Michael Saylor on The Blockchain Interviews with Dan Weiskopf

Intro Vocals [00:00:02] You’re watching The Blockchain Interviews, hosted by Dan Weiskopf. Each episode features interviews with leading industry experts, so that viewers can have a deeper understanding of today’s quickly evolving blockchain marketplace.

Dan Weiskopf [00:00:26] I’m delighted to have Michael Saylor, chairman, CEO, and founder of MicroStrategy, on as our guest for the Blockchain Interview series today. I’m not sure Michael Saylor really needs a traditional introduction, but for those few who aren’t on Twitter–aren’t technology experts and didn’t graduate from MIT with the highest of honors–Michael Saylor has been CEO for 30 years at MicroStrategy and two years ago took the Bitcoin market by storm. And so, Michael, thank you very much for all that you do for Bitcoin and and what you do for your shareholders.

Michael Saylor [00:01:14] Thanks, Dan, happy to be here.

Dan Weiskopf [00:01:17] So we were early investors in MicroStrategy, fortunately, and I don’t know why I ever had 100,000 Bitcoin as a number in my head. To be clear, you’ve always been very transparent, but you’ve never projected out a specific number, now you’re at 105,000 Bitcoin on your balance sheet at MicroStrategy. Is there a target that you have in mind?

Michael Saylor [00:01:49] No, just by as many as we can, more is better.

Dan Weiskopf [00:01:54] More is better. And along the same lines, frankly, I don’t think sometimes you get enough credit for tapping the capital markets as you have. I mean, you were really smart in recognizing, you know, how the convert market was trending. And, you know, how do you go about, as an entrepreneur, using the capital markets and the decision process and managing risk versus opportunity?

Michael Saylor [00:02:27] You know, I mean, I think if we look at the last decade, Bitcoin is up about 120% a year on average for 10 years. It’s up about 250% for the past 12 months. Over any last four year time frame, I don’t think anybody has ever lost money holding it for four years. So a pretty simple rule of thumb would be if I could borrow money for less than the expected return, and if it comes due more than four years out, then I think I’m pretty safe. So if you’re going to loan me money at 6% interest for six days and I bought Bitcoin, might be some risk, six months, maybe some risk, six years, well, I took a survey on Twitter of all my followers, and I said, you know, over the course of seven years, do you think Bitcoin will go up on average, six, then eight percent interest or more? It turns out that was our last secured debt financing. We borrowed money at six and an eight percent interest. So it’s like 90% of them said yes. OK, so if you’re long Bitcoin, you think it’s going to go up more than 6% a year, then would you borrow money at 6%? Sure. Would you borrow money at 2%? I mean, the truth of the matter is, if you went to anybody in any business in the world and you asked them, would you borrow a billion dollars at 0% interest to invest in the business you’re in? If the answer is no, then they must not believe in the–they probably should get out of the business, right? If you’re not willing to invest a billion dollars at 0% interest in the business that you’re currently in, you’re short, right. You’re short the business, right. So in that case, the right answer is you ought to borrow the billion dollars and short the thing, right? But if you don’t have an opinion one way or the other, you probably shouldn’t be in that business. And there’s ten thousand businesses Dan. I don’t have an opinion on, like, you know, biomechanical engineering or nuclear engineering. I don’t really know. I don’t purport to be an expert. And the 99.9% of the things in the world that I’m not an expert in, I just feel like you should focus upon the thing that you’re going to work on. If you–if you know that thing and someone is willing to give you a favorable financing and if you have a use of the proceeds. Look, there’s a lot o–if I’m running a diner down the street and it’s a nice diner and I got six employees and I’m really good at and I love it, and you offered me a billion dollars, maybe I don’t need a billion dollars of capital to upgrade my diner, it’s not capital intensive. So there are some businesses where you can’t use the capital. But Bitcoin is a business where you can use the capital. It’s either going up or it’s going down. If it’s–if it works, it’s going up and if it’s going up, then you would like to own as much of it as you can possibly own. So my view of the capital markets is if you can–if you can acquire capital at a reasonable cost of funds under the right conditions without onerous covenants, then, yeah, you should go ahead and acquire that capital.

