what the issue is.
 Inflation is, if I had a currency
 which was completely non-inflationary,
 if I never printed another dollar
 and if I eliminated fractional reserve banking
 from the face of the earth, we'd still have inflation.
 And we'd have inflation as long as we have government
 that is capable of pursuing any kind of policies
 that are in themselves inflationary
 and generally they all are.
 So in general, inflationary is the big characteristic
 of human nature that governments, collection of groups
 that have power over others
 and allocate other people's resources
 will try to intentionally or not hide the costs
 of those allocations, like in some tricky ways,
 whatever the options are available.
 Hiding the cost is like the tertiary thing.
 The primary goal is the government will attempt to do good.
 That's the primary problem?
 They will attempt to do good
 and they will do good imperfectly
 and they will create oftentimes as much damage,
 more damage than the good they do.
 Most government policy will be iatrogenic.
 It will create more harm than good
 in the pursuit of it, but it is what it is.
 The secondary issue is they will unintentionally pay for it
 by expanding the currency supply without realizing
 that they're actually paying for it
 in a suboptimal fashion.
 They'll collapse their own currencies
 while they attempt to do good.
 The tertiary issue is they will mismeasure
 how badly they're collapsing the currency.
 So for example, if you go to the Bureau of Labor Statistics
 and look at the numbers printed by the Fed,
 they'll say, oh, it looks like the dollar's lost 95%
 of its purchasing power over 100 years.
 Okay, they sort of fess up to those problem,
 but they make it 95% loss over 100 years.
 What they don't do is realize it's a 99.7% loss
 over 80 years.
 So they will mismeasure just the horrific extent
 of the monetary policy in pursuit of the foreign policy
 and the domestic policy, which they overestimate
 their budget and their means to accomplish their ends,
 and they underestimate the cost,
 and they're oblivious to the horrific damage
 that they do to the civilization
 because the mental models that they use
 that are conventionally taught are wrong.
 The mental model that, it's okay,
 we can print all this money
 because the velocity of the money is low,
 because money velocity is a scalar
 and inflation is the scalar,
 and we don't see 2% inflation yet
 and the money velocity is low,
 and so it's okay if we print trillions of dollars.
 Well, the money velocity was immediate, right?
 The velocity of money through the crypto economy
 is 10,000 times faster than the velocity of money
 through the consumer economy, right?
 I think Nick pointed out when you spoke to him,
 he said it takes two months
 for a credit card transaction to settle, right?
 So you wanna spend a million dollars
 in the consumer economy,
 you can move it six times a year.
 You put the million dollars into gold,
 gold will sit in a vault for a decade, okay?
 So the velocity of money through gold is 0.1.
 You put the money in the stock market
 and you can trade it once a week,
 the settlement is T plus two,
 maybe you get to two to one leverage.
 You might get to a money velocity of 100 a year
 in the stock market.
 You put your money into the crypto economy
 and these people are settling every four hours.
 And if you're offshore,
 they're trading with 20X leverage.
 So if you settle every day and you trade with 20X leverage,
 you just went to 7,000.
 So the velocity of the money varies.
 I think the politicians,
 they don't really understand inflation
 and they don't understand economics,
 but you can't blame them
 because the economists don't understand economics.
 Because if they did,
 they would be creating multivariate computer simulations
 where they actually put in the price
 of every piece of housing in every city in the world,
 the full array of foods and the full array of products
 and the full array of assets.
 And then on a monthly basis,
 they would publish all those results.
 And that's a high bandwidth requirement.
 And I think that people don't really wanna embrace it.
 And also the most pernicious thing,
 like there's that phrase,
 you can't tell people what to think,
 but you can tell them what to think about.
 The most pernicious thing is,
 I get you to misunderstand the phenomena
 so that even when it's happening to you,
 you don't appreciate that it's a bad thing
 and you think it's a good thing.
 So if housing prices are going up 20% year over year,
 and I say, this is great for the American public
 because most of them are homeowners,
 then I have misrepresented a phenomena.
 Inflation is 20%, not 7%.
 And then I have misrepresented it as being a positive
 rather than a negative.
 And people will stare at it
 and you could even show them their house on fire
 and they would perceive it as being great
 because it's warming them up
 and they're gonna save on their heat costs.
 It does seem that the cruder the model,
 whether it's economics, whether it's psychology,
 the easier it is to weave
 whatever the heck narrative you want.
 And not in a malicious way,
 but just like it's some kind of like emergent phenomena,
 this narrative thing that we tell ourselves.
 So you can tell any kind of story about inflation.
 Inflation is good, inflation is bad.
 Like the cruder the model,
 the easier it is to tell a narrative about it.
 And that's what the,
 so like if you take an engineering approach,
 I feel like it becomes more and more difficult
 to run away from sort of a true deep understanding
 of the dynamics of the system.
 I mean, honestly, if you went to 100 people on the street
 and you asked them to define inflation,
 how many would say it's a vector tracking the change
 in price of every product service asset in the world
 over time?
 No. Not many.
 Now, if you went to them and you said,
 do you think 2% inflation a year is good or bad?
 The majority would probably say, well, here it's good.
 The majority of economists would say
 2% inflation a year is good.
 And of course there's, look at the ship next to us.
 What if I told you that the ship leaked 2% of its volume,
 every something, right?
 The ship is rotting 2% a year.
 That means the useful life of the ship is 50 years.
 Now, ironically, that's true.
 Like a wooden ship had a 50 year to a hundred year life,
 100 would be long, 50 years, not unlikely.
 So when we built ships out of wood,
 they had a useful life of about 50 years and then they sunk,
 they rotted, there's nothing good about it, right?
 You build the ship out of steel, you know,
 and it's zero as opposed to 2% degradation.
 And how much better is 0% versus 2%?
 Well, 2% means you have a useful life of, you know,
 it's half life at 35 years.
 2% is a half life of 35 years.
 That's basically the half life of money and gold.
 If I store your life force in gold
 under perfect circumstances,
 you have a useful life at 35 years.
 0% is a useful life of forever.
 So 0% is immortal.
 2% is 35 years average life expectancy.
 So the idea that you would think the life expectancy
 of the currency and the civilization
 should be 35 years instead of forever
 is kind of a silly notion.
 But the tragic notion is it was, you know,
 seven into 70 or 10 years.
 The money has had a half life of 10 years,
 except for the fact that in weak societies
 and in Argentina or the like,
 the half life of the money is three to four years,
 in Venezuela one year.
 So the United States dollar
 and the United States economic system
 was the most successful economic system
 in the last hundred years in the world.
 We won every war.
 We were the world's superpower.
 Our currency lost 99.7% of its value.
 And that means horrifically,
 every other currency lost everything, right?
 In essence, the other ones were 99.9,
 except for most that were 100%
 because they all completely failed.
 And, you know, you've got a mainstream economic community,
 you know, that thinks that inflation is a number
 and 2% is desirable.
 It's kind of like, you know,
 remember George Washington, you know how he died?
 No.
 Well-meaning physicians bled him to death.
 Okay, the last thing in the world you would wanna do
 to a sick person is bleed them, right?
 In the modern world.
 I think we understand that oxygen is carried
 by the blood cells.
 And, you know, and if, you know,
 there's that phrase, right?
 A triage phrase,
 what's the first thing you do in an injury?
 Stop the bleeding.
 Single first thing, right?
 You show up after any accident, I look at you,
 stop the bleeding because you're gonna be dead
 in a matter of minutes if you bleed out.
 So it strikes me as being ironic
 that Orthodox conventional wisdom
 was bleed the patient to death.
 And this was the most important patient in the country,
 maybe in the history of the country.
 And we bled him to death trying to help him.
 So when you're actually inflating the money supply at 7%,
 but you're calling it 2%
 because you wanna help the economy,
 you're literally bleeding the free market to death.
 But the sad fact is George Washington went along with it
 because he thought that they were gonna do him good.
 And the majority of the society, most companies,
 most conventional thinkers, you know, the working class,
 they go along with this because they think
 that someone has their best interests at mind.
 And the people that are bleeding them to death believe,
 they believe that prescription
 because their mental models are just so defective.
 And that understanding of energy and engineering
 and the economics that are at play
 is crippled by these mental models.
 But that's both the bug and the feature of human civilization
 that ideas take hold, they unite us, we believe in them.
 And we make a lot of cool stuff happen by,
 I mean, as an average sort of just the fact of the matter,
 a lot of people believe the same thing,
 they get together and they get some shit done
 because they believe that thing.
 And then some ideas can be really bad
 and really destructive, but on average,
 the ideas seem to be progressing in a direction of good.
 Let me just step back.
 What the hell are we doing here, us humans on this earth?
 How do you think of humans?
 How special are humans?
 How did human civilization originate on this earth?
 And what is this human project that we're all taking on?
 You mentioned fire and water,
 and apparently bleeding you to death is not a good idea.
 I always thought you can get the demons out in that way,
 but that was a recent invention.
 So what's this thing we're doing here?
 I think what distinguishes human beings
 from all the other creatures on the earth
 is our ability to engineer.
 We're engineers, right?
 To solve problems or just build incredible, cool things?
 Engineering, harnessing energy and technique
 to make the world a better place than you found it.
 From the point that we actually started to play with fire,
 that was a big leap forward.
 Harnessing the power of kinetic energy and missiles,
 another step forward.
 Every city built on water.
 Why water?
 Well, water's bringing energy, right?
 If you actually put a turbine on a river
 or you capture a change in elevation of water,
 you've literally harnessed gravitational energy,
 but water is also bringing you food.
 It's also giving you a cheap form
 of getting rid of your waste.
 It's also giving you free transportation.
 You wanna move one ton blocks around.
 You wanna move them in water.
 So I think, I mean, the human story is really the story
 of engineering a better world.
 And the rise in the human condition
 is determined by those groups of people,
 those civilizations that were best at harnessing energy.
 If you look, the Greek civilization,
 they built it around ports and seaports and water
 and created a trading network.
 The Romans were really good at harnessing
 all sorts of engineering.
 I mean, the aqueducts are a great example.
 If you go to any big city,
 you travel through cities in the Med,
 you find that the carrying capacity of the city
 or the island is 5,000 people without running water.
 And then if you can find a way to bring water to it,
 it increases by a factor of 10.
 And so human flourishing is really only possible
 through that channeling of energy, right?
 That eventually takes the form of air power, right?
 I mean, that ship, I mean,
 look at the intricacy of those sails.
 I mean, it's just the model is intricate.
 Now think about all of the experimentation
 that took place to figure out how many sails
 to put on that ship and how to rig them
 and how to repair them and how to operate them.
 It's thousands of lives spent thinking through
 all the tiny little details,
 all to increase the efficiency of this,
 the effectiveness, the efficiency of this ship
 as it sails through water.
 And we should also note there's a bunch of cannons
 on the side, so obviously.
 Another form of engineering, right?
 Energy harnessing with explosives.
 To achieve what end?
 That's another discussion, exactly.
 Suppose we're trying to get off the planet, right?
 Well, there's a selection mechanism going on.
 So natural selection, however evolution works,
 it seems that one of the interesting inventions on Earth
 was the predator-prey dynamic.
 That you wanna be the bigger fish.
 That violence seems to serve a useful purpose
 if you look at Earth as a whole.
 We as humans now like to think of violence
 as really a bad thing.
 It seems to be one of the amazing things about humans
 is we're ultimately tend towards cooperation.
 We like peace.
 If you just look at history,
 we want things to be nice and calm.
 And but just wars break out every once in a while
 and lead to immense suffering and destruction and so on.
 And they have a kind of like resetting the pallet effect.
 It's one that's full of just
 immeasurable human suffering,
 but it's like a way to start over.
 We're quite the apex predator on the planet.
 And I Google something the other day,
 what's the most common form of mammal life on Earth?
 By number of organisms?
 By count. By count.
 And the answer that came back was human beings.
 I was shocked, I couldn't believe it.
 It says like, apparently if we're just looking at mammals,
 the answer was human beings are the most common,
 which was very interesting to me.
 I almost didn't believe it,
 but I was trying to, eight billion or so human beings.
 There's no other mammal that's got more than eight billion.
 If you walk through downtown Edinburgh and Scotland
 and you look up on this hill and this castle up on the hill,
 and you talk to people and the story is,
 oh yeah, well that was a British castle,
 before it was a Scottish castle, before it was a Pict castle,
 before it was a Roman castle,
 before it was some other Celtic castle,
 before it was, then they found 13 prehistoric castles
 buried one under the other under the other.
 And you get the conclusion that 100,000 years ago,
 somebody showed up and grabbed the high point,
 the apex of the city,
 and they built a stronghold there, and they flourished,
 and their family flourished, and their tribe flourished
 until someone came along and knocked them off the hill.
 And it's been a nonstop, never ending fight
 by the aggressive, most powerful entity,
 family, organization, municipality, tribe, whatever.
 All for the hill.
 For that one hill, going back since time immemorial.
 And you scratch your head and you think,
 it seems like it's like just this never ending wheel.
 But does not lead, if you just, all kinds of metrics,
 that seems to improve the quality of our cannons and ships
 as a result.
 It seems that war, just like your laser eyes,
 focuses the mind on the engineering tasks.
 It is that.
 And it does remind you that the winner
 is always the most powerful.
 And we throw that phrase out,
 but no one thinks about what that phrase means.
 Like, who's the most powerful,
 or the most powerful side won,
 but they don't think about it.
 And they think about power, energy delivered
 in a period of time.
 And then you think, a guy with a spear is more powerful
 than someone with their fist.
 And someone with a bow and arrow is more powerful
 than the person with the spear.
 And then you realize that somebody with bronze
 is more powerful than without.
 And steel is more powerful than bronze.
 And if you look at the Romans,
 they persevered with artillery,
 and they could stand off from 800 meters and blast you
 to smithereens.
 You study the history of the Balearic slingers,
 and you think we invented bullets,
 but they invented bullets to put in slings
 thousands of years ago.
 They could have stood off 500 meters
 and put a hole in your head.
 And so there was never a time
 when humanity wasn't vying
 to come up with an asymmetric form
 of projecting their own power via technology.
 An absolute power is when a leader is able
 to control large amount of humans,
 they're facing the same direction,
 working in the same direction to leverage energy.
 The most organized society wins.
 When the Romans were dominating everybody,
 they were the most organized civilization in Europe.
 As long as they stayed organized, they dominated.
 And at some point they overexpanded
 and got disorganized and they collapsed.
 And I guess you could say that
 the struggle of human condition,
 it catalyzes the development of new technologies,
 one after the other.
 It penalizes anybody that rejects ocean power, right?
 Gets penalized, you reject artillery, you get penalized,
 you reject atomic power, you get penalized.
 If you reject digital power, cyber power,
 you get penalized.
 And the underlying control of the property
 keeps shifting hands from one institution
 or one government to another
 based upon how rationally they're able to channel
 that energy and how well organized or coordinated they are.
 Well, that's a really interesting thing
 about both the human mind and governments
 that once they get a few good, and companies,
 once they get a few good ideas, they seem to stick with them.
 They reject new ideas.
 It's almost, whether that's emergent
 or however that evolved,
 it seems to have a really interesting effect
 because when you're young, you fight for the new ideas.
 You push them through, then a few of us humans find success,
 then we get complacent.
 We take over the world using that new idea,
 and then the new young person with the better new idea,
 challenges you, and you, as opposed to pivoting,
 you stick with the old and lose because of it.
 And that's how empires collapse.
 And it's just both at the individual level that happens
 when two academics fighting about ideas
 or something like that,
 and at the human civilization level, governments,
 they hold on to the ideas of old.
 It's fascinating.
 Yeah, an ever persistent theme in the history of science
 is the paradigm shift.
 And the paradigms shift when the old guard dies
 and a new generation arrives,
 or the paradigm shifts when there's a war
 and everyone that disagrees with the idea of aviation
 finds bombs dropping on their head,
 or everyone that disagrees with whatever your technology is
 has a rude awakening.
 And if they totally disagree, their society collapses
 and they're replaced by that new thing.
 A lot of the engineering you talked about
 had to do with ships and cannons and leveraging water.
