WEBVTT - Michael Saylor: The Blueprint for A New Financial System 0:00:00.240 --> 0:00:06.120 There are no losers here except the twentieth century antiquated 0:00:06.200 --> 0:00:12.119 oligopoly that is selling inferior credit instruments. But that's technology. 0:00:12.160 --> 0:00:14.840 The human race has got to move forward. The skeptics 0:00:14.840 --> 0:00:18.240 and the cynics, they choose to be strategically ignorant. 0:00:18.360 --> 0:00:20.479 Twenty seven years ago you didn't have trading apps on 0:00:20.520 --> 0:00:22.880 your phone, and now it's even more accessible, but yet 0:00:22.880 --> 0:00:24.040 the market is still held back. 0:00:24.160 --> 0:00:29.560 The investment cycle is one thousand times faster than technology, 0:00:30.080 --> 0:00:33.559 real estate, anything else you've ever seen before in your life. 0:00:33.640 --> 0:00:37.560 We're literally selling fifty million an hour or one hundred 0:00:37.560 --> 0:00:39.920 million an hour and buying one hundred million dollars a 0:00:39.920 --> 0:00:41.600 bitcoin the same hour. 0:00:41.800 --> 0:00:44.360 Is there an appetite for over collateralized debt that pays 0:00:44.400 --> 0:00:44.920 ten percent? 0:00:45.159 --> 0:00:47.760 Just go walk down the street and ask one hundred people, 0:00:47.920 --> 0:00:52.199 would you like a stable investment that yielded ten percent 0:00:52.360 --> 0:00:54.480 tax deferred? If you think the bitcoin is okay, I 0:00:54.480 --> 0:00:57.120 can jack your retirement income from thirty thousand to one 0:00:57.160 --> 0:00:59.920 hundred and twenty thousand. So what we're really talking about 0:01:00.680 --> 0:01:03.960 is creating an annuity or a pension, And so what's 0:01:03.960 --> 0:01:08.440 the offers like? Happily ever after, it's social security. That's 0:01:08.480 --> 0:01:10.760 the product for how many people a. 0:01:10.800 --> 0:01:13.040 Billion we need to go build the world that we want. 0:01:13.120 --> 0:01:15.280 The real interesting question for all of us in the 0:01:15.319 --> 0:01:16.000 industry is. 0:01:20.160 --> 0:01:21.920 Michael. First of all, thank you for taking the time 0:01:21.920 --> 0:01:22.920 to sit down with me here in DC. 0:01:23.840 --> 0:01:24.839 Yeah, happy to be here. 0:01:25.240 --> 0:01:27.240 I've gotten to spend a little bit time with you, 0:01:27.240 --> 0:01:28.759 but I've never sat down one on one, so I've 0:01:28.760 --> 0:01:31.759 been excited for this. There's one question I've always wanted 0:01:31.760 --> 0:01:33.640 to ask you because I love history, and I know 0:01:33.720 --> 0:01:37.240 you majored in science of history of science, but you 0:01:37.280 --> 0:01:42.839 also have the MIT engineering degrees in astronautics, system dynamics, 0:01:42.840 --> 0:01:44.759 and history of science. It seems like this unique blend 0:01:44.800 --> 0:01:47.640 and I'm just curious how that the history so you 0:01:47.680 --> 0:01:49.920 sort of get the history as well as like aeronautics, 0:01:50.160 --> 0:01:53.520 helps you maybe understand bitcoin better and maybe sort of 0:01:53.520 --> 0:01:55.160 see where the future of bitcoin goes. 0:01:56.360 --> 0:02:01.240 Yeah, I think when you read I've read a lot 0:02:01.240 --> 0:02:05.800 of history of late in its original form, you see 0:02:06.000 --> 0:02:11.320 historians observing things. They're making observations that are noting its suboptimal, 0:02:11.480 --> 0:02:13.400 like observing ten thousand tragedies. 0:02:13.639 --> 0:02:13.880 Right. 0:02:15.320 --> 0:02:18.919 Then occasionally you'll see philosophers who are complaining about it. 0:02:19.400 --> 0:02:23.160 So philosophers synthesize and they complain about about what they 0:02:23.160 --> 0:02:26.400 don't like, or they lament that it isn't better the 0:02:26.440 --> 0:02:37.679 Austrian economies. The philosophers. The engineers build machines that work airplanes, ships, railroads, right, 0:02:37.840 --> 0:02:49.120 et cetera, electric motors. The scientists they divine the relationships. 