What an awesome gathering of Bitcoiners. I am delighted to be here in Nashville, a city known for music, a city known for freedom, and I’m decided to use slides. And for those of you who have seen my presentation, some are with slides, some are without slides. I got a lot of good comments on the ones with slides, and so I figured the best way to make this presentation better was more slides. So, number go up.
And with no more delay, I want to talk about the Bitcoin revolution. And I also want to talk about rebuilding our global economy with digital capital. The world as we know it is based on 20th century ideas and 20th century technology. Stocks trade 9.30 to 4 unless there’s a bank holiday. You can’t do things on the weekend.
Everything is slow. Everything is expensive. If we want to prosper in the 21st century, we need new ideas and they need to be based on new technology. This chart you’ve seen before, I popped it up, it’s 900 trillion dollars of global wealth. It’s that 900 trillion, it’s spread across physical assets and financial assets that are 20th century ideas, 20th century technology.
And in the upper left corner is a little orange blip, the little orange asset that could, what we call Bitcoin. It’s one trillion. It seems like a lot if you start it with zero, but when you look at it against the greater scheme of things in the world, it’s 0.1%. Here’s another way to see that same chart.
It’s not 900 trillion of assets. It’s a bunch of assets held for their utility value and a bunch of assets held as a store of value, long-term capital. When I buy a house, I want to live in it. of value, long-term capital. When I buy a house, I want to live in it, but when I buy a bunch of bonds, I just put my money there because I didn’t know what else to do with the money.
And when you start to see the world as a big chunk of long-term capital, 450 trillion dollars or more of capital, and you start to think about the way we store that capital, you see the engine for the revolution. The global economy struggles because we’re relying upon imperfect assets and imperfect systems to store that capital.
It’s crippling our capital preservation. So how do we engineer a better system? Well, this is Tesla, and Tesla had a quote He said, you want to understand the universe? Think in terms of energy, frequency, and vibration I’m going to translate that I’m going to talk about the physics of money now What are the physics of money? Energy is money, or capital, or wealth.
You could use them interchangeably for this speech. Frequency is about the duration or the lifespan. How long will it take? A minute, an hour, a year, a century? And we vibrate money every time we trade with each other, or we transfer from one locale to another, or we transform a property into another type of asset.
So here is an important equation. equation, this is useful life is equal to the value of an asset divided by the cost to maintain that asset. If you’re looking for the useful life of your money in an asset, then the way to figure it out is ask, how much does it cost every year to maintain that asset in pristine condition? year to maintain that asset in pristine condition. What do I have to spend in order to avoid depreciation or decay? It turns out that that L, that useful life, is very close to something we
know in the Bitcoin community is stock to flow. They’re very related if you’re measuring them in years. Many individuals and most corporations, they use financial assets to preserve capital. And this is the source of a challenge for us. Let’s talk about financial assets. I want to keep my money for a long period of time.
Start with a billion dollars, put it in the peso, and the money is decaying in two years, right? And 98% inflation rate strips you of your economic energy or your capital. This is not a good long-duration asset. The Turkish lira, your capital lasts three years. The U.S. dollar, under traditional monetary inflation for the past century, might last 14 years, but it’s not like you have it for 14 years.
The life is being sucked out of you linearly over the 14 years. Put your money in a hedge fund, what’s the annual cost? It’s 2% management fee and then 20% of the upside, about 4% a year if you’re investing in normal assets. That means it’s a 25-year asset. Treasuries, you’re going to get a yield, but the 3.5% after-tax yield goes against the 7% monetary inflation.
Maybe your money lasts 30 years. yield goes against the 7% monetary inflation, maybe your money lasts 30 years. Capital in a mutual fund where you pay a 1% fee, 100 years. That’s about the best you’re going to get. If you manage to buy a diversified portfolio at 10 basis points, the counterparty risk is going to drive you to a 1% cost. So those are your financial assets.