Dan Weiskopf [00:05:49] And I think you’ve also made the decision not to loan your Bitcoin out. Can you walk me through why that decision is the right decision? Because arguably you could loan it out, take a yield in and maybe pay a dividend.

Michael Saylor [00:06:06] OK, well, there’s a couple of issues with it, first of all, as a publicly traded company, it takes the typical publicly traded company three to six months to get through the compliance and the regulatory and the accounting and the due diligence issues to simply trust the counter parties to acquire and custody Bitcoin. OK, so that’s a big deal. And what do you get for that? Well, the last decade you got 120% annualized return. In the last year you got 250% annualized return. So I would say you get a pretty good return by going through the motions of acquiring and holding the Bitcoin. The offers with regard to yield are 4%, 5%, 8%? OK, so you’re talking about an order of magnitude less and you’re at least going to double the amount of effort, but you’ve got counterparty risk, so you know, what if you–want if you loan out a billion dollars of the Bitcoin and somebody loses it all? Right? So I think the counterparty risk is large. There’s already complexity, right? There’s DeFi complexity. Am I going to do a DeFi? Well, that’s got a regulatory overhang, right? Maybe it’s illegal. Maybe it’s a security problem. So, no, not going to do that, there’s a security problem. So what if I put it on a DeFi blockchain and there’s a rug pull and you lose it all? OK, so there’s a security issue. There’s a regulatory issue, there’s an audit and there’s a legal and accounting issue. OK, so. Well, what if I do CeFi? Well, you know, what if I put it with one of the yield generating CeFi players, BlockFi,et cetera? Well there’s regulatory overhang there, too. There’s a question of compliance. My auditors would have to get comfortable with their auditors. Right. My lawyers have to get comfortable that I’ve gone through the due diligence. OK, how does one go through the due diligence process of trusting the counterparty right now? So I think the right way to think of it, Dan, is like we’re in year one or year two of commercial Bitcoin banking. OK, we haven’t even, like ,what’s the date? It’s like the early part of August, you know, our first our first Bitcoin acquisition was August 11th or something like that. So we’re not even one year into it. And I think when you get to three to five years into the world of Bitcoin banking, the security issues, the regulatory issues, the due diligence issues…Can you show me a Bitcoin bank that’s taken a billion dollars of Bitcoin and generated yield consistently for 10 years in a row without any kind of mishap?

Michael Saylor [00:09:13] No, how about five years? How about three years?

Dan Weiskopf [00:09:15] Sounds like somebody with experience, right? You’ve been on both sides, right. So I get it. Yeah.

Michael Saylor [00:09:21] So the point really is you’re taking 100 times as much risk and it’s 10 times as complicated. To get 5% more. So let me turn it around a different way, if I’m going to go ahead, like, I wouldn’t take 100x more risk to start with, right? That, like, as a fiduciary, that doesn’t make sense. Let’s assume that it wasn’t any risk. It was just 10 times harder. Well, why would I divert the time of my legal team and my finance team to go jump through 10 times as many compliance, accounting, security, regulatory and process hoops when I have other things I could do at the time? Why don’t I just go and raise another billion dollars and buy Bitcoin that’s been yielding 120% a year for a decade? Wouldn’t it make a lot more sense to leverage up or to acquire more of the thing that’s going up 120% a year than it is to divert everybody in order to get it to go up 123% a year with 100 times as much risk and 10 times as much complexity. So it’s–let me offer a different example. So do you want to buy 100,000 acres in Vegas and just own it and you could do it overnight? Or do you want to carefully huddle with 100 architects and plan 150 hotels and the septic systems and all the traffic light systems and all the elevator systems of all the casinos and hotels and restaurants in Vegas?

Dan Weiskopf [00:10:57] You’re the king of analogies, I love it.

Michael Saylor [00:10:59] It’s just complicated and risky and distracting and deluded.

Dan Weiskopf [00:11:05] We get asked the question, so I figured I’d just throw it at you and ask, as somebody once said to me, asked and answered, I totally understand. So turning things around a little bit, you’ve got two businesses, right? Is the software business now, you know, growing in terms of being able to hire, maybe, better people? Are people more excited as a result of what you’re doing with Bitcoin? I wrote a piece about how Cisco should be doing a little bit more like what you’re doing. And I just wonder if you’re fostering innovation and showing that you’re willing to take risk in your Bitcoin endeavors for the software.