0:02:49.160 --> 0:02:53.000 The math that you know explains the universe, and the 0:02:53.000 --> 0:02:57.080 physicists you know, and the mathematicians take that you know 0:02:57.200 --> 0:03:02.160 to the extreme right. I had a background on all 0:03:02.200 --> 0:03:05.600 those things. I think it was useful to have studied physics. 0:03:06.400 --> 0:03:09.280 It's useful to have studied math. It's useful to have 0:03:09.360 --> 0:03:13.440 studied all of the sciences and the engineering disciplines, which 0:03:13.480 --> 0:03:19.440 get deep in thermodynamics and mechanics. And I think it's 0:03:19.480 --> 0:03:22.840 also useful to have studied history and philosophy and the 0:03:22.919 --> 0:03:27.600 history of science. It's particularly interesting subject because it goes 0:03:27.680 --> 0:03:31.320 back and looks at the histories, but it's extrudes it 0:03:31.360 --> 0:03:36.120 through or filters through a scientific lens, like the classic 0:03:36.200 --> 0:03:40.000 non scientific historian says this happened, and this happened, and 0:03:40.040 --> 0:03:44.680 that was sulb optimal, right, and the history of science 0:03:45.160 --> 0:03:48.840 historians says that happened because of this. That happened because 0:03:48.880 --> 0:03:53.600 of this, Yeah, guns, germs and steel. Right that the 0:03:54.360 --> 0:03:56.920 Europeans didn't just show up to the New World and 0:03:56.960 --> 0:03:59.000 then they conquered it. They showed up to the New World, 0:03:59.080 --> 0:04:01.640 brought a German every but he died. They didn't have 0:04:01.720 --> 0:04:04.440 to conquer it. I think ninety ninety five percent of 0:04:04.480 --> 0:04:08.440 the natives died, you know, And that's that's actually, you know, 0:04:09.360 --> 0:04:13.360 a biological explanation for what happened. If you don't understand 0:04:13.840 --> 0:04:18.320 you know, the science of immunology, or you don't understand germs, 0:04:18.320 --> 0:04:21.880 you couldn't explain it. And then you know, if you 0:04:21.920 --> 0:04:23.760 think about the impact of steel, what's to take to 0:04:23.800 --> 0:04:29.320 create steel and explosives and gunpowder? You know. And so 0:04:29.400 --> 0:04:36.159 the history of science is all about how technology dynamics 0:04:37.680 --> 0:04:40.680 channeled the course of human history. And I think the 0:04:40.720 --> 0:04:44.800 reason it's important to bitcoin is is you can't really 0:04:44.880 --> 0:04:47.599 understand bitcoin if you're not an engineer. If you don't 0:04:47.640 --> 0:04:56.880 understand engineering systems, engineering control systems, servo mechanisms, the system stability, 0:04:57.200 --> 0:05:00.240 you've got to understand all those concepts. Intuitive if you 0:05:00.240 --> 0:05:05.799 don't understand thermodynamics. You know, the people that are pure 0:05:05.839 --> 0:05:11.000 computer scientists who are weak on physics and engineering and systems. 0:05:11.320 --> 0:05:15.400 Oftentimes they create Reube Goldbherd devices in code that a 0:05:15.480 --> 0:05:19.159 hardcore engineer wouldn't build, right, And so you can't just 0:05:19.200 --> 0:05:23.159 be a coder. And of course if you're a pure 0:05:23.240 --> 0:05:26.200 engineer and you reduce the world, or I built a 0:05:26.240 --> 0:05:28.480 ship or I built I built a gun, but you 0:05:28.520 --> 0:05:32.160 don't consider the implication of the ships and the guns 0:05:32.480 --> 0:05:36.320 on the course of economic and political history, right, then 0:05:36.360 --> 0:05:38.440 you don't really understand bitcoin either, because you have to 0:05:38.480 --> 0:05:42.560 understand the history of money and the history of economics 0:05:42.600 --> 0:05:48.039 and mercantel networks and yeah, yeah, the idea, the idea 0:05:48.120 --> 0:05:51.440 credit networks are local, like a German prints can have 0:05:51.480 --> 0:05:54.560 a credit network, a British prints can have a credit network. 