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Lex Fridman Podcast
#276 – Michael Saylor: Bitcoin, Inflation, and the Future of Money
Apr 14, 2022
04:02:29
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Quick takeaways
- Inflation is a misunderstood and significant problem in our economic system, with the true consequences often underestimated.
- Accurate economic models, the impact of inflation, and interdisciplinary thinking are crucial to address complex challenges.
- Digital transformation has improved various aspects of civilization, including culture, education, and growth.
- Bitcoin offers a decentralized and incorruptible alternative to traditional banking, benefiting unbanked individuals in developing regions.
- Bitcoin's unique advantages, institutional adoption, and potential as a treasury reserve asset make it a promising form of digital property.
Deep dives
The Power of Engineering in Human Civilization
Human civilization is defined by our ability to engineer and solve problems. From harnessing fire and water to developing intricate ships and cannons, engineering has allowed us to shape the world around us and improve the human condition. The rise and success of civilizations have been determined by their ability to harness energy efficiently. As we continue to engineer and innovate, we make progress in fields like digital information, dematerializing books, music, maps, and more. This digital transformation has brought about a new wave of prosperity and access to knowledge that was unimaginable in the past.
The Misunderstanding of Inflation and Government
Inflation is a misunderstood and significant problem in our economic system. Many conventional economists view a 2% inflation rate as desirable, but fail to appreciate the true consequences of expanding the currency supply. All government policies tend to be inflationary, as they require funding that often leads to an expansion of the currency supply. This ultimately leads to a devaluation of the currency over time. The mismeasurement of inflation further exacerbates the problem, as the true extent of its impact is often underestimated. This flawed understanding of economics and inflation perpetuates damaging policies and inhibits further progress.
The Role of Power and Engineering in Human Societies
Throughout history, the most powerful civilizations have been the most organized and technologically advanced. The ability to harness energy and project power has allowed societies to dominate and shape the world. Understanding power dynamics and engineering better ways to harness energy and technology has been a driving force in human civilization. As we continue to evolve and innovate, it is crucial to recognize the importance of accurate economic models, the impact of inflation, and the need for interdisciplinary thinking to address the complex challenges of our time.
The Importance of Digital Transformation for Civilization
Digital transformation has the potential to improve civilization in various aspects, such as culture, education, and growth. Trillion-dollar entities like Apple, Amazon, Facebook, Google, and Microsoft have emerged as a result of this transformation.
Democratizing Education with Digital Platforms
Digital education platforms like the Sailor Academy offer free, accessible, and high-quality education to anyone on earth. Through online lectures and resources, people can access postgraduate level education without the high costs associated with traditional institutions.
The Layered Architecture of Bitcoin and Digital Property
Bitcoin operates on a layered architecture, with different layers serving different functions. Layer 1 is the foundation for property settlement and immortality, while Layer 2, like Lightning Network, enables faster and more scalable transactions. Layer 3 consists of custodial services and exchanges, facilitating convenient transactions but with a relinquishment of control. This layered approach allows for efficiency, security, and portability in the digital economy.
Bitcoin as a Solution for Economic Empowerment
Bitcoin is seen as a solution to the economic challenges faced by billions of unbanked individuals who lack property rights. By providing a digital bank accessible through mobile phones, Bitcoin offers a decentralized and incorruptible alternative to traditional banking. Without the need for physical branches or copper wires, Bitcoin can empower individuals in Africa and other regions by providing them with a secure means to store value and engage in financial transactions.
The Potential of Bitcoin as Digital Property
Bitcoin is considered a form of digital property with unique advantages over traditional assets. Its decentralization, fair distribution, and the ability to program it for fast transactions make it a promising alternative to conventional assets like gold or bonds. With institutional adoption increasing and the potential for Bitcoin to serve as a treasury reserve asset for governments, its market cap could reach trillions of dollars. The dematerialization of assets, such as hotels, and the emergence of layer two and layer three technologies are expected to further unlock the potential of Bitcoin as a digital property.
The Importance of Conservation of Energy in Cyberspace
The speaker emphasizes the need for conservation of energy in cyberspace. The first generation of the internet lacked energy conservation, resulting in issues like spam, scams, and hacking. Introducing conservation of energy can mitigate these problems and make cyberspace more secure and efficient. This can be achieved through high-speed digital assets like Bitcoin and the lightning network, which enable fast transactions and microtransactions. By requiring a security deposit for safe passage through cyberspace, we can mitigate denial of service attacks and incentivize responsible behavior online.
The Role of Focused Specialization in a Digital Era
The podcast discusses the growing importance of specialization and authenticity in the digital era. With an abundance of information and content available, individuals and platforms that focus on a specific area and provide authentic expertise gain more trust and attention. By staying true to their passion and expertise, specialists can build a loyal audience and rise to the top of their respective fields. The podcast emphasizes the need for individuals to focus their energy, guard their time, and curate their environment in order to excel and make a meaningful impact. Authenticity, focus, and expert specialization are key factors in succeeding in today's digital landscape.
9.
How to Visualize Inflation and Other Economic Concepts Through Machine Learning
4min
Michael Saylor is the CEO of MicroStrategy and a prominent holder and proponent of Bitcoin. Please support this podcast by checking out our sponsors:
– Scale: https://scale.com/lex
– Coinbase: https://coinbase.com/lex to get $10 in free Bitcoin
– Audible: https://audible.com/lex to get $9.95 a month for 6 months
– NetSuite: http://netsuite.com/lex to get free product tour
– SimpliSafe: https://simplisafe.com/lex and use code LEX
EPISODE LINKS:
Michael’s Twitter: https://twitter.com/saylor
MicroStrategy: https://microstrategy.com/
Michael’s Book: https://amzn.to/37J2iA0
Book mentioned: https://amzn.to/3jwsIaP
PODCAST INFO:
Podcast website: https://lexfridman.com/podcast
Apple Podcasts: https://apple.co/2lwqZIr
Spotify: https://spoti.fi/2nEwCF8
RSS: https://lexfridman.com/feed/podcast/
YouTube Full Episodes: https://youtube.com/lexfridman
YouTube Clips: https://youtube.com/lexclips
SUPPORT & CONNECT:
– Check out the sponsors above, it’s the best way to support this podcast
– Support on Patreon: https://www.patreon.com/lexfridman
– Twitter: https://twitter.com/lexfridman
– Instagram: https://www.instagram.com/lexfridman
– LinkedIn: https://www.linkedin.com/in/lexfridman
– Facebook: https://www.facebook.com/lexfridman
– Medium: https://medium.com/@lexfridman
OUTLINE:
Here’s the timestamps for the episode. On some podcast players you should be able to click the timestamp to jump to that time.
(00:00) – Introduction
(07:09) – Grading our understanding
(19:27) – Inflation
(39:03) – Government
(1:00:13) – War and power
(1:11:23) – Dematerializing information
(1:42:45) – Digital energy and assets
(1:54:23) – Oil barrel vs Bitcoin
(2:03:43) – Layers of Bitcoin
(2:20:53) – Bitcoin’s role during wartime
(2:25:37) – Jack Dorsey
(2:41:58) – Bitcoin conflict of interest
(2:48:39) – Satoshi Nakamoto
(2:54:04) – Volatility
(3:06:30) – Bitcoin price
(3:18:46) – Twitter verification
(3:27:42) – Second best crypto
(3:33:24) – Dogecoin
(3:37:57) – Elon Musk
(3:43:26) – Advice for young people
(3:54:54) – Mortality
(3:57:59) – Meaning of life
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