 What about this whole digital thing that's happening?
 Been happening over the past century.
 Is that still engineering in your mind?
 You're starting to operate in these bits of information.
 I think there's two big ideas.
 The first wave of ideas were digital information.
 And that was the internet way been running since 1990
 or so for 30 years.
 And the second wave is digital energy.
 So if I look at digital information,
 this idea that we wanna digitally transform a book,
 I'm gonna dematerialize every book in this room into bits.
 And then I'm going to deliver a copy of the entire library
 to a billion people.
 And I'm gonna do it for pretty much de minimis electricity.
 If I can dematerialize music, books, education, entertainment,
 maps, right?
 That is an incredibly like exothermic transaction.
 It's a crystallization when we collapse
 into a lower energy state as a civilization
 and we give off massive amounts of energy.
 Like if you look at what Carnegie did,
 the richest man in the world created libraries everywhere
 at the time and he gave away his entire fortune.
 And now we can give a better library
 to every six year old for nothing.
 And so what's the value of giving a million books
 to eight billion people, right?
 That's the explosion in prosperity
 that comes from digital transformation.
 And when we do it with maps, I transformed the map,
 I put it into a car, you get in the car
 and the car drives you where you wanna go.
 With the map, right?
 And how much better is that
 than a Ram McNally Atlas right here?
 It's like a million times better.
 So the first wave of digital transformation
 was the dematerialization of all of these informational
 things which are non-conservative.
 That is, I could take Beethoven's fifth symphony
 played for by the best orchestra in Germany
 and I could give it to a billion people
 and they could play it in a way
 when they could play it a thousand times each
 at less than the cost of the one performance, right?
 So I deliver culture and education and erudition
 and intelligence and insight to the entire civilization
 over digital rails.
 And the consequences of the human race
 are first order generally good, right?
 The world is a better place, it drives growth
 and you create these trillion dollar entities
 like Apple and Amazon and Facebook and Google
 and Microsoft, right?
 That is the first wave.
 The second wave.
 Do you mind, I'm sorry to interrupt,
 but that first wave, it feels like the impact
 that's positive, you said the first order impact
 is generally positive.
 It feels like it's positive in a way
 that nothing else in history has been positive.
 And then we may not actually truly be able
 to understand the orders and magnitude
 of increase in productivity in just progress
 and human civilization until we look back centuries from now.
 It just feels, or maybe I'm like,
 just looking at the impact of Wikipedia.
 Right.
 The giving access to basic wisdom or basic knowledge
 and then perhaps wisdom to billions of people.
 If you can just linger on that for a second,
 what's your sense of the impact of that?
 You know, I would say if you're a technologist philosopher,
 the impact of a technology is so much greater
 on the civilization and the human condition
 than a non-technology that is almost not worth your trouble
 to bother trying to fix things a conventional way.
 So let's take example.
 I have a foundation, the Saylor Academy,
 and the Saylor Academy gives away free education,
 free college education to anybody on earth that wants it.
 And we've had more than a million students.
 And if you go and you take the physics class,
 the lectures were by the same physics lecturer
 that taught me physics at MIT.
 Except when I was at MIT,
 the cost of the first four weeks of MIT
 would have drained my family's life,
 collective life savings for the first last 100 years.
 Like a hundred years worth of my father, my grandfather,
 my great grandfather, they saved every penny they had
 after a hundred years, they could have paid for one week
 or two weeks of MIT.
 That's how fiendishly expensive and inefficient it was.
 So I went on scholarship.
 I was lucky to have a scholarship.
 But on the other hand, I sat in the back of the 801 lecture
 hall and I was like right up in the rafters.
 It's an awful experience on these like uncomfortable
 wooden benches and you can barely see the blackboard
 and you got to be there synchronously.
 And the stuff we upload, you can start it and stop it
 and watch it on your iPad or watch it on your computer
 and rewind it multiple times and sit in a comfortable chair
 and you can do it from anywhere on earth
 and it's absolutely free.
 So I think about this and I think you want to improve
 the human condition.
 You need people with postgraduate level education.
 You need PhDs and I know this sounds kind of elitist
 but you want to cure cancer and you want to go to the stars,
 fusion drive, we need new propulsion, right?
 We need extraordinary breakthroughs
 in every area of basic science, be it biology or propulsion
 or material science or computer science.
 You're not doing that with an undergraduate degree.
 You're certainly not doing it with a high school education
 but the cost of a PhD is like a million bucks.
 There's like 10 million PhDs in the world
 if you check it out.
 There's 8 billion people in the world.
 How many people could get a PhD or would want to?
 Maybe not 8 billion but a billion, 500 million.
 Let's just say 500 million to a billion.
 How do you go from 10 million to a billion
 highly educated people, all of them specializing
 and I don't have to tell you how many different fields
 of human endeavor there are.
 I mean, your life is interviewing these experts
 and there's so many, right?
 You know, it's amazing.
 So how do I give a multimillion dollar education
 to a billion people?
 And there's two choices.
 You can either endow a scholarship
 in which case you pay $75,000 a year.
 Okay, 75,000, let's pay a million dollars
 and a million dollars a person.
 I can do it that way.
 And you're never, even if you had a trillion dollars,
 if you had $10 trillion to throw at the problem
 and we've just thrown $10 trillion at certain problems,
 you don't solve the problem, right?
 If I put $10 trillion on the table and I said educate everybody,
 give them all a PhD, you still wouldn't solve the problem.
 Harvard University can't educate 18,000 people
 simultaneously or 87,000 or 800,000 or 8 million.
 So you have to dematerialize the professor
 and dematerialize the experience.
 So you put it all as streaming on-demand
 computer-generated education
 and you create simulations where you need to create simulations
 and you upload it.
 It's like the human condition is being held back
 by 500,000 well-meaning average algebra teachers.
 I love them.
 I mean, please don't take offense if you're an algebra teacher,
 but instead of 500,000 algebra teachers
 going through the same motion over and over again,
 what you need is like one,
 or five, or 10 really good algebra teachers
 and they need to do it a billion times a day
 or a billion times a year for free.
 And if we do that,
 there's no reason why you can't give infinite education,
 certainly in science, technology, engineering, and math, right?
 Infinite education to everybody with no constraint.
 And I think the same is true, right?
 With just about every other thing.
 If you want to bring joy to the world, you need digital music.
 If you want to bring enlightenment to the world,
 you need digital education.
 If you want to bring anything of consequence in the world,
 you got to digitally transform it
 and then you got to manufacture it something like
 100 times more efficiently as a start,
 but a million times more efficiently
 is probably, you know, that's hopeful.
 Maybe you have a chance.
 If you look at all of these space endeavors
 and everything we're thinking about getting to Mars,
 getting off the planet, getting to other worlds,
 number one thing you got to do is you got to make
 a fundamental breakthrough in an engine.
 People dreamed about flying for thousands of years,
 but until the internal combustion engine,
 you didn't have enough energy, enough power
 in a light enough package in order to solve the problem.
 And the human race has all sorts of those fundamental engines
 and materials and techniques that we need to master.
 And each one of them is a lifetime of experimentation
 of someone capable of making a seminal contribution
 to the body of human knowledge.
 There are certain problems like education
 that could be solved through this process of dematerialization.
 And by the way, to give props to the 500K algebra teachers,
 when I look at YouTube, for example,
 one possible approach is each one of those 500,000 teachers
 probably had days and moments of brilliance.
 And if they had the ability to contribute to
 in the natural selection process, like the market of education
 where the best ones rise up, that's a really interesting way,
 which is like the best day of your life,
 the best lesson you've ever taught could be found
 and sort of broadcast to billions of people.
 So all of those kinds of ideas can be made real in the digital world.
 Now, traveling across planets, you still can't solve that problem
 with dematerialization.
 What you could solve potentially is dematerializing the human brain
 where you can transfer...
 Like you don't need to have astronauts on the ship.
 You can have a floppy disk carrying a human brain.
 So based on those points, you'd love for the 500,000 algebra teachers
 to become 500,000 math specialists,
 and maybe they clump into 50,000 specialties as teams,
 and they all pursue 50,000 new problems,
 and they put their algebra teaching on autopilot.
 That's the same as when I give you 11 cents worth of electricity,
 and you don't have to row a boat eight hours a day before you can eat.
 It would be a lot better that you would pay for your food
 in the first eight seconds of your day,
 and then you could start thinking about other things.
 With regard to technology,
 one thing that I learned studying technology when you look at S-curves
 is until you start the S-curve,
 you don't know whether you're 100 years from viability,
 a thousand years from viability, or a few months from viability.
 Isn't that fun? That's so fun.
 The early part of the S-curve is so fun, because you don't know.
 In 1900, you could have got any number of learned academics
 to give you 10,000 reasons why humans will never fly.
 In 1903, the Wright brothers flew, and by 1969, we're walking on the moon.
 The advance that we made in that field was extraordinary,
 but for the 100 years and 200 years before,
 they were just back and forth, and nobody was close.
 That's the happy part.
 The happy part is we went from flying 20 miles an hour or whatever
 to flying 25,000 miles an hour in 66 years.
 The unhappy part is I studied aeronautical engineering at MIT in the 80s,
 and in the 80s, we had Gulfstream aircraft, we had Boeing 737s,
 we had the Space Shuttle, and you fast forward 40 years,
 and we pretty much had the same exact aircraft.
 The efficiency of the engines was 20, 30% more.
 We slammed into a brick wall around 1969 to 1975.
 In fact, the Global Express, the Gulfstream, these were all engineered in the 70s,
 some in the 60s.
 The fuselage silhouette of a Gulfstream, of a G5, was the same shape as a G4,
 is the same shape as a G3, is the same shape as a G2,
 and that's because they were afraid to change the shape for 40 years
 because they worked it out in a wind tunnel, they knew it worked.
 When they finally decided to change the shape, it was like a $10 billion exercise
 with modern supercomputers and computational fluid dynamics.
 Why was this so hard? What does that wall meet of that you slammed into?
 The right question is, so why does a guy that went to MIT that got an aeronautical engineering degree
 spend his career in software?
 Why is it that I never, a day in my life, with the exception of some Air Force Reserve work,
 I never got paid to be an aeronautical engineer and I worked in software engineering my entire career?
 Maybe software engineering is the new aeronautical engineering in some way.
 Maybe you hit fundamental walls in certain, until you have to return to it centuries later.
 Or no?
 The National Gallery of Art was endowed by a very rich man, Andrew Mellon,
 and you know how he made his money? Aluminum.
 Okay? And so, and you know what kind of airplanes you can create without aluminum?
 Nothing. Nothing. Right?
 So it's a materialist problem.
 Okay, so 1900, we made massive advances in metallurgy, right?
 I mean, that was US steel. That was iron to steel, aluminum.
 Massive fortunes were created because this was a massive technical advance.
 And then we also had the internal combustion engine and you know,
 the story of Ford and General Motors and Daimler-Chrysler and the like is informed by that.
 So you have no jet engines, no rocket motors, no internal combustion engines.
 You have no aviation.
 But even if you had those engines, if you were trying to build those things with steel,
 no chance. You had to have aluminum.
 So there's like two pretty basic technologies.
 And once you have those two technologies, stuff happens very fast.
 So tell me the last big advance in like jet engines, there hasn't been one.
 Like there hasn't, the last big advance in rocket engines.
 How's it been one?
 The big advances in spaceship design from what I can see are in the control systems,
 the gyros and the ability to land, right?
 In a stable fashion. That's pretty amazing, landing a rocket.
 Also in the, I guess according to Elon and so on,
 the manufacture of the more efficient and less expensive manufacturer of rockets.
 So like it's a production, whatever you call that discipline of at scale manufacture,
 at scale production, so factory work.
 But it's not 10X. I mean, maybe it's 10X over a period of a few decades.
 When we figure out how to operate a spaceship, you know,
 on the water in your water bottle for a year, right?
 Now, then you've got a breakthrough.
 So the bottom line is propulsion, propellant, propulsion technology, propellants,
 and the materials technology, they were critical to getting on that aviation S curve.
 And then we slammed into a wall in the seventies and the Boeing 747,
 the global express, the Gulf stream.
 These things were the space shuttle.
 They were all pretty much reflective of that.
 And then we kind of, then we stopped.
 And at that point you have to switch to a new S curve.
 So the next equivalent to the internal combustion engine was the CPU.
 And the next aluminum equivalent was silicon.
 So when we actually started developing CPUs, the transistor gave way to CPUs.
 And if you look at the power, right, the bandwidth that we had on computers and Moore's law, right?
 What if the efficiency of jet engines had doubled every three years?
 Right? In the last 40 years where we'd be right now, right?
 So I think that if you're a business person,
 if you're looking for commercially viable application of your mind,
 then you have to find that S curve.
 And ideally, you have to find it in the first five, six, 10 years.
 But people always miss this.
 Let's take Google Glass, right?
 Google Glass was an idea in 2013.
 The year is 2022.
 And people were quite sure this was going to be a big thing.
 And it could have been at the beginning of the S curve.
 But fundamentally, we didn't really have an effective mechanism.
 I mean, people getting vertigo and they're, you know.
 But you didn't know that at the beginning of the S curve, right?
 I mean, maybe some people had a deep intuition about the fundamentals of augmented reality.
 But you don't know that.
 You don't have those.
 You're looking through the fog. You don't know.
 So the point is we're year zero in 2013,
 and we're still year zero in 2022 on that augmented reality.
 And when somebody puts out a set of glasses that you can wear comfortably
 without getting vertigo, right?
 Without any disorientation that managed to have the stability
 and the bandwidth necessary to sync with the real world, you'll be in year one.
 And from that point, you'll have a 70-year or some interesting future
 until you slam into a limit to growth.
 And then it'll slow down.
 And this is the story of a lot of things, right?
 I mean, John D. Rockefeller got in the oil business in the 1860s.
 And the oil business, as we understood it, became fairly mature by the 1920s to 30s.
 And then it actually stayed that way until we got to fracking,
 which was like 70 years later, and then it burst forward.
 So the interesting story about Moore's law, though, is that you get this constant burst of S curves on top of S curves on top of S curve.
 It's like the moment you start slowing down or almost ahead of you slowing down,
 you come up with another innovation, another innovation.
 So Moore's law doesn't seem to happen in every technological advancement.
 It seems like you only get a couple of S curves and then you're done for a bit.
 So I wonder what the pressures there are that resulted in such success over several decades and still going.
 Humility dictates that nobody knows when the S curve kicks off.
 And you could be 20 years early or 100 years early.
 Leonardo da Vinci, you know, they were Michelangelo.
 They were designing flying machines hundreds and hundreds of years ago.
 So humility says you're not quite sure when it's when you really hit that commercial viability.
 And it also dictates you don't know when it ends.
 Like when will the party stop? When will Moore's law stop?
 And we'll get to the point where they're exponentially diminishing returns on silicon performance.
 And when you just like we got exponentially diminishing returns on jet engines, you know,
 and it just takes an exponential increase in effort to make it 10 percent better.
 But while you're in the middle of it, then you know you can do things.
 So the reason that the digital revolution is so important is because the underlying platforms,
 the bandwidth of and the performance of the components and I say the components are the radio protocols,
 mobile protocols, the the batteries, the CPUs and the displays.
 Right. Those those four components are pretty critical.
 They're all they're all critical in the creation of an iPhone.
 I wrote about it in the book, The Mobile Wave, and they catalyze this entire mobile revolution
 because they have advanced and continue to advance.
 They created a very fertile environment for all these digital transformations.
 And the digital transformations themselves, right, they they call for creativity in their own.
 Right. Like like I think the interesting thing about let's take digital maps.
 When you when you conceptualize something as a dematerialized map, right,
 it becomes a map because I can put it on a display like an iPad or I can put it in a car like a Tesla.
 But if you really want to figure it out, you can't think like an engineer.
 You need to think like a fantasy writer.
 Like this is where it's useful if you studied if you read played Dungeons and Dragons and you read Lord of the Rings
 and you you study all the fantasy literature because because when I dematerialize the map,
 first I put 10 million pages of satellite imagery into the map.