We’re running the world on a 20th century set of ideas, and on average, your financial assets are going to last you 30 years. We all know inflation dilutes the value of financial assets, but inflation is just the tip of the iceberg. You’re also going to get diluted by tariffs and tolls and torts and transfers, taxes. We got all sorts of taxes, income tax, capital gains tax.
Every time you vibrate and move the money, you get taxed on the money. And then if the taxes don’t take you and the torts don’t undo you, you’ve got weather and competition and obsolescence and politics, catastrophe. Those are the things that dilute the value of your capital over time. And if you want to maintain economic energy, you have to fight against that friction.
Well, most people realize that’s a frustrating endeavor and it’s a no-win endeavor. So they give up on financial assets and they start turning to physical assets to preserve capital. Well, here’s the physical asset, a Ferrari. Not a good way to keep your money forever though, because after five years you’ve spent as much on the insurance and the upkeep and the depreciation as it’s worth. Yachts aren’t much better.
If you spend 10% of your money operating it, you also get hit with depreciation. Don’t store your money in yachts. A home in Miami Beach, if you buy a $10 million house, you better come up with $10 million to maintain the house over 17 years. Now you’ve got no money left. Silver? 22 years. A warehouse? 40 years, maybe 50 years.
Bar of gold? 62 years. A painting? 72 years. Land? The average property tax in the United States is 1.1 percent. That means your money is going to last 91 years. Unless the government reassesses the value of your property, then it’s going to last less than 91 years. The oldest family ranch in the United States is King Ranch. They made it 173 years. Every other family in the country failed.
And here’s the longest held property, the crown estate in the United Kingdom. You could say the royal family held it since 1066, but on the other hand, it passed from the Plantagenets to the Stuarts through the Lancasters and the Yorks and eventually found its way to the Hanover family. And so maybe seven different families split that.
None of them got to take it with them. So physical assets, you might think, might last a thousand years. Probably about 50 to 75 years is the best you’re going to do. Entropy is diluting the value of your physical assets. It’s sucking the capital, the energy out of them.
There’s a reason it’s called earth and not heaven. Because politicians are very creative. They got a city tax, a county tax, a state tax, a federal tax, a transfer tax, a usage tax on the property. And if that doesn’t get you, there’s rent control, price control, or a culture shock. Then you’ve got competition. You might get discriminated against.
There’s recession. The currency can collapse. Your tenants won’t pay you. Someone will slip and fall on the front sidewalk and sue you. There’s weather, war, crime, and catastrophe. And if energy prices go through the roof, it’s going to be hard for you to make a go of it. Physical capital is not a simple solution.
Something I learned at MIT, the three laws of thermodynamics, you can’t win. You can’t break even. win. You can’t break even, but you can’t get out of the game. So you could stop right here and be a little bit depressed, but then again, we don’t want to lose. So you start thinking, what if we could find a way out of the game? Then we could break even. And he went away.
And that’s Bitcoin. Bitcoin is digital capital. That’s what he created. Bitcoin’s immortal, immutable, and immaterial capital. And I use that in this sense. It’s got an infinite lifespan. It’s not being attacked by the forces of weather and entropy and inflation. It’s immaterial in the sense that it’s not in the physical world, it’s not suffering from all of those parade of horribles that are the scourge of financial and physical assets.
And it is the solution to our economic dilemma. The transformation of our capital from financial and physical assets to digital assets, it solves the problem that we’re all facing. Now, how long-lived is Bitcoin? Well, take your Bitcoin and put it at scale with a custodian, an institutional-grade custodian. You pay 10 basis points.
You know, by the first law of money, that means you’re going to last a thousand years. The custodian might not last a thousand years, but that doesn’t matter because you can move the Bitcoin every year or every decade, and you can stay one step ahead of the custodian’s failing. You can’t teleport a building. You can’t teleport the King Ranch, you know? And so Bitcoin is that thing that you can move.
