Discussion Notes, Bitcoin, Michael Saylor and Ben Cowen

  1. Bitcoin is “Apex Property” … in the analogy of property, it is the equivalent of buying a block of manhattan property in the late 1800’s. Smart contract platforms are like buildings built on the property and Dapps are like opening a restaurant in one of the buildings.
  2. Part of the benefit of bitcoin is in its simplicity. It is not trying to be anything complex, just a store of value that will be relatively stable over time.
  3. Bitcoin is the best hedge against inflation of the US dollar
  4. The IRS treats bitcoin as property
  5. Bitcoin is the least risky digital / crypto asset, all other tokens and coins have a variety of increasing risk profiles, particularly on the regulatory front. Saylor expects that the SEC will regulate both centralized and decentralized exchanges.
  6. “If you define the world as the only area I’m going to invest in is crypto, you might be taking on too much risk. That’s the same as saying ‘I’m only going to invest in stocks in Venezuala’ [ie, too myopic]”
  7. Saylor: Charting is looking at the past and ignores major tech and UX innovations that are responsible for the really big moves in tech companies, digital currency, etc. Knowing what has happened in the past doesn’t tell you answers to the most important questions like will this large company invest 10B$ in Bitcoin next week.
  8. In the West, we have devaluing currencies and so you have to find scarce assests.
  9. We sill are at about 98% illiteracy when it comes to Bitcoin. A lot of people can’t even agree that BTC is digital property. The primary driver will be the rate at which this education spreads and the behavior of major tech companies with regards to BTC.
  10. Regulatory clarity will come very slowly and have moments of slow forward and back movement.
  11. Debt - it seems that the cheapest money that anyone can find right now is taking out Home Equity loans at 1.5% or 2%
  12. This last 12 months, we are in the one year in the last 100 years with the lowest mortgage rates for borrowing money from the bank and the highest rate of monetary inflation. The spread is unprecedented. Conventional wisdom about being careful about debt, this makes sense until someone punches a hole in the airplane and the oxygen is running out. Then you need to take a more aggressive position.
  13. Your salary got devalued 37% over the past year due to the rate of inflation on the USD.
  14. Paying off a low-rate loan in a high inflation environment is the same as losing, lets say 15% to the bank.
  15. Every government in the world is conspiring to drive up the price of assets
  16. If everyone on Wall St is 40% richer based on doing nothing, who is paying them? Think really hard. Who’s poorer? It must be everyone else. It’s a zero sum game. This is the enraging delimmna. If you save your money and don’t take on debt, you have no asset and the political system just made all the assets 40% more expensive. This is a massive wealth redistribution and that’s the moral hazard.
  17. A saver holds an asset for 100 years. An investor holds an asset for 10 years. Trading or speculating would be anything shorter term. Then there is gambling, where you’re just having fun.
  18. When you think about debt financing, you should take any opportunity for long duration at a low, fixed rate. What you don’t want is something that gets marked to market regularly. Stay away from short-term debt.

References

  1. https://www.youtube.com/watch?v=x1LvKmW_lXk