 That's a simple physical transform.
 But then I start to put telemetry into the map and I keep track of the traffic rates on the roads.
 And I tell you whether you'll be in a traffic jam if you drive that way and I tell you which way to drive.
 And then I start to get feedback on where you're going.
 And I tell you the restaurants close and people don't like it anyway.
 And then I put an AI on top of it and I have it drive your car for you.
 And eventually the implication of digital transformation of maps is I get in a self-driving car and I say,
 take me someplace cool where I can eat.
 And and how did you get to that last step?
 Right. It wasn't simple engineering.
 There's a bit of fantasy and they're a bit of magic design, art, whatever the heck you call it.
 It's whatever. Yeah.
 Fantasy injects magic into the engineering process like imagination.
 Like proceeds great revolutions in engineering.
 It's like imagining a world like of what you can do with the display.
 How will the interaction be?
 That's where Google Glass actually came in augmented reality, virtual reality.
 People are playing in the space of sci fi imagination.
 They called a moonshot. They tried.
 It didn't work, but to their credit, they stopped trying.
 Right. And then there's new people.
 They keep dreaming.
 Dreamers all about all around us.
 I love those dreamers and most of them fail and suffer because of it.
 But some of them win Nobel prizes or become billionaires.
 But what I would say is if half the civilization dropped what they were doing tomorrow
 and eagerly started working on launching a rocket to Alpha Centauri,
 it might not be the best use of our resources because it's kind of like half of Athens in the year 500 BC
 eagerly started working on flying machines.
 If you went back and you said, what advice would you give them?
 You would say, you know, it's not going to work until you get to aluminum.
 And you're not going to get to aluminum until you work out the steel and certain other things.
 And you're not going to get to that until you work out the calculus of variations and some metallurgy.
 There's a dude, Newton, that won't come along for quite a while,
 and he's going to give you the calculus to do it.
 And until then, it's hopeless.
 So you might be better off to work on the aqueduct or to focus on sales or something.
 If I look at this today, I say there's massive, profound civilization advances
 to be made through digital transformation of information.
 And you can see them like that.
 This is the story of today.
 This is not the story of today, right?
 It's 10 years old, what we've been seeing.
 We're living through different manifestations of that story today, too, though, like social media.
 The effects of that is very interesting because ideas spread even, you talk about velocity of money,
 the velocity of ideas keeps increasing.
 So Wikipedia is a passive store.
 It's a store of knowledge.
 Twitter is like a water hose or something.
 It's like spraying you with knowledge whether you want it or not.
 It's like social media is just like this explosion of ideas.
 And then we pick them up and then we try to understand ourselves because the drama of it also plays with our human psyche.
 So sometimes there's more ability for misinformation, for propaganda to take hold.
 So we get to learn about ourselves.
 We get to learn about the technology that can decelerate the propaganda, for example, all that kind of stuff.
 But like the reality is we're living.
 I feel like we're living through a singularity in the digital information space.
 And we are not we don't have a great understanding of exactly how it's transforming our lives.
 This is where money is useful as a metaphor for significance, because if money is the economic energy of the civilization,
 then something that's extraordinarily lucrative that's going to generate a monetary or a wealth increase is a way to increase the net energy in the civilization.
 And ultimately, if we had 10 times as much of everything, we'd have a lot more free resources to pursue all of our advanced scientific and mathematical and theoretical endeavors.
 So let's take Twitter.
 Twitter is something that could be 10 times more valuable than it is.
 Twitter could be made 10 times better.
 By the way, I should say that people should follow you on Twitter. Your Twitter account is awesome.
 Thank you.
 It could be made 10 times better.
 Yeah, Twitter can be made 10 times better if we take if we take YouTube or take education.
 We could generate a billion PhDs.
 And and the question is, do you need any profound breakthrough in materials or technology to do that?
 The answer is not really.
 Right. So if you want to, you could make Apple, Amazon, Facebook, Google, Twitter, all these things better.
 The the United States government, if they took one percent of the money they spend on the Department of Education and they simply poured it into digital education
 and they gave degrees to people that actually met those requirements, they could provide a hundred X as much education for one one hundredth of the cost.
 And they could do it with no new technology.
 That's a marketing and political challenge.
 So I don't think every objective is equally practical.
 And I think the benefit of being an engineer or or thinking about practical achievements is when the government pursues an impractical objective
 or when anybody an entrepreneur, not so bad with an entrepreneur because they don't have that much money to waste.
 When a government pursues an impractical objective, they squander trillions and trillions of dollars and achieve nothing.
 Whereas if they pursue a practical objective or if the or if they simply get out of the way and do nothing and they allow the free market to pursue the practical objectives,
 then I think you can have profound impact on the human civilization.
 And if I if I look at the world we're in today, I think that there are there are multi trillion, 10, 20, 50 trillion dollars worth of opportunities in the digital information realm yet to be obtained.
 But there's hundreds of trillions of dollars of opportunities in the digital energy realm that not only are they not obtained,
 the majority of people don't even know what digital energy is.
 Most of them reject the concept.
 They're not looking for it.
 They're not expecting to find it.
 It's inconceivable because it is a paradigm shift.
 But in fact, it's completely practical.
 Right under our nose.
 It's staring at us and it could make the entire civilization work dramatically better in every every respect.
 So you mentioned in the digital world, digital information is one digital energy is two and the possible impact on the world and the set of opportunities available in the digital energy space is much greater.
 So how do you think about digital energy?
 What is it?
 So I'll start with Tesla.
 He had a very famous quote.
 He said, if you want to understand the universe, think in terms of energy, vibration and frequency.
 And it gets you thinking about what is the universe.
 And of course, the universe is just all energy.
 And then what is matter?
 Matter is low frequency energy.
 And what are we?
 We're vibrating for ashes to ashes, dust to dust.
 I can turn a tree into light.
 I can turn light back into a tree.
 If I consider the entire universe, and it's very important because we don't really think this way.
 Let's take the New York disco model.
 What if I walk into a nightclub and there's loud music blaring in New York City?
 What's really going on there?
 Right.
 If you blast out 15, 14 billion years ago, the universe is formed.
 Okay, that's a low frequency thing.
 The universe.
 Four and a half billion years ago, the sun, maybe the earth or form.
 It's 400 million years old, the shift that New York City is on is some hundreds of millions of years.
 But the Hudson River is only 20,000 years.
 There's a building that's probably 50 years old.
 There's a company operating that disco or that club, which is five to 10 years old.
 There's a person, a customer walking in there for an experience for a few hours.
 There's music that's oscillating at some kilohertz.
 And then there's light.
 And you have all forms of energy, all frequencies, all layered, all moving through different medium.
 And how you perceive the world is a question of at what frequency do you want to perceive the world?
 And I think that once you start to think that way, you're catalyzed to think about what would digital energy look like
 and why would I want it?
 And what is it?
 So why don't we just start right there?
 What is it?
 The most famous manifestation of digital energy is Bitcoin.
 Bitcoin is a crypto asset.
 It's a crypto asset that has monetary value.
 Can we just linger on that?
 Bitcoin is a digital asset that has monetary value.
 What is a digital asset?
 What is monetary?
 Why use those terms versus the words of money and currency?
 Is there something interesting in that disambiguation of different terms?
 I'd call it a crypto asset network.
 The goal is to create a billion dollar block of pure energy in cyberspace,
 one that I could then move with no friction at the speed of light.
 It's the equivalent to putting a million pounds in orbit.
 How do I actually launch something into orbit?
 How do I launch something into cyberspace such that it moves friction free?
 And the solution is a decentralized proof of work network.
 Satoshi's solution was I'm going to establish protocol running on a distributed set of computers
 that will maintain a constant supply of never more than 21 million bitcoins
 subdividable by 100 million Satoshis,
 each transferable via transferring private keys.
 Now, the innovation is to create that in a ethical, durable fashion.
 The ethical innovation is I want it to be property and not a security.
 A bushel of corn, an acre of land, a stack of lumber and a bar of gold and a bitcoin are all property.
 And that means they're all commonly occurring elements in the world.
 You could call them commodities, but commodity is a little bit misleading.
 And I'll tell you why in a second.
 But they're all distinguished by the fact that no one entity or person or government controls them.
 If you have a barrel of oil and you're in Ukraine versus Russia versus Saudi Arabia versus the US,
 you have a barrel of oil, right?
 And it doesn't matter what the premier in Japan or the mayor of Miami Beach thinks about your barrel.
 They cannot wave their hand and make it not a barrel of oil or a cord of wood.
 And so property is just a naturally occurring element in the universe.
 Why use the word ethical?
 I'm sorry to interrupt occasionally.
 Why ethical assigned to property?
 Because if it's a security, a security would be an example of a share of a stock or a crypto token controlled by a small team.
 And in the event that something is a security because some small group or some identifiable group can control its nature, character, supply,
 then it really only becomes ethical to promote it or sell it pursuant to fair disclosures.
 So I give you maybe practical example.
 I'm the mayor of Chicago.
 I give a speech.
 My speech, I say, I think everybody in Chicago should own their own farm and have chicken,
 a chicken in the backyard and their own horse and an automobile.
 That's ethical.
 I give the same speech and I say, I think everybody in Chicago should buy Twitter stock,
 sell their house or sell their cash and buy Twitter stock.
 Is that ethical?
 Not really.
 At that point, you've entered into a conflict of interest because what you're doing is you're promoting an asset
 which is substantially controlled by a small group of people, the board of directors or the CEO of the company.
 So how would you feel if the president of the United States said, I really think Americans should all buy Apple stock?
 Especially if you worked at Google.
 But you worked anywhere.
 You'd be like, why isn't he saying buy mine?
 A security is a proprietary asset in some way, shape or form.
 And the whole nature of securities law, it starts from this ancient, ancient idea, thou shall not lie, cheat or steal.
 So if I'm going to sell you securities or I'm going to promote securities as a public figure or as an influencer or anybody else,
 if I create my own Yo-Yo coin or Mikey coin and then there's a million of them and I tell you that I think that it's a really good thing
 and Mikey coin will go up forever.
 Nobody buys Mikey coin and then I give 10 million to you and don't tell the public.
 I've cheated them.
 Maybe if I have Mikey coin and I think there's only 2 million Mikey coin and I swear to you there's only 2 million
 and then I get married and I have three kids and my third kid is in the hospital and my kid's going to die.
 And I have this ethical reason to print 500,000 more Mikey coin or else people are going to die.
 And everybody tells me it's fine.
 You know, I've still abused, you know, the investor, right?
 It's it's a ethical challenge.
 If you look at ethics laws everywhere in the world, they all boil down to having a clause which says that if you're a public figure,
 you can't endorse any security.
 You can't endorse something that would cause you to have a conflict of interest.
 So if you're a mayor, a governor, a country, a public figure, an influencer,
 and you want to promote or promulgate or support something using any public influence or funds or resources you may have,
 it needs to be property.
 It can't be security.
 So it goes beyond that, right?
 I mean, like what the Chinese want to support an American company, right?
 As soon as you look at what's in the best interest of the human race, the civilization,
 you realize that if you want an ethical path forward, it needs to be based on common property, which is fair.
 And the way you get to a common property is through an open permissionless protocol.
 If it's not open, right, if it's proprietary and I know what the code says and you don't know what the code says, that makes it a security.
 If it's permissioned, if you're not allowed on my network or if you can be censored or booted off my network, that also makes it a security.
 So when I talk about property, I mean, the challenge here is how do I create something that's equivalent to a barrel of oil in cyberspace?
 And that means it has to be a non-sovereign bearer instrument, open permissionless, not censorable, right?
 If I could do that, then I could deliver you 10,000 dematerialized barrels of oil and you would take settlement of them.
 And you would know that you have possession of that property, irregardless of the opinion of any politician or any company or anybody else in the world.
 That's a really critical characteristic.
 And it actually is probably one of the fundamental things that makes Bitcoin special.
 Bitcoin isn't just a cryptoasset network. It's easy to create a cryptoasset network.
 It's very hard to create an ethical cryptoasset network because you have to create one without any government or corporation or investor exercising into influence to make it successful.
 So open, permissionless, non-censorable. So basically no way for you without explicitly saying so, outsourcing control to somebody else.
 So it's a kind of you have full control. Even with a barrel of oil, what's the difference between a barrel of oil and a Bitcoin to you?
 What is the... because you kind of mentioned that both are property. You mentioned Russia and China and so on.
 Is it the ability of the government to confiscate? In the end, governments can probably confiscate no matter what the asset is, but you want to lessen the effort involved.
 A barrel of oil is a bucket of physical property, liquid property. And Bitcoin is a digital property.
 But it's easier to confiscate a barrel of oil.
 It's easier to confiscate things in the real world than things in cyberspace. Much easier.
 So that's not universally true. Some things in the digital space are actually easier to confiscate because just the nature of how things move easily with information, right?
 I think in the Bitcoin world, what we would say is that Bitcoin is the most difficult property that the human race possesses or has yet invented to confiscate.
 And that's by virtue of the fact that you could take possession of it via your private keys.
 So if you've got your 12 seed phrases in your head, then that would be the highest form of property, right?
 Because I literally have to crack your head open and read your mind to take it.
 It doesn't mean I couldn't extract it from you under duress, but it means that it's harder than every other thing you might own.
 In fact, it's exponentially harder. If you consider every other thing you might own, a car, a house, a share of stock, gold, diamonds, property rights,
 intellectual property rights, movie rights, music rights, anything imaginable, they would all be easier by orders and orders of magnitude to seize.
 So digital property in the form of a set of private keys is by far the apex property of the human race.
 In terms of ethics, I want to make one more point. It's like I might say to you, Lex, I think Bitcoin is the best, most secure, most durable crypto asset network in the world is going to go up forever.
 And there's nothing better in the world. I might be right. I might be wrong.
 But the point is, because it's property, it's ethical for me to say that.
 If I were to turn around and say, you know, Lex, I think the same about micro strategy stock, MSTR. That's a security.
 Okay. If I'm wrong about that, I have civil liability or other liability because I could go to a board meeting tomorrow and I could actually propose we issue a million more shares of micro strategy stock.
 Whereas the thing that makes Bitcoin ethical for me to even promote is the knowledge that I can't change it.
 If I knew that I could make it 42 million instead of 21 million and I had the button back here, right, then I have a different degree of ethical responsibility.
 Now, I could tell you your life will be better if you buy Bitcoin and it might not. You might go buy Bitcoin, you might lose the keys and be bankrupt and your life ends and your life is not better because you bought Bitcoin, right?
 But it wouldn't be my ethical liability any more than if I were to say, Lex, I think you ought to get a farm.
 I think you should be a farmer. I think a chicken in every pot, you should get a horse. I think you'd be better.
 I mean, these are all opinions expressed about property, which may or may not be right that you may or may not agree with.
 But in a legal sense, if we read the law, if we understand securities law, and I would say, you know, most people in the crypto industry, you know, they don't they didn't take companies public.
 And so they're not really focused on the securities law. They don't even know the securities law.
 If you focus on the securities law, that would say you just can't legally sell this stuff to the general public or promote it without a full set of continuing disclosures signed off on by a regulator.
 So so there's a fairly bright line there with regard to securities.
 So when you get to the when you get to the secondary issue, it's how do you actually build a world based on digital property if public figures can't can't embrace it or endorse it?
 You see, so you're not going to build a better world based upon Twitter stock, if that's your idea of property, because Twitter stock is a security and Twitter stock is never going to be a non sovereign bearer instrument in Russia, right?
 Or in China, right? It's not legal in China, right? It's not a global permissionless open thing.
 It will never be trusted by the rest of the world. And legally, it's impractical. But, you know, would you really want to put $100 trillion worth of economic value on Twitter stock of there's a board of directors and a CEO that could just get up and like take half of it tomorrow?
 No. So if you want to if you want to build a better world based on digital energy, you need to start with constructing a digital property. And I'm using property here.
 Open permissionless legal sense.
 But I would also go to the next step and say, property is low frequency money. So if you if I give you a million dollars.
 And you want to hold it for a decade, you might go buy a house with it.