Michael Saylor [00:11:48] You know, I think the Bitcoin decision increased our brand awareness by a factor of 100. OK, so that helps us enormously with recruiting and helps us enormously with retention. It helps us enormously if we go to a CFO or CEO and we’re showing MicroStrategy software now, they know who we are. Right. And I think I’ve got twenty twenty five million YouTube views. So people have heard of us now. So it’s always useful if people know who you are, and of course, Bitcoin is one of the most, if not the most disruptive technology of the decade, and it’s disrupting the energy industry ,it’s disrupting the investment community, it’s disrupting the technology community. That means–it’s disrupting politics and economics in general. It’s disrupting the definition of assets and property rights. So that being the case, it gets people’s attention and it’s progressive and it gets people focused. So I think it’s been great for morale. It’s been great for retention, it’s been great for acquisition of new employees. And it’s helping us to deliver our corporate message. MicroStrategy’s software business was up 10% in the first quarter year over year. Our business is up 13% and the second quarter. So when you get to double digit growth, that’s a good thing. And we’ve been seeing strengthening of that business subsequent to our decision to embrace Bitcoin.

Dan Weiskopf [00:13:31] Yeah. Do you expect that some of your software projects would be targeted or focused in on the blockchain?

Michael Saylor [00:13:41] You know, we talked about pursuing good ideas, Dan, I don’t regret any bad idea I ever pursued because I never pursued a bad idea. I regret all the good ideas I pursued because they were dilutive to the great ideas. So here’s a good idea: Why don’t we get some yield on our billion dollars of Bitcoin? It’s a good idea. It’s distracting, dilutive and potentially going to create problems. Here’s another good idea: Why don’t we use our software expertise to build something cool in the Bitcoin blockchain world? Yeah, yeah, we could, but what? We’ve got a five hundred million dollar business which is very profitable and we are the best in the world and we’ve got 30 years of experience in it and we know that there’s nobody better than us. We can keep doing that and grow that and cultivate that, or we can look for a new application of software. But, you know, if I had a Bitcoin for every time somebody came up to me and said, I have an idea for a new app? I mean, there’s a hundred thousand ideas for a new app, they all require software. I got plenty of ideas. I think the one thing I learned in business over my 30 years is it’s a lot easier to acquire something. You can acquire or you can create a piece of software or you can buy a business, that’s really easy. It’s much harder to be competitive in the business. Can you actually launch something and be the best in the world at it? That’s harder. And then it’s really, really hard to commercialize something. So the standard of commercializing something is, I have to shift the product, be the best in the world at it, and then I have to be able to upgrade it continuously forever for less money than my customers are willing to pay me to use it. So can you actually profit continuously from something while growing it? Because if you can’t keep making a profit while you grow the fame, then even if you’re the best in the world now, you won’t be the best in the world in a decade. You’ll get squeezed out by somebody else. So I think when you look at all these businesses, you know, the standard of, “Can I come up with something cool to build?” That’s very low, I could come up with a hundred thousand good ideas of things to build. Can I be the best in the world at it? I don’t know, I mean, I won’t know until I’ve done it for three to five years. And then can I grow it continuously against the person that is the best in the world at it? Right, the decision to compete is the decision to be the best in the world continuously, forever at a profit at something. OK, when you think about it that way, it gives you laser eyes, right, gives you a focus because you realize that it’s like you can go into any city in the world to start a restaurant. Can you make money? You’ll know in thirty six months. Will you be there in one hundred years? Will you be there in a decade? That’s very hard and it’s probably 10,000 times harder than the first stage of just launching the thing or doing the thing. That’s why there’s a 99.9% percent failure rate on mobile apps or new ideas or websites. In fact, I think most people underestimate the true failure rate of all these business ideas. I mean, to say that 99% of them fail is to understate the issue. It’s more than 99% failure. And so you’ve got to really find a way to bring a massive asset to bear in such a way that you know you’ll be the best in the world, and then you have to be ready to fend off all comers over the course of the next decade if you really want to go for that. If you don’t, then the problem, Dan, is it’s dilutive because the 27 engineers that I put on this thing are getting pulled off of something else. The capital I put to this thing are getting pulled off of something else. Right, so the world is full of people that are diluting their capital and diluting their bandwidth and diluting their brand, pursuing good ideas.