Say you custody your Bitcoin. You can self-custody your Bitcoin for about one basis point a year, assuming you buy good hardware wallets and signing devices and spend a day a year to keep track of it. Now you’ve got a 10,000-year asset. And what happens if you give it to the AI? Well, an AI or a computer program can maintain those private keys for the cost of electricity.
You’ve got a 100,000 year asset. The AIs are going to want the Bitcoin. If they have a choice between owning the Bitcoin and owning the ranch in Texas or owning the bar of gold or owning the Argentine peso, it’s pretty obvious what they’re going to want, and you can see here why they’re going to want it.
Digital assets are in a class all their own. When you compare them to all the other assets that you can use for capital preservation, you can see they’re off the scale. Everything else is living in the domain of 30, 40, 50 years, and you’re in the domain of 1,000 to 100,000 years. It’s a breakthrough in capital preservation, but it makes it a revolution in economics.
If you would be rich, trade wisely. And here’s a very simple principle. Trade temporary for permanent. Trade your ice cream cone that’s melting for the peso, the peso for the dollar, the dollar for the land, and the land for the Bitcoin. Trade the currency for capital. Trade something fragile for something resilient. Trade something local for something global.
Trade something physical for something digital. Trade the security for the commodity. Trade the commodity for the scarcity. You can’t go wrong moving in that direction. So let’s talk about some great trades in history, some trillion-dollar trades. The Dutch understood naval power. They understood ships.
They had thousands of them. They bought the best port in the New World for a couple of hundred dollars in plastic and textile trinkets. for a couple of hundred dollars in plastic and textile trinkets. And that’s worth two and a half trillion dollars today. Okay? It was an investment that’s returned 6% for 398 years straight.
It’s a 10.5 billion X return. And if you think about it, you’re like, why would I actually give up the best port in America for a bunch of textiles and plastic and glass? But the people that sold the thing to them didn’t understand naval power.
If you don’t appreciate the reason you’re going to want the property, you won’t value the property. Napoleon wanted to gallivant across the old world, and Jefferson wanted to expand in the new world. So France sells Louisiana to the U.S. for $15 million in 1803. The $15 million probably lasted a few months fueling the French army. It’s gone. Jefferson got that.
He got 27% of the United States. It’s an 800,000x return worth 12 trillion or more. It’ll be worth more. Jefferson had some vision, as did this man. Seward paid $7 million for Alaska two years after the country was decimated by the Civil War. John D. Rockefeller was trying to start an oil company. Today, there’s a trillion dollars of oil underneath Alaska.
It’s a massive return for a piece of paper. How much is digital capital worth? Take the $450 trillion multiplied by 3%. That’s your entropy cost or your inflation cost. It costs the world $13.5 billion a year to take all of those parade of horribles when they’re trying to preserve their wealth. If you put a 20 P to E on it, like you’d value a company or a long duration bond, that’s worth $270 trillion.
So digital capital is worth 10, 20, 15 trillion a year, and it’s worth hundreds of trillions of dollars. Reality check. Is he full of BS? Well, digital capital is returning 55% for the past four years. Financial capital, the best in the world, is the bond. It’s minus 5%. Imagine capitalizing your company or your country on a minus 5% instead of a plus 55%. It’s obviously working. And now let’s come back to my chart here.
Global wealth, we can look at it like this, and we see the little Bitcoin, you know, square in the left corner. But what’s happening? Here’s my macro Bitcoin forecast. It’s 21 years. Goes out to the year 2045. What do I think will happen? Well, I’ve got a bear case and a bull case, but what I think will happen is that 55% ARR goes to 50%, 45, 40, 35, 30, 25, 20. It’s between 50 and 20. It’ll gradually decelerate till it’s growing about twice as fast as the S&P index.
And at that rate, Bitcoin’s $13 million a coin in the year 2045. $13 million. It could be a $3 million bear case. It could be a $49 million bull case. But what is Bitcoin? 7% of the world’s assets then. What about the rest of the assets? Well, I actually think that AIs and technology are going to revolutionize tech.