 Right. And the house is low frequency money. You converted the the million dollars of economic energy into a structure called a house. Maybe and after a decade, you might convert it back into energy, you might sell the house for currency.
 And it'll be more worth more or less depending upon the monetary quality means what here.
 How quickly it changes state how quickly does something vibrate.
 So if if I transfer $10 from me to you for a drink and then you turn around and you buy another right we're vibrating on a frequency of every few hours.
 Right. The energy is changing hands. But it's not likely that you sell and buy houses every few hours.
 Right. The frequency of of a of a transaction and real estate is every 10 years, every five years.
 So it's a much lower frequency transaction.
 And so when you think about what's going on here, you have extremely low frequency things, which we'll call property.
 Then you have mid frequency things. I'm going to call them money or currency.
 And then you have high frequency. That's energy. And that's why I use the illustration of you got the building, you got the light and you got the sound and they're all just energy moving at different frequencies.
 Now, Bitcoin is magical and it's it is truly the innovation. It's like a singularity because it represents the first time in the history of human race that we managed to create a digital property properly understood.
 It's easy to create something digital, right. Every coupon and every scan on Fortnite and Roblox and Apple TV credits and all these things.
 They're all digital something, but they're securities, right. Chairs of stock are securities.
 Whenever anybody transfers, when you transfer money on PayPal or Apple Pay, you're transferring in essence a security or an IOU.
 And so transferring a bearer instrument with final settlement in the Internet domain or in cyberspace, that's a critical thing.
 And anybody in the crypto world can do that. All the cryptos can do that.
 But what they can't do, what 99 percent of them fail to do is be property. They're securities.
 Well, there's a line there I'd like to explore a little further. For example, what about when you like Coinbase or something like that, when there's an exchange that you buy Bitcoin is in, you start to move away from this kind of some of the some of the aspects that you said makes up a property, which is this.
 Nonsensical and permissionless and open.
 So in order to achieve the convenience, the effectiveness of the transfer of energy, you have to leverage some of these places that remove the aspects of property.
 So maybe you can comment on that. Let me give you a good model for that. If you think about the layer one of Bitcoin, the layer one is is the property settlement layer and we're we're going to do 350,000 transactions or less a day.
 A hundred million transactions a year is the bandwidth on the layer one. And it would be an ideal layer one to move a billion dollars from point A to point B with the massive security.
 The role of the layer one is is two things.
 One thing is I want to move a large sum of money through space with security. I can move any amount of Bitcoin in a matter of minutes for dollars on layer one.
 The second important feature of the layer one is I need the money to last forever. Right. I need the money indestructible, immortal. So so the bigger trick is not to move a billion dollars from here to Tokyo.
 The big trick is to move a billion dollars from here to the year 2140.
 And and that's that's what we want to solve with layer one. And and the best real metaphor in New York City would be the granite or the schist.
 What you want is a city block of bedrock. And how long has it been there? Like millions of years it's been there. And how fast do you want it to move? You don't.
 In fact, the single thing that's most important is that it not deflect. If it deflects a foot in 100 years, it's too much. If it deflects an inch in 100 years, you might not want that.
 So the layer one of Bitcoin is a foundation upon which you put weight. How much weight can you put on it?
 You put a trillion, 10 trillion, 100 trillion, a quadrillion. How much weight is on the bedrock in Manhattan? Right.
 Think about 100 story buildings. So the real key there is the foundational asset needs to be there at all.
 So the fact that you can create a hundred trillion dollar layer one that would stand for a hundred years, that is the revolutionary breakthrough first time.
 And the fact that it's ethical, right, is ethical and it's common property, global permissionless, extremely unlikely that would happen.
 People tried 50 times before and they all failed. They tried 15,000 times after and they've all been, they've all generally failed.
 98% have failed and a couple have like been less successful. But for the most part, that's an extraordinary thing.
 Now, just really quickly pause just to define some terms. If people don't know, layer one is that Michael's referring to is in general what people know of as the Bitcoin technology originally defined,
 which is the blockchain. There's a consensus mechanism of proof of work, a low number of transactions, but you can move a very large amount of money.
 The reason he's using the term layer one is now that there's a lot of ideas of layer two technologies that built on top of this bedrock that allow you to move a much larger number of transactions.
 So sort of a higher frequency, I don't know what terminology you want to use, but basically be able to use now something that is based on Bitcoin to then buy stuff, be a consumer, to transfer money, to use it as currency, just to define some terms.
 Yeah. So the layer one is the foundation for the entire cyber economy and we don't want it to move fast.
 What we want is immortality, immortal, incorruptible, indestructible. That's what you want, integrity from the layer one.
 Now there's layer two and layer three and layer two I would define as an open permissionless non-custodial protocol that uses the underlying layer one token as its gas fee.
 So what's custodial mean and how does the different markets like, is Lightning Network?
 The Lightning Network would be an example of a layer two, non-custodial. So the Lightning Network will sit on top of layer one.
 It'll sit on top of Bitcoin and it solves the, what you want to do is solve the problem of it's well and fine.
 I don't want to move a billion dollars every day. What I want to move is five dollars a billion times a day.
 So if I want to move five dollars a billion times a day, I don't really need to put the entire trillion dollars of assets at risk every time I move five dollars.
 All I really need to do is put a hundred thousand dollars in a channel or a million dollars in a channel and then I do 10 million transactions where I have a million dollars at risk.
 And of course it's kind of simple. If I lower my security requirement by a factor of a million, I can probably move the stuff a million times faster.
 And that's how Lightning works. It's non-custodial because there's no corporation or custodian or counterparty you're trusting.
 Right? There's the risk of moving through the channel. But Lightning is an example of how I go from 350,000 transactions a day to 350 million transactions a day.
 So on that layer too, you could move the Bitcoin in seconds for fractions of pennies.
 Now that's not the end all be all because the truth is there are a lot of open protocols. Lightning probably won't be the only one.
 There's an open market competition of other permissionless open source protocols to do this work.
 And in theory, any other crypto network that was deemed to be property, deemed to be non security, you could also think of as potentially a layer two to Bitcoin.
 Right? There's a debate about are there any and what are they? And we can leave that for a later time.
 So why do you think of them as layer two as opposed to contending for layer one?
 Yeah, actually, if they're using their own token, then they are a layer one. If you create an open protocol that uses the Bitcoin token as the fee, then it becomes a layer two.
 Right? Bitcoin itself incentivizes its own transactions with its own token. And that's what makes it layer one.
 Okay, what's layer three then?
 Layer three is a custodial layer. So if you want to move Bitcoin in milliseconds for free, you move it through Binance or Coinbase or Cash App.
 So this is a very straightforward thing. I mean, it seems pretty obvious when you think about it that there are going to be hundreds of thousands of layer threes.
 There may be dozens of layer twos. I mean, Lightning is a one, but it's not the only one anybody can invent something. Right?
 And we can have this debate about custodial, non custodial.
 Don't you think there's a monopolization possibilities at layer three?
 So, you know, coin, you mentioned Binance, Coinbase. What if they start to dominate and basically everybody's using them practically speaking,
 and then it becomes too costly to memorize the private key in your brain? I mean, or like the cold storage of layer one technology.
 The idealist fear the layer threes because they think and especially they detest. They would detest it a bit.
 There's almost like a layer four, by the way, if you want to. A layer four would be I've got Bitcoin on an application, but I can't withdraw it.
 So I've got an application that's backed by Bitcoin, but the Bitcoin is sealed.
 It's a proprietary example. And I'll give you an example of that. That would be like grayscale.
 If I own a share of GBTC and and so I own a security, actually, you know, you could own MSTR.
 If you own a security or you own a product that has Bitcoin embedded in it, you get the benefits of Bitcoin, but you don't have the ability to withdraw the asset.
 To get on the security market at layer four. Am I understanding this correctly?
 I don't know if I would say I don't not all securities are layer four, but but anything that's a proprietary product based upon what with Bitcoin embedded in it, where you can't withdraw the Bitcoin is another application of Bitcoin.
 So if if you think about different ways you can use this, you can either stay completely on the layer one and use the base chain for your transactions, or you can limit yourself to layer one and layer two lightning.
 And the purist would say we stay there. Get your Bitcoin off the exchange.
 But you could also go to the layer three when cash app supported Bitcoin, they made it very easy to buy it.
 And then they gave you the ability to withdraw when PayPal or I think Robin Hood let you buy it.
 They wouldn't let you withdraw it. And there was a big community uproar.
 And people want they want these layer threes to make it possible to withdraw the bitcoins.
 You can take it to your own private wallet and get it off the exchange.
 I think the answer to the question of, well, is corruption possible is corruption is possible in all human institutions and all governments everywhere.
 The difference between digital property and physical property is when you own a building in Los Angeles and the city politics turn against you, you can't move the building.
 And when you own a share of a security that's like a US traded security and you wish to move to some other country, you can't take the security with you either.
 And when you own a bunch of gold and you try to get through the airport, they might not let you take it.
 So Bitcoin is advantageous versus all those because you actually do have the option to withdraw your asset from the exchange.
 And if you if you had Bitcoin with Fidelity and you had shares of stock with Fidelity and if you had bonds and sovereign debt with Fidelity,
 if you own some some mutual funds and some other random limited partnerships with Fidelity, none of those things can be removed from the custodian.
 But the Bitcoin you can take off the exchange, you can remove from the custodian.
 So it's still possible.
 There's a deterrent. There's a deterrent.
 There's an anti-corrupting element and the phrase is an armed society is a polite society. Right.
 Because you have the optionality to withdraw all your assets from the crypto exchange, you can enforce fairness.
 And at the point where you disagree with their policies, you can within an hour move your assets to another counterparty or take personal custody of those assets.
 And you don't have that option with most other forms of property.
 Maybe you don't have as much optionality with any other form of property on Earth.
 And so what what makes digital property distinct is the fact that it has the most optionality for custody.
 Now, coming back to this digital energy issue, the real key point is the energy moves in milliseconds for free on layer threes.
 It moves in seconds or less than seconds on layer twos.
 It moves in minutes on the layer one.
 And I don't think it makes any sense to even think about trying to solve all three problems on the layer one because it's impossible to achieve the security and the incorruptibility and immortality.
 If you try to build that much speed and that functionality and performance.
 In fact, if you come back to the New York model, you really wanted a block of granite, a building and a company.
 That's what makes the economy right.
 If you said if I said to you, you're going to build a building, but you can only have one company in it for the life of the building.
 It would be very fragile, very brittle.
 What company 100 years ago is still relevant today?
 You want all three layers because they all oscillate at different frequencies and and you know, there's a tendency to think, well, it's got to be this L1 or that L1.
 Not really. And sometimes people think, well, I don't really want any L3.
 But companies, it's not an even war.
 Companies are better than crypto asset networks at certain things.
 If you want complexity, you want to implement complexity or you want to implement compliance or customer service, right?
 Companies do these things well, right?
 We know you couldn't decentralize Apple or Netflix or even YouTube.
 The performance wouldn't be there and the subtlety wouldn't be there.
 And you can't really legally decentralize certain forms of banking and insurance because they will become illegal in the political jurisdiction of their end.
 So unless you're a crypto anarchist and you believe in no companies and no nation states.
 Right. Which is just not very practical.
 Not anytime soon.
 Once you allow that nation states will continue and companies have a role,
 then the layered architecture follows and the free market determines who wins.
 For example, there are layer 3s that let you acquire Bitcoin and withdraw Bitcoin.
 There are other applications that let you acquire but not withdraw it.
 And they don't get the same market share, but they might give you some other advantage.
 There are certain layer 3s like Jack Dorsey's Cash App where they just incorporated Lightning, an implementation of it.
 So that makes it advantageous versus an application that doesn't incorporate Lightning.
 If you think about the big picture, the big picture is 8 billion people with mobile phones served by 100 million companies doing billions of transactions an hour.
 And the companies are settling with each other on the base layer in blocks of 80 million at a time.
 And then the companies are trading with the consumers.
 Right. In proprietary layers like layer 3 and then on occasion people are shuffling assets across custodians with Lightning layer 2
 because you don't want to pay $5 to move $50. You want to pay a 20th of a penny to move $50.
 And so all of these things create efficiency in the economy.
 And Lex, if you want to consider how much efficiency? If you gave me a billion dollars in 20 years, I couldn't find a way to trade with another company or a counterparty in Nigeria.
 Like no amount of money. Give me $10 billion. I couldn't do it because you get shut down at the banking level.
 You can't link up a bank in Nigeria with a bank in the US. You get shut down at this credit card level because they don't have the credit card.
 So they won't clear. You get shut down at the compliance FCPA level because you wouldn't be able to implement a system that interfaced with somebody else's system if it's not in the right political jurisdiction.
 On the other hand, three entrepreneurs in Nigeria on the weekend could create a website that would trade in this Lightning economy using open protocols without asking anybody's permission.
 So you're talking about something that's like a million times cheaper, less friction and faster to do it if you want to get money to move.
 What do you think that looks like? So now there's a war going on in Ukraine. There's other wars. Yemen going out throughout the world in this most difficult of states that a nation can be in, which is at war.
 Civil war or war with other nations. What's the role of Bitcoin in this context?
 Bitcoin is a universal trust protocol, a universal energy protocol, if you will.
 English is one. What I see is a bunch of fragmentation of applications. For example, the Russian payment app is not going to work in Ukraine.
 The Ukraine payment app is not going to work in Russia. The US payment apps won't work either of those places, as far as I know.
 So, you know, and in Argentina, their payment app may not work in certain parts of Africa.
 So what you have is different local economies where people spin up their own applications compliant with their own local laws or, you know, in war zones, not compliant, but just spinning up.
 So how do you build something that's not compliant? What is the revolutionary act here when you don't agree with the government or what you want to free yourself from the constraints?
 So here's the thing. The when a nation is really at war.
 Is the especially if it's an authoritarian regime, it's going to try to control the pipeline, lock everything down. Yeah. The spread of information. How do you break through that? Do you do the thing that you mentioned, which is you have to build another app essentially that allows the flow of money outside the legal constraints placed on you by the government? So basically break the law.
 Metaphorically speaking, if you want to break out the constraints of your culture, you learn to speak English.
 For example, it's not illegal to speak English or even if it is right, doesn't matter. But but English works everywhere in the world. If you can speak it and then you can tap into a global commerce and intelligence network.
 So Bitcoin is a language. So you learn to speak Bitcoin or you learn to speak lightning and then you tap into that network in whatever manner you can.
 But the problem is it's still very difficult to move Bitcoin around in Russia and Ukraine now during war. And there was a sense to me that the cryptocurrency in general could be the savior for helping people. There's millions of refugees. They're moving all around. It's very, it's very difficult to move money around in that space to help people.
 I think we're very early. Like like we're very embryonic here. If you look at the.
 Who's we, sorry, we as a human civilization, are we operating in the cryptocurrency space?
 I think the entire crypto economy is very embryonic and the human race's adoption of it is embryonic. We're like one, two percent down that adoption curve.
 If you take lightning, for example, the you know, the first real commercial applications of lightning are just in the last 12 months.
 So we're like year one. We might be approaching year two of commercial lightning adoption. And if you look at lightning adoption, lightning is not built into Coinbase, is not built into Binance, is not built into FTX.
 You know, Cash App just implemented the first implementation, but not all the features are built into it. There's a few dozen, a dozen lightning wallets circulating out there.
 So I think that, you know, we're probably going to be 36 months of software development at the point that every Android phone and every iPhone has has a Bitcoin wallet or crypto wallet in it of sorts.
 That's a big deal. If Apple embraced lightning, that's a big deal.
 So the adoption is the thing like in a war zone adoption, the people who struggle the most in war are people who are weren't doing that great before the war started.
 They don't have the technological sophistication. The hackers and all those kinds of people will find a way.
 It's just regular people who are just struggling to make day by day living. And so if the adoption permeates the entire culture, then you can start to move money around in the digital space.
 What if from a psycho, if you can psychoanalyze Jack Dorsey for a second.