Dan Weiskopf [00:18:10] So I think you kind of answered a question that I wanted to ask when I first got into the business around the time, frankly, when you were launching MicroStrategy, I was focused on venture capital. But that’s not going to be your thing, because I can envision you getting at least a hundred ideas sent to you or somebody who you would dedicate to venture capital. But that’s not that’s not your vision for MicroStrategy. It’s not your vision for Michael Saylor.

Michael Saylor [00:18:46] If you spent 20 years of your life doing VC, venture capital, if you have a pool of billions of dollars of capital that you range from limited partners and they gave you the money and you agreed to a contract that you would invest it in venture capital, and then you’re staring at the crypto world. Then that might make sense, right? You have a strategic pool of capital and you have a strategic capability to invest in early stage companies, you know, you should. If, you know, if you just have the idea that you’d like to be a venture capitalist, here’s the problem, Dan. I have a billion dollars of capital, but it’s not limited partner capital strategically committed to venture capital. OK, so I could just buy Bitcoin with it, right? So if I were to buy–if I were to invest in 10 companies, that’s 10 companies out of 100.000 companies, what’s the success rate? There’s 100,000 companies that might plug into Bitcoin. I would rather just own the Bitcoin instead of expressing a directional exposure or an opinion about which of those companies–I mean, don’t you have to analyze all 100,000 companies to know that you’re 10 are going to be the ones that win? And, so, my problem with that is I don’t want to be in the business of choosing winners and losers in that space, nor do I want to manage the early stage VC process. I would be distracting myself, my management bandwidth. I’d be moving away from running MicroStrategy and managing Bitcoin. I would be running into the VC world and I’d be diluting my capital because a billion dollars invested in VC is a billion dollars not invested in Bitcoin. When I talk to all these Bitcoin companies, that they’re VC finance, they’re like, “Oh, I just raised one hundred billion.” I said, “Well, how much bitcoin do you have?” They looked their head down. They won’t let me invest in Bitcoin. I’m like, well, that’s pretty foolish. Why don’t you take the hundred million and put 80 million of it into Bitcoin? Because if the business fails, you’ll probably still succeed. And if the business succeeds, then you’ll still succeed. And on the other hand, if Bitcoin fails, you’re not going to succeed no matter what you do. Right. There’s no point in being the world’s best bitcoin something or rather a bitcoin goes to zero. So the problem, I think, with the VC is you’re taking capital that could be invested in Bitcoin and you’re investing it downstream one, two, three or four layers away from Bitcoin. And you’re taking all of that execution risk and competitive risk. When you could just own the underlying asset,

Dan Weiskopf [00:21:47] Let’s talk about that a little bit, and I understand where you’re coming from and, you know, that’s why we’re involved in your stock. But they’re going to be a lot of winners, too, right? You know, there’s a whole discussion or narrative around Ethereum, right. But you’re focused on Bitcoin specifically. So we run a portfolio of between 40 and 60 names and are constantly screening through about 200 different companies that are going to be involved in the blockchain and growing space.

Michael Saylor [00:22:17] But you understand you raised the money and your charter is you’re required to take a diversified interest in a market basket of securities. That’s your charter.

Dan Weiskopf [00:22:28] That exactly is the mandate.

Michael Saylor [00:22:30] What if you took all the money invested in one company? Are you allowed to?

Dan Weiskopf [00:22:38] I’d be fired.

Michael Saylor [00:22:39] So you understand, you have to.

Dan Weiskopf [00:22:40] Absolutely.

Michael Saylor [00:22:42] Because your investors wanted to buy a diversified portfolio of securities, I assume.

Dan Weiskopf [00:22:34] Yes.

Michael Saylor [00:22:45] So you probably can’t even buy the underlying–can you buy corn or oil rights or land or in the underlying bitcoin?