0:05:55.040 --> 0:05:59.440 But gold or silver networks tend to be transnational. Right 0:05:59.560 --> 0:06:03.200 that the French, the Germans, the Brits, the Persians and 0:06:03.240 --> 0:06:06.000 the Chinese could all agree to trade on a silver 0:06:06.120 --> 0:06:09.120 network or a gold network, but not on a Chinese 0:06:09.120 --> 0:06:12.600 paper money network. And so when you start to understand 0:06:14.000 --> 0:06:19.680 the impact of technology has metallic money on economic networks, 0:06:20.360 --> 0:06:23.400 and then the impact of a ship with guns on it, 0:06:24.480 --> 0:06:28.840 you know, on that economic network, or the impact of 0:06:29.000 --> 0:06:33.440 not having immunity to all the germs the Europeans brought, 0:06:33.839 --> 0:06:36.359 or the impact of not having steel and being stuck 0:06:36.360 --> 0:06:38.600 in the Stone Age. All of those things have an 0:06:38.640 --> 0:06:41.480 impact on the way the world evolved, and I think 0:06:41.920 --> 0:06:48.760 bitcoin is it's crossing every one of those fields right now, right. 0:06:49.800 --> 0:06:53.120 Yeah, So being able to synthesize that information and understand 0:06:53.160 --> 0:06:55.440 the cause and effect, and then looking at the changes today, 0:06:55.480 --> 0:07:00.320 as you said, sort of a multinational asset, strong, a steel, fast, etc. 0:07:00.680 --> 0:07:02.680 Then you can start to it seems like you can 0:07:02.720 --> 0:07:05.039 start to see maybe the future that that creates better 0:07:05.080 --> 0:07:05.719 than most people. 0:07:06.200 --> 0:07:08.840 Well, I just I think if you've got a broad 0:07:09.840 --> 0:07:14.440 synthetic educational background, if you've studied a bunch of different subjects, 0:07:14.480 --> 0:07:19.800 had a lot of experience, you appreciate bitcoin more. If 0:07:19.840 --> 0:07:24.080 you have a very narrow background, if you understand economics 0:07:24.120 --> 0:07:26.400 or i you've studied economics but never studied engineering, you'd 0:07:26.400 --> 0:07:28.960 be missing half the equation. And if you're an engineer 0:07:28.960 --> 0:07:31.840 that doesn't understand economics and never been in business, or 0:07:32.160 --> 0:07:36.640 never traded internationally or never traveled yet, or didn't know 0:07:36.640 --> 0:07:40.520 anything about history, yeah, you would also understand only a 0:07:40.520 --> 0:07:42.320 part of the equation. So I just think you need 0:07:42.320 --> 0:07:44.560 to know a lot of different subjects in order to 0:07:44.600 --> 0:07:51.280 fully appreciate the impact and the significance of the invention 0:07:51.360 --> 0:07:51.840 of bitcoin. 0:07:52.000 --> 0:07:56.480 Yeah, which is then in your professional career building technology companies, 0:07:56.640 --> 0:07:58.600 and so you kind of predicted a lot of those 0:07:58.680 --> 0:08:00.640 technology companies that have grown some of your books that 0:08:00.640 --> 0:08:03.040 you wrote in the past. But then also navigating those 0:08:03.040 --> 0:08:06.200 tech companies through the capital markets then sort of gives 0:08:06.200 --> 0:08:08.840 you a new perspective to see the deficiencies in the 0:08:08.840 --> 0:08:11.640 current capital markets that we have today and then help 0:08:11.680 --> 0:08:14.760 you kind of think about fixing those with jumping into 0:08:14.880 --> 0:08:19.040 sort of like this refinery model, trying to see solve 0:08:19.080 --> 0:08:20.840 some of the deficiencies in those capital markets the way 0:08:20.920 --> 0:08:22.520 companies are crue capital. 0:08:22.480 --> 0:08:24.120 Yeah, I think what can be said of the capital 0:08:24.160 --> 0:08:28.320 markets is ninety nine point nine percent of the companies 0:08:28.360 --> 0:08:31.600 were locked out of them, right, So the first question 0:08:31.720 --> 0:08:33.800 you got to ask is how come this forty million 0:08:33.840 --> 0:08:37.960 businesses in the United States, But there's only like four 0:08:38.000 --> 0:08:39.920 thousand publicly. 