 So he's one of the early adopters or he's one of the people pushing the early adoption this layer three. So inside cash app, what do you make of the man of this decision as a business owner, as somebody playing in the space?
 Like what, why did he do it? And what does that mean for others at the scale that might be doing the same? So incorporating lightning networking, incorporating Bitcoin into their products.
 I think he's been pretty clear about this. He feels that Bitcoin is an instrument of economic empowerment for billions of people that are unbanked and have no property rights in the world.
 If you want to give an incorruptible bank to eight billion people on the planet, that's the same as asking the question, how do you give a full education through PhD to eight billion people on the planet?
 And the answer is a digital version of the 20th century thing running on a mobile phone. And Bitcoin is a bank in cyberspace, it's run by incorruptible software and it's for everybody on earth.
 So I think when Jack looks at it, he's very sensitive to the plight of everybody in Africa. If you look at Africans, right? Like you're going to give them banks, you're not going to put a bank branch on every corner.
 That's an obscene waste of energy. You're not going to run copper wires across the continent. That's an obscene waste of energy. You're not going to give them gold.
 So how are you going to provide people with a decent life? The metaphor I think is relevant here, the biological metaphor, Lex, is type one diabetic.
 If you're a type one diabetic, you can't form fat. And if you can't form fat, then you can't store excess energy. So that means that, I mean, fat is the ultimate organic battery.
 And if you've got 30 pounds of it, you can go 60 days without eating. But if you can't generate insulin, you can't form fat cells.
 And if you can't form fat cells and store energy, then you can eat yourself to death. I mean, you will eat and you will die. You'll starve to death.
 So the lack of property rights is like being a type one diabetic. And so if you look at most people everywhere in the world,
 they don't have property rights. They don't have effective bank and their currency is broken.
 Like what are the two things that in theory would serve as the equivalent of an organic battery or an economic battery to civilization?
 It would be I have a currency which holds its value and I can store it in a bank. So a risk, a risk free currency derivative.
 I pay you your money. You take your life savings. You put it in a bank. You save up for your retirement. You'll have happily ever after.
 That's the American dream, right? That's the idyllic situation. The real situation is there are no banks.
 You can't get a bank account. So I give you your pay in currency and then I double the supply and I give it to my cousin or I give it to whatever cause I want.
 Or I use it to buy weapons and then you find a loaf of bread cost triple next month is what it costs. And your life savings is worthless.
 And so in that environment, everybody's ripped back to Stone Age barter. And the problem with that, even Stone Age barter is you're going to carry your life savings
 on your back and what happens when the guy with the machine gun points it at your head and just takes your life savings.
 So I think from Jack's point of view, he thinks that life is this is maybe too strong, but these are my words.
 Life is hopeless for a lot of people and Bitcoin is hope.
 Because it gives everyone an engineered monetary asset that's a bearer instrument and it gives them a bank on their mobile phone.
 And they don't have to trust their government or another counterparty with their life force.
 So there's a secondary thing I think he's interested in, which is the first thing is the human rights issue.
 And the second thing would be the friction to trade cross borders is so great.
 You're like AI, so I'll give you a beautiful notion. Maybe one day there'll be an artificially intelligent creature in cyberspace that is self-sufficient and rich.
 Like that we would have sovereignty.
 Can a robot own money or property? How about Tesla car?
 Can I actually put enough money in a car for it to drive itself and maintain itself forever?
 Or can I create an artificially intelligent creature in cyberspace that is endowed such that it would live a thousand years and continue to do its job?
 We have a word for that in the real world is institution. Harvard, Cambridge, Stanford.
 There are institutions with endowments that go on in perpetuity.
 But what if I wanted to perpetuate a software program?
 And with something like digital property, with Bitcoin and Lightning, you could do it.
 And on the other hand, with banks and credit cards, you couldn't, right? You couldn't ever.
 So you can create things that are beautiful and lasting.
 And what's the difference in speed?
 Well, so I can either trade with everybody in the world at the speed of light, friction free in 24 hours, writing a Python script.
 Or I can spend a hundred billion dollars to trade with a few million people in the world after it takes them six months of application.
 The impedance is like a 10 million to one difference.
 Right. And the metaphors are literally like launching something in orbit versus almost orbit or vacuum sealing something.
 Does it last forever and does it orbit forever or does it go up and come down and burn up?
 Right. And I think Jack is interested in, you know, putting freedom in orbit.
 Putting freedom in orbit.
 And he said it many times. He said, this is the Internet needs a native currency.
 Right. And no political construct or security can be a native currency.
 You need a property and you need a property that can be moved a million times a second.
 Can you oscillate it at 10 kilohertz or a hundred kilohertz?
 And the answer is only if it's a pure digital construct, permissionless and open.
 And so I think he's enthusiastic as the technologist and he's enthusiastic as the humanitarian.
 And what he's doing is to support both those areas.
 He's supporting the Bitcoin and the Lightning protocol by building them into his products.
 But he's also building the applications, which you need at the cash app level in order to commercialize and deliver the functionality and compliance necessary.
 And they're related.
 And I should also say he's just a fascinating person.
 I for a random reason that I couldn't even explain if I tried.
 I met him a few days ago and gave him a great big hug in the middle of nowhere.
 There was no explanation. He just appeared.
 That's a fascinating human. His relationship with art, with the world, with human suffering, with technology is fascinating.
 I don't know what his path looks like, but it's interesting that people like that exist.
 And in part, I'm saddened that he no longer is involved with Twitter directly as a CEO,
 because I was hoping something inside Twitter would also integrate some of these ideas of what you're calling digital energy to see how social networks,
 something I'm really interested in and passionate about could be transformed.
 Let me ask you just for educational purposes.
 What's the can you please explain to me what Web 3 and the beef between Jack and Mark Andreessen is exactly?
 Did you see what happened? Sorry to have you analyze Twitter like it's Shakespeare.
 But can you please explain to me why why there is any any drama over this topic?
 First of all, Web 3 is a term that's used to refer to the part of the economy that's token finance.
 So if I'm launching an application and my idea is to is to create a token along with the application and issue the token to the community
 so as to finance the application and build support for it, I think that I think that that's the most common interpretation of Web 3.
 There are other interpretations, too. And so I'm just going to refer to that one.
 And I think the beef in a nutshell, not articulated, but I'll articulate it is whether or not you should focus all your energy creating applications
 on top of an ethical digital property like Bitcoin or whether you should attempt to create a competitor to it,
 which generally would be deemed as a security by the Bitcoin community.
 So I'm going to put on my Bitcoin hat here. Yeah. Right.
 All the tokens that are if it's driven by a venture capitalist was security.
 If there's a CEO and a CTO, it's a security.
 All these projects, their companies, foundations or companies. Right.
 If you call them a project or a foundation, it doesn't make it not a security.
 They're all in essence collections of individuals that are issuing equity in the form of a token.
 And if if there's a pre mine, an IPO, an ICO, a foundation or any kind of any kind of protocol
 where there is a a group of engineers that have influence over it, then to a securities lawyer or, you know,
 to most Bitcoiners and definitely to anybody that's steeped in securities law, you look and say, well, that passes the Howie test.
 It's it looks like a security.
 It should be sold to the public pursuant to, you know, disclosures and regulations.
 And you're just ducking the IPO process. Right.
 And so now we get back to the ethical issue.
 The ethical issue is if you're trading it as a commodity and representing it as a commodity while truthfully, it's a security, you know,
 then it's a violation of ethics rules and it's probably illegal.
 Well, you're you keep leaning on this. Let me push back on that part.
 Maybe you can educate me. But you keep leaning on this line of securities law as if it with all due respect to lawyers,
 as if that line somehow defines what it what is and isn't ethical.
 I think there's a lot of correlation, as you've discussed.
 But I'd like to leave the line aside.
 If the law calls something as a security, it doesn't mean in my eyes that it is unethical.
 I mean, there could be some technicalities and lawyers and people play games with this kind of stuff all the time.
 But I take your bigger point that if there's a CEO, there's a project lead that's fundamentally well,
 that to you is fundamentally different than the structure of Bitcoin.
 It's not that creating securities is unethical. I created security.
 I took a company public. Right. That's not the unethical part.
 It's completely ethical to create securities. You know, block is a security.
 All companies are securities. The unethical part is to represent it as property when it's a security.
 And and to promote it or trade it as such.
 This whole promotion, that's also a technical thing, because you're like what counts as a not as promotion is a legal thing.
 And you get in trouble for all these things. But that that's the game that lawyers play.
 There's an ethical thing here, which is like what's the right to promote a not?
 You know, to me, propaganda is unethical, but it's usually not illegal.
 If you roll the clock back 20 years, right, all the boiler room pump and dump schemes were all about someone pitching a penny stock,
 you know, selling Swampland in Florida.
 And if you roll the clock back forward 20 years and I create my own company and I represent it as the same thing and I don't make the disclosures, right?
 You're you're just one step removed from the boiler room scheme.
 And that's what's distasteful about it.
 There are ways to sell securities to the public, but there are but there are expectations.
 Maybe we could forget about whether the security laws are ethical or not. Right.
 I will leave that alone. We'll just start with the biblical definition of ethics.
 Yes. Don't lie, cheat or steal.
 So if I'm going to sell something to you, I need to fully disclose what I'm selling to you. Right.
 And and that that's a matter of great debate right now.
 And so I think that that's part of the debate.
 But the other part of the debate is whether or not we need more than one token like.
 We need at least one. Right. We need we need at least one digital property.
 Because zero means there is no digital economy. Yes.
 And by the way, you know, the conventional view of maximalist is they think there's only one and everything else isn't.
 That's not the point I'm going to make.
 I would say we know there is that as there is at least one digital property and that is Bitcoin.
 If you can create a truly decentralized, non-custodial, you know, bearer instrument that is not under the control of any organization that is fairly distributed,
 then you might create another or multiple. And there may be others out there.
 But I think that the frustration of a lot of people in the Bitcoin community and I share this with Jack is we could create a hundred trillion dollars of value in the real world simply by building applications on top of Bitcoin as a foundation.
 And so continually trying to reinvent the wheel and and create competitive things is a massive waste of time and its diversion of human, human creativity.
 It's like we have an ethical good thing. Yeah.
 And now we're going to try to create a third or a fourth one.
 Why? Let's talk about it. So first of all, I'm with you. But let me ask you this interesting question because we talked about properties and securities.
 Let's talk about conflict of interest. You said you could advertise public. You have a popular Twitter account.
 It's it's hilarious and insightful. You do promote Bitcoin in a sense. I don't know if you would say that.
 But do you think there's a conflict of interest in anyone who owns Bitcoin promoting Bitcoin? Is it the same as you promoting the farming?
 I would say no, there's an interest. I think that I think that you can promote a property or an idea to the extent that you don't control it.
 I think that the point at which you start to have a conflict of interest is when you're promoting a proprietary product or proprietary security, a security in general is proprietary asset.
 So, for example, if you look at my Twitter, you will find that I make lots of statements about Bitcoin.
 You won't ever see me making a statement that say MicroStrategy stock will go up forever.
 I'm not promoting a security MSTR because at the end of the day, MSTR is a security. It is proprietary. I have proprietary interest in it.
 I have a disproportionate amount of control and influence on the direction.
 The control is the problem. The control is the problem because you have interest in both.
 You can very if Bitcoin is successful, as we're talking about, you are very possibly can become the richest human on Earth, given how much you own in Bitcoin, right?
 The wealthiest, not the richest. I don't know what those words mean.
 I would benefit economically.
 You would benefit economically.
 That's true.
 So the reason that's not conflict of interest is because the word property that Bitcoin is an idea and Bitcoin is open.
 It's because I don't own it. I don't control it.
 In essence, the ethical line here is could I print myself 10 million more Bitcoin or not?
 Or can anyone? It's not just you. It's can anyone?
 Because can you promote somebody else's? Yes, I guess you can.
 Like, can you promote us, Apple?
 It's like you could have a Twitter account where you promote oil or you promote camping or you promote family values or promote, you know, a carnivore diet or promote the Iron Man, right?
 You're not going to get wealthier if you promote camping because you can't own a stake in. I mean, you own a lot of Bitcoin.
 What is that? What is that? Don't you own the stake in the idea?
 I would grant you that.
 But the lack of control is the fundamental ethical line that you just you don't have.
 All you are is you're a fan of the idea. You believe in the idea and the power of the idea.
 Yeah, I think you can't take that idea away from others.
 Let's come back to let me give you some maybe easier examples.
 If you were the head of the Marine Corps.
 Right. And.
 And someone came to you and said, I created Marine Coin and and the twist on Marine Coin is, is I want you to tell every Marine that they'll get an extra Marine Coin.
 You know, when they when they get their next stripe.
 And then I'm going to give you, you know, I'm going to let you buy Marine Coin now.
 And then after you buy Marine Coin, I want you to like promote it to them.
 Right. At some point, if if you start to have a disproportional influence on it or if you're in a conversation with people with disproportionate influence becomes conflict of interest.
 And it would make you profoundly uncomfortable, I think. Yeah.
 If the head of the Marine Corps started promoting anything that looked like a security.
 Now, if the head of the Marine Corps started promoting canoeing.
 You might think he's kind of wacky, like maybe like that's kind of a waste of time and distraction.
 So but but but to the extent that canoeing is not a security, not a problem unless you, you know,
 ultimately the issue of decentralization is really a critical one.
 So not having a head.
 So is it something can Bitcoin be replicated?
 So the all the things that you're saying that make it a property, can that be replicated?
 I think it's possible to create other crypto properties.
 Does it does the having a head like of a project, a thing that limits its ability to be a property if you if you try to replicate a project?
 Is that the fundamental flaw?
 I look, I think the real fundamental issue is you just never want it to change.
 Like like if you really want something decentralized, you want a genetic template that substantially is not going to change for a thousand years.
 So I think Satoshi said it at one point, he said the nature of the software is such that by version point one, its genetic code was set.
 If if there was any development team that's continually changing it, you know, on a routine basis, it becomes harder and harder to maintain its decentralization.
 Because now now there's the issue of who's influencing the changes.
 So what you really want is is a very, very simple idea, right?
 The simplest idea. I'm just going to keep track of who owns 21 million parts of energy.
 And when someone proposes big functional upgrades, you almost don't you don't really want that development to go on the base layer.
 You want that development to go on the layer threes because now cash app has a proprietary set of functionality and it's a security.
 And if you're going to promote the use of this thing, you're not going to you're not going to promote the layer three security because that's an edge to a given entity.
 And you're trusting the counterparty. You're going to promote the layer one or most the layer two.
 OK, so one of the fascinating things about Bitcoin and sorry to romanticize certain notions, but Satoshi Nakamoto that the founders anonymous.
 Maybe you can speak to whether that's useful, but also I just like the psychology of that to imagine that there's a human being that was able to create something special and walk away.
 So first, are you Satoshi Nakamoto? I'm certain I'm not.
 No, actually, I think the providence is really important.
 And if I were to look at the highlighted points, I think having a founder that was anonymous or sort of anonymous is important.
 I think the founder disappearing is also important.
 I think that the fact that the Satoshi coins never moved is also important.
 I think the lack of an initial coin offering is also important.
 I think the lack of a corporate sponsor is important.
 I think the fact that it traded for 15 months with no commercial value was also important.
 I think that the simplicity of the protocol is very important.
 I think that the outcome of the block size wars is very important and all of those things add up to common property.
 They're all indicia, indicators of a digital property as opposed to security.
 If there was a Satoshi sitting around sitting on top of 50 billion dollars worth of Bitcoin,
 I don't think it would cripple Bitcoin as property, but I think it would undermine its digital property.
 And if I wanted to undermine a crypto asset network, I would do the opposite of all those things.
 I would launch one myself. I would sell 25% or 50% to the general public.
 I would pre-mine some stuff or early mine it, and I would keep an influence on it.
 Those are all the opposite of what you would do in order to create common property.
 And so I see the entire story as Satoshi giving a gift of digital property to the human race and disappearing.
 Do you think it was one person? Do you have ideas of who it could be?
 I don't care to speculate.
 But do you think it was one person?