Dan Weiskopf [00:22:54] No, no.

Michael Saylor [00:22:55] Because you have a charter.

Dan Weiskopf [00:22:56] Correct.

Michael Saylor [00:22:57] OK, so it’s totally legitimate. But you understand, you raised all your capital with a strategy to invest in a diversified portfolio of securities. And maybe you’ve got a tighter strategy. Maybe your focus is on the crypto world or the whatever world, right? Well, my strategy is to run an enterprise software company that builds the world’s best business intelligence software. And my second strategy is to acquire and hold Bitcoin. And that’s the first two paragraphs of the first paragraph of my 10K. If you read it and pull it, that’s what it says.

Dan Weiskopf [00:23:36] Sure.

Michael Saylor [00:23:37] Well, that’s a very clear disclosure of your investing. And MSTR then that’s what you’re expecting to get. My job is not to diversify your portfolio to 100 other securities if my job is not to hedge the risk. In fact, if you had one hundred million dollars and you wanted 1% exposure to bitcoin, you might prefer to own MicroStrategy that says we’re going to be 3x leverage Bitcoin, then own a Bitcoin ETF, which is one leverage Bitcoin, and you certainly don’t want to take your 1% and invest it in a company run by Yo-Yo Smith that sometimes buys and sometimes sells Bitcoin and hedges it for you, but doesn’t tell you what they’re going to do. And they’re not predictable. Because if Bitcoin goes to zero, then you’re going to lose your 1%. In which case, if you’re 20% exposed, you only got 20% of the upside, if you’re 1x exposed, you got the full upside and if you’re 3x exposure, you got 3x the upside. So you understand the number one question is what exposure am I buying? I’d rather own the company that’s got the most exposure and the second is, do I trust them and do I understand their strategy? I don’t really want someone that’s flaky, that’s going to change their strategy and blow with the wind, because it makes it impossible for me as the portfolio manager to construct my portfolio rationally. If you’re in the aluminum business, I want you to do aluminum then. And if you’re going to be in the timber business, I want you to buy timber. And if you’re in the Bitcoin business, I want you to buy Bitcoin. And the one thing I don’t want to read is, while the company may or may not buy it and they may hedge it, if they get worried about it and they, you know, they’re not quite sure, right? Because, I mean, if I wanted an uncertainty, you know, security or an uncertain outcome, there’s a lot of ways to get an uncertain outcome. I want to know what I’m buying. That’s why you put it up front. And I think from an investor relations point of view, our job is to have a strategy and execute the strategy with clarity and consistency. And I think from a security point of view, that’s definitely the safest and most responsible way to go about it, right? If you’re if you’re unpredictable, you know, that creates complications down the road.

Dan Weiskopf [00:26:21] I totally agree with what you’re saying. And sometimes we’re going to go after different types of companies that maybe are conglomerates. But to your point, we know they’re conglomerates. In your case, we know exactly what we’re getting and we appreciate that. So we always try and conclude these calls with two wild card questions. OK, the first question I have is, what is the one thing investors in the block chain are not paying attention to today, in your judgment?