0:08:39.600 --> 0:08:43.520 Traded companies, right, so don't have access to the capitol. 0:08:43.920 --> 0:08:46.320 Okay, So it doesn't sound like a like if I 0:08:46.360 --> 0:08:49.439 said only four thousand companies have telephone and internet access 0:08:49.520 --> 0:08:51.200 and the other forty million businesses don't. 0:08:51.200 --> 0:08:52.920 What would you say, Yeah, that'd be a problem. 0:08:53.240 --> 0:08:55.560 Yeah, you know what if I said four thousand companies 0:08:55.600 --> 0:08:58.600 have bank accounts and the other forty million don't. Right, 0:08:58.920 --> 0:09:02.680 So you just start with the observation that the capital 0:09:02.720 --> 0:09:06.560 markets can't be all that effective if ninety nine point 0:09:07.120 --> 0:09:11.560 nine percent of the companies can't access them. And you know, 0:09:11.760 --> 0:09:15.320 beyond that, the other observation is if you look at 0:09:15.360 --> 0:09:17.440 the companies that are in the public market, if you 0:09:17.440 --> 0:09:21.200 look at the thousands of publicly traded companies, it's like 0:09:21.280 --> 0:09:26.760 twenty that control all the attention. And so you know, 0:09:27.400 --> 0:09:32.120 most public companies are zombie companies. They're uninteresting, no one 0:09:32.160 --> 0:09:36.640 cares about them, They carry a huge burden of regulatory compliance, 0:09:37.480 --> 0:09:41.680 and they don't get the attention they deserve. So one 0:09:41.720 --> 0:09:49.760 could characterize the capital markets as being unwieldy, ineffective, right, 0:09:49.800 --> 0:09:53.640 And it's you know, and what is that they're twentieth 0:09:53.640 --> 0:09:57.240 century instruments that never really evolved in the twenty first century. 0:09:58.240 --> 0:09:59.560 You got to ask the question, why does it take 0:09:59.600 --> 0:10:02.240 three years to raise money if you have a small business, 0:10:02.240 --> 0:10:03.439 Why can't you do it in three days? 0:10:03.840 --> 0:10:03.960 Right? 0:10:04.720 --> 0:10:08.520 Why is it? Uh? You know, why does Why is 0:10:08.559 --> 0:10:11.560 it impossible to take custody of your own stock shares? 0:10:12.480 --> 0:10:15.160 Why is it impossible to trade shares on Saturday afternoon? 0:10:15.760 --> 0:10:20.360 Why is it impossible to transfer things globally? You know? 0:10:20.640 --> 0:10:23.000 Why is it? Why is it that you can actually 0:10:23.000 --> 0:10:26.560 take a million dollars of cash and get paid interest 0:10:26.559 --> 0:10:29.199 on it, but you can't take a million dollars worth 0:10:29.280 --> 0:10:34.120 of stock shares and get paid for that? Yeah? Why? 0:10:34.280 --> 0:10:34.439 Why? 0:10:34.679 --> 0:10:36.840 You know? So there are all these things that just 0:10:37.520 --> 0:10:40.240 are very inefficient that we just take for granted, but 0:10:40.600 --> 0:10:41.760 they don't work very well. 0:10:41.840 --> 0:10:45.840 Right. A lot of that is technology being inefficient, and 0:10:45.880 --> 0:10:48.679 here we're at this in DC, at this bitcoin policy event, 0:10:49.120 --> 0:10:51.400 and a lot of that might also be regulatory, right, 0:10:51.440 --> 0:10:53.800 So a lot of that regulations maybe prevent some of that. 0:10:54.040 --> 0:10:59.160 Yeah, generally, often oftentimes whenever you have a highly regulated industry, 0:11:00.720 --> 0:11:04.960 progression stops. Right the banking If you look at the 0:11:04.960 --> 0:11:10.320 credit markets, they seem to be stuck and stuck in 0:11:10.440 --> 0:11:15.640 a mode that was probably probably modern thirty years ago, 0:11:16.200 --> 0:11:20.280 Like they're thirty forty years old and they haven't advanced. 0:11:20.400 --> 0:11:22.640 If you look at the equity markets, it's the same way. 0:11:22.720 --> 0:11:27.320 For example, now, my company came public in nineteen ninety eight, 0:11:28.000 --> 0:11:30.400 we traded on NASDAK from nine thirty in the morning 0:11:30.400 --> 0:11:33.839 till four in the afternoon. The year is twenty twenty five. 0:11:34.400 --> 0:11:36.280 We trade on NASDAK from nine to thirty in the 0:11:36.360 --> 0:11:40.400 morning till four in the afternoon. Right, what's the difference 0:11:40.440 --> 0:11:42.520 between the way my stock trades today and the way 0:11:42.559 --> 0:11:44.000 it traded twenty seven years ago? 0:11:44.360 --> 0:11:44.840 Yeah? 0:11:44.880 --> 0:11:47.400 Nothing? Nothing? 