 I think it was one person, maybe in conjunction with a bunch of others.
 I mean, it might have been a group of people that were working together, but certainly there's a Satoshi.
 I mean, it's just so fascinating to me that one person could be so brave and thoughtful.
 Or do you think a lot of his accent, like the block size wars, the decision to make a block a certain size,
 all the things you mentioned led up to the characteristics that make Bitcoin property.
 Do you think that's an accident or it was deeply thought through?
 This is almost like a history of science question.
 I think people tried it for, they tried 40 of them.
 I mean, I think there's a history of attempting to create something like this, and it was tried many, many times.
 And they failed for different reasons.
 And I think that it's like Prometheus tried to start a fire 47 times and maybe the 48th time it sparked.
 And that's how I see this.
 This is the first one that sparked.
 And it sets a roadmap for us.
 And I think if you're looking for any one word that characterizes, it's fair.
 The whole point of the network is it's a fair launch, a fair distribution.
 Like, yeah, I have Bitcoin, but I bought it.
 In fact, at this point, we've paid $4 billion of you real cash to buy it.
 If I was sitting on the same position and I had it for free, then there's always this question of, did I pay, you know, or I bought it for a nickel a coin or a penny a coin.
 The question is, was it fair?
 And that's a very hard question to answer.
 Right.
 Did you acquire the Bitcoin that you own fairly?
 And if you roll the clock back, you know, you could have bought it for a nickel or a dime.
 But that was when it was a million times more likely to fail.
 When the risk was greater, the cost was lower.
 And then over time, the risk became lower and the cost became greater.
 And the real critical thing was to allow the marketplace absent any powerful interested actor.
 Right. It's almost like if Satoshi had held a million coins and then stayed engaged for 10 more years, tweaking things in the background, there'd still be that question.
 But what we've got is really a beautiful thing.
 We've got a we've got a chain reaction in cyberspace or an ideology spreading virally in the world that that has seasoned in a fair ethical fashion.
 Sometimes it's a very violent, brutal fashion with all the volatility.
 Right. And there's been a lot of a lot of sound and fury along the way.
 How do you psychoanalyze?
 How do you deal from a financial, from a human perspective with the volatility?
 You mentioned you could have gotten it for a nickel and the risk was great.
 Where's the risk today?
 What's your sense?
 You know, we're 13 years into this entire activity.
 I think the risk has never been lower.
 If you look at all the risks, right, the risk, the risks in the early years are is the engineering protocol proper, like one megabyte block size, 10 minute clock frequency cryptography is first.
 Will it be hacked or will it crash 730,000 blocks and it hasn't crashed?
 Will it be hacked?
 Hasn't been hacked, but you know, it's a Lindy thing, right? You wait 13 years to see if it'll be hacked.
 But on the other hand, with a billion dollars, it's not as interesting a target as it is with 100 billion.
 And when it gets to be worth a trillion, then it's a bigger target.
 So so the risk has been bleeding off over time as the network monetized.
 I think the second question is, will it be banned?
 You couldn't know it could literally could have been banned at any time many times early on.
 In fact, in 2013, I tweeted on that subject.
 I thought it would be banned.
 I made a very famous tweet.
 I thought it was it was going to be banned in 2014.
 The IRS designated it as property and gave it property tax treatment.
 So they could have given it a tax treatment where you had to pay tax on the unrealized capital gains every year and it probably would have crushed it to death.
 Right. You know, so so it could have been in any in any number of places banned by a government.
 But in fact, it was legitimized as property.
 And then the question is, would it be hacked or would it be copied?
 Will it be something better than that?
 And it was copied 15000 times and you know the story of all those and and they either diverged to be something totally different and not comparable or someone trying to copy a non sovereign bearer instrument store of value found that their networks crashed to be one percent of what Bitcoin is.
 So now we're sitting at a point where all those risks are out of the out of the way.
 I would say that year one of institutional adoption is it started August 2020.
 That's when MicroStrategy bought 250 million dollars worth of Bitcoin and we put that on the wire.
 We were the first publicly traded company to actually buy Bitcoin.
 I don't think you could have found a five million dollar purchase from a public company before we did that.
 So that was kind of like a gun going off.
 And then in the next 12 months, Tesla bought Bitcoin, Square bought Bitcoin.
 And I'd say now we're in year two of institutional adoption.
 And there are about 24, should be 24 publicly traded Bitcoin miners by the end of this quarter.
 So you're looking at 36 publicly traded companies.
 And you've got 50, at least in a range of 50 billion dollars on the balance of Bitcoin on the balance sheet of publicly traded companies and hundreds of billions of dollars of market cap of Bitcoin exposed companies.
 So I would say the asset decade one was entrepreneurial, experimental.
 Decade two is a rotation from entrepreneurs to institutions and is becoming institutionalized.
 So maybe decade one, you go from zero to a trillion and decade two, you go from one trillion to a hundred trillion.
 What about governments? Government adoption, institutional adoption.
 Is our governments important in this? Maybe making it some governments incorporating it into as a currency into their banks, all that kind of stuff.
 Is that important? And if it is, when will it happen?
 It's not essential for the success of the asset class, but I think it's inevitable in various degrees over time.
 But the most likely thing to happen next is large acquisitions by institutional investors of Bitcoin as a digital gold.
 Where they're just swapping out gold for digital gold and thinking of it like that.
 And the government entities most likely to be involved with that would be sovereign wealth funds.
 If you look at all the sovereign wealth funds that are holding big tech stock equities, the Swiss, the Norwegians, the Middle Easterners.
 If you can hold big tech, then holding digital gold would be not far removed from that.
 That's a non-controversial adoption.
 I think there are opportunities for governments that are much more profound.
 If a government started to adopt Bitcoin as a Treasury Reserve asset, that's much bigger than just an asset investment.
 That's a hundred X bigger.
 And you could imagine that's like a trillion dollar opportunity. Like any government that wanted to adopt it as a Treasury Reserve asset would probably generate trillions of dollars.
 A trillion or more of value.
 And then, you know, the thing that people think about is, well, will oil ever be priced in Bitcoin or any other export commodity?
 I think there's like one point eight trillion dollars or more of export commodities in the world. And right now they're all priced in dollars.
 I think that this is a colorful thing, but it's not really that relevant.
 Like you could sell all that stuff in dollars.
 The relevant decision that any institution makes, whether they're a nonprofit, a university, a corporation or a government, is what's your Treasury Reserve asset?
 And if your Treasury Reserve asset is the peso, and if the peso is losing 20 percent or 30 percent of its value a year, then, you know, your your balance sheet is collapsing within five years.
 And if the Treasury Reserve asset is dollars and currency derivatives and U.S. Treasuries, then you're getting your seven. Right now it's probably 15 percent or more monetary inflation.
 We're running double the historic average. You could argue triple, somewhere between double and triple, depending upon what your metric is.
 So, you know, do I think it'll happen? I think that they're conservative, but they have to be shocked. And I think there is a shock.
 The late Russian sanctions are a big shock. When the West sees 300 billion dollars worth of Russian gold and currency derivatives, I think, you know, you got the famous quote by Putin that, you know, we have to rethink our Treasury strategies.
 And that pushes everybody toward a commodity strategy. What commodities do I want to hold?
 I think that's got a lot of people thinking. I think it's got the Chinese thinking. Everybody wants to be the reserve currency, right?
 So if I buy 50 billion dollars worth of dollars every year, then I buy 500 billion over a decade and I probably pay 250 billion dollars of inflation cost on the backs of my citizens in a decade.
 So inflation could be one of the sources of shock. And you wonder if there is a switch to Bitcoin, whether it will be a bang or a whimper.
 Like, what is the nature of the shock or the transition?
 I think that the year 2022 is pretty catalytic for digital assets in general and for Bitcoin in particular.
 The Canadian trucker crisis, I think, educated hundreds of millions of people and made them start questioning their property rights and their banks.
 I think the Ukraine war was a second shock. But I think that the Russian sanctions was a third shock.
 I think all three of them. And I think hyperinflation in the rest of the world is a fourth shock and then persistent inflation in the US is a fifth shock.
 So I think it's a perfect storm. And if you put all these events together, what do they signify?
 They signify the rational conclusion for any person thinking about this is, I'm not sure if I can trust my property.
 I don't know if I have property rights. I don't know if I can trust the bank.
 And if I'm politically at odds with the leader of my own country, I'm going to lose my property.
 And if I'm politically at odds with the owner of another country, I'm still going to lose my property.
 And when push comes to shove, the banks will freeze my assets and seize them.
 And I think that that is playing out in front of everybody in the world, such that your logical response would be,
 I'm going to convert my weak currency to a strong currency. Like I'll convert my peso and lira to the dollar.
 I'm going to convert my weak property to strong property. I'm going to sell my building downtown Moscow.
 And I'd rather own a building in New York City. I'd rather own in a powerful nation than be stuck with a building in Nigeria or a building in Argentina or whatever.
 So I'm going to sell my weak properties to buy strong properties. I'm going to convert my physical assets to digital assets.
 I'd rather own a digital building than own a physical building.
 Because if I had a billion dollar building in Moscow, who can I rent that to?
 But if I have a billion dollar digital building, I can rent it to anybody in any city in the world.
 Anybody with money and the maintenance cost is almost nothing. And I can hold it for 100 years.
 OK, so it's indestructible building. And then finally, I want to move from having my assets in a bank with a counterparty to self custody assets.
 Right. So and this is not it's not just Ukraine, but this is like the story in Turkey, Lebanon, Syria, Afghanistan, Iraq, South America.
 You don't really want to be sitting with 10 million dollars in a bank in Istanbul.
 The bank's going to freeze your money, convert it to lira, devalue the lira and then feed it back to you over 17 years.
 Right. So self custody assets would be layer one Bitcoin.
 Self custody assets. It's like if I if I got my own hardware wallet and I've either got your highest form of self custody would be Bitcoin on your own hardware wallet or Bitcoin in your own self custody.
 And the other the other thing people think about is how do I get crypto dollars like tether like some stable coin?
 Yeah, like I'd rather if you had a choice, would you rather have your money in a bank in a war zone in dollars or have your money in a stable coin on your mobile phone in dollars?
 Right. I mean, you take the latter risk rather than the former war zone. Definitely.
 And you can see that happening like we've gone from five billion in stable coins to 200 billion in the last 24 months.
 So I do think there's massive demand for crypto dollars in the form of a US dollar asset.
 And there's and everybody in the world would say, yeah, I want that.
 Well, unless you're just an extreme patriot, but most people in the world would say I want that.
 And then a lesser group of people would say, I think I want to be able to carry my property in the palm of my hand so I have self custody of it.
 So Bitcoin price has gone through quite a roller coaster.
 What do you think is the high point is going to hit?
 I think it'll go forever. Right.
 I mean, I think the Bitcoin is going to it's going to climb in a serpentine fashion, it's going to advance and come back and it's going to keep it's going to keep climbing.
 I think that the volatility attracts all the capital into the marketplace.
 And so the volatility makes it the most interesting thing in the financial universe.
 It also generates massive yield and massive returns for traders. And that attracts capital.
 Like we're talking about the difference between five percent return and five hundred percent return.
 So the fast money is attracted by the volatility.
 The volatility has been decreasing year by year by year.
 I think that that it's stabilizing. I don't think we'll see as much volatility in the future as we have in the past.
 I think that if we look at Bitcoin and model it as digital gold, you know, the market cap goes to between 10 and 20 trillion.
 But gold is remember gold is is defective property. Gold is dead money.
 You have a billion dollars of gold that sits in a vault for a decade.
 It's very hard to mortgage the gold. It's also very hard to rent the gold.
 You can't loan the gold. No one's going to create a business with your gold.
 So gold doesn't generate much of a yield. So for that reason, most people wouldn't store a billion dollars for a decade in gold.
 They would buy a billion dollars of commercial real estate property.
 And the reason why is because I can rent it and generate a yield on it that's in excess of the maintenance cost.
 So if you consider digital property, that's a hundred to two hundred trillion dollar addressable market.
 So I would think it, you know, it goes from 10 trillion to 100 trillion as people start to think of it as digital property.
 What does that mean in terms of price per coin?
 At five hundred thousand. Right. That's a 10 trillion dollar asset.
 At five million. That's a hundred trillion dollar asset.
 So you think it crosses a million. It can go even higher.
 Yeah, I think it keeps going up forever. I mean, there's no reason we're going to go to 10 million a coin.
 Right. Because digital property isn't the highest form. Right.
 Gold was that low frequency money. Property is a mid frequency money.
 But when I start to when I start to program it faster, it starts to look like digital energy.
 And and then it doesn't just replace property.
 Then you're starting to replace bonds. It's 100 trillion in bonds.
 There's 50 to 100 trillion in other currency derivatives.
 And then and then and these are all conventional use cases. Right.
 I think that there's three hundred fifty trillion to five hundred trillion dollars worth of currency, currency derivatives in the world.
 And that and when I say that, I mean things that are valued based upon fiat cash flows, any commercial real estate, any bond, any sovereign debt, any any currency itself, any derivatives to those things.
 They're all derivatives and they're all defective and they're all defective because of this persistent seven to 14 percent.
 Laps inflate, which we call inflation or monetary expansion. Can we switch subjects to talk about the energy side of it?
 Like the innovative piece. Yeah. Let's just start with this idea that I've got a hotel worth a billion dollars with a thousand rooms when it becomes a dematerialized hotel.
 I love that word so much, by the way, dematerialized. We're crossing the fountain below here.
 Imagine the fountain blow is dematerialized. The problem with a physical hotel is I got to hire real people moving subject to the speed of sound and physics laws and Newton's laws.
 And I can rent it to people in Miami Beach.
 But if it was a digital hotel, I could rent the room to people in Paris, London and New York every night.
 And I can run it with robots. And as soon as I do that, I can rent it by the room hour and I can rent it by the room minute.
 And so I start to chop my hotel up into one hundred thousand room hours that I sell to the highest bidder anywhere in the world.
 And you can see all of a sudden the yield, the rent and the income of the property is dramatically increased.
 I can also see the maintenance cost of the property falls. I get on Moore's law and I'm operating in cyberspace.
 So I got rid of Newton's laws. I got rid of all the friction and all the all those problems.
 I tapped into the benefits of cyberspace. I created a global property.
 I started monetizing at different frequencies. And of course, now I can mortgage it to anybody in the world.
 Right. I mean, you're not going to be able to get a mortgage on a Turkish building from someone in South Africa.
 You have to have to find someone that's local to the culture you're in.
 So when you start to move from analog property to digital property, it's not just a little bit better.
 It's a lot better. And what I just described, Lex, is like the DeFi vision.
 Right. It's the beauty of DeFi flash loans, money moving at high velocity.
 At some point, if the hotel is dematerialized, then what's the difference between renting a hotel room and loaning a block of stock?
 Right. I'm just finding the highest best use of the thing.
 It feels like the magic really emerges, though, when you build a lot, a market of layer two and layer three technologies on top of that.
 So maybe you can correct me if I'm wrong, but for all these hotels and all these kinds of ideas, it's always touching humans at some point.
 And consumers or humans, business owners and so on.
 So you have to create interface. You have to create services that make all that super efficient, super fun to use, pleasant, effective, all those kinds of things.
 So you have to build in a whole economy on top of that.
 And I happen to think that won't be done by the crypto industry at all. I think that'll be done by centralized applications.
 I think it'll be the citadels of the world, the high speed traders of the world, the New Yorkers.
 I think it'll be Binance, FTX and Coinbase as a layer three exchange that will give you the yield and will give you the loan and the best terms.
 Because ultimately you have to jump these compliance hoops. It comes like BlockFi can give you yield, but they have to do it in a compliant way with the United States jurisdiction.
 So ultimately, those applications to use that digital property and either generate a loan, give you a loan on it or give you yield on it are going to come from companies.
 But the difference, the fundamental difference is it could be companies anywhere in the world.
 So if a company in Singapore comes up with a better offering, then the capital is going to start to flow to Singapore.
 I can't send 10 city blocks of LA to Singapore to rent during a festival, but I can send 10 blocks of Bitcoin to Singapore.