Michael Saylor [00:26:56] I think everybody underestimates the success and the value of Bitcoin and overestimate everything else. I mean, Bitcoin is 10 years old–successful proof of work system, it’s not clear to me like you’ve only got two things in the blockchain that have been deemed as property or commodity Bitcoin. In theory, there’s only two, but there’s only one of them that has a consistent strategy for the next decade and a consistent path for the last decade. And that’s Bitcoin, right? So I think it’s pretty important to understand that the Bitcoin is pretty much the most predictable thing in the entire blockchain universe, everything else is uncertain. There’s massive technical uncertainty, security, uncertainty, legal uncertainty, execution uncertainty. And so I think people overestimate the certainty of the value of everything else. I think they underestimate the value of Bitcoin. People ask me if I’m going to diversify, and my point is the most diversified strategy you could take is on all the Bitcoin. Every single time you buy something other than Bitcoin in the blockchain system, you’re actually assuming a whole basket of new risks that you didn’t even know you assumed. And you’re losing diversification against the traditional conventional economy. You’ve got 500 trillion dollars worth of assets in the world. Every bank, every big tech company, every government on Earth, every one of them would solve their problems by buying Bitcoin. Buying bit- if Apple, Google and Facebook build Bitcoin into their application, they improve their business if El Salvador or Cuba or Turkey or Japan or Russia or the US or the UK or France buy Bitcoin, they fix their balance sheet. Every company on Earth, if they buy Bitcoin, they fix their balance sheet. So Bitcoin is the solution to hundreds of thousands of entities. And if you don’t own it, you’re not exposed to each of those entities, right? Everything else in the world is not–you’re not going to buy a random mobile app in order to fix your balance sheet if you’re Turkey. And you’re not going to buy another crypto, right? That there isn’t there isn’t a proof of work digital property which is stable that you can use to fix your city, fix your state, fix your country, fix your business, fix your technology. So I think people underestimate Bitcoin. I think they overestimate everything else. And, you know, you’re either going to invest in conventional equities and conventional equities have equity risk and they have all sorts of a stack of employment risk, tariff risk, transport risk, execution risk, competitive risk, etc. There’s a ton of risk there. And I think that when you get into the blockchain area, there’s just a huge stack of risk. So I think people, typically, they underestimate all the risks of not buying Bitcoin. And they’re underexposed. I think that’s the number one thing that I think people don’t have right now, they should be more exposed to Bitcoin, less exposed to everything else in the world.

Dan Weiskopf [00:30:32] The second wild card question is which industry will be most affected by blockchain?

Michael Saylor [00:30:44] It’s a tossup between conventional finance and big tech, like every conventional bank, Goldman Sachs, JP Morgan, Citigroup, Fidelity, Blackstone, BlackRock–hat they’re affected, right? If you’re taking one hundred trillion dollars of bonds with a negative yield and you swap the one hundred trillion dollars of bonds into Bitcoin, which is appreciating, I mean, there’s no way to describe that as anything other than a multi trillion dollar transformation–a digital transformation of bonds to Bitcoin. And if you look at traditional finance, there are massive businesses that are all built around wrapping fixed income instruments and bond instruments and providing management services. So I think that clearly that’s going to be affected. But the other side of this is big tech. Bitcoin is worth a trillion dollars to Apple. Bitcoin is worth a trillion dollars to Facebook. Facebook is a trillion dollar company. And what’s in the app? Your digital relationships and digital photos and digital videos are in the app. Well, what if digital property is in the app? What happens when Facebook has a trillion dollars worth of money on deposit in the app from a billion people? So Google, Facebook, Amazon, Apple, I mean, all of those companies, especially Google, Facebook and Apple, they’re the obvious candidates to become trillion dollar big tech banks, fintech banks. So this is pretty compelling to them because you know, how many analysts are walking around with the next idea for how Apple adds one or two or three trillion dollars to its market cap? Right, I mean, well, not many other ideas.

Dan Weiskopf [00:32:41] Well, you know, I wrote about how Apple should be a buyer of Bitcoin maybe six months ago. I mean, it’s got 200 billion dollars of capital on their balance sheet. How can they spend all that money? They should create more innovation, inspire people, buy Bitcoin and do what you’re doing.