We had no companies worth a trillion, then we had a bunch of trillion dollar companies. You’re going to see more because you’re going to see companies with 100,000 AIs and no employees, and they’re going to do the work of companies that used to have 100,000 employees. You’re going to see megacorps develop, you know, shipping robots and self-driving cars and a company that gives a personal physician to a billion people without any doctors on the payroll.
So clearly, equity is going to grow fast. Gold is going to get demonetized. Land will be less monetized. But look, here’s the future in 2045. It doesn’t look that revolutionary. It looks like today. It’s just that Bitcoin is visible on the chart to you. When Bitcoin is visible, that’s going to be the base case.
Now, what are the implications of this? How do you make money? Well, let’s talk about individual Bitcoin strategy. What should you do? Make Bitcoin your primary treasury asset, convert your excess earnings to Bitcoin, utilize subsidized credit if the government will loan you money, borrow the money at cheap rates and buy Bitcoin and find a tax-efficient way to invest the Bitcoin.
What shouldn’t you do? Don’t quit your day job. Don’t lose your focus on Bitcoin. Don’t use margin loans and trade with leverage. You get wiped out while you’re asleep on a Saturday night. That’s not good. Good, 30-year loan for 3% backed by the government on your land. Bad, overnight 10x leverage.
So what’s a typical person? Well, we actually model an individual, and we said, what if you had $750,000 in net assets, and you made $200,000 a year, and you’re going to make 5% more every year, and you’ve got a savings rate of 25%, and you can invest $50,000 a year? Well, there’s a lot of strategies. You can be the normie and do a normal strategy, diversified portfolio.
You can be a 10 percenter and you can put 10 percent of your assets into Bitcoin. You can be a BTC maxi and put 80 percent of your assets and put 80 percent of your earnings into Bitcoin. You could be a double maxi and that’s when you basically take an extra $250,000 loan against the house and then the triple maxi is you finance the house for Bitcoin you buy Bitcoin you flip all your assets to Bitcoin and then you move to a cheap tax jurisdiction where you actually can avoid some taxes and invest an extra 50 grand in Bitcoin,
maybe a Singapore, UAE, or something. What’s the result? Well, this is the result. The normie ends up with $8 million in 21 years. The 10 percenter will more than double that. The maxi ends up with $100 million. The double maxi, $150 million. The double maxi, 150. The triple maxi, 214 million. You can see the power of leverage, and the choice is yours.
And you can also see, you know, it takes 15.9 Bitcoin to be a triple maxi. You know, 6.25 Bitcoin will make you a wealthy person. Let’s talk about corporations. Dues. Convert your capital to BTC. Convert your cash flows to BTC. Issue equity to buy BTC when it’s accretive. Issue debt to buy BTC when it’s accretive. Issue debt by BTC when it’s accretive. Don’ts.
Don’t bleed your capital with taxable dividends. Don’t surrender your capital with stock buybacks. Don’t dilute your shareholders with risky overpriced M&A activity. Here’s our typical corporation. $100 million of cash flow, $1 billion of enterprise value. It’s growing. It’s generating a lot of cash flow. Its share price is $100.
And now the issue is, what’s your strategy? Normie, maxi, double maxi, triple maxi? Well, the normie is going to be okay. You’ll have a $1,200 stock price, but just 10% allocation doubles it. The maxi is going to nearly 8x it. The double maxi is $17,000 stock. The triple maxi is $28,000. What kind of company do you want to run? Reality check.
This is a triple maxi strategy at work right now. This is micro strategy. It will be 48 months on August 10th of this year since we started down this road. 48 months. And, you know, if you’re running a company, and there’s 300 million companies out there, if you’re running a company and you think you can do what Microsoft and Apple and Google do, then good for you.
You can get to a 20 20 to 25% ARR. If you want to copy NVIDIA, you will beat everybody. But I think that right now in the boardrooms of Microsoft and Apple and Google and Tesla, they’re stressed out about copying NVIDIA. And the irony is, it’s easy to copy MicroStrategy. I just gave you the playbook.