 So you've got a truly global market that's functioning in this asset. And is there a second order asset?
 For example, maybe you're an American citizen and you own 10 Bitcoin and someone in Singapore will generate 27% yield in the Bitcoin.
 But legally, you can't send the money to them or the Bitcoin to them.
 It doesn't matter because the fact that that exists means that someone in Hong Kong will borrow the 10 Bitcoin from somebody in New York and then they will put on the trade in Singapore.
 And that will create a demand for Bitcoin, which will drive up the price of Bitcoin,
 which will result in an effective tax free yield for the person in the US that's not even in the jurisdiction.
 So there's nothing that's going on in Singapore to drive up the price of your land in LA.
 But there is something going on everywhere in the world to drive up the price of property in cyberspace if there's only one digital Manhattan.
 And so there's there's a dynamic there, which is profound because it's global.
 But now let's go to the next extreme. I'm still giving you a fairly conventional idea,
 which is let's just loan the money fast on a global network and let's just rent the hotel room fast in cyberspace.
 But let's move to maybe a more innovative idea.
 The first generation of Internet, you know, brought a lot of productivity, but there's also just a lot of flaws in it.
 For example, Twitter is full of garbage. Instagram DMS are full of garbage. Your Twitter DMS are full of garbage.
 YouTube is full of scams. Every 15 minutes, there's a Michael Saylor Bitcoin giveaway spun up on YouTube.
 My Office 365 inbox is full of garbage. Millions of spam messages.
 I'm running four different email filters. My company spends a million dollars a year to fight denial of service attacks and all sorts of other security things.
 There are denial of service attacks everywhere against everybody in cyberspace all the time. It's extreme.
 And we're all beset with hostility, right? You've been a victim of it in Twitter.
 You know, you go on Twitter and people post stuff they would never say to your face.
 And then if you look, you find out that the account was created like three days ago and it's not even a real person.
 So, you know, we're beset with phishing attacks and scams and spam bots and garbage. And why?
 And the answer is because the first generation of Internet was digital information and there's no energy.
 There's no conservation of energy in cyberspace. The thing that makes the universe work is conservation of energy.
 Like, if I went to a hotel room, I'd have to post a credit card. And then if I smash the place up, there'd be economic consequences.
 Maybe there'd be criminal consequences. There might be reputational consequences.
 You know, a lamp might fall on me. But in the worst case, I can only smash up one hotel room.
 Now, imagine I could actually write a Python script to send myself to every hotel room in the world every minute,
 not post a credit card and smash them all up anonymously.
 The thing that makes the universe work is friction, speed of sound, speed of light,
 and the fact that ultimately it's conservative. You're either energy or you're matter.
 Once you've used the energy, it's gone and you can't do infinite everything that's missing in cyberspace right now.
 And if you look at the look at all of the moral hazards and all of the product defects that we have and all of these products,
 most of them, ninety nine percent of them could be cured if we introduced conservation of energy into cyberspace.
 And that's what you can do with high speed digital property, high speed Bitcoin.
 And by high speed, I mean not 20 transactions a day. I mean 20,000 transactions a day.
 So how do you do that? Well, I let everybody on Twitter post a thousand or ten thousand Satoshi's via lightning wallet, a lightning badge.
 Give me an orange check. If you put up 20 bucks once in your life, you could give 300 million people an orange check.
 Right now, you don't have a blue check, Lex. You're a famous person. I don't know why you don't have a blue check.
 Have you ever applied for a blue check? No. There are three hundred sixty thousand people on Twitter with a blue check.
 There are three hundred million people on Twitter. So the conventional way to verify accounts is elitist archaic.
 How does it work? How do you get a blue check? You got to apply and wait six months and you have to post, you know,
 like three articles in the public mainstream media that illustrates you're a person of interest.
 Interesting. Generally, they would grant them to CEOs of public companies or the whole idea is to verify that, you know, that you are who you are.
 You say you are. Right. But the question is, why isn't everybody verified? Right. And there's there's a couple of threads on that.
 One is some people don't want to be doxed. They want to be anonymous. But but they're even anonymous people that should be verified.
 Right. Because otherwise you're you're subjecting their entire following to phishing attacks and scams and hostility.
 But the other the other what's the orange verification? So the this idea, can you actually elaborate a little bit more if you put up 20 bucks?
 I think everybody on Twitter ought to be able to get an orange check if they could come up with like ten dollars.
 And what is the power of that orange check? What what does that verify exactly?
 You basically post a security deposit for your safe passage through cyberspace.
 So the way it would work is if you if you've got ten dollars once in your life, you can basically show that you're credit worthy.
 And that's your pledge to me that you're going to act responsibly.
 So you put the ten or the twenty dollars into the lightning wallet, you get an orange check,
 then Twitter just gives you a setting where I can say the only people who could DM me are orange checks.
 The only people that can post on my tweets are orange checks.
 So instead of locking out the public and just letting your followers, you know, comment, you lock out all the unverified.
 And that means people that don't want to post ten dollar security deposit can't comment.
 Once you've done those two things, then you're in position to monetize malice.
 Right. Monetize motion or malice for that matter.
 But let's just say for the sake of argument, you post something and ninety seven hundred bots spin up, you know, and pitch their whatever scam.
 Right now you sit and you go report, report, report, report, report, report.
 And if you spend an hour, you get through half of them, you waste an hour of your life.
 They just spin up another ninety seven gazillion because they've got a Python script spinning it up. So it's hopeless.
 But on the other hand, if you report them and they really are a bot, Twitter's got a method to actually delete the account.
 They know that they're bots. The problem is not they don't know how to delete the account.
 The problem is there are no consequences when they delete the account.
 So if there are consequences, Twitter could give they could just seize the ten dollars or seize the twenty dollars because it's a bot.
 It's a malicious criminal act or whatever. It is a violation of the platform rules.
 You end up seizing ten thousand dollars, give half the money to the reporter and half the money to the Twitter platform.
 And it's a really powerful idea, but that that's tying it.
 That's adding friction akin to the kind of friction you have in the physical world.
 You're tying. You have consequences. You have real consequences.
 Putting conservation of energy conservation of energy.
 There's no friction. There's no nothing on this earth. Right.
 I mean, you can't walk across the room without friction. Right.
 So friction is not bad. Right.
 Un unnecessary friction is bad.
 So in this particular case, you're introducing conservation of energy.
 And in essence, you're introducing the concept of consequence or truth into cyberspace.
 And that means if you do want to spend up ten million fakes, fake less Freedman's.
 Right. It's going to cost you one hundred million dollars to spend up ten million fake Lexus.
 But the thing is, you could do that with the dollar. But your case, you're saying that it's more tied to physical reality when you do that with Bitcoin.
 Yeah. Well, let's follow up on that idea a bit more.
 If you did do it with the dollar, then the question is, how does six billion people deposit the dollars?
 Right. Because what you're doing is, could you do it with a credit card? Like, how do you send dollars?
 Well, you have to dock yourself. Like, it's not easy.
 So you're talking about inputting a credit card transaction, doxing yourself.
 And now you've just eliminated the two billion people that don't have credit cards or don't have banks.
 You've also got a problem with everybody that wants to remain anonymous.
 But you've also got this other problem, which is credit.
 You know, credit cards are expensive transactions, low frequency, slow settlement.
 So do you really want to pay two and a half percent every time you actually show a twenty dollar deposit?
 And maybe you could do a Kludgy version of this for a subset of people.
 It's like it's 10 percent as good if you did it with conventional payment rails.
 But what you can't do is the next idea, which is I want the orange badge to be used to give me safe passage through cyberspace, tripping across every platform.
 So when I how do I solve the denial of service attacks against a website?
 I publish a website. You hit it with a million requests.
 OK, now how do I deal with that?
 Well, I can lock you out and I can make it a zero trust website.
 And then you have to be coming at me through a trusted firewall or with a trust, trusted credential.
 But that's that's a pretty draconian thing.
 Or I could put it behind a lightning wall.
 A lightning wall would be, you know, I just challenge you, Lex, you want to browse my website.
 You have to show me your hundred thousand Satoshi's.
 Do you have a hundred thousand Satoshi's? Click.
 OK, now you click away a hundred times or a thousand times.
 And after a thousand times, you know, well, now, Lex, you're getting offensive over to take a Satoshi from you or 10 Satoshi's a microtransaction.
 You want to hit me a million times. I'm taking all your Satoshi's and locking you out.
 What you want to do is you want to go through 200 websites a day.
 And what you want every time you cross a domain, you need to be able to in a split second.
 Prove that you've got some asset.
 And now when you cross back, when you exit domain, you want to fetch your asset back.
 So how do I in a friction free fashion browse through dozens or hundreds of websites, post a security deposit for safe passage and then get it back?
 You couldn't afford to pay a credit card fee each time.
 When you think about two and a half percent as a transaction fee, it means you trade the money 40 times and it's gone.
 Yeah, it's gone. Yeah.
 So you can't do this kind of hopping around through the Internet with this kind of verification that grounds you to physical reality.
 It's a really, really interesting idea. Why haven't that hasn't that been done?
 I think you need two things.
 You need an idea like a digital asset like Bitcoin.
 That's a bearer instrument for final settlement.
 And then you need a high speed transaction network like lightning where the transaction cost might be a twentieth of a penny or or less.
 And if you roll the clock back 24 months.
 I don't think you had the lightning network in a stable point.
 It's really just the past 12 months. It's an idea you could think about this year.
 And I think you need to you need to be aware of Bitcoin as something other than like a scary speculative asset.
 So I really think we're just the beginning.
 The embryonic stage.
 I have to ask Michael Saylor, you said before there's no second best to Bitcoin.
 What would be the second best?
 Traditionally, there's Ethereum with smart contracts, Cardano with proof of stake, Polkadot with interoperability between blockchains.
 Dogecoin has the incredible power of the meme.
 Privacy with Monero. I just can keep going.
 There's, of course, after the block size wars, the different offshoots of Bitcoin.
 I think if you if you decompose or segment the crypto market, you've got crypto property.
 Bitcoin is the king of that.
 You know, and other Bitcoin forks that want to be in a bearer instrument store of value would be a property, a Bitcoin cash or Litecoin, something like that.
 Then you've got crypto currencies.
 I don't think Bitcoin is a currency because a currency I define in nation states since a currency is a digital asset that you can transfer in a transaction without incurring a taxable obligation.
 So that means it has to be a stable dollar or a stable euro or a stable yen, a stable coin.
 So I think you've got crypto currencies, Tether, Circle, most famous.
 Then you've got crypto platforms, you know, and Ethereum is the most famous of the crypto platforms, the platform upon which, you know, with smart contract functionality, et cetera.
 And then I think you've got just crypto securities.
 It's just like my favorite whatever meme coin.
 And I love it because I love it.
 And it's attached to my game or my company or my persona or my whatever.
 I think if you push me and said, well, what's the second best? I would say the world wants two things.
 It wants crypto property as a savings account and it wants cryptocurrency as a checking account.
 And that means that the most popular thing really is going to be a stable coin dollar.
 Right. And there's maybe a fight right now. It might be Tether.
 Right. But a stable dollar, because I feel like the market opportunity, it's not clear that there'll be one that will win.
 The class of stable dollars is probably a one to ten trillion dollar market easily.
 I think that in a crypto platform space, Ethereum will compete with Solana and Binance Smart Chain and the like.
 Are there certain characteristics of any of them that kind of stand out to you?
 Don't you think the competition is based on a set of features?
 Also, the set of features that a cryptocurrency provides, but also the community that it provides.
 Don't you think the community matters and sort of the adoption, the dynamic of the adoption, both across the developers and the investors?
 If I'm looking at them, I mean, the first question is, what's the regulatory risk?
 How likely is it to be deemed a property versus security?
 And the second is, what's the competitive risk?
 And the third is, what's the speed in the performance?
 And all those things lead to the question of what's the security risk?
 How likely is it to crash and burn? And how stable or unstable is it?
 And then there's the marketing risk. I mean, there are different teams behind each of these things and communities behind them.
 I think that the big cloud looming over the crypto industry is regulatory treatment of cryptocurrencies and regulatory treatment of crypto securities and crypto platforms.
 And I think that won't be determined until the end of the first Biden administration.
 For example, there are people that would like only U.S. FDIC insured banks to issue cryptocurrencies.
 They want JP Morgan to issue a crypto dollar backed one to one.
 But then in the U.S. right now, we have Circle and we have other companies that are licensed entities that are backed by cash and cash equivalents, but they're not FDIC insured banks.
 There's also a debate in Congress about whether state chartered banks should be able to issue these things.
 And then we have Tether and others that are outside of the U.S. jurisdiction. They're probably not backed by cash and cash equivalents.
 They're backed by stuff. And we don't know what stuff. And then finally, you have, you know, UST and DAI, which are algorithmic stablecoins, right, that are even more innovative further outside the compliance framework.
 So if you ask who's going to win, the question is really, I don't know, will the market decide or will the regulators decide if the regulators get out of the way and the market fall out?
 Well, then it's an interesting discussion. And then I think that all bets are off if the regulators get more heavy handed with this.
 And I think you could have the same discussion with crypto properties like the DeFi exchanges and the crypto exchanges.
 I think the SEC would like to regulate the crypto exchanges. They'd like to regulate the DeFi exchanges.
 That means they may regulate the crypto platforms and at what rate and in what fashion.
 And so I think that I could give you an opinion if it was limited to competition and the current regulatory regime.
 I think that the regulations are so fast moving and it's so uncertain that you can't make a decision without considering the potential actions of the regulators.
 I hope the regulators get out of the way. Can you steal me on the case that Dogecoin is, I guess, the second best cryptocurrency, if you don't consider Bitcoin a cryptocurrency,
 but instead a crypto property? I would classify it as crypto property because the US dollar is a currency.
 So unless your crypto asset is pegged algorithmically or stably to the value of the dollar is not a currency, it's a property or it's an asset.
 So then can you still man the case that Dogecoin is the best cryptocurrency then? Because Bitcoin is not even in that list.
 The debate is going to be whether it's property or security. And there's a debate whether it's decentralized enough.
 So let's assume it was decentralized. Well, it's increasing at not quite 5%, what, 5% a year inflation rate, but it's not 5% exponentially.
 It's like a plus 5 million, 5% something captain is less. I forget the exact number, but it's an inflationary property.
 It's got a lower inflation rate than the US dollar and it's got a much lower inflation rate than than many other fiat currencies.
 So I think you could say that. But don't you see the power of meme, the power of ideas, the power of fun or whatever mechanism is used to
 captivate a community? I do, but there are meme stocks. It doesn't absolve you of your ethical and securities liabilities if you're promoting it.
 So like I don't have a problem with like people buying a stock. It's just the way I divide the world is right.
 There's investment, there's saving and there's speculation and there's trading. So Bitcoin is an asset for saving.
 If you want to save money for 100 years, you don't really want to take on execution risk or the like.
 So you're just buying something to hold forever for you to actually endorse something as a property.
 Like if you said to me, Mike, what should I buy for the next 100 years? I say, well, some amount of real estate, some amount of scarce collectibles, some amount of Bitcoin.
 Right. You can run your company, right. But running your company is an investment. So the savings are properties.
 If you said, what should I invest in? I'd say, well, here's a list of good companies, private companies. You can start your own company. That's an investment.
 Right. If you said, what should I trade? Well, I'm trading as like a proprietary thing.
 Like I don't have any special insight into that. If you're a good trader, you know you are. If you said to me, what should you speculate in?
 We talk about meme stocks and meme coins and it kind of sits up there.
 It sits right in the same space with what horse should you bet on and what sports team should you gamble on and should you bet on black six times in a row and double down each time?
 I mean, it's fun. But at the end of the day, it's a speculation. Right. You can't build a civilization on speculation.
 It's not an institutional asset. And in fact, where I'd leave it, right, is Bitcoin is clearly digital privacy, which makes it an institutional grade investable asset for a public company, a public figure, a public investor or anybody that's risk adverse.