0:11:47.559 --> 0:11:47.800 Yeah? 0:11:47.960 --> 0:11:51.320 Right? Could you imagine any other industry where there was 0:11:51.400 --> 0:11:54.800 no material change for twenty seven years. 0:11:55.160 --> 0:11:58.000 Every day we see headlines about inflation and dead and 0:11:58.080 --> 0:12:01.520 diminishing control over our own money. That's why I always 0:12:01.520 --> 0:12:04.160 come back to bitcoin, because it's built for generations, it's 0:12:04.160 --> 0:12:07.480 built for legacy. But protecting your bitcoin legacy the right 0:12:07.520 --> 0:12:11.280 way is not always simple. It demands discipline, focus, and 0:12:11.360 --> 0:12:14.960 the right partner. 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I've been using and recommending 0:12:52.440 --> 0:12:55.200 Unchained for years. I even got my parents to set 0:12:55.280 --> 0:12:57.360 up with them. So if you want to get set up, 0:12:57.679 --> 0:13:01.840 check out Unchained signature at unchained dot com, slash mark 0:13:01.920 --> 0:13:04.760 Moss and as a loyal listener, I got a discount 0:13:04.800 --> 0:13:07.800 for you. Just use code Moss ten at checkout to 0:13:07.880 --> 0:13:10.800 get ten percent off your first year. Because your bitcoin 0:13:10.920 --> 0:13:14.800 isn't just for life, it's for generations. And one of 0:13:14.840 --> 0:13:17.080 the differences, I mean, twenty seven years ago you didn't 0:13:17.120 --> 0:13:19.440 have trading apps on your phone and now it's even 0:13:19.440 --> 0:13:22.040 more accessible. But yet the market is still held back, 0:13:22.080 --> 0:13:23.840 even though retail could access it easier. 0:13:24.000 --> 0:13:27.559 Yeah, because you know, the traditional finance industry is highly 0:13:27.600 --> 0:13:33.719 regulated and it has settled into a comfort zone, and 0:13:34.040 --> 0:13:37.200 you know the forces of progression are in the crypto industry. 0:13:37.640 --> 0:13:39.880 Most of the forces of the traditional finance industry are 0:13:39.960 --> 0:13:44.280 forces of regression like that that the knee jerk reaction 0:13:44.559 --> 0:13:47.160 is why shouldn't we do this? Why is this a 0:13:47.160 --> 0:13:50.160 bad idea? If you listen to all the guenslor speeches 0:13:50.200 --> 0:13:52.640 for the last four years, it's always why this is 0:13:52.679 --> 0:13:58.000 a bad idea, right right, Like why can't why can't 0:13:58.040 --> 0:14:01.199 I issue a token, you know, for my small business 0:14:01.280 --> 0:14:07.000 over the weekend? Well, we got to protect the investors, right, Okay, 0:14:07.040 --> 0:14:09.960 So that's why we're going to disenfranchise forty million companies 0:14:09.960 --> 0:14:12.320 for being able to raise money, because the people that 0:14:12.440 --> 0:14:15.679 might want to invest in them might not be qualified 0:14:15.679 --> 0:14:18.800 to make that investment. So it's kind of like, well, 0:14:18.840 --> 0:14:21.160 why don't we give cars to people below the age 0:14:21.160 --> 0:14:25.800 of sixty? Got to protect the pedestrians or protect the work. 0:14:26.400 --> 0:14:26.560 You know. 0:14:26.720 --> 0:14:28.840 It's like if you if you took that rule and 0:14:28.880 --> 0:14:32.000 you applied it to phones, or cars, or websites or 0:14:32.000 --> 0:14:35.760 flying in an airplane, we would have no automobive industry. 0:14:35.840 --> 0:14:39.920 We'd have no aircraft industry, we'd have no telephones, we 0:14:40.000 --> 0:14:42.840 have nothing, because we wouldn't do anything until we're sure 0:14:42.840 --> 0:14:44.880 that no one would be harmed by the doing of 0:14:44.920 --> 0:14:47.640 the thing. We wouldn't even have fire, you know, we 0:14:47.640 --> 0:14:50.080 w'udn't want someone to get burned. We wouldn't have electricity. 