It’s simple. This is how it compounds over four years. Four years of doing that gets you to a 1300% improvement. So bottom line, build a strong capital structure, avoid dilutive financial practices. Let’s talk about an institution. You got a church, a charity, an endowment of Harvard, you know, any non-profit.
What should you do? Modify your charter to invest in BTC. Reallocate from short-term duration assets to long-duration assets. You know, you wouldn’t invest in ice cream cones. Don’t invest in the peso, but why are you holding 20-year financial instruments? Don’t own 50-year physical land instruments.
Buy a 1,000-year instrument. Use BTC. BTC is the cost of capital, not the S&P. The S&P is 13%. BTC is 55%, right? Think of 55%. That’s your cost of capital. And then use intelligent leverage. Okay, here’s our model, a billion-dollar portfolio. You want to be a normie, a maxi, a triple maxi. Here, at the maxi, we just said put 100% in at the double maxi, and triple maxi is take 10% leverage.
And that’s what happens. You start with a billion dollars, and in 21 years, you’ll have $5 billion of your enormity, and you’ll be patting yourself on the back talking about what a good job you’ve done managing the endowment. But it could have been $300 billion. It could have been 100x. It could have been 100x.
Not that hard, very straightforward. Now let’s talk about wealth of nations. This is the interesting one. What’s the national Bitcoin strategy? Do’s and don’ts. Well, reallocate your treasury from gold and bonds, their short duration assets, to a 10,000 year asset. Issue currency to buy Bitcoin. Issue debt to buy the Bitcoin.
Encourage Bitcoin ownership with favorable laws. Protect self-custody for individuals and corporations. protect self-custody for individuals and corporations, and support integration with the banking system of your country. Those are all do’s. The don’t, don’t pursue policies hostile to Bitcoin and Bitcoin holders.
This one’s not complicated. Now, let’s say you’re an indebted country. You’re actually in debt. You’re running a deficit. I could name these countries, but I won’t. I’m just going to say you owe a lot of money, and you’re struggling. Your interest rates are high, and you don’t know what to do. Well, here’s your strategies.
Are you a normie or a 10 percenter or a maxi, double maxi, or triple maxi? The maxi is you put a third of your treasury into this. A double maxi is 65 percent. And a triple maxi is put all your treasury into it and start issuing debt. For those of you who can actually read, right, the subtext of this is the first country to buy Bitcoin by issuing its own currency wins. This is simple. You print paper. Remember that sewer check? You issue the check.
They’d be like, well, yeah, you could whine. Oh, we couldn’t afford it. It was two years after the Civil War. The country was bankrupt. Millions of people are dead. The South is in disrepair. The North is angry. And this guy, Seward, comes up with an idea to buy frozen tundra, a lot of it, from a bunch of Russians that wanted the paper.
Okay, so people have done things under worse situations. But you can see here the normie strategy is you owe $3 trillion. You’re not getting anywhere. The maxi strategy pays off your debt. The double maxi strategy makes you rich. The triple maxi strategy makes you very rich.
Why? Because you’re buying the property that everybody is running to in a hundred years, and you just go buy it now. Like, standard oil was nothing. There was no gasoline. There were no automobiles. We had no diesel locomotives in 1867. We invented all that stuff, but common sense says, oh, I can buy something that’s equal to about one-fifth of the size of the nation for a few dollars.
Why don’t I just grab it? Bitcoin strategy for wealthy foreign countries. Let’s say you have a lot of money. You know, maybe you’re Saudi Arabia or Norway’s say you have a lot of money. You know, maybe you’re Saudi Arabia or Norway, and you make a lot of money. Well, what’s your strategy? You want to be a normie, a maxi, a double maxi? A maxi puts 25% of their money into Bitcoin.
A triple maxi goes 75% and converts their surpluses into Bitcoin. Here’s what happens. You just get insanely rich. $58 trillion of rich. But, you know, more than that, this strengthens your national security because you end up with $50 trillion or more of digital capital nobody can take.