Michael Saylor [00:32:59] You know, and I get that, by the way, and I agree with that. But that’s a strategy that anybody with capital can pursue. So if you want to make 10 billion dollars, you just buy 10 billion dollars of Bitcoin and wait for it to double. It’s a very simple strategy. And as large institutions get comfortable with Bitcoin as an asset class, they’re going to pursue that strategy, right? But my idea or my thought with Apple is, we will get to a point in this world where eight billion people will have a mobile phone. I guess six billion now, five to six billion, and those mobile phones will be controlled probably by either the IRS or the Android operating system. So you’re staring at–who are the big mobile players? It’s Google and Apple, split the world between them. And then Facebook is that compelling app on top of them. So those are the big three. We will get to the world where everybody wants to carry their property on their phone. And so if you’re if I give you a million dollars and I say to you, I say to you, invest it in something that you can give to your grandchildren or your great grandchildren in one hundred years. You know, a building, land, gold, silver, a stock, you know, a bond, you know what? Is that something? Well, I don’t want to take any of that risk. I just want the pure money. And the answer is, OK, put a million dollars of Bitcoin on the thing and how are you going to handle that? A mobile device and how are you going to secure it? You know, it’s going to be some combination of face I.D., multi signature face I.D. or or biometrics across multiple mobile devices with multi factor authentication. And that’s how you’re going to move it and that’s how you’re going to custody it. And that means that the iCloud–what’s in the iCloud now, right? Your videos, your photos, your documents and your communications. What’s not in the iCloud now? Your money. What happens when 100 trillion dollars gets slurped out of 20th century property? Which is land, real estate, gold, bonds, securities–what happens when 100 trillion dollars gets slurped into digital property? It’s got to land in the iCloud or the equivalent of the Android cloud or in Facebook. And if none of those three step up, Dan then it’s going to be Square and PayPal, and then one day Square will be a trillion dollar company, right? And it’s going to be a little war between now and maybe, you know, they’ll be maneuvering between the exchanges and the apps, et cetera. But that’s the opportunity now, and it’s big. It’s the future of big tech because the next. Yeah, the mobile wave has chapters, right? Mobile photos, mobile video, mobile- digital photos, digital video, digital books, digital maps, digital relationships, digital education, digital property, digital property is that last chapter. And it’s the big chapter because digital property is worth somewhere between 100 trillion and two or three hundred trillion dollars. So the question is, who in the next decade is going to control, manage, program the digital property and will that be Apple or will that be Facebook or will that be Square? That’s the opportunity and that dwarfs digital maps and digital music and digital books, and I don’t think any of them quite have their heads around it. Probably the most sophisticated entrepreneur in the space right now is Jack Dorsey. Paypal knows they’ve got to do something, they don’t get leapfrogged. A lot of the guys in the crypto space, they’re still busy trading cryptos. But you see, the value is not in trading. 250 or 500 different crypto coins. The value is in slurping 50 trillion dollars out of bonds into Bitcoin and slurping 50 trillion dollars or 100 trillion dollars out of real estate. Here’s how you know, you’ve got to the right place when the rich 70 year old that has 100 hundred million dollars and is thinking about how to give it to his grandchildren when that person says, I guess I should put 50 million dollars of it into Bitcoin, because that’s a bunch better idea than owning a building in Manhattan. And it is a better idea, by the way, property tax in Florida is 2% interest a year. If you take 100 million dollars and you buy property or buy a house in Florida, you’re paying two million a year. OK, well, I’ll figure it out. In 30 years, you lose your property. Most property has a high maintenance expense. And so what you want is a low tax load, low maintenance that you can’t put one hundred million into a yacht and give it to your grandkids. Cost, you know, you know, the maintenance costs on a yacht is 10% a year. What, you know, so what can I put the money into? That is low maintenance that’s going to appreciate. And the only idea people have right now is a diversified portfolio of securities, hence the ETF boom. But at the end of the day, you’re holding a diversified portfolio of securities, you’ve got employment risk, tax risk, execution risk, securities risk, custody risk, counterparty risk, all sorts of things. And so I’m not suggesting that Bitcoin or digital property replaces ETFs and securities because you’re always going to want to own a basket of companies if you are an investor. But if you are a saver and you are thinking about buying land or gold or some other very scarce asset for 100 years, digital property in the form of Bitcoin is by far the best idea we’ve come up with in the century, and so the real opportunity here is not keep reinventing Bitcoin. The real opportunity is for Apple Computers simply to sell 10 thousand dollars of Bitcoin to 100 million people. And that’s a big idea, and if 100 million people have 10 thousand dollars sitting in the iCloud, then you just became the world’s biggest, most profitable bank in the history of mankind. Right? That’s just sitting and waiting out there for someone to grab.

Dan Weiskopf [00:40:00] Michael, thanks for spending the time with me today. I look forward to seeing your company grow and see the, you know, the Bitcoin price appreciate. Keep up the good work block and tackling. Thank you again. Look forward to staying in touch.

Michael Saylor [00:40:18] Thanks for having me. Dan.

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