0:14:50.280 --> 0:14:54.400 People might get shocked, right, got to protect you know, 0:14:54.960 --> 0:14:56.760 got to protect the people that might get hurt by 0:14:56.760 --> 0:15:00.840 the new idea. So that's pretty much should be the existing 0:15:00.840 --> 0:15:04.880 status quo in traditional finance, and it has been for 0:15:05.280 --> 0:15:05.920 thirty years. 0:15:06.000 --> 0:15:10.960 Yeah, and with the advancements of technology, I'll get I 0:15:11.000 --> 0:15:12.720 want to get more into the politics side. And you 0:15:12.840 --> 0:15:15.120 talked earlier on your keynote about maybe the last twelve 0:15:15.200 --> 0:15:18.720 months of this big political wins that shifted, but kind 0:15:18.760 --> 0:15:21.520 of sticking with some of the ways that technology is changing. 0:15:22.280 --> 0:15:24.040 On your keynote, you said you spent I think about 0:15:24.040 --> 0:15:26.120 thirty years trying to come up with a billion dollar idea, 0:15:26.200 --> 0:15:28.200 which you did and then couldn't come up with the 0:15:28.200 --> 0:15:30.960 next one and now half a dozen billion dollar billion 0:15:30.960 --> 0:15:34.920 dollar ideas in the last year or two. And that's 0:15:34.960 --> 0:15:37.600 sort of in New York at the unconference, you talked 0:15:37.600 --> 0:15:40.320 about this refinery model and standard oil sort of taking 0:15:40.320 --> 0:15:43.520 this raw asset like bitcoin and creating products off of it. 0:15:43.880 --> 0:15:47.000 And so you're creating now products off of it. That's 0:15:47.040 --> 0:15:50.280 the model to do is what would be the kerosene 0:15:50.280 --> 0:15:51.160 of this industry. 0:15:53.360 --> 0:15:57.760 Kerosene represents most highly refined crude oil. It's like it's 0:15:57.840 --> 0:16:01.440 pure liquid energy. Right if JEF you put it in rockets, like, 0:16:01.480 --> 0:16:04.640 you can't refine oil more than kerosene. So it's an 0:16:04.640 --> 0:16:12.320 important metaphor. It's the cleanest, highest grade distilled liquid energy, 0:16:13.040 --> 0:16:15.800 like pure grain alcohol. Right, that's what you're talking about 0:16:15.800 --> 0:16:20.920 there from a bunch of potatoes, stock of potatoes and 0:16:20.960 --> 0:16:26.600 outcomes pure grain alcohol. The equivalent of kerosene in the 0:16:26.600 --> 0:16:31.120 bitcoin industry is a treasury preferred credit instrument like stretch. 0:16:32.040 --> 0:16:36.040 So on one side you have digital capital bitcoin and 0:16:36.560 --> 0:16:44.120 bitcoin is a long duration, volatile, high energy, high performance 0:16:45.120 --> 0:16:49.760 source of capital. Long duration. Think of it in terms 0:16:49.840 --> 0:16:52.720 of like two hundred and forty months, like twenty years. 0:16:53.320 --> 0:16:56.280 You should if you want to get the optimal performance, 0:16:56.280 --> 0:16:58.840 you can hold it for twenty years. It's a ten 0:16:58.880 --> 0:17:02.280 to twenty year type in man high volatility. Right now, 0:17:02.360 --> 0:17:05.359 it's about forty five ball implied ball. It's been fifty, 0:17:05.359 --> 0:17:10.280 it's been sixty, it's been seventy ball and high performance, 0:17:10.400 --> 0:17:14.040 you know, appreciating fifty percent a year. So that's the 0:17:14.240 --> 0:17:21.000 raw commodity. What happens if I if I strip away 0:17:21.520 --> 0:17:27.200 the volatility, strip away the risk, strip away or compress 0:17:27.280 --> 0:17:31.760 the duration, translate it to a given currency, and extract 0:17:31.760 --> 0:17:35.800 the yield. That's what a treasury credit instrument or treasury 0:17:35.880 --> 0:17:40.639 preferred is. So that's what stretches. The idea is you 0:17:40.760 --> 0:17:43.879 build something that's got one month, like I'm going to 0:17:43.920 --> 0:17:47.919 give you ten percent dividend yield for one month. Like 0:17:48.040 --> 0:17:52.240 the duration is one, the yield is ten