You know, they can’t steal it, right? They bomb your country. They invade your border. They’re not getting the Bitcoin, right? So this is good for your financial security and your national security. But note, if you are Saudi Arabia or Norway, and if you pursue the triple maxi strategy, Saylor says it’s very easy to do, but it’s 4.
2 million Bitcoin you end up with at the end of that line. That means there’s not a lot of room for triple maxis, not at the nation state level, right? There’s going to be one, there might be two. At some point, right, this is an opportunity for an aggressive mover. You can have a lot of triple maxi families and a lot of triple maxi corporations, not a lot of room for triple maxi nations.
And let’s look at the U.S. U.S. is a special case. Well, the rules are still the same, right? Buy Bitcoin, sell the paper, get rid of your gold, go long range. And the don’ts are still the same. Don’t harass the Bitcoiners. Don’t send the industry overseas. Don’t send the capital overseas. But what’s our base case here? Well, you know, we think that AI and new technology is going to drive growth.
I mean, you know, I’m going to assume that the United States is going to be run by competent executives, and they’re going to harness technology, and we’re going to actually take advantage of AI, and we’re going to create robot cars and robots and, you know, billion-person websites that give you free accounting and legal and medical advice, and all that’s going to grow our revenues faster than it grows our expenses, and we’ll eventually get to the point where interest rates come down. But the question is, what’s the United States Bitcoin strategy?
And we could be normies. You could be a 10%-er. That’s kind of like buying 500,000 Bitcoin. You could buy a million Bitcoin. A double maxi is 2 million Bitcoin. A triple maxi is buy 4 million Bitcoin. And then start sweeping the surplus of the nation when it comes into Bitcoin.
And the consequences? Well, if you’re a normie, you know, if you’re a normie and you have great productivity growth and brilliant technology and the robots do all the work for us, you’re still going to be in debt. It just won’t get much worse. I mean, that’ll save us. We need that. If you’re a maxi, you’ll pay off half the debt. If you’re a double maxi, you got a surplus. And if you’re a triple maxi, instead of owing 30 trillion, the nation has 30 trillion, right? Bitcoin is not the solution to all our problems.
Bitcoin is not the solution to all our problems. It is the solution to half our problems. And the important point is the other half are very complicated. They’ll take a lot of people and energy. This half is simple. This is a very simple thing to solve half our problems. So Bitcoin is cyber Manhattan.
Hundreds of trillions of dollars of capital are going to go there. We’re going to demonetize Russian tundra and Chinese real estate and everything in Africa and all of the crappy buildings, everything anybody bought that they didn’t need, it’s getting demonetized. You buy a Bitcoin, you owe a building, otherwise a boulevard, otherwise the entire neighborhood.
It’s only 276 to the third. That’s what you’re looking at right now. And I’m going to leave you with one quote. Satoshi Nakamoto kicked off the Bitcoin network January 3rd, 2009. On January 17th of 2009, 14 days later, 16 months before pizza day, when Bitcoin was worth nothing and it was not going to be worth anything for a year, Satoshi Nakamoto said it might make sense just to get some in case it catches on.
If enough people think the same way, it becomes a self-fulfilling prophecy. And never have wiser words been spoken. You’re staring at a trillion dollars of proof, but there’s still thousand X to come, and you have a lot more information at your fingertips, the writing is on the wall. Bitcoin is the future of capital, it’s the future of money.
It might make sense to get some because it has caught on. Thank you. Welcome Michael. The Bitcoin Conference. We started with a dream to build a community focused on Bitcoin. It all started in 2019 in the heart of San Francisco, the first major Bitcoin conference in years that kickstarted a revolution.
And then Miami, a place where enthusiasts, developers, dreamers and innovators could come together to make Bitcoin better. It has been an amazing five years and eight conferences, thanks to all of you. Bitcoin Conference has become the largest premier global Bitcoin gathering in the world, leading hyper-Bitcoinization.
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