66: Michael Saylor on Bitcoins killer app, Ethereum, Web3 & inflation

The problem with all the currencies over the long-term is the best currency in the world is going to lose 99.9% of its value over 100 years—the best. The dollar is going to lose 99.9% of its value over 100 years.

The only reason that you're not panicked in the US is because the CPI is manipulated to create the lowest possible inflation number. The lowest number that they can possibly create is, like, 8% right now. But you don't gotta be a rocket scientist to figure out that the rate at which stuff you need to buy is going up in price is more than 8%.

The creativity that's going to increase the ecosystem, the economy, by a factor of 100 is mostly going to take place on layers 2, 3, 4, 5, & 6. Bitcoin at layer 1, it's good enough. It's good enough to be a hundred-trillion-dollar base layer. It's good enough to be 200x bigger than it is. It's good enough to be a $500 trillion base layer.

I think a wallet, a wallet you can trust, that will hold a large supply of currency, like dollars, and property, like Bitcoin—that's a killer app for 8 billion people. So, I think the obvious thing to do would be for Apple, Google, or Facebook to build that wallet into their device.

The problem with ETH is after the merge, they've still left all sorts of questions: What's the issuance schedule going to be for the next thousand years? What are the staking rules? There's such an ambitious technology agenda that the protocol never stops mutating. And the problem with an ever-mutating DNA structure is you generally end up with a monstrosity.

The issue with ETH is, if you want a decentralized network, you have to actually install a protocol, and it has to run unmolested, you know, unmodified for 5 to 10 years before you can conclude that it is decentralized and censorship resistant—and ETH hasn't even got there yet.

What's the half-life of energy in Bitcoin? Well, it's forever ... If I take the electricity that I would use to run a car for 100 years, and I put it in the car, I'm going to lose it because of... depletion. But if I take the same energy, and I sell it to the grid, take the money, buy the Bitcoin, attach the Bitcoin to a chip in the Tesla, or in the car, the car will run itself forever.

The near-term inflation hedge is you swap out your local currency for dollars ... The long-term inflation hedge is you swap out your weak property for strong property. Like, you don't want to own a rental apartment building in Istanbul; you want to own the the equivalent amount of Bitcoin.

At some point, all of the tinkering trying to reinvent the wheel is dysfunctional. I think most of the people in the crypto industry, they keep trying to reinvent the wheel. There's some measure of ignorance and arrogance, right? And greed. They kind of want to get rich, but if you're greedy, a better way to get rich is build an application on top of Bitcoin using the token.

What if I told you I could move every building in San Francisco every 140 milliseconds? You would think, well, that sounds pretty cheap, don't you think? Can you move a building in San Francisco to London in 140 milliseconds for 50 cents? Because Bitcoin can. You put a billion-dollars in Bitcoin and move it, literally, for fifty cents.

The clear theoretical cut off, I think, is 4 years. If you want a safe, a really safe, cut off, look at the 4-year moving average of Bitcoin. If you have money that you can afford to put away and hold for more than 4 years, you would be foolish to store it in a currency.

I think that the rest of crypto takes a shortcut. The shortcut is issuing unregistered securities. So, there really isn't an example that I can think of of any kind of smart contract network or proof-of-stake or crypto network that competes with Bitcoin that didn't take the shortcut of an unregistered security. They're not decentralized.

I would say year one of lightning was 2021 ... I think you'll see an explosion of really cool applications built on the lightning protocol, because lightning reduced the cost to move Bitcoin by a factor of 100,000 or something.

When Satoshi invented something that allowed you to transfer value from two parties without an intermediary, not only did Satoshi invent the ability to transfer energy in cyberspace, Satoshi invented the ability to manifest energy in cyberspace.

If you had asked 1,000 investors on Wall Street, 'What is YouTube Worth?', the high bidder was probably Google, and there were probably 5 out of 1,000 that would have said it's worth a lot, and 99% of them would have said, 'Are you out of your mind? It's worth nothing.'

If you look at Bitcoin, think... superconducting energy network. I want to move energy at the speed of light, friction-free, for free, and I want to instantiate it forever, like put it in a crucible.

You got to think of money as a currency component and a property component. And the currency is the medium of exchange that you're going to use to pay your day-to-day bills ... And then the property is your long-term store of value.

Bitcoin is an option for anybody in the world that lives in a nation where they can't trust the bank or they can't trust the local currency—and that's the killer app for them.

The thing that's wrong with the world is we dissipate too much energy. And the cure is stop dissipating, stop wasting, energy.

When I say [Bitcoin] is digital energy... Two-thirds of the people in the crypto industry for the last decade—they don't understand what I'm saying.

I think most people that grew up in the crypto industry, they only know enough to hurt themself. I think most people that aren't technologists, they only know enough to hurt themself.