percent, the 0:17:52.280 --> 0:17:57.360 currency base is US dollars. The spread. It's like, if 0:17:57.359 --> 0:17:59.720 the risk free rate is four hundred basis points and 0:17:59.720 --> 0:18:03.680 that's a six six hundred basis point credit spread, I've 0:18:03.720 --> 0:18:07.200 extracted a six hundred basis point spread for the next 0:18:07.280 --> 0:18:13.159 month in US dollars. Maybe I five x overcollateralize it. 0:18:13.200 --> 0:18:16.399 Maybe I ten x if I, you know, raw bitcoin 0:18:16.880 --> 0:18:19.159 is like one to one. It's like if I have 0:18:19.200 --> 0:18:21.240 a dollar bitcoin. I have a dollar a bitcoin and 0:18:21.280 --> 0:18:24.720 bitcoin trades down fifty percent, I've lost half my money. 0:18:25.200 --> 0:18:28.840 But if I ten x overcollateralize something I have ten 0:18:28.880 --> 0:18:32.119 dollars a bitcoin, I have one dollar of stretch. A 0:18:32.160 --> 0:18:34.960 bitcoin trades down fifty percent, I still get a dollar 0:18:35.080 --> 0:18:37.639 stretch a bitcoin trades down ninety percent, I still have 0:18:37.680 --> 0:18:41.159 a dollar of stretch. The statistical odds of bitcoin trading 0:18:41.160 --> 0:18:44.720 down ninety percent or like points something. Right, It's a 0:18:45.000 --> 0:18:50.080 small percentage. So by over collateralizing, you strip away the 0:18:50.400 --> 0:18:56.080 risk by structuring it to adjust. If you put a 0:18:56.119 --> 0:19:02.760 set of adjustments or representations below below one hundred, you 0:19:02.920 --> 0:19:05.440 start to strip away the ball Telly on the downside. 0:19:05.560 --> 0:19:07.160 If like with Stretch, what we did is we put 0:19:07.200 --> 0:19:09.800 in a call option at one oh one, and then 0:19:09.840 --> 0:19:12.440 we told the market we're going to sell it actively 0:19:12.760 --> 0:19:16.320 at one hundred or better. And then we also told 0:19:16.320 --> 0:19:18.760 the market we're not going to sell it below ninety nine, 0:19:19.640 --> 0:19:21.880 and if it's below ninety nine, we're going to raise 0:19:21.920 --> 0:19:26.840 the dividend. Okay, So you're kind of collaring this instrument. 0:19:27.880 --> 0:19:31.760 And then the last point is we created a preferred 0:19:31.840 --> 0:19:35.479 instrument where we pay it monthly in cash and then 0:19:35.520 --> 0:19:38.000 we adjust the dividend every month. So it turns out 0:19:38.000 --> 0:19:40.720 if you scan in the history of preferred stock or 0:19:40.760 --> 0:19:43.520 the history of the credit markets, no company has ever 0:19:43.640 --> 0:19:50.440 issued a perred preferred stock where the management has discretion 0:19:51.000 --> 0:19:55.280 to adjust the dividend every single month. Like there are 0:19:55.320 --> 0:19:57.920 some preferred. That are floaters where they set the credit 0:19:57.960 --> 0:20:00.439 spread at three hundred and fifty bases points over SOFA, 0:20:00.520 --> 0:20:02.880 and they will float with SOFA with the risk free rate. 0:20:03.800 --> 0:20:05.520 And there are a lot that are fixed where you 0:20:05.600 --> 0:20:08.440 sit it at seven percent, and the principle will trade 0:20:08.520 --> 0:20:11.800 up and down if sofur falls or arises. But the 0:20:11.960 --> 0:20:17.600 idea that the credit spread is completely variable is a 0:20:17.640 --> 0:20:21.520 new idea. But by the way, not a new idea 0:20:21.760 --> 0:20:24.160 in a world of credit, because who does this, well, 0:20:24.359 --> 0:20:26.000 Nation States do it. 0:20:26.040 --> 0:20:26.400 The Fed. 0:20:27.000 --> 0:20:29.359 Literally, that's what a central bank does, right, That's what 0:20:29.440 --> 0:20:32.199 every central bank does. They set the interest rate on 0:20:32.320 --> 0:20:36.120 their currency. Ye what we did was just copied you know, 0:20:36.760 --> 0:20:40.520 traditional bankers, and we set the interest rate on our currency, 0:20:40.600 --> 0:20:46.360 which is stretch. So that is the kerosene of of 0:20:46.440 --> 0:20:50.760 the bitcoin you know, Treasury company, or