 I think that the other the top 100 other cryptos are like venture capital investments. And if you're a VC and if you're a qualified technical investor and you have a pool of capital and you can take that kind of risk, then you can parse through that and form opinions.
 Just orders of magnitude more risky because of competition, because of ambition and because of regulation. And if you take the meme coins like, you know, when some rapper comes out with a meme coin, it's like maybe it'll peak when I hear about it.
 Right. It's like, I mean, ship was created as the coin such that it had so many zeros after the decimal point that when you looked at it on the exchanges, it always showed 0000.
 And it wasn't until like six months after it got popular that they started expanding the display so you could see whether the price had changed.
 That's speculation. You you've been maybe you can correct me, but you've been critical of Elon Musk in the past in the crypto space. Where do you stand on Elon's effect on Bitcoin and cryptocurrency in general these days?
 I believe that Bitcoin is a massive breakthrough for the human race that will cure half the problems in the world and generate hundreds of trillions of dollars of economic value to the civilization.
 And I believe that it's an early stage where many people don't understand it and they're afraid of it.
 And there's FUD and there's uncertainty, there's doubt, there's fear. And it's a very noisy crypto world.
 And there's 15000 other cryptos that are are seeking relevance.
 And I think most of the FUD is actually fueled by the other crypto entrepreneurs. So the environmental FUD and the other types of uncertainty that surround Bitcoin generally, they're not coming from legitimate environmentalists.
 They don't come from legitimate critics. They actually are guerrilla marketing campaigns that are being financed and fueled by other crypto entrepreneurs because they have an interest in doing so.
 So if I look at the constructive path forward, first, I think it'd be very constructive for corporations to embrace Bitcoin and build applications on top of it.
 You don't need to fix it. There's nothing wrong with it.
 Like when you put it on a layer two and a layer three, it moves a billion times a second at the speed of light. So every beautiful, cool DeFi application, every crypto application, everything you could imagine you might want to do, you can do with a legitimate company and a legitimate website or mobile application sitting on top of Bitcoin or Lightning if you want to.
 So I think that to the extent that people do that, that's going to be better for the world.
 If you consider what holds people back, I think it's just misperceptions about what Bitcoin is. So I'm a big fan of just educating people.
 If you're not going to commercialize it, then just educate people on what it is. So for example, Bitcoin is the most efficient use of energy in the world by far.
 Most people don't necessarily perceive that or realize that, but if you were to take any metric, energy intensity, you put like $2 billion worth of electricity in the network every year and it's worth $850 billion.
 There is no industry in the real world that is that energy efficient. Not only that energy efficient, it's also the most sustainable industry.
 We do surveys. 58% of Bitcoin mining energy is sustainable. So there's a very good story.
 In fact, every other industry, planes, trains, automobiles, construction, food, medicine, everything else, is less clean, less efficient.
 So the basic debate was... I wouldn't say there is a debate. I would just say that to the extent that the Bitcoin community had any issue with Elon, it was just this environmental uncertainty that he fueled in a couple of his tweets.
 Which I think just is very distracting.
 Well, that was one of them, but I think it's like the Bitcoin maximalists, but generally the crypto community, what you call the crypto entrepreneurs, are, you know, it's also they're using it for, I mean, for investment, for speculation, and therefore get very passionate about people's kind of celebrities, including you, like famous people.
 Right. Saying positive stuff about any one particular crypto thing, a thing you can buy in Coinbase.
 And so they might be unhappy with Elon Musk that he's promoting Bitcoin and then not, and promoting Dogecoin, then not.
 And this kind of... There's so much emotion tied up in the communication on this topic. And that's, I think that's where a lot of the...
 Look, I don't have a criticism of Elon Musk. He's free to do whatever he wishes to do. It's his life. In fact, Elon Musk is the second largest supporter of Bitcoin in the world.
 I think that the Bitcoin community tends to eat its own quite a bit. It tends to be very, very self-critical. And instead of saying, well, Elon is more supportive of Bitcoin than the other 10,000 people in the world, you know, with serious amounts of money they focus upon.
 Yeah, this is strange. Eating your own is just...
 I mean, I think he's free to do what he wants to do. Like, and I think he's done a lot of good for Bitcoin in putting it on the balance sheet of Tesla and holding it. And I think that sent a very powerful message.
 Do you have advice for young people? So you've had a heck of a life. You've done quite a lot of things. Start before MIT, but starting with MIT.
 Is there advice you have for young people in high school and college? How to have a career they can be proud of, how to have a life they can be proud of?
 I was asked by somebody for quick advice for his young children. He had twins when they enter adulthood. He said, give me your advice for them in a letter. I'm going to give it to them when they turn 21 or something.
 So then he handed it. I thought I was at a party and then he handed me this sheet of paper and I thought, oh, he wants me to write it down right now. So I sat down, I started writing and I figured, well, what would you want to tell someone at age 21?
 You wrote it down.
 So I wrote it down. And I tweeted it and it's sitting on Twitter, but I tell you what I said. I said, my advice if you're entering adulthood, focus your energy.
 Guard your time.
 Train your mind.
 Train your body.
 Think for yourself.
 Curate your friends.
 Curate your environment.
 Keep your promises.
 Stay cheerful and constructive.
 And upgrade the world.
 Like that was the 10.
 Upgrade the world. That's an interesting choice of words. Upgrade the world.
 Upgrade the world.
 It's like an engineer.
 Focus your energy. It's a very, yeah, it's a very engineering themed.
 Keep your promises too. That's an interesting one.
 I think most people suffer because they just, they don't focus.
 You got to figure out, I think the big risk in this world is there's too much of everything.
 Yeah.
 Like you can sit and watch chess videos a hundred hours a week and you'll never get through all the chess videos. Right. There's there's too much of every possible thing.
 Every too much of every good thing. So figuring out what you want to do and then everything will suck up your time. Right.
 There's a hundred streaming channels to binge watch on.
 So you got to guard your time and then train your body, train your mind and control who's around you. Control what surrounds you.
 So ultimately in a world where there's too much of everything, then your success.
 It's like those laser eyes. It's like those laser eyes. You have to focus on just a few of those things.
 Yeah. I mean, I got a thousand opinions we could talk about and I could pursue a thousand things, but I don't expect to be successful.
 And I'm not sure that my opinion in any of the 999 is any more valid than the leader of thought in that area.
 So how about if I just focus upon one thing and then and then deliver the best I can in the one thing?
 That's that's the laser eye message. The rest get you distracted.
 How do you achieve that? Do you find yourself, given where you are in life, having to say no a lot?
 Or just focus comes naturally when you just ignore everything around you. So how do you achieve that focus?
 I think it helps if people know what you're focused on.
 So you everything about you just radiates that people know people know this.
 If they know what you're focused on, then you won't get so many other things coming your way.
 If you know, if you dally or if you if you flirt with twenty seven different things,
 then you're going to get approached by people in each of the twenty seven communities. Right.
 You mentioned beginning a PhD and given given your roots at MIT.
 Do you think there's there's all kinds of journeys you can take to educate yourself?
 Do you think a PhD or school is still worth it?
 Or is there other paths through life that is worth it if you have to pay for it?
 Is it worth it to spend the time on it? The time and the money is a big cost.
 I think time, probably the bigger one.
 It seems clear to me that the world wants more specialists.
 It wants it wants you to be an expert and to focus on in one area.
 And it's punishing generalist jack of all trades,
 especially people that are generalists in the physical realm,
 because if you're a specialist in the digital realm, you might very well.
 Well, you're the person with seven hundred thousand followers on Twitter and you show them how to tie knots.
 Or, you know, you're the banjo player, you know, with one point eight million followers.
 And whenever he types banjo, it's you. Right.
 And so the world wants people that that do something well,
 and then it wants to stamp out 18 million copies of them.
 And so that argues in favor of focus.
 Now, I mean, the definition of a PhD is is someone with enough of an education that they're capable of or have made.
 I guess I guess to get a PhD, technically you have to have have done a dissertation where you made a,
 you know, a seminal contribution to the body of human knowledge.
 And if you haven't done that, technically, you know, you have a master's degree, but you're not a doctor.
 So if you're interested in any of the academic disciplines that a PhD would be granted for,
 then I can see that being a reasonable pursuit.
 But there are many people that are specialists.
 You know, you know, the Agimator. Yeah.
 Yeah. Yeah. Yeah. Yeah. Yeah.
 He's the world's greatest chess commentator. Yeah.
 And I've watched his career and he's got progressively better and he's really good.
 He's going to love hearing this. Yeah.
 The Agimator here is this. I'm a big fan of the Agimator.
 I have to cut myself off, right?
 Because otherwise you'll watch the entire Paul Morphy saga for your weekend.
 But the point really is YouTube is full of experts who are specialists in something.
 And they rise to the top of their profession.
 And Twitter is too.
 And the Internet is so I would advocate that you figure out what you're passionate about
 and what you're good at and you do focus on it, especially if the thing that you're doing can be automated.
 The problem is, you know, back to that 500,000 algebra teacher type comment,
 the problem is if it is possible to be automated, then over time someone's probably going to automate it.
 And that squeezes, you know, the state space of everybody else.
 It's like after the lockdowns, it used to be there are like all these local bands that played in bars
 and everybody went to the bar to see the local band.
 And then during the lockdown, you would have like the six super groups and they would all get 500,000 or a million followers.
 And all these smaller local bands just got no attention at all.
 Well, the interesting thing is one of those 500,000 algebra teachers is likely to be part of the automation.
 So it's like it's an opportunity for you to think where's my field, my discipline evolving into.
 I talked to a bunch of librarians, just happened to be friends with librarians.
 And that's libraries will probably be evolving.
 And it's up to you as a librarian to be one of the one of the one of the few that remain in the rubble.
 If you're going to give commentary on Shakespeare plays, I want you to basically do it for every Shakespeare play.
 Like I want you to be the Shakespeare dude, because once I once just like Lex, you're like, I don't know what kind of you're the deep thinking podcaster.
 Right. Or you're the you're the podcaster that goes after the deep intellectual conversations.
 And once I get comfortable with you and I like you, then I start binge watching Lex.
 But but if you change your format through 16 different formats so that you could compete with 16 different other personalities on YouTube, you probably wouldn't beat any of them.
 Right. You would probably just kind of sink into the you're the number two or number three guy.
 You're not the number one guy in the format. And I think that that the algorithm, right, the Twitter algorithm and the YouTube algorithm, they really reward the person that's focused on message consistent.
 The world wants somebody they can trust that's consistent and reliable.
 And they kind of want to know what they're getting into because this is taken for granted, maybe. But but there's 10 million people vying for every hour of your time.
 And so the fact that anybody gives you any time at all is a huge privilege. Right. And you should be thanking them.
 And you should respect their time. It's interesting.
 Like everything you said is very interesting. But of course, from my perspective and probably from your perspective, my actual life has nothing to do with it's just being focused on stuff.
 And in my case, it's like focus on doing the thing I really enjoy doing and being myself and not caring about anything else.
 I don't care about views or likes or attention. And that just maintaining that focus is the way from an individual perspective, you live that life. But yeah, it does seem that there's the world and technology is rewarding the specialization and creating bigger and bigger platforms for the different specializations.
 And and that and that lifts all both actually, because the specializations get better and better and better at teaching people to do specific things and they educate themselves.
 And it's just everybody gets more and more knowledgeable and more and more empowered.
 The reward for authenticity more than offsets the specificity with which you pursue your mission.
 Like, like, another way to say it is like nobody wants to read advertising. Like if you were to spend 100 million dollars advertising your thing, I probably wouldn't want to watch it.
 Yeah. But if you see the death of that.
 Yeah. And so that the commercial shows are losing their audiences and the authentic specialist or the authentic artists are are gaining their audience.
 And that's a beautiful thing. Speaking of deep thinking.
 You're just a human. Your life ends. You've accumulated so much wisdom, so much money, but the ride ends. Do you think about that? Do you do ponder your death, your mortality?
 Are you afraid of it?
 When I go, all my assets will flow into a foundation and the foundation's mission is to make education free for everybody forever.
 And if if I'm able to contribute to the creation of of a more perfect monetary system, then maybe that foundation will go on forever.
 The idea, the foundation of the idea. So not just the each of the foundations.
 It's not clear we're on the S curve of immortal life yet. Like that's a biological question. And you ask that, you know, on some of your other interviews a lot.
 I think that we are on the threshold of of immortal life for ideas or immortal life for certain institutions or computer programs.
 So if we can fix the money, then you can create a technically perfected endowment. And then the question really is, what are your ideas?
 What do you want to leave behind? And so if it's a park, then you endow the park. Right. If it's if it's free education, you endow that if it's if it's some other ethical idea.
 Right. Does it make you sad that there's something that you've endowed some very powerful idea of digital energy that you put out into the you help put it into the world and your mind, your conscious mind will no longer be there to experience it.
 It's just gone forever. I rather think that the the thing that Satoshi taught us is you should do your part during some phase of the journey and then you should get out of the way.
 And I think Steve Jobs said something similar to that effect in a very, very famous speech one day, which is, you know, death is a natural part of life and it makes way for the next generation.
 And I, I think the goal is you upgrade the world, right? You leave it a better place, but you get out of the way. And I think when when that breaks down, you know, bad things happen.
 I think nature cleanses itself. There's a cycle of life.
 And speaking one of great people who did also get out of the way is George Washington. So hopefully when you get out of the way, nobody's bleeding you to death in hope of helping you.
 What do you think? Do a bit of a callback. What do you think is the meaning of this whole thing? What's the meaning of life? Why are we here? We talked about the rise of human civilization.
 It seems like we're engineers at heart. We'll build cool stuff, better and better use of energy, channeling energy to be productive. Why? What's it all for?
 You're getting metaphysical on me. Very. There's a beautiful boat to the left of us. Like, why do we do that? This, this boat that sailed the ocean.
 Then we build models of it to celebrate great engineering of the past to engineer is divine.
 You can make lots of arguments as why we're here. We're here to we're here to entertain ourselves or we're here to to create something that's beautiful or something that's functional.
 I think if you're an engineer, you entertain yourself by creating something that's both beautiful and functional.
 So I think all three of those things, it's entertaining, but it's ethical. You know, you got to admire, you know, the first person that built a bridge crossing a chasm or the first person to work out the problem of how to get running water to a village.
 On the first person to figure it out, how to, you know, dam up a river or mastered agriculture or the guy that figured out, you know, how to grow fruit on trees or created orchards, you know, and maybe one day had like 10 fruit trees is pretty proud of himself.
 So that's functional. There is also something to that. Just like you said, that's just beautiful.
 It does get you closer to, like you said, the divine something.
 When you when you step back and look at the entirety of it, a collective of humans using a beautiful invention or creation or just just something about this instrument is creating a beautiful piece of music.
 That seems just right. That's what we're here for. Whatever the divine is, it seems like we're here for that. That and I of course love talking to you because from the engineering perspective, the functional is ultimately the mechanism towards the beauty.
 Isn't there something beautiful about about making the world a better place for people that you love your friends or family or yourself?
 You know, and when you think about the entire arc of human existence and you roll the clock back 500,000 years and you think about every struggle of everyone that came before us and everything they had to overcome in order to put you here right now.
 You know, you kind of you got to admire that right. You got to respect that.
 That's a heck of a gift they gave us. It's also a heck of a responsibility.
 Don't screw it up.
 If I dropped you 500,000 years ago and I said figure out steel refining or or you know, figure out rate, silicon chips, fab reproduction or or whatever it is.
 Why?
 Or fire. And so now we're here and I guess the way you repay them is you fix everything in front of your face. You can.
 Right. That means to someone like Elon, it means get us off the planet.
 Right. To someone like me, it's like I think, you know, fix the energy and the system.
 And that gives me hope. Michael, this is an incredible conversation. You're an incredible human. It's a huge honor. You would sit down with me.
 Thank you so much for talking to you. Thanks for having me.
 Thanks for listening to this conversation with Michael Saylor to support this podcast. Please check out our sponsors in the description.
 And now let me leave you with a few words from Francis Bacon. Money is a great servant, but a bad master.
 Thank you for listening and hope to see you next time.