of the digital 0:20:50.800 --> 0:20:55.720 assets industry. Because it's the it represents the greatest degree 0:20:56.160 --> 0:21:00.439 of financial engineering, just like kerosene represents the greatest degree 0:21:00.480 --> 0:21:06.320 of petroleum engineering. Right, I've done the most refining. I've 0:21:06.359 --> 0:21:10.960 distilled the highest quality product. You could imagine, for example, 0:21:11.359 --> 0:21:15.840 you could you could extract the same product and yen. 0:21:16.800 --> 0:21:19.280 So I want to create a yen instrument that's ten 0:21:19.320 --> 0:21:24.359 thousand yen that pays you know, a monthly yen cash 0:21:24.640 --> 0:21:28.520 yield or a cash dividend. I changed that every month, 0:21:29.359 --> 0:21:32.800 and now I've created the equivalent of kerosene for the 0:21:32.880 --> 0:21:36.720 Japanese market. And of course, what does everybody want? Everybody 0:21:36.800 --> 0:21:39.320 kind of just wants. I've got some money I need 0:21:39.320 --> 0:21:41.480 to park for the next ninety days. If I put 0:21:41.520 --> 0:21:42.639 it in the bank, If I put it in the 0:21:42.640 --> 0:21:44.920 bank in Japan, I got fifty basis points or less. 0:21:45.560 --> 0:21:47.200 I put it in the bank in Switzerland, I get 0:21:47.200 --> 0:21:49.600 minus fifty basis points. If I put in the bank 0:21:49.600 --> 0:21:51.560 in Europe, I get two hundred basis points or less. 0:21:51.560 --> 0:21:52.800 If I put it in the bank in the US, 0:21:52.840 --> 0:21:56.320 I got four hundred basis points or less. And so 0:21:56.760 --> 0:21:59.000 what I'd like to do is put it in some 0:21:59.119 --> 0:22:02.240 kind of structure where I'm going to get my money 0:22:02.280 --> 0:22:05.560 back in nine months or six months or whatever. The 0:22:05.560 --> 0:22:07.119 principal is not going to move around, but I'm going 0:22:07.200 --> 0:22:10.320 to get ten percent. Everybody wants a bank account of 0:22:10.320 --> 0:22:12.359 base ten percent out of four percent, two percent or 0:22:12.440 --> 0:22:18.040 zero percent. And and so I think I think the 0:22:18.080 --> 0:22:21.800 most interesting product that you can create, the most interesting 0:22:21.840 --> 0:22:25.879 digital credit product is a treasury preferred credit instrument for 0:22:25.960 --> 0:22:31.239 corporate treasurers or for retirees. Right, just you know, and 0:22:31.280 --> 0:22:33.639 how big is that, Marcus, Like thirty trillion dollars in 0:22:33.680 --> 0:22:37.600 the US. Yeah, of just short term treasury money. So 0:22:37.760 --> 0:22:41.040 thirty trillion in the US that's getting paid, so fur. 0:22:43.160 --> 0:22:43.480 Yeah. 0:22:43.800 --> 0:22:50.160 And the opportunity with digital credit is you create a company, 0:22:50.240 --> 0:22:53.080 you hold bitcoin, that's digital capital. You start to issue 0:22:53.080 --> 0:22:55.840 credit instruments on top of the capital, and you can 0:22:55.880 --> 0:22:59.240 decide how much risk do you want to strip away? 0:22:59.440 --> 0:23:02.720 Is it a BTC rating of two, which is two 0:23:02.720 --> 0:23:07.040 times over collateralized, or is it ten? Right, Two is 0:23:07.080 --> 0:23:10.480 less risk stripped away. Ten is more risk strip strip away. 0:23:10.480 --> 0:23:12.520 The amount of risk you want strip away, the amount 0:23:12.560 --> 0:23:18.920 of volatility. The smaller the instrument compared to the overall 0:23:18.920 --> 0:23:21.320 collateral pool, the less the volatility. And then there are 0:23:21.320 --> 0:23:24.520 a lot of terms and conditions that you can put 0:23:24.560 --> 0:23:29.520 in the instrument that would constrain the volatility. So you 0:23:29.600 --> 0:23:31.880 decide how much volatility and risks you want to strip away, 0:23:32.000 --> 0:23:33.800 decide how much yield do you want to give it. 0:23:34.520 --> 0:23:36.440 You decide whether you want it to be in pounds 0:23:36.520 --> 0:23:40.879 or Canadian or euros or yen or whatever you know, 0:23:41.760 